Page 364 - Arabia the Gulf and the West

The Masquerade 36i

Boumedienne’s ultimate aim - as well as the utter pointlessness of the
negotiations up to date - was now plain. He intended to take total control of the

French oil industry in Algeria, while retaining French technicians to run it.
The revenues from oil production, most of which would go to Algeria, were to
be used to finance a highly ambitious programme of Algerian industrialization.
In an interview published inLe Monde on 2 March 1971 the Algerian president
made no secret of his intentions.

If we have not nationalized [the oil companies] too per cent, it is so as to take account of
the interest of our partners and of the important relations which exist in other fields. We
have sought only one objective: to acquire control. .. . Having acquired control, we will
respect the interests of our partner. If he finds the situation uncomfortable for various
reasons, if he does not accustom himself to what the Arabs require in this respect, then
he will have to find other solutions. But this would mean that on the other shore of the
Mediterranean a decolonization of attitudes is still far distant.

The ‘partnership’, in short, consisted in the French supplying the skills and
the money and the Algerians giving the orders. It was nationalization ‘on the
cheap’ and ELF-ERAP had said so on 25 February. The company was not
prepared to play the ox to the Algerian plough. On the contrary, it demanded
that the Algerian government nationalize its assets in the country outright, and

pay a proper indemnity, which ELF-ERAP defined as FF4,ooo million. The
French government made a show of supporting the companies. It informed the
Algerians early in March that they would be expected to pay FF4,ooo million
as compensation for the 51 per cent shareholding they had taken in CFP’s and
ELF-ERAP’s operations in Algeria. In addition, the companies’ share of
future crude oil production was to be made available to them at a reasonable
price and without restrictions upon its sale; and the companies were to be

entitled to retain their profits from production in hard currencies and to be
freed from any obligation to reinvest them in Algeria. If the Algerian govern­
ment refused to accept these conditions, so the French official statement
continued, it must proceed to nationalize the companies’ operations in Algeria
completely and pay full and fair compensation, payment to be made in crude

oil should Algeria not possess the necessary reserves of foreign currency.
For all its brave words, however, the French government betrayed an almost
palpable lack of determination in its demeanour, a fact which did not escape
Boumedienne’s notice. After waiting to see the outcome of the Tripoli negotia­
tions between the companies and the Libyans, he announced on 13 April that
the new posted price of Algerian crude was $3.60 a barrel, i.e. 15 cents more
than the Libyans had achieved. He offered the derisory sum of 500 million

rancs in compensation for the 51 per cent participation he had taken in CFP’s
and ELF-ERAP’s operations, and at the same time he cancelled all other
oreign-held exploratory concessions. Moreover, he insisted upon the payment
0 retrospective taxation, a demand which, if it had been complied with, would