Origins and History
Oman's growth into a successful oil- and gas-producing nation had humble beginnings — so humble, in fact, that it began with a dud. A geological survey of the country in 1925 found no conclusive evidence of oil. Twelve years later, however, when geologists began intensively searching for oil in neighbouring Saudi Arabia, Oman's Sultan Said bin Taimur granted a 75-year concession to the Iraq Petroleum Company (IPC). Pausing only for the Second World War, exploration for oil was underway in Oman.
The exploration and production operations were to be run on behalf of the IPC by Petroleum Development (Oman and Dhofar) Ltd. The operating company had four shareholders, each with an interest of 23.75%: the Royal Dutch/Shell Group, the Anglo-Persian Company (which would eventually become the British Petroleum Company, or BP), Compagnie Française des Pétroles (whose convoluted lineage would make it a predecessor of today’s TotalFina-Elf) and the Near East Development Company (whose likewise convoluted lineage would make it a subsidiary of today’s ExxonMobil). The remaining 5% stake was held by a fifth shareholder, Partex.
Having landed at Duqm in February 1954, IPC geologists were faced with tribal conflicts which made access to the most promising oil prospect, Jebel Fahud, difficult. They reached the jebel in October 1954 and began to survey the surrounding terrain. Supplies had to be transported from Duqm. In January 1956 the company started drilling its first well at Fahud but the hardships were all in vain: the well was dry. Later, when the supply line was switched to the Sumail Gap, warring tribes were able to disrupt convoys and bring operations to a halt.
Further dry wells were drilled and this lack of success, combined with worsening logistical problems and a glut of oil on the world market, led most of the partners to withdraw from the venture in 1960. Only Shell and Partex opted to remain in Oman to continue the search for oil. Their optimism was soon to pay off, however: they struck oil at Yibal in 1962 — and from these inauspicious beginnings an oil-producing nation was born.
Read more about this topic: Petroleum Development Oman
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