Neither side backing down in Peruvian social conflict

The standoff continues between the Argentine oil company Pluspetrol on one side, and the Achuar indigenous people on the other. Ever since the indigenous group seized 14 oil wells, Peruvian officials have been working around the clock to negotiate a resolution to the conflict.

In a press conference, Carlos Sandi, president of the Federation of Indigenous Communities of the Corrietes River (Feconaco), told reporters that the indigenous communities are demanding that Pluspetrol recognize their right to the land as a condition for continuing talks and lifting the protest. He added that a meeting had been planned for this week, but was suspended, “because the company did not want to recognize our rights to the land.”

Sandi explained that part of the oil company’s strategy is to recognize the rights of some indigenous groups and not others, signing agreements with just some of the indigenous communities.

Pluspetrol has been issuing press releases but Sandi’s colorful comments have received much more press coverage than the oil company’s bland reassurances of its commitment to peaceful and harmonious dialogue.

In other Peruvian oil news, the Chinese National Petroleum Corporation was officially presented to Peruvian regional and municipal authorities by Perupetro, the Peruvian state oil company. CNPC reiterated its interest in investing in the Peruvian oil industry, despite low global oil prices.

Oil prices recover, but it might be too late for Colombia

Portafolio, the Colombian business journal, reported that, despite recent signs of the beginnings of a recovery in global oil prices, the problems with Colombia’s oil industry run deeper than just the price of oil. According to the International Energy Agency, the fall in global oil prices could hit Colombia harder than had originally been foreseen.

The IEA estimates that in 2015, Colombian oil production will average just 930,000 barrels per day – less than the 1 million barrels per day goal expectation of the Colombian government, and 60,000 bpd less than 2014’s level. Furthermore, Colombia’s experience is an outlier: of the 33 countries whose oil sectors are analyzed by the IEA, Colombia’s experienced the greatest drop in expected production. The explained that this is because of the ongoing attacks against Colombia’s oil infrastructure and sub-par exploration results from Colombia’s oil sector. As a case in point, state oil company Ecopetrol announced that its production had fallen 25 percent.

Nonetheless, the Colombian stock exchange had its best day of 2015, rebounding strongly on the back of the recovery in oil prices. It would seem that, so goes the price of oil, so goes the broader Colombian economy.

It would be foolish to hold out too much hope that the recent upswing in oil prices is a sign of bigger things to come. The Colombian government should be cautious and focus on shoring up the fundamentals of its domestic oil industry and on stimulating exploration. Unless Colombia can shore up its oil reserves, production will start dropping; hopefully the IEA’s prediction will not come to pass in 2015.

Conflict continues between Pluspetrol and Peruvian indigenous group

A group of approximately 100 young protestors assembled outside of Pluspetrol’s Lima office on Tuesday to protest the oil company’s treatment of the Pampa Hermosa indigenous group. The protestors had a banner identifying themselves as “The indigenous youth defending our forest.” According to interviews with the protestors, their ambitions are greater than those of the Pampa Hermosa indigenous people. These young protestors are fighting out against “43 years of pollution by oil companies” and want the oil companies to clean up their mess.

In other news related to the conflict between Pluspetrol and Pampa Hermosa, Fernando Melendéz, the regional president of Loreto, the area in question, arrived in Dorissa over the weekend to facilitate “the first attempt at dialogue” between the conflicting parties. Meléndez asked them to have faith, adding, “The people have been abandoned, but today they have a president that listens to them, and so I am here. I am taking the time necessary to resolve the communities’ problems.”

The incident also received some international press coverage, with Vice News publishing the most well-researched and comprehensive report to date. Vice put a number on the indigenous communities’ demands, reporting that they are demanding $33 million in reparations. The Vice report did not blame Pluspetrol or the indigenous groups for the conflict, but instead laid the blame with the Peruvian government: “Under Peru's constitution, the state owns the country's mineral wealth, not those who happen to live on top of it. This has put it on a collision course with tribes campaigning for legal recognition of their ancestral lands. The state has failed to sufficiently regulate the oil sector, in spite of warnings issued by its health and environment ministers over pollution levels.”

Drama for the Colombian mining sector

According to Luz Stella Ramírez, vice president of the National Mining Confederation, the Colombian mining sector has planned a national strike for February 18 to protest the Colombian government’s actions against the sector. According to the Confederation, the government has violated promises that it made last year.

In other mining-related news, China announced that, for the first time in a century, it would reduce its consumption of carbon, looking to boost renewable energy’s share of the country’s energy consumption to 20%. The move could have significant consequences for Colombia, as Colombia is the world’s fourth-leading coal exporter, with the mineral comprising 12% of the country’s exports. Compounding the effect of reduced remand, global coal prices have also been falling for several years. One possible solution is for Colombian companies to diversify their mining portfolio with out leaving the mining industry entirely.

Colombian coal companies aren’t the only ones suffering, as Gran Colombia Gold and AngloGold Ashanti, two of the leading gold mining companies in Colombia, have both suffered rough weeks. To add insult to injury, Goldex, the main gold trading company in Colombia, in the country is being investigated for supposedly having laundered 2.3 billion Colombian Pesos. Gold mining companies are also battling depressed global gold prices, and on a local level, have to contend with the growing scourge of illegal mining in Colombia. Officials are worried that falling foreign investment in the mining sector will spur the growth of illegal gold mining.

Progress on Peru's oil field standoff

On Friday, the Interethnic Association for the Development of the Peruvian Jungle (Aidesep) expressed solidarity with the demands of the indigenous people who seized 14 oil wells owned by Pluspetrol, and criticized the Peruvian government for its slowness in organizing a dialogue between the oil company and its opponents. Aidesep, an umbrella organization for dozens of Peru’s indigenous groups, specifically called out the Presidency of the Council of Ministers and the National Office for Dialogue and Sustainability (ONDS), and noted that the Peruvian government has already declared an environmental emergency in Pampa Hermosa’s river valleys due to the oil extraction. Once again, the Pampa Hermosa indigenous group has demonstrated its communications savvy.

Possibly in response to the criticism, the ONDS on Sunday organized a meeting between representatives of Pluspetrol and the indigenous communities in the Loreto region. The ONDS High Commisioner, Julio Rojas, appreciated both parties’ disposition to try to find consensus through dialogue, and called on the indigenous people to prioritize the use of dialogue instead of the use of force to achieve its social and environmental goals. Ana Jara, president of the Council of Ministers, expressed confidence that significant progress would be made towards a solution during the meeting.

In unrelated news, the Peruvian press highlighted Bloomberg’s report on the resiliency and strength of the Peruvian economy. Bloomberg particularly praised Peruvian president Ollanta Humala for his foresight in attracting investment to energy and agriculture projects in order to reduce the country’s dependence on its mining sector. Despite this dependency, according to the president of Minas Buenaventura, the Peruvian mining can stay strong and continue to develop even with lower international mineral prices. The outlook is good for the Peruvian economy.