Bidding Begins For Peru's Largest Oil Block In Amazon

Bidding Begins For Peru's Largest Oil Block In Amazon
Peru opens bidding for rights to develop the country's largest oil block after several months of negotiations with indigenous groups over pollution, energy regulator Perupetro says.

Reuters

LIMA, May 14 (Reuters) - Peru on Thursday opened bidding for rights to develop the country's largest oil block after several months of negotiations with indigenous groups over pollution, energy regulator Perupetro said.

Argentine energy company Pluspetrol has operated oil block 1-AB, located in Peru's Amazon forest and also known as 192, since 2001, but its contract ends in August.

Block 1-AB typically produces between 15,000 and 17,000 barrels of oil per day in Peru's northern Loreto region.

Perupetro's president, Luis Ortigas, said the winning bid would combine the most favourable financial incentives as well as the largest number of planned exploratory and development wells. He said five or six companies had expressed interest.

The winning bid would be announced on July 15, Ortigas said.

Bidding was delayed by about a month due to complicated negotiations with local communities. A Peruvian law called "prior consultation" requires the government to discuss new projects with indigenous groups that might be affected.

"This is a valuable opportunity to demonstrate that investment and the rights of indigenous people can be reconciled," Ortigas said.

Indigenous Achuar communities in Peru's north announced in March that they had reached a settlement for an undisclosed sum with energy firm Occidental Petroleum Corp, which they said had polluted their lands while operating the block from 1971 to 2000.

(Reporting by Mitra Taj; Writing by Richard Lough; Editing by Ted Botha)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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