Peru’s State Oil Company Petroperú Receives Financial Lifeline Amid Crisis

The Peruvian government has approved emergency measures to rescue state-owned oil company Petroperú from its ongoing financial crisis.

Prime Minister Gustavo Adrianzén announced the approval of an urgent decree to help Petroperú overcome its current financial difficulties.

Petroperú has been struggling with massive debt exceeding $8.5 billion. The company’s board of directors recently resigned due to government inaction regarding its future.

The new decree aims to ensure the continued nationwide distribution of fuel and the company’s sustainability.

Energy Minister Rómulo Mucho provided some details about the rescue plan. It includes new financial injections to help Petroperú meet short-term obligations like fuel payments, supplier commitments, and bank interest.

The goal is for Petroperú to achieve a positive cash flow by the end of 2024. However, the financial support comes with conditions. Petroperú must implement austerity measures, including staff reductions.

The company aims to cut expenses by 10% this year and 30% in 2025. Some departments have already been merged, and workers have been invited to leave voluntarily.

The crisis stems partly from technical issues at Petroperú’s main refining unit. The Flexicoking Unit, capable of processing heavy crude oil, has been inoperative since early 2024 due to failures.

This has significantly impacted the company’s cash flow. The government hopes these measures will help Petroperú regain market confidence and prestige.

Minister Mucho emphasized that within a year, the company should no longer need government support. The rescue plan aims to stabilize Petroperú’s finances while imposing stricter corporate discipline.