CURRENT INTELLIGENCE BULLETIN - 1957/03/28

• Document Type: SPECIALCOLLECTION
• Keywords: 2018 Sanitization
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03160435
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: March 28, 1957

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28 March 1957
Copy No. 132
DOC:2MENT NO.
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CLASS. C.iiANGED TO: TS S
NEXT FIL-ViEW DATE:
AUTH: HR 70-2
DATE.
EVEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
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CONTENTS
1. EGYPTIAN MEMO BUM ON SUEZ CANAL
(page 3).
2. MIDDLE EAST 50/50 OIL PROFIT FORMULA MAY BE
BREACHED (page 4).
READS ALARMIST RUMORS IN SYRIA
(page 5).
4. SOVIET NOTE TO NORWAY
page 6).
5. CAMBODIAN GOVERNMENT URGES PROMPT DELIVERY
OF CHINESE COMMUNIST AID (page 7).
28 Mar 57
Current Intelligence Bulletin Page 2
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1, EGYPTIAN MEMORANDUM ON SUEZ CANAL
Comment on:
The draft memorandum on the Suez
Canal circulated by Egypt on 26 March
once again makes clear the Nasr re-
gime's intention to operate the canal
and collect the tolls under its own authority exclusively.
The only hint of international participation in the financial
arrangements for the canal is an authorization for toll pay-
ments to be made to the account of the Egyptian canal
authority with the Bank of International Settlements, a non-
political institution which acts as clearing agent for cen-
tral banks in the European Payments Union. Tolls can also
be paid directly to the National Bank of Egypt.
The memorandum states that Egypt will
establish a "Suez Canal capital land development fund" which
will receive 25 percent of gross receipts to meet the needs of
development and capital expenditures on the canal. However,
it appears that this fund would be entirely under Egyptian con-
trol. The balance of the memorandum consists essentially of
a reaffirmation of Egypt's determination to abide by the Con-
stantinople Convention of 1888 and of its willingness to arbi-
trate disputes with users and with the stockholders of the na-
tionalized Suez Canal Company.
This memorandum, like its predecessors,
is not likely to satisfy the essential demand of Britain, France
and other Western European shipping countries that either the
financial or operating authority over the canal should be sub-
ject to some form of international control. The British govern-
ment has informed British shipowners they should not use the
canal for the time being, and the French government has asked
several other SCUA members to make similar requests. How-
ever, ships of several nationalities, including Greek and Dutch,
reportedly have already paid tolls to the Egyptian canal authority.
28 Mar 57
Current Intelligence Bulletin Page 3
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2. MIDDLE EAST 50/50 OIL PROFIT FORMULA
MAY BE BREACHED
Comment on:
The Shah of Iran
had
liZnitiateclian oil agreement with the Ital-
ian government-owned oil company--Ente
Nazionale Idrocarburi (ENI)- -on terms more favorable to
Iran than other oil agreements. The terms apparently would
result in a division of profit on about a 75/25 basis in Iran's
favor. The Shah indicated, however, that he suspects the
company's good faith and is not sure that the agreement will
be formalized.
Even though this particular deal is not
consummated, it may achieve ENI director Mattes objective
of an Italian share in the Middle Eastern oil picture. Earlier
this month Mattei threatened representatives of Western oil
companies that he would upset "the whole applecart in the
Middle East" unless they co-operated with the Italian com-
pany. Oil industry sources "emphatically" agree that ENI
has this capability. Mattei said, however, that the whole deal
could be called off if ENI "were given a small percentage of the
Iranian consortium."
The Italian-Iranian deal reportedly involves
development of at least part of the promising Qum field south
of Tehran. The Iranian government reportedly would put up
50 percent of the capital and the Italians the other half. Profits
accruing from Iran's share of the investment would go solely to
the government and Iran would also take half of the Italian com-
pany's profits. While technically this can be defended as not
breaching the 50/50 principle, actually such would be the case.
Should the initialed agreement go through,
the 75/25 division would evoke demands for renegotiating oil
contracts in other Middle East countries and probably through-
out the world.
28 Mar 57 Current Intelligence Bulletin
Page 4
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3. USSR SPREADS ALARMIST RUMORS IN SYRIA
Reference:
A "Soviet bloc source"--probably the
Soviet embassy in Damascus--has warned
Syria that Israeli reserves are being mo-
bilized and troops being massed on the
Jordanian and Syrian borders
The Soviet embassy in Damascus warned
that there were British and French con-
centrations on Cyprus to "meet any developments" when the
Suez Canal opens,
Moscow attempted a similar rumor cam-
paign in Syria in late November in connection with internal dis-
turbances, playing on Syrian fears of a Turkish and Iraqi attack.
The USSR may have felt that such warnings, in addition to hard-
ening the Arab attitude toward the West, might aid Syrian left-
ists, particularly chief of army intelligence Sarraj, during pres-
ent factional conflicts by implying that Arabs can count only on
the USSR for support. -
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4. SOVIET NOTE TO NORWAY
Reference:
Premier Bulganin's note of 21 March to
Norwegian prime minister Gerhardson
is the first formal Soviet communication
to any country dealing with the risks of
accepting atomic weapons or atomic-
equipped units. This has, however, been a strong Commu-
nist propaganda theme since January, and a number of in-
formal diplomatic warnings have been given since then, par-
ticularly to Asian-African countries.
Bulganin admonished Norway against al-
lowing its territory to be used as a base against the Soviet
Union and warned that Norway might have to "pay dearly" for
NATO bases. He pointed out the necessity in wartime for
retaliation against an aggressor and "also against the bases
which are located near our borders."
The most immediate purpose of this letter
was probably to deter Norway from accepting new conventional
missiles and rockets which could, however, be equipped with
atomic warheads. This latest Soviet warning is not likely to
deter the Norwegian government from accepting these weapons,
but it will complicate the government's effort to "educate" pub-
lic opinion on their necessity.
28 Mar 57
Current Intelligence Bulletin Page 6
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SECRET
C ODIAN GOVERNMENT URGES PROMPT DELIVERY
OF CHINESE COMMUNIST
The Cambodian government instructed
its permanent economic mission in
Peiping on 12 March to make "urgent
demarches" to the Chinese Communist
regime to eliminate shipping difficulties
so that Chinese aid to Cambodia might be implemented "im-
mediately." Any delay, would risk pro-
voking repercussions on a "political level."
Comment The continuing absence of any results
from the trade and aid agreements nego-
tiated with Peiping nearly a year ago has largely dissipated
the initial enthusiasm of Cambodian officials. Growing Com-
munist subversion in Cambodia has augmented this disillusion
and has generated serious criticism of Cambodia's national
policies.
28 Mar 57
Current Intelligence Bulletin Page 7
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