"Decline in royalties from hydrocarbons raises concerns in the Peruvian economy."

The decline in royalties from hydrocarbon companies in Peru has raised concerns in the energy sector and the country's economy. According to a report from the National Society of Mining, Petroleum, and Energy (SNMPE), during the first half of 2024, the payment of the royalty regime by these companies decreased by 11.8%, totaling 579.44 million dollars, compared to the 656.71 million dollars recorded in the same period the previous year. This drop reflects the difficulties the industry faces in a context of fluctuating prices and operational challenges. The data reveals that, despite the overall decrease, there was a slight uptick in June, when royalties paid reached 100.87 million dollars, representing an increase of 0.4% compared to June 2023. However, this increase is insufficient to reverse the negative trend of the first half, as the amount remains lower than in June 2022, when royalties amounted to 173.47 million dollars. This comparison highlights the fragility of the sector and the need for effective measures to stabilize it. The breakdown of royalties indicates that, in June, companies contributed 47.93 million dollars from natural gas exploitation, 21.10 million dollars from oil, and 31.84 million dollars from natural gas liquids. These figures underscore the importance of natural gas in the state's revenue structure, especially at a time when the country seeks to diversify its energy sources and improve its infrastructure. In this context, the Ministry of Energy and Mines (Minem) has announced plans to supply 10 hospitals in various regions of the country with natural gas. This initiative aims not only to improve the quality of health services but also to ensure a more efficient and sustainable use of available energy resources. The initiative could generate greater demand for natural gas, which in turn could positively influence future royalties. On the other hand, the company Petrotal has also made significant announcements. The company has revealed a new project in Loreto, involving an investment of 260 million dollars until 2042. This project has the potential to boost oil production and, consequently, royalties to the state. However, it faces challenges related to environmental regulation and relationships with local communities, which are crucial for the success of any operation in the region. As the energy landscape becomes more complicated, there is a need to review and possibly reform the regulatory frameworks governing the hydrocarbon industry. The SNMPE has indicated that changes to the regulations for qualifying oil companies are being prepared, which could bring about a new approach to how activities in the sector are managed and controlled. These modifications could have a significant impact on investment and the stability of royalties. The decline in royalties not only affects companies but also the Peruvian state, which relies heavily on this revenue to finance various social and infrastructure projects. The decrease in capital flow could result in cuts to critical areas such as education, health, and security, ultimately affecting the most vulnerable populations. It is essential for the government and companies to work together to address these challenges. Policies should focus on fostering a conducive environment for investment while ensuring environmental sustainability and respect for local communities. A collaborative approach could be the key to revitalizing the sector and increasing royalties in the long term. Finally, with the decline in royalties in the first half of 2024, the future of the hydrocarbon sector in Peru appears uncertain. The combination of external factors, such as oil and gas prices, and internal factors, such as regulation and investment, will play a crucial role in the coming months. Without a clear and effective strategy, companies and the state may face an even more challenging landscape in the near future.