September 16, 2024 [Reuters]- Peru’s government said on Saturday it has approved financing totaling $1.75 billion for struggling state oil firm Petroperu, part of an effort to help the company manage mounting debt and dwindling cash.

After Prime Minister Gustavo Adrianzen this month called for “drastic measures,” Petroperu’s board of directors resigned over issues including what board members called the company’s financial instability.

The measures announced on Saturday in a government decree included a short-term credit line of up to $1 billion, as well as $750 million in “transitory financial support.”

“The purpose of this emergency decree is to adopt extraordinary and urgent economic and financial measures to overcome Petroperu’s financial situation,” the decree said.

The government also called for the Economy Ministry to take over Petroperu’s debt payments in the second half of 2024 corresponding to bonds and loans intended to finance the modernization of the Talara refinery.

Petroperu is the country’s main fuel supplier, and has said it needs at least $2.5 billion to continue running.

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