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The Masquerade 331

be based upon posted or tax reference prices, and these in turn would be
determined by the governments concerned. Although the latter might be

prepared to grant the oil companies guarantees of stability of revenue payments
for a limited period, they reserved to themselves the right to renegotiate
concessionary agreements at any time to recover what they considered to be
‘excessive net earnings' by the companies. If a company refused to negotiate, or
to agree upon a figure for excessive profits, the host government would decide
the sum unilaterally. Any disputes between governments and companies were
to fall exclusively within the legal jurisdiction of the competent courts of the
oil-producing country in question, or within that of any special regional court
which might be established in the future.
Taken as a body, these claims amounted to a renunciation of formerly
recognized principles of international law in the conduct of relations between
the oil companies and the OPEC governments. If the claims were enforced,
then any hope of stable company-government relations would fly out of the
window - as the delegates doubtless realized. The strongest advocate of
‘participation’, i.e. the acquisition by the concessionary government of a
portion of an oil company’s assets and equity shareholding, was the youthful oil
minister of Saudi Arabia, Ahmad Zaki al-Yamani, who had picked up the germ
of the idea from his predecessor, Abdullah al-Tariki. It was on all counts a
thoroughly unscrupulous device - though, not surprisingly, in an age of
increasingly debased standards of international behaviour, it was soon to be
regarded as unexceptionable - for it opened the way for a concessionary
government to reap the benefit, at relatively little cost to itself, of an oil

company’s labours over the years, without taking any of the risks, financial or
otherwise, which the company had run in prospecting for and extracting oil.
Participation was all too clearly the first step along the road to complete
nationalization, which Tariki was at that time, in his capacity as oil consultant
to more than one Arab government, strenuously urging (although he was later
to temper his enthusiasm in the light of experience). While some oilmen saw
resolution XVI-90 as the writing on the wall, the companies as a whole were
reluctant to believe that it spelled a real danger to their position. They doubted
that OPEC would ever attain the cohesive strength to challenge their preroga­
tive to fix posted prices and to determine the amounts of crude oil they would
lift. Still less were they disposed to credit OPEC with the capability to enforce
the other provisions in the resolution, including that on participation. Where
the companies erred in their calculations was in regarding price-fixing and
participation primarily as economic questions. If they ever had been, which is
doubtful, they certainly were no longer. Now they were almost exclusively

political issues, and the political mood in the Arab world in 1968 was sullen and
captious, soured more than usual, after the events of 1967, by hostility towards
the West. Sooner or later the oil companies, as the most conspicuous represen­
tatives of Western influence and interests in the Middle East, were bound to