Private participation option pitched during Petroperú debate

The solution to the crisis facing Peru’s national oil company Petroperú is private management, according to the NOC’s most recent chairman, Oliver Stark.

Stark made the comment during a congressional roundtable where he highlighted Petroperú’s governance challenge but added that privatization is not an option, the legislative body reported.

President Dina Boluarte has ruled out privatization of the state company.

Former Petroperú chairman Carlos Paredes Lanatta echoed his colleague’s words, adding that state interference must stop, and called for the injection of private capital.

Paredes attributed Petroperu’s current situation in part to the investment in the overhaul of the Talara refinery.

According to Paredes, the new refinery is far from the market where there is greater consumption and from the place where heavy crude oil is available for refining.

“It is important that Petroperú has a technical and independent board, free from political interference and conflicts of interest, that really works so that the state oil company emerges from the crisis, is a viable company and that resources from the treasury do not continue to be injected into it,” local mining, petroleum and energy industry group SNMPE said following this month’s resignation of Petroperú’s board.

In a statement, the board said they had “been alerting the government since the beginning of its administration about the financial unsustainability facing the company.”

“We consider that we have fulfilled the assigned responsibility, and under current conditions, it is not feasible to continue with the order received,” the board added.

Petroperú’s situation has raised concern among other groups, such as foreign trade association ComexPerú, automobile association AAP and the Lima chamber of commerce which point to the need for greater government action.

In the first half of 2024, Petroperú’s net losses widened to US$452mn from US$380mn in 1H23.

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