Camisea, one of the largest natural gas fields in Latin America, located approximately 500 kilometers east of Lima (Peru), has become the epicenter of a possible legal battle between SK Innovation, the largest hydrocarbon company in Korea. South, and the State of Peru.
The events date back to September 2019, when the Korean company reached an agreement to sell 17.6% of its stake in the project to the Argentine Pluspetrol, which maintains a position of 27%, for 1,052 million dollars (871 millions of euros).
However, those involved were met with the refusal of the Government of Peru to said agreement due to the lack of approval of an anti-corruption clause in the contract.
Specifically, the Andean Administration obliged the buyer to relinquish their rights over the deposit in the event that the company or other companies in the consortium were involved in a case of corruption anywhere and at any time, both present and future.
To carry out the agreement, the State required the other consortium partners to sign the document, including Hunt Oil, Repsol, Sonatrach and Tecpetrol.
Given the position of the Peruvian authorities, SK Innovation notified a couple of weeks ago that it was evaluating an international arbitration against the Peruvian State.
“SK wants to sell its stake to one of its partners in the consortium, but it cannot do so because the Peruvian state, which has to give its approval for any change, refuses to give it,” it explained in a statement.
In this sense, the company understood that it was “very unlikely” that any company is willing to sign a clause of these characteristics. “The Peruvian state is making it impossible for SK to sell its stake, severely affecting its property rights,” the company said.
The company highlighted that the country’s position on this matter was a violation of international law and the Free Trade Agreement between Peru and South Korea, and warned that blocking the operation would mean a loss of 1,000 million dollars (828 millions of euros)
for the country, among other impacts.
“This decision to consider arbitration hurts us and we do not take it lightly, but SK is facing the threat of significant and irreparable financial damage and must protect its rights,” the company added.
In the absence of knowing the end of the litigation, it should be noted that the closing of the agreement will be subject to the approval of various Peruvian authorities, such as the state company PerúPetro, the Ministry of Energy and Mines and the Ministry of Economy and Finance.