Foreign Relations of the United States, 1952–1954, The Near and Middle East, Volume IX, Part 1

880.2553/4–1852

No. 251
Memorandum of Conversation by William McMaster of the Petroleum Policy Staff

secret

[ Washington ,] April 18, 1952.

Subject:

• Anglo–American Oil Policy for the Middle East.

Participants:

• British Embassy
• Mr. J. A. Beckett, Petroleum Attaché
• Mr. D.A. Greenhill, First Secretary
• State
• PED—Messrs. Eakens, McMaster
• NE—Messrs. Sturgill, Funkhouser, Longanecker

This was the first of a series of meetings expected to be held with the British as requested in their “personal memorandum” entitled “Anglo-American Oil Policy for the Middle East,” dated March 24, 1952 and submitted to the Department on March 28, 1952.¹

1. Discussion of memorandum with British Foreign Office and British Ministry of Fuel and Power:

Mr. Eakens stated that he had discussed the memorandum with representatives of the Foreign Office and the Ministry of Fuel and Power in London in the early part of April. The discussions were primarily on the urgency of an Anglo-American agreement on an oil policy for the Middle East to satisfy the oil producing countries that they are fairly treated and on equal basis with their neighbors. (see 1(c) of British memo.)

There was general recognition of the possible affect of the current Aramco-SAG negotiations on existing agreements in other Middle East countries.

It was agreed that it would be useful to continue discussions of a joint Middle East oil policy in Washington.

Regarding publication of a joint U.S.-U.K. Middle East oil policy it was stated that the U.S. would not favor publication but Mr. Eakens said he had the impression from his discussions in London that the British continue to favor publication.

In addition, the British were informed of the action recently taken by MSA-Justice against American oil companies regarding their pricing practices in connection with shipments of Arabian crude oil to Western Europe under EGA/MSA financing.

2. Development of U.S. position in respect to objectives presented in British memorandum:

The British stated that they did not require any positions in writing at the present time but would like to orally discuss the Department’s Middle East oil policies as they are developed. However, it was decided that a Department position should be developed on each of the points raised in the British memorandum to be submitted to the British as a memorandum or an Aide-Mémoire.

3. Discussion of FTC report on International Petroleum Cartels:

The British were informed that publication of the report was delayed by the FTC because of the Iranian problem. The Department thinks there are major reasons which make it difficult for it to delay publication of the report.

Mr. Greenhill stated that it was unfortunate to add to an already embarrassing situation by publication of past acts of the oil companies. The British would much prefer that the report not be published. If publication cannot be avoided they would like to have adequate advance notice to allow them to make the necessary preparations to meet the possible impact of publication.

4. Relinquishment program in Saudi Arabia:

Mr. Greenhill referred to a despatch from Jidda regarding the relinquishment of oil concessions in Saudi Arabia and asked if there were any new developments on the relinquishment program.

Mr. Eakens stated that the program was already in effect and that 33,000 square miles of Aramco’s concession would be relinquished every three years. Mr. Funkhouser pointed out the SAG was talking in terms of a much larger relinquishment—as much as one-half of the Aramco concession.

. . . . . . .

1. Not found in Department of State files.