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In 1921,
Sheikh Ahmad Al-Jaber Al-Sabah became the Ruler of Kuwait. A brave
and resourceful leader, a man of vision as well as a valiant
warrior, Sheikh Ahmad was to steer his people through difficult
times as the 1920s drew to a close. The cultured pearl industry
became a serious, and ultimately overwhelming, competitor to
Kuwait's main industry, pearl diving. In spite of this, and despite
a worldwide decline in trade as the thirties began, he kept his
faith in the future. This was largely because of several strange
black patches of a rough bituminous substance which had long been
observed in different parts of the desert. The Ruler and his people
were well aware of the activities of the oil prospectors in
neighbouring Bahrain, Saudi Arabia and Iraq - to say nothing of the
Anglo-Persian Oil Company's successes in southern Iran. Their
expectations raised by the Bahrain oil discoveries of 1932, Kuwaitis
were hopeful that these surface deposits betokened underground
reservoirs of a commodity which could stimulate and revitalize their
trade.
Oil Concession Agreement Signed
On December 23rd, 1934, Sheikh Ahmad Al-Jaber Al-Sabah signed a
document which was to increase his country's wealth and
international importance: the first Kuwait oil concession agreement
granted to Kuwait Oil Company Limited. Kuwait Oil Company, Ltd. was
formed by the Gulf Oil Corporation (presently Chevron Oil) and the
Anglo-Persian Oil Company (presently British Petroleum).
Oil Discovered
While drilling continued in Bahrain, attention turned to Burgan and
to the recommendations about this area in the technical report of
Cox and Rhoades. Geological surveys were carried out and the Company
drilled in this area through 1937 and early 1938. It was here, on
February 22nd, 1938 that oil was discovered. Moreover, this oil was
under such pressure and in such quantity that it blasted through the
well head valve with such force that it could not be controlled. It
was a gusher that was "difficult to hold". Lack of sufficient
drilling mud to block the hole meant that other means had to be
found to block the well, and found immediately. Donald Campbell,
then Chief Accountant, finally located a 60 foot wooden pole in the
town bazaar which served as a temporary stopper. And that was how
they brought in Burgan No. 1 - at 11 a.m. on a rainy Thursday
morning. This first well is still producing today.
The Silver Wheel : The First Oil Shipment
On June 30th, 1946 H.H. the late Sheikh Ahmad Al-Jaber Al-Sabah
turned a silver wheel to start Kuwait's first crude oil export
aboard the tanker "British Fusilier".
The 30th of June, 1996 marks the 50th anniversary of exporting the
first Kuwaiti oil shipment. This enabled the State of Kuwait to join
the ranks of the world's major oil producers. At 7 o'clock in the
morning of the 30th of June, 1946 a grand celebration was occasioned
by exporting the first Kuwaiti oil shipment. The celebration, held
under the auspices of the late Sheikh Ahmad Al-Jaber A-Sabah (then
the Amir of Kuwait), was attended by the country's senior officials,
the Political Resident in the Gulf area, the Political Agent in
Kuwait and a distinguished audience of guests.
Mr. Southwell, Director of Kuwait Oil Company Ltd., London, started
the event by receiving Sheikh Ahmad Al-Jaber A-Sabah and his
companions and escorting them to the ceremony site, where the silver
wheel had been placed to herald the occasion. Sheikh Ahmad turned
the wheel to start the first Kuwaiti crude oil shipment flowing
smoothly through an off-shore pipeline to the British tanker
Fusilier. 10,567 tons of crude oil were loaded in 11 hours and 13
minutes, an average of 950 tons per hour.
Nationalization of the Oil Industry
A new era of historic importance began on December 6th, 1975 with
the nationalization of Kuwait's oil industry. In line with all the
other Arab oil producing states, Kuwait began negotiations in the
early 1970s to restore control over its own natural oil resources.
By mutual agreements with the Company's two original partners, the
State's shareholding in Kuwait Oil Company was increased
progressively until full control was achieved. On March 5th, 1975,
an agreement was signed by the State of Kuwait and the two oil
companies (British Petroleum and Gulf) giving Kuwait complete
control of its oil resources.
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