Repsol, energy sovereignty and economic policy space in Peru
03 June 2013
The government has been criticised for bowing to vested interests after scrapping plans to buy energy assets.
Repsol, the Spanish oil and gas company, announced some time back plans to sell its Peruvian assets, including the La Pampilla refinery and a chain of petrol stations in Lima and other cities. Government officials had expressed interest in acquiring these through the state-owned Petroperú. But following intense lobbying, state company Petroperú announced at the beginning of May that it was jettisoning the proposal.
The proposal generated controversy amid Peru’s powerful business organisations. They argued that the acquisition of Repsol’s assets would signal an about-turn on the approach followed by successive governments since the Fujimori administration’s privatisation policies in the 1990s. Many in business saw this as Humala revealing his true colours, abandoning the so-called ‘road map’ (with which Humala had appeased business organisations and the right when he took office in July 2011), and resuming his plans for the ‘great transformation’ on which he had been elected.
A Peruvian Chávez?
The possibility of acquiring Repsol led to a media onslaught by Lima’s conservative press and television. Coinciding with events in Venezuela following Nicolas Maduro’s victory over Enrique Capriles, the media used the Repsol affair to portray Humala as a true follower of ‘Chavismo’ and Venezuelan-style ‘21st century socialism’.
On April 30, the high command of Confiep, Peru’s premier business lobby organisation which represents the views of leaders of a variety of sectoral interest groups, issued an ultimatum to the government. The position adopted by its president, Alfonso García-Miro, was particularly intransigent according to witnesses cited by the weekly magazine Caretas.
The same afternoon, Humala and the first lady Nadine Heredia, met with energy minister Merino to tell him to scrap the plan to acquire the Repsol shares. The order came from the top, not from the economy minister, Luis Miguel Castilla, widely regarded as the guarantor of orthodox policy by the business community. Mining minister Jorge Merino was also seen as sidelined, calling into question his future in the role. A day later, the official announcement came that, following an “exhaustive” investigation into the issue, the proposed purchase was cancelled for purely “economic” reasons.
Supporters of the purchase on the grounds that it would enhance Peru’s energy sovereignty were swift to denounce what was widely seen as a coup by Confiep. The former president of Congress, Daniel Abugattás, attacked García Miró and other business leaders for being happy for state activity when this means offers of finance or subsidies of one kind or another but opposing it when it comes to thinking of “the general good or the need for energy security”.