[Entrevista] Carlos Paredes Lanatta: “The board is responsible”

Carlos Paredes Lanatta He is an economist and former president of Petroperú. In the midst of the crisis that this oil company is going through, he spoke with this medium and warned in Peru21TV that “the departure of Hugo Chávez Arévalo (from the general management) is part of the solution to the crisis” of the institution, but he stated that “the board of directors must be removed” for being responsible for the current crisis that the oil company is going through.

After Chávez, how is Petroperú?

The company is very weakened by the scandals that have occurred in recent months. The sword that defined Hugo Chávez’s departure from Petroperú was the increase in the risk perception that he has in the market, that is, the low rating of his debt; Petroperú papers went from being investment grade to being speculative bonds or junk bonds, the result of poor financial management.

How serious is the crisis?

I don’t think it will go bankrupt, nobody wants this to happen. For this reason, a rectification is required in the current management of the company, a new management team that can transmit security and transparency to the market. We are not on the verge of a collapse of the largest company in the country. What causes you a low score when you go into debt is that you are going to pay a higher interest rate. Talking with the creditors, with the risk rating agencies, which the previous management did not do, it could be coped with.

And who are responsible for this collapse?

Without a doubt, it is the directory. Although the departure of Hugo Chávez is part of the solution, it must be accompanied by the removal of the board of directors, and the replacement of unqualified management. If the company remains in the hands of the same people who have brought it to this situation, there is no hope of improvement in the short term.

How should the directory in Petroperú be recomposed? What should be the profile of the professionals who enter?

There are strong confrontations in the General Meeting of Shareholders, where the Ministry of Energy and Mines has three of the five seats in the General Meeting of Shareholders and confronts the Ministry of Economy and Finance through public communications, something that never in my life had seen; the ministers do not speak through periodicazos. As long as Minem authorities continue to have control of the board, it will not be different from what we had; I am not very optimistic if this does not change. Honesty, managerial experience, knowledge of the business and independence, is what is needed in the company.

The head of the Minem went against the MEF for keeping a manager like Chávez. What is his opinion?

The Minister of Economy, oscar grahamhas saved the situation, has been very brave and firm in not falling under pressure from the Ministry of Energy and Mines and the radical wing of the Governmentor. The confrontation between the Minen and the MEF is because each one emphasizes two different issues, Economy and Finance emphasizes transparency, efficiency, reducing the company’s deficit, the rating of Peruvian debt bonds, reducing the interest rates we have to pay; Minem’s concerns seem to be to control and take over more state institutions. That a Minister of Energy and Mines tried to amend the plan, in an absurd way, to the Minister of Economy and Finance and that, in addition, opposes the Comptroller General of the Republic, is something never seen before.

To stop this takeover, should the head of the Minem be removed?

What Minister Palacios has done totally disqualifies him from continuing to lead the most important sector in the country; we do not need the ministers to be the cause of more uncertainty. The errors are very large; should step aside for the benefit of the country.

Panorama has denounced that Heaven Petroleum Operators (HPO), owned by Samir Abudayeh, has not distributed biodiesel to Petroperú since February. Who is responsible?

I know that since the middle of last week there is a rule approved by the Minem that states that biodiesel should no longer be consumed for a month, and this would allow the supplier not to fulfill its commitment and not be subject to the penalties of the contract. What we see is very powerful people outside the government, who have the potential to change the rules, the procedures under which contracts are made in Petroperú. The problem again points to the Minem, who is the one who gave that rule. The signs are very strange.

What do you find strange?

The demand (for biodiesel) existed, the need existed; what was modified were the procedures in Petroperú for the acquisition of biodiesel, but once the contract was awarded, which is being investigated by the Comptroller’s Office, and which led to Mr. Chávez being prevented from leaving the country, which after all that now the contract is not fulfilled, and that a sectoral norm is approved, which says: for a month you do not have to comply with this, it is really strange.

Chávez Arévalo has blamed the comptroller for generating a financial panic. Is it true that the Comptroller is responsible?

In no way, the problem was not the Comptroller’s Office, the problem was Petroperú. For a world-class auditing company like PricewaterhouseCoopers to say to the largest company in the country (Petroperú) ‘no, thank you, I don’t want to audit you’, what have they seen? What is the reputational risk facing ? That reflects the way things were handled in Petroperú.

Pedro Castillo has protected this official for a long time. Isn’t he the great responsible?

Castillo, to harm Peru less, should try to govern the country with suitable, honest, capable people. Transparency is needed in Petroperú, a mea culpa, a change of directors and respect for the workers, which is not happening at this time. I hope that the entire Petroperú community can get ahead.

Keep in mind

-Carlos Paredes Lanatta is an economist from the Universidad del Pacífico. He has a master’s degree in International Economics and Development, and a Ph.D. in Economics from Yale University (USA). He has been a professor at the Pacific Business School and the Graduate School of the Universidad Continental.

-Paredes was president of the board of directors of Petroperú between 2019 and 2020. He has also been head of the Cabinet of Advisors of the Ministry of Economy and Finance, executive director of Grade, advisor to the Ministry of Coordination and Planning of Venezuela, and associate researcher at the Brookings Institution (USA.).