Legal Framework

Description

By Decree Law No. 17753 of July 24, 1969, the Petroleum Fiscal Company was named Petróleos del Perú - PETROPERÚ. PETROPERÚ is organized and operates as a limited company in accordance with the provisions of Legislative Decree No. 043, Law of the Petróleos del Perú Company - PETROPERÚ S.A. published on March 4, 1981 and its amendments (Law No. 26224, published on August 23, 1993; Law No. 29163 - Law on the Business Activity of the State approved on December 2, 1988; Law No. 28840 - Law for the Strengthening and Modernization of the Petróleos del Perú Company - PETROPERÚ S.A. and Law No. 30114, dated December 2, 2013). This regulation governs the economic and financial activity of the company, as well as its relationship with the various levels of government and administrative regimes.

The Social Statute of PETRÓLEOS DEL PERÚ (PETROPERÚ S.A.) was approved by the General Shareholders' Meeting on October 18, 2010. According to it, PETROPERÚ's corporate purpose is to carry out hydrocarbon activities as indicated in the Organic Hydrocarbons Law. In the exercise of its work, it acts with full economic, financial and administrative autonomy, and in accordance with the objectives, policies and strategies approved by the Ministry of Energy and Mines. In addition, it can carry out and enter all kinds of acts and contracts, as well as be governed in its foreign trade operations by the generally accepted uses and customs of international trade, and by the regulations of international law and the hydrocarbon industry.

On June 2, 2004, Law No. 28244 was promulgated, which excluded PETROPERÚ from the process of promotion of private investment in its modalities of transfer of shares and/or assets and sale of assets in case of dissolution or liquidation. In addition, it authorized its participation in hydrocarbon exploration and production activities.

Likewise, on July 23, 2006, Law No. 28840, Law for Strengthening and Modernizing the Petróleos del Perú - PETROPERÚ S.A. Company, was published in the Official Gazette El Peruano. This Law grants it greater autonomy in the development of its activities and excludes it from the scope of the National Fund for State Financing (FONAFE) and the rules and regulations of the Public Investment System (SNIP), now the National Multiannual Programming System and Investment Management. With Supreme Decree 012-2013-EM, published on April 27, 2013, the Regulation of Law No. 28840 was approved.

Law No. 28840 and subsequently Law No. 29163 - Promotion Law for the Development of the Petrochemical Industry (approved on December 19, 2007) - expanded the scope of the activities of PETROPERÚ to include the activities established by the Organic Hydrocarbons Law, in all phases of petroleum industry and trade, including its derivatives, basic and intermediate petrochemicals and other forms of energy.

The administration and activities of PETROPERÚ are carried out within the framework of Law 26221, the Organic Hydrocarbons Law, and its amendments and related regulations.

In April 2010, PETROPERÚ registered its shares in the Public Registry of the Securities Market, for which the rules that regulate said market are applied. Among others, Resolution SMV 005-2014-SMV-01 - Regulation of important facts and reserved information, which mandates it to report to the Superintendence of the Securities Market all important facts derived from the development of its activities.

In addition, PETROPERÚ, according to article 3 of Legislative Decree 43, is subject to the regulations of the National Control System contemplated in Law N ° 27785, Organic Law of the National Control System and the General Comptroller of the Republic.

On December 18, 2013, Law No. 30130 was published, declaring of public need and national interest the priority execution of the Modernization of the Talara Refinery to ensure the preservation of the quality of the air and public health, and to adopt measures to strengthen the corporate governance of PETROPERÚ. Subsequently, with Supreme Decree 008-2014-EM, published on March 24, 2014, the Regulation of Law 30130 was approved.

Law No. 30130 authorizes PETROPERÚ S.A. to sell or issue shares to be placed in the Stock Market. In this process, the State may incorporate a private participation of up to 49% of its outstanding capital. Likewise, it is established that PETROPERÚ S.A. can carry out investment activities and projects, as long as they do not generate firm or contingent liabilities, current or future, do not affect the guarantees of the Talara Refinery Modernization Project (PMRT) and do not demand resources from the Public Treasury, which does not limit those projects that allow maintaining the operation of the company upon its entry into force of the law. These restrictions will cease when PETROPERÚ S.A. generates sufficient income flow to guarantee the payment of the indebtedness to be contracted for the investments linked to the PMRT and a private participation of at least 40% of its outstanding capital stock has been incorporated.

Also, through Law No. 30357, published on November 6, 2015, a Fourth Final Complementary Provision was incorporated to Law N ° 30130, which refers to the exploitation of Lot 192.

On December 30, 2016, Legislative Decree No. 1292 was published in the Official Gazette El Peruano, declaring the safe operation of the North Peruvian Pipeline of public necessity and national interest, and providing for the reorganization and improvement of the Corporate Governance of PETROPERÚ S.A.

Other standards that refer to PETROPERÚ are the following:

  • Law No. 29817, Law that declares of public necessity and national interest the construction and operation of the Hydrocarbon Transport System (natural gas, natural gas liquids and derivatives) and the creation of a petrochemical industrial pole for national energy security purposes. 
  • Law No. 29970 - Law that strengthens the Energy Security and promotes the development of the Petrochemical Complex in the South of the Country, in which the participation of PETROPERÚ S.A., individually or in association, in the development of the petrochemical center referred to in said Law. 
  • Legislative Decree No. 1031 - Legislative Decree that promotes the efficiency of the State's Business Activity-, which provides for the registration of a minimum of 20% of PETROPERÚ's share capital in the Public Registry of the Securities Market and the annual verification of the financial statements by independent external auditors appointed by the General Shareholders' Meeting. 
  • S.O.T. of Law N ° 27806, Law for Transparency and Access to Public Information, which establishes that companies of the Peruvian State are subject to the procedure of access to public information, which mandates them to provide the information required by any person in application of the principle of public awareness. 
  • Law N ° 26887, General Law of Societies.

Finally, PETROPERÚ's contracts are governed by the PETROPERÚ Acquisitions and Contracting Regulations, approved by Board Agreement 056-2017 of May 29, 2017 (effective as of July 4, 2017) within the framework of the provisions of Legislative Decree 1292, which authorizes PETROPERÚ to have its own Acquisitions and Contracting Regulations.