Page 422 - Arabia the Gulf and the West

The ‘Sting, 419

Rome in mid-January 1974 that the only way to avert an economic recession
was for the oil-consuming countries to press in concert for a reduction of oil
prices to sensible levels. In vain did the United States government urge its
European allies to refrain from taking separate initiatives over oil supplies

before they had discussed the possibilities of co-ordinated action at the confer­
ence which the United States was arranging in Washington for early February.
Self-respect was thrown to the winds as the governments of Europe and Japan
rushed to court the Arabs and the Persians, jostling and shoving one another in
their eagerness to be the first to pay the Danegeld and to receive in return

knowing nods and winks about future oil supplies.
On 9 January 1974 the French government announced that a preliminary
agreement had been reached with Saudi Arabia (upon whom France relied for
about a quarter of her oil supplies) for the supply of thirty million tons of oil
over the next three years in exchange for refining and petro-chemical equip­
ment. The agreement, between CFP and ELF-ERAP on the one side and
Petromin, the Saudi government agency, on the other, was described as a

‘pilot’ scheme for a much more extensive arrangement between the two
countries for the exchange of oil for industrial goods, including arms. While
the French government obviously believed it had pulled off something of a
coup by the arrangement, the sober truth was that the French oil companies
had agreed to pay $10.80 a barrel for participation crude which they could have

purchased through ARAMCO for $8.40 a barrel. On 24 January the French
foreign minister, Jobert, arrived in Saudi Arabia on the first stage of a tour
which was to take him, after Saudi Arabia, to Kuwait, Syria and Iraq. All
manner of topics were discussed by him on this tour during the next fortnight-
oil supplies, technical aid, economic co-operation, liquefied gas tankers, power
stations, aircraft, and armaments galore. Everywhere he went Jobert urged the
desirability of an early conference between the EEC countries and the Arab oil

states to discuss both oil supplies and the need for close economic co-operation
between the two blocs, a proposal which his listeners could not fail to interpret,
as they were intended to, as a pointed snub to the United States and the
forthcoming Washington conference.
While Jobert was on his travels, French ministers and officials elsewhere

were feverishly negotiating a positive farrago of agreements, each one more
wondrous than its predecessor. A Franco-Libyan protocol signed by the
rench premier, Messmer, and Major Abdul Salem Jallud (now prime
minister in Qaddafi’s ‘cabinet’) on 19 February envisaged the construction of
nuclear power stations along the Libyan littoral, its transformation into a great
agricultural region, and the creation of harbours, docks, desalination plants
an telecommunications systems, all to be provided in return for certain

quantities of oil, the price of which, as Jallud was careful to stipulate, would be
xe by the Libyan government alone. Even more sublime wonders were to be
wrought by Franco-Persian collaboration, if a protocol signed on 9 February