335. Memorandum of Discussion at the 406th Meeting of the National Security Council, Washington, May 13, 19591
[Here follows a paragraph listing the participants at the meeting.]
1. Western European Dependence on Middle East Petroleum
[Here follows discussion of matters unrelated to Libya.]
Secretary Dillon then said he would like to turn to a specific problem for a moment. It seemed probable that substantial reserves of petroleum were ready for development in Libya, but the oil companies were loath to push this development too rapidly and thereby jeopardize their position in the Middle East. If the left-hand version of the draft NSC Action2 were adopted and literally interpreted, the U.S. would be compelled to put pressure on the oil companies to develop [Page 730] the Libyan fields immediately. A rapid development of the Libyan fields would have severe repercussions in the Middle East; it would, for example, preclude the purchase of more oil from Iran to compensate Iran for a decline in the price of oil. Secretary Dillon thought that the specific problems he had just mentioned illustrated the enormous complexity of the subject.
[Here follows discussion of matters unrelated to Libya. Returning to the subject of Libya, the President commented:] The Libyan oil fields appeared promising, but the oil industry apparently did not want a crash program for development of the Libyan fields. [Here follows discussion of matters unrelated to Libya.]
The Vice President asked whether the Libyan oil fields were being developed exclusively by U.S. companies. Secretary Dillon said Shell was interested in Libya, but that the big strikes were under the control of U.S. companies. The Vice President said he understood that it was our policy not to push development of the Libyan oil fields. Secretary Dillon said this policy was an oil company policy, not a U.S. Government policy. On the other hand, if we urged the companies to develop the Libyan fields rapidly at this time, the result would be a serious disturbance in the Near East. The Vice President thought the nub of the matter, the immediate problem, was what to do about Libya. We had a great many political problems in Libya. Secretary Dillon said that if the Libyan people were fully cognizant of Libyan oil resources, they would demand their immediate development. Mr. McCone said it would not be long before they were fully informed of these oil resources. The Vice President pointed out that any suggestion that the U.S. oil companies are deliberately retarding the development of the Libyan oil fields would be very unfortunate. The President said the oil companies were not retarding the development of the Libyan fields unduly, inasmuch as they were putting 100 million dollars into these fields at a time when petroleum supplies were adequate.
[Here follows discussion of matters unrelated to Libya.]