(Sunday, December 30, 2018)
02:59
All across the world, Iran is known to be a country sitting atop rich oil and gas reserves. Since more than a century ago when oil was discovered, Iran has turned into one of the major players in the industry. That caused Iran myriads problems, but Iran has since been an influential state in the oil market.
Iranians
were familiar with oil and gas since ancient time. Archeologists have unearthed
artifacts proving that Persians knew bitumen and its use. During the Elamite
civilization, famous stamps were made from natural bitumen. Furthermore,
bitumen was used for coating boats and coffins, and in the manufacturing of
some vessels. These are just examples of use of bitumen, a derivative of oil,
in ancient Persia, today known as Iran.
The use of
oil, bitumen and gas in the following civilizations and particularly for
religious purposes and the use of gas as fuel in ancient fire temples are among
signs of the familiarity of ancient Persians with petroleum and its
derivatives.
When we add
military purposes and take into consideration oil-powered cannon ships of the
Persian Army that the paramount significance of oil and its derivatives in
ancient Persia and following periods could be realized.
Despite
ancient Persians’ familiarity with oil, it was centuries later that Iran and
the entire world appreciated the real value of this remarkable fluid.
The West was
looking for an alternative to coal in order to speed up trend of its industrial
revolution. To that end, it studied various spots in the world. One of them was
Iran. British geologist, naturalist, explorer and archaeological excavator
William Kennett Loftus visited southwest Iran in the 1800s and published his
observations in Europe.
In his
article about the geological specifications of Turco-Persian border areas,
Loftus spoke about petroleum seeps.
**Financial
Woes
Petroleum
seeps in southwestern Iran date from long time ago. Petroleum seeps are quite
common in many areas of the world, and have been exploited by mankind since
Paleolithic times. Natural products associated with these seeps include
bitumen, pitch, asphalt and tar. In locations where seeps of natural gas are
sufficiently large, natural "eternal flames" often persist. The
occurrence of surface petroleum was often included in location names that
developed; these locations are also associated with early oil and gas
exploitation, as well as scientific and technological developments, which have
grown into the petroleum industry.
Loftus’s
article on petroleum seeps encouraged Western governments to test the
likelihood of oil and gas in Iran. The opportunity for that purpose was created
during the Qajar era. In 1872, Baron Julius Reuter won the first ever oil
concession from the Government of Persia for exploiting mine and reservoirs.
But the concession was scrapped very soon under pressure from Russia. One
decade later, the Europeans made a fresh try to dominate Iran’s oil. In 1883,
Dutch Albert Hutsen won a concession to extract oil in Iran in Dalaki. He had
established a company to carry out exploration operations in that area. But no
acceptable results were achieved and he had to stop work. His company went
bankrupt and he sold it shares.
Reuter once
again jumped to the fray in 1889 to explore oil. He established a bank and
purchased the shares of Hutsen’s company. Since the only authorized zone for
exploration was southern coasts, Reuter focused on Qeshm Island for oil
exploration.
A 700-foot
well was drilled in Qeshm Island, but no oil was found. After this failure, the
exploration operation was halted in 1894. Everyone was frustrated with failed
oil exploration operations, ranging from Western investors and economic
planners to Qajar court and government officials who were grappling with
financial difficulties.
Iran was
facing a financial turmoil at that time and the government desperately needed
money. The reason for such financial needs was the Qajar king’s luxurious
lifestyle.
Two years
prior to the time that Reuter stopped his operation in Iran, French
archeologist and geologist Jacques de Morgan travelled to Iran and visited
Qasr-e Shirin and southwestern Iran. He published his travelogue in a Paris
paper, raising the possibility of oil reservoirs in western Iran.
When Antoine
Ketabchi (of Georgian or Armenian origin), who was head of Iran’s Customs, was
tasked with travelling overseas to find investor for Iran’s oil, he had basic
knowledge of the existence of oil in Iran.
Ketabchi was
supposed to inaugurate an exhibition in Paris, but his meetings and talks
showed that he was looking for someone to invest in Iran’s oil. Ketabchi met
with Reuter’s secretary whom he knew during Reuter’s presence in Iran. He also
met with de Morgan who was assured oil existed in Iran.
Ketabchi,
along with Morgan and de Reuter’s secretary, met with the British ambassador to
Paris. The ambassador introduced a millionaire whom he knew quite well. He was
William Knox D’Arcy.
D’Arcy was
born in England in 1840. He later moved to Australia where he was a lawyer. He
was also interested in betting in racing matches.
D’Arcy
always took risks. Before coming to Iran, he took the risk of purchasing an
abandoned gold mine in Australia. Later on, it was known that the mine was
still rich in gold.
Gold mining
revenue made D’Arcy a rich man. He returned to London as a millionaire. D’Arcy
was looking for a place to invest his money in. He warmly welcomed the offer to
come and invest in Iran’s oil.
He first
sent his secretary to Iran in March 1901 to study conditions for investment.
His meeting with the Shah of Iran came to fruition very soon. Some sources say
D’Arcy had bribed some of Shah’s influential associates. The concession was
awarded to D’Arcy in the same year for oil exploration. Under the concession,
D’Arcy was authorized to explore, recover and export oil from Iran over a
60-year period. The authorized zone for that purpose was 480,000 square miles
in southern Iran in a bid not to face opposition from Russia, the northern
neighbor.
Courtesy of
Iran Petroleum
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