Page 358 - Arabia the Gulf and the West

The Masquerade 355

‘back-up’ group decided to abandon the letter to OPEC and to recognize the
total separation of the Gulf and Libyan negotiations. Gone now was all hope of
achieving a reasonable settlement. In its place was a fatalistic acceptance that
any agreement with Libya would be unrealistic, and that all that might perhaps
be salvaged from the collapse was some kind of undertaking from the Gulf
states that they would not leap-frog over the Libyan settlement.
Suffice it to say that in the negotiations that followed none of the assurances
that the companies had previously deemed essential was obtained - or if it
was, it was not worth the breath of air expelled in its utterance. A major reason
for the companies’ failure was the obvious disarray in their ranks, especially in
contrast to the solidarity displayed by OPEC. Unlike the companies, OPEC

made skilful use of publicity and press conferences, with the shah as the star
turn and Amuzegar and Yamani orchestrating the performances. At one stage
in the negotiations the companies were greatly embarrassed by the leaking of
their so-called ‘irreducible terms’ - sent by way of the Foreign Office to the
British embassy in Tehran - and their subsequent publication in the
government-controlled Tehran press. Scarcely able to contain his glee,
Amuzegar seized upon the leak to berate the company negotiators for their
‘duplicity’. ‘The British government was running negotiations!’ he cried, in a
touching affirmation of the enduring legend of a British hand in every intrigue
in Persia. All talk of assurances now, he exclaimed, would only serve to make
him and his colleagues ‘absolutely furious’. They would present their terms to

the companies on 3 February on a take-it-or-leave-it basis. If the companies did
not accede to them, the shah would legislate to impose a 60 per cent tax rate
unilaterally and he would ask the rest of OPEC to follow' suit. Any company
which refused to accept the new' tax rate would be told to cease production.
The companies made one last effort to dig in their heels. Without the
required assurances, they indicated, they could not reply to the Gulf
committee’s terms by 3 February, when the OPEC conference was due to
convene. The warning was brushed aside. On the opening day of the confer­
ence the shah addressed the delegates and exhorted them to gird themselves for
battle. Thus encouraged, the next day, 4 February, the conference adopted
two defiant resolutions. The first required the Gulf oil states to introduce
legislation on 15 February to implement Caracas resolution XXI-120 which
provided for, among other things, a 55 per cent tax rate and the elimination of
posted price disparities. If the companies had not signified their acceptance of

the legislation by 22 February, all OPEC members were to take ‘appropriate
measures, including a total embargo on shipments of crude oil and petroleum
products’. The resolution also called for the enactment of similar legislation by
Libya and Algeria, threatening an OPEC embargo if the oil companies did not
grant these two states the new Gulf posted prices plus a premium for lower
freight costs. Further support was given to the Libyans in the second res­
olution, which endorsed any action the Libyan government might take to