Background on Petroperú and its Relevance
Petroperú, the state-owned petroleum company in Peru, has been under scrutiny following an Organization for Economic Cooperation and Development (OCDE) report. The OCDE’s analysis focuses on Petroperú’s financial situation and potential capital injections that could jeopardize Peru’s fiscal stability.
Experts’ Warnings and OCDE’s Concerns
Alexander Müller, Chief Economist for the Andean Region, Central America, and the Caribbean at Bank of America (BofA), had previously warned about this issue. In a recent interview with Gestión, Müller stated, “If no new transfer is made to Petroperú this year and everything else remains constant, you will mechanically reach (comply with the fiscal rule).”
The OCDE echoes these concerns, emphasizing that repeated capital infusions into Petroperú, driven by the company’s financial difficulties and failure to meet obligations, have heightened fiscal risks. These risks include increased contingent liabilities and reduced fiscal space, according to the organization. The OCDE stresses that maintaining financial support for Petroperú remains a significant risk.
OCDE’s Recommendations for Improvement
To address these concerns, the OCDE recommends implementing a credible strategy to restore Petroperú’s viability. This should align with OCDE guidelines on public corporate governance, such as integrating Petroperú into the Fondo Nacional de Financiamiento de la Actividad Empresarial del Estado (Fonafe), as suggested in the OCDE Economic Studies: Peru 2023.
Recently, it was revealed that Petroperú’s losses exceeded 50% of its capital, prompting the Ministry of Economy and Finance (MEF) and the Ministry of Energy and Mines (Minem) to join Petroperú’s General Shareholders’ Meeting (JGA).
Key Questions and Answers
- What is Petroperú and why is it important? Petroperú is Peru’s state-owned petroleum company. Its financial stability is crucial for Peru’s overall fiscal health.
- What concerns have been raised about Petroperú? Experts, including the OCDE and BofA’s Alexander Müller, have expressed concerns about Petroperú’s financial instability and the potential fiscal risks associated with continued capital injections.
- What does the OCDE recommend to address these concerns? The OCDE suggests implementing a credible strategy to restore Petroperú’s viability, aligning with public corporate governance guidelines and potentially integrating Petroperú into Fonafe.
