Tuesday, 1 August 2017

A GUSHER OF PROSPERITY....how oil was struck in the Middle East for the first time.

26 May 1908.Something unexpected happened on this day in Iran(Persia) beyond anyone's imagination of almost all in that country or the middle east.The incident was so silent that not many took notice in the rest of the world either. But that fateful day changed course of history of not only  that country but the whole world thereafter and still continues.It was a discovery after 7 long years of futile but hard search and toil!

 After the event, the British professional who managed that wanted to inform his company headquarters at London as early as possible.He did his best. He sent a note by a camel courier to the nearest telegram facility which was many of kilometers away. It took 5 days for the telegram to reach London after the occurrence!! British Government was also simultaneously  informed so but in a coded message so as to avert attention of the people handling such a telegram - to keep it as a secret."See Psalm 104:15 and see Psalm 114:8" was the coded message.Those sentences of the Bible read:"That he may bring out of earth oil to make him a cheerful countenance ...the flint stone into a spring well."

Yes,they struck oil for the first time in the whole middle east that day. As on date it is 109 years since then.We all know now how much that discovery has influenced us,my life included.A short exploration on how oil was found in middle east for the first time,history unknown to most of us........







Late 18th century.....
This was the period many powerful countries of  Europe ventured to take advantage of poor but potentially resourceful Asian,African and South American countries.Heavily resourceful country like India had already been milked as 'jewel in the crown' of England.It was the  time when various European Govts or wealthy business men there wanted to fish out more based on scientific explorations

.A French geologist and archaeologist named Jacques De Morgan published a paper titled "Annales de Mines' in  1892.In this he had reported on the abundance of oil seeps in Western Persia and possibility of establishing an oil industry there.

In 1900 Paris exposition took place in which Iran headed by Kitabchi Khan,an Armenian emigrant from Istanbul, participated.He approached both French and British investors to explore oil in Iran. Obviously huge financial investment and technical know how was required for this which Iran lacked.Understandably no takers were there for the offer because of the heavy risk involved. Finally he ran to William Knox D Arcy,an English (Irish by birth) business man who was looking for new venture after his very successful business in Australia.He had made a fortune out of a mining right deal for gold,silver and copper there.He agreed in principle subject to detailed discussions and agreement for which he sent his agent Alfred L Marriot to Tehran.On 28 May 1901 the agreement was signed when the King of Iran was Muzaffer-al-Din-Shah Qajar.

In hind sight I would appreciate the timely efforts of Kitabchi Khan in this matter.It is the vision first than the investment  that is required in any successful business deal, something I have learned myself in my professional life, that too from Middle East.I cant but smile over the fact that the time has turned a full circle- now it is the Govts in Middle East and the wealthy business men that invest in Europe and US!!

Years of George Reynolds......
A qualified professional in oil exploration named George Bernard Reynold who had served British Indian Service earlier was contracted for the job by D'Arcy. Reynold had the advantage of first hand experience of drilling in Sumatra,Indonesia.He hand picked services of few professionals with whom he had worked in India or Indonesia-an American engineer as his deputy,Polish and Canadian oil drillers and an Indian doctor.Arnold Wilson, a young Lt  of British  Indian Army along with 20 of his gunmen was deputized by the British Govt for the protection of the operation.Those were the members of the team who reached Iran soon.

They were received by- rages of small pox,attacks from bandits while temperature often soared past 50 degree C.Drinking water was scarce. In spite of all these, the team kept on moving place to place but with negative results for few years.Money started getting drained from the coffer of the investor-D' Arcy until a position he cant run the show alone.He could successfully organize monies from Burmah Oil Company in 1904 who was ready to invest to continue the search for oil.

The D day....
Struggle of Reynold and his team further continued in Iran but with out any success or even any such markable indication.By early 1908, 7 years after the commencement of the search, D Arcy again ran out of all the invested money and decided to stop the operation.He had conveyed that message to Reynold who kept on drilling new wells but without any positive result.



Finally on 26 May 1908 at 4.00 AM local time they struck oil in a place called Masjid-i-Suleiman.It is recorded that the drill had done 1180 feet while a gusher shot 75' into the air!The live photo which was clicked on the occasion is posted above. Sorry for the clarity of the photo but note that it was clicked in 1908!

D'Arcy and Burmah oil Co reorganized their holdings in 1909 as Anglo Persian Oil Co(APOC).Its public offering of stock shares was sold out in 30 minutes in London.By 1914 British Government purchased majority shares of this company which eventually became British Petroleum in 1954 and BP in 2000.

It is doubtful whether Reynolds received all the respect and credit he deserved.Very often professional life is like that.Most of the investors think it is only for money that employees work for and as long as it is paid their obligations are over! Reynold worked 2 more years in Iran during which they could drill many successful wells but by then fell out with APOC. Services of Reynold was terminated in 1911!! Something else was in store for him it seems.!He joined Shell Oil Co thereafter  discovered oil for the first time in Venezuela in 1922!!

Subsequently oil was discovered in Iraq in 1927, while Bahrain followed suit in 1931.Saudi Arabia found the commercial source of Oil in 1938 along with Kuwait, while Qatar discovered oil in 1939 though it took few more years to have the benefits of it because of the world war 2..UAE joined the club of oil producers in 1958 and Oman in 1962.....




13 comments:

  1. Good one.. history explained in the best way..

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  2. ELIMA:
    Very interesting reading.

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  3. Hats off Dear Jayson,very informative......
    VARGHESE MATHEW

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  4. Its quite informative, but it became too short ....Still Reynolds are living in all organizations....

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  5. Excellent writing on the subject.Narrated in the best way,
    PK MOHAMMED

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  6. Arun Gopal Very much informative... from 1908 to till date....

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  7. AS USUAL EXCELLENT SELECTION OF TOPIC.VERY INFORMATIVE.
    .GREAT WRITING JAISON CHATTEN.....
    PRINCE MANJALIL

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  8. Jomy Joseph:-
    Obviously well researched and precisely documented...Great read!

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  9. Excellent read, Sir. Informative.

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