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| in Vienna, Austria on Karl Lueger Ring |
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membership was the world’s petroleum exporters except the Soviet Union
became world’s new bankers, have a significant say over the foreign policies, and make a new international economic order |
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| goal was to have a global redistribution of wealth from North to South- “North-South dialogue” |
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| Biggest Battle in the Middle East |
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| between Saudi and Iran who competed over producing the most oil and now on price |
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| price increase was a great victory and he could now fulfill what he called Iran’s Great Civilization and solve Iran’s domestic problems |
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| made two different prices- a lower one for Saudi and a higher one for the other members |
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• Opposed higher prices because of damage that such increases might do to the world economy
• The International Energy Agency wanted to establish a minimum safeguard price to provide a floor to protect higher cost energy investment in the Western world against slash in world price |
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| • “barrels-for-bushels” deal |
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= the US would import Soviet oil in exchange for American wheat. This could mean a “defeat” for OPEC which would savory irony of using Soviet oil to break OPEC grip
• The deal fell through |
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| gave the Shah a free hand to buy as many American weapons as long as they were not nuclear |
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| • Policy part of a “twin pillars strategy |
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| ”= established for regional security once British withdrawal from the Gulf – Iran and Saudi Arabia were the pillars (Iran= Big Pillar) |
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| chaos, waste, inflation, temptation, corruption, and deepening political and social tensions |
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| a reminder of the times when companies held way and exporters were poor- now exporters saw concessions as degrading |
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• concession was the first on the block
o Oil Company was established by BP and Gulf
o had 60% and BP and Gulf 40%
o announced they will take the last 40% and BP and Gulf would not have any more special links to Kuwait- compensated the companies with $50 million |
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- president of Gulf Oil Trading Company
o Assumed they would retain preferential access in Kuwait because the company had been there for almost a half century long
o Gulf would be treated like any other customer
o Gulf got a very small discount on oil going into its own system but none at all on any oil that might be sold to anyone else |
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all oil companies’ concessions and other assets in the country would revert to Venezuela once the concession terms ended and policy of no new concessions
• Foreign ownership would not be acceptable anymore and nationalization would have to come |
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| declared not only the oil industry but all foreign investment in Venezuela should be nationalized |
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wanted to maintain the flow of technology and skills from the outside world in exchange for being paid for a barrel
• Companies also made contracts with country to get their oil to markets
• Exxon signed with " " what considered to be the largest oil supply contract made to that date- 900000 barrels per day
• The oil industry was central to the overall economic well-being of Venezuela
• A state holding company- known as PDVSA was established to play a central financial role to be a buffer between the policians and oil men
• The country’s new nationalized oil company was destined to become a major force in its own right in the new world oil industry |
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• Aramco was the greatest concession of them all
• Saudi took 60% share in Aramco but wanted 100%
• Aramco- Exxon, Mobil, Texaco, and Chevron
• Biggest concession- controlled fully 1/3 of free world’s oil reserves
• Two factors needed each other- Saudi had the oil but Aramco had the market |
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| New Saudi Arabia Agreement |
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Saudi would take over ownership of all of Aramco’s assets and rights within the country and Aramco would contine to be the operator and provide services to Saudi and receive 21 cents a barrel – market 80% of Saudi production
• Oil producers achieved their grand objective- controlled their own oil
• Saudi never signed the agreement |
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was pioneered by Indonesia and Caltex
The services were much the same but the terminology
The companies were now becoming contractors with “production sharing” contracts that gave them rights to part of any stream of oil they discovered.
reflected a change: sovereignty of a country was recognized by both parties in a way that was acceptable in the domestic politics of the countries |
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