Thread Content
According to Sinochem New Network, the Peruvian government recently issued an emergency decree authorizing the restructuring of the ailing state-owned oil company Petroperu, allowing private capital to invest in its core assets. This move is aimed at rescuing the company from its financial crisis and laying the foundation for its transition to a self-sustaining operation. Under the decree, Petroperu could be split into one or more portfolios of assets, the most notable of which is the Tarara refinery, for which investments of up to $6.5 billion are planned for modernization. The company also operates 6 crude oil fields with limited production, and possesses a fuel distribution and marketing network. Petroperu’s financial situation is “critically precarious.” Data from Peru’s Ministry of Energy and Mining show that from January to October 2025 alone, the company incurred losses of $479 million; as of December 2025, its debts to suppliers amounted to $764 million. The financial difficulties were partly due to the huge debts associated with the renovation project at the Tarara refinery; the final cost of this project was twice the initial budget, which led to the company losing its investment-grade rating in 2022. Between 2022 and 2024, the government provided Petroperu with financing totaling approximately $5.3 billion. This restructuring marks the government’s attempt to fundamentally reverse its long-term reliance on **financial bailouts** by introducing private capital and technical management.