Peru

New oil legislation was passed in August 1993, leading to a return of foreign investment and the eventual privatization of the state oil company, Petroperu. Perupetro, a state agency and not to be confused with Petroperu, was established to promote, negotiate, and administer exploration and production contracts, for which Petroperu must compete with private firms. Recently, Peru's government improved the country's legal framework, improved its national economy, and reduced terrorism, all of which activities were welcomed by foreign investors. The privatization activities of Petroperu was anticipated to begin in July 1995, but was delayed due to widespread unrest and rioting. However, the first Petroperu assets were sold in June 1996 {see Endnote 77}. Recent estimates are that privatization of Peru's state oil company will raise $3 billion.

Several foreign investments recently have been made in Peru. In June 1996, Pluspetrol, an Argentine petroleum company was awarded exploration and development rights for Peru's northern oilfields {see Endnote 78}. ARCO received an exploration and production contract for a northern tract in December 1995 {see Endnote 79}. A consortium led by the French petroleum company Elf Aquitaine was awarded an exploration and production contract for an eastern tract in September 1995 {see Endnote 80}. Chevron received approval in June 1995 to begin exploration and development in the large Camisea natural gas field in Peru's southeastern region, while the Coastal Peru Ltd, the Peruvian affiliate of a U.S. company, signed an exploration and development contract with Petroperu for a tract in central Peru. Also in 1995, Occidental won a 20-year development contract for a production tract in a commercially viable field. In August 1994 Mobil's Peruvian subsidiary was authorized to begin exploration of a tract in the southern Peru. Mobil is also a partner in a 30-year exploration and development joint venture in northwest Peru. Mobil and Royal Dutch/Shell have agreed to develop the giant Camisea natural gas field in southeastern Peru through a joint venture. Mobil and Shell Oil are negotiating a contract with Petroperu for exploration and development rights to two blocks that surround two of the major Camisea fields {see Endnote 81}. Downstream, Petroperu sold 60 percent of the equity in its largest refinery (102,000 barrels per day) to a consortium led by Repsol, which included Mobil and YPF, outbidding PDVSA's Maraven affiliate {see Endnote 82}. Mobil also bought several gasoline stations from Petroperu.