British Petroleum And The Redline Agreement

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Edwin Black spoke of the 1928 agreement, signed by a consortium of oil companies, which is a Western-controlled oil cartel in the… Read more years later, Walter C. Teagle of Standard Oil of New Jersey noted that the deal was “a bad step.” [5] It was, however, used to define the scope of activity of TPC`s successor, the Iraq Petroleum Company (IPC). Writer Stephen Hemsley Longrigg, a former IPC collaborator, noted that “the Red Line Agreement, which has been repeatedly seen as a sad case of illegal cartel or as an enlightened example of international cooperation and equitable sharing, should maintain the field for twenty years and largely determines the pattern and pace of oil development over much of the Middle East.” [6] Apart from Saudi Arabia and Bahrain, where ARAMCO and BAPCO predominated, the CPI monopolized oil exploration within the Red Line during this period. Edwin Black spoke of the 1928 agreement signed by a consortium of oil companies, which created a Western-controlled oil cartel in the Middle East, which he said was the source of decades of struggle for power and energy supply. He talked about the role of oil in the creation of Iran, Iraq and other Middle Eastern countries and American foreign policy. He answered questions from listeners at the St. Regis Hotel in Washington, D.C. It was a political forum of the Jewish Institute for National Security Affairs. “After the creation of IPC, [Calouste] Gulbenkian insisted that consortium participants sign the Red Line Agreement (Yergin 1991: 203-6). The red line was drawn on a map to define the territories that were once under the sovereignty of the Ottoman Empire, and the agreement stipulated that participants in the IPC consortium agreed to participate in the exploitation of oil, which was to be discovered within the red line exclusively by consortia of the same composition as the CPI. Therefore, if one of the members of the IPC consortium discovered oil or obtained a concession elsewhere within the red line, he would have to offer that asset to the remaining members in the same “geometry” as in the CPI. [3] The “Red Line” agreement is an agreement signed by partners of the Iraq Petroleum Company (IPC) on July 31, 1928.

[1] The contract was signed between the Anglo-Persian Company (later renamed British Petroleum), the Royal Dutch/Shell, the French Oil Company (later total), the Near East Development Corporation (later renamed ExxonMobil) and Calouste Gulbenkian (an Armenian businessman). The aim of the agreement was to formalize the structure of the IPC company and to associate it with a “self-refusal clause” prohibiting one of its shareholders from independently seeking oil interests in the former Ottoman region. It marked the creation of a monopoly or an oil cartel of enormous influence that extended over a vast territory. The cartel was preceded by three decades by the birth of another cartel, the Organization of the Petroleum Exporting Countries (OPEC), established in 1960. [2] The U.S. oil companies Standard Oil of New Jersey and Socony-Vacuum were partners of IPC and were therefore bound by the Red Line Agreement. When offered a partnership with ARAMCO to develop Saudi Arabia`s oil resources, their CPI partners refused to withdraw them from the agreement. After the Americans claimed that World War II had ended the agreement on the red line, lengthy legal proceedings followed with Gulbenkian. [7] Finally, the matter was settled out of court and the American partners were allowed to join ARAMCO. [8] The “Red Line” agreement became a legacy after that date, as IPC continued to make concessions under its terms, but shareholder companies were allowed to seek new oil concessions throughout the Middle East independently of each other.

[9] Senator McConnell (R-KY) spoke about the President`s speech on reducing dependence on foreign oil.

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