Peru reshuffles board at battered state oil company Petroperu

Credit: REUTERS/Mariana Bazo

By Marco Aquino

LIMA, Feb 26 (Reuters) - Peru's government will reshuffle the board of state-run oil producer Petroperu, Prime Minister Alberto Otarola told journalists on Monday, as the cash-strapped firm faces additional spending needs on the horizon.

Otarola did not immediately say who the new board members would be, but that the board would be made up of "independent" professionals.

Petroperu has a "huge liquidity problem," Economy Minister Luis Arista said, speaking alongside Otarola. The economy minister has traditionally formed part of the state-run firm's board, with recent changes giving the minister's seat more weight.

The mines and energy minister also typically holds a seat.

The crisis comes after expenditures to modernize Petroperu's Talara refinery, financed with bonds, private bank loans and state contributions, surged to a larger-than-expected $6.5 billion. In January, the firm said it had spending needs of more than $2.5 billion.

The state is looking to once again make Petroperu a solvent company with the board swap, by providing the firm with financial backing and through "austerity" measures, Arista said.

The government will give Petroperu its "financial guarantee" through the state's Banco de la Nacion by signing off on credit so the firm can make payments to suppliers, the minister added.

(Reporting by Marco Aquino; Writing by Kylie Madry; Editing by Anthony Esposito, Sarah Morland and Sandra Maler)

((Kylie.Madry@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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