ONASSIS OIL TANKERS BOYCOTTED; SAUDI ARABIAN CONTRACT SCORED

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75-00149R000600090068-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: November 16, 2016
• Document Release Date: March 17, 1999
• Sequence Number: 68
• Publication Date: January 21, 1955
• Content Type: NSPR

NEW YORK TIAM JAN 2 1 1955
Approved For Release 2000/05/24: CIA-RDP75-00149
1Onassis' Oil Tankers Boycotted;
baud i ra tan 'on race Scored
fto 01
_... ,
Move by Major Compgnles Is Viewed as
First Phase of Strategy to Destroy
His Fleet Unless Pact Is Modified
CAIRO, Jan. 20-Major oil
compnaies have begun a boycott
against the oil tanker fleet of
,Aristotle Onassis, Greek-born Ar-
1 gentine shipping magnate. They
hope to force the modification of
!his allegedly monopolistic oil
shipping contract with the Saudi
Arabian government.
The boycott as described by oil
circles here today is the first
phase of a worldwide strategy to
destroy Mr. Onassis' tanker em-
pire unless the contract is modi-
fied to the satisfaction of major
oil interests. The projected cam-
paign against Mr. Onassis Is re-
ported to have the tacit endorse-
ment of the United States Gov-
ernment.
Under the terms of the agree-
ment concluded at Jiddah a year
a.go today, Mr. Onassis is to ere-
late a private company called the
Saudi Arabian Maritime Cow-
pany limited with a minimum
registry of 500,000 tons of tank-
ers.under the Saudi Arabian flag.
Saudi Arabia is bound to compel
all oil shipments from the coun-
try to be carried in Saudi Arabi-
~.n Maritime Company ships with
the exception of - the Arabian
American Oil Company.
Aranico is permitted to give
preference to such of its own
tankers as were carrying Saudi
Arabian petroleum before Dec.
31, 1953.
Transport Rates Set
Transport rates, according to
the agreement, "shall be in
accordance with the price an-
nounced monthly by the London
tankers panel," but not less than
the average rate, of the panel
over two years ended March 19,
1954; Mr. Onassis is to pay" tax to
the Saudi Arabian government of
11/2 shillings sterling (21 cents)
on e.jch ton of oil shipped.
The agreement was 'protested
by both the State Department
alid Aramco, which holds a vast
sixty-six-year Saudi Arabian oil
concession dating from 1933.
United States officials say if
the agreement is maintained
there is nothing to prevent simi-
lar agreements in other oil-pro-
{ ducing countries from creating
monopolies that would squeeze
the American maritime Industry
from the ,shipment of American-
!produced oil in vital world areas.
'.Further consideration is that
U,nited States tanker fleets would
ultimately bee reduced against na-
tional strategic interests.
Aramco, whose parent.compa-
vies are Standard of New Jer-'
sey, Socony, Standard of Califor-
nia nia and the Texas Company,
charged the Onassis agreement
contravened Its concession, which
stipulates the oil it produces shall
be sold and transported on a com-
petitive basis
If the agreement is enforced,
company spokesmen said, Mr.
Onassis would eventually obtain.
complete monopoly on Saudi Ara-
bian oil transport as Aramco
tankers, limited to those in traf-,
fic before December 31, 1953, be-
came obsolete. Such a situation,,
called "flag discrimination," is
opposed by the oil- interests and!
the United States and British!
Governments as well as other in-
ternational. maritime Interests.
King Saud Set Deadline
King Saud is reportedly much
embarrassed by the reaction to
his agreement with Mr. Onassis,
which produced such manifesta-
tions as the widely publicized
i
charges of corruption made by
Mr. Onassis' brother-in-law and
shipping rival Stavros Niarchos.
Early last month King Saud
requested Aramco and Mr, Ona.s-j
sis to try to settle their differ-~
ences by a deadline of Jan, 1.5
after which he said the disputeI
must go to arbitration.
Arbitration is now in prepara-
tion here technically between
Aramco and Saudi Arabia and
the issue is whether or not thel
Onassis agreement contravenes+
Aramco's concession. Mr. Onassis,
arrived here yesterday as a very
much interested party although
not technically a disputant, .
Mr. Onassis has conferred with!
top executives of Arameo and;
parent companies in New York,
the Hague, Dharan and Jiddah.
Facing a.formidable array of oil;
company power, he reportedly)
has elcpressed the willingness to
drop the restrictive clause against'
Aramco ships in return for a
guaranteed minimum oil tonnage
for his ships with?the additional,
proposal that Aramco use his
ships under long-term charters.'
'Aramco, which produced about
42,000,000 tons of oil last year,
and shipped 40 per cent of it, re-;
jected the demands as excessive.!
Aramco paid King Saud about
$220,9 000 in royalties
last year.
.
ifr.Onassis estimates King Saud's
taxes on the proposed Saudi Ara-
bian Maritime Company ship-
ments would net him an addi
tional $5,000,000.
CPYRGHT
Approved For Release 2000/05/24: CIA-RDP75-00149R000600090068-6