Militant Arab voices within the world’s richest oil cartel want new talks with Western oil companies before the end of this year aimed at higher oil prices, oil industry sources said today.
This was revealed after a two-day meeting of the cartel, called the Organization of Petroleum Exporting Countries (OPEC), whose 11 members, mainly Arab states, produce 85 percent of the world’s oil. The meeting was held late last week at OPEC’s Vienna headquarters.
The sources said Arab members want an extraordinary OPEC conference here in Sept. to plan strategy for the new price talks. A present agreement between OPEC and the companies which buy its oil provides for a 2.5 percent inflationary factor clause. But the Arabs say inflation is running as high as eight percent and they want a revision of the agreement plus compensation for the money they say they are losing.
OPEC got more money for its oil just two months ago by demanding “full compensation” for the 10 percent devaluation of the U.S. dollar. The companies offered 6 percent at first and in the end agreed to pay 12 5 percent. The Arabs were said to have wanted to make the new demands at last week’s meeting, but more moderate non -Arab OPEC members were against it.
OPEC members are: Abu Dhabi; Algeria: Saudi Arabia; Libya; Iran; Iraq; Qatar; Nigeria; Indonesia; Venezuela; and Kuwait. OPEC is also making plans to combat a U.S.-initiated “consumer bloc” or “consumer’s OPEC” which is expected to be formed within the foreseeable future to uniformly tackle OPEC’s demands. Most of OPEC’s oil goes to Japan and Western Europe. The industries of those nations are entirely dependent on OPEC exports.
As energy demands increase, however, U.S. consumers will find their fuel oil and gasoline stems more and more from Middle Eastern wells. A British report earlier this year said oil demand in the U.S. was doubling every 16 years and that country will be 50 percent dependent on imports in 12 years time. OPEC is also gearing up for the future and looking at the possibility of the often-referred-to “world energy crisis.”
Many economists in the U.S. and Europe say that unless the West forms a consumer front, the crisis will arrive within the next decade. By 1985, the experts say, oil demands will have doubled–but the supplies won’t have. There will be a competitive scramble by the billion-dollar oil concerns, trying to buy up the last drops of Arab oil–unless the consumers agree to limit their imports and keep prices stable.
At the moment, OPEC is not too worried about a consumer’s front. If one is formed, the billionaire oil sheikhs say, they will simply turn off the oil taps on the Western world’s industries and homes.
LIBYA NATIONALIZING U.S. OIL FIRMS
(Libya, the most militant of the oil-producing Arab states, has moved to nationalize the remaining major American oil Interests in that country. Deputy Petroleum Minister Omar Muntasser said at a press conference in Tripoli Saturday that Libya would pay only the “net book value” for the American installations
The three U.S. groups involved are the Oasis consortium comprised of five companies; Occidental Petroleum; and American Overseas Petroleum, composed of Texaco and Standard Oil of California. The three firms produce 1.3 million barrels of oil a day out of Libya’s total daily production of 2.3 million barrels.
According to Muntasser, Libya proposes to pay them only the original cost of their installations less depreciation for tax purposes. They will not be compensated for the value of their annual production or for the cost of duplicating their installations. American oil investments in Libya are estimated at slightly over $1 billion but their current value is calculated at four times that amount.)
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
