The deposits gained notoriety from 1911, when it was discovered that their owners and tenants exploited many more lots than those originally registered, despite which, they refused to pay the taxes to which they were obliged according to Peruvian laws.

The long-standing controversy surrounding the refinery and its relation to the penetration of Anglo-American capitalism in Peru was the most scandalous case of its time, which had a considerable influence on the political sphere of the country.

Controversy broke out on December 3, 1911,[9] when the engineer Ricardo A. Deustua made a public complaint, in the sense that the London-based company exploited many more assets than those recognised by the judge of Paita and the government in 1888.

These, despite suffering the hostility of the English, who ordered the population to deny them even food and water, completed the work successfully, finding themselves surprised that there were not 10 but no less than 41,614 pertenencias.

[13] The IPC exploited the site, installing stations around the country and building two docks at the port of Talara, where it purchased ships to distribute oil around Peru.

[14] The second government of José Pardo y Barreda (1915–1919) was forced to face the solution of this issue when the IPC caused an oil crisis by stopping its exploitation of 30 wells in Negritos.

The transactional agreement was signed on March 2, 1922, between the Peruvian Foreign Minister Alberto Salomón and the English representative A. C. Grant Duff.

On April 24 of that year, 1922, without further discussion, they approved the Transactional Agreement, which they granted the status of Award, the conditions of which were binding on the high contracting parties as a solution to the controversy.

[10][22] In 1963, architect Fernando Belaúnde Terry won the presidential elections, one of whose electoral campaign promises was the solution to the controversy.

As a first step, he sent to Congress a project to declare the Paris Award null and void and requested that the oil fields be taken over by the state-owned Empresa Petrolera Fiscal [es] (EPF).

All of which went against the expectations created by Law 16,674, which required the delivery of all IPC facilities for their debts,[10] but for the moment the government knew how to exploit the agreement as a great success of its management.

[25][26] However, public opinion changed its mind when Oiga, a local magazine, revealed the conditions that the IPC had imposed for the signing of the act.

[27] The peak moment of the scandal came when the resigning president of the EPF, engineer Carlos Loret de Mola, reported on September 10, 1968, that a page was missing in the crude oil price contract.

The truth is that it served as a pretext for a group of army officers, led by General Juan Velasco Alvarado, to carry out a coup d'état less than a month later,[23] accusing the government of "appeasement."

Pedro Pablo Kuczynski, then manager of the Central Reserve Bank of Peru was accused on October 3, alongside Carlos Rodríguez Pastor Mendoza and Richard Webb Duarte [es] of granting foreign currency certificates to the IPC without the signature of the Minister of Economy, allowing this company to remit $115 million of current profits.

[23] After a judicial process that lasted eight years, the Supreme Court of Justice of Peru acquitted Kuczynski, and other BCR officials, of all charges.

To pay this global compensation of 76 million dollars, the Peruvian government obtained a loan from private banks in the United States.