835.796/193: Telegram

The Ambassador in Argentina (Armour) to the Secretary of State

1129. Embassy’s 1080, October 3, 8 p.m.61 Today, the general manager of YPF, Mariol Villa, called at the Embassy and expressed considerable concern over status of his company’s contract signed [Page 349] December, 1940 with Phillips Petroleum Company regarding use of petroleum patents and training of YPF engineers in the United States. Villa understands through YPF representative in New York that our Government has requested Phillips to suspend dealings with YPF presumably because latter has been selling aviation fuel to Lati.

Villa claims that the small sales made to Lati were transacted because YPF had a surplus of 87 octane fuel caused by Argentine Army and Navy changing to 90 octane.

He said YPF sales to Lati began on August 13 and were stopped after September 5, although on September 26 he is reported to have admitted to local general manager for Standard Oil that YPF was supplying Lati with normal monthly requirements for Argentina.

At any rate, Villa said this morning that he appreciated our position and promised that YPF would accept no future orders from Lati, Condor or Air France. He desires to know as soon as possible whether such cooperation by YPF would permit resumption of dealings with Phillips Petroleum Company and says otherwise YPF would be seriously handicapped in its normal operations. On the foregoing basis, the Embassy is disposed to recommend that Phillips be allowed to proceed with YPF contract. Should the Embassy learn at some future date that YPF has violated its verbal agreement, the Department will be advised so that appropriate action can be taken.

  1. Not printed.