STATUS OF OIL COMPANIES' NEGOTIATIONS WITH INDONESIAN GOVERNMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00429A001300030024-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 12, 2016
• Document Release Date: December 18, 2001
• Sequence Number: 24
• Publication Date: May 21, 1963
• Content Type: MEMO

Approved For Release 2002 r4 E lA-RDP79T00429A001300030024-7
ND PQ GN DISSI M
May 1963
M tORA iU;
T: Status of Oil Companies' Negotiations with
Indonesian Government
1. Attached to a file of recent State cables on
above subject
. Caltex, Stanvac and Shell have made no recent
effort to reopen negotiations with the Djakarta govern-
ment on terms for future activity in the country. A
government decree delivered to the companies on 10 May,
permits them to renew talks before 16 June, on which
date new regulations--as yet not made known to the com-
panies--will become effective. Should the companies de-
cide against either resuming negotiations or accepting
blindly the 16 June regulations, they will have until
late September in which to close down operations.
.l. Ambassador Jones has been instructed by State
approach Sukarno on the oil problem before tikarno
leaves Djakarta on 22 May for a month Fs trip to Japan
and ;urope. Jones has been directed (tab B) to tell
Cukarno that unless a firm government/company profit
split of 60/40 has been concluded by 15 June, the com-
panies will stop their export of oil. They will not
continue to operate for the duration of the period of-
fered by the government decree.
4. Jones has been told to say that If the oil com-
panies are compelled to withdraw from Indonesia, the
projected US program of economic assistance will not
be implemented. Without participation, the proposed
IMF stabilization program devised for Indonesia can be
expected to collapse.
h. Jones has been apprehensive about making such
an approach and in fact advised against it. (tab C) he
reports (tab D) that field representatives of both
Caltex and Stanvac were "shocked and surprised" over
State Dept. review completed
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Lofts and doubted the wisdom of such a move.
Jones has been advised by State (tab E) that co Many
field representatives "do not reflect the judgment of
their principals"
. Jones s arranged to see Sukarno on 22 May
but has been advised by a Sukarno aide (tab P) that
he will be lucky to have more than live minutes with
n uiarno.
N IGN DI EM
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