Rocky environment pushes Petroperú deeper into the red

Peru’s national oil company Petroperú posted a US$380mn net loss in the first half compared to a net loss of US$158mn in 2Q23 and a net profit of US$114mn in 1H22.

In its latest earnings report, the NOC attributed the result to lower domestic sales because of “aggressive” competition, supply problems due to protests and prioritization of LPG supply to continue the ramp up of the new Talara refinery.

According to Petroperú, heightened competition comes from importers who have the possibility of granting greater commercial facilities to clients, as they are integrated companies.

The bottom line also was impacted by higher sales costs due to the non-optimized operation of Talara during its progressive start-up and higher financial costs due to working capital debt and interest on bonds and a loan from Spanish export credit agency Cesce.

First half revenue slid 38% year on year to US$1.86bn.

“It is necessary to indicate that the economic and financial results of Petroperú S.A. will improve substantially with the commissioning of the conversion units (catalytic cracking unit and flexicoking unit) estimated for the third quarter of 2023,” the operator said.

Regarding the refinery, the company added that ramp-up delays stem from political and social turmoil which caused road closures, impacting hydrogen supply, natural gas supply shortfalls in the area and unforeseen events inherent to the complexity of the plant’s start-up.

Petroperú highlighted that it is working on an ESG strategy with IHS Markit with the objective of achieving greater acceptance and expanding international financing sources.

In recent days, the NOC’s board approved a restructuring plan prepared by Arthur D. Little and Columbus HB Latam.

Petroperú did not release physical metrics for sales and production, among other data, at this time.