The Peruvian Government is contemplating additional financial support for the state-owned oil company Petroperu, reported Reuters.

The move follows a challenging period for the national oil and gas producer, which experienced a cash crunch leading to a downgrade of its investment grade rating in 2022.

Peru Economy Minister Alex Contreras was quoted by the news agency as saying that the government’s potential financial aid “is a decision that has to be made by the Committee of Ministers, and we will evaluate all possible scenarios”.

A report accessed by Reuters, which was recently presented to ministers, indicates that Petroperu requires $1.57bn (5.81bn sol) to finance crude oil imports for its upgraded Talara refinery on Peru’s northern Pacific coast.

These imports are crucial to maintain national supply and to initiate operations at the expanded refinery, which completed its upgrade late last year.

The modernisation of the Talara refinery has led to a total expenditure of approximately $6.53bn, including interest payments, surpassing the initial $5bn projection.

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By GlobalData

Currently, the refinery has a processing capacity of 95,000 barrels per day (bpd), a 30% increase.

According to the company report, the investment in the refinery was financed through $1.15bn in debt, a $2bn bond issuance and $1.3bn in loans, with the remaining funds coming from Petroperu’s own resources.

Last year, Reuters reported that Petroperu held talks with US and Asian oil producers with a view to importing around 63,000bpd of crude for its Talara refinery.