Petroperú president, board resign amidst squabbles with government

Thursday, December 1, 2016

Peru will appoint the fourth president of Petroperú this year after the board of directors at the state oil company resigned over differences with the government, cabinet chief Fernando Zavala said.

Petroperú's general manager Luis Garcia Rossell, who joined the company in September after working at a unit of SAB Miller, will replace Augusto Baertl, said Zavala, also an ex-SAB Miller executive.

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"I understand they were affected by the public debate over some appointments," Zavala told reporters at a conference in the southern coastal city of Paracas on December 1. "We understand their position and have accepted their resignation. The new board of directors will take charge tomorrow."

Baertl, a veteran miner who was appointed in August, was the third management change at the company this year. The government objected to Petroperú's decision to hire Vladimiro Huaroc, who was running mate for a rival candidate against President Pedro Pablo Kuczynski in the June general elections, Baertl said December 1.

"The appointment was a board decision taken in mid-November. The board of directors works together and transmits that message," Baertl told reporters at the same conference. "As a state company, Petroperú must be managed with political independence."

Petroperú has been struggling to repair its aging 200,000b/d north Peruvian oil pipeline, shut since mid-February. The 854km conduit, which still contains 2M barrels of crude, has had 10 leaks this year, allegedly caused by local communities seeking clean-up jobs.

President Kuczynski, who took office in July, is looking to hold an IPO for the company and sell state-backed bonds to finance the US$3.5bn expansion of Petroperú's 62,000b/d Talara oil refinery. The firm sold off its 102,000b/d La Pampilla refinery, production blocks, oil tankers and gasoline stations in the 1990s, leaving it with the pipeline and four aging refineries with total capacity for 80,000b/d.