Peru Aims to Launch Auction of 26 Oil Concessions in the Amazon this Year

Peru’s government intends to call for bids on 26 oil concession blocks in the country’s Amazon rainforest later this year, according to the head of government oil supervisory agency Perupetro.

The plan to auction those oil blocks has been delayed due to the prior consultation law, which requires the government to consult with indigenous groups that could be affected by mining and energy and other development projects in their territories.

Perupetro’s president, Luis Ortigas, said the agency is to consult with about 40 indigenous communities before launching the auction for the 26 concessions in the Amazon.  He said the international auction is planned for before the end of 2013.   No details have been given on which blocks are to be up for auction.

Meanwhile, on Friday, Perupetro announced a call for bids on the concession of nine offshore oil blocks, which could attract investments of at least $450 million. The blocks are seven miles offshore, two blocks are in the Salaverry-Trujillo basin on the north coast, three blocks are in the Lima-Pisco area, and three off the south coast near Mollendo.  The contract model considers that once the commercial discovery of oil is made, the state oil company Petroperu should have a 25% share in the venture.

The auction is the first to be held by the current government. The last time the government launched a round for oil bids was in 2010.

“This exploration will represent a minimum investment of $450 million for the companies that win the blocks, taking into account the maximum time frame of seven years to realize their operations,” state news agency Andina reported Ortigas as saying.

Perupetro said some 20 firms are interested in the auction, including those in the U.S., Europe, Asia and other Latin American countries.

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