- PetroTal (TSXV:TAL) has been forced to shut in production at its Bretana oil field following pipeline closures in Peru
- The Peruvian government instructed the shutdown of the Northern Oil Pipeline as part of COVID-19 mitigation measures
- Petroperu SA, which operates the pipeline, has filed for an appeal, but it’s not known how long the suspension will last
- Separately, PetroTal has initiated a number of policies to reduce expenditures and preserve its liquidity
- PetroTal (TAL) is currently down 31.71 per cent to C$0.14 per share, with a market cap of $94.27 million
PetroTal (TSXV:TAL) has been forced to shut in production at its Bretana oil field following pipeline closures in Peru.
The decision comes after a public health directive from the Peruvian government, which mandated the shutdown of the Northern Oil Pipeline, which is operated by Petroperu SA.
As part of broader efforts to curb the spread of COVID-19 in communities surrounding the pipeline operations, the directive states that no employees over the age of 60 or with chronic health conditions should be working in high risk areas.
While Petroperu has filed an appeal to resume operations under designation as an essential service, it’s not yet known how long the suspension will last.
As such, PetroTal has capped oil production at its Bretana oil field due to storage capacity limitations. The company is currently managing these measures to ensure a swift return to regular operations once the Northern Oil Pipeline reopens.
Manolo Zuniga, President and CEO, of PetroTal, said the company will continue to support the Peruvian government’s public health decisions.
“In the meantime, we continue to work on securing the necessary financial backing to ensure we are properly funded and emerge stronger from this crisis.
“PetroTal appreciates the ongoing dedication of all employees and the support for our business during these challenging times of the pandemic impact,” he added.
As a consequence of the shut-in measures, PetroTal is making moves to significantly reduce costs related to the operation if the Bretana oil field. This includes temporarily laying off staff to achieve a workforce of essential employees only and applies to both the oil field and its corporate office.
In addition, company-wide salary cuts have been made, including a 20 per cent reduction to cash compensation packages for management personnel and company directors. Certain capital expenditures for the year will also continue to be deferred.
PetroTal (TAL) is currently down 31.71 per cent to C$0.14 per share at 3:38pm EDT.