832.6363/10–2846: Telegram

The Chargé in Brazil (Daniels) to the Secretary of State


1813. This morning I expressed interest in pending petroleum legislation to Foreign Minister Gracie and Minister Rubens de Mello (now Secretary General Foreign Office) and hoped that it would be passed rapidly and in terms consistent with Brazilian Government policy objectives of constitution favoring foreign capital participation on equal terms. At same time I mentioned refinery matter (reDeptel 1386, October 25, 7 p.m.) and said that information had come to me to effect that consideration was being given by National Petroleum Council to expanding pending refinery concessions and including São Paulo area in concessions in such way as to preempt, for practical purposes, refining industry in Brazil to exclusion of American or other foreign capital. I said I was passing this report on simply as matter of information in which I was sure they would be interested, but naturally hoped that no action would be taken contrary to objectives of constitution and Brazilian policy as previously expressed publicly on repeated occasions. Rubens de Mello stated that it was still Government policy to permit foreign capital participation in refining as well as development and drilling; and asked if I could let him have a confidential letter on the subject. I said that in response to his request I would be glad to provide him a confidential letter on this point adding that I naturally felt the matter should be handled with discretion, to which both he and Gracie agreed.

In view apparent urgency matter am sending Rubens de Mello confidential letter immediately incorporating in general terms Department’s views as expressed in Deptel under reference. Text letter94 will be sent Department by air.

  1. Not printed.