Congress: Energy Commission returns to Petroperú the oil lots

After the Executive branch, through the Ministry of Energy and Mines (Minem) and Perupetroceded to Petroperú only a minority shareholding in the Talara lots, the Congress of the Republic renewed its votes in favor of the State’s sovereignty over its natural resources and gave new encouragement to the state company.

The device, which passed the filter of the Energy and Mines Commission with 9 votes in favor, 7 against and 3 abstentions, declares it is in the national interest that Petroperú, through direct negotiation, be awarded all the oil blocks in the territory for its exploitation and exploration in order to guarantee the country’s energy security after 30 years of privatization, in which, for example, only an exploratory well in Lot X, the largest in Talara.

The document also considers that the state oil company will evaluate and determine, before signing the contracts, which are the most convenient crude oil deposits for its operations from a technical, economic and socio-environmental point of view.

In addition, the contracts signed by Petroperú will not generate firm or contingent liabilities, present or future, nor will they affect the guarantees assumed for the execution of the Talara Refinery Modernization Project (PMRT), a legislative mechanism similar to the one signed for it to assume the Lot 192 (law 30357). It must go through plenary.

“The signing of hydrocarbon contracts between Perupetro and Petroperú will be aligned with the national energy policy and the annual and five-year objectives approved by Minem,” the ruling states.

Center Perupetro

During the debate, Congresswoman Francis Paredes Castro requested to suspend the bidding process for lots V and VII until Minem and Perupetro “explain before the national representation” the new scheme with which the companies will compete, which she considered harmful to national interests. .

According to the parliamentarian, in this tender, the royalty is not a competition variable. In this way, it would have been established that it is associated with the relationship of expenses and income, as well as the price of a basket of crude oils similar to those produced. There would not be, then, “any guarantee that the percentage of gross income to pay the current canon and surcharge will be reached.”

If 18.75% is not reached, he said that it would correspond to the Ministry of Economy and Finance (MEF) to take resources from the Public Treasury to pay the remaining amount for each lot.

“Under this scheme, companies are going to inflate their costs in order not to have higher profits, and there we are going to have serious problems,” warned Paredes Castro.

Vertically integrate Petroperú

Currently, Petroperú buys at US$80 a barrel that is produced at just over US$30, because it does not have the vertical integration that would allow it to manage more competitive prices for the market.

Fitch Ratings said Petroperú could circumvent the need for a second year of government support if the New Talara Refinery (NRT) significantly increases the company’s cash flows.

Paredes Castro criticized that Perupetro insists on bidding for concession contracts and not service contracts, thus the State loses ownership of the extracted hydrocarbons.

Data

To drain. Since privatization, Peru’s oil production has dropped from 120,000 barrels per day (bpd) to 40,000 (bpd) by the end of 2022.

Proposal. Petroperú would be a partner in blocks VI and Z-2B. In Lot I it will continue with a temporary contract.