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THAT THERE WERE MAMY UNCERTAINTIES IN THE SITUATION (EG THE , ATTITUDE OF U| GOVERNMENT AMD OJHEJL EUROPEAN OIL COMPANIES) <.. AMD THE BEST COURSE AT THE MOMENT SEEMED TO BE TO PLAY FOR TIRE. WE WENT ON TO-WARM THAT ANY SUBSTANTIAL INFILLING OF THE US MARKET SHARE BY SHELL/BP WOULD ALMOST CERTAINLY OCCASION CRITICISM \U THE UK AND COULD LEAD TO PRESSURES ON THE BRITISH GOVERNMENT TO FOLLOW THE US EXAMPLE AMD BAM ALL TRADE WITH UGANDA. WE WOULD LIKE TO KEEP INCLOSE TOUCH WITH THE COMPANIES. 5. SHELL, WITH ASSENT FROM BP, VOLUNTEERED THAT THEIR PRESENT INTENTION WAS TO TRY TO KEEP THEIR DELIVERIES OF POL TO UGANDA* AT ABOUT THE REDUCED LEVELS OF RECENT MONTHS, IF NECESSARY RELYING ON UGANDAN FAILURE TO PAY OFF DEBTS AND/OR BY REFERENCE TO INABILITY TO INCREASE TAKE-OFF FROM THE MOMBASA REFINERY, THEY HAVE PROMISED TO PROVIDE US VITU FIGURES. THEY WARMED HOWEVER THAT IT WAS POSSIBLE THAT PRESSURE FROM THE UGANDAN GOVERNMENT MIGHT INCREASE SINCE"OIL STOCKS IN UGANDA WERE VERY LOW AND THAT THEY MIGHT NOT THEREFORE BE ABLE TO HOLD THIS LIME fOn VERY LONG. THEY WANTED TO KEEP IN TOUCH WITH US, AMD MIGHT MEED FURTHER GUIDANCE AT SHORT NOTICE, WE COMMENTED THAT AT FIRST SIGHT THE SHELL/BP RESPONSE TO THE SITUATION SEEMED ENTIRELY APPROPRIATE, BUT THAT WE WOULD NEED TO CONSULT MINISTERS. • : . 6. WE WILL TELEGRAPH FURTHER WHEN WE HAVE THE PROMISED DETAILED INFORMATION FROM THE COMPANIES AMD HAVE HAD THE OPPORTUNITY TO CONSIDER OUR POSITION MORE FULLY. 7, WITHOUT APPROACHING THE-KENYANS,. V.'S SHOULD BE GRATEFUL FOR AMY PRELIMINARY COMMENTS YOU MAY HAVE OH THE LIKELY VIEWS OF THE KENYAN GOVERNMENT ON SHELL/EP'S PROPOSED TACTICS, ' 8, RECORD OF CONVERSATION FOLLOWS BY BAG. OV/EM ' . . • . . . • • • • FILES RHODESIA D • " COPIES TO E D WED. CES 5/ C I P C3AD . MR.BUTLER TRED MR.REID ' . . . "fcOOt'l D j.»n fpWOr-'AQ • *~ N2WS D I1R."HAYES CONFIDENTIAL