163. Memorandum From the President’s Assistant for National Security Affairs (Brzezinski) to President Carter 1

SUBJECT

  • Letter from Ambassador West

Ambassador West’s latest letter to you makes the following points:

1. As reported earlier, Oil Minister Yamani is now absolutely certain that there will be an oil price freeze at the OPEC meeting on the 20th. However, when asked if the price freeze would extend for a full year, he hedged, noting that market pressures would make a substantial price increase inevitable depending on how the United States and the European Community cope with their energy needs and problems.

2. Yamani said he had no assurance that Saudi Arabia would increase its production substantially. In fact, he felt there was no way they could or would go to 16 million barrels per day as projected by our CIA report for 1982. There is a tough internal fight within the Saudi Government about going even to a level of 10 or 12 million barrels per day.

3. This fight is becoming more stringent because of the Saudi takeover of ARAMCO.2 At the present time it requires approximately $1 billion in capital expenditures to increase production by a million barrels per day. With the takeover, this capital expenditure will probably have to be included as part of the government budget and will therefore fall under the Finance Minister or Minister of Planning, rather than Yamani. Both Finance Minister Aba al-Khayl and Planning Minister Hisham Nazer are among those opposed to an increase in production.

4. Ambassador West suggested that Yamani come back through the United States after the Caracas conference (assuming it is successful) for a series of interviews and public appearances which might help your energy program. He believes this would be useful to US-Saudi relations and might even stimulate the stock market.

5. Ambassador West suggests that Mrs. Carter make a courtesy call on Queen Efat, King Faisal’s widow, during the stop in Riyadh. [Page 536]This matter has been handled in the normal preparations for the trip. Queen Efat will be at the dinner for Mrs. Carter and no separate call is required.

A typed version of his hand-written letter is at Tab A.3

  1. Source: Carter Library, National Security Affairs, Staff Material, Middle East, Subject File, Box 81, Saudi Arabia: 11–12/77. Confidential. Sent for information. A stamped notation on the memorandum reads: “The President has seen” and Carter initialed it. Sent under a December 19 memorandum from Sick to Brzezinski in which Sick recommended that Brzezinski forward the memorandum to Carter.
  2. Saudi Arabia acquired a 60 percent share in Aramco in 1974 and took full control in 1980.
  3. Attached but not printed are the typed and handwritten texts of West’s December 2 letter.