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Peru Pushes Last-Resort Plan to Keep Petroperú from Creditors

The Finance Ministry says a newly installed professional board must stop years of losses or creditors could assume effective control of the state oil company.

Overview

  • Finance Minister Elmer Cuba warned Tuesday that the government has made a final intervention and that failure by the new board or non‑cooperation from the union would likely hand Petroperú to its creditors.
  • Petroperú carries about $5.6 billion in liabilities, including roughly $3.0 billion in international bonds and $1.3 billion owed to foreign banks backed by Spain’s CESCE.
  • The MEF blames years of operating losses and massive cost overruns on the Talara refinery modernization—originally budgeted at $1.7 billion and later reported to have risen to several billion dollars—for the company’s deterioration.
  • A pending $2.0 billion disbursement from Proinversión forms part of the rescue plan and is seen as crucial to the restructuring’s initial viability.
  • If the rescue fails, the state could lose effective control of Petroperú with political and fiscal consequences for public finances and fuel markets, and workers’ cooperation will be a key early test of the recovery effort.