CONFIDENTIAL #2 機密
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would not have associated themselves with a deal of this nature (for reasons deriving from their relationships with the various Arab states), and it was felt desirable to ascertain the reactions of the Foreign and Commonwealth Office and the British Embassy in Jedda. Their reactions were unenthusiastic. The FCO said that if the deal was, as it seemed
to be, illegal under Saudi law, HMG would be embarrassed if it came to light.
3.
The British Embassy in Jedda made the alternative suggestion of a direct approach to the Saudi Minister of Petroleum and Minoral Resources, Shaikh Ahmed Zaki Yamani. On 6th November a telex was sent to Jedda asking for a nomince on the Embassy staff with whom to discuss the next steps. A reply was received on 10th November.
4.
In the meantime, there was increasing evidence that the offer would come to nothing and, in fact, was probably a speculative venture of some sort. Despite constant pressure, the Singapore contacts were unable to produce contract documents or the final seller in person and contacts in the bank to which payment would be made did not recognise the name of the seller or his company as given by the Singapore contacts. One of the oil companies represented on the Board of Owensbord also produced information from their Head Office on similar phantom product offers with which the international oil companies themselves have become familiar-
5.
On 10th November 1980 telephone contact was made with a Commercial Counsellor at the British Embassy, Jedda. He advised that an approach to Shaikh Yamani on a government-to-government level was probably the best hope of obtaining the oil required and, in the current state of the spot market for refined products, perhaps the only (albeit slim) hope. He suggested that the approach should be by an official letter from the Governor to Shaikh Yamani conveyed by a dologation consisting of a senior Unofficial and a senior Government official, backed up by whatever supporting staff are required. This is now being followed up : a message has been sent and if the response is favourable, arrangements are in hand to send a delegation to Saudi Arabic.
/6.
A
G.S. 166
CONFIDENTIAL **
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