UPDATE: Peru Government Says It Won't Purchase Repsol Assets in Peru

(Adds confirmation from Mines and Energy Ministry)

 
  By Ryan Dube 
 

LIMA, Peru--Peru's state-owned Petroleos del Peru SA (PETROBC1.VL), or Petroperu, has decided to not buy the local assets of Spanish oil company Repsol SA (REP.MC, REPYY), the government said Thursday.

Petroperu's board of directors decided to not continue with the process after a technical and economic evaluation of acquiring the assets, a spokesman from the Ministry of Energy and Mines said. Petroperu said it would prioritize its current investment projects rather than purchasing assets from Repsol.

President Ollanta Humala and other high-level government officials have said recently that the government was studying the possibility of purchasing the assets, which include Repsol's La Pampilla refinery and gasoline stations.

The government came under a firestorm of criticism this week from opposition politicians and the business community over concerns that the purchase of the assets would signal a policy shift towards increasing the state's presence in the economy.

Currently, Petroperu owns a number of aging refineries and a pipeline and leases its name for a chain of service stations. Repsol has been selling some of its assets, and earlier this year sold off a minority holding in Peru LNG, which produces liquefied natural gas.

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