Petroperú Board of Directors outlines the path to financial recovery with transparency

The following is a machine translation of a Petroperú release

Petroperú's Chairman of the Board, Dr. Alejandro Narváez Liceras, presented at a press conference the current situation of the company and the urgent measures and objectives of the new Board of Directors, aimed at reducing the projected impact on its results for 2024 and 2025, prioritizing cost reduction, improvement of the operating margin and increase in market share that will allow the company to overcome its critical situation and achieve its financial recovery in the medium term.

“We have found Petroperú with a net loss of 750 million dollars and a projected loss of 960 million dollars for 2024, with a market share of 25%, the numbers speak for themselves,” he said. In this regard, he indicated that in order to improve the results, a cost reduction and resource optimization plan will be implemented, which implies the operational efficiency of the New Talara Refinery (NRT) and other business units, efficient imports of crude oil, LPG and diesel at the lowest cost on the international market, as well as technical management of fuel prices.

Narváez Liceras was emphatic in mentioning that a commercial strategy will be implemented to recover market share. To this end, a transformation of the Supply Chain and Marketing Management will be carried out, with a high-performance commercial team. Priority will be given to the sale of fuels to large consumers in the industrial sector and direct sales will be made to the different market segments.

“This year we should close with a market share of 28%, which will reduce the projected losses. For 2025, we aim for a market share of 38%, which will allow us to achieve positive figures,” said Narváez Liceras.

“Petroperú’s vision is to develop a comprehensive energy security project for the country,” he said, reaffirming the company’s presence in the upstream, either directly as operator of lots I, VI and Z-69 or with a partner in Lot X. Currently, these lots supply oil and natural gas to the NRT.

Likewise, within the framework of Emergency Decree 013-2024, a prestigious international firm will be hired as soon as possible to implement the transformation process of Petroperú, whose main objective is the financial restructuring and strengthening of the governance of the company.

The Chairman of the Board of Directors reported that the challenges facing Petroperú are challenging, as the company has received unfavorable figures and operating costs, such as a negative refining margin in NRT and high production costs, a situation that he hopes to reverse with the urgent measures to be implemented. “Our goal is for the Talara Refinery to process up to 100 thousand barrels per day in December 2024 with an operating margin higher than the current one,” he said.

He also announced the restoration of the Ethics and Transparency Commission, as part of a plan to be accountable to all Peruvians. He also announced the implementation of an ISO 37001 Anti-Bribery Management System. He also noted that an open-door policy will be implemented with stakeholders, working closely with the towns and communities of direct influence.

Regarding the planned Forensic Audit of the NRT, he mentioned that it will be carried out with the active participation of the Office of the Comptroller General of the Republic to identify alleged irregularities in the execution of the project and those responsible. He also pointed out that the sale of unproductive or non-strategic assets held by Petroperú is still underway, in accordance with the measures required by the Government.

"The company's situation is complex, but with a clear strategy we can turn Petroperú into an example of efficiency and transparency. Our plans will allow us to build an energy company for all Peruvians," said Narváez Liceras.

Narváez was accompanied by the members of the Board of Directors: Carlos Balta Chirinos, César Rodríguez Villanueva, Fidel Moreno Rodríguez, David Quispe Figueroa and Antonio Manosalva Alarcón and the general manager, Oscar Vera Gargurevich. “All the members of the Board of Directors are top-level professionals, with solid professional experience and deep knowledge in their areas of specialization. It is a competent and committed team to run the company with honesty and transparency, but above all with efficiency,” he concluded.