800.6363/1133
The Ambassador in Argentina (Armour) to the Secretary of State
[Received March 29.]
Sir:
. . . . . . . . . . . . . .
The lists of material attached to the Commission’s report contain the items considered necessary by Y. P. F. for the equipping of all of the companies operating in Argentina. It may be noted that the Standard Oil Company is listed as needing 3,000 tons, and that nothing is included for Ultramar. This is because the Argentines took the position originally that material should be used only in fields now actually producing.
[Page 383]If our informal advices are correct, the negotiations of the private companies with the Minister of Agriculture will give them access to areas for which Standard Oil will need an additional 2,000 tons of material and Ultramar will need about 12,000. This will bring the total petroleum industry requirements over the next twelve months to some 64,000 metric tons. This quantity is considered by Argentina to be a fair quid pro quo, and not subject to reduction. In any final agreement, it is contemplated by the Embassy that monthly minimum releases of this material will be made coincident with the export of petroleum. For instance, if the ratio is 6.5 to 1,5,000 tons monthly of material would be counterbalanced by 32,500 cubic meters of petroleum, say 204,000 barrels, or a saving of 3 to 4 average tanker cargoes per month. It will not be feasible to use more than half of the industrial material before the end of 1943, and therefore the Department’s telegram No. 377 of March 15 which indicated that some 26,000 tons of steel would be available in the last six months of 1943 shows that the material requirements and the steel supplies available are reasonably in agreement.
If the negotiation is concluded as expected,
- (1)
- the United States will be saved the time of probably six tank steamers, which may be diverted from supplying Uruguay, Paraguay and southern Brazil.
- (2)
- The United States-owned oil companies will be given a commercially acceptable chance to develop sufficient production to take care of their share of the Argentine market, and thus protect their very considerable investments in Argentina.
At this moment the Embassy does not consider it feasible to comment further, first, upon the likelihood of the negotiations being concluded to our satisfaction, and second, upon the real value of the arrangement to the United States.
The Department will receive further advices and the Embassy’s views, in due course.
Respectfully yours,
First Secretary of Embassy