How was the first oil field in the Middle East
region discovered?
The notorious D'Arcy concession made on May 28th 1901 marked the foundation of Iran’s oil industry.
In the second half of the 19thcentury, when
the U.S. oil industry came into existence (1859),
several concessions were granted in Iran for the crude oil production. Numerous drilling operations were carried out in many parts of the country; however, none of them yielded satisfactory results.
The first stage of drilling operations, on the basis of D'Arcy's concession, was carried out in Ghasr-e-Shirin and Chah-Sorkh regions; however, they did not produce acceptable results.
The volume of oil production in the said regions failed to justify the continuation of operations there.
Therefore, drilling rigs were moved further south, to Shooshtar region.
Despite the optimism about the outcome of the drilling operations in the said region, D'Arcy's financial problems created some problems there.
By 1904, he had spent some 220 thousand pounds, but further investment was needed for the drilling job in the region.
A Scottish firm active in Myanmar managed to resolve the problem. The firm was cooperating with Myanmar’s oil company and had built a refinery in the capital Rangoon.
The Scottish firm could not provide the needed crude oil demanded by the British admiralty because of its limited activity in Myanmar. Therefore, D’Arcy offered a better concession to the Scottish firm so as to persuade it to make investment in Iran.
The talks between D'Arcy and Myanmar’s oil company led to the establishment of the Concessions Ltd in 1905, the headquarters of which were located the Scottish capital, Glasgow. The said Scottish firm was supposed to undertake the drilling operations in Masjed Soleiman region, with the financial support of Myanmar’s oil company. To that end, the Company signed a contract with Bakhtiari tribal chief, based on which the tribe agreed to protect the Company's properties and installations in return for money.
The Iranian government never recognized the contract, which was negotiated by the British ambassador in the absence of the Iranian officials. Reza Shah abrogated the deal in 1924.
At the same time, drilling operations continued in several regions. Two wells drilled in north of Ahwaz did not produce favorable results.
A well drilled in Masjed Soleiman, however, produced oil on May 26th, 1908. The results of the tests were positive. Drilling of another two well in the field proved that the field contains a huge amount of crude oil reserves and therefore it was registered as the first oilfield of the Middle East region.
Surprisingly enough, Reynolds, head of the drilling
operations, had received a letter on May 14th from the Company’s headquarters in Scotland. The letter was written less than two weeks before oil production in Masjed Soleiman, indicative of the disappointment of the Company’s authorities with operations. They had ordered Reynolds to stop the job and move the Company’s machinery and equipment to Khorramshahr in case oil could not be reached at 1500, 1000 and 1600 feet.
