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Peru resuming oil production?

Peru's government wants to increase oil production in some of its inactive Amazon fields at a time when world oil prices are rising.

One of the areas which should be restored is Block 192, the Andean country’s largest field. Block 192 is located deep in the Amazon jungle in northern Peru and has been one of the country’s leading oil producers for decades.

It is also the source of extensive environmental damage to the surrounding rainforest, which is the main reason why pumping stopped two years ago. Oil from hundreds of previous spills still seeps into the topsoil of the tropical soil, covering native plants and leaking into streams that flow into the mighty Amazon River.

Oil in flag of Peru

In 2016, state-sponsored testing of 1,138 people in more than three dozen communities in this oil-producing region showed that about half had high levels of lead, arsenic and mercury in their blood, which the government says is likely due to exposure to oil.

Read also: Covid fears sent crude oil down

Rising energy prices are becoming a problem in Peru, and the country will once again try to take steps to become as self-sufficient as possible. Western sanctions against Russia, a major oil exporter, have taken millions of barrels a day out of an already tight global market. This is squeezing drivers at the pumps, hurting farmers and traders and driving up inflation.

Long road to self-sufficiency

Peru imports 80% of its oil, petrol and diesel. President Pedro Castillo is determined to reduce that share. His government has run the struggling state oil company Petroperu and has resumed oil production for the first time in decades, but it is still below 1 000 barrels a day. At its peak in 1980, Petroperu’s production was around 200,000 barrels a day, a figure that plummeted following privatization, when the company stopped production and focused on refining and distribution.

Bruno is an Investment enthusiast with several years of experience in the industry. He enjoys following the latest news and technology trends...

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