Saudi Arabia Grants Standard Oil of California an Oil Concession

Washington recognized the Kingdom of Hejaz and Nejd and its Dependencies in 1931, communicating through the two countries' representatives in London. The name Saudi Arabia followed in 1932. [1]

American geologists began surveying eastern Saudi Arabia after the kingdom granted Standard Oil of California an oil concession in 1933. Its subsidiary, the California Arabian Standard Oil Company, undertook the search for a commercially viable field. [2]

Drilling began in 1935, but early results were disappointing. Geologist Max Steineke urged the company to persist, and in 1938 Dammam No. 7 finally produced oil in commercial quantities. [2]

The company later became the Arabian American Oil Company, or Aramco. Saudi ownership grew in stages: the government acquired a quarter share in 1973, increased it to 60 percent the following year, and completed its purchase in 1980. The enterprise that began with an American concession had become wholly Saudi owned. [2]

Oil companies established a sustained American presence before Washington opened a resident legation in Jeddah in 1942. [1] [2] [3]

Related Reading

• Saudi Arabia and the United States