Are There Opportunities for Upstream Sector in Peru? A Comprehensive Study of Peruvian Peak Oil Production with Hubbert Model

Abstract Oil and gas industry in Peru has a long history with more than 100 years oil production with almost all coming from Talara and Marañón Basins. Peruvian oil production has decreased significantly up to 41 MBOPD in the latest 10 years1, with a cumulative oil production exceeding 1.6 and 1.1 billion barrels in Talara and Marañón fields2 respectively. Despite, primary recovery factors represent just 9% and 20% respectively. which may be an indicator of proved hydrocarbon potential that can be recovered with new development strategies and better technology. This study explores the opportunities to increase the oil supply for the Upstream Sector in Peru by using the Hubbert Model to determine the peak oil and maturity degree of each production region, and for the whole country; a sound estimation of hydrocarbon potential would be crucial to trade off the negative impact in Peru's balance of payments and exchanges due to decreasing oil production and increasing oil imports. A multicycle Hubbert approach was used to model production history, determine the peak oil and maturity degree, and forecast oil supply for each production region in Peru. Based on analysis of production trends, reserves and contingent resources can be identified in each area, as well as the more suitable technologies and development plans can be proposed. Typically, primary recovery factors for main fields in Peru are in between 5 to 50% with 14% average. The multicycle Hubbert approach indicates that heavy oil recovery can be increased by at least 20% in Marañón Basin, with new technology (horizontal drilling with autonomous inflow control devices and/or selective completion and/or chemical EOR). On the other hand, mature Talara fields have shown in recent years low decline rates which also indicates that additional development plans, with more suitable technologies for tight reservoirs, along with new waterflooding or gas flooding projects may also raise recovery factors up to 15%.