Talisman to stop exploration and withdraw from Peru

Talisman to stop exploration and withdraw from Peru

BY RYAN DUBE

LIMA, Peru -- Talisman has decided to stop exploration in northern Peru and withdraw its business activities from the Andean nation. Talisman has been exploring in Peru since 2004. It operates blocks 64 and 103, and also has interests in blocks 123 and 129.

"Despite our success in finding light oil in Block 64 Situche Central, we have been unable to build a material resource position in Peru, the company's vice president of international exploration, Richard Herbert, said in a statement. "After careful consideration, a decision has been made to exit Peru and focus on near-term liquids and oil-linked gas opportunities in our global portfolio."

While Talisman said it has good relations with local authorities and indigenous residents, environmental nongovernmental organizations have criticized the company for operating without the consent of indigenous groups.

"Talisman's exit sends a clear message to the oil industry: Trampling indigenous rights in the rush to exploit marginal oil reserves in the Amazon rainforest is not an option," said Gregor MacLennan, the Peru program coordinator Amazon Watch.

Peru's government has been looking to prevent conflicts between rural, indigenous communities and natural resource companies. Social conflicts in Peru often result in violent protests and have delayed investments worth billions of dollars in mining and energy projects.

President Ollanta Humala's government approved legislation last year aimed at improving consultation with indigenous people before the development of nearby natural resource projects.

Dow Jones Newswires