Perenco's idea of community relations: Shoot the locals

In Peru there are two conflicting issues in its oil industry. One you get to hear about quite a lot, the other doesn't tend to get much press coverage:

1) Peru is about to auction a new batch of lots for oil and gas exploration in its Amazon Basin region in July and has recently agreed to deals worth $650m via PetroPeru (yep, the same oil company in the centre of all those corruption scandals just a few months ago) with international oil companies.

2) Locals in and around the regions being sold off and/or currently being explored are on the tenth day of a general strike against the oil companies. They complain of non-cooperation from the oil companies, broken promises of investments in the local regions, pollution of the rivers and waterways killing fish and animals and the forcing upon them of new laws that will strip them of the rights currently held to decide whether the oil companies can operate in their ancestral homes. A specific complaint is how oil companies refuse to engage in the legally required consultation meetings with locals and, even when they do turn up to the meetings, refuse to listen to the other point of view and simply say "we're going to do this, this and this, like it or not."

All this background explains, in a more or less way, why the local Amazin basin peoples have called their general strike. As part of that strike they have bloked several main trunk route waterways to stop the oil companeis from operating. So two days ago, the French Perenco Oil & Gas company (people with a bad rep for pollution in Ecuador, it should be noted) took it upon themselves to break their boat through the barriers set up. When local approached the boat in question they were shot at by the people on board, according to this report. Beats talking to them every time, no?

Yet another lesson in winning friends and influencing people, neoliberal style. I find it jawdropping to think of a mindset that believes you can trample all over these people and then expect to have an operating oil well further down the track. If there is one place in the world where you need to keep the locals on your side, it's the Amazon Basin. Watch Joffé's 1986 movie The Mission for insight.

Good news for Peru (as long as you don't look too hard)

Yesterday, President Twobreakfasts signed an executive order to lower the prices of 90 octane and 84 octane fuels by 9% and diesel by 4%. That means the benchmark 84 octane sells for a maximum price of S/10.50 per US gallon in Lima (transport costs can raise the price for some of the harder to get at corners of Peru....you've seen the map with the bigass mountain range running through the country, haven't you?).

So now that Peru has cheaper fuel, time to rejoice, no? Hmmmmmm...let's put it in a bit of context. Here's a chart that shows the current prices for the same US gallon of fuel in the USA and Peru in US dollars (I got the US national average from gasbuddy dot com tonight, though I do understand that for example Missouri has $1.80/g fuel and California has $2.40/g fuel right now).

Big difference, no? Well, the 50% difference in average pump prices between the two nations isn't even half the story. According to the CIA World Handbook, GDP per capita in the USA was U$45,800 for 2007 (PPP) and GDP per capita in Peru stood at U$7,600 (also PPP). So this next chart shows just how much fuel the average per capita GDP can buy in its own country.

Yep, that's nine and a half times as much in the States as it is in Peru. Thought of in basic terms, it hurts the pocket nine times more in Peru to fill your car up than it does in the States. So no more whining up there, please........

Bolivia does good business with foreign oil company: Shockingly the story is missed by English media

Evo shows his true colors

Yesterday, the gov't of Bolivia (via its state-owned oil company YPFB) and Spain's Repsol signed off on its deal and fomally created their joint venture company known as YPFB-Andina. The JV company is 51% Bolivia and 49% Repsol. The ceremony and related comments were missed almost entirely by the English speaking media.....after all, the last thing anyone needs to hear about Bolivia is their willingness to work with foreign investors and come to fair agreements that suit everybody.

Make no mistake; this deal is a big one for Bolivia because the JV controls 40% of all hydrocarbons production in the state. It is rightly being fanfared in Bolivia today as an important step forward for both future fiscal revenues and wider stability. However, don't expect Bolivia to come up on your mainstream news media until Evo says "Yankees go home" again.

Oh yeah, nearly forgot: I say "almost" missed the story, as AP manged to scrawl ten lines on the event. Here is their report in its entirety:

Bolivia takes control of Repsol local subsidiary

LA PAZ, Bolivia: Bolivia's state energy company has completed its takeover of the local operations of Spanish company Repsol.

Repsol YPF and the government signed an agreement Wednesday making Bolivia's YPFB the majority stakeholder in Repsol subsidiary Andina, ending months of negotiations. The company will be known as YPFB Andina SA.

President Evo Morales said at the signing ceremony that Bolivia needs "partners who will be respected by the state as long as they respect (the country's) sovereignty."

Repsol executive Nemesio Fernandez promised investment but did not give details.

Morales ordered Bolivia's hydrocarbons industry nationalized in 2006. The government is still negotiating with three other foreign companies over compensation.

As you might expect, even this single note on the agreement between Repsol and Bolivia is missing facts and slanted its own way...I mean, I just love the way the title implies Bolivia is stealing something from the poor, hard done by Spaniards who in turn are al vague and "we dunno what to do now" about the new JV. Just another piece of crap reporting on Bolivia to add to the pile, folks. So if you're versed in Spanish take a look at this note that gives plenty more, including comments from the Repsol side that "....the new agreement between the shareholders will achieve growth for the company and ....the Spanish/Argentine company respects the rules of every country (in which it operates)."

Respect Bolivia? Ahhhh!...NOW i understand why the English press didn't bother covering this story!