890F.6363/3–2948: Telegram

The Secretary of State to the Legation in Saudi Arabia

secret   us urgent

170. Re problem arising from Superior-Central approach to SAG for off-shore concession, you should inform HM that US and UK [Page 14]consider that problem of exploiting Persian Gulf sub-soil beyond three mile limit (re Legtel 164, Mar 29) is important one presenting some difficulties. In interest of exploitation on orderly, fair and reasonable basis, US and UK officials now having discussions for purpose of formulating principles and examining how these would work out in practice with view to presenting their conclusions for consideration of SAG. Active work being pressed on matter so that two govts can present views at earliest possible date. They hope that until their views are presented SAG will find it possible defer consideration of proposals which have been or may be submitted to it looking to exploitation sub-soil Persian Gulf.

Brit Emb. informs that London will instruct Trott1 to make representations similar to foregoing.

As to participation Brit capital in off-shore oil concession, you should state that US Govt considers that decision is entirely one for SAG to make. US would be disturbed if concession or participation were granted to nationals of any govt having unfriendly attitude toward either US or SA. Apart from this US considers that competition for concession should be free and open and awarded by SAG on basis of what it judges to be in best interests of SA.2

Sent Jidda, repeated London.

Marshall
  1. Alan C. Trott, British Ambassador in Saudi Arabia.
  2. Jidda, on May 11, advised the Department that “When handing Finance Minister note embodying observations Deptel 170, May 8, he said American representative Superior and his British opposite number Weightman had been informed … SAG would only toe prepared to resume oil concession discussions after representatives had obtained approval their respective governments for such discussions. Finance Minister … emphasized SAG would make no move in absence concurrence US and British Governments.” (Telegram 267, 890F.6363/5–1148)