Peru’s Oil and Gas Sector Stalls at Zero Growth Amid Critical Challenges

The Ministry of Economy and Finance reports that Peru’s oil and gas production will close 2025 with zero growth, following a 3.6% drop in the first half caused by plant and pipeline maintenance.

Production setbacks began when Las Malvinas gas plant and the Transportadora de Gas del Perú pipeline shut down for repairs. Camisea gas and condensate wells also paused operations.

These interventions cut natural gas output by 5% and gas‐liquid condensates by 10%, while PetroTal’s Lote 95 delivered a 14% bump in crude oil.

By August, the sector averaged 43,765 barrels per day, far below domestic demand of around 300,000 barrels. The North Peruvian Pipeline remains offline, trapping nearly two million barrels valued at $130 million in storage and blocking any surge from new fields.

Investors pulled back, funneling only $133 million into hydrocarbons through April—a 5% decline from 2024. Companies cite short contract terms and mounting political uncertainty ahead of the 2026 elections as major deterrents.

Without clear signals or stable policy, firms hesitate to commit funds to long-term drilling projects. Looking to 2026, the ministry projects a 3% rebound led by the planned restart of Lote 192 and ongoing output at Lote 95.

Yet Lote 192 lacks a qualified operator after Altamesa Energy’s exit and a failed bidding process. Petroperú’s direct selection of Upland Oil and Gas still faces regulatory and financing hurdles.

Industry leaders warn that without swift clarity on Lote 192’s operator, fresh investment will stall. They also stress the need to revive the North Pipeline to move crude from Lote 192 and Lote 8.

Reactivating these assets requires political commitment and financial backing that currently remain uncertain. Beyond these fields, Peru could tap northwest blocks 10 and Z-69 to bolster production.

These sites already produce and may attract private capital for incremental drilling. Chevron plans to evaluate its permits and begin work by late 2026. Still, any gains hinge on contract reforms that offer longer terms and clearer cost recovery.

Natural gas remains crucial for half of Peru’s electricity mix. The ministry forecasts a rebound in natural gas and liquid gas output in 2026, driven by Lote 88 and rising thermo-electric demand.

Yet industry experts caution that exploration must accelerate to replace depleting reserves. Failure to secure new discoveries risks energy shortages and greater import dependence.