Page 167 - Adobe Photoshop PDF
P. 167
I think the three of us were most fortunate, as we might easily have be-
come mob victims.
%RWK LQ $UDPFR DQG &KHYURQ 2YHUVHDV , KDG UHDVRQ WR ¿QG WKDW
LQ WKH RLO EXVLQHVV RYHUVHDV D FRQWUDFW KDV QRWKLQJ OLNH WKH H൵HFW LQ
America that a written contract conveys. Sometimes a contract saves
the day. For example, the Concession Agreement that gave SoCal the
right to explore for oil in Arabia was critical to its success in the mid-
50s. Aristotle Onassis, a Greek shipowner, bribed the Saudi Finance
Minister to sign an agreement that gave Onassis the right to carry all oil
exported from Arabia in his tankers or he would receive a payment per
barrel that would be like a tax. Fortunately, SoCals Concession Agree-
ment had covered this kind of possibility by guaranteeing the company
free access to export. The matter was carried to international arbitra-
tion and the company won. Shortly thereafter, the Finance Minister was
dismissed. Aramcos top management passed the instruction to us, No
reference to the tribunals decision is to be made to Saudi Arabs. If a
question arises, there is to be no gloating. Wise counsel!
In December 1950, the Company had negotiated what was con-
VLGHUHG D KXJH ERQDQ]D WR WKH 6DXGL JRYHUQPHQW E\ VKDULQJ SUR¿WV RQ D
50-50 basis. All capital invested came from the four owner companies
the SAG invested nothing. A few years later, the Iranians expropri-
ated the Anglo-Iranian Oil Company operations in Persia. Oil produc-
WLRQ LQ 6DXGL $UDELD LQFUHDVHG FRQWLQXRXVO\ ZLWK DWWHQGDQW SUR¿W WR WKH
government. Despite this, there was continuing pressure for a greater
VKDUH RI WKH SUR¿WV WR JR WR WKH 6DXGL JRYHUQPHQW 3UHVVXUH FDQ EH LP-
plemented in a huge variety of ways. For example, the importation of
equipment can be delayed in customs, or visas for employees can be
delayed. Expropriation is an ever-present threat. Since your assets are
¿[HG LQ DQG RQ WKH JURXQG LQ WKH FRXQWU\ D FRPSDQ\ FDQ¶W VLPSO\ VD\
The heck with it, we are leaving! There are also other oil companies
of other nations (Italy and France especially) who would like to have
the government expropriate your operations and allow them to come in
DQG RSHUDWH WKH RLO ¿HOGV DQG UH¿QHU\ WKHPVHOYHV QRW KDYLQJ LQYHVWHG
KXQGUHGV RI PLOOLRQV RI GROODUV LQ VXFK WKHPVHOYHV 7KHUH DUH LQ H൵HFW
163
