In 1925, the United Kingdom of North and Hijaz was created on the territory of the Arabian Peninsula, which was headed by Abd Aziz Ibn Saud. In September 1932, the kingdom was renamed Saudi Arabia. The young state was not only very poor, but also experienced a sharp deficit of drinking water. And it is a desire to find the water played a very large role in the further development of the country.
Abdel Aziz ibn Saud
The King of Ibn Saud had a friend and advisor - Garry St. John Bridgener Philby or just Jack Philby. He grew up on Ceylon, graduated from Trinity College in Cambridge and began his career in the public service in India. During World War I, he consisted in the British political mission in Baghdad and Basra. Ibn Saud Philby first met in 1917 during his mission to Er Riyadh. In 1925, dissatisfaction with Great Britain's politics in the Middle East, Jack Philby was advocated to leave public service. He returned to Saudi Arabia, founded in Jeddes a trading company and resumed friendship with Ibn Saud, after a while was becoming an unofficial adviser to the king.
Filby and took the solution to the water problem. He was interested in this issue of one of his acquaintance - American Charles Crane. Crane was the rich owner of the company dealing with all that is associated with plumbing systems. In addition, he was a man, lively interested in history and international relations. But his main passion was Arabiska. And it was the Arabistrict who brought together Crane and Philby, who met, rewritten, exchanged ancient manuscripts. When Jack Philby told Crane about his philanthropic plans for the benefit of Arabs with water, he immediately responded. At the Crane, at this moment in the neighboring Yemen, there was an expedition in order to search for water led by a very experienced sisterman and a drill specialist Karl Twitchell.
On February 25, 1931, Crain arrived in Saudi Arabia, Jidda. The king met his luxury banquet and big honors. For its entertainment, hundreds of king's bodyguards performed fascinating dance with sabers. The king gave Crane a lot of carpets, daggers, saber and two thoroughbred Arab horses. Together, they talked about the scorched rocky desert and the possible presence of underground rivers under the foreground. After that, the Twitchell expedition was transferred to Arabia.
Having done a difficult journey at 1,500 miles to check the signs of artesian water in the Arabian desert, Twitchell in April 1931 appeared in Jeddah with bad news: water drilling was unpromising. But at the same time, he stated that the experience of Burovikus tells him that oil should have oil in the eastern regions of Arabia.
2 Concession for Oil Search
The prospects for the horizon pushed Philby and Ibn Saude to action. It was necessary to find foreign investors. The choice fell on the Americans. The king asked Burosika Karl Twitchell to be his intermediary in America. In February 1933, Twitchell returned to Saudi Arabia and brought with his person named Lloyd Hamilton. Hamilton was a lawyer who represented the interests of the Oil Company Standard Oil of California (SOCAL). Philby signed a secret agreement with a Socal, according to which he became a "consultant" of the company. Under the terms of the agreement, he received $ 1,000 per month for six months, obliges to achieve the concession for the searches for oil, as well as a bonus in the event that oil is found.
SOCAL was not the only company interested in the search for oil in Arabia. Iraqi oil company also sent his representative for negotiations. Saudi side demanded that the future concessionaire pay 100 thousand pounds in gold when signing the agreement. "Iraqi oil company" suggested the maximum of 10 thousand f. Art. SOCAL was also not ready to pay so much. But as a result, the agreement was signed with the Americans.
Under the terms of the contract, the SOCAL should immediately pay 35 thousand pounds of sterling gold. After eighteen months, the issuance of a second loan in 20 thousand pounds was assumed. In addition, the company pledged to provide another loan in 100 thousand pounds of sterling gold on the fact of oil detection. The concession operated for 60 years and covered the territory of 360 thousand square miles. On May 29, 1933, the contract was signed.
3 Oil detection
The first two geologists landed in El Jubaile in September 1933 and met with Twitchel, who arrived from Jeddah. Local merchant Hamad Al-Gusaybi became an agent of the company. Geologists lived in huoffe in his house until 1936. At first, geologists moved cargo to the desert on camels. Only a few months later trucks appeared. All equipment and most of the nutrition company brought from the United States through the port of El Khubar. By the end of 1933, eight oil workers were already in Saudi Arabia.
By 1935, geologists found a favorable structure to start drilling. On April 30, 1935, the drilling of the first well Dammamm-1 (D-1) began. She was destined to become historical only thanks to her first number. After 7 months, Dammamm-1 gave gas and signs of oil at the depth of seven hundred meters. But due to the breakdown of the equipment, the drillings were forced to cement the well. Immediately launches were started. At the depth of 663 meters, signs of oil were found. The company decided to expand the search, they began to smoke four more wells. The prefabricated homes, equipment, equipment were sent to Al Hasu from the USA - everything is necessary to continue work.
By the end of 1936, 62 Americans and more than 1,000 Saudis worked in the Dammamm dome district. But there were no reasons for joy. Deepening D-1 to 975 meters did not give anything. D-2 turned out to be "raw" and gave water ten more than oil. From D-3, 100 barrels of heavy oil with 15 percent of water were struck with difficulty. D-4 turned out to be dry, D-5 - the same hopeless. "Wild Cat" - a well, drilled at early 1937 in the area of \u200b\u200bEl Alat in 20 miles to the north-west from Dakhran to a depth of 1380 meters, gave a small amount of oil to water.
The experimental well D-7, laid down in December 1937, was difficult: the chains were torn, the borants were lost. But in early March 1938, D-7, drilled to the depth of 1440 meters, gave oil. On the first day, only about 1,500 barrels, and in two weeks two more times more. The continuation of the D-2 and D-4 to the detected depth of the oil occurrence also made good results and marked the opening of a new oil layer to the region in the formation, which geologists dubbed the Arabian zone.
King Abdel Aziz Ibn Saud blessed the historical discovery and in April 1939 he himself came to Al Hasu from Er-Riyada on an ancient caravan way through the Red Sands of Dakhna Desert, accompanied by a huge sweat in 2000. The procession has numbered up to four hundred cars. In the town that has just received the official name Dachran, a tent town of 350 white tents was broken. To the arrival of the king was built the first oil pipeline to Cape Tanurura, where the first part of the oil was waiting for the tanker "D. J. Schofield. " On May 1, 1939, the King of Ibn Saud with a corresponding case by solemnity turned the valve, putting oil from Saudi Arabia.
Today we are completing the publication of a fragment from the book Daniel Ergin "Mining. The worldwide history of the struggle for oil, money and power. " This is a story about how Harry Saint John Bridgener Philby (Father famous) helped King Saudi Arabia to find an oil source of income. Ready Daniel Ergin:
During the opening of the Bahrainsky field in May 1932, Sokal turned to Philby so that, according to the director Sokal, "" enter into contact with His Majesty Ibn Saud. " Philby knew that competition between various oil companies would provide better conditions Transactions for his friend of the king, so came into contact with the "Iraqi oil company" through its main founder - "Anglo Persian company", pointing to them for interest "Sokal" to El Haza. "I should in no way be the interests of the concern mentioned," he wrote to the senior geologist "Anglo Persian company," but it is generally located to help everyone who is interested in these issues almost can help the government. " In the end, he agreed to be an adviser to Sokal, but secretly. At the same time, he supported contacts with the "Iraqi oil company", and so successfully that its representative Longridge considered him a trustee. In fact, and then, in the future, Loya Filby was primarily a king.
Philby received satisfaction from his new union with Sokal. Help the American company to seek success in Arabia - it means again "pull the lion for the tail" and harm the interests of Great Britain in the region. Agreement with Sokal gave him a great personal income. By implementing many projects for your trading company, he constantly faced the same problem, common to the whole kingdom, he did not pay him. And the money was extremely needed, for example, in order to pay for the school of Kim's son in Cambridge University. For the services of Sokal agreed to pay Jack Philby on a thousand dollars a month for six months plus awards, both by signing the concession contract and in the opening of oil. Thus, Kim Philby was eventually continuing to continue his studies in Cambridge, where he took the first step in the "career" of the Soviet spy.
During the negotiations, the Saudi side did not leave doubts that her the main goal It was getting a big prepayment. "It is useless to keep in you the hope that you could consolidate a concession without significant remuneration," wrote Philby in Sokal. - The main thing is that the Government of Ibn Saud is a major debtor and cannot fulfill obligations to its creditors. His only hope is paid to payable now to lay potential resources. "
The positions of the two Western groups differed sharply. While "Sokal" was interested in obtaining a concession, "Iraqi oil company", followed by "Anglo Persian Company", thought completely differently. Longridge confidentially told Filby that "they are no longer needed by them, as they already found it so much that they do not know what to do with it. At the same time, they are vital in not to let her competitors. " So, the efforts of the "Iraqi oil company" were rather "preventive" than survey. In addition, "Anglo Persian company" continued to skeptically refer to the oil potential of El Haza and was not going to do any large investments in Saudi Arabia. The task of Longridge, as he explained to the British ambassador, was to "not buy a cat in a bag, paying a bunch of money for the right to extract oil with big problems."
Despite the fact that the pace of negotiations has increasingly discouraged their participants, the mysterious Philby shone in a variety of roles - he worked as a paid representative of Sokal, he was an adviser to Saudi, instructed the Iraqi oil company, served as a trustee of Longridge and speaking from time to time with various oil workers As his king asked during their last car voyage in Mecca. Not only oil occupied Philby: he actively sought a monopoly on the importation of cars for the Saudi government and the company for the transport of pilgrims, was engaged in the organization of a radio network in the country.
Sokal offered only the fifth part of what Saudis was asked. In early April 1933, one of the managers "Sokal" reported Philby about the "unfortunate impasse, in which the negotiations came," ... the country's oil resources are almost unknown, and for the company would be a top of the recklessness to spend large sums Before surveying the geology of the region. The companies did not have to worry too much about the "Iraqi oil company" and "Anglo Persian company" - they were ready to give only a small share of what "Sokal" offered. Philby advised Longridge: "You can collect things, Americans offer much more than yours." So Longridge arrived, suddenly left and leaving the "battlefield". Philby persuaded Americans and Suleiman to achieve "discharge", which would mean the proposal of more significant amounts from Sokal.
To May 1933, the final sketch of the contract on the concession between Sokal and Saudi Arabia was ready to represent the king. After formal discussions at the Secret Council, Ibn Saud said Abdulla Suleiman: "Sign with God." The agreement ensured the immediate payment of 35 thousand pounds of sterling gold (175 thousand dollars) - 30 thousand pounds as a loan and 5 thousand advances in the account of inconctions from the profits paid for the first year. After eighteen months, the issuance of a second loan was estimated at 20 thousand pounds (100 thousand dollars). The whole total loan had to return only from the deductions to the government. In addition, the company provided another loan in 100 thousand pounds of sterling gold (500 thousand dollars) on the fact of oil detection. The concession acted for sixty years and covered the territory of 360 thousand square miles. On May 29, 1933, the contract was signed. Ibn Saud got very significant money. The king and his minister of finance insisted also on the conditions that prompted the "Sokal" to maintain work as soon as possible.
There was only one problem - where to get so much gold? Since America has just abandoned the Golden Standard, the "Sokal" attempts to get gold directly to the United States were rejected by Assistant Secretary of the Treasury of Dean Asson. But in the end, the London office of the guarantee trust, acting for "Sokal", received 35 thousand gold perfects on the Royal Mint. They were sent to the ship in Saudi Arabia in seven boxes. It even took care of the fact that the English monarch was depicted on the coins, and not Queen Victoria, because they feared that in the society of the male domination of Saudi Arabia coins with her image could depreciate.
Getting a concession of the American company should inevitably change the picture of political interests in the region. When Philby told the British ambassador to Sir Andrew Riaan about getting the concession "Sokal", he looked "as if the thunder struck, and his face was crushed with annoyance and disappointment." Philby got great pleasure. Of course, the Loss of Great Britain meant the US winning, although Washington realized this not immediately. Despite the repeated protests of Sokal, the administration of Roosevelt refused to open a diplomatic representation, repeatingly repeating that there was no need for this. Only in 1939, the US Ambassador in Egypt was also accredited in Saudi Arabia. Only in 1942, the United States was opened in Saudi Arabia a permanent diplomatic mission with one employee.
The "Anglo-Persian company" and "Iraqi oil company" very soon realized that because of their misfortunes made a mistake. The founders of the Iraqi oil company, accusing each other, decided to no longer allow such mistakes. In 1936, the group received a concession in Hijaz, the western part of Saudi Arabia, who stretched from Transiordia to Yemen himself. Conditions assumed a much higher fee than that that was in the contract with the "Sokal" three years ago. The contract of this turned out to be only one minus: "Iraqi oil company" did not manage to find oil at all.
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... Exquising works Next to Saudi Arabia were disappointed, and the Board of Directors "Sokal" was increasingly worried. In November 1937, the manager of foreign oil production "Sokal" telegraphed into Arabia an internal order about the ban on the implementation of any projects without prior representing a detailed plan. And then, in March 1938, a few weeks after the opening in Kuwait, stunning news came: at a depth of 4727 feet in the "Well No. 7" of the dummam zone, a large amount of oil was detected. In the end, the discovery was accomplished - in almost three years after the start of drilling in the well "Dammamam number 1". Ibn Saud and Saudi Arabia were on the way to wealth. The unity of the kingdom no longer depended on the vibrations of the number of believers who committed pilgrimage to Mecca.
Opening of oil in Saudi Arabia caused feverish attempts to receive concessions here, and not only from the Iraqi oil company, but also from countries that had a more sinister shade - Germany, Japan and Italy. Observers had the impression that the countries of the axis make concerted efforts to obtain rights to drilling in Saudi Arabia. The Japanese opened a diplomatic representation there and offered huge, compared to existing conditions, Amounts for concession in the country and in the ownership of the king in the neutral zone. It was, according to the expression of one Saudi official, "completely astronomical proportions". The Japanese presented Ibn Saud as a gift to a classic combat robe Samurai, which, however, turned out to be a little large-body by the monarch. To catch in the country, the Germans accredited their Baghdad ambassador to Saudi Arabia and opened a permanent mission. They also pushed the "weapon" deal with Saudis. Meanwhile, Italy continued the pressure campaign at Saudi Arabia in order to receive a concession. However, KASKOV, in accordance with the secret attachment to the 1933 Agreement, had predominant rights to Saudi territory, which she successfully implemented on May 31, 1939, expanding total area Its exclusive concession up to 440 thousand square miles, which was approximately the sixth of continental America. Of course, it had to pay for it. As the financial needs of Saudi, Sokal repeatedly gave the kingdom of loans worth in millions of dollars.
But, as soon as it turned out, taking into account the magnitude of the rates in the game all this was done in vain. The opening on the "Well No. 7" in March 1938 was the beginning of a new era. The necessary industrial, administrative and residential construction in Dahran, which ultimately ended with the suburbs for American specialists, an oasis in the middle of the desert. Immediately after the opening on the "Well No. 7" began construction of the pipeline connected the deposit and races of Tananur - a place on the shore, selected for the sea terminal. In April 1939, a huge procession from four hundred cars, in which there were a king with a big retinue, crossed the desert and arrived in Dakhran. There they are located in 350 tents. The reason was the arrival of the first cargo in the races of tanner "D. J. Schofield. " With an appropriate case, the solemnity of the King of Ibn Saud himself turned the valve, putting oil from Saudi Arabia.
Sokal hurried to spread their searches to most of the desert. The search for a depth of ten thousand feet showed the possible availability of very large oil reserves in this place. In 1940, mining reached 20 thousand barrels per day. Perspectives seemed even more rainbow.
But here intervened the second world War. In October 1940, the Italians bombed dacharan, although, obviously aimed at Bahrain. Later, in January 1941, a small refinery began to build a small oil refinery, which, however, was closed in June next year. In neighboring Kuwait, work was also suspended due to war. In accordance with the orders of the allies governments, all wells in Kuwait poured cement and thereby disabled - there were concerns that they would fall into the hands of Germans.
In Saudi Arabia, oil operations were also mainly discontinued, and most American employees went home. The remaining team supported production at the level of 12 15 thousand barrels per day, oil was sent for processing to Bahrain. But further development was postponed. However, as the world's oil potential of Saudi Arabia is aware, the country's oil resources inevitably had to become a facility of more intensive and intensive political games, which could be the "standard of California", the King of Ibn Saud and even Philby, for the first time a king first Thought of an underground treasure.
During the thirties, Jack Philby flourished in Saudi Arabia, continuing the country's geographical research. After the beginning of the Second World War, he tried to become an intermediary between Ibn Saud and the President of the World Zionist Organization by Haim Weitmann in cases of the Palestine section, but this did not lead to anything. His anti-British sentiments were not died. He criticized allies noisy and during a trip to India was arrested. He was sent back to England, where he had to sit in prison for half a year. He spent the rest of the war, spending pamphlets, poems and books "not for publication", fusing in a second-rate policy. Returning after the war in Saudi Arabia, Philby again became an adviser to the king, conducted surveys, wrote new books and led his trading business profitably in the conditions of post-war oil. He married a young woman represented by the king, he at the age of sixties again became his father. However, after the death of Ibn, Saud Philby took to criticize for the motion of his son, the new King of Saud. Philby was expelled from the country, but after a few years they allowed to return. In 1960, during a trip to Beirut to visit the son of Kimu, he fell ill and got into the hospital. Man whose life was so rich and "panoramic", bold and theatrical, now lay unconscious. He woke up only for a moment, whispered to his son: "I'm so tired," and died. At the Muslim cemetery in Lebanon, Kim ordered to make a simple inscription on the tombstone: "The greatest of Arab researchers."
Hajj was the main source of income of the kingdom, and a sharp reduction in the number of pilgrims in connection with the world economic crisis Put out Saudi finances in desperate position. The government built the first radio stations, improved the jedda water supply and acquired cars, owing a total of 300-400 thousand f. Art. Lenders simply stopped paying. Attempts to get loans did not lead to anything 1.
At that moment, the city of Philby, using his personal connections with the king, persuaded him to meet with the American millionaire Ch. Crane, who traveled in the Arab countries under the guise of Philanthrop. Obviously, he was associated with American oil companies and told the ground for their introduction into a completely unfamiliar area for them. Crane was accompanied as a translator J. Antonius, the future author of the book "Awakening Arabs". The American millionaire sent a geologist K. Tweitch allegedly for conducting research to the water in Saudi Arabia 2.
In the spring of 1932, Twitchel found that the promising geological structure on oil was located in the Dakhran area, and went to the United States to inform about this oil company 3.
The new era was approaching in the history of Saudi Arabia, which will have an impact on its society, comparable in depth only with the effects of Islam. But the driving forces of these changes lay outside Arabia. They were called by switching the economy of the XX century. For new energy raw materials - oil. Its searches covered by all countries of the planet.
American monopolies in the Middle East in the 20s. Until 1920, American companies or showed indifference to foreign reserves or endured failures in attempts to get a concession in Eastern Hemisphere due to the restrictive national and colonial policy of European powers and private oil firms. After 1920, however, they became actively interested in oil deposits abroad, consistent with the concerns of a dual character - a promising lack of oil in the United States and the threat to be in the face of the Anglo-Dutch monopoly on the world's resources of this raw material. The main reason was in concern to be aside from the exploitation of deposits of cheap oil, successfully located in relation to important markets 4.
In 1920, W. Fairish, later President "Standard Oil Company of New Jersey," said that in Texas and Oklahoma, oil is depleted. In the same year, White, the chief specialist of the US geological administration, predicted the exhaustion of American oil reserves for 18 years. In this regard, the Department of Navy began to exercise anxiety, as experts claimed that the United States would have to reduce oil consumption or start its import. Senator G. K. Lodzh warned the Congress that "England acquires control over the supply of oil in the world" 5.
Does the company really assumed that the US oil reserves are so limited, or it was a pretext to more actively involve the American government into their expansion outside the national borders, remains unknown. Pressure methods for the government and manipulating with public opinion in the interests of monopolies are so worked in the United States, which is most likely the second reason led to the dissemination of such statements. In any case, in the early 20s, the largest American companies entered into the struggle for concessions in Central and South America and in the Middle East. American oil companies emphasized that at that moment the United States, possessing 12% of the oil reserves of the world, gave 70% of world production. But control over the sources of oil outside the United States was in the hands of English-Dutch monopolies 6.
American companies feared that they were late for the section of the Middle East Petroleum Cake. The Ministry of Internal Affairs has developed a policy to support the struggle of American corporations for concessions abroad to push all government departments and agencies to help them. At the Peace Conference in Sanremo in April 1920, the fate of the Ottoman Empire was discussed. London and Paris agreed on the section of Iraqi oil. The US government intervened in order to introduce its oil companies to the pool, began to talk about "discrimination" of the United States in commercial activity On the territory of Germany and its allies, insisting on the "Open Doors" policies.
When the Ataturk government tried to challenge the accession of Mosul territory to Iraq, the United States has opened the opportunity to blackmail its allies to support Turkish requirements. Therefore, in 1921-1922. An agreement was achieved that the Americans would provide 20-25% of the shares of the future oil company. In 1921, after the Council of the League of Nations handed over the province of Mosul Iraq, the Iraqi government provided "Terkish Petroleum Company" a concession for 75 years. But in 1927, when oil production has already begun in Mosul, Americans have not received their share. Only in July 1928 an agreement was achieved, known later as the "Red Draw Agreement". In accordance with it, the main owners of Terkish Petroleum Company (from 1929. "Iraq Petroleum") became the Anglo-Persian oil company (the future English-Iranian, and then British Petroleum), the English-Dutch "Roiyal Dutch Shell ", French" Kompani Francese de Petrole "and" Nier Estrn Divelopment Corporation "as part of" Standard Oil (New Jersey) "(future" EXCON ") and" Sokoni Vacuum "(Future" Sokoni Mobile "), 5% of the shares I got Kalast Gulbenkyan - the organizer "Terkish Petroleum Company" 7.
US companies have penetrated Iraq Petroleum, although on second roles. But "Red Draw Agreement" significantly limited them independent actionSince the participants of Iraq Petroleum pledged to acquire concessions in the territories of the former Ottoman Empire only in the same proportions as in Iraq. Recall that semorette and El Hass on the eve of the First World War were formally considered part of the Ottoman Empire.
Getting a Saudi concession. "Oil of Cali-Fornaya Standard" (Sokal) was one of the American oil companies, which, after the First World War, made serious attempts to engage in oil production outside the United States. Although she was one of the largest American corporations, her efforts in the 20s find something abroad turned out to be unsuccessful 8.
But as the fate of Iraq Petroleum was connected with the identity of Delta K. Gulbenkyan, so the searches of oil and oil concessions in a number of Arabian countries were associated with the name of the energetic New Zealander Major Frank Holmes. He appeared on Bahrain at the beginning of the 20s allegedly in order to participate in search of water. In 1922, he went to NEF for negotiations with ABB Al-Aziz on behalf of the English firm "Estrn & General Sindicate". Ibn Saud agreed to provide 30 thousand square meters. Miles in El Hase in Concession "Syndicate". By agreement, concessionaires were to pay 2 thousand f. Art. per year for the right to operate. In 1925, Holmes also received a concession on Bahrain 9.
"Syndicate" - an English firm, whose leaders were not alien adventurism. She did not have enough capital, but she hoped to interest British oil companies in concessions. However, they were confident that they would cope without intermediaries. Without finding support, Holmes stopped payments, making only 4 thousand f., And the concession into the territory with the richest oil reserves in the world was annulled 10.
The concession on Bahrain, obtained by a period of two years, survived only because the "syndicate" achieved its extension. Failure in attempts to interest English oil companies, "Syndicate" contacted American "Gulf Oil Corporation". In November 1927, Gulf sent his geologist to explore Bahrain and make a geological map. The Americans decided that the game costs the candle and twisted the concession from the "syndicate".
However, Gulf collided with complications. At that time, she was connected with Iraq Petroleum, then still known as "Terkish Petroleum". The "Red Drawing Agreement" applied to Bahrain. Then "Gulf" in December 1928 passed the focus of its rights related to the "syndicade" 11.
The lack of interest in the concessions in Bahrain and in Arabia in English oil companies at that time was explained by the fact that, in their opinion, they were not going to risk there. Oil production in Iran and Iraq was made from other geological structures than those that were in Bahrain and in Arabia. In such structures on the island of Kesm, the oil was not found in the Iranian coast. The British considered Bahrain and Arabia with unprofitable areas. But History oil industry Knows examples when new aliens found oil in those places from which old companies on geological reasons refused.
The United Kingdom was against the emergence of the American oil company in the Persian Gulf. By agreement, signed in 1914, the ruler of Bahrain pledged to not grant concessions on its territory and not accept proposals for anyone without an English consent.
Another month before the transfer of the concession, the British authorities informed "End Enunion of General Sindicate" that they will "advise" the ruler of Bahrain to extend their concession only if the "syndicate" undertakes to transfer the company's concession under English control and management. Then Sokal simply bypassed formal English restrictions and organized in August 1930. Bahrain Petroleum Company by registering it inCanada, i.e., formally turning into a British company. In the meantime, in the spring of 1930, two representatives of Sokal F. Davis, later Chairman of the Board of Aramko, and W. Taylor investigated Bahrain and recommended drilling 12.
Geological structures on Bahrain, in which there were signs of oil, caused interest to Sokal to Arabia, located nearby. The company did not communicate directly with the King of Abd al-Aziz in the spring of 1930, because he thought that Holmes would do it better. However, Holmes was engaged in negotiations with the ruler of Kuwait on behalf of Gulf. He promised to visit the king, but he postponed the visit, knowing that he lost the trust of Abd al-Aziz after the refusal to pay for the previous concession. Two years have passed, and in June 1932, the oil was opened in Bahrain. Sokal decided to contact the King of Saudi Arabia, bypassing Holmes. In addition, she learned that the Anglo-Indian government recommended "Syndicate" not to promote the interests of Gifph or Sokal in Saudi Arabia.
Back in 1930, representatives of Sokal turned to the Saudi representative in London to get permission to visit El Has by their geologist. The king then refused. But by this time, the "independent geologist" K. Twitchel, fulfilling the task of the "Philanthropy" Crane, has already visited Eastern Arabia and recommended to seek concession. Sokal joined contacts with Twitch 13.
In October 1932, the Sokal Directorate sent a telegram in Filby, who then lived in Jedda, with a proposal to agree with the Government of Saudi Arabia on the conduct of preliminary geological exploration on oil in the Eastern province. However, the Saudi government preferred negotiations on the concession before geological work.
In early 1933, L. Hamilton, a company representative, already arrived in Jidd, where K. Twitchel helped him at the negotiations, who explored water and mineral resources In Arabia. At the same time, the representative of Iraq Petroleum, Longrigg and Holmes, appeared in Jedde - from "Syndicate". Saudi representative at the negotiations demanded that the future concessionaire pay 100 thousand pounds in gold when signing the agreement. "Syndicate" immediately left the game. Iraq Petroleum suggested the maximum of 10 thousand f. Art., still not believing in the presence of oil in Saudi Arabia, and Sokal won a concession for 50 thousand f. Art. fourteen.
One of the reasons for the victory of the Americans in the struggle for the concession was also the fact that in the Middle East there was no imperial past. Surrounding from all sides by English colonies or dependent on the UK countries, forced all the time to make friendly gestures in her address, Ibn Saud Nevertheless, did not trust her and did not want to admit a British company to his country 15.
Negotiations passed into the gloomy business period after the crisis of 1929. Already when the agreement between Sokal and Saudi Arabia was achieved through all points, the United States declared on April 20 an embargo on gold exports and then moved from the Golden Standard. Then the company just bought golden performed in English currency market. Finally, on May 29, 1933, the agreement was signed by Abdallah as-Suleiman, Saudi Finance Minister, and L. Hamilton for the "Standard Oil of California". Saudi government of the Royal Decree dated July 7, 1933 ratified this agreement, and it became effective from July 14, 1933.
In November 1933, the concession was transferred to the branch of California-Arabien Standard Oil Company. This name was changed in January 1944 at Arabien American Oil Company (Aramko).
By 1936, Sokal possessed potentially large production capabilities in an eastern hemisphere, but a weak transportation network and market connections. At the same time, the oil distribution system, which developed "Texas Company" (now Texaco), needed cash products. Both companies have united their interests in the gigantic area between Egypt and the Hawaiian Islands. Texaco received half of the shares of the oil company operating in Saudi Arabia 16.
After some time, after the conclusion of the agreement on the oil concession, the Anglo-American group received a concession for the development of golden kines. Gold began to extract in Machd Ed Dahab, but the copy was exhausted by 1953 in the Hijaz Mountains quite a lot of golden spears, but apparently, and Tsar Solomon, and Abbasid Caliphs at one time were quite a lot of gold, and the copy after a brief period operation became unprofitable 17.
The concession agreement represented the Sokal "Exceptional right for the period of 60 years to explore, explode, drilling, extracting, recycle, produce, transport, sell, export and export oil and petroleum products and create the necessary means of maintenance for these operations. Companies were provided with an exceptional rights of 400 thousand square meters. Milf, covering almost all the eastern part of Saudi Arabia (1 square. Mile is about 2.59 square meters. km). This agreement provided for the "preferred law" of Sokal to receive additional concessions in the remaining areas of the eastern part of Saudi Arabia, as well as other rights that the government can get in the neutral zone south of Kuwait. In exchange for these concessions, the company agreed to perform the following conditions:
1. Provide Saudi Arabia, a loan of 30 thousand f. Gold or its equivalent, which was supposed to be paid for fifteen days from the date of signing the agreement. The company pledged to provide an additional loan of 20 thousand f. Gold in 18 months, if the agreement still remains in force. The payment of these loans should be made by extracting from half of the estimated rent to the government for a concession.
2. Every year to pay 5 thousand f. Gold forward, right up to the opening of commercial oil reserves.
3. After opening oil in commercial quantities, immediately deposit the rent in the amount of 5 thousand f. And one more such payment in the same amount in a year. Executions should be made from the estimated rent. Start returning areas that the company is not going to exploit.
4. After the oil detection, the government should receive a rent in 4 gold shillings or their equivalent for each ton of oil. Each year, the company pledged to allocate oil to the Government for the production of gasoline and kerosene.
5. Build a refining plant after oil is open, and to provide free 200 thousand American gallons of gasoline and 100 thousand American gallons of kerosene (1 American gallon is 3.78 liters).
In turn, the Government agreed to free the company and its enterprises from all direct and indirect taxes, customs duties, etc. 18.
There is no doubt that the terms of the agreement were extremely beneficial for the company and disadvantageous for Saudi Arabia, but they reflected the advantage of the forces between partners. When the Saudi government signed an agreement, he had no experience in oil affairs, and it desperately needed money. The main efforts of the government were aimed at obtaining financial benefits in the form of rent, rental payments and loans.
The agreement point, which freed the company from "all direct and indirect taxes", deprived the kingdom of a colossal source of income and provided the company potentially huge profits on its investments. Business firms that acted in other countries have always been taxed.
Start of production. The company was in a hurry. The first two geologists landed in El Jubile in September 1933, less than four months after signing the concession agreement, and met with K. Twitch, who arrived from Jeddah. Local merchant Hamad Al-Gusaybi became an agent of the company. Geologists lived in huoffe in his house until 1936
Already on September 28, they discovered hints on the dome structure. First, geologists moved cargo on camels. Only a few months later trucks appeared. All equipment and most of the nutrition company brought from the United States through the port of El Khubar. By the end of 1933, eight oil workers were already in Saudi Arabia.
By 1935, geologists found a favorable structure and began drilling. The first well showed only signs of oil and a bit of gas. The first oil in commercial quantities was discovered in 1938. In September 1938, some oil began to carry on Bahrain to the processing plant belonging to Bahrain Petroleum Company. Then the port was selected for oil exports - Ras Tannerur. The English admiralty has provided some data on navigation conditions in the Persian Gulf.
In 1939, the king and his courtyard visited the area of \u200b\u200boil production in Dahran, where the camp was broken by 350 tents. Several days Saudi know celebrated the beginning of oil production. On May 1, 1939, the first tanker with liquid flammable was departed from Saudi Arabia.
By the time the Second World War began, geologists covered 175 thousand square meters. Mile pre-exploration and 50 thousand square meters. Mile detailed intelligence. A smaller area was covered by seismic exploration and drilling. When work due to war were suspended, geologists already knew that they revealed fantastic oil reserves, but did not yet fully determine their size. In 1934, the company drilled a well in Jauf. She turned out to be completely empty, and this area was recognized as unpromising 19.
After the disclosure of the oil, the Saudi government agreed to increase the initial zone of concessions in the southern and northern regions of Eastern Arabia and provide the company the right to exploit the Saudi share in neutral zones between Saudi Arabia and Iraq and between Saudi Arabia and Kuwait. It increased the size of the territory where the concessionaire had exceptional rights, to about 496 thousand square meters. miles, of which 484 thousand square meters. Miles were on the mainland and 11 thousand - in the continental shelf of the Persian Gulf. The Concession Square was equal to the territory of Arizona, New Mexico and Texas, combined. Companies were provided with significant rights in the area to the west of the zone with exceptional rights. Part of the preferred rights zone was abandoned in 1947, and the remaining part - in 1963.
The new concession was provided for 60 years, and the initial agreement period was extended for six years. The company has achieved a ten-year moratorium on the transfer of any part of the territory with special rights. In response to these additional privileges, the company pledged:
1. After the end of the ten-year moratorium, gradually return those areas of the concession zone that is not going to operate.
2. Immediately pay 140 thousand f. Gold and additionally 100 thousand f. After opening oil in commercial quantities.
3. Install the annual rentment of 20 thousand f. For an additional area that will be paid until oil detected in commercial quantities.
4. Zoom up to 1.3 million gallons Manufacture of free gasoline for Saudi government.
The dynamics of oil production growth in Saudi Arabia looks like this:
The reason for the sharp drop in oil prices could be the US transaction with Saudi Arabia. American President Donald Trump himself provokes such speculation. In gratitude to the decline in prices for black gold, he is even ready to forgive the cruel killing of a journalist in Turkey. Is the friendship of Saudi Arabia with Russia nothing else worth?
US President Donald Trump thanked Saudi Arabia for reducing oil prices. "Oil prices decrease. Wonderful! how large decline Taxes for America and for the world. Enjoy! 54 dollars (Trump meant the price of Barrel oil of the WTI brand - approx. View) was 82 dollars. Thanks Saudi Arabia, but let's make it below! " - wrote on the eve of Tremitter Trump.
According to him, he restrains oil prices, and Saudi Arabia helps him in this. Fearing the high cost of oil, Trump is ready to forgive Er-Riyadh even the cruel killing of Jamal Chashogji journalist at the Consulate of the Kingdom in Turkey. The Turkish authorities believe that behind this crime is personally Hereditary Prince Mohammed Ben Salman Al Saud.
Oil production in the United States is important, but concerns only oil miners. Whereas gasoline prices, directly correlating with oil quotes, are important for the entire American economy.
Is the friendship of Saudi Arabia with Russia nothing costs anything else and the Saudites playing the back of Moscow playing on the side of Washington?
"The situation around the oil market is rather ambiguous. Here is an interesting scenario that Donald Trump concluded a deal with saudi, they say, he forgives they murder journalist Jamal Chashogji In exchange for a decline in world oil prices, "says Expert" International Financial Center "Gaidar Hasanov.
"Saudi Arabia is really" to blame "in reducing oil prices in recent weeks, for which she thanks Donald Trump," Mark Goyakhman agrees from the TeleTrade GK.
You can speculate on the fact that Saudi Arabia went on the Trump, who climbed all his twitter accusations of Arabs and OPEC in high oil prices. However, there is another explanation.
Recall that as soon as in August, it became known that in November the United States will ban other countries to buy Iranian oil, black gold immediately began a strong growth. From August to the beginning of October, Brent oil has risen from 70 to 86.5 dollars per barrel. "It was assumed that US sanctions against Iran would reduce the offer in the world by about 1 million barrels per day. Market participants were laid in price in prices, which caused their growth. But when the oil became too expensive for consumers in the United States, Donald Trump appealed primarily to Saudi Arabia as a market leader with a call to increase production and, accordingly, the offer of oil in the world. And Er-Riyadh went to this, declaring in advance, "the expert reminds the prehistory. As a result, in words about the growth of production, oil quotes from October went down. The Saudites mined 10.6 million barrels per day in October increased production in November to about 11 million barrels.
"However, the Saudis began to increase production not because of the Trump appeals, but due to the concerns that the sharp rise in prices would limit the demand for black gold in the world and will lead to a collapse of quotations in the future," Goyhman explains.
The next step to lower the oil prices did the really Donald Trump. At first he convinced everyone that sanctions against Iran would be tough, but in November, instead of a total ban on the purchase of Iranian oil, there was an unexpected exception for major importers. As a result, the Saudis raised production, but Iranian oil practically does not leave the market, and even the mining of shale oil in the US themselves is growing. All this turned out not a deficit, but an excess proposal, and, of course, presses on prices.
The oil in the fire was poured by the latest OPEC forecasts: next year, with the growth of world production, the need for oil will be lower than expected due to a slowdown in economic growth in the world. "Thus, the situation turned into its opposite - instead of concerns of the deficit of oil it turned out that there would be a great excess," says Goyhman. As can be seen, "to blame" in this and the Saudites, and the Americans. However, this does not prove that they acted at the same time behind Russia.
What is further waiting for oil? The likelihood of a sharp collapse of 55 dollars or even more than 35 dollars for the "barrel" is small, Goyhman believes. It is precisely because within the framework of OPEC + there is already a discussion of a new restriction of black gold mining. An important meeting of Vladimir Putin with Prince of Saudi Arabia Mohammedin Ben Salman on the G20 summit on next week. And real solutions can be December 6 at a meeting of OPEC countries in Vienna.
Interesting, that the positions of Er-Riyadh and Moscow are diverged here. "While Saudi Arabia called for a reduction in production volumes and warned about the appearance of oversaturation, Russia stated that before the adoption of any decision was needed for further monitoring of the market," reminds Hasanov. Saudi Arabia has already announced a reduction in production in December by 0.5 million barrels per day and will try to convince Russia in the need for new preparation quotas in 2019 to prevent the oil quotation collapse. "The experience of the past agreement on reducing production by OPEC countries + shows that it was effective and carried out by all participants. Therefore, it is very likely that oil quotes in the coming months will still rise and will be held on average in the area 70-75 dollars per barrel"," Says Goyhman.
If Russia refuses cooperation with OPEC and does not want to associate itself with a new agreement, then on the background of record production in the United States, you can wait for a new collapse up to $ 50 per barrel Brent,
However, the fall in prices below $ 40 is unprofitable by any of the exporting countries, parry Hasanov. Moreover, even the United States does not benefit such price collapse. "A decline in prices can delay some plans for companies for growth (business) that they have previously had," Wood Mackenzie analyst Andrew McConn notes in The Wall Street Journal article, which Dow Jones leads. The preservation of low oil prices for a long time will have a very significant impact on mining plans in regions such as North Dakota and Canada, Matthew Portillo from Tudor, Pickering, Holt & Co. Market participants may begin to leave it. The oil produced there is difficult to deliver to export markets, it has to be implemented with a discount due to infrastructure problems. Ego Resources noted that she will have to reduce production plans for 2019, if oil falls below $ 50 per barrel.
