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¶ In Iraq, the concessions are held by the Iraq Petroleum Co., which is owned by Anglo-Iranian Oil (23¾%); the British-controlled Royal Dutch-Shell (23¾%); Jersey Standard and Socony-Vacuum, through their jointly owned Near East Development Corp. (23¾%); the French Government through its Compagnie Française des Petroles (23¾%). The only individual is a mysterious Armenian financier, Calouste S. Gulbenkian, whose 5% gives him a distant claim to the title of the "world's richest man."
¶ In Arabia, the concessions were wangled from wily old Ibn Saud by Arabian American Oil Co. (Aramco), jointly owned by Standard Oil Co. of California and the Texas Co.
Jersey Standard has long wanted to get into Arabia. But it was virtually barred by the famed and cartel-like Red Line Agreement* which it was forced to sign to get a share in Iraq Petroleum.
Under this cozy agreement no member of Iraq Petroleum could develop fields in the Red Line area unless he put the oil into a common pot. Last week, fed up with this, Jersey Standard formally announced what it had only hinted at before.
It said the agreement was dead. Then Jersey Standard and its, partner in Middle Eastern ventures, Socony, dealt themselves a new hand.
New Deal. In the new hand Holman held, the aces were Socony's Board Chairman Harold Sheets; Henry DeWard Collier, the shrewd, benign-looking board chairman of Aramco, boss of Standard of California; William Starling Sullivan Rodgers, director of Aramco and board chairman of the Texas Co.;Aramco's globe-trotting Vice President James Terry Duce. Their companies produce 22% of the worlds oil. They reached an agreement which, in effect, put Jersey Standard and Socony in Arabia.
In broad outline, the deal called for Aramco to borrow $227,500,000 from a group of banks to spend on the venture. (Jersey Standard and Socony will guarantee $102,000,000 of the loans, all three companies will share the rest.) Aramco will build a 1,000-mile pipeline from the blistering oil-rich city of Dammam to the Mediterranean: it will construct a deep-water port at Dammam, build a short railroad, install additional refinery equipment and connecting pipelines. All this, it expects, will step up production in Arabia from the current 200,000 barrels a day to 500,000, replenishing the depleted treasury of Ibn Saud by 23¢ for every barrel.
Win the Pot? But with its new hand, Jersey Standard got a joker. The French have not taken kindly to Jersey Standard's view that the Red Line Agreement is defunct, are now suing-in London to try to keep it in force. As bait to the French to settle out of court, Jersey Standard and Socony have offered to sink upwards of $20,000,000 in Iraq's Kirkuk fields to quadruple production, help build two—and possibly three—more pipelines from Kirkuk to the Mediterranean.
To mollify Anglo-Iranian, concerned about selling its own production in Iran, Jersey Standard planned to buy substantial quantities of oil over the next 20 years. To transport it, Anglo-Iranian will build a pipeline from Abadan on the Persian Gulf to the Mediterranean—with Standard footing about $30,000,000 of the bill.