Before the Organization of Petroleum Exporting Countries (OPEC) rose to power in the 1970s, U.S. oil companies had a major role in both the ownership and operation of oil production facilities in the Mideast. Since then, that role has diminished greatly as the governments of the region have assumed ownership of their national oil industries. Today, there are essentially no American- ownedproduction facilities in the area, although U.S. companies own or hold a partial interest in some Mideast refineries and petrochemical plants and several thousand Americans still work in the oil industry in the region.
The Saudi Arabian Oil Company (commonly called Saudi Aramco) is a corporation wholly owned by the Saudi Arabian government that is the sole producer of oil and natural gas in that nation.
Aramco was a partnership among Chevron, Exxon, Texaco and Mobil. It had its origins in an exploration agreement signed in 1933 by Standard Oil of California (or Socal—Chevron's predecessor company) and the Saudi government. After five years of futile efforts, exploratory drilling finally found commercial quantities of oil in 1938, but large-scale oil production commenced only in the post World War II period. From less than 20,000 barrels per day (b/d) before 1944, Saudi production rose to 500,000 b/d by 1950 and to 3.5 million b/d by 1970. In 1980, Saudi production peaked at 9.6 million b/d, following which it fell once more as high oil prices reduced international demand.
Beginning in 1973, Saudi Arabia bought out the ownership interests in Aramco of the American oil companies. The takeover was an amicable and orderly process that proceeded over an extended period. Beginning with the acquisition of a 25 percent share in 1973, Saudia Arabia's government increased its share to 60 percent in 1974 and eventually to 100 percent in 1980, when it paid for substantially all of Aramco's assets.
Today, of Saudi Aramco's 43,000 employees, only about 2,500 are Americans. The company also draws on the expertise of another 2,000 or so resident Americans on loan from U.S. oil companies.
Most of the Mideast oil industry assets formerly owned by U.S.
companies were transferred to the Mideast countries during the 1970s. While in some cases (Algeria, Iraq and Libya), the transfer was accomplished by expropriation, in most others (Saudia Arabia, Iran, Kuwait, Abu Dhabi and Qatar) it took the form of gradually increasing "participation" agreements that extended over a number of years.
American companies still own some assets in the area. For example, Texaco owns a refinery (and a 50-percent share in the crude oil production that supplies it) at Mina Saud in the Neutral Zone between Saudi Arabia and Kuwait. That facility, with a capacity of 50,000 b/d was closed down immediately after the Iraqi invasion and the 45 or so U.S. citizens who worked there were evacuated. Amerada Hess has a small share in some oil fields in Abu Dhabi, amounting to about 9,000 b/d. Conoco has an equity interest in oil fields in nearby Dubai which produce 110,000 t/d. Mobil has 50 percent ownership of a refinery at Yanbu in Saudi Arabia, with a capacity of 250,000 fc/d, as well as a petrochemical plant there. It also has a smaller share in other operations in Saudia Arabia, including a lubricating oil refining plant.
Exxon also owns shares of petrochemical plants in Saudia Arabia and Abu Dhabi. These operations employ several hundred Americans.
In summary, the role played in the Mideast by the U.S. oil industry as a whole and the value of the physical assets owned by U.S. oil companies today are both far smaller than they were 20 years ago.
Oil Supply Data Sources Of U.S. Oil Imports Before The Embargo Of Iraq/Kuwait Oil The Persian Gulf supplied 25.3 percent of the crude oil and petroleum products imported into the United States from January to July 1990: 8.2 percent from Iraq, 14.8 percent from Saudia Arabia, and 1.2 percent from Kuwait.
Small amounts also came from Oman, Qatar and the United Arab Emirates.
OPEC nations outside the Middle East—Venezuela, Nigeria and four others—provided 29 percent.
Canada, Mexico and other non-OPEC nations outside the Middle East supplied the remainder.
After The Embargo According to the most recent information available, Persian Gulf petroleum imports to the United States fell during the months immediately following the early August 1990 United Nations' embargo of Iraqi and Kuwaiti supplies. However, because total U.S. imports also fell, there was only about a 2 percent drop in the Persian Gulf share of that total.
The decline in Persian Gulf imports was gradual, in part because petroleum supplies that left Iraq and Kuwait before the embargo arrived at U.S. ports during August and September. Also, during this same period, Saudi Arabia, among other Persian Gulf countries, took steps to increase daily production.
Thus, Persian Gulf imports averaged 23.4 percent of total U.S.
imports during September and October 1990. Of this amount, 20.7 percent came from Saudia Arabia, 2.3 percent from Iraq, 0.2 percent from Kuwait and 0.2 percent from Oman.
In addition, OPEC nations outside the Middle East—Venezuela, Nigeria and four others—provided 29.9 percent in September and October. Canada, Mexico and other non-OPEC nations outside the Middle East supplied the remainder.
From January to July 1990, U.S.
petroleum imports, as a percent of domestic deliveries, reached 50 percent, the highest seven-month level in history. During September and October 1990, imports dropped to about 42 percent of domestic demand. The reasons for the decline include a drop in oil use because of higher world oil prices and a weaker economy plus a drawdown in inventories during a p e r i o d of r e d u c e d a v a i l a b i l i t y of supplies.
Japan and Western Europe also rely on the Persian Gulf for a substantial portion of their oil imports.
In 1989, Japan, which imports virtually all of its oil, imported a 4.4 percent of its oil from Iraq, 6.8 percent from Kuwait and 15.8 percent from Saudia Arabia. In 1989, Western Europe, which imports about 75 percent of its oil, imported 8.9 percent of its oil from Iraq, 4.7 percent from Kuwait, and 11 percent from Saudia Arabia.
the purpose of enhancing our nation's sealift capability. They are too old and too slow and lack many of the required de- sign features. As the Persian Gulf war proved, the military needs ships that have 24-knot speed capability and are maintained in a reduced operating status to ensure quick deliverabil
construction yard of M.A.N.'s Machinery, Plant and Systems Division (M.A.N.-GHH) on the Weser River. The dock had been ordered by Iran for the Persian Gulf Shipyard Project (PGSP) at a contract price of approximately $18 million. Immediately after launching the dock, named Dolphin, was taken over
rig berthing. Gulf Copper is very active in the current ship activation program for the Maritime Administration in support of U.S. activities in the Persian Gulf and was one of the first yards to activate two ships simultaneously. For free literature detailing the Gulf Copper's facilities and services
presently provides marine services worldwide to the offshore industry, with principal operations in the Gulf of Mexico, the North Sea and Persian Gulf. It operates a fleet of approximately 70 vessels. Pott also has major interests in shipbuilding and inland waterways transportation. Jones
a dramatic practical test. According to the Military Sealift Command, as of April 15, 1991, 10 million tons of cargo had been shipped to the Persian Gulf. The ships utilized for this massive operation, as shown in table 2, were chartered from U.S. and foreign-flag commercial operators or activated
Pentagon's chief shipping officer, Adm. Francis Donovan, Commander of the Navy's Military Sealift Command, said in his first postwar analysis of the Persian Gulf military crisis that the U.S. merchant marine is deficient by some 20 to 25 roll-on/roll-off (RO/RO) cargo vessels. He estimated that such
aircraft flight operations and additional personnel costs required by the call-up of Reserve units. The skyrocketing costs of U.S. operations in the Persian Gulf region has increased the likelihood t h a t Congress will be asked to approve a supplemental appropriations bill soon after it reconvenes. The
the Navy for Reserve Affairs. The ship is a larger version of the successful Lerici Class Italian Minehunters that were so effective in the Persian Gulf mine clearance during Operation Desert Storm. The Heron is 188 feet long, 890 metric tons in weight and built entirely of flexible and resilient
both software products for two years, has expanded its coverage to South America. Operation Desert Storm has also prompted interest in the Persian Gulf. For free literature detailing the software of Micronautics, Circle 53 on Reader Service Car
Nitro (AE-23) recently entered the facility of New York Shipyard Corporation, Brooklyn, N.Y., for an overhaul. The ammunition ship had served in the Persian Gulf Desert Storm Operation and delivered ammunition to the battleship USS Wisconsin three days before the start of military action. Homeported
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VESSELS SAFE Boats Delivers 19th Boat to FDNY SAFE Boats International (SAFE) has delivered boats 17, 18 and 19 to the marine division of the New York Fire Department, all during the month of August. The three latest additions to the FDNY ? eet are 33’ full cabin boats, the most popular con? guration
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escalation of the situation as around half of all seaborne crude oil in 2019 from 9m to 4m DWT. uct tankers will be employed to transport in the Persian Gulf would have a severe is transported through the Strait of Hor- In contrast to the disappointing de- the product to where it is needed. impact on
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I INSIGHTS: GOVERNMENT UPDATE Dennis L. Bryant Dennis Bryant is with Bryant’s Maritime Consulting, and a regular contributor to Maritime Reporter & Engineering News as well as online at MaritimeLogisticsProfessional.com. email@example.com Running on Reserves The time is long overdue for Congress
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MARINE COATINGS As the offshore industry recovers, choosing the right hull coating for those newly activated assets will be equally important. By Davide Ippolito, Hempel A/S he global offshore support vessel (OSV) market is still recovering from a protracted T slump, but thankfully momentum is
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EDITOR’S NOTE “Change is the New Normal” As I assembled this particular edition of MarineNews, it occurred to me that no matter how staid or unchanging the domestic waterfront might sometimes seem, its actual nature couldn’t be more of a polar opposite. Over time, we write about the same topics many times