Office of the Historian

890F.6363/12–2647

Memorandum of Conversation, by Mr. Richard H. Sanger of the Division of Near Eastern Affairs

secret
[Washington,] December 26, 1947.

During the course of a conversation Mr. Philip Kidd1 expressed grave concern over the future of the American oil interests in Saudi Arabia. In this connection he brought out the following points:

1.
The officials of Aramco are giving serious thought to abandoning plans to construct the pipeline from the oilfields of Saudi Arabia to the Mediterranean. Although work has started on this project, and its abandonment would cost Aramco about $25 million, nevertheless the officials of the Oil Company feel that in view of the feeling against the United States in Syria, which makes unlikely the ratification of the pipeline agreement by the Syrian legislature, and in view of the lack of security for American pipeline workers in Arab countries,2 the completion of this pipeline may be impossible. A directors’ meeting is to be held on January 19, at which time it is expected a final decision on this will be made.
2.
Various Saudi Arabian officials have asked officials of Aramco in that country whether the Oil Company was giving thought to the possibility of changing its citizenship and incorporating under Canadian, Panamanian, or other country laws. Mr. Kidd said that the feeling among Aramco officials in this country was at present strongly against making any such move, but he admitted that the matter was being given consideration.

  1. Director of the Washington office of the Arabian American Oil Company.↩
  2. In airgram 624, December 11, the Embassy in Cairo, noting the continuing violent reactions throughout the Arab world as a result of the vote by the U.N. General Assembly to partition Palestine, reported that Tapline operations had been suspended. All Tapline personnel had been flown out of Transjordan where the Tapline camp was reported razed and the local Government was unable to guarantee protection. (890.6363/12–1147) Earlier, on December 3, Mr. Kidd had telephoned Mr. Sanger to say that because of disturbances, two field parties of Americans working on the pipe line in Syria had been flown to Beirut. (890D.6363/12–347)↩