Protests expand in Peru's oil-producing Amazon region

LIMA, Sept 2 (Reuters) - Demonstrators in the Peruvian
Amazon (NASDAQ:AMZN) barricaded streets, hurled stones at local businesses and
burned at least one vehicle to protest the government's decision
to award a Canadian company a license to tap the country's
largest oil block.
The protesters, led by the region's governor, want the
government to repeal its recently inked contract with Pacific
Exploration and Production Corp PRE.TO and transfer control of
block 192 to state-owned Petroperu.
"The only thing foreign companies have done is pollute and
foment distrust among local populations," said Fernando
Melendez, governor of the Amazonian region Loreto. "We don't see
any benefits and remain an impoverished region."
The oil field has been developed for more than 40 years,
most recently by Pluspetrol, an Argentine company whose contract
expired Aug. 29.
In the remote city of Iquitos, the capital of Loreto, irate
locals blocked streets with rocks, smashed windows and torched a
car, TV images showed.
The unrest comes a day after indigenous communities seized
oil wells and an airdrome in a neighboring oil block and said
they would take similar measures in block 192. ID:nL1N118059
Native protesters have distanced themselves from demands for
Petroperu to assume control of the oil block, saying a
state-owned company is just as capable of polluting as a private
firm.
But hardline supporters of Petroperu say Peru's president,
Ollanta Humala, and Energy Minister Rosa Maria Ortiz missed an
opportunity to bolster the company by giving it full control of
block 192 when it failed to draw any bids in an open auction
last month.
The government instead held talks with private companies to
find a new operator to keep oil flowing. It ended up awarding a
two-year contract to Pacific Exploration. ID:nL1N10W0Z0
Humala had once promised to transform Petroperu, which has
not produced oil in two decades, into a bigger energy player.
Petroperu declined to exercise its option to take a minority
stake in block 192 and earlier this year backed out of its
decision to be a junior partner in two other oil blocks.
The government has said Petroperu is not ready to return to
upstream activities and must focus on the expansion of its main
refinery.
Protesters say the government is smothering Petroperu's
growth and are calling for Ortiz to step down.
Oil block 192 produces a little over 10,000 barrels per day.
Peru is a net oil importer.
Interior Minister Luis Guadalupe said 2,000 police officers
were deployed to Loreto to restore order.