Word: oil
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Dates: during 1950-1959
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...uncertainty about which way the U.S. economy is going was nowhere more sharply reflected than on Wall Street's stock market. Like a ballplayer trying to work out his muscle kinks with knee bends, the Big Board bounced up and down last week; market leaders in steel, oil and aircraft tumbled as much as 2½ points in a day. On Monday, the Dow-Jones industrial average skidded 9.25 points to 478.95, for the market's sharpest break in nearly two years. Though intermittent rallies flickered across the floor at midweek, they could not make up the loss...
...private investments abroad jumped by a record $3.9 billion to $33 billion, three times more than the total investment in the domestic steel industry. American companies directly invested $2.8 billion in their foreign subsidiaries, a full $1.1 billion more than in 1955. Half of it went into the oil business, which also accounts for the biggest part of total U.S. investment abroad ($7.2 billion), but manufacturing investments rose by $739 million, while mining and public utilities also made big advances...
...unanimous vote, Iran's Senate last week ratified an oil pact that was a major break in the traditional fifty-fifty profit split that Middle Eastern governments give foreign prospectors. To Italy's state-run ENI and its ambitious boss. Enrico Mattei, Iran granted twelve-year drilling concessions for a strip on the Gulf of Oman, a submerged area off Abadan, and a promising 6,800-sq.-mi. area south of the fabulous Qum find (TIME, May 6). But to Iran ENI gave up to 75% of the profits from any oil find it may make...
Though Iran still claims that "the principle of sharing profits fifty-fifty between partners has been respected." it will get its extra 25% by bringing the state-run National Iranian Oil Co. (NIOC) in as an equal partner with Italy's ENI. From any profits, the Iranian government will skim a 50% royalty off the top; then the remaining 50% will be divided equally between ENI and NIOC. In addition, ENI will ante up NIOC's initial contribution to the joint company on a "loan" basis, pump another $22,250,000 into the venture over the next twelve...
...most Western oilmen ENI's largess was a power play to crash Italy into the big leagues of Middle East oil. Probably no major Western company will be as free-handed in future contracts with oil-rich Iran. Even so, the ENI deal is a significant break in the fifty-fifty pattern. The government will press for NIOC participation in future oil deals...