How was the first Middle-East oilfield discovered
The signing of the notorious D’Arcy concession on 28 May 1901 marked the foundation of the oil industry , now celebrating its one-hundredth anniversary .
Oil and bitumen , in seepages , were used in traditional and primitive ways in the olden times Iran . In the second half of the 19th century , when the U.S oil industry came into being ( 1859 ) ,several concessions were granted in Iran for the extraction of Oil . Drilling operations were carried out in several parts of the country , but none ended in satisfactory results . The first phase of drilling operations carried out on very satisfying either .Although drilling activities had proven the existence of oil ,the wells’ output ratio did not justify the continuation of operations in those areas . Next , drilling rigs were moved further south , to Shooshtar area . Experts were optimistic about the outcome of drilling operations in that region , but the Major obstacles were the insufficiency of D’Arcy finances . Related projects required heavier investments , for which , D‘Arcy was personally unprepared. By 1904 , he had spent 220 thousand pounds , which was a huge amount at the time .The impediment was removed by a Scottish oil company , which had obtained a concession in Burma , and had constructed a refinery in Rangoon . At that time , the British admiralty had decided to replace oil for coal , to fuel its warships , and for that purpose , needed 50 thousand tons of oil per year . The British government resorted to the Scottish entity – The Burma Oil Company – to produce the required amount of Oil . That company’s oil reserves, however , were not sufficient enough to enable it to undertake a long-term commitment . Technical experts did not recommend a further expansion of Oil operations , in the Burmese concessionary are . D’Arcy had a much better concession for the solution of the British admiralty’s problem , provided the Burma Oil Company’s financial capabilities were diverted to his area for further investment .
Negotiations of D’Arcy and the Burma Oil company resulted in the establishment of the concessions Syndicate Ltd . , in 1905 . Its headquarters was in Glasgow , south central Scotland .The Syndicate was to carry on with drilling operations in the masjid-e-Soleiman area , with the financial support of the Burma Oil Company . To that end , the Syndicate negotiated a contract with Bakhtiari tribal chieftains , and the agreed to guard and protect the company’s properties and installations in return for a set amount of wages . The government of Iran never recognized the contract , which was negotiated by the British consul in the absence of country officials ; and Reza Shah officially cancelled it in 1924 .
Meanwhile drilling operations continued in several spots . Two wells drilled north of Ahwaz did not show favorable results . A well drilled in Masjid-e-Soleiman , however , struck oil on 26 May 1908 . Tests proved that experts had come to what they were looking for . Second and third wells were also proof of a huge oil reservoir , and as a result , Masjid-e-eSoleiman was registered as the first Middle-East oilfield in the world oil history .
It was very surprising , because Reynolds , head of drilling operations , who was happily on his way back to Awaz , had received a letter dated 14th May from the Company headquarters in Scotland . The letter , written less than two weeks earlier than the Masjid-e-Soleiman drilling success , indicated the disappointment of Company authorities with the operations . They had instructed Reynolds that should drilling not reach oil at 15 to 16 hundred feet , all company machinery and equipment were to be transferred to Khorramshahr port city of Iran .