Peru May Rescind Camisea Block 56 Gas Contract on Taxes

Peru may rescind a contract with a group led by Hunt Oil Co. for failing to pay sufficient royalties on natural-gas shipments from the country’s largest fields, a government official said.

The six-company group, which operates the Camisea project, exported 10 shipments of gas from its Block 56 to third parties without notifying Peru, said Aurelio Ochoa, president of state oil-contracting agency Perupetro. The Camisea group, which include Spain’s Repsol SA (REP) and Pluspetrol SA of Argentina, has 60 days to pay the taxes or seek international arbitration, he said.

“We’re sticking strictly to the contract,” Ochoa said at a press conference today in Lima. “I hope we can solve this by September to avoid rescinding the contract, as their only way out is arbitration or payment.”

Peru’s President Ollanta Humala was elected last year on pledges to force oil and mining companies to pay higher royalties. Earlier this year, the government ordered the Camisea group to halve its gas exports to Mexico to allocate gas reserves to domestic industries.

Jeanne Phillips, a spokeswoman for Hunt Oil, was unavailable for comment. Kristian Rix, a spokesman for Repsol, and Daniel Guerra, a spokesman for Pluspetrol, didn’t respond to e-mails and telephone calls seeking comment.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net