432. Editorial Note
In his inaugural speech of July 28, 1963, President Belaúnde promised to resolve the long-standing controversy between Peruvian interests and the International Petroleum Company (a subsidiary of Standard Oil of New Jersey) over rights to the La Brea y Parinas oil fields. IPC owned the surface and sub-surface drilling concessions to the fields under the terms of a 1922 arbitral agreement. Peru wished to gain control of the fields in the interest of national sovereignty.
[Page 887]Belaúnde discussed the issue with Ambassador Jones and Teodoro Moscoso on August 28 in Lima. Both sides expressed the desire to keep negotiations on the issue private and amicable and to conclude them before October 28. (Airgram A-172 from Lima August 29; Department of State, Central Files, PET 6 PERU)
Negotiations were unsuccessful. On October 28 Belaúnde introduced to the Peruvian Congress a draft law declaring the 1922 agreement null and void. The Congress passed the law on November 1.
On November 8 Ambassador Jones met with Belaúnde to discuss the matter but was rebuffed by the President. The Ambassador made clear that the continued provision of U.S. economic assistance to Peru was contingent on the satisfactory resolution of the issue. (Telegram 572, November 9; ibid.)
Peruvian envoy Manuel Ulloa met with Presidential Special Assist-ant Ralph Dungan at the White House on November 14 in an effort to reach a compromise solution to the problem. They arranged for renewed negotiations between the Peruvian Government and IPC officials to be held in New York. (Telegram 376 to Lima, November 14; ibid.) The sides held preliminary talks on December 4 and decided to hold more formal negotiations following the December 15 municipal elections in Peru. (Telegram 451 to Lima, December 6; ibid.)