Outline from Presentation: Formatting didn't quite translate from word (sorry)

a. A brief history:
i. 347 A.D. Oil wells are drilled in China up to 800 feet deep using bits attached to bamboo poles.
ii. 1264 Mining of seep oil in medieval Persia witnessed by Marco Polo on his travels through Baku.
iii. 1500s Seep oil collected in the Carpathian Mountains of Poland is used to light street lamps.
iv. 1594 Oil wells are hand dug at Baku, Persia up to 35 meters (115 feet) deep.
v. 1735 Oil sands are mined and the oil extracted in Alsace, France.
vi. 1815 Oil is produced in United States as an undesirable by-product from brine wells in Pennsylvania.
vii. 1848 First modern oil well drilled in Asia, northeast of Baku, by Russian engineer F.N. Semyenov. **Some claim that Colonel Drake built the first modern oil well in Pennsylvania—but that is actually the first well in the US
viii. 1849 Distillation of kerosene from oil by Canadian geologist Dr. Abraham Gesner. Kerosene eventually replaces whale oil as the illuminant of choice and creates a new market for crude oil. **Did this save the whales?
ix. 1878 Electric light bulb invented by Thomas Edison eliminates demand for kerosene, and the oil industry enters a recession.
x. 1883 French Rothschild’s financed a railroad to transport Baku kerosene to the Black Sea Port, Batum, in Georgia
xi. 1885 Oil burners on steam engines in the California oil fields, and later on steam locomotives, create new crude oil markets.
xii. 1886 Gasoline-powered automobiles are introduced in Europe. Before this gasoline was simply a cheap solvent produced as a byproduct of kerosene distillation.
xiii. 1892 first oil tanker sailed from Batum (the Black Sea Port) created by the English Samuel Family (later created Shell)
xiv. 1899 between 1880-1899 most Arab sheikdoms agreed not to allow any foreigners (excluding Britain) without Britain’s express permission. This lasted until the 1970’s
xv. 1910 boom in car sales helped gasoline surpass kerosene sales.
xvi. 1913 Winston Churchill obtains his goal—convincing the British government to convert navy from coal to oil power. This helped to make oil a matter of national security rather than a mere commodity.
xvii. 1915-1916 The UK made a pact with the Emir of Hejaz, Hussein, that Britain would back an uprising in Mesopotamia (now Iraq) in return for dominance over the oil.
xviii. 1918 Churchill wins the Parliament with 254/272 votes to have the government purchase 51% of BP, essentially creating a gov owned country with a private “heart”. This enabled the gov to appoint the majority of the board members and have ultimate control of the company’s actions. This changed the perspective of oil in relation to nations, and above all—strategic national alliances.
xix. 1920 Hussein’s revolt finally begins, but—to the UK’s surprise—Hussein revolts also against Britain’s intention to rule his new kingdom secretively.
xx. 1921 Britain bribes local tribes to accept Faisal Hussein as king of Iraq (formerly Kirkuk, Baghdad, and Bashra).
xxi. 1925 Britain finally achieves an official alliance with Hussein and before the pseudo assembly is formed the British Oil company TPC achieved a secure oil concession with Iraq (not officially named until 1929). Essentially—Iraq was created by Britain in the interest of national security to gain control of Mesopotamian oil.
xxii. 1938 US companies, Texaco and Chevron, begin producing commercial quantities of oil out of Saudi Arabia.
xxiii. 1943 President Roosevelt authorized the Lend-Lease Act with Saudi Arabia because such oil reserves were proving to be important to US national security (due to depletion of US sources).
xxiv. 1949 Oily Rocks (AKA Neft Dashlari) Azerbainjan, a man made island on the Caspian Sea, pioneered the first offshore oil rigs in the world.
1. 125 miles of roads link the oil rigs in the Caspian Sea
2. 600 total oil rigs (approximately 400 operable)
3. Oilrigs are now decrepit, some literally falling into the sea (as are some of the roads). Yet many are still in operation despite age.
xxv. 1951 Iran, angered that BP did not increase standards of living for Iranian employees (as agreed) and angered that they got less than 50% of profits began strategies to force BP to do this.
xxvi. 1953 US CIA creates a coup that removes Mossadegh eventually gaining control of 60% of Iranian oil (again to BP’s dismay—had BP simply agreed to Iranians initial requests they would have had a much better cut of the profits).
xxvii. 1952 Gamal Abdel Nasser headed a coup and won control of Egypt. He then (quietly for a couple of years) began to press all Arab leaders, and civilians, to take control of oil prices, demanding higher profit shares and higher prices per barrel.
xxviii. 1953Discovery of the “Seven Sisters” the 7 major oil companies who controlled 82% of world crude reserves, 80% of world production, and 76% of refineries. And they illegally conspired to suppress competition. Truman decided to resolve issue by civil litigation rather than through criminal proceedings out of fear of loosing control of Middle Eastern Oil (Maugeri 73). Seven sisters are as follows:
1. Exxon (Standard Oil New Jersey)
2. Texaco (Texas Oil Company)
3. Chevron (Standard Oil California)
4. Mobil (Standard Oil new York-Vacuum oil)
5. Gulf Oil
6. Royal Dutch Shell
7. BP (Anglo-Iranian oil company)
xxix. 1955 Nasser incites Arabs to strike—against King Saud’s (of Saudi Arabia) orders.
xxx. 1969 Libyan Coup lead by Muhammar al-Qaddafi is successful. Like Nasser, Qaddafi desired to gain the upper hand with foreign oil companies. Both Nasser and Qaddafi changed the Arab viewpoint on relations with foreign oil companies.
xxxi. 1971 OPEC (Organization of Petroleum Exporting Countries) approves a 45-55 profit-sharing formula for all members. Inspired by Quaddafi (no surprise there).
xxxii. 1990 Suddam Hussein successfully attacked and obtained control of Kuwait. Frustrated at loosing the war with Iran in the 80’s (and obtaining an enormous deficit in the process), felt that Kuwait was drawing too much oil from a field which lay under their mutual border—essentially loosing Iraq the commodity needed to repair Iraq’s deficit.
1. This maneuver gained him 20% of the world’s known oil reserves, a situation untenable to the major players in the oil industry.
2. The UN placed an embargo on both Iraqi and Kuwait oil expecting Hussein to give up.
3. After several months of strangulation and military defeat when war was finally launched against him, Hussein lit over 800 oil wells, refineries, and storage on fire. The age old, If I can’t have it no-one can complex.
4. This caused the international oil companies to pursue oil profits in other, non-OPEC countries. One of these prospects was the Caspian region.
xxxiii. 1991 the USSR dissolves, and 15 new nations states gain independence. Turbulence, instability, and desperate desire for independence ensue.
1. Oil rich Central Asian and Caucasus countries all face similar dilemmas:
a. Land locked
i. Pipelines only to Russia—preventing economic independence
ii. Lack of financing and engineers to build new transportation systems for oil and gas
b. Desire to gain independence from Russia
i. “We would prefer to eat grass if only we could be independent from Russia” economist Nia Lomadze (Kleveman 39)
c. Rotten with corruption and rife with civil wars
i. Armenia and Azerbaijan most importantly: Russia backed Armenia in gaining control of the Nagorno-Karabakh province. This sparked militant focus for Azeri rather than stabilization and growth—ultimately keeping the small oil rich country under Russia’s thumb.
2. Kazakhstan had a far better start, having already negotiated a pipeline (prior to USSR dissolution) with Chevron for development of their Tengiz oilfield (Caspian area).
a. They finalized the oil deal with chevron as early as 1993.
b. 1994 OKIOK (Offshore Kazakhstan International Operating Co.) began a seismic survey of the Kazakh-Caspian Shelf.
i. 2000 discovery of the world’s larges oilfield in 30 years (Kashagan) with something like 30-50 bb barrels of oil.
3. 1993 BP headed the contract with Azerbaijan and other small oil companies—labeling their endeavor as the AIOC (Azerbaijan International Operating Company.
4. Several Options for exportation of oil soon brought several oil hungry nations out of the woodwork:
a. Russia was the cheapest route, but undesirable to all new nation states
b. Iran, the next cheapest option: Undesirable to the US for political reasons
c. Turkey’s control of the Bosporus straight (difficult for tankers to navigate—several disastrous incidents caused Turkey to threaten limiting the number of tankers allowed to navigate the narrow straight.
d. China, Turkmenistan, and Kazakhstan
e. Kazakhstan with Iran, Russia, Turkmenistan, and (via Afghanistan) Iran and Pakistan
f. Turkmenistan with Turkey—via Azerbaijan and Georgia
g. Azerbaijan with Russia, Iran and Turkey
h. … And the list goes on, as countries desire to profit by forming an alliance similar to marrying their princess to their neighboring country’s prince.
5. 1998 a new pipeline actually emerges: connecting Baku to Supsa, a Georgian Port on the Black Sea (issue of Turkey limiting tankers)
6. 2002 another pipeline is completed connecting Kazakhstan’s Tengiz field to the Russian port of Novorossiysk—also on the Black Sea.
7. 2002 the scoffed at “Blue Stream” pipeline connecting Turkmenistan to Turkey by route of undersea pipe—achieving the first pipeline to be laid at phenomenal depths of 2150 meters!
8. Turkey (in the late 90’s) proposed a different plan that caught the attention of many would be international investors.
a. A pipeline stretching from Baku Azerbaijan to the Turkish port—Ceyhan. A pipeline more than 1000 miles in length. This idea, of course, was abhorrent to Russia.
b. The BTC pipeline began construction in 2005, and was completed last July (2006).
c. Recent articles have brought into light possible failures of the BTC construction. OPIC (essentially a “watchdog”) shows that there was knowledge of cracks and leakages in the pipeline coating—which could lead to corrosion and environmental damage. It seems that there was knowledge of this issue during construction, but choices were made to continue with the project.
i. Unsurprisingly—headlines from Armenian reporting agency, PanArmenian, “Pipeline construction resulted in ecological catastrophe on BTC Corridor” the interior of the article however shows that this is pure speculation.
ii. Similarly—Russian reporting agency, Regnum, with the headline, “BTC Pipeline goes to pieces” also makes speculatory claims that an environmental disaster has occurred.