LIMA, Peru — Peruvian President Alan Garcia has threatened to take over the operations of three U.S. oil companies unless they agree by midnight to invest more and pay higher taxes.
Peru suspended the contracts of the companies--Occidental and Belco and a joint U.S.-Argentine consortium--last August over a tax dispute and gave them until today to negotiate new contracts.
Garcia told reporters last night that the companies, which together pump two-thirds of Peru's 180,000 barrels per day (bpd) output, would have to pay higher taxes and invest at least $267 million between them in searching for more oil.
Decrees published today raised taxes on oil profits to 68% from 41%.
Garcia suspended the firms' contracts in August after accusing them of misusing tax exemptions granted by the previous government of President Fernando Belaunde Terry.