Office of the Historian

525. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Rubottom) to the Secretary of State1

Washington, June 2, 1960.

SUBJECT

  • Action of U.S. Oil Companies (and Shell) in response to Cuban Demand to Process Russian Oil

Tom Mann and I went to New York yesterday to meet with representatives of Esso (N.J.), Texas, and Shell companies. This meeting evolved from a meeting of their representatives with Secretary Anderson on Tuesday,2 at which Tom Mann was present, to discuss the problem posed for the companies by the Cuban demand that they process Russian crude in their refineries in Cuba, figures indicating that this might result in their obtaining up to 50 percent of their own commercial requirements in Cuba from Russian sources for the balance of this year.

Mr. Anderson made it clear that it would be in accordance with this government’s policy toward Cuba if the companies decided to reject the Cuban demand. He also stressed that they themselves would have to make this decision. This was in accord with the Department’s views previously decided.

However, Secretary Anderson also made 5 points to the companies which in the latters’ view lay the groundwork for their decision unfavorable to Cuba. The points are:

1.
The oil industry in Cuba, i.e. all 3 companies would act in unison.
2.
Their decision would be consistent with U.S. policy.
3.
If the decision led to their ultimate expropriation, the U.S. government would support their being paid adequate, prompt and effective compensation, a prior memorandum to that effect being made available to them.
4.
The U.S. government would make clear by statement or otherwise its belief that no other American oil companies should enter the Cuban market.
5.
The U.S. government would also probably indicate its support of the position of the oil companies by communicating this position to the other governments in the hemisphere urging that they respect the U.S. views regarding Cuba’s action.

Complying with points 4 and 5 will require that this government take various steps, including public declarations as well as informal discussions with private companies and with the other governments in the hemisphere. I have concluded that the best way to provide a setting for the refusal of the companies to run the Russian crude through their refineries in Cuba is for the Department to make a strong statement, to be released this weekend, making clear our feelings about Cuban public vilification of the United States and economic discrimination against the U.S.

Mr. Mann and I will confer with Mr. Hager and suggest to the latter that he take the proper steps to bring the problem of the companies to the attention of the Justice Department. While the companies may be taking similar action, they have arrived at their decisions independently.

  1. Source: Department of State, ARA Files: Lot 78 D 287. Secret. Drafted by Rubottom. The source text bears the following handwritten notation by Rubottom: “Not forwarded. Hold for record purposes. Points covered by direct consultation between Rubottom & Mann, Mann and Dillon, and Rubottom & Secy. Herter. (last on 6/3)”.↩
  2. May 31. No record of this meeting has been found.↩