Details Cited in OPEC Deal With 4 Firms

United Press International

The four U.S. partners in the Arabian American Oil Co. have agreed to purchase about 1.3 million barrels of oil a day from OPEC leader Saudi Arabia at official prices under long-term contracts that contain several escape clauses, industry sources said Thursday.

The sources, who spoke on the condition they not be identified, said the Aramco partners--Exxon Corp., Mobil Corp., Texaco Inc. and Chevron Corp.--are very sensitive about their relationship with Saudi Arabia, OPEC’s principal producer and the world’s largest oil exporter.

In a marked departure from its usual tight-lipped stance, Aramco publicly disclosed Tuesday that the four U.S. oil companies had entered multiyear contracts to buy oil from Saudi Arabia at new fixed prices established by OPEC.

Aramco refused to reveal how much oil was involved in the agreement, widely viewed by analysts as bolstering the Organization of Petroleum Exporting Countries’ chances of maintaining its $18-a-barrel price target in 1987.


The sources said the four Aramco partners, who produce the bulk of Saudi Arabia’s oil, have agreed to purchase a total of about 1.3 million barrels a day from the kingdom at official government prices.

The kingdom’s OPEC-assigned output quota is 4.35 million barrels a day.

Sales to Third Party

In return, the Saudis agreed not to restrict the companies from selling the oil to third parties and not to penalize the partners if they take less than their allotted volume during a particular month, the sources said.


In addition, the kingdom gave the companies a clause allowing them to cancel their contracts on 30 days’ notice after July 1, the sources said.

OPEC, which reached accord in December to raise oil prices to an official average of $18 a barrel Feb. 1 by cutting production in the first half of 1987 and eliminating discounts, is scheduled to hold its next meeting in June.

The sources said Saudi Arabia asked Aramco to issue the public statement on the agreement with the U.S. partners to counteract reports that the four oil giants had balked at purchasing its crude at the new official prices of $17.52 for Arab light and $16.89 for Arab heavy.

Observers had been skeptical about whether OPEC would achieve its $18 price goal--particularly in the spring, when world oil demand slumps to its low for the year--without commitments from the Aramco partners to buy Saudi crude on a long-term basis.