OIL CONTRACTS ANNULLED

Press, Volume CII, Issue 30291, 18 November 1963, Page 15

OIL CONTRACTS ANNULLED

Argentina Ignores Warning By U.S. (A’-Z. Press Association—Copyright) BUENOS AIRES, November 16. Argentina last night ignored a United States warning of possible serious consequences and annulled its multi-million-dollar oil contracts with eight American and four other foreign companies, the Associated Press reported. President Arturo Illia carried through with a campaign pledge and issued decrees placing foreign petroleum production and development under the control of the Government-run oil agency, Yacimientos Petroliferos Fiscales.

The decrees authorised the Y.P.F. to use force if necessary to take over the operations of the foreign companies. President Kennedy has maintained that the United States cannot block the longthreatened annulment but that the United States will press for full compensation for the American firms. Washington also has indicated to Argentina that the annulment could result in a reduction or cessation of United States aid and private investments.

The United States Undersecretary of State (Mr

Averell Harriman) emphasised die American stand to President Illia personally last week.

It was not immediately known whether the companies would be fully compensated since the final annulment papers will be drawn up by Argentina’s Procurator General. The United States companies. who have estimated that they invested 397 million dollars for drilling and exploration, have already indicated they will take legal action to gain compensation. President Illia . maintains the contracts were made illegally and unconstitutionally by the former President. Mr Arturo Frondizi, in 1958.