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Peru’s prime minister defended the new leadership at Petroperu against criticism from business groups that said they would slow the restructuring of the heavily indebted state-owned oil company.
Author of the article:
Bloomberg News
Marcelo Rochabrun
Published Nov 14, 2024 • 1 minute read
(Bloomberg) — Peru’s prime minister defended the new leadership at Petroperu against criticism from business groups that said they would slow the restructuring of the heavily indebted state-owned oil company.
“We hope that these appointments will soon and silently start to generate positive results,” Prime Minister Gustavo Adrianzen said in an interview in Lima. Peru is hosting the Asia-Pacific Economic Cooperation summit this week, with world leaders from the region in attendance.
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Petroperu has been a recurrent drag for Peru’s coffers, requiring over a billion dollars in aid that has hurt the country’s fiscal accounts. Business groups in Peru have sharply criticized the recent appointments of Alejandro Narvaez as Chairman and Oscar Vera – a former energy and mines minister – as CEO, saying they will not help a turnaround.
“Narvaez has said that the company is not undergoing a crisis, despite the bailouts Petroperu has required to avoid insolvency,” said business trade group Confiep in a statement this week. “These appointments are political, ideological and irresponsible, and they reinforce the executive’s position that it is against restructuring Petroperu.”
Petroperu operated without a board for around eight weeks, after a previous slate of directors resigned en masse, accusing the government of dragging its feet over the tough decisions needed to transform the company. Petroperu is heavily indebted due to the construction of its $6 billion Talara refinery, which was much delayed and over budget.
Meeting bond and lender payments has been a headache for Petroperu, with the government currently assuming those bills directly. Finance Minister Jose Arista said in an interview earlier this week that it was unlikely that the government would continue paying creditors on behalf of Petroperu next year, but did not rule it out.
Adrianzen denied Petroperu would need more financial support from the government, but acknowledged that his predecessors had made similar ascertions, only to then bail out the company at a later date.
“Personally, I reject the need for a new rescue,” the prime minister said.
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