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5C0 • ' •* ' C O I T J T D S S T I A L V ,?HI£R CAT A HI ?C0 27O9U5Z MW BY BAG CONFIDENTIAL TO IMMEDIATE NAIROBI TGLNO 553 OF 27 OCTOBER 1NFO. P R10 RITY WASH!NGTON INFO SAVING PARIS, BO N H, YOUR TELNOS 1077 AND 1305s US TRADE BAN AND UGANDA POL i. OFFICIALS MET REPRESENTATIVES OF SHELL AMD BP OH 26 OCTOBER If! RESPONSE TO A REQUEST FOR ADVICE FROM THE COMPANIES, TO DISCUSS ACTION THEY MIGHT TAKE FOLLOWING THE WITHDRAWAL OF US OIL COMPANIES FROM THE UGANDAN MARKET. 2a SH-.:.LL SAID THAT ALL THREE US OIL COMPANIES HAD NOW STOPPED SUPPLIES TO UGANDA AND WITHDRAWN THEIR EXPATRIATE STAFF. THC- UGANDAN GOVERNMENT HAD APPROACHED THE MANAGER OF SHELL/BP UGAi.'OA LIMITED, WHO HAD STALLED WHEN ASKED TO MAKE UP TH6 SHORTFALL LEFT 3Y THE WITHDRAWAL OF THE US COMPANIES, THE G0VF.3M0R OF THE BANK OF UGANDA WAS MEETING 114 NAIROBI WITH THE SHELL/DP REPRESENTATIVE ON 26 OCTOBER BUT THE OUTCOME OF THIS WAS MOT YET KNOWN„ THE KENYAN GOVERNMENT HAD TOLD SH&L.L IN NAIROBI T!!AT3 WHILE THEIR RELATIONS WITH UGANDA WERE COOLj THEY WANTED THE OIL COMPANIES TO BE QUOTE STRICTLY CORRECT UNQUOTE IN THEIR TRADING RELATIONS WITH UGANDA. 3. SHELL THEM EXPLAINED THAT IN DECIDING THEIR REACTION TO THE ' UGANDAN REQUEST THEY WOULD BE GUIDED BY THE FOLLOWING CONSIDERAT- IONS-^ •"- (A) F;OT TO BE SEEM TO FRUSTRATE US LEGISLATION, AND TO AVOID PARLIAMENTARY AND PUBLIC CRITICISM IN THE UK3 (B) TO OBSERVE THEIR CONTRACTUAL OBLIGATIONS TO UGANDA, THEY ARE , COMMITTED UNDER A 1970 AGREEMENT TO SUPPLY THE UKQUAHTIFJEO OIL REQUIREMENTS OF BP/SHHLL UGANDA LTD, THE AGREEMENT PROVIDES FOR 2 YEAR13 NOTICE OF TERMINATION; (C) THE SAFETY OF THEIR STAFF IN KAMPALA INCLUDING FOUR EXPATRIATE STAFF, TWO OF WHOM AR£ BRITISH? (D) THE NEED TO REMAIN ON GOOD TERMS WITH THE KENYANS.' 4, ASKED TO STATE OUR POSITION, V/E SAID THAT WHILE THERE HAD H;:~N NO TIME TO CONSULT MINIST^^.OUR PROVISIONAL VIEW WAS