(First published in Norwegian 2 October 2008)
By Erik Hagen
Norwatch has revealed that the small Norwegian petroleum company Discover Petroleum International AS has been awarded a petroleum block in the middle of a unique rain forest area in Peru. When you fly across the area with Google’s satellite photo programme Google Earth, you can see huge areas of untouched rain forest and rivers that meander beneath cloud dots. The above photograph was taken inside Discover’s area.
Norwegian petroleum industry may soon take over these forest areas.
The Norwegian petroleum block in the rain forest lies squeezed between the two national parks Manú and Bahuaja-Sonene in southeastern Peru, close to the borders with Brazil and Bolivia.
From what Norwatch has been able to discover, the closest existing pipeline lies about 150 to 200 km away, in the northwest. For the Norwegians to be able to get the hydrocarbons to the pipeline, they will have to transport them straight through Manú National Park. That entails cutting a road through even more untouched rain forest, which, furthermore, is a national conservation area. So far, it is unknown whether the company will be extracting petroleum or gas, but Peruvian media are suggesting that the area has a large gas potential.
The block was awarded to the Norwegian company at a ceremony in Peru’s capital, Lima, on the morning of 10 September this year, almost a week before Norwegian Prime Minister Jens Stoltenberg won international praise for efforts to save the rain forest in Brazil. The same company was simultaneously awarded a series of licences offshore Peru.
The rain forest area in question is 6846 km2 in size and is situated in a region called Madre de Dios, the Mother of God. The petroleum authorities have named it Block 157.
The company has confirmed to Norwatch that they have accepted the offer. For the time being, however, they are somewhat unsure about several of the environmental aspects of the project.
“To have a controversy going in Peru makes no sense to us. I want to emphasise that if there are any environmental problems connected with this, then we shall have to reconsider our involvement,” Jan M. Wennesland, board chairman of Discover Petroleum, told Norwatch.
In an Untouched Area
When Norwatch confronted the leading campaign organisation, Amazon Watch, in California, with the information about the new allotment, they had not heard about the block.
“New blocks are constantly turning up,” Atossa Soltani, the leader, sighed.
She explained that more than 70% of the Peruvian Amazon area has been leased out to petroleum companies just during the past 2 years. When she was made aware of where the Norwegian company has received a licence, she reacted strongly. “This area contains one of the most unspoilt rain forest areas in the Amazon,” she told Norwatch.
See survey of Peru’s petroleum blocks here. Norwatch found the information about the Norwegian licence on the web pages of PeruPetro , the Peruvian petroleum directorate.
The licence was awarded to Discover Petroleum International AS, in partnership with the Peruvian state petroleum company, PetroPerú S.A.
Cut the Corner
According to the web pages of the Peruvian environmental organisation FENAMAD , the western bit of the block was cut off earlier this year because it was inhabited by Indian tribes who did not want contact with the outside world.
“If they had not done that, petroleum exploration would quite simply have been illegal according to Peruvian law. What they did was therefore a minimum. But that that does not make it any better to bore in that block. The area does, after all, contain unique rain forest. This is an absolute “no no-go zone”, especially for companies that claim to have an environmental policy,” Soltani told Norwatch.
Peru contains the next to the largest part of the Amazon, only surpassed by Brazil.
Controversy out of the Question
“So far we have not invested a penny in the onshore block. It is Peru’s offshore blocks that have been our main concern,” Discover Petroleum’s Jan M. Wennesland told Norwatch.
Wennesland has a great deal of experience within the petroleum sector; he has previously been the chairman of the board of Aker Maritime and has held leading positions in Saga and Statoil.
According to Wennesland, it is only a few days since the company received the formal documents from Peru, and they have not had time to examine them thoroughly yet.
“Is it really possible to explore for and extract petroleum in a rain forest without destroying the environment?”, Norwatch asked.
“That is almost impossible for me to answer. It is Peru who has awarded the licences. The allotment letter consists of a long series of chapters that concern precisely this. At this point I can not say whether it is possible to meet all these environmental requirements,” Wennesland said.
The chairman is also somewhat unsure of whether there are people inhabiting the block they have been awarded; the company will examine these aspects more thoroughly in the near future.
“To have a controversy going in Peru makes no sense to us. I want to emphasise that if there are any environmental problems connected with this, then we shall have to reconsider our involvement,” Wennesland told Norwatch.
Discover Petroleum is a 3-year-old Norwegian petroleum company with 26 employees which over a short time has been awarded several blocks in the Norwegian Sea and the Barents Sea. As recent as 21 April this year they established a separate company that was to concentrate on the international market.
A few days after the allotments were granted, there was debate about the Norwegian company in the Peruvian press.
Two economists raised questions with regard to why the petroleum directorate had chosen precisely Discover as its collaborator for development of five offshore blocks. It is a small company, has few current licences, and has no experience in that part of the world, claimed economists Patricia Teullet and Cecilia Blume, according to the news service Peru21 . They especially raised doubt as to whether the Norwegian company had the financial clout to carry through the project without pushing the risk onto the state company.
The president of the petroleum directorate, Daniel Saba, then had to get out and extinguish the fire. He emphasised that Discover had satisfied the requirements to qualify and that the Norwegians were to cover the expenses. If they couldn’t do so, the contract would be closed, he told Diario la Primera. Discover had documented for the authorities that they had a very secure economy, according to Saba.
Discover Petroleum has informed Norwatch that it was through a dialogue with contacts in Mexico that they obtained contacts in PetroPeru. The Peruvian company invited Discover to send a joint application for offshore blocks. In addition, they collaborated with regard to block 157.
“With regard to the onshore block, it was sort of an addition to what we were really interested in – that is, the offshore blocks,” Wennesland explained.
The reason they found out about the blocks in Peru was that the company owns what the board chairman calls “generation 2 within electromagnetic measurements”. Their product, PetroMarker, is supposed to have aroused great international interest.
Draw a line between the six markers on the map. Within this hexagon lies Block 157.
Here are the coordinates for the block: