Peru's President Seeks to Boost State Energy Firm

Peru's President Ollanta Humala on Friday sought a last-minute compromise with Congress on a bill that aims to clear the way for state-owned energy company Petroperu to control the country's biggest oil block.

Humala asked the opposition-controlled Congress to modify the legislation to make clear that Petroperu would only be able to operate block 192 after a contract with Pacific Exploration and Production Corp expires.

It was unclear if lawmakers who overwhelmingly passed the bill earlier this month would incorporate Humala's proposal or vote to pass it into law unchanged.

Peru awarded Pacific a two-year service contract in August after an auction for a 30-year concession failed to draw any bids amid slumping oil prices and tensions with local communities.

Critics said the government should have transferred the block to Petroperu so the state firm could return to upstream activities. Petroperu has mainly refined, transported and commercialized oil for the past two decades.

Humala's decision to send the bill back to Congress came three weeks after it passed 71-10 and within hours of a deadline that would have allowed it to become law.

Energy and Mines Minister Rosa Maria Ortiz had called the legislation "unconstitutional" and "a horrible signal to investors" before its passage.

The bill does not propose changing Pacific's contract but would modify a law that Humala had interpreted as barring Petroperu from investing in oil production while a $3.5 billion expansion of its main refinery is ongoing.

Pacific has declined to comment on oil block 192.

(Reporting by Mitra Taj; Editing by Richard Chang)