"An 11.8% drop in royalties from the hydrocarbon sector raises economic concerns."

The recent publication by the National Society of Mining, Oil and Energy (SNMPE) has shed light on the royalties that hydrocarbon sector companies have paid to the state in the first half of 2024. A total of US$579.44 million has been paid by these companies, representing a significant decrease of 11.8% compared to the US$656.71 million recorded in the same period of the previous year. This decline in royalty revenues raises questions about the sector's performance and its impact on the national economy. June 2024 presents a somewhat more positive picture, as companies paid US$100.87 million in royalties, which indicates a slight increase of 0.4% compared to the US$100.44 million from the same month in 2023. However, when comparing this figure to what was reported in June 2022, which reached US$173.47 million, a considerable drop is evident, potentially reflecting structural or cyclical issues within the industry. The SNMPE has broken down the payments for June 2024, indicating that US$47.93 million came from natural gas exploitation, while US$21.10 million corresponds to oil royalties. Additionally, US$31.84 million were generated from the production of natural gas liquids. These numbers suggest that while there is a short-term rebound, the long-term trend may not be as encouraging. The decline in royalties can also be seen as a reflection of the broader context in the hydrocarbon sector, which has faced various challenges, from fluctuations in international oil prices to changes in regulation and investment in alternative energy resources. Most companies are grappling with rising cost pressures and must simultaneously adapt to an environment with increasing demand for more sustainable energy sources. Sector analysts warn that the drop in royalty payments could have significant repercussions for state project financing and the government's capacity to invest in infrastructure and public services. At a time when the global economy is in constant flux, reliance on revenues from the hydrocarbon sector could prove problematic if the country’s economic base is not diversified. This is compounded by the context of the proposal from the Lima Chamber of Commerce (CCL) to reduce the number of candidates in the upcoming elections, a topic that has gained relevance in public debate. Political stability and a predictable regulatory framework are key factors in attracting investment in the energy sector, as well as ensuring that royalties remain at levels that benefit the state. Additionally, it is essential for the state and hydrocarbon sector companies to find common ground that allows for maximizing royalty benefits without compromising environmental sustainability. In this regard, technological innovation and the use of cleaner practices in hydrocarbon production could be a viable path to enhance both state revenues and the companies’ reputations. The announcement by Grupo ON regarding its agreement to sell Win to Linzor Capital Partners also highlights the sector's dynamism, albeit in a context where royalties are declining. This can be interpreted as an attempt by companies to consolidate and adapt to the new realities of the energy market, which demands greater efficiency and environmental responsibility. In conclusion, although the hydrocarbon sector showed a slight rebound in June 2024, the fall in royalty revenues in the first half of the year and their comparison with previous years is a cause for concern. It is necessary for both the government and sector companies to work together to ensure not only economic stability but also the sustainable development of the country in an increasingly competitive and demanding global context.