In 2023, the Peruvian state-owned oil company, Petroperú, faced one of its worst financial crises, due to its accumulation of up to $6.5 billion in debt for its Talara Refinery Project, which will likely serve as a major driver of oil exploration and exploitation in Indigenous territories of the Amazon and in ancestral fishing grounds in the north Peruvian coast.
Due to successful community opposition against oil activities, finance campaigning, and avid supporters who continue to show solidarity with Indigenous and fishing communities impacted by Petroperú, the company is facing heightened financial risks, blocking potential avenues for immediate long-term financing abroad. For instance, Petroperú was unable to secure a $500 million loan guarantee in 2023 from Italy’s export credit agency (SACE) partly due to intense scrutiny from Indigenous nations and strong backlash against Petroperú in Italy.
In great need of financing to overcome its debt from the Talara Refinery, Petroperú made its first move of 2024 by turning to the Peruvian government for a bailout. Despite its initial hesitation to provide financial support, citing the need for funds to manage climate emergency threats posed by El Niño, the government eventually chose to provide lines of credit and guarantees to keep the company afloat. Desperate to raise money to supply its refinery, import crude, and expand its oil production, Petroperú will turn to international financial markets in 2024, despite the company’s track record of environmental, rights, and climate risks.
The world’s largest fossil fuel financiers, Citigroup and JPMorgan Chase, are considering supporting the company again by arranging or underwriting Petroperú’s $1 billion bond issuance. This is despite ongoing demands by a united front of multiple Indigenous nations of the Peruvian Amazon for international financiers to halt new financing for Petroperú.
A decision to financially support Petroperú will only lead the country farther away from a just energy transition, exacerbate the country’s oil debt, and worsen its economy’s addiction to oil. Failure to withdraw from Petroperú’s bond issuance will also contradict banks’ climate commitments, as the company plans to open new oil lots in sensitive ecosystems necessary for mitigating the climate crisis and crucial for Earth’s survival.
Joining forces with our partners, Amazon Watch is gearing up to launch a series of campaign actions in 2024. Our mission: to ensure financiers, including commercial banks, investors, and insurers, fully grasp the perils of financially supporting Petroperú.
Amazon Watch asks you to join us as we work together with Indigenous allies to protect the Amazon and our planet and make a powerful impact on the fossil fuel industry. Financiers, such as Citi and JPMorgan Chase, must not finance Petroperú and further Amazon destruction!
