Keys to Petroperú’s return to Talara lots

1. Is Petroperú qualified to assume the lots?

It is mentioned that Petroperú does not have the capacity to operate on a large scale in the upstream market for crude oil exploration and exploitation, since 30 years have passed since its lots were privatized. Therefore, it would not have suitable personnel today either.

Gustavo Navarro reject this claim. The former general director of Hydrocarbons clarifies that, in the oil market, it is common for the professional staff of the previous operator to be inherited, as happened with the lots that in the 1990s were delivered to companies that “did not have any experience, like Graña y Montero”, but which continued to produce. Proof of this is that the state company successfully received Lot I.

In addition, he stresses that the current president of Petroperú, Pedro Chira, is a “deep connoisseur of upstream”, like Daniel Diaz del AguilaExploration and Production manager.

2. Government must support the board

The corporate governance of Petroperú has been affected in recent years by a lack of transparency and political interference. For the petroleum engineer and professor Alexei Huerta, restructuring is necessary within the state company, not only strengthening it with more engineers, geologists, technicians and field workers, but also attracting the ideal profiles for boards through public tenders. “Before, a director arrived as a position of trust (of the president) and they were withdrawn, together with his payroll, without evaluating his management. The matter was very political,” he comments.

Huerta considers that Pedro Chira has a “very healthy” board of directors because he has experience in the sector, both locally and internationally, but it is key that the General Shareholders’ Meeting (Minem and MEF) support them and provide them with tools to a good restructuring.

3. Does the law stop your new investments?

Article 6 of Law 30130 states that Petroperú can make investments as long as they do not affect the guarantees of the New Talara Refinery or the Public Treasury. If said investment goes to guarantee its operability, it is welcome. Of course, you must have a partner who occupies 40% of the project.

“Article 6 is in force, but only for risk investments, such as exploration, where it would enter with a private partner. The lots (from Talara) are in the production process and no additional law is required because there are no risks. There would be opposition of article 6 as long as Petroperú enters to explore, but it will not do this, it will only continue to produce”, maintains Aurelio Ochoa Alencastreformer president of Perupetro.

The opposite case is what happens in Block 192. Here there is a risk scenario because Petroperú will have to take over the reins of the block —paralyzed for more than two years— with a strategic partner.

The previous board of directors of Petroperú chaired by Carlos Vives authorized to continue the process of Block 192 with Altamesa.

According to Ochoa Alencastre, for ongoing operations, such as those in Talara, Petroperú does qualify, and a clear example is Block I, which returned to the State at the end of 2021, and insists on the same point as Navarro: it has taken 100 % of this lot with the same engineers who were in the previous company (UNNA, from the Graña y Montero group). This line will be continued in the lots that are expiring and are reverted to the State despite “external pressures.”

4. Doesn’t Petroperú limit its financial crisis?

Alejandro Narvaez, former president of Petroperú, acknowledges that the state company does not have financial capacity after borrowing US$5.29 billion to float the New Talara Refinery (NRT), but this is not the touchstone to remove it from the equation; on the contrary, If you want to recover the investment, you have to bet on its integration into the lotswhich are the raison d’être of the complex.

The matter —he adds— is merely political because there is no investment risk, since oil is there to continue exploiting it. Even Petroperú would benefit from better refining profit margins.

In his opinion, “there is no strength or will” of President Dina Boluarte and the Minister of Energy and Mines, Óscar Vera, to ratify Petroperú, and the latter is surprised by his silence despite his past in the first state company.

5. Will the canon received by the regions fall?

All oil and gas blocks pay royalties, which go to the Public Treasury and contribute to the canon with a percentage of their production —18.75%— in Piura. Both are paid anyway.

According to the former president of Petroperú Humberto Campodónico, in the case of Petroperú, the income tax (IR) is going to fall because the company is going to depreciate its assets from the Talara refinery, and that is considered a cost. This depreciation is carried out by all companies: Las Bambas, Quellaveco, Pluspetrol, etc.

Notwithstanding this, Petroperú can benefit from article 50 of the Law 26221which allows the contractor that has an oil block to choose to exclude it from the general accounting of the company.

Thus, each segment of the company will pay the IR separately. Therefore, the IR payment of the Talara lots that are assigned to Petroperú will be independent of the refinery. This ensures that 50% of the IR that corresponds to the Piura region will be paid.