Petroperú president resigns in spat over fuel-purchase bill

The president of Peru's state oil company Petroperú, Alejandro Narváez, resigned on Wednesday over a disagreement with the finance ministry regarding a bill that would allow the company to buy small amounts of feedstock without tenders, local papers reported. Energy and mines minister Glodomiro Sánchez confirmed Narváez's resignation to the press, after it was announced on Tuesday by finance minister Pedro Pablo Kuczynski in a television program. Narváez presented the bill to congress to enable Petroperú to purchase feedstock without tenders thereby making its refining and commercialization businesses more efficient. However, Kuczynski criticized the bill because it would allow Petroperú to buy feedstock directly at prices that may not be the lowest possible. Narváez told radio station CPN that he had decided to "step aside" because the company does not have the flexibility to function properly. He said the existing laws forcing Petroperú to only buy feedstock through public tenders "restrict the competitiveness of Petroperú and will generate enormous losses for the company" during the current energy crisis, he said. Petroperú posted net profits of 209mn soles (US$64.3mn) in 2004, compared to 13mn soles in 2003, under Narváez's leadership. Narváez attributed the higher-than-expected increase in profits to improved macroeconomic factors in 2004 and the efficient and transparent management of the company. Narváez, who took over the helm of the company late 2003, promised to slash operating costs, increase investment and modernize the company.