Hydrocarbon Investment

Opportunities in Peru

Rolando Bolaños Z.

Manager of Exploration

February, 2014

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1. Peru: an underexplored country

3. Contract Terms

4. New Bidding Rounds 2014

5. The Data Bank

INDEX

6. Final Remarks

2. General Remarks

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1. Peru: An underexplored country

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Peru is located within the western hydrocarbon production trend in South America: The Sub Andean Megatrend.

4. Camisea area gas and condensate production in south Ucayali basin.

2. Heavy oil production in Eastern Marañon basin

3. Light oil production in north Ucayali basin

1 Light oil production in Western Marañon basin

5. Light oil production in Tumbes and Talara basins

Areas with oil production of over 150 years.

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3

4

1 5

Large available areas for exploration

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BASINS Wildcats %

Talara 1,299 84.68

Marañón 115 7.50

Ucayali 59 3.85

Sechura 24 1.56

Tumbes -

Progreso 13 0.85

Santiago 7 0.46

Madre de Dios 6 0.39

Trujillo 4 0.26

Titicaca 4 0.07

Pisco 1 0.07

Huallaga 1 0.00

Lima 1 0.00

Mollendo 0 0.00

Salaverry 0 0.00

Moquegua 0 0.00

Bagua 0 0.00

Ene 0 0.00

1,534 100.00

Talara

Marañón

Ucayali

Sechura

Tumbes - Progreso

Santiago

Madre de Dios

Trujillo

Titicaca

Pisco

Huallaga

Lima

Mollendo

Salaverry

Moquegua

Bagua

Ene

Talara

Marañón

Ucayali Sechura

98% Wildcats in 4 basins

Distribution of Wildcats in 18 Basins

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Accumulated 1,000 BBO

Daily 25,000 BOD

MARAÑÓN BASIN

Accumulated 1,500 BBO

Daily 38,000 BOD

30 BCFGD

TALARA BASIN

Accumulated 31BBO

130 BBC

0.8 TCFG

Daily 300 BOD

106,000 BCD

1,181 BCFGD

UCAYALI BASIN

Hydrocarbon Producing Areas

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2. General Remarks

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Source: Banco Central de Reserva del Perú, Ministerio de Economía y Finanzas, y IMF. * Cifras estimadas. BCRP (Reporte de Inflación, Set 2012) y FMI

Sustained GDP growth

During the last 10 years the Peruvian economy increased very rapidly …

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Source: Banco Central de Reserva del Perú, Ministerio de Economía y Finanzas, IMF y ProInversión

Sustained GDP growth

… and will continue leading the regional growth making the GDP to become higher than the world average by 2020 …

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Fuente: Banco Central de Reserva del Perú, Ministerio de Economía y Finanzas * Cifras estimadas (Reporte de Inflacion, Set 2013) y MEF (MMM2014-2016)

The economic growth

The economic growth has been impelled by the high private investment …

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Investment

… which represents near 22 % of the GDP …

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Fuente: BCRP y MEF *Cifras estimadas MEF (MMM 2014-2016)

Fuente: Fondo Monetario Internacional (cifras estimadas)

Foreign Direct Investment

… Peru is attractive for Foreign Direct Investment, which registered a level up to 12,000 million US $ in 2012

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Fuente: BCRP * Cifras estimadas BCRP (Reporte de Inflación, Setiembre 2013

Fuente: BID 1/ en el caso de Peru y Chile, cifras al cierre. Fuente BCRP y Banco Central y Chile

Degree of Investment and Confidence

Peru has deserved a good investment rate and the investors confidence due to its favorable economic policy

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Fuente: Standard & Poor’s, Fitxh Ratings y Moody’s. Actualizado al 23 de Oct, 2013

Fuente: UNCTAD (WIR 2011)

3. Contract Terms

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PERU: CONSTITUTIONAL GUARANTY “CONTRACT LAW”

• Established under Article 62° of the Peruvian Constitution.

• Contracts between PERUPETRO and Contractors may only be modified by agreement of the Parties.

• The Constitution guarantees equal treatment for domestic investments and foreign investments.

The model of the contract: A Contract Law

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• Flexible Work Programs: can be set in Exploratory Work Units (EWU).

• Technical Information available free of charge.

• No signing bonus for the Contract.

• Free decision of the Contractor to continue the exploration during the production phase.

• International arbitration as part of the License Contract.

License Contract Remarks

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4. New bidding rounds in 2014

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Contract term about to end – Marañón basin

BLOCK 1AB

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Fields under Production: 12

Active wells: 116

Accumulated Production: 718

MMBO

Daily Production: 14,800 BOD

Reserves: 71.1 MMBO

Access: by air and rivers

Tigre, Corrientes and Pastaza

Next Bidding Round – Block 1 AB

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For further information:

promocion@perupetro.com.pe

26 Blocks for

Exploration

activities in the

Jungle basins

Next Bidding Round - 26 New Blocks

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5. The Data Bank

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http://www.perupetro.com.pe

1. All seismic, well

data, well logs and

technical reports

available.

2. Available for

download on

request

3. No charge for Data

and Reports

The Data Bank

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6. Final Remarks

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Final Remarks

• Peru has 18 sedimentary basins with 83 million hectares (ha), most of

them under an immature exploration stage.

• There are 76 contracts of exploration and exploitation with 33 million

hectares. There is a remaining of 50 million ha for new contracts.

• It is estimated that Peru has a total of up to 4,000 million boe of proved

reserves at December 2013, being the natural gas and NGL is the

main volume.

• As a result of the new discoveries, the proved reserves of oil, natural

gas and NGL have had a sustained increment during the last 20 years.

• The most prolific and successfully productive region is the Sub Andean

trend, with a success ratio of 35% and exceptionally 77% in Camisea.

• The maintenance of an investment level of around 2,000 million of

U.S. $ per year is required for the purpose of improving the actual

reserves level.

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• New bidding Rounds during 2014:

a. 26 new blocks for hydrocarbon exploration in the Amazon region.

b. 6 offshore blocks for hydrocarbon exploration.

c. 1 Block with current production (Block 1-AB)

• Peru offers the best economic framework and business environment as

a destination for foreign investment.

• The Data Bank offers technical information regarding most of the basins

free of charge for enterprises interested in hydrocarbon exploration and

exploitation in Peru.

Final Remarks

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Thank you for your attention…

www.perupetro.com.pe

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