SPH calls for respect for institutional framework, legal predictability and free competition in bidding for oil lots

This is an automated translation of the original release published in Spanish.

SPH statement

The Peruvian Hydrocarbons Society (SPH) considers it essential for the Government to ensure respect for institutionality and legality in the process of concession of oil blocks with expiring contracts, in order to guarantee the predictability of private investments in hydrocarbons.

The intention to directly transfer to Petroperú, through a Supreme Decree, the concession of the lots located in Talara (I, VI, Z-2B and X), whose contracts are about to expire, requires a deeper constitutional and legal analysis.

The Constitution of our country, as well as the Bilateral Investment Protection Treaties (BITs) signed by the Peruvian State, guarantee the principle of equal treatment and non-discrimination between public investment and national and foreign private investment. This norm allows free competition to be ensured for the benefit of society, which implies granting the opportunity for private investors to have the right to compete on equal terms with state-owned companies, which to participate must be subject to the same standards and requirements that is required of the private sector.

A bidding process for these lots would generate greater competition, which would result in better investment conditions, payment of royalties and canons, and also greater production to supply the new Talara Refinery.

Finally, the SPH considers it very important to guarantee the continuity of the operations of the lots whose contracts are about to expire, in order to safeguard jobs and royalty and canon payments to the Piura region. These lots require investments that promote the drilling of wells in order to avoid the decline of the fields and increase their production, risky activities that the private sector is able to carry out, allowing Petroperú to allocate its income to meet its needs. operational priorities.