Pumping Under Pressure

In a part of the world never known for unity, the oil-rich countries of the Middle East have been unusually har monious in demanding "akthar, akthar" (more, more) from the Western oil consortiums. The loudest voice has come from Syria, which has no wells but makes do with the next-best thing: a 305-mile stretch of the pipeline through which the Iraq Petroleum Co. pumps oil from its Iraq field to the Syrian port of Baniyas on the Mediterranean. Last week, after weeks of futile negotiations on new rates, Damascus seized the pipeline "to achieve the full rights of the people."

The I.P.C., composed of French, British and U.S. partners, including Mobil and Jersey Standard, considers Syria's demands "fantastic." Syria wants its annual take increased by $15 million to $43 million; on top of that, it is asking for another $11 million a year over the next decade to make up for what it calls "faulty accounting" in I.P.C.'s past fee payments. When I.P.C. balked at the outrageous sums, Syria at first threatened to blow up the pipeline, then decided to seize it and force I.P.C. to run it under government supervision. As things stand, I.P.C. may have to double its annual shellout to $56 million before it can get its pipeline back.

It may be no consolation to I.P.C., but every Western outfit in the Persian Gulf area may soon be paying more. Iran is demanding that its producers increase their output by 17.5% this year to boost its royalties to $625 million. Iraq wants production increased by 10% to bring its revenues to $372 million. Kuwait has decided that its $636 million annual take is not enough.

There is more than simple greed behind the pressure. The Persian Gulf countries want high pumping quotas as insurance against competition from new oil sources being developed in areas closer to world markets. By year's end Libya will pass Iraq in production, rank fourth in the Middle East (after Saudi Arabia, Kuwait ,and Iran). Algerian production is growing and tiny Tunisia became an exporter for the first time this year. Before long, Egypt will be in the market, thanks to a Phillips Petroleum strike near El Alamein announced last week.

All of this puts the major oil companies in a better bargaining position than ever before. With new, often cheaper sources available elsewhere, they are not as dependent as the sheiks are on Persian Gulf oil. Syria, among others, does not yet seem to have got the word.

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