PetroTal reaches de-escalation plan in Peru river blockade

PetroTal updated the market on the ongoing “illegal river blockade” in Peru on Friday, reporting significant operational disruption as the Indigenous Association for Development and Conservation of Bajo Puinahua (AIDECOBAP) seized and held two oil transport convoys.

The AIM-traded firm said the first convoy affected was an empty Brazilian convoy en route to the Bretana field, with a crew of six and a total capacity of 70,000 barrels of oil.

It said the second convoy, a Peruvian vessel carrying around 40,000 barrels of oil destined for the Iquitos refinery, was manned by eight Peruvian nationals, none of which are employees of PetroTal.

The company clarified that it neither owns nor operates either of the seized convoys.

During the seizure, a navy sailor sustained a minor head injury from a spear, prompting the involvement of the Peruvian Navy.

PetroTal said AIDECOBAP's blockade of the Puinahua channel, involving around 60 individuals and 10 boats, had further impeded the transit of ships.

Residents of Bretana, who rely on the river system for various purposes, had reportedly expressed their opposition to the ongoing blockade.

As a result, the Presidency of the Council of Ministers (PCM) and the Ministry of Energy and Mines held a meeting with AIDECOBAP on 8 June.

PetroTal said it was invited to participate in the meeting, which aimed to gain a deeper understanding of AIDECOBAP's grievances and motivations for the engagement.

As a result of the discussions, a de-escalation plan had been implemented.

“The company has, and always will, strive for full alignment between all working table and social fund members to achieve the social fund's objectives,” PetroTal said in its statement.

“PetroTal is working with all parties to help the government of Peru generate a rapid, peaceful, and safe resolution to the blockade.

“The company's 2023 oil production forecast included planned downtime and a 5% social downtime contingency in its 2023 guidance to allow for social disruption.”

At 1041 BST, shares in PetroTal were down 0.63% at 39.75p.

Reporting by Josh White for Sharecast.com.