Archive for the ‘Business’ Category
Tuesday, January 15th, 2008
President Alan García announced Monday that the Spanish-owned Repsol YPF oil company has found more than 2 trillion cubic feet, TCF, of natural gas in Peru’s southern Cusco department. Repsol YPF reportedly discovered the reserve in the Kinteroni well, one of four in Block 57, located north of the Camisea nastural gas reserves in Block 88 and Block 56.
García said the discovery promises to stimulate further investment and oil exploration in the region, which holds some of the largest undeveloped gas reserves in South America, Radio Programas radio reported.
“This finding is very important, this discovery is very important, more than 2 trillion cubic feet,” said García. “They believe there could be as much as 2.5 trillion cubic feet, which is worth billions of dollars.” (more…)
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Wednesday, January 9th, 2008
Out-dated infrastructure in Peru’s highly centralized seaport system is a major challenge facing the country’s supply network, according to the Foreign Commerce Society of Peru, Comex Peru. An article by Comex, which appeared in daily Gestión today, stressed the need for modernizing the ports so Peru can sustain its sizzling economic growth and become an economic leader in South America.
While Peru’s Finance Ministry reported economy growth of more than eight percent last year, development at its seaports has not kept pace. According to Comex, customs officials at the ports still do not electronic devices for such basic procedures as filling out merchandise declarations. This has caused a bottleneck of merchandise, which is impeding the competitiveness of Peruvian exporters.
Necessary infrastructure changes to improve the supply network, and take advantage of the U.S.-Peru free trade agreement, include increasing storage zones, providing updated technology and improving Peru’s regional ports, which would help to decentralize the system. The Public Port of Callao accounted for 56 percent of the country’s seaport operations in 2006, Comex said. Other major South American seaports, like Chile’s Valparaíso and Colombia’s Cartagena, reported around 15 percent of their national port operations.
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Wednesday, January 9th, 2008
Economy and Finance Minister Luis Carranza announced today that Peru’s 2007 economic growth was 8.3 percent, the highest since 1994. Carranza said the growth was to increased in private consumption and investment, Agencia Andina reported. Private investment, for instance, increased by 25.5 percent while private consumption grew by 7.4 percent.
The impressive growth came despite a heavier tip in Peru’s trade balance compared to the year prior, he told reporters. “In effect, during 2006 the terms of trade grew by 27.4 percent, while in 2007 it grew by only 5 percent.” Carranza attributed the decline to a 58.6 percent increase in the price of oil and a 83.8 percent increase in the price of wheat.
Among other statistics provided by Carranza are Peru’s GDP per capita, which increased from $3,377 in 2006 to $3,931 in 2007, as well as Peru’s 3.9 percent inflation rate, the third lowest in Latin America according to the Central Reserve Bank of Peru. (more…)
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Tuesday, January 8th, 2008
Agriculture Minister Ismael Benavides Ferreyros announced an investment of about $300 million this year in order to improve productivity of Peru’s agriculture sector ahead of the implementation of the U.S.-Peru free trade agreement.
The Agriculture Ministry has set a a goal of producing 400,000 new jobs within the sector, and another 200,000 jobs to agricultural production by 2011.
“We are going to invest approximately $300 million this year that will be used for plans and programs in the countryside in order to carry out the objectives of our Strategic Agrarian Plan,” Benavides told Radioprogramas radio Monday. He added that the investment “will help to lower rural poverty by 35 percent, resulting in economic improvement for 540,000 rural families.”
Peru’s agriculture sector promises to undergo profound changes with the implementation of the U.S.-Peru FTA, signed into law Dec. 14 by President George W. Bush.
Critics say the FTA will jeopardize the livelihood of thousands of Peruvian farmers, particularly producers of sensitive products like rice, potatoes, corn and wheat in the Andes, who will have to compete with the influx of heavily subsidized U.S. exports. Supporters argue the deal will provide farmers with new opportunities to market products like artichoke, maca, and quinoa.
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Monday, January 7th, 2008
Peru’s National Institute for Natural Resources, INRENA, announced that 616,000 hectares, or about 1.5 million acres, of Peruvian forest was internationally certified for use last year. INRENA’s announcement is part of an effort to meet environmental provisions established by the free trade agreement with the United States. Peru plans on certifying 2 million hectares, or almost 5 million acres, of forest by 2011.
INRENA authorities told Agencia Andina “the government has begun an active control so Peruvian timber exported to the United States will have a legal origin and be sustainable in character.”
Illegal logging is a source of social conflict and widespread deforestation in Peru. According to a 2007 report by the National Association of Amazon Indians in Peru, AIDESEP, 83 percent of Peru’s exported mahogany, one of the World’s most valuable and appreciated timber species, in 2005 was illegally logged. The main importer of Peru’s mahogany is the United States.
(more…)
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Friday, December 21st, 2007
The U.S. Export-Import Bank, Ex-Im, approved a $250 million loan for the second phase of the Camisea gas project Friday, following the lead of the Inter-American Development Bank which brushed off environmental and social concerns by approving a $400 million loan.
The loan will partially fund a natural gas liquefaction plant and other infrastructure on the pacific coast that would turn Peru into an exporter of liquefied natural gas, with markets in Mexico and possibly Chile and the United States for regasification.
The $3.9 billion project, headed by Texas-based Hunt Oil, is expected to generate an average of $230 million a year in incremental royalties and $90 million in income tax revenue for the Peruvian government. It is one of Latin America’s key energy infrastructure projects.
In 2003, Ex-Im denied the Camisea a $200 million loan to finance the first phase of the energy project, a transportation component, citing environmental concerns. On Dec. 13, a delegation of human rights and environmental activists from Peru met with bank officials in Washington to persuade them that threats to the fragile jungle eco-system and its indigenous inhabitants still exist.
The World Bank is expected to announce its decision whether to finance the project in mid-January.
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Wednesday, December 19th, 2007
The Inter-American Development Bank, IDB, approved a $400 million loan for Peru’s Camisea gas project today, brushing off appeals from environmentalists who insist it will do irreparable harm to the fragile jungle eco system and its indigenous inhabitants. The project consortium, headed by Texas-based Hunt Oil, will use the loan to begin construction of a natural gas liquefaction plant on Peru’s pacific coast. It will also create a marine terminal and a 253-mile, 34-inch, or about 86-centimeter, pipeline connecting the plant to the Transportadora de Gas del Peru pipeline.
According to the IDB, the project is expected to generate an average of $230 million a year in incremental royalties and $90 million in income tax revenue for the Peruvian government. At a total cost of $3.9 billion, the project is the biggest private investment in Peru’s history.
The Camisea gas fields are located in Peru’s south-eastern Amazon basin. It is the largest energy project in Peruvian history and known to hold some of the largest undeveloped gas reserves in South America. (more…)
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Saturday, December 15th, 2007
Peru will loom slightly larger than usual in the headlines in U.S. newspapers this weekend after President George W. Bush signed into law a free trade agreement between the two nations.
The bill passed following a contentious feud in Congress that ended only after Republicans agreed to Democratic demands to include labor union protection and environmental standards, both in the Peru deal and in future trade pacts.
Bush said before signing Friday that he is hopeful the Peru deal will pave the way for approval of deals with Panama, Colombia and South Korea before he leaves office in 2009. And President Alan Garcia assured Bush that his government will make good on its pledge that the trade deal will favor Peru’s poor, particularly “the population in the Andes and their small enterprises.”
“You should be sure, as well as the members of the Congress and the American people, that in Peru this treaty would not exclude the poorest of the Peruvian workers,” Garcia said moments before Bush signed the pact. “On the contrary; using the words of the great Abraham Lincoln, it will be a free trade agreement of the people, by the people, and for the people.”
But not everyone in Peru is comforted by that assurance.
Weeks before the House approved the deal on Nov. 8 in a 285-132 vote, David Bayer, a former deputy executive officer for USAID in Lima until 2002, sent out the following appeal. He wrote it from his home in Ica, the coastal city devastated by the magnitude-8 earthquake last August (it is reprinted here with David’s permission):
What is wrong with the Peruvian-US Free Trade Agreement (FTA)?
Chapter X is the most insidious part of the US-Peru-FTA in terms of its damage to the vast majority of Peruvians. The GRADE analysis ( a conservative NGO) points out the the poor and extreme poor in Peru will get poorer with the implementation of the FTA:
Chapter X boils down to this: when the FTA is signed, everything favorable to the big private corporations and multinationals gets “frozen in time” or “shielded.” If the companies are exonerated from taxes (as is the case with the Peruvian agro-exporters) or have a special low-tax regime (as is the case with 80 percent of the major Peruvian mining companies) THEN NONE OF THESE PRIVILIGES CAN BE CHANGED by the national, regional or local government without violating Chapter X . (more…)
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Friday, December 14th, 2007
A delegation of human rights and environmental activists from Peru appealed to officials from the World Bank, Inter-American Development Bank (IDB) and the U.S. Export-Import Bank (Ex-Im) yesterday to reject future loans to the Camisea gas project. The delegation argued that the banks would be breaching their social and environmental safeguard standards if they approve more than $1 billion in public financing to the project. The delegation includes Congresswoman Gloria Ramos and representatives of Peru’s national indigenous organization, AIDESEP.
If the loans are approved, the project would begin construction of a liquefaction plant on Peru’s pacific coast. The IDB and Ex-Im are expected to make their decision regarding the loans in late December. The World Bank will announce its decision in mid-January. (more…)
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Thursday, December 6th, 2007
Peru’s Housing Minister, Hernán Garrido Lecca, signed an agreement with the Japan Bank of International Cooperation (JBIC) yesterday to fund two major water project and improve water supply in Lima — the world’s second largest desert city after Cairo. The $100 million development fund will underwrite a planned water treatment plant in Huachipa. The plant will produce five-cubic-meters of water per second from the Rímac river.
The agreement will also develop 16-miles of pipeline to transport water to Lima’s northern zone, where it will be stored in five reservoirs with a capacity of 2,000 to 13,000-cubic-meters. Officials say the projects will benefit 4 million people.
According to Sedepal, the State-run water company, the Huachipa treatment plant will have the capacity to increase future water production to 10-cubic-meters per second. It could then supply potable water to Lima’s southern zone. The project, which will go out for international bid in the coming days, is scheduled to be completed by December 2010. (more…)
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