Peru Demands Contract Renegotiation For Huge Camisea Gas Field

Lima, Sept 28 (UrduPoint / Pakistan Point News - 28th Sep, 2021 ) :Peru's government on Monday submitted a formal request to renegotiate the contract with the consortium that exploits the huge Camisea gas field, in the Cusco region, a day after threatening it with nationalization if it did not agree to pay more taxes.

Prime Minister Guido Bellido and Minister of Energy and Mines Ivan Merino delivered a letter to the offices of Pluspetrol -- which is part of the consortium with the Spanish Repsol and the American Hunt Oil, among other firms -- in Lima in order to formalize the beginning of renegotiations to distribute profits more in favor of the Peruvian state.

"We have come to start the renegotiation process, the state has to take action," Bellido told reporters.

On Sunday, he had threatened to nationalize the Camisea natural gas field -- one of the largest in South America -- if the consortium refused to renegotiate the distribution of profits.

The director of the National Society of Mining, Oil and Energy (SNMPE), Pablo de la Flor, said in a statement Monday that the threat to nationalize the oil field was "unconstitutional and puts Peru's energy matrix at risk." "What was expressed by Prime Minister Guido Bellido differs notably from what the government has been communicating in recent weeks: a message of confidence and an invitation to private investment," De la Flor said in a statement from SNMPE, which groups mining and oil companies in Peru.

He said Bellido's statement carried an explicit threat to one of the most important private investments in recent decades, one that has allowed Peru to change its energy matrix.

But energy minister Merino said that a "new renegotiation is necessary and we see it as a new pact, I believe that the conditions are in place for it and we are not going to violate any norm." Leftist Peruvian President Pedro Castillo announced earlier this month his intention to "recover" the Camisea deposit, one of his main campaign promises.

"In this people's government, we are committed to bringing cheap gas to all Peruvians. Any renegotiation will be done with unrestricted respect for the rule of law and ensuring national interests. The state and the private sector working together for a better Peru," Castillo tweeted Sunday night.

Over the past 17 years, the Camisea Consortium paid more than $9.75 billion Dollars in taxes and royalties.

More than 1.2 million homes, a sixth of all Peru's homes, currently receive natural gas.

In addition, Peru exports liquefied natural gas to Mexico, China, Japan, South Korea and some countries in Europe.