198. Agreed United States-United Kingdom Position Paper1
GUARANTEES FOR MAINTENANCE OF FLOW OF MIDDLE EAST OIL THROUGH PIPELINES
(Agreed US-UK Paper)
Recommended Position
The two Governments recognize that access to Middle East oil will be of increasing importance to the West and that greater guarantees for oil pipeline operations would be desirable. Both Governments will continue to lend appropriate assistance to petroleum transit companies in the defense of their interests under existing transit arrangements. They are also prepared to consider negotiating treaties with transited countries designed to lend stability to new pipeline projects [Page 461] and will consult together to this end. The two Governments will consider whether it is desirable to negotiate similar treaties for the protection of existing pipeline operations.
Discussion
The recent crisis in the Middle East has revealed the vulnerability of both producers and consumers of oil in relation to governments controlling the transit routes from the oil-fields to the markets. In the case of the Suez Canal, the problem is of wider scope than the oil industry and is being handled independently. But the destruction of the I.P.C. pipeline in Syria, and the threat to destroy the trans-Arabian pipeline in the same country, have created a specific problem the solution of which is equally urgent. It is unlikely that oil companies will be prepared to invest large amounts of capital required for expansion of the existing pipeline system unless they can be given better guarantees for the security of the lines than they have hitherto enjoyed. And this difficulty arises at a time when Europe’s requirements of Middle Eastern petroleum are rapidly increasing.
It has therefore been suggested that the governments of the pipeline companies in the Middle East should endeavor to find some means of creating the necessary conditions for expanding investment in pipeline schemes. Of the suggestions so far examined, the most practical seems to be the negotiation of treaties between these parent governments and the governments of the countries in which the pipelines are situated.2 These treaties would seek to extend appropriate protection for pipeline operations. Their substance would be determined on the basis of further study and consultation.
It would probably be easier to begin with a new pipeline rather than with those already in operation, particularly if this pipeline were constructed through a country which had not hitherto been used for the transit of oil. The inter-governmental treaty could then be incorporated in a “package deal”. The I.P.C. are contemplating an early approach to the Turkish Government for the construction of a pipeline across their territory from the oil-field at Kirkuk. This proposal might provide the best opportunity for initiating the suggested series of intergovernmental agreements. The two Governments will consider whether it is desirable to negotiate similar treaties for the protection of existing pipeline operations.
- Source: Department of State, Conference Files: Lot 62 D 181, CF 856. Secret. A cover sheet indicates that the paper was prepared jointly by representatives of the British Embassy in Washington and the Department of State and that, within the Department of State, it was approved in substance by Rountree, Moline, Corbett, Beckner, and Metzger. The paper was one of several agreed position papers done in preparation for the Anglo-American Heads of Government Conference at Bermuda. See the editorial note, infra. The paper was discussed at a meeting of Department of State and British Embassy officials on March 8. The memorandum of the conversation is ibid., Central File, 880.2553/3–857. The recommended position was formally approved by the two governments on March 23.↩
- The text is approved on the understanding that the “countries in which the pipelines are situated” included producing as well as transit countries. [Footnote in the source text.]↩