Oxy Pulls Out of Peru

Environmental groups and indigenous leaders have claimed a dramatic victory after Occidental Petroleum Corp confirmed plans to withdraw from a controversial oil and gas venture in Peru.
Occidental’s departure, which the company said is contingent on approval by the Peruvian government, follows extensive criticism by NGO’s.
One of the company’s biggest critics, Atossa Soltani, executive director of Amazon Watch said that Occidental’s decision to divest its Peru assets is significant as an acknowledgment by a big company that “the risks to a company’s reputation” from unpopular development in the Amazon “outweigh by a long-shot any economic advantage.”
Soltani acknowledged that the victory will be diminished if Occidental simply divests its holdings to other oil companies that already have a stake in Peru. Repsol and Petrobras, share one of Occidental’s blocks. Amerada Hess and Talisman share another lease.
In 2002, Occidental divested some Colombian holdings following extensive protest from another tribe, the U’wa. But Colombian state oil company Ecopetrol SA has since pushed ahead with the development in the face of continued tribal opposition. “That’s still in a standoff,” Soltani said of the ongoing Colombia dispute. “The industry as a whole has not learned its lesson,” she added.

Occidental spokesman Larry Meriage confirmed that the company wants to leave Peru, but that the decision still awaits final approval from the government.
Article cited: John M. Biers, “Occidental Withdraws From Controversial Peru Venture”, Dow Jones Commodities Service via Comtex News Network, 6 December 2006
Amazon Watch Press release here.