August 1, 2011 / 10:12 PM / in 7 years

Peru to beef up state energy companies -minister

* State-run energy companies to have greater role

* PetroPeru president wants firm to expand, produce oil

* Brazil energy management ‘best in region’ - Peru Minister

LIMA, Aug 1 (Reuters) - Peru’s state-run energy companies could have a greater role under President Ollanta Humala, like those in neighboring Brazil and Chile, Minister of Energy and Mines Carlos Herrera said on Monday.

He spoke hours after Finance Minister Luis Miguel Castilla said modernizing public companies was important and state oil and gas company PetroPeru could be opened to private investment. [ID:nN1E7700ZG]

Peru’s state-owned energy companies do not have the market share or international importance that Brazilian energy giant Petrobras or Chile’s miner Codelco enjoy, and most Peruvian companies were privatized in the 1990s.

“When you look at economies like Colombia, Chile or Brazil you see a totally different situation,” said Herrera at a press conference. “What we’re looking at is allowing state companies to have a greater involvement in the management of the state.”

Companies that could be reformed or expanded, possibly with the introduction of private capital, include PetroPeru and ElectroPeru, the state electricity company.

“The general idea is for the capital to be private,” Herrera said.

Humberto Campodonico, the designated President of PetroPeru, said he wanted the company to run its own oil fields to produce petroleum rather than buying it from other companies in order to run its refineries and gas stations.

“This is what helps a company move forward and become competitive — it’s what happened with Ecopetrol and Petrobras, and with Enap in Chile,” he told journalists.

He said many of the contracts with private companies running Peru’s oil blocks will expire between 2014 and 2016, giving PetroPeru an opportunity to enter the market.

Humala, who took office on July 28, promises to respect existing contracts and free-market reforms that have made Peru one of the world’s fastest growing economies. He also pledges to share Peru’s new-found wealth with the the one third of Peruvians still mired in poverty.

While Humala favors a stronger role for state-owned companies in strategic sectors like energy, he has ruled out nationalizing private companies, as Venezuela’s socialist President Hugo Chavez has done.

Instead, his government most closely resembles that of former Brazilian President Luiz Inacio Lula da Silva, a union leader who managed to please Wall Street even as he combated poverty in South America’s largest country.

Herrera praised Brazil’s energy sector for combining state and private resources and for being a leader in developing alternative fuels.

“Brazil is one of the countries in the world that has best managed its energy sector,” he said. (Reporting by Caroline Stauffer and Teresa Cespedes; Editing by David Gregorio)

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