OPEC CONFERENCE RESULTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78S01932A000100160037-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 14, 2016
• Document Release Date: April 17, 2003
• Sequence Number: 37
• Publication Date: September 18, 1974
• Content Type: CABLE

SIGNAL CCNTFR IJ SC C>NLY
1 l-E MArlD LC:1 Till
AGt". f, 01 /1 F TOG
Approve o For Release :B003/05(D14 : CIA-RDP78S01932A000100160037-1
CTA/lil{ISS.
SOURCE REV: -- - - -
TO: IMMEDIATE WHITE HOUSE//SITUATION ROOM FOR MR FAZIO.LO
ALnn i~u...,, DATE: 18 SEPTEMBER 1174
25X1
SUBJECT: OPEC CONFERENCE RESULTS
OPEC DECIDED LAST WEEK TO 1:FLTZC POSTED PRICES FOR THE" FOURTH
QUARTER OF 11 7NJ, ? BUT TO INCREASE MEMBL-R GOVERNMENTS' TAKE BY D.5%
EFFE:C'I'IVL OCTOBER 1, TO COMPENSATE FOR INFLATION. BE_CALJ!~E TAX AND
ONG
_ f E SU if.ll? a 1 frNT_E. AI_~-. i" fill
I'RIE?.El'G D1.L I Ei~I+
IMPLEMENTING THE ;ENCNLASE WILL TAKE A VARIETY OF FORMS. FOR THOSE
PRODUCERS WHO HAVE A DUAL PRICE SYSTEM, TAXES ON ~QLJITY OIL WILL
BE BOOSTED; FOR THOSE WITH A SINGLE PRICE SYSTEM, SOME OTHER
MECHANISM WILL. BE USED.
A STRAIGHT APPLICATION OF THE dPEC.FORMULA INDICATES THAT THE
WEIGHTED AVERAGE COST TO THE PRODUCING COMPANIES FOR CRUDE WILL
INCREASE BY AT LEAST 33 CENTS, TO -*9.84 PER BARREL. ACTUALLY, WE
THINK IT LIKELY THAT THE INCREASE WILL BE ON THE ORDER OF 40 TO
DATE
OUIG:
UNIT:
EXT:
COORDINATING OTrICEHS
REPRODUCTION BY OTHER THAN THI ISSUING OFFICE IS PROHIBITED
25X1
25
25X1
Approved For Release 2003/05/14: CIA-RDP78S01932A00010010937 1 '
I.UII Ic')'vl;
i'AL4ti 25X1
 SCM
App,ooveds r`"Re~T se 1 /05/ I, : P7860193~AOOO 100 16003
0 .Q Q 0 0 0
50 CENTS.
COMPANY PROFITS ON THEIR
CRUDE OPERATIONS IN TILE GULF ARE ON THE ORDER OF 4B TO 5D CENTS
PER BARREL. WE WOULD EXPECT THAT MOST OF THE
INCREASED COST OF OIL WILL BE PASSED ON/THE CONSUMER.
~A(yiAl_ '-S S .,(} ~.Tt;E 4PEC-I Cr.iI;FIIEPv ? -AiV}?-fartEVAILING ,HUYBAEK
C-f s--4l~blib"t?itif fC "(S..~i'~tit'~ `PhiF _rc U/i'I. f'dCRCASE -TN HE.,"C4S 4',,Dt
04L 11A1~ f34= CLOSE?f~ TO 5%_"THAN_ THE -3 1,/p%- OPEC -CLAIM S ?-----TG t-HIS- tWWOULD
E4UA-TF TO ~~t]~`i'{~` Jt} CEN i S" PER-BARRE!_- RATHFRI THAN -THE -33- CENTS- PEP
wL A"I f' tr-I~---t1SS E D U Y OP I E r"~
THE SAUDIS WERE ODD MAN OUT AT VIENNA. THEY WOULD NOT GO
ALONG WITH THE INCREASES IN ROYALTIES AND TAXES--A POSITION
SIMILAR TO 5`ii $f~T THE QUITO MEETING. THEY IND.PATED,
HOWEVER, THAT THEY WOULD INCREASE THE AVERAGE PRICE OF SAUDI OIL
FROM ;9.34 PER BARREL TO *9.I+7--ABOUT 13 CENTS PER BARREL, BUT
STILL 20 CENTS BELOW THE STATED OBJECTIVE. OF OPEC. THIS, WOULD
.MAKE SAUDI OIL THE CHEAPEST IN,OPEC? ACTUALLY, WE BELIEVE'THAT
YAMANI'S IMPOSITION AT VIENNA WAS JUST POSTURING AND THAT WHEN
THE TIME COMES TO SETTLE ACCOUNTS WITH ARAMCO YAMANI WILL INSIST
DATE:
ORIG:
UNIT:
EXT:
COORDINATING OFFICERS
RELEASING OFFICER
BY OTHER THAN THE ISSUING OFFICE IS PROHIBITED
CtAS51FICATION REPRODUCTION
Approved For Release 2003/05/14: CIA-RDP78SO1932A00010016
25X1
 SIGNAL CENTEFt 1551 ONLY
I L
pprov d`Por e`leas A'63/ 5/''x?4: iA-hDPnS019 ~1A00
S f t I~ CJ ~1 [~ 0 -
25X1
ON RECEIVING RETROACTIVE REVENUE THAT WILL AT LEAST EQUAL THE
OPEC FORMULA.
OTHER I'T'EMS FROM THE OPEC CONFERENCE:
--AS OF JANUARY i`175.f THE RATE OF INFLATION IN INDUSTRIALIZED
COUNTRIES WILL. AUTOMATICALLY BE TAKEN INTO ACCOUNT WHEN
BILATERAL AS WELL AS A MULTILATERAL BASIS.
ADJUSTING NEW PRICES.
--A WORKING COMMITTEE WILL STUDY A NEW SYSTEM FOR LONG-TERM
OIL PRICING.
--A STUDY WILL BE MADE ON THE SUBJECT OF SUPPLY AND DEMAND.
IN THE MEANTIME, A NUMBER OF COUNTRIES ANNOUNCED THEIR
DECISION TO MAKE A VOLUNTARY CUTBACK IN THEIR PRODUCTION
LEVEL.
--A REPORT OF THE WORKING PARTY ON THE OPEC DEVELOPMENT FUND
WAS EXAMINED AND THE MEMBERS DECIDED TO CONTINUE AID ON A
{SPECIAL DISTRIBUTION:
DATE:
ORIG:
UNIT:
18 SEPT 71+
25X1
25X1
25X1
25X1
FORM 4C Appre vzd' oviRelease 2003/05/14: CIA-RDP78S01932A00010016003 -
1-74 Et>IIIDNS