The farm-in follows recent media speculation that Karoon was negotiating an exploration and production contract in the country’s nearby Marañón Basin.

It also follows Karoon’s initial entry in South America, when it successfully bid on five contiguous blocks in Brazil’s Santos Basin, where the 8 billion barrel Tupi oil discovery was made.

Under the Peruvian deal, Karoon will earn an initial 20% interest from Vamex – a wholly-owned subsidiary of United States company Pitkin Petroleum – in Block Z38 by funding a 2000km 2D seismic survey.

It can take an additional 40% interest, in return for 670 square kilometres of new 3D seismic data.

Karoon said the first seismic survey was expected to begin later this year, as tendering for the survey vessel was well advanced.

The Tumbes Basin is adjacent and to the north of the Talares Basin in northern Peru, with both regions containing similar source rocks.

The Talares Basin is a prolific oil and gas area with over 1 billion barrels of oil produced to date.

Block Z38 is close to the producing Amistad gas field operated by Noble Energy.

According to Karoon, geotechnical analysis of the existing data indicated the block was prospective for both oil and gas.

“Preliminary economic evaluation by Karoon indicates that any offshore development could be rapidly brought to production due to the close proximity of existing oil and gas infrastructure,” the company said.