Latest Peruvian privatization sale back on track

Petroperu SA's privatization committee has resumed the sale of bid documents, continuing to Oct. 7, for the auction of 10-year renewable contracts to operate the state company's oil terminals. The auction, which had earlier been scheduled for August, will take place in the second half of November, according to Jorge Gonzalez, president of Copri, Peru's privatizaton commission. The commission has been overseeing the piecemeal privatization of state petroleum company Petroperu.

Sept. 22, 1997

2 min read

Petroperu SA's privatization committee has resumed the sale of bid documents, continuing to Oct. 7, for the auction of 10-year renewable contracts to operate the state company's oil terminals.

The auction, which had earlier been scheduled for August, will take place in the second half of November, according to Jorge Gonzalez, president of Copri, Peru's privatizaton commission. The commission has been overseeing the piecemeal privatization of state petroleum company Petroperu.

Gonzalez also said that the government would decide on the privatization of Petroperu's Talara refinery by yearend, depending on developments in oil markets.

The terminals now comprise three business units: Terminales del Norte, including Eten, Salaverry, Chimbote, and Supe; Terminales del Centro, including Callao on the coast and Cerro de Pasco in the central highlands; and Terminales del Sur, including Pisco, Mollendo and Ilo on the coast and Juliaca and Cuzco in the southern highlands.

Industry complaints

Oil companies have complained that the Peruvian government has changed the original program, which offered the sale of Petroperu's eight terminals on an individual basis and the auction of a 60% stake in the Talara refinery at an early date.

Now, companies said, there is no progress on the refinery's privatization, and the terminals have been divided into units of three, of which Petroperu will retain ownership and only offer operating contracts.

Owners of large distribution networks are also excluded from bidding for the terminals.

Companies said that the restrictions contradict Peru's 1993 hydrocarbons law, which says the market will operate according to supply and demand. They also said that the government was subsidizing gasoline and fuel oil produced by Petroperu at the Talara refinery.

The companies said that during the past three years, investors, including major international companies such as Royal Dutch/Shell, Mobil Corp., Texaco Inc., Repsol SA, and YPF SA and the local Pecsa retail chain, have doubled the number of Peru's gasoline stations to 1,900.