Page last updated at 23:57 GMT, Friday, 10 October 2008 00:57 UK

Oil row brings down Peru cabinet

Peruvian President Alan Garcia
President Garcia has ordered an investigation

The Peruvian government has stepped down over a continuing scandal about the allocation of oil concessions.

President Alan Garcia said he was accepting the resignation of the full cabinet offered on Thursday by Prime Minister Jorge del Castillo.

The country's Energy Minister Juan Valdivia and the president of the state oil company stepped down on Sunday.

A day later, President Garcia put five oil contracts with Discover Petroleum, a Norwegian firm, on hold.

The scandal emerged last Sunday when a TV station broadcast a tape which it claimed was a recording of an executive in the state oil company, Petroperu, and a prominent lobbyist discussing payments to help Discover Petroleum win contracts.

The company denies any wrong-doing, as does Petroperu's president, Cesar Gutierrez.

Mr Garcia has ordered an investigation and insisted that the government must be purged of corruption.

This week, thousands of people protested in several Peruvian cities, calling for the government to step down.

They accused the governing party Apra of "stealing" while the people were struggling.

Protesters decry Peru corruption
08 Oct 08 |  Americas
Oil contract scandal shakes Peru
07 Oct 08 |  Americas
Peruvian tribes end land protests
21 Aug 08 |  Americas
Country profile: Peru
06 Jun 08 |  Country profiles

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