Peru approves emergency overhaul of state oil firm Petroperu

As authorities work to stabilize a struggling company, which is plagued by mounting losses and debt, Peru’s government has approved an emergency decree allowing private investment in some shares of the state-owned oil company Petroperu.

Just before the new year’s beginning, President Jose Jeri made the announcement.

The change allows for private participation in significant operations to be reorganized into one or more asset units. That includes the prestigious Talara refinery, which recently received a $6.5 billion upgrade.

Along with a national fuel distribution and marketing network, Petroperu also runs or holds concessions for six crude oil blocks with limited production.

The decree, according to Peru’s Ministry of Energy and Mines, “lays the groundwork for Petroperu’s self-sustaining company by ensuring compliance with financial obligations through technical management of its assets.”

The ministry cited accumulated losses of $479 million between January and October 2025 as well as supplier debts totaling $764 million through December as examples of the company’s financial position, which the ministry called “particularly sensitive.”

These figures add up to the $774 million loss that was previously reported.

The Talara refinery modernization, which ultimately cost double what was originally anticipated, added to Petroperu’s financial strain, which resulted in the company losing its investment-grade credit rating in 2022.

The government has since provided about $5.3 billion in financing between 2022 and 2024, and has since done so on numerous occasions.

The business has also been subject to environmental scrutiny, which is considered crucial to Peru’s energy security.

Authorities declared an “environmental emergency” and launched an investigation in 2024 following an oil spill that reportedly affected 47 to 229 hectares (roughly 116 to 566 acres) along a portion of the nation’s northern coastline.

In response to Peru’s persistent political unrest, Petroperu is attempting to restructure. Dina Boluarte, one of the many presidents who failed to serve fully in office in recent years, was impeached by the Congress in October.

Jeri, her immediate successor, has had a difficult time finding steady leadership at Petroperu, appointing three board chairs in three months.