PERSIAN OIL FIELDS

Otago Daily Times, Issue 19013, 8 November 1923, Page 7

PERSIAN OIL FIELDS

THE BRITISH RIGHTS. REPORTED OFPER BY DUTCH COMPANY. Press Association—By Telegraph—Copyrig n LONDON, November 6. The Daily Express says; “It is definitely stated that the Royal Dutch Oil Combine is negotiating for the purchase of the British Government’s holding in the Anglo-Persian Oil Company. It is understood that if a deal is effected it will entail a cash payment of £12,000,000.’’ — A. and N.Z. Cable. The modern story of oil in Persia to date is almost exclusively the story of the Anglo-Persian Oil Company, for no other interests are represented there in producing, refining, or selling. Title to something over a half interest in tho AngloPersian Company rests with the British Government, while thfe Persian Government and a group of its subjects are partners in any profits made. The pioneer to whom credit is due for this present general interest in Persian oil was a British subject named William Knox d’Arcy, who journeyed into the Bakhtiari Hills more than 20 years ago in a search for petroleum. After varied negotiations, he received from the Shah, in May, 1901, a concession carrying the exclusive right for 60 years to drill for, produce, pipe, and carry away oil and petroleum products throughout the whole Persian Empire, with the execution of the provinces of Azerbaijan, Ghilan, Mazandernn, Astrabad, and Khorassan. This concession covered 500,000 square miles in area, and comprised about the southern three-quarters of Persia, reserving to the Government 15 per cent, of the net profits derived from operations under the concession. In 1902 the Anglo-Persthn Oil Company (Ltd. ) was formed with a capital consisting of 5,000,000 dollars fully-paid ordinary shares and 5,000.000 dollars in cumulative 6 per cent, participating preference shares. The company has power to create debenture stock to the extent of half the share capital. The present capitalisation is approximately 98.775.000 dollars. Fifty miles north-east of Ahwaz, on the Karun River, is Maidun-i-Naftun, the main producing field. Following a series of somewhat disappointing results, when, it is said, serious thoughts of abandoning the whole project had been entertained, d’Arcy, who had hoard of oil seepages in the vicinity of Shuster, sent men to examine them in spite of much local native opposition, and in consequence of the favourable renorls received drilling was undertaken. The oil sand was reached in the first well at 1100 ft. Oil flowed at high pressure, and reached a height of 70ft, carrying away the derrick. Development proceeded with such _ success that it was not long before a considerable initial production was attained at Maidun-i-Naftun. By 1915 the field was reported to bo producing annually about 4,500,000 barrels. With the huge demand for oil which tho war developed, the Persian fields supplied a. substantial part of the British needs. To handle the oil production there has been erected a complete refinery at Abadan, an island in the Shatt-al-Arab River 15'0 miles below the oil fields, which has become a veritable hive of industry, with its tills, railroad lines, tankage, and employees’ houses. Abadan possesses, including families of staff, employees, and the adjacent native village, a population of somewhere in the neighbourhood of 8000 people. The refinery area is over two square miles. Many extensions to the plant “wore under contemplation during the war period, and most of these are now working. The present capacity of this plant is said to be about 55.000 barrels per day. The oil produced at Maidun-i-Naftun is a light gravity crude, about 57 degrees Baurne. It'is high quality, containing a large percentage of benzine, kerosene, and lubricating oils, as well as fuel oil of high calorific value, and a percentage of paraffin wax. The main well on the property, F 7, which has been a chief source of production for a number of years, has produced 26.000.000 barrels in the last 10 years, and there is a present daily yield of 13.000 barrels. The fact that throughout this field all the wells hitherto brought in have been flowing ones with constant pressure at the head has resulted in low producing cost. According <o reports published some months ago tlie Persian fields are producing 65,000 barrels daily, as compared with <IO.OOO in 1921. Tlie former figure would thus give an annual total of somewhere about 24.000.000 barrels, but this appears to be a conservative eslirmte of th’s find's capacity. It has lv»n publicly stated that while it is impossible te make a definite estimate ns to this field’s staving oizalit’es, all evidence points to an extensive life with an aggregate nrodiWlon much in excess of the present output. A recent return of world netroleum production gives some idea of Persia’s present position in tfio o’l world. From being, iust a little over 12 years ago. a practiocllv unknown oil eountrv, in 1921 she find crept into fourth place in the world’s oil production, end bearing in mind t’— *- the whole area of tt,o ..-.reocsion is 500 epo ‘omro miles and that tli° area producing this aunntitv >s sa ; d to be t’-'-ee and SOliaTe miles. it man easily hanp»n that Persia will turn out to be anoibw Mexico.