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NLT (PSF-SUBJ) 303 copy / of 2 iNCOMING TELEGRAM Department of State 625 TELEGRAPH BRANCH 22-D-X mor A Action Control: 9973 Rec'd: August 19. 1951 N EA FROM: Tehran Info TO: Secretary of State /ANATIONAL SS ARCHIVES 1 RECORDS DECLASSIFIED G NO: 706, August 19, Noon SERVICE** E. O. 11652, Sec. 3(E) and 5,D) EUR D.p. of State 4-11-76 E DCR PRIORITY Bay NLT HC NARS Delle 9.21.78 PROJECT NLT 7A.2 FROM HARRIMAN TO PRESIDENT AND SECRETARY o NO DISTRIBUTION EXCEPT BY DIRECTION OF SECRETARY's OFFICE. Fol reply of Persian del to proposals of Brit del was handed last night by Iran negot comite to Brit del or (Without prejudice to the rights of two parties). e DO Persian del does not consider that proposals for future operation of oil industry in south which Brit del acting on behalf of former oil 00 submitted to Persian del, conform to definition of nationalization of oil industry stipulated in Persian law and which formed part of formula put forward by Mr. Harriman and accepted by HMG and former oil co. According to formula nationalization of oil industry is defined as meaning that ewl exploration, extraction and exploitation operations are in hands of Persian Govt. But principles jbdwqpegmsnrit del wld not only take out of hands of Persian Govt substantial part of powers of ment of oil industry, but wld also revive former AIOC in new form. oxBeu Leaving out certain minor points, main headings proposed by Brit del and arguments which are now put forward on various subjs are as fols: 1. Purchasing organization: cousnubetou In these proposals, estab of a purchasing organ for export of Persia's oil is envisaged. This organ wld enter into a long term contract, say for 25 yrs, with Persian Nati Oil Co. This organ wld buy Persian oil in very large quantities in such a way as to approximate to a monopoly one 31J Altho provision is made in Art 3 of Brit del's memo for Persian Natl Oil Co. to be able to engage in additional transactions REPRODUCTION OF THIS TOP SECRET MESSAGE IS PROHIBITED