On February 22nd, 1938, oil was discovered in the Burgan field of Kuwait. The Kuwait desert had long stood witness to several strange black patches of a rough bituminous substance; but it was not until the matter was investigated in 1935 did it become apparent that the wealth of Kuwait had remained underground for years, and was yet to be discovered.
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 was drawing 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 a subsequent 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 that 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, the people of Kuwait were hopeful that these surface deposits were indications of underground reservoirs of a commodity, which could stimulate and revitalize their country’s economy.
Signing of the Oil Concession Agreement
On December 23rd, 1934, Sheikh Ahmad Al-Jaber Al-Sabah signed a document that was to increase his country's wealth and international importance: the first Kuwait Oil Concession Agreement was awarded 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).
Discovery of Oil
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 22nd February 1938 that oil was discovered. Moreover, this oil was under such pressure and in such quantity that it blasted through the wellhead valve with such force that it could not be controlled. It was a gush that was "difficult to hold". Lack of sufficient drilling mud to block the hole meant that other means had to be immediately found to block the well. Donald Campbell, then Chief Accountant, finally located a 60 feet long wooden pole in the town bazaar and that served as a temporary stopper. That was how, at 11 a.m., on a rainy Thursday morning Kuwait witnessed the birth of “Burgan No. 1”. Even today, this first well continues to produce.
The Silver Wheel: The First Oil Shipment
On 30th June 1946, His Highness 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". 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 Kuwait’s 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 Kuwait’s crude oil shipment flowing smoothly through an offshore pipeline to the British tanker Fusilier. 10,567 tons of crude oil was loaded in 11 hours and 13 minutes, an average of 950 tons per hour! 30th June 1996, marked the 50th anniversary of the export of Kuwait’s first oil shipment.
Nationalisation of the Oil Industry
A new era of historic importance began on 6th December 1975 with the Nationalisation 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 progressively increased 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.