Foreign Relations of the United States, 1969–1976, Volume E–5, Part 2, Documents on North Africa, 1969–1972

21. Telegram 64991 From the Department of State to the Interests Section in Algeria¹ ²

Washington, April 30, 1970, 0138Z

REF:

• Algiers 592, 595

1. Department continues to favor expansion commercial relations with Algeria. It has become increasingly clear, however, that our ability to encourage this relationship by positive acts is likely to be limited by lack of progress toward settlement of outstanding claims of American nationals against Algeria and disputes with American corporations. We have on several occasions tried to make this clear to GOA, most recently in Secretary’s message to Bouteflika (State 032269). We wish to avoid giving Algerians impression our moves are related only to El Paso project or that we are pressing them too hard. At same time, we consider Bouteflika’s request that the Secretary facilitate El Paso project an important initiative to which we are attempting to be responsive.

2. We are hopeful that SONATRACH President Ghozali’s recent statements to Gibson (Algiers 592 and 595) indicate Algerian awareness of desirability of reaching settlement with oil companies. Department suggests you seek early meeting with Ghozali to explore his approach including status of disputes with American oil companies mentioned reftels. Further, you should make clear to Ghozali that statement which appeared in “International Commerce” that settlement of disputes will probably have to await Govt to Govt negotiations after resumption of relations does not represent Department policy. We believe the sooner progress can be shown toward settlement of claims and disputes the better. Absence of diplomatic relations need not delay this effort. Recent communications from Department (Blake-Newsom memo of April 16 on status of nationalizations and restrictions on US-owned property) and copies of Phillips and Sinclair interventions in Distrigas case before FTC should provide you with most recent info available to Dept. As you noted in Algiers 592, USG is unable to speak for oil companies. In any case, we envisage your first meeting with Ghozali as exploratory and largely for purpose of assuring that Gibson conveyed Ghozali’s statements accurately. We leave to your discretion whether or not to have Bray accompany you to see Ghozali.

3. Concurrently, you should seek appointment with Ould-Rouis or equivalent level Foreign Ministry official to initiate talks on claims arising from GOA 1963 nationalizations, eleven of which were submitted to GOA in late 1965 and early 1966 (there may be additional claimants who have not furnished complete dossier). As you aware, GOA recognized principle of compensation or restitution at its discretion in these cases before negotiations ceased with rupture of diplomatic relations in June 1967. You should have sufficient documentation on hand to make this initial approach. You should make clear that we consider settlement of these claims in interest of long-range US-Algerian relations since outstanding nature of these claims make USG actions favorable to Algeria considering more difficult than would otherwise be the case.FYI. We will want GOA reaction to reopening of these claims before proceeding further. If GOA should respond that it is unable to undertake substantive discussion of claims pending consideration of French, Swiss, Italian and other claims, you should make clear that this is problem between GOA and those governments, but is not in our opinion sufficient reason to delay progress on US claims. END FYI.

4. AF/N officers (Blake and Lowrie) made strong pitch to head of Algerian Interests Section Ben-Allou on April 28 covering most of above points.

END

Rogers

1. Source: National Archives, RG 59, Central Files 1970–73, POL ALG-US. Confidential. Drafted by Lowrie on April 28; cleared by E/ORF/FSE, L/AF, E/IMA/FOD, L/C, L/E and AF/N; and approved by Smith. In telegram 652 from Algiers, May 6, Eagleton reported that he had discussed with Algerian officials the fact that Algerian disputes with American oil companies could affect Federal Power Commission (FPC) consideration of the El Paso gas deal. (Ibid.)
2. While the Department favored the expansion of commercial relations with Algeria, it noted that progress was impeded by outstanding disputes between that country and American individuals and corporations.