800.6363/1538g: Circular telegram
The Secretary of State to Certain Diplomatic Representatives 30
The following relates to both the proposed pipeline and the forthcoming conversations with the British on oil.
For your confidential information, while the proposed pipeline, if constructed, would have a direct relation to any agreement that may be arrived at with the British on oil, it originated as an entirely separate proposal from the conversations.
As indicated in Secretary Ickes’ press release, a summary of which we sent you, the proposed pipeline would start in Saudi Arabia with gathering systems to the Arabian and Kuwait oil fields and would presumably follow the most direct route feasible to an undetermined port on the Eastern Mediterranean. It is proposed that the Government would build, own, and arrange for the operation (presumably by the companies) of the line, although, for your strictly confidential information, the way is left open for a reexamination after the emergency period of the question of ownership.
The Agreement which has been signed by Secretary Ickes with the American companies operating in Saudi Arabia and Kuwait, and which was referred to in the press release, is an Agreement on Principles only. No definitive contract for the construction of the pipeline has been signed, and there has developed considerable opposition to the line in Congress and on the part of the American oil industry. We contemplate that no positive action will be taken concerning the construction of the pipeline, including the surveying of possible routes, until the matter has been properly cleared with all interested governments in the area. However, the matter will not be discussed with such governments until there is no longer any question concerning the actual construction of the line.
You have been informed by Radio Bulletin concerning the Acting Secretary’s announcement regarding the forthcoming conversations with the British (Department’s press release of March 731). As indicated in that statement, there will be preparatory technical discussions between British and American experts on oil problems of mutual interest to the two Governments. It is planned that these discussions will lead as rapidly as possible to conversations between high level groups representing the two Governments. The Secretary of State has been appointed by the President as chairman of the American group at the high level.[Page 27]
It is contemplated that these conversations will be entirely between the British and ourselves. However, the Acting Secretary’s announcement (Department’s press release of March 7) specifically stated that should these conversations lead to conclusions, no decisions affecting producing areas will be taken without consultation with the governments of the countries concerned. Moreover, the Acting Secretary announced that this Government is at all times ready to discuss economic problems with any other friendly country concerning petroleum questions of mutual interest. You should endeavor to see that the Department’s release and particularly these statements are given adequate publicity. Also, you should bring them to the attention of the authorities in such manner as you think advisable.
We will endeavor to keep you advised concerning any developments of which you should be aware in regard to either the pipeline or the discussions with the British.