LATIN AMERICA ADVISOR
ENERGY ADVISOR www.thedialogue.org BOARD OF ADVISORS Mary Rose Brusewitz Partner, Strasburger & Price Jeffrey Davidow Senior Counselor, The Cohen Group Ramón Espinasa Consultant, Inter-American Development Bank Luis Giusti Senior Advisor, Center for Strategic & International Studies
A WEEKLY PUBLICATION OF THE DIALOGUE
Why Do Peru’s Pipelines Keep Spilling Oil?
OIL & GAS
Pemex Approves New Joint Venture in Gulf of Mexico The venture marks the second time that Pemex has looked to outside partners in order to boost crude oil output. The partner in the venture for the Ayin and Batsil oil fields may be announced in March, Pemex said.
Jonathan C. Hamilton Partner, White & Case
Raul Herrera Partner, Corporate & Securities Practice, Arnold & Porter
El Salvador to Build Geothermal Plant in Bolivia
James R. Jones Chairman, ManattJones Global Strategies Jorge Kamine Counsel, Skadden Arps
The Northern Peruvian Pipeline has had several leaks over the last year, endangering the surrounding environment and individuals living near it. // File Photo: Peruvian Government.
Craig A. Kelly Director, Americas Int’l Gov’t Relations, Exxon Mobil
Jeremy Martin Director, Energy Program, Institute of the Americas Larry Pascal Chairman, Americas Practice Group, Haynes & Boone Charles Shapiro President, World Affairs Council of Atlanta R. Kirk Sherr President, Clearview Strategy Group Mark Thurber Partner, Andrews Kurth Alexandra Valderrama Manager, International Government Affairs, Chevron Lisa Viscidi Program Director, Inter-American Dialogue Max Yzaguirre President and CEO, The Yzaguirre Group
October 21, 2016
Following several highly publicized oil pipeline leaks the company suspects were caused by vandalism, extreme weather or sabotage, the president of Peruvian state-owned energy company Petroperú, Augusto Baertl, said this month that the Northern Peruvian Pipeline should resume operations in four to five months after repairs are completed. What are the likely causes of the leaks, and why do they keep happening? How can Petroperú better secure its infrastructure to guard against potential threats in the future? What technology should be used to monitor energy infrastructure, especially in areas where potential leaks could lead to serious environmental or health issues, and what role do regulators have to play in pipeline security?
Jeremy M. Martin, member of the Energy Advisor board and director of the Energy Program at the Institute of the Americas: “The 40-year-old Northern Peruvian Pipeline presents a boiling stew of issues. A lack of maintenance and overall supervision by the financially challenged state oil firm has led to than 20 spills since 2011, and several large fines have been imposed on Petroperú. Beyond the age of the pipeline and the requisite maintenance that it entails, it is important to remember that a large stretch of the pipeline runs through the Peruvian jungle and the country’s Amazonian region. The costs, stresses and toll the jungle environment takes on maintaining the pipeline are important. In a low oil price environment with increasingly stretched investment budgets, the cost factor is particularly acute for a state firm. But perhaps most importantly, at the center of the issues Continued on page 3
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Salvadoran state-owned energy company LaGeo will lead the project, and will assist with the supervision, management, installation, technical specifications and engineering of the pilot plant. Page 2
OIL & GAS
Brazil Planning to Simplify LocalContent Rules Brazil’s minister of development, industry and trade, Marcos Pereira, said the Brazilian government plans to design a policy that attracts inves