Setting the Stage

Major
Frank
Holmes
(abu Naft)

Iraq
Petroleum
Company
(Anglo-

Persian,
Royal
Dutch
Shell,
Standard
Jersey,
French
Oil)

Red-line
agreement

The King in Debt

1932
Ibn Sauds finances dwindling due to a significant
drop in pilgrimage.
Ibn Saud is no longer able to finance his kingdom
development projects
1933
Philby encourages Ibn Saud to open up his
kingdom to foreigners and award concessions

Aramco is Created
Philby mediates the Alhasa oil concession deal.
Interested parties are Socal (Standard Oil of
California), Anglo-Persian (British Government)

Holmes discards his right to the concession

fear of defying the British government
In debt to Ibn Saud for not paying the concession fees

May 8 1933, Concession awarded to Socal

60 year concession
35,000 in gold
Annual rent of 5,000 gold
Royalty of four shillings gold per ton of oil produced

Dammam no. 7
Dammam 7 became commercial on October 16,
1938
Ibn Sauds first yearly cheque: $1,523,648
(21 cents a barrel in royalties)

More concessions awarded for other parts of the

kingdom
Higher concession payments