832.6363/7–3046: Telegram

The Acting Secretary of State to the Ambassador in Brazil (Pawley)

secret

1023. Dept informed (1) that Drault–Ernanny group probably prepared to meet supplementary requirements for refinery concession including refinery site by Aug 3 deadline, (2) that doubtful Sampaio group will be able to do so due lack of site, (3) that Ipiranga group now understood to be associated with Drault–Ernanny, and (4) that in event Drault–Ernanny only recipient concession group will seek concession for second refinery São Paulo in hopes obtaining strong monopoly position in Rio-São Paulo area.

Concentration of all refining in main consuming centers in hands strong Brazilian group would represent unfortunate development at this stage our efforts to achieve entry foreign capital.

Can you confirm above? Are there any further useful and practicable [Page 548]steps which should be taken now to keep refining concession matter open until laws modified?

Acheson