887.2553/8–1050: Telegram

The Secretary of State to the Embassy in Iraq 1


69. Reur 95 Aug 10.2 You shld indicate to Iraqis that new IPC royalty rate now equals or surpasses those in other NE producing areas. This includes latest AIOC terms offered Iran. Above condition plus IPC liberality in granting royalty increase without quid pro quo shld in Dept’s view dissuade Iraq from new demands. In view (1) present world situation, (2) alignment of royalties offered Iraq, Saudi Arabia and Iran and (3) US–UK continuing efforts to encourage cos. mend fences in NE concessions, Embs Baghdad, Jidda and Tehran shld as occasion arises maximize efforts with respective Foreign Govts to endeavor obtain period of relative stability re concession contracts.3

  1. Sent to Jidda as 61, Tehran as 314, repeated London as 931, Cairo by air, Moscow by air.
  2. Supra.
  3. Despatch 554 from Baghdad, November 30, advised the Department of State that a group of Iraq Petroleum Company officials called on the Chargé on November 27, and informed him that it was “no longer an ordeal to travel to Baghdad where a feeling of friendship and cooperation is now prevalent in contrast to the pre-London Agreement days when visiting officials from IPC London were subjected to constant pressure to raise oil royalty rates; increase oil production and divert the Haifa pipelines to an Arab port.” (887.2553/11–3050)