Sign Now, Pay Later

These days when U.S. businessmen venture into Moscow to explore trade possibilities, they frequently have in mind a simple machines-for-minerals deal -their technology in return for Siberian natural gas, for example. Soviet leaders, who have been criticized at home for planning to turn Russia into what dissident Physicist Andrei Sakharov once termed a "raw-material supply appendage" for the West, are extremely sensitive about such proposals. They are far more receptive to plans that allow the Soviets to pay for the U.S. technology they want with the very goods that will be produced by using that technology. Occidental Petroleum Chairman Armand Hammer put together just such a pay-for-itself scheme, and last week Occidental and Kremlin trade officials reached general agreement on the largest U.S.-Soviet trade deal ever contemplated -a multi-billion-dollar barter arrangement involving chemicals and fertilizer.

If the plan is put into action, Occidental and San Francisco's Bechtel Corp. will build a huge chemical-plant complex in the Volga River city of Kuibyshev. It would produce up to 4,000,000 tons of liquid ammonia and 1,000,-000 tons of urea annually, which Occidental would get over a 20-year period in return for its investment.

These chemicals would be sold on the open market throughout the world. In addition, the Soviets would get large quantities of superphosphoric acid, produced by Occidental in the U.S., which would be manufactured into phosphate fertilizers sorely needed by the Russian agriculture industry.

With his customary elan, the Russian-speaking Hammer celebrated the deal at a signing ceremony attended by two Soviet industrial ministers and then flew out of Moscow in his private jet without telling even his top aides many of the details. Among them: just how much the agreement is worth (estimates range from $4 billion to $8 billion) and how Occidental's investment will be financed. One guess: bank loans guaranteed by the U.S. Government. Said a businessman familiar with Occidental: "Where the money comes from is still the big question."

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