The Karoon offshore Peru acreage block Z38 is in water depths from 200 to 700m and is located 56km west of the city of Tumbes and 39km west of the Caleta Cruz (refurbished dock and 135 MW proposed power plant). In addition to the port city of Tumbes with its energy markets and infrastructure it is also close to the border of Ecuador and Ecuador’s most populous city, Santiago de Guayaquil.

 

 

Karoon (Operator) 75%, VAMEX 25%.

 

 

 

The attractive potential of the block is highlighted by 12 Miocene structural features some of which exhibit possible Direct Hydrocarbon Indicators (DHIs). These structures are in water depths between 100 to 530 meters. Of these features two main leads have been identified with 100 to 200mmbl oil or multi TCF gas prospective resources potential.

 

 

Karoon has a 3D program planned in early 2010 to fulfill the Second Phase Work Program with drilling on target to begin in 2010/2011. 

 

 

Z-38 block is around 20km from the oil and natural gas fields Albacora (7 Mmbo probable reserves), Corvina (204 Mmbo probable reserves and currently being developed), and Piedra Redonda (96 Bcf Probable reserves) discovered in the 1970's and 1980's in the Z1 block. The Corvina field began producing oil in 2007. The Corvina CX-11 platform is currently averaging 5,950 bopd since Jan 2009 (BPZ, 2009). The operator, BPZ, also has plans to monetise the Corvina gas reserves through a gas-to-power plant. The proposed simple-cycle power plant site is adjacent to a substation and power transmission lines which in time may be able to transmit up to 360 MW of power. 

 

The Albacora 38˚ API oil field north of Corvina will be the next field to be developed and appraisal drilling is ongoing.  This may be followed by the southern Piedra Redonda gas field.

 

To the northeast in the Gulf of Guayaquil, approximately 60 kilometers from the block, is the Miocene Amistad gas field, operated by Noble Energy that delivers 13 Bcf per year to a 130 MW power plant at the fast-growing, regional, Ecuadoran city of Machala.

Consistent GDP growth in Peru has led to consistent energy demand growth. Attractive commercial terms have been introduced by the Government to encourage investment and exploration to stem Peru's falling domestic oil production. Peru is also one of the most open countries to private investment in South America. In addition, Peru and Ecuador’s demand for electricity provides an economically attractive market for gas.

 

Historically a number of simple tilted fault blocks (eg. Delfin), and four way dip closures (eg. Corvina) have been targeted in Tertiary sequences in the Tumbes Basin. New seismic data also reveals that there is stratigraphic play potential in the basin.

 

The reservoir target intervals lie from the Upper Miocene Tumbes Fm. through to the Oligocene Mancora Fm. At Albacora, Barracuda and Corvina the reservoirs are of Early Miocene age (Zorritos Fm). In the Amistad field Middle to Upper Miocene (Cardalitos/Subibaja to Tumbes/Progreso Fm) sandstones produce gas. These younger formations have superior reservoir characteristics compared with the older Zoritos Fm. sands. These younger sands are the primary target in Karoon's Z38 block.