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UPDATE 2-Peru says Petroperu may sell bonds this year for refinery work
February 6, 2017 / 11:59 PM / 9 months ago

UPDATE 2-Peru says Petroperu may sell bonds this year for refinery work

(Adds Tamayo’s comments on Petroperu oil pipeline and recent spills)

LIMA, Feb 6 (Reuters) - Peru’s state-owned energy company Petroperu might sell an “important” amount of bonds this year to help finance the $3.5 billion expansion of its Talara refinery, the energy and mines minister said on Monday.

A bond issuance would lower costs and extend the deadline for paying off debt for the project, which would also be financed through loans, Minister of Energy and Mines Gonzalo Tamayo told a press conference.

The government of President Pedro Pablo Kuczynski said last year that it had ruled out any bond issuance to finance the project and was instead pursuing loans from Spanish state-backed insurer Cesce, the World Bank and a lending syndicate.

Tamayo said the government had since reconsidered and that Petroperu would likely sell the bonds with the state of Peru providing a guarantee.

Petroperu might also seek a bridge loan until the bonds are launched, Tamayo added.

“It would be an important issuance,” Tamayo said, declining to specify an amount. “It would have to be this year.”

Tamayo also said that in coming days Petroperu would likely resume operation of the northern branch of its Amazon-to-coast oil pipeline, and the government was aiming for it to be fully operational by the end of the year.

The four-decade old pipeline was shuttered a year ago after the first of what would eventually become a dozen oil spills in 2016 that have frayed Petroperu’s relations with nearby indigenous communities.

Petroperu started to use trucks to transport oil from tanks that had fed into the pipeline two months ago, but a recent road accident spilled another 800 to 1,000 barrels of oil in the Amazon, Tamayo said.

A clean-up has been delayed because of a dispute with nearby communities, Tamayo added.

Reporting By Mitra Taj; Editing by Cynthia Osterman and Andrew Hay

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