OREANDA-NEWS. Canada's Pacific Stratus Energy has suspended crude production on block 192 in the northern Peruvian jungle because of a prolonged pipeline restriction.

The 1,100km (684mi) northern oil pipeline, owned and operated by state-run PetroPeru, suffered two ruptures in February, dumping some 3,000 bl of heavy crude near indigenous communities in Amazonas and Loreto states.

The Peruvian government declared health emergencies in more than 20 native communities to facilitate remediation. PetroPeru faces fines in excess of $20mn.

While the spills have been contained, PetroPeru has come under pressure to guarantee that the pipeline is secure, forcing it to stop the flow of crude.

The pipeline could remain closed for another six to eight weeks, according to upstream regulator PeruPetro.

PeruPetro president Rafael Zoeger said Pacific Stratus continued operating in February, but was forced to close wells after storage tanks were filled. PeruPetro has declared force majeure on the block.

Pacific Stratus, a subsidiary of financially struggling Pacific Exploration and Production, was unavailable for comment.

Output from block 192, once Peru's most important production block, averaged 4,224 b/d in February, down from 9,731 b/d the same month last year, according to PeruPetro. The block did not register any production in the first half of March. Production was 9,990 b/d in March 2015.

The block covers 512,000 hectares (5,120km2) along the border with Ecuador.

Pacific Stratus has had a difficult time since taking over block 192 in September 2015. It was awarded a two-year management contract for the block after PeruPetro failed to attract bidders in an international tender. The block was previously managed by Argentina's Pluspetrol until its 30-year contract expired at the end of last August.

Peru's congress objected to the no-bid contract given to Pacific Stratus and approved legislation requiring PetroPeru to take over management. Outoging president Ollanta Humala vetoed the legislation, but lawmakers overturned the veto in October. The block will be handed over to PetroPeru in 2017.

Pacific Stratus had to suspend production for 10 days in September because of indigenous protests that it said cost the company $40mn.

The loss of production from block 192, together with lower production on other blocks because of the oil price collapse, pushed down national crude production to 46,570 b/d in February, compared with 59,129 b/d in the same month last year. Production in the first half of March was 35,961 b/d, while production during the full month last year was 60,000 b/d.

Three blocks now account for most of Peru's crude, including Chinese state-run CNPC with 11,000 b/d on block 10 on northern coast, Colombian-South Korean Savia with 8,600 b/d on offshore block Z-2B, and Pluspetrol with 7,600 b/d on block 8 in the jungle.

Peruvians go to the polls on 10 April to elect Humala?s successor. A likely run-off will be held in June.