Camisea contract renegotiation back on agenda

Market impact:
Bearish on gas and LNG prices

The election of Pedro Pablo Kuczynski as Peru’s new president has strengthened calls for the country to renegotiate its gas production and LNG export contracts. Gas and LNG are vital sources of revenue for the government, but low energy prices have curbed this source of income. Kuczynski will face constitutional obstacles while renegotiating contracts that he played a pivotal role in establishing. If the government can successfully renegotiate contracts by offering more lucrative terms, it is expected to boost upstream investment in Peru.