Pacific E&P is confident it will overcome opposition to its recently started operations in Peru´s biggest crude oil production area and that it will make its two-year contract prevail against any congressional action.
Pacific "will implement a process of getting involved with the interest groups, which will generate mutual trust based on the sustainable development of the region,” Catalina Martinez, company spokeswoman, recently told Latin Business Daily by email from Columbia.
Company shares are traded both in Canada and Colombia.
The Peruvian city of Iquitos was the center of stoppages and protests against the central government's decision on Sept. 1 to hand over the crude production area, known as block 192, to Pacific E&P after a contract was signed days earlier.
During the protests, all businesses, schools and public transportation was halted for two days while police were deployed to fight groups that were trying to block access to the airport.
The protests were organized by labor unions, the regional government and several civilian organizations, which want the area instead to be transferred to state oil company Petroperu. Some of the groups also wanted to complain about pollution.
“We trust we can operate in a responsible way, coherent with the environment for the development of the Loreto region,” Martinez added.
Asked about the Peruvian congress' decision in early September -- in a vote with 71 in favor, 10 against and 12 abstentions—to hand over the area to the state oil company Petroperu, Martinez said that there is a contract signed already between Peru and Pacific E&P.
The area, which accounts for 17 percent of the total crude oil production in Peru, was given to Pacific E&P “through a signed contract… ratified by a decree… for a period of two years," Martinez said.
The contract became official on Aug. 29 just hours before Pacific E&P took possession of the area that had previously been under a long-term contract with Argentina-based Pluspetrol.
Peruvian government officials, including Energy and Mines Minister Rosa Maria Ortiz, have warned that breaching the contract with Pacific E&P could have serious consequences.
The congressional initiative is currently under review by Peruvian President Ollanta Humala who can return the law to Congress where it would have to be voted on again.
The most likely scenario, given the high number of votes in favor of the transfer, is that Congress will again approve the law but make changes to it so that the block area be transferred to Petroperu at the end of the two-year period, legislators have said in local media.
Petroperu officials have said that the company is not able to immediately operate the area, which produces just more than 10,000 barrels per day and has connections by pipeline to its biggest refinery.