The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

In neighboring Iraq, a fifty-fifty deal was also in place by early 1952. Thus, a new foundation had been established for relations between David Ricardo’s landlord and tenant. And the tenant oil companies had to grapple with their significance. Inside Jersey, several departments collaborated on a working paper on the fifty-fifty arrangements, to provide internal guidance for the company. The paper noted that Jersey had gone through a considerable process of education since the Mexican expropriation. “We now know that the safety of our position in any country depends not alone on compliance with laws and contracts, or on the rate or amount of our payments to the government, but on whether our whole relationship is accepted at any given moment by the government and public opinion of the country—and by our own government and public opinion—as ‘fair.’ If it is not so accepted, it will be changed.” Unfortunately, “‘fairness’ and ‘unfairness’ are essentially concepts of the emotions rather than fixed and measurable standards.” However disconcerting and unpalatable it might be to the engineers, businessmen, and buccaneers who ran international oil companies, that was a fact of life. “Experience already shows that there is something inherently satisfying in the ‘50/50’ concept.” Satisfying or not, it was a necessity. But had the battle over rents ended with a lasting peace treaty or was it only a truce? Did the companies now have a position that they could successfully defend agai...