By Alexander Villegas
SANTA ROSA, Peru (Reuters) -Near a remote bend of the Patoyacu River in Peru’s northern Amazon, Wilmer Macusi stood atop a rusty pipeline cutting through the jungle, swirling a branch in the pool of stagnant water surrounding it.
“They say this is clean,” said Macusi, a 25-year-old Indigenous Urarina leader, pointing to the spot where an oil spill occurred in early 2023. “But if you move the water, oil still comes out.”
Black droplets bubbled to the surface as plastic barriers meant to contain the spill drooped into the water. The pipeline links a nearby oilfield, Block 8, to the larger government-owned North Peruvian Pipeline (ONP). Macusi’s community of Santa Rosa lies a short walk away.
Peru’s northern Amazon holds hundreds of millions of barrels of crude, according to government data. But Indigenous groups say oil extraction over the past half-century brought pollution, not progress, and are opposed to a fresh wave of development.
The region once pumped more than half of Peru’s oil, peaking at about 200,000 barrels a day in the 1980s before environmental liabilities and community opposition drove production below 40,000 bpd. Key blocks went dormant in 2020.
Now, the region’s modest reserves are again central to state oil firm Petroperu’s plans. The company has spent $6.5 billion upgrading its Talara refinery into a 95,000-bpd complex aimed at producing high-grade fuels for export. Heavily indebted with a CCC+ junk credit rating from ratings agency Fitch, Petroperu wants to revive Amazon oil output to supply Talara.
The state firm estimated last month that proven and probable reserves in the region were worth $20.9 billion, which Petroperu said could deliver $3.1 billion in tax revenues for local governments and communities.
While the amount of oil at stake is relatively small, the plans have fueled tensions over past spills, stoking Indigenous opposition at a time Brazil, Ecuador and Guyana are trying to expand their Amazon oil frontiers.
Frustration about climate action and forest protection boiled over at the COP30 climate summit this week, when dozens of Indigenous protesters forced their way into the venue and clashed with security guards.
Petroperu is also planning to import oil to the refinery by linking the 1,100-km ONP to neighboring Ecuador, which aims to boost production in its own Amazon region as part of a $47 billion oil expansion plan.
Hailed as an engineering marvel when it was built in the 1970s, the ONP has since become a lightning rod for leaks, protests and sabotage. Indigenous groups in both countries are resisting the pipeline link-up.
The government is weighing options for how best to run the pipeline, including through a joint venture or outsourcing its management.
OBSTACLES TO REVIVAL
Petroperu failed to attract an international partner to run its largest oilfield, Block 192, which produced more than 100,000 bpd at its peak but has recently been the focus of Indigenous protests demanding remediation for damage to the forest, soil and waterways.
Petroperu’s former chairman Alejandro Narvaez, who was fired last month, estimated Block 192 could produce at least 20,000 bpd with investment and overall Amazon production could hit 100,000 bpd.
The state oil firm selected domestic firm Upland Oil & Gas to operate the block, but Peru’s state oil regulator disqualified Upland last month on the grounds it did not demonstrate financial capacity. Upland disputes the decision and has asked for a review.
Petroperu also partnered with Upland to revive production at the smaller Block 8, which produced 5,000 bpd last month.
Upland’s CEO Jorge Rivera, son of one of Peru’s early oil prospectors, told Reuters that Upland has offered Indigenous communities training, jobs and funding.
“We’ve dedicated ourselves to understanding the complexities behind operating these fields,” he said.
Rivera visited Santa Rosa in March, gifting a Starlink terminal and requesting a report on the community’s needs.
The community’s main demand was the cleanup of the nearby spill, but questions remain over who bears responsibility.
Though the operator is responsible for the 108-km stretch of pipeline that runs through Block 8 connecting it to the ONP, Upland’s contract exempts it from liability for past pollution.
The previous operator, an Argentine subsidiary named Pluspetrol Norte, was fined a record number of times by Peru’s environmental regulator OEFA before it filed for liquidation and left the area in late 2020.
Eight Indigenous federations and non-governmental organizations filed a complaint to the OECD’s Dutch National Contact Point, a mechanism to implement OECD guidelines for businesses, which concluded in September that Pluspetrol had violated Indigenous communities’ rights in Peru’s Amazon and urged the company to address the environmental damage.
In a response to Reuters, Pluspetrol said it already had complied with environmental and human rights regulations and that the NCP statement was “without merit” for not reflecting the “breadth and complexity of the evidence presented and the extent of actions taken by the company.”
ONP SPILLS
Decades of scientific research have found high levels of lead, mercury, cadmium and arsenic in wildlife and Indigenous people living near Peru’s oilfields. Estimated cleanup costs for Block 192 alone stand at $1.5 billion.
OEFA registered over 560 environmental infractions including oil spills and others from the ONP or other oil infrastructure in Blocks 192 and 8 from 2011 through September 2025.
Petroperu has said any damage is “temporary and reversible” and blamed unspecified “economic and rural-domestic activities” by local communities as the main driver of water pollution.
In late 2023, Peru’s prosecutor’s office said it had broken up a network of businessmen, local Indigenous leaders and a Petroperu employee that it said was orchestrating oil spills to secure lucrative cleanup contracts.
In an interview with Reuters before his dismissal, Narvaez said Petroperu had prioritized cleaning up spills under the regulator’s supervision.
The government of Peru’s interim President Jose Jeri, who took power last month, replaced Narvaez with Petroperu board vice president Fidel Moreno and said it will soon replace Petroperu’s entire board of directors.
Moreno did not reply to an interview request.
Macusi said communities had yet to access a fund from Upland promising 2.5% of oil sales. Meanwhile, meetings with the oil regulator, Perupetro, to discuss funding for community projects have been delayed.
After an oil spill from the Block 8 connector pipeline in 2022, Urarina communities held a strike, taking over oil facilities, fields and blockading a river to demand a better state response. Macusi, who as a teen worked hauling buckets of spilled oil, says communities are ready to take action again.
“If the promised benefits don’t come soon, we’ll take measures,” he said.
(Reporting by Alexander Villegas; Additional reporting by Marco Aquino; Editing by Nia Williams and Katy Daigle)
