FRENCH OIL COMPANIES Algeria takes 51 p.c. share

Press, Volume CXI, Issue 32541, 26 February 1971, Page 9

FRENCH OIL COMPANIES Algeria takes 51 p.c. share

(N.Z:P.A.-Reuter—Copyright) ALGIERS, February 25. Algeria’s seizure of a majority holding in all French oil-producing firms in the country is a prize it has been seeking from France through negotiation for five months.

The take-over, which l becomes effective immediately, was announced by President Houari Boumedienne in Algiers last night when he addressed some 3000 trade union officials. The Algerian leaders also announced nationalisation of all French interests in natural gas concessions, as well as in oil and gas pipelines. All nationalised assets are being transferred to the Algerian State-owned oil and gas concern, Sonatrach, which now controls about twothirds of the Algerian oil output. estimated at nearly 48 million tons last year. Companies will receive compensation. The Algerian move was not totally unexpected, coming after repeated Algerian accusations of French prevarication in negotiations held alternately in Paris and Aimers. They were suspended three weeks ago at France’s request. The negotiations, held at ministerial level, aimed at revising a State oil agreement signed in July, 1965, which was then hailed as a model of its kind. It was later viewed with increasing suspicion by Algeria because of France’s alleged failure to fulfil its commitments. When announcing that Algeria was raising its share in all French oil companies

lto 51 per cent. President Boumedienne stressed that ’ his country was ready to . maintain links of co-opera-ttion with France and that his Foreign Minister (Mr AbdelaI ziz Bouteflika) was standing by to negotiate the terms of 1 compensation and other outl standing issues. Algeria’s wish and need to maintain privileged relations with France is probably one iof the reasons for which ; French oil companies were not totally nationalised. Only two days ago the AI- , gerian Industry and Energy ; Minister (Mr Belaid AbdesI selam) said in an interview in ( Algiers that French com- . panies would have experi- . enced the same fate as other ) foreign oil companies had it not been for specific co- , operation ties between Al- ' geria and France. i Other companies included

the Anglo-Dutch Shell and a group of American-owned concerns such as Esso, Mobil and Philips, all nationalised or placed under State control. Latest compensation agreements provided for payments in kind and, at a time when she needs maximum financial resources to carry out her four-year development plan, Algeria will probably favour similar arrangements with France, whose companies produce about 33 million tons of crude oil a year. President Boumedienne said that last night his country would continue to provide France with oil but apply world market conditions and decisions just agreed on at the Tripoli conference of Mediterranean exporting countries.