US-based oil and gas company PetroTal has announced temporary shut-in of Bretana oil field in Peru due to covid-19 pipeline closure and storage capacity limitations.
The move comes after the state-owned company Petroperu announced the shut down the Northern Oil Pipeline (ONP), after the health department of the Peruvian government issued a directive for covid-19 prevention in high risk areas and for high risk individuals.
On 27 May 2019, PetroTal entered into a pipeline transportation service contract with Petroperu to gain access to Peru’s ONP.
PetroTal stated: “Although Petroperu has filed an appeal with the Peruvian government to allow the pipeline to resume operations on the basis that it is an essential service, it is not clear how long the pipeline operations will remain suspended.
“PetroTal has commenced steps to temporarily shut down oil production at the Bretana oil field due to storage capacity limitations.”
The company has also updated the market on financing initiatives to accommodate the impact of oil price reductions on oil sales at the Bretana field in Peru’s block 95.
Planned capital expenditure of PetroTal for 2020 continues to be deferred
PetroTal said its planned capital expenditure for 2020 remains deferred and has reduced overall general and administrative costs by approximately 20%.
The cost reductions includes company-wide salary cuts, including cash compensation reductions of 20% for management and directors.
The company added that the oil field shutdown would lead to cost reductions for operating, transportation and general and administrative expenses.
PetroTal president and CEO Manolo Zuniga said: “PetroTal continues to support initiatives to ensure the Peruvian government provides the support needed during this pandemic, just as other countries have done.
“In the meantime, we continue to work on securing the necessary financial backing to ensure we are properly funded and emerge stronger from this crisis.
“PetroTal appreciates the ongoing dedication of all employees and the support for our business during these challenging times of the pandemic impact.”
In April, PetroTal had completed its third horizontal well 6H in the Bretana oil field.
