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Peru to Review Pluspetrol's Natural Gas Contract After Deadly Protests

Peru will evaluate a natural gas contract it signed with Pluspetrol in 2005 and is asking the Argentine company to leave a restive Amazonian town following deadly protests there, the government said on Thursday.

Pluspetrol started exploratory activities in natural gas block 108 last year, upsetting locals in the town of Pichanaki who fear it will lead to pollution and hurt farming.

Energy and Mines Minister Eleodoro Mayorga said he believes the company has complied with its contract for developing block 108 but that the government must make sure.

“That contract must be evaluated,” Mayorga said on state television from Pichanaki, in Peru's Amazonian region of Junin.

“I would like to know about advances that have been made, and if they've been made with all the permits this type of work requires,” Mayorga said.

Mayorga traveled to the town to calm tensions after street demonstrations against the company left one dead and dozens injured on Tuesday.

Pluspetrol did not respond to requests for comment on Thursday. It said earlier this week that it has not yet drilled any wells and that its activities in block 108, mainly seismic testing, satisfy all environmental laws.

Protesters in Pichanaki have called for Pluspetrol's departure, a demand Mayorga said he would try to fulfill.

“I'm going to ask the company to leave Pichanaki within three days, the time it needs to go and take everything it has brought,” Mayorga told cheering crowds in a televised speech.

The government of President Ollanta Humala, a former leftist military officer who turned to the right upon election in 2011, okayed Pluspetrol's environmental study for block 108 in 2013.

The concession is expected to hold significant reserves of natural gas.

Pluspetrol is also struggling to end conflicts in Peru's northern Amazon, where indigenous protesters have taken control of oil wells and halted 3,100 barrels of output per day in the country's biggest oil block.

Pluspetrol also leads a consortium that operates Peru's biggest natural gas field, known as Camisea.