Peruvian currency plunges against US dollar amid Prime Minister’s threat of nationalization against gas supplier – MercoPress
Peruvian currency plunges against US dollar amid Prime Minister’s threat of nationalization against gas supplier
Peruvian sol fell sharply on Monday against the US dollar in markets in Lima following Sunday statements by Prime Minister Guido Bellido, who threatened the new government to stabilize cooking gas supplier Camisea.
Bellido had warned that he could nationalize Camisea in case the private owners in charge of the mining area are unwilling to revise the contracts in favor of the state.
The US currency started on a bullish path on Monday and reached a maximum peak of 4,127 soles. Although at the end of operations it closed at 4,123 soles, a record price for the dollar in Peru, according to data from the Central Reserve Bank (BCRP).
Bellido’s words contrasted with those of Peruvian President Pedro Castillo, who had assured five days earlier in his speech to the United Nations that under him there would be no expropriations.
To stop the advance of the US currency, the BCRP went out to sell $ 183 million at the end of the day; at an average exchange rate of 4,126 soles per dollar. So far this year, the dollar has already accumulated a 13.93% rise in Peru, after closing last year at 3,619 soles.
Hours after Bellido’s controversial post, President Castillo reaffirmed his government was determined to provide affordable gas to all Peruvians and insisted that any negotiations would be conducted with unrestricted respect for the state of right and safeguarding national interests.
Currently, the Peruvian Constitution does not contemplate the possibility of nationalization. And the Peru Free socialist party does not have enough votes in Parliament to reform the Magna Carta, in force since 1993.
But Bellido was seen on Monday at the headquarters in Lima of the Argentinian company Pluspetrol, the majority partner of the Camisea consortium, to deliver a letter in which he formally urged the company to negotiate to increase profits in favor of the state.
Meanwhile, Energy and Mines Minister Iván Merino insisted before Parliament’s budget committee that renegotiation was needed. He said that hydrocarbons and mining should pay more taxes since they account for 21% of the country’s tax collection when it generates more than 60% of exports.
Pluspetrol has been operating the Camisea natural gas field since 2004, located in the south-eastern Amazon.
We call on the operator and marketer of gas Camisea to renegotiate the distribution of profits in favor of the State. Otherwise, we will opt for the takeover or nationalization of our domain ??? Bellido had said Sunday on his Twitter account.
We need to have gas in the country that is accessible to those who have the least. Today we have access to international costs, ?? he added.
Bellido then rephrased his statements and stressed that the government should focus on an intense dialogue with the multinational.
Merino said in a virtual meeting with congressional members of the Budget Committee on Monday that “the conditions are right? For a renegotiation of the benefits that the Camisea consortium grants to the State.
According to the National Society of Mines, Petroleum and Energy, Camisea’s gas production capacity is around 1,600 million cubic feet per day. Of these, 600 are exported, 600 others are intended for local consumption and 400 must be reinjected into the fields due to lack of demand.
Camisea is Peru’s largest gas field and is located in the Amazon part of the southeastern region of Cusco. The consortium made up of the Argentinian Pluspetrol, the American Hunt Oil, the Surcoerana SK Innovation, the Argentinian Tecpetrol, the Spanish Repsol and the Algerian Sonatrach, produces natural gas and condensates from blocks 88 and 56.
Camisea is Peru’s most important gas project as it contributes more than 40% of the energy of the whole country. It produces 92% of the controlled production of natural gas in Peru. Its gas generates more than 40% of the electricity consumed nationally.