811.20 (D) Regulations/8407: Telegram
The Secretary of State to the Chargé in Argentina (Reed)
1265. Embassy’s A–73 of August 12. Your understanding of what full participation in the Pool would mean in Argentina’s case is in the main correct. To take the position however that Argentina’s own production must be shared with other republics is definitely an extension of the principles upon which the Pool was originally based. All that can fairly be represented without such extension of principle is that no pool tankers will be used to supply any country which is capable of supplying itself from its own production at the same level as the others. From the beginning however, it has been made clear that all pool members must use their oil importing tankers in the common interest on a basis of equality. This would not apply to Argentina’s tankers used in her own coastwise crude movement.
The Department believes that the basis suggested by Embassy which contemplates pooling of tankers available for importing and considering all crude production in excess of the last 12 month average as exportable with an understanding as to material to be supplied from here for use by mixed companies in further development of exportable production, might lead to a satisfactory solution. In fact our recent informal discussions here with Catinari51 of YPF and members of the Argentine Embassy have been along this line. In these discussions Catinari stated that, in his personal opinion, Argentina would not view with favor the exportation of locally produced oil because their proven reserves are insufficient to guarantee continued supply for [Page 412] Argentina. He appeared satisfied with the suggestion that this government give assurance that any oil thus exported would be replaced in kind, that is by sale of oil to Argentina, following the war emergency. It is suggested that you include the same provision in your discussions.
It is important that you do not commit this government to supplying any material nor to any other final agreement until so instructed. You should however press your discussions with the utmost vigor along the lines you have indicated and keep Department informed currently by telegram as to developments. If Department is thus informed its discussions and other actions can be shaped and timed to give you the best possible support. Particularly the Department wishes to be kept closely informed as to the reactions of government officials and of YPF to the mixed company idea. It is the Department’s opinion that the mixed company plan has fundamental merits which may make it most effective in averting serious difficulties which have been experienced elsewhere.
- Juan Norberto Catinari, temporarily in the United States, attached to the Argentine Embassy.↩