BMI's Executive Summary

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The latest Peru Oil & Gas Report from BMI forecasts that the country will account for 2.12% of Latin America regional oil demand by 2011, while providing 0.76% of supply. Latin American regional oil demand rose to an estimated 6.87mn barrels per day (b/d) last year. It should average 7.01mn b/d in 2007 and then rise to around 7.82mn b/d by 2011. Regional oil production was last year estimated at 10.97mn b/d. It is set to rise to 11.85mn b/d by 2011.

In terms of natural gas, the region last year consumed an estimated 183bn cubic metres (bcm), with demand of 271bcm targeted for 2011, representing 48% growth. Production of an estimated 191bcm in 2006 should reach 272bcm in 2011, and implies just 2bcm of net exports the end of the period. Peru is not a significant regional gas consumer but, by 2011, its share of regional production is set to reach 3.31%.

For the whole of last year, our estimates of average crude oil prices are US$61.10 for the OPEC basket, US$65.10 for Brent, US$66.20/bbl for WTI and US$61.30 for Urals. For the first quarter of this year, we have adjusted our forecasts to reflect the weather-induced volatility. The OPEC basket is now expected to have averaged US$54.30/bbl, with Brent at US$57.60; WTI averaging US$58.70 and Urals at US$54.00/bbl. Our projections for 2007 as a whole are barely changed from the last quarterly report. We are still assuming an OPEC basket price average of US$55 per barrel. Based on last year's typical price differentials, this implies Brent at US$58.80, WTI averaging US$59.90/bbl, and Urals at US$55.30/bbl.

Peruvian real GDP growth is now forecast by BMI at 5.5% for 2007, down from an estimated 7.9% in 2006. We are assuming 5.3% growth in 2008, followed by 4.7% in 2009 and 4.5% in 2010/11. We are assuming oil and gas liquids production of no more than 90,000b/d by 2011, with the country expected to pump 110,000b/d this year. Consumption is forecast to increase by around 3% per annum to 2011, implying demand of 166,000b/d by the end of the forecast period. The import requirement would therefore be approximately 76,000b/d by 2011. Gas production is forecast to increase from last year's estimated 2.5bcm to 9bcm over the period, with net exports of up to 6bcm by 2011.

In the BMI Business Environment Ranking matrix, Peru receives an unchanged composite score of 38, which now ranks the country equal second out of nine states included in the Latin America region, alongside Trinidad & Tobago. The overall business environment can be considered attractive in a regional context, thanks largely to above-average hydrocarbons growth potential and reserves to production ratio (RPR) offsetting mid-range scores for competitive environment and licensing framework.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Peru Political SWOT Analysis

Peru Economic SWOT Analysis

Peru Business Environment SWOT Analysis

Chapter 3 - Regional Market Overview

Latin America Region

Peru

Chapter 4 - Business Environment Rankings

Peru

Latin America Region

Chapter 5 - Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Oil & Gas Growth

Oil/Gas Reserves

Licensing/Regulation

Competitive Environment

Chapter 6 - Business Environment Overview

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Foreign Direct Investment

Tax Regime

Chapter 7 - Oil Market Outlook

Assessing The Risks

Table: Crude Price Forecasts 2007

Revised Forecasts

Table: Oil Price Forecasts

Chapter 8 - Regional Supply and Demand

Latin America

Table: Oil Production (000b/d) – Latin America

Table: Oil Consumption (000b/d) – Latin America

Chapter 9 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Chapter 10 - Industry Forecast Scenario

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

LNG

Refining And Oil Products Trade

Revenues/Import Costs

Table: Peru Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Peru Other Energy – Historic Data & Forecasts

Key Risks To BMI’s Forecast Scenario

Chapter 11 - Economic Outlook

Table: Economic Activity Indicators

Chapter 12 - Regional Case Study – Royal Dutch Shell

Competitive Landscape

Executive Summary

Table: Key Players: Peru Oil & Gas Sector

Overview/State Role

CNPC – Summary

Occidental – Summary

Table: Key Upstream Players

RepsolYPF – Summary

Maple Gas – Summary

Pluspetrol – Summary

Hunt Oil – Summary

Table: Key Downstream Players

SK Corporation – Summary

Petrobras – Summary

Others – Summary

Chapter 13 - Company Monitor

Perupetro/Petroperu

Chapter 14 - Company Monitor

RepsolYPF Peru

Chapter 15 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Energy Industry

Cross checks

Sources

Network of Latin American Oil & Gas Sources

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BMI's Latin American Oil & Gas Reports are based on an extensive network of multilateral organisations, government departments, oil & gas industry associations, chambers of commerce and company reports. Information sources include: