Category: Peru

Peru has signed a hydrocarbon exploration contract with an affiliate of state-owned China National Petroleum Corp, Sapet Development Peru Inc., to operate in the south-eastern region of the country bordering Bolivia, an area with the country’s highest gas reserves.

Hunt Oil of the U.S. has filed with Peru’s securities commission to issue $150 million of bonds in the local market. Hunt has plans for a $2 billion project to export natural gas from Peru to Mexico and is due to start construction of infrastructure at the end of this year. The company also recently signed an oil exploration and production contract with the Peruvian government to operate in the south of the country.

Ex president of Peru Alberto Fujimori has confirmed that he will run for next year’s presidential elections due to take place in April 2006. At a press conference in Tokyo, Fujimori said he intended to run for president and claimed to have 30% support of the voters in Peru. Fujimori has been in Japan since resigning his presidency in 2000 and Peru has unsuccessfully sought his extradition from there to face human rights and corruption charges at home. Last month he received a new Peruvian passport.

Peru’s largest telecoms operator, Telefónica del Perú, has issued its first local currency bonds abroad. The $225 million sol-denominated paper matures in 2016. Telefónica’s issue follows Brazil’s successful first issue on 20 September, when it sold $1.5 million of real-denominated bonds to international investors.

Phelps Dodge Corp, which owns Peru’s third-largest copper mine, Cerro Verde, has said it has secured loans of $450 million to help with its expansion plans for the mine. The US company said it may replace $90 million of the financing with a bond sale in Peru. This follows a decision late last week by Cerro Verde shareholders to approve issuing bonds for up to $250 million. Phelps Dodge expects to triple annual production to 300,000 metric tons following expansion.

Peru experienced 0.09% deflation in September, making it the second month of consecutive deflation in the country after 0.18% recorded in August. This takes cumulative inflation for the nine months to end-September to 0.89%. Brazil also witnessed a fifth deflationary month with a rate of 0.53%, following August’s fall of 0.65%. Meanwhile, Colombia recorded a rise of 0.43% in September’s rate of inflation, pushed up by higher school fees at the start of the academic year, according to official sources. Cumulative inflation was at 4.42% as at end-September. And Venezuela registered 1.5% in September, meaning that cumulative inflation for the first nine months of the year is now 11.6% against 14.7% for the same period last year. Argentina is due to release its figures on Wednesday.

Peru has set the date of 16 December for the anticipated privatization of La Granja copper deposit. The project, which has gold as well as copper deposits, has been explored before, most recently by Melbourne-based BHP Billiton. The Australian company, however, pulled out citing low-grade ore and high extraction costs. Officials say new technology now available should make extraction easier. An estimated $700 million is needed to develop the project.

Shareholders of Peruvian copper mining group Cerro Verde have approved a $250 million bond issue, the company said. The funds raised will be used to pay for its $850 million expansion plans which are expected to boost copper production to around 300,000 metric tons a year by mid-2007 from around the current 100,000 tons a year.

However, Peru’s GDP growth rate in July again slowed to 4.92%, less than the government 6.5% forecast and market expectation of 5.9%. This follows growth of only 4.6% recorded in June, the lowest level since last October. Since then, growth rates have been consistently above 6%.

Former president of Peru, Alberto Fujimori, who has been in Japan since resigning in 2000, has received a new Peruvian passport in Tokyo. Fujimori, who faces human rights and corruption charges in Peru, has claimed Japanese citizenship since leaving Peru but has said that he plans to return to the country to stand for presidential elections in April 2006. Peru has unsuccessfully sought his extradition from Japan and has banned him from running for office until 2010.