888.2553/5–2454: Telegram
No. 464
The Secretary of
State to the Embassy in the United
Kingdom1
priority
6287. At meeting today2 with Humphrey, Anderson, Murphy and Byroade oil company principals agreed they could accept agency-type contract so long as following “minimum indispensables” met: (1) 50–50 profit-sharing; (2) taxes should constitute main portion money paid Iran; (3) duration agreement should be approximately same as former AIOC concession; (4) full and effective management control; (5) monopoly production and marketing oil in contract area [Page 1008] although Iran would have option sell certain percentage crude oil received as royalty; (6) “concession security” must be guaranteed in form Majlis approval all essential parts agreement.
Company principals agreed British manager and UK incorporation operating companies could not be accepted present time by Iranians; however, they were firmly against incorporation in Iran or Iranian manager.
Assumption at meeting was that US Gov’t would exert maximum pressure in Iran in support above requirements if suitable face-saving devices provided Iran. Re questions of registration and nationality manager it was agreed US Gov’t would if necessary exert pressure on UK Gov’t at appropriate time in forthcoming discussions in London.
It was pointed out that political and strategic consequences failure obtain settlement from present negotiations would seriously endanger security Middle East and would possibly confront US Gov’t with need take some alternative action in attempt save Iran from communist control. For instance, it was suggested US Gov’t might consider it necessary sponsor some independent oil venture to lift at least limited quantities oil.