DEVELOPMENTS IN INDOCHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001100010079-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 21, 2016
• Document Release Date: February 15, 2008
• Sequence Number: 79
• Publication Date: December 13, 1973
• Content Type: SUMMARY

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Secret
_TA. DerI.la, U- 417 7.3M;L/3
Developments in Indochina
Secret
122 25X1
13 December 1973
State Dept. review completed
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Developments in Indochina
CONTENTS
13 December 1.973
CAMBODIA . . . . . . . . . . . . . . . . . . . . . 1
In Cambodia, the world
oil crisis has come at a time when the
country's civilian stocks of petroleum are
critically low.
LAOS . . . . . . . . . . . . . . . . . . . . . 4
The cease-fire is holding remarkably well,
and no ear y wi -
drawal of Communist forces is likely.
SOUTH VIETNAM . . . . . . . . . . . . . . . . . . . 6
Friction continues at the top levels of
the Thieu government, and the President
may soon be forced to take more.positive
measures to resolve the power struggle
among his aides.
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The Petroleum Situation
The current world oil crisis has caught Cam-
bodia's civilian stocks of petroleum at a critical
point. Supplies of most products are at about three-
weeks' level, with kerosene in particularly short
supply. Phnom Penh would like to have a 60-day
supply of fuel oil and auto diesel by the end of the
year, and a 30-day reserve of all other civilian oil
products in anticipation of increased Communist in-
terdiction of principal transport routes.
Four companies supply Cambodia's civilian POL
needs--Shell, Esso, Caltex, and Summit. Summit is
based in Taiwan and delivers oil refined in Thailand
to Battambang in Cambodia. The other three companies
have been obtaining refined oil from Singapore since
Cambodia's only refinery at Kompong Som was shut down
by Communist attacks in early 1971. Esso completed
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its contracted deliveries five months ago and is
beginning preparations to pull out of Cambodia al-
together by the end of 1974. After announcements
early last month of sharp cutbacks in scheduled
deliveries because of the Arab embargo, Shell and
Caltex (which together provide some 70 percent of
Cambodia's civilian needs) have agreed to honor
existing commitments. This latest decision should
see Cambodia through the end of the year, but the
government will probably be unable to achieve targeted
reserve stock levels, and there is growing uncertainty
over adequate deliveries in 1974.
The situation with respect to the military sector
is less clear. Stocks of gasoline and auto diesel
are sufficient for at least four weeks at present
consumption rates. POL for the military is supplied
by Shell, Esso, and Caltex, which obtain refined pro-
ducts from Singapore. Singapore notified these com-
panies that all contracts to deliver POL to Cambodian
military forces--funded by the US Department of
Defense--were being canceled as of 1 December. It
is not known whether this directive was at the in-
itiative of the Arabs or of the refineries. It has
been proposed that existing contracts be modified
to read as an agreement between the government and
the oil companies, but with purchase of supplies
ultimately to be reimbursed by the Pentagon. The
proposed modification was approved by the local
representatives of the three distributors; Singapore
was to respond by 28 November, but we have no in-
formation on its decision.
Cambodian authorities have taken measures to
conserve existing stocks. The Cambodian Army is to
reduce consumption of all POL products ten percent
by 15 December, and civilian stocks of gasoline and
diesel fuels are being rationed. Government vehicles
and public transportation are so far not affected.
Additional conservation measures can-be expected and,
for civilians, are likely to include substantial price
increases and rationing of all petroleum products.
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North Vietnamese Standing Fast
The formation of a new coalition government,
which will establish a specific deadline for the
withdrawal of all "foreign military forces" from
Laos, continues to be delayed by procedural wrangling
between Lao Communist and government negotiators.
According to the 14 September protocol to the
Vientiane peace agreement of 21 February, foreign
troop withdrawal is to take place in three stages
at 20-day intervals and is to be completed within
60 days after the new government and its advisory
body, the Joint National Political Council, are
established.
Prime Minister Souvanna recently confided to
Ambassador Whitehouse that he was discouraged over
the recent upsurge of Communist offensive activity
in South Vietnam and had concluded that Hanoi would
need the Ho Chi Minh trail network until the rains
begin again in the late spring. Souvanna indicated
that he expected Lao Communist negotiators to stall
on the formation of a coalition government--and,
hence, North Vietnamese withdrawal--until that time.
The link between the North Vietnamese presence
and political progress in Vientiane may not be as
real as the Prime Minister seems to believe. Given
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the high priority Hanoi attaches to maintaining an
adequate flow of troops and supplies to the south,
any troop withdrawals will probably come prituarily
from combat units in north Laos, with logistic and
engineen forces in the south remaining intact. Hanoi
almost certainly intends to maintain a sizable mili-
tary presence in the southern Lao panhandle to
facilitate and safeg'iard the dry season supply push
currently under way there. Continuing construction
work on a major new dual lane, all-weather road
which will eventually span the entire length of the
panhandle, coupled with the announcement earlier this
year of "aid" agreements between Hanoi and Sam Neua,
could provide a facade of legitimacy for an indefinil:e
North Vietnamese presence along the infiltration cor-
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SOUTH VIETNAM
More Infightz'.ng at the Palace
There are signs of continued friction at the
top levels of the Thieu government. President
Thieu is attempting to resolve the power struggle
among his aides, but more positive act';.cn may be
necessary.
Prime Minister Khiem reportedly complained re-
cently that presidential assistant Nguyen
Van Ngan is trying to use the government's Democracy
Party to gain control of both the army and the ad-
ministration. Khiem charged that the Democracy
Party is becoming too powerful and that Ngan ex-
ercises too much influence on domestic political
decisions. The Prime Minister said that he and the
senior generals have thus far rebuffed Ngan's efforts,
but said he would soon warn Thieu of the undesirable
effects of current Democracy Party activities.
Ngan is out of favor at the palace
that as a result, Thieu has refused to meet per-
sonally with Ngan.
The other major actor in the dispute, Informa-
tion Commissioner Hoang Duc Nha, apparently is still
on good terms with Thieu. Nha, who has ,Jaen Thieu's
closest civilian adviser, may even be taking on ad-
ditional responsibility. A task force of senior
officials set up by Thieu reportedly has decided to
place the country's defector program under the
operational control of Nha's information Commission.
13 December 1973
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