Mitra Taj, Argus

LIMA
EnergiesNet.com

The Peruvian government signed off on a $1.5bn bailout of state-owned PetroPeru to help the company import crude and products as its dwindling inventories have sparked fears of worsening fuel shortages.

PetroPeru’s financial situation has deteriorated rapidly this year after it failed to produce an audit of its 2021 statements amid a growing graft scandal involving Peruvian president Pedro Castillo and a former chief of PetroPeru. S&P Global Ratings and Fitch both downgraded the company’s credit rating to junk, restricting its access to short-term credit.

In an urgent decree passed late on 25 October, Castillo authorized 4bn soles ($1bn) in capital for the company from the public treasury, as well as a $500mn credit line from the state-run bank Banco de la Nacion to help the company import crude, biodiesel and fuels.

In May, the finance ministry gave Petroperu a $750mn loan, which is due for repayment by the end of this year.

The fresh funding for PetroPeru was approved more than a week after the government said it would bail the company out again, and came as some retail fuel stations in Lima report running short because of limited supplies from PetroPeru’s 15,500 b/d Conchan refinery.

The company meets 40pc of local diesel needs and 55pc of gasoline. Spanish company Repsol supplies most of the rest.

The government decree warned of a «high risk» of worsening fuel shortages in coming days, after PetroPeru’s inventories of liquid fuels at some of its plants and terminals dropped to under five days. It said Fitch’s September downgrade had complicated the company’s efforts to reestablish short-term credit lines with domestic and international banks, and had led to new restrictions from its international providers of crude oil.

The company’s troubles have been compounded by longer-than-usual closures because of recent high waves at Peruvian ports, restricting discharging, the government said.

PetroPeru canceled a shareholders meeting that had been scheduled for 21 October, citing force majeure for unstated reasons. It has not yet announced a new date.

Shareholders were due to discuss the start date of its upgraded Talara refinery, its audit of 2021 financial statements and a spate of new oil spills from a shuttered pipeline.

argusmedia_26 10 2022