POSSIBLE NATIONALIZATION OF ESSO AND MOBIL DISTRIBUTION SYSTEM IN ALGERIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70S00385R000100240005-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 12, 2016
• Document Release Date: December 18, 2001
• Sequence Number: 5
• Publication Date: August 29, 1967
• Content Type: MF

Approved For lease 2002/0$/01; ; (IA-RDP70SO038WO01062-' -0
Director of Economic Research 29 August 1967
Chief, Fuels ani Power Branch
Pos ible Nationalization of ESS0 and MOBIL Distribution
System in Algeria
REF : State, Algiers 355, dated 28 August 1967. C.
25X1A
1. Reference indicates Mobil has information that announcement
of the nationalization of the Faso and Mobil distribution system in
Algeria is imminent. Nothing was known concerning compensation.
2. The definition extent, and value of the facilities involved
is not known fl/PP. 25X1
If in fact only the distribution
system is involved, the value probably is not great. The following
facts afford scme insight into the situation.
3. Algeria produced about 240 million barrels (33.2 million
metric tons) of oil in 1966 and during the first half of 1967 was
producing at about the same rate. It consumes about 9 million barrels
annually in its internal market plus about 1.4 for the bunker trade.
The market has been divided about as follows: Shell - 25%, Esso - 22*,
Total's Sahm - 15%, BP - 13?x, Mobil - 8t, Beryl - 7, Algeronaphte -
6 14, Mediterrarienne des Combustibles i %, and Ste. Algerienne des
Petroles Mory 12p. Thus the facilities affected by the nationalization
would be those serving about 30 percent of the market, and probably are
handling only a little over 3 million barrels per year.
4. Marketing margins In Algeria have been too low to make
distribution activities very profitable. Sonatrach, the Algerian
Government-owned oil company, has for some time wanted to enter
marketing. In May 1966 the marketers proposed a "capon exploitation
consortium" in which Sonetrach would have 10 percent of the share
capital and the distribution companies 90 percent allocated in
proportion to their participation in the market. Consortium assets
would have consisted of primary outlets (means of transportation and
storage yards) mu-i the companies vou3A have kept their secondary outlets
(service staticns and sales points). Nothing came of the proposal
because the cearpanies insisted on increases in the marketing margins.
State Dept. review completed
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 Approved For.ease 2002108/01: CIA-RDP70SO038 00100240005-0
6. Natione.lizetion of Esso and Mobil oil interests in Algeria
has been under study and it probably has been found that such action
will provide no economic advantage to Algeria. In pre-independence
days the service stations and garages were owned by individual
Frenchmen who lad acquired franchises from the oil companies concerned.
Since the depaxture of the French proprietors, the oil companies have
claimed title to the service stations. Nationalization of such
holdings may be regarded as a +p to anti-American feelings developed
during and since the Arab Israeli war.
25X1A
25X1 B
Approved For Release 2002/08/01 : CIA-RDP70SO0385R000100240005-0
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"0240005'-0'
PACE 01 A-GIER 00355 21 49Z
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ACTION AF 21
INFO NEA 19,10 2jA SS0 00A US T E
SS 35,7GPM 03ASC 01.NSC
C'~1
01
00, NSCE GLOB ECO 00.7E SR 01 c EUR 25d SP
I NR 07,p DOD 01 AE 19A COM 08A i NT
SAW 00:3.--hi w
25X1A,
0 P 281905;' AUG 67
F E1 AMEMBASGY ALGIERS
YEi SE CSTATE: WASHDC IMMEDIATE ~
INFO ANEMBAASSY BEIRUT PRIOE;t!T 108
AMEMSASSY GENEVA 23
A,MEMBASSY 1 WAR T OUM 40
IMEMBASS-Y PARIS 531
CO NF I D E N T I A .L ALGIERS 355
336 (NOTAL )
'6, TRSY
25X1
1v MOBIL HAS FIRM INFORMATION THAT TEXT NATIONALIZING ESSO AND
N B I X ;wI I_ .TFM 6~?S F~F,~EIJ S t~NE YN i -- AW7 UNCEMENT EXPEQTED 'TONIGMT OR TOMORROW MORNING?
REF.- ALGIERS 330k
i FROM FRAGMENTARY KNOWLEDnE OF TEXT 2E S T