from an economist
On July 13th, just over three weeks after RBourmediene's coup, a new Franco-Algerian oil agreement was concluded. It is due to be initialled by the end of this month. It has a number of features which represent a new departure in the economic relations between oil-producing and oilconsuming countries, For the first time, the policy of an oil-producing country towards the independent oil companies will be governed by an over~ riding agreement on taxation, exploration, production, transportation and industrialisation with an importing Government,
France will gain a privileged position in the exploration of Sahara oil and gas, which is regarded as coming from the franc zone, as well diplomatic springboard for General de Gaulle to reassert his right to pose as the champion of the under-developed countries. At one leap, Algeria will gain higher tax and royalty revenue, direct participation in the exploitation of Sahara crude and substantial French aid for the development of a petrochemical industry and other forms of industrialisation,
The international oil companies, on the other hand, will certainly be worse off than before in financial terms, and may well find that their future activities in Algeria are as effertivelycontrolled as in France. The agreement is line with France's particular policy of carving out, by decree and administrative controls, a large and growing share of the its own domestic market for refining and distribution for specially created state-owned concerns. The new agreement dovetails these arrangement with those for the production of oil.
The main novelty in the agreement is the concept of "co-operative association", underwhich a new joint state oil company will be created on a 50-50 basis for exploiting all future oil and natural gas concessions in the Sahara, This represents an advantage for France over the previous position because in the three years since independence the Algerian Government has awarded no new concessions of any significance. On another front, actual production has been limited by pipeline capacity to some 27 million tons a year. ‘Jith the coming into operation of the British-built third pipeline production will probably rise to 37 millions tons per year. Although the pipeline did not feature in the negotiations, the disposal of the oil will come under the other spects of the agreement, therefore Algeria has lost some of the advantage it gained by defying French oil interests and going ahead with the construction of the pipeline,
These new agreement,whilst it can in no way be likened to others concluded between the imperialist powers and oil-producing countries, contains many features which could consolidate a neo-colonialist relationship between France and Algeria.