Wednesday, November 18, 2015

Advances in Peru's battle against illegal mining

On Wednesday, the National Park Rangers in Peru (Sernanp) announced that it had successfully forced illegal miners out of the country’s Amarakaeri Communal Reserve, located in the illegal mining hotbed of Madre de Dios. The raids against the illegal mining encampments were joint interdepartmental raids involving, in addition to the Sernanp, the national police, the regional government, and special prosecutors.

In oil-related news, Peruvian state oil company Petroperu said on Tuesday that it was adjusting its contract with GeoPark Limited in order to win government approval for the contract. Petroperu President Germán Veleasquez explained to the press, “Oil is a risky activity, and we're transferring the risk to GeoPark.” Reuters noted that the Peruvian oil company has been waiting for government approval of the joint venture ever since the contract was originally agreed to in 2014.

Petroperu will lower its share of control of block 64 in the Peruvian Amazon from the agreed-to 25%. Peruvian President Ollanta Humala, who originally campaigned on promises of turning Petroperu into a major energy player, worries that prematurely turning Petroperu back into an oil producer could endanger public funds.


El Comercio published an opinion piece on the terrible management of Petroperu, lending additional weight to the argument that the company might not be ready to become a major oil player. Petroperu had originally announced a loss of $94.2 million for 2014, but after a detailed external audit, those net losses rose to $218 million. The oil company was caught flat-footed by falling oil prices, and has not responded well to the new global market conditions.

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