PetroTal upbeat on sales developments in Peru

PetroTal updated the market on its sales on Thursday, with 720,000 barrels of oil under contract for export from Bayovar by Petroperu for the July lifting.

The AIM-traded firm said that, following an “accelerated and temporary” re-opening of section II of the Northern Peruvian Pipeline (ONP), which had been previously closed due to maintenance operations, Petroperu was able to deliver a “material amount” of oil to Bayovar over recent weeks.

It said the oil previously entered the ONP in 2020, and was part of the restructured oil sales arrangement with Petroperu, announced in late 2020, with the company receiving approximately $45 per barrel of value.

PetroTal said it would receive the difference between that tender price and the restructured $45 per barrel price in the contract, generating more than $60m of price adjustment revenue.

Additionally, Petroperu recently informed PetroTal that it was able to temporarily pump all the oil from Station 5, totalling approximately 550,000 barrels, to the Bayovar port.

The ONP section II has an approximate capacity of 2.1 million barrels, with an estimated 82% being Bretana oil.

Section I of the line between pump stations one and five remained closed, however, due a maintenance delay from ongoing social protests in a community near pump station one.

“We applaud Petroperu's efforts to resume partial pipeline operations in a safe and reliable way,” said president and chief executive officer Manuel Pablo Zuniga-Pflucker.

“The true up revenue to be received from this tender was previously anticipated in the fourth quarter, and will provide assurance that we can execute our shareholder strategy on time and as indicated in our corporate presentation.”

At 1115 BST, shares in PetroTal were up 5.66% at 56p.

Reporting by Josh White at Sharecast.com.