Rules of Fair Play
Law N° 26221, Organic Law of Hydrocarbons, in force since November 18, 1993, and Sole Consolidated Text approved by Supreme Decree Nº 042-2005-EM, their purpose is to promote investment in exploration and exploitation of hydrocarbon activities. Along these lines, PERUPETRO S.A. was created as a Private Law State Company of the Energy and Mines Sector, whose main functions are, inter alia, promote investment in the exploration and exploitation of hydrocarbons activities, and negotiate, conclude and monitor, as the Contractor, by the authority under the State, the Contracts and technical evaluation agreements.
In merit of this law, the State promotes the development of hydrocarbon activities on the basis of free competition and free access to economic activity, ensuring legal stability of the contracts as stated in article 62° of the Constitution of Peru, as well as the stability of fiscal and exchange rate prevailing at the date of the Contract. Similarly, article 66º of the Constitution of Peru states that natural resources, renewable and non-renewable, are the patrimony of the Nation; that the State is sovereign in its use; and, by organic law establishes the conditions of its use and its granting to private. The concession grants the holder a property right, subject to that legal regulation.
In this regard, the Law N° 26221 provides that the exploration and exploitation of hydrocarbons activities shall be made in the form of License Contracts, Service Contracts or other forms of contracting authorized by the Ministry of Energy and Mines, which are governed by private law and that once approved and signed, may only be amended by written agreement between the parties, the amendments must be approved by Supreme Decree.