Peru is considering taking steps to bring the state oil company back from the financial brink

(Reuters) – Peruvian officials are looking for ways to help cash-strapped state oil company Petroperu avoid bankruptcy or liquidation, Economy Minister Jose Arista told Congress on Friday, including cost cutting, asset sales and possible private management.

Last month, the company described its financial situation as “extremely serious.”

“Petroperu is currently facing a difficult financial situation that requires urgent action from the government as its sole shareholder,” Arista said. “In this context, the executive is assessing measures to strengthen the management of the company to enable the continuity of its operations.”

These measures include the sale of unprofitable and non-operating assets and the outsourcing of private management of the company.

“The employment of a private manager for the company is being considered, which does not mean its privatization and would allow the use of international management practices used around the world by large modern oil companies,” Arista said.

A spokesman for Peru’s president said last month that Petroperu would not be privatized after the company took the unusual step of favoring private management as the only solution to its current financial situation.

The assessed activities will be presented to the president’s cabinet of ministers for approval in the coming weeks, the minister added.

Petroperu, the Andean country’s main supplier of motor fuels, said last month it needed $2.2 billion in immediate financial aid and forecast additional multi-million-dollar losses this year.