Petroperu rules out purchase of Repsol Peruvian assets

06 May 2013 23:07  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Petroleos del Peru (Petroperu) has ruled out the possibility of purchasing Peruvian assets owned by Spanish firm Repsol, the state-run oil company said on Monday.

Following a technical, economic and financial evaluation, Petroperu said that its management had “agreed not to continue participating in the [bidding] process”.

Instead, the company would prioritise the completion of ongoing projects, including a $3bn (€2bn) scheme to modernise its Talara refinery in northwest Peru.

The decision ends speculation that the Peruvian government was on the verge of buying Repsol’s Pampilla oil refinery and a chain of gasoline stations.

On April 3, Reuters reported that Petroperu had submitted a preliminary bid to buy La Pampilla, despite concerns that the 102,000 bbl/day refinery required a $1.6bn upgrade.

And in an interview on Peruvian television last week, President Ollanta Humala said that no decision had yet been taken on the Repsol asset purchase.

Opposition parties and industry groups had contested the deal, fearing government intentions to abandon market-friendly policies and to take control of natural resources.

Peru’s Mining, Oil and Energy Society (SNMPE) had earlier warned against the state interfering in the private sector and giving wrong signals to potential investors.

“We don’t understand why the state would want to intervene in economic activities where private companies already invest and take risk,” SNMPE said.

According to its website, Petroperu owns the Talara, Iquitos, Conchan and El Milagro refineries. The company also controls the Norperuano oil pipeline in northern Peru.

Meanwhile, a spokesman for Repsol said the company would continue to monitor its assets. The company would not comment on the Petroperu decision.

Repsol announced last year proposals to sell up to €4.5bn of assets between 2012 and 2016 in order to fund planned investments in exploration and production.

In February, Repsol sold its liquefied natural gas (LNG) assets in Peru, Trinidad and Tobago and the Bay of Biscay to Royal Dutch Shell for $4.4bn.

And in July last year, the company sold butane subsidiary Repsol Butano Chile to a consortium of Chilean investors for $540m.

($1 = €0.76)

By: Simon West

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