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Discovery and growth of O&G in the Middle East


Oil and gas middle gas

The Middle East's journey with oil and gas began centuries ago when ancient civilizations utilized surface seepages of crude oil for various purposes such as waterproofing and medicinal applications. However, it was the advent of the modern oil industry in the 19th century that truly unlocked the region's vast hydrocarbon potential. In this blog, we will explore the fascinating tale of how the discovery of oil and gas in the Middle East has reshaped the region's fortunes and the global energy landscape. To start off, where does the middle east stand in terms of its Oil reserves? According to the BP Statistical Review of World Energy 2022, Saudi Arabia's proven oil reserves were estimated to be around 298.7 billion barrels. According to the International Monetary Fund (IMF), oil-exporting countries in the Middle East and North Africa region collectively earned approximately $553 billion in oil export revenues in 2019. Several Middle Eastern countries, such as Saudi Arabia, UAE, and Kuwait, have established sovereign wealth funds to manage and invest their oil revenues for future generations. These funds are among the largest in the world and invest in various global assets. 1) Early Signs of Petroleum

Bitumen boat

The Middle East has a long history of interacting with petroleum. Early civilizations in the region, including the Sumerians and Babylonians, utilized natural oil seepages for medicinal purposes and waterproofing.


Bitumen, a naturally occurring form of petroleum, was collected from surface seepages and used as a sealant for their infrastructure.

Image ref : British museum 2) Birth of the Modern Oil Industry

Wiki : Edwin Drake

The birth of the modern oil industry can be attributed to Edwin Drake's successful drilling of the first commercial oil well in Pennsylvania, USA, in 1859. This breakthrough triggered a wave of oil exploration across the globe, including the Middle East. Image ref : Edwin Drake


3) William Knox D'Arcy's effort

Masjed

In 1908, British geologist William Knox D'Arcy struck oil in the deserts of Masjed Soleyman, southwestern Iran.

This discovery marked the Middle East's first major commercial oil find and laid the foundation for its status as an oil-rich region. Image ref : Masjed Soleyman 4) The Rise of Oil Titans

rig in a desert

Following the Masjed Soleyman discovery, exploration intensified in the Persian Gulf region.

Royal Dutch Shell and the Gulf Oil Corporation (now part of Chevron) were among the pioneering companies that secured oil concessions in the area. Image ref : Oil and Gas 5) The Saudi Arabian Gusher

Aramco

One of the most significant events in the Middle East's oil history occurred in 1938 when American geologists discovered vast oil reserves in the desolate eastern region of Saudi Arabia. This discovery eventually led to the formation of the Arabian American Oil Company (ARAMCO), now known as Saudi Aramco, the world's largest oil company. Image ref : Aramco


6) Nationalization and OPEC

OPEC

In the post-World War II era, many Middle Eastern countries sought to gain greater control over their oil resources.


The nationalization of oil industries in countries like Iran, Iraq, and Saudi Arabia led to the formation of national oil companies and increased the region's influence in the global oil market.

In 1960, the Organization of the Petroleum Exporting Countries (OPEC) was established, further solidifying the Middle East's position as a major oil-producing and exporting region. Image ref : OPEC


7) Oil and Gas Expansion

Oil and gas

As the world's demand for oil and gas grew, so did exploration efforts in the Middle East.


Alongside oil, natural gas emerged as an important energy resource in the region, with significant reserves found in countries such as Qatar, Iran, and the United Arab Emirates.

Image ref : NS Energy


Conclusion: The discovery and growth of oil and gas in the Middle East have been a transformative force, turning the region into a significant player in the global energy market. The abundance of hydrocarbons has catapulted several Middle Eastern countries into economic prosperity, facilitating infrastructure development, and funding social programs. However, challenges such as fluctuating oil prices, geopolitical tensions, and the need for sustainable energy solutions lie ahead. The Middle East must adapt to the changing energy landscape while responsibly managing its resources for a prosperous and harmonious future. Reach out to us if you have any questions or feedback!

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