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a. Schedule aggregate exports from the Middle Eastern area to meet expanding demand. To realize this end it is necessary to work out a flexible schedule of probable import requirements of Eastern Hemisphere markets. This schedule must make allowance for probable rate of annual increase in consumption, for indigenous production, and for probable imports from other sources of supply. The aggregate volume of export so determined should be allocated among the various producing countries on some equitable basis.

b. Assure adequate representation of consuming countries in the determination of export schedules and price arrangements.

c. Consider problems arising in connection with the distribution of Middle Eastern petroleum, all conclusions reached to be consistent with any relevant international understandings.

d. Assure equitably distributed economic benefits to all the producing areas affected.

e. Abolish restrictions on production, refining, transportation and exports of petroleum from concession reserves held solely or jointly by American and/or non-American interests, in so far as inconsistent with the terms of the contemplated agreement.

f. Provide that the two countries will make their petroleum resources available to each other and to all friendly countries in emergencies or for security reasons, consistently with whatever collective security arrangements may be established.

2. Furthermore, the understanding should include the following:

a. That the two Governments will propose to other interested countries a multilateral petroleum convention based upon the principles adopted in the bilateral agreement; and

6. That this multilateral convention will establish an International Petroleum Council, and indicate the views of the two Governments concerning the appropriate composition, functions and purposes of such a Council.

890F.6363/143 : Telegram The Secretary of State to the Minister Resident in Saudi Arabia

(Moose)

35

WASHINGTON, June 27, 1944-5 p. m. 116. The inquiry of the Acting Foreign Minister,85 reported to us in your no. 178 of June 23,86 whether there have been any recent developments in connection with the proposed trans-Arabian pipeline should be answered in the negative. For your confidential background information, there is an informal understanding within this Government to the effect that no further action will be taken on an Arabian pipeline as a governmental project until after the completion of the Cabinet-level conversations with the British and such subsequent public hearings as the Special Senate Oil Committee may wish to hold.37

36 Yusuf Yassin. 36 Not printed.

HULL

890F.6363/10–1644 : Telegram

The Secretary of State to the Minister in Saudi Arabia (Eddy)

WASHINGTON, October 16, 1944-1 p. m. 213. Aramco is instructing its Jidda representative to acquaint you with information contained in company's cable no. 57 from Davies to Ohliger 38 regarding pipeline reconnaissance party.39

Although Aramco desires you to be fully informed of these plans, it is not expected that it will be necessary for you to take any action with regard thereto. However, should the King or Saudi Arabian officials inquire of you regarding the subject, you may state that it is purely an Aramco matter in which this Government is not involved, but that this Government has been fully informed of the company's plans and entertains no objection to them. In the event it should appear necessary to take any active measures to assist the company

37 Between March 31 and June 13, 1944, the Senate Special Committee Investigating Petroleum Resources held a series of eleven executive sessions regarding the proposed pipeline. The Committee's intermediate report, issued on April 7, 1945, stated: “Quite apart, however, from constitutional and legal principles, the opinion began to develop, as a result of the committee's investigation, that the determination of a sound and long-range national petroleum policy compelled the utmost care and public consideration prior to commitment on the part of the United States along the lines of the pipe-line proposal. Therefore, the committee unanimously concluded that the President of the United States and the Secretary of the Interior should be advised of these views. The chairman took action accordingly.

"On June 12, 1944, the President wrote to the chairman of the Committee that he was asking the Secretary of the Interior to enter into no contract relating to an Arabian pipe line without giving the committee 30 days' notice in advance. On the following day the Secretary of the Interior ... appeared before the committee to testify, in executive session, in relation to the pipe line and the pending negotiations with the British looking toward an Anglo-American oil treaty. At the conclusion of the Secretary's testimony, it was understood by the committee that, before any contract relating to the pipeline would be entered into, the committee would receive reasonable notice thereof while Congress was in session.” (Senate Report No. 179, 79th Cong., 1st sess., p. 2.) The question of building a pipeline across Saudi Arabia was handled thenceforth under private auspices.

* Floyd Ohliger, General Manager for Aramco in Saudi Arabia.

80 In telegram 2870, October 16, 1 p.m., to Cairo, the Department stated: “The Arabian American Oil Company plans to send soon a party of eight to the Near East to conduct a short preliminary reconnaissance, chiefly aerial, to ascertain the most advisable and best route in general, as well as terminus, of such pipeline as might be constructed, if and at such time as conditions permit, to the Mediterranean from the Persian Gulf. Although the company is not planning at present to construct the pipeline, it is making the reconnaissance on the basis of the company's own initiative so that it will be prepared to build the line later should circumstances warrant. When the route is decided upon, the company intends to negotiate with the governments involved to obtain the right, but without obligation, to construct the line." (800.6363/10–1144)

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in this matter, you should report fully to Department and request instructions.

HULL

890F.6363/11-1044 : Alrgram

The Minister in Saudi Arabia (Eddy) to the Secretary of State

Jidda, November 10, 1944–9 a. m.

[Received November 22—5 p. m.] A-74. During visit of Aramco officials to Riyadh, October 18–20 (ReLegs 325, October 30, 5 p. m.40), King Abdul Aziz consented readily to Aramco survey 41 of possible pipe-line route to Mediterranean (ReDepts 213, October 16, 1 p. m.). King had no objection to use of airplanes for survey. Aramco's suggestion of route via AbqaiqYuriya Al Ilya-Hafar Al Batn was dismissed by King who said best route would be Abqaiq-Abu Hadriya, keeping sand belt always on left. He had obviously formed decided opinions in advance of any surveys. Equally obvious he is hospitable and friendly to construction of pipe-line.

Aramco party reports that King's close adviser, Khalid Bey al Gurgani, formerly always aloof in manner, and long reported hostile, was friendly and openly cordial for first time.

EDDY

890F.6363/11-1044
Memorandum by the Director of the Office of Near Eastern and

African Affairs (Murray) to the Under Secretary of State
(Stettinius)

[WASHINGTON,] November 23, 1944. MR. STETTINIUS: As you may perhaps have noticed from airgram no. 74 of November 10 from our Minister at Jidda, King Ibn Saud "consented readily” to permit the survey of a possible pipe-line route to the Mediterranean 42 by the Arabian American Oil Company during a visit of officials of that company to Riyadh last month.

40 Post, p. 751. « The results of the survey were embodied in "Prospectus for a Crude Oil Pipe Line from Oil Producing Regions in Saudi Arabia to the Mediterranean Sea, May 31, 1945”, a copy of which was transmitted to the Department by the Ambassador in Egypt in despatch 337, April 23, 1948 (890F.6363/4-2348).

"In a memorandum of November 25 in reply the Under Secretary of State said that he had noted favorably the King's consent to permit a survey of a possible pipe-line route across Saudi Arabia.

This is good news and a further indication that the King is disposed to play ball with us in everything that pertains to the development of our great oil concession in his country.

WALLACE MURRAY

811.6363/1-2245 Memorandum by the Assistant Secretary of State (Clayton) to

President Roosevelt 43

WASHINGTON, [undated.] The following comments will indicate, I believe, that foreign oil matters are in hand and therefore need not receive attention at the expense of other matters at your forthcoming meeting abroad.

Our foreign oil policy should seek the development of Middle Eastern oil for peacetime commercial purposes in order to promote, for our national security, the relative conservation of strategically located Western Hemisphere supplies. Since there is sufficient Middle Eastern oil to supply world markets for the forseeable future, this Government should not look upon those distant fields as security reserves but as sources of peacetime supplies for Eastern Hemisphere markets so that oil exports from the Western Hemisphere may be curtailed. Accordingly, we should endeavor to (1) safeguard Middle Eastern concessions now held by American companies, and (2) encourage the companies to expand Middle Eastern production.

As you know, in the Anglo-American petroleum negotiations the British and ourselves agreed upon principles in line with this objective. These were embodied in the Anglo-American oil agreement,44 and it is our intention to preserve them although the agreement will be revised in early renegotiations with the British 45 to remove certain ambiguities.

The British and ourselves have declared our intention of working toward a multilateral oil agreement with other interested governments, including of course the Russian Government. However, it is felt that oil discussions should not be held with that Government until we can determine more clearly the basis on which governmental oil sys

* Not sent; this memorandum was drafted in the Petroleum Division on January 19, 1945, to brief President Roosevelt on American foreign oil policy in connection with his forthcoming conference with British Prime Minister Churchill and Soviet Premier Stalin at Yalta. In an attached memorandum of January 22, 1945, to John E. Orchard, Special Assistant to Mr. Clayton, the Assistant Chief of the Division of Coordination and Review (Daniel) stated: "For reasons which you will understand we are not sending anything more to the White House for the President's special attention." (811.6363/1-2245) President Roosevelt left Washington on January 22.

" For the text of this unperfected agreement of August 8, see Department of State Bulletin, August 13, 1944, p. 154; for negotiations leading to the agreement, see vol. III, pp. 94 ff.

45 See footnote 36, ibid., p. 127.

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tems and privately owned oil industries can meet. The Russians hold no concessions in the Middle East, the concessions there, as you know, being controlled by the British and ourselves, and the Anglo-American agreement should take care of all British-American oil problems in the area. When the Russians recently sought a concession in Iran, while American and British interests were also negotiating there, the Iranian Government decided to grant no new foreign concessions. 48 We recognized that such a decision rested solely with the Iranian Government, but expressed the hope that if in future Iranian concessions should be granted to foreigners, American interests would have equal opportunity with the nationals of other countries.

We are now actively developing with the British a program to assure oil supplies to France and other liberated areas. As soon as the program has been sufficiently developed, it will be laid before other interested governments.

W[ILLIAM] L. C[LAYTON]

46 See telegram 895, December 3, from Tehran, p. 479.

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