Peru’s state-run oil company, PetroPeru, is considering offering a minority stake to private investors in the second half of 2025, as it aims to recover from financial difficulties and return to profitability. Chairman Alejandro Narvaez stated in an interview that the potential offering would only commence once the company is back in the black, with projected profits between $200 million and $250 million next year.
Narvaez emphasized that “nobody buys shares in a company that has huge losses,” noting that the offering would be gradual, although he did not specify whether it would be 10% or 20% of the company.
Despite expectations that PetroPeru’s losses could reach $960 million by the end of this year, Narvaez aims to reduce that figure to $860 million. To address its financial challenges, the company plans to seek new financing sources from creditors and has initiated steps to mitigate losses, including hiring an international management firm.
Following a complete board resignation in September due to financial issues, Narvaez was appointed chairman alongside six new board members. He mentioned that PetroPeru requires $2.5 billion to maintain operations, and while the government approved approximately $1.75 billion in financing, Narvaez is determined to avoid further state funding requests, prioritizing social programs instead.
PetroPeru lost its investment-grade rating in 2022 after investing $6.5 billion to modernize its Talara refinery. The company has issued bonds worth about $3 billion since 2017 for this purpose and carries an additional $1.3 billion in debt with foreign banks.
Narvaez stated that the company will not issue more bonds and will instead focus on negotiations with creditors. Once a leading crude producer, PetroPeru has shifted its focus to refining, with plans to achieve full production capacity of 95,000 barrels per day at the Talara refinery by year-end, aiming for a 38% market share by 2025, up from the expected 28% in 2024.
Additionally, Narvaez plans discussions with Ecopetrol from Colombia and Petroecuador to secure crude supplies for the refinery, marking a strategic move to enhance operations after PetroPeru resumed crude production following the expiration of private leases in 2023.