SOVIET ENTRY INTO THE BELGIAN OIL INDUSTRY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001600010020-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 22, 2016
• Document Release Date: October 1, 2009
• Sequence Number: 20
• Publication Date: June 1, 1968
• Content Type: IM

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GtiTfO STATES OF ^M~p`Lr
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Soviet Entry Into the Belgian Oil Industry
1 T
Secret
ER IM 68-70
June 1968
Copy N2 65
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WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP I
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SECRET
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
June 1968
INTELLIGENCE MEMORANDUM
Soviet Entry into the Belgian Oil Industry
Summary
Recent action by the USSR designed to lead to
investment in petroleum importing, distributing,
and refining facilities in Belgium reflects a new
Soviet policy to expand participation in Free World
oil refining and marketing activities. A newly
chartered joint Soviet-Belgian oil company, Nafta
(B) , has announced plans to construct an oil
importing and distribution facility on land it has
leased in the Antwerp harbor area. Plans also call
for Nafta (B) to engage in refining operations,
and an offer, apparently unsuccessful, has been
made to buy a small refinery from an independent
Belgian oil company. Previously the USSR has
refrained from investing in oil facilities abroad
and, except for a small marketing and brokerage
firm in England, from engaging in local commercial
oil activities in Free World countries.
The oil sales currently contemplated by Nafta
(B) are too small to change significantly the market
shares of the traditional suppliers or to influence
prices in Belgium, or to make much profit for the
USSR. The USSR, however, can use Nafta (B) to gain
experience in commercial and governmental procedures
in the Western oil business and shows a willingness
to adapt to Western business procedures.
Note: This memorandum was produced sc!ely by CIA.
It was prepared by the Office of Economic Research.
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1. A Soviet-Belgian firm -- Nafta (B) --
capitalized initially at a nominal $60,000 and
owned 60 percent by Soviet agencies and 40 percent
by private Belgian interests, was established in
Antwerp in December 1967. Under the articles of
incorporation, Nafta (B) can engage in all commer-
cial and industrial operations (including refining)
related to petroleum. It has leased 60 acres of
land in the Antwerp harbor area for development as
a petroleum import and distribution facility and
has attempted to purchase a small refinery near
Antwerp from an independent Belgian firm. This is
the first evidence of Soviet willingness to invest
abroad in both marketing and refining and may reflect
a new policy to expand participation in Free World
oil activities.
2. The only other Soviet venture in foreign
oil marketing is Nafta (GB), Ltd. in Great Britain.
This company, capitalized at a nominal $120,000, is
a successor to Russian Oil Products Ltd., which
existed in Britain before World War II. Nafta (GB)
owns minor petroleum storage facilities and markets
locally procured petroleum products principally
through about 100 retail outlets in Britain. It
has no authority to import oil from Communist
sources or to refine petroleum. Except for its
minor interest in the United Kingdom, the USSR has
hitherto confined its activities in Free World oil
essentially (1) to sales of crude oil and refined
products to companies (including government-owned
concerns) having established oil refining and dis-
tribution facilities and (2) to aid programs in
the less developed countries involving technical
assistance and equipment for the exploration and
production phases of the oil industry. Neither of
these activities involved foreign investment or
the ownership of assets abroad.
Belgian Imports of Communist Oil
3. In 1967, Belgium imported about 570,000
tons of petroleum products from Communist countries
450,000 tons from the USSR and 120,000 tons from
Rumania and East Germany. These imports covered
about 3 percent of Belgium's demand for petroleum
in 1967 of about 16 million tons. Most of Belgium's
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oil imports now come from the Middle East and North
Africa. The Belgian government reportedly estab-
lished the following annual import quotas of Com-
munist oil beginning in 1968:
Thousand
Metric Tons
USSR - petroleum products
600
crude oil
700
Rumania - petroleum products
220
East Germany - petroleum
products
150
Total
1,670
4. It appears unlikely that the USSR will use
its full import quota of crude oil and products
before 1970. Petroleum tankage and distribution
facilities on the tract at Antwerp are not scheduled
to be completed until mid-1969.* Rented or leased
facilities might be found in the interim for
handling petroleum products, but the crude oil
quota cannot be used until refining facilities
are Evailable.**
* Nafta (B) plans to develop the leased land at
Antwerp in three phases. The first phase, sched-
uled for completion in May 1969, provides for about
260,000 cubic meters of petroleum tankage along
with other supporting facilities. Details of the
second and third phase are incomplete, but by the
end of the third phase total tankage will amount
to 750,000 cubic meters.
** The conditions of the crude oil quota stipulate
that the imported crude must be refined by Nafta
(B) in Belgium and cannot be re-exported or sold
locally in its crude form or as fuel oil to power-
plants.
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bhuKh l
5. The Communist oil quota of nearly 1.7 mil-
lion tons -- assuming that it remains unchanged
and is fully used -- would represent about 9 percent
of total Belgian demand in 1970, which will have
grown to about 20 million tons. If the USSR's
plans materialize, the lion's share of the increase
in Belgium's petroleum supply between 1969 and 1970
would come from Soviet imports.
Spokesmen for the Belgian government who
favor the deal with the USSR claim that it will
permit a further diversification of sources of oil
imports, foster an expansion of the oil industry
and domestic employment, and promote Belgian exports
to Communist countries.* Most of the oil imports
would be tied to barter arrangements and are ex-
pected to be offset by Belgian exports to Cc;