Moderator – Carlos Gomero, partner of Laub&Quijandría
The first speaker of this session was Luis Carranza, , Ex-Minister of Economy and Finance, who stated that the potential economic growth in the South (12% annually) lies in the mining sector (See Presentation), which concentrates major social conflicts constituting a barrier to private investment and; therefore, fewer possibilities to reduce inequality and poverty in the surrounding areas. The competitive advantages, we have for having resources such as copper, must go hand in hand with a strong institutionality, which will help to achieve projects like Las Bambas, Toromocho, Constancia and Ampliación Cerro Verde; their implementation will triple the copper production by 2020 and generate more jobs and derivative investments with a multiplier effect.
On the other hand, he said that the mining cluster in the south is still basic and it is necessary to take advantage of low costs of labor, energy, and transport to repower it. As a counterpart, there is a lack of logistic competitiveness, which is derived from the large gap in infrastructure we have and which reduces sustainability from economic growth in the South despite having large investment projects such as:
- Majes Siguas II
- Hydroelectric Power Plant Molloco
- Virtual Gas
- South Energy Node
- South Peru Gas Pipeline
Our second speaker was Carlos Gonzales, main partner of Enerconsult and Ex-Head of the Administrative Supervision Area of Contracts of PERUPETRO S.A., developed a presentation in which he emphasized challenges and adversities facing oil sector (See Presentation), reflected in the constant decline in domestic crude oil production. He mentioned two factors:
- “Permitting” and Social License
- Profitability vs Risk
Both give answer to the lack of investment to encourage development of this sector. It is necessary a profitability that compensate for the integrated, politic and regulatory risk assumed by oil investors. Among the urgent measures proposed is to restore the legal framework which states that mining royalty is 5%, in order to increase profitability, attract investments, increase crude oil production and become the largest oil canon receiver. Also, as long-term measures, he suggests:
- Strengthen PERÚPETRO
- Amend the Organic Hydrocarbons Law
- Amend Contract Model
CLOSING CEREMONY
The closing ceremony of the Third International Congress “Energy Day” was in charge of the Vice-Minister of Energy of the Ministry of Energy and Mines, Edwin Quintanilla, who made a presentation on political orientations and main projects of the energy sector.
Detailing which are the key points to achieve efficient development of the energy sector:
- Institutionalize planning of the energy sector. Thus, the Ministry of Energy and Mines has created an Advisory Committee to issue opinions and facilitate dialogue with stakeholders with regards to the Energy Planning Process. Its first task is to update the National Energy Plan for 2014-2025, based on studies conducted and in coordination with institutions of the energy sector.
- For the hydrocarbon sector, it is necessary:
- Relaunch exploration
- Consolidate the gas pipeline national network
- Re-strengthen PETROPERÚ, and
- Promote development of petrochemical industry
- As for the electricity sector, it is necessary to: (i) enhance contribution of RER in the energy matrix; thus, before the end of the year, a new auction will be held to complete at least 5% of contribution of RERs, (ii) increase performance of suppliers; thus, it is necessary to modernize regulation and corporate management, promote private participation and improve collaboration between the private and public sector, and (iii) preserve the hydro-thermal balance in generation
- Consolidate regional integration with Ecuador, Colombia, Bolivia and Chile
Finally, this Congress was closed, appreciating the different contributions and proposals made throughout the day.
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