Status Report on Iran Oil Negotiations
Donald D. Kennedy to John Foster Dulles (1954)

The Mossadegh Project | May 15, 2019                      

Iran Oil Consortium | Archive of Documents (1953-1954)


No. 477

Memorandum by the Acting Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Kennedy) to the Secretary of State [Donald D. Kennedy to John Foster Dulles]

Washington, June 16, 1954.


       Status Report on Iran Oil Negotiations

Mr. Hoover is concluding his discussions in London today and is proceeding to Iran. [Under Secretary of State Herbert Hoover, Jr.] Representatives of the various companies in the proposed consortium will follow by the week end. The following is the current status of the principal problems:

(a) Difficulties regarding the acceptance of an agency type of agreement revolve around the definition of “agent”, which, unless defined, may lead to a conflict with provisions granting the consortium effective control of management. Mr. Hoover and Mr. Phleger are optimistic that wording can be worked out which will protect the consortium’s position and still be acceptable to Iran. [Herman Phleger, Legal Adviser of the Department of State]

(b) Nationality of consortium—The United States is opposed to British nationality of the operating companies. The consortium will seek agreement for [a] UK holding company, Dutch operating companies, and [a] UK service company, the last to take care of purchases, engineering, etc.

(c) Management of consortium—AIOC has already accepted [the] principle of [a] Dutch managing director with [the] first subordinate to be American, [the] second British, and [the] balance of top management Dutch. [Anglo-Iranian Oil Company, aka British Petroleum]

(d) Headquarters of consortium—U.S. companies and Shell firmly support [an] Iranian headquarters. [Royal Dutch Shell] AIOC and [the] French appear [are] still determined on [basing] headquarters in London. However, Mr. Hoover thinks it [is] likely their position on this will be modified.

Note: Bracketed text added for better readability.
[Annotations by Arash Norouzi]

Source: Foreign Relations of the United States, 1952–1954, Iran, 1951–1954, Volume X (1989)

Paper drafted by Arthur L. Richards, Director of the Office of Greek, Turkish, and Iranian Affairs (GTI), Department of State, according to the Office of the Historian.

“Kennedy, Donald D., Director, Office of South Asian Affairs, Bureau of Near Eastern, South Asian, and African Affairs, Department of State, until June 24, 1954; Attaché of the Embassy in India, June 24–July 26, 1954; Counselor, July 26–29, 1954; thereafter, Counselor with personal rank of Minister; also Counselor with personal rank of Minister of the Embassy in Nepal from August 30, 1954.” — Biography from the State Department Office of the Historian

So Kennedy was either the “Acting Assistant Secretary of State” (as titled in the above memo) or the “Director” for the Bureau of Near Eastern, South Asian, and African Affairs at the time. The Office of the Historian contradicts itself.

Divvying Up the Loot: The Iran Oil Consortium Agreement of 1954
Divvying Up the Loot: The Iran Oil Consortium Agreement of 1954


Related links:

Status of Iranian Oil Negotiations | CIA Report (July 30, 1954)

Secretary of State John Foster Dulles to Ambassador Loy Henderson (Sept. 23, 1953)

Sec. Dulles’ Message to Pres. Eisenhower Re: Iran Oil Deal (August 3, 1954)

MOSSADEGH t-shirts — “If I sit silently, I have sinned”

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