The Board of Directors elected by the General Shareholders' Meeting informs the public about the company

The directors appointed by the General Shareholders Meeting (GSM) of Petroperú address the public to report the following:

1. For the sake of transparency, a statement was published on May 13, 2024, announcing the critical situation in which the company found itself, while awaiting a response from the government regarding the recommended actions to achieve efficiency gains in Petroperú that would ensure its self-sustainability. Thus, it was also stressed that “it was immoral” to continue requesting more money from the State without the company committing to profound changes. After a few months, the government's decision on what to do with Petroperú is still pending.
2. Why has Petroperú arrived at the current situation? There are three reasons that explain it: (i) a historical political and union interference, which has led the company to move away from efficient, transparent management and good corporate governance; (ii) the construction of the New Talara Refinery (NRT), which having cost twice the budgeted amount will have a long stabilization process with the risk of continuing to impact the financial statements for at least two more years; (iii) and the consequent over-indebtedness that has deteriorated its solvency and liquidity ratios to the extreme.
3. Under these conditions, the government, which is the 100% shareholder of Petroperú, has three options to consider:
1. Continue to inject capital into the company, as it has done until now, without asking for or ensuring credible organizational changes that seek its efficiency.
2. Accept its bankruptcy and/or liquidation with the legal and financial obligations that could be faced.
3. Decide on a deep restructuring that highlights credibility. This would lead to a consequent and necessary injection of capital from the government on the condition that organizational efficiency actions are carried out that would be implemented with the support of a firm with proven international experience. This stabilization would have to ensure the attraction of private capital to Petroperú to strengthen its transformation. This option, of course, faces institutional risks, which may eventually end up interrupting or reversing this plan, so it should be accompanied by a strong legal framework that reinforces future actions. This was the restructuring alternative that the current board of directors developed.
4. That said, the government must urgently assess all of the above and make a decision, since under the current conditions, the management of Petroperú is becoming unsustainable.
5. Since the first day the board appointed by the GSM took office, it has performed its duties with the utmost commitment and responsibility, with the main objective of advancing towards the company's self-sustainability and good corporate governance. During this period, the board has provided Petroperú with greater transparency, making public its audited financial statements, reporting the financial situation to the Superintendency of the Securities Market (SMV) in a timely manner and communicating its progress to the country. Actions have been taken to gain efficiency, reducing the number of management positions, promoting the reduction of its high payroll and generating significant savings. It has also deepened investigations into serious cases of employee corruption, which will be made public once concluded.
6. The directors appointed by the GSM trust that the government will soon make the best decision, putting first the respect that Peruvians deserve, who have been financing Petroperú with their taxes, while watching how attention to a long list of social priorities is neglected.