CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026900010044-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 25
• Document Creation Date: December 21, 2016
• Document Release Date: April 11, 2006
• Sequence Number: 44
• Content Type: REPORT

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Top Secret
Offlux-MIN
National Intelligence
Bulletin
State Dept. review completed
Top Secret
N2 631
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National Intelligence Bulletin
August 22, 1974
CONTENTS
CYPRUS-GREECE-TURKEY: Efforts to get Greek and Turk-
ish Cypriot leaders talking again are making progress.
(Page 1)
SYRIA: Damascus showing more interest in pursuing
negotiations than war. (Page 4)
INTERNATIONAL MONETARY: Dollar up as oil producers
invest more in US. (Page 6)
SOUTH VIETNAM: Military situation. (Page 9)
USSR: Soviet media's assessment of US-USSR relations.
Page 12)
PORTUGAL: Spinola threatens resignation again.
(Page 17)
MEXICO: New oil fields discovered. (Page 19)
SPANISH SAHARA: Madrid informs UN of referendum.
(Page 21)
FOR THE RECORD: (Page 22)
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*Ankara
CYPRUS
UK Sovereign base area
WED Turkish-Cypriot enclave
MILES
556445 8-74
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National Intelligence Bulletin
CYPRUS-GREECE-TURKEY
August 22, 1974
Diplomatic efforts to get Greek and Turkish Cypriot
leaders talking again made some progress yesterday. Cyp-
riot President Clerides has agreed to meet with his Turk-
ish Cypriot counterpart to discuss urgent humanitarian
problems--such as refugees--arising from the Cyprus con-
flict. Although the announced scope of the discussion
is narrow, it is likely to extend to political matters.
Athens continues to refuse to participate in Cyprus
peace talks until the Turkish forces pull back to the
positions they occupied on August 9, when demarcation
lines were agreed upon. By setting what it knows to be
an impossible condition, Athens clearly wishes to avoid
responsibility for negotiating at such a disadvantage,
preferring that the Greek Cypriots take the lead. Athens
may at some future date agree to negotiate a wider polit-
ical settlement with Turkey that would include other
issues such as the Aegean seabeds dispute.
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National Intelligence Bulletin August 22, 1974
In a press conference yesterday, Turkish Cypriot
leader Rauf Denktash warned that the Turkish army would
undertake new military action to protect Turkish Cypriots
if President derides is unable to control the Greek
Cypriots. Denktash expressed impatience with Clerides
in a conversation with US Ambassador Brown yesterday,
saying that there is "no government" on the Greek side
of the line. He also said that only a limited number of
Greek Cypriots would be permitted to return to their
homes in the Turkish area.
Clerides has admitted he
is not politically strong enough to e on the various
terrorist groups in Cyprus at this time. He said he
would try to regroup these elements under some sort of
state control and then disarm them. He said that there
is considerable confusion among the terrorist groups
but that much depended on the Turks and that if they
were reasonable, his task would be much easier.
The Greek government has banned all demonstrations,
and the US embassy reports that anti-US incidents have
generally diminished. Greece continues, however, to
refuse diplomatic clearance for landings at Greek air-
fields other than Athens, and flights in and out of
Athens require six-hours prior notification.
According to NATO Acting Secretary General Pansa,
the Greek Ministry of Defense on August 20 instructed
the Greek representative on the NATO military committee
that a fifteen-day withdrawal notice for Greek military
personnel at NATO will become operative on the date
Athens actually issues the recall order. Pansa observed
that the Greek officers at NATO have to date received
only a readiness order. The Greek delay in issuing the
recall order has provided some encouragement to NATO
authorities that Athens is having second thoughts about
withdrawing from the NATO integrated command.
According to the press, Foreign Minister Mavros has
informed the Soviet government that Greece is ready to
withdraw its troops from Cyprus if Moscow could guarantee
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National Intelligence Bulletin August 22, 1974
that the Turks will follow suit.
No reports of major cease-fire violations on Cyprus
were received yesterday. There were a few relatively
minor clashes in Nicosia and around the Turkish enclave
just west of Larnaca. The latter skirmish appears to
have been between Cypriot forces. The UN contingent
patrolling Famagusta is continuing to ignore the Turkish
order to withdraw from the area.
Reconnaissance flights from the USS Forrestal have
not sighted any Greek or Turkish combatants in the area
around Crete. There are no indications that the Greek
troops transported to Crete on commercial ferries over
the weekend are being moved to Cyprus.
According to the Greek press, there was an incident
yesterday on the Greek/Turkish frontier in the Evros
ldi
h
i
er.
so
s
area resulting in the death of one Turk
This is the first such incident in the border area.
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National Intelligence Bulletin August 22, 1974
Syrian Foreign Minister Khaddam's visit to Washington
this week underscores Syria's interest in pursuing its
objectives, for the present at least, through negotiations
rather than war. President Asad put the Syrian army on
a precautionary alert over recent weeks, but otherwise
Damascus' reaction over the past month to Israeli military
maneuvers and talk of war has been unusually restrained.
While in Yugoslavia last week, Asad accused the Is-
raelis of raising tensions in an attempt to stall nego-
tiations and warned that Syria was ready to rebuff any
Israeli attacks. He said that Syria might have to use
force again if Israel continued to throw "obstacles in
the path to peace," but in the joint communique issued
at the end of the visit the Syrians implicitly stressed
the need to continue efforts to find a peaceful solution.
The reorganization and intensive retraining of the
Syrian armed forces and the Soviet militar resupply ef-
fort have been cited recently as
evidence of hostile intent. ere .is n sign that
Syria is preparing to renew hostilities soon or that Asad
is under pressure to do so. For the present, the Syrians
seem to be concentrating on establishing a credible
threat so that Asad can negotiate from strength.
There is always the danger, of course, that the
Syrians might become disenchanted with the peace talks,
but they do not appear anywhere near that point now.
Also, the Syrians know that without Egyptian support or
the element of surprise, they would risk disaster by
carrying out a large scale attack against Israel.
In the meantime, Asad seems preoccupied with sorting
out his relations with Egypt, Jordan, and the Palestine
Liberation Organization in preparation for the next stage
of the Geneva talks. Asad met with PLO chief Yasir
Arafat earlier this month.
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National Intelligence Bulletin
INTERNATIONAL MONETARY
August 22, 1974
Reports that oil producers have begun investing
more funds directly in the US were a major factor in
the dollar's sharp rise on foreign currency exchanges
last week. Since August 9, the pound declined nearly
2 percent against the dollar; other European currencies
declined up to 2 percent in relatively active trading.
The reports apparently stem from Kuwait's taking a
larger part of its mounting oil revenues in dollars.
Kuwait is not selling off its sterling holdings, as
some press reports indicate. The last oil payment,
made to Kuwait at the end of July, consisted of a much
higher share of dollars and a relatively lower propor-
tion of sterling than payments made under an agreement
with the oil companies that was renegotiated last May.
Although this agreement does not specify the per-
centages of currencies in which payment must be made,
Kuwait's willingness to accept a lower proportion of
sterling indicates that it does not intend to increase
its sterling holdings as rapidly as in the past.
As a result, the British are receiving a smaller
share of the return flow of oil revenues and will find
it necessary to finance a larger proportion of their
oil bill through dollar borrowing,
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AN
XU YEN
MILES
SOUTH VIETNAM
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National Intelligence Bulletin August 22 9 1974
SOUTH VIETNAM
Fighting is continuing in the northern provinces,
the central highlands, and north and west of Saigon.
Continued North Vietnamese military pressure in
Quang Ngai and Quang Nam has led the government to con-
sider abandoning some of its geographically isolated
outposts in the north should the come under he v
Communist attack.
Further south, the government"s loss of an outpost
in Kontum Province has been confirmed: Mang Buk fell on
round at-
d
g
August 20 after heavy artillery, mortars an
tacks ,
Communist attacks in southeastern Tay Ninh Province
have forced government regional forces to abandon two
small outposts. Despite the loss of these two positions,
there are no signs that the Communists are planning heavier
action against the provincial capital of Tay Ninh City.
They are likely, however, to continue action against other
government outposts in the province.
Although government commanders are generally satis-
fied with the performance of their units, they are com-
plaining of shortages of ammunition and equipment. They
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National Intelligence Bulletin August 22, 1974
are also pointing to the large amounts of ammunition and
equipment the Communists have been using as a sign that
the Communists have more than sufficient resources and
intend to maintain the pace of fighting for the next sev-
eral weeks. Nonetheless, these commanders remain confident
that they can contain the attacks and that South Vietnames
forces can eventually retake most lost ositions.
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National Intelligence Bulletin August 22, 1974
USSR
Soviet media are still taking a cautiously optimistic
line on the significance of political developments in
Washington for Soviet-US relations. The Soviets are em-
phasizing the "purely domestic" reasons for President
Nixon's resignation, and one Soviet writer specifically
rejected the arguments of those who would link US do-
mestic problems with the relaxation of tensions between
Moscow and Washington. The Soviets continue to stress
a theme that began to gain prominence in the late spring
and early summer: that there is widespread support for
detente in most, if not quite all, circles in the US
and that the movement toward detente stems from over-
riding historical and "objective" circumstances. Moscow
thus is minimizing the impact of the change in admin-
istrations and is at least implicitly endorsing President
Ford's remarks regarding the continuity of US policy
toward the Soviet Union. Nonetheless, Moscow is doubt-
less reassessing the mid- to long-term outlook for US-
Soviet relations. The Soviets themselves are showing
no signs of a reduced interest in detente.
The Soviets may even believe that a President un-
encumbered by Watergate may make more rapid progress in
resolving bilateral issues. Moscow was quick to report
President Ford's activities in behalf of the trade re-
form bill and the improved prospects for early extension
of most-favored-nation status to the USSR. Moscow may
also see better chances for progress in the three major
sets of security negotiations--SALT, CSCE, MBFR--where
movement has been minimal in recent months. The Soviets
have been particularly vocal since the summit on the
necessity of further advances in arms control. Although
much of their recent rhetoric has centered on a compre-
hensive nuclear test ban and denuclearization of the
Mediterranean--old Soviet favorites advanced largely
for their propaganda value--Moscow seems genuinely con-
cerned about the lost momentum in the disarmament field.
There is no clear evidence, however, that this concern
will be translated into significant Soviet concessions
when the talks resume next month.
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National Intelligence Bulletin August 22, 1974
The early signs are that the Soviets will be reas-
sured by the nomination of Governor Rockefeller, whose
support for detente and whose ties to Secretary Kissinger
have been noted in the Soviet and East European media.
Soviet public reaction to Mr. Rockefeller's nomination
has been limited almost entirely to factual reporting.
In the only commentary available, a Moscow broadcaster
noted on Tuesday that in 1972 Governor Rockefeller had
"evaluated highly" the steps taken to improve US-Soviet
relations.
The Soviets are probably
about the relative riorities
iitration.
somewhat less sanguine
of President Ford's admin-
----------------
the Soviet press has begun to emphasize US
...... pro lems, particularly the "worsening economic
situation." A Pravda article on Tuesday ascribed the
resignations of President Nixon and Vice President Agnew
to "contradictions of capitalist society and serious
conflicts among ruling circles." At the same time, the
Soviets have said that economic difficulties in the US
---
may cause Washington to be more interested in trad
the USSR.
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National Intelligence Bulletin August 22, 1974
PORTUGAL
President Spinola has again threatened to resign be-
cause of differences with the Armed Forces Movement.
Spinola's threat was a result of conflicts with the
movement on such issues as decolonization policy, purging
the officer corps, and the relationship of the movement
to the regular military hierarchy. Spinola was dissuaded
by Armed Forces Chief of Staff Costa Gomes, who has been
acting as conciliator between the two sides.
This latest resignation threat--like the one in mid-
June--may be a move to pressure the movement, which has
been acting as a final arbiter on government decisions.
Spinola's position was temporarily strengthened after
his threat in June, but the cabinet shuffle a month later
was provoked by his continuing disagreements with the
movement and marked a loss of power for him.
Although press reports indicate that the movement
reiterated its support for Spinola late last week, he
failed to win unanimous support as he had in June. This
diminution of his influence may stem both from the emer-
gence of Costa Gomes as a power in his own right and a
growing realization by the movement that an effective
partnership with Spinola may not be possible. The move-
ment may also be emboldened by its success in guiding
the African colonies toward independence more quickly
than Spinola would like.
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Golden Lane Tampico
Oil Field
.,r New Oil -':IN L0
Mexico Ciiy* Veracruz Field C,udeAdelEennen
Coo Va eaC?s~4.Y y7 '
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National Intelligence Bulletin August 22, 1974
Mexico has discovered what may prove to be giant
oil fields in its Chiapas and Tabasco states that could
change the petroleum market in the Western Hemisphere.
If the more optimistic estimates of the new fields'
potential are borne out, Mexico could rank alongside
Venezuela within a few years as the hemisphere's leading
oil exporter. Venezuela's proved reserves, now estimated
at 14 billion barrels, have been declining steadily as
a result of reduced exploration.
The state oil company discovered the new fields in
1972, and all subsequent wells have proved successful.
Another dozen or so geological structures likely to be
productive have been mapped in the area. Mexico has
already earmarked $1.4 billion to explore and develop
the new deposits during 1974-76, These fields are be-
ing widely compared with the "Golden Lane" fields that
made Mexico the world's largest oil exporter early in
the century. The oil is of high quality. Reservoir
pressures, gas/oil ratios, and other indicators are all
highly promising,
Mexican officials, meanwhile, have announced an
abrupt turnaround in the nation's crude oil supply. In
June, sharply increased production from the new deposits
allowed Mexico to break the record of 521,000 barrels
per day set in 1921, to end crude oil imports of 65,000
barrels per day, and to declare an exportable surplus.
Mexican oil production will probably exceed 750,000
barrels per day by the end of 1974, and the country will
have an exportable surplus in excess of 150,000 barrels
per day. Transporting this oil should pose no problem;
the fields are close to port facilities on the Gulf of
Mexico. The discovery is also like to brie a 20-
ercent increase in gas production.
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National Intelligence Bulletin
SPANISH SAHARA
endum question'-is framed in terms acceptable to Rabat.
August 22, 1974
Madrid yesterday informed the UN that a referendum
to decide the political future of Spanish Sahara will be
held in the first half of 1975. Spain said that its de
cision is consistent with UN resolutions' calling for
self-determination for territory.
King Hassan, who claims the province for Morocco,
has been pushing for direct negotiations with Madrid,
but indicated in a speech on August 20 that he would
not oppose a referendum. He will, however, want to en-
sure that the 20,000-25,000 Saharans he claims live in
Morocco are allowed to participate and that the refer-
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National Intelligence Bulletin
August 22, 1974
Cambodia: Prince Sihanouk arrived in Bucharest on
August 20, ostensibly to attend Romania's 30th anniversary
of liberation from Nazism. An official delegation from
the Lon Nol government is also in Bucharest for the World
Population Conference. One of Phnom Penh's delegates is
former prime minister Hang Tun Hak, who has tried unsuc-
cessfully in the past to open channels to Sihanouk,
There is as yet no evidence that Sihanouk plans any con-
tacts with Phnom Penh officials, but the Romanians have
expressed interest in acting as intermediaries and may
try to arrange a meeting.
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Top Secret
Top Secret
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