Peru's Oil Sector Faces New Risks Amid Strike and Privatization Plans

A three-day strike at Peru’s state oil company began Monday as workers protested government plans to open the company to private investment, a move that comes as Petroperu also weighs bringing in outside management for its debt-laden Talara refinery. Workers at state-owned Petroperu launched the strike in opposition to what unions describe as a creeping privatization agenda, Reuters reported. The walkout targets administrative and operational functions and adds pressure to a company that has relied heavily on state support to stay afloat. The labor action coincides with internal discussions at Petroperu over whether to appoint an external operator to manage the Talara refinery, the country’s largest refining asset. According to Quantum Commodity Intelligence, the company is exploring outside management options for the 210,000-barrel-per-day Talara refinery as part of efforts to stabilize operations and address mounting debt. Talara has been a focal point of Petroperu’s financial strain. The refinery underwent a costly modernization completed in 2024, but the upgrade left the company with a heavy debt burden and has yet to translate into consistently strong operating performance. Cash flow from the facility has fallen short of expectations, intensifying scrutiny from both creditors and the government. Peru is a small crude producer by global standards, pumping roughly 40,000 to 45,000 barrels per day, but its oil sector carries outsized domestic importance because the country relies heavily on local refining to meet fuel demand. State-owned Petroperu dominates the downstream market, and its Talara refinery, with capacity of about 210,000 barrels per day, accounts for the vast majority of Peru’s refining capability, making disruptions at the company disproportionately significant for domestic fuel supply despite the country’s limited upstream output. According to EnergyNews.pro, Peru’s government is actively considering allowing private investors to take stakes in Petroperu, reversing years of resistance to outside participation in the state oil company. Officials have said private involvement could take the form of minority equity stakes, management contracts, or partnerships tied to specific assets, while the state retains overall ownership. Unions have strongly opposed those plans, arguing that private participation threatens job security and national control over strategic energy infrastructure. Labor leaders have said the strike is meant to force the government to abandon privatization efforts and recommit to public financing of Petroperu. By Charles Kennedy for Oilprice.com More Top Reads From Oilprice.com UK Urged to Ease 2030 Electric Vehicle Sales Goal Indian Refiner MRPL Shifts from Russian to Venezuelan Oil Supply Europe’s New Oil Sanctions Are Squeezing Russian Revenues