Standard Oil geologists arrive in Saudi Arabia

Standard Oil geologists arrive in Saudi Arabia

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On September 23, 1933, a party of American geologists lands at the Persian Gulf port of Jubail in Saudi Arabia and begins its journey into the desert. That July, with the discovery of a massive oil field at Ghawar, Saudi King Abdel Aziz had granted the Standard Oil Company of California a concession to “explore and search for and drill and extract and manufacture and transport” petroleum and “kindred bituminous matter” in the country’s vast Eastern Province; in turn, Standard Oil immediately dispatched the team of scientists to locate the most profitable spot for the company to begin its drilling.

As automobiles and other internal-combustion machines proliferated, both in the United States and around the globe, Standard Oil was eager to control as much of the market for gasoline as it could. As a result, it would do almost anything to have first dibs on Saudi oil. The partnership between Abdel Aziz’s government and Standard Oil became known as the Arabian American Oil Company (Aramco). (Texaco soon joined the partnership; about a decade later, so did Standard Oil of New Jersey and Socony-Vacuum Oil.) The company promised to provide the Saudi government with a steady income, along with an outright payment of 50,0000 British pounds; in return, Aramco got exclusive rights to all the oil underneath the eastern desert. In 1938, the company’s gamble (after all, while Aramco engineers knew there was oil in the region, no one knew exactly where or how much) paid off: its geologists and drillers discovered oil in “commercial quantities” at the Dammam Dome, near Dhahran. The next year, Aramco exported its first tanker-load of petroleum.

In 1950, once it had become clear how very much oil there was under that desert, Aramco agreed to split its profits with the Saudi government. In 1980, after several years of squabbling over the price and availability of the country’s petroleum (Saudi Arabia was a founding member of the Organization of the Petroleum Exporting Countries, or OPEC, whose 1973 embargo precipitated a massive fuel crisis in the United States and other parts of the industrial world), Saudis won total control of the company: It’s now known as Saudi Aramco. The next year, the kingdom’s oil revenues reached $118 billion.

Standard Oil geologists arrive in Saudi Arabia - HISTORY

by Timothy Oleson Tuesday, August 23, 2016

The towns of Jubail and Dammam on Saudi Arabia's Persian Gulf coast played major roles in the early history of oil exploration in the country. Credit: ©NormanEinstein, Creative Commons Attribution-ShareAlike 3.0 Unported.

Saudi Arabia currently produces about 11 million barrels of oil per day, edging out Russia and the U.S. to rank first in the world in production, according to the U.S. Energy Information Administration. The desert kingdom also has proven reserves of more than 260 billion barrels — spread among numerous fields (though most reside in a handful of giant fields) — amounting to about one-fifth of the world&rsquos total. The country exports more oil than any other and exerts an undeniably prominent influence on the world oil market from its seat in the Organization of the Petroleum Exporting Countries (OPEC).

With a resumé like that and three-quarters of a century of oil-rich history to recall, it is almost unfathomable that Saudi Arabia was once considered a risky proposition for oil companies seeking new sources of crude. That perception began to change after the first commercially viable well was drilled there in 1938. But when two geologists — Robert Miller and Schuyler Henry — employed by Standard Oil of California (Socal) arrived in the Saudi Arabian port town of Jubail on Sept. 23, 1933, the vast expanse of the Arabian Desert that lay before them was still very much an unknown prospect.

Let the Race Begin

An oil well in the Baba Gurgur field in northern Iraq gushes circa 1932. The 1927 discovery of Baba Gurgur helped renew interest among international oil companies that the Middle East might harbor more oil than previously expected. Credit: Creative Commons CC0 1.0 Universal Public Domain Dedication.

The British, who had been actively seeking oil abroad since before World War I and who had benefited mightily against Germany by converting their naval ships to burn oil instead of coal (at the behest of then-First Lord of the Admiralty Winston Churchill), were the first to test the sands of the Middle East. Along with a partner company, Burmah Oil, British millionaire William Knox D&rsquoArcy — who had signed a concession agreement with Shah Muzzufar al-Din Kajar in 1901 allowing him to explore part of western Persia (present-day Iran) — struck oil in 1908 at Masjid-i-Sulaiman in the Zagros Mountains.

Despite the promise of this early find, and the presence of natural oil seeps throughout the region, additional deposits were slow to turn up. The slow speed of new discoveries was attributable to a number of factors, not the least of which was the prevailing opinion among geologists (and hence, many international oil companies) that the Persian Gulf — and especially the Arabian Peninsula — was simply not the place to find oil in any significant quantity. Many of the local rulers were also busy trying to consolidate power in their dominions and were reluctant to allow Westerners to set up camp. Besides, most were more interested in finding sources of fresh water — a far more valuable commodity for them at the time, they thought — than oil.

By the end of World War I, however, it had become clear to many nations that a steady supply of oil was crucial to fuel ongoing and rapid industrialization and to maintain their stature and security on the world stage. Hence, although production at home continued, many American oil companies — along with companies from a handful of other Western nations, including Great Britain, France and the Netherlands — began intensifying their search for additional sources. What commenced was an international race to identify and gain access to promising lands via concessions with local rulers.

Ibn Saud and Saudi Arabia

Following the discovery of oil in the first commercial well in 1938, the oil industry grew rapidly in Saudi Arabia, as did the infrastructure needed to support it. Credit: © Bergman.

But by the late 1920s, some of the world&rsquos major oil companies had begun reassessing the oil potential in the Middle East, at least in part due to Holmes' persistent efforts to find money to drill. The 1927 discovery of a large deposit dubbed Baba Gurgur near Kirkuk in northern Iraq by the Turkish Petroleum Company (TPC) — jointly owned by several European oil interests — also helped.

By 1931, Socal (later to become Chevron) — one of the so-called baby Standards to emerge from the 1911 breakup of Standard Oil — had gained a Middle East foothold by wresting control of a concession to explore for oil in Bahrain away from these same European companies. They began drilling in October of that year, and on May 31, 1932, Socal struck oil. &ldquoThough only modest in production, the Bahrain discovery was a momentous event, with far wider implications … After all, the tiny island of Bahrain was only 20 miles away from the mainland of the Arabian Peninsula where, to all outward appearances, the geology was exactly the same,&rdquo writes Daniel Yergin in his Pulitzer Prize-winning account of the oil industry&rsquos history, &ldquoThe Prize: The Epic Quest for Oil, Money, and Power.&rdquo

Meanwhile, after Holmes failed to secure backing to drill, Ibn Saud, still more interested in finding water than oil, then solicited help from American plumbing mogul Charles Crane. Crane obliged and in early 1931 assigned a mining engineer, Karl Twitchell, to survey the king&rsquos lands for water. The prospects for precious water, Twitchell reported after a year-long trek through the desert, were negligible. But, like Holmes, he had become convinced that there was oil beneath the sand, specifically in the eastern region of al-Hasa.

The Bahrain find was enough to convince Ibn Saud finally that he should allow more expansive foreign exploration, so he dispatched Twitchell to drum up interest. When Twitchell approached Socal in mid-1932 on the king&rsquos behalf to gauge the company&rsquos interest in pursuing a concession agreement, the company was &ldquodelighted and immediately receptive,&rdquo Yergin writes. The wheels of negotiation were quickly set in motion.

Negotiating a Deal

Max Steineke was in charge of Casoc's (California-Arabian Standard Oil Company) operations in the al-Hasa region of Saudi Arabia in 1938. Credit: ©Timothy J. Barger, Creative Commons Attribution-ShareAlike 3.0.

In February 1933, Twitchell — now employed by Socal to negotiate on the company&rsquos behalf — returned to Saudi Arabia with a company attorney. They faced only half-hearted competition in their attempt to win the concession, easily besting a bid from the Iraqi Petroleum Company (a rebranding of the TPC). Coming to terms with the Saudi Finance Minister Abdullah Suleiman, who aggressively sought better terms for the king, was more difficult. In early May, though, the two sides reached a compromise and on May 29, 1933, the agreement was signed.

In exchange for a 60-year concession to explore roughly 930,000 square kilometers in al-Hasa, Socal provided payments and loans to the king, the first of which totaled about $175,000, though more were promised down the line and in the event oil was found. (The loans also were only to be repaid from eventual oil royalties if oil was found.)

The company promptly set up its operations in Saudi Arabia, establishing its headquarters in Jeddah and eventually creating a newly formed subsidiary called Casoc (California-Arabian Standard Oil Company), to oversee the concession. Four months later, in September, Robert Miller and Schuyler Henry made the short boat trip from Bahrain to the coastal town of Jubail, ready to begin searching for oil in Saudi Arabia, the first representatives of an American oil company to do so.

Early Exploration

The geologists quickly identified a promising site about 100 kilometers down the coast from Jubail. Named the Dammam Dome, it was a jabal (or hill) that they had noted previously from offshore while working in Bahrain. Drilling commenced on the first test well, Dammam No. 1, in June 1934, by which time Casoc&rsquos exploration team had grown to 10 geologists. Despite the geologists' hopes for early success, the first well failed to produce, as did five successive wells at Dammam.

At the insistence of Max Steineke, appointed chief geologist of the operation in 1936, Casoc continued its efforts, adding more personnel and covering more ground in its search. Steineke also suggested exploring deeper beneath the surface, and in December of that year, Casoc began drilling Dammam No. 7 with that intent. Though beset with technical troubles and equipment problems, Steineke&rsquos intuition that deeper might be better was ultimately validated. Dammam No. 7, drilled more than 600 meters deeper than the earlier test wells, &ldquocame in&rdquo on March 3, 1938, and was soon producing nearly 4,000 barrels per day.

And the Rest Is History

Oil production in Saudi Arabia took off from there. Renamed the Arabian-American Oil Company (Aramco) in 1943, the company would go on to locate and tap numerous major gas and oilfields in Saudi Arabia in the years to come, including the world&rsquos largest, Ghawar, in 1948. Infrastructure — pipelines, shipping ports and towns, for example — needed to support the industry sprung up as well, bringing rapid modernization with it.

Having already joined forces with the Texas Oil Company (Texaco) in 1936, Aramco brought in Standard Oil of New Jersey (later to become Exxon) and Socony-Vacuum (later to become Mobil) — both baby Standards as well — as partial partners in 1948. Success, of course, brought incredible profit both for Aramco&rsquos partners and for the Saudi leadership.

Aramco&rsquos early partnership with Ibn Saud and its discovery of oil in Saudi Arabia were enormous milestones in 20th century energy exploration and production. As more oil was found, the concession agreement proved malleable, with Aramco repeatedly acceding to Ibn Saud&rsquos push for a greater share of the wealth. In the early 1970s, the Saudi government began acquiring an ownership stake in Aramco, completing a full takeover in 1980 and subsequently renaming the company Saudi Aramco. The nationalization of its oil production operations paved the way for Saudi Arabia to become the influential economic and political player — both regionally and globally — that it is today.

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The History behind Oil Discovery in Saudi Arabia

Saudi Arabia is the world's most important oil producer. Area-wise, it is the 14th largest country in the world covering about two million square km, which makes it the 2nd largest OPEC Member Country. Before the discovery, Saudi Arabia was largely dependent upon religious tourism.

It is not possible to confirm the exact date when the search for oil began in Arabia. But one could say it might be January 15, 1922, the day that ‘Abd al-‘Aziz ibn ‘Abd al-Rahman Al Saud reclaimed Riyadh.

The main three events which change the shape of the world or became causes for the search for oil were

  • the discovery of oil or rumors about oil seepage in different places in the Middle East
  • the demand for oil in World War 1.
  • the worldwide economic collapse.

In 1922 King Abdul Aziz arranged a meeting with mining engineer Major Frank Holmes from New Zealand. Holmes had been moved from Gallipoli to Ethiopia during World War I, where he heard the stories of the oil flow in the Persian Gulf region for the first time.

After the war, Holmes set up Eastern and General Syndicate Ltd to search for the oil acknowledgments in the area. In 1923, the King signed a contract with Holmes and giving him permission to search for oil in eastern Saudi Arabia.

Eastern and General Syndicate brought in a Swiss geologist to assess the land but he stated that searching for oil in Arabia would be “a pure risk”. This discouraged the banks and oil companies from investing in Arabian oil projects and they stepped down from investing in oil search.

In 1925, Holmes signed a contract with the Sheikh of Bahrain, allowing him to search for oil there. He then went to the United States to find an oil company that would be interested in investment. He found help from Gulf Oil.

In 1927, Gulf Oil had taken control of all the contracts that Holmes entered years ago. But being a partner in the Iraq Petroleum Company, which was co-owned by Anglo-Persian, and “the Near East Development Company, Gulf Oil was representing the benefits of the American companies.

On 31 May 1932, the SOCAL subordinate, the Bahrain Petroleum Company (BAPCO) struck oil on Bahrain. In March 1933 dialogues for an oil acknowledgment for al-Hasa province opened at Jeddah.

Twitch ell is there with lawyer Lloyd Hamilton on behalf of SOCAL. The Iraq Petroleum Company represented by Stephen Longrigg competed in the bidding but SOCAL has approved the concession on 23 May 1933.

Under the agreement, SOCAL was given “investigation rights to some 930,000-square km of land for 60 years”. Shortly after the contract, geologists arrived in al-Hasa and start finding for oil. SOCAL associated a subordinate company, the California Arabian Standard Oil Company (CASOC) to develop the oil acknowledgment.

SOCAL also joined hands with the Texas Oil Company when together they created CALTEX in 1936 to gain the benefit of the latter’s alarming marketing network in Africa and Asia.

When CASOC geologists reviewed the allowance area, they acknowledged a promising place and named it Dammam No. 7, after a close-by village.

Over the next three years, the drillers were failed in making a profitable strike, but head geologist Max Steineke kept trying. He insisted the team to drill deeper and deeper. Even many problems came. But finally, Drillers struck oil on 3 March 1938.

In 1939, the first amendment gave the Arabian American Oil Company a larger area to search for oil and extended the contract until 1949, increasing the original contract by six years.

In 1943, the company in Saudi Arabia’s control changed its name to Arabian American Oil Company (ARAMCO). In addition, several changes were made to the original acknowledgment after the finding of oil.

In 1945, the Trans-Arabian Pipeline Company (Tapline) was started and was completed in 1950. The pipeline significantly improved the efficacy of oil transport but also had its weakness.

Beginning in 1950, the Saudi Arabian government began an outline of trying to enhance government shares of income from oil production.

In 1950, an equal profit-sharing agreement was signed, whereby a tax was charged by the government.

By 1982, ARAMCO’s acknowledgment area was a bargain to 220,000 square kilometers, down from the original 930,000 square km.

By 1988, ARAMCO was officially acquired by Saudi Arabia and known as Saudi Aramco.

In 2005, Saudi Arabia was the world's 15th major user of primary energy, of which over 60 percent was based on petroleum. The rest was made up of natural gas.

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History of oil in America

Despite their contentious political status and unpopularity with environmentalists, oil and gas are still used for myriad purposes in American life. From fueling cars and commercial vehicles to powering planes to facilitating the creation of plastics, waxes, and latex, oil and gas remain an inescapable facet of daily life and business in the United States.

Many think of the history of oil in America as relatively recent and not all that widespread—limited particularly to the famous oil-rich state of Texas. And indeed, the abundance of oil and resultant business in the state looms large in the popular imagination, from television shows like Dynasty, which follows the family of a wealthy oil tycoon, to the Texas-born-and-bred political family of two United States presidents—George H.W. Bush and his son, George W. Bush—who owned an oil and gas exploration business.

But oil in America has a much longer, richer, and more complicated history than what most of us know of it from popular culture and surface-level political familiarity. It was actually discovered by Native Americans long before settlers ever set foot in America, and was used for some incredible purposes before its contemporary applications. One such use is medicine, which has utilized for oil across cultures for centuries.

Stacker looked at 30 of the most important milestones in the development of the oil and gas industry in America, since the earliest recorded uses of it more than 600 years ago. Click through for a look at America’s fascinating, rich, and occasionally global entanglement with oil and gas. It illuminates as much about the intrepid, entrepreneurial, and all-out capitalistic spirit of the United States as it does about oil and gas themselves, and also shows just how much a natural resource can respond and react to world events.

From the Civil War to American foreign policy, to cloak-and-dagger coups in the Middle East, oil has been involved in many of America’s defining moments. And with the nation today ranking as the #1 producer of oil in the world, that doesn’t show any signs of changing.

Native Americans were the first to discover oil in America, when the Seneca tribe, a member of the Iroquois nation, began harvesting seep oil as early as 1410. The tribe claimed the land in what is now Pennsylvania, where they used a skimming process to extract seep oil, which they then collected and used as a mosquito repellant, a body salve, and more.

In 1657, the Jesuit Recorder—an account kept by Jesuit missionaries during their time in New France—noted, upon coming across oil, that they’d discovered a “heavy and thick water, which ignites like brandy, and boils up in bubbles of flame when fire is applied to it.” The register further noted that the substance was so oily that Native American tribes used it to “anoint and grease their heads and bodies.”

Crude oil was bottled in Ohio as early as 1814, after a couple of saltwater well drillers accidentally discovered the oil while drilling. The oil was then bottled up with one main purpose: to be used for medicine, which cultures around the world—including in some regions of Nigeria, for example—have also used crude oil for.

Four years after Ohio bottled up crude oil, Kentucky followed suit. This time, the oil was discovered by salt-makers on the hunt for brine who instead found themselves drilling into an oil well that became the first commercial oil well in the state.

The first American natural gas well was dug in 1825 in Fredonia, a town in western New York. The well made New York the first state to produce natural gas commercially. The gas was not only supplied to businesses in the area, but also used to power the first gas streetlights.

In 1846, the geologist Abraham Gesner invented the first kerosene lamp, though the lamp wasn’t widely used at first due to the high price of kerosene. However, the lamp would prove critical in the boom of the oil business over the next decade, as it was discovered that kerosene could be extracted from petroleum, making the cost of powering a kerosene lamp substantially lower than it had been initially.

By the 1850s, the businessman Samuel Kier already owned oil wells he had been using for medicinal purposes, and was looking for new avenues to market his resources. He began testing different ways to burn oil in lamps for illumination.

The first oil rig was established in 1859 in Titusville, Pennsylvania. The rig tragically caught fire a few short months later, which would serve as a warning sign to would-be drillers everywhere of the dangers of oil drilling.

Despite the disaster at the Titusville rig, the promise of oil remained stronger than the fear of its hazards, and a number of other rigs quickly sprung up in the Titusville rig’s wake. Many of those rigs that mushroomed in the 1860s were clustered in the Appalachian Basin, even as the Civil War raged on.

The foundation for one of the biggest oil companies in the world technically begun in 1867, when Charles Pratt, one of the earliest players in the petroleum industry, started Charles Pratt and Company with his partner, Henry Rogers. The company would later join forces with Rockefeller’s Standard Oil in 1874, four years after the oil behemoth’s birth.

John D. Rockefeller first became involved in the oil industry in 1863 when he invested in an Ohio oil refinery as part of his Standard Oil Trust. In 1870, he renamed his company—it would now just be Standard Oil—before going on to absorb a vast majority of competing oil companies and refineries. This kind of monopolizing earned Rockefeller a huge deal of criticism, and which would eventually pave the way to antitrust legislation.

The first oil in the Midwest was drilled in 1892. The oil was discovered on the property of a blacksmith in Kansas while the drillers were in pursuit of natural gas.

In 1894, oil was finally discovered in the state that would become most famously associated with it: Texas. Hired to find water in the small Lone Star town of Corsicana, a drilling contractor instead stumbled upon an oil well, causing Texas to become an oil hub virtually overnight.

In 1901, oil was discovered in coastal Louisiana. The discovery was made after a flood in a Louisiana rice field revealed an oil deposit beneath the field.

The muckraking journalist Ida Tarbell published her history of Standard Oil in 1904, using the book to expose John D. Rockefeller’s numerous illegal machinations to acquire his competitors. The exposé ultimately played a part in the breakup of Standard Oil in 1911 by order of the U.S. Supreme Court.

The first natural gas pipeline was established in 1908. The pipeline was constructed in order to transport gas from Caddo field, the oldest gas field in Louisiana, to the city of Shreveport.

The Supreme Court of the United States brought an end to Rockefeller’s Standard Oil in 1911. The court ruled that the company was in violation of the Sherman Antitrust Act due to its aim to establish a monopolistic hold on the oil industry and that it would thus have to dissolve.

The first gas station in America was founded in Ohio in 1912. In homage to its origin, the “Standard Oil Auto Filling Station” was called a filling station well into the 1970s.

The state of Oregon established the country’s first gas tax in 1919. Gas was taxed by the gallon, and the profits were used for road maintenance.

In 1923, the government of the Navajo Nation was established. The reason was so that the tribe could do business with oil companies, to whom the Navajo had leased oil-rich land on their reservations.

A deadly, five-day oil fire erupted in 1926 when San Luis Obispo Tank Farm caught fire by a strike of lightning. Two people were killed, and final damages were priced at $15 million.

Though Oregon was the first to impose a state gas tax in 1919, 1932 saw the establishment of a federal gas tax. The initial levy? Just 1 cent per gallon.

The first Saudi-American oil deal was struck in 1933. The government of Saudi Arabia issued the rights to Standard Oil of California (later known as Mobil, and later, ExxonMobil) to search for oil, and a team of geologists arrived to explore soon thereafter.

The former DuPont Company inventor, Earl Silas Tupper, left the company in 1938 to found the eponymous plastics company that is still going strong today. Tupper Plastics Company used oil to create the plastic that was then turned into Tupperware.

In response to World War II, gas and oil were both rationed across the United States. Though the rationing began in 1942 with just 17 eastern states cutting back on their gas use, all 48 states had adopted gas rationing practices by the end of the year after it was made mandatory by order of President Franklin D. Roosevelt.

The oil industry played a role in the 1953 CIA-backed plot to overthrow the Shah of Iran. Iran’s nationalization of the British Anglo-Iranian Oil Company was one of the primary impetuses for the orchestration of the coup.

Oil production peaked in the United States in 1970, at 9.6 million barrels per day. Famous Shell geologist—and heralded predictor of “peak oil”—M. King Hubbert had earlier predicted that the peak would occur in 1965, making his prediction five years short of accurate. Oil production in America would not surpass this 1970 peak until 2018.

Economists coined the term “stagflation” to explain the concurrent inflation and stagnation that took place during the economic downturn between 1971 and 1983. As part of the rough economic period in American history, oil prices skyrocketed in response to an oil embargo imposed on America by oil-rich Middle Eastern countries. These nations issued the embargo in response to America’s support for Israel during the Yom Kippur War.

While politicians have debated the role that oil played in the Bush administration’s decision to go to war with Iraq in 2003, one thing is certain: oil interests were affected. America and its allies regained control of what has been called the “oil spigot” of the world in Iraq.

The discovery of technology that allowed for natural gas to be extracted from shale caused estimates of the country’s natural gas reserves to jump significantly. The new drilling technologies ultimately accounted for a 35% surge in gas reserve estimates nationwide.

Featured Authors Ellen R. Wald ’04 on Saudi Arabia’s Oil-Rich History

The book: A century ago, the land now known as Saudi Arabia was controlled by regional warlords. Now, it is a unified country, a wealthy regional powerhouse, and a major player on the international stage. Ellen R. Wald ’04 profiles the rise of the Arab Nation in Saudi, Inc. (Pegasus Books), focusing on how the country has grown through the shrewd leadership of the al Saud family, and how its rise has been intertwined with the cultivation of a state corporation, Aramco, built on what is possibly the world’s most profitable commodity — oil.

The author: Ellen R. Wald ’04 is a consultant on geopolitics and the global energy industry. She teaches Middle East history and policy at Jacksonville University and contributes weekly columns about the geopolitics and energy policy in several news outlets including Forbes. She lives in Jacksonville, Fla.

A British writer once described Sulaiman as “a frail little man of ‘uncertain’ age but with something of the inspiration of the prophets in his soul.” When the Americans from Standard Oil of California first arrived in Saudi Arabia in 1932, Sulaiman was still “lithe and skinny.” One of the early geologists who came in the 1930s to survey the terrain described the finance minister as a “bright, intelligent, enthusiastic man” who was full of energy and ideas.” The first American ambassador noted that “the Minister of Finance had four [wives], established in a like number of identical adjoining homes where he passed his nights in strict rotation.” As the Americans would discover, however, Sulaiman had a darker side that most often emerged when he drank. Though Islamic law proscribed the whiskey he loved, Abdullah Sulaiman could not seem to put away the bottle. Contemporaries said he would go through periods of sobriety that usually coincided with the month of Ramadan. When abstaining, the Americans observed, he was much more agreeable and even-tempered. Despite this vice, or perhaps because of it, Sulaiman often presented an image of religious devotion in front of foreigners. When meetings with oil company executives would run into one of the five set times for prayer, Sulaiman would always stop the discussion, go to the corner of the room where he would face Mecca and prostrate himself on his prayer rug.

His title of “Sheikh” meant nothing more than a general honorific Arabs had used for centuries to indicate a man of power. As finance minister, Sulaiman exercised complete control over the king’s entire treasury. It was said that “he had his own accounting system that nobody knew how it worked.” Of course, given the state of Arabia in the first decades of the 20th century, the king’s wealth—kept in gold coins, cash, and other precious metals—fit into chests that Sulaiman reportedly stored in his family home. During those lean years, Abdullah Sulaiman’s duties as finance minister mostly involved shaking down Abdul Aziz’s subjects for tax money and collecting tolls from pilgrims on hajj. Once the money came in, Sulaiman’s task was to figure out how to make the money last. In addition to supplying the royal family’s needs, the funds need to be distributed among the king’s subjects in politically expedient ways to ensure continued loyalty from nomadic and settled tribesmen. The degree of loyalty an Arabian king commanded from his subjects depended on his ability to meet their financial needs.

Reviews:Saudi, Inc. should be mandatory reading for anyone planning to do business in Saudi Arabia… Ellen Wald has done a masterful job of taking you inside the boardrooms and the royal chambers, the competing interests and personalities. She captures the vast scope of history [and] brings alive the interplay among the al Saud family, the tribes, the religious community and culture. Those who may think the Saudis were ill equipped to deal with the modern world are likely to walk away rethinking facile assumptions. Wald chronicles the skill in which the Saudis outmaneuvered everyone, especially the large U.S. corporate enterprises. A necessary read for all those venturing to the Gulf.” —James B. Smith, U.S. Ambassador to Saudi Arabia, 2009-2013

“Well-written and well-researched, Wald’s book is crucial reading for understanding Saudi Arabia… A timely masterpiece.” — Steve Forbes ’70, chairman and editor-in-chief of Forbes

The source of Saudi oil

The 11 Stanford graduate students were accompanied by Lowe and Steve Graham, the Welton Joseph and Maud L’Anphere Crook Professor in GES. The students, who chiefly work in sedimentary geology, examined rocks they normally don’t work with—namely carbonate rocks that happen to be time-equivalent to some of the most productive reservoir rocks ever found.

“For us, this trip was like a short course, expanding our knowledge of sedimentary systems,” said Tess Menotti, PhD ’14, a GES graduate student.

Energy companies hire sedimentary geologists to help find oil, but the field is much broader than that. For example, Lowe explores Earth’s earliest surface environments and also uses outcrops and cores to study how coarse sediment is transported and deposited in the deep sea.

“Last year in Death Valley, I don’t think we talked about oil, as the focus was understanding rocks and the geology.” Menotti said. “In Saudi Arabia, we did fieldwork and had academic discussions about the origins of the rock formations and their features, some of which have implications for the oil and gas industry.”

Lowe said there were also discussions about possible Stanford-KFUPM collaborations including student exchanges, short courses, research conferences, field seminars, and cooperative research projects with Saudi Aramco.

Like Stanford, KFUPM is well known for its science and engineering programs and has a campus featuring palm trees and light-colored buildings with colonnaded walkways. Some at the all-male university wear the traditional, often red-checked, ghutra headdress and an ankle-length flowing robe, while others wear Western-style collared shirts and pants. Classes are conducted in English.

At Saudi Aramco, which is headquartered in Dhahran, students toured the EXPEC Computing Center, the Geosteering Center, and the Upstream Professional Development Center. The group had a chance to experience the Cave Automated Virtual Environment (CAVE), a four-sided immersive virtual reality display that allowed the visitors to see a 3D model of the rocks they would study near Riyadh. At Saudi Aramco’s core warehouse, they saw how much effort the company makes to understand its producing oil reservoirs by using core acquisition and analysis. Lowe said the technology demonstrations were amazing.

The next day, they convoyed west into the desert to Riyadh, the capital and largest city. For three consecutive days, they ventured to enormous roadside rock cuts, which are very valuable to geologists, Lowe said. “Most of Saudi petroleum reserves are from limestone, which forms from organisms in shallow, warm water environments. We looked at sediments representing a variety of shallow-water depositional environments from the perspective of the organisms that inhabited these environments, the wave and current activity during deposition, the role of sea level changes on the sedimentary record, and the potential of the rocks as petroleum reservoirs.

“It is a memorable experience when one examines the same geological section multiple times and still finds something new, “ said Mohammed “Moe” Mohanna, a part-time master’s student at KFUPM and a carbonate sedimentologist at Saudi Aramco. “That was the case during the Stanford visit to Saudi Arabia. It brought new exciting ideas, theories, and even conclusions to extensively studied sections.”

Not all of the learning on the trip was etched in stone. In the evenings, the group sat on floor pillows and ate traditional cuisine, such as Arabic rice, fluffy pita-like bread, and meat-and-vegetable dishes.

“A major thing that will stick with me is how hospitable, how welcoming and sharing everyone we ran into was,” Menotti said. “When we visited someone's home, the camel farm, a restaurant or hotel or shop, we would immediately be offered a platter of dates and Arabic coffee. The Saudis wanted to share their culture with us.”

The Stanford women chose to wear abayas: black, robe-like garments that female Saudis wear when in public. “We were going to be guests with an amazing opportunity,” Menotti explained, “so we thought that it was important to respect their culture. Even with the abayas, we definitely didn’t blend in.”

Some of that was because they wore hiking boots—standard fieldwork footwear—that were visible below the ankle-high hems. Their headscarves weren’t always secured traditionally, either, Menotti said. Regardless, they were greeted kindly by everyone they met. The Stanford women occasionally tripped when walking on outcrops or up stairs but, Menotti joked, “I didn’t have to worry if I wore the same shirt underneath the abaya two days in a row.”

On the final afternoon of the trip, the group of scientists visited Aramco Beach, kicked off their hiking boots, and waded into the Persian Gulf—one final chance for the visitors from California to get their feet wet.

The Saudi Adventure Begins: Vignette from Ɖ,001 Arabian Days'

West meets East in Saudi Arabia in 1940s.

By 1950 the horrors of World War II had largely receded, and America dominated the brave new, post-war world. The promising oilfields wildcatted just before the war by American geologists in the arid, menacing Arabian wastelands of the Eastern Province were by mid-century gushing oil and luring former grunts and sailors and flyboys like thirsty camels to a sudden waterhole.

The Americans arrived with their flat-top haircuts, still-lean warrior physiques and that can-do American confidence that anything — “anything in the world” — is do-able if you just refuse to quit. Soon, sporting desert tans streaked with dirt and sweat, and a potent, adventurous brio, they were hard at work creating something from nothing—as Americans from Jamestown to Los Alamos to the Panama Canal had always done.

What the American oilmen and their Saudi hosts ultimately achieved would prove to be nearly miraculous, unleashing the world-changing power of a virtual subterranean sea of “black gold.” Coincidentally, it also inadvertently bequeathed to later generations the inevitable global warfare, social conflict and environmental degradation spawned by competition for and exploitation of a vital and precious yet innately toxic and planet-threatening fossil fuel.

My father, Albert Coleman Snedeker, then 29, had been assigned in 1949 to the new Arabian-American Oil Co. (Aramco) venture — a partnership of top American oil firms, including his employer, Standard Oil of California (SoCal).

In February 1953, Aramco transferred him from its New York office to field headquarters in Saudi Arabia. Because Aramco family housing was still under construction in Arabia, Dad had to temporarily leave the rest of us— my eldest sibling, Mike, 9 sister, Kathy, 4 me, 3 and Mom (the former Betty Brown)—behind in Walnut Creek, California. It was near where Dad grew up and his mother still lived. We left-behinds had moved from New York back to California when Dad departed for the desert.

We would join him about six months later in sunbaked Arabia, arriving on Aug. 7, 1953, at the fledgling Aramco-built airfield near Dhahran.

Author's Bio: With his recently-published set of colorful recollections, 3,001 Arabian Days: Growing up in an American Oil Camp in Saudi Arabia (1953-1962), A Memoir, Aramco Brat and annuitant Rick Snedeker (Badge Number 199932) joins a distinguished list of Aramcons who have captured their memories of life in the Kingdom on paper. As the title indicates, Rick focuses on his growing-up years in Dhahran as the son of Albert Coleman Snedeker—known as “Big Al” to his friends—a manager in the Aramco Traffic Department responsible for keeping company camps well-supplied with the foodstuffs and sundry necessities of daily life throughout Aramco’s critical growing-up years in the ’50s and ’60s. As Aramco grew to maturity, so did Rick.

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Max Steineke

Max Steineke: Geologist and Icon

Chief geologist from 1936 – 1946, Max Steineke arrived in Saudi Arabia after 13 years as a Socal (Standard Oil Company of California) geologist with experience in Alaska, Colombia and New Zealand. Steineke is described by author Wallace Stegner in his book Discovery!, as “Burly, big-jawed, hearty, enthusiastic, profane, indefatigable, careless of irrelevant detail and implacable in tracking down a line of inquiry, he made men like him, and won their confidence.” The early pioneers agreed, and Steineke was highly respected by both his American and Saudi colleagues. Despite their limited communication in broken Arabic and English, Steineke developed a close friendship with chief guide, Khamis ibn Rimthan. The two worked side by side for many years in the early exploration days.

Steineke is well known for his efforts at Dammam Well No. 7, which in 1938 produced oil in commercial quantities for the first time in Saudi Arabia. With no promise of success – and previous unsuccessful drilling attempts – the teams kept drilling at Steineke’s urging, which led to the discovery that ultimately transformed the Kingdom. It was no surprise that Steineke was awarded the prestigious Sidney Powers Memorial Medal in 1951, the highest honor for a petroleum geologist. Steineke’s perseverance and commitment to Aramco give him a very special place in both the company and world history.

Watch the video: Standard Oil geologists arrive in Saudi Arabia September 23 1933


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