09:16 | Lima, Dec. 01 (ANDINA).
The cost to modernize and upgrade Petroleos del Peru S.A.'s, or Petroperu's, refinery at Talara in northern Peru will be more than the $1.7 billion originally projected by the state-owned company, the chief executive of Petroperu said.
Humberto Campodonico said at a press conference Friday that the updated cost estimate to carry out the project should be known shortly, adding that it will be more than the original estimate.
Dow Jones Newswires reported Campodonico saying that there is no fixed date yet for when Petroperu will begin to sell shares in the company, adding that investors will want to know more clearly what the costs will be of the upgrade to the Talara refinery, as well as what Petroperu's plans are for upstream developments.
Petroperu is listed on the Lima Stock Exchange, a step it took in 2009 as part of the process of advancing with its initial public offering.
"Investors want to know what will happen with a company for the next two, three, four or five years," Campodonico said following a presentation at the CADE business conference in this southern Peruvian city.
Petroperu has a 47% share of Peru's wholesale market for petroleum products.
It doesn't produce any crude oil in Peru although it plans to do so by taking stakes in concessions of already operating wells.
Petroperu signed a contract this year with Societe Generale S.A. France to carry out due diligence to determine the cost of upgrading the Talara refinery. Societe Generale is also analyzing, evaluating and designing the financial framework for the project.
The upgrade is aimed at reducing levels of sulfur and allowing the refinery to refine the heavy crude that will be extracted in the future in northern Peru. Petroperu says it aims to increase oil production at Talara to 95,000 barrels a day from the current capacity of 65,000 barrels a day.
Petroperu mainly runs refineries, and a pipeline. Its plan to return to production also includes taking a minority stake in more than 30 oil blocks to be auctioned off by state agency Perupetro S.A.
(END) INT/EEP
Published: 12/1/2012