891.6363 AIOC/7–947
The British Embassy to the Department of State
Ref: No. G6/ /47
Aide-Mémoire
proposal by the anglo-iranian oil company, in partnership with the standard oil company, to construct an oil pipeline from the persian gulf to the mediterranean
The representatives of the British Chiefs of Staff submitted a memorandum to the Combined Chiefs of Staff on March 8th 1947 … on the strategic aspect of the routes under consideration by the Anglo-Iranian Oil Company for the construction of an oil pipeline from the Persian Gulf (near Basra) to the Mediterranean. The memorandum expressed the hope that the United States Chiefs of Staff would be prepared, for strategic reasons, to support, with the Standard Oil Company (the American partners of the A.I.O.C.) the proposal that the pipeline should be constructed on a southern route terminating at Gaza, as indicated in the memorandum.
The United States Chiefs of Staff advised, in their reply, that, due to the commercial and political aspects involved, the problem should [Page 661] be referred to the Foreign Office and the State Department for consideration.
During the last meeting of the Council of Foreign Ministers in Moscow, the British Foreign Secretary spoke on this subject to the United States Secretary of State, giving him a memorandum and map indicating the alternative routes for the pipeline. It was stated in the memorandum that the British Government had told Sir William Fraser, Chairman of the A.I.O.C. and at that time in New York for talks on this subject with the Standard Oil Company, that they preferred the southern route terminating at Gaza. The memorandum added that the British Government had asked Sir William to press for this route with the Standard Oil Company despite the added cost involved.
Sir William Fraser has now reported on the talks which he has had with the Standard Oil Company. He states that, as a result of the survey made early this year by a party of British and American experts, Standard are very strongly in favour of the northern route and terminal, and have based all their estimates and planning on this route. It is thought that, while the Standard may have been in touch with the State Department, it is unlikely that the United States Government’s views on the strategic aspect have been conveyed to them.
The technical and economic findings of the survey party, which may be taken as representing the joint views of the British and American partners in the pipeline project, are strongly in favour of the northern route. The following is a brief summary of the party’s conclusions:
- (a)
- There is no suitable terminal for the pipeline on the coast south of Haifa and difficulties of building a protected harbour would be very extensive. Survey party advised strongly against Gaza in particular as being situated in a desert where neither supplies of fresh water, foodstuffs nor any facilities for the subsistence of a large number of refinery staff are available.
- (b)
- The laying of a pipeline south of the Dead Sea would be technically feasible but would present problems of unprecedented difficulty and magnitude. Survey party advised unanimously against this route, not only because of its greater length, but also because of its rises and falls which would involve construction of an additional pumping station. They were also impressed by the fact that this route would have to cross a large tract of little explored territory amongst the hottest and most broken and desolate on the earth’s surface.
- (c)
- The capital cost of constructing a pipeline on the southern route would be more than seven million pounds higher than for the northern route, and operating costs would also be higher by over a million pounds a year. The survey party gave first preference to a terminal at Hamra Bay in the Lebanon with Tartous in Syria as their second preference, and the Bay of Acre (i.e. the Haifa area) as their third preference.
It will be seen from this that the technical and commercial considerations, which are strongly in favour of the northern route, are in direct opposition to the strategic considerations, which require that the route and the terminal on the Mediterranean should be situated as far to the south as possible. It is in fact evident that the pipeline and the refinery will be less vulnerable and more defensible the further south they are located. The chief factor applicable to the Middle East on the outbreak of a war is the absolute necessity for gaining time to prepare our defences as far north as possible, and the further south that the oil pipeline is situated the greater will be the possibility of conducting a successful defence. The denial of our access to the Tripoli (Syria) [sic] terminal of the Iraq Petroleum Company oil line is a direct illustration from the last war. But on the other hand the need for striving for the greater security of the pipeline and Mediterranean terminal must to some extent be related to the possibility of providing for the security of the sources from which the oil is drawn. The possibility of providing for the safety of these oil fields cannot be assessed at the present time.
The British Foreign Secretary has asked the British Embassy to have an urgent and secret exchange of views with the State Department on this whole question. The problem, as it appears to His Majesty’s Government, is whether the strategic advantages of the southern route are so great as to outweigh the commercial advantages of the northern route, and justify our two Governments in requiring the oil companies concerned to undertake the added cost and difficulties of construction, bearing in mind the essential need, in the event of war, of safeguarding oil supplies.1