109. Memorandum of Conversation1


  • President Ford
  • Dr. Henry A. Kissinger, Secretary of State and Assistant to the President for National Security Affairs
  • Wells Stabler, Ambassador to Spain (briefly)
  • Lt. General Brent Scowcroft, Deputy Assistant to the President for National Security Affairs

[Omitted here is material unrelated to Iran.]

Kissinger: The Iranian stuff is going very well. We have agreed on a $12.5 billion program over five years—this is non-military. There will be military purchases as well. Six billion for nuclear development, five billion for port facilities, 2.5 billion for agriculture. In addition, they will sell 500,000–750,000 barrels per day below OPEC price and tied to military purchases. The other program we can announce in principle, to be signed while the Shah is here. The oil deal will bring pressure on the price structure, because the purchasers will have to find where else to make a cut of that size. In view of what the French did on the invitation, it would be crazy for us not to go forward on things like this.

The President: When can we announce this?

Kissinger: We can’t. They first want to sell a certain amount of oil to us. We can then cut wherever we want and they can raise production. It must either produce price cuts or further cutbacks. But the $12.5 billion can be announced today. What they want is to announce the oil deal and further purchases together. I don’t think they realize what they are doing. Algeria has already cut production by two million barrels. They can’t cut further. Our joint commissions are pushing the producers into big development programs, for which they will need the additional oil production.

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You should tell Ansary . . . We shouldn’t haggle over the price so long as it is below the OPEC price. The key thing is that the production is coming out of someone else’s hide. We may have broken OPEC, or will have if we can make one more deal like this. Maybe it’s too fast, because we need to get our system in place first.

They will buy other things with the $1.5-to-2 billion in receipts for the oil deal. The money will never leave the United States.

The President: Congratulations. I think that is great.

Kissinger: If we can get the same with the Saudis, it will be great.

The President: The announcement today will have a good impact on Congress.2

[Omitted here is material unrelated to Iran.]

  1. Source: Ford Library, National Security Adviser, Memoranda of Conversations, Box 9. Secret; Nodis. The meeting was held in the Oval Office.
  2. See footnote 2, Document 108. The transcript of Kissinger and Ansary’s news conference held at the conclusion of the Commission’s session is printed in the Department of State Bulletin, March 31, 1975, pp. 402–403.