Petroperu on a Self-Funding Capacity and Development Drive

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). After posting a $35 million profit in 2002, Petroperu is looking to finance planned upgrades of its capacities from internal cash flow. In July the Peruvian national fuel utility plans to put a new set of tenders out.

Investment will favor the company's 62,000 bpd Talara refinery on Peru's north coast. The aim is to boost the refinery's capacity to 90,000 bpd. Over a four year project period, Pertoperu aims to produce higher octane gasoline and install a catalytic cracking unit to boost kerosene and diesel output.

The development program is also aimed at Petroperu's 10,000 bpd Iquitos refinery in the northeast jungle and the 8,000bpd Conchan facility south of Lima. Currently the company imports 330,000 bpd of light crude and the country's total out is running at 95,000 bpd.

This program is the second part of a drive to develop and privatize resources. In 2002 the company awarded a $20 million contract to a consortium of Venezuela's Otepi construction company (Caracas, Venezuela) and the local Cosapi (Lima, Peru) to upgrade the Talara refinery. The contract included the optimization of productive processes, installation of a desalinization unit and replacement of the refinery's main oven.

The completion of this phase overlaps with 2003's new initiatives and is designed to allow the refinery to process heavy crude, whereas before it has been limited to light crude. This meant that the plant was working at only 50% capacity. Heavy crude will be imported from abroad and sourced locally. Foster Wheeler (NYSE:FWC) (Clinton, New Jersey) has been carrying out feasibility studies on the project.

On tender program are projects in the $200 million to $300 million range. These include the replacement of underwater supply lines and increasing the refinery's storage capacity and the installation of new processing units enabling Talara to produce more modern fuels.