[News] Given the dramatic situation of the hydrocarbon industry, companies evaluate their permanence in Peru

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The hydrocarbons sector is in a "dramatic" situation since almost a third of what was obtained in December 2019 is produced, so some companies are already evaluating whether or not they will continue their operations in the country, he warned. Monday the National Society of Mining, Oil and Energy (SNMPE).

"It is barely producing 21,000 barrels per day, when until December 2019 it was reaching 62,000 barrels per day," said Pablo de la Flor, executive director of the SNMPE.

According to De la Flor, 15 of the 26 production contracts have suspended activities due to the measures adopted by the COVID-19 pandemic and social unrest. Likewise, 9 of the 13 contracts signed for exploration activities are in force majeure.

"This difficult scenario for the hydrocarbon sector has brought as a consequence not only the contraction of investments in the‘ upstream ’, but also that companies evaluate their permanence in the country," he said.

In this context, the executive asked the authorities not to take actions that could harm the development of the hydrocarbon industry and that measures be dictated that guarantee the sustainability of operations and a good climate for investments.

 

Challenge to OEFA
On the other hand, the SNMPE assured that the Environmental Assessment and Enforcement Agency (OEFA) would be violating the ruling of an international arbitration in the case of Pluspetrol Norte, in which it was determined that contractually it does not correspond to assume responsibility for pre-existing liabilities when was in charge of the operation of the former Block 1AB.

"We are facing a questionable action by a supervisory body that, by not complying with an arbitration award, affects the image of Peru as a country in which the rule of law and legal stability for investments prevail," said De la Flor.

According to the executive director, the attitude of OEFA generates a lot of concern in the energy mining union since it scares away investments in circumstances that the sector faces one of the most severe crises in its history due to the coronavirus pandemic.

The SNMPE requested that the requirements formulated by the OEFA in matters of soil remediation be carried out in a technical way and in accordance with the legal order. Likewise, he assured that the companies in the hydrocarbon sector that work in the country do not oppose the environmental control work that the State has established.