Peru oil ambitions get a reality check

Low oil prices are forcing Peru’s government to reevaluate $2 billion it planned to invest in an oil refinery and new pipelines in the Amazon jungle, the country’s oil minister said Thursday.

Suspending the pipeline project could put Peru’s ambitions to become a net oil exporter on hold.
The upgrades would boost the transport and refining of heavy crude from deep in the Amazon jungle and include a $1 million modernization of the Talara oil refinery in northern Peru, Oil and Mining Minister Pedro Sanchez told foreign correspondents in a news conference.

The modernization of Talara would expand capacity from a daily 62,000 barrels to 95,000 barrels and allow for the processing of heavier crude. The government began the formal process to hold an international auction to choose a construction company, but the modernization project is now in doubt.

Peru is also reviewing a project to build pipelines deep into the northern Amazon jungle so that Paris-based Perenco SA can transport heavy crude from a newly opened oil block.

AP