Foreign Relations of the United States, 1947, The Near East and Africa, Volume V

740.00119 Council/4–447: Telegram

The Acting Secretary of State to the Secretary of State, at Moscow

secret
us urgent

Washington, April 4, 1947—7 p. m.

813. Secdel 1427. For Secretary from Acheson:

1. Subject is establishment Iranian-Soviet oil company agreed in principle in exchange notes Apr 4, 1946, between Iranian PriMin Qavam and Sov Amb Sadchikov incident to removal Sov troops from Iran, arrangement being subject to ratification or rejection by Iranian Majlis (Legislature) scheduled convene in few weeks. Agreement covers roughly five northern provinces of Iran and participation to be 51 percent by Sov Govt and 49 percent by Iranian Govt during first 25 yrs and 50–50 during next 25 years.

2. Brit Emb Reps called Mar 31 on instruction to communicate substance FonOff cable re Sov oil arrangement and to request Dept views, Communication interpreted by Dept as indicating FonOff presumption Majlis will ratify agreement when presented and approve concession, and left impression here Brit Govt has discussed matter with Iranian Govt in terms of granting a concession to Sovs (patterned after AIOC concession in south), concession to contain safeguards intended to protect sovereignty of Iran. Brit Reps seem uncertain whether proposed safeguards in above FonOff cable communicated to Iranian Govt. Dept expressed views that proposed safeguards appeared incomplete and ineffective, and that there are no safeguards which, in final analysis, would prevent political and economic penetration of Iran by Sovs, if latter disposed pursue that objective, with possible resultant repetition of situation similar to if not more serious than recent Azerbaijan incident.

For your info Dept after conversation with Brit Emb Reps informed Amb Allen, Tehran, Jan 9,¹ Brit FonOffi had communicated to Iranian Govt its view that flat refusal Sov oil arrangement inadvisable and that Sov concession could be devised which would safeguard basic Iranian interests.

3. Dept outlined to Brit Reps its most tentative views as follows:

(a) US Govt must disassociate itself completely from any pressure whatsoever designed to induce Iranian Govt to enter any oil arrangement with Sovs, decision this matter being entirely within competence Iranian Govt;

(b) Neither does US Govt intend at this time to influence Iranian Govt to refuse Sov oil arrangement;

(c) If in connection with either acceptance or refusal of Sov oil arrangement Iranian Govt is subjected to pressures threatening independence of Iran, US Govt will support fully Iranian sovereignty in conformity with its obligations to UN.

4. Iranian Amb Ala has informed Dept officials on various occasions that he has recommended to his Govt that it refrain from granting any further mineral concession (including subject oil arrangement) to any foreign interest. He has stated that he is studying advisability of Iran taking position that it not grant any further mineral concession to foreigners until his Govt has explored fully possibility of obtaining advisory opinion from appropriate UN organization, both as to concessionaire and terms of concession. His idea is that development Iranian resources will in general be reserved for exploitation by Iranian nationals.

5. Re para 4 above, Dept’s tentative view is that Iranian Govt has full right to seek such advice and assistance from UN; but that US Govt should not at this time encourage development UN powers with respect to international oil matters except pursuant to Anglo-American oil agreement² scheduled for Senate hearings at early date and contingent upon exploratory inter-governmental conversations now projected with other interested govts including Iran and possibly Soviet Union. In any case Dept convinced assignment to any UN body of regulatory authority at this time impracticable. Entire question, however, of feasible and desirable UN responsibility in international oil field merits and is receiving thorough study.

6. Another question which has arisen is that of employment by Iranian Govt of Am technical expert advice on terms of any concession that might be granted Sovs. Dept view is that such advice if needed should be sought only after decision taken in principle by Iranian Govt whether to grant concession. This appears to be also present view Amb Ala.

7. While Dept does not entirely discount possible interest Soviet Union in Iranian oil, Dept has long felt that prime motivation Sov activities in Iran is political rather than economic. We believe that Iran would be following a most dangerous course if it should grant any mineral concession to any foreign Govt or company before political situation Near and Middle East is clarified and before Iran is in position to arrange for development its mineral resources under its own unquestioned sovereignty.

We therefore propose suggesting informally to Iran Govt that if Sov arrangement is rejected by Majlis it might be advisable for Iran Govt concurrently to announce that Iran Govt has no intention of granting any oil concession at this time covering the northern provinces to any other foreign interests and that the Majlis decision is taken without prejudice to eventual negotiations with Sovs for commercial oil rights this area. If pressed for our opinion on proposed Sov arrangement we contemplate informing Iran Govt that we feel it should make its own decision free from foreign influence. We would point out that in our opinion proposed arrangement is subject to abuses which Iran Govt should consider in making its decision.

Your views and instructions will be appreciated.

Sent Moscow for Secretary.

Rpt Tehran as 163 and London as 1509.

Acheson

1. In telegram 15, not printed.
2. Signed at London on September 24, 1945; for information on this agreement, which failed to obtain ratification by the United States Senate, see Foreign Relations, 1945, vol. vi. bracketed note p. 244. The text of the agreement is printed in Department of State Bulletin, September 30, 1945, p. 481.