To exploit its oil deposits, King ibn-Saud granted concessions to the
Arabian-American Oil Company (Aramco), owned jointly by Texaco and the
Standard Oil Company of California. Aramco paid royalties to the
government that funded Saudi Arabia's infrastructure and economic
development.
King ibn-Saud's son and heir was deposed in 1964 by the royal family
because of his wild and reckless spending. His half-brother became
king (King Faisal). Sheik Ahmed Zaki Yamani had been appointed
minister of petroleum and mineral resources in 1962. He was
Western-educated (New York University, Columbia, and Harvard), very
intelligent, and level-headed. He negotiated agreements with Aramco
providing for the gradual transfer of ownership to Saudi Arabia and
initiated the formation of the Organization of Petroleum Exporting
Countries (OPEC).
World Civilizations, seventh edition, Burns, Ralph, Lerner, and
Meacham, W. W. Norton & Company, Inc., 1986, pages 1397-1398
"In 1972 the government of Saudi Arabia demanded tighter rein on its
oil industry as well as participation in the oil concessions of
foreign companies. Aramco (a conglomerate of several American oil
companies) and the government reached an agreement in June, 1974,
whereby the Saudis would take a 60% majority ownership of the
company's concessions and assets. The concept of participation was
developed by the Saudi Arabian government as an alternative to
nationalization."
"By the early 1980s, Saudi Arabia had gained full ownership of Aramco."
"History" infoplease
://www.google.com/url?sa=U&start=3&q=http://www.infoplease.com/ce6/world/A0860941.html&e=7781
These steps allowed the country to have complete control over its oil
reserves and their rate of development. Since Saudi Arabia has half
of the global unused oil production capacity, the country plays a key
role in determining global oil prices.
Ironically, Saudi Arabia may have to reopen its oil industry to
foreign companies in order to increase production to meet demand. It
is possible that exploiting new reserves will require technical
capabilities that only foreign oil companies have and that the country
lacks sufficient financial ability to fund the estimated $6 billion to
$12 billion needed to increase its production from its current 8.5
million barrels per day to 12 million barrels per day.
"Oil Shortage?" By Stanley Reed With Stephanie Anderson Forest in
Dallas, BusinessWeek, April 5, 2004
http://www.businessweek.com/@@SjF1aoQQrFFhDg0A/magazine/content/04_14/b3877007.htm
Search Terms: Saudi Arabia oil nationalization
Sincerely,
Wonko |
