Al-Faqih Sets Conditions for New Partners in Saudi Oil
15 January 1947
The Red Line Agreement originated in 1928 among companies developing oil in former Ottoman territories. It required participating firms to seek their partners' consent before pursuing concessions within the agreed area. In 1946, Jersey Standard and Socony were invited to enter Aramco. [2]
Saudi minister Asad Al-Faqih warned the State Department on 15 January 1947 that proposed new investors in Aramco could be refused entry. After discussing the matter with Crown Prince Saud, who was visiting the United States, Al-Faqih told Richard Sanger that the Saudi leadership wanted oil development to remain exclusively in American hands. [1]
Standard Oil of New Jersey and Socony Vacuum were considering joining Aramco. According to Al-Faqih, King Ibn Saud initially welcomed their participation but feared that obligations under the Red Line Agreement might give British, French, or other interests access to the concession. The minister made the condition explicit: prospective partners would have to free themselves from those earlier commitments. [1]
Related Diplomats
Sources
- Henderson to Acheson on Al-Faqih's warning about Saudi oil ownership
Document 439, complete memorandum; January 15 conversation recorded January 16
Opening and final paragraphs
- The 1928 Red Line Agreement
Signing the Red Line Agreement; self-denying clause and 1946 invitation to Jersey Standard and Socony
Notes
- The memorandum records Al-Faqih's account of the Saudi leadership's position. The subsequent corporate transaction is outside this account. [1]
Related Reading
Cite This Article
Al-Faqih Sets Conditions for New Partners in Saudi Oil. Chanceries Diplopedia. Record 3a9056f40964eb0662b4. https://chanceries.org/research/history/saudi-red-line-warning-1947/