Aramco’s early Americans

The drilling crew of Dammam Well No. 7 pose on the steps of the rig, where drilling for oil began in 1935. Three years later, oil was struck here on March 4, 1938. (Saudi Aramco)
Updated 17 June 2019
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Aramco’s early Americans

  • On the first day, in 1938, some 1,500 barrels of crude oil gushed from well number 7 near Dammam
  • Saudi Arabia's single biggest asset has retained the dynamism of the American companies that developed it

ABU DHABI: By March 1938, in the rocky desert around Dammam, Tom Barger and Max Steineke were men under pressure.
The two American geologists had been searching barren eastern Saudi Arabia for oil for three years, but the six wells they had drilled had yielded nothing. Their bosses at the Standard Oil Company of California (SOCAL), having sunk millions of dollars in the Saudi project, were losing patience.
As American oil industry expert Ellen Wald describes in her recent book Saudi, Inc., well number 7 in Dammam was proving especially troublesome. The rock was too hard, and even at a hard-won depth of 4,500 feet, none of the precious black stuff had materialized.
SOCAL had bitten the bullet with a telegram to the two geologists, ordering them not to drill any new wells. Enough was enough - there was no oil in Saudi Arabia, they had concluded.
Barger and Steineke had been led to Dammam by their Saudi guide Khamis ibn Rimthan, who must have had some kind of sixth sense about the rolling desert region. Steineke took the decision to drill a further 200 feet deeper - and suddenly the future of Saudi Arabia was unleashed.
On the first day, 1,500 barrels of crude gushed from Number 7. A few days later, it was at 4,000. When King Abdul Aziz ceremonially turned the spigot in 1939 to let the oil flow through a hastily built pipeline to Ras Tanura on the Gulf coast, Saudi Aramco was effectively born.
Today Aramco is the world's biggest oil exporter, but it is an extraordinary company in several ways. It is already the world's most profitable company; when it is listed on a stock market - planned for 2021 - it will be by far the most valuable company in the world; and it is sitting on one of the biggest recoverable reserves of oil on the planet.
Under Chairman Khalid Al-Falih and CEO Amin Nasser, Saudi Aramco has just set a record for the largest capital-raising exercise by an emerging market company: a $12 billion bond that attracted $100 billion of interest from global investors.
But it is unique too in another way too: it is the single biggest asset of the Kingdom, led by expert Saudi executives, but its origins are unmistakably American, and its has retained the dynamism and efficiency of a great US corporation.
Jamal Al-Kishi, one of the Kingdom's leading bankers and an astute observer of international business affairs, said: "American companies and engineers worked assiduously to develop what's today Saudi Aramco, an undisputed global leader across the hydrocarbon value chain, run competently by Saudi nationals."
That Barger and Steineke were there at all in 1938 owes a lot to the vision of another American SOCAL man, Fred Davies, a Minnesotan who had been foraging around the Middle East for oil for most of the 1930s. In those days, the great rivalry in the region was between the growing economic power of the Amercians, and the fading imperial aspirations of the British, who had cornered the oil market in Iran and Iraq.

OIL PIONEERS

• Karl S Twitchell (1885-1968): Mining engineer who evaluated Saudi Arabia for mineral and petroleum resources; crossed Arabian Peninsula to meet US geologists in 1933.

• Charles Crane (1858-1939): Plumbing tycoon who in 1931 introduced the King to Twitchell. who delivered positive outlook for oil.

• Stephen Bechtel (1900-1989): Engineer whose Bechtel Corporation built the Ras Tanura refinery, deep-water pier, power plants, airports, hospitals and infrastructure.

Davies was convinced there was oil on the other side of the Gulf, and had found some in Bahrain. The Aramco legend has it that Davies was standing on an oil-bearing mound there when he looked across the Gulf toward the newly founded Saudi Arabia, and thought the geological formations he could just about make out looked very similar to the Bahrain dome.
Davies and another American, Lloyd Hamilton, had been part of the SOCAL team that had negotiated the oil concession with King Abdul Aziz in 1933. For what now seems the ridiculously small sum of £35,000 in gold and a further £20,000 in 18 months, with £5,000 annually in rent and bigger royalty payments if oil was discovered in meaningful quantities, SOCAL had bought the rights to Saudi oil.
Saudi Aramco's profit last year amounted to $111 billion - proof that the Americans were onto a good thing 80 years ago.
The US-Saudi relationship survived the difficult days of World War II, when Germans and Italians attacked Saudi facilities to try to stop the flow of fuel to Allied armies, and was cemented by the historic meeting between the King and US president Franklin D Roosevelt on board the USS Quincy at Suez in 1945.
By then, Saudi Arabia was a valued oil exporter for the West, and the Arabian American Oil Company - Aramco for short - was already an engine for economic growth in the Kingdom.
Wald calculates that in 1946 Aramco was providing more money to the Saudi treasury than it ever got from pilgrimage to Makkah and Madinah, traditionally the Kingdom's big revenue stream.
All that was about to shift up several gears with the discovery in 1948 of the Ghawar, still the biggest single oil field in the world. The Americans called it "the field of dreams."
Davies, now Aramco CEO, oversaw a dramatic expansion of the Saudi operation to take advantage of the huge opportunities Saudi Arabia offered. This was an era of rapid economic development, with American contractors at the forefront of the industrial modernization of the Kingdom.
A crucial role was played by another big US corporation. Stephen Bechtel, whose family company had helped built the gigantic Hoover Dam in the USA, saw the opportunities and immediately traveled to Saudi Arabia for meetings with Aramco and with the King.
The result was a spree of development projects to enhance the oil industry but also modernize the Kingdom. A railroad was built to link the capital Riyadh with the oil-producing provinces; pipelines were laid to get the crude to export hubs on the Gulf coast; refining and processing facilities were built to handle the tsunamis of crude now flowing from Saudi wells.
The most ambitious project of all - the Trans Arabia Pipeline or Tapline - was built to bring crude overland to refineries and ports on Lebanon's Mediterranean coast, and thence to Europe.
Bechtel's work began to change the look of the traditional Kingdom. At Aramco's growing production HQ in Dhahran, American executives and engineers expected some of the comforts of home, and Bechtel built what is still referred to as "The Camp" - a little bit of suburban America, complete with porches, BBQs and cinemas, in the heart of Arabia.
Most of Bechtel's work was for Aramco, but the benefit was felt across Saudi society. Roads, power plants, desalination facilities, hospitals, schools and hotels all followed in a gigantic public-works campaign.
By the 1970s, the global oil market had begin to change, and economic power was increasingly in the hands of the producers. In a series of purchases, the Kingdom took control of Aramco, buying out the original American owners.
In contrast to other oil-exporting countries, and in keeping with the amicable relationship that had existed since the beginning, there was never any wholesale appropriation of American assets by the Saudi state.
Although that was the end of American ownership, it was not the end of cooperation with the US oil industry in the new Saudi Aramco. Modern-day Aramco still employs American experts, and has a huge presence in the American oil business, with several centers in the US and the country's biggest refinery in Texas, Motiva.
Since the 1980s, the growth of Aramco into a global energy powerhouse has been led by Saudis, but that success owes a lot to its American heritage.
Al-Kishi, CEO of Deutsche Bank in the region, said: "Perhaps the most vital contribution the Americans have made to the Saudi oil industry and Saudi Arabia is the development of Saudi local talent through the establishment of educational and training centers in the Kingdom and the sponsorship of Saudi nationals in American higher education."
Wald told Arab News "the American corporate culture still runs through modern-day Aramco," highlighting the fact that many of the most influential leaders of the company since the 1970s were American-educated and trained, including former CEO Ali Al-Naimi.
"Under Ali Al-Naimi, Saudi Aramco planned a rise to become an international oil and energy giant by diversifying Aramco’s downstream industry internationally and eventually into other energy sources," she said.
"The Americans had no vision of what Aramco would be today, and they had no need for a powerful Aramco. It is primarily the leadership of Saudi career oilmen like Al-Naimi and others that charted a path for Aramco to become the most profitable company in the world today."


Saudi preacher Awad Al-Qarni: Justifier of terror

Updated 23 July 2019
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Saudi preacher Awad Al-Qarni: Justifier of terror

  • Saudi critic of Western culture laid the groundwork that turned young Muslims into violent extremists
  • Claimed modern literary works could lead to belief in falsehoods that aim to destroy Islamic teachings

For years Awad Al-Qarni, this week’s preacher of hate, used TV interviews to glorify terrorism, spread conspiracy theories and launch tirades against the West.

His radical views and dogmatic interpretation of religion was criticized in the Saudi press, on social media and by scholars.

But that did not shake his many firm convictions, one of which was that the fight against terrorism was “fabricated” by the West to colonize the East and destroy its way of life.

Born in 1957 and raised in Balqarn governorate in Saudi Arabia’s southwestern Asir region, Al-Qarni went on to serve as a professor at Imam Muhammad ibn Saud Islamic University.

There, long before the emergence of social media, he managed to misguide a large number of followers with his politically charged rhetoric delivered via mosque sermons and after-school programs for youths in the city of Abha.

“Despite the West’s claims of peace since the founding of the League of Nations, and subsequently the UN, the Security Council and organizations everywhere, humanity hasn’t suffered from war, destruction, colonialism, enslavement, confiscation of wealth, intervention in the affairs of nations and peoples, control over their capabilities and wealth, and the overthrow of their regimes and governments, as they suffered in the time of the domination of the West and the time of the Security Council,” Al-Qarni told the anchor of the program “Al-Malaf” on Al-Majd satellite TV channel in January 2017.


CONSPIRACY THEORIES OF AL-QARNI

The “war on terror”

• “It is one of the tools of the West through which it establishes a new era of colonialism, domination, exploitation and enslavement of peoples as much as it can, without a doubt.”

• “We’re living the biggest lie history has ever known. Many Third World leaders understood these facts and talked about them. Many realized them but few talked about them, like (Nelson) Mandela, (Fidel) Castro, Ahmadu Bello in Nigeria and King Faisal. Therefore, they were assassinated or there were attempts to assassinate them, or they became prisoners or fugitives.”

 

9/11

• “It’s in the West’s interest for (terrorism) to continue. This terrorism doesn’t pose an existential threat to the West and its countries. Three-thousand Americans were killed in a certain operation. All the accumulated evidence proves that the operation was premeditated, fabricated and calculated. ... In a nutshell, it’s in the West’s interest for terrorism to continue in Islamic countries so it can exploit and utilize it.”

 

Modernism

• “One of the ideas that has plagued the nation ... is an intellectual doctrine that seeks to destroy everything that is inherited, eliminate everything that is old and revolt against ethics, values and beliefs. This doctrine is called by its preachers and servants of its idols modernism.”


In Al-Qarni’s view, the war on terror is “one of the tools of the West through which it establishes a new era of colonialism, domination, exploitation and enslavement of peoples as much as it can, without a doubt.”

Qainan Al-Ghamdi, a Saudi political analyst, told Arab News that Al-Qarni’s arguments reflect the thinking of the Muslim Brotherhood, whose followers believe that the “West will stop meddling in the affairs of the Middle East only when it’s burned by terrorism.

“They’re certain that any campaign against terrorism threatens their plans and projects.”

That is why these preachers of hate instigated young men to go to warzones in the Middle East, Al-Ghamdi said.

“They did all that they could, through persuasion and offers of financial support, to get young men to travel to warzones and get themselves killed,” he added.

“They think that through this process, the region will end up being only for (the Brotherhood’s followers), so they can achieve their goal of seizing political power.”

Al-Qarni’s vehement opposition to the anti-terror campaign is unsurprising given that he considers Western culture and thought as racist, and based on the rejection or enslavement of the other.

“It runs in their (Westerners’) blood, no matter how they try to deny it. There’s no doubt that there are a number of thinkers, philosophers, reformers and some social strata who tried to be human … But the mainstream of Western thought and culture, represented or served by politicians who try to win them over, is a racist and exclusionary thought that seeks to eliminate others,” Al-Qarni said.

“Their dealings with the Red Indians, the indigenous peoples of Australia and New Zealand, the African and Muslim peoples are clear.”

In his 1998 book “Modernism in the Balance of Islam: Islamic Perspectives in Literary Modernism,” Al-Qarni identifies modernity as an imminent threat to Muslims.

“One of the ideas that has plagued the nation … is the intellectual doctrine that seeks to destroy everything that is inherited, eliminate everything that is old and revolt against ethics, values and beliefs,” he wrote. 

This doctrine, he said, is called “modernism by its preachers and servants.”

From Al-Qarni’s perspective, “modernism” is an idea that creates great and irreparable damage, and should therefore be resisted.

“Modernism is a subversive idea. The modernists present a destructive vision of the lives of people that includes all its aspects,” he wrote.

“The term ‘modernism’ is an invasion that must be confronted. The basis of modernism is reason and rationality that reject everything that the mind does not perceive.”

As a corollary, Al-Qarni said, modern literary works could lead mankind to believe in falsehoods that aim to destroy Islamic teachings.

Three years after his polemic against modernity was published, Al-Qaeda carried out the Sept. 11 attacks against the US, which left nearly 3,000 people dead and 6,000 injured, and caused damage estimated at $10 billion.

Al-Qarni said the attacks were “fabricated” — the West was exploiting terrorism in Islamic countries for its interest.

In another interview on Al-Majd TV, Al-Qarni declared that the West wanted terrorism to remain, especially because “it doesn’t threaten” Western countries.

“It’s in the West’s interest for (terrorism) to continue. This terrorism doesn’t pose an existential threat to the West and its countries,” he said.

“Three-thousand Americans were killed in a certain operation (9/11). All the accumulated evidence proves that the operation was premeditated, fabricated and calculated.”

Al-Qarni is of the view that terrorist attacks inside the Kingdom are a way for them to claim their ‘right’ to establish control over the country.  Power is their goal.

Al-Qarni asserted that it was not he who was making the claim. “Noam Chomsky said this, and recently a Western scientific engineering institute said the (twin) towers were toppled by a controlled explosion,” Al-Qarni said, falsely attributing the conspiracy theory to the American linguist and social critic.

“It’s in the West’s interest for terrorism to continue in Islamic countries so it can exploit and utilize it.”

Al-Ghamdi said such views are unsurprising given that Al-Qarni believes that acts of violent extremism by Muslims, whether in Saudi Arabia or abroad, are not really terrorism.

“Al-Qarni is of the view that terrorist attacks inside the Kingdom are a way for them to claim their ‘right’ to establish control over the country. Power is their goal,” he said. 

Al-Ghamdi added that Al-Qarni’s antipathy toward the Saudi legal system, among other institutions, is rooted in the Brotherhood’s political philosophy.

“Even though they don’t publicly say it, followers of the Brotherhood don’t recognize the Saudi judiciary,” Al-Ghamdi said.

“Their deviant thoughts and hate-filled views are in sharp contrast to our country’s fair and unbiased laws and regulations.”

In March 2017, Al-Qarni was fined SR100,000 ($27,000) and banned from writing by Riyadh’s Specialized Criminal Court, which handles terrorism cases.

He was convicted for spreading content on Twitter that “could jeopardize public order and provoke public opinion.” However, his political commentary became even more outrageous and provocative. 

In September 2017, along with fellow hate preachers Salman Al-Odah and Ali Al-Omari, Al-Qarni was arrested.

Among other accusations, evidence was presented showing that Al-Qarni was funding the Brotherhood and other extremist jihadist groups in Egypt’s Sinai Peninsula.