Presidential Files; Folder: 6/30/80 [1]; Container 167
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6/30/80 [1] Folder Citation: Collection: Office of Staff Secretary; Series: Presidential Files; Folder: 6/30/80 [1]; Container 167 To See Complete Finding Aid: http://www.jimmycarterlibrary.gov/library/findingaids/Staff_Secretary.pdf WITHDRAWAL SHEET (PRESIDENTIAL LIBRARIES) FORM OF CORRESPONDENTS OR TITLE RESTRICTION DOCUMENT DATE l"'h .. ._, L:_ - emo w/�t-t-. ". .....� ..L<:;;!O:.. vv. uuncam, vr. to {:fie r.L.<:::i:I.J.I;L<:::U'-o Vf'I/I$U A M*feting "•AJith Za1d Yamani � Re; . pp . ) ' .,, ·S'Uif-- - u Of./ b� .�' .Of'4,eJJ '0 0 ' ' ' ,�; 3j '( <>'t;o 8 �p � ;:, ' ' 0 0 ,, 'o �- 0 0 0 0 ' u " .. ,'4 •I 0. l, 0 ;ilb· ·o o ' ' ·' 0 ' . ,, ,,. 0 .. 0 ., 0 0 ' ; " ·,, ' ' ' ' 0 0 < ' 0 ' " i . ' " ' ' ' ' FILE LOCATION Carter Presidential Papers- Sta�f Offices; Office of Staff Sec. ·Pres. Handwriting File, "6/30/80 [1] . " Box 193 RESTRICTION CODES (A) Closed by ExeCutive Order 12356'governirig access to national security information. (B) Closed by statute or by the agency which originated the document. (C) Closed in accordance with restrictions contained in the donor's deed of gift. NATIONAL ARCHIVES AND RECORDS ADMINISTRATION. NA FORM 1429 (6-85) . HOUSE · THE WHITE . ' . -:'" WASHINGTON - 80 - . 30 Jun . - - � · - - - - . ·· : · - � - - - � --- -::':: -- = ·: - -- � .. ; - �� - - :-' - · - :�: . � � - -�: · -:::�-:_�:.;__·-��.. ::·_ . , � .. :: -�---��:�;�:-�.��;: � - --�-� · -:�. · ��--- ���-- __ ::� -- ,.. - ....; : . - {.i� . '·: -- - - Duncan -. - .>; � Secretary _ - - _ . _ , . ... � :._ _ . · :.._ __ _· _. :· ·-- . � . - :·· -�- - -. :... -�---:. -�- �,...--- _ · _ _ _ · _ was retu�ned in ·· The attached · today · the President's outbox you for . and is forwarded to .. appro priate handling· : Rick Hutcheson � · - ----:---::=:-:-- - -------:r-'- - - - - - - - ----:---- - ----- -----'-- .....:. - --- -- �--- �- .7-:-·.:···-o ·· · :� ] - - � · I �- T� ' ·' � -�;""· ·_ ;· ··: · . ;-- --:- · . � .- � � .f - �;_ .. _;;·._ .. ' ____ ... -·- -::· .--::.·::::._ - :>"'4' - · �---- - -; �- ..::..... ._ ·:_._. -::. ..-. � . _ . : THE SECRETARY OF ENERGY WASHINGTON, D.C. 20586 27 June 1980 MEMORANDUM FOR: THE PRESIDENT FROM: Charles w. Duncan, Jr. SUBJECT: Meeting with Zaki Yaman Attached you will find the complete Memorandum of Conversation from my meeting with Saudi Arabian Oil Minister Zaki Yamani earlier this week, following my departure from Venice. Following is a summary of the key points raised in the meeting: 1. Summit Yamani expressed support for the energy accomplishments of the Summit following my summary of the communique. He then indicated en that the French had advised him that you had proposed to make a (I) en ·vicious attack on all of OPEC and that the French had intervened (I) 0 ""0 a.. to soften the language. I indicated that this was incorrect and co ..__ ::2;cf that the words "some of" in the communique had been a U.S. >-c initiative. a..o 0 · Ocu 0 C: 2. Domestic Politics · - (I) c en e � t5a... Yamani reiterated his previous observations that it was critical <I> '- w-2 you be reelected and that Sen. Kennedy's continuing to seek the nomination was irresponsible. He noted the Saudis were deeply concerned about Reagan's repeated inaccurate statements on energy, mentioning his claim that there was as much oil in Alaska · as in Saudi Arabia. 3 • Price and Production . � Yamani indicated that there would be no Saudi price increase now, but suggested that there could be one in the future for purposes of attaining price unity at the upcoming fall OPEC meeting. He noted again that the Crown Prince had approved the 9.5 million barrels per day production level "at least through � the third quarter." He said that Saudi production capacity had @ now been increased to 10.5 million barrels per day on a sustain- Q able basis, but that there, was growing resistance within the government to continuing to the planned level of 12 million barrels per day. He suggested that it would be a great help in countering this resistance if you sent a letter to the Crown Prince urging that capacity be increased beyond the 12 million � level for reasons of security and market stability. I have • attached a draft letter for your review. NA��������?��ITY ·� ClaSslftBO DY;;;=r-�-=::;-- �..e&J Unauthorized Disclosure eubfect to �.. �dmlmstrollllq and Crlmlnat Sanction!. lOP-�_ SECRET •, Electronic Copy Made 2 for Preservation Purposes He then provided an analysis of the world oil mar ket, stressing the importance of maintaining plentiful supplies throughout the summer so that pressure could be brought to bear on the OPEC price hawks to reduce their prices. He said it would be important for BP and Shell to resume purchases of Iranian oil at reasonable prices, in the range of $32.30 per barrel. He felt the Iranians would eventually accept this price. He cate gorically stated that recent offers of $35 and 33.50 were unacceptable. He supported our policy of holding the line on Algerian gas prices. Without increased gas price revenues and with added production from Iran adding to overall supply, Algeria would be forced to maintain their current level of production to maintain necessary revenues and might be pressured to reduce prices. 4. SPR Yamani indicated that he understood the Congressionally mandated SPR legislation, and I confirmed for him that we would be using NPR oil for the initial fill. It is my impression that we are now past the critical point with Saudi Arabia on this issue. 5. Iraq Yamani cited the growing reasonableness of Iraq in the pursuit of moderate oil policies, which is increasingly helpful to Saudi Arabia, notwithstanding their past differences. He recommended a dialogue between me and the Iraqi Oil Minister, stating he would be willing to host an introductory dinner for the three of us. He would then withdraw, and any continuing dialogue would be bilateral. He suggested a propitious timing might be in September, following the Tri-partite meeting of OPEC Foreign, Finance, and Oil Ministers, though it should be in a different location. If for any reason you or Secretary Muskie feel I should decline this suggestion, please adv ise me. 6. Conclusion Yamani was pleased with the energy results of the Summit, relaxed on the SPR question, and most productive in terms of his su gg es tions on both Iraq and Algeria. The meeting served to further the dialogue that seems to be developing as a result of this series of meetings. His Royal Highness Crown Prince Fahd ibn al-Aziz Al Saud Riyadh, Saudi Arabia Your Royal Highness: I would like to take this opportunity to advise you directly of the results of the recent Economic Summit meeting held in Venice, and some of its implications for the decade we face. As you know, my colleagues and I reached agreement on an ambitious plan of action to break the link between economic growth and the consumption of oil over the next ten years. One of the central features of this plan is our intention to increase among the Summit countries the supply of non-oil resources by the equivalent of 15-20 million barrels per day over this period. we have set this goal for ourselves in the realization that we must work in close cooperation with your country, and other responsible oil producers, to effect an orderly transition away from excessive dependence upon the petroleum resource base, which must be preserved for future generations. -lOP_SECRET rrd NARA,DATEitl.; "/'II/ 2 I �ould like to reiterate my deep appreciation for the responsible policies of your government on petroleum matters. I am sensitive to the very real difficulties �hich sometimes beset those �ho advocate and pu rsue policies of moderation and prudence, in the face of conflicting demands. As �e face the 1980's, it is clear to me that our countries face a serious and gro�ing challenge to our vital security concerns; I am confident that �e can meet this challenge if �e strengthen the sound policies that �e have developed. In this connection, I �ould like you to dra� your attention to the essential role �hich your country's installed production capacity �ill play in maintaining future market stability. One of the stark le ssons from the upheavals of 1979 is that in the interests of economic and political stability, the Free World needs a significant margin of production capacity to absorb sudden and unpredictable disruptions of petroleum supplies. In this regard, I �ould ask you to consider most carefully the no tion of bringing your country's production capacity expeditiously to a level �ell beyond the 12 million barrels per day platform that has been discussed publicly. It is my firm conviction that the future margin of Saudi Arabian capacity over projected market needs, may very �ell be the Free World's margin bet�een stability and serious disruption over the next ten years. Sincerely, __ ....;· Department of Energy Washington, D.C. 20585 MEMORANDUM OF CONVERSATION SUBJECT: Meeting bet�een Secretary Duncan and Zaki Yamani on Wednesday, June 25, 1980. Summit The meeting began �ith a debrief on the Venice Summit by Secretary Duncan. Yamani stated that he understood President Carter had made a vicious attack on OPEC at the Summit and that the French had intervened to soften the President's proposed language. Yamani indicated that he had learned this from the French. Secretary Duncan stated that this simply �as not true and provided Yamani �ith a copy of a Chicago Tribune article giving credit to the U.S. for differentiating bet�een OPEC producers. Secretary Duncan indicated that he, in fact, had personally intervened on behalf of the U.s. to insert the �ords 11 some of 11 in the communique so as to distinguish bet�een the OPEC moderates, such as Saudi Arabia, and the OPEC price ha�ks. Secretary Duncan concluded this part of the discussion by observing that the French supported us in this effort, but �ere not correct in suggesting that �e had taken the lead in proposing language to attack all of OPEC.