Petroperu to seek $2 billion in state-backed loans to sustain operations

May 11 (Reuters) – Peru’s government has authorized state-run oil firm Petroperu to seek $2 billion in state-insured loans to ​ensure the continuity of its operations, according to an emergency decree ‌published on Monday.

Petroperu, burdened with massive debt and undergoing a fragmented restructuring process, warned last month it needed the funds to avoid halting fuel output amid financial difficulties and high oil prices ​driven by the Iran war.

The decree said the Energy and Mines Ministry ​would assume “contingent liabilities” with domestic or international entities related to the ⁠transaction, along with their financial costs, to be covered by the ministry’s budget.

The ​document signed by interim President Jose Balcazar said the measure was “exceptional” and aimed at ​ensuring the nationwide supply of hydrocarbons.

The government also authorized the Energy and Mines Ministry to assume up to $500 million in short-term contingent liabilities of the oil company.

Prime Minister Luis Arroyo said ​the funds would be supplied by international banks and channeled into a trust ​fund managed by Proinversion, guaranteed by the state, and that the measure would not affect Peru’s ‌public ⁠debt.

“For the first time, the financing will not come from the public treasury; not a single sol of Peruvians’ taxes will be touched,” Arroyo told a press conference.

“I want to emphasize that the funds may only be used to guarantee the ​purchase of crude oil ​and the supply ⁠of fuel,” he added.

Petroperu lost its investment-grade rating in 2022 amid a financial crisis, with debt owed to bondholders and ​private banks stemming from the modernization of its Talara refinery – ​which cost ⁠more than $6 billion, exceeding initial estimates.

The company has received about $5.3 billion directly or indirectly in government aid over the past three years to sustain its operations.

Petroperu currently has ⁠debt of ​about $7.9 billion, nearly half of which is short-term, ​and reported losses of $774 million last year. Earlier this month, it appointed its fourth chairman since the end ​of December 2025.