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UPDATE 1-Peru weighs costs and benefits of Repsol stake -minister
April 25, 2013 / 4:56 PM / 5 years ago

UPDATE 1-Peru weighs costs and benefits of Repsol stake -minister

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By Patricia Velez and Teresa Cespedes

LIMA, April 25 (Reuters) - Peru is weighing the “costs and benefits” of a possible purchase of a stake in Spanish oil company Repsol’s Peruvian assets, Finance Minister Luis Miguel Castilla said on Thursday.

The government has said it is evaluating the purchase to guarantee adequate fuel supplies in Peru, a net oil importer whose economy has grown around 6 percent a year for the last decade.

“This is going to take into account costs and benefits. No decision has been made,” Castilla said at the World Economic Forum on Latin America. “Like all investments, there will be rigorous analysis done.”

Business leaders have recoiled at the government’s plan, which could include a stake in Repsol’s Peru refinery and its chain of gas stations.

President Ollanta Humala responded to their concerns on Wednesday by saying he wants to strike a balance between statist and free-market economic policies.

Peruvian business groups have criticized the potential investment, saying it would show Humala wants the government to take a more active role in the economy. Government officials, including Prime Minister Juan Jimenez, have said they have sought to allay those fears.

Humala ran for office on a platform that emphasized greater state control over “strategic” sectors like natural gas and oil, although since taking office he has signed free-trade deals and sought to lure more foreign investment to the sector in what has been South America’s fastest-growing economy.

A Reuters exclusive on April 3 said state-run Petroperu had submitted a preliminary bid to buy the Pampilla refinery of Repsol - even as there were disagreements within Petroperu about whether it should agree to take on some $1.6 billion in liabilities for environmental improvements and other upgrades at the plant.

Repsol’s Pampilla plant has capacity of 102,000 barrels a day and is one of Peru’s two main refineries. Pampilla produces about half of the refined products in Peru. Repsol officials declined to comment when asked about the potential sale. (Reporting by Patricia Velez and Teresa Cespedes; Editing by Bob Burgdorfer)

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