The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

Finance Minister Abdullah Suleiman had skillfully, with the assistance of “Jack” Philby, negotiated the original Socal concession in 1933. But now, he regularly threatened to close down the entire oil operation unless Saudi Arabia were able to share in what he called “large company profits.” Suleiman’s demands seemed endless: Aramco should pay for construction projects; Aramco should contribute to a Saudi “welfare fund”; Aramco should advance new loans. “Each time the company agreed to one thing,” said Aramco’s general counsel, “there was always just one more.” But what the Saudis really wanted was a renegotiation of the original concession so that the government’s “take,” its share of the rents, would be much increased. Aramco was clearly a very profitable company, and they insisted that they get their rightful share. They wanted what the Venezuelans had already gotten. It was not just word of the deal the Venezuelans had recently struck that had traveled from Caracas. A Venezuelan delegation was promulgating the fifty-fifty concept throughout the Middle East, even going to the trouble of translating its documents into Arabic. The Venezuelans had not taken on these additional expenses sheerly out of altruism. In Caracas, it had become, as Romulo Betancourt observed, “increasingly evident that the competition from low-cost, high-volume production from the Middle East was a grave threat to Venezuela.” Best get those costs up, which would be accomplished if the Middle Easter...