888.2553/6–1654
No. 477
Memorandum by the Acting Assistant Secretary
of State for Near Eastern, South Asian, and African Affairs (Kennedy) to the Secretary of
State1
top secret
Washington, June 16, 1954.
Subject:
- Status Report on Iran Oil Negotiations
Mr. Hoover is concluding his discussions in London today and is proceeding to Iran. Representatives of the various companies in the proposed consortium will follow by the week end. The following is the current status of the principal problems:
- (a)
- Difficulties regarding the acceptance of an agency type of agreement revolve around the definition of “agent”, which, unless defined, may lead to a conflict with provisions granting the consortium effective control of management. Mr. Hoover and Mr. Phleger are optimistic that wording can be worked out which will protect the consortium’s position and still be acceptable to Iran.
- (b)
- Nationality of consortium—The United States is opposed to British nationality of the operating companies. The consortium will seek agreement for UK holding company, Dutch operating companies, and UK service company, the last to take care of purchases, engineering, etc.
- (c)
- Management of consortium—AIOC has already accepted principle of Dutch managing director with first subordinate to be American, second British, and balance of top management Dutch.
- (d)
- Headquarters of consortium—U.S. companies and Shell firmly support Iranian headquarters. AIOC and French appear still determined on headquarters in London. However, Mr. Hoover thinks it likely their position on this will be modified.
- Drafted by Richards.↩