Peru looking to overhaul laws to deal with oil companies after spills – Peruvian Minister

Feb 26, 2022 News

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Kaieteur News – In light of the difficulties the Peruvian government is having with Repsol, a Spanish oil company, to clean-up the oil spill that contaminated their shores and water – Peru’s Minister of Environment (MINAM), Modesto Montoya, recently cited the importance of legislative reform to adequately deal with companies after oil spills.

In a recent press release, Minister Montoya emphatically stated that he believes that Repsol is setting a bad example for the population and other companies, due to the fact that it is not fully complying with its obligations in the clean-up and remediation of the areas damaged by the oil spill that occurred on January 15, 2022 along Peru’s coastline.
The oil spill occurred on January 15, 2022 at one of the La Pampilla refineries off the coast of Ventanilla in the region of Lima, Peru. It was reported that the spill was caused by shock waves from an undersea volcanic eruption near Tonga in the South Pacific Ocean. At the time of the undersea eruption, Suezmax tanker, Mare Doricum, was offloading a shipment of Brazilian crude oil at one of La Pampilla refinery’s offshore mooring buoys, and as such, a quantity of the cargo was released.
Repsol had underreported the quantity of crude that was spilled but later investigations by Peru’s Agency for Environmental Assessment and Control (OEFA) revealed that almost 12,000 barrels of oils had spilled – more than double the amount that was initially reported by the company.
During a recent interview on a Peruvian radio station, Montoya not only stated that the oil company is setting a bad example but stressed that MINAM Public Attorney’s Office will initiate the corresponding lawsuits so that the company pays for the damage caused.
In fact, the Minister said, the company should, on its own initiative, financially help the fishermen and other people who have been harmed by the ecological disaster. The Minister added that the company should do so, “so that the affected people do not suffer from hunger.” But according to Montoya, the State is assisting the population of these areas in compliance with the functions conferred by law.
He stated too that a legislative reform is necessary to overcome the administrative obstacles that the executive power has, and to deal with cases such as the Repsol oil spill. It was at this juncture he insisted that there is no lack of will on the part of the government.
More than a month after the disaster, the country is said to be still grappling with the clean-up. A Peruvian official announced that the company is not fulfilling its obligation. However, the country continues to take actions against Repsol.
Peru’s Agency for Environmental Assessment and Control (OEFA), an agency attached to MINAM, had reported that Repsol has paid three coercive fines of a total amount of Sol$1,380,000 (US$362,285) – the fines were for the failure to comply with three of the 14 measures ordered. Those measures are: identification of the areas affected by the spill, cleaning of the affected areas, and containment and recovery of hydrocarbons (crude).
The OEFA has also initiated sanctioning administrative procedures, where the fines can be up to Sol$55,200,000 (US$14,808,852) for Repsol – the agency had vowed to continue to impose fines against the company if it fails to comply with the 14 administrative measures issued.
Prior to the aforementioned fines being imposed against the company, this publication reported that the first periodic fine that was initiated against the Spanish oil giant, was in the sum of Sol$460,000 (US$121,500) for the non-compliance of identifying the areas affected by the oil spill.
Kaieteur News reported that following the devastating oil spill, several Peruvian officials had called for the oil company to offer compensation for the disaster.
The first action that was taken against the company was Peruvian Judge, Romualdo Aguedo on Friday, January 28, 2022 granting the order to prevent four Repsol executives from leaving the country. Peruvian media reported that Judge Aguedo imposed an 18-month ban on the grounds of the potential risk that the officials might leave Peru.
Those that have been barred are refinery manager, Jaime Fernández-Cuesta Luca de Tena; terminal manager, Renzo Alejandro Tejada Mackenzie; environmental manager, Gisela Cecilia Posadas Jhong and production manager, José Gregorio Reyes Ruiz.
In taking additional steps, Peru’s former Minister of the Environment, Rubén Ramirez on Monday, January 31, 2022, revealed that the government had taken the decision to suspend the company’s hydrocarbon loading and unloading activities. In other words, Repsol’s operation in the country was halted until it can substantially prove that another oil spill will not occur again in its waters.
However, in an update it was revealed that a fuel shortage in Peru had forced the country’s OEFA to lift the suspension on Repsol’s operation temporarily. However, the company was only allowed to continue its operations for 10 days and under supervision from the OEFA. That 10 days period has since come to an end and the Peruvian government has signalled that it has other alternative sources to obtain fuel.
As the Government of Peru takes action to protect its people and its environment, Guyana in contrast, continues to give American oil giant, ExxonMobil, permission to operate without full coverage insurance to cater for such a disastrous oil spill. Just recently, ExxonMobil announced that it has commenced oil production at Guyana’s second offshore development area called Liza Phase Two in the Stabroek Block.
Among the oil companies working in Guyana’s backyard is the very oil company –Repsol – that caused the oil spill in Peru.
The clean-up and remediation of approximately 12,000 barrels of crude that contaminated the shores and waters of Peru is expected to cost some US$65 million – this was announced by Repsol’s Chief Executive Officer (CEO), Josu Jon Imaz.
Imaz told analysts on a conference call, “What we are seeing today in cost terms could be around $65 million, more or less … this figure could increase in coming weeks.” The CEO added, “A main part of this figure is going to be covered by insurance companies and so on.”

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