Pedro Chira: “There is a whole machinery to attack Petroperú in decisive moments”

Petroperú has preliminarily requested new contributions for S/5,573 million and the capitalization of its debt for US$750 million. Pedro Chira, president of the board of directors of the state company, clarifies that they seek to be honest with their accounts with the Government at the beginning of a new stage with their return to Talara, refinery through.

—Why wasn’t the request for contributions made public before?

—It is unfortunate that a company’s own information comes out in this way, because it is part of a strategy that is sent to its shareholders. This was a request that had been sent to Minem for evaluation, and once evaluated, whether or not to recommend to the MEF what the level of support would be. It is part of a board’s normal process to advise its General Meeting of Shareholders (AGM) on the best way to conduct the company.

—The preliminary document should not have been leaked, then?

-No. It is more than evident the machinery of detractors or interested parties who come to poke around and attack Petroperú at decisive moments. All possibilities are open, even if contributions are not given.

—Why would they require more contributions from the Government?

—In 2022, due to governance problems, Petroperú loses something very important: the line of credit from banks at the national and global level. A revolving line of US$4,000 million was always managed to buy crude oil for the domestic market. They gave us US$750 million and then a capital of US$1,000 million that was spent on importing fuel, gasoline and oil. It is false that it was to pay for the New Talara Refinery (NRT).

—Was it enough for the situation of Petroperú, which did not yet have the NRT operating?

-No. The scenario was that in January 2023 it would be starting, and in March generating margins. For this, help was requested last year in November. Added to the protests and Cyclone Yaku, there were some events typical of a refinery that did not allow it to start up as estimated later in June and we completed the process at the end of August.
Here comes the new contribution.

—To clarify, the request for help is to ensure the supply of fuel due to the effect of the stress situation on the cash register and to have maximum inventories in all our plants and face any shortage in the event of an El Niño phenomenon ( FEN) medium to severe, which would close ports and roads.

—Wouldn’t a disastrous Child demand more contributions?

-No. The request is enough to stabilize 2023 and cover the effects of the FEN that could arrive in April or May 2024. What the board wanted is to be honest with the accounts, because the scenario today is different from that of 2022. Now the NRT already It started and is in the testing and stabilization period. We should start selling more fuel with higher margins and with the lots (from Talara) we will have savings that will allow us to take advantage of the oil income, because today we buy oil at US$85 per barrel.

—Was there a deadline?

—We expected a response, at most, until mid-September. The request contemplates leaving the accounts at zero and with our efforts to move forward. This still has to be evaluated by Minem, endorsed by MEF and, depending on what the State can give, it will be seen if we will be able to meet our expectations.

—How will lots I, VI and Z-69 help in that case?

—Our most conservative evaluations indicate that, in those three lots that are about to expire, we would be talking about a joint EBITDA of US$80 million per year, and if we add Lot X, over US$200 million. Those are the businesses for which they attack us, that is the money that is at stake.

—In what condition are the lots returned to the State?

—What we see in lots VI and Z-69 is disappointing. We will charge what we have to charge the current operators, it is not a clean slate. There is a responsibility in terms of lack of maintenance and we have studies of how much we should receive for asset deterioration. They are very important figures. Privatization has been a disaster.

—And the EBITDA of the NRT?

—That’s another business unit. Considering the projections, we would have an EBITDA of between US$450 (if the differential or crude oil prices are reduced) and US$700 million per year.

—How much of that will be used to repay the New Talara Refinery?

—Our commitments reach US$330 million a year. Let’s remember that we are already paying before the construction is finished, it is an investment, for the moment, without return. Payment, since 2019, has been made with cash.

—Would it be enough so that Petroperú no longer needs new lifesavers?

-That’s how it is. They say that Petroperú is insolvent, when in reality today we have the assets that will give us solvency. If we manage to have the lots, in the best years we will have an EBITDA of more than US$1,000 million and a minimum of US$800 million to meet the debt and pay the State what it owes.

MEF observes capitalization, but does not rule out contributions

The day before, Minister Alex Contreras told the Congressional Economy Commission that there is no room to inject more resources into Petroperú. However, he recognized that September and October will be decisive months, as profits will begin to be generated. “I say it with absolute transparency, there is no room to capitalize Petroperú, if desired, because we are already at the limit of the fiscal rule,” he said.

Chira also recalled that, since privatization, Petroperú has been forced to compete in the market at a loss, without ever forgetting its subsidiary role of bringing energy to the entire country.