Peru Expects Oil Pipeline to Stay Closed at Least 6 More Months

Reuters, July 27, 2016

Peru's oil pipeline will likely remain closed for at least another six months following two spills that first halted its daily transport of 12,000 barrels in early February, state energy agency Perupetro said Tuesday. A third oil spill in June prompted Peru to dismiss the head of state-owned energy company Petroperu, the owner of the 1,106-kilometer (687-mile) pipeline that moves crude from the Peruvian Amazon to the Pacific coast.

"It seems ... it is going to be paralyzed six months or more," Perupetro President Rafael Zoeger said about the pipeline in a news conference.

Perupetro is the state agency that oversees public energy contracts while Petroperu is the state energy company that commercializes, distributes, and transports oil products in Peru, a relatively small oil producer. Zoeger said that as a result of the pipeline closure, oil output has stopped at block 192, operated by Pacific Exploration & Production Corp, and block 67, developed by French oil company Perenco. Zoeger added that if it takes a long time to reopen the pipeline and global crude prices increase, the companies might restart production and transport crude via river barges.

Peru now produces about 37,000 bpd, Zoeger said, down from 58,000 last year and more than 150,000 three decades ago. Since 2011, there have been 23 leaks from the four-decades-old pipeline, according to the ombudsman's office.

(Reporting by Teresa Cespdes; Writing by Mitra Taj; Editing by Sandra Maler)

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