Statement

Dear fellow citizens:

The editorial of today’s El Comercio newspaper reflects its critical vision regarding public companies and public investment projects in the productive area in general, and Petroperu and the new Talara refinery in particular. Regardless of how close or distant we can be from this vision, it is important to make some details:

1. The fact that the Public Treasury assumes part of the debt of Petroperú, a 100% state-owned company, does not make the project more expensive or increase the public debt. Petroperu's debt is public debt. Moreover, by going to the Public Treasury, it will be possible to access lower interest rates and generate savings for the State.
2. This financial operation has the great advantage of improving the company's balance sheet, increasing its valuation in the market, and making viable the entry of minority private capital to Petroperu, with all the benefits that entails. If we want a more solid, better managed Petroperu and that benefits more Peruvians, the option proposed by the current administration is a coherent and transparent solution. This capitalization of the company will necessarily have to be accompanied by changes in its governance structure and verifiable commitments to transparency and efficiency.
3. It is important to note that the transfer to the Public Treasury of a minor portion of Petroperu's debt is only one of the actions we are evaluating to address Petroperu's over-indebtedness. We have already reduced working capital needs and reduced short-term indebtedness, we are analyzing the possible monetization of the auxiliary units of the refinery, we have corrected pricing methodologies in order to end with hidden subsidies, and we are looking for the incorporation of private capital in order to reduce the financial leverage of the company.
4. Undoubtedly, in the approval of the Talara Refinery Modernization Project (PMRT), political criteria dominated, and it was not launched with all the analysis and transparency that was required. In fact, it is not about the modernization of an old refinery, but a new one. It was also illusory to think that a project of this magnitude could only be executed based on debt. The expected result has been on indebting Petroperú, as was foreseen in Board meetings at that time.
5. Faced with the complex problem that we inherited in 2019, and regardless of the genesis of the project, we are making decisions based on economic analysis, and acting firmly and transparently, with the sole objective of benefiting Peruvians and minimizing the costs of decision taken years ago and to value the millionaire investment made from 2014 onwards.
6. There is no doubt that the project has faced unnecessary problems and costs, many of them attributable to the Peruvian State and Petroperú. These problems are being solved and the costs explained in two Agreements of Principles that we have reached with the companies in charge of the execution of the project. These Agreements, not binding, are being analyzed by the Comptroller General of the Republic, at our request. Soon we will make public and explain these Agreements, before signing the modifications to the contracts. We seek to solve real problems, not reap easy applause from the gallery.
7. Our commitment is with transparency and efficiency. We are working tirelessly for the well-being of Peruvians and for leaving a more transparent, solid and viable Petroperu than the one we received.
8. A warm greeting to all Petroperu workers and, especially, to all Peruvians, who are the true owners of the company and for whom we are working with enthusiasm and pride.

Carlos E. Paredes Lanatta
President of the Board.
Petróleos del Perú-PETROPERU S.A.

COM-21