Foreign Relations of the United States, 1969–1976, Volume XXXVII, Energy Crisis, 1974–1980

147. Memorandum From the President’s Assistant for National Security Affairs (Brzezinski) to Secretary of Energy Schlesinger¹

Washington, April 14, 1978.

SUBJECT

• The President’s Conversation With Venezuelan President Perez: Follow-up

In the President’s second conversation with Venezuelan President Carlos Andres Perez on March 29,² the President said he thought Perez’ idea for a long-term supply arrangement was a good one, and that he would aggressively pursue it when he returned. Perez also explained the mutual interest of both countries in developing the Orinoco, but said that it was politically impossible for Venezuela to deal directly with the U.S. oil companies. He suggested an interesting proposal whereby the U.S. companies and government could work with the Canadian government’s oil company to finance and develop technology for the Orinoco. The President said that the energy program had highest priority, and that Venezuela should try to improve its investment climate so that the oil companies would be less reluctant to invest.

The President was also asked to respond to two specific concerns: Congressional plans to increase domestic refining capacity and the possible violation of a U.S.-Venezuelan commercial agreement on tariffs and oil.

Could you please coordinate with State and prepare a short paper for the NSC dealing with the following issues:

—possibilities for a long-term supply agreement with Venezuela;

—Congressional plans to increase the domestic refining capacity and its implications for Venezuela;

—the possible violation of a 1972 U.S.-Venezuelan commercial agreement on tariffs and oil (ref: Caracas 3048);³

—whether the USG would purchase Venezuelan residual oil for our strategic reserve;

—and, whether there is anything that we can do as a government to encourage U.S. participation in the research and development of the Tarbelt, either official or private.

Please provide this report to the NSC by May 1, 1978.⁴

Zbigniew Brzezinski

1. Source: Carter Library, National Security Affairs, Staff Material, North/South File, Box 47, Pastor Country Files, Venezuela, 3–4/78. Confidential. A copy was sent to Vance.
2. See Document 146.
3. Not printed. (National Archives, RG 59, Central Foreign Policy Files)
4. Schlesinger forwarded the paper, “Energy Issues Raised During The President’s Trip to Venezuela,” to Brzezinski on May 17. The issues covered included: 1) The Question of a Long Term Supply Agreement, 2) Congressional Actions to Protect U.S. Refiners, 3) Alleged U.S. Violation of a 1972 U.S.-Venezuelan Exchange of Notes, 4) Residual Fuel Oil for the Strategic Reserve, 5) Possible USG Actions to Aid in Research and Development of the Orinoco Tarbelt, 6) Public Sector Cooperation, 7) Examination of Arrangements Involving Private Sector Participation, and 8) Next Steps. (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 85, Venezuela, 1/77–12/78)