CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A025000110001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: December 15, 2016
• Document Release Date: October 29, 2003
• Sequence Number: 1
• Publication Date: August 13, 1973
• Content Type: REPORT

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Central Intelligence Bulletin
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e
13 August 1973
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13 Augus 1973
Central Intelligence Bulletirl~
SAUDI ARABIA: King may cut ,tack production of oil
destined for U (Page 1)
CAMBODIA: Lull ii my rgent activity in Phnom Penh
area. (Page 2)
LIBYA: Further atiorlization of oil companies
expected. (Pa a 3)
ISRAEL: Aermath of air's piracy incident. (Page 4)
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SAUDI ARABIA: King Faysal reportedly will an-
noun that Saudi Arabia will reduce
the production o oil "destined for the United States"
by 100,000 barrels per day (bpd) for six months.
Faysal's decision was reported to be in response to
the US veto on 26 July of a Security Council resolu-
tion on the Middle East.
Current oil production in Saudi Arabia is about
8 million bpd, but ARAMCO--owned by four US companies
and the Saudi Government--had hoped to increase pro-
duction to about 9 million bpd by the end of 1973.
It is not clear whether Faysal intends to cut back
total oil exports by 1.00,000 bpd or to seek to de-
crease Saudi oil actually coming into the US--
currently only about 300,000 bpd out of total US oil
imports of 6 million bpd. If the Saudi King ordered
a production cutback his might be followed
by similar steps on the part o other Arab oil-
producing countries.
Foreign visitors who have met recently with
Faysal have acknowledged that he is increasingly
critical of US policy in the Middle East, in the
wake of the Security Council veto. The Saudis have
been under growing pressure from other Arabs to use
the country's oil and rapidly mounting cash reserves
as political levers to get the US to modify its stand
on Arab-Israeli questions. This decision constitutes
the King's first overt action linking oil policy and
Middle Eastern politics. Although his move appears
to be largely symbolic: it couldortend harsher
Saudi policies. I
13 Aug 73 Central Intelligence Bulletin
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CAMBODIA: Military activity in the Phnom Penh
area is at its lowest level since April.
Government commanders are taking advantage of
the lull in enemy attacks to expand their defense
perimeter. South of the city, troops have cautiously
advanced down Routes 2 and 3 and have regained all
but a small segment of Route 201 against no opposi-
tion. Other government units are patrolling east
and west of Route 1 between the capital and the naval
installation at Neak Luong. Cambodian Army units
are continuing offensive operations north of the
city.
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LIBYA: The government's 51-percent nationali-
zati-cr of Occidental Petroleum probably will be
followed by moves against other companies.
On 11 August Tripoli nationalized a majority
share of Occidental's Libyan assets and threatened
to take the remaining 49 percent if the company
resisted the action. Occidental aquiesced and
will receive compensation only on the basis of net
book value--a low valuation method. The company
ik_ also agreed to market Libya's share of the produc-
tion and will pay a high price =or zne gOVeLliuieixL-
owned oil--more than a 50-percent increase over that
paid by Occidental previously. Occidental produces
about 15 percent of Libya's oil, exporting most of
it to Western Europe.(
The Oasis Group of companies, which accounts
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for a i st 40 percent of Libyan production, is
scheduled to meet next with Libyan officials and
probably will face demands to accept the same set-
tlement as Occidental. Three of the Oasis partners--
Continental, Marathon, and Amerada-Hess--have rela-
tively little oil production outside of Libya and
probably will aquiesce. Shell, the other Oasis
partner, has most of its production in the Persian
Gulf countries and Nigeria, and probably will resist
Tripoli's demands in an attempt to deter other oil-
producing countries from demanding similar terms.
It is almost certain, however, that acceptance of
Tripoli's terms by Occidental and three of the Oasis
partners will spur the Persian Gulf countries to
seek im roved terms from the oil companiea operating
there.
13 Aug 73 Central Intelligence Bulletin 3
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Central Intelligence Bulletin
ISRAEL: Tel Aviv is attempting to head off
possible wider ranging legal complications arising
from its interception of a Lebanese civilian air-
liner on Friday, but it appears basically unfazed
by the universal condemnation the action has aroused.
The Arab states have hinted indirectly.at retaliation.
Israeli ambassadors have been instructed to
take the line that the operation was necessary in
the face of the general international failure to
act against terrorism. Defense Minister Dayan's
public statement similarly justified the action,
describing George Habbash--the fedayeen leader who
was originally scheduled to be on the airliner and
was the target of the Israeli operation--as a mass
murderer.
Dayan's prediction that Israel will continue
such operations against the fedayeen is an indica-
tion that Tel Aviv is, as in previous incidents,
undeterred by the international outcry. The Israelis
may be somewhat apprehensive, however, that this in-
cident will have longer range implications that
necessitate their unusual efforts to explain them-
selves.
The first battle will be at the UN today, where
o the Security Council will meet to consider the corn-
plaints of Lebanon and of Iraq, which had chartered
the Lebanese airliner. Although the Lebanese have
not yet drafted a resolution, a Lebanese Government
statement has called on the "international community"
to impose sanctions on Israel. Iraq can be expected
to take a tough line at the UN if Lebanon does not.
A complaint has also been lodged with the Interna-
tional Civil Aviation Organization (ICAO), which is
scheduled to meet in Rome later this month to con-
sider legal sanctions against states which encourage
or condone hijacking.
In the Arab world, the Israeli action is being
met with predictable indignation. Iraq issued a
statement reserving ":Lts full right to take deterrent
measures against this aggression," and an Egyptian
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spokesman has noted that Israel's act opens the door
for all other Middle East governments to engage in
air piracy. These comments may presage official
Arab government efforts to retaliate in kind for
the Israeli action.
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The fedayeen are probably somewhat disconcerted
at the accuracy of Israeli intelligence in pinpoint-
ing Habbash's travel plans and at the implications
for their freedom of movement. Nevertheless, they
can make propaganda capital out of Israel's failure
to capture Habbash, and they are not likely to be
deterred from efforts at retaliation.
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FOR THE RECORD*
Pakistan-PRC: One hundred Chinese T-59 tanks
have recently arrived in Pakistan. This represents
the final shipment of tanks under a pledge made by
Peking in 1.972 to equip two new infantry divisions.
Other equipment yet delivered includes small
arms and artillery.
on 10 August northwest of Havana.
The E-II class cruise missile submarine that ac-
companied them to Havana was last detected at sea
USSR-Cuba: A Soviet Kresta class cruiser
a Kanin class destroyer are operating in the Gulf
of Mexico after visiting Havana from 4 to 9 August.
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had been circulating for some weeks. These moves 25X1
may be part of President Duvalier's efforts to re-
move critics of his regime, and additional changes
are likely.
Pakistan: The National Assembly has elected
President Bhutto to be prime minister. Under the
new constitution which goes into effect this week,
executive power is vested in the prime minister.
Bhutto will relinquish the Presidency, which will
be a ceremonial office.
Haiti: A major shakeup of the Haitian armed
forces and extensive diplomatic changes were an-
nounced by the government on 11 August, two days
after a cabinet reshuffle. Rumors of the changes
*These items were prepared by CIA without consulta-
tion with the Departments of State and Defense.
13 Aug 73
Central Intelligence Bulletin 6
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