Peru's Energy and Mines Minister, Juan Valdivia, sensationally quit on Monday amidst allegations of corruption in the form of kickbacks in exchange for guaranteeing lucrative oil contracts for Norwegian-based producer Discover Petroleum.
Mr Valdivia had little choice but to resign following a local television program airing a audiotape, on Sunday, of a conversation between Alberto Quimper, a high-ranking official in the state energy agency Perupetro, and Romulo Leon, a prominent lobbyist and a member in President Alan Garcia's ruling APRA political party.
The conversation involved Discover Petroleum, which has recently been awarded four separate oil contracts in Peru. The recording, made in February, apparently discloses the two men agreeing to favour Discover in a round of auctions.
The moral guillotine was wielded upon both Quimper and Cesar Gutierrez, the head of the country's state oil operations company, who have both been suspended pending an investigation.
Mr. Gutierrez said he resigned to protect Petroperu and to help cooperate with the investigation.
Gutierrez immediately made his defence quite clear: "What we have done is associate ourselves with a qualified company to participate in the auction.
"If people unrelated to us had economic pacts, it was absolutely unknown to me," he said.
An embarrassed, and clearly angered President Garcia, responded by saying: "The best way to respond to these atrocities and these rats is to immediately act to purge our government and our state from all acts of corruption." And, he has done just that.
However, both Mr. Valdivia – one of the publicly guilty until proven innocent 'rats' - and the Norwegian company involved have both denied any wrongdoing.
Managing Director of Discover Petroleum, Jostein Kjerstad, said that the company: "has never known about or been party to any payments like these."
Discover was awarded the contracts, at an auction last month, to help the state-owned Petroperu explore for oil on Peruvian Pacific coastline and in its southern Madre de Dios jungle.
Cuarto Poder, the news program which broadcast the tapes, said it was given the incriminating evidence by Fernando Rospigliosi, interior minister under former President Alejandro Toledo.
Rospigliosi is reported to have received the scandal-ridden evidence from an anonymous source.
Meanwhile, President Garcia's government has suspended the contracts with the company involved.
Despite the cloud of corruption that had engulfed the auction, in the form of the news media, the President has defended the auction process for granting contracts.
This is likely to be because the auction helped boosted the total number of contracts granted for oil and gas exploration, and extraction in Peru to a record 104, up from just 27 contracts in 2003.
But also, his endorsement of the process is partly to do with wealth and his estimation that it will bring $13.3 billion in energy investment into Peru.
The corruption scandal could not come at a worse time for the President, as thousands of people have taken to the streets in several Peruvian cities to protest against the rising cost of living and low wages.
Mr. Garcia, who took office in 2006 and who has seen his popularity fall sharply in recent times, is left fighting a domestic battle on two very testing fronts.
