Peru Minister touts Saudi mining interests and Chevron offshore Potential

A top minister announced on Tuesday that Peru is seeking major investments from Saudi Arabia, as well as the U.S. oil company Chevron, to develop its energy and mining resources. This is part of a broader strategy to revitalize this sector.

Peru, the third largest copper producer in the world, is pushing to jumpstart investments, which have slowed down over recent years due to political unrest and social conflict.

In an interview with the, Energy and Mines minister Jorge Luis Montero stated that he expects to sign a Memorandum of Understanding with Saudi Arabia by November for developing projects for lithium and strategic minerals.

He said that the Middle Eastern Kingdom was looking for a "reliable partner" in Peru.

Montero announced that he will travel to Saudi Arabia with Peru's Foreign Minister next month to sign wider economic agreements with Gulf nations.

He said that Saudi Arabia was interested in "investing in energy and mining activities...even in future seawater desalination plant for the mining industry."

Parallel to this, there is a parallel effort underway in Peru's energy industry. Chevron is one of the key players in this effort. It will begin drilling offshore early next year.

Montero stated that if the reserves found in these blocks are confirmed, Montero expects production to reach between 250,000 and 300,000 barrels a day.

He predicted that such a volume would allow Peru, which is currently a net importer of oil, to stop imports in three years and save the country $5 billion per year.

Peru has finalized a commercial agreement and infrastructure agreement between it and its neighbor Ecuador to further strengthen its energy strategy. The deal is scheduled to be signed by state-owned oil companies Petroperu, Petroecuador and Petroecuador on October 24, 2018.

The agreement will connect oil fields in southern Ecuador to Peru's underutilized Norperuano pipe, allowing Ecuadorean Crude to be transported and processed at Petroperu’s recently modernized Talara Refinery.

Montero claimed that the deal was a lifeline to the financially struggling Petroperu. It would ensure a constant supply of fuel, keeping the Talara refinery running "24 hours a day." (Reporting and editing by Marco Aquino, Sarah Morland, Jamie Freed).

(source: Reuters)