329. Telegram From the Department of State to Secretary of State Kissinger in Jerusalem1

39712/Tosec 158. Subject: Jobert Note. From Donaldson to Secretary.

1.
Paper on access to Saudi crude oil which Jobert left with you2 during Washington Conference states that it would have been desirable for Europeans to have been permitted to participate in Aramco in same manner as open-door principle which led U.S. to participate in Iraq in 1924 and Iran in 1953. Whether or not such a solution would [Page 919]now be possible it will remain necessary for Europe to have continuing access to Saudi oil. In 1973, for example, France received about 620,000 b/d of Saudi oil from U.S. companies making up Aramco. This represented 25 percent of French oil supplies and 8.6 percent of Saudi production.
2.
With foregoing as background Jobert suggests that “if American Govt desires to avoid increased pressures on the interest of American companies in Saudi Arabia” USG should accept and support policy by American companies who are partners in Aramco to enter into long term agreements to deliver to France the same proportional share of Saudi production remaining at their disposal as in 1973. He notes that U.S. companies have been so far unwilling to consider such long term agreements.
3.
Taken literally, paper can be taken as threat, i.e., if we don’t get our fair share of Aramco production from American companies we will get it some other way. Moreover, paper makes no reference to govt. to govt. deals with SAG, suggesting that intention is to maintain some access to proportionate share U.S. company supplies while seeking more direct and additional access to Saudi production.
4.
Given French policy both externally and in treatment foreign companies in internal market I can see why Aramco participants would be loathe to enter into long term arrangements with French Govt. Nonetheless, I think we should discuss with Aramco partners (Exxon, Socal, Texaco and Mobil) in general terms their intentions with respect to supply of European markets. In view of prospective discussions we will be having in Energy Coordinating Group on “the role of the international oil companies” we will need in any case to consult with companies. In light these consultations we will prepare suggested response for you to make to Jobert.
5.
You have received memo from Simon3 which comments at your request on “French allegation that they compelled seek bilateral deal for Saudi crude because American companies unwilling sell crude to French.” This not precisely allegation in Jobert memo which is that Aramco partners won’t enter into long term supply commitments. Simon memo correctly but irrelevantly states that French receiving less oil from American companies because of tight oil market rather than refusal deal with France.4
Casey
  1. Source: Library of Congress, Manuscript Division, Kissinger Papers, Box CL 139, Geopolitical Files, France, Chron Files, 8 Jan–29 May 1974. Secret; Immediate; Cherokee; Nodis. Drafted by Katz and approved by Donaldson. Repeated Immediate to Tel Aviv.
  2. Summarized in Document 324.
  3. Not further identified.
  4. Telegram 965/Secto 64 from Cairo, February 28, for Donaldson from Kissinger, reads in full: “Secretary agrees with your proposed course of action.” (Library of Congress, Manuscript Division, Kissinger Papers, Box CL 139, Geopolitical Files, France, Chron Files, 8 Jan–29 May 1974)