Exploitation of Oil a history of Entrepreneurs Who Made it Happen Texts on History of Petroleum Exploitation

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Exploitation of Oil A History of Entrepreneurs Who Made it Happen

Texts on History of Petroleum Exploitation

Current Middle East Reserves

World Petroleum Exploitation

Iraq's Role?

World Petroleum Exploitation

Commodity Scarcity

Oil Time Line – Important Events

1850 - 1910: Kerosene the fuel of choice
1869: Suez Canal opens
1878: Electric Light
1908: Auto Boom starts
1912: UK Navy uses Oil
1914 – 1918: WWI
1920: 9 million vehicles U.S
1938 – 1945: WWII
1948: Israel born
1948: 1st Arab Israeli War

History of Petroleum Exploitation

How: Seeps (Oil Springs), & Wells - Hand Dug & Drilled (Percussion & Rotary)
Where: Asia, Middle East, Europe & America
Use: Heat, Paving, Light, Kerosene, Transport (Ships and Automobiles)
Entrepreneurs: John Rockefeller, Nobels, Rothschilds, Marcus Samuel, William D’Arcy, Henri Deterding, Calouste Sarkis Gulbenkian
Movers: Stalin, Ford, Fisher, Churchill, Ibn Saud, Mossadegh, Shah Reza Pahlavi, Nasser, Khomeini, Mohammar Qaddafi, Saddam Hussein

The Players

John Rockefeller
Rothschild
Nobles Robert, Ludwig, & Alfred
Marcus Samuel
William D’Arcy
Henri Deterding
Calouste Gulbenkian

Movers & Shakers

Henry Ford
Jackie Fisher
Winston Churchill
Ibn Saud
Dr. Mohammad Mossadegh
Shah Reza Pahlavi
Gamal Abdel Nasser
Ayatollah Ruhollah Khomeini
Mohammar Qaddafi
Saddam Hussein

Early History of Oil Monopolies

Appalachians: Key Elements

Rail Boom of US (1830-1860)
Refining of Oil for Kerosene (1850)
Oil Boom after Drake’s well (1859)
Standard Oil Incorporated (1870)
Light bulb of Thomas Edison (1878)

Baku: Key Elements

Rail Boom of Russia (1830-1917)
Refining of Oil for Kerosene (1830)
Oil Boom with Nobel Brothers Incorporation (1875)
Tanker "Zoroaster" (1877) & Pipeline (1897-1907)

World Wide: Key Elements – Spindletop (1901)

Suez Canal Built (1869)
Henry Ford Mass Produces Cars (1908) 9m – (1922) Royal Navy Converts to Oil (1912)

Early History - Appalachians

Standard Oil Monopoly Grows

1867: Rockefeller & Andrews absorbed William Rockefeller's refinery, & Henry M. Flagler joins partnership
1870: Standard Oil Company forms - John D. Rockefeller president, William Rockefeller, Flagler, Andrews & Stephen Harkness
1870: Uses South Improvement Company secret rebates for better rates with Pennsylvania Railroad (PRR), Eire, & New York Central
Standard Oil organization buys-up opposing interests, or guarantees financial security & jobs as partners gaining a monopoly on oil production in US
1882: Separate companies organized in each state
1890: Standard Oil controlled over 90% of refined oil in USA
1895: Rockefeller retires from active business but keeps his title as president till 1911

Standard Oil Monopoly Ends

1900: Mergers made Standard Oil the largest company in U.S. with fields located in U.S. Began exporting products to Europe & Far East competing with "Shell" Transport & Trading Company & Royal Dutch Petroleum Co.
1901: Jan 10 Spindletop's discovery & uncontrolled exploitation busted Standard Oil) monopoly in U.S. so now it competed with Shell Transport & Trading, (begun life ferrying oil produced by Rothschilds and Nobles in Baku to Far East and Western Europe) and Royal Dutch
1903: Royal Dutch & Shell Oil established the jointly owned Asiatic Petroleum Company Limited to combat Standard Oil.
1911: May 15 Supreme Court US sees Standard Oil, now holding 64% of oil market, as a monopoly & orders form some 37 new companies

Early History of Oil Monopolies

Appalachians: Key Elements

Rail Boom of US (1830-1860)
Refining of Oil for Kerosene (1850)
Oil Boom after Drake’s well (1859)
Standard Oil Incorporated (1870)
Light bulb of Thomas Edison (1878)

Baku: Key Elements

Rail Boom of Russia (1830-1917)
Refining of Oil for Kerosene (1830)
Oil Boom with Nobel Brothers Incorporation (1875)
Tanker "Zoroaster" (1877) & Pipeline (1897-1907)

World Wide: Key Elements – Spindletop (1901)

Suez Canal Built (1869)
Henry Ford Mass Produces Cars (1908) 9m – (1922)
Royal Navy Converts to Oil (1912)

Caspian Sea

Early History - Baku

Baku Oil Monopoly Grows

1873: Russia used Nobel’s guns which needed a supply of walnut wood for gunstocks from Caucasus region. Oil fever just began in Baku & Robert saw profit & brought a small refinery & kerosene plant with "walnut money"
1879: With his younger smarter brother Ludwig founded Nobel Brothers' Oil Producing & Extracting Company.
Ludwig, organized & engineered modern technology related to oil production. Built 1st tanker, Zoroaster, in Caspian Sea reducing transport expenses. Success led to tanker fleet (including Moses, Spinoza, & Darwin) further increasing turnover with Nobel’s supplying Russia with Baku oil via rivers & Caspian Sea. Ludwig 1st to introduce railway tanks for oil transport.
1879: Built a pipeline reducing transport expenses by five, paying for itself in a year. Built iron oil reservoirs with tank parks in Baku & other cities.
1880's Rothschild's interests in Baku supply their refinery on Adriatic with Russian oil. In exchange built a railroad from Baku to Black Sea port of Batum. Baku oil now major world supplier & new railroad meant Rothschilds had more oil than they could sell & now competing with Standard oil, sought markets east of Suez.
1890: Baku now busiest port in world.

Baku Oil Monopoly Lives

1878: Marcus Samuel expanded from antiques, curios, bric-a-brac, & exotic sea shells to selling cased Russian kerosene in Far East, top-selling fuel in world & used for lamps and stoves
Standard Oil under priced competitors to defend its Asian markets & controlled almost all world’s supplies.
12 years later Samuel visited Baku with Rothschilds & thought to export oil to Far East via Suez Canal (opened in 1869), countering Standard Oil competition in region. Built eight tankers that met safety regs. of canal to Singapore & Bangkok after noticed harbor in Constantinople jammed with tankers loading Russian oil. Rejected Standard's acquisition overtures, Samuel created "Shell" Transport & Trading in 1897.
1898: Rothschild brothers formed Mazut Transportation Society & by 1912 owned 13 large tankers in Caspian with auxiliary ships; partnered with Shell to transport excess kerosene to Far East.
1900: Nobel Brothers & Rothchild's have oil production exceeding US
1901: Jan 10 Spindletop's discovery meant that Shell Transport & Trading, that had been ferrying oil produced by the Rothschilds and Nobles in Baku to the Far East & Western Europe could compete directly Standard Oil at a favorable rate
1903: Royal Dutch & Shell established jointly owned Asiatic Petroleum Company Limited

Joseph Stalin

1879: December 9 - Joseph Vissarionovich Djugashvili (Stalin) was born in Gori, Georgia.
1888-94: Elementary clerical school in Gori.
1894: Begins studies at Tiflis Theological Seminary.
1895: Contacts groups of Russian Marxists exiled to Transcaucasia by tsarist government.
1896-1898: At Theological Seminary in Tiflis gathers Marxist students & studies Marx, Engels, & Lenin.
1898: January formed workers' Marxist circle in Central Railway Workshops of Tiflis.
1899: May 29 Stalin expelled from Tiflis Theological Seminary for propagating Marxism.
1898-1904: Organized, directed revolutionary activities, writes leaflets, lead strikes & sent to Siberia; received letter from Lenin & escaped back to Baku to lead general strike of Baku workers.

Baku Oil Monopoly Dies

1903 & 1904: Oil worker strikes common against Tsar
1904: Baku kerosene supplied 47% of needs of UK & 71 % of France
1905: Revolution halts production at Baku by oil worker strikes; Josef Dzhugashvili (Josef Stalin) exiled to Siberia
1911: Musavat party urges a Muslim state with Azerbaijan under Turkey
1914-18: Baku oilfields & oil refineries control by Shell & Nobel Brothers, supply Russian Army. UK interest in Transcaucasia & oil-rich area
1917: Armed intervention, aimed at Bolsheviks in Transcaucasia & East to gain control of Baku's oil, discussed in London. Henri Deterding, Shell president, buys shares of largest oil producers who fled Baku after Oct revolution. Sets up military-political mission in Iran with General Dunsterville
1918: March pogroms against Azerbaijanis by Armenians & Bolsheviks in Baku. Declaration of Baku Commune establishes links with Moscow & recognizes role of Russian Federation .
1920: April 28, Bolsheviks seize power in Baku & Nobels sell most of Russian holdings to Standard Oil (NJ). Standard Oil protests nationalization refuses cooperation with Soviet government. Mobil, invests in Russia. Continued inflow of Western funds help Russian oil production to recover, & by 1923 oil exports climb back to pre-revolutionary levels.
1920: Roughly 9 million gas-burning vehicles now in the U.S

Early History of Oil Monopolies

Appalachians: Key Elements

Rail Boom of US (1830-1860)
Refining of Oil for Kerosene (1850)
Oil Boom after Drake’s well (1859)
Standard Oil Incorporated (1870)
Light bulb of Thomas Edison (1878)

Baku: Key Elements

Rail Boom of Russia (1830-1917)
Refining of Oil for Kerosene (1830)
Oil Boom with Nobel Brothers Incorporation (1875)
Tanker "Zoroaster" (1877) & Pipeline (1897-1907)

World Wide: Key Elements – Spindletop (1901)

Suez Canal Built (1869)
Henry Ford Mass Produces Cars (1908) 9m – (1922)
Royal Navy Converts to Oil (1912)

Central Asian & Middle East Oil

British Navy & Petroleum

John Arbuthnot “Jackie” Fisher: 1st Baron Fisher (Jan 25, 1841 – July 10, 1920), joined Navy in 1854 & as 3rd Sea Lord built 1st destroyers, 1902 2nd Sea Lord, in 1905 1st Sea Lord when Germany & Britain in naval arms race. Preferred battlecruiser with speed not amour, introduced submarines & converted from coal to oil fueling
Winston Churchill: After career as journalist, in army and then parliament, in 1912 became 1st Lord of Admiralty & ordered conversion from coal to oil
1901: Spindletop's discovery lead to Shell Transport & Trading needing sales

Zagros Mountains

Iranian Negotiations Begin

Masjid-i-Suleiman

1905: Burma Oil Comp supplies D'Arcy with more finance
1908: Oil at Masjid-i-Suleiman
1907: Royal Dutch Shell incorporated (60%RD - 40%Sh)
1909: Anglo-Persian Oil Company” forms to develop field
1911: 138 mile pipe Masjid-I-Suleiman - Abadan refinery
1912: Anglo-Persian 10-year contract with Royal Dutch-Shell as outlet for crude & oil products
1914: Anglo-Persian contract to supply Navy’s ships & UK government invest £2 million becomes major shareholder
1915: Anglo-Persian forms British Tanker Company & at end of WW I owns a shipping fleet
1917: Anglo-Persian buys British Petroleum Company, acquiring a marketing organization for products & founds a research centre at Sunbury-on-Thames in UK

Calouste Sarkis 5% Gulbenkian

1869. March 29th: Wealthy Armenian family in Istanbul, Banker father imported Russian kerosene to Ottoman empire. Educated in Turkey, & France
1897: Engineering degree, London Kings's College
1898: Financial & oil advisor to Turkish embassies Paris & London
1902: Becomes British Citizen
1907: Helped form Royal Dutch Shell (60%RD - 40%Sh)
1908: Organized UK & Dutch Oil Co’s as Turkish Petroleum Co. Called Mr. 5% from holdings
1910: Consultant to Turkish National Bank pushing Oil exploration in Iraq & opening up Middle East

Calouste Sarkis 5% Gulbenkian

1928: Post WWI architect of Red Line Agreement with British (Persian Oil), Anglo-Dutch (Shell), French (CFP) & US (Exxon & Mobil) joint venture in former Ottoman empire producing areas except Kuwait & Iran for 5% of all oil found.
Oil in Iraq & Saudi Arabia made him one of world's richest men.
Avoided taxes by shuttling between Ritz Hotel in London & Ritz in Paris.
Diplomatic status as accredited to Iraqi embassy of London exempting from taxation
Formed Gulbenkian Foundation in Portugal and supported the Arts