Academic journal article Houston Journal of International Law

The Camisea Project: Developing Legal Frameworks for Avoiding Social and Environmental Conflicts in Sensitive Areas

Academic journal article Houston Journal of International Law

The Camisea Project: Developing Legal Frameworks for Avoiding Social and Environmental Conflicts in Sensitive Areas

Article excerpt

  I. INTRODUCTION

 II. THE CAMISEA PROJECT

III. FRAMEWORK

 IV. PREVENTATIVE PROVISIONS
     A. Legal Framework
     B. Previous Evaluation
     C. Environmental Impact Assessment Provisions
        1. Effects
        2. Environmental Management Plan
     D. Citizen Participation
     E. Land Use Covenants
     F. Canon
     G. Multiple EnvironmentaI Authorities
        1. Ministry of Energy and Mines
        2. The Supervisory Organism of Investment in
           energy and Mines
        3. National Institute for the Assessment of
           Natural Resources
        4. Other Entities

  V. CONCLUSION

I. INTRODUCTION

The Camisea field in Cusco, Peru is one of the most important nonassociated natural gas reserves in Latin America. (1) The contract for the exploitation of this field was executed in 2000, and its production stage began in August 2004 (the Project). (2) Camisea is located in the Peruvian forest. (3) People who reside in the area of the Project are "Native Communities," whose members live in accordance with centuries-old customs, (4) and small groups in voluntary isolation who do not want to have contact with other cultures or populations. (5) From an environmental point of view, Camisea is located in a hot spot of biodiversity. (6) Except for small areas used by the Native Communities, Camisea is a tropical forest that has never been interfered with by human hand. (7) Finally, a small part of the Project--Block 88--is located in the buffer area of a wildlife reserve. (8)

With these elements, it is easy to call Camisea a sensitive area in both social and environmental terms. This Article provides an overview of the legal efforts made by the different stakeholders involved in the Project (government, licensees, and private actors, among others) to develop Camisea in harmony with the population and avoid damage to the environment.

II. THE CAMISEA PROJECT

The Camisea Project involves two different stages. The first stage includes the construction of the facilities required to produce gas in Block 88; to separate the natural gas from the associated natural gas liquids (NGL); to transport the natural gas to Lima (where it is consumed); and to transport the NGL to a processing plant on the Peruvian coast in order to produce propane, butane, natural gasoline, and diesel. (9) The next stage involves the development of a second field (Block 56) near Camisea, the expansion of the natural gas transportation system, and the construction of a liquefaction plant. (10) The two stages of the Project have an approximate cost of five billion dollars. (11)

This Article focuses on the first stage of the Project and in particular the production facilities located in the Camisea area. These facilities include the following activities: (1) constructing and operating a gas separation and condensation plant (Malvinas Plant); (2) drilling four wells for gas extraction at four platforms; (3) constructing and operating pipelines from the drilling platforms to the Malvinas Plant; and (4) performing 3D seismic surveys over an area of 1200 square kilometers. (12)

According to the last reports of reserves, the Camisea field has approximately 8.7 trillion cubic feet (TCF) of natural gas and 547 million barrels of associated natural gas liquids (propane, butane, and condensate). (13) The Peruvian Government granted the rights to exploit these reserves to the joint venture formed by Pluspetrol (Argentina), Hunt Oil Company (USA), SK Corporation (Korea), Repsol (Spain), Tecpetrol (Argentina), and Sonatrach (Algeria) (the Licensees). (14) These rights have been granted through a license agreement, which basically allows exploitation of the reserves in exchange for a royalty to be paid to the Peruvian Government (37% of the sales made by the consortium). (15) Exploitation rights are valid for forty years, and Pluspetrol has been appointed as operator of the contract. …

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