International
oil cartels: Another
S.E.
Asia
invasion
(EDITOR'S NOTE: This is the first of two parts.)
By MICHAEL MORROW
Dispatch News Service International
SINGAPORE - Behind the buffer of the Indo-
china War, American, Japanese and international oil
companies are moving determinedly into Southeast
Asia with hopes of exploiting what may prove to be
the world's largest offshore oil reserves. This de-
velopment promises increasing pressure from power-
ful economic interests against an American disen-
gagement from Indochina.
It will, moreover, keep Southeast Asia in the
mainstream of big power politics for a long time to
come. And it could be the source of additional econ-
omic friction between the U.S. and its most import-
ant Asian ally - Japan.
Indonesia is presently the focal point for South-
east Asian oil exploration, but oil fever has spread
throughout Southeast Asia, including Vietnam where
offshore oil drilling within a year is a possibility.
Indonesia's crude oil exports from onshore wells
have nearly doubled since 1964. Lt. General Ibru Suto-
wo, director of the government-owned oil monopoly
P. T. Pertamina, has pedicted that total oil produc-
tion will reach two million barrels per day (about
one-fifth of U.S. production) by 1973 as offshore
reserves begin to develop. He estimates that by the
end of the decade Indonesia will be one of the top
oil-producing countries in the world.
To date, the Pertamina oil monopoly has let near-
ly a million square miles of oil concessions, most of
them offshore. American oil companies or their
subsidiaries are the major recipients.
Shell, a benefactor of earlier British and Dutch
control of Malaysia and Indoesia, has had a head
start in developing the area's oil reserves. Its explora-
tion of North Borneo is the oldest offshore ex-
ploration in the region, dating to 1956. Shell has also
been the first to begin developing rich natural gas
reserves with a $300 million scheme for refrigerat-
ed liquification of natural gas at its North Borneo
concession site.
OTHER SOUTHEAST Asian countries have nego-
tiated with foreign oil firms for much of their con-
tinental shelves. Malaysia has let much of its shelf
to American, Japanese and French companies. Cam-
bodia, which let a large part of its shelf to the
sFrench oil combine Elf Union just before the over-
throw of Sihanouk last year, will see offshore drill-
ing within the year according to a company spokes-
man in Singapore. Burma has begun offshore ex-
ploration with West German involvement in the
form of an aid agreement for offshore development.
Negotiations with Japanese oil concerns are report-
ed underway but moving slowly.
In Thailand, the government has tentatively let
the entire Thai continental shelf area in the Gulf
of Siam to Continental, Union, Gulf, British Petrol-
Middle East-Japan sea route and central location
relative to Southeast Asian oil fields and markets,
appears slated to be regional capital for the oil in-
dustry's Southeast Asian empire. According to the
American Embassy, the number of Americans living
here has increased from 2,000 to nearly 7,000 in
the last two years. Nine thousand Americans are
expected by 1972.
The growth is attributed primarily to oil business.
By Embassy reckoning, 33 American firms involved
in petroleum exploration are now in Singapore, hav-
ing invested $12.1 million as of mid-January.
According to the Embassy survey, four American
refining enterprises are committed and have invest-
ed $101.6 million in Singapore. "But this is peanuts
compared with what is coming," said an Embassy of-
ficial. American refineries are committed to $121.5
million in investments over the next 8 months.
Singapore government statistics list gross fixed
assets in the petroleum sector to date at appriximate-
ly $230 million.
OIL PRODUCTS constitute 18 per cent of Singa-
pore's total trade. Though the majority of these
products are of Mid-East origin bound for Vietnam,
Thailand or Japan, Singapore's own production of
refined oil products has increased tremendously -
from 17.3 million barrels in 1965 to an estimated
110 million barrels in 1970. By 1975, current pro-
duction is expected to more than double.
Singapore's trade with Indonesia is classified so
that information on the amount of Indonesian oil
reaching Singapore is not available. However, oil pro-
ducts from North Borneo have trebled since 1963.
Sarawak refineries are now the major supplier of
approximately one million tons of jet aircraft fuel
which yearly passes through Singapore, going most-
ly to Vietnam and Thailand.
Bangkok has also approved a Japanese govern-
ment survey to plot a pipeline across the Kra Is-
thmus in southern Thailand. The pipeline would
cost $250 million and permit Japanese 500,000dton
super-tankers from the Middle East to offload oil
for transfer to other tankers in the Gulf of Siam.
Thus they could bypass the Straits of Malacca, too
shallow to accommodate such large ships.
According to the most recent Chase Manhattan
World Petroleum Industry report, the international
oil industry's expenditures in the Far East tallied
$1.5 billion in 1969, up $17 million from 1968. It was
the third largest sector of capital outlay for the
industry.
Chase Manhattan expects $35 billion to be spent
by international oil concerns in the Far East be-
tween 1969 and 1980, twice as much as was spent
in the preceding twelve year period with four times
as much money spent on exploration. Seventy-five
percent of this is slated for refinery development
in Japan and Australia.
ACCORDING TO the U.S. Assistant Secretary for
eum, American Overseas Petroleuzn (a subsidiary of
Standard of Indiana incorporated in the Bahamas)
and Tenneca (a joint venture of Marathon, Phillips
Petroleum and Italian oil interests). In addition, two
concessions have been let in the Northeast, in sensi-
tive areas adjoining the Laos border, and another let
in the area surrounding Bangkok. Finalization of
contracts and drilling waits on the Thai legislature's
passage of oil laws, expected this year.
Saigon's legislature passed South Vietnam's first
petroleum exploitation and exploration legislation in
late November. According to oilmen in Singapore,
40 internationaloilconcerns will soon bid on 18
concessions totalling 90,000 square miles. (The March
6 Business Week said ten American firms recently
signed exploration agreements.)
The Philippines has reportedly let 117 out of 555
on-and-offshore oil concessions, but current Philip-
pine legislation is considered unsatisfactory to inter-
national oil concerns because it consists of ma-
jority Filipine ownership for foreign participation
in oil development. Local companies with some
foreign backing have been further stymied by prob-
lems of financing owed to the weak position of the
peso. However, freer legislation now pending in
Manfla could provide major international oil con-
cerns the privileges they demand for exploration
investments within the year.
SINGAPORE, WITH its pivotol position on the
Economic Affairs, Philip H. Tresize, speaking on
October 23 of last year, "we have a short-range
fuel and energy problem . . . it has a number of
causes: the nuclear utility program has encountered
serious delays; natural gas production has not kept
up with demand; local anti-pollution regulations
have increased the requirements for sulphur-free
residual oil and for natural gas: and our own
growing requirements have coincided with rising de-
mand in Europe and Japan and with a serious tank-
er stringency caused by an interruption of produc-
tion and transportation of oil in the Middle East."
According to Tresize, U.S. oil consumption will be
nearly half the non-communist world's million bar-
rels per day by 1980. Even with development of
Alaskan reserves, he predicted, current production of
10 billion barrels per day could not expand to meet
demand. Thus, more oil is likely to be imported.
The major market for Southeast Asian oil, how-
ever, appears to be Japan, 90 per cent of whose oil
imports now come from the Mid East and whose
petroleum needs are expected to rise over 300 per
cent in the next 15 years.
When Chase Manhattan's David Rockefeller visited
Singapore in March, 1970, he was accompanied by
John G. Winger, head of the bank's Energy Econ-
omics Division. Winger said at the time that: "As
we all know, current conditions in the Middle East
are not all favorable . . . A prolonged interruption
could not be tolerated. It is likely, therefore, that an
intensified effort will be made to find and develop
alternate sources of supply."
Chase sticks by that prediction. "Japan particularly
is over the barrel," commented Andrew Barry, re-
gional oil expert for the bank in Singapore. Accord-
ing to Chase Manhattan, the Far'East is third only
to North America and Western Europe among non-
communist regions of the world in energy consump-
tion. It constitutes 13 per cent of the total market.
Its demands, moreover, may increase threefold by
1980.
"AS FAR AS OFFSHORE area is concerned," com-
mented James Gauntt, a professional geololgist with
long experience in the region, "in this region you are
looking at 65 per cent of the area in the world favor-
able to offshore exploration . . . I think a safe figure
for production from the south section of Asia five
years from now is four million barrels per day."
Others are more skeptical, but geological odds fav-
or Gauntt's prediction. The China Sea Basin alone
is 1.5 million square kilometers of sedimentary ocean
bottom with much of its area covered with less than
600 feet of water, the maximum depth in which pre-
sent offshore rigs can drill.
Much of the oil found in the region so far has
tested much lower in sulphur than Middle East Oil.
Such "sweet crude" along with natural gas, in which
the region is suspected to be rich, can be expected to
draw a premium on the future's pollution-conscious
energy market.
Southeast Asia offers the added attraction of be-
ing an international oilman's bargain basement. Oil
leases let for 543,898 acres (about 850 square miles)
of U.S. continental shelf in November of last year
cost oil companies $345.8 million initial payment:
By comparison, 800,000 square miles of Indonesian
offshore concessions have so far been acquired by
foreign oil companies for an initial cash outlay of
less than $80 million.
Even the much heralded "production-sharing" ar-
rangements in Indonesia are a very good deal for
the oil companies. The fc rmula for these arrange-
ments allow the concession aire up to 40 per cent of
all oil produced in order to cover "operational costs."
This percentage is unattached by taxes or royalties.
The remaining oil is split with the Indonesian oil
monopoly Pertamina with the oil company normally
getting 35 per cent of this amount.
ONLY PROFITS from this latter amount are tax-
ed. The oil companies thus end up with more than
60 per cent of the oil, two thirds of it free of taxes
or royalties. Both tax and royalty payments can be
reduced, moreover, by use of subsidiary-to-subsidiary
selling at artifically low prices.
Prospects for large profits from the development
and exploitation of Southeast Asian oil are good.
For this very reason political crises can be expected
as the firms of many nations scramble for oil con-
cessions.
c0 1971 Dispatch News Service
I
The Seale trial: Politics
on judicial ground
By ALAN LENHOFF
NEW HAVEN - In order to realistically as-
sess the problems involved in holding a fair
"trial" for Black Panther Seale and Erica
Huggins, it is necessary to view the trial in
a distinctively political context.
The Black Panther Party represents a revo-
lutionary .force outside the mainstream of
American affluence that challenges the exist-
ing police control of the ghetto and seeks to
raise black people from their status as second-
class citizens.
The government reaction to the Panthers
and other revolutionary black groups has so far
been a moderate amount of civil rights legis-
lation coupled with i startling number of
police raids on local Panther headquarters,
which have resulted in ,the deaths of over 20
Panthers and a number of policemen.
J. Otis Cochran, President of the Black
American Law Students Association, addressed
a May Day rally in New Haven in support of
the Panthers last year and said:
"It would take a person of extreme naivete
to contend that there has been no pattern to
police harassment of the Panthers in the last
two years; it would take extraordinary gulli-
bility to believe that every arrest made has
been justified, that every charge brought in
has been grounded on reasonable evidence;
that every pre-trial detention or every bail
figure set has been the product of a fair and
impersonal inquiry."
"And it would take a person of surpassing
faith in our police departments to believe that
there has never been manufactured evidence,
that no agents have ever been planted as pro-
vocateurs, or that no dummy informers have
been created out of thin air."
IN THIS SENSE the trial must be viewed as
a political trial in which the government has
chosen to confront its enemies in the judicial
arena of its own creation.
Some will argue that a murder trial trans-
cends all political barriers; that there is a
general agreement within our society that
people should not kill other people. This argu-
ment further dictates that the judicial system
has a clear cut obligation to try murderers
without any consideration of possible political
motives.
The rationale for calling murder a crime
however, is based on subjective political ideas.
An important distinction to be made is that
"killing" per se is not a crime unless it is done
under circumstances that the system condemns.
For example, policemen who shoot looters
ire not called murderers. Nor is the pilot who
drops bombs on Vietnamese peasants or the
man who kills a burglar.
Our society justifies these "contradictions as
being necessary for preservation of the exist-
ing svstem and its neonl but has categorically
often neatly disposed of in police review boards
or (as in Ann Arbor) an ad hoc investigating
commission.
Just as important perhaps is the facts that
neither Seale nor Huggins is charged with
the actual killing of alleged police agent Alex
Rackley. Seale is charged with telling Panther
George Sams to "off the mother fucker". Sam,
in turn, ordered Panthers Warren Kimbrow
and Lonnis McLucas to carry out the killings.
ANOTHER FACTOR that makes this a poli-
tical trial is that the court system cannot iso-
late itself from the political world outside its
doors. The fact that jurors have contact with
the media and other persons before they are
empaneled on the jury insures that they will
bring with them various amounts of informa-
tion and misinformation that have been pre-
sented to them in a political manner.
This was demonstrated on numerous oc-
casions during the jury selections at New Hav-
en when many propspective jurors were dismis-
sed because of preconceived ideas about Black
Panthers.
Persons questions about their knowledge of
the Panthers gave such answers as:
"I think its a colored motorcycle gang".
"It's just like the Communist Party."
"My husband told me its a party of colored
people who believe that black people are better
than white pelople."'
The court did award the defense 60 jury
challenges (challenges without sufficient rea-
son) in an effort to keep projudiced people off
the jury. However, this attempt was unsuccess-
ful as the defense used all its challenges before
the end of the jury selection.
At that time the defense made a motion to
have an additional 60 challenges awarded, cit-
ing the fact that over 1300 prospective jurors
had been questioned so far, during four months
of jury duty selection.
Judge Harold Mulvey denied the motion but
awarded the defense two additional challenges.
THE DEFENSE also repeatedly moved to
have the charges dismissed because of diffi-
culty in finding an impartial and open-minded
"jury of peers" from the lists of registered vot-
ers in New Haven County.
An indication of the magnitude of this prob-
lem came when the court began consideration
of the second panel of 500 prospedtive jurors.
Only three per cent of the members were black
and the average age was 47.
The jury that was finally chosen has an
average age of 44 and includes five blacks out
of a jury of 12. The black jurors, however, can
hardly be called peers, since each is old enough
to be the defendants' parents.
The most accurate assessment of the situa-
tion, however, seems to have come from Judge
Mulvey.
Back in January during jury selection. Seale's
War research fast:
Life of enlightenment
By ROSE SUE BERSTEIN
A FAST AGAINST war research. What a lovely opportunity to prove
the sincerity of one's scruples against the military. An exquisite
chance to demonstrate conviction.
The time has come, I decided, to join in this test of character. People
throughout the world go hungry every day, and here we spoiled and
overfed university students find it difficult to give up our food for a
paltry week.
Why this attachment to food, I wondered. Why can we not be spiritual
for one week? Why can't I experience the exhiliration every other faster
seems to be talking about?
So I stopped eating. I soon discovered how linked up in the routine
of living are our meals. What does one do all day without meals?
Many students, I noticed, wake up in the morning, eat breakfast
while reading the paper, go to class, eat lunch while reading their mail,
go to class again, "relax before dinner," eat dinner while discussing
what happened that day,.
But if meals are so important, then why always the other activity,
the supplementary nourishment? I tried reading the paper at nine one
morning without breakfast. It seemed rather lackluster, and I couldn't
quite understand.
What was in that serving of scrambled eggs that rendered the news
comprehensible? How does cottage cheese enhance the message in a
letter from home? And what in God's name can tuna salad do to spice
up the tone of everyday gossip?
THIS EMPHASIS on combining eating with other activities extends
beyond meal hours. For example, at the outset of my fast, I went for a
walk with a friend, and though we were both fasting, there was a com-
pulsion to "go somewhere to get something to eat," even if it was no
more than fruit juice or tea.
If the food is so important, on the one hand, then why the need to
mask one's eating with some other activity? And, if the tone be reversed,
and the activity itself is primary, then why the need to affix it to a meal?
One answer may lie in the student's schedule. Meal hours arrive at
convenient intervals by which to gauge a day's activity. Between the
last afternoon class and dinner may be a good time for a few hands of
bridge. But if there were no set dinner hour imminent, perhaps a more
time-consuming activity would be selected.
Or, take another example. If I wake up between breakfast-time and
lunch-time, I often have an impulse to turn over and go back to sleep
until lunch. After all, what else is there to do before lunch if you don't
have a class and there's not enough time to study something thoroughly?
I HOPE THAT if I lived alone, away from institutional structures
Lett(
Differential increases
To the Daily:r
I WOULD .like to add some fur-
ther comments to the discussion
of the editorial, "The B u d g e t
Crisis". Several of your readers
have properly written to point out
that time spent in classroom hours
is only a small fraction of t h e
time teachers give to their work
at the University. However, nei-
ther the editorial or these addi-
tional comments have considered
the important role of research for
teaching itself.
Teaching is certainly a primary
function of a great University, but
the discovery of new knowledge is
important too, and is also essen-
tial to our teaching function. One
of the most important aspects of
the learning experience for our
graduate students, as well as for
many undergraduates, is partici-
pation in and observation of dis-
covery, research, creative scholar-
ship, and creative work in the
arts. This is an important part of
what a great university has to of-
fer.
It is an error to separate t h e
faculty into those who are "re-
search-oriented" and those who
are interested in teaching. Some
of the best teachers in the Uni-
versity are distinguished schol-
ars and research experts. Besides,
there are many kinds of teaching.
Some men are brilliant and stir-
ring lecturers who can enthrall a
large audience almost every class
hour. Others, who could not pos-
sibly give such lectures, are mas-
ters in teaching smaller groups of
students who learn by association
with the model of the work of a
fine scholar. There are - and
should be - various mixtures and
teaching of orientations in a great
University.
INSTEAD, I would like to sug-
gest careful consideration of dif-
ferential increases (and perhaps
decreases) in teaching loads. For
example, I believe that faculty
members who are skillful teachers
but have little interest in re-
search should be encouraged to
take on a larger teaching load
that is to do that' in which they
have primary interest and skill
The encouragement should carry a
reward with it: those who teach
more and well should receive pro-
motions and salary increases com-
mnensurate with those given for re-
search contributions. For many
young staff members being per-
mitted to do more teaching will be
a source of satisfaction rather
than frustration, if they can look
forward to promotion without the
obligation of publication in whicn
they have no interest. Many
others will prefer to continue to
do research as well as to teach.
We need both kinds of faculty
members.
Such a program will involve dif-
ficult decisions in establishing dif-
ferentiel criteria and in their ap-
plication. But decisions about pro-
motions and merit increases are
difficult now, and some changes
do not seem to offer an insuper-
able obstacle.
It should be clear that a reduc-
tion in the amount of research ac-
tivity on the campus will yield far
less than proportional financial
savings. A large proportion of all
ers to The Daily
research activity is paid for by
outside grants rather than from
general funds. Furtner a large
number of graduate and profes-
sional students derive their fel-
lowships, assistantships, research
experience, and dissertation ma-
terial from such research projects.
They would lose both the experi-
ence and the financial support
with a drastic cut in research.
A PROGRAM OF selective var-
iations in teaching loads of the
kind I have suggested might pro-
vide significant savings, without
creating the havoc of across-the-
board increases in classroom hours
for all. This particular proposal
may be lacking in merit, but I
think it is this kind of flexible re-
sponse to the problems of the Uni-
versity that we need to be seeking.
-Ronald Freedman
Professor of Sociology
Feb. 19
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excesses of information gathering .,.
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