138. Letter From President Nixon to King Faisal of Saudi Arabia1
Your letter of July 10, 1972,2 was most welcome, and I was gratified to know that the current negotiations between the oil industry and the Organization of Petroleum Exporting Countries are receiving your personal attention. The United States Government recognizes the importance of these negotiations and shares your view that the outcome will have a profound effect on the Free World’s economy and on the prospects for stability in the Middle East.
I also fully share Your Majesty’s concern over the future control of Middle East oil and your desire that a negotiated settlement be achieved. It is in the interest not only of our two countries but of the Free World generally that the settlement finally agreed upon be viewed as fair to both parties and as providing for a lasting relationship between the companies and your government.
If a structure of world peace is to be built, it will depend in large measure on the ability of us all to establish certain principles to govern our relationships. This is as true of economic as of political relationships. In the case of the present negotiations, it is important that the compensation finally received by the companies be regarded by all nations as just and adequate; the settlement of the compensation question will be evaluated in terms of its impact on international trade and investment relationships. If the settlement adversely affects these relationships, for example by impeding the flow of private investment and technology to the developing world, the vacuum thereby created would tend to be filled by interests that are inimical to the principles and values we both uphold. I am sure Your Majesty will have very much in mind the need to balance short-term advantage against the long-term interest in strengthening the forces of moderation in the world.[Page 343]
I had noted with some concern the initial OPEC compensation proposals which would meet no generally accepted standard for the adequate determination of the value of enterprises. We were most pleased with the visit of His Highness your son, Prince Sa’ud,3 and to learn from him that your negotiators have very much in mind our interest in fair and equitable compensation to the companies. Prince Sa’ud met with all senior officials in my government who deal with energy policy to discuss the position of Your Majesty’s government on this and related subjects. He performed this mission with great eloquence, and we presented our views with great candor. He indicated that he would report to you.
It seems to us that the American oil companies have shown and are prepared to continue to show flexibility on the issues involved in the current negotiations. They have expressed to us their desire to reach a mutually satisfactory settlement and their intention to take reasonable positions on the issues. As Your Majesty knows, true negotiations require flexibility on both sides. With such flexibility I am confident that the negotiations can be brought to a successful conclusion. Your continued personal interest will do much to assure their success.
The world forces of moderation and evolutionary progress, eminently represented by Your Majesty, have scored solid gains in the last few years. And, as I wrote Your Majesty on July 21,4 the cooperation of the states concerned with the stability of the Arabian peninsula has been enhanced by your policies. It is my sincere hope that this will continue to be the case and that each step taken may strengthen the foundation for our cooperation in the pursuit of our common interests.
Prince Sultan’s visit here provided an excellent opportunity for us to exchange views on the interests that Saudi Arabia and the United States have in common.5 As I wrote to Your Majesty after my talk with Prince Sultan, we very much welcome such discussions and believe continuing exchange of this kind will serve the best interests of both our nations. Prince Sa’ud’s talks enhanced our understanding of each other’s concerns with respect to our future energy requirements, and I would welcome further discussions over time on a long-term approach to the problems of oil in the Middle East.
- Source: National Archives, RG 59, Central Files 1970–73, POL 5–1 SAUD. Secret; Exdis. The letter was submitted to Nixon under an August 8 covering memorandum from Kissinger and Flanigan, which informed Nixon of the differences between ARAMCO and Saudi Arabia on the question of compensation. (Ibid., Nixon Presidential Materials, NSC Files, Box 1287, Saunders Files, Saudi Arabia, 1/1/72–8/30/72) Thacher personally delivered the letter to Faisal, August 14. (Telegram 2628 from Jidda, August 13; ibid., Box 761, Presidential Correspondence, Saudi Arabia, King Faisal, 1972) His comments on the meeting were transmitted in telegram 2656 from Jidda, August 15. (Ibid., Box 1287, Saunders Files, Saudi Arabia, 1/1/72–8/30/72) The letter was also passed on to Jungers. (Telegram 149065 to Jidda, August 16; ibid., Box 761, Presidential Correspondence, Saudi Arabia, King Faisal, 1972)↩
- Summarized in Document 129.↩
- See Document 134.↩
- Nixon’s letter to Faisal is in the National Archives, RG 59, Central Files 1970–73, POL 7 SAUD.↩
- Regarding Prince Sultan’s visit to the United States, see Foreign Relations, 1969–1976, volume XXIV, Middle East Region and Arabian Peninsula, 1969–1972; Jordan, September 1970, Documents 160 and 161.↩