Page 343 - Arabia the Gulf and the West

340 Arabia, the Gulf and the West

in company with Sir Eric Drake, the chairman of BP, had talked in New York

with Sir Alec Douglas Home, who was attending a session of the United
Nations. They told the British foreign secretary that they believed that the oil
companies should defy the Libyans, even at the risk of losing their concessions.

Home said he would have to consult his fellow European foreign ministers
before giving an opinion on the matter. According to what he is said to have
reported back later, he found the foreign ministers unprepared to run any risk
of losing their oil supplies. It would have been surprising if they had responded

in any other way; which is not to say, however, that they would necessarily
have refused to countenance any action if the consequences of a surrender in
Libya had been adequately explained to them. Nor were they being asked to

take inordinate risks, for Barran and Drake had assured Home that if they were
deprived of Libyan oil, the companies could still supply 85-90 cent of
Europe’s oil requirements.
Whether Home made all this clear to the foreign ministers is not known.

Even if he had, however, they may still have taken their cue in framing their
response from his attitude and demeanour; and the British foreign secretary
was not exactly spoiling for a fight with the Libyans, or any other Arabs for that

matter, in defence of British interests in the Middle East in the autumn of 1970.
The Conservative administration of Edward Heath was already showing its
metal by its supine response to the wave of hijackings of civil airliners by Arab
terrorists in September 1970, and by its furtive preparations to abandon its

responsibilities in the Persian Gulf. The price of its disingenuousness and
pusillanimity was to be paid by BP fifteen months later, in December 197U
when Qaddafi expropriated the company’s concession and assets in Libya,

ostensibly in reprisal for the British government’s complicity in the Persian
occupation of the Gulf islands of Abu Musa and the Tunbs.
panics,'as we^ve see^hfd"11811 American go^nments, the oil com-
demands Even Shell rh n° reC0Urse h“‘ to concede the Libyan junta’s
the end o settle ’ m°S‘ Vallant of the Seven Sisters, was compelled in

ta fte Uh™ J ‘ermS '°th0se forced uP°n others. The ripples
Al-rh c£± deru SWift t0 make ‘h^r appearance. Iraq and
a sSr aoTnr T 7 Libya aS Mediterranean oil exporters, demanded
*
Pe ™ eum 3 * *nCreaSe “ the P°sted Price of crude. The Iraq
deliverArl K mPany responded by offering Iraq 20 cents a barrel on oil
P
• . 1/ P e lne to ‘he Mediterranean and additional payments connected
*
, ’kTm expenses. (The course of the Algerian negotiations will be
\P
e.scn \Y/u^tert? u wa** ers*a and Saudi Arabia all pressed for higher posted
prices. 1 e the Kuwaitis and the Persians proceeded to settle for an increase
of 9 cents a barrel, the Saudis held back. To raise the producing countries’
revenues further, the companies offered Persia, Kuwait, Nigeria, Iraq and the

Gulf shaikhdoms the 55 per cent tax rate which had been conceded to Libya.
The offer met with virtual silence, a silence which began to look all the more