Abstract
Development of capitalist oil economy during the period between two World Wars and to the second half of the 40s was followed by inter-imperialistic fight for control over oil sources in colonies and dependent countries, on the one hand, and consolidation of efforts of the world’s largest oil monopolies, on another hand. At a boundary of 20-30s, seven oil monopolies have united in international oil cartel having secret character. It included five American companies («The Standard Oil Company of New Jersey», «The Standard Oil Company of California», «Mobil Oil», «Gulf Oil Corporation», and «Texas Oil Company»), and English one («British Petroleum Company») and one Anglo-Dutch («Royal Dutch-Shell»). «Big Seven» was also closely connected with French one «CompagnieFrancaise des Petroles» - direct participant of a number of joint agreements.
In 1928, American oil monopolies have achieved the conclusion of agreements between shareholders of «IPC» on so-called «red line». On the basis of this agreement, all new oil concessions that could further be received in the territory of former Ottoman Empire by the Iraq Petroleum Company or branches had to be also presented in other companies – participants of international IPC group in the same proportion that the stocks «IPC» are divided.
In certain cases, for example, when receiving concessions in peninsula – Qatar, Oman and Muscat conditions of this agreement were met, in others – monopolies continued competitive fight between English and American ones. However, in all cases their main aspiration were to receive concessions, as it is possible for bigger area to achieve full monopoly in a stealing of subsoil of the Middle Eastern region by and large [1].
Indicative example of fierce competitive fight on oil monopolies is penetration of foreign capital to Bahrain and Saudi Arabia. Originally, concession on Bahrain belonged to the British company, which did not attempt to begin to extract oil. When concession has been transferred into American Eastern Gulf Corporation connected with «IPC», it has turned out that under the terms of agreement on «red line» this American company has to accept the capital and other participants of the agreement. In order to avoid this, in 1933 the right for concession has been transferred to the «Standard Oil Company of California», which is not connected by the agreement that has founded «Bahrain Petroleum Company» [2].
Then, the American monopolies have begun to try to obtain wealth of Saudi Arabia. In February, 1933 representatives of American“Standard Oil of California” along with «Iraq Petroleum Company» have begun negotiations with the king Ibn Saud on providing concession to them on investigation of oil in province of Al- Hasa. Being afraid of penetration of England into Saudi Arabia, the king has preferred Americans. In July 1933, he ratified the agreement under that the American company has received the concession covering all eastern part of the state.
After receiving concession by the initiative of the U.S. Government, there have begun the negotiations with the Saudi Ambassador in London. These negotiations have come to the end with the conclusion of interim agreement between the Kingdom of Saudi Arabia and the USA. This agreement was about political and consular representation, judicial protection, trade and navigation. It has strengthened position of new American company «California-Arabian Standard Oil Company» created for investigation oil in Saudi Arabia. According to terms of the contract, the government of Saudi Arabia has received initial payment of 50 thousand gold British pounds. However, the share of receipts from oil up to the end of World War II was rather insignificant [3].
During the World War II, Saudi Arabia declared the neutrality and firmly adhered to it, despite the pressure from England and powers of «axis» (Germany, Italy, Japan) wishing to use the territory of this country and its economic resources, first of all oil in their strategic interests. During this period there was started the next round of fight between England and the USA for prevailing the influence on Saudi Arabia.
In the early 40s, England, having obtained a big loan from the USA had given to the King Ibn Saud significant economic assistance with goods and gold. Supply of the country with food was also completely in the hands of British. In 1942 in Saudi Arabia, there have appeared British economic and financial advisers.
Fast strengthening of economic influence by England has caused serious concern of American oil company “California-Arabian” on profits. It has demanded from the U.S. Government to take effective measures for preservation of American control over oil stocks of the country. In addition, in February 1943 the USA has distributed to Saudi Arabia the law on“lend-lease” under which it has received 99 million US dollars for wartime though it continued to remain the neutral country. By the end of the year, there has been reached agreement on construction in Dhahran (region of oil fields) big American military and air base. As a result, influence of England in Saudi Arabia has been gradually liquidated [4].
Strengthening of positions by the USA in Saudi Arabia has caused immediate increasing of activity by American «California-Arabian Standard Oil Company». In 1943, it was renamed into «Arabian-American Oil Company» (Aramco). At the end of 1943, there has been reached an agreement with the Saudi government upon construction of the largest oil pipeline from the area of crafts in Persian Gulf to the Mediterranean Sea. This oil pipeline has been urged to increase competitiveness of the Arab oil in European market. At the end of World War II, Aramco has started construction of large oil refinery in RasTanura. This oil refinery in October 1945 has given its first result.
Distinctive feature of the vast majority of foreign oil concessions in the Middle East, especially those from them, which have been received before World War II or in the first post-war years, is the huge size of the areas covered by them. Therefore, in Iraq «Iraq Petroleum Company» and its subsidiaries «Mosul Petroleum Company» and «Basra Petroleum Company» controlled almost all territory of the country by 1941. In Bahrain «Bahrain Petroleum Company» has received all archipelago and its territorial waters in concession. «Qatar Petroleum Company» has received all Qatar and territorial waters. «Kuwait Oil Company» had extended its influence on all over Kuwait. In Saudi Arabia, «Aramco» had received concession of 880 thousand square km in size, including a continental shelf.
Other feature of foreign oil concessions are also very long terms of their action. In Iraq and Qatar, concessions have been provided for a period of 75 years, in Bahrain for 91 years, in Kuwait for 92 years and in Saudi Arabia for 66 years.
The activity of concessionaires was actually uncontrollable to the governments and is not accountable to jurisdiction of the country of residence. At the same time, the oil-producing Arab countries had no right to unilaterally change or cancel these concession agreements that contradicted national interests of these countries.
Having concentrated in their hands extensive oil-bearing territories of the Arab East foreign oil monopolies many years took fabulous profits what were not received in one other area of the globe from operation of their natural rich and human resources.
Unequal character of the concession contracts – imposed to the Arab countries by foreign oil monopolies becomes even more obvious by consideration of their financial conditions.
Under agreements of 1925 and 1931 before the beginning of regular export of oil, the IPC annually paid to the Iraqi government 400 thousand British pounds gold. After the beginning of export, it has been stipulated that to the government of Iraq had to deduct annually not less above-stated sum. In case of sharp growth, the payment had to make 4 shillings for ton. This principle of «the fixed income» has been accepted for 20-year term from the moment of the beginning of commercial operation of the oil pipeline. Over it, the company did not pay any tax and duties [3].
Extraordinary low payments to local authorities in combination with extremely modest costs for investigation, drilling of wells and oil production in the Arab countries, all this was a source of the fantastic income for imperialistic monopolies.
According to official data, the expenses on production of 1 barrel of oil in Bahrain, Iraq, Kuwait and Saudi Arabia averaged in the late of 40s only for 10 cents.
Fight of imperialistic superpowers for oil, did not stop also during the war. Theresult of this fight was changed in control over sources and oil production in capitalistic world in favour of American monopolies. At the beginning of 1946, the American oil monopolies as a result of the strengthened search and investigation of oil on their concessions had 44% of all stocks reconnoitered in the Middle East (against 48,5% which were under control of the English capital, 2,8% - the Dutch and 4,7% of French).
At this stage of competitive fight of imperialistic monopolies, the agreement on so-called «red line» did not suit the American oil monopolies any more, and they have ceased to reckon with it.
Fight between monopolies of the imperialistic countries for oil of the Middle East was combined with not less fierce fight for nearby sales markets, especially for the market of capitalist Europe. The oil-extracting industry of the Arab countries was created and developed with orientation first to requirements of the world market. In this regard, the question of organization of regular export of oil occupied one of the major places in activity of the foreign oil companies allocating the most part of the funds for construction of pipelines and moorings, providing export of crude oil to the main centers of its consumption.
A number of advantages in this fight was on the side of British at the beginning: huge reserve of oil fields of Iran and Iraq, their injurious operation, extremely favourable conditions of concessions and two lines of oil pipeline built in 1934 from Kirkuk (Iraq) to Tripoli (Lebanon) and Haifa (Palestine) delivered the Iraqi oil to coast of the Mediterranean Sea and have allowed to monopolize sales markets.
The serious blow to the interests of English and Anglo-Dutch capital was put by war between Israel and the Arab states in 1948 and at the beginning of 1949. Because of this war transportation of oil on branch “Kirkuk- Haifa” has been stopped, the large oil refinery in Haifa, this is nowadays in the territory of Israel stayed idle. The additional branch of oil pipeline “Kirkuk-Haifa” with annual capacity of 6 million ton was carried out only to eastern frontier of Israel. Thus, the Anglo-Dutch capital for some time has been deprived of opportunity to increase export of oil and process it on the coast of the Mediterranean Sea.
The American capital has immediately used it. The American oil monopolies have taken all measures to the fastest construction of grandiose “Trans-Arabian” pipeline from Saudi Arabia through Syria to Lebanon. For construction and operation of this oil pipeline there has been founded new American company called «Trans- Arabian Pipeline» or «Tapline».
At the same time, English capital forced construction of two new branches of oil pipeline Kirkuk-Tripoli (Lebanon) and sought to prevent laying of trans-Arabian oil pipeline through Syria to Lebanon to the Mediterranean Sea.
The intrigues of English and American imperialists have created extremely intense internal situation in Syria. As a result, for only during 1949 there in Syria have been made three revolutions. The lieutenant colonel AdibShishakli who has headed the third revolution has granted to the American monopolies the right for laying of the pipeline across the Syrian territory.
At the end of 1949, two new branches of oil pipeline “Kirkuk-Tripoli”have become operational, and total annual capacity of all strings of pipeline in it has reached 23-24 million ton. In a year, by the end of 1950, construction of“trans-Arabian oil pipeline” has been finished, and in 1951, there had begun its operation. The trans-Arabian oil pipeline is the largest on extent in the Arab countries. Its length exceeds 1700 km.
The profit of the American oil monopolies has even more increased because of laying of this oil pipeline. Their competitiveness on a sales market in capitalist part of Europe and in the Mediterranean Sea has become stronger as delivery of oil on the oil pipeline managed Aramco of only 40 cents per barrel. It was cheaper than across the Suez Canal that provided not less than 60 million US dollars in a year of additional profit [5].
The end of the World War II and the progress of national liberation movement promoted development of consciousness of Arab people that strengthened their determination to do away with backwardness and poverty, to achieve original political and economic independence.
In oil-producing countries of the Arab East, fight against foreign oil monopolies became fight for independence.
In the early 50s the national liberation movement during which imperialists have been forced to go for increase in concession payments has captured oil-producing countries of the Arab East. According to financial conditions of concessions reconsidered in 1950-1954 it was necessary to monopolies instead of the fixed payments from unit of the extracted oil to establish the principle of so-called «equal section of profit» for the first time introduced in the Middle East on December 30, 1950 by the agreement of government of Saudi Arabia with «Aramco». This precedent has given the grounds to other oil-producing countries of the Middle East to demand revision of concession agreements.
The satisfaction of these requirements was promoted much by nationalization of “The Anglo-Iranian Oil Company” in Iran in 1951. The imperialistic monopolies frightened of growth of national liberation fight and the course of events in Iran have made concessions.
At the justice of new principle of «the equal section of profits», seeming at first sight the colonial essence of concession contracts remained invariable. In addition, concessions were only the first step in their fight for economic independence. However even small increase in profits has significantly raised their role in the state budget of these countries.
In process of growth of concession payments in Arab countries have appeared certain material prerequisites for overcoming of economic backwardness and dependence on imperialism. At the same time, there were felt more and more clear contradiction between the level of income from oil and social and economic backwardness of the Arab countries. The example of the Soviet Union, which has been for the whole world the proof of advantages of planned development of a national economy, has induced the progressive public of the Arab countries to insist on acceptance in the countries of state plans of economic development. However, from the very beginning imperialists of the USA and England have used reasonable efforts implementation of development plans for the Arab countries went under their control to keep a role of raw appendages of world capitalist system behind oil-producing countries [6].
As a conclusion of discussed matters above, the change of political climate in the Middle East has introduced in problems of oil for much new issues:
First, a number of oil exporting countries have begun to pursue independent oil policy and more vigorously to advocate the national interests in eyes of foreign oil monopolies.
Secondly, in the capitalist oil market there was appeared a strong contender of the Middle East and North Africa where in the mid-fifties was discovered large reserve of oil.
Weakening of the position of imperialistic international oil cartel in the Middle East was promoted also by aggravation of inter-imperialistic contradictions.
When the countries of the Middle East have started active carrying out independent oil policy, foreign monopolies have resorted to blackmail and threat of the transference of new investments into other petro industrial regions (first of all to the Sahara). The governments of the countries of the Middle East have tried to use the rivalry between members of cartel and outsiders for the conclusion with the outsiders of concession agreements based on the open auction and on conditions more favourable to themselves [7].
Then in 1957-1959 Iran, Saudi Arabia and Kuwait have provided concessions to outsiders’ fight of imperialistic predators for the Arab oil has even more escalated.
It should be noted that new concession agreements with outsiders were more favourable to oil-producing countries in comparison with agreements of members of the international oil cartel as OPEC. The independent policy of the governments of the countries of the Middle East and impact of outsiders has pressed up the cartel in this region. At the same time, the cartel tried to retain Middle Eastern oil because the total amount of the profits got here only by oil monopolies of the USA in 1957 exceeded average profits on all foreign capital investments of the USA twice.
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