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

24. Telegram 58412 From the Department of State to the Embassy in France¹ ²

Washington, April 7, 1971, 1955Z

1. French Ambassador Lucet called on Assistant Secretary Newsom April 6 in connection with Ambassador’s planned consultations Paris next week. Lucet indicated he would appreciate rundown on US-GOA relations, particularly USG intentions with respect to importation LNG from Algeria.

2. Newsom indicated he welcomed opportunity review subject with Ambassador as he had done with Le Gourrierec and Landy in February. Recalled that at that time he had assured Quai representatives USG respects French role in Algeria and that USG has no intention creating any difficulties for France in its relations with Algeria, particularly at this difficult time. Newsom indicated we aware doubts in some French circles re US intentions with respect to French interests in Algeria and North Africa generally. He therefore welcomed opportunity repeat assurances he had given to Le Gourrierec this subject.

3. Newsom noted many of doubts re US role in Algeria stemmed from activities private American companies there. He stated such activities were taken on initiative of companies themselves and without stimulation by USG. For example, El Paso arrangement with SONATRACH for importation LNG was begun by company on its own over two years ago. Matter was brought to attention of Department and other agencies of government only as requirement for USG role, such as FPC approval, became evident. Newsom indicated there are three aspects of El Paso matter which relevant to timing of decisions USG will be called upon to make: progress toward settlement claims by American companies against GOA; FPC hearings; and, finally, Eximbank consideration of loan requested by SONATRACH.

4. Re claims, Newsom stated settlements had now been made on all with exception of Esso and Newmont Mining, with prospects for Esso settlement good. Re FPC hearings on El Paso application for LNG imports scheduled begin April 8 and first place would require number of weeks for completion. FPC would determine whether such imports were in national interest. Some opposition to imports expected. Re Eximbank, Algerians probably under impression SONATRACH loan would be made if settlement of company claims effected. However, Eximbank action on SONATRACH application for $285 million loan probably would remain in abeyance for several weeks. Sometime after commencement first phase FPC hearings, Department would be submitting letter to FPC in response latter’s request as to whether there exists any objection on foreign policy grounds to importation of LNG. In response Lucet’s query, Newsom said letters in previous cases had indicated no such objection and so far as he now aware this was probably position Department would take in El Paso case.

5. Lucet then commented that it appeared probable that in normal course of events FPC approval would be obtained for LNG imports and Eximbank would be favorably disposed to loan. Newsom concurred while noting decision by FPC and Eximbank not predetermined and in any event several weeks away. Newsom further noted that Eximbank would not take all of $285 million loan; roughly half would have to be sought from private banks under Eximbank guarantee. Newsom noted parenthetically that $285 million covered Arzew liquefaction plant. Total expenditures in project as a whole, by Algerians as well as El Paso, would amount to about one billion. Lucet appeared impressed. Newsom further noted several of tankers required by El Paso would be constructed in French shipyards.

6. Lucet then asked whether there was any significantly new development in US-Algerian political relations. Newsom replied that while commercial and economic ties appeared to be evolving significantly, broader USG-Algerian relations appear to be pretty much same as they had been in the past. We and Algerians talk more to each other than was case a year or so ago, and Algerians now tend to include head of USINT Algiers in more functions than was case in past, most notably in funeral ceremonies for Colonel Chabou. Newsom also noted that Algerians, after delay of more than a year since Secretary Rogers and Foreign Minister Bouteflika had discussed subject, had finally sent senior diplomat to head Algerian Interests Section Washington last December.

7. Lucet expressed appreciation briefing by Newsom. Indicated he would return from Paris around April 21 and would provide Quai views at that time. He felt certain, however, US Embassy Paris already fully informed his government’s interests and concerns this whole subject. END

Rogers

1. Source: National Archives, RG 59, Central Files 1970–73, POL ALG-US. Secret. It was repeated to Algiers. Drafted on April 6 by Blake (AF/N); cleared by EUR/FBX, E/ORF/FSE, and AF; and approved by Blake. As a series of documents indicates, Paris, still in negotiations with Algiers over post-independence expropriations, was not eager to see the United States act on the El Paso Company’s proposed deal with SONATRACH. (Ibid., Nixon Presidential Materials Project, NSC Files, Boxes 677–678, Country Files, Europe, France) In telegram 65768, April 17, the Department sent an oral message from Nixon to President Pompidou indicating that the United States had no desire to impede France in resolving its problems with Algeria, and that there was time for French-Algerian negotiations to be completed before the natural gas deal was finalized. The restoration of political relations with Algeria, Nixon emphasized, would benefit all in the West. (Ibid., Box 678, Country Files, Europe, France, Volume VIII, 4/71–12/71)
2. This 5 page telegram transmitted Secretary Rogers account of the April 6 meeting between Assistant Secretary of State for African Affairs David Newsom and French Ambassador Lucet at which Lucet inquired as to U.S. relations with Algeria. Lucet was particularly interested in the U.S. importation of Algerian liquefied natural gas.