Oil and Gas to Peru

Trends and opportunities

The market

Latin America is set to be one of the fastest-growing regions in terms of oil and gas production over the next decade. Its global share of oil output is said to increase from 11.5 per cent to 12.2 per cent between 2013 and 2022, maintaining a steady 6.3 per cent global share of natural gas production (Source: Business Monitor International, October 2014).

Peru has adopted a market-oriented approach to the development of its oil and gas sector and its operating environment remains one of the best in the region. Local participation is competitive and not mandatory. Companies enjoy a high degree of operational independence and investors are given legal guarantees on their investments.

Downstream regulation also permits private companies, both domestic and foreign to own and operate oil and gas stations, gas processing plants, pipeline infrastructure and refineries.

A largely under-explored onshore and offshore acreage makes Peru one of the most attractive oil and gas markets in Latin America.

Exploration and production

As of 31 December 2015, there are 66 active oil contracts in Peru:

  • 41 contracts in the exploration phase.
  • 25 in the operational phase.

For this period four exploratory wells, three confirmation wells and 81 development wells were drilled.

During 2015:

  • Audited production of liquid hydrocarbons (oil and natural gas liquids) reached an average of 149 thousand barrels per day (MBPD) lower by 13 per cent compared to 2014 (173 MBPD).
  • Oil production was 58 thousand barrels per day (MBPD) and production of natural gas liquids was 91 thousand barrels per day (MBPD).
  • Audited production of natural gas recorded averaged 1,209 million cubic feet per day - MMPCD, three per cent lower than the previous year (1,250 MMcfd).
At the closing of 2015, investments in these activities added to US$755 million (US$317 in exploration and US$438 in active operations) (Source: Ministry of Energy and Mines – Hydrocarbons Yearbook 2015).

Internal market

During 2015, 19,611.7 thousand barrels of domestic crude oil were processed and 32,330.6 thousand barrels of oil were imported. Sales in the domestic market were 85,256.7 thousand barrels of oil, where diesel reached the highest sales volume with 47 per cent, followed by LPG (22 per cent) also other important products for their demand were Gasolines and Gasohol (18 per cent), and Turbo (eight per cent.)

External market

Export volumes of products during 2015 amounted to 87,469.7 thousand barrels including LNG (50 898.9 thousand barrels). Regarding gasoline and oil, 16,707.7 thousand barrels and 2,906.5 thousand barrels were exported respectively. This drop in exports of fuels was due to falling international price of crude oil.
The volume of imports in the same year reached 60,780.1 thousand barrels, an increase of 14.6 per cent compared to 2014. Crude Oil and Diesel recorded higher volumes imported.
The trade balance registered a deficit of the order of 1,551.8 million dollars, higher compared to 2014 (US$1,529.7 million) (Source: Ministry of Energy and Mines – Hydrocarbons Yearbook 2015).


Australian companies in the oil and gas industry are used to operating in markets with conditions similar to Peru. Australia has expertise and innovative solutions for operating in countries with demanding environmental and safety requirements and remote locations, where energy is expensive and water scarce.

A lack of adequately trained personnel is also forecast over the coming years as new projects come on-stream. This could be an opportunity for Australian providers entering the market. For more information about the local market, visit Peru Petro.

The Peruvian Investment Promotion Agency (Proinversion) manages several oil and gas infrastructure and distribution projects to be granted in concession. In general, Australia has strong offerings that match Peru’s market needs, including:

  • innovation and research and development
  • drilling technologies, including offshore and onshore exploration and production (E&P)
  • geophysics
  • pipeline design and construction
  • geotechnical engineering and assessment
  • advanced safety training
  • liquefied natural gas (LNG) processing
  • rehabilitation and facility management
  • energy infrastructure, including subsea infrastructure
  • education and training for the industry
  • environmental related products and services (tailing management, water treatment plants, software)
  • communities engagement consulting
  • hydrocarbons E&P in marine reserves

Peru's recently amended environmental law is expected to support increased exploration, the streamlining of environmental impact studies and fast tracking permit approvals. The law, which came into force in July 2014, has relaxed regulations governing the extractive industries and offered additional incentives to exploration. Key amendments include:

  • fast-tracked environmental permits
  • streamlined environmental impact studies
  • curtailed jurisdiction of the Ministry of Environment over the extractives industry, including the removal of its power to exempt areas from exploration drilling
  • three year reduction on fines for environmental violations
  • re-introduction of tax breaks.

Competitive environment

There is a strong international presence in the oil and gas industry in Peru. Most players in the upstream and downstream sector, equipment, technology and service providers are multinational or global companies due to the lack of expertise, capital or technology of local players.

There are two Australian exploration and production companies with active projects in the market, as of October 2014. There are also nearly 60 equipment, technology and services companies providing services to the mining sector which could expand to the Peruvian oil and gas industry.

There are a number of challenges to future investment in the Peruvian Oil and Gas sector. Red tape is a significant hindrance to hydrocarbon development. The Peruvian Hydrocarbons Society (SPH) estimates that approximately US$2.5 billion in investments are being held back due to social conflicts and difficulties in obtaining environmental permits (Source: América Economía, March 4, 2014). The National Society for Mining, Petroleum and Energy (SNMPE), says the delay in adopting new oil and gas environmental regulations may discourage investment in the hydrocarbon sector.

Another challenge to future investment is the opposition to hydrocarbons projects from environmentalists, indigenous populations and individuals within various government agencies. In addition, oil and gas companies are still adapting to the requirements of the Previous Consultation Law with indigenous communities, derived from ILO Convention 169.

Tariffs, Regulations and Customs

The upstream sector is governed by the Hydrocarbons Law. Pursuant to this law, exploration and production licences may be granted as either licence contracts (concessions) or service contracts. Under licence contracts, extracted oil and gas becomes the property of the licensee. Resources may be booked as reserves and output sold on both domestic and international markets. Under service contracts, a private company is hired to undertake exploration and production, but resources remain under ownership of the state. Typically, the contracted party is compensated by a share in the output.

Once a contract has been entered into, the Peruvian government is unable to unilaterally alter the terms of that contract. Both local and foreign companies are allowed to bid for licences and no preference is shown for local companies. However, foreign companies must establish a domestic branch or Peruvian subsidiary, before entering a contract. (Source: Business Monitor International)

A revised version of the Hydrocarbons Law’s regulations proposed by the Ministry of Energy and Mining is being reviewed by the Ministry of Environment. This version looks for a simplification in the administrative procedures for the approval of exploration and production permits with the purpose of attracting new investors to the sector. Complementary measures benefiting oil and gas investors were approved by President Humala in July 2014, with the purpose of reversing the sluggish economic growth of the first semester.

Tax Incentives

Peru boasts an attractive fiscal regime. The taxation structure in effect at the time a contract is signed remains in effect until that contract expires, stabilising taxes across the contract period. A change in ownership has no effect on the taxation structure, as tax stability is, in essence, granted to the licence itself and not the licensees.

The government has developed tax incentives to encourage investment. The main incentives are:

  • If a licensee holds more than one licence, they may offset losses in one licence, against profits in another. Losses can also be carried forward and offset against net income derived in future fiscal years.
  • Projects with significant pre-operating stages are offered financial relief in the form of early VAT recovery.
  • The import of certain goods and inputs used for exploration purposes is exempted from custom duties, and the temporary import of goods and inputs (for no longer than four years) may also be granted tax exemption.
  • Taxes must be paid in Peruvian currency, but other transactions may be conducted in foreign currency.
  • Gas not required for domestic consumption may be sold internationally, and may be exempted from taxes, subject to governmental discretion.

Marketing your products and services

Market entry

As of May 2016, there are more than 35 Australian companies providing services to the mining sector that have offices in Peru. Setting up an office is a well-worn path for suppliers wishing to establish a sustainable presence in the Oil and Gas market. Many Australian companies develop a presence by growing a subsidiary office from Australia or an existing office in the region.

Others have acquired a local company or developed a joint venture. Relationships are very important in Peru and a local partner can provide valuable connections and networks to decision makers. Some suppliers prefer not to have a presence in Peru, instead choosing to sell into the market through distributors or agents. This approach is less capital intensive, but requires patience and a good local partner.

The best approach depends on the type of business, the appetite for risk, funds available to the company and issues around protection of intellectual property.

Some tips to keep in mind:

  • Oil and gas blocks tenders are promoted by Perupetro, which provides publicly available information free of charge.
  • Infrastructure projects, including the design, finance, construction, operation and maintenance of pipelines, supply systems and facilities are promoted by Proinversion.
  • The mining, equipment, technology and services industry (METS) is highly competitive and most major multinational vendors are in the market.
  • Setting-up in Peru sends a strong message to customers signalling commitment to the market and will often convert interest into a solid commercial relationship.
  • Given the focus on productivity in the oil and gas industry, prepare a concrete value proposition which demonstrates clearly how your solution has saved customers money in previous projects.
  • Understand Peruvian oil and gas company structures and their process for procurement. To be successful you need to be patient, persistent and polite.
  • It is important to consult with headquarters and the Exploration and Production (E&P) sites while conducting business development. The E&P sites tend to be in remote locations in the Amazon or the northern coast and headquarters tend to be in Lima.
  • Consider participating in oil and gas conferences held in Peru, such as INGEPET or those promoted by the SNMPE or SPH Sociedad Peruana de Hidrocarburos (SPH). They are an excellent way to meet customers and gather intelligence.


Austrade is actively promoting Australian oil and gas policy, as well as the capabilities and innovative solutions that are supporting the oil and gas sector to attain better efficiency and productivity.

The media report on new technology, services and products that respond to Peru’s challenges.

Some tips to help your media promotion:

  • Have communications collateral available on your company in Spanish. This could be a local website and printed collateral i.e. flyers.
  • Customise your value proposition and key messages pitch to match the requirement.
  • Send content to industry media about your company, product and service.

Links and Industry Contacts

Oil & Gas

Sociedad Nacional de Minería, Petróleo y Energía (SNMPE)
Sociedad Peruana de Hidrocarburos (SPH)


Ministry of Energy and Mining
Ministry of Environment (MINAM) 


Revista ECOMIN
Revista Horizonte Minero
Revista Oro Negro
Revista Petróleo, Gas & Negocios

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

Contact details

The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

  • develop international markets
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Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.