The National Institute for the Defense of Competition and the Protection of Intellectual Property (Indecopi) has released (26 December) a report addressing the contracting processes for hydrocarbon exploration and exploitation in Peru.
The study, conducted by Indecopi’s Commission for the Defense of Free Competition (CLC), evaluates these processes through the lens of competition law and provides recommendations to ensure fairness and non-discrimination for all interested investors.
The report focuses on changes introduced in 2023 to direct negotiation procedures proposed by Perupetro, the state-owned entity responsible for hydrocarbon exploration and exploitation contracts. These changes, which impacted licensing agreements with Petroperú for blocks I, VI, and Z-69 in the Talara region, raised concerns about their potential effects on competition.
Concerns Over Competitive Neutrality
The study found that recent regulatory adjustments may have limited competition by affecting the participation of companies in the allocation of oil blocks. Perupetro’s role as both promoter and regulator necessitates adherence to competitive neutrality principles, ensuring equal treatment for all entities—public or private—under guidelines established by the Organization for Economic Cooperation and Development (OECD).
Indecopi underscored the importance of transparent and equitable contracting to uphold the regulatory framework that guarantees free access to economic activities in Peru’s upstream hydrocarbon sector.
Key Recommendations
The report outlines several recommendations to strengthen competition in the hydrocarbon sector:
- Transparency: Ensure that contracting processes are clear and accessible to all potential participants.
- Non-Discrimination: Guarantee equal treatment for public and private companies.
- Competitive Environment: Foster conditions that encourage active participation from a diverse range of operators.
- Timely Communication: Improve the dissemination of information to ensure stakeholders are informed about opportunities and regulatory updates.
These measures aim to align Peru’s hydrocarbon management practices with international standards, maximizing the efficient use of the nation’s resources and promoting economic growth.
Commitment to Economic Welfare
Indecopi’s efforts to address competition in critical sectors reflect its broader mission to safeguard market fairness and enhance the well-being of citizens. By advocating for reforms in the hydrocarbon sector, the organization seeks to attract investment, boost efficiency, and ensure the equitable use of Peru’s natural resources.
The full report is available for public consultation on the government’s website: https://www.gob.pe/es/i/6210356.
