On Friday, Peruvian state-owned oil company Petroperu announced
that it had decided not to exercise its option for a 25% stake in the block 192
oil field, as allowed for under Peruvian law. Ultimately, Petroperu awarded
the newly-renamed Canadian oil company Pacific Exploration and Production Corp
a two-year service contract to operate block 192. The contract decision
came not a moment too soon, as the 30-year contract with the block’s current
operator, Pluspetrol, was set to expire in just 8 days.
Petroperu President German Velasquez explained
that the oil company passed on its option because the terms of the two-year
contract carried too much risk and not enough reward. He added, “And you're not
going to be able to take advantage of the generation of wealth as much as in a
long-term contract.”
Despite the announcement of the contract award, the
controversy over Block 192 has not ended. Local indigenous communities in the
Loreto region had wanted
Petroperu to assume full control over Block 192 and not hand its operation over
to a foreign oil company. Loreto regional governor Fernando Meléndez told the press
that his constituents reject the contract award and are holding firm to their
demands.
As a result, local authorities, unions, and indigenous
organizations in Loreto organized
a 24-hour strike today to try to force the government’s hand and put Petroperu
in charge of the operation of Block 192. Some organizers warned
that if the government does not cave to their demands, the protests could
escalate.
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