Commodities
Market Chatter: Peru's State-Owned Oil Company Warns Fuel Output at Risk Without $2.5 Billion in Financing
Petroperu, Peru's state-owned oil company, requires about $2.5 billion in loans to keep its refineries running and to avoid disruption to fuel supplies, Chairman Roger Arevalo told a congressional committee on Tuesday, according to Reuters.Arevalo warned that fuel shortages could emerge "in the coming days" if the company fails to secure private financing backed by government guarantees to continue crude purchases for its refineries, as its debt burden balloons to $7.9 billion.According to Arevalo, private banks are ready to lend $2.0 billion, which is short of their $2.5 billion requirement. However, the government is planning an emergency decree for a state guarantee to help the company with its private financing, without any direct funding.The company's two major refineries, Talara and Conchan, are currently operating below their respective capacities due to insufficient funds to purchase raw materials.Over the past three years alone, the company has received $5.3 billion in state support, but delays and cost overruns with the Talara modernization project, which ultimately exceeded over $6.0 billion, worsened Petroperu's balance sheet fundamentals.Petroperu did not immediately respond to' request for a comment on this story.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)