Petro-Peru: What should the country do with the state oil company? | ANALYSIS | fuel shortage | Gasoline price | Oil | Hydrocarbons | Energy | ECONOMY

Should we refloat it? Privatize it? Or should we sell its assets and liquidate it?because it’s worth nothing and it’s broken”, as proposed Alberto Arispe, general manager of Kallpa?

At this time I have proposed my resignation to the presidency of Petroperú to seek the achievement of that consensus”, Campodónico indicated last Thursday.

With that, the official was referring, not to the search for an agreement within the government, but to the beginning of a public discussion to define as a country what we should do with the state oil company.

What would that solution be?

TERMINAL PATIENT?

My concern is that the country is not clearly told how sick Petroperú is, because if it were a private company it would already have gone bankrupt.“, he pointed Pedro Gamio, former Vice Minister of Energyin Canal N.

The delay in the construction and commissioning of the new Talara refinery prevents Petro-Peru from producing fuels and forces it to carry out costly imports. (Photo: Minem)

So far this year, in fact, the Ministry of Economy and Finance (MEF) had to come to the rescue Petro-Peru con US$2,250 million so you can buy fuel.

This is a situation never seen or heard of in the entire history of Petro-Peru and that it is due, in the opinion of the majority of hydrocarbon experts, to the delay in the start-up of the new Talara refinery and the controversial administrative and financial decisions taken by Hugo Chavezformer general manager of the state company, which have led to the company losing its lines of credit and not having money to pay its service providers. diesel, gasoline and LPG.

We are referring, among other things, to the unnecessary confrontation with PwC, to the scandal of the purchase of biodiesel (involving President Pedro Castillo) and the beheading of the corporate management of Petro-Peru (19 managers fired in one day) ordered by Chávez at the time of assuming the management of the company in October 2021.

This is something that no company of any size would do, and it is the cause of the financial problems of Petro-Peru. Not the fault of the new refinery, in my opinion”, indica Luis Fernández, former Peru-Petro contract manager.

It is precisely to prevent similar episodes from occurring in the future that the consultancy Gas Energy advises shielding Petro-Peru against the political power of the day, similar to what is happening in Enap (Chile), a state company that has reported profits of US$457 million as of the third quarter of 2022.

ARMORED OF PETRO-PERU

According to Álvaro Ríos, founding partner of Gas Energyshielding the directory Petro-Peru will prevent thisbail out the Executive all the time”.

The unnecessary confrontation between Petro-Perú and PwC during the administration of Hugo Chávez had repercussions at the international level and led to the credit disqualification of the state-owned company by Fitch and S&P.  (Photo: PwC)
The unnecessary confrontation between Petro-Perú and PwC during the administration of Hugo Chávez had repercussions at the international level and led to the credit disqualification of the state-owned company by Fitch and S&P. (Photo: PwC)

The idea, he explains, consists of appointing an independent board of directors that does not bend before the Executive and a president that cannot be changed from time to time or “handled like a puppet”.

If that was the case, Petro-Peru it would not have accepted, for example, the Government’s commission to massify natural gas in the south, a project where it clearly cannot make the connections grow because it is only the temporary administrator and not the concessionaire”, points Gustavo Navarro, former director general of hydrocarbons.

For these reasons, Campodónico endorsed the armor plating proposal and submitted it to the company’s board of directors weeks before his resignation.

In the board of directors we have proposed a bill so that the directors of Petroperú and the president of the board of directors are elected with meritocracy and transparency”, explained the official in RPP.

According to Ríos, this will be achieved by incorporating a list of independent personalities who know about business management and who are “some tigers in business”.

Anthony Laub, partner of Laub & Quijandria, believe the same. To his knowledge, what the directory of Petro-Peru What you need are professionals who have dealt with projects, finance and bond issues, rather than directors with technical qualities, because these can be found at the management level.

If Petro-Peru were shielded against political power, its board of directors would not have accepted assignments such as the widespread use of natural gas in the south of the country, which only generate complications.  (Photo: GEC)
If Petro-Peru were shielded against political power, its board of directors would not have accepted assignments such as the widespread use of natural gas in the south of the country, which only generate complications. (Photo: GEC) / HUGO PEREZ

We should look for someone like Augusto Baertl, Roque Benavides or Eduardo Torres Llosa to come. That’s the kind of people that Petro-Peru you need today”, he refers.

In Laub’s opinion, this armor should be associated with the opening of Petro-Peru to private capital, an extremely complicated task due to the problems and debts that the state company faces.

If a capital opening process is called and nobody shows up, then we will know the dimension of how complicated the company is”, points out the specialist. What is being done about it?

PRIVATE CAPITAL

The emergency decree) don’t just throw a lifeline at Petro-Peru so that it can acquire fuel, it also dedicates a section (Article 4) to strengthening the company.

In it, it is arranged that it hires a specialized international consultant so that “present a restructuring plan” within a maximum period of nine months.

Likewise, it proposes the valuation of the company for a public offering of shares (up to 49%) within a maximum period of twelve months, and suggests its return to the National Fund for Financing State Business Activity (Fonafe).

Specialists doubt that the opening of Petro-Peru to private capital will attract investors.  (Photo: Petro-Peru)
Specialists doubt that the opening of Petro-Peru to private capital will attract investors. (Photo: Petro-Peru)

In the opinion of César Gutiérrez, former president of Petro-Peruthe standard contains a series of contradictions and misleading messages and says nothing “of the horizon that the company will face at least in 2023″.

In particular, it criticizes the hiring of an international consultant to deliver a restructuring plan no later than July 2023.

That is to say, they are in crisis; the Government does not trust the managers and expects a report (on the restructuring of the company) in three quarters. Unheard”, he writes in his column for El Montonero.

The same happens with the announced opening to private capital of Petro-Peru. According to the vast majority of specialists, it will be very difficult for a private party to want to be a partner of the state oil company in the conditions it finds itself in today, with a very high debt for the new Talara refinery and recent loans from the State that you know how you will pay.

“¿Do you think that any private person would dare to be a minority partner in a public company, politically managed?”, Gutierrez wonders.

In Laub’s opinion, nothing is lost by trying, but if no private shows up for the opening process it will be clear that this is not the way to go.

So, the solution will be to grant Petro-Peru to a company specializing in restructuring to manage it and put it in the blue. We are going to pay you a lot of money, but the cost will be less than keeping incapable officials running a company that is getting out of hand”, he notes.

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