The future of Peru´s biggest crude oil production block, an area of the Amazon rainforest known as Block 192, looked uncertain amid protests and after a congressional committee voted Wednesday in favor of giving its administration to state oil company, Petroperu, even as authorities had already signed a contract with Canada´s Pacific Exploration and Production for a two-year concession.
According to information published by the Peruvian Congress, the Congressional Committee for Energy voted 12-3 in favor of handling the administration of the field for a 30-year period to Petroperu. The transfer is to follow the end of a concession of the area awarded to Pluspetrol from Argentina, which expired at the end of August.
The approval by the committee opens the way for a vote by a Congressional plenary session as early as late Thursday.
The voting will occur as thousands of people have held protests in the northern Peruvian city of Iquitos for two days demanding that the oil production area, which is yielding 10,000 barrels per day after steady decreases over the past decades, be transferred to state oil Petroperu and not to Pacific E&P.
If the area is transferred to Petroperu, there will be a conflict with a government decision in late August to sign a two-year concession contract with Pacific E&P, a Canadian company that was formerly Pacific Rubiales.
Officials at the state oil company reached by Latin Business Daily confirmed the contract was already signed.
Pacific E&P, which this year was not able to renew an exploration contract it had in Colombia over the largest oil block in that country, did not reply to two requests for comment sent by Latin Business Daily on Wednesday and Thursday.
The protests forced road closures and prevented commercial and student activity in the city of Iquitos. In addition, a group of natives occupied crude oil production Area 8, next to the Area 192, to demand environmental clean-ups.
Martin Perez, president of the main Peruvian business guild known as Confiep, said Thursday on local radio in Lima that the decision by the Congressional Committee was “completely unacceptable.”
Petroperu produced and refined crude oil until most of the company assets were sold during auctions in the 1990s. During those auctions, Petroperu lost all its crude oil production assets which left the company vulnerable as it had kept five refineries and needed to purchase crude oil to refine facing high volatility over the past decade. Legislators have said that Petroperu needs to operate the area to have access to crude oil production.
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