(Reuters) – Peru officials are looking at ways to help cash-strapped state oil firm Petroperu avoid bankruptcy or liquidation, Economy Minister Jose Arista told Congress on Friday, including cost cutting, asset sales and possible private management.
The company described its financial condition last month as “extremely grave.”
“Petroperu is currently facing a difficult financial situation that demands urgent actions by the government as the sole shareholder,” Arista said. “In this context the executive branch has been evaluating measures to strengthen the company’s governance to allow the continuity of its operations.”
The measures include the sale of unprofitable and nonoperational assets and the contracting of private management for the firm.
“The hiring of a private manager for the company is being evaluated, which does not imply its privatization and which would allow the application of international management practices that large modern oil companies employ globally,” said Arista.
A spokesperson for Peru’s president said last month that Petroperu would not be privatized, after the company took the unusual step of arguing for private management as the only solution to its current financial condition.
The measures under evaluation will be presented to the president’s cabinet of ministers in the coming weeks for approval, the minister added.
Petroperu, the Andean country’s main supplier of motor fuels, said last month that it needs $2.2 billion in imminent financial help, and it has forecast millions of dollars in additional losses this year.
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