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Natural Gas, Natural Neighbors

A megaproject takes on the big job of safeguarding local communities and the environment in the Peruvian Amazon.


Every morning at 6 a.m. a loudspeaker cackles to life in a compound of prefab buildings. First come the announcements, and then the national anthem, “…our sovereign Peru has risen!”

Were it not for the anthem, this could be Energy Camp Anywhere. All such compounds look pretty much the same because they all have the same purpose: get the gas or petroleum out of the ground for as long as reserves hold out.

But in one important respect, this camp, called Las Malvinas, is very different: It is in the Amazon. Anything that happens in the Amazon tends to be difficult, potentially injurious to local people and their environment, and as a result—controversial.

As the sun rose over Las Malvinas, workers started to file into the cafeteria for breakfast, leaving their hardhats on a rack outside the door. Many wore jumpsuits, each of a different color and emblazoned with logos from multinational companies. The dashing helicopter pilots, in their spiffy blue uniforms and shoulder insignias, were ready to begin their day of airlifting men and materials to and from the drilling platforms in their Soviet-era machines.


The Camisea Natural Gas Project is the biggest infrastructure project ever carried out by Peru and one of the biggest energy projects in South America. It represents a total investment of US$1.4 billion, including $75 million from the Inter-American Development Bank. Camisea’s multiple wellheads pump natural gas from deposits 4,000 meters below the rainforest of the Lower Urubamba River. After the gas is treated at Las Malvinas, two pipelines transport the gas and liquids over the Andes to domestic markets and export terminals on the Pacific coast.

The gas started flowing in 2004, immediately enabling Peru to begin substituting a percentage of imported petroleum with domestically produced fuel. Camisea is also living up to its promise of benefiting the broader economy by adding an estimated percentage point to the country’s gross domestic production during its 30-year lifetime. Royalties from the project are starting to finance social development projects in local communities. And this is just the start: there is much more gas to be discovered and exploited in the Peruvian Amazon, and many more benefits to come.

But Camisea is far more than just an energy megaproject. It is also increasingly recognized as a model for exploiting energy resources in the Amazon in a socially and environmentally sustainable way. In this respect, Camisea is a clear departure from the past, when energy extraction projects in the Amazon were synonymous with abuse of local communities and widespread environmental damage.


Oscar Guillén, community affairs field supervisor for Pluspetrol, the operator of the consortium that runs the Las Malvinas operation, is one of the reasons that Camisea has earned this reputation. He and his colleagues occupy a different world, both figuratively and literally, from other Pluspetrol workers. He does not wear a jumpsuit or a hardhat, but rather a neatly pressed sport shirt. And while other Pluspetrol personnel are strictly prohibited from making contact with local people to reduce the risk of spreading disease and running afoul of local customs, Guillén and his staff spend much of their time in the communities, getting to know the residents and their needs.

Guillén’s mandate is to finance development projects in these communities in exchange for the right to operate on their lands and waterways. This was one of the many programs Pluspetrol is developing in the area of its 30-year concession.

But even were it not stipulated in a formal agreement, the company would have been acting in its own best interest to get the communities on its side. Whatever it can do to avoid the conflicts and even outright violence that have marred previous projects will allow it to continue, unimpeded, in its core mission, which is to exploit gas.

“Pluspetrol aims to be a good neighbor,” said Guillén. “We want to work in harmony with the local communities. We don’t want any kind of problem,” he said.

According to Pluspetrol’s community experts, working with local people is no simple matter. Without a thorough understanding of the internal politics, cultural practices, traditions, and environmental conditions of the area, money and good intentions often produce little more than resentment and suspicion. This comes as no surprise for members of Guillén’s staff, some of whom have spent much of their professional lives in the rainforest. They love the forest and respect the peoples who live in it.


Pluspetrol now has the staff and experience to navigate the complex currents of community development, said Guillén. The first step is to get to know a community, starting with the need to respect the authority and autonomy of the local leadership. For example, prior to attending a community meeting, the Pluspetrol’s team always informs the village leaders exactly who will be coming. When this reporter wished to accompany a Pluspetrol group to a meeting in the village of Camisea, Pluspetrol’s staff worked into the night to locate the village’s leader to ask his permission.

The next step is to help the communities learn decide how to spend the Pluspetrol funds. Leaders make decisions all the time, of course, but generally over short time frames, often less than a year into the future. “Only after they are able to look years into the future can we ask them to decide on projects,” said Lucía Medina, an archeologist who works as a community liaison and curator of the Las Malvinas museum.

Although Pluspetrol’s aim is to leave project decisions to the communities, it also wants to make sure that its money will be well spent. The projects must bring long-term benefits to the community as a whole. Some projects help strengthen community ties with the outside world by buying radios, computers, and outboard motors. Social projects include schools, community centers, electrification and water and sanitation.

After the community has decided on its project, Pluspetrol comes up with a funding offer. Often the community will counter with its own proposal, and the two sides reach a compromise.


Pluspetrol’s responsibilities don’t end when it writes the check. The company still has its reputation to protect. “We don’t want to be associated with failed projects,” said Guillén. “The projects we fund are a reflection of the company.”

This is not to disparage the ability of the communities to carry out projects. “They have considerable social capital, they have strong ties to the land, and their people know how to work,” said Guillén. But these are new kinds of undertakings, often involving procurement of equipment and contracting of outside experts. Pluspetrol staff often follow a project through the implementation period, or help to enlist the support of other experienced groups, such as a local Dominican mission, an indigenous organization or nongovernmental organizations.

Since beginning operations in the Lower Urubamba, Pluspetrol has worked with the 22 communities of the area. During the construction phase of Block 88, nine more communities were added and a total of $2,700,000 was allocated to the communities that had been affected by the activities. In the construction phase of Block 56, Pluspetrol worked with 41 communities and a total of $2,400,000 was allocated to the communities of that area.

In addition, the company has entered into health and educational agreements amounting to US$800,000, mostly invested in community works and other projects, including community facilities, mothers clubs, health posts, educational centers; radio communication systems, power generators, communal electricity networks; the purchase of power saws and the provision of scholarships.

Pluspetrol operations have also created employment opportunities for the local population that has enabled community members to earn some $4.3 million since the beginning of the project, according to the company. In the coming years, the company expects to increase its financial support to the communities as they and the local governments improve their ability to carry out and manage development projects. Local governments have been included as participants in projects in the Lower Urubamba to strengthen skills at the community level, create an electricity network and form an integral health program. The company is also working to enlist local government to carry out sustainable development projects.

Guillén is proud of his company’s record and occasionally voices resentment of the criticism it gets from some nongovernmental groups. But he says he doesn’t mind criticism when it is offered constructively.


The Camisea Natural Gas Project has brought major changes to the Lower Urubamba region. No longer marginalized from the rest of the country, the Lower Urubamba has become a new theater of cooperation among native communities, government officials, Pluspetrol and other energy companies planning on entering the region. Government agencies that formerly never came here are now providing vital services to help ensure the long-term well-being of the region’s peoples, particularly in such key areas as health services and land titling. As the coffers of local governments fill with Camisea royalties, municipalities and provincial governments are also getting the expertise to go into the Lower Urubamba to meet with local people and identify projects that they can finance at a lower level.

All of these groups, which previously had little contact, are now learning to work with each other. And they are doing so in a context of strengthened territorial and property rights which have given native people an unprecedented ability to determine their own future (see links to related articles on the right).

All parties agree the era of uncontrolled extractive industries in the Amazon is gone forever. No longer can companies and governments even consider disregarding the rights of local communities, as they once did. No longer can projects degrade the environment or ignore the need to account for long-term consequences, such as the influx of new settlers.

“We don’t have the space or the time to make mistakes,” said Medina. “The company realizes that it could never restore damage it could do to the environment and society, or recover its reputation.”

Republished with permission from
IDBAmerica, the magazine of the Inter-American Development Bank.

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