Consequences of the State’s Negligence to Lower Gas Export Prices

SOURCES:
http://www.economist.com/node/16281343?story_id=16281343&fsrc=rss

http://www.reuters.com/article/idUSN2322651820100624

http://www.larepublica.pe/economia/23/08/2010/gas-seguira-siendo-mas-caro-para-peruanos
http://e.larepublica.pe/image/2010/agosto/23/eco01.jpg

http://viewswire.eiu.com/index.asp?layout=ib3Article&pubtypeid=1142462499&article_id=1257319110&fs=true&rf=0

http://ipsnews.net/news.asp?idnews=51443

http://www.amazonwatch.org/amazon/PE/camisea/

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NOTES

In January 2006, Hunt Oil broke ground on a $1 billion plant to liquefy natural gas for export to planned markets in mainland Mexico and Western United States.

The government doent seem to be pursuing any changes to these contracts so that the price of (natural) gas bought for exports is not too different from the price of the gas bought for domestic (clients)," García told reporters. He said that Peru would seek to reach an agreement with natural gas companies because he does not want investors to take Peru to court for breach of contract.

Para mas informacion puedes revisar: los articulos de Humberto campodonico, en el diario la republica, alli estan sus articulos sobre el tema en los ultimos 3 meses han sido varios. Su columna se llama cristal de mira. Tambien esta el ing. carlos herrera descalzi, del colegio de ingenieros del peru. En la web de Propuesta ciudadana hay un documento llamado "gas de camisea" entre la exportacion y el mercado interno que tiene informacion que puede ser util.

Producto de las protestas en la provincia de La Convencion en el cusco, el gobierno ha sacado otro decreto supremo estableciendo que el gas del lote 88 quedara exclusivamente para el mercado interno, ya no se exportara. Ahora falta que el gobierno negocio esto con el consorcio camisea.

En tu opinion experta, se lograra que suban los precios del gas natural exportado del lote 88, o parece ser improbable dada la poca voluntad politica?
En relacion al precio de exportacion. El cuestionamiento vino porque actualmente el precio Henry Hub del gas al que se empezo a exportar esta bajo (alrededor de 4 dolares), lo que descontando los costos de transporte y otros dan un precio en boca de pozo de 0.54 +- dolares por millon de BTU (y la regalia resultante para el estado 0.14 centavos), cuando el mercado interno esta pagando mas (entre 1 y 2.5 dolares). Por eso hace poco ante los reclamos del sur del pais el gobierno emitio un decreto supremo estableciendo que la regalia que paga la exportacion no sera en promedio menor que la que paga el mercado interno. En boca de pozo quiere decir, en el lugar donde se extrae el gas del subsuelo.

[3] Maybe the price paid by foreign importers is in fact not equal to the world price, but rather some kind of negotiated price that gives the foreign buyers a very sweet deal. This could give you the gap you describe regardless of the royalty rate. What is happening is that domestic firms selling a bunch of exports to favored buyers -- who happen to be foreign -- at a loss. You would want to know why that sweet deal is in place: is it permanent, was it a condition of attracting foreign investment, etc.


The urgency of this matter has even made it a prominent issue in the upcoming Peruvian presidential elections of 2001. With the exploitation of natural resources likely to be a central issue in the presidential election, Mr Humala's radical position (he has promised to turn Block 88 of the Camisea field, which is currently destined for exports, over to supply the domestic market) may prove attractive in some parts of the country. Against this backdrop, the current government and the Camisea Consortium may look to speed up a new agreement and avoid further confrontation.

To avoid the loss of the 3,750$, the Peruvian government would have to enforce a reduction in domestic taxes on natural gas, or regulate or constrain the ability of natural gas producers to charge higher prices to Peruvians than to foreign importers.

know you don't have time for it at the moment, but Paul Collier's recent book The Plundered Planet would be a good source. I think he argues there that many countries charge too low a royalty rate, in effect giving away their natural resources too cheaply.

--High domestic prices discourage the consumption of natural gas and its use in production, and encourage the substitution of other forms of energy. Environmental impacts depend on comparing natural gas with other energy sources.

Further adverse fiscal impacts could come from a higher cost of borrowing in international markets, because of lower creditworthiness associated with the weaker revenue base.