Foreign Relations of the United States, 1952–1954, Iran, 1951–1954, Volume X

888.2553/1–1954

No. 410
Memorandum of Conversation, by the Director of the Office of Greek, Turkish, and Iranian Affairs (Richards)

secret

Washington, January 19, 1954.

Subject:

• Iranian Oil Negotiations

Participants:

• Mr. Harold Beeley, Counselor, British Embassy
• Mr. Herbert Hoover, Jr., Consultant to the Secretary
• Mr. Arthur L. Richards, GTI

Mr. Beeley called at his request this morning and stated that the British Embassy had received instructions along the following lines:

(1) The British accepted our suggested amendment to the proposed text to be given to the Iranian Government by British Chargé Wright.¹ The third sentence of the message will therefore be altered to read as follows: “The AIOC, with the approval of Her Majesty’s Government, are therefore resuming their talks with other companies in order to see whether it is feasible to form such a group, in which AIOC would have an appropriate share. This group would be in a position to negotiate a comprehensive settlement with the Persian Government.”

(2) As regards our suggestion that, in conversation with the Persians, Mr. Wright state that the companies to participate in the proposed consortium should be principally those already holding Middle East oil interests, Mr. Beeley stated that HMG could not accept the use of the word “principally”. The British Government felt that the participation must be restricted to those companies already operating in the Middle East. To open the door to companies not now engaged in producing and marketing Middle East oil, including American independents, “would be to admit oil companies of numerous nationalities, including British independents, who could not contribute towards restoring Persian oil to its traditional markets.”

(3) Mr. Beeley stated that the British will take note of our views about the proportion of participation by AIOC. He stated that the British Government would not accept without further exploration the idea that total British participation should not be over 50 per cent. In fact, the British expected AIOC to participate to the extent of 50 per cent. Therefore participation by another British company would increase the total British participation to over 50 per cent. He stated that 50 per cent participation by AIOC “was fundamental.”

(4) Mr. Beeley stated that HMG was grateful for our suggestions regarding method of negotiation and would give our suggestions due consideration.

(5) While appreciative of the reasons for the suggestion that the next meeting be held in Montreal, HMG considered that “for practical reasons” it would be necessary to continue conversations in London.

(6) Mr. Beeley stated that the British Government is ready to proceed with (a) the delivery of the proposed message to the Iranian Government and (b) to authorize AIOC to extend invitations to the companies to resume talks. Action on both the foregoing was being held up pending a United States decision on the anti-trust aspects of the problem. HMG believes any “delay most inadvisable from a psychological point of view” and would very much like to be able to authorize Mr. Wright to deliver the proposed message on Thursday, January 21, if at all possible. Failing this, it is sincerely hoped by HMG that the United States position would be sufficiently firm to permit the delivery of the message by Saturday, January 23.

1. Telegram 1522 to Tehran, Jan. 15, transmitted an earlier version of the proposed British communication to the Iranian Government. (888.3932/1–1554)