831.6363/1401: Telegram

The Ambassador in Venezuela (Corrigan) to the Secretary of State

137. The heads of all the oil companies operating in Venezuela were summoned to Miraflores at noon today. Each representative was received in separate audience by President Medina and given a copy of final draft of the new petroleum law which the President and his special commission have just finished drafting. The representatives of the largest companies (Van Hasselt of the Royal Dutch and Proudfit of the Standard of New Jersey) were given in addition a draft for a separate agreement binding them to the construction of refineries with a capacity of 8000 metric tons (about 50,000 barrels) per day within 5 years after termination of the war. The refining stipulation to which the companies objected has been kept out of the final draft of the law.

The reaction of the heads of the leading producing companies is generally favorable although each has minor changes to suggest. They have been given 12 days to prepare their reply during which time the staff of the Ministry of Fomento will be ready at all times to discuss details of proposed modifications.