All this in an adverse context due to the restriction of its credit lines because “we have not yet recovered market confidence, nor our credit rating“, he points out Pedro Chira, president of the state oil company.

LOOK: Government will implement a partial bailout for Petro-Perú: What does this new decision consist of?

Hence his insistent request for financial support in order to avoid a situation “very complex” and “very difficult” for the company.

This is a request that has been evaluated by a high-level working group, which would have very few days to make a determination. What could this commission decide? Everything indicates that its members will choose to rescue Petro-Perú, given the situation the company is going through.

But, Should this support be given without conditions? Will it be the last? What is needed to prevent it from happening again?

RESCUE CONDITIONS

Pedro Chira has made it clear that government help is necessary because of the “heavy backpack” (US$1.6 billion) that Petro-Perú has to carry.

Petro-Perú has lost a lot of market in the fuel distribution sector.

On the contrary, economists and hydrocarbon specialists recommend the sale, concession or liquidation of the company, as less bloody measures for the country than a new bailout.

In that line, Víctor Gobitz, president of the National Society of Mining, Petroleum and Energy (SNMPE) He opts to restructure the state company in a bankruptcy process before Indecopi.

However, he considers that this measure will be very difficult to implement due to “to the current context, where the State is a shareholder”. Therefore, he proposes a rescue, but “with conditions” so as not to damage the country’s credit rating.

In this sense, it is urgent to publish and execute the Petro-Perú restructuring plan, prepared by Arthur D. Little (ADL), which implies the departure of the officials who have led Petro-Perú to its current condition, since “They are the least indicated to manage the Government rescue”.

This includes the company directors and to Minister of Energy and Mines, Óscar Verawho is judge and party, since he continues to be a Petro-Perú worker (with leave).

What’s more, the economist Alejandro Indacochea notes that Vera was director of the state company at the time when the credit rating crisis broke out that led to its current prostration.

Minister Óscar Vera was a member of the Petro-Perú board of directors at the time the company began to lose its credit rating, in 2022. (Photo: Jesús Saucedo)

Minister Óscar Vera was a member of the Petro-Perú board of directors at the time the company began to lose its credit rating, in 2022. (Photo: Jesús Saucedo)

/ NUCLEO-PHOTOGRAPHY > JESUS ​​SAUCEDO

“This is the first time that I have come across a restructuring plan that is going to be executed by the same people who created the problem, that is, by those who bankrupted the company.””notes Indacochea.

THE LAST SALVAGE?

For these considerations the hydrocarbon expert Carlos Gonzales proposes to look for imaginative formulas to not deliver the bailout directly to Petro-Perú.

For example, a committee of suppliers can be formed to pay them what they are owed. But next we must see how to prevent the problems (ransom requests) that have happened in recent months from happening again,” points out.

This means selling, concessioning or liquidating the company. Or, ultimately, reorganize it with what is most at hand: Arthur D. Little’s plan, which no one (except Petro-Perú itself) knows about to date.

“Ensuring whether it will be the last rescue or not involves the strengthening that we are doing in the company and the change in governance.”“, indicated Pedro Chira last Thursday.

If this plan is so important, why does Petro-Perú refuse to publish it?

Last week the oil company indicated that it has been reporting in its web portal the progress of the restructuring plan, but not to the extent of publishing it completely so as not to alert its commercial competitors.

Last July, Petro-Perú's board of directors approved the restructuring plan prepared by the consulting firm Arthur D. Little.  The company states that it does not socialize it so as not to reveal its commercial strategy to the competition.

Last July, Petro-Perú’s board of directors approved the restructuring plan prepared by the consulting firm Arthur D. Little. The company states that it does not socialize it so as not to reveal its commercial strategy to the competition.

“Would anyone in their right mind reveal the strategies to recover in the next 3 to 4 years? And what a coincidence that those who ask for it are our competitors through certain companies (the SNMPE)”, Chira wonders.

A healthy measure to overcome this obstacle, in Indacochea’s opinion, is to publish the document, but with the exception of the chapters corresponding to the commercial strategy.

Everything else agrees Erick García, former general director of hydrocarbons at Minemmust be published, especially what is related to the directory recomposition (with more independent directors), the division of the company by business lines and staff reduction and incentive plans (for early retirement). Will this avoid new bailouts, as Petro-Perú assures?

SELF-SUSTAINABLE PETRO-PERU?

In his presentation last Thursday (before the national press) Chira was categorical in assuring that Petro-Perú will once again be self-sustainable from 2025thanks to the 100% commissioning of the new Talara refinery.

Thus, the company aims to record an Ebitda (operating profit) of US$572 million in 2024 and US$783 million in 2025.

With this, Chira assures, Petro-Perú will be in a position to pay the State all the bailouts that it has sought (including, eventually, the third party).

Petro-Perú is betting all its chips on the new Talara refinery to generate positive cash flows and get out of its poor financial situation.

Petro-Perú is betting all its chips on the new Talara refinery to generate positive cash flows and get out of its poor financial situation.

Asked about this, a former senior official of the state company considered that the new Talara refinery would be able to generate the aforementioned Ebitda, but “only in the event that it manages to operate at 100% of its capacity”.

This means, explains César Gutiérrez, former president of Petro-Perúthat the refinery would have to process 95 thousand barrels per day (bpd) of crude oil in the ideal mix for which it has been designed: 34 thousand bpd of light crude oil and 61 thousand bpd of heavy crude oil.

The problem with this, the specialist points out, is that the batches of Talara light crude oil “They are only capable of producing 24 thousand bpd together, which forces them to adopt two alternatives: lower the loading capacity or import the missing 10 thousand bpd,”with which the net refining margin would be reduced by US$2″.

But there is another drawback, and that is that many of these lots are being given ‘by hand’ to the state oil company in such conditions that it is can’t invest nor, nor, increase its production. How, then, does Petro-Perú hope to obtain more accessible crude oil for its new refinery?

TALARA: MILKING THE COW

Minem’s decision for Petro-Perú to operate oil lots in Talara to increase its cash flow is a double edged sword.

And, on the one hand, it seems to be clear that the oil company will increase its Ebitda with the possession of the lots I, VI, Z-69 and, above all, of xwhich he aspires to enter from next May.

In fact, in a presentation before the Minister council, The state-owned company indicated that its Ebitda will increase by US$132 million, in 2024 alone, if it manages to enter this oil field.

But this would occur at the expense of the productivity of the lot, because the terms of his entry (through a two-year transitional contract) prevent investments and, therefore, increase production.

This means that Petro-Perú will milk the poor cow until it becomes emaciated and no longer produces.”warns Arturo Vásquez, former vice minister of Energy.

In his opinion, this would merit criminal, administrative and civil liability, because “What the Petro-Perú bureaucrats are doing is improving their economy”but “The country will lose by not being able to make investments in said lots.”

Who will resent it? The public treasury, for royalties not received, and also the Tumbes and Piura regions, which “They will obtain fewer resources from the canon and the oil canon”explains Vásquez.

Not for nothing Chamber of Commerce, Industries and Tourism of Talara (CCITT)sent a letter last week to Peru-Petro (in charge of signing oil contracts) expressing its concern because “Petro-Perú is not going to make any investment in the lots”.

“This means that Petro-Perú will milk the poor cow until it becomes emaciated and no longer produces”

Arturo Vásquez, former vice minister of Energy

This is, the union points out, a situation that will harm Talara companies even more, which “Today they suffer the loss of 15,000 direct and indirect jobs” due to the crisis in the hydrocarbon sector.

For this reason, the CCITT urged the president of Peru-Petro, Isabel Tafur, to deliver lotunder a license contract for 30 years, following a bidding process that should already be called”.

It would, however, be a request that will fall on deaf ears since the Government has already decided to hand over the oil field to Petro-Perú, by “political decision,” according to statements made by the Vice Minister of Hydrocarbons, Walter Poquiomato the SNMPE and transmitted to Trade.



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