780.022/3–1054

No. 1548
Memorandum of Conversation, by the Officer in Charge of Arabian Peninsula-Iraq Affairs (Fritzlan)

secret

Subject:

• Buraimi Dispute: Aramco’s Interest in latest British Proposals.

Participants:

• Mr. George Ray, General Counsel of Aramco
• Mr. Chapman, of Aramco
• NEA—Mr. Byroade
• NE—Mr. Hart
• NE—Mr. Fritzlan

[Page 2584]

Mr. Ray had just returned from Saudi Arabia and wished to acquaint the Department with recent developments in respect to the latest British proposals for settlement of the Buraimi dispute. (See Department’s telegram to Jidda No. 246 of February 161 and London’s despatch 2768 of February 15, 1954.2) Mr. Ray indicated that these developments had serious implications affecting Aramco’s position in Saudi Arabia.

He began his statement with the remark that the Department had informed Aramco, during a recent conversation between Messrs. Davies, Duce, Young, Hart, and Fritzlan, at which time the British proposals were discussed, that according to the British both the Saudi Arabian Government and Aramco had discussed with them questions relating to an oil concession in the disputed areas of the Trucial Coast. Mr. Ray added that Aramco had not been able to find evidence of any such discussions.

Mr. Byroade stated that in December 19523 Prince Feisal had informed him that the Saudis were not interested in oil in the disputed area but in tribesmen who had indicated their allegiance to Ibn Saud, and that he (Feisal) personally was prepared to see the British obtain an oil concession in any of these areas which may be awarded to Saudi Arabia if this should serve to remove British claims to Buraimi. Mr. Byroade mentioned this as indicative of the thinking at that time of Prince Feisal and perhaps other members of the Saudi Arabian Government.

Mention was then made of conversations in the Department and in London with Mr. Duce, Vice President of Aramco, concerning Aramco’s interest in oil in the disputed area. Mr. Ray’s attention was drawn to a conversation with Mr. Duce in the Department on April 3, 1953,4 concerning which the memorandum reporting the conversation attributes to Mr. Duce the statement that “Aramco had no present intentions to seek oil in Buraimi, or any other disputed area, and that the company had informed King Ibn Saud that if at any time it would alleviate his boundary problems the company would renounce its concessionary rights in disputed territories.” Reference was also made to the statement made by Mr. Duce at a luncheon on April 16, 1953, in London, attended by Mr. Ross, Head of the Eastern Department of the Foreign Office, [Page 2585]Messrs. Anderson and Stebinger, Jersey and Socony Directors of IPC, and Mr. Palmer of the U.S. Embassy, to the effect that “Aramco had no particular interest in the disputed areas. The undisputed portions of its concession were already sufficiently large to provide for its requirements. He (Duce) had, in fact, personally told Prince Feisal that Aramco would be willing to forego any claims which it might have to the disputed areas if that action would assist in promoting a settlement. He wished to tell the same thing to Mr. Ross . . .” (Quoted from memorandum of conversation enclosed with London’s despatch 4998 of April 20, 1953.5

The foregoing references to statements made by Prince Feisal and Mr. Duce seemed greatly to surprise Mr. Ray, who took note of them.

Mr. Ray continued by way of reading a report written by Mr. Ohliger, Vice President of Aramco, concerning his talks with Saudi officials in Riyadh on March 5. Mr. Ohliger had been summoned to Riyadh by the King and had first had a few words with Sheikh Hafiz Wahba, Saudi Ambassador to London, during which Hafiz questioned him closely concerning a meeting which he said took place last year between an Aramco official and certain IPC and Foreign Office officials during which oil in the disputed area was discussed. Mr. Ohliger indicated his awareness of Mr. Duce’s visit to London in April but did not believe he had gone into the question of oil in the disputed area. Following this meeting Mr. Ohliger had a lengthy conversation with Sheikh Yusuf Yassin. (It is hoped that a copy of the report of this conversation may be obtained.)

During this conversation Sheikh Yusuf charged collaboration between the United States and UK Governments and Aramco in drawing up the latest proposals on Buraimi and specifically the third proposal dealing with present and future oil operations in any portion of the disputed areas which may be awarded by arbitration to Saudi Arabia.6 Mr. Ohliger denied that Aramco had had any part in formulating these proposals. Sheikh Yusuf questioned him at great length and in a penetrating manner on Mr. Duce’s discussions in London last April, but Mr. Ohliger reiterated his ignorance of any discussions concerning oil in the disputed areas.

When asked for Aramco’s views of the British proposals, Mr. Ohliger . . . said categorically that Aramco would have no part in their acceptance and would absolutely refuse to give up its concession rights in any territory in the area which may be awarded to Saudi Arabia. Sheikh Yusuf’s efforts to get Mr. Ohliger to modify his position somewhat were unsuccessful . . . . When asked by [Page 2586]Sheikh Yusuf if Aramco would respond to a request by the Saudi Government to undertake operations in the disputed area in order to balance British operations, he replied in the affirmative but stated that there would be some delay as advance planning would be necessary.

Mr. Ray concluded his remarks by saying he wished to clarify the question of United States participation with the British in formulating these proposals and also wondered how far we would be prepared to go to back Aramco and the Saudi Arabian Government in any action which may be taken. Mr. Byroade stated categorically that the British proposals had not been formulated in collaboration with the Department. We first learned of these proposals when Mr. Beeley of the British Embassy informed us on February 157 concerning them and stated that the Foreign Office had instructed the British Ambassador in Jidda to present them to the Saudi Arabian Government.

Mr. Byroade pointed out Sheikh Yusuf’s misconception of the British proposals and said he could not understand how Aramco’s position was in any way jeopardized since a British concession in the disputed area could result only from agreement by both Aramco and the Saudi Arabian Government. Mr. Ray said he was doubtful that IPC would be willing to move out of any area awarded to Saudi Arabia upon an indication that Aramco did not wish to give up any of its concession rights there. Any agreement that IPC operations should continue until arbitration was completed would make it exceedingly doubtful that they would relinquish their work at the request of Aramco. He added that he felt the injection of the oil companies into a border dispute between sovereign governments most improper and an unnecessary complication. He stated further that the Executive Committee of Aramco had decided unanimously that Aramco’s concession rights in the disputed area should in no way be impaired by agreeing to relinquish to IPC rights which Aramco may acquire in any disputed area awarded to Saudi Arabia. He personally felt that the company should now officially make this statement in order that the Saudis and the British would know exactly where they stood. Mr. Byroade stated that the nature of the British offer would seem to indicate such a step in the event Aramco should reach the decision mentioned by Mr. Ray. He did, however, raise the question whether such action might cause the Saudis to reject the proposals and thereby cause settlement of the dispute to be delayed. Mr. Ray fully understood the [Page 2587]nature of the dilemma in which Aramco was placed but seemed persuaded that it was in Aramco’s interests to issue a public statement refusing to give up any concession rights which may be acquired in areas now in dispute.

Mr. Byroade inquired whether Aramco would need any oil which might be found in the disputed area in view of the vast oil reserves of other portions of their concession area. Mr. Ray said that he felt there would be a shortage of oil in 25 years and that Aramco would need access to all possible sources.

At this point the meeting adjourned to Mr. Hart’s office since Mr. Byroade had another appointment.

There was considerable discussion of aggressive British intentions as Mr. Ray and his associates interpreted the recent British proposals. Mr. Ray felt that giving the IPC access to any Saudi territory would be the opening wedge for further British demands upon Saudi Arabia in, for example, the area bordering the Hadhramaut. Mr. Hart stated that from his experiences in Dhahran he would suggest that Aramco itself had not been entirely innocent of aggressive tactics. He elaborated somewhat on Aramco expeditions into Qatar and the disputed Sufuk Wells area to illustrate the point that, whatever Aramco policies at the present time might be, the tactics of Aramco exploration parties until recently could be characterized as aggressive. He felt that not unnaturally this had produced a reaction on the part of IPC causing them likewise to become somewhat aggressive.

At the conclusion of the meeting Mr. Ray mentioned the recent Rub al-Khali incident at which time an Aramco exploration party had been halted by a British officer in an area well within Saudi Arabia on the pretext that the area belonged to the Aden Protectorate. Mr. Ray stated that Aramco was under pressure from King Saud to return to the spot in question in order to reinforce the Saudi position on the matter.Aramco, he stated, would naturally expect Saudi protection should an exploration party return.

Mr. Fritzlan stated that a British Embassy representative had recently informally indicated to him that the Foreign Office seemed to think that the Saudi complaint that a British party had trespassed on Saudi territory was justified. It did not appear, therefore, that any serious difficulties would arise in respect to this incident.