Dallas Morning News Gets a Few Facts Wrong

The Dallas Morning News published an article by Jim Landers "Hunt Oil Making Big Play in Peru." The article gets some basic facts right about the project, but makes many blunders, too. A few inaccuracies:

The article claims that NGO Amazon Watch "hired engineers who said the pipe steel and welds were defective." This refers to a study done by the NGO E-Tech International, that was not paid for by Amazon Watch.

According to the article, Barbara Bruce, Hunt's general manager of Peru LNG said, "the first of five leaks in the gas liquids line was caused by a weak weld." In the next paragraph, the article states that the companies insist that the welds are not fault and that the Inter-American Development Bank's auditors have found no problems so far with the quality of the pipe.

The map incorrectly shows the new pipeline (blue) will be constructed going from the Amazon region (Campo Las Malvinas), to the coast at Pampa Melchorita. In fact, the companies indicate that they are not laying a new pipeline in the Amazon region because of the environmental risks.

Of the existing pipeline, the article claims that they "were built in the six-month dry season of 2003-04." Actually, the right-of-way for much of the pipeline in the Amazon region was cleared in 2002. Because of delays in construction, some areas of the pipeline were subjected to two rainy seasons before they were reforested, resulting in excess erosion documented here.

According to Carlos Abanto of the Lima-based association, Labor. He never said: "If the IDB participates, it will be much better." as was quoted in the article. He did say that the IDB claims its participation in the project to be a guarantee for the project, but that this has not occurred as evidences by the spills, community problems, and contamination.

Some other interesting quotes from the article:

About 600 people are now walking the line to identify weak points, clear them out and clean them out," said Ms. Bruce.

But I think the consortium is a very responsible group of guys. ... In the end, Hunt will do well here." Prime Minister Pedro-Pablo Kuczynski who is a former advisor to Hunt Oil.

Mr. Garcia met with Hunt officials last week, and endorsed the Camisea project "wholeheartedly," Steve Suellentrop, Hunt Oil.

Peruvian Congressional Committee Recommends Renegotiating Camisea Contract

A Peruvian congressional committee issued a report yesterday evaluating the impacts of pipeline accidents. The report confirms that the project has contaminated the environmental in the neighboring indigenous communities. It also contains 17 recommendations, among them that the government renegotiate the contract for Block 88. The president of the commission, Carlos Armas, assigned responsibility for the accidents to the contractors Pluspetrol, TGP, Techint, the Ministry of Energy and Mines, and regulator OSINERG. He also called for the removal of OSINERG president, Alfredo Dammert. The report will now be debated by the Congress and submitted to the Public Ministry which will investigate if there have been any violations of the law.

Article in La Republica (in Spanish)

Dallas Morning News: Garcia Win 'Good News' for Petroleum Companies

Columnist Jim Landers of the Dallas Morning News writes from Pluspetrol's Malvinas camp to say that Alan Garcia's win in Peru's elections is "good news" for multinational petroleum companies." From the article:

The oil companies argue that Camisea is clearly Peru's golden goose. And there is much more to come.

Hunt Oil has the lead for the next big expansion from Camisea, which will be a $2.5 billion liquefied natural gas export project. A new pipeline across the Andes will deliver the gas to a Pacific coast liquefaction plant, where superchilled tankers will take the LNG to markets in Mexico and California.

That will mean a lot more money for Peru. It will also, of course, make money for Hunt and its LNG partners in Spain, South Korea and France.

Article in the Dallas Morning News

Alan Garcia Government will Renegotiate Camisea Contract

Following up on a campaign promise, the Director Economy for President Elect Alan Garcia's Apra party, Enrique Cornejo, confirmed that the new government would renegotiate its contract with the Camisea consortium within 6 months of taking office. Reason given: increase in oil prices since the contract had been signed. Peru 21 article (Spanish).

Dead Fish Prompt Rumors of New Camisea Spill

As of June 6, 2006, several communications have come from organizations working in the Lower Urubamba including the Machiguenga council, COMARU and the Escuela para el Desarrollo have reported evidence of some contaminant in the Camisea River that has been killing fish. The Community Monitoring Program (PMAC) has not yet issued a report. Pluspetrol has evidently denied that there has been any spill and has blamed the fish deaths on the use of the toxic plant barbasco for fishing in one of the Camisea's tributaries in the community of Segakiato. Tensions are apparently high between the company and the communities, and the latter are calling for independent experts to come and assess the reason for the fish dye-off. The communities are reporting a contaminant much stronger than the traditionally-used barbasco.

Ministry of Energy and Mines Will Announce Pipeline Auditor in July

On July 13, 2006, Peru's MEM will announce the company or consortium that will carry out an independent audit of the Camisea Gas project. The government's audit will examine the design, construction, and materials used in the pipeline's construction and any risks to public security. The audit is being financed by the pipeline consortium, TGP, through an agreement with the Peruvian government. Since the project began operation in August 2004, there have been five accidents, including an explosion in March that left local residents hospitalized.