Onshore Sechura Basin - Block XXI

Project Summary

The Sechura Basin in Northwest Peru produces commercial oil and gas from sandstone reservoirs of the late Eocene (Olympic gas field) and from pervasively fractured Palaeozoic highs (San Pedro oil field). The basin shares Cretaceous and Tertiary stratigraphy with the major producing Talara Basin also in Northwest Peru. Baron Oil holds 30% of a permit to explore Sechura Basin Block XXI.

Block XXI covers 3,030 km2.

Permit history and standing

A promotional license was entered into in October 2004 and Block XXI was formally awarded to Baron Oil Peru SAC in December 2005. The licence establishes an exploration period of seven years over five periods. During the third exploration period Baron Oil together with its partner Vale acquired a survey of over 8000km of aerogravimetrics. Based on this survey a seismic grid for 2D seismic has been defined and at present the company is working on the environmental permit to shoot the 2D seismic. Currently Baron Oil is in the fourth exploration period of the contract and is expecting to obtain all necessary permits for the seismic campaign during 2014.

Location and infrastructure

Block XXI is in Northwest Peru near the provincial capital city of Piura (pop. 380,000). The area is served by the Panamerican Highway, the Interocean Highway and an international airport. The land use is open dry grazing land with very low population density. The port town of Talara, 75 km northwest, is an oilfield hub. The Talara refinery purchases oil at international prices. The northern Peru crude oil pipeline traverses the southern end of Block XXI to an export terminal on Bayovar Bay. Gas from the Olympic gas field at La Casita is processed onsite and is sold to local industry.

Exploration history

Minchales-1 was drilled on gravity high in the 1950's in the South of the area. Few details are available although the well is shown on maps as bearing oil shows, and a review of the petrophysics by Baron indicates good Verdun Formation reservoir with small residual hydrocarbon zones.

Pabur-1X was terminated for mechanical reasons and was high in the stratigraphy at the time of abondonment.

A 5,200 km2 aeromagnetic survey was flown in 2005. Six leads identified as basement highs were interpreted. The San Pedro discovery by Petrotech in the adjacent offshore area in 2006 focused immediate attention on the most prominent high (San Alberto) in the North of the block and all other work was directed to this area.

Baron drilled the well San Alberto -1X; in 2006. Good porosity was encountered in the Verdun Formation and fractured Palaeozoic rocks. A gas reading of 15,600 ppm C1 and 1,600 ppm C4+C5 was recorded in the Palaeozoic. Gravity and electrical geophysical methods (DNME) were acquired and San Alberto -2X was drilled in 2008. Both Tertiary and Palaeozoic reservoir was again present and very minor mudlog shows were encountered. Without seismic data it is unclear whether either well was within closuree.

Drilling has demonstrated the existence of effective reservoirs. The required elements for success are access to a functioning source kitchen and valid closures correctly placed in time and location to receive that charge. The major feature on the geophysics is the basement highs either side of a NW-SE trending trough. Cretaceous units including the Redondo and Muerto source interval are generally widespread in Northwest Peru. Cretaceous sediments were intersected at the Rio Loco well and outcrop on the flanks of the Andes to the east, as such Cretaceous source units may be expected in the trough. Current depth to basement exceeds 3500m at the centre of the trough. Burial history modelling for the adjacent offshore areas indicates some uplift occurred in the Miocene and that maximum burial is therefore greater than present. Burial in the order of 3000 m 4000 m is sufficient for oil generation. Six structural leads flanking the trough in Block XXI based on aeromagnetic and gravity are ideally placed to receive charge from the trough, however this data is inadequate to predict closure. Seismic data is required to demonstrate structural closure prior to any further drilling.

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