Andean Group - February 2026

In January, the government of Peru’s then president José Jerí (2025-2026) issued a decree allowing for the restructuring of state oil company Petroperú, permitting private investment in its key assets, which could be separated into blocks. Peru’s investment promotion agency (Proinversión) has been tasked with evaluating 60 key assets belonging to Petroperú, which include the company’s main headquarters in Lima.

Petroperú has been in a state of crisis since modernisation works at its Talara refinery in the Piura region went heavily over budget in 2022. The final cost was US$6.5bn, double the original estimate, and resulted in Petroperú losing its investment grade rating that year. According to the mining and energy ministry, the company accumulated losses of US$479m between January and October 2025, and debts to suppliers of US$764m between January and December 2025.

Under Jerí’s predecessor, Dina Boluarte (2022-2025), the government committed to bailing out the company. In February 2024 it authorised an emergency loan of US$800m from state-owned bank Banco Unión, and a further credit line of up to US$500m. The mining and energy minister at the time, Rómulo Mucho Mamani, declared that Petroperú was bankrupt, but that the financial bailout would alleviate cashflow pressures and thus be beneficial in the long term.

However, just over six months later, in September 2024, the entire executive board of Petroperú resigned, with CEO Oliver Stark accusing Boluarte of refusing to make difficult decisions regarding the company’s future. The board declared that it would be “immoral” for Petroperú to continue receiving bailouts from the Peruvian government, particularly given widespread poverty and social inequality in Peru, and called for the company to either be allowed to go bankrupt or for it to be restructured and partially privatised. However, Boluarte rejected both of these options, describing Petroperú as “the country’s only strategic company” and blaming its precarious financial situation on many years of corruption and inefficiency.

Jerí’s restructuring announcement failed to assuage concern at Moody’s, the credit ratings agency, which announced on 28 January that it had lowered Petroperú’s rating from B3 to Caa1, and changed the company’s outlook from ‘stable’ to ‘negative’. Moody’s expressed concern that support from the Peruvian state has tended to be reactive rather than proactive. The change in rating suggests an increased vulnerability to adverse conditions that could impact Petroperú’s capacity to meet its financial obligations. Moody’s said that “further downward pressure could arise if liquidity deteriorates further, restructuring or asset transfer actions weaken creditor protections, or the company engages in transactions that we deem to be distressed exchanges”.

The restructuring announcement also triggered protests in Talara, where residents and workers blocked the main highway. Their main objection was to a potential ‘covert privatisation’ of Petroperú and its key assets, including the refinery.