• FEB HAMMACK OIL COMPANY ONE ENERGY SQUARE, SUITE 1150 DALLAS, TEXAS 75206 February 11, 1987 Governor William P. Clements, Jr. State Capitol Austin, Texas 78701 Dear Governor Clements: I am sorry to have missed you this weekend. 10,!; Office Phone: 692-8163 Home Phone: 528-0654 As I explained to Rita, it is reported in trade journals that effective February 1, 1987, the ARAMCO Group have made a long-term fixed price agreement with Saudi Arabia with the initial price being $18/bbl. If confirmed (Ed Vetter should be able to confirm the details of the agreement), then a comparable crude in the United States should sell for approximately $1.00 more per barrel because of the additional transportation costs. The State of Texas is a very large royalty owner. If you, as Chief Executive of the State of Texas, demanded from the same companies parity prices with Saudi Arabia for the state's royalty crude production, it could cause a general price increase throughout Texas. Such an increase would be most beneficial to the Texas economy. Needless to say, many political overtones are present. This would be the only "action" by an elected official in the U. S. A. to support King Fahd's crude price position. Coincidently, the Russians made great strides in their relations with Saudi Arabia by immediately setting a fixed price of $18.30/bbl. for Russian crude. I hope these thoughts can be used to yours and the State of Texas's best interests. Sincerely, Jhn A. Hammack QA1-t\-C/e& Dobil- 310'111
