THE SHIFT OF THE OIL POWER TO MIDDLE EAST

Lecturer : Madam Rozana Azrina Binti Sazali

Names : 1) Abdullah Haziq Bin Mohd Jamal ( 2017466148 )
2) Mohd Rafiq Bin Mohd Zubir ( 2017466188 )
3) Muhammad Aiman Faisal Bin ( 2017466168 )
Mohd Zailani
4) Muhammad Hafiz Bin Hassan ( 2017466154 )
TABLE OF CONTENTS

CONTENTS PAGES

Introduction 3

1.0 Early Exploration of oil and gas in middle east 4

2.0 World dependence on Middle Eastern oil 7

3.0 Storage and Trap of Oil 9

Conclusion 13
Introduction

Petroleum word comes from the Ancient Greek word which ‘petra’ means rock and ‘oleum’
means oil. Petroleum is type of material which naturally occurring in the earth subsurface. It
has a yellow to black color. It consists of variety type of hydrocarbon with various molecular
weights. It formed when mass quantity of dead organism which buried under the subsurface
for million years and undergoes high temperature and pressure before the petroleum is form.
Petroleum has widely used in our daily life because almost all of thing we can found
nowadays is either made from petroleum or run using petroleum. For example, it has been
use as fuels, derivatives for other chemical, agriculture and others.

Today, the petroleum can give big impact to our society including economy, politics and
technology. Petroleum has become major factor in several military conflicts in this twentieth
century and anyone that has access to world petroleum, he can rule the world as said by Dr.
Zakir Naik. Due to his many exploration and exploitation of petroleum happen across the
world. Now, the power of oil has shift to the hand of Middle East which give chance for
Middle East to rule the world or to be ruled by others.
1.0 Early Exploration of oil and gas in middle east

The beginning of oil exploration in middle east started when Dr Mark Hobbs looks at the role
maps have played in oil exploration in the Middle East from the West’s early work in the
region at the beginning of the 20th century until today.

Britain has a long history of involvement in the Middle East. Government files dating from
the early 20th century, such as those found in the India Office Records held at the British
Library, reveal British attitudes to the region in the wake of the discovery of large deposits of
oil. The maps in these records demonstrate the extent of Middle Eastern oil resources, and
illustrate the West’s attitude to the region, its nations, and the boundaries dividing them

When did the search for oil in the Middle East begin? The West’s view of the region as a
blank canvas of rich mineralogical resources first took shape in the decade prior to the First
World War. In 1901 the English entrepreneur William Knox D’Arcy negotiated a concession
with the Persian Government to search for oil in its territory.

In May 1908, after seven years’ searching, oil was finally found in significant amounts at
Masjed Soleyman, in the southwest corner of Persia, close to the border with Turkish
Mesopotamia (now Iraq). One year later, the Anglo-Persian Oil Company (APOC) was
incorporated in London. The bottom figure shows the map of oilfield in middle east.
In anticipation of Britain’s plans to convert its naval fleet from coal to oil power, the
company’s prospectus for investors promised that an ‘almost limitless market will be found
for Fuel Oil for marine purposes especially on Warships.’ Red dots on the map
accompanying the prospectus indicated ‘unquestionable oil indications’, while red crosses
indicated wells already in operation.

Further discoveries of oil reserves across the region followed in the ensuing decades: Iraq in
1927, then Bahrain (1932), Qatar (1935), Saudi Arabia and Kuwait (1938), the United Arab
Emirates (1958), and Oman (1964).

With each discovery, new companies were founded, backed by investors from Britain, the
United States, and Europe. Each hoped to secure concessions for exploration and extraction
with the ruling figure or government. In many cases, the pithy issue of defining new national
boundaries also had to be address.

Who mapped the Middle East’s oil fields and what was the outcome?

In a region still largely uncharted and unexplored by the West, maps played an essential part
in plotting oil resources in the Gulf and determining the extent of concessions. Files in the
India Office Records indicate the extent to which concession boundaries eventually dictated
the region’s national borders. Many of these lines ran through harsh landscapes of desert,
mountains and marshes, inhabited by nomadic tribes on a seasonal basis. Whilst previously
national boundaries were vague and indeterminate, oil exploration added an impetus to
defining these frontiers.

For British administrators, the most authoritative map of the day was Hunter’s Map of
Arabia, produced by Lieutenant Fraser Hunter between 1905 and 1908. With a scale of 32
miles to an inch, and incorporating an index of place-names in both English and Arabic, it
was the most authoritative map of the region in the early decades of the 20th century.
This map shows important features such as pipelines, oil and gas field and also refineries in
Iran.

Initial search

In 1922, Ibnu Saud met a New Zealand mining engineer named Major Frank Holmes. During
World War I, Holmes had been to Gallipoli and then Ethiopia, where he first heard rumours
of the oil seeps of the Persian Gulf region.He was convinced that much oil would be found
throughout the region. After the war, Holmes helped to set up Eastern and General Syndicate
Ltd in order, among other things, to seek oil concessions in the region.

In 1923, the king signed a concession with Holmes allowing him to search for oil in eastern
Saudi Arabia. Eastern and General Syndicate brought in a Swiss geologist to evaluate the
land but he claimed that searching for oil in Arabia would be “a pure gamble”. This
discouraged the major banks and oil companies from investing in Arabian oil ventures.

In 1925, Holmes signed a concession with the sheikh of Bahrain, allowing him to search for
oil there. He then proceeded to the United States to find an oil company that might be
interested in taking on the concession. He found help from Gulf Oil. In 1927, Gulf Oil took
control of the concessions that Holmes made years ago. But Gulf Oil was a partner in the Iraq
Petroleum Company, which was jointly owned by Royal Dutch/Shell, Anglo-Persian, the
Compagnie Française des Pétroles, and "the Near East Development Company, representing
the interests of the American companies.The partners had signed up to the “Red Line
Agreement” which meant that Gulf Oil was precluded from taking up the Bahrain concession
without the consent of the other partners; and they declined. Despite a promising survey in
Bahrain, Gulf Oil was forced to transfer its interest to another company, Standard Oil of
California (SOCAL), which was not a bound by the Red Line Agreement.[5]

Meanwhile Ibnu Saud had dispatched American mining engineer Karl Twitchell to examine
eastern Arabia. Twitchell found encouraging signs of oil, asphalt seeps in the vicinity of
Qatif, but advised the king to await the outcome of the Bahrain No.1 well before inviting bids
for a concession for al-Hasa.To the American engineers working in Bahrain, standing on the
Jebel Dukhan and gazing across a twenty-mile (32 km) stretch of the Persian Gulf at the
Arabian Peninsula in the clear light of early morning, the outline of the low Dhahran hills in
the distance were an obvious oil prospect.

On 31 May 1932, the SOCAL subsidiary, the Bahrain Petroleum Company (BAPCO) struck
oil on Bahrain.The discovery brought fresh impetus to the search for oil on the Arabian
peninsula.Negotiations for an oil concession for al-Hasa province opened at Jeddah in March,
1933. Twitchell attended with lawyer Lloyd Hamilton on behalf of SOCAL. The Iraq
Petroleum Company represented by Stephen Longrigg competed in the bidding but SOCAL
was granted the concession on 23 May 1933. Under the agreement, SOCAL was given
“exploration rights to some 930,000 square kilometers of land for 60 years”.Soon after the
agreement, geologists arrived in al-Hasa and the search for oil was underway.

2.0 World dependence on Middle Eastern oil

The concern of Western governments is explained by the fact that more than 70 per cent of
the oil reserves outside Communist control lie in the region around the Persian Gulf. Since
World War II, “the center of gravity of world oil reserves,” as one American oil expert puts
it, “has moved from this continent plumb into the Middle East.” Whereas 20 years ago the
United States had 59 per cent of proved free world oil reserves and the Middle East only 17
per cent, today the United States has only 14 per cent and the Middle East 71 per cent.
Moreover, during 1957, for the first time in 14 years, U.S. production exceeded new
discoveries, so that the country's proved oil reserves declined from 30.4 billion to 30.3 billion
barrels. In the Middle East, on the other hand, exploration enlarged known oil reserves by
about 15 per cent, to nearly 170 billion barrels.

Sizable oil production in the Middle East dates only from World War II. In 1939, the region
produced only about 300,000 barrels of oil a day. By the end of the war six years later,
production had not quite doubled. In 1950, however, 1.8 million barrels of oil were being
produced daily and by 1957 Mideast output had risen to almost 3.5 million barrels a day.

Oil can be produced more easily and more cheaply in the Middle East than anywhere else in
the world, because geological formations have trapped vast pools of petroleum relatively
close to the surface of the earth. The average Middle Eastern well produces more than 5,000
barrels a day, whereas the average yield per well amounts to only 200 barrels a day in
Venezuela and to only 12 barrels a day in the United States.

This country's needs for Middle Eastern oil have been temporarily lost to sight by the
accumulation of excess supplies of western oil as a result of the recent business recession and
of increased production during the Suez crisis. Despite the present oversupply many
observers believe that in the long run this country cannot get along without Middle East oil.
The United States has had no major oil discoveries since 1954. Yet domestic consumption
increased about 5 per cent annually from 1953 to 1956 and is expected to keep growing in
step with the gross national product. To satisfy the increasing demand at an economic price,
more and more American oil companies are turning to foreign areas, including the Middle
East, to supplement dwindling domestic resources.

For Western Europe oil resources of the Middle East are of vital importance. About 85 per
cent of European oil requirements are at present met from that area. Because Middle Eastern
oil was closer and could be bought without dollar currency, postwar European oil demands
were deliberately rerouted under the Marshall Plan from traditional Western Hemisphere
sources to the Middle East. European consumption of oil is expected to increase at a rate of
about 12 per cent a year—little of which can be supplied from Europe's meager reserves.
Although most of the Continent's oil needs were met from the Western Hemisphere while the
Suez Canal was blocked in 1956 and 1957, European strength, and perhaps even
independence, is virtually dependent on continued access to Middle Eastern oil.
3.0 Storage and Trap of Oil
Current estimates place the Middle East’s conventional oil at about 800 Bbo, or nearly half of
the world’s proven recoverable crude. What makes the Middle East so unique is the
concentration of numerous giant fields in the region. With only 2% of the world’s producing
wells, the Middle East’s output is over 30% of the world’s crude, highlighting its prolific
fields. In addition, the Middle East holds 40% of the world’s conventional gas reserves.

The Middle East is renowned for its rich carbonate oil reservoirs. Such reservoir rocks are
also found in North America and Western Siberia (mainly Paleozoic), Central and South
America (mainly Mesozoic), and South East Asia (mainly Miocene).

In the Middle East, however, carbonates were deposited on a long and wide shelf from the
Permian to the Paleocene with insignificant hiatus. Even after the Arabia-Asia collision,
carbonate sedimentation continued in a very shallow marine environment (an ongoing
process in the Persian Gulf). Indeed, large oil fields in the Middle East have thick stacks of
multiple carbonate payzones.

Limestones and dolomite reservoirs of the Middle East have fairly good porosity and
permeability. Primary porosity has been well preserved in packstones and grainstones such as
those of the Late Jurassic Arab Formation widely spread in the Middle East. In Saudi
Arabia’s Ghawar field (the world’s largest oil field), two producing members (C and D) of
the Arab Formation, have thicknesses of 30m and 80m respectively, and a porosity of 20%.
The same formation in the UAE ranges from 130 to 240m in thickness and 10-30% in
porosity. Moreover, the Zagros deformation has created fracture networks enhancing
permeability, especially in cemented limestones such as the Oligocene-Miocene limestones
of southwest Iran (Asmari Formation) and eastern Iraq (Jerrible Formation), where their
thicknesses range from 120-140m, and porosities from 8-24%.

Apart from marine shale and marl cap rocks, many Middle East basins also contain evaporite
beds, which are efficient seals because of their ductility. The main evaporite horizons
include:

1. The Infracambrian Hormuz salt

2. Triassic interbedded evaporates

3. Late Jurassic Gotnia-Hith Formation

4. The Miocene Gachsaran Formation (the entire Phanerozoic succession is bounded by

evaporite seals both at the bottom and on the top).

These ductile evaporite and shale beds have also acted as detachment horizons for the Zagros
thrust structures, thus producing vertical compartments of petroleum systems within the
sedimentary succession.
Stratigraphy and petroleum source-reservoir rocks of selected areas in the Middle East
Conclusion

As we know oil is very important to our life and without it we may suffer from big problem.
Oil is the biggest advantage to the country that owns it. Before the Middle East gain the oil
power, they started with scratches which happen from 1992 when King Saud met a New
Zealand Engineer name Major Frank Holmes. Starting from that, they develop their oil
system slowly before become the biggest oil power in the world which that make many
country depend or too depended on them such as United States, China and others country as
this country has high demand for petroleum. The increase in reserve of oil in Middle East has
strengthened their power in oil industry. The most important thing is not who has biggest
power in oil but how the oil is managed to give benefits for all.
REFERENCES

1) https://en.wikipedia.org/wiki/Petroleum
2) https://en.wikipedia.org/wiki/History_of_the_oil_industry_in_Saudi_Arabia
3) https://www.bl.uk/maps/articles/oil-maps-of-the-middle-east
4) http://library.cqpress.com/cqresearcher/document.php?id=cqresrre1958091000
5) http://peakoilbarrel.com/world-proved-oil-reserves-fact-fiction/
6) https://www.geoexpro.com/articles/2014/02/how-much-oil-in-the-middle-east
7) https://www.geoexpro.com/articles/2010/01/why-so-much-oil-in-the-middle-east-
cd8a38e3-b5f5-462e-979e-2b3bb804dcee