Peru approves emergency overhaul of state oil firm Petroperu 

Peru’s government has approved an emergency decree allowing private investment in parts of the state-owned oil company Petroperu, as authorities move to stabilise a firm weighed down by mounting losses and debt.

President Jose Jeri announced the decision shortly before the beginning of the new year.

The measure permits the reorganisation of Petroperu into one or more asset units, opening the door to private participation in key operations. That includes those at the flagship Talara refinery, which recently underwent a $6.5bn upgrade.

Beyond the refinery, Petroperu operates or holds concessions for six crude oil blocks with limited production, alongside a nationwide fuel distribution and marketing network.

In a statement, Peru’s Ministry of Energy and Mines said the decree seeks to “ensure compliance with financial obligations through technical management of its assets, laying the foundation for Petroperu to become a self-sustaining company”.

The ministry said the company’s financial position “is particularly sensitive”, citing accumulated losses of $479m between January and October 2025, as well as debts to suppliers totalling $764m through December.

Those figures come on top of reported losses of $774m in the previous year.

Petroperu’s financial strain has been compounded by debt linked to the Talara refinery modernisation, which ultimately cost double its original estimate and led to the company losing its investment-grade credit rating in 2022.

Since then, the government has repeatedly stepped in to support the firm, providing about $5.3bn in financing between 2022 and 2024.

The company, which is seen as crucial to Peru’s energy security, has also faced environmental scrutiny.

Authorities declared an “environmental emergency” and launched an investigation following an oil spill along a stretch of the country’s northern coastline in 2024, affecting an estimated 47 to 229 hectares (about 116 to 566 acres).

The Petroperu restructuring effort comes amid persistent political instability in Peru. Several presidents have failed to complete full terms in recent years, including Dina Boluarte, who was impeached by Congress in October.

Her successor, Jeri, has struggled to steady leadership at Petroperu, appointing three board chairs in just three months.

The move comes as Peru faces continuing political volatility, economic uncertainty and public pressure for stronger oversight of state institutions.