Memorandum, State Department Summary of Telegrams

OFFICE OF THE SECRETARY OF STATE WASHINGTON E.O. 12065, 1982 State Dept. DEB Guidelines, NLT, 02151-6-85 March 6, December 6, 1951 By SECRET SECURITY INF ORMATION SUMMARY OF TELEGRAMS SAUDI ARABIA Trouble is apparently brewing for the Arabian- American Oil Company (Aramco) in the wake of other Middle East oil difficulties. Messrs. Owen, the head of Aramco in Arabia, and Hawkey, the Assistant Treasurer of Aramco, were re- cently summoned by the Minister of Finance following several instances of Arabian Government demands for special financial arrangements over and beyond the present contractual arrangements. The Finance Minister said the attitude of the Company in recent months had convinced him that it was impossible to cooperate officially any longer. He mentioned as cases in point the sterling problem (the Saudis want a higher percentage of dol- lars than the present arrangement calls for), the Saudi demand for an Arabian member on the Aramco board, and the alleged discovery by auditors that Aramco's books were kept in New York (which our Em- bassy says is not true). Early this week Najib Salha, the Assistant Deputy Minister of Finance, told Mr. Owen that he had himself been summoned to see the Minister of Finance, who was obviously intoxicated and who launched into a tirade against Aramco and finally instructed Salha to send a telegram to the Customs Administration ordering it to cut off all oil shipments (presumably through Tapline and Ras Tannura). Salha told Owen that the order was fantastic and that he had not carrieditout, hoping the Finance Minister might calm down and forget the instruction, but the latter had instead followed up with a telephone call later on asking if his instructions had been carried out. Ambassador Hare, in commenting on the situation, says that although the Minister of Finance has no serious ground for his assertion of non-cooperation by Aramco, it is conceivable that in his frequently befuddled state of mind he might have developed a phobia on the subject as illustrated by his recent insistence on the transfer of the Aramco Board to Dhahran. However, says Hare, he does have his lucid moments and the consistent recurrence of his non-cooperation charge leads to the conclusion that it represents deliberately adopted policy of making things difficult for the Company. SECRET SECURITY INFORMA TION