Petroperú sidelined

22 March 2015

The abrupt dismissal last week of the president of Petroperú, appears to put an end to a long-running argument as to whether the state oil company should actually be involved in producing crude. Its role now seems destined to be no more than a refiner of largely imported crude for the domestic market.

When he became president in 2011, Ollanta Humala promised that the state oil company would be given a much more important role in the oil industry. The country, he argued, would benefit as a result. But it soon became clear that the then minister of economy and finance, Miguel Castilla, had other ideas.

Humala’s first minister of energy and mines, Carlos Herrera Descalzi, was partisan to the idea of rebooting Petroperú, sidelined in the oil business ever since the era of privatisations under ex-president Alberto Fujimori. Humala also appointed Humberto Campodónico, a left-of-centre economist, as president of Petroperú. Both had argued that in Peru, as in most other Latin American countries, the state oil company should act as such. They were subsequently dismissed.

A law, approved by the MEF (Ministry of Economy and Finance) and passed in 2013 (Ley 30130, article 6) restricted any role for Petroperú in the productive sphere. Up to that point it seemed that Petroperu would take over a number of blocks whose contracts with private foreign companies were about to expire, among them Block 1A/B in the Amazon (now known as Block 192) and a number of fields offshore of Talara which together account for most of the crude currently produced in Peru.

On March 19, it was announced that Petroperú’s president, Pedro Touzzet, had been sacked. His crime? Two days earlier he had announced in the Congress that the company could well afford to take control of two offshore fields whilst also financing the modernisation and enlargement of the company’s refinery in Talara. This contradicted statements by the new minister of energy and mines, Rosa María Ortíz, that it was illegal for the company to engage in upstream activities.

The shareholders’ committee of Petroperú (which reflects the opinion of the MEF and the MEM (Ministry of Energy and Mines) abruptly replaced Touzzet with the head of Electroperú, Germán Velázquez. Amongst other things, the move is reckoned to benefit the big private construction firm Graña y Montero which now looks likely to take the biggest share of these offshore fields.

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