1944, covering the proposed pipeline from the Persian Gulf area to a port on the eastern Mediterranean, with the revisions made therein at the meeting of the Directors of the Petroleum Reserves Corporation on January 27, 1944.25 Sincerely yours, 800.6363/1506c: Circular airgram CORDELL HULL The Acting Secretary of State to Certain Diplomatic Representatives in the American Republics 26 WASHINGTON, February 17, 1944-7 p. m. For your strictly confidential information, we are actively engaged in developing a firm post war foreign oil policy. Exploratory conversations will soon be initiated between this Government and the British Government on problems of mutual interest concerning Middle Eastern oil. It is quite possible that these conversations will lead to international oil discussions of a broader scope. On February 2, the Secretary met with the heads of the American companies operating abroad and with the President of the American Petroleum Institute and advised them of the forthcoming conversations with the British and indicated the Department's interest in foreign petroleum matters. American oil companies with foreign interests are being encouraged to present their views and problems to the Department, and are discussing with the Department their interest in and endeavors to obtain foreign concessions. The Department is informing them that this Government, because of the wartime and long-range importance of oil, favors the development of foreign oil resources and welcomes the participation of American companies in that development. This Government takes the clear position that, if any country grants to foreigners rights concerning the exploration for or development of petroleum resources, the nationals of the United States should be accorded equal opportunity with the nationals of any other country to obtain such rights. With this end in view, if the occasion arises, you should render all appropriate assistance to representatives of 25 At a meeting of the Board of Directors of the Petroleum Reserves Corporation on February 5, 1944, Mr. Ickes submitted an additional paragraph (No. 11) which had been drafted at President Roosevelt's direction. Mr. Rayner notified Mr. Ickes the same day of the approval of the additional paragraph by the Secretary of State (800.6363/2-544). The date January 24 was retained on the outline as finally approved. A summary was released on February 6, 1944, by the Department of the Interior (800.6363/2-644); for substance of the press release, see telegram 437, March 3, 1 p. m., to Cairo, p. 24. The texts of the outline and of the press release are printed in the Congressional Record, vol. 90, pt. 2, p. 1466. 26 Sent to the diplomatic representatives in Colombia, Ecuador, Paraguay, and Venezuela. American oil companies who may be seeking petroleum concessions or rights in the country to which you are accredited. This assistance should include such introductions by you as may facilitate proper contacts between the companies' representatives and government officials and other persons where desirable. To the maximum extent appropriate, in the light of the foregoing policy, you should indicate an interest in the matter to government officials. The Department desires you to maintain such contact with any oil company representatives, who may be engaged in the above-indicated endeavors, as will encourage them to keep you advised of their activities. The Department wishes to be kept fully and currently informed of any action taken by the Embassy in line with the foregoing. STETTINIUS [For the texts of messages exchanged by President Roosevelt and British Prime Minister Churchill on February 20, 22, 24, and March 4, concerning the ownership of oil resources in the Middle East, see volume III, pages 100, 101, 102, and 103; see also the portion of a message of March 3 in footnote 10, ibid., page 103.] 800.6363/1515a: Telegram The Acting Secretary of State to the Minister in Egypt (Kirk) WASHINGTON, March 3, 1944-1 p. m. 437. There is given below in substance the press release of February 6, issued by Secretary Ickes regarding the construction of a pipe line in the Middle East: "An Agreement in Principle with the Arabian American Oil Company and the Gulf Exploration Company was signed by Secretary Ickes with the approval of the President and of the State Department and upon the recommendation of the War and Navy Departments, the Joint Chiefs of Staff and the Army-Navy Petroleum Board, the purpose of which is to make provision for the construction of a pipe line from the Persian Gulf area to a point on the Eastern Mediterranean and to provide for United States Naval and Military forces a reserve of one billion barrels of oil. The Government will determine the most feasible plan for operation of the facilities and will retain supervision thereof. The entire cost of construction plus interest, estimated to be between $130,000,000 and $165,000,000, is guaranteed by the companies and will be returned to the Government within a period of 25 years. The pipe line facilities, subject to certain stipulated obligations, will be available to other oil producers and shippers in addition to those signing the Agreement. The companies agree to maintain a crude oil petroleum reserve of 1 billion barrels or 20 percent of the total crude reserve if they [there] are less than 5 billion barrels to be available for Government purchase for military or naval use at 25 percent below Persian Gulf area market price or of price of similar United States crude oil, whichever is the lower. The Government is not obligated to take any of this oil but has right to do so at any time for a period of 50 years and also has an option to purchase all crude petroleum and petroleum products thereof produced by the companies in times of war or other national emergency. Further, the Agreement provides that the companies will not sell petroleum or petroleum products to any Government or nationals of any Government when, in the opinion of the State Department, such sales would be unwise in the light of United States foreign policy and requirements of collective security. The companies also agree that they will give notice to the State Department and Petroleum Reserves Corporation before negotiating with governments of any foreign countries for the sale of petroleum and petroleum products from their concessions in Saudi Arabia and Kuwait. The Petroleum Reserves Corporation does not propose to compete with private oil industry of the United States. Its purpose is to promote that industry, to further the interests of the people of the United States, and to promote the interests of the governments and of the peoples of the areas concerned. The agreement is conditioned upon obtaining the sanction of the rulers of Saudi Arabia and Kuwait. In addition, the sanction would be obtained of other interested foreign governments, including those of Trans-Jordan and Palestine." 27 Repeat to Jidda, Jerusalem and Baghdad.28 Copies of press release and the Outline of Principles of Proposed Agreement have been sent air mail.20 STETTINIUS "For comments on the proposed pipeline made before the House of Commons by the British Secretary of State for Foreign Affairs (Eden) on February 9, March 1, and April 26, 1944, see Parliamentary Debates, House of Commons, 5th series, vol. 396, col. 1744, vol. 397, col. 1434, and vol. 399, col. 785. In telegram 561, March 9, 5 p. m., the Minister in Egypt reported a statement by the Egyptian Minister of Commerce and Industry before the Chamber of Commerce the previous night that the Egyptian Government had not been officially informed of the project and that there had been no negotiations on the subject between the Egyptian and American Governments (800.6363/1522). 28 Also repeated to Tehran with the following added: "Referring to your 122 of February 23, the foregoing may be brought to attention of Prime Minister." (800.6363/1515a) No. 122 stated: "Would appreciate being informed of nature of reply which may be made to Prime Minister in response to his request for information concerning proposed new oil pipe [line] from this area to Eastern Mediterranean." (800.6363/1501) 29 Instruction 697, February 19, not printed; copies of the enclosures were also transmitted the same day to Jidda and Baghdad in instructions 115 and 142, respectively. 554-184-65-3 WASHINGTON, March 21, 1944-11 p. m. The following relates to both the proposed pipeline and the forthcoming conversations with the British on oil. For your confidential information, while the proposed pipeline, if constructed, would have a direct relation to any agreement that may be arrived at with the British on oil, it originated as an entirely separate proposal from the conversations. As indicated in Secretary Ickes' press release, a summary of which we sent you, the proposed pipeline would start in Saudi Arabia with gathering systems to the Arabian and Kuwait oil fields and would presumably follow the most direct route feasible to an undetermined port on the Eastern Mediterranean. It is proposed that the Government would build, own, and arrange for the operation (presumably by the companies) of the line, although, for your strictly confidential information, the way is left open for a reexamination after the emergency period of the question of ownership. The Agreement which has been signed by Secretary Ickes with the American companies operating in Saudi Arabia and Kuwait, and which was referred to in the press release, is an Agreement on Principles only. No definitive contract for the construction of the pipeline has been signed, and there has developed considerable opposition to the line in Congress and on the part of the American oil industry. We contemplate that no positive action will be taken concerning the construction of the pipeline, including the surveying of possible routes, until the matter has been properly cleared with all interested governments in the area. However, the matter will not be discussed with such governments until there is no longer any question concerning the actual construction of the line. You have been informed by Radio Bulletin concerning the Acting Secretary's announcement regarding the forthcoming conversations with the British (Department's press release of March 731). As indicated in that statement, there will be preparatory technical discussions between British and American experts on oil problems of mutual interest to the two Governments. It is planned that these discussions will lead as rapidly as possible to conversations between high level groups representing the two Governments. The Secretary of State has been appointed by the President as chairman of the American group at the high level. 30 Sent to the diplomatic representatives in Egypt, Iran, Iraq, and Saudi Arabia; the representative in Egypt was directed to repeat the message to the representative in Palestine. 81 Department of State Bulletin, March 11, 1944, p. 238. It is contemplated that these conversations will be entirely between the British and ourselves. However, the Acting Secretary's announcement (Department's press release of March 7) specifically stated that should these conversations lead to conclusions, no decisions affecting producing areas will be taken without consultation with the governments of the countries concerned. Moreover, the Acting Secretary announced that this Government is at all times ready to discuss economic problems with any other friendly country concerning petroleum questions of mutual interest. You should endeavor to see that the Department's release and particularly these statements are given adequate publicity. Also, you should bring them to the attention of the authorities in such manner as you think advisable. We will endeavor to keep you advised concerning any developments of which you should be aware in regard to either the pipeline or the discussions with the British. HULL 811.6363/4-1144 Memorandum by the Inter-Divisional Petroleum Committee of the Department of State 32 FOREIGN PETROLEUM POLICY OF THE UNITED STATES [WASHINGTON,] April 11, 1944. I OBJECTIVES OF UNITED STATES FOREIGN PETROLEUM POLICY 1. The "equal access" clause of the Atlantic Charter should be implemented in respect of petroleum. 2. General recognition should be achieved of the principle of equal opportunity for American enterprise in exploration for additional 32 A report entitled Wartime Evolution of Postwar Foreign Oil Policy, prepared on May 29, 1947, in the Department of State, stated: "Beginning in December of 1943 a working group of economic and political officers in the Department, known as the Inter-divisional Petroleum Committee, met rather frequently to consider policy documents and various drafts of an Anglo-American agreement and of an annotated agenda for Anglo-American discussions. "During the period of activity of this Inter-divisional Petroleum Committee the President established on February 15, 1944 a 'Cabinet Committee' to prepare for, directly or through designees, petroleum conversations with the Government of the United Kingdom. Secretary of State Hull was Chairman and Secretary of Interior Ickes was Vice Chairman of this Committee. The Cabinet Committee in turn established on April 1, 1944 the 'Interdepartmental Petroleum Committee' to consist of personal designees of the various members of the Cabinet Committee. The function of this Interdepartmental Committee was to examine and discuss documentation relative to the objective of the AngloAmerican discussions. "The Inter-divisional Petroleum Committee of the State Department produced a policy document entitled 'Foreign Petroleum Policy of the United States'. A first draft of this document dated approximately February 22, 1944 was con |