by Arthur Clark
Unique Messages Unveiled to Mark Anniversary of First Oil Strike
Ours is the industry of Spindletop and shale, of Manifa and Ghawar, of Steineke and Khamis. As they knew 80 years ago, and as Americans and Saudis know today, going the extra mile together when others are starting to write us off is the best way of making our own history. — Amin Nasser
When Dammam Well No. 1, pictured here near the original Dhahran camp, failed to produce, Max Steineke (right), Khamis ibn Rimthan (left), and the exploration team continued to search. Two years in, as prospects grew dim, they finally hit pay dirt with Dammam Well No. 7 — the Prosperity Well.
Houston — When Daniel Yergin, founder of Cambridge Energy Research Associates (CERA), welcomed Saudi Aramco president and CEO Amin Nasser to CERAWeek by IHS Markit on March 5, he wished the keynote speaker a happy 80th anniversary of the Kingdom’s first commercial oil strike at Dammam No. 7 (the Prosperity Well).
This official telegram, sent from Dhahran to
Riyadh and San Francisco on March 4, 1938,
confirms the discovery of oil in the Kingdom’s
Eastern Province. In writing to R.W. Hanna in
California 10 days later, Socal executive W.H.
Berg noted: “There is nothing out of the ordinary
occurring here in the general course of our
business. However, we are all very much hopped
up over the results of tests made on our deep
drilling in Arabia. While ‘one swallow does not
make a Spring,’ I am rather encouraged to feel
that in this instance, one oil well will make an oil
field.”
Two Letters
Yergin went on to quote from two little known letters that focused on that discovery. CERAWeek is the premier annual gathering of energy experts and officials in the U.S.
Nasser, whose address was titled “The Real Future Facing the Petroleum Industry,” thanked Yergin and pointed to the American-Saudi partnership — exemplified by the teamwork between pioneer geologist Max Steineke and Bedouin guide Khamis ibn Rimthan in the 1930s — that enabled the company to achieve success.
Yergin quoted from letters discussing the oil strike that ushered Saudi Arabia into the petroleum era. Both came from the archives of Chevron, whose predecessor, Standard Oil of California (Socal), began exploring in the Kingdom in September 1933 and struck oil in commercial quantities near today’s Dhahran after five years of hard, often frustrating, work far from home base.
“There is nothing out of the ordinary occurring here in the general course of our business,” Socal executive W.H. Berg wrote to R.W. Hanna, another Socal employee, in California on March 14, 1938. “However, we are all very much hopped up over the results of tests made on our deep drilling in Arabia.
“While ‘one swallow does not make a Spring,’ I am rather encouraged to feel that in this instance, one oil well will make an oil field,” Berg continued.
Yergin also quoted from a letter written by William J. Lenahan, the company representative in Jiddah, to Socal lawyer Lloyd N. Hamilton, who had negotiated the oil concession agreement with ‛Abd Allah Al-Sulayman, the Kingdom’s finance minister. On Oct. 30, 1938, Lenahan wrote that he had visited King ‘Abd Al-‘Aziz Al Sa‛ud to inform him of the commercial oil strike. The king replied, “Some of my people have been telling me that oil in large quantities would never be found in my country … but I always thought they were wrong.”
Daniel Yergin welcomed Amin Nasser during
the recent CERAWeek activities, quoting from
two little known letters that provide insight into
the company’s origins and its founders.
Partnership Spawns History
“The Americans had even more important news,” Yergin said of the letter: “Saudi Arabia was now shipping 5,000 barrels of oil per day (from al-Khobar to Bahrain) … and the greatest news was that Saudi Arabia had become the 22nd largest oil producer in the world.”
“Well, I think we could all agree it’s gone higher — much higher,” Yergin quipped as he welcomed Nasser to the podium.
Nasser thanked Yergin for “reminding us of that historic breakthrough 80 years ago this week,” that was “only possible because of an incredible partnership between an American geologist, Max Steineke, and his Bedouin guide, Khamis ibn Rimthan. They always seemed to know where to go next and what it would take to get there.”
Nasser discussed today’s challenges facing the petroleum business, calling it “an industry at the heart of the much larger global economy.” And he offered solutions, including expanded exploration, investment in infrastructure, and enhancing and developing technologies, as well as challenging assumptions about the speed with which alternatives will penetrate markets. In closing, he harkened back to the spirit that brought in Dammam No. 7 eight decades ago.
“Ours is the industry of Spindletop and shale, of Manifa and Ghawar, of Steineke and Khamis,” he said. “As they knew 80 years ago, and as Americans and Saudis know today, going the extra mile together when others are starting to write us off is the best way of making our own history.”