Foreign Relations of the United States, 1958–1960, Volume V, Microfiche Supplement, American Republics

PE–40. Telegram from the Chargé in Peru (Neal) to the Department of State¹

Lima, March 17, 1960, 5 p.m.

798. In conversation at airport with Prime Minister Beltran this a.m. re La Brea y Parinas found he unaware Department had called in Berckemeyer.² I stated we concerned about recommendation of Consultative Committee.³ He said our concern justified because it did not look good but this is IPC’s problem and they will have to settle it. I told him they would need his help.

Beltran then went into a tirade saying he was not going to help them at all. Said he had his lesson with IPC and from here on out “they can go to hell” as far as he is concerned. Stated IPC failed to come to his assistance when he needed only the slightest help on his bond issue; they reluctantly agreed to take 25 million instead of 50. He said IPC has been playing a one-way street so he is through.

I told him an adverse La Brea decision would affect Peru’s investment climate and jeopardize his own economic program. He said he could not help that but he was not going to assist IPC; they got themselves into this situation so they can get out of it themselves.

I told him IPC could not win it alone or without him but he said again he had his lesson, et cetera, et cetera.

I asked him what assistance could be expected from the President. He said he did not know.

Neal

1. Source: Department of State, Central Files, 823.2553/3–1760. Confidential.
2. In telegram 631 to Lima, March 9, the Department of State reported that it had expressed to Ambassador Berckemeyer its “deep concern . . . over demands for annulment La Brea y Pariñas award, stating such action would doubtless have very adverse effect climate for U.S. investment in Peru. Explained our position based on opposition to unilateral annulment international award and agreement and in no sense implied unwillingness to see change brought about by negotiation as we understood from conversations here and in Lima that company more than anxious negotiate conversion to concession operating under Petroleum Code.” (823.2553/3–960)
3. In despatch 460 from Lima, February 2, the Embassy reported that on January 21, the Peruvian Chamber of Deputies approved a Government-sponsored resolution requesting the Consultative Commission of the Ministry of Foreign Affairs, an advisory body consisting of prominent Peruvians, to render its opinion on the validity of the La Brea y Pariñas arbitral award of 1922. (723.12/2–2160) In despatch 27 from Lima, July 8, the Embassy stated that the Commission’s report, released on July 8, recommended that the Executive branch submit a bill to the Congress to establish new arrangements for the development of petroleum in the La Brea y Pariñas area. The Commission rejected nationalization as a solution to the problem on the ground that it was unnecessary and would impose an immense financial burden on the state. (823.2553/7–1860)