Environmental and Social Due Diligence Assessment of Two Oil Exploration Blocks, Perú

Acorn International led an environmental and social due diligence assessment for an international oil and gas company considering investing in two oil exploration blocks in Peru held by another company.

Main issues of concern included indigenous people, possibly with some living in voluntary isolation, protected areas including a proposed IUCN biosphere reserve, tropical forest with high biodiversity, the presence of coca growers and illegal loggers, a strong national, changing government structure and regulations, and both local and international NGO pressure against developing oil and gas reserves in the area.

Our team performed a rapid (5-day), high level Health, Environmental, Safety and Social Screening to identify risks and issues that would need to be considered when making initial investment decisions.

Once the company decided to pursue discussions with the field operator and government officials, Acorn International was asked to design and lead an in-depth due diligence assessment of potential environmental and social risks.

Our work involved working with the target oil and gas company, developing a checklist and protocol of questions to be addressed in the assessment, performing advance research, conducting interviews in Lima with multiple governmental agencies and others, analyzing results, and preparing a report of findings.

Our team worked with various groups within the client oil and gas company to vet the report and integrate their comments into a final report. Our analysis included consideration of legal, operational and reputation liabilities that would need to be faced by the company if the investment were to proceed.