Global ratings from Standard & Poor’s downgraded the issuer’s long-term credit rating Petroleum of Peru – Petroperú SA from “B” to “B-” and placed the company under “negative credit watch,” according to a report published on December 22, 2025.
The decision responds to a lower expectation of the capacity of the Government of Peru to implement measures to provide sustainable financial support to the company and the persistent weakness of Petroperú’s financial indicators.
The rating agency said it viewed the possibility of new government intervention to preserve the company after several years as less certain Petroperu benefited from government support, among which a loan stands out $1 billion awarded in 2024 with a state guarantee.
The report points out that there are doubts about the sustainability of future support measures due to the recurring political changes in the country.
The negative outlook implies that the rating could fall again in the coming months if the restructuring process undertaken by the company results in a repurchase or restructuring of debt that the agency considers to be “stressed” – which would amount to a default – or if additional government support is not provided to deal with upcoming maturities in the near term.
Standard & Poor’s expected that the consequences of a possible default would continue to affect the Peruvian government, but now believes that the consequences are more manageable than in the past.
The report reports that as of September 2025 Petroperu had Total financial debt of $5.45 billionof which near the 10% ($580 million) expires in the next 12 months.
In August, the company refinanced short-term debt for approx $1 billion through a loan guaranteed by the State and granted by the Banco de la Nación with a maturity until 2028. The details of the structure indicate that the 79% the liability is denominated in US dollars and the 21% in soles.
In the short term, the company must expect semi-annual payments of the CESCE loan $86 millionInterest on international bonds with maturities in 2032 and 2047 for approx $81 millionAnd $5 million Interest on a loan from the Ministry of Economy and Finance.
Standard & Poor’s expects these December obligations can be met, but warns that cash generation will remain very limited and deleveraging is unlikely in the coming years.
According to the agency, the EBITDA (earnings before interest, taxes, depreciation and amortization) in the 12-month period ending September 2025 -$122.8 millionalthough the company a Positive EBITDA of $38.7 million in the third quarter, after registration -$98.6 million in the same period of 2024.
In any case, interest coverage remains low because EBITDA roughly covers it 20% the interest accrued in this quarter. The adjusted debt to EBITDA ratio calculated by the rating agency was 44 timeswith interest coverage of less than 1 time.
The rating agency points this out Petroperu The restructuring process continues and further information on the objectives and schedule is required to assess the results.
The temporary improvement in third quarter results was due to an increase in sales, mainly due to higher production from the Talara refinery, which increased sales and exports, as well as a decline in product purchasing.
Petroperu It is wholly owned by the Peruvian state Ministry of Energy and Mines (40%) and Ministry of Economy and Finance (60%). It operates three refineries (Talara, Conchán, Iquitos) with a total processing capacity of 122,500 barrels per dayin addition to the Norperuano pipeline nearby 1,100 kilometers.
The company generates most of its revenues through the refining, marketing and distribution of fuels in the local market, and the main debt investments were intended for the modernization of the Talara complex.
Now it is National Federation of Petroleum, Energy and Allied Workers of Peru (FENPETROL) and the Petroperú Oil Workers Union Front (FSTPP) They blamed Minister Denisse Miralles and the President of the Republic, José Jerí, for the economic, financial and institutional consequences that, in their opinion, could arise from the recent decisions regarding the administration of Petroperú.
According to the joint statement from FENPETROL and the FSTPPThe recent actions and statements by the Minister of Economic Affairs and Finance were interpreted as political intervention in the management of the state-owned company Petroperu.
The trade union organizations stated that the financial situation, debts and guarantees were attributed Petroperu They pose a financial risk to the state and warned that any decision that weakens its governance could increase the likelihood of new transfers of public resources and pressure on the budget deficit.
The statement attributed the recent reduction in… Credit rating of the country by Standard & Poor’s to the perception of institutional disorder and lack of autonomy in the management of state-owned companies, as well as the weakening of the Ministry of Economy and Finance as a reference for stability. According to the text, this deterioration increases country risk, increases the cost of government financing and impacts the national productive apparatus.
The unions also expressed concern that, in their opinion, the Ministry of Economy and Finance had not responded to political interventions in the company, an interpretation that, in their view, could be understood as a confirmation of these measures, with possible medium and long-term consequences for the country’s economic reputation.
FENPETROL and the FSTPP They demanded the return of the technical and independent leadership in Petroperuand explained that allowing political criteria-led administration could increase fiscal risks for the state. The statement ended with a call for an immediate correction of the decisions made and emphasized that state inaction in this regard can entail significant costs for the country.
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