THE MARKET ORIENTED REGIMES: PERU
| Jurisdiction | Derecho Internacional |
(Mar 1999)
THE MARKET ORIENTED REGIMES: PERU
Muñiz, Forsyth, Ramírez, Pérez-Taiman & Luna-Victoria
Limá, Peru
THE ROCKY MOUNTAIN MINERAL LAW FOUNDATION
SPECIAL INSTITUTE ON
OIL AND GAS DEVELOPMENT IN LATIN AMERICA
MARCH 17-19, 1999
INTRODUCTION
The Peruvian Constitution of 1993 supports free private initiative and a social market economy model. It provides that national and foreign investment are subject to the same conditions. For this purpose, a number of rules have been enacted to promote private investment, both national and foreign.
The Organic Hydrocarbon Law 26221, promulgated in august 1993, opened up all phases of the hydrocarbon business to foreign investment
ORGANIC HYDROCARBON LAW
The Organic Hydrocarbon Law 26221 (hereinafter Law 26221), which radically changed the hydrocarbon legislation with the creation of Perupetro S.A. (hereinafter Perupetro), was published on August 20, 1993. The main object of this law was to promote the development of hydrocarbon activities, based on free competition and free access to all
[Page 6C-2]
economic activities. This new regime, which was aimed at developing hydrocarbons based on an economic liberalization process, eliminated the State's monopoly.
Law 26221 provides that:
— Any individual or legal entity, whether national or foreign, may construct, operate and maintain pipelines for the transportation of hydrocarbons and byproducts.
— Any individual or legal entity, whether national or foreign, may construct, operate and maintain hydrocarbon and byproduct storage facilities.
— Any individual or legal entity, whether national or foreign, may construct, operate and maintain petroleum refineries and processing plants for natural gas and condensates, natural asphalt, greases, lube oil and petrochemical products.
— Any individual or legal entity, whether national or foreign, may import hydrocarbons.
— Activities and prices related to crude oil and byproducts are governed by supply and demand.
Additionally, the legal framework currently in force affords national and foreign investors a number of benefits that include tax stability, exemption from the payment of some tributes and duties in the exploration phase, and guaranties as to the free possession and availability of foreign currency.
Under law 26221, the State, as owner of all the hydrocarbons located in the national territory, granted Perupetro an ownership right over said hydrocarbons at the time they are extracted, for it to sign exploration and exploitation or exploitation contracts, either License or Service Contracts (hereinafter Contracts).
1. Acquisition of Technical Information
When Law 26221 created Perupetro, it clearly stated that part of the corporate object of this company was to organize and manage a Data Bank with information related to hydrocarbon exploration and exploitation operations. It was also stated therein that Perupetro could use said information to promote the participation of the private sector, and could also disclose it to promote investment and research work.
[Page 6C-3]
Perupetro's Data Bank has been recently organized by a renowned international company, and includes both the information inherited from Petróleos del Perú in 1993, as well as the information obtained by contractors during the exploration campaigns undertaken since that year, related to areas relinquished or areas in respect whereof the relevant information may already be made known to third parties due to the expiration of the corresponding confidentiality period.
The information contained in this Data Bank can be acquired by any state or private entity, either national or foreign. To acquire said information it is not necessary to be a contractor or to be carrying out activities in Peru. The only requirement is to be interested in the subsequent performance of exploration/exploitation operations and to observe the guidelines on the transfer of technical information, approved by Perupetro for this purpose.
If the person who requests technical information is an oil company that is already a contractor of Perupetro, and the information relates to the Contract area, then said company is entitled to a discount equivalent to 50% of the price of the relevant information (in the case of seismic lines, in order for said discount to apply, more than 50% of the seismic lines are to be located within the Contract area). This discount may be extended to include information related to areas that are close to the Contract area, at Perupetro's sole discretion.
Perupetro's Data Bank "Documentary Fund" consists of well files, technical reports, geological and geophysical sections, maps, lithographic and stratigraphic columns, geochemical analyses, aerophotographic documents, observer and topographic reports, field notebooks, reservoir and production data, slides, fluid and field rock samples (whether prepared or not), well and conventional cores, magnetic tapes containing underground and well geophysical information and, in general, all the technical information related to the petroleum industry.
To acquire technical information, an application is to be filed with Perupetro, indicating the area of interest, its intended use, and the type of copy needed (photocopy, diazographic copy, second original, continuous form, magnetic version, etc).
Once the relevant application is approved by Perupetro, a "Letter Agreement" will be signed. This document identifies the technical information to be transferred, its intended use, the transfer modality (in exchange for a given sum and/or for technical studies), the transfer price, and a confidentiality commitment.
[Page 6C-4]
In order to select the technical information to be acquired, the representatives of interested companies will receive a list of the information available regarding regions or areas of interest.
The representatives of companies interested in acquiring technical information may visit Perupetro's data room only to verify the existence of the information and select the information they wish to acquire; however, they will not be allowed to copy any information during their visit.
Perupetro approves from time to time a price list of the technical information contained in its Data Bank. Prices are subject to changes, without prior notice. The 18% Value Added Tax is to be added to said price.
In addition, there are a number of discounts that are based on the media where the information is stored, their condition, the time when they were acquired, and the transfer of information to potential partners.
Perupetro may transfer the following information to interested companies, at no cost:
• Index or equivalent maps: of blocks, location maps, geophysical surveys, and location of wells, with or without basic information (well depth, crossed stratigraphy, Initial Production Range, accumulated production).
• Topographic maps.
• Stratigraphic columns.
Finally, it should be pointed out that the information contained in this section summarizes Perupetro's current "Policy on the Transfer and Use of Technical Exploration-Production Information", which is subject to revision or changes from time to time.
2. Qualification of Oil Companies
Pursuant to Article 14 of Law 26221, any individual or legal entity, either national or foreign, that wishes to enter into hydrocarbon exploration and exploitation or exploitation Contracts must be previously qualified by Perupetro. Thus, the "Regulations governing the Qualification of Oil Companies", which established the technical, legal, economic and financial requirements to be satisfied in order to obtain the above qualification that allows oil companies to enter into Contracts with the
[Page 6C-5]
Peruvian State through Perupetro, were approved by means of Supreme Decree No. 047-93-EM.
The above qualification is an indispensable requirement to begin negotiations for the signing of a Contract with Perupetro, which evaluates the technical, legal, economic and financial capacity of the oil company in order to determine whether or not it is in a capacity to comply with all the obligations it will assume under the Contract, based on the characteristics of the area requested, the possible investment, and the environmental protection rules governing the performance of its operations. For this reason, the qualification is granted for each specific Contract to be signed by an oil company.
In the case of foreign oil companies, the qualification is granted in favor of the ultimate parent corporation, which shall be jointly and severally liable at all times for the technical, legal, economic and financial capacity of the branch to be established and registered in Peru for the purpose of signing the Contract.
The term technical capacity refers to the experience and means required to perform petroleum operations in keeping with the practices and standards accepted by the international petroleum industry and in strict compliance with Peruvian environmental protection rules.
The term economic and financial capacity refers to the solvency, soundness and economic and financial support of the company that requests the qualification, as required to guarantee the fulfillment of its contractual obligations.
The term legal capacity refers to the legal existence of the company and the absence of impediments that might hinder compliance with its contractual obligations.
Companies that have no experience in the exploration and exploitation of hydrocarbons are released from the obligation of proving their technical capacity. They will be qualified on the basis of their legal, economic and financial capacity; however, they cannot serve as operators of the Contract. In such event, a company that has obtained the necessary technical qualification must necessarily participate in the Contract as a coventurer and Operator.
The qualification...
To continue reading
Request your trial