JOSEPH BELL, Esq., Sun Oil Co. SUN OIL Co., Assistant General Counsel for International and Special Programs, Federal Energy Administration, New Post Office Building, Washington, D.C. DEAR MR. BELL: Sun Oil Company is in receipt of a copy of Mr. Zarb's April 17, 1975 letter to Mr. H. Robert Sharbaugh, the President of the Company, advising that the Attorney General's approval of affiliates terminates on April 27, 1975 and requesting that information be provided as to the grounds on which we believe the affiliates' participation is necessary to the operations under the agreement and further outlining ownership. The exemption to Sun Oil Company and its affiliates is covered by a letter dated April 3, 1975. Thus the exemption to Sun's affiliates expires May 2nd. As a result of conversations between Sun representatives and Mr. James P. Morris of FEA, Sun believes it desirable to modify the listing of Sun affiliates as originally submitted by Mr. Sharbaugh on March 5, 1975. The affiliates whose participation appears necessary to the operations of the IEP include the following: 1. Sun Oil Company of Pennsylvania; Puerto Rico Sun Oil Company; Suntide Refining Company. These subsidiaries incorporate Sun's primary domestic marketing and refining operation. Included are five U.S. mainland refineries and a Puerto Rican refinery. The subsidiaries are frequently importers of record and additionally export significant volumes of lubricating oils, specialty oils, waxes and petrochemicals to member countries of the IEP. 2. Sun Oil Company (Delaware). This subsidiary's activities include the exploration and production of crude oil, natural gas, and natural gas liquids within the United States. The expertise of representatives of this subsidiary would appear to be of value to the IEP. 3. Sun Oil International, Inc. Sun International, Inc. is responsible for Sun's worldwide exploration and production operations other than those in U.S. and Canada. The expertise of Sun International, Inc. representatives would appear to be of value to the IEP. 4. Sun Oil Trading Company. This subsidiary markets Sun's equity production to purchasers in international markets. It is significantly involved in the international supply to member countries of the IEP. 5. Sun Oil Trading Company Limited (Bahamas Corporation). This subsidiary buys, sells and trades crude and petroleum products in the international market. It is significantly involved in the international supply to member countries of the IEP. 6. Sun Oil Company of Canada Limited (Dominion of Canada Corporation); Sun Oil Company Limited (Dominion of Canada Corporation); Great Canadian Oil Sands Ltd. (Dominion of Canada Corporation). Sun Oil Company of Canada Limited acts as an agent in the sale of crude oil in Canada, primarily to Canadian customers but also to United States customers. It is thus significantly involved in the international supply to a member country of the IEP. Sun Oil Company Limited engages in the production of crude oil, natural gas and natural gas liquids, the manufacturing of petroleum products and chemicals and the marketing of products in Canada, primarily to Canadian customers but also to United States customers. Great Canadian Oil Sands, Ltd. engages in the production of synthetic crude from the Athabasca oil sands in Alberta, Canada. This production is also sold in Canada, primarily to Canadian customers but also to United States customers. Sun Oil Company Limited and Great Canadian Oil Sands, Ltd. are thus significantly involved in the supply to member countries of IEP. 7. Venezuelan Sun Oil Company; Sunray Venezuela Oil Corp.; Iranian Sun Oil Company; Dubai Sun Oil Company. These subsidiaries are primarily engaged in the production of crude oil in Venezuela, Dubai and Iran. The production is sold either independently by the production subsidiaries or through Sun Trading Company. Customers include those from member countries of IEP and thus the activities of these subsidiaries are significant to the supply to member countries of the IEP. 8. Sun Oil Company (Netherlands) BV (Netherlands Corporation); British Sun Oil Company, Ltd. (United Kingdom Corporation); Sun Oil Co. (Belgium) S.A. (Belgium Corporation). These international marketing-subsidiaries are primarily engaged in the purchase and resale of significant volumes of lubricating and specialty oils to customers in member countries of the IEP. 9. Sun Transport Inc.; Sun Overseas Transport, Ltd. (Liberia Corporation). These subsidiaries are operators respectively of Sun's U.S. registered ships, tugs, barges and foreign registered ships owned or chartered by Sun. Activities include transportation to customers in member countries of the IEP. All of the above subsidiaries are 100% owned except for Great Canadian Oil Sands, Ltd. which is 96.4% owned, and all are U.S. corporations unless otherwise noted. I trust that these brief descriptions will suffice for your purposes. Yours very truly, Mr. FRANK G. ZARB, SAMUEL K. WHITE, Vice President, Legal Affairs. Texaco, Inc. TEXACO, INC., Washington, D.C., April 21, 1975. Administrator, Federal Energy Administration, DEAR MR. ZARB: This letter is in response to your April 17 letter to Mr. Olmstead requesting information concerning affiliates previously requested to be included in the coverage of the "Voluntary Agreement and Program Relating to the International Energy Program." In his March 10 letter to Mr. Bell, Mr. Olmstead listed the following as Texaco's designated affiliates: Texaco Export Inc.; Texaco Operations (Europe) Ltd.; Texaco Overseas Petroleum Company; and Texaco Indonesia Corporation. After further review, Texaco has determined that only the first two above listed affiliates will be designated for the present and that the latter two will be removed. For the reasons you indicated, it is difficult to identify all of the affiliates whose participation may later be required. As the activities of the IEA become clearer, or after principles/plans have been approved, Texaco may wish to designate additional affiliates. In the meantime, with respect to the two affiliates designated, the following information is submitted: Texaco Export Inc., a Delaware corporation, is a wholly owned subsidiary of Texaco Inc. and is its principal international crude oil and refined products trading company. The major portion of the crude oil produced or acquired by Texaco subsidiaries operating in the producing countries is sold to Texaco Export Inc. which, in turn, sells and, in many cases, delivers the crude oil to Texaco subsidiaries operating in the consuming countries and to third parties. Texaco Operations (Europe) Ltd., a Delaware corporation, is a wholly owned subsidiary of Texaco Inc. and is its principal trading company in Europe. The major portion of the refined products imported by local Texaco subsidiaries for sale in the several European countries is acquired by them from Texaco Operations (Europe) Ltd. Very truly yours, J. DONALD ANNETT, Union Oil Company of California UNION OIL COMPANY OF CALIFORNIA, Mr. FRANK G. ZARB, Administrator, Federal Energy Administration DEAR MR. ZARB: This is in response to your letter of April 17, 1975 concerning our reconsideration of the list of affiliates that should be included along with the parent Company, Union Oil Company of California, that should logically be covered under the "Voluntary Agreement and Program relating to the International Energy Program". Upon further consideration of this matter, we have concluded that it would be logical to reduce the number of our affiliates so covered from the seven given in my letter of March 5, 1975 to you (CLC-1970) to the following five: Unoco Limited; Union Oil Company of Canada, Ltd.; Union Oil Company of Indonesia; Union Oil Company of Iran; and Pure Oil Company of Venezuela. All of these subsidiaries, with the exception of Unoco Limited, are engaged in the actual production of foreign crude oils, so, we believe that their participation is reasonably necessary to operations under the Voluntary Agreement as presently foreseen. Unoco Limited is our subsidiary which negotiates and administers crude oil contracts involving the sale of foreign crudes, so, here again, we believe their participation is reasonably necessary to operations under the Voluntary Agreement as presently foreseen. The stock of all of these affiliates are 100% owned by the parent Company, Union Oil Company of California, with the exception of Union Oil Co. of Canada, Ltd. in which the parent Company owns 87% of the stock. We hope this will supply the information you need. If you have any further questions, please let me know. Very truly yours, CLYDE L. CALDWELL, APPENDIX 6 The Secretary of State Speech STRENGTHENING THE WORLD ECONOMIC STRUCTURE Secretary Henry A. Kissinger before the Kansas City International Relations Council. Yesterday [in St. Louis] I spoke of the political challenges facing us in foreign policy-that we have a vast agenda ahead of us, that the world is poised on the brink of a new era of achievement or one of chaos, that America's role will be vital. Our challenges in the economic field are no less urgent and important. Today I will discuss the international economic system and set forth a comprehensive American approach to the major issues at hand. The paramount necessity of our time is the preservation of peace. But history has shown that international political stability requires international economic stability. Order cannot survive if economic arrangements are constantly buffeted by crisis or if they fail to meet the aspirations of nations and peoples for progress. The United States cannot be isolated-and never has been isolated-from the international economy. We export 23 percent of our farm output and 8 percent of our manufactures. We import far more raw materials than we export; oil from abroad is critical to our welfare. American enterprise overseas constitutes an economy the size of Japan's. America's prosperity could not continue in a chaotic world economy. Conversely, what the United States does-or fails to do-has an enormous impact on the rest of the world. With one-third of the output of the non-Communist world, the American economy is still the great engine of world prosperity. Our technology, our food, our resources, our managerial genius and financial expertise, our experience of PR 250 May 13, 1975 Kansas City, Mo. leadership are unmatched. Without us there is no prospect of solution. When we are in recession, it spreads; without American expansion, the world economy tends to stagnate. For 30 years the modern economic system created at the Bretton Woods conference in 1944 has served us well. Its basic goals-open, equitable, and expanding trade, the stability and orderly adjustment of currencies, coordination in combating inflation and recession-have largely been achieved. World growth has surpassed any prior period of history. But the system is now under serious stress. It faces shortages and disputes over new issues such as energy, raw materials, and food. And many of its fundamental premises are challenged by the nations of the developing world. Obvious crises are the easiest to meet; the deepest challenges to men are those that emerge imperceptibly, that derive from fundamental changes which, if not addressed, portend upheavals in the future. These contemporary challenges to the world economic structure must be overcome, or we face not only an end to the growth of the last 30 years but the shattering of the hopes of all of mankind for a better future. Our economic strength is unmistakable. But what is tested now is our vision and our will-and that of the other nations of the world. The Existing System The international economic system has been built on these central elements: • Open and expanding trade; 53-813 O-75-9 Within this framework, over the past quarter century, the industrialized countries have maintained an almost continuous record of economic growth. The developing countries have made unprecedented advances, though their progress has been uneven. After the experience of the 1930's the postwar system was designed-with the United States playing a leading role-to separate economic issues from political conflict and to subject them as much as possible to agreed multilateral procedures. The rules were designed to restrain unilateral actions that could cause economic injury to others. The world's economic growth within this framework has been simultaneously the cause and the result of growing interdependence among nations. Revolutions in communication and transportation have shrunk the planet. The global mobility of capital, management and technology, and materials has facilitated the growth of industry. World trade has encouraged specialization and the efficient division of labor, which in turn have stimulated further expansion. The recession and inflation of the last few years-which spread around the world-have reminded us that nations thrive or suffer together. No country-not even the United States- can solve its economic problems in isolation. Consciousness of interdependence has been most successfully implemented among the industrialized countries. When the energy crisis first hit us the industrial countries agreed that they would not resort to unilateral, restrictive trade measures to make up the payments deficits caused by high oil prices. That pledge was respected and will be renewed this year. And last fall, as the recession worsened, the President held a series of conversations with German, Japanese, British, and French leaders to devise a coordinated strategy for economic recovery. These policies have begun to bear fruit. The advanced industrialized countries have understood the imperative of coordinating their economic policies. As our economies now turn toward expansion we must ensure that our policies remain coordinat ed, particularly for the control of inflation with its economic costs and attendant social dangers. Against this background of cohesion the industrial countries can act with renewed confidence across the entire range of political, economic, and security issues. The annual ministerial meeting later this month of the Organization for Economic Cooperation and Development [OECD] is therefore of great significance. This body-composed of the industrialized countries of North America, Europe, and Asia-will assess where we stand and discuss even closer coordination and joint actions in economic policies. Secretary [of the Treasury William E.] Simon and I will represent the United States. The Challenge From The Developing World Global interdependence is a reality. There is no alternative to international collaboration if growth is to be sustained. But the world economic structure is under increasing challenge from many countries which believe that it does not fairly meet their needs. The challenge finds its most acute and articulate expression in the program advanced in the name of the so-called Third World. This calls for a totally new economic order, founded on ideology and national self-interest. It is stimulated by resentments over past exploitation, and it is sustained by the view that the current system is loaded against the interests of the developing countries. One of the central proposals is that the prices of primary products should be set by international agreements at new high levels and then pegged to an index of world inflation. The objective, as with the oil price increases, is a massive redistribution of the world's wealth. This challenge has many aspects. At one level it is an effort to make the availability of vital natural resources depend on political decision, particularly with respect to energy, but increasingly involving other materials as well. More fundamentally it is a result of the new dispersion of economic power among developed and developing coun tries that springs from the unprecedented global economic expansion of the last 30 years. The United States is prepared to study these views attentively, but we are convinced that the present economic system has generally served the world well. We are prepared to consider realistic proposals, but we are convinced that poorer nations benefit most from an expanding world economy. History has proved the prosperity of |