207. Memorandum of Conversation1
SUBJECT
- Kuwait Oil Problems
PARTICIPANTS
- His Excellency Abdul Rahman al-Ateegi, Kuwaiti Foreign Ministry Under Secretary
- His Excellency Talat al-Ghoussein, Ambassador of Kuwait
- Ambassador Raymond A. Hare, Assistant Secretary, NEA
- Mr. Harrison M. Symmes, NE
- David Korn, NE
Ambassador Hare said he was pleased to note that U.S.-Kuwaiti relations are very good. He hoped that the current conversations between the oil companies and the GOK were working out well.2
Mr. Ateegi said the oil question is a very irritating and delicate problem. The companies must make an effort to understand the situation in Kuwait and be prepared to reach a compromise. The companies, Mr. Ateegi stressed, must be very careful. They think the Kuwaiti Minister of Foreign Affairs and Finance is taking an extreme position. This, Mr. Ateegi emphasized, is a dangerously false assumption. Mr. Ateegi complained that, while oil offtake was rising in Saudi Arabia, Iran and other countries, it had increased hardly at all in Kuwait. The companies had furnished no satisfactory explanation for this. Despite these difficulties, Mr. Ateegi felt that there was some hope for an agreement.
Ambassador Hare said experience had taught him that such matters as oil offtake were very complicated. As far as details were concerned he felt that the oil companies were best qualified to speak for themselves. However it might be noted that even the Shah of Iran, despite an increase in Iranian offtake, was dissatisfied with the oil companies on this score. Offtake depends upon an extremely complex set of factors which only an expert can understand. For this reason it is necessary to have thorough talks before reaching any conclusions.
Mr. Ateegi said the oil companies’ failure to increase offtake would not really be an issue if conditions between the GOK and the companies were normal. However, under present circumstances people in Kuwait [Page 397] interpret the companies’ action as punishment or pressure, thus making it a very sensitive issue.
Ambassador Hare said that while there had always been and will always be differences of views, over the years the company-Government relationship in the oil producing countries had been a very constructive and beneficial one. This is another reason we hope the dialogue can be maintained.
Mr. Ateegi said the GOK wished to maintain the dialogue but felt that the matter would be made much easier if the companies showed greater understanding. The GOK does not want to enact laws or regulations which would “upset” the companies. Mr. Ateegi suspected, however, that the fact that the companies had not sent their highest level representatives to the current talks in Kuwait meant that they are not thinking seriously about solving the problem. While he could not state categorically that this was the case, Mr. Ateegi said that the companies sending their “third ranking” representatives might be interpreted to mean that they are not really ready to come to an agreement. Mr. Ateegi indicated that the Kuwaitis did not regard the company representatives currently in Kuwait as of sufficient rank to negotiate with a Minister. Mr. Symmes remarked that while Gulf Oil’s Elston Law may not be the highest level of company representation he is probably more knowledgeable and better able to negotiate on the matters at issue in Kuwait than someone more senior.
- Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 6 KUW. Confidential. Drafted by David A. Korn (NEA/NE).↩
- For documentation on U.S. international oil policy, see Foreign Relations, 1964–1968, vol. XXXIV, Documents 175 ff.↩