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Volume :5 Issue : 17 1979      Add To Cart                                                                    Download


Auther : By Dr. Ali Al-Kawari


The topic of discussion of this article is mainly concerned with the new changes the oil-industry in the Arab Gulf has experienced. Two major stages are identified: The infancy stage and the pre 1970 conditions characterized by the conflict between the governments of oil producing countries and oil companies. And the stage of new changes matured after 1970 and precipitated by the gradual nationalization of oil resources and the new challenges the oil countries chose to face consequently.

The conflict stage over profit sharing between producer and oil companies was concerned with four major issues demands:

  1. Increase of production.
  2. Price increase.
  3. Cutting down production costs.
  4. Increase of royalties and tax rates.

The second stage started during 1970 with the new changes regulating the relationship between producer and exploiting oil company of which most important was the regaining of the oil countries full ownership of their oil resources. This led to the situation where oil producer became oil sellers, that meant actual price of oil exceeded posted price according to market demand. Oil resource ownership means also the break of monopoly of the seven sisters as producer states started sharing control over marketing, refining, production and transport means of oil. Another change was the increased awareness of oil producers and the strengthening of their political will as to adopt policies according to their national interests: to gain the maximum economic and social profits from the oil industry.

Yet this new situation put them in front of new responsibilities and challenges: long-term planning and development, their role in the economic world market, regulating production to serve best national interests…, in short to fulfill the historic responsibilities they assume towards the future generations of their countries.

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Dec 26, 2021

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