Office of the Historian

332. Memorandum From the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Rountree) to the Acting Secretary of State1

Washington, August 31, 1956.

SUBJECT

  • Assistance from Arab States in Furthering Western Bid to Build Syrian Oil Refinery

Discussion:

Taking advantage of a further delay in the awarding of the contract for the construction of the Syrian Government Oil Refinery, I feel we should seek to explore with Iraq and, perhaps ultimately, with Saudi Arabia the possibility of one of these countries assisting in persuading the Syrians to accept the bid of Procon.2 This is the lowest Western bid, $1,100,000 higher than the bid of the Czechoslovakian company.

We believe, in view of Iraq’s close interest in Syrian petroleum developments and its traditional desire to maintain strong influence politically in Syria, this matter should be first explored with Prime [Page 589] Minister Nuri. The attached telegram (Tab A)3 seeks to do this.

In the event that Iraq is not in a position to assist, we would plan to make a similar approach to Saudi Arabia (Tab B).4 In view of traditional Iraqi suspicions toward Saudi influence in Syria and our own close relations with Iraq, we believe it advisable to present the problem first to the Iraqis.

Recommendation:

That you approve the attached telegram (Tab A).5

  1. Source: Department of State, Central Files, 883.2553/8–3156. Top Secret. Drafted by Newsom, initialed by Wilkins and Rountree, and sent through S/S.↩
  2. Reference is to Procon Ltd. of Great Britain, a subsidiary of the U.S. firm, Procon, Inc.↩
  3. Not attached to the source text, but evidently the same as telegram 309 to Baghdad, September 1. (Department of State, Central Files, 883.2553/9–156) It instructed the Embassy in Baghdad to explore with Nuri al-Said the question of how the Syrian Government might be dissuaded from accepting the Czech bid and to suggest that Nuri might be able to use diplomatic pressure combined with the possibility of a loan offer to help the refinery project or to make up the difference between the bids.↩
  4. Attached to the file copy of telegram 309 to Baghdad, but not printed. The draft telegram, evidently never sent, instructed the Embassy in Jidda to discuss with King Saud the possibility of his persuading the Syrians to accept the Procon bid.↩

  5. A notation by an unidentified hand indicates that Hoover approved transmission of the telegram to Baghdad; Hoover’s name appears as the approving officer on telegram 309.

    In telegram 361 from Baghdad, September 4, Gallman reported that he had reviewed the subject with Nuri al-Said and that Nuri was not prepared to make a loan offer but agreed to discuss the matter with the Syrian Government. (Department of State, Central Files, 883.2553/9–456)

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