Dhahran: Out in the blue
Oil in the region was first discovered in Iran in 1908, followed by Bahrain in 1932. Earlier oil exploration attempts in the Arabian Peninsula, specifically in Yemen and Oman, were put on a hold due to a lack of security.
During those days, other parts of the Arabian Peninsula were politically unstable due to which they lacked the security considered necessary for oil exploration. This proved to be a major impediment to many westerners keen on helping the region explore oil.
Those were the times when King Abdul Aziz was engaged in the unification of Arabia. He succeeded in retrieving Riyadh in 1902, Al-Ahsa in 1913 and the entire Najd region in 1922.
It was during the World War I, when rumors of oil seeps in Al-Ahsa surfaced.
Encouraged by the security situation, a New Zealand mining engineer, Maj. Frank Holmes, set up a company (Eastern & General Syndicate Ltd.) and called on King Abdul Aziz. Subsequently, an oil concession agreement was inked in 1922. Interestingly, a Swiss geologist working with the company had claimed that oil exploration in Al-Ahsa would be “a pure gamble”. That did not deter Holmes and he went to Bahrain and signed an oil concession agreement in 1925. The magnitude of the task forced him to seek help from Gulf Oil, which accepted the concession in 1927.
Being a member of a conglomerate consisting of various European oil companies, Gulf Oil had to have consent from all the members. The group did not approve the project. However, Standard Oil of California (SOCAL) took Bahrain’s concession.
In the meantime, an American mining engineer, Karl Twitchell, met King Abdul Aziz and subsequently was sent off to search for oil in Al-Ahsa in the Eastern Province where signs of large oil reserves were reported in 1931.
Twitchell suggested to the king to await the outcome of the development of Bahrain No. 1 oil well before calling bids for a concession.
On May 31, 1932, SOCAL (Bahrain Petroleum Company-BAPCO) struck oil. Bahrain is only 32 km from Jabal Dhahran (Dammam Dome), and it was in the clear view of SOCAL geologist Fred Davies who noted the resemblance of its limestone to Jabal Dukhan in Bahrain where oil had been discovered.
The oil concession was granted to Standard Oil of California (SOCAL), and the agreement was signed on May 29, 1933, which was attended by Karl Twitchell and lawyer Lloyd Hamilton as the representative of the company. To develop the concession, SOCAL had to set up California Arabian Standard Oil Company (CASOC).
On Sept. 23, 1933, King Abdul Aziz proclaimed the regions under his political and administrative control, including Al-Hijaz that he had already regained in 1925, as the Kingdom of Saudi Arabia.
Miraculously, on the same day, Sept. 23, 1933, CASOC began its search for oil by sending its geologists, Bert Miller and Krug Henry.
In the fall of 1934, drillers and rig-builders came from Bahrain, and a series of potential oil wells were drilled. Initially, the geologists identified an oil site on April 30, 1935, and named it Dammam No. 1 and after seven months of drilling, only gas was found with traces of oil. So it had to be plugged.
The drilling work continued without much success. In the meantime, SOCAL joined hands with Texas Oil Company in 1936 to set up CALTEX as a subsidiary company. Texas Oil had a formidable oil-marketing network in Africa and Asia.
On Dec. 7, 1936, the wildcatters spudded in well No. 7, and on Oct. 16, 1937 the drillers were able to get two gallons of oil in flow of mud cut with gush of gas! However, the company chief geologist, Max Steineke, was adamant on drilling deeper in Dammam No. 7 despite enormous technical difficulties.
In July 1937, the word came out to prepare Dammam No. 7 for a deep-test well. As Mary Nortin described this venture, after drilling (1382 m/4534 feet) into their best prospect, the CASCO crew had not found enough oil to fill the crankcases of their own trucks.
The stockholders were more than ready to pull out of Saudi Arabian project altogether and that prompted the company to call Max Steineke to San Francisco in early 1938 to explain his case.
Steineke never wavered in his belief that oil lay beneath Saudi Arabia, and stood his ground, though he was unable to prove his assumption, but rather relied on his educated intuition and optimism.
On March 3, 1938, while Steineke was still arguing his case in San Francisco, the drilling team struck oil in Dammam No. 7 at a depth of 1440 m/4727 f.
This discovery revealed many oil wells, including Ghawar, the world’s largest onshore field, and Safaniya, the world’s largest offshore field, and ultimately the largest oil reserve in the world.
Dammam No. 7 has become known for being a symbol of the first of success. It continued producing oil without a pump from March 3, 1938 until 1982 when it was taken out of production because of slack demand despite its capability of generating about 1,800 barrels a day in the same manner to the present day.
The oil produced from Dammam field was commercially viable, so CASCO was ready for export operations. CASCO established the Arabian Oil Company, better known as Aramco; constructed a 69 km pipeline from this field to the port of Ras Tanura; and built its headquarters nearby Jabal Dhahran and on the same camp where both Bert Miller and Krug Henry pitched their tents on Sept. 28, 1933 to explore the prospects of oil in Saudi Arabia.
The oil camp was officially named Dhahran and became synonymous with Aramco, which will celebrate its 80th birthday around the date of the National Day of Saudi Arabia.
King Abdul Aziz patronized the celebration of the first shipment of oil from that port on May 1, 1939.
This event turned a new page in the history of Saudi Arabia. The discovery of oil changed the Kingdom for good and placed it in an important position among the comity of nations.
• Dr. Abdulrahman Al-Zuhayyan is a Saudi academician based in Riyadh. This article is exclusive
to Arab News.
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