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The Masquerade 333

Canal. Another was the severity of the winter of 1969-7010 Europe, which had
rapidly depleted existing stocks of oil. A third factor was the presence in Libya
of a number of independent oil companies which, unlike the majors, had no
alternative sources of supply if their Libyan operations were interfered with.
Towards the end of January 1970 Qaddafi summoned the representatives of
the various oil companies in Libya to their first, and what was to prove their
last, personal meeting with him. He told them that they would have to alter
their pricing policy for Libyan oil, otherwise they would find themselves cut
off from it. ‘People who have lived for 5,000 years without petroleum’, he
proclaimed loftily, ‘are able to live without it even for scores of years in order to
reach their legitimate right.’ At a subsequent meeting with Qaddafi’s nominee
as oil minister, the companies’ representatives were informed that higher
prices for Libyan oil were justified not only by Libya’s proximity to Europe,
which reduced transport charges, and by the low sulphur content of Libyan
oil, but also because Libya had been underpaid for her oil ever since exports
began in 1961. It was clear from this last allegation that the domestic political
motive for demanding a substantial increase in oil prices was to discredit the
previous regime by showing that it had sold its oil too cheaply. The increase the
Libyan junta wanted was 44 cents per barrel, which was about 40 per cent up
on the current posted price. Interestingly enough, the amount was close to the
figure the Algerian government was demanding in the negotiations it had
embarked on with the French government over oil and other matters late in
1969- Indeed, as time went by, it became more and more apparent that the two
North African states were closely co-ordinating the tactics they were using to
bring pressure upon the oil companies and their home governments.
In an endeavour to intimidate the companies, Qaddafi pointedly dispatched
his oil minister to the Soviet Union, and in April 1970 he called upon the
Libyan people to mobilize for the battle with the oil companies - the allies, so
he asserted, of world Zionism and local forces of reaction. He made his
intentions even plainer by putting the negotiations.with the companies in the
hands of his prime minister, Mahmud Mughrabi, a Palestinian exile who had
obtained a doctoral degree in economics at Georgetown University in Washing­
ton, and who had been imprisoned by the monarchical regime for his extremist
activities. At first Mughrabi, who had called in Abdullah al-Tariki as an
adviser, directed his attack upon only two companies, Occidental Petroleum
and Esso. Early in May Occidental was ordered to cut its production from
800,000 barrels a day to 485,000 b/d, and Esso was at the same time forbidden
to commence the export of liquefied natural gas from the plant it had built at
Marsa al-Brega at a cost of $35° million. The fiat to Occidental was justified by
the Libyan RCC on the grounds of the need to ‘conserve’ Libya’s oil reserves, a
notion which Libyan reservoir engineers had picked up during their training in
the United States. The real reason was that Occidental, like the other small
independent companies, which by the early summer of 1970 were producing