WORLD’S OIL PRODUCTION

Press, Volume LXXXIII, Issue 25206, 10 June 1947, Page 7

WORLD’S OIL PRODUCTION

FIELDS IN MIDDLE EAST RECENT “SIGNIFICANT DEVELOPMENTS ” (Special Correspondent N.Z.P.A.) LONDON, June 8. “Several significant developments in Connexion with the oilfields of the Middle East” have occurred within the last six months, comments the financial correspondent of the “Manchester Guardian.” Their effect, he continues, has been to reinforce the already widely held view that over the next decade or two the centre of gravity of the world oil industry, now located in America, will gradually shift. It will go towards the Middle East, once the great oil-producing potentialities there are brought to fruition. American and other western hemisphere countries are steadily approaching the stage at which they will be consuming the whole of their own output In time America will become a substantial net importer of petroleum products, because her consumption is increasing at a pace which threatens at no distant date to outrun domestic supplies. While America must seek alternative supplies, Middle Eastern oil producers have quite a different problem Their proved oil reserves are very large, development and production costs are relatively low, and the need is to find adequate outlets for what promises to be a dynamically expanding output. A marriage of the interests of American distributors and Middle East producers is thus a wholly logical development. The correspondent refers to the sharply increased American participation in Middle East oil interests in the last year. In addition to already owning Arabian American Oil and Bahrein Oil, with a part interest in Iraq Petroleum and Kuwait Oil, American firms have agreed to buy large quantities of crude oil over a 20-year period from the Anglo-Iranian Company. They have also acquired a considerable interest in existing American concessions in Saudi Arabia and are* investigating the possibility of constructing two pipelines to the Mediterranean. It was also recently announced that “itish, American. French, and Dutch interests are hoping to secure an agreement to get more oil from Iraq, while me Shell group will be purchasing increasing quantities from Kuwait Oil, wnich is jointly owned by the Anglorranian Company and Gulf Explorab°n of America. All these events serve to underline fieavily what has already been tolerably clear, namely, that the Middle •Crast is destined to become the premier ex P°rting region of the world, although before, that- stage is reached much work will remain to be done by yay of the construction of pipelines { er ®cting refineries.” This development cannot be a rapid Process, and for several years at least yorld oil prices will probably con“®ue to be dominated by American Price trends. It is obvious that the beneficiary mom Middle East developments is Britain through the Anglo-Iranian Tympany, in which the British Government is the largest shareholder, ine company is rapidly expanding its 'ytput, a substantial part of which *lll be sold to American interests.