rtment to protest formally to GOF [Government of France] recent activities of CFP and ERAP that are detrimental to the interests of the Iraq Petroleum Company. Company representatives expressed their conviction that CFP has been pressured by GOF . . . by threatening to have ERAP negotiate for the venture if CFP does not."
A note was prepared, signed by the Secretary, for delivery to the French Foreign Office no later than October 18. While vigorously worded, its logic is somewhat difficult to follow. The fact that the Iraqi government would still entertain proposals from IPC related to the disputed areas is somehow twisted into an argument that Iraq recognizes "a continuing right in IPC to the areas. . . ." The same conclusion is drawn from the fact that the Iraqi government "has not attempted to cede any of the territory to other foreign oil interests." Yet the note itself ascribes this forbearance simply to the exercise of pressure on aspiring independents: "That no other companies have been granted rights to the disputed territory is due to the vigor with which the IPC shareholders and their respective governments have asserted the continuing effect of the concession agreement between the IPC and the GOI. . . ." That note also emphasized the danger of establishing harmful precedents: "The note also emphasized the danger of establishing harmful precedents: "The GOF must appreciate that the acquisition by French companies of territories claimed by the IPC can create precedents elsewhere which can weaken the security of Western oil rights and thereby adversely affect the national interests of France as well as of the United States." Yet how could developments in Iraq serve as precedents for countries where the growth rate had not been held down to less than half that of other leading Mideast countries, where proven and productive fields had not been suppressed for years on end, where misleading information had not been deliberately supplied to the host government and where, in the words of the Department's own legal counsel, the company had not followed a "dog in the manger" policy?
The controversy escalated to a new height when on October 23, 1967, President Mostini of Mobil's French subsidiary met with Foreign Minister Giraud. Referring to protests lodged by Exxon and Mobil, Giraud commented that the "two letters had practically identical wording and seemed to have been written by same attorney." According to an account transmitted by the U.S. Embassy in Paris:
He [Giraud] then strongly objected to part of letter raising possibility of legal action against CFP on oil eventually flowing from disputed areas. He asked how this should be interpreted. If this is simply a case of Mobil and Esso lawyers filing protests, French government would do nothing. However, if Mobil and Esso really contemplate legal action, the French government would consider this a declaration of hostilities and take appropriate action against the companies in France. Giraud stated frankly, "This is a threat." . . .
Mostini acknowledged to us that Dica [the French regulatory agency] has unlimited scope for harassing local affiliate, can do "anything and everything under 1928 law."
It was not long, however, before the whole issue became moot, as Iraq moved inexorably toward complete nationalization, including the takeover of IPC's major producing property, the Kirkuk field. In 1964, the government established the Iraq National Oil Co. (INOC) for the express purpose of operating in those areas confiscated from IPC under Public Law 80; and three years later, the newly formed company was authorized to work in the expropriated areas. On June 1, 1972, all of IPC's properties were nationalized, and in March of the following year IPC formally accepted the nationalization. Perhaps because IPC realized that it had a weak case (as the State Department's legal counsel had predicted earlier), the company "desisted from taking legal action to prevent exports of Kirkuk crude." Thus forty-five years after it had brought in its first well in Iraq, the Iraq Petroleum 