Word: oils
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Dates: during 1970-1979
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Aramco got a bonanza from the gap between the $18-per-bbl. price that Saudi Arabia had been charging, vs. the official cartel ceiling of $23.50. In unregulated markets outside the U.S., Aramco's proud parents have been able to sell their gasoline, heating oil and other products for high prices even though these fuels were made from the lowest-cost cartel crude. Largely as a result, third-quarter profits of Exxon, Mobil, Texaco and Socal jumped by anywhere from 73% to 211%. The revenue surge enraged the Saudis; Oil Minister Ahmed Zaki Yamani argues that Aramco...
...Aramco is under attack because of a highly complex tax break. The company pays Saudi Arabia the fixed price for the oil that it extracts and then collects a production fee of 25? per bbl. But 85% of its payments are considered Saudi income taxes, which Aramco's four parents ultimately can use to reduce their U.S. income taxes. Every time Saudi Arabia increases its oil prices, Aramco's local tax payments rise, and so do its benefits under the U.S.'s so-called foreign tax credit. President Carter has vowed to tighten up on the credits...
...imminent and would have no effect on the company's operations beause Aramco would continue to run them for a fee. But skeptics suggest that the takeover might already have been consummated. They contend that the Saudi government's action in providing Aramco since last July with oil at much less than its real market value was in part to compensate the company, free of capital gains taxes, for the takeover of its assets...
...their middleman role, Aramco's American chiefs plainly have divided loyalties. From Chairman John J. Kelberer, a career-long Aramco engineering manager, on down, executives remain determined to do nothing that would anger their Saudi hosts or jeopardize the company's concession. During the 1973-74 Arab oil embargo, Aramco's executives not only did as they were told by the Saudi government, but cut back production by more than requested just to show that they were good Saudi corporate citizens...
...threaten to boost production enough to create periodic petroleum gluts. Yet high Aramco officers are among the few people who know the real size of Saudi Arabia's production capacity. Last spring Exxon and Socal divulged to the Justice Department, in its ongoing anti-trust investigation of the oil industry, that Aramco had little spare capacity. That statement helped to undercut Saudi influence over cartel price policy. On the eve of the Caracas gathering last week, Saudi officials proclaimed that the country could boost output almost immediately, perhaps to a hefty 11 million bbl. Meanwhile, the Saudi government...