As the oil empire Aramco celebrates its 75th anniversary on May 20 graced by King Abdullah, its success story stands out quite unprecedented in the history of mankind. A trip to a single Aramco oil installation in the harsh desert can give one an idea of the power, the glory, and the sheer uniqueness of Saudi Aramco. It has been a hugely profitable enterprise that underpinned Saudi Arabia's might after its unification by late King Abdul Aziz. Now the country has more than a quarter of the world's total proven reserves, over 264 billion barrels, and is also the largest producer and exporter on the planet. It was a story of adventure and bridging of cultures starting in 1933 when the Kingdom granted oil concessions to Standard Oil of California (Socal, today's Chevron). The east coast of the Kingdom was the beginning of oil prospecting. The early signs of hope started with the second drill site known as Dammam 2 in May 1936 where it produced a total daily production of 3840 barrels a day, encouraging Socal to boost its operations in the area by increasing its American employees to 62 and Saudis to 1076. As more Saudis joined the operations, Socal passed the concession to a wholly-owned subsidiary called California-Arabian Standard Oil Co. (Casoc). But soon the company began to worry as Dammam 2 started to produce 9 times more water than oil as the drilling went deeper. Hope became even dimmer with Dammam 3 production capacity of only 100 barrels a day. Dammam 4 and Dammam 5 were completely dry. Dammam 6 produced a little oil mixed with water. In 1936, the Texas Oil Company (now Texaco) purchased a 50 percent stake of the concession. And after enduring five years of baking heat and mirages in the salt flats of the eastern desert in the Kingdom, oil was still not discovered in commercial quantities, prompting Socal to have second thoughts about its whole operation in the Kingdom. But drilling in the desert continued with Dammam 7. Socal, however, was on the verge of halting all its operations in the Kingdom to put an end to its losses, recalling its chief geologist Max Steinke in March 1938 to San Francisco for serious talks. During his exploration mission, Steinke teamed up with Khamis Bin Ramthan, a Bedouin who guided Steinke through the desert to found an oil empire later called Aramco. Steineke bonded deeply with his Arabian hosts and brought his family to live with him in the Kingdom. “He left the most beautiful impression in the heart,” said Abdulaziz Shalfan, one of Socal's first Saudi employees. He established the foundation for a mutually beneficial partnership between Saudi Arabia and American oil companies that would last for decades. Torn between his enthusiasm to continue the search and evidence of oil in the desert, he argued his way through during a Socal executive meeting recommending more exploration. While Steinke was on the spot with Socal executives in the midst of the great American depression, it was a particularly hard decision to make. But on March 4, Ohliger cabled electrifying news: Dammam No. 7 was flowing 1,585 barrels a day. Three days later figures had soared to 3,690 and three weeks later total production was over 100,000 barrels. When wells No. 2 and No. 4 were deepened to the same zone with the same results, San Francisco finally relaxed and the men in Saudi Arabia cheered. Dammam 7 was declared a commercial oil field. Socal executives took their hats off to honor Steinke. Crude oil was started to be exported to Bahrain by barge. In 1939, a great celebration marked the moment which five years of effort had been aimed at, the loading of the first tanker exported. With Dammam 7, oil exploration picked up steam throughout the Eastern Province. The company name was changed in 1944 from California-Arabian Standard Oil Company to Arabian American Oil Company (or Aramco). A year later, Ras Tanura Refinery began operations. Ras Tanura has since served as a major oil port and oil operations center for Aramco. In 1948, Standard Oil of New Jersey and Socony-Vacuum Oil (both now Exxon Mobil) join Socal and Texaco as owners of Aramco. Standard Oil of New Jersey purchased 30 percent of the company, and Socony Vacuum 10 percent, leaving Standard Oil of California and the Texas Oil Company with equal 30 percent shares. Measuring 280 km by 30 km, Ghawar oil field was discovered in 1948, by far the largest conventional oil field in the world. In 1950, the 1,700 Trans-Arabia Pipe Line (Tapline) was completed, linking the Eastern Province to Lebanon and the Mediterranean. With oil exploration operations heating up throughout the region, Safaniya field, world's second largest offshore oil field, was discovered in 1951. Its reserve amounts to around 37 billion barrels of oil and 5,360 billion cubic feet of natural gas. It wasn't until the 1960s, however, that the country began to see tangible results from its oil wealth, which began to transform the kingdom. The world was quickly becoming a customer of Aramco. In 1961, liquefied petroleum gas (LPG) – propane and butane – was first processed and shipped to customers. Due to a boom in global prices in the 1970s, Saudi Arabia became one of the fastest-growing economies in the world. In 1973, Saudi Arabia's government acquired a 25 percent participation interest in Aramco. And in 1980, the Saudi government acquired 100 percent participation interest in Aramco, purchasing almost all of the company's assets. In 1980, the Eastern Province was linked to Yanbu on the Red Sea through East-West Pipelines, which were completed in 1987 boosting capacity to 3.2 million barrels a day, and later to 5 million barrels a day. Reduced global consumption and the development of fields in other countries through the 1980s led the Kingdom to lower its production from 10 million barrels per day to 2 million, and to accept a production quota within OPEC, and eventually shutting operations at Dammam 7 (or the well of benefits as it was called by King Abdullah) in 1982 after 45 years in service with 32 million barrels. In 1988, Saudi Arabian Oil Company, or Saudi Aramco was established. And it was a great beginning. One year later, high-quality oil and gas were discovered south of Riyadh, the first find outside the company's original operating area. Upon the Second Gulf War of 1991, the Kingdom was hit by a major environmental hazard, oil spills. Aramco played a major role to combat marine pollution. King Abdullah inaugurated the Shaybah field in the Empty Quarter in 1999, one of the largest projects of its kind in the world on stream. With the beginning of the new millennium, Petroleum Intelligence Weekly ranked Saudi Aramco No.1 in the world for the 11th straight year, based on the Kingdom's crude oil reserves and production. As Saudi Aramco ranked first, so did its discoveries. In 2004, King Abdullah inaugurated the 800,000 barrel-per-day Qatif Abu Sa'fah Producing Plants mega project. In addition to the crude, the plant would provide 370 million standard cubic feet of associated gas daily. As Saudi Aramco continues its steady expansion, it stands proud of its great achievements throughout the past 75 years. __
