Interoil is continuing its efforts to obtain a license extension for Blocks III and IV in the Talara Basin in northwest Peru. Due to recent developments, Interoil wishes to update the market on the current situation as seen by Interoil.
During an industry luncheon on 15 October 2013 in Lima, Peru, Luis Ortigas, President of the Perupetro Board of Directors, announced that the Perupetro board has resolved to initiate a process towards extending certain oil and gas production licenses in the Talara Basin. Interoil's Blocks III and IV are among these licenses. A final decision to extend the licenses is subject to final negotiations and approval by the competent Peruvian governmental bodies.
According to Ortigas, the process of awarding the extensions is expected to begin shortly and will entail negotiation between the operators of each block and Perupetro on the terms of the extensions, including a specific work program for each of the licenses. Extensions could also be made contingent on participation by Petroperu, Peru's National Oil Company. For Interoil, these negotiations will also entail finding a solution to the ongoing arbitration case against Perupetro, to which Interoil will propose to Perupetro that the arbitration case is put on hold during the negotiations for the extension and terminated upon the entering into of a new license agreement.
CEO Thomas J. Fjell of Interoil comments:
"Although no final decision has been made, Interoil is very pleased to see that Perupetro have decided to negotiate license extensions with the existing operators instead of initiating a bid round. Avoiding a lengthy bid round process will enable us to invest in Blocks III and IV as soon as the license extension has been entered into. These investments will increase production, royalty and tax payments to the government of Peru and benefit the local communities in the Talara region."Should Interoil receive a license extension for Block III and Block IV this would most likely allow Interoil to continue operations on the licenses for an additional period of ten years.
For more information please contact:
Thomas J. Fjell
Mob: +47 958 15 300
Mob: +47 488 94 426
Interoil Exploration & Production ASA is a Norwegian based exploration and production company - listed on the Oslo Stock Exchange - with focus on Latin-America. The company is operator of several production and exploration assets in Peru and Colombia. Interoil currently employs approximately 275 people and is headquartered in Oslo.