Oral History Interview with William Tucker, September 25, 1985 Page: 98
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98
commodity, and OPEC was pushing the price up behind the
rise in product. prices. This is why the refining business
was a pretty good business in those days.
With the Bahrainis, what we did eventually, in a
negotiation, we agreed on a flexible formula to establish
the refining profit. The Bahrain government could then
apply whatever it was--I've forgotten what it was, but
let's say a 45 percent tax rate--to the earnings of the
refinery, whereas previously we had had, I think, ten
cents a barrel flat refining fee, which the Bahrain refinery
was always allowed to earn and which the government took
sixty percent of. It was eleven cents, and they took six
cents a barrel. We suddenly found ourselves with extremely
high trading profits because we were buying relatively
cheap crude oil from Saudi Arabia; we were reselling; and
the trading companies were reselling the product at a very
high price. The Bahrain government really wasn't participat-
ing in this profit growth. I remember being frightened to death
of how do you change this age-old formula without having
something to tie to. If you just start negotiating a split
on the refining profit, you know, you get lost.I finally hit on the idea, in an airplane between
New York and San Francisco, that I would say to the govern-
ment, "Look, we will develop the formula based on our
realization for the procjuct---what we get for the product
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Marcello, Ronald E. & Tucker, William. Oral History Interview with William Tucker, September 25, 1985, book, September 25, 1985; Denton, TX. (https://texashistory.unt.edu/ark:/67531/metadc2137858/m1/100/?q=%22~1%22~1: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Oral History Program.