Agreement on oil

Press, Volume CXI, Issue 32531, 15 February 1971, Page 1

Agreement on oil

(N.Z.P.A.-Reuter—Copyright)

TEHERAN, February 14.

Month-long efforts by six Persian Gulf oil-producing States to increase oil earnings are due to culminate today in an agreement with Western oil companies.

Informed sources said the agreement, valid for five years, would be signed at midnight (New Zealand time), only a day short of the deadline set by the producer nations.

The agreement would mean that the Gulf producers— Iran, Iraq, Kuwait, Saudi Arabia, Abu Dhabi, and Qatar —refrain from introducing legislation tomorrow to bring the companies to heel by unilaterally increasing the price of their crude oil.

The sources said the agreement would be very much in line with the demands the Gulf producers put forward during a ministerial conference of the 10-nation Organisation of Petroleum Export-

ing Countries (0.P.E.C.) in Caracas, Venezuela, last December.

These demands included the establishment of a uniform general increase in the posted prices of crude oils, elimination of existing disparities in prices, adoption of a new system for adjustment of gravity differential for prices, and elimination of companies’ allowances from January 1, 1971. In Tripoli, the Libyan Deputy Prime Minister (Major Abdel Salam Jalloud), speaking before the announcement that agreement was near in Teheran, said the Gulf states’ demands were not satisfactory to Libya, and did not even meet the minimum Libyan demands. Major Jalloud, the Minister responsible for the national economy, said in an interview that Libya had postponed its negotiations with the oil companies operating

in his country to see what came of the O.P.E.C. discussions in Teheran. The terms of the Teheran agreement were expected to be announced at a press conference last night but it was delayed. Informed sources said this was over a secondary point which Lord Strathalmond, the chief negotiator for the 23 companies involved in the talks, wanted to clear with London.

the main points of an agreement had been settled, Lord Strathalmond said, including the issue of price "leap-frogging”—the companies had insisted on firm guarantees against demands for further price increases during the period of- the agreement. Thq sources said the Gulf producers would receive an increase of 35 cents a barrel) in the posted price of crude oil, plus an annual increase to offset world-wide inflation.