Distributing oil riches

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Case of history failure

The oil concessions given to the giant oil companies of major European colonial powers and America was based on the investments of millions of dollars and British pounds these companies made in the exploration of oil in the 1920s and 1930s before actually acquiring profitable returns. The book ‘The Prize: The Epic Quest for Oil, Money and Power’ by Daniel Yergin is the best book on this subject, and I had earlier touched upon some of the contents of this enormous encyclopedia in more than one article.

Many things have changed since the publication of the book and a majority of the concession agreements have been canceled. Kuwait, despite its small size, played a role in canceling them; however, one of the most important provisions remains valid till date and is in force in several countries, that is to say the provision which is related to the right of the ruling family on the wealth of the State. Thus, the companies shared oil revenues in varying degrees, with the ruler directly, not with his government or the state, ruler spends what he deems fit on his people.

The rights of concession revenues are transferred from a ruler to his successor. The situation in Kuwait differed in the 1960s when the enlightened ruler, His Highness the Amir Abdullah Al- Salem, decided to waive his rights in the oil concession agreement in favor of the Kuwaitis, and years later, the elected National Assembly abolished the concession agreement and nationalized the oil sector. The phrase ‘The empire on which the sun never sets’ was often used to describe the British Empire, because its expanse around the globe meant that the sun was always shining on at least one of its territories.

This colonial success did not come from vacuum, but was driven by an advanced administration and a strong colonial will. The people of a small remote island could not control all these peoples if they did not possess the power and strict organization and documentation. The book ‘The Doomsday’, which was documented in 1086, is the oldest manuscript of its kind in the world which includes accurate demographic and architectural statistics. Britain has also begun to record temperatures since 1659 and other striking precedents.

If we look back at the history of Kuwait, we will find that historical documents, mainly political are very few, however, until 1975, the state did not have any copies of correspondence between the Kuwaiti government and the oil companies from 1934 until the signing of the oil exploration agreement and the concession rights, and how to distribute returns and others. It almost required the presence of a personality such as the late Yusuf Ahmad Al-Ghanim, who paid attention to this fact and shortcomings. He contacted Sheikh Jaber Al-Ali, the then Minister of Information, and urged him to do something to collect those correspondences and obtain the text of the concession agreement, especially the parties to the agreement no longer lived, except the British Archibald H. T. Chisholm, who participated in the drafting of the agreement, so he was assigned with the task, which took him five years to complete.

According to the correspondences, Sheikh Ahmad Al-Jaber badly needed money at that time; however, he was prudent in negotiations to obtain the best conditions from the oil companies. Although the agreement and its annexes of correspondences were published in a booklet in English in 1975, and with a modest technical level, of which I have a copy, no academic or scientific specialist paid attention to the importance of the booklet although it contains very important facts and information. We hope Mr Abdullah Al-Ghunaim, President of the Kuwaiti Research and Studies Center, translate and print the booklet/document properly and comment on it.

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By Ahmad Al-Sarraf

This news has been read 13293 times!