Decrease in royalties from hydrocarbon companies in Peru during 2024: Economic alert?

The National Society of Mining, Petroleum, and Energy (SNMPE) recently published a report revealing that companies in the hydrocarbons sector in Peru paid the State a total of US$478.5 million in royalties during the first five months of the year 2024. This figure represents a 15.1% decrease compared to the same period the previous year, when oil companies disbursed US$563.5 million. Although there is a decrease in payments made by companies in the sector, the guild highlights that in May 2024 there was a 14.4% increase in royalty disbursements compared to May 2023. In that month, hydrocarbon companies paid a total of US$100.4 million to the Peruvian State. Despite this improvement in May, the figures continue to show a downward trend compared to previous years. For example, in May 2022, royalties reached US$151.7 million, indicating a decline in revenues generated through this channel for the State. In the breakdown of payments made in May 2024, it is highlighted that companies in the hydrocarbons sector paid US$48.2 million for natural gas exploitation, US$20.2 million for oil, and US$32.1 million for the production of natural gas liquids. These figures reflect the diversity of activities carried out in the sector and their direct impact on state coffers. Furthermore, the same report reveals that private investment in the country experienced a marginal growth of 1% during the first half of the year. This figure contrasts with expectations of a greater dynamism in private investment, which could indicate some caution on the part of investors regarding the current economic outlook. It is important to highlight that private investment plays a crucial role in the economic development of the country, as it drives job creation, fosters innovation, and contributes to sustainable growth. Therefore, it is essential to create the appropriate conditions to promote a greater flow of investment in strategic sectors such as hydrocarbons. Given this scenario, it is necessary for authorities and sector stakeholders to work together to identify the factors that may be limiting the growth of private investment and to take the necessary measures to promote economic reactivation. Likewise, transparency and efficiency in the management of resources from royalties must be promoted to ensure their effective use for the benefit of the population. In conclusion, the data presented by the SNMPE highlights the importance of the hydrocarbons sector in the Peruvian economy, as well as the challenges it faces in terms of investment and revenue generation for the State. It is crucial to promote a conducive environment for private investment and establish mechanisms that optimize the utilization of natural resources for the benefit of society as a whole.