Memorandum of Conversation, by Mr. Perry N. Jester of the Division of Near Eastern Affairs

Participants: Mr. Sheets, Socony Vacuum Oil Company;
Mr. Case, Socony Vacuum Oil Company;
Mr. Murray;42
Mr. Ailing;43
Mr. Jester.

Mr. Sheets stated that he had called especially to present the need for consideration of post-war American interests in the handling of installations now being erected in various parts of the world, of which the installation at Pointe Noire was an example. He pointed out that the Fighting French were holding out for the complete reversion of the installations at Pointe Noire to the French State without cost at the close of hostilities, that these installations were only of minor importance, but that the principle involved was very important. He stated that negotiations which had been conducted by the Army Air Force with the French authorities in French Equatorial Africa had as their object on this point either the right of the United States Government to sublease or sell such installations to American interests at the end of the war, or secondly, to hold the matter in abeyance as a subject of further negotiations between the two countries. He related, however, the substance of several conversations which he had had with Monsieur Tixier, the Fighting French Delegate in Washington, by whom he had been [Page 592] informed that Mr. Berle had agreed, by a letter under date of August 27, 1942, that these installations and improvements would remain the property of France after the war. Mr. Sheets pointed out that if this were done and the principle followed in other cases, the post-war positions of American oil companies would be jeopardized in other countries where competing foreign interests would be supplied with expensive and valuable equipment at the expense of the American taxpayers, and that the position of the American oil companies in those markets would be detrimentally affected. He hoped that Mr. Murray and the Near Eastern Division would do everything possible to prevent any such action being finally agreed upon. Mr. Sheets requested that a check be made on the dates of correspondence on this subject, which appeared to be a letter from Monsieur Tixier to either the Secretary of State or an Assistant Secretary of State under date of February 26, 1942, and Mr. Berle’s letter of August 27, 1942 above referred to.

Mr. Sheets was undoubtedly aware of the fact that the negotiations for the agreement with the Fighting French regarding installations in French Equatorial Africa have been completed and that a memorandum of agreement has been drawn up, with the exception, however, that the negotiating parties had not agreed on the final sentence of Article 9 which states “that final disposition of all installations will be the subject of future negotiations between the two countries”.

Mr. Sheets stated that his company was most interested to know of any errors of omission or commission in their activities abroad and would appreciate being informed by the Department of any instance when, in its opinion, any action of theirs had been amiss. Mr. Jester raised the question of the possible misunderstanding by the public of the close working relationship between the United States Army Air Force and representatives of Socony Vacuum Oil Company in negotiating leases in Africa for ground and other installations, the point being that it might appear as if the United States Government, through the United States Army, was assisting one American oil company to obtain preferential leases abroad to the exclusion of other American oil interests. Mr. Sheets replied that this contention could only be raised by a misunderstanding or ignorance of all the facts which were that (1) these installations were being erected with funds supplied by the United States Government; (2) that the Socony Vacuum organization was acting solely in the capacity of an agent for the United States Government; (3) that the title to the property remained with the United States Government for the duration of hostilities; and (4) that the subsequent manner of disposal would be for the United States Government to decide, [Page 593] which would probably be by sale to the highest bidder, at which time any American interest would have the opportunity of bidding for the purchase of such equipment, provided of course we did not give them away to other Governments.

With regard to the report that a considerable oil field had been discovered fairly close to the coast back of Loanda and Pointe Noire in French Equatorial Africa, Mr. Sheets stated that his company was very much interested in obtaining any information available on this subject. In reply to a question, he stated that his company did not have any partnership agreement with the Dutch Shell Company for operations in this field.

Mr. Sheets stated further that he felt that American interests should endeavor to obtain concessions abroad whenever possible if the standard of living of this country was to be maintained in the post-war period, since our oil reserves would not last, he thought, for more than ten years at the present rate of extraction.

No information was given to Mr. Sheets or Mr. Case concerning the action previously taken by Mr. Berle in the matter of the installations at Pointe Noire.

  1. Wallace Murray, Adviser on Political Relations.
  2. Paul H. Ailing, Chief of the Division of Near Eastern Affairs.