887.2553/8–1050: Telegram

The Ambassador in Iraq (Crocker) to the Secretary of State


95. 1. Finance Minister Uzri, discussing IPC negotiations with Embassy officer, summarized results substantially as reported by London telegram 762, August 3 [4]1 to Department. Uzri said:

  • a. Change from four to six shillings gold increases Kirkuk royalties from under 12 to approximately 18 shillings per ton, retroactively effective January 1, 1950. He roughly estimates resultant additional revenues will be 1,800,000 pounds for calendar year 1950 and total of 17,000,000 pounds for years 1950 through 1954. Net effect is IPC has given now royalty increase which Iraq would probably have received in 1954 in any case.
  • b. Cabinet now giving further consideration to referring “gold clause” to courts. We realize it is complicated question.
  • c. Question, IPC and BPC concessions left for further negotiations which expected take place later this year.2

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2. Uzri, while not jubilant over results negotiations, seemed feel they had been moderately successful from Iraqi standpoint.

3. Noncommittal press release (London telegram 762) issued stating “agreement reached on one major issue re royalties”. Otherwise no facts yet made public. Reportedly government considering whether or not submit agreement to Parliament.

4. Despite lack of factual information re agreement, opposition papers attacking Nuri and government for “failure” of negotiations, while pro-government papers claim success, saying “benefits will soon be evident”.

Comment: Embassy feels that due appreciation should be expressed to American partners for whatever influence they may have exercised in persuading IPC grant royalty increase agreed upon at London. This will presently improve relations with Iraq Government and should provide sufficient revenue to assure success of any Point Four program that may eventually be instituted here.

Sent Department 95; repeated information London 19, Tehran 24, Cairo unnumbered, Jidda unnumbered.

  1. Supra.
  2. Telegram 696 from Paris, August 7, not printed, advised the Department of State that a Cie Française Petroles official had expressed satisfaction to an Embassy officer about the conclusion of the Iraq Petroleum Company negotiations with the Government of Iraq. The last paragraph read: “Questions re unification IPC, BPC and NPC concessions and reopening Haifa pipeline were reportedly scrupulously avoided at London meeting though IPC Board stressed importance developing Basra area fields rather than Mosul.” (887.2553/8–750)