New president appointed for PetroPeru

Peru's government announced a leadership change in state-owned PetroPeru, the first step in its plan to overhaul the company.

Mario Contreras, an engineer with more than two decades experience working in PetroPeru, was tapped on 16 September as the new president, replacing Eduardo Guevara, who had been in the job for more than two years. The four other board members were changed along with Guevara.

President Pedro Castillo's leftwing administration has pledged to dramatically change PetroPeru, vertically integrating it along the crude value chain and giving it a broader scope as an energy company.

PetroPeru is returning to the upstream business after nearly three decades with block 192 in the northern jungle. The 10,000 b/d block reverted to the state last February from Canada's Frontera. It has not pumped any crude since early 2020, but should be reopened in the final quarter of the year, according to the energy ministry.

The company will finish the $5.4bn modernization of its flagship Talara refinery in the first quarter of 2022. Output will increase to 95,000 b/d, from 65,000 b/d, and it will be capable of processing heavy crude.

Energy minister Ivan Merino told Congress recently that PetroPeru would have a greater role in natural gas, potentially taking over a project to distribute gas in seven central and southern regions. He said the project, which the state has tried to offer in tender since 2018, but with no luck, would be carried out by the public sector.

PetroPeru began natural gas distribution in four southern cities last December after Spain's Naturgy pulled out of its contract in Peru.

The minister also sees PetroPeru taking on a role in renewable energy, especially solar and wind projects.

The energy and mines regulator, Osinergmin, recently upped its estimates for the potential of renewable generation. It increased the potential for hydroelectric generation in Peru to 77,000MW, up from 60,000MW, and wind power to 70,000MW from 20,000MW.