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Through payments to [the] National Iranian Oil Company and application of Iranian tax laws it has been estimated that total direct income to Iran from increased scale of operations for the first 3 full years, following a starting up period of 3 months, will be 150 million pounds on the basis of present prices and costs. The estimated figures begin at 31 million pounds for the first full year of operation, increasing to 67 million pounds for the third.

The National Iranian Oil Company will continue to operate the Naft-I-Shah oil field and Kermanshah refinery to produce a part of Iran's own oil needs, and will continue to handle the distribution of oil products in Iran.

The National Iranian Oil Company will also be responsible for all facilities and services not directly a part of producing, refining and transportation operations of the operating companies. These will include such functions as industrial training, public transport, road maintenance and facilities such as housing, medical care and social welfare. The National Iranian Oil Company will be reimbursed for a major part of the cost of such facilities and services by the operating companies, with whom close cooperation will be maintained.

Production of crude oil from Iran, following a starting up period of three months, will be increased progressively, bringing total exports of crude and products to a minimum of eighty million cubic meters (78 million tons; 500 million barrels) for the first three year period. In addition some five million cubic meters will be produced for internal consumption. Following the third year it would be the policy of the consortium companies to continue taking quantities of crude oil which would reasonably reflect the supply and demand trend for Middle East crude oil, assuming favorable operating and economic conditions in Iran.

Large scale operations at the Abadan refinery will be resumed as quickly as possible. It is expected that, again following the initial period of three months a total of nearly 35 million cubic meters (30 million tons; 220 million barrels) of crude will be processed for export during the first three years of operation. Of this, some 15 million cubic meters (13 million tons; 94 million barrels) will be processed during the last three years, a rate which will once again establish Abadan's output as the largest in the Eastern Hemisphere, despite sharp increases in refinery capacity in that area during the last three years.

The two operating companies will be organized by the consortium and will carry on operations in Iran within a specified area. One of the companies will deal primarily with exploration and production, the other with refining. The companies will be registered in Iran and have their management and operating headquarters there. They will be incorporated under the laws of the Netherlands. There will be seven directors of each company, two of whom will be named by Iran and five by the consortium. Operating data and records of the companies will be available to Iran and the National Iranian Oil Company.

The consortium is expected to consist of the Gulf Oil Corporation, Socony Vacuum Oil Company Incorporated, Standard Oil (New Jersey), Standard Oil Company California, the Texas Company, the Anglo-Iranian Oil Company, Compagnie Française de Petroles and Royal Dutch/Shell.

55. UNITED STATES GRATIFICATION OVER THE SETTLEMENT: Message From the President of the United States to the Shah of Iran, August 5, 19541

YOUR IMPERIAL MAJESTY: The important news that your Government, in negotiation with the British, French, Dutch and United States oil companies, has reached, in principle, a fair and equitable settlement to the difficult oil problem is indeed gratifying.

Your Majesty must take great satisfaction at the success of this significant phase in the negotiations to which you personally have made a valuable contribution. I am confident that implementation of this agreement, under Your Majesty's leadership, will mark the beginning of a new era of economic progress and stability for your country.

Like myself, all Americans have a deep concern for the well-being of Iran. With them I have watched closely your courageous efforts, your steadfastness over the past difficult years, and with them I too have hoped that you might achieve the goals you so earnestly desire. The attainment of an oil settlement along the lines which have been announced should be a significant step in the direction of the realization of your aspirations for your people.

There is concrete evidence of the friendship that exists between our two countries and of our desire that Iran prosper independently in the family of free nations. We have endeavored to be helpful in the form of economic and technical assistance and we are happy to have helped in finding a solution to the oil problem.

I can assure Your Majesty of the continued friendly interest of the United States in the welfare and progress of Iran, and of the admiration of the American people for your enlightened leadership.

With sincere best wishes for the health and happiness of Your Majesty and the people of Iran.

1 Department of State Bulletin, Aug. 16, 1954, p. 230. The letter was released to the press on Aug. 5. For the Shah's reply, released to the press on Aug. 9, see ibid., Aug. 23, 1954, p. 266. For further statements and exchanges relative to the agreement, see ibid., Aug. 23, 1954, pp. 266–267, and Nov. 8, 1954, p. 683.

F. TERRITORIAL DISPUTES AND CLAIMS

Cyprus

56. UNITED STATES HOPES FOR SETTLEMENT OF THE CYPRUS ISSUE AS BETWEEN GREECE AND TURKEY: Note From the Secretary of State to the Prime Minister of Greece, Released September 18, 19551

I have followed with concern the dangerous deterioration of GreekTurkish relations caused by the Cyprus question. Regardless of the causes of this disagreement, which are complex and numerous, I believe that the unity of the North Atlantic community, which is the basis of our common security, must be restored without delay.

Since the time, almost a decade ago, when Communist expansion first posed a serious threat to the free world, the close and friendly cooperation of Greece and Turkey has proved a powerful deterrent to Communist ambitions in the eastern Mediterranean. In Korea, Greek and Turkish troops fought valiantly, side by side, to repel the Communist aggressors.

I cannot believe that in the face of this record of common achievement, any problem will long disrupt the course of Greek-Turkish friendship. Nor can I believe that the unhappy events of the past two weeks will reverse policies of cooperation which were initiated twenty-five years ago under the far-sighted leadership of Eleftherios Venizelos and Kemal Ataturk.

Since 1947 the United States has made very considerable efforts to assist Greece and Turkey to maintain their freedom and to achieve greater social and economic progress. We have extended this assistance and extend it now-because we believe that the partnership of Greece and Turkey constitutes a strong bulwark of the free world in a critical area.

If that bulwark should be materially weakened, the consequences could be grave indeed. I urge you therefore to make every effort to assure that the effectiveness of your partnership is not impaired by present disagreements.

I am confident that the spirit of close cooperation that Greece and Turkey have so often demonstrated in the past as fellow members of the United Nations, the North Atlantic Treaty Organization and the Balkan Alliance will enable you to transcend immediate differences in the interests of free world unity.

An identic note,

1 Department of State Bulletin, Sept. 26, 1955, p. 496. mutatis mutandis, was sent to the Prime Minister of Turkey (ibid., pp. 496-497). * Treaties of Feb. 28, 1953, and Aug. 9, 1954; supra, pp. 1233-1239.

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