Pipeline Pipedreams
By MICHAEL ADAMS CAIRO r-r HE first Arab Oil Congress produced no sub- stantial surprises and—largely for that reason —ended on a note of satisfaction strongly tinged with relief. The organisers of the congress could congratulate themselves on the achievement of their declared objective, which was to enable delegates from producing countries and operating companies to exchange among themselves views and information on topics of mutual interest. The delegates could congratulate themselves on manag- ing to do this without reaching for their guns. And so everyone was happy, except the two or three delegates who were antisocial enough to put for- ward ideas of any originality.
The first of these was Mr. Frank Hyndrex, an American lawyer attached to the Saudi Arabian directorate of petroleum affairs. Early on he estab- lished himself as the black sheep of the conference by suggesting at a public session that any govern ment had an inalienable right to break its con- tractual obligations towards a concession-holder, if by doing so it fulfilled its 'primary responsibility' towards its own people. After a tense twenty-four hours during which the congress contemplated this sanseulotte proposition, it was neatly shot down by Mr. Archibald Chisholm of British Petroleum, with the assistance of three or four less expert marksmen; after that, it only remained for the representatives of the principal American com- panies to whisper in the corridors that of course Hyndrex had neither the experience nor the authority to pronounce on such a subject.
Next came the Lebanon's Mr. Emile Bustany, the ebullient incarnation of successful private enterprise. He put before the congress the plan which he has spent much time and trouble in publicising during the past two years : for an Arab Development Bank, to which each. producing country and each oil company operating in the Middle East would be invited to contribute 5 per cent. of its profits. Mr. Bustany estimated that these contributions would provide £35 million (rising, with the expected increases in oil produc- tion, to £50 million within a few years) which could be devoted to development schemes in what Mr. Bustany called the 'have-not' Arab countries, meaning those who produce little or,no oil them- selves though they derive some revenue from the pipelines of their more fortunate neighbours.
This admirably simple scheme was acclaimed, as it always is in public, even by those who have no intention whatever of lending it their support. Nobody cared to say out loud that it would not work because the Arab governments would never co-operate in running it, and the representatives of the oil companies (for whom it would only mean the loss of another 5 per cent. of their profits) were happy to leave to one of Mr. Bustany's brother-Arabs the task of undermining it.
This was Sheikh Abdullah Tariki, the powerful and intelligent Director-General of Petroleum Affairs in Saudi Arabia, whom many delegates had been eyeing anxiously from the start of the congress as the man most likely to speak some un- palatable home truths. In countering Mr. Bus- tany's proposal, Sheikh Abdullah did indeed cause one or two sensitive muscles to twitch in the faces of the oil men (`the Arab peoples,' he said, 'are more in need of the money that comes from the oil industry than are the oil companies') and he put forward a scheme of his own, almost as well known as that of Mr. Bustany and no more desir- able in the eyes of the oil companies—nor, in present political circumstances,- more workable.
This is the scheme for an Arab pipeline, slightly longer than the existing `Tapline,' which carries oil a thousand miles across the desert from Saudi Arabia to the Mediterranean. The Tariki pipe- line would also run from the Persian Gulf to the Mediterranean, but it would gather oil from dif- ferent sources—ideally Saudi Arabia, Iraq, Iran, Kuweit and Qatar—and, it would be under wholly Arab ownership and control. The oil men say it is a perfectly workable proposition and give it their official blessing, but one suspects they would change their tune if they thought the scheme likely to come to anything. The oil companies would obviously be asked to help in financing the new pipeline, which would cost (with its Mediterranean terminal) some £200 million; but they would prefer to use some of the tankers which are now lying idle in the world to transport any surplus of Middle Eastern oil, rather than sink money in a twelve-hundred-mile pipeline which would be at the mercy of the discontented in any of half a dozen Arab transit countries. Until Arab unity is a good deal nearer to realisation, an Arab pipeline is an engaging flight of fancy.
The same is not true of all the ideas that found expression at the Arab Oil Congress. The resolu- tions which were produced at the end—they were not voted on but were agreed by the heads of the delegations—were vaguely phrased, and there was a clear wish not to alarm the oil companies, by any demagogic demands. But they contained refer- ences to all the ideas which are current in Arab minds, and which add up to a desire for a greater share, not merely in the profits of the oil industry, but in its management and control. These include the formation of 'national companies' to compete with (and ultimately of course to replace) the existing 'private' companies; consultation between the oil companies and the Arab governments before changes are made in the prices of crude oil; and 'integration' of the Arabs as partners into all the phases of the oil industry.
. . and all I wanted to know was what won the 2.30.'
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