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| William D'Arcy |
In 1901, British businessman William D'Arcy convinced the Persian government to award him a concession for oil exploration, extraction, and sales in exchange for £20,000 and 16% of profits over the next 60 years. At one point when he was on the verge of bankruptcy, D'Arcy appealed to the British government for help; they agreed to assist him, fearing he might otherwise sell his concession to a foreign country such as Russia. Britain, still a great power at that time, also wanted to maintain a political presence in the Middle East. The British government pressured an existing British oil company, Burmah Oil, to give D'Arcy the financial assistance he needed in 1905; shortly thereafter, large amounts of oil were found.
In the following years, oil was discovered in a great many places in the Middle East: the Arabian Peninsula, beneath the Caspian Sea, beneath what would become the nations of Iraq, Kuwait, the United Arab Emirates, and others. In 1944, a prominent petroleum geologist named Everette DeGolyer reported to the U.S. government that he was certain the Middle East nations were sitting atop at least 25 billion barrels of crude oil, at least 5 billion of which were in Saudi Arabia. Not reported at that time were his unofficial estimates of up to 300 billion barrels of oil—a third of which he thought underlay Saudi Arabia. In a report to the State Department, DeGolyer's team commented that "The oil in this region is the greatest single prize in all history."
To begin with, the Middle East does not have two thirds of the world's oil reserves.
The oil reserve estimates refer to a narrow category of "proven" oil reserves, not to "every ... barrel of oil in the world" According to a US Geological Survey report quietly published in 2000, there is more oil outside the Middle East than inside the region. Certainly two thirds is not at all accurate -- It's 54 percent of identified reserves, possibly 40 percent of ultimately recoverable reserves, and possibly 30 percent or less if you include unconventional heavy oil fields. The Middle East does not have two thirds of the world's oil -- it has 54 percent of identified reserves, or, if you look at ultimately recoverable reserves, 39 percent. Kuwait -- not Iraq -- has the second largest identified oil reserves in the world with 99.4 billion barrels, compared to 96.5 for Iraq, according to USGS (US Geological Survey) . Saudi Arabia may have one quarter of the world's identified oil reserves, as the oil industry claims, but it has only about 16 percent of all ultimately recoverable reserves, according to the USGS. In the report that accompanies the reserve estimates, USGS did not include "unconventional" oil such as Venezuelan heavy crudes. However, the agency did say that these unconventional sources "are approximately equal to the Identified Reserves of conventional crude oil accredited to the Middle East." In other words, according to the USGS, and employing a conservative estimate for unconventional oil, the Middle East probably has anywhere from 29 to 35 percent of ultimately recoverable world oil reserves -- not two thirds, as is commonly claimed by the oil industry.
