Pedro Castillo denied the expropriation of an Argentinian-owned gas consortium | The President of Peru has ratified the will to renegotiate contracts to improve the participation of the State

From Lima

President Pedro Castillo left his Prime Minister’s announcement of a possible expropriation of gas fields without words, in the hands of a transnational consortium in which two Argentinian companies. Castillo was quick to try to ease the turmoil caused by statements by ministerial chief of staff Guido Bellido, who announced that while the Camisea Consortium, which operates and distributes 92 percent of the gas produced in the country, no ‘would not agree to renegotiate Under the terms of the contract with the State, denounced by various sectors for having favored the private consortium to the detriment of the country, the gas fields would be nationalized. The president ratified the government’s desire to renegotiate gas contracts to improve state participation and lower its price for consumers, but refused a possible nationalization. Castillo assured that this renegotiation would be done “with full respect for the rule of law”.

Bellido started the storm with his surprise announcement. “We have called on the operator and marketer of gas Camisea to renegotiate the distribution of profits for the benefit of the State. Otherwise, we will opt for the recovery or nationalization of our deposit, ”declared the ministerial chief of staff. The surprise was not in the call for renegotiation, an intention that the government has made clear from the start and that it is a campaign offer, but in the announcement of a possible expropriation.

“Communist threat”

Bellido’s message that opens the door to nationalization – which Castillo then closed – was used by the right-wing political and media opposition to bolster their attacks on the left-wing government, seeking to create a scenario of uncertainty and afraid, speaking of “communist threat “and” nationalization of the economy “. The attacks take place in a context where a sector of the opposition, very present in Congress, and a large part of the media, are maneuvering to destabilize the Castillo regime. Businessmen threatened to withdraw investments.

Seeking to calm things down, Castillo wrote on Twitter: “In this popular government, we are committed to bringing cheap gas to all Peruvians. Any renegotiation will be carried out with full respect for the rule of law and guaranteeing national interests. The state and the private sector are working together for a better Peru ”. Your message was a disavowal from your chief of staff. But the attacks from the right did not lower the tone. At Congress, the opposition announced they would call the chief of staff for his statements and threatened to fire him – Congress has the power to censor ministers – if the president has not changed it.

On a recent trip to the United States, Castillo met with financial organizations and businessmen, to whom he assured that the possibility of any nationalization is ruled out. In this sense, the Minister of the Economy, Pedro Francke, has repeatedly assured, in the media and during meetings with businessmen, that there will be no nationalization. What Bellido has said about Camisea gas goes the other way.

Internal differences

In government, everyone agrees on the need to renegotiate contracts de Camisea, but there are disagreements over whether expropriation should be an alternative. Differences that have been made public amid tensions within the government due to differences among its members. We are talking about a radical sector and a moderate sector. Bellido, a member of Congress and leader of the ruling Peru Libre (PL) party, is identified with the so-called radical sector, which heads the leadership of the PL. PL Secretary General Vladimir Cerrón enthusiastically supported the nationalization of gas. The ruling parliamentary bench, made up of 37 out of a total of 130 members, whose spokesperson is the brother of Vladimir Cerrón, supported Bellido, but a group of government lawmakers clarified that this statement was not supported. by the whole bench. Several ministers, including those of Energy and Mines and the Economy, have spoken out against a possible nationalization of gas. The right encourages and exploits differences in internal government strike the Castillo regime, which they seek to overthrow.

Consortium with the Argentine capital

The Camisea Consortium is made up of five companies, between them Argentina’s Pluspetrol, with 27.2 percent, and Tecpetrol, which has 10 percent. The other companies are the American Hunt Oil (25.1%), the Korean SK (17.6%), the Spanish Repsol (10%) and the Algerian Sonatrach (10%). The gas exploitation and marketing contracts, which entered into force in 2004, are called into question because they allow its export with a low payment of royalties. Export has been given priority and there has been no policy of massification of domestic consumption of natural gas, which is cheaper and less polluting than liquefied petroleum gas. The consumption of natural gas is low and is mainly concentrated in Lima. The Camisea gas fields are located in the south of the country, but these populations do not have access to this gas.

Prioritize the internal consumption of gas produced in the country and improve the participation of the State in export earnings, they are central points of the renegotiation promoted by the government. This Monday, Bellido personally delivered a letter to the offices of Pluspetrol calling them to a first meeting on Wednesday to begin this renegotiation. The right, which shouted Bellido’s declarations to heaven, has endorsed these contracts which have harmed the country’s interests for years.