Page 389 - Arabia the Gulf and the West

386 Arabia, the Gulf and the. West

national assembly had refused to ratify the agreement with BP and Gulf, which
gave Kuwait a 25 per cent share in the companies’ operations, on the grounds
that it affronted the sovereign dignity of the people of Kuwait. The opposition
to the agreement was led by Ahmad al-Khatib, the founder of the Kuwaiti
chapter of the Arab Nationalists’ Movement and the darling of the radical

faction in the assembly. The government of Kuwait, anxious as always to show
its radical-chic colours, and at the same lime to neutralize the growing influ­
ence of Khatib and his followers, in the second week of July proclaimed the
agreement it had signed in January null and void. Nothing less than an
immediate 51 per cent share in BP’s and Gulf’s operations, it declared, would
satisfy the aspirations of Kuwait. BP and Gulf must have recalled rather wryly
the assurance given by Abdur Rahman al-Atiqi, the Kuwaiti oil minister, less

than eighteen months previously when he had stated unequivocally (or so it
seemed at the time):

Effecting an increase in the oil revenues of an oii-producing country depends on a state’s
awareness of its legal commitments under a concession granted to a company to operate
on its territory, and the ability and willingness of such a state to keep its agreements. I
would say that it would not be possible to realise such an increase by issuing unilateral
legislation.

The events of June and July were followed with keen interest by the Saudi
Arabian oil minister, Yamani. Up to date no progress has been made with the
implementation of the participation measures worked out between the Saudi
government and ARAMCO the previous December. In part, the delay was

due to the Saudis’ reluctance to agree on future production levels and the basis
of compensation; but it was also occasioned by the Saudis’ desire to temporize
until they had seen what was happening elsewhere. Now, with the Libyan and
Kuwaiti examples to hand, Yamani told the ARAMCO representatives when
talks were resumed early in August, ‘You [i.e. the oil companies in general] will

have to improve on the Kuwaiti deal if you are to avoid nationalization [in
Kuwait] and then I’ll have something even better than Kuwait.’ On 1 Sep­
tember Qaddafi took by fiat what he could not obtain by fair negotiation - a 51
per cent share in the Libyan operations of Esso, SOCAL, Texaco, Mobil and
Shell, the first four being, of course, the parent companies of ARAMCO.
fortnight later Yamani expressed the view to ARAMCO that Kuwait was
bound to demand more than the 51 per cent participation achieved by Libya.

Saudi Arabia, naturally, would not be outdone by either Libya or Kuwait ut
would require something more, especially as Persia across the Gulf was now m

full possession of her own oil resources.
Participation was only one of the strings to OPEC’s bow: another,, an just
as strong, was prices. Throughout July there had been rumbhn^ romthe

organization about the need to increase oil prices further so as to keep p
inflation in the industrial nations. They culminated in a statement r