Evening star. [volume] (Washington, D.C.) 1854-1972, 1951-09-22
Pulling Deal in Oil

One of the puZzling by-products of the
1ranian oil stalemate is found in the London
announcement that the Anglo-Iranian Oil Com
pany has contracted to buy from Communist
Romania approximately is million barrels of
fuel oil in the next three months.
On the surface at least the deal appears
to have strategic advantage only to the West.
1t extracts from Communist supplies, estimated
as being far short of the reserves available TO
the Western world, a substantial quantity of oil,
perhaps as much as 20 per cent of the Romanian
production for the period involved. In return,
according to the announcement, it carries cash
only and in sterling rather than in dollars.
Since the bargain undoubtedly was made
with the approval of the British government,
and very likely with Moscows approval also, 1t
seems logical to assume that it fits into the
pattern of East-West trade which principals on
both sides of the Iron Curtain seem resolved
to maintain. Unless there is some undisclosed
concession by Britain also involved, however,
this particular transaction serves only to help
counter the Iranian impasse.
On that situation, incidentally there has
still been no better prescription for resolution
of the differences than Averell Harriman's coun-
sci that any resumption of negotiations must be
based upon recognition of the practical business
and technical aspects of the oil industry and
upon mutual good will between the parties
Certainly in the negotiations thus far the
present Iranian government has ignored the first
of these requirements. The Surfacing and proc
essing of oil and petroleum products, and the
eventual translation of such effort into profitable
distribution, demand heavy capital investment
skill and experience on the technical side and
highly organized marketing structure. The
Anglo-Iranian Oil Company, whatever its past
shortcomings the side of social consciousness
or in the equitable sharing of profits possesses
these qualities and facilities The newly organ
tied National Oil Company of Iran does not.
The Iranian company has no marketing sys-
tenn worthy of the name. Neither do such
potential customers Afghanistan and some
Of the satellites of Soviet Russia which have in
oicated an interest in purchasing Iranian oil.
Soviet Russia itself could move only small
percentage of Iranian production by tanker from
the Persian Gulf and the prospects for pipeline
CT rail shipment northward are practically nom
existent today and engineeringly impractical in
the future The Iranians have acknowledged
their own shortage of adequately skilled tech
nical personnel in their suggestion that British
workmen at the top operating levels remain IN
Iranian employ individual basis. 1t has
been indicated that few would do so and the
alternative of recruiting other foreigners of suf-
ficient competence and responsibility would be
time consuming and not simple
Confscation of the British facilities would
meet the capital investment problem only
temporarily Substantial capital, or re-
investment of proceeds, would be essential to
operation, maintenance and the continuing
demand for improvements in such vast enter
prise-at least if it is to be conducted on a
profitable basis,
AS for the requirement of mutual good will
It. is an obvious one if national interests of
two countries are to be joined in such an
endeavor. The rights, well as the response
bilities of all interested parties must be assured
on some basis other than political whims of
the moment The Iranians are naive indeed If
they feel that Russian participation in the oil
developmenA can be obtained on a oI e-way