PERU: Rush for Oil

In nationalist-minded Latin America, foreign oil companies rarely get a chance at new concessions these days on any terms. But in Peru, “nationalist-but-realist” President Manuel Odria now offers new concessions to foreign companies on the handsome basis of a 50-50 profit split with the government. Last week, less than a month after it began to accept bids under the new oil law (TIME, March 24), Odria’s Oil Bureau was swamped with some 300 claims by 15 foreign and domestic oil firms for more than 9,000,000 acres of concessions. Said Oil Bureau Director Fernando Noriega Calmet: “We have a real oil rush.”

Almost all the applications are for areas in the Sechura desert, just south of the long-established north coast field at Talara (output: 33,000 bbls. a day). International Petroleum, a Canadian subsidiary of Standard Oil (N.J.) which operates Talara, is a major Sechura bidder. Other foreign applicants: Peruvian Gulf, a subsidiary of Gulf Oil Corp.; Richmond Petroleum, subsidiary of Standard Oil Co. of California; Conorada, jointly owned by Continental Oil, Ohio Oil and Amerada Petroleum Corp., principal wildcatter in North Dakota’s new and gushing Williston Basin. All of these except Peruvian Gulf have asked for both exploration and exploitation concessions, indicating that they think the oil is there and are ready to lay out considerable sums right away.

Thus far, however, the real rush has been to the Oil Bureau’s map-lined Lima headquarters. There last week Director Noriega and his assistants pored over the rival claims, many of which overlap. Noriega hopes that his bureau can start handing out decisions by July. Then the rush to tap the new fields will really begin.