Oil and Gas News | Oil and Gas Jobs | Oil and Gas Engineering
The Oil & Gas Hub
  • Main
  • News
  • Photo
  • Video
  • Oilfield Jobs
  • Learning Section
  • Oil & Gas Calculator

Petroperu plans US$3bn bond issue

2017.04.26
834

Petroperu intends to issue US$3 billion in bonds before the end of June to help finance the restructuring of the state-run company, Peruvian Energy Minister Gonzalo Tamayo said last week.

Some of the funds raised by the bond issue would be used to finalise the upgrade of the US$5.4 billion Talara refinery, the largest downstream facility in the country. Tamayo said the bonds would be put up for sale on the international market before the end of the first half of the year.

The move is part of Peruvian President Pedro Pablo Kuczynski’s plan to turn the company around. Tamayo said Petroperu was currently financed through a “combination of short-term loans” and a long-term bond issue was a cheaper method of borrowing for the company.
 
“During the previous government, Petroperu borrowed at very high rates to finance the refinery without having the money. It has taken out very expensive short-term loans so we have to do all this credit restructuring,” said Finance Minister Alfredo Thorne in January.

Thorne had appeared to rule out raising funds through a bond issue in December but Tamayo revealed in February that the government was considering a “major issue”. The finance minister had flown to Spain in January to secure US$3 billion in loans, including one from state-backed Spanish credit management company CESCE. But it appears the government has performed a U-turn on the plan and now favours a bond issue instead.

Tamayo did not reveal the terms of the bond but the minister did indicate that the bonds would be backed by the government when he announced that the company was contemplating it as a financing option in February.

The Talara refinery is due to be completed in 2019 and was over 50% finished at the end of 2016, the company said. The upgrade will increase the refinery’s crude processing capacity to 95,000 bpd, a 50% increase on its current peak output.

In addition, Petroperu will also use the money to fund repairs on the Norperuano pipeline which has been closed since last February following two major oil spills. Tamayo said he anticipated that the pipeline would begin full operations again in the second half of this year. 

As part of Kuczynski’s plan to improve Petroperu, his administration passed a decree in December that allows the company to use up to US$400 million of public funds on the Talara upgrade and the pipeline repairs.

The decree also allows Petroperu to enter partnerships with private companies to help it begin producing oil again. Until 2015 the company was forbidden from upstream activity in order to encourage foreign investment in the Peruvian oil and gas sector.

Related Posts

Weekly Energy Digest - May 6th,2025
2025.05.06
311
Weekly Energy Digest - May 6th,2025
Oil benchmarks declined for most of the week, with fears of further OPEC+ output cut rollbacks compo…
Weekly Energy Digest - April 30th,2025
2025.04.30
480
Weekly Energy Digest - April 30th,2025
Oil prices fell for the week on the back of OPEC+ members’ discussion about an additional supp…
Weekly Energy Digest - April 22th,2025
2025.04.22
617
Weekly Energy Digest - April 22th,2025
Oil benchmarks recorded their first weekly gain in 3 weeks. Oil markets spent most of the week seeki…
Weekly Energy Digest - April 15th,2025
2025.04.15
775
Weekly Energy Digest - April 15th,2025
Oil prices continued their decline this week, reaching four-year lows due to escalating US-China tra…
Market quotes are powered by TradingView.com
© Oil and Gas News | Oil and Gas Jobs | Oil and Gas Engineering, 2025
ADVERTISE  | Contact Us  | Privacy Policy  
Made in studio Zuber