890F.6363/1–1647
Memorandum by the Director of the Office of Near Eastern and African Affairs (Henderson) to the Under Secretary of State (Acheson)
In a conversation on January 15, Asad Al-Faqih, Saudi Arabian Minister to the United States, spoke very frankly with Mr. Sanger, of the Near Eastern Division, regarding new developments affecting Saudi Arabian oil. The Minister who had just been discussing the matter with the Crown Prince of Saudi Arabia,1 said that the King has been happy over the way his oil resources are being developed by the Texas Company and Standard Oil of California working through the Arabian American Oil Company. And according to the Minister, the King had first welcomed the prospect of having two additional American Companies (Standard of New Jersey and Socony Vacuum) the compartments in Aramco.
The King, however, is now much disturbed by the possibility that the Red Line Agreement may still be in force, or if not actually in force will still be honored in some way. What he fears is that this will prove an “open door” through which British, French and other oil interests can get a foothold in the development of Arabian oil. The Minister repeated twice that the King and the Crown Prince were agreed that the developments of Arabian oil resources must remain [Page 635] exclusively in American hands. He ended by saying that if the proposed new partners in Aramco could not disassociate themselves from previous commitments, they would not be permitted to buy into the Arabian concession.