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PetroTal Corp. announces oil sales contract with PETROPERU S.A.

Oil&Gas Materials 27 December 2019 14:37 (UTC +04:00)
PetroTal Corp., the Peruvian focused exploration and production company has announced an oil sales contract with PETROPERU S.A., a state owned company, for oil production from the Bretaña oil field, operated 100 percent by PetroTal
PetroTal Corp. announces oil sales contract with PETROPERU S.A.

BAKU, Azerbaijan, Dec. 27

By Leman Zeynalova - Trend:

PetroTal Corp., the Peruvian focused exploration and production company has announced an oil sales contract with PETROPERU S.A., a state owned company, for oil production from the Bretaña oil field, operated 100 percent by PetroTal, Trend reports citing the company.

“Commissioning of the central production facility is underway, and oil production has surpassed 10,000 barrels of oil per day (“bopd”) from the Bretaña oil field in Peru. This oil sales contract enables PetroTal to ship all oil in excess of its existing 1,200 bopd sales agreement with the Iquitos refinery, through the 854 kilometer North Peruvian Oil Pipeline, owned and operated by Petroperu,” reads a message from the company.

Petroperu has agreed to purchase the oil at pump station No. 1 located at Saramuro, approximately 460 kilometers from the Bretaña oil field. The company will barge the oil to Saramuro at an estimated average cost of $4.25 per barrel. The oil delivered at Saramuro will be sold based on the monthly average reference price of ICE Brent minus $4.00 per barrel. When the oil is ultimately sold by Petroperu at Bayovar, PetroTal will receive a valuation adjustment based on the actual price achieved by Petroperu, whether higher or lower.

This sales contract will allow PetroTal to receive oil sales revenue earlier, allowing PetroTal to maintain strong liquidity. The oil sales contract allows us to submit monthly invoices, rather than having to wait for the ultimate sale at Bayovar after sufficient oil volumes have been achieved for a tanker to take the oil to its final market. This oil sales contract is initially for one year and can be extended with the agreement of both parties. For Petroperu, the increased oil volumes through the pipeline will enhance economics since Petroperu will earn the previously published pipeline tariffs along with a commercialisation fee.

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