208. Memorandum From Harold Saunders of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1 2

[Page 1]

SUBJECT:

  • Message to the Shah on the Oil Settlement—Telegram for Clearance

Peter Flanigan recommends a Presidential telegram to the Shah of Iran commending him for the manner in which the Shah concluded the recent negotiations with the oil consortium. This idea was suggested by Mr. Jamieson, Chairman of Standard Oil of New Jersey and negotiator with the Shah.

At Tab A is a memorandum for the President seeking his approval of this message. If the President approves the memo at Tab A, then the telegram at Tab B should be cleared.

RECOMMENDATION: That you seek the President’s approval of the attached message for dispatch before your departure for California. To be timely, it should arrive this week.

[Page 2]

Tab A
Memorandum From the President’s Assistant for National Security Affairs (Kissinger) and the President’s Assistant for International Economic Affairs (Flanigan) to President Nixon

SUBJECT:

  • Message to the Shah on the Oil Settlement

The Shah of Iran last week reached agreement with the members of the oil consortium on a variety of measures to increase oil production in Iran, to increase Iran’s overall oil income, to increase Iran’s direct involvement in the petroleum operation and to extend the companies’ role in Iran for another fifteen years beyond 1979 with periodic review. The negotiations were tough, but the main point from our vantage is that these negotiations were conducted in a responsible way. In addition, the Shah has taken a different direction from the other oil producing nations, thus weakening the position of OPEC in its negotiations with the oil companies.

Ken Jamieson, Chairman of Standard Oil of New Jersey, and chief negotiator with the Shah suggested this to Flanigan. This suggestion is supported both here and in the State Department, that a message from you to the Shah commending the manner in which these negotiations were carried out would be an appropriate gesture. This would not require you to make any judgment on the terms of the settlement but would simply follow up your discussion with him on the necessity of preserving stability in the flow of oil by letting the Shah know that you have noted his contribution.

RECOMMENDATION: That you approve dispatch of the following message to the Shah:

“It was with great satisfaction that I learned of the successful conclusion of negotiations between your government and the oil consortium member companies. Your efforts to establish a new [Page 3]framework for your future relations have been of great interest to me and I have been most impressed by the seriousness of purpose and the pragmatic approach that have characterized the attitudes and positions of both sides. I sincerely hope that the mutual respect and confidence that both sides exhibited in the negotiations will continue to characterize your relations and that this agreement will be the basis for further cooperation to the mutual benefit of all parties concerned. With warm personal regards.”

Mr. Price has cleared the text.

Approve [HK for RN] Other_______

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 1282, Saunders Files, Middle East Negotiations, Iran 6/1/72–9/30/72. Confidential. Sent for action. Tab B is not published. A handwritten note by Kissinger reads “I signed off for Pres. HK
  2. Saunders submitted a recommended Presidential telegram for the Shah, congratulating him for the way he had conducted the recent negotiations with the oil consortium.