FOREIGN RELATIONS, 1946, VOLUME VI



other structure declared duration reserve subject to foregoing allot-
ment procedure.
  Furthermore, 1942 law adopts principle exploration and exploita-
tion for oil in Rum (outside existing producing fields) must be done in
associations which must include, in case of exploration work, all
parties with oil rights in area concerned and, in case of exploitation,
owners of surfaces covering given proved structure. Private conces-
sion holders are required join associations or give up their interest
therein in return for royalty payment. In no case may private con-
cession holder develop his own concession.
  Am cos object to associations principally (1) they contain numerous
members and are unwieldy, (2) membership may be acquired irre-
spective solvency individual members with inability pay proportionate
expenses, and (3) previous geological knowledge and development
technology must be shared with small Rum cos contributing little if
anything. Association procedure similarly applies extensions to
proven areas of existing fields and to discovery new zones beneath
those presently exploited.
  Although 1942 law contains restrictive features applicable foreign
cos, there is no evidence German influence. Conversely, law appears
aimed insuring greater participation Rum cos in ownership and devel-
opment indigenous petroleum resources.
  Outstanding example discrimination against Brit and Am cos is
Rum Govt declaration new joint Sov-Rum co (Sovrompetrol) as
Rum co; therefore it is eligible benefits and advantages accorded Rum
cos under above law.
  2. Extent Am co problems under 1942 law met by Rum Peace
Treaty"8 agreed provisions. Although Dept believes Am oil cos
(principally Romana-Americana) prefer acceptance Brit position
calling for repeal 1942 mining law, Dept's view is agreed provisions
(para 1, 2, and 6 Article 24) Rum Peace Treaty provide sufficient
protection restore Am property rights as existed prior enactment
1942 law.
  3. Furnishing price data later.
  4. Petroleum annex proposed by Brit Govt apparently designed
cancel Rum Govt actions detrimentally affecting Brit oil interests
without yielding benefits obtained thereunder. US Govt unable
support this position and therefore concurs action taken by Amdel.19
Also see para 2 above.
  '8aFor text of the Draft Peace Treaty with Rumania, as approved by the
Council of Foreign Ministers on July 18,1946, see vol. iv, p. 63.
  " In the June 4 and June 26 meetings of the Economic Committee of
the
Council of Foreign Ministers, the British delegation proposed a special annex
on petroleum to the Draft Treaty of Peace with Rumania. The American delega-



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