SAUDI ARABIAN OILFIELDS

Press, Volume LXXXVIII, Issue 26726, 9 May 1952, Page 9

SAUDI ARABIAN OILFIELDS

King’s Demand For Bigger Share

(N.Z. Press Association—Copyright) (Rec. 8 p.m.) LONDON, May 7. King Ibn Saud, the 72-year-old monarch of Saudi Arabia, is demanding 66 per cent, of the profits of the Arabian American Oil Company, Midlie East diplomatic sources said in London to-day. They added that he was also pressing the Americans to bring three Saudi Arabians on to the company’s board. Saudi Arabia is the largest oilproducing area in the world. The oil company at present shares its profits there on a 50-50 basis with the Saudi Arabian authorities. The concession, which still has 50 years to run. covers more than 400,000 square miles of the desert kingdom. King Ibn Saud granted the concession in 1939 and it was revised in 1950. The Saudi Arabian Government’s demands are regarded by oil experts as equivalent to the nationalisation of the country's enormous oilfields, says the correspondent of the Associated Press in Beirut. The correspondent adds that the immediate demand is that Saudi Arabia's share of the company’s profits should be increased from the present £53.000,000 annually to £70.000,000. “The Arabian-American Oil Company is the world's -largest oil producer with an output of 850.000 barrels daily,” says the correspondent. "In addition to wanting an increased share of the profits Saudi Arabia demands: “(1) That half the members of the Arabian-American Oil Company board of directors must be Saudi Arabians. “(2) The removal of the company’s headquarters from the United States to Saudi Arabia. “(3) In five years the company must surrender half its concession area of 400,000 square miles to the Saudi Arabian Government. “(4) In the next few years the company will be obliged fully to exploit the remaining 200,000 square miles. If this is not done, this area will also be handed back to the Government. “(5) The Government reserves the right to operate the oilfields in the case of war. “Other oil companies are closely watching the negotiations. They say that the outcome will influence oil operations over the Middle East.”