Newspaper article THE JOURNAL RECORD

Peru Nationalizes New York's Belco Petroleum, Freezes Accounts

Newspaper article THE JOURNAL RECORD

Peru Nationalizes New York's Belco Petroleum, Freezes Accounts

Article excerpt

LIMA, Peru - Police with submachine guns surrounded the headquarters of New York-based Belco Petroleum Corp. on Saturday after the governm ent nationalized the company, froze its bank accounts and took control of its local assets.

President Alan Garcia announced Friday that the state oil company, Petroperu, would take charge of Belco's operations in Peru because the company had refused to accept new conditions for spending its profits on new exploration and production.

The made several attempts Saturday to reach the company at its three listed telephone numbers in New York, but there was no answer.

Dante la Gatta, Belco's general manager in Peru, turned over the company's principal documents to Alfredo Carranza, president of Petroperu's board of directors, in a brief ceremony Saturday morningat the company's headquarters in the upper-class neighborhoood of San Isidro.

""What is important now is that Belco's production continues flowing normally,'' Carranza said.

La Gatta said Belco was producing 24,000 barrels a day from its wells, down from 29,000 barrels daily when Garcia canceled its contract in August.

Garcia also announced that Los Angeles-based Occidental Petroleum Corp. had reached an agreement in principle under which the company would give up its lucrative tax breaks in return for access to new oil fields in Peru's Amazon jungle.

Garcia said Occidental had agreed to invest $267 million in exploration in new areas and described it as the biggest exploration program in Peru's history.

He said a consortium of Occidental and the Argentine firm, Bridas, also would continue to operate in Peru but under terms of its original contract, which set the tax level for foreign oil companiesat 68 percent.

The government of former President Fernando Belaunde Terry had lowered taxes for foreign companies to 41 percent in 1980 under legislation that required them to reinvest the savings in new oil exploration in Peru.

Garcia canceled the Belaunde-negotiated contracts with the three companies on Aug. 28, accusing them of misusing profits and not reinvesting them as required.

The official news agency Andina said Petroperu's general manager, Carlos Lizier, took control of Belco assets Saturday in Zorritos. The town in Talara province, 770 miles northwest of Lima, is operational headquarters for the 111 offshore production rigs that Belco operates off the Pacific coast.

Current production by Petroperu and the three American-linked companies is about 180,000 barrels a day, according to the state oil company. Petroperu produces 60,000 to 65,000 barrels.

Offshore production is costly and technically complicated, and government critics have questioned Petroperu's ability to do this. …

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