Office of the Historian

800.6363/1191: Telegram

The Ambassador in Argentina (Armour) to the Secretary of State

Buenos Aires, June 2, 1943—6 p.m.
[Received 10:10 p.m.]

1165. Embassy’s 1136, May 29, 6 p.m. Department’s authorization requested to conclude with Argentine Government agreement substantially as follows:

1.
The United States to make available to Argentina over the next 12 months f.o.b. New Orleans or other North American port to be named by Argentina, 36,000 metric tons of petroleum industry equipment at the minimum rate of 3,000 tons a month.
This material to be divided among the petroleum companies operating in Argentina approximately as follows (figures in tons):
  • Cía. Ferrocarrilera de Petroleo 1210.
  • Cía. Argentina “Astra” 1330.
  • Ultramar 1490.
  • Diadema Argentina, S. A. 1970.
  • Standard Oil Company 3,000.
  • YPF 24,000.
  • Undivided 3,000.
  • Total for 12 months 36,000.
2.
Argentina to place at the disposal of the Petroleum Supply Committee for Latin America approximately 327,000 cubic meters of crude oil, or products if preferred by the buyer, c.i.f. Uruguay, Paraguay and Southern Brazil river or rail entry ports, at minimum rate of 30,000 cubic meters a month. For each ton of material made available by United States, Argentina to deliver ten cubic meters of petroleum.
3.
Petroleum exported by Argentina to be paid for in accordance with sales contracts to be negotiated by the petroleum business entities in Argentina and in the purchasing countries. Prices paid to lie between present supply cost to purchasers and present prices received by Argentine suppliers for comparable sales to local consumers.

YPF desires 12 drums ethyl fluid per month and also one plant to produce monthly 250 cubic meters of iso-octane and another for a reforming or catalytic process to produce monthly 800 cubic meters of aviation base gasoline. If this equipment is made available the export of petroleum will be continued to a total of 360,000 cubic meters. The Embassy feels that if the ethyl fluid is forthcoming immediately the agreement can be written for 360,000 cubic meters, with the understanding that the other equipment for making aviation gasoline will be released if found to be available, at some future time.

The 36,000 tons of material to be supplied under agreement will include items most urgently needed from the lists submitted in despatch 9421, March 20, with proviso that steel is principal material and other materials will be included if and when available.

Embassy considers it highly desirable that any commitment undertaken by United States be carried out promptly to the letter in order to justify Embassy’s insistence upon similar performance by Argentina. Therefore if Department authorizes the agreement Embassy will understand it to mean that all Government Departments concerned will cooperate to ensure scheduled delivery of oil industry materials.

Petroleum deliveries by Argentina cannot commence immediately at full rate without serious disruption of existing economy therefore tentative plan is 5,000 cubic meters in July, 10,000 in August, and 5,000 monthly increments to 30,000 in December and 30,000 thereafter.

Petroleum industry material to be made available 1,000 tons July, 2,000 August, 3,000 September, and 3,000 monthly thereafter as minimum but larger quantities if convenient to supplier.

Embassy suggests that allocation of petroleum be handled by Maxwell Merritt as local representative of American Pool Committee in consultation with Embassy. It would seem expedient to schedule delivery of 10,000 cubic meters to Paraguay and 317,000 to Uruguay, and supply 33,000 to Brazil river areas if additional quantity is available. Department’s approval of this slight increase over present pool allotment to those countries is requested.

[Page 387]

Probably Uruguay will receive only crude oil which may necessitate adjustments in Ancap37 Refinery. Paraguay will also purchase crude but it will be refined by Standard and Shell in Argentina since these companies now divide the distribution in Paraguay. All crude will probably be supplied by YPF who thus make attractive profit although purchasers make approximately equal saving over their present costs.

In accordance with Department’s telegram 1699, November 10,38 paragraph 2b, if found necessary Argentina may wish to request one or more cargoes of short products in pool tankers which would take away equal quantities of other petroleum products. This movement would be outside of agreement quantities.

. . . . . . . . . . . . . .

Armour
  1. Administración Nacional Combustibles “Alcohol Portland”, the Uruguayan state petroleum monopoly.↩
  2. Foreign Relations, 1942, vol. v, p. 423.↩