886A.2553/1–2351: Telegram

The Ambassador in Saudi Arabia (Hare) to the Department of State 1

secret

466. ReEmbtel 449, January 16.2 While en route Dhahran by Aramco plane January 16, Owen of Aramco told me he had just received letter from Finance Minister re tapline protection. Translation had not been completed but appeared to be ultimatum to meet Saudi demands or face temporary closing of line. Before my departure [Page 282]from Dhahran yesterday Owen gave me details of contents letter but said had not yet been decided what action to take.

Following are principal points in letter:

1.
All blame for delay and inaction placed on tapline;
2.
Tapline offer (Embtel 433, January 10)3 “Absolutely unacceptable”.
3.
“Final settlement on this subject is”, as outlined Embtel 433, on condition commencement construction is not delayed longer than 2 weeks from January 16;
4.
If company unable accept number 3 above, “Government suggests” Aramco “pay immediately $4 million on account” in order permit SAG commence building program. Discussions re settlement may then be later resumed “at Government’s convenience;”
5.
If Aramco unable accept either number 3 or 4 above, “Government will find itself obliged to take administrative measures to stop temporarily the flow of oil through the pipes” until satisfactory solution reached;
6.
SAG would greatly regret such action, but Government has waited so long it considers company solely responsible for these consequences;
7.
Letter concludes that “Government will not accept company interference with arrangements which Government makes for maintenance of security in its country and protection of company’s people and property which Government guarantees to maintain and preserve. However, it is up to Government alone to decide the type of this preservation and method of carrying it out.”

Hare
  1. Repeated to Cairo.
  2. Not printed; it reported a conversation between Owen and Hare. Owen did not believe the Saudi Arabian Government would close the line down but said Aramco had learned that its offer, reported in telegram 433 from Jidda, January 10, had never been forwarded to Riyadh. He believed the Finance Minister and Salha were trying to hold Aramco up for more money, while merely informing Riyadh that the company was intractable without mentioning its counter-offer. (886A.2553/1–1651)
  3. Not printed, but see footnote 3, p. 276.