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

by Daniel Yergin

For the most part, oil operations outside the United States had been based on the concession system, the history of which reached back to William Knox D’Arcy and his bold and blind venture into Persia in 1901. Under the concession system, the oil company contractually obtained rights from a sovereign to explore for, own, and produce oil in a given territory, be it as large as D’Arcy’s original 480,000 square miles in Persia or Occidental’s 2,000 square miles in Libya. But now, as far as the oil exporters were concerned, concessions were already a thing of the past, holdovers from the defunct age of colonialism and imperialism, wholly inappropriate to the new age of decolonization, self-determination, and nationalism. Those countries did not want to be mere tax collectors. It was not only a question of garnering more of the rents. For the exporters, the greater question was sovereignty over their own natural resources. Everything else would be measured against that objective.