Shell and Mobil shelve their Peruvian plans
15 Jan 2000
Royal Dutch/Shell has announced the cancellation of a $3 billion plan for the Camisea natural gas project in Peru. The decision means Shell and its partner, Mobil, will not pipe natural gas from Peru's southern jungle to its capital, Lima.
The plan was to pipe around 500ft3/day of natural gas, reducing the capital's energy costs and providing Peru's industry with what regional analysts described as a long-overdue boost.
After two years of exploration, costing $250 million, the gas producing consortium could not agree with the government over crucial issues of gas distribution and tariffs in Lima, and over export details.
President Alberto Fujimoro wanted a distribution network when the first gas arrived in Lima in 2001, and also rejected Shell's intention to export the energy to Brazil and Bolivia.
Fujimoro had been 'optimistic and realistic' that the project would go ahead, but Peru's industry feared the president was attempting to drive too hard a bargain. Shell and Mobil have both stated that they will continue their block 75 exploration commitments in the region.
