The Caravan Goes On (eBook)

Prologue

Due partly to the forces of history and partly to the fortuitous discovery of oil, a peninsula vaguely identified as “Arabia” on still-incomplete world maps began to receive world attention in the early years of the 20th century.

After World War I, in the wake of the collapse of the Ottoman Empire, the British and French worked to establish and expand their spheres of influence in the Arabic-speaking lands of the Middle East, particularly in areas perceived to have strategic or economic value. These areas extended mainly from Mesopotamia (now Iraq) to the Levant and Egypt. The Arabian Peninsula – close to the action but not central to it – was to some extent “watched over” by the British from their outposts along its southern and eastern edges (now the countries of Bahrain, Oman, Yemen and the United Arab Emirates) as well as from faraway India.

The Turks, rulers of the Ottoman Empire, had made sporadic efforts – occasionally hindered by the British – to establish control over the Red Sea coast southward as far as the Islamic holy cities of Mecca and Medina. But neither the Ottomans nor the British made specific land claims in Arabia. Although there were Ottoman forts in eastern Arabia, there was no defined colonial power controlling the many cities, towns, villages and tribes spread across this huge peninsula. Apart from some inconclusive oil exploration by the British in the Farasan Islands off Arabia’s Red Sea coast in 1912, no specific exploration had been carried out in Arabia to discover oil or other valuable natural resources.

A nation began to coalesce as Abdulaziz Al Saud, leader of the Saud clan, consolidated control in the central Najd region, with Riyadh as his center of operations and later as his capital. This nation-building process began in 1902 with the capture of Riyadh and progressed slowly and by steps, eventually encompassing all of the territory that we now call Saudi Arabia. It involved uniting a scattered yet socially cohesive population of tribal families and isolated cities, towns and villages across the peninsula.

The charismatic King Abdulaziz Al Saud (better known in the West as Ibn Saud) proved to be a wise and persuasive leader, establishing the Kingdom of Saudi Arabia in 1932. The financial needs of the new government and country were increasing and becoming critical at this time, during the Great Depression. Few natural resources had been identified in this embryonic nation, which was larger than the combined area of France, Germany, Italy, Spain and Britain – or equal to the land area of the United States east of the Mississippi River – and which lacked a national communications grid and modern transportation system.

The British made several attempts to obtain oil concessions in Saudi Arabia through high-level discussions with Finance Minister Sheikh Abdullah Sulaiman, but none of these discussions were substantive. In fact, King Abdulaziz believed that the British were not serious about the country’s oil prospects, since they did not make any significant cash offers in these talks.

In February 1933 the Standard Oil Company of California (Socal), today known as Chevron, which had a presence in Bahrain and was interested in securing an oil concession in Saudi Arabia, sent mining engineer Karl Twitchell and lawyer and land-lease expert Lloyd Hamilton to Jeddah, the Kingdom’s commercial and, at the time, diplomatic capital. Twitchell and Hamilton brought their wives along with them. The Saudis were impressed with their seriousness and were interested in making a deal, so negotiations began in earnest. The Americans received unexpected support from a British advisor to King Abdulaziz, Harry St John (Abdullah) Philby, who had no sympathy for Britain’s commercial interests in Saudi Arabia. Philby was a noted Arabist, explorer and writer. Born in Ceylon (later Sri Lanka), he had worked for British intelligence in Baghdad and in British-Mandate Palestine. Afterwards, he converted to Islam and became a close advisor of King Abdulaziz.

The proposed Concession Agreement was presented to the King’s council for approval in May 1933. King Abdulaziz – who reportedly sat quietly, almost as if dozing, through the reading of the specific terms of the contract – became suddenly alert when the droning voice of the reader ceased, having completed all 37 separate articles. At this point, the King said: “Put your trust in God and sign.” His Finance Minister, Abdullah Sulaiman, did so. Sulaiman had been advised by Sir Andrew Ryan, the first British Minister to Saudi Arabia, to accept the American offer because “it was most unlikely that there was oil there anyway.”1 Ryan himself had for a time led the British negotiations with the Saudis on behalf of the Iraq Petroleum Company (IPC), but the British had been unwilling to come anywhere near the Saudi position and eventually bowed out.

The terms of the Concession Agreement were considered “stiff ” by the international oil industry. The accord provided the Kingdom up-front with certain sums of badly-needed cash in pounds sterling, gold or its equivalent – an initial loan of £30,000 and after 18 months another £20,000, plus annual rent of £5,000, not including oil royalties and certain other payments – amounts that after 80 years of inflation seem very small indeed. The original agreement also provided that Socal would pay the Saudi Government £50,000 upon discovery of oil in commercial quantities, plus £50,000 a year later – both sums advances against future royalties.

The far-reaching Concession Agreement was carefully and faithfully followed and honored by both sides in the decades to come. The agreement covered 320,000 square miles (829,000 square kilometers) of Saudi territory, along with preferential rights to bid for additional land. Socal formed a subsidiary called the California Arabian Standard Oil Company (CASOC) to administer the concession. In 1939 – following discovery of crude oil in commercial quantities the previous year near the company’s camp, which is today the oil city of Dhahran – CASOC negotiated a supplemental agreement that increased the total area of the deal to 425,000 square miles (1.1 million square kilometers). The deal included additional cash for the Kingdom and other important provisions, such as the requirement to build a refinery to provide the country with refined petroleum products (a provision featured in the original agreement as well) and subsequent relinquishment of acreage over set periods of time to ensure expeditious exploration over the years.

During the years between signature of the concession in 1933 and the discovery of oil in 1938, CASOC expanded geological exploration and began operations that focused first on providing services for American geologists in the field. Initial geological crews began arriving in 1933. CASOC’s activities took on a new permanence with the arrival of the first few wives and families of American employees in Dhahran in April 1937. Expanded operations meant serious attention had to be paid to providing support, such as food imports, motor vehicles, machinery, repair facilities, housing and various kinds of amenities such as one might find in a small American town – but with added complexities in view of the fact that the residential camp was located in a harsh desert climate far from outside support.

During this pioneering stage, I was spending my childhood years – up to age 13 – in the farmlands of North Dakota, followed by eight more years in Oregon and Washington, where I attended high school and college. I had little or no idea that I would eventually be leaving home to live and work in a distant and – to me, at least – exotic land.

In eastern Saudi Arabia, Bedouin guides and local villagers were being hired in small numbers as laborers, drivers, mechanics and helpers. They required training, living accommodations and basic amenities. Initially, the number of Saudis employed was small, but jobs were highly prized and eagerly sought after by local residents. Thus the CASOC community and its needs grew steadily.

After oil was discovered in 1938, the oil company began to hire personnel to operate new facilities required to produce, process and transport the petroleum. The Government began to think about using its new-found wealth to enhance the lives of the people. The company’s growth slowed to a standstill during World War II, after which operations restarted in earnest, as both Saudi Arabia and the company that in 1944 became the Arabian American Oil Company (Aramco) began a long and steady period of development. Both entities needed to deal with a welter of multicultural workforce challenges. Many of these came about because Americans and Saudis had hardly heard of each other prior to being required to work and live together. It remains one of the most remarkable and fortunate aspects of the story that “Aramcons” developed into a close-knit community and the company and the Government expanded in parallel, relying on each other to achieve common goals. Both the company and the country were confronting new challenges – entering a brave new world, as it were – and they worked in partnership to achieve their respective and common goals.

I became a member of the unique Aramco community in 1947, and played my own small part in the development of what became the world’s...