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Peru sells refinery for $180.5 million

By JANE HOLLIGAN

LIMA, June 11 -- Peru sold a 60-percent stake in its main oil refinery, La Pampilla, to a consortium led by Spain's Repsol for $180.5 million Tuesday in a decisive step toward completion of the most controversial of the country's privatizations. Privatizations committee head, Jorge Gonzales Izquierdo, said the price and the quality of the buyer proved the government was not 'selling cheaply' the country's assets. The committee set a minimum price of $108 million for the 28-year-old refinery, which has a capacity to process 102,000 barrels-a-day of crude oil, and the buyer will be obliged to invest $50 million in five years. The sell-off in parts of Petroperu, the country's largest company, sparked opposition from oil workers, regional authorities and the armed forces and in the run up to the 1995 election, President Alberto Fujimori halted the sale to allow wider consultations. Opinion polls showed up to 70 percent of Peruvians opposed the sale of the company. The winning consortium, called Refinadores del Peru and led by Repsol, the privatized Spanish hydrocarbons company, beat the only other bidder in the auction for the refinery, Venezuelan state oil firm Maraven, which bid $165.6 million. Repsol, which will operate the plant, has a 55-percent stake in the consortium, while Argentina's YPF has 25 percent. The remaining stake is divided evenly between Mobil of the United States, the banking group Peru Privatization Fund, Peru's second largest bank, Banco Wiese and Peruvian construction concern Grana y Montero. At the same sealed bid auction, a consortium led by Argentina's Pluspetrol bought for $142.2 million a 27-year licence to explore and extract oil from a jungle area, known as Lot 8-8X and currently operated by state company Petroperu.

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Pluspetrol beat two other Argentine firms, YPF and Perez Companc, as well as the Chinese state concern, China Petroleum Technology and Development Corp., which came second with a bid of $115 million. Pluspetrol has 60 percent of the winning consortium. Twenty percent is owned by Pedco and 20 percent divided among Korean companies Daewoo and Yukon. 'Both for the economic offer and for the quality and nature of the operators, we can feel fully satisfied that we have carried out our duty to safeguard the country's interests,' said Gonzales, who is also Labor Minister. 'I think the claims that we were selling the country's assets cheaply have been completely disproved,' he said. Repsol representative Francisco Moreno said that it planned to invest more than the minimum $50 million required under the bid conditions. 'We are going to invest in improving the environment, in the modernization of the refinery, in energy saving measures and in increasing the yield of light products,' Moreno said. The price paid for La Pampilla includes Peruvian debt paper worth $38 million, while that paid for the exploration area includes $25 million of debt paper at face value. Repsol is a privatized Spanish company, considered the fourth-largest in the European Union, with a global production capacity of 240 million barrels a year. Pluspetrol operates nine oil fields in Argentina, Peru, Bolivia, Colombia, and Algeria and has total oil reserves of around 360 million barrels.

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