dge or belief have expressed interest in Iraq land concessions in order to deter them from making offers to GOI while critical IPC-GOI negotiations in progress."* In an outgoing telegram of July 8, Under Secretary George Ball stated, "The firms to which Department has spoken are Sinclair, Union Oil, Standard of Indiana, Continental, Marathon, Pauly, and Phillips. These companies have been responsive to Department's urgings and it is therefore incumbent on us to make same effort with any new American or American-affiliated company which appears to be entering Iraq picture."
Despite the fact that by the end of the year the Department had made its views known "forcefully and repeatedly to Sinclair, Continental and some 8 other companies," a cloud loomed on the horizon: "U.S. independents are becoming increasingly nervous lest other American or non-American companies get in ahead of them and cause them to lose out entirely." During the next two years the problem subsided as a compromise agreement was reached in 1965 between IPC and the Government of Iraq. But the agreement was never ratified, and in 1967 the issue resurfaced. The principal aspiring "poachers" (to use Secretary Rusk's term) were the Italians and the French. Here, the U.S. governments could engage in "harassment of majors," which, as Rusk noted, "dictates cautious approach to problem."
On May 13, the Financial Times of London reported a "'clash' of U.K., U.S., France and Netherlands with Italy over reported ENI [the Italian state-owned oil company] negotiations to take 20 million tons of crude from INOC [the government-owned Iraq National Oil Company] in return for leading role in exploitation of concession areas which were to have been explored by BP, Shell, Mobil and CFP." Protests were lodged with the Italian Foreign Office by ambassadors of the United States, the United Kingdom, France, and The Netherlands. According to Ambassador David Bruce, "Four companies and respective government furious that Italians interfering with 1965 agreement." In this case, the gravamen of the Department's concern was made explicit: "Companies maintain ENI does not have outlets requiring 20 million tons. Thus their oil, taken as royalty in kind by INOC from IPC operations, would be released on world markets." At the same time, Ambassador Reinhardt in Rome called upon Foreign Minister Ortona to express the U.S. government's "particular concern." Ortona reported that ENI had "taken note" of the protests, but expressed the view that "in light of its own past experiences with major oil companies, it did not see why it should exercise self-restraint in this matter." The mere fact that ENI was a state-owned company, Ortona pointed out, did not mean that it was under the control of the Italian government: "There were limits to pressure Foreign Ministry could bring on ENI," given the fact that "Italy's long quest for sources of oil was [a] matter of continuing and acute public and political interest." Nonetheless, Ortona, said, a "warning" had been given to ENI by the Foreign Ministry. Whether because of the warning or differences over terms, the deal fell through.
Keeping French interests out of Iraq proved more difficult, and ultimately impossible. In the summer of 1967, Iraq passed a new law (No. 97) specifically barring the return of any known reserves to the IPC and giving the country's own Iraq National Oil Company the right to exploit those reserves either by itself or in partnership with other companies. Shortly thereafter a smaller French firm, ERAP, was granted a concession on territory taken from IPC. This was followed by a proposal on the part of the major French Company, CFP, that it establish a joint venture with the Iraq National Oil Company to develop the highly productive North Rumaila field. To the other IPC owners it was bad enough for outsiders to produce on lands IPC claimed as its own, but for one of the owning companies to do so seemed little short of treasonous. On October 13, senior officials of Exxon and Mobil met with Under Secretary Katzenbach "to urge Depa