Peru eyes sanctions over Repsol oil spill, doesn't rule out production halt

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LIMA, Jan 24 (Reuters) - Peru's Prime Minister Mirtha Vásquez said on Monday the government was looking at sanctioning a major local refinery owned by Spanish energy firm Repsol (REP.MC) after an oil spill last week, and did not rule out suspending operations at the facility.

Vásquez said some political parties were calling for the government to cancel the Pampilla refinery's contract or even expropriate it over the disaster, but said options were still being looked at.

"We are evaluating the legal aspects, we still cannot say whether a license is going to be suspended or not," she told local radio station RPP.

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"That will depend a lot on the evaluation we make of the legal terms under which the company is operating and what type of sanctions or infractions were committed."

The oil spill, blamed on unusual waves triggered by a volcanic eruption in Tonga over a week ago, has affected an area of up to 9 million square meters, the government has said. It has been termed an "ecological disaster". read more

Repsol's Pampilla refinery accounts for over half of Peru's refining capacity.

Vásquez said that aside from sanctions against Repsol and the demands to restore the affected areas, prosecutors were investigating the case for alleged environmental crimes and the state was evaluating compensation for those affected.

"They cannot argue they are not responsible. They are, and therefore they have to think about the consequences," she said.

The President of Repsol Peru, Jaime Fernández-Cuesta, said on Sunday night that the refinery could have reacted faster and that only the day after the spill did they learn the full magnitude of the disaster.

Hundreds of people marched on Sunday in protest against Repsol over the spill, reaching the vicinity of the refinery in the Ventanilla district, located north of the city of Lima.

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Reporting by Marco Aquino; Writing by Carolina Pulice; Editing by David Gregorio

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