Peru sets aside tribal concerns, OKs drilling in natgas block

LIMA Wed Jan 29, 2014 7:44pm EST

LIMA Jan 29 (Reuters) - Argentine energy company Pluspetrol won a key approval for new drilling in Peru's biggest natural gas concession after the project was blocked for a year on worries it would hurt isolated indigenous tribes, officials said on Wednesday.

Deputy culture minister Patricia Balbuena said in a telephone interview that the government approved Pluspetrol's environmental impact study for expanding its operations in Block 88 after field work found so-called "uncontacted" indigenous groups no longer lived in most of the concession.

Tribes that have largely avoided contact with outsiders for centuries risk illness and death if exposed to common germs.

Now the only pending green lights for fresh drilling in Block 88 are operating permits that will likely be granted in 90 days, an official in the energy and mines ministry said.

Pluspetrol declined to comment on Block 88.

Critics said the government only reversed its view on the presence of isolated tribes there to push the project through.

Block 88 overlaps with the Kugapakori-Nahua and Nanti indigenous reserve and Peru's abundant Camisea gas fields. It holds some 8 trillion cubic feet of proven and certified natural gas reserves.

Tapping the block is central to President Ollanta Humala's pledge to secure cheap fuel for everything from cars and kitchen stoves to power plants and petrochemical factories.

In 2012 the Humala administration convinced the Camisea consortium that Pluspetrol controls to sell all of the natural gas produced from Block 88 to the local market.

Several high-ranking officials resigned last year after their objections to new drilling in Block 88 were overridden.

One-time deputy minister Paulo Vilca told Reuters he quit in July after being pressured to withdraw his concerns about the project's impact on isolated tribes.

"You can't carry out activities near these people - contact put their lives at risk," said Vilca. "And now the government has greatly reduced the size of their territory."

Balbuena said Vilca's assessment was based on outdated information, and that fly-overs and interviews in Block 88 last year turned up scant evidence of uncontacted tribes.

"We only found one testimony - one person who said their family was still in isolation, and they hadn't seen them in six years" said Balbuena, adding that 3D seismic testing in a small swath of the lock has been restricted as a result.

Humala's natural gas plans have also stalled on financing issues and armed rebel groups where pipeline are being built.

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