September 2, 2015 / 6:50 PM / 4 years ago

Protests expand in Peru's oil-producing Amazon region

LIMA, Sept 2 (Reuters) - Demonstrators in the Peruvian Amazon barricaded streets, hurled stones at local businesses and burned at least one vehicle to protest the government’s decision to award a Canadian company a license to tap the country’s largest oil block.

The protesters, led by the region’s governor, want the government to repeal its recently inked contract with Pacific Exploration and Production Corp and transfer control of block 192 to state-owned Petroperu.

“The only thing foreign companies have done is pollute and foment distrust among local populations,” said Fernando Melendez, governor of the Amazonian region Loreto. “We don’t see any benefits and remain an impoverished region.”

The oil field has been developed for more than 40 years, most recently by Pluspetrol, an Argentine company whose contract expired Aug. 29.

In the remote city of Iquitos, the capital of Loreto, irate locals blocked streets with rocks, smashed windows and torched a car, TV images showed.

The unrest comes a day after indigenous communities seized oil wells and an airdrome in a neighboring oil block and said they would take similar measures in block 192.

Native protesters have distanced themselves from demands for Petroperu to assume control of the oil block, saying a state-owned company is just as capable of polluting as a private firm.

But hardline supporters of Petroperu say Peru’s president, Ollanta Humala, and Energy Minister Rosa Maria Ortiz missed an opportunity to bolster the company by giving it full control of block 192 when it failed to draw any bids in an open auction last month.

The government instead held talks with private companies to find a new operator to keep oil flowing. It ended up awarding a two-year contract to Pacific Exploration.

Humala had once promised to transform Petroperu, which has not produced oil in two decades, into a bigger energy player.

Petroperu declined to exercise its option to take a minority stake in block 192 and earlier this year backed out of its decision to be a junior partner in two other oil blocks.

The government has said Petroperu is not ready to return to upstream activities and must focus on the expansion of its main refinery.

Protesters say the government is smothering Petroperu’s growth and are calling for Ortiz to step down.

Oil block 192 produces a little over 10,000 barrels per day. Peru is a net oil importer.

Interior Minister Luis Guadalupe said 2,000 police officers were deployed to Loreto to restore order.

Reporting by Marco Aquimo; Writing by Mitra Taj; Editing by Leslie Adler

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