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Bahrain History DISCOVERY OF OIL pg. 2
picture courtesy newarabia.net
Oil exploration did not mean immediate wealth for Arab rulers of the area. Although the oil companies struck large deposits of oil in Bahrain almost immediately, it took longer in other countries to locate finds of commercial size. Oman, for instance, was unable to export oil until 1967. World War II delayed development of whatever fields had been discovered in the 1930s; so it was not until the 1950s that countries still technically dependent on Britain for their security began to earn large incomes. The oil fields in Kuwait were developed the fastest, and by 1953 that nation had become the largest oil producer in the gulf. Considerably smaller fields in Qatar came onstream in commercial quantities in the 1950s, and Abu Dhabi began to export offshore oil in 1962. Dubayy began to profit from offshore oil deposits in the late 1960s. Until the 1970s, foreign companies owned and managed the gulf oil industry. In most cases, European- and United States-based concerns formed subsidiaries to work in specific countries, and these subsidiaries paid fees to the local rulers, first for the right to explore for oil and later for the right to export the oil. When the first arrangements were made, local rulers had a weak bargaining position because they had few other sources of income and were eager to get revenues from the oil companies as fast as possible. Moreover, in 1930 no one knew the size of gulf oil reserves. As production increased and the extent of oil deposits became known, indigenous rulers improved their terms. In the 1950s, rulers routinely demanded an equal share of oil company profits in addition to a royalty fee. By the 1970s, most of the gulf countries, which by then were independent of British control, bought major shares in the subsidiary companies that worked within their borders. By the early 1990s, many of these subsidiaries had become completely state-owned concerns. They continued to employ Western experts at the highest decisionmaking levels, but the local government had ultimate responsibility and profits. courtesy FRD country studies next page - Independence Contents of History of Bahrain: The Gulf in the Ancient World - The Gulf in the Middle Ages (page 1, page 2) - The Age of Colonialism (page 1, page 2) - Wahhabi Islam and the Gulf (page 1, page 2) - Treaties with the British (page 1, page 2) - Discovery of Oil (page 1, page 2) - Independence (page 1, 2, 3, 4, 5)- Developments since Independence (page 1, page 2) - Tribal Nature of Gulf Society (page 1, 2, 3, 4) bahrain home - bahrain map - bahrain hotels - bahrain nightlife - bahrain overview - bahrain history index - bahrain pictures
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