Peru Industry Group: Government Plan to Buy Repsol Assets Sends Bad Signal

   By Ryan Dube 
 

LIMA, Peru--Peru's National Mining, Oil and Energy Society, or SNMPE, said Tuesday that the government's interest in buying a refinery and gasoline stations sends a bad signal to the business community.

President Ollanta Humala and other top government officials have said recently that they are looking at the possibility of buying a minority stake in the assets, which are owned by Spain's Repsol SA (REP.MC, REPYY).

Repsol has been looking to sell its assets in Latin America and elsewhere. In Peru, Repsol owns a network of gasoline stations, La Pampilla refinery and a cooking-gas-distribution network.

The purchase, which would be made through state-owned oil company Petroleos del Peru SA (PETROBC1.VL), or Petroperu, has come under fire from the private-sector and opposition politicians who accuse the government of wanting to increase the state's presence in the economy and control fuel prices.

The SNMPE, a prominent association of private-sector companies working in Peru's mining, petroleum and energy sectors, joined others on Tuesday in opposing the government's plans, saying it could hurt business confidence in Peru.

"It is essential to maintain the confidence that our country has won in order to capture the prívate investments necessary to continue on the path of growth," SNMPE President Eva Arias said.

SNMPE estimates that purchasing the assets would require an investment of about $2 billion. Ms. Arias said the government could better use the funds to invest in improving health care, education, security and infrastructure.

Write to Ryan Dube at [e-mail]

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