243. Telegram From the Embassy in Libya to the Department of State 1

138. Subject: Discussion with Libyan Petroleum Minister. During cordial conversation with Econ Counselor and EmbOff morning June 15, Petroleum Minister Muusa made following points.

1.
GOL policy banning all exports remains unchanged, despite diplomatic representations by Spain, France, Italy, and West Germany. [Page 437]Contrary to his remarks to Ambassador June 12 (Baida 593) and to OIC Baida prior to meeting Prime Minister Maaziq June 13, Muusa gave no indication that he expects any change in near future. Muusa stated that he had been unsuccessful at June 13 meeting in winning any special consideration for waxy crudes (Tripoli 78).
2.
GOL has been kept fully informed about recent meeting in Kuwait of Saudi, Iraqi, and Kuwaiti Oil Ministers and their approaches to oil companies for diplomatic support. GOL has not yet exerted pressure through oil companies, partly because large number (about 40) here.2
3.
Discussing earlier meeting in Baghdad of all Arab Oil Ministers, Muusa emphasized that Baghdad meeting did not identify states aiding Israel militarily and thus subject to export ban. To date, there has been no joint Arab decision on this point,3 despite recent parallel decisions by Saudi Arabia and Kuwait. Muusa revealed that second major Baghdad resolution (possible confiscation of oil companies owned by nationals of such states) was proposed by Iraq and Algeria; supported by UAR; and opposed by Libya, Saudi Arabia, and Kuwait. Muusa claimed he told Baghdad meeting that Algeria wanted to confiscate non-French companies anyway and this resolution was merely pretext.4
4.
In general, Muusa indicated GOL willingness to coordinate oil policy with certain “producers,” in which category he clearly included [Page 438]Saudi Arabia and Kuwait and clearly excluded Syria and UAR. In reply to question, Muusa stated that there no present plans for another meeting of Oil Ministers, although there possibility of direct contacts during Foreign Ministers meeting in Kuwait June 17. Muusa not yet sure whether he will be included in GOL delegation.
5.
Muusa would not be drawn out on Libyan work stoppage. While he did not seem to condone stoppage, he implied that vigorous GOL opposition not indicated at present, another apparent shift from an earlier position.
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  1. Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, PET 17–1 LIBYA. Confidential; Priority. Repeated to London, Paris for OECD, Baida, Beirut, Jidda, and Kuwait. Passed to the White House, CIA, USIA, DOD, NSA, COMAC, USUN, and CINCSTRIKE.
  2. See Document 240 regarding the approach to the companies by the oil producers. The Embassy reported that later in the afternoon of June 15, the first hints surfaced that the oil companies in Libya would be asked to exert pressure on Western governments because of “tremendous pressure” from UAR and the Libyan man-in-the-street. “This comes within hours after Muusa told EmbOffs that GOL did not intend use oil companies as levers against USG. Clearly, Petroleum Ministry was instructed otherwise during afternoon June 15.” Later that same day, the four largest oil companies operating in Libya, Oasis, Esso, Mobil, and Amoseas, were asked to meet with Minister Muusa the following day, June 16. The Embassy did not inform them beforehand of the subject of the meeting. (Telegram 147 from Tripoli, June 15; National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, PET 6 LIBYA)
  3. According to an Embassy report, the Libyan Oil Minister told the company representatives on June 16 that “Libya, in contrast to other Arab oil producing countries, had ordered total shutdown of exports in order not to identify without positive proof any country as being involved on the side of Israel in recent conflict.” Muusa also indicated that the “reasonableness of U.S. in resolving this problem could well influence when and to what extent exports will recommence and future relations between Libyan Government and American oil companies operating in Libya.” In conveying the message to the U.S. Government, Esso’s parent company, Standard Oil Company of New Jersey, stated its concerns: “In view of Jersey’s tremendous investments and profit potential here and in other Arab producing countries feel strong approach to state this matter along above lines warranted.” The other oil companies received a similar message from the Minister. (Telegram 187 from Tripoli, June 16; ibid.)
  4. On June 19 Algerian President Boumediene called for all Arab producers to cut off petroleum production for one year “to save Arab honor.” (Telegram 4268 from Algiers, June 19; ibid., PET 17–1 ARAB)