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Syria: Turning the Valves

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In December, the 550-mile oil pipeline stretching from Kirkuk, Iraq, across 305 miles of Syria to the Mediterranean ports of Baniyas and Tripoli went as dry as the arid land through which it snakes. The reason: in a dispute with Western-owned, London-based Iraq Petroleum Co.* over transit and terminal fees, socialist Syria squelched the flow.

Last week a settlement was reached, and Syria turned the valves to start the 950,000 bbl. a day of crude oil gurgling once again toward the coast. That night Premier Youssef Zayyen, 36, went on radio and TV to declare “a triumph of the struggling masses over Western monopolies.” Following his speech, the audience again heard the lyrics of a song written especially for the crisis:

Arab oil is for the Arabs, all the Arabs. Either we get our rights or we will set it afire.

No one set the .oil afire, and all parties involved lost from the shutdown, but the Syrians were clearly winners in the settlement. l.P.C. agreed to raise the transit-terminal royalties that it pays to Syria by a hefty 50%, to about $42 million. Also, it paid retroactive fees back to Jan. 1, 1966, of $14 million. l.P.C. lost its bid to cut the featherbedded work force down to 1,000 from 3,400 (hired to repair the pipeline blown up by Syria during the Suez crisis of 1956).

Left unresolved was the staggering $110 million that the Syrians say is owed them because of ten years of “faulty bookkeeping” by the company. l.P.C. wants the issue settled by compulsory arbitration, but Syria does not want to lose this ace, preferring to threaten future closing of the pipeline should the company become difficult and refuse further demands.

In the end, the happiest to hear of the settlement were Middle Easterners themselves, who have suffered the uncommonly cold Middle East winter with inadequate supplies of bottled gas.

* Shared by British Petroleum, Compagnie Française des Petroles, Royal Dutch/Shell, Mobil Oil, Standard Oil (New Jersey) and the Gulbenkian family of Europe.

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