880.2553/3–2654
No. 287
Memorandum of Conversation, by Richard Funkhouser and David Robertson of the Office of
Near Eastern Affairs
Subject:
- Oil Discussions with British Embassy Representatives
Participants:
- Harold Beeley, Counselor, British Embassy
- Angus Beckett, Petroleum Attaché, British Embassy British Legal Representative
- Mr. Byroade—NEA
- Mr. Robertson—NE/E
- Mr. Penniman—PED
- Mr. Hart—NE
- Mr. Funkhouser—NE
Mr. Beeley addressed himself to two principal points: (a) the status of 1952 U.K. note recommending close inter-governmental cooperation on Middle East oil problems and (b) the specific problem of pipeline transit agreements with Middle Eastern states. Counselor Beeley recalled that Assistant Secretary McGhee had suggested an Anglo–American statement in 1951 setting forth joint U.S.–U.K. oil policy for the Middle East. The joint declaration [Page 662] would throw support behind the 50–50 agreements. While this course had not been considered expedient by the two governments, Mr. Beeley stated that the U.K. was strongly in favor of coordinating efforts with respect to Middle East oil problems. Consequently, they had put their position into a formal note to the State Department in January 1952.1 No reply had ever been received from the State Department and Mr. Beeley asked if it would not be appropriate for the U.K. Government to formally present another note continuing the latest thinking on this problem. He also observed that Mr. Eden had mentioned the desirability of continuing close consultations in recent discussions with the Secretary.
A Departmental representative provided additional background information which included the points that: (a) the U.S. Government discouraged the idea of a joint declaration as it might provide an upsetting factor rather than stabilizing factor in the Middle East; (b) the British note had not been answered due to difficulty which the Department had found in trying to formulate its position, particularly at a time when the Justice Department was initiating action against U.S. companies as well as British subsidiaries in the United States for violation of the anti-trust act; and (c) the Department had, however, recognized the need for close exchange of information on the Governmental level and had instituted monthly meetings with representatives at the British Embassy for this purpose. Mr. Beeley was apparently not aware that these meetings had been called from time to time at either the request of PED or the British Embassy and it was concluded that continuation of these informal meetings would be satisfactory to both parties without the necessity for a new formal note from the U.K. Government.
Regarding the specific problem of pipeline transit problems, Mr. Beeley stated that Middle Eastern states might endeavor to play off the British and American pipeline companies in the area against each other and felt that it would be in the interest of both the United States and Great Britain to try to arrive at a position which would serve to stabilize this situation in the area. He recalled that earlier his Government had suggested that IPC and Tapline get together to work out common agreement on their position with the countries transited. However, the anti-trust position of the Department of Justice had precluded the American companies from participating. Alternatively, the Foreign Office had suggested that each Government obtain necessary information from their respective oil companies and endeavor to arrive at a formula at a Government level. When the two Governments had agreed, [Page 663] they could each advise the companies concerned. Departmental representatives stated that the American companies had been contacted but were unable to come up with any conclusions with respect to a desired formula for governing transit payments. They added that the attitude of the Department of Justice may have a bearing on the willingness of the companies to participate in any plan whose purpose was to agree on a formula for transit payments.
Mr. Byroade stated that it was possible that in one or two decades the entire complex in the Near East may change from the present pattern of private company operations to a buyer/seller arrangement with the country owning the resources selling direct to distribution organizations. He added that some high level planning must be undertaken, possibly including new Congressional legislation, if the American oil industry position is to be preserved in some way acceptable to the countries concerned. Mr. Beeley observed that the Anglo–American oil agreement, had it been concluded, could have taken cognizance of just such a problem.
Mr. Beeley asked if Aramco could be made aware that Tapline back payments to Saudi Arabia might cause Iraq to increase its demands from IPC. He was informed that nothing Aramco was doing in this respect would prejudice the position of IPC.
Mr. Beckett confirmed that U.K. Governmental requests to British companies had been made concerning their views on the pipeline problem but that no conclusions had been reached by the British companies, let alone the U.K. Government.
- Not found in Department of State files.↩