Mobil Oil Corp. president William P. Tavoulareas set up his son five years ago as a partner in a London-based shipping management firm that has since done millions of dollars in business operating Mobil-owned ships under exclusive, no-bid contracts.

Tavoulareas' son, Peter, was a 24-year-old shipping clerk in 1974, making $14,000 a year. Today, with the help of Mobil, he owns 45 percent of the Atlas Maritime Co., which operates 17 ships worldwide.

Mobil, the second largest oil company, provided Atlas with some of these ships-among them Mobil-owned supertankers-under management agreements that allowed Atlas to go into business with a minimal amount of capital.

Mobil also initially provided Atlas with office space in Mobil's corporate offices in London and loaned Atlas a Mobil shipping vice president when Atlas' own top shipping executive resigned in 1975.

Mobil leased back the ships it provided Atlas, thus creating work for Atlas at a time when the shipping industry was severely depressed.

The leasing was handled through an intermediary company, Samarco, of which Mobil owns 45 percent.

According to one source, Peter Tavoulareas put up no investment capital for his initial 25 percent share of Atlas. Moreover, the lucrative Mobil contracts, along with other managerial assistance provided by Mobil,helped make Atlas an overnight success. Peter Tavoulareas, now 30, maintains a highly affluent lifestyle, including a home in one of London's most fashionable districts, a Rolls Royce and a summer home on Long Island.

The creation of Atlas was a marked departure from Mobil's historical practice of managing its own fleet of crude oil tankers through its shipping and transportation division.

Atlas was created to handle the day-to-day management work for Samarco, a complex shipping partnersip that Mobil negotiated in 1974. The other partners included a prominent Saudi Arabian merchant family and a member of the Saudi royal family.

Samarco--Saudit Maritime Co.--was set up as a way to share shipping revenues among the partners, but the company existed largely on paper, according to one of its original directors, John D. Kousi.

The complicated transactions between Mobil and Atlas and Samarco are not especially unusual in the intricate world of international oil-except perhaps for the presence of father and son. That relationship is not illegal, but securities law requires that Mobil officials report it fully to their stockholders. Mobil claims it did, but that is in dispute.

Beyond the legal questions, however, the story of Mobil's president and his son offers a rare glimpse into corporate behavior at the top of one of the largest publicly help international oil companies.

The Mobil board of directors was told from the outset about the Atlas arrangement but was assured that company president Tavoulareas was not involved in his son's venture in any way. Mobil officials did not tell their stockholders about the son's involvement in Atlas until two years later.

After initial press inquiries in the fall of 1976, Mobil board chairman Rawleigh Warner Jr. disclosed in a special letter to stockholders that Peter Tavoulareas "is one of the principals" of Atlas.

That diclosure prompted an investigation by the Securities and Exchange Commission (SEC) in early 1977, but the inquiry was dropped after confidential sworn testimony was taken from the elder Tavoulareas. U.S. securities law requires that corporate officials disclose the details of business transactions between companies and relatives of the companies and relatives of the companies's executives. The law was designed to protect shareholders from business decisions based on favoritism.

In recent days, The SEC has reopened its investigation into the role Mobil's president played in his son's partnership in Atlas.

Mobil chairman Warner says he assured directors in board meetings that Tavoulareas "does not participate in any decisions" relating to Mobil's business with Atlas.

But a source close to the Tavoulareas family and those familiar with the formation of Atlas said Mobil's president was involved personally in several key decisions and actions relating to Atlas, among:

* Tavoulareas personally recruited two shipping executives, one an outside consultant and the other a Mobil vice president for Atlas. One of them set up and ran Atlas for more than a year. The other managed it for a time.

* The Mobil president helped negotiate the arrangement whereby the Saudi shipping partnership, Samarco, would turn over all of its management business to Atlas. Mobil officials acknowledged this in a statement last week to The Post.

* As the formation of Atlas was being planned in April 1974, Tavoulareas personally urged that his son be included as an equity partner in Atlas. However, in the Mobil statement, Tavoulareas denies this. "Mr. Tavoulareas asserts that he did not initiate this arrangement," the statement said.

* The elder Tavoulareas played a personal role in forcing the resignation in 1975 of Greek shipping executie George D. Comnas, who had been recruited a year earlier by Tavoulareas to set up Atlas. The resignation follwed several personal disputes between Commas and Tavoulareas' son. Mobil's statement said: "Mr. Tavoulareas played a minor the arrangements made when Comnas departed from Atlas. Since it was on Mobil's recommendation--including Mr. Tavoulareas'...[that Comnas set up Atlas], it was logical that Mr. Tavoulareas participate."

The elder Tavoulareas was not avilable for an interview, but through a spokesman acknowledged that the basic idea to set up Atlas was his and that he recommended Comnas set it up. But he denied that he urged that his son be accepted as a partner and stated that he divorced himself from Mobil's business with Atlas after his son joined the company.

Comnas, according to Marquis Who's Who, completed a 30-year career with Exxon in 1968 and was president of Mediterranean and African subsidiaries for Exxon during his last years there. In the five years before he formed Atlas, Comnas, 66, was managing director and chairman of the board of C.M. Lemos & Co. Ltd. of London, reportedly the largest of the Greek shipping firms.

One of Mobil's partners in Samarco said that the involvement of Peter Tavoulareas was accepted without objection because it was assumed that other Atlas managers were competent to run the business.

"Clearly it was a nepotistic act," said Kousi, one of the original directors of Samarco. "At his age [Peter was 24 in 1974] he wasn't a genius, nor was he terribly experienced in shipping. You couldn't expect a lot from someone with that level of experience."

Philip Piro, a Baltimore eye surgeon and former son-in-law to the elder Tavoulareas, who is now estranged from the family, said Tavoulareas expressed his interest at the time as "giving Peter a little nudge to get him along." Tavoulareas, through a spokesman, said he does not recall making the remark.

In 1973, a year before young Tavoulareas became a partner in Atlas, he was making $14,000 a year as a clerk in the London office of Greek shipping magnate Lemos. Sources said that job also was arranged by his father.

Before that, the Mobil president's son was graduated from St. Johns University in New York, where his father sits on the board of trustees, and later received a master's in business administration from Columbia University.

In an early interview, Peter Tavoulareas said that his partnership in Atlas did not represent "overt favoritism" and that his responsibilities in the company revolved around "financing." Peter Tavoulareas said that he was asked by Comnas to join Atlas and was offered an equity interest.

In a later interview, Peter Tavoulareas would not comment further. "I've answered all of the questions you're going to get from me. Atlas has nothing to do with Mobil, it has nothing to do with Samarco and it has nothing to do with the Saudis. Atlas is none of your damn business." He then hung up.

In recent weeks, Mobil has not responded to Washington Post requests for interviews with company officials familiar with Atlas and its operations. The first such request was made Nov. 8. Mobil's vice president for public affairs, Herbert Schmertz, said Nov. 16, "We're not saying no and we're not saying yes." Still later, Schmertz said the request was "under consideration." In a letter to The Post Nov. 12, another Mobil spokesman, John Flint, said, "We understand that you have been advised that this matter has been examined by several reporters for The Washington Post and New York Times, and apparently they found no basis to do a story."

The Post did make a brief inquiry into Atlas in 1976, but received assurances from Mobil executives that Mobil's president had maintained a completely "hands off" attitude toward Atlas. The Post began a new inquiry two months ago, based on information about Atlas.

Mobil's Schmertz eventually requested that questions be dictated so that Mobil could respond in writing. This was done and Mobil responded to these questions Nov. 20.

Several sources who agreed to discuss the details of this episode if their identities were protected were intimately familiar either with Mobil's shipping operations or with the attempts by Mobil's president to secure a position for his son in the upper strata of the business world.

The story of international finance, shipping and oil politics begins with the 1973 Arab oil embargo.

In the wake of the oil cutoff, Mobil officials learned that a prominent Saudi merchant company, Haji Abdullah Alireza & Co., was interested in extending Saudi influence from the production of oil to its transportation.

Mobil officials believed at the time that a shipping partnership with the Saudis might yield preferential treatment in the loading of crude oil at Saudi ports.

In his 1976 message to stockholders, Mobil's warner said, "Samarco was formed in anticipation...of [Saudi] flag preference regulations applicable to exports of petroleum from that country and, also, in anticipation of...favorable financing from Saudi Arabian sources."

Mobil and its partners in the venture acknowledge now that neither the preference laws nor the financing for ships materialized.

"The business reasons were wrong, they didn't prove out," says Kousi, whose company sold out its interest in Samarco to Mobil two years ago. "We just didn't see the anticipated benefits," he said.

But at the time Samarco was formed, Mobil officials felt "preference shipping was much more a threat," according to the Mobil statement. Samarco, however, in which Mobil initially held a 30 percent interest and now holds a 45 percent interest existed mostly on paper. The real work of the partnership would be performed by the management company, Atlas.

"There was no staff or offices for Samarco," said Kousi. "It needed no real offices."

The negotiations between Mobil executives and the Saudi partners in Samarco took all of 1974. After the partnership agreement was struck in December, Mobil issued a brief press release saying, "Samarco has engaged the servies of Atlas manage the operation of Samarco's fleet."

In his statement last week, Mobil acknowledged that "Atlas was created in anticipation o managing Samarco's business." Atlas was created in July 1974.

Mobil president Tavoulareas, the statement continues, was involved in the "policy aspects of participating in Samarco and concept of Atlas" during those negotiations.

Mobil's first goal when it entered the talks in January 1974 was to steer the Saudis away from a partnership they had formed with a New York-based shipping concern, Fairfield-Maxwell Ltd. The Saudis had approached Fairfield-Maxwell after Mobil initially rejected the joint venture idea.

"The initial invitation from the Saudis was turned down...consistent with our normal policy of providing our own transportation and not permitting preference shpping," Mobil said last week.

But Mobil officials said they subsequently perceived a greater threat from preference shipping. Sources said Mobil then dispatched two negotiators to Jeddah in Saudi Arabia to push Mobil as a partner. One of the negotiators was Mobil's Mideast agent, W. Jack Butler, and the other was the Greek shipping executive, Comnas, who was recruited personally by Tavoulareas to advise Mobil on how to set up an independent shipping concern.

By April, the talks on Samarco had progressed far enough that the managment arm of the partnership was being planned by Tavoulareas, who recommended to the partners that Comnas be tapped for the job. Late in April, according to one knowledable source, Tavoulareas personally urged that his son become a partner in Atlas. Sources said that shortly thereafter, the issue of young Peter's involvement was raised with Mobil chairman Warner, who said he raised the issue with the directors and won their approval.

In its statement, Mobil said, "It was George Comnas who asserted that he would like Peter Tavoulareas and one other associate at Lemos, a major shipping company, to join him in the management of Atlas. Mr. Tavoulareas asserts that he did not initiate this arrangement."

Nevertheless, the other Lemos employee who came to Atlas with young Tavoulareas, an experienced insurance clerk named Ares D. Emmanuel, was given only employe status while Peter Tavoulareas was made a 25 percent partner. Within a year, Tavoulareas would become a 45 percent partner.

After Atlas became fully operable in late 1974, the time came for Samarco to begin acquiring ships for Atlas to manage. However, contrary to Mobil's hopes when it formed the partnership, the Saudis were unwilling to provide any investment funds or financing for ships.

Mobil said in its statment that an unspecified amount of "capital contribution" was made by each partner when Smarco was formed. One of the partners, the son of Crown Price Fahd, heir to the Saudi throne, apprently had a special arrangement. Said Mobil: "The prince's share was financed by loan, which he must repay before he receives any financial benefits in the company."

As a result, in early 1975, Mobil provided Samarco's first vessel from its own fleet. The ship, a supertanker, had been launched as the Mobil Mariner, but was renamed the Saudi Glory, presumably to reflect the interests of the Saudi partnership.

The Saudi Glory was turned over to Atlas by Mobil under a "bareboat" lease through Samarco, meaning he structure of the tanker, without crew, fuel or stores, was rented to the Saudi partnership and its management arm. However, because Samarco and Atlas had no funds with which to pay such a rental fee, the ship was leased by to Mobil simultaneously.

Under this arrangement, Atlas agreed to operate the vessel for Mobil, hire crews, arrange for fueling and handle small maintenance chores. All major repairs were Mobil's responsibility. Thus Mobil paid Atlas the cost of operating the ship plus an unspecified margin of profit.

Mobil's executive vice president for Mideast transportation, Paul J. Wolfe, said in an early interview that Atlas' basic managment fee was $600,000 a year and included an escalation clause. Other sources said the fee would escalate with the cost-of-living index and also after Atlas acquired more than 10 ships.

Peter Tavoulareas said the managment fee was $680,000 for 1976, when Atlas was operating six ships.

The firm's income for subsequent ars is not know, but one knowledgeable source said that Atlas was strctured so that profits would increase dramatically as more ships were acquired, because overhead costs for staff and office space were relatively fixed.

Because Mobil operates its own ship managment arm within the Mobil organization, it could have managed the Samarco fleet itself, company officials acknowledged.

But Mobil officials claim that there could have been a conflict of interest for any one of the Sarmaco partners to manage the ships owned by all of the partners. Mobil's statement said:

"Mobil did not want to manage Samarco or set up a Samarco management company, as there could be a conflict of interest between Mobil and Samarco when chartering ships in or out for either company. Neither of the Saudit partners had experience to qualify them to manage. Fairfield-Maxwell could have had a similiar to have an independent third-party managing company."

Mobil officials said a study was done of management fees in the shipping industry as a guide to setting Atlas' fees. But the company acknowledged that there were no bids.

Ship management arrangements are difficult to assess on a bid basis...From Mobil's experience, the over-riding selection criteria for such operations is the prospect of good, safe, performance and access to low-cost dependable crews," the company's statement said.

(Atlas has lost one ship, the Atlas Titan, which exploded and burned last May at Setubal, Portugal, during a tank-cleaning operation, according to Lloyd's of London. The ship was sold for scrap in July.)

According to Mobil's statement, one advantage derived from using Atlas as a management company came from Atlas' "ability to use low-cost Greek crews unavailable to Mobil or to other, similar non-Greek companies."

Kousi, Mobil's partner at the time, reacted to that statement by saying, "Who didn't [have access to low-cost Greek crews]? That's a phony argument." Kousi said that virtually all companies who have international subsidiaries, such as Mobilhave access to low-cost crews of Greek and other nationalities.

It is not clear from maritime records how many ships Mobil supplied to Atlas under the contract arrangement. The records show that in March 1978, Mobil was the registered owner of an oil tanker named the Yanbu that was under Atlas' control. And, last October, Mobil supplied to Atlas another tanker named the Solon, records show.

The second of the ships that were turned over to Atlas in 1975 was also a Mobil ship. The 250,000-ton super-tanker, launched as the Mobil Supplier, according to Federal Maritime Commission rec ords was renamed the Al Haramain.

The third ship, also Mobil's, was launched as the Elena and became the Al Rowdah.

Presently, Mobil officials said in their statment that they have chartered "certain tankers" to Samarco "and chartered most of these back from Samarco on a time charter basis."

Of the 17 ships Atlas reportedly operates worldwide, Mobil said seven are run for Samarco and four of those ships are owned by Mobil.

Less than a year after this corporation was set up to manage the fleet assembled by Mobil with the Saudis, Atlas underwent an internal struggle in which Peter Tavoulareas and one of his employees, Emmanuel, took over control of the company.

Comnas, who had been recruited by Mobil to set up Atlas and run it, resigned in mid 1975. Mobil's Wolfe explained the Greek shipping executive's departure by saying that Samraco's directors had grown dissatisfied with his performance.

Kousi, who was on the Samarco board at the time, declined to discuss Comnas' departure in detail. He did say that it was not Samarco's board that was dissatisfied, but rather, "Mobil basically was dissatisfied."

Sources familiar with the situation said that Peter Tavoulareas had several personal disputes with Comnas and shortly thereafter, his father, William Tavoulareas, intervened. Mobil played a minor role by "assuring a settlement that was fair and equitable to both parties."

That settlement reportedly included Mobil paying Comnas a substantial retainer as an independent marine consultant for several years.

The relationship between the Mobil president and Atlas also was exemplified by his response when Atlas was left without a seasoned shipping executive in control after Comnas departed.

Almost immediately, according to Piro and other sources, the elder Tavoulareas dispatched on of his senior shipping executives, Herman f. Hoffmann, to London to help run Atlas.

Said Kousi: "Mobil had suggested Comnas so it was natural for Mobil to step forward and to feel an obligation to meet whatever vacuum they thought existed."

Mobil gave this account in its statement: "Since Mobil had originally recommended G. Comnas to Samarco, we felt an obligation to Samarco to maintain quality management of their operations. We made Hoffman...available as an interim manager of Atlas."

During this period, Hoffman was given the opportunity to take over Atlas permanently, but he declined. While he remained at Atlas, Mobil officials said, Hoffmann's salary "was pro-rated in proportion to his time. Atlas reimbursed Mobil for that portion relating to Atlas duties, plus all related expenses."