Memorandum of Conversation, by the Acting Director of the Office of Greek, Turkish and Iranian Affairs (Rountree)



Iraqi and Iranian Petroleum Discussions
7.92 Ammunition under S/MDA

Participants: Mr. Aram, Chargé d’Affaires, Embassy of Iran
Mr. Rountree, GTI

Mr. Aram called on Monday, July 31, to discuss several current matters.

Mr. Aram said that he had received a telegram from Tehran indicating that discussions were being held in London between the Iraq Petroleum Company and Iraqi officials concerning oil concessions, and wondered whether the Department had any information concerning this matter. Mr. Rountree said that we are aware that such discussions are taking place, but are not informed on the details.1 It is understood that the discussions embrace several aspects of the Iraq concessions, naturally including questions of royalties. It is understood that the discussions have now been transferred to Baghdad, where they will continue.

Mr. Aram said that his interest was primarily in connection with the report that the United States Government had taken the position with the Petroleum Company to the effect that it should accede to the demands of the Iraqi Government, or at least to conclude an agreement which would be favorable to the Government. He said that if [Page 69] the United States Government had in fact followed this course, he thought it would be proper for the Iranian Government to request that a similar position be adopted vis-à-vis the British Government in relation to the AIOC concession. Mr. Rountree said that he was certain the United States Government had taken no such position in the oil discussions but considered the matter to be as between the contracting parties, although we were naturally interested in the outcome. He pointed out that in the case of Iran we had expressed to both parties of the dispute our interest in their coming to an agreement acceptable to both, but we of course had not injected ourselves into discussions on the merits of the respective positions nor had we suggested particular concessions to be made by either. Mr. Aram appeared to agree that this was as far as the United States Government properly could go in the matter.

Mr. Aram then raised the question of the urgent desire of the Iranian Government to obtain substantial quantities of 7.92 ammunition under the Military Aid Program. He said that he had received a communication from his government suggesting that the United States provide this material under the “current year’s appropriation”, which Mr. Aram interpreted to mean the second annual appropriation for MDA. Mr. Rountree said that he thought this matter should be considered by the appropriate representatives of the two governments at the time military lists in general are discussed between them in connection with the second appropriation bill. He said that while he must confirm this point with the appropriate authorities in the Department, he felt our position would be that this matter should be taken up by the Iranian Government in Tehran with General Evans (this position was later confirmed to Mr. Aram following discussions with S/MDA).

  1. Telegram 3429 from London, June 17, informed the Department of State that the Iraq Petroleum Company had decided to invite the Government of Iraq to send representatives to London for detailed discussions preliminary to negotiation of new agreements. Telegram 9 from Baghdad, July 3, advised the Department that “Ex Prime Minister Nuri Said and Minister economics Dhia Jaffar leaving Baghdad late tomorrow for London to conduct negotiations re IPC convention.” Telegram 546 from London, July 25, advised the Department that “Iraqis seeking redefinition gold basis present royalty rate instead of asking for outright increase ostensibly so that agreement does not have to be submitted Majlis for ratification.” It stated that the issue of royalty payments had almost monopolized the London discussions. Documentation is in Department of State file 887.2553.