“For us, it was a catastrophe,” Bisa Tirko, President of the Chapra Nation’s autonomous government, recounted during a video call with Mongabay. “Seeing this disaster in the place where you grew up, where you fished and swam, was devastating.”
Despite the severity of the spill, Petroperú has yet to fully address the environmental damage, and the company now faces a severe financial crisis. In 2022, Petroperú lost its investment-grade rating due to extensive debt incurred from a $6.5 billion upgrade of its Talara refinery. The situation worsened in 2023 when the company reported losses exceeding $822 million. Since then, the Peruvian government has injected $1.3 billion into the company to stabilize it.
A recent report from the Hydrocarbon Impact Working Group (GITH), which comprises 17 civil society organizations, reveals that the Chapra spill was not an isolated incident. Since 2020, Petroperú has been responsible for 191 oil spills, second only to Pluspetrol, which had 394 spills during the same period. The report also highlights that Petroperú has faced 154 fines from the energy regulator OSINERGMIN and 61 administrative actions from the environmental regulator OEFA since 2020. This raises concerns about the future of ongoing remediation efforts if Petroperú collapses.
Lack of Regulatory Framework Raises Concerns
Aymara León Cépeda, co-author of the GITH report and adviser for the Northern Amazon Oil Observatory (PUINAMUDT), expressed concern over the absence of a clear regulatory framework for handling Petroperú’s potential collapse. “Without a guiding framework, there is a risk that responsibilities for cleanup and remediation could remain unresolved,” León Cépeda told Mongabay.
Experts like Vladimir Pinto from Amazon Watch suggest that the Peruvian government may intervene to prevent Petroperú’s failure. “The government is likely to act to prevent the company’s collapse due to its significant obligations and valuable assets,” Pinto explained.
Community Impact and Company Inaction
Bisa Tirko described the horrific aftermath of the spill, including the overwhelming smell of oil and the environmental devastation. Weeks passed without any action from Petroperú, prompting her to travel to Lima to demand accountability. While there, she discovered that Petroperú had filed a criminal complaint against her, a charge she denies.
Petroperú only responded to the community’s needs on October 13, 2022—over a month after the spill—promising to address the contamination. However, the company did not return until April 2023. According to a Petroperú spokesperson, the company activated its Contingency Plan immediately after the spill, implementing measures to contain and control the oil. However, Bisa Tirko claims that contamination persists and that the cleanup efforts have been inadequate.
OSINERGMIN, the energy regulator, stated that verifying compliance with environmental obligations is not within its purview. This lack of oversight has left communities struggling with the consequences of the spill, including the contamination of their fishing grounds.
Financial Troubles and Environmental Costs
In April, Petroperú reported a need for $2.2 billion in financial assistance and forecasted significant losses. The company’s board has initiated restructuring efforts, including hiring a private management firm and optimizing infrastructure. Despite these efforts, Petroperú’s market share has plummeted from 51% to 25%, and the cost of the Talara refinery nearly tripled.
The GITH report highlights the ongoing environmental damage and legal uncertainties surrounding Petroperú’s remediation responsibilities. Companies are typically required to produce an abandonment plan after their contracts end, detailing remediation actions for contaminated sites. Yet, many companies, including Petroperú, have failed to comply with these requirements.
León Cépeda pointed out that weak enforcement mechanisms often allow companies to bypass their environmental responsibilities. “Fines alone are not enough to compel companies to fulfill their obligations,” León Cépeda said. “There needs to be stronger enforcement, such as targeting parent companies with more resources or revoking operational rights.”
The situation at Lot 192, one of Peru’s oldest oil production sites and a hotspot for spills, exemplifies the problem. After 54 years of operations, the site has amassed $5.5 million in environmental damage. If Petroperú collapses, the future of cleanup efforts remains uncertain.
In summary, Petroperú’s financial woes cast a shadow over the cleanup of environmental disasters in the Peruvian Amazon. As the company struggles to stay afloat, the impact on local communities and the environment remains a pressing concern.
