PERU: The Montana Plan

At his ornately carved dark wood desk in Lima's graceful Presidential Palace, President José Luis Bustamante pored over a plan. It had been drawn up, at his request, by crack U.S. petroleum engineer Arthur Curtice. The plan was to throw Peru's important oil reserves open to foreign exploitation.

In the musty chambers of Lima's venerable Gran Hotel Bolívar, over bourbon-and-sodas, representatives of the world's major oil companies also studied the supposedly secret Curtice plan. They grumbled at proposed royalties that would resemble the prevailing Venezuelan scale of 16⅔%. Such percentages, they said,...

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