The Road to Abadan
It has taken some months for General Zahedi's regime to put itself into a position to brave the extreme nationalists in Persia and open negotiations on the Persian oil industry. It has taken some months more for the international oil companies to agree among themselves about the roles they are prepared to play in rehabilitating Abadan: The position has now been clarified: subject to a satisfactory agreement, the Anglo-Iranian Oil Company will recognise the nationalisation of its assets in Abadan by the Persian Government. The Persians, subject to a similar qualification, are prepared to recognise that the marketing of Abadan production must be done by non-Persian companies. The companies themselves have now agreed on the share which each of them will have in these marketing operations (Anglo-Iranian will keep 40 per cent., each of the five big American companies will have 8 per cent., Royal Dutch Shell will have 14 per cent., and French Petroleum 6 per cent.). The companies have also agreed what they will paY for this entree to Anglo-Iranian's market; this may involvo allowing Anglo-Iranian into American markets elsewhere. But it was the dictates of duty rather than commerce that prompted these arrangements. The capacity of Abadan is 25 million tons a year. In 1950, the last full year of its operation, world production of oil was 525 million tons. 10 1954, without Abadan, world production will be approximately 660 million tons. If the production of Abadan is to be Ithsorbed by world markets, the rate of expansion in other parts of the Middle East will have to be slowed down, unless the Price of oil is to be allowed to fall.. For this doubtful privilege the United States Government has persuaded the American Companies to grant a substantial concession. Negotiations have 119W. begun between the consortium thus formed, and the Persians. The main obstacle will arise over the management of Production in Persia. The consortium will have to provide the Morley to start the refihery again, and it will have to finance all the marketing. It will, therefore, require some guarantee, in the Presence of its own technicians in key places, that the Persian producing company carries out any agreement. Another difficulty will be the question of compensation to be paid by the Persians to Anglo-Iranian; they have agreed to the principle tout, by no means, to the details. General Zahedi is in control Qf the threats to his regime. But whether he can sell an agreement, acceptable to the British and Americans, to the Persian populace and politicians will depend largely on the Plah. And the present Shah's attitude to his Prime Ministers l$ a notoriously fickle element in the Persian climate.
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