Carlos Vives: “If they are assigned to us, we have no problem assuming 100% of the Talara lots”

Today more units of the New Talara Refinery (NRT) and, from Petroperú, detail the relevance of this operation and how, when complemented with the oil lots that will be reverted to the State, more competitive prices will be generated for the national market in the medium and long term.

━ What does this new drive boot imply?

━ It is a gradual and progressive start-up process, and now we have to inaugurate the diesel hydrodesulfurization unit. We have already obtained a first production of diesel with very low sulfur, although it still does not represent the amount that it should have. Deep conversion units such as catalytic cracking and flexicoking will enter later.

━ Because it is important?

━ To improve the air quality and health of our population. In addition, we will obtain an important refining margin, which is the difference between the oil purchased and the fuels sold, which will allow Petroperú to have enough income to start honoring the loan commitments. Fresh and important money for our company will begin to flow.

━ How does the refinery impact ordinary citizens?

━ Unfortunately, for two or three years, since we did not have the refinery in operation, all the fuels and oil that we had to import with our diesel and gasoline were in the Price Stabilization Fund, making us uncompetitive compared to Repsol, whose refining margins are considerable. In order not to lose market we had to make significant discounts; however, in a week we will have a significant refining margin to go out to the population with much more competitive prices.

━ It is produced at a third of its capacity, when will the refinery reach 100%?

━ Let’s take the 30,000 barrels per day with forceps. In this first stage of desulphurization, up to 23,000 barrels will be produced; and when the deep recovery units enter later, it will allow us to reach the production designed for the plant (approx. 95,000 barrels).

━ Is there a tentative date?

━ We will have about 45,000 barrels of diesel and 25,000 of gasoline per day. This will happen when we finish the operational part of the gradual and progressive start-up process, which could be in March, as long as events that usually delay the start-up of the complex do not occur.

– With these units underway, will Petroperú’s commercial presence be recovered?

– We have lost that margin, and we are at 34%. It’s going to be very difficult to get it back quickly, but we plan to take it up to 36% or higher this year. We have been hard-pressed to maintain our market. We have bought and sold with a difference that affected our box. Our cash has been affected by trying to compete with our main competitors such as Repsol.

oil lots

━ Focusing on the Talara lots with expiring contracts, does Petroperú have the strength to take them on?

━ These lots are ongoing businesses. Oil is pumped every day to the surface. There is practically no risk compared to an exploratory activity. We have timely informed Perupetro our intention to have an important participation in the next license contracts that will be tendered or negotiated with us. If they give us 100% of the lots, we have no problem assuming it technically and economically. We already demonstrated it with Lot I despite being a small one.

━ Then they will go without partners to the lots…

━ The oil fields date from 120 to 150 years of exploitation, and exploration is practically done. I’m not saying there aren’t some areas that might require exploration, but in the long run, these fields would no longer need areas to explore. However, if in a few years an area is found that deserves exploration, we will choose to go with an operating partner. The company is not going to enter into that risk of exploring.

━ Some example?

━ A specific case is Block Z-2B of Savia, which also ends this year. This sea lot, which is complex, if they give it to us 100%, we would opt to go with an operating partner. Talara is very different from Lot 192 in the jungle and 64 and 8 in the northern jungle. talara It is a business already in progress.

━ Have the terms been agreed with Perupetro on Block 192?

━ After the conversations with Perupetro, we estimate that this February we will be able to sign the contract for Block 192. There must be recognition for the larger amounts required to put it into operation. Let’s remember that it was stopped since January 2020.

━ What are the changes about?

━ The license contract that we would sign with Perupetro has the condition that we will enter with an operator that will work in the field. We will have an initial participation, if I remember correctly, of 39% and the difference is assumed by the contractor. This participation percentage may change in the following months after the operation takes place.

━ With the increase in the percentage in 192, will the agreement with Altamesa be respected?

━ We are respectful of what is signed in the directory of our offices. We are optimistic to sign new considerations for the contract with Altamesa. As I said, the conditions changed and he was also involved in these talks. high table. We will tell them that we are interested in him continuing to be an operator, but you have to see the considerations.

━ Does the comptroller support it?

━ It is up to the Comptroller’s Office to determine if Altamesa’s selection process was correct. We consider the selection of the potential partner Altamesa fair.

North Peruvian Pipeline

━ What is Petroperú proposing to start up the North Peruvian Pipeline?

━ We have a comprehensive plan that is being considered by the board of directors. We have a whole plan already carried out to be able, let’s say from our way of seeing things, to solve the problem of the oil pipeline that also involves environmental and social issues. Additionally, not having the volume of crude necessary to transport it in the pipeline is not profitable. For us there has to be an important consideration in closing gaps, because there are many extreme poverty communities in deep Peru.

━ Any deadline for pumping oil?

━ We had a date in January to start pumping oil through the pipeline, but there have been cuts in sections 1 and 2. We are probably talking about two more months to see how to start re-pumping crude through the pipeline. We have the plan on the board of directors and in due course it will be considered at the General Meeting of Shareholders (Minem and MEF) which has also requested it. There are coordinations with the Joint Command of the Armed Forces to place detachments in some parts along the ONP and given the large number of attacks in section 1, between station 5 and station 1 San José de Saramuro, it is considering putting it out of service that part of the ONP, in such a way that the crude that comes from the jungle passes through station number 1 and arrives near our station 5 by barge where we will build a landing stage to avoid the problem of passing a good stretch of section 1 to partially solve the problem of not having pumping by the ONP. In parallel, work must be done to close gaps and we also believe it is important that those responsible for these attacks that harm communities do not go unpunished.

Economic impact

– How does the return to the Talara batches and the higher rent from the refinery benefit?

━ It is important for the economic reactivation of the company, but in the 2023 budget they have not been considered (the lots), only the Batch I and almost nothing of the 192 because it will not go into production and it will take time. Despite these considerations and what the refinery will work on, we have made an estimate that this year we will have an EBITDA of between US$500 and US$600 million..

– Higher than previous years?

– Yes, it is higher than 2020 and 2021. If I remember correctly, in 2021 the EBITDA was around US$ 260 million.

– How are you doing with the hiring of the auditor of the 2022 financial statements?

– On Friday (January 27) the process called by the Comptroller’s Office ended and there were no bidders. Now the Comptroller’s Office has to inform us of the details so that we can convene the audit and negotiate the considerations to reach a contract. However, we have been talking with the potential auditor that is PWC, practically. He will be our auditor. We have already talked. It remains for the Comptroller to send us the letter confirming that there were no bidders and we will call PWC to negotiate the contract. Regarding the deadlines, we are very tight if not concerned, however, we have the detail of having discussed the problem several times with PWC about the deadline that we have set.