OIL: The Mysterious East

Between Saudi Arabia and Kuwait, by the Persian Gulf, lies the “neutral zone”—a condominium of Arabia’s King Ibn Saud and Kuwait’s Sheik Sir Ahmad al Jabir-al-Subah. There, last week, business looked cracking good.

The American Independent Oil Co., which last year won the oil concession to Sheik Ahmad’s half of the neutral zone (TIME, July 19), sent him a token of gratitude: a 195-foot diesel yacht, complete with 25-man crew, dishes, linen, and a sheep pen on the upper deck. “There’s nothing elaborate about it,” said American Independent’s President Ralph Davies. “It’s merely in good taste, and appropriate. He’s the ruler of a country; he can’t be expected to ride in a rowboat.”

For the concession in Ibn Saud’s half of the neutral zone, California’s independent Oilman J. Paul Getty offered a reported $9,000,000 down, a minimum royalty of $1,000,000 a year, a royalty of 55¢ a barrel, and a 25% interest in the company. This was so much more than any other company offered that oilmen were aghast. Furthermore, the world oil supply was already so ample that U.S. imports from the Middle East and Venezuela are being cut back. Last week there were signs that gasoline prices might soon be coming down. In view of that, Getty’s rivals thought he would have to step some to make his concession—if he gets it—pay off.