Petróleos del Perú – Petroperú S.A. is a state-owned Peruvian oil company, primarily operating in the downstream sector with its principal refinery and largest asset: the Talara Refinery. Recently, it returned to the upstream business, operating Block I, Block VI, and Block Z-69. It also operates the controversial North Peruvian Pipeline, which transports crude oil from the Peruvian Amazon to the coast.
Petroperú has plunged into massive indebtedness to complete its Talara Refinery Modernization Project, now at a projected cost of $6.5 billion. As a result, Petroperú is financially obligated to maximize its oil production to sustain its business and must open new oil wells in addition to imports from existing blocks.
It is now actively trying to start new operations on key oil concessions located in the Peruvian Amazon, in Block 64 and Block 192, and in Block Z-2B and Block X, located in the north coast. These blocks, however, face growing Indigenous and community opposition, intensifying demands for proper remediation prior to new oil activities, and significant legal risks.
This opposition can impede Petroperú’s future operations and may disrupt current plans to make its Talara Refinery fully operational and be able to repay Petroperú’s investors and lenders.
Amid its financial situation and escalating opposition against its activities, Petroperú is in search of new sources of financing to support its business in 2024. New financing for Petroperú, however, presents an updated set of potent financial, governance, social, environmental, legal, and climate risks.
The following report, Assessing Petroperú’s Financial, Environmental, Legal, and Social Risks serves as an update to The Risks of Investing in Petroperú, which was released in 2022.
