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

880.2553/11–3053: Telegram

No. 318
The Chargé in France (Achilles) to the Department of State¹

confidential

Paris, November 30, 1953—5 p.m.

2099. I. Charpentier, Director General of Economic side of Foreign Office, in informal conversation with Labouisse, stated that French officials were pre-occupied with certain aspects of the world petroleum problem. He expressed particular concern over recent talks between Aramco and Saudi Arabia, without apparently knowing precise nature of those talks. He also expressed concern as to effects surplus supplies will have on prices. He said that Bonnet had been instructed to discuss matter with Department.

II. The particular points discussed by Charpentier fall roughly into three categories:

a. Iranian Oil. Present French concern here is that they be included in any conversations relating to possible cutbacks in other areas in event Iran production resumed. He said he had talked matter over with British, expressing view that this question should be discussed on “governmental level” and that British had agreed. Charpentier suggested that US, UK, French and Netherlands governments were those who should “put heads together.”

b. Modification of structure of companies. Charpentier suggested possibility that events would necessitate some reconstitution of the structures of international oil companies in the Middle East. He apparently has in mind the possibility of single entity in each Middle East producing country which would own the oil, refining and distributions facilities, which ownership would be shared presumably by producing country and the international petroleum companies. He said this was only tentative thinking on his part but that matter of structure of companies would certainly have to be discussed and French would like to be in on discussions. His reason for suggesting some structural modifications was that we would be “eaten to bits” by the producing countries if the off-takers could not get together. He realized anti-trust problem for US would make it all more important that matter be handled on governmental level.

c. Soviet Offers. Charpentier mentioned facts that Soviets have agreed to furnish French 400 thousand tons crude from Baku; that Finns had asked whether French wanted one million tons Russian oil; that Soviets had recently offered sell gasoline to France against payment in Austrian schillings (Charpentier said French had refused offer; he also requested that information re this offer be closely held); and that Soviets offering oil to Italy and certain South American countries. He feels that entry of Soviets in world petroleum picture emphasizes the need for inter-governmental discussions among US, UK, French and Netherlands.

III. Wish to emphasize that Charpentier approach very informal and apparently unofficial. Gather that any official approach in hands of French Embassy Washington. If Department has been approached by French Embassy, we would appreciate receiving comments.²

Achilles

1. Repeated to London.
2. Telegram 2027 to Paris, Dec. 3, not printed, informed the Embassy that Ambassador Bonnet had requested informal talks on Middle East oil problems at the official level, preferably on a tripartite basis with the British. On Dec. 3, the French Embassy was informed that the Department of State would be glad to discuss the matter with them on a bilateral basis, since such talks had recently been held with the British. (880.2553/11–3053) For a memorandum of the first conversation with the French on Dec. 18, see Document 320.