International problems foreseen in breaking up oil companies

Book · Thu Jan 01 04:00:00 EST 1976

OSTI ID:7239497

Mr. Katz examines the impact that Bill S. 2387 could have on the U.S. domestic energy objectives; S. 2387 would require the vertical divestiture of a number of major U.S. oil companies. An examination of the potential international problems of divestiture exposes some issues that have been overlooked. In no event would non-U.S.-based integrated firms divest their operations outside the U.S. Second, foreign governments could well twist the divestiture process to their own advantage. A very specific concern of the Department of State is the effect of divestiture on the U.S. ability to cope with an embargo. Finally, divestiture could threaten essential investment flows into new oil and gas exploration and development in the non-oil-producing developing countries. It is concluded that ''the U.S. national interest would not be served by passage of this legislation. It would not reduce our vulnerability to continued OPEC price fixing--a vulnerability that can only be eliminated by reducing our dependence on OPEC oil. In addition, it would be likely to impact seriously on U.S. control over the delivery of our essential energy imports, creating the opportunity for foreign firms, including those controlled by OPEC governments, to acquire refining, distribution, and other foreign assets now held by U.S.-based companies. It would also seriously complicate our efforts to minimize theeconomic and political impact of any future oil embargo through the IEA's emergency program.'' (MCW)

• OSTI ID: 7239497
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
021000 -- Petroleum-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002* -- Energy Planning & Policy-- Petroleum
AGREEMENTS
CHARGES
ECONOMICS
GLOBAL ASPECTS
INDUSTRY
INTERNATIONAL AGREEMENTS
INTERNATIONAL COOPERATION
INTERNATIONAL ORGANIZATIONS
LEGAL ASPECTS
LEGISLATION
MARKET
OPEC
OPERATION
PETROLEUM INDUSTRY
REGULATIONS
TRADE