Peru's prime minister threatens to nationalise Camisea gas field

If the consortium formed by Argentina's Pluspetrol, Spain's Repsol and US-based Hunt Oil, among other companies, refuses to "renegotiate" the distribution of profits in favour of the Peruvian state
Peru's Prime Minister Guido Bellido

PHOTO/REUTERS  -   Peru's Prime Minister Guido Bellido

Peru's Prime Minister Guido Bellido threatened on Sunday to nationalise the Camisea gas field if the consortium formed by Argentina's Pluspetrol, Spain's Repsol and US-based Hunt Oil, among other companies, refuses to "renegotiate" the distribution of profits in favour of the state.

In a message published on the social network Twitter, Bellido assured that the government is calling on the consortium to agree to hand over a greater share of the profits obtained from the sale of gas from one of Latin America's largest gas fields to the state.

"We call on the company that exploits and markets Camisea gas to renegotiate the distribution of profits in favour of the state. Otherwise, we will opt for the recovery or nationalisation of our field," Bellido published without prior warning.

The renegotiation of the concession contracts for the exploitation of Camisea, located in the Amazonian jungle of the southern region of Cusco, was a campaign promise of the socialist Peru Libre party, which Bellido is a member of, and a native of Cusco.

Several hours after the great commotion generated in Peru by Bellido's message, the president of Peru, Pedro Castillo, qualified that "any renegotiation will take place with unrestricted respect for the rule of law and looking after national interests".

"In this government of the people, we are committed to bringing cheap gas to all Peruvians. The state and the private sector working together for a better Peru," added Castillo, who this week told the United Nations that his government is not communist and would not practice expropriation.

More effusive was Peru Libre's secretary general, Vladimir Cerrón, who welcomed Bellido's message and encouraged a nationalisation that is currently not allowed under the Peruvian constitution.

Logotipo de la empresa petrolera española Repsol
REUTERS/Sergio Pérez - Spanish oil company Repsol logo
Pluspetrol, majority partner

Within the Camisea consortium, Pluspetrol is the majority partner with a 27% stake, followed by US-based Hunt Oil (25.1%), Korea's SK Innovation (17.6%), Spain's Repsol (10%), Argentina's Tecpetrol (10%), and Algeria's Sonatrach (10%).

Since 2019, Pluspetrol's purchase of SK Innovatión's stake has been blocked by the Peruvian state's requirement to sign an anti-corruption clause obliging the buyer to divest its rights to the field in the event that corruption is found in Camisea.

Since 2004, Pluspetrol has been in charge of the exploration and exploitation of the natural gas reserves in blocks 56 and 88 of Camisea and their subsequent processing at the Malvinas fractionation plant, located on the banks of the Urubamba River, where liquids and dry gas are separated.

From that plant, the gas is transported by a pipeline of more than 500 kilometres to the port of Pisco, on the Pacific Ocean, where there is a fractionation plant for export and for domestic consumption in homes.

El logo de la compañía estatal de energía Sonatrach en la sede de Argel, Argelia
REUTERS/RAMZI BOUDINA - The logo of the state energy company Sonatrach at its headquarters in Algiers, Algeria.
0.5% of GDP in royalties

Under normal conditions, Camisea produces between 43 and 48 million cubic metres of gas per day, from blocks 56 and 88 in charge of Pluspetrol and 57 in charge of Repsol, according to the Supervisory Body for Investment in Energy and Mining (Osinergmin).

In this way, Camisea produces 92% of Peru's controlled natural gas production and its gas allows the generation of more than 40% of the electricity consumed nationally.

During its first 15 years of operations, Camisea had a turnover of 30 billion dollars after an investment of 5 billion dollars and generated royalties for the Peruvian state of 8 billion dollars, equivalent to 0.5% of the country's Gross Domestic Product (GDP).

This is not the first time Bellido has launched controversial messages on Twitter, as earlier in the week when he urged Foreign Minister Óscar Maúrtua to resign if he did not agree with the executive recognising Nicolás Maduro as the legitimate president of Venezuela.