Foreign Relations of the United States, 1952–1954, Eastern Europe; Soviet Union; Eastern Mediterranean, Volume VIII

882.2553/5–3152: Telegram

No. 466
The Secretary of State to the Embassy in Turkey¹

secret
priority

Washington, June 3, 1952—3:55 p.m.

1129. Dept shares ur view re importance petroleum matter discussed with you by Pres, PriMin and FonMin (Embtel 1355).² Dept anxious facilitate matter in any feasible way. Suggest before ur departure you inform Turk Govt accordingly.

Dept not clear, however, whether Turk Govt has in mind participation US firms in oil exploration and development operations (a) on some basis with Turk Govt or Turk Govt entity such as MTA or (b) on normal commercial basis as in other countries. If (a), Dept seriously doubts that any competent Amer co wld be interested. Depts comments below therefore based on (b), in connection with which you may wish make fol additional points:

1. It wld appear desirable obtain the services of qualified consultants to advise Turk Govt both upon procedures for obtaining cooperation Amer oil cos and upon steps which must be taken by Turk Govt to assure adequate interest in project. This wld entail advise upon legis which might be required on behalf Turk Govt. Dept prepared recommend several qualified consultants for selection by Turk Govt and will do so upon its request;

2. Dept not in position to predict degree of interest on part of US firms. Turk stability wld offer incentive to firms interested in new investments. However, in order prevent over optimism on part of Turks you might wish point out that two factors might limit the interest of oil cos; i.e., a) their reluctance in view of present world conditions to invest large sums of money in new areas far distant from the US; and b) fact that Turk is relatively less attractive from point of view of oil potentialities than other proven oil areas more adjacent to US, such as Canad, Ven and Peru. At such time as Turk Govt wishes, however, Dept will explore matter fully with Amer oil firms either on confidential basis or by wide publicity. We believe latter wld produce most interest but wld be guided by Turk wishes.

Additional reaction which you might wish bear in mind in talk with Turks fols:

(1) US pol in matters this kind opposed to exclusion nationals of other countries from participation and wld prefer to see Turk open concessions on competitive basis to nationals of any friendly country. Dept recognizes, however, that cos to be granted oil concession in Turk is matter for decision by Turk Govt.

(2) Dept believes interests of Turk wld best be served by having Turk oil resources developed by several firms whether of different or of same nationality rather than by an exclusive concession to any one firm and that in view anti trust aspects of matter firms shld operate as separate entities and not under one corporate head. This, however, wld not apply to group of smaller independents similar AMINCO operations.

3. In view this new development and possibility that interest by Amer firms wld depend upon new and carefully considered legis, you may wish suggest to Turks that action upon Draft Law transmitted Embdes 620 May 5³ be held in abeyance for time being. FYI it wld appear to Dept that legis along the lines of that in Ven will be required to interest Amer firms in Turk oil development. While same result might be accomplished by repeal all contrary legis and granting of individual concessions, Dept considers this course far less satis then gen law applicable all cos.

4. Re consultants referred to in 1, above, Dept considers those which it might suggest shld serve only in advisory capacity on legis, procedures for interesting Amer cos, designation of zones, etc., and not as negotiators on behalf Turk Govt with Amer cos interested in concessions.⁴

Acheson

1. Drafted by William M. Rountree (NEA/GTI) and Robert H. S. Eakens (E/OMP/PED) and cleared with E and NEA.
2. Supra.
3. Despatch 620 transmitted the text of a draft law allowing participation of foreign capital in the development of Turkish petroleum resources. (882.25/5–552)
4. On June 5, McGhee reported that he had presented a note to the Secretary General of the Foreign Ministry based on the suggestions in this telegram and stated further that assumption (b) was the correct basis for the participation of foreign oil companies. (Telegram 1393; 882.2553/6–552)