State-run Petroperu to raise $2.7 bln to fund refinery expansion
LIMA Dec 17 (Reuters) - Peru's state-run energy firm Petroperu seeks to raise $2.7 billion to fund a refinery expansion and will tap international investors for roughly half the funds it needs, the government said late on Tuesday.
It plans to raise $1.3 billion through bonds and loans in international markets and $1.4 billion from the local market to pay for the modernization of Talara, a refinery in northern Peru expected to produce 50 percent more oil once upgrades are complete in 2017, the energy and mines ministry said.
The Talara expansion will cost a total of $3.5 billion. Petroperu will put up $2.7 billion and the rest will come from other firms, the government said.
The administration of President Ollanta Humala announced earlier this month that it would allow the privatization of up to 49 percent of Petroperu through share offerings on the local stock market.
Last week, Peru's Congress approved the plan, setting the stage for the first injection of private capital into the company in its 40 years.
"This decision is important because it consolidates Peru's energy and industrial policies and carves a sustainable path for a state company's participation in large-scale investments," Humala said on Tuesday upon signing into law the reforms.
Humala wants to turn Peru into a net energy exporter by transforming Petroperu into a bigger regional player such as Brazil's energy firm Petrobras.
Petroperu is now only involved in the refining, transportation, storage and commercialization of oil products.
The government wants Talara to produce 95,000 barrels of oil per day instead of the current 65,000 bpd.
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