Carlos Vives: “There is total agreement with Minem regarding the return of Petroperú to the Talara lots”

— Engineer Vives, why do you resign from the presidency of Petroperú?

— These are cycles that are ending, the board needs to be refreshed with other ideas and other forces. Sincerely, I don’t think any director says they have thrown it out. I reiterate, these are cycles that end and welcome the new directory and that it works as we have worked. Of course, I say it very clearly: as we have worked since April 2022, with complete autonomy from the board of directors in its decisions, zero political interference and full support for management and staff so that they can work calmly.

— It is pointed out -without any support- that your departure is due to a discrepancy with Minem over the management of the Talara lots that will revert to Petroperú, what do you have to say about it?

— My resignation is not at all due to a discrepancy with the Ministry of Energy and Mines (Minem) regarding the return of oil lots to the company. What’s more, in recent events, such as public hearings in Talara, in Congress and other spaces, I have expressed not only my congratulations to Minem, but also to the highest authorities in the country for deciding the return of the Talara oil blocks, whose contracts are close to this year and in the first months of the following. There is no discrepancy between the company and the Energy and Mining sector, at all. We have had a complete coincidence.

— Why is it important that these lots, which previously belonged to Petroperú, return to the company?

— Because this is going to give a very important support, through the Talara refinery, to the company, I mean the entry of fresh money to the company’s weak treasury. This is so because the production that comes from the Northwest oil fields is practically without risk. Every day, underground facilities pump crude oil from the depths to the surface with absolutely no major risk. That’s like taking cold hard cash to the surface and companies whose contracts are expiring soon are benefiting from that. That has to return to the company and it will do good for our (Talara) Refinery project, for the company and for the country, but above all for the population that consumes fuel, allowing the company to offer better commercial conditions and I mean specifically discounts, and reach the country with better competitive fuel prices.

— Why do you think the announcement of Petroperú’s return to oil exploitation has generated so much anger in the private sector and its allies?

— The allocation of oil lots is completely handled by Perupetro. They are the ones who decide, but the guidelines are already practically on the table and they are the ones set by the Minem. The production that comes out of these lots in the northwest, which have been exploited for a long time, is without major risk, I compare it to hard cash that comes to the surface. There is no greater risk, so it is a business in progress and a round business that the companies have in operation, in business.

— Is Petroperú in the capacity to assume these operations?

— There is much talk that Petroperú will not be able to work on the exploitation of these wells and on exploration, and of course not on exploration. If it were about working on exploration, the company is determined, and it has to be like that, (to go) with an operating partner to assume the exploration risk. What is exploitation is only about continuing to produce the wells that are already producing. (Meanwhile), the wells that are required to drill unproved reserves should be drilled with virtually no increased risk as well: You drill your wells, they start producing, and there’s no increased risk in that.

— That’s just what the current operators do, correct?

— That is what private companies are doing to date. A concrete example from 2000: to date, 25 exploratory wells have been drilled, if I remember correctly. The vast majority of all these wells are offshore, developed by the Petrotech company or the Savia company. The other two wells that have been drilled, one is an exploratory well in Block I and, look, in Block X, the most important, the one with the greatest potential, which has the northwest fields, only one well has been drilled. exploratory in more than 20 years. So what are we talking about? To be clearer: the companies that are working in the northwest are only benefiting from Talara’s risk-free production, call it proved developed reserves., which is what it is producing at the moment and proven undeveloped reserves, that it is enough to drill a well without major risk and production comes out, they are taking advantage of that, let’s say, because it is their business and they have a current contract which they it allows, but why not Petroperú when there is a need in the country for its flagship company to take over? That is what I understand and I understand the reaction of the private sector, but I believe that it is time to look, walk and stomp, and strengthen Petroperú with this because that is a need not for the company, not for the refinery, but a need of the country.

— How has Petroperú fared in the operation of Block I?

— We have been operating Block I, which has completed its two-year temporary contract in October, whose production is 500 or less than 500 barrels per day, and only to maintain production. By exploiting and just maintaining production, Petroperú has benefited with a net profit per year of more than 5 million dollars. So imagine for a lot that produces 10,000 or more, like Lot X. That’s what you have to examine and see why the other party is claiming. This is a very strong current because, just as there is a current that wants the return of the oil lots to the company to benefit the country, there is a very strong current that does not want it, and suddenly wants the company to collapse so that someone is behind watching what happens, and says, since the company has already collapsed, I buy the refinery or I keep the lots. You have to be very careful with that and now is the time to speak clearly, things are like that.