Peru has issued an emergency decree that reshapes Petroperu and lets private investors take stakes in the state-owned refiner and fuel marketer. Interim President José Jeri approved the measure on Jan. 2, saying the move will keep a loss-making but strategic firm from draining public finances and risking fuel shortages.
The decree allows Petroperu to split its assets into separate business units that ProInversión can offer to local or international partners, starting with the flagship Talara refinery, which finished a $6.5 billion (C$8.8 billion) revamp in 2023.
Losses trigger urgent decree
Petroperu’s finances have deteriorated for three straight years. The Energy and Mines Ministry reported accumulated losses of $479 million (C$647 million) between January and October 2025 and trade payables of $764 million (C$1.0 billion) at year-end.
Those deficits come on top of a $774 million shortfall in 2024 and heavy borrowing tied to the Talara upgrade, which doubled its original budget and cost Petroperu its investment-grade credit rating in 2022. Lima has already channelled about $5.3 billion (C$7.2 billion) in loans, guarantees and capital injections since 2022, yet the company still faces liquidity pressure.
“The decree seeks to ensure compliance with financial obligations through technical management of its assets,” the Energy and Mines Ministry said in a statement.
Officials argue that breaking Petroperu into smaller blocks will help attract know-how, cut operating costs and curb the need for future bailouts.
Talara refinery under scrutiny
Talara processes 95,000 barrels a day, but construction delays and cost overruns left Petroperu with extra debt just as crude prices weakened. Private partners may now be invited to operate the refinery, supply crude or market finished fuels.
In upstream, Petroperu holds six marginal blocks in the northern jungle and coast; those licences could also be spun off. The decree gives ProInversión sixty days to outline a promotion plan, while Petroperu’s board must deliver a leaner organigram within 30 days.
Energy Minister Luis Bravo rejected claims that the decree is a back-door privatisation. “Petroperu carries debt of more than S/1.6 billion, and supplier obligations that exceed S/2.5 billion, so restructuring is the only way forward,” Bravo told Radio Nacional. He added that operational staff will remain a priority, but the number of management posts must fall.
Peru’s environmental watchdog is still monitoring cleanup from a 2024 crude spill that affected up to 229 hectares of coastline, underscoring the need for stronger oversight. Political turnover has compounded the challenge, with three Petroperu board chairs named in as many months.
For now, the decree runs for one year. Success will depend on investor appetite and the speed of negotiations in a charged political climate. A short sentence ends here.