Perenco mulls staying in Guatemala amid heightened scrutiny

Perenco, Guatemala’s principal oil producer, is in talks with authorities to determine the potential of remaining in the country, according to the upstream operator.

“The Xan and refinery licenses are due to expire in August 2025 and, through a constructive dialogue with the government, Perenco Guatemala is currently evaluating the options to stay beyond that time,” a company spokesperson told BNamericas via email.

“The Xan well that is in a protected area can no longer continue operating because it would be a violation of the existing legislation, but we expect Perenco will continue to carry out exploration and production in other areas of the country where there are no environmental protection limits,” the Central American country’s President Bernardo Arévalo said in a press conference.

Last month, energy and mines minister Víctor Hugo Ventura told lawmakers that the government is not against hydrocarbons but that the “house must be put in order.”

The government has come under increasing pressure to bolster socio-environmental oversight of upstream operations, a situation which has come to the fore with the embattled Escobal silver mine.

“Perenco Guatemala has been operating in the country since 2001 and is proud to have played an important role in the responsible development of the country’s oil resource. Today Perenco Guatemala produces 4,700 barrels of oil per day and its operation extends from the Xan field located in Petén to the Piedras Negras terminal in the Guatemalan Caribbean through 475km of pipeline. Perenco also operates the La Libertad refinery that produces 2,700 barrels of high-quality asphalt per day for the Central American and Guatemala markets,” the company said.

Perenco Guatemala is a subsidiary of Anglo-French oil company Perenco Plc.

Also read Guatemala: Icefi recommends to the Energy and Mines Commission of Congress not to amend the Hydrocarbons Law to extend the contract with the company Perenco

Current exploration and production contracts in Guatemala (Source: Energy and mines ministry)

THE NUMBERS

In the first two months of 2024, crude production in Guatemala, which along with neighboring Belize are Central America's sole hydrocarbons producers, totaled 334,680b, energy and mines ministry data shows.

Perenco accounted for 86% of the output, Empresa Petrolera del Itsmo 12% and Latin American Resources the balance.

The information reveals that oil production in 2023, 2022 and 2021 reached 1.82Mb, 2.26Mb and 2.3Mb, respectively. The ministry attributes falling output to the natural decline of producing zones.

Past government announcements of potential acreage rounds have not come to fruition, and although interested parties may approach the ministry, socio-environmental issues and uncertainty over pending reform to the hydrocarbons law would be keeping investors at bay.

Monthly oil production in Guatemala (Source: Energy and mines ministry)