146
PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
businessman, reported to the Turkish Sultan Abdul Hamid on the
oil potential of the then Turkish provinces. The Sultan, realizing
that oil was a worthy possession, transferred large areas into his
own personal possession. In 1914, the Iraq Petroleum Company
was formed as a result of an agreement between British and Dutch
companies. In 1928, 95% of the Iraq Petroleum Company was
divided equally between the British (BP), the Dutch (Shell), the
French (CFP, the Compagnie Française Pétrole), and a Rockefellercontrolled American group (Exxon and Mobil); the remaining 5%
went to Mr. Gulbenkian, and the other 95%.
In 1908, the Anglo-Persian Oil Company, which eventually
evolved into BP, discovered oil in Iran, and shortly thereafter in 1911,
Winston Churchill, First Lord of the Admiralty, used Government
money to buy half of the company on behalf of the Royal Navy.
Churchill also decided that new British battleships would be fueled
by oil rather than coal, and the Iranian supplies were very valuable
to the British in World War I.
American companies, in the light of vast oilfields being discovered
in Texas and California, were unwilling to explore abroad. However,
the US government began to use considerable political and economic
pressure to try to force American companies into the Europeandominated consortia in the Middle East. In the 1920s, new fields came
on line and there were serious concerns about excessive supplies of
oil. By 1928, there were negotiations between BP, Shell, and Exxon
leading to the Achnacarry Agreement, which set out working principles to avoid competition at the marketing end of the oil industry.
The agreement had to exclude the US domestic market because of
the new anti-trust legislation, but as a consequence of the Achnacarry
Agreement, each large company could feel that it would be able to
negotiate a market share for its oil without the danger of a price crash.
Briefly, the break-up of the Standard Oil in 1911 had effectively
warned off any overt attempts at controlling the large American market, but the same constraints did not apply to the rest of the world.
After 1928, the era of the great Middle East oil strikes began,
though Middle East production remained low. On June 1, 1932,
SoCal (now Chevron) struck oil in Bahrain, the first strike in the
Arabian Peninsula. In 1933, BP extended its Iranian lease for another
60 years and Gulf joined with BP to explore a Kuwaiti concession
in 1934. In 1938, Gulf and BP discovered oil in what was to become
the Burgan field in Kuwait, and Chevron struck oil in Saudi Arabia,
which was marketed through Texaco's global sales network under
PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
businessman, reported to the Turkish Sultan Abdul Hamid on the
oil potential of the then Turkish provinces. The Sultan, realizing
that oil was a worthy possession, transferred large areas into his
own personal possession. In 1914, the Iraq Petroleum Company
was formed as a result of an agreement between British and Dutch
companies. In 1928, 95% of the Iraq Petroleum Company was
divided equally between the British (BP), the Dutch (Shell), the
French (CFP, the Compagnie Française Pétrole), and a Rockefellercontrolled American group (Exxon and Mobil); the remaining 5%
went to Mr. Gulbenkian, and the other 95%.
In 1908, the Anglo-Persian Oil Company, which eventually
evolved into BP, discovered oil in Iran, and shortly thereafter in 1911,
Winston Churchill, First Lord of the Admiralty, used Government
money to buy half of the company on behalf of the Royal Navy.
Churchill also decided that new British battleships would be fueled
by oil rather than coal, and the Iranian supplies were very valuable
to the British in World War I.
American companies, in the light of vast oilfields being discovered
in Texas and California, were unwilling to explore abroad. However,
the US government began to use considerable political and economic
pressure to try to force American companies into the Europeandominated consortia in the Middle East. In the 1920s, new fields came
on line and there were serious concerns about excessive supplies of
oil. By 1928, there were negotiations between BP, Shell, and Exxon
leading to the Achnacarry Agreement, which set out working principles to avoid competition at the marketing end of the oil industry.
The agreement had to exclude the US domestic market because of
the new anti-trust legislation, but as a consequence of the Achnacarry
Agreement, each large company could feel that it would be able to
negotiate a market share for its oil without the danger of a price crash.
Briefly, the break-up of the Standard Oil in 1911 had effectively
warned off any overt attempts at controlling the large American market, but the same constraints did not apply to the rest of the world.
After 1928, the era of the great Middle East oil strikes began,
though Middle East production remained low. On June 1, 1932,
SoCal (now Chevron) struck oil in Bahrain, the first strike in the
Arabian Peninsula. In 1933, BP extended its Iranian lease for another
60 years and Gulf joined with BP to explore a Kuwaiti concession
in 1934. In 1938, Gulf and BP discovered oil in what was to become
the Burgan field in Kuwait, and Chevron struck oil in Saudi Arabia,
which was marketed through Texaco's global sales network under