Peru Approves Emergency Overhaul of State Oil Firm Petroperu

Peru’s Government Approves Emergency Decree for State-Owned Oil Company

The Peruvian government has issued an emergency decree allowing private investment in parts of the state-owned oil company Petroperu. The move aims to reorganize the company into one or more asset units, enabling private participation in key operations.

As part of this plan, Petroperu’s flagship Talara refinery will be subject to private investment. The refinery recently underwent a $6.5 billion upgrade. Additionally, the company operates or holds concessions for six crude oil blocks with limited production and a nationwide fuel distribution and marketing network.

According to the Ministry of Energy and Mines, the decree seeks to ensure compliance with financial obligations through technical management of its assets. This is aimed at laying the groundwork for Petroperu to become a self-sustaining company.

Petroperu’s financial position has been reported as sensitive, with accumulated losses totaling $479 million between January and October 2025, along with debts to suppliers amounting to $764 million through December. The company has also faced significant debt linked to the Talara refinery modernization, which exceeded its original estimate.

The government has previously provided financing to Petroperu, with approximately $5.3 billion in support between 2022 and 2024. However, the company’s financial strain has been compounded by environmental concerns, including an oil spill along Peru’s northern coastline in 2024.

This move comes as Peru faces ongoing political instability, economic uncertainty, and public pressure for stronger oversight of state institutions. The government’s decision will be closely monitored as it aims to stabilize Petroperu and ensure its long-term sustainability.

Source: Al Jazeera