823.2553/3–150
Memorandum of Conversation, by the Petroleum Attaché of the Embassy in Peru (Levangie)
Subject: Peruvian Oil Legislation
Participants: Peruvian Ambassador Fernando Berckemeyer, Messrs. James C. Lobenstine (NWC) and George W. Levangie, Petroleum Attaché (ARA)
The meeting was arranged by Mr. Lobenstine for the afternoon of March 1, after Messrs. Mills, Lobenstine and Levangie had agreed that a frank explanation of the status of the Peruvian oil legislation to Ambassador Berckemeyer could be expected to reach General Odría, and might influence the latter toward issuing promptly the final draft of the legislation as a decree-law. The conversation was to be unofficial and the ideas put forward only were to be represented as an expression of Mr. Levangie’s views and not those of the Department. High points of the discussion follow:
The Ambassador opened the conversation by stating to Mr. Lobenstine that Mr. Black,1 of the International Bank, had agreed to recommend an expert who would be engaged to set up an office of technical people in Lima, which office would be expected to prepare reports and applications for loans for irrigation, agriculture, etc., and to answer any of the Bank’s questions regarding such loan applications.
Turning to the subject of oil, the Ambassador gave an opening by stating that Mr. Ralph Davies, of the American Independent Oil Company, had recently asked him for information on, and shown interest in, the Peruvian oil situation. This led to general conversation between the Ambassador and the visitors on the pending oil legislation.
Mr. Levangie briefly viewed the history of legislation since 1945 and 1946, and pointed out how the Peruvians had lost an excellent opportunity in 1946 to break the exploration impasse. He stated that, if legislation is not enacted promptly, there is danger of the same thing occurring again. The Ambassador was reminded that the Conorada Oil Company2 had arranged for geological and geophysical work to be done in the Sechura Desert, in anticipation of issuance of a satisfactory decree-law, but that the Conorada might not go through with this work if the legislation was not promulgated at an early date. The great probability of serious delay and unattractive changes in the proposed law, if the project is left to the next session of the Peruvian [Page 986] Congress, was pointed out to the Ambassador. The Ambassador showed clear appreciation of the difficulties that could be expected to rise, and offered that, if a decree-law were now issued, the chances were decidedly in favor of its being passed at the coming session of Congress without major change.
The Ambassador, during the conversation, returned three times to the question of the actual cause of delay in the issuance of the decree-law. It was explained to him that the majority of the Military Junta and Peruvian officials in general were believed to fully approve of the project and of its prompt appearance as a decree-law, but that the political advisers of General Odría were counselling that he not risk offending opposition groups previous to his presidential campaign. The Ambassador offered that this opposition was the Miró Quesada3 group. At another point in the discussion, Mr. Levangie emphasized again that the question was one apparently entirely political, and that for the well-being of Peru, there should be no more delay. He mentioned that the oil companies had had interviews with Hector Boza, Pedro Beltrán,4 Agusto Gildemeister, and other influential persons, and that these appeared favorably disposed and had promised to talk to General Odría. The Ambassador stated that he knew that Beltrán was in favor of immediate legislation.
The Ambassador asked if the views being expressed by the Petroleum Attaché had been stated in the same frank way to General Odría—the idea apparently being that General Odría would have been impressed. He intimated that this still might be done. It was explained to him that Ambassador Tittmann had recently called on General Odría and had had a brief discussion as to the pending oil law, but that it was impossible for Ambassador Tittmann to go into the question fully and frankly, as this might have been interpreted as intervention in Peruvian affairs.5 It was pointed out that for the Petroleum Attaché to have accompanied Ambassador Tittmann on his visit to General Odría would have drawn the attention of the opposition to the fact that oil was being discussed at the Palace, and thus, possibly have created embarrassment.
Throughout the conversations, the Ambassador’s interest was keen and he showed a good knowledge of Peru’s oil difficulties. He seemed entirely agreeable to the ideas expressed and indicated his willingness to forward these to General Odría. Mr. Lobenstine is of the [Page 987] opinion that he will either write to General Odría or talk to him by telephone on the subject of the conversation.6
Mr. Levangie repeated several times during the conversations that the views being expressed were entirely his and should not be considered to represent those of the Department.7
- Eugene R. Black, President of the IBRD.↩
- A joint subsidiary of Continental Oil Company, Ohio Oil Company, and Amerada Petroleum Corporation.↩
- Luis Miró Quesada Guerra, Director of the Lima newspaper, El, Comercio.↩
- Banker, cotton grower, and a leader of the Alianza Nacional.↩
- In despatch 258 from Lima, February 20, 1950, Ambassador Tittmann reported in part that he had left with President Odría a memorandum (not printed) which urged promulgation of the petroleum decree-law with the least possible delay, on grounds that the Peruvian balance of payments would thereby be benefited and that discovery of new reserves would suit both Peruvian interests and the general needs of hemisphere defense. (823.2553/2–2050)↩
- No reference to relay of the substance of this conversation to President Odría has been found in Department of State files.↩
- In August 1950 President Odría submitted draft petroleum legislation to the Peruvian Congress which had been elected the preceding June.↩