Invitation to Drillers

Few major oil companies have ever drilled in Spain because of currency restrictions and a law that limited foreign participation in drilling companies to 25%. But now Spain is in desperate financial straits, needs both oil and dollars, cannot afford its own major drilling program. Last week the Spanish Cortes (parliament) passed a sweeping new oil law to lure foreign drillers.

For the first time, both management and capital can be 100% foreign, and the government will guarantee free conversion of profits, to be split fifty-fifty, into hard currencies. U.S. oil companies have long been plugging for such a change. Caltex and Standard Oil Co. (New Jersey) are already negotiating for rights under the new law, which imposes only two major restrictions: 1) Spain's home needs must be met first, and 2) Spanish oil must be carried in Spanish tankers.

Though no commercial oil has ever been found in Spain or Spanish possessions, geologists are almost unanimously optimistic. They think there is oil under the sands of the Spanish Sahara and Ifni (Spanish West Africa), and also in some areas of Spain itself. The bill also cheered U.S. businessmen, who hope that other foreign investments will be welcomed in Spain if drilling programs successfully bring in both dollars and oil.

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