324. Memorandum From Harold H. Saunders and William B. Quandt of the National Security Council Staff to the President’s Deputy Assistant for National Security Affairs (Scowcroft)1
- SUBJECT
- French Memorandum on Access to Saudi Oil
State has sent you an information copy of a paper that Foreign Minister Jobert handed to Secretary Kissinger during the energy conference.2 The Secretary has asked Donaldson and Simon to give him their comments on the paper.
The main points are the following:
- —Europe must have access to Saudi reserves, either through dealings with the Aramco share holders or through bilateral arrangements with the Saudis.
- —France received about 8.6% of Saudi production through Aramco, of which half was delivered to French companies and half to foreign companies.
- —France recommends that Aramco commit itself to a policy whereby Aramco would enter into long-term contracts to provide the same proportion of the share of Saudi production at their disposal to France as was the case in 1973, e.g., 8.6%, half of which would be sold to French companies.
Apart from political arguments for or against this type of agreement we would simply note that the issue may soon become quite irrelevant if Aramco agrees to 100% Saudi take-over in the near future. In any event, the oil situation is so much in flex that we would not think that deals of this type had much chance of surviving.