Petroperu and the Andean Development Corporation (CAF) have signed a financial advisory agreement for the Talara Refinery Modernization and Adaptation Project in Peru, whose investment cost is estimated at US$1bn.


Under the agreement, CAF will assist the state oil company with financial evaluation and definition of the structure and implementation of financing for development of this important project.


The work will be divided into two phases: first, financial evaluation and assistance with definition of the structure of the transaction, and second assistance with implementation of the selected structure.


CAF will analyse possible available sources of financing for the project, as well as designing a financial scheme to obtain the funds needed to execute the project and comply with the guidelines established by the government authorities.


The objectives of the project include modifying its production pattern to cleaner fuels, reducing sulphur content in diesel and gasoline, improving other characteristics of its fuels, increasing refining capacity, adapting to processing low-cost heavy crudes, and expanding capacity to convert residuals into medium distillates (diesel, turbo and kerosene).


It also aims to adapt production to common technical specifications for Latin America and the Caribbean in a framework of economic efficiency which will result in competitive prices that guarantee the highest possible volume of local products on the Peruvian market with quality specifications that meet Latin American and Caribbean standards.