856D.2553/12–3151: Telegram

The Ambassador in Indonesia (Cochran) to the Secretary of State


933. Stanvac group came my office 11:30 morn 31st. I acquainted them my conversation with Subardjo (Embtel 9301). I did not tell them that just as I was leaving Subardjo latter expressed opinion Indo wld have to get rid of its Neth advisors. Subardjo said they were making too many problems. He asked me what BPM position was on 65–35 arrangement. I said I did not know what cut Indo Govt getting from BPM at present. I pointed out however that BPM “let alone” agreement still has five years to run. We agreed it might be conceivable BPM wld like see Stanvac forced out of Indo within those five years, Caltex deterred from moving into production and BPM thus left to monopolize oil industry and be in position dictate its terms when agreement lapses in 1956.

As Prioleau and I en route to Wilopo’s for twelve noon appointment, Prioleau remarked on concern his group over degree to which Oudt (former NEI FinMin and now advisor to Indo FinMin) and Kuypers influencing Indo Govt position toward Stanvac. Stanvac group thought intransigent attitude Neth advisors toward Stanvac might result from antagonism Neth civil servants NEI formerly had for BPM because of latter’s superior attitude toward them. Stanvac thought possible old Neth civil servants might now be getting back at BPM thru setting precedent in case Stanvac which wld have to be followed in BPM. I told Prioleau we cld speculate considerably as to whether Indo formula might be supported by conscientious Neth advisors wanting get maximum results for Indo, or whether such advisors being used as tools Neth interests, governmental or private, that are antagonistic to Amer interests, official or private, or whether sitn is as Stanvac suspected.

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To Wilopo, who recd us alone, Prioleau and I each set forth all arguments which we had offered on earlier occasions with Roem, Hatta and Subardjo. We made point Wilopo was official directly concerned as EconMin and we wanted bring him to date from our side as to developments that had occurred in his absence. We argued so strongly against 65–35 arrangement that he promised start his investigation all over again, beginning with data Stanvac has submitted and calling upon his technicians to provide their material. I counseled him against depending upon Neth advisors exclusively. Prioleau volunteered to have his org make all pertinent info avail and assist in every way toward reaching mutually satisfactory agreement. Next step will presumably be Wilopo call Gibbon info development new plan. I feel we have definitely blocked possibility Indo Govt moving now, at expiry Stanvac “let alone” agreement, arbitrarily to impose 65–35 percent arrangement. I feel door left open for further exchange ideas and negots.

  1. Supra.