LETTER TO MR. ALLEN DULLES FROM JAMES TERRY DUCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R003800040050-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 12, 2016
• Document Release Date: February 15, 2002
• Sequence Number: 50
• Publication Date: March 11, 1958
• Content Type: LETTER

Approved For=Release 2002/02/27 : CIA-RDP80BO1676R003800040050-4
ARABIAN AMERICAN OIL COMPANY
A CORPORATION
SHOREHAM, BUILDING
WASIIINGTON 5, D. C.
larch 11, 1958
Mr. Allen Dulles,
21030 h Street, N. V.
inashington 25, D. C.
Lith reference to our conversation regarding the present
status of Riddle East reserves and production, I cannot over-
emphasize the importance of these to the United Slates at the present
time. I believe we are approachins the end of the growth of our
proved reserves in the U. S. and while by increasing price and
thereby stimulatinc drilling activities, we can somewhat artifically
continue to increase our proved reserves, we can only do it for a
relatively short time and at a high cost. The only area in which
there is any great possibility for our finding massive new reserves
is in the seaway where production techniques are difficult and costs
are high. It is true that we can produce oil from oil shale and
recover it from tar sands at home, but this has to be at a price
and I might add that this price is written not only high in dollars
but in steel consumption and in labor to mine and process it, two
['actors we must not neglect in times of crisis. Steel and labor
are the real currencies of war time.
At the present time 71% of the world's proved reserves
lie in the Middle East. I enclose a tabulation showing world proved
reserves as estimated in 19L17 and 1957, together with present pro-
duction rates and a guess at future probable ultimate recoverable
reserves in the Middle East. To tut this in the proper framework,
our proved reserves at home today are about 33 billion barrels in
contrast to 169 billion barrels in the `Middle East. I would Guess
that the probabilities are that the ultimate recoverable reserves
in the Middle Fast may reach a figure of say four hundred billion
barrels, so that a large proportion of .,he ,,orldls oil is going to
come from this area despite discoveries in other areas which may
temporarily divert markets from the Middle East, such as for exa iple
in Algeria and in Venezuela.
If the ttussians can Fin control of the Persian Gulf they
would thereby gain control of the world's oil industry. They could
determine prices for oil and control the quantities laid down and this
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 Approved ForRelease 2002/02/27 : CIA-RDP80BO1676R003800040050-4
P Mfr. -Allen Dulles - 2
March 11, 1956
would not only affect the oil industry but also other fuels, such as
coal, and ultimately might determine the rate of industrialization
in many areas. There could be no more satisfactory way of manipula-
ting the world economy than the control of oil reserves in the ,iIddle
East. These reserves are, therefore, of permanent and parmount im-
portance in the power struggle in which -,.,e find ourselves involved.
They should remain in the hands of the west at all costs.
Sincerely yours,
-
Y alc
z~-~
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 Approved FoLRelease 2002/02/27 : CIA-RDP80BO1676R003800040050-4
-ESTIMATED F.0E' WWJ RLD CM[' DE OIL RESERVES YEAR DD 1947 AND 1957 AND
POSSIPLE I LTIPjATE RECCVEh'.ARIE RESERVES
(Millions of P'arrels, except as indicated -
of -_ 7, of Possible Ult.
Eastern Hemisphere Preserves Total Reserves Total Recov.Reserv.
Middle East
Saudi Arabia
-'ahrain 3,b~J0 6-5% 45,000 ig.o% 100,000
280 .5
Min f a 200 - X500
Iran 5
I racy , 625 10.5 32,000 13.5 100~000
5,000 9.5 25,000 10.5 100,000
Israel - - 5u - 20
Kuwait 4,500 8.5 60,000 25.0 100,000
Kuwait Neutral Zone -
Qatar - 5,000 2.0 25,000
8-
8-y 500 1.0 1.750 1.0 20,000
ria. - 500 .5
oral Middle East 19,505 3 717;7-1 71. , 20
l,estern Europe 194 .5 1,369 1.0
I! t'ri c a 14 If - 814 .5
'Tritish forneo
20U .5 550 3.0
Indonesia 850 1.5 7,500 -
Other Far r.,ast and Oceania 193 .5 528 -
Total - --- - -
Eastern Hemisphere 21,084 39.5 180,262 76.0
?:e st ern Hemisphere
Canada
Mexi co
United States
Venezuela
Other Ivestern hemisphere
200 .5 3,259 1.5
1,058 2.0 2,750 1.0
21,488 40.0 33,OOU 14..0
8,350 15.5 16,000 6.5
1, 304 2.5 2,255 1.0
Total
Lectern Hemisphere 32,400 60.5 57,264 2!i..0
Total FVee L`orld
53,484 100.0 237,526 1u0.0
Production
1'/D 1/5 8
Thousands
(fbls.)
978
35
842
615
1.4
1, 313
73
159
235
60
120
330
35
h, 805
485
250
6,883
2,540
1..35
10,593
15,397
Approved For Release 2002/02/27 : CIA-RDP80BO1676R003800040050-4
 Approved For Release 2002/02/27 : CIA-RDP80BO1676R003800040050-4
Approved For Release 2002/02/27 : CIA-RDP80BO1676R003800040050-4