OIL: Chosen Instrument

In London last week, Oilman Ralph K. Davies sealed the deal that he hoped would make his American Independent Oil Co. (TIME, Sept. 1) one of the biggest U.S. producers in the Middle East. Said Davies: “A forward-looking . . . chapter in the history of oil … The first time a large-scale oil operation has been undertaken in the Middle East by independents.”

But how independent was Independent? Ten U.S. oil companies ponied up its $10 million capital. The State Department smoothed the path to the Sheikh of Kuweit, joint owner with Saudi Arabia’s Ibn Saud of the Arabian desert’s “neutral zone,” where Independent’s oil concession lies. State also passed the word that Independent was its chosen instrument for the “neutral zone” oil lands. And Arabian American Oil Co., in neighboring Saudi Arabia, was ready to let Independent use the projected 1,100-mile pipeline to the Mediterranean.

When the sheikh put his share in the lands up for auction, Gulf Oil Corp. and Shell Union Oil Corp. made token bids, and Independent walked off with the prize. One oilman said simply: “The whole industry stood on the sidelines and cheered.” For Independent is an important face-saver—token “proof” that the U.S. does not maintain its strategic Middle East beachhead for the sole benefit of the companies that dominate the U.S. oil industry.