By ROBERT KOZAK
LIMA, Peru -- Peru's government plans to focus on
modernizing its Talara refinery and other projects, after closing the door to
a possible purchase of assets owned by Spanish oil company
Withering criticisms from the business sector led the
government on Thursday to announce that state-owned Petroleos
del Peru, or Petroperu, won't buy Repsol's La Pampilla refinery and a chain of service
stations in Peru.
Petroperu was looking at taking a minority stake in the
Repsol assets, although business groups fiercely opposed any
deal, saying the government would be taking too great a role in
"The decision was taken to not advance in this area as it
wasn't an area that would generate economic possibility for the
nation," Prime Minister Juan Jimenez told reporters.
Energy and Mines Minister Jorge Merino said the government
will focus instead on projects currently under way, such
as the upgrade at its Talara refinery aimed at boosting
production to 95,000 bpd from about 60,000 bpd now.
Analysts said that investors will now keep a closer eye on
President Ollanta Humala's policies.
"We think investors' scrutiny over President Humala's policy decisions will be on the
rise," Credit Suisse said Friday in a research note.
Before being elected in 2011, Mr. Humala espoused socialist
policies, but his administration has for the most part followed
Eurasia Group said that the decision was "a positive signal
that President Ollanta Humala is sensitive to swings in
investor confidence and remains committed to the current
investor-friendly economic policy framework."
"The episode probably shows that Mr. Humala still believes
in the merit of greater state presence in the hydrocarbons
sector, but the risk of more aggressive policies will be
contained by Mr. Humala's attempt to do so through market
mechanisms and his concern over negative investor sentiment,"
Petroperu owns refineries, a pipeline and leases its name
for a chain of service stations.
Dow Jones Newswires