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Ly ——~ A t : | 7 and is expected to go down to 15,000 feet. Aramco is as yet unable to determine what to expect when the final results of this exploration are in, but it has already proven to its satisfaction that this area will be much more productive than it had been considered heretofore, If the explorations are auccessful, they feel that the reserves uncovered here will nullify all previous estimates of the amount of o11 in Saudi Arabia. - oe Production , Mr. Hardy stated that production averages about 1,000,000 barrels of ofl per day from 140 wells, of which approximately 300,000 is carried via pipeline to Saidon in Lebanon, 300,000 go to Bahrein for refining and 300,000 plus to Ras Tanura for shipment by tankers. With regard to their pipeline, Mr. Owen pointed out that expenses, including charges levied by numerous nonproducing countries, were becoming so great that pipeline movement was not much cheaper than movement by tanker. _——" The most serious difficulty confronting U. S. of1 operations in Saudi Arapia is & recent agreement made between King Saud and Aristotle Socratesnassis, a Greek tanker tycoon who is also the owner of the Casino at Monte Carlo. Onassis purchased the Casino for the purpose of using part of it as a headquarters. ,This agreement was made between the Saudi Arabian Finance Minister ElfSuleiman, “ard Onussis. Under this agreement, which went into effect on April 9, 1954, Onassis obtained the right to henceforth carry all Aramco o11 in excess of that carried by Aramco'ts own tankers operating out of Ras Tanura prior to December 31, 1953. The capacity of company tankers is estimated to be 10 to 20 per cent of the total 1,000,000 barrels. The agreement would prohibit the shipment of oil in charter tankers, the tankers of other nations and in tankers belonging to the United States Navy. The impact of this agreement on the current o11 market is so great that it cannot be estimated. HT The ramifications of this agreement into other industries likewise cannot be estimated. In return for this agreement, Saudi Arabia will receive one and one-half shillings per ton on all oil shipped in Onassis tankers. This amounts to $.03 per barrel. Basic tanker rates were established by the U. S. Maritime Commission about the end of the war from the Persian Gulf to all world ports. Post-war demands for Gulf o11 and the shortage of tankers resulted in increased shipping rates, exceeding U. S. Maritime rates by 60 to 70 per cent until .@ short time ago. The world demand for tanker construction was ex- panded during the post-war years; however, there is at present a surplus of tankers. This has resulted in increased competition and lower rates. It has also enabled Onassis to gain control of a greatly