Jerusalem (Jan. 14)
The huge Mosul oil pipeline, largest in the world, which was a matter of dispute between the United States, Great Britain and France, was opened officially today at Kirkuk by King Ghazi of Iraq in the presence of many prominent personages from European and Asiatic countries.
The pipeline will terminate in Haifa, where a celebration will be held January 22, commemorating the event. The line will enable American, French, British and Dutch oil companies to obtain no less than 4,000,000 tons of oil from Mosul through Palestine annually, and it will also convert the Haifa harbor into one of the most important commercial centers of the world.
An agreement to enable the transit of oil from Iraq to the Palestine harbor was signed between the Palestine government and the Iraq Petroleum Company, Ltd. This agreement is valid for seventy years. At the end of this term all property of the company automatically becomes the property of the Palestine government.
No import tax may be levied by the Palestine government on the company on anything necessary for its undertaking. Similarly all petroleum needed for requirements of the company is free of import duty.
The agreement between the Palestine government and the oil company provides that Palestine port authorities are to give all facilities to the company and that the company may build a port for its own purposes.
The company must employ local labor in Palestine. No property, income or any other tax can be imposed on the company or its employees.
When the company offers shares, the offer is to be made in Palestine at the same time as in other countries, it is made clear in the agreement. This eliminates any preferential treatment for countries like France or the United States, which are interested in the oil operations in Mosul.
The rich Mosul oil fields, whose development is now considered completed, have been the subject of controversy among English, French and American interests. The English, who have more oil than they need at the present time, were in favor of delaying the development of the Mosul fields for another six years. The Americans sided with the English. The French, who are dependent upon England, America and Soviet Russia for their petroleum supplies, insisted upon immediate action in the Mosul project.
The Iraq-Palestine pipeline cost $50,000,000.
The chief cost of developing the Mosul fields is involved in transporting the oil from the region near Bagdad to Mediterranean ports. The pipeline covers about 1,200 miles.
Originally the plan was to run the pipeline along the Haifa-Bagdad railway route, and to make Haifa the terminus. Great Britain favored this plan because it meant that the pipeline would be run through territory under British mandate.
French companies, however, argued it would be cheaper to run the line through Syria, under French mandate, because the land there is more level. A compromise was eventually reached, whereby the line will have two termini: one at Haifa in Palestine and the other at Tripoli in Syria.