Foreign Relations of the United States, 1949, The Near East, South Asia, and Africa, Volume VI

890F.6363/1–2949

The Officer in Charge of the Embassy in Egypt to the Secretary of State

secret

Cairo , January 29, 1949.

No. 100

The Officer in Charge of the American Embassy at Cairo has the honor to enclose herewith a copy of a letter agreement between Pacific Western Oil Corporation and the Saudi Arabian Government¹ which is to supplement the concession contract covering the oil rights of the Saudi Arabian undivided half of the Kuwait Neutral Zone.

This letter agreement deals with the very critical relationships to be established between the companies and governments interested in the oil development of the Neutral Zone. The letter states that the Saudi Arabian Government undertakes to guarantee that Pacific Western will have no interference from any other power, i.e., the Sheikh of Kuwait, British Political Resident, in the pursuit of their oil business. The letter agreement further states that the company will be allowed to commence work promptly after the concession contract is signed, that the company will be able to purchase Saudi Arabian currency in the open market, that the concession contract and this letter will be kept “secret and confidential.”

Pacific Western representatives stated that American Independent Oil Company (AMINCO) did not possess a guarantee on the part of the Sheikh of Kuwait that the Saudi Arabian Government would not interfere in AMINCO’s operations and that for this reason the company had been unduly delayed.

1. Not printed; the file copy hears no date. Jidda, on March 1, reported advice from Saudi authorities that the concession was signed at Riyadh on February 24 (telegram 143, 890F.6363/3–149).