Foreign Relations of the United States: Diplomatic Papers, 1944, The American Republics, Volume VII

834.6363/224

Memorandum of Conversation, by Mr. Rex Townsend of the Petroleum Division

[ Washington ,] May 17, 1944.

Participants:	A. C. Rubel
	W. H. Geiss
	J. A. Loftus45
	Rex Townsend

Mr. Rubel reviewed briefly the progress that the Union Oil Company have been making in their negotiations for a petroleum concession with the Paraguayan Government. He stated that Dr. Perez Uribe⁴⁶ and Mr. Ferrari⁴⁷ (who is the brother-in-law of President Morínigo) are now in New York and will leave for Los Angeles by plane on May 19 to confer with the lawyers of the Union Oil Company regarding the contract which they have drawn up for signature with the Paraguayan Government.

Mr. Rubel stated that he would send the Department through Mr. Geiss a copy of this contract and assured us that it did not contain any monopolistic feature. They are not negotiating for a blanket concession on the whole country, but, for a large portion of the Chaco comprising approximately 23,000,000 hectares. Rubel stated that this contract will contain some rather stiff drilling clauses and that although the exploration period covers 10 years that he fully expected that they would release at least half of the above mentioned area back to the Government within three years. It is quite evident from this conference with Mr. Rubel that the Union Oil Company is most anxious to cooperate fully with the Department in connection with their negotiations in Paraguay, and particularly as they expressed the fear of possible interference or obstruction of some kind at a later date by the Argentine Government. I asked Mr. Rubel if he had received any definite indication of such interference on the part of the Argentine to date. He replied that there was nothing concrete yet, it was merely in the form of an indirect suggestion or rumor. However, he stated that he will keep us informed in the event that anything came up in this respect. He stated that the geophysical equipment and instruments were already on the ground in Paraguay and that they would be ready to send the crews down in the near future.

Mr. Rubel asked the Department for assistance in securing priorities for Uribe, Ferrari and Mr. George Sherwell to leave New York by plane on Friday, May 19. He added that it was most important for Mr. Sherwell to accompany the Paraguayans as neither of them spoke a word of English and Sherwell would have to act as interpreter in the negotiations.

45. Official of the Union Oil Company.
46. Oscar Perez Uribe, member of the Paraguayan Council of State and president of the Paraguayan Committee of the Inter-American Development Commission.
47. Presumably Mario Ferrario, Under Secretary of State for Foreign Relations.