Oil and gas zones cover one-quarter of the Peruvian Amazon

Posted: 3 February 2006

The Peruvian Amazon, a region that still holds some of the most pristine biodiverse rainforests on Earth, is facing an unprecedented wave of new oil and gas exploration.

"Around 54 million acres of remote and intact rainforest is now zoned for oil and gas activities in Peru," said Dr Matt Finer, staff ecologist at Save America's Forests in Washington, DC. "This amounts to more than 25 per cent of the entire Peruvian Amazon."

Gas pipeline being laid in the Peruvian Amazon. Photo: Adam  Goldstein/Amazon Watch
Gas pipeline being laid in the Peruvian Amazon. Photo: Adam Goldstein/Amazon Watch
Gas pipeline being laid in the Peruvian Amazon© Adam Goldstein/Amazon Watch
After Peru had not had any new major oil discoveries in decades, the government lowered royalties on exploration in 2003. This move sparked a resurgence of interest in Peru among foreign oil companies.

Oil rush

Before 2003, there were seven active oil and gas blocks in the Peruvian Amazon being operated by foreign oil companies. Since 2003, fifteen blocks have been leased to foreign oil companies, including nine in 2005. In addition, seven new blocks were created and placed on the market in 2005.

"Of the 29 oil and gas blocks in the Peruvian Amazon, over 75 per cent have been leased or created in just the past three years," said Finer, who has spent years working as an ecologist in Peru, Ecuador and Bolivia.

These concessions are operated by a total of nine foreign oil companies, with Occidental (US), Hunt Oil (US) Repsol (Spain), and Pluspetrol (Argentina) all operating multiple blocks.

The northwest and southern Peruvian Amazon are the target of intense oil and gas exploration, and Finer says the northwest region is almost entirely covered by a contiguous mass of nine oil blocks.

In the south, "oil and gas blocks now sandwich Manu," said Finer of Peru's Manu National Park.

This area west of Puerto Maldonado was declared a National Park in 1973 in order to protect its great diversity of plants and animals living in pristine areas. It was declared a Biosphere Reserve in 1977 and a UNESCO World Heritage Site in 1987. The success in preserving such a large tract of pristine rainforest is largely due to the inaccessibility of the area. Several indigenous groups live inside the park, and some of them have not yet had contact with outsiders.

To the west of the park is a contiguous mass of eight blocks - including the massive gas reserves of Camisea - and to the east of the park are three enormous blocks that cover much of the Madre de Dios region.

Indigenous children on the banks of the Camisea River in 1998, before the gas development. Photo: Racimos de Ungurahui/Amazon Watch
Indigenous children on the banks of the Camisea River in 1998, before the gas development. Photo: Racimos de Ungurahui/Amazon Watch
Indigenous children on the banks of the Camisea River in 1998, before the gas development.© Racimos de Ungurahui/Amazon Watch

Oil pollution

Located in the remote Urubamba Valley in the south-east Peruvian Amazon, the $1.6 billion Camisea project includes two pipelines to the Peruvian coast cutting through an Amazon biodiversity hotspot.

Gas extraction in Camisea, which began in August 2004, has been controversial because the area is remote, megadiverse, and home to indigenous peoples. One of the four Camisea wellsites is located within a Machiguenga community, and the other three are within the Nahua Kugapakori Reserved Zone, established to protect indigenous peoples in initial contact and voluntary isolation.

"Two weeks ago, the Camisea pipeline ruptured, spilling around 5,000 barrels into four local rivers," said Maria Ramos of the Washington, DC based conservation group Amazon Watch, describing a spill on November 24. "This was the fouth liquid petroleum spill of the Camisea pipeline since the start of operations 15 months ago."

The spill took place following a break in the pipeline carrying gas from Camisea to the Peruvian coast in the Cordillera de Vilcabamba, District of Echarte, department of Cusco, affecting Machiguenga, Yines, and Ashaninka communities.

Following the spill, the indigenous federations of the Camisea region issued a statement confirming river contamination. They blockaded one of the rivers to dramatize their demand for clarification of the cause of the spill and repairs to damaged areas. Four days into the blockade 2,500 local residents were participating.

"We'll continue the non-violent blockade of the Urubamba River in order to pressure the government and the companies to take appropriate measures," said Luis Vasquez Rios, protest spokesperson and president of CECONAMA, one of three indigenous organizations involved in the blockade.

Finer says the native peoples of the northwest Peruvian Amazon, the Achuar, also report severe oil pollution of their traditional lands.

Species rich

The Peruvian Amazon makes up a large part of western Amazonia, a megadiverse region to the west of the Brazilian Amazon and to the east of the Andes Mountains. Finer points to recent scientific studies revealing that Amazonian plant, tree, bird, amphibian, and mammal species richness all peak in the western Amazon.

"One of the major fears conservationists have," he says, "since virtually all of the blocks are in roadless rainforest, is that oil and gas companies will have to build new road networks and pipeline right-of-ways to access drilling platforms. These new corridors would provide unprecedented access to previously remote rainforest, leading to colonization of indigenous territories and accelerated deforestation rates."

Texas-based Hunt Oil's consortium faces the suspension or loss of its concession to run the Camisea trans-Andean pipeline carrying gas from the Peruvian Amazon to the Pacific Coast. Four major liquid gas spills from the pipeline in its 15 months of operation have prompted an emergency review by a joint technical commission from Peru's Ministry of Energy and Mines (MEM) and energy regulator (OSINERG).

The commission is considering an independent audit of the entire 430 mile Camisea pipeline which potentially could shut down pipeline operations until the safety of the pipeline can be guaranteed. The audit is one demand made by indigenous groups, along with more careful oversight of pipeline operations by government officials.

Unfavorable audit findings could result in suspension and/or the revocation of the concession from the consortium, Transportadora de Gas del Perú (TGP), of which Hunt Oil is the majority stakeholder and Buenos Aires-based Techint is the operator.

Despite unresolved issues, Hunt Oil is now beginning phase II of the Camisea project. To date, the company has refused to consider drilling methods such as Extended Reach Drilling that would minimize negative impacts to the pristine areas affected. Environmental groups regard the $5 billion Camisea project as one the most harmful in the Amazon today. They say the project has already caused "significant damage" to the Lower Urubamba Basin, among the most biodiverse and sensitive rainforest ecosystems on Earth, and disrupted the health and livelihoods of local indigenous populations who rely on local rivers for their survival.

In a December 2005 letter to Hunt Oil CEO Ray Hunt, Amazon Watch, Oxfam America, Environmental Defense, SEEN, World Wildlife Fund, Friends of the Earth and the Amazon Alliance called on the executive to "halt the pipeline's operations and conduct a comprehensive hydrostatic test of the entire pipeline" in order to prevent future spills.

Related links:

View a map showing the oil and gas zones in Peru.

Amazon Watch

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