91. Telegram 4519 From the Embassy in Bolivia to the Department of State1 2

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USCINCSO for Polad


  • Ovando Says Gulf Settlement Approved

1. I am pleased to report that President Ovando told me last night, together with Gulf’s negotiator, Tom Lumpkin, that he had fully approved the report and recommendation for settlement made to him a few minutes earlier by the GOB Commission which had been negotiating with Gulf. He asked Lumpkin to meet with MinFinance Sanchez de Lozada today to assist with draft of supreme decree which will embody the agreement. He said he intends to have full Cabinet consider and approve the decree next Tuesday, and to have decree published on Wednesday, Sept. 9.

2. The occasion was a party at the Finance Minister’s home. Present in addition to the host and the President were the Foreign Minister, the Ministers of Energy and of Mines, the Minister Secretary to the President, and other members of the Commission, including General Ortiz and high officials of YPFB and Ministries of Energy and of Mines; also, DCM Barnebey and myself.

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3. The President arrived about an hour after the others and, upon entering the room, rushed across it to engage in a prolonged, back-pounding embrace with Lumpkin; the same being repeated upon his departure more than an hour later. Quite a contrast here, when for at least a year Gulf has been portrayed as a black-tentacled octopus, or as a sinister-looking scrooge-type with a hairy wart on a long pointed nose, complete with shylock cape and dripping talons. But all was different last night; spirits were light, good fellowship prevailed and seemed relieved. Even Gulf-hating communist Enrique Mariaca (WHO GOB petroleum consultant) seemed not to have a care.

4. In private conversations I told the President that I thought Bolivia would gain much favorable recognition for the statesmanlike way in which it has shown its respect for international obligations, while at the same time serving the dictates of Bolivian judgment as to the needs of nationalism and sovereignty. I hope and recommend that if the settlement is perfected next week, as now seems entirely probably, that Washington will do what it can to inspire appropriate recognition.

5. While all present last night seemed vastly pleased and relieved with what they had achieved, several, including Ovando, mentioned to me that they expect to be attacked for the settlement by the extremists, the students, and in general by all those politically on the outside. Nevertheless, they expressed determination to defend the agreement and see it through. Among other things, the President is most anxious for the first cargo of oil to leave Arica before Sept 26, the first anniversary of his government; and, assuming the decree appears on schedule next week, Gulf should be able to arrange this.

6. After the President departed, the party became quite jovial for a while before breaking up. In this period, the leader in letting off steam was the usually taciturn Minister of Mines, Oscar Bonifaz, who came into the negotiation late and for a time proved to be most difficult. Apart from Ovando’s leadership and the quiet work of Energy Minister Capriles, much credit must go to Finance Minister Sanchez de Lozada, who seems to have been a prime mover on the Bolivian side. He, incidentally, [Page 3] will be in Washington late next week and it would be appropriate for Dept officers to recognize his role in this matter. Finally, much credit must also go to the Gulf team, and specially Lumpkin, whose skill, tact, patience and consideration were frequently commented upon with genuine appreciation by those present last night and, of course, publicly recognized by the President in his friendly attitude toward Lumpkin.

7. This being Bolivia, it is always possible that tomorrow’s news may disrupt today’s. However, as of this moment things look better on Gulf’s problem than we perhaps had any right to expect, considering the general political turmoil which prevails, we are hopeful that the President’s word and timetable will be adhered to, and believe the Dept should have a feeling for the spirit of the matter, as of now.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 770, Country Files, Latin America, Bolivia, Vol. 1, 1969–1970. Confidential. Repeated to Buenos Aires, Madrid, Lima, and USCINCSO. Gulf Oil and Bolivia reached an agreement on September 1. (Telegram 4428 from La Paz, September 2; ibid.)
  2. Ambassador Siracusa discussed a meeting held with President Ovando the previous evening. Siracusa concluded that the international community would look favorably on the Gulf Oil settlement. Ovando stated that, even though opponents in Bolivia would criticize the settlement, he would uphold it.