137. Briefing Memorandum From the Assistant Secretary of State for Inter-American Affairs (Todman) to Secretary of State Vance1


  • Comments of Mexican Foreign Secretary on Gas Price Negotiations

At your request, I called Secretary Roel this afternoon. He told me that President Lopez Portillo wanted us to know that Mexico cannot modify the price that it is asking for its natural gas ($2.60 per 1000 cubic feet) and which was agreed to by the six U.S. gas transmission companies. Roel added that since the U.S. companies had agreed to the $2.60 figure in the letter of intent, the U.S. Government should discuss the price question with them.2 He added that for Mexico to take any further action would not be proper as it would be equivalent to intervening in an internal U.S. affair. He said that Mexico would therefore wait until the U.S. Government worked out this question with the private companies.

The President, Roel continued, had requested him and the Director of PEMEX, Jorge Diaz Serrano, to come to the U.S. if necessary to explain this position to us. He concluded by saying that he does not believe it would do any good for him and Diaz Serrano to come, since they would have nothing to add to the above. However, he would come if we so request. I told him that I would convey this information to you.

  1. Source: National Archives, RG 59, Central Foreign Policy File, P780029–1711. Confidential. Drafted by Simcox.
  2. On August 3, PEMEX signed letters of intent with six American gas companies (Tenneco, Texas Eastern, Florida Gas, Southern Natural Gas, Transcontinental Gas, and El Paso). (Telegram 12968 from Mexico City, August 4; National Archives, RG 59, Central Foreign Policy File, D770279–0998) In telegram 5886 from Mexico City, April 11, 1978, the Embassy reported that Lopez Portillo “spoke of the gas sale in the past tense,” and suggested that “Mexico had been victimized by entering into the letter of intent with the six U.S. companies.” (National Archives, RG 59, Central Foreign Policy File, D780155–0924)