Monday, July 21, 2014

The Peak Of The Oil Wars - 10

Ottoman and Persian Empires circa 1912
This series has focused on the fundamental origins, in current civilization, of the thinking that resulted in the change to the use of oil as the fundamental source of energy.

In other words, Current Civilization's enslavement by addiction to the use of oil (Russia-Ukraine's part below).

It is also a story of a century of decisions which define the suicidal episodes of current civilization, a dynamic which we have found also applies to most civilizations, empires, and societies (Civilization Is Now On Suicide Watch).

The graphic to the upper-left shows the Ottoman Empire (now Turkey) and the Persian Empire (now Iran) circa 1912.

A few years prior to 1912, oil had been discovered in the Persian Empire:
In 1901 William Knox D'Arcy, a millionaire London socialite, negotiated an oil concession with Mozaffar al-Din Shah Qajar of Persia [now Iran]. He assumed exclusive rights to prospect for oil for 60 years in a vast tract of territory ... By 1908 having sunk more than £500,000 into their Persian venture and found no oil ... [however,] in a stroke of luck, struck oil shortly after on May 26, 1908 ... [thereafter those interested] created the Anglo-Persian Oil Company (APOC) ... Volume production of Persian oil products eventually started in 1913 from a refinery built at Abadan, for its first 50 years the largest oil refinery in the world (see Abadan Refinery). In 1913, shortly before World War I, APOC managers negotiated with a new customer, Winston Churchill [Britain], who was then First Lord of the Admiralty. Churchill, as a part of a three-year expansion program, sought to modernize Britain's navy by abandoning the use of coal. Furthermore, Churchill wanted to free Britain from its reliance on the Standard Oil [American] and Royal Dutch-Shell [Netherlands]  / Dutch / Brits] oil companies. In exchange for secure oil supplies for its ships, the British government injected new capital into the company and, in doing so, acquired a controlling interest in APOC. The contract that was set up between the British Government and APOC was to hold for 20 years. The British government also became a de facto hidden power behind the oil company ...
(Anglo-Persian Oil Company, emphasis added, see also Viva Egypt - 2). As for the Ottoman Empire, oil was discovered near Mosul:
Discovery of oil in 1908 at Masjid-i Suleiman in [what was then "Persia", now] Iran – an event that changed the fate of the Middle East – gave impetus to quest for oil in Mesopotamia [now Iraq]. Oil pursuits in Mesopotamia [now Iraq] were concentrated in Mosul, one of three provinces or "vilayets" constituting [Mesopotamia, now] Iraq under the Ottoman [Ottoman Empire] rule. Mosul was the northern province, the other two being Baghdad (in the middle) and Basra (in the south) provinces. Foreign geologists visited the area under the disguise of archeologists.

For a good part of the last century, interests of national governments were closely linked with the interests of oil companies, so much so that oil companies were de facto extensions of foreign-office establishments of the governments. The latter actively lobbied on behalf of the oil companies owned by their respective nationals. The oil companies, in return, would guarantee oil supply to respective governments – preferably at a substantial discount.

This symbiotic relationship manifested itself superbly when Turkish Petroleum Company (TPC), founded in 1911 and named as such in 1912 to exploit Mosul oil, was reorganized in March 1914 at a meeting held in Foreign Office in London where British and German diplomats sat next to executives of British and German banks and British and Dutch oil companies. Notwithstanding its name, TPC did not have Turkish participation. At that time World War I had not broken out yet, and Germans were welcome at TPC.

The British and Dutch were attracted to German participation because German banks had obtained a concession from the Ottomans in 1904 – a concession that in fact had been allowed to lapse. Calouste Gulbenkian, the consummate deal-maker of Armenian origin that helped found TPC, was not present at the meeting, but his interests were well looked after. He ended up with 5 percent share in TPC, though with no voting rights.
(The Quest for Oil, emphasis added). The video at the end of this post shows some additional Ottoman Empire oil fields up in the Black Sea area that were producing prior to WW I.

The same sort of deception was taking place against Persia [now Iran], according to a book published in 1912:
"The Persian Government, starting in December, 1909, had been seeking to obtain a loan of about $2,500,000 from the Russian and British Governments, but the conditions which the two Powers endeavored to impose upon the granting of this assistance was so dangerous to, and even destructive of, Persia's independence that the Medjlis [the Parliament] was compelled to reject them. Shortly thereafter Persia entered into negotiations with a private banking-house in London for a loan, and it was upon the point of being concluded on terms mutually satisfactory, when, in October, 1910, the negotiations were brought to an end through the action of the British Government, working in harmony with Russia, whereby Persia was prevented from realizing money on the crown jewels which she was ready to pledge for the loan. All this time Russia had been openly endeavoring to extort a number of valuable concessions from the Persian Medjlis as the price of withdrawing her troops from Northern Persia. The general attitude of the two Powers toward Persia was marked with increasing unfriendliness and hostility."
(The Strangling of Persia, Intro. p. liii, by W. Morgan Shuster, emphasis added). The year 1912, shortly before WW I, was a time when both of the empires shown on the map had oil resources within their borders, and both had predators circling around them.

That map was to change when the first world oil war (WW I) took place, as detailed in the "Blood and Oil" video below, a good look at that oil war.

In closing for today, (more in future posts), let's bring oil wars up to date:
When Russia seized Crimea in March, it acquired not just the Crimean landmass but also a maritime zone more than three times its size with the rights to underwater resources potentially worth trillions of dollars.

Russia portrayed the takeover as reclamation of its rightful territory, drawing no attention to the oil and gas rush that had recently been heating up in the Black Sea. But the move also extended Russia’s maritime boundaries, quietly giving Russia dominion over vast oil and gas reserves while dealing a crippling blow to Ukraine’s hopes for energy independence.

Russia did so under an international accord that gives nations sovereignty over areas up to 230 miles from their shorelines. It had tried, unsuccessfully, to gain access to energy resources in the same territory in a pact with Ukraine less than two years earlier.
(In Taking Crimea ..., emphasis added). Our current oil-based civilization has been warring over oil for over a century because of the mindset of Oil-Qaeda, the current "Jim Jones" that is deceiving and leading us toward mass suicide (MOMCOM's Mass Suicide & Murder Pact - 5).

The next post in this series is here, the previous post in this series is here.

A look at the phenomenon of "blood for oil" is depicted in this video:


  1. I think Crimea was more about the port than the oil.

  2. Russia has had the port access all along, with rights to have troops there.

    But the oil in the Black Sea belonged to Ukraine.

    Until Crimea wanted to re-join the Russian Federation.

    And did so by vote of its parliament and public.

    That means their boundary goes up to 230 miles into the Black Sea now.

    Where the oil is.

    The NY Times article in the post pointed out: "Russia portrayed the takeover as reclamation of its rightful territory, drawing no attention to the oil and gas rush that had recently been heating up in the Black Sea. But the move also extended Russia’s maritime boundaries, quietly giving Russia dominion over vast oil and gas reserves while dealing a crippling blow to Ukraine’s hopes for energy independence."

    Russia already had its fleet in the port all along, as agreed to years ago by everyone concerned.

    Russia had offered to develop the oil with Ukraine two years ago, but Russia was rebuffed.

    Now the Ukraine is rebuffed.

    Oil war over.

    Russia won.

  3. Hi Kathy,

    Russia has had Novorossiysk as its main port on the Black Sea for over a hundred and fifty years. Before that it was an Ottoman Empire port. "From 1722, the bay was commanded by the Ottoman fortress of Sujuk-Qale or Soğucak. After the coastline was ceded to Russia in 1829 as a result of the Russo-Turkish War, admirals Mikhail Lazarev and Nikolay Raevsky founded an eastern base for the Black Sea Fleet on the shore in 1838." (Wikipedia, "Novorossiysk").

    As to Sevastopol, the port you evidently alluded to and commenter Randy too: "The Russian lease on port facilities in Sevastopol, which, though the main base of Russia's Black Sea Fleet, is [was] part of Ukraine, was set to expire in 2017. Ukraine was reported to be planning to not renew the lease; however, in April 2010 the Russian and Ukrainian presidents signed an agreement to extend the lease by twenty-five years, with an option of further extension of five years after the new term expires." (Wikipedia, "Sevastopol").

    I agree with the NY Times writer I quoted: "... the move also extended Russia’s maritime boundaries, quietly giving Russia dominion over vast oil and gas reserves while dealing a crippling blow to Ukraine’s hopes for energy independence."

    Trillions of dollars worth of oil booty in the most recent oil war.

    Hope they let it stay in the ground for global warming's sake.

    June was the hottest in history, and the ocean is at it's hottest of all recorded history.

  4. Randy, Dredd, while you both make good points, rational, etc, Hillaty and Her donors, and the so called Powers That Be, are still trying to encircle Russia, shoving NATO right up their @#$. Yes, I do be;lieve that during the lead up to Sochi Russia has intel that there would be a push to replace the president of Ukraine, and than a cancelation of the lease for the port in Crimea. The same powers that be want Russia out of its Med port in Syria.

    I do not discount the oil angle, but that, IMO, is NOT what provoked Putin to action. Putin/Russia have more oil/gas than they can get rid of, they do not need the Crimea oil, instead, they want to build South Stream. )Note that gas prices are falling.)

  5. Kathy,

    The fallout between the Ukrainians themselves was about oil, and gas, and the NATO aggression was a factor that helped divide them.

    There was a tug of war involving ExxonMobil and the usual suspects:"The ongoing political standoff in Crimea has already halted Ukraine’s oil and gas ambitions. Ukraine came close to inking a deal with a consortium of international oil companies that would have led to an initial $735 million investment to drill two offshore wells. The consortium led by ExxonMobil – with stakes held by Shell, Romania’s OMV Petrom, and Ukraine’s Nadra Ukrainy – had been particularly interested in the Skifska field in the Black Sea, which holds an estimated 200 to 250 billion cubic meters of natural gas. If it can get the field up and running, Exxon hopes to eventually produce 5 billion cubic meters per year. Exxon’s consortium outbid Russian oil company Lukoil for the rights to the block.

    Those plans were still in the early stages – the consortium and the Ukrainian government led by Viktor Yanukovych couldn’t agree on terms. Obviously, once Yanukovych was ousted, ExxonMobil had to put those plans on hold until further notice.

    Exxon’s plans for Skifska may not have a future if Russia simply takes Ukraine’s assets. The speaker of Crimea’s parliament said on March 13 that its oilfields should be under the care of Moscow. "Russia, and Gazprom, should take care of the oil and gas production,” said Vladimir Konstantinov. The new Ukrainian government in Kiev may not have much control over the situation if Crimea’s government nationalizes Chornomorneftegaz and its assets. Ukraine had been optimistic about developing its offshore oil and gas reserves, but after Sunday’s referendum, those reserves may suddenly be in Crimean (or Russian) territory

  6. BTW, that article I provided a link to was published in March of this year.

  7. The oil and gas war history mentioned in my post is not controversial, it is plain, out in the open, written, and well documented history.

    The same players in this oil war, which has been going on for a century, were urging those in what was once the Ottoman Empire, to favor Europe in this episode involving a Black Sea oil and gas tug and pull.

    Commenter Randy linked to a March article by authoritative sources which chronicled a Ukrainian internal tug and pull, encouraged by European nations (egged on by Washington) on one side, with Russia exerting influence on the other side.

    Another article from that same authoritative site updates us on the issue:

    "Russia’s annexation of Crimea has totally upended Kiev’s plans for Black Sea and Sea of Azov offshore oil and natural gas production.

    Before the peninsula’s March 16 independence referendum, followed two days later by Russian annexation, Ukraine’s state-owned Chornomornaftogaz (“Chernomorneftegaz” in Russian) owned 17 hydrocarbon fields, including 11 natural gas fields, four gas condensate fields, and two oil fields, along with 13 offshore platforms in the Black Sea and Sea of Azov.

    Among foreign companies interested in Crimea’s offshore hydrocarbon assets were ExxonMobil, Royal Dutch Shell and Petrom.

    Pre-annexation, Chornomornaftohaz also held a 100 percent interest in five offshore license blocs – Vostochno-Kazantipskoe in the Sea of Azov and Odesskoe, Bezymiannoe, Subbotina and Palasa in the Black Sea. Crimea was third in Ukrainian natural gas production after the Kharkov and Poltava regions.

    After the referendum, the Crimean Parliament nationalized both Chornomornaftohaz and state-owned Ukrtransgaz, which owned the national gas transmission network belonging to Ukraine’s state-owned Naftogaz company. It then chartered a new company, the Crimean republican enterprise (PKK) "Chernomorneftegaz." The Crimean Parliament also claimed the peninsula’s "continental shelf and exclusive economic zone" in the Black Sea.

    On March 26, Crimea’s Supreme Council speaker Vladimir Konstantinov told journalists that the nationalization of the Ukrainian Chornomornaftohaz state company had been fully completed, adding that the enterprise had a new director and was “working normally.”

    Russia’s annexation of Crimea has also had an immediate and chilling effect on the energy deals that ousted Ukrainian President Viktor Yanukovych’s government had been negotiating with foreign energy firms. On March 19, Royal Dutch Shell announced that it was abandoning negotiations to sign a production sharing agreement (PSA) to develop Crimea’s offshore Skifska field, saying it had “decided to focus its strengths and capital on other opportunities in our world projects portfolio.”

    Ukraine’s transitional government was quick to respond to its Crimean losses. On April 3, Minister of Justice Pavel Petrenko announced that a review of Ukraine’s “losses in Crimea, including Ministry of Energy property, the Black Sea shelf and Chornomornaftohaz, and Ministry of Infrastructure and Transport property (railway, real estate, ships and planes” had been completed with an eye toward launching a case at the Council of Europe to recover compensation for damages.
    " (Russia Claims Ukraine’s Black Sea Oil And Gas Bounty, May 2014). Let's face reality, this was an oil war that Russia won --an oil war that everyone else involved lost.

  8. You are right that Western Ukraine, the Clinton Foundation and their supporters and the EU were focused on Crimea's oil. But Russia was not so much. Instead, my intelligence sources provided verifiable info that after taking over Ukraine, NATO et al would move to cancel/not renew port leases to Russia. It is the threat to their ports in Crimea that provoked Putin. Again, yes, European interests were focused on oil, while Putin wanted to insure access to warm water port. At any rate, Crimea should be a part of Russia. China will continue to build the bridge.

    1. "in April 2010 the Russian and Ukrainian presidents signed an agreement to extend the lease by twenty-five years, with an option of further extension of five years after the new term expires." --comment up-thread quoting Wikipedia

      2017 + 25 = 2042

      Four years ago it was extended to 2042 with Russia having an option to extend it further.

      What is it that you do not understand about this Kathy?

      Your "intelligence sources" aren't.

  9. Kathy pointed out China, which is a big player in oil dynamics with Russia because they both want to remove the dollar as the international currency for paying for petroleum.

    That is very big.

  10. Compare what Russia "paid" for the Black Sea oil to what the U.S. paid for recent Iraqi oil ... don't forget the trillions in military expenditures and the blood spilled.

    In effect, Russia paid only a penny for every $1,000 the U.S. taxpayer paid.