Indigenous protesters continue to prevent repair of North Peruvian energy pipeline; government likely to seek negotiated solution

On 21 February, Peru’s National Mining, Petroleum, and Energy Association (SNMPE) estimated current daily losses over the halting oil transportation from the closure of the North-Peruvian pipeline at USD1 million. The pipeline has operated on a limited basis since October last year when, according to state owned oil company Petroperú, it was damaged by an “attack” during a community protest staged by the Mayuriaga indigenous group, demanding a halt to oil activities in the region and objecting to the results of municipal elections on 7 October. The damage produced an initial spill of nearly 8,000 barrels of oil. Since then, Petroperú has restored normal operations to sections 1 and 2 of the pipeline, between San José de Saramuro in Loreto to Bayóvar in Piura, but the 252 km northern section remains out of service. The Mayuriaga have repeatedly prevented Petroperú from reaching the site to repair the pipeline, leading to ongoing production losses and environmental damage. On 8 February, the government called an environmental state of emergency in the Manseriche district of the Datem province in the Loreto department.

Significance: The suspension of oil transportation at the North-Peruvian pipeline has significantly affected oil production from Block 192 (currently Peru’s second largest oil facility after CNPC’s Block X), which had been producing 12,000 barrels per day (b/d) – before the pipeline being disrupted – according to Canadian project operator Frontera Energy. If the pipeline remains inaccessible for repair and out of service, Frontera is unlikely to renew its service contract when it expires in September. To enable pipeline repairs, the firm has requested police assistance to remove the blockade, but the government appears reluctant to risk violent confrontation. Instead, the government is likely to continue to seek a negotiated solution to a range of Mayuriaga grievances, which cover political representation and social spending. This would be confirmed by government statements seeking further discussions. Further spills not attributable to “attacks” would indicate Petroperú’s inability to maintain and operate the Norperuano pipeline adequately, increasing infrastructure disruption risks for oil-producing blocks. An indicator of increasing protest risks would be local and indigenous groups blockading the Marañón River, disrupting hydrocarbon, fuel, and cargo transport.