Al mashriq - The Levant

    (This letter is David Dodge's response to a series of questions I asked him about his time with Tapline - Børre Ludvigsen)

Princeton, NJ
23 July 1998

Dear Barre,

While I was employed by Tapline and living in Beirut between 1954 and 1976, I'm afraid I did not keep a journal and do not have any Tapline documentary records. Consequently, I have to rely on my memory, which at my age of 75 isn't very good. Nevertheless, I'll try to respond to your letter by jotting down some recollections and observations that may be helpful. However, I cannot vouch for the accuracy of what follows. Also, I have not taken the time to edit my remark so they may appear to be rather rambling and poorly organized. I have been busy with other matters and have not had time to do the research required to answer all your questions thoroughly and accurately.

When I joined Tapline in 1954, after serving with its affiliate Aramco since 1949, the company had executed agreements with Saudi Arabia, Jordan, Syria, and Lebanon. These agreements allowed Tapline to tramsport oil (produced by Aramco) across their territories in return for certain fees (both fixed and variable according to volume) and services.

The services were quite extensive, especially in the pump stations in northern Saudi Arabia (Qaisumah, Rafha, Badanah, and Turaif). These services in Saudi Arabia included providing medical treatment free-of-charge to local people (employees and non-employees), building roads and schools, and developing water wells. At the time, the Saudi government did not have the resources to develop the northern area and depended on Tapline to help do this - in return for transit rights (just as it depended on Aramco to help develop the Eastern Province).

In the Western Coutries (Jordan, Syria, and Lebanon) the services provided by the company under agreements with the governments were much less extensive. These countries were all relatively developed, so unlike Saudi Arabia did not need much help from Tapline. The company did pay these Western Countries some fees for security measures and road maintenance.

One special problem in the Western Countries was compensation to private landowners for land expropriated for Tapline use. At times there were oil spills off-shore in Lebanon, which led to claims by fishernen and others and a lot of litigation. Most spills were minor, but there was a huge spill one year that led to extensive claims by Syrians as well as Lebanese. Tapline spent a great deal of time and money on legal fees and settlements.

Tapline made special arrangements to deliver oil to refineries in Jordan (a mostly governmental refinery at Zerqa near Amman) and in Zahrani (a Caltex-Mobil refinery next to the terminal).

Controversy arose constantly between the governments and the company over such issues as inadequate security and demands for higher fees. The basic agreements were amended several times, usually in the governments' favor, to settle differences. The Syrians were expecially tough negotiators. At one time (perhaps 1970) a serious rupture occurred in the pipelime in Syria, and the government did not let the company repair it until a new agreement more favorable to Syria was executed. Often, after an amended agreement had been negotiated with Syria, the other Western Countries (agreements with which were similar, and in some respects the same, as those with Syria) would demand and get equal treatment.

Tapline operations were particularly lucrative when the Suez Canal was shut down after the 1967 war with Israel, because it was much less costly to ship oil to market through the pipeline via the Mediterranean than around the Cape of Good Hope. I should note that for accounting purposes, Tapline operations did not show a profit; any profit went to its parents (Mobil, Texaco, Exxon, and Chevron). Government pressures for increased fees were espexcially heavy then. However, before the reopening of the Suez Canal (about 1975), Tapline began to face growing competition from super-tankers, which with advantages of economy of scale and no transit fees or services could carry oil from the Gulf around the Cape at lower cost than the cost of pumping oil through Tapline. Eventually, this competition, and also security problems resulting from the Lebanese civil war that began in 1975, resulted in the closing of Tapline operations. However, the company did continue to pump oil to Zerqa in Jordan as mentioned below and the company was not actually abandoned to the governments under basic agreements until the 1980s.

As a result of an Israeli action, Tapline operations were closed down for some time after Israel occupied Golan (through which Tapline passed) in the 1967 war. An Israeli tractor "accidentally" ruptured the line and Israel refused to allow the repair until Tapline agreed to make a special payment for Israel's benefit. This was handled by an American negotiator who acted for the comtany but was not a company employee. Syria and the other transit governments were pragmatic about this inclident and did not interfere with the negotiations with Israel in a way that would have delayed the repair job and a decrease in transit fees.

Tapline's only significant problem with its employees was the organization of a labor union in Lebanon and its strong demands for higher wages and benefits. A clever ambitious Sidon employee headed the union. A major strike took place in Lebanon by this union, I think in the 1970s, and it was successful in getting considerably higher compensation (including retirement benefits) then and in later years. The union was backed by other unions in Lebanon and had no opposition from the government. Tapline employees in Syria and Jordan were too few to be interested in forming unions. The autocratic nature of the Saudi government prevented union activity in Saudi Arabia.

Except for the 1967 war as noted above, I don't think Tapline was significantly affected by the other Arab-Israeli wars and the Lebanese crisis in 1958. However, the increasing tensions between Palestinians and Lebanese, especially after 1967, were a major cause of concern and Tapline had to work closely with Lebanese security forces to avoid trouble. The Lebanese civil war, which began in 1975, did of course seriously disrupt Tapline operations and coupled with the super-tanker competition mentioned above forced the discontinuation of pumping oil to Sidon (Zahrani).

I do not recall any Tapline employee who was seriously injured, killed, or kidnapped on the job as a result of military engagements between the Arabs and Israelis or between opposing Arab factions. However, I vaguely rermember a Syrian employee beinq injured on duty, possibly by a land mine.

The pipeline, after being taken over by the transit governments, was used to deliver oil to Zerqa in Jordan, but Saudi Arabia shut down these deliveries when Jordan more or less supported Iraq in the Gulf war in the 1990s.

Tapline was important to US interests in the region. Not only did it serve American commercial and strategic interests by transporting crude oil at relatively low cost from the Gulf to the Mediterranean, but it also engendered good will for the US. While there were continuous disputes between the transit countries and the company over fees and other issues, the former appreciated Tapline as a provider of revenues, jobs, and services. I think the US government regarded Tapline as a stabilizing asset during the turbulent period of the Cold War and several Arab-Israeli wars. During my period with Tapline, to the best of my knowledge the company stayed out of politics and fuctioned independently of the US government. On the other hand, I think the US government did encourage Tapline's parent companies to construct the pipeline in the 1940s to support its strategic position in the region, and later continued to be interested. in Tapline's welfare.

I took early retirement from the company in 1976, and do not know what happened to its records when it was finally closed down. These records and archives may have been sent to Aramco.

Good luck and best regards,

David S. Dodge
retired Manager for Government Relations (Western Countries), Tapline