SAUDI RENEGOTIATION OF ARAMCO DEAL MOVING ALONG
Saudi Arabia's renegotiation of its
collective agreement with Aramco to purchase oil for the
latter's ex-partners is moving along and should lead to a
fundamental structural change in the contract, oil industry
sources said.
    Petroleum Intelligence Weekly, in this Monday's edition,
said negotiations are moving along for adjustment of the 1.34
mln bpd joint long term agreement at official prices and
volumes and other terms may be rearranged.
    The agreement signed in January for the months from
February to June is up for renegotiation.
    Under the January contract Aramco was to purchase 1.34 mln
bpd for the four partners allocated among them as Exxon Corp
<XON> 440,000 bpd, Texaco Inc <TX> 350,000 bpd, Mobil Corp
<MOB> and Chevron Corp <CHV> 550,000 bpd between them.
    But an overlifting by Texaco Inc in the first quarter
allowed other companies like Exxon Corp to underlift its
obligations under the contract
    PIW said that that one alternative under consideration is
to revert to four individual contracts rather than a collective
agrement.
    John Lichtblau, director of the Petroleum Industry Research
Foundation Inc said that renegotiation of the pact was more of
a formality as the Saudis have each company on a separate
schedule although separate agreements with the companies would
favor one on one negotiations and ensure that contracted
liftings occur .
    "The companies will probably follow the Saudi wants within
limits as they do not want to antagonize them for the long
haul," he said.
    Lichtblau said that the renegotiations would most likely
concentrate on volume rather than price.
    Saudi displeasure with the agreement has long been noted
and in April industry publications said that renegotiation were
being sought, a fact later confirmed by Reuters with Aramco.
    Aramco Corp was formerly owned by Chevron Corp <CHV>, Exxon
Corp <XON>, Mobil Corp <MOB> and Texaco Inc <TX> but is now
owned by Saudi Arabia which bought its assets although the
ex-partners have various agreements with Saudi Arabia.
 Reuter
