161. Memorandum From James H. Critchfield, Special Assistant to the Deputy Director of Plans, Central Intelligence Agency, to Director of Central Intelligence Schlesinger1

    • The White House Group on Energy and the Middle East
A White House group delving into this general area is evolving; its size, make-up and function are thus far somewhat unclear but some [Page 404] general observations can be made on the basis of developments the past two weeks:
Mr. Ehrlichman appears to be the central figure in at least the effort to organize something. Mr. Flanigan and Secretary Shultz are involved. Dr. Kissinger has thus far not played a role but Brent Scow-croft and Hal Saunders are members of the group.
Three or four different members of the Treasury Department have appeared thus far.
There has been no discussion in terms of departmental or agency representation as such. Jim Akins is temporarily on the White House staff working on the energy policy paper. I was simply invited by the White House to participate.
The original briefing given by Akins and me was for Ehrlich-man, Kissinger, Shultz and Flanigan. Kissinger did not appear but sent Scowcroft. Hal Saunders organized it. The subject was broad—the world energy situation and the Middle East.2
The group that met on the morning of 6 February appears to be a “working group” concentrating on the short term problems of dealing with the Shah’s recent proposals to the oil companies and the state of the mediation effort following Iraq’s 1 June 1973 nationalization of IPC.
Attached is a February 5, 1973 NSC Memorandum from Hal Saunders which was discussed at a one and one-half hour meeting starting at 11:30 AM, February 6.3 There was no “chairman;” Flanigan and Scowcroft provided what structuring there was. Generally, Flanigan was an advocate of early action to let the Shah know that his response to the President was unsatisfactory.4 Scowcroft and Saunders, with my support, were advocates of delaying any action until we know what position the oil companies will offer the Shah; the American companies will have determined their position by next week and will meet with the other members of the Consortium a few days later. Jack Bennett of Treasury emphasized the need to protect the legal position of contracts in international relations. Saunders and I advanced the idea that the best approach to the Shah might be indirect, attempting to involve him in a discussion of Iran and U.S. longer range strategic objectives that would, in turn, provide a better framework within which to define our common interests in energy matters.
It was unanimously agreed that the U.S. companies (Exxon5 and Mobil) should be asked to slow down the tempo of negotiations with [Page 405] the Iraqis. Viewpoints on the motives of the French, the Dutch and the British in the Iraq question and in the broader context of the Gulf region varied. Flanigan attached importance to lining up the British and the Dutch to support the U.S. position. Akins and I cited evidence suggesting that the French, with considerable support from the Dutch, might find it in the long range interest of France to precipitate a collapse of the existing international oil structure in the entire Gulf, including Saudi Arabia.
All agreed that the U.S. action must take place in advance of the next meeting between the Jamieson group and the Shah in late February.
Discussion of the seven items listed as requiring decisions6 did not lead to many firm conclusions. There was no clear consensus on item 1, i.e. the effort to relate U.S. broad interests with the specific interests of the oil companies.
It was left that Flanigan would contact Mobil and Exxon to emphasize the linkage between the Iran and Iraq problems.
There is apparently a general tendency on the part of Flanigan to use the group to formulate very short term actions on the immediate problems in Iran; representatives from Dr. Kissinger’s office appear inclined to start now in taking a longer term view of our Iran problems while putting them in a broader regional context. State was not represented although someone remarked that “Akins represents the State Department view.”
Thus far there has been no effort to block out next steps for the senior group (Ehrlichman, Shultz, Kissinger and Flanigan); Saunders, Akins and I appear to be established members of this loosely organized arrangement.
James H. Critchfield
  1. Source: Central Intelligence Agency, Executive Registry Files, Job 80–M01048A, Box 4. Secret. A copy was sent to Helms, Karamessines, and Waller.
  2. See Document 160.
  3. Attached but not printed is an “Issues Paper: Iran—Consortium Confrontation,” written by Akins, February 5. The reference is to a second February 6 meeting on oil. No other record of this second meeting was found.
  4. See Document 152.
  5. Standard Oil of New Jersey changed the Esso brand name to Exxon on January 1, 1973.
  6. As listed in the “Issues Paper” (see footnote 3 above), the seven items were: What interest does the United States have in maintaining the oil companies in their present form? Is the preservation of the current status quo a worthy objective and will the Shah’s moves upset the status quo? What action should the United States take in Iran, a Presidential letter, or an envoy? In either case what would the President ask? Which of the two options proposed by the Shah is least objectionable to the United States? When should the United States take action? How does the United States coordinate positions with Britain, France, and the Netherlands?
  7. Printed from a copy that indicates Critchfield signed the original.