LIMA, June 27 (Reuters) - Peru's state-run oil company

Petroperu is in talks with five firms, including Canada's

PetroTal ( PTALF ) and U.S.-based Upland Oil and Gas, as it seeks

a partner to reactivate a key Amazon oil block, a company

executive said late Thursday.

Tomas Diaz, manager of Petroperu's exploration and

exploitation unit, told Reuters the company expects to reach an

agreement for Lot 192 by mid-to-late July.

The reactivation of Lot 192, located near the border with

Ecuador, is crucial for supplying Petroperu's newly modernized

Talara refinery. The company is grappling with a financial

crisis and significant debt following a $6.5 billion overhaul of

the plant.

"We are in a direct negotiation process," Diaz said, adding

that a meeting with PetroTal ( PTALF ) is scheduled for next week. "We

expect to select our operating partner in about two weeks; it

will then be presented to Petroperu's board for approval."

PetroTal ( PTALF ) and Upland Oil and Gas did not immediately respond

to requests for comment.

Petroperu, which holds a 39% stake in Lot 192, has been

searching for a new partner since April after Altamesa Energy

Canada, which held the remaining 61%, withdrew from the project

amid debts to suppliers and local communities.

Diaz stated that any new operator must honor existing

service agreements with community-owned companies in the area.

Oil firms in the Peruvian Amazon often face conflicts with

indigenous communities demanding local jobs and greater social

investment.

Petroperu expects the block to produce up to 12,000 barrels

per day (bpd) within six months of restarting. That output could

rise to around 21,000 bpd after the new operator completes a

drilling program.

PIPELINE TALKS

Diaz also confirmed that Petroperu is in separate talks with

PetroTal ( PTALF ) to renew a contract for crude transport through the

Northern Peruvian Pipeline.

The 1,100-kilometer (684-mile) pipeline is currently

operational but sits idle without any active contracts.

PetroTal ( PTALF ), which operates the nearby Lot 95, previously

stopped using the pipeline due to repeated shutdowns caused by

attacks on the infrastructure, opting instead to ship its crude

by barge to Brazil.

"A new crude transport contract will be positive and make

Petroperu's pipeline profitable," Diaz said.

Petroperu posted a first-quarter loss of $111 million,

improving on a $183 million loss from the same period a year

earlier.