AP NEWS
Related topics

Gorbachev Hails Deals With Giant Companies Chevron, IBM With AM-Summit Rdp Bjt

June 3, 1990

WASHINGTON (AP) _ Soviet President Mikhail S. Gorbachev, anxious for Western expertise and capital to boost his ailing economy, on Sunday celebrated multimillion-dolla r deals signed with Chevron and IBM.

Gorbachev said the agreements provided a ″solid pillar of support″ for a new era of superpower cooperation.

″While we and the president were working and our ministers were also discussing things, there were important contact discussions with various Americans companies and some important decisions were made,″ Gorbachev said.

He mentioned both Chevron and IBM by name in his remarks at a joint news conference with President Bush wrapping up the four-day summit meeting.

The Soviet leader made clear during his Washington visit that he is hoping to entice many more American companies into doing business in the Soviet Union. He also planned to meet on Monday with South Korean President Roh Tae- woo, hoping to boost trading ties between those two nations as well.

In addition, Gorbachev said Sunday that he was planning on traveling to Japan, another capitalist country where the Soviets are hoping to attract investment support.

The agreement the Soviets signed with Chevron Corp. on Saturday would grant the San Francisco-based oil firm exploration rights for development of the Soviet Union’s largest newly discovered oil field, an 8,900-square-mile region near the Caspian Sea.

Officials said the reserves of the Tengiz oil field could exceed 25 billion barrels, 2.5 times larger than those on Alaska’s North Slope.

The agreement will allow Chevron to dispatch a 20-member technical team to the region.

The team’s findings will form the basis for further negotiations on a possible joint production agreement with the Soviets, officials said.

Gorbachev on Sunday said the Chevron deal had the potential of being worth 10 billion rubles, which would translate into $6.25 billion at the official currency conversion rate.

The other agreement signed by the Soviets over the weekend was for IBM to sell 13,000 personal computers for use in Soviet schools.

While the purchase price was not disclosed, stock analysts said the deal could be worth around $25 million to IBM. The company said that shipments of the computers, which cost between $2,000 and $3,000 each before subtracting discounts for large purchases, would start in September.

Both the Chevron and IBM agreements were examples of commercial contacts that would be facilitated by the trade agreement signed by Bush and Gorbachev on Friday. That pact faces an uncertain future in Congress, where many have insisted it will not gain approval unless Gorbachev eases economic pressure against the independence movement in Lithuania.

In addition to being a necessary first step toward drastically cutting tariffs on Soviet goods sold in the United States, the trade agreement would expand opportunities for U.S. companies in the Soviet Union by reducing red tape and providing greater protections against copyright piracy.

Chevron officials stressed that much work would have to be done before conclusion of a joint venture agreement with a Soviet company to pump oil from the huge field.

For one thing, they said there were environmental concerns to address. The oil field lies along the Caspian Sea, home to the sturgeon that produce caviar, an important cash export for the Soviet Union.

But in the signing ceremony at the Soviet Embassy, Chevron official Richard H. Matzke said that a joint production venture between the Soviets and a giant U.S. oil company made a lot of sense.

″The Soviet Union is the world’s leader in oil production. The United States is the world’s largest consumer of oil,″ he said.

AP RADIO
Update hourly