Investment in hydrocarbons in Peru is recovering with a growth of 21.7% for 2024.

The recovery of investment in the hydrocarbons sector is shaping up to be one of the most encouraging pieces of news for the Peruvian economy in the short term. According to projections from the Ministry of Economy and Finance (MEF), investment in hydrocarbons is expected to increase by 21.7% by the end of 2024, recovering from the 4% contraction observed in the previous year. This projected growth is not only significant but represents the highest rate of increase in investment since 2021, marking a notable change in the sector's trajectory. The first half of 2024 has already shown compelling results, with a 58.3% increase in investment, reaching $240.4 million. This remarkable progress has been primarily driven by investment in well exploitation, focusing on lots 56, 95, and 192. Improvements in production, drilling of new development wells, and refurbishment of infrastructure have been key to this rebound. The dynamism in investment is not limited to the early months of the year, as the MEF, in conjunction with projections from Perupetro, anticipates that this trend will continue into the second half of 2024 and 2025. Lots 192 and 56 will remain the main recipients of investment in oil exploitation, while exploration will also show growth, with a special focus on lots XXIII and Z-62. One of the standout players in this growth is PetroTal, which has announced an investment of over $107 million for 2024. This investment will be directed towards drilling and operating three new horizontal wells, in addition to expanding infrastructure in Lot 95, underscoring the private sector's confidence in the country's hydrocarbon resources. Meanwhile, the natural gas sector is also experiencing a resurgence. Olympic Perú Inc. has projected an investment of $776 million over a 12-year horizon, aimed at drilling new wells and creating facilities in Piura. The implementation of this ambitious plan will depend on the approval of the National Environmental Certification Service for Sustainable Investments (Senace) for its Environmental Impact Study Modification (MEIA). Simultaneously, the reactivation of operations in Lot 8, thanks to the approval of a temporary license contract for hydrocarbon exploitation, will allow Upland Oil and Gas to restart activities with a projected investment of $54 million to reactivate 55 wells between 2024 and 2025. This reactivation is a clear indication of the companies' willingness to contribute to the recovery of the sector. Another crucial aspect of this recovery is the expansion of natural gas distribution infrastructure. Promigas Perú has announced a $50 million investment plan for 2024, focused on the massification of natural gas in the northern part of the country. This investment is vital for improving access to this resource and thus contributing to regional economic development. Cálidda, for its part, also has ambitious plans for the expansion of natural gas distribution in Lima and Callao, with an investment of $100 million in 2024 and an additional $500 million plan for the 2025-2029 period. This effort aims to bring natural gas to seven additional regions, including Cusco, Ayacucho, Huancavelica, Apurímac, Puno, Pucallpa, and Junín, which could drastically change how these regions access energy. However, these advancements are not without challenges. The need for a more extensive network of natural gas pipelines, as pointed out by the company TGP, is a critical issue for enhancing the country's competitiveness. As the hydrocarbons sector recovers, adequate infrastructure will be essential to ensure that the benefits of these investments translate into sustainable long-term economic growth. In summary, investment in hydrocarbons in Peru is on a promising recovery path, driven by coordinated efforts between the public and private sectors. However, the success of this recovery will depend on companies' ability to navigate the regulatory and infrastructure challenges that still persist in the country. Attention to these aspects will be crucial to ensure that the expected growth in the coming years materializes effectively and beneficially for all Peruvians.