The Secretary of State to the Ambassador in China ( Stuart )

948. Dept recently informed that Anglo-Iranian Oil Co. has signed contract with Chinese Petroleum Corp for delivery Takao of 300,000 tons crude—one-third first half and two-thirds second half 1947. According BritEmb here business taken on competitive bid. According Arabian American Oil, the supposed other bidder, no real bid called for. Aramco consulted by Chinese but when time for bid arrived found business already placed with AIOC. Report requested details especially names of bidders, prices, terms, duration and possible tangential considerations.

Assumption by AIOC of supervision of rehabilitation Takao refinery (Shanghai A–684, Sept 1719) assumedly in conjunction with crude contract raises question whether Chinese-AIOC arrangement envisages more than mere supply contract. Indications from oil Cos that AIOC interested marketing. Is AIOC financing any part Takao reconstruction? Is AIOC interested in Kansu development?

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