High Temps, Low Prices and Sweet Crude: An Adventure in Oil with Aramco

Posted by on March 26, 2008

I was getting gas the other day and listening on the radio about gasoline prices going up yet again and I stopped to think about the history of gas (petrol) and its base component, oil. Yes, you can say all you want about green energy…and that’s a good thing, however, modern economies are still run on oil.

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(1)

This in turn led me to thinking about ARAMCO, or also known as Saudi Aramco. Origining in the late 1930’s under the leadership of Standard Oil, the company searched for and produced the many oil jackpots found in Saudi Arabia.

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While production continued in the 1930’s, the exploration and exportation of oil didn’t really start producing until after the Second World War, corresponding with the expanded thirst for oil resources to run the modern economies.

 

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The scope of work was tremendous. The wells had to be drilled and the infrastructure had to be constructed as well. Aramco at that time was owned by different companies, including:

Standard Oil

Texas Oil Company

Socony Vaccum

In an oral interview with some of the pioneers of the time, it turns out there was quite a interest in how to pay the Saudis for the oil that was used, with royalties, etc. involved. Says one interviewee:

“…Well, yes. the concession agreement contained provisions to pay the Kingdom a certain amount of money in royalty for each barrel produced plus taxes. the royalty portion was payable in gold, so even after production went up they still insisted on being paid royalty in gold bullion. For a while there was some gold bullion minted in the Philadelphia mint that became known as “slugs”- -the Aramco Americans called them “slugs” –and these “slugs” were in various weights of gold….”

(Source: American Perspectives of Aramco)

In any event, some of the history behind Aramco are facinating, both from a oil perspective as well as post-war America and Saudi Arabia. Take a few minutes to enjoy the links below if you have time.

Have a great day, see you tomorrow!

Links:

CIA World Factbook: Saudi Arabia

Wikipedia: Aramco (Brief article, not complete)

Saudi Aramco (Home Page)

Internet Archive: Desert Venture (I)

Internet Archive: Desert Venture (2)

American Perspectives: Aramco (oral history)

Sources:

(1-2-3)Desert Venture: Internet Archive

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