Environmental and health remediation costs are set to soar as Petroperú prepares to take over Block 192 in northern Amazonia in September on a 40-year concession. This will follow a prior consultation process in progress with the largely indigenous population.
According to the Defensoria del Pueblo, despite the millions of barrels of oil extracted from their territories for nearly fifty years, the communities still lack basic services including electricity, health and education.
Block 192 is also a byword for oil spills and contamination with heavy metals, notably of the water sources on which the population depends for subsistence (fishing as well as drinking water). A UNDP report carried out for the government in 2018 identified 32 sites for urgent remediation, the preliminary stage of which has already run through US$15 million dollars of restoration work.
The Ministry of Energy and Mines has assigned a further US$53 million of its 2019 budget for remediation of contamination by oil exploitation, but the total cost for Block 192 is likely to be much higher, let alone for the Amazon region’s many other concessions under exploitation.
As a parastatal, Petroperú was an unlikely winner of the concession, and already faces the uphill but essential task of renovating or even replacing the Northern Peru pipeline. The indigenous federations of the area and their national organisation AIDESEP are also much better prepared than previously for negotiations over environmental controls, benefits for the communities, and demands for adequate remediation.
On behalf of the communities, AIDESEP has separately challenged in detail the new draft Law on Hydrocarbons intended to water down significantly environmental standards and the consultation rights of populations affected.