140 mya - 140 million years ago
Middle East and North Sea oil forms from the continuous rain of dead
bodies of tiny plant and animal plankton in the seas of this time.
90 mya - 90 million years ago North and Central American oil forms from
the continuous rain of dead bodies of tiny plant and animal plankton in
the seas of this time.
74 mya - 75 million years
ago - oils generated from the organic-rich marine carbonates deposited
in the Jurassic era thermally mature and are expelled from the
carbonate rock into anhydrite capped reservoirs deep within the ground.
These trapped oils form the worlds largest oilfield, the super-giant
Ghawar field of Arabia.
1848 - the first ever oil well is drilled in Baku, Georgia.
1850 - most homes in the west are lit by smoky, smelly, whale oil
lamps. The beginning of a turn to clean burning kerosine.
1858 - The first oil well drilled on the continent of North
American is drilled in Ontario, Canada.
1859 - first ever U.S. oil well
drilled in Pennsylvania by the
Pennsylvania Rock Oil Company at the site of seeping oil at Oil Creek,
Titusville. Oil is struck at 21 meters. Numerous refineries spring up
in the oil region. Gasoline is an unwanted by-product of kerosine
refining.
1870 - John D Rockerfeller founds the Standard Oil Company.
1878 - Standard Oil controls 90% of the refining capacity in USA.
Kerosine for lighting is a main product, as whale oil for lighting is
now increasingly expensive as whale catches have peaked, and are
now declining year on year.
1877 - Worlds first oil tanker (steam driven) plys the Caspian sea,
carrying kerosine.
1878 - Invention of the lightbulb -death knell of the kerosine lamp.
1882 - Karl Benz, a German inventor, develops and builds the first
automobile. The vehicle uses 'benzine' distilled from coal. Later, Benz
switches to 'petroleum', refined from crude oil.
1892 - In a technological breakthrough, French car builder Peugeot
creates the first petrol-engined 4 wheel car that has rubber tyres.
1901 - Spindletop oilfield in Texas drills a well that gushes 100,000
barrels of oil a day.
1901 - William Knox D'Arcy, ultimate founder of British
Petroleum company, buys a 480,000 square mile concession from the Grand
Vizier in Teheran, Persia (Iran) to search for oil.
1901 - Englishman Wheatman Pearson buys oil concessions in Mexico.
1903 - Ford motor company incorporated.
1903 - the British Foreign
Secretary
warns Russia and Germany that Britain would "regard the
establishment of a naval base or of a fortified port in the Persian
Gulf by any other power as a very grave menace to British interests,
and we should certainly resist it with all the means at our disposal."
The economic importance of the region to colonial corporate interest
was recognised as a prize worth fighting for.
1905 - William Knox D'Arcy, in a partnership with the Burmah Oil
company, finally strikes oil in his Persian concession. The partners
form the Anglo-Persian Oil Company, later to be renamed British
Petroleum.
1906 - There are about 100,000 cars and trucks in USA.
1908 - First mass production of automobiles, with the introduction of
the model T ford.
1908 - Irans first oilfield, the Masjed
Soleiman field in southwestern Khuzestan Province, is discovered. It is
estimated to hold 6 billion barrels.
1908 - Shell oil buys oilfields in Egypt.
1910 - Shell oil buys the Ural-Caspian oilfields in Russia.
1910 - the British navy commences switching from coal powered ships to
oil powered ships.
1911 - In a world of relatively small companies, the oil companies are
already giants. Standard Oil and Royal Dutch Shell have oifields in
Indonesia, Russia, USA, Venuezuela and Mexico. These two giant
companies have pipelines, refineries, tankers, storage depots, and huge
shipping fleets operating worldwide.
1911 - Standard Oil found by US courts to be an "unreasonable" monopoly
as is broken up into 34 smaller companies.
1912 - Peugeot
create the first petrol engine with twin overhead cams and 4 valves per
cylinder.
1913 - world navies switch from burning coal (steam) to
increase the speed and range of warships.
1914 - The British Government takes a 51% holding in the Anglo-Persian
oil company just prior to world war 1, and changes the rules so that
only British citizens may be company directors. This company will
provide handsome profits to the British government treasury.
1914 - major
industrialised nations give up the gold standard whereby each currency
was fixed at a given amount of gold, and could be freely exchanged for
that physical gold equivalent. All balance of payment deficits between
one country and another were settled by transfer of gold, reducing the
currency available for circulation in the debtor nation and curbing
public spending in the debtor nation, thus driving down domestic prices
and making exports competitive once more.
By abandoning the gold standard, long term bonds could be raised to
finance war.
1914 - 1918 - oil found to be of even greater militarily importance as
use of trucks and
tanks in battle commences. First oil supply shortage, but the Allied
army has a
much greater access to oil.
“the Allied cause
has floated to victory upon a wave of oil.”
-Lord Curzon, member of the British War Cabinet
1918 - The British,
aware Mosul and Bhagdad are rich prospects, seize
the oil region of Mosul, fighting on after the armistice in order to
seize it, and block French interests in the area. In the aftermath of
the collapse of the Ottoman empire, Britain draws up the boundaries of
the British-created state of Iraq, making sure it contained the most
oil-prospective sectors for its oil companies. The UK Secretary of
the War Cabinet, noted in cabinet letter that oil was a “first
class war aim.”Curzon lies about UK economic interests, saying,
“Oil had not the remotest connection with my attitude over Mosul..”
1919 - The USA
Government, concerned about domestic oil shortages, and
without overseas sources, demands that USA oil companies be included in
concessions in Iraq. A new consortium was created, including USA
companies, and named the 'Iraq Petroleum Company'. It consisted of of
BP, Exxon, Gulf, Texaco, Mobil, and a private entrepreneur.
1919 - Shell buy Wheatman Pearson's by now large Mexican oil
concessions.
1919 - Exxon buys significant sized Texas oil company.
1920 - Exxon buys Russian oilfields.
1920's - 'roaring twenties'
- the British Empire is declining, British Imperial forces are
overextended across the globe. British armed forces occupy
Iraq and spend 10 years 'pacifying' Iraq with poison gas, troops,
incendiary munitions and armoured vehicles in order to protect their
oil company interests. Maintaining the Imperial reach is a huge
drain on government funds. As a result, Britain has a huge government
budget deficit, which it 'manages' by devaluing the pound and borrowing
heavily from overseas. It imports far more by value than it exports,
i.e. has a huge foreign trade deficit. By the late 1920's the western
world start to abandon 'holding' British pound debt and repatriate
their capital. The pound falls
heavily as a currency of value.
In USA,
from 1921 to 1929, there is a huge expansion of easy credit.
Undercapitalized banks and loan agencies proliferate. Huge amounts - an
estimated $US28 billion - of money are created through easy loans.
Banks cut each others throats to match low interest rates and attract
borrowers. America promotes unsound loans of American dollars overseas
in order to stimulate overseas markets to buy US farm exports, thus
keeping unemployment in the USA low.
1920's - Competition
between oil companies is fierce, with much price
slashing and below-cost selling to gain market share. The two main oil
exporting countries are USA and Mexico. All oil prices are
'benchmarked' to the price of oil in the Gulf of Mexico plus
transportation costs from the Gulf of Mexico to the point of delivery,
regardless of where in the world the oil was actually produced or
actually delivered. All contracts are in USA dollars.
1920 - there are approximately 9 million cars in USA, consuming about 3
billion US gallons of petroleum a year. The US Geological Survey
expresses concern that at this rate of consumption, there may be only
enough oil for about the next 20 years.
1924 - North America is by far the world's largest oil producer,
pumping out 2.3 million barrels a day. Europe is a far distant second,
producing 179,000 barrels a day. The Far East produces 95,000 barrels
of crude a day, and the Middle East, only 83,000 barrels of oil a day.
1926 - Arabian tribal king, Ibn Saud, completes his conquest of the
Arabian Peninsular and names the country after his family - 'Saudi'
Arabia.
1927 - Gulf oil buy the oil concession of the Sheikdom of Kuwait.
1928 - (september) Major USA and
UK oil companies Exxon, Shell, and BP meet at Achnacarry
Castle in Scotland and agree not to compete
against each other in a global price-fixing collusion.
1928 - An agreement is signed
by USA and the UK giving the Iraq
Petroleum Company
oil-drilling rights in every part of the old Ottoman Empire, from
Turkey to the southern tip of Saudi Arabia. In the post-Ottoman
era boundaries were somewhat fluid, so a red line was drawn by USA and
UK on a map to show what areas where covered. This came to be known as
the 'red line agreement'. The line enclosed almost all likely oil
prospects, except for Kuwait and Persia (Iran).
The Iraqi British 'puppet' government 'settles' on a royalty of 4
gold shillings per ton. Oil companies make a profit of around two times the sum
they pay the Iraqi government.
1929 - The 'great depression'. USA credit bubble collapses as shonky US
banks fail in July 1929, paper companies on the US sharemarket fail and
the sharemarket bubble pops in october 1929.
1930 - by the early months of 1930 the USA economy more or less
collapses.There is 30% unemployment, house prices collapse, domestic
farming prices fall as spending power disappears. Small farmers in some
impoverished states with endemic erosion problems are badly hit, other
regions are much less badly affected. In the UK there is depression in
the north, but little effect in the south as new industries around
based on electricity and new technologies expand.
1930 - USA imposes the Smoot-Hawley tariffs to protect local industry.
The US protectionist anti-fair trade impulse first established by the
US Constitution is re-invigorated. World trading economies are chilled.
1932 - Iraq is
granted independence by Britain, the occupying power. But Britain
continues to rule by indirect proxy means and via stooges. It leaves a
large military force and a large military air base in the
country to ensure it's highly profitable oil interests are protected.
1933 may 29th - King Saud follows the advise of his English advisor
Harry Philby
and sells a concession to Standard Oil of California to search for oil
reserves.
Short of capital, Standard Oil of California (SOCAL) on-sells half its
concession in
Saudi Arabia to Texaco, via a joint venture called Aramco.
1934 - Gulf Oil and BP form a joint venture to develop prospects in
Kuwait.
1938 - First Middle East oil well commences production at Dhuhran,
eastern Saudi Arabia.
1938 - Kuwaits giant Burgan
field
discovered by the Gulf Oil-BP joint venture.
1938 - Mexico nationalises all 17 foreign oil companies controlling
Mexico's oil resource, and established the state run Permex company.
Permex is forced to pay compensation for nationalised fields.
World War II - Britain attempts to persuade King Saud to transfer the
Texaco-Standard Oil concession to BP by advancing the King around 20
million dollars. The American companies lobby USA president Roosevelt,
and the USA government trumps the British offer. Britain and Russia
invade Iran to secure oil and supply routes after the 'shah' of Iran
harbours nazi operatives.
USA supplies allies with goods to
prosecute the war, including most of the oil. Payment in gold is
demanded. USA accumulates a large
portion of the worlds gold reserves.
1941 (July) - USA freezes all Japan's financial assets in USA.
These
assets were used by Japan to pay for oil imports - 80% of which come
from USA. Three days later Japan invades Indonesia to seize control of
the Royal Shell Petroleum oil fields in southern Indonesia.
1943 - Realising the huge strategic importance of oil to a modern
army, President Roosevelt declares the "the defense of Saudi
Arabia is vital to the defense of the United States."
1944 -
Bretton Woods agreement leads to the gold standard being re-introduced,
but this time the US dollar is allowed to be exchanged for gold - i.e.
a gold/US dollar interchange standard, but only with foreign
governments, not citizens. IMF established, with USA having
veto rights on any major decisions made.
1945 - As oil is of clear
military strategic significance, US President
Roosevelt meets with King Abd al-Aziz Ibn Saud,
feudal monarch of the around 5 million people of the vast Arabian
desert and commandeer of vast Arabian oil reserves. Agreement is
reached to protect the founder of the Saud dynasty
from competitors and external forces in return for privileged access to
Saudi oil. Secret plans are made to destroy oil fields - even nuclear
bombs are considered - if the Russians gain influence or control of the
Saudi fields.
1945 - The USA government forms an agreement with Saud that Aramco
would pay it's USA taxes to Saud, not to the USA government. This
became known in USA government circles as 'the golden gimmick' that
kept Saudi Arabia happy while USA supported the return of some of the
'Israeli' arab diaspora into a specially contrived 'homeland' separated
from the other indigenous arab tribes of the Palestinian area.
early 40's - US oil
companies - State Oil and Texaco bring Exxon and Mobil into the
partnership
Company, Aramco.
1945
- US State department recognises that the Middle East oil reserves
are "a stupendous source of strategic power, and one of the greatest material prizes in
world
history." ref
1940's and 1950's - Giant oil fields found in the Middle East,
including the world's largest oilfield (supposedly holding 115 billion
barrels of oil), the Ghawar field (discovered
in 1948, and first production in 1951). As
British colonialisation melts away, Middle East nations take back
control of their only significant resource, oil. Iran regains its own oil resources by
nationalising all oil production. Resentment of foreign control
of the impoversihed middle easts only worthwhile resource grows.
1945 - Oil from the Middle East
is so important in Europe that the oil price 'benchmark' is left at
Gulf of Mexico prices plus the actual cost of transport (i.e. not
the 'make believe' system of using the cost of transport as if from the
Gulf of Mexico for calculating the transport cost of Middle East oil to
Europe!).
1947
- The Arabian American Oil Company (ARAMCO) is formed in 1947 with the
Saudi feudal king, finally achieving the USA's objective of elbowing
British and French oil interests out of the Arabian Peninsular.
1947 - (october)
- first oil producing well drilled 10 miles offshore from Louisiana, in
the Gulf of Mexico, USA
1949 - Qatar's Dukhan
onshore oil and gas field comes into production.
1950 - the Saudi King demands a higher price for the oil concessions
granted Aramco. In response, the USA State department allows Aramco to
deduct the money paid to Saud from their USA tax liability, making oil
companies one of the lowest taxed industries in USA.
1950 - world oil
consumption is about 10 million barrels a day.
1950 - China uses about
10,000 tons of oil a month, almost all from domestic production.
1951 - The two most common plastics derived from petroleum products
(polythene is best known) are invented.
1951 - Korean war causes a boom in market economies as supply contracts
for the war stimulate western industries.
1951 - Iran elects Dr. Mossadeq Prime Minister. He nationalises the BP
oilfields and creates the 'National Iranian Oil Company'. BP boycotts
Iranian oil. The British Government uses a fighter plane to highjack a
Panamanian oiltanker that had loaded at an Iranian oil terminal and
force it to the British colony of Aden.
1951 - oil prices briefly spike, and with them, inflation (to around 8%)
1952 - USA Senate Committee releases a report 'The International
Petroleum Cartel' accusing the seven largest oil companies (the 'seven
sisters') of colluding to 'fix' world prices and 'fix' global market
share between them. However, with the change in presidency, the focus
of concern became 'the communist threat', and concerns about cartels
were forgotten.
1953 - USA's
CIA , with British help, backs a plot ('operation Ajax') against
the legal government of
Iran, successfully
installing their puppet, the son of the previous 'shah' of Iran,
complete with CIA trained secret police to murder and torture. The head
of the CIA at the
time, Allen Dulles, was previously a leading oil industry corporate
lawyer. American and British companies formed a consortium to buy and
develop Iranian oil resources. While nominally Iranian, the 'National
Iranian Oil Company' is placed under USA, British and French oil
company operational control.
1953 - USA Departments of State, Defense and Interior say USA oil
companies are instruments of US foreign policy.
1953
- USA government directive to USA oil companies says it is "in the
security interests of the United States" for those USA companies to
help "provide to the friendly
government of Iran substantial revenues on terms
which will protect the interests of the Western World in the petroleum
resources of the Middle East." The USA is ordering USA oil companies to
join a consortium to exclusively exploit Irans oil resources, as
was done in Saudi Arabia.
1953 - USA president calls for the antitrust actions being taken
against the USA oil companies to be dropped.
1954 - USA uses about 3 million
barrels a day in motor vehicles, and about 2 million barrels of oil a
day in industry. Another 1.5 million barrels or so are used in various
other sectors, including shipping and heating.
1954 - there are 511,000 oil wells in the
USA, with an average production of 12.4 barrels of crude a day .
1955 - USA oil companies now control 40% of Iranian oil production.
1956 - Suez Crisis - Egypt seizes the
Suez canal from the foreign-owned 'Suez Company'. With the main route
to the Mediterranean blocked, oil shortages develop and fuel prices
climb abruptly.
1956 - USA
geophysicist M King Hubbert predicts in a paper
presented to a meeting of the American Petroleum Institute that oil
production in continental US would peak sometime between 1965 and 1970.
He predicts world production will peak around the turn of the millenium.
1956 - The
number of motor vehicles in the UK is now 6.3 million.
Late 50's - following the Suez
fuel crisis, Germany produces a range of 'bubble cars', tiny cheap low
fuel consumption cars made to transport two people without getting wet.
The most popular are the three wheeled BMW Isetta, the Messeerschmitt,
and the Heinkel Trojan. The UK produces a few three wheelers -
Scootacar, Bond, Peel - before the mini is introduced in 1959, when
their popularity then plummets.
1960 - world oil consumption
about 20 million barrels a day. A plant at Abqaiq is built to compress and liquify the
waste petroleum gas into 'liquefied petroleum gas' (LPG). The 'natural
gasoline' liquids in the gas were also captures. Previously the gas was
'flared off' at the wellhead as there was no market for it, piping it
onshore to remove it was hugely expensive, and it often contained elements corrosive to the oil pipelines.
1960 - ARAMCO finds a way to use the waste gas from oil fields. 1960, the company constructs
a plant in Abqaiq, Saudi Arabia, to compress and liquefy what are
called natural gas
liquids (NGL) - composed of propane, butane and natural gasoline.
1960 - Peak of discovery of Chinese
oil, with nearly three quarters of
discoveries being in parts of giant fields. The Daquing megafield is
brought into production in may of this year.
1960 - OPEC forms with
five members - Iran, Iraq, Kuwait, Saudi Arabia
and Venezuela
mid 60's - historically, the peak of new oil discovery (in volume
terms), with an all-time annual record rate of 45 billion barrels of
oil discovered per year. The yearly consumption rate at this time was
about 15 billion barrels - far below the rate at which new discoveries
were adding to the global pool of oil reserves. Global oil reserves
continue to swell and build.
1961 - (april) E.F. Schumacher states in a report published by the UK
National Coal Board entitled 'Prospect for Coal'-
"The oil crisis will come, not when all the world's oil is
exhausted, but when world oil supplies cease to expand. If this point
is reached, as our exploratory calculation would suggest that it might,
in about twenty years' time [1980], when industrialization will have
spread right across the globe and the underdeveloped countries have had
their appetite for a higher standard of living thoroughly whetted,
although still finding themselves in dire poverty, what else could be
the result but an intense struggle for oil supplies, even a violent
struggle, in which any country with large needs and negligible
indigenous supplies will find itself in a very weak position."
1961 - December - first shipments
of LPG leave Saudi Arabia. Capacity is about 4,000 barrels of liquid a
day.
1958 to 1972 - price of oil slowly falls in real terms (inflation
adjusted), from $US3 (about $US15 when adjusted to 2005 dollars) in
1958, to $US3.75 in1972, i.e. about $US11
(2005 adjusted).
1952 to 1971 -
USA dollars pouring postwar reconstruction into Europe are not looked
on favorably, as the France, Germany and Switzerland regard the
printing of dollars as inflationary. Huge dollar printing to fund the
American war against Vietnam compounds the inflation. As a result,
European central banks convert the
greenback into its redeemable gold value from the USA central bank. The
20,000 tonness of USA Fort Knox gold
reserves falls to about 8,500
tonnes.
1965 - Russias giant
Samotlor field discovered. The Samotlor field has
reserves of about 57 million tons of high-viscosity oil
in Cenomanian deposits.
1967 - Iran - a
five-megawatt research nuclear reactor is given to Iran by the United
States under the Eisenhower 'Atoms for Peace Program'.
1967 - Arab oil embargo. Texas,
with unused production capacity, pumps furiously and floods world
markets with oil.
1967 - "In the absence
of the gold standard, there is no way to protect savings
from confiscation through inflation. There is no safe store of value.
If there were, the government would have to make its holding illegal,
as was done in the case of gold. If everyone decided, for example, to
convert all his bank deposits to silver or copper or any other good,
and thereafter declined to accept checks as payment for goods, bank
deposits would lose their purchasing power and government-created bank
credit would be worthless as a claim on goods." Alan Greenspan.
1967-1968 - Russias
giant Siberian fields developed.
1968 - the
giant Shaybah oilfield straddling the United Arab Emirate and Saudi
Arabian border is discovered. This field is one of the largest onshore
oilfields in the world.
1968 - USA one of North
Americas largest oil fields is found at Prudhoe
Bay in Alaska.
1969 - USA production of oil from
Prudhoe Bay starts.
1970 - major oil export
pipeline (the TAP line) taking oil from Saudi Arabia to the
Mediteranean is attacked in Syria. Oil has to be taken by tanker,
resulting in high tanker transport rates until the end of the year.
This is the first significant exposure of the vunerability of the west
to oil and gas pipeline attack as a means of political suasion.
1970 - (october) US (lower 48 states) oil peaks. US demand for petrol and
oil
products continues to increase.
1970 - USA produces
10 million barrels of oil a day (peak production, pretty much as Hubbert predicted).
1970 - Oil is about $US16 a barrel adjusted to todays (2005) dollars.
1970 - The USA Department of Commerce estimates the net assets of the
petroleum industry in the Middle East alone at $US1.5 billion, with a
profit yeild of $US1.2 billion - a return on investment of an
astonishing 79%,
1970 - (december) OPEC meeting sets a minimum tax rate of 55% on
foreign oil companies operating in OPEC countries.
1970 - UK
consumes 28 million tonnes of oil in road transport (private and
commercial).
1970 - UK now consumes 1.2
million tonnes of oil per year in rail transport (passenger and
freight).
1971 - Qatar, Libya,
United Arab Emirates, Algeria, Nigeria and Indonesia have added to
OPEC's member nations.
1971 - (feb 14) Foreign oil companies operating in OPEC countries
accept a 55% tax rate, and further progressive increases.
1971 - (feb 24) Algeria nationalises just over 50% of French oil
company concessions in Algeria.
1971 - (april 2) Saudi Arabia, Iraq, Algeria and Libya negiotiate an
increase in the price per barrel of oil delivered to the Mediterranean
from US$2.55 to US$3.45. The price is also indexed to inflation.
1971 - (july 31) Venezuela introduces a law to transfer
all "unexploited concession areas" to government
ownership by 1974.
1971 - (august 15) America under
Nixon
unilaterally
decouples the dollar from the gold
standard. The dollar can no longer be redeemed
for
gold. America now has
an "alarming"
federal budget deficit of 23 billion dollars. European banks prudential practise
to redeem US dollars holdings from the USA gold backing is unilaterally
defaulted on. USA, with huge debts it has no intention of paying with
real money (gold) is technically bankrupt.
Now the US dollar is the only world reserve currency
that can
be printed
at (USA) will. No longer is the dollar a benchmark currency
interchangeably backed
by gold, with other currencies pegged to it, with little need to adjust
relative values, little need for cross border currenct flow for
financing, and thus no ability to speculate on currency movements.
The
US dollar is currently the sole currency of trade for oil, so the
dollar is, for now,
backed and inter-changed with 'black gold'.
No longer backed by gold, and will vast amounts of dubious 'promise to
pay paper treasury bonds on issue' the US dollar devalues immediately.
Nixon brings down a 90-day wage, price, and rent
freeze to try to control inflation.
1971 - In the
US, oil is placed on governmental price control.
1971 - (september
22) - OPEC commences negotiations with oil companies
to raise oil prices to retrieve the value lost by the sudden drop in
value of the US dollar.
1971 - (december) - Libya nationalises the BP oil concession.
1971 - Norway - oil production commences.
1971 - Russias giant
Samotlor oil field in western Siberia commences production, initially
producing over 100,000 barrels of oil a day.
1971 - The single largest
gas reservoir in the world is found off the shores of Qatar.
Recoverable
reserve estimates are put at around 380 trillion cubic feet.
1971 - Up until now, Texas oil producers had held the balance of
power, manipulating oil price by limiting production. USA energy
requirements meant Texan rate limiting had to be abandoned, and OPEC
gains strategic degrees of freedom to copy the USA and rate limit
supply.
1972 - With rate limiting gone, production in Texas increases, but only
by very little - Texas oilfields have peaked at about 3.5 million
barrels a day.
1972 - (january 20) - Agreement is reached with Western oil companies
that crude oil prices from the Middle East will increase by 8.49% to
offset the loss rising from the devalued US dollar.
1972 - oil
interests contribute an estimated $US2.7 million to Richard Nixon's
campaign for presidency.
1972 - Iraq nationalises
some of
its oil. Exxon, BP, Shell and Chevron lose control of Iraq's oil.
1972 - Iraq's North Rumaylah field starts production, producing about
29 million barrels of crude.
1972 - Oil is just over $US2 a barrel in dollars of the day. Weak US
dollar means returns to exporters are lower than they seem.
1972 - large US oil companies maintain USA domestic reserves at low
levels, waiting to produce more when global prices rise again.
1972 - december 21 - OPEC (with the exception of Iraq)
signs an agreement with western oil companies providing for 25%
government ownership of all Western oil interests operating in Saudi Arabia, Kuwait, Qatar, and Abu Dhabi.
The agreement is to begin on January 1st, 1973. Ownership is to
increase to 51% by January 1st, 1983.
1972
- (september 11th) Chile - Democratically elected president Allende is
murdered by
military general Augusto Pinochet and his army conspirators in an act
of criminal terrorism sponsored by the USA presidential offices 'secret
agent' branch, the ironically named 'Criminal Investigation Agency'.
Pinochet, his army, airforce and navy form an 'axis of evil', whose
'rogue state' commits horrific crimes against humanity including the
brutal murder of more than 3,000
innocent citizens and the torture of 27,000 more.
The USA, a very very weakly democratic
country, says voters in Chile are "irresponsible" to exercise their
democratic right to select the government of their choice in their own
country; and the USA government says
that "irresponsible" behaviour (i.e. democracy) needs to be "rectified"
(i.e. subjugate citizens under an unelected, totalitarian, criminal,
fascist regime).
To rectify something is to make it 'right'.
Apparently murder and torture are 'right' in the view of the USA
government. Therefore, the USA government view of democracy must be
that democracy is
'wrong'.
1973
- (april) USA's Henry Kissinger, in a "Year of Europe" explicitly gives
voice to the USA administrations fear that Europe could become an
economic and political entity as strong as the U.S. and might develop
the same strong bilateral economic and political links with the Middle
East and North Africa America currently considers to be its 'right'. He
goes on to state that if that were ever allowed to happen, the U.S.
would no longer be the only pre-eminent world power. Clearly, the
doctrine of preventing economic rivals from having access to oil has deep roots.
"The illegal we do immediately. The
unconstitutional takes a little longer"
- Henry Kissinger, New York Times, Oct. 28, 1973
1973 - (jan) USA experiences a cold winter. Price controls are now
'voluntary'. Heavy demand and low US heating oil reserves cause a
shortage of product. Heating oil prices skyrocket. Price control on
heating oil is re-imposed.
1973 - (jan) Shah of Iran decrees that the 1954
operating agreement between a government and oil company consortium
would not be renewed when it expires in 1979. The consortium is made up
of USA's Standard Oil, SOCONY-Vacuum, Texas Oil, Gulf Oil,
Europe's Royal Dutch-Shell and Compagnie Francaise de Petroles. It
included the government backed but relatively
powerless Anglo-Iranian Oil Company (AIOC).
1973 - (march) USA re-imposes price control on the 23
largest oil companies selling oil products in USA.
1973 - (march) Iraq and oil consortium members agree to
nationalise oil immediately in return for a guarantee of 20 years
supply.
1973 - (june 14) USA has a 60 day price freeze
re-imposed by Nixon.
1973 - Oil is about $US8 a barrel in dollars of the day -
approximately $US13 in todays (Q1 2005) inflation-adjusted dollars
1973 - (september 1) Libya
takes a 51% part of nine foreign oil companies concessions
(Mobil, Esso, Texaco, Libyan-American (ARCO), SoCal,
Grace, Shell, Gelensberg, Libya/Sirte)
1973 - (october 6) The
Arab-Israeli
war. Syria and Egypt attack Israel. USA backs Israel. Syria and Egypt
suffer a humiliating defeat.
1973 - (october 7) Iraq nationalises Mobil and Exxon oil companies
23% share of Basrah Petroleum.
1973 - USA government
guarentees to support the tribally-based feudal Saud family
dictatorship in exchange for guarantees the Saud family will accept
only USA dollars for oil.
1973 - the
Saudi Government
increases its share in the US oil company Aramco (which has 'locked up'
the rights
to Saudi oil field exploration and production) from 'tiny' to 'minor'
(25%).
1973 - Arab
countries win control of their own oil resources by
nationalising all foreign oil businesses operating in their countries.
1973 - Saudi's Abqaiq oil field
peaks at just over a million barrels
a day.
1973 - USA is now importing 33%
of its oil requirements. It can no longer influence oil prices by
flooding the market with US oil to moderate prices
1973 - USA conventional natural gas
production peaks at about 63
billion cubic feet per day, or about 11.3 million barrels of oil
equivalent per day.
1973 - USA bankers
bring Japan, emerging as an industrial giant, into the dollar system.
Japan has no oil resources, so imports huge quantities of oil, which it
now agrees to pay for exclusively with American dollars, in effect
helping back the US dollar with
gold, black gold. Oil. The export
earnings are 'invested' in USA treasury bonds (IOU's written by the
American government). The Japanese funds help pay the US government
deficit.
1973 - (october 16) the so-called 'Gulf Six" - Saudi Arabia, Iran, Iraq,
Abu Dhabi, Kuwait - raise the posted price of Saudi light crude by 17%,
from $US3.12. to $US3.65 a barrel. Simultaneously, they announce they
will cut production.
1973 - (october
19-20) Oil embargo placed on Israel and it's supporters
in
the west by
OPEC to punish Israels western supporters. Saudi Arabia and other Gulf
states refuse to sell oil to the United States. (USA imports around 36%
of its oil needs.)
1973 - (november) - oil embargo now also includes Netherlands, Portugal, Rhodesia, and South Africa.
'The first oil crisis'. 5 million barrels a day are lost to world
production, with 1 million
barrel regained from extra pumping capacity by non-OPEC
suppliers. The nett drop in world production is about 7%. Gas station
run out of petrol. Petrol supply is
rationed in many western countries. Recession spanning late 1973 into
1974 in many Western countries, the worst since World War II.
1973 - USA - Oil shock
recession. 97
billion dollars is wiped from the New York stock exchange. The
Dow-Jones Stock Market index falls 47%. Some
interest rates hit 20%. Extensive unemployment and under-employment.
1973 (november 27) USA Nixon signs the Emergency Petroleum
Allocation Act to enable the government to control the production,
marketing, and pricing of petroleum in USA.
1973 -
The USA presidential/military/industrial complex considers (but does
not act on) plans to use the USA military to invade parts of Saudi
Arabia, Kuwait, and
Abu Dhabi and seize some of their biggest oil fields for USA use.
Instead, major OPEC countries are required
to 'invest' all their US
dollar profits from oil sales in USA treasury bills, with half the
interest payable by the USA in the form of USA goods and services -
substantial parts of it being USA built military equipment and training.
1973 - (november) USA -
The US president, Nixon, announces "Project Independence" which he
claims will free United States dependence on foreign oil by 1980. He is
unlikely to believe this is feasible - it is likely he is lying to the
public in order to justify US oil companies exploiting Alaskan
hydrocarbon resources.
1973 - USA trans Alaska
pipeline from ice bound Prudhoe Bay 800 miles to ice free Valdez is
initiated.
1974 -
(january) Kuwait takes 60% in the BP-Gulf Oil
Kuwaiti concession.
1974 - (early) Oil prices skyrocket by 400% due to OPEC continuing
to limit supply. Prices reach $US25, which is about $US40 in todays (Q1
2005) dollars.
1974 - (january) USA - law passed to limit speed to 55 miles per
hour in order to conserve petrol and diesel during the petrol shortage
crisis.
1974 - (january) USA - the winter is particularly cold. Natural gas
inventories are alarmingly low. The US government orders businesses,
shops, malls and all public buildings to reduce their hours of
operation during weekends and at night in order to conserve gas used
for space heating.
1974 - (january) USA -
independant truckers livelihood hit hard and
they strike in protest at the high cost of diesel and difficulty in
getting supply.
1974 - (february)
- USA - petrol now 50 cents a gallon (dollars of
the day). People 'garage' or sell large 'gas guzzling' cars, Some
switch to public transport, some buy small cars. Demand for fuel
efficient cars skyrockets within the space of a few months.
1974 -
(february 11) USA announces Nixons "project Independance' to make USA
energy independant.
1974 - (february
11) Libya nationalises the 3 USA oil
companies which refused to allow a Libyan controlling interest in september last year.
1974 - (march) OPEC embargo against USA ends. Embargo on other
countries continues. The repercussions continue to
reverberate through western economies.
1974
(june 4) - the Saudi Government
increases its share in the US oil company Aramco (which has the rights
to Saudi oil field exploration and production) to 60%.
1974 - (may) Nigeria takes a 55% controlling ownership of all
foreign oil concessions.
1974 - (june) - USA petrol
is about 55 cents a gallon, or $2.29 a gallon in 2005 dollars.
1974 - (june) German oil import costs have now risen by an additional
17 billion Deutchemarks. Inflation has reached 8%. Transport,
agriculture and the industrial sector have been badly hit, especially
energy intensive businesses such as steel production, chemical
industries and shipbuilding. The oil shock is estimated to have caused
500,000 job losses by now.
1974 - (october) Saudi Arabia increases the tax rate on
the oil consortium profits to 85% and royalty rate to 20%.
1974 - structural inflation from high oil prices has fed throughout
the western economies by the end of 1974. Inflation in western
oil-dependant economies is 11% - 15%. Resultant recession, with low
economic activity
and high unemployment, continues. The combination of stagnant economies
and high inflation is tagged 'stagflation'.
1974 - Less-developed
economies suffer a 400% overnight increase in the cost of energy
imports. Indias total foreign exchange
reserves of $US629 million cannot meet the the
oil import bill of $US1,241 million a year. This deficit in the
balance of
payments is now echoed around all the third world nations.
Developing countries now have an enormous trade deficit of $US35
billion, which is, unco-incidentally, four times (400%) larger than
their deficit prior to the 1973 oil shock.
1974
Onward - the 'petrodollar era -vast flood of dollars into Middle East
as USA and Europe have
to pay higher oil prices in US dollars. Deposited in US and UK banks,
these dollars were interest-bearing to the oil nations, so had to be
re-lent by the depository banks. Banks can loan 'fictional money' of up
to around 10% of actual deposits they hold. These 'imaginary dollars'
were re-lent as eurodollar
bonds to third world countries that didn't have the dollars to pay for
oil imports. This recycling from oil nations to third world nations and
back to oil nations became known as 'recycling petrodollars'. Banks
'clicked the ticket' via interest rates each time it went around. Both
banks and oil companies make huge profits from the third world.
1974 - In the USA, the consumer price index
increases by 12%. High meat prices spark consumer revolts. Some
Washington State butchers offer horsemeat for sale. Recipes for cheap
pasta based dishes abound. A drought in Washington State makes life
worse by reducing water supply to the hydro dams. Brown out results.
1974 - USA. The higher price of oil leads to an increase in the number
of US
wells brought into production, wells which prior to 1973 would not have
been economic to produce oil or gas from (and would have been regarded
as 'dry' for economic reasons, in spite of the presence of oil). It
also leads to the major US oil companies urging the Saudis to
pressurise their reservoirs with water to increase flow from the pumps,
in spite of the risk it might reduce the ultimate yeild expected from
the reservoirs.
1974 - UNESCO consultant Harry Lustig writes in 'Courier' monthly
magazine of January 1974 -
" To what extent is the world energy crisis upon us now and how much time do we have
before it will reach truly disasterous proportions?
What is the lead time necessary for producing needed technological
innovations and economic and social rearrangements?
How reliable are the estimates of fossil fuel reserves?
How long will the world's stocks of natural nuclear fuel last and how
good are the prospects for controlled fusion?
What is the relative availability , exploitability and cost (economic
and environmental) of the "natural" substitutes: solar, wind,
geothermal and tidal energy?"
1974 - Norways
Statfjord oilfield discovered.
Expressed in todays dollars (Q1 2005), oil prices will remain, on
average, around $US38 - $US40 level for the next 5 years.
1974 - Iran -
the 'shah' announces a policy of developing 23,000 megawatts of nuclear
energy in Iran for electricity and to desalinate water. It is clear to
the government that by 2100 Irans oil and gas reserves would be too
expensive to waste in generating electricty. The option of also
"exploring" its use for "military purposes" is quietly discussed with
USA and other Western states. The US react by using their influence with
to ensure that two US constructors, General Electric and Westinghouse,
have a preferred status in pitching their reactors to Iran. Ultimately,
the shah awards the contracts to France and Germany.
1975 - USA economy still in "the worst business slump since the great
depression". In the worst week, there are 1 million newly unemployed
register for jobless benefit. LA police department trains its officers
in crowd control in case of possible food riots.
1975 - (December 22) USA - law signed to establish a 'Strategic
Petroleum Reserve' as a result of the lesson of the 'oil shock'. It
also allows government control of domestic oil prices if necessary.
1975 - Saudi agree that
to accept
American dollars
exclusively for the
sale of their oil.
1975 - (december) Iraq completes the nationalisation of Basrah
oil by re-nationalising the concessions controlled by BP,
Shell and CFP.
1970's - as the US dollar
becomes the de facto world reserve
currency, central bank gold reserves become a 'non-performing
asset' as they do not yeild interest. Many central banks begin to
reduce their holdings
of gold.
1976 - number of USA oil
workers (mainly US controlled ARAMCO oil company) in extremely
fundementalist feudal
Saudi Arabia now peaks at 30,000. USA exports from the USA
industrial-government-military complex to Saudi Arabia reach $2.8
billion. Saudis increasingly concerned about US de facto economic
colonisation.
1976 - date all benefits
of Armaco are ear-marked to go to the Saudi
government in several years time.
1976 - Saudi Arabia has
somewhere between 5 and 10 billion dollars 'invested' in USA treasury
bonds by now. The dollar firms as a result, and the stockmarket has now
rebounded. 'Kindness' must be rewarded.
1976 - the year the last new
oil refinery is built in the USA
1976 - Saudi's Berri oil
field peaks at around 800,000 barrels a day.
1976 - China's Daqing
mega-oilfield peaks at 916,191
barrels crude a day.
1976
- USA president Ford signed a directive offering Iran an option to buy
and operate a US-built nuclear fuels reprocessing facility as part of
an Iraqi owned and operated nuclear energy program using Iraqs own
uranium deposits. The
proposal is for reactors powered by nuclear fuels processed from
Iraqi-mined yellowcake which are then
reprocessed after use in the reactor to extract plutonium. This
regenerated fissile material is then used as fuel once more. The
plutonium created from the spent nuclear fuel could, of course, be
further processed into a grade usable in nuclear weapons. The chief of
staff of the White House, Dick Cheney, and Secretary of Defense Donald
Rumsfeld both endorse the proposal.
1976 - oil (Saudi light) is $US12.37 a
barrel.
1977 (july) - USA -
The purchase of salt caverns in the Gulf of Mexico for the 'strategic
petroleum reserve' for use in emergencies
is now complete, and filling commences - 412,000 barrels of light crude
oil are deposited in
the first of the salt caverns in southern Louisiana and East Texas,
close by oil
refineries. Total capacity of the reserve is 117 million barrels.
1977 (july) - oil is $US13.66 a barrel.
1977 - USA - Oil imports are now
6.6 million barrels a day.
1977 - 8 billion dollars and 800
miles later, oil flows from
the
trans-Alaskan pipeline from Prudhoe Bay.
1977 - USA - Severe
winter co-incides with a natural gas shortage. Prices rise dramatically.
1977 - USA -
President Carter gives a televised address
in which he warned that oil consumption was exceeding the rate at which
new oil was being found and outlining a government programme of
conservation and switch to coal, nuclear, and renewable energy.
1977 - Iraq completes a pipeline from Kirkuk oilfields across Turkey to
a terminal in the Mediterranean at the port of Dortyol.
1977 - Saudi Arabia now produces 10 million barrels of crude a day.
1977 - Saudi
Arabia's production is cut in half due to a fire in a
separation facility in the Abqaiq field. Prices barely move, as many
other countries have spare capacity.
1978 - crude oil is $US14 a barrel.
1978 - Prudhoe Bay oil field pipeline
to Valdez (the Trans Alaska Pipeline) finally opens after 2 years of
construction and expenditure of around $US8 billion.
1978 - Saudi Arabia - last
exploration well brought into production from the salt domed structures
of northern Arabia, mostly offshore. Since start of exploration of this
province in 1938, 12 oilfields yeilding a million barrels a day of oil
were found. The earliest fields discovered have the greatest total
reserves. The 6 fields found 1938 to 1963 had total reserves of about
5,500 million barrels of oil. The 6
fields found this year have a total of about 1,000 million
barrels of oil.
1978 - (june) -
bloc of OPEC members seek higher prices for crude, and try to get
acceptance for oil being priced in a more stable currency than the US
dollar. Saudi Arabia and Iran block the move.
1978 - Iran's 'Shah' puts the country under military control as
agitation for a muslim religion-based state continues.
1978 - (october) Fire in an Iranian pipeline drops production by over
300,000 barrels a day.
1978 - (mid
december) Iranian production is 1.5 million barrels a day.
1978 - (end of december) Iranian production drops precipitously to
about 500,000 barrels a day.
1979 - OPEC, mainly Saudi, production increases by an additional 1.6
million barrels a day by end of february to make up Iran's shortfall as
Iranian domestic turmoil continues.
1979 - (january 20) Saudi Arabia turns up the heat by announcing that
it will cap its production at 9.5 million barrels a day during the
first quarter of 1979 (in the end it doesn't). Oil prices rise by 36%.
1979 - (january) USA uses its compulsory buy-sell laws to allocate
crude oil resources and to cap the price of oil products.
1979 - UK becomes oil independant - all domestic requirements are
met from the North Sea fields. However, while supply is secure, oil is
sold by the oil companies at global prices. The UK pays the same high
prices as everyone else, albeit the government receives a better
royalty.
1979 - Mexicos
supergiant oil field, the Cantarell Complex, with massive reserves of
35 billion barrels of oil, (destined to become the second largest oil
producing field in the world, after the massive supergiant Saudi Ghawar
field), comes into production.
1979 - Final
audit of Saudi oil fields by foreign
petroleum companies to establish true value of Saudi field assets.
The audit
established around 110
billion barrels of proven
reserves.
1979 - (feb 12) Iranian revolution commences as the Shah has fled and
the interim government loses the support of the military.
1979 - (march 5) Iran starts to export oil again.
1979 - (Q2) oil once more plentiful, but global stocks of refined
petrol have been drawn right down, and refineries are playing
'catch-up' and can't meet demand.
1979 - USA - Energy saving policies introduced, including requiring
public buildings to be heated no higher than 65 degrees in winter. In
order to conserve petrol, gas stations in some states open only on
alternate days.
1979 - July 15 - USA President Carter gives a speech tio the
nation -
"In little more than two decades, we've
gone from a position of energy
independence to one in which almost half the oil we use comes from
foreign countries, at prices that are going through the roof. Our
excessive dependence on OPEC has already taken a tremendous toll on our
economy and our people.
This is the direct cause of the long lines
which have made millions of you spend aggravating hours waiting for
gasoline. It's a cause of the increased inflation and unemployment that
we now face.
This intolerable dependence on foreign oil threatens our
economic independence and the very security of our nation."
1979 - Uranium
"yellowcake" spot prices reach a record high of $US43
1979 - (july 30) New Zealand faces a petroleum shortfall and
institutes fuel conservation measures, including 'carless days' when
owners must designate (via a windshield sticker) a day of the week on
which they will not drive their car. The speed limit is reduced, and
sale of gasoline in weekends is banned. The restrictions remain in
place for the next 6 months.
1979 - (october) Canada stops supplying light crude to USA refineries
in order to conserve domestic supplies.
1979 - (november) Iranian 'revolutionary guards' take USA embassy
hostages. USA stops all Iranian imports. Iran cancels all contracts
with USA oil companies.
1979 - (december) nervousness over the Iranian revolution continues.
Oil is
$US32.50 a barrel (dollars of the day)
1979 - USA president Carter sets up the US Central Command - a
military quick reaction strike force prepared to bomb, invade and
control any oil supplying Middle East country at any time the
presidential-administrative/military/industrial complex dictates.
1979 - the world uses about 63
million barrels a day.
1980 - USA - the Maryland
Cove Point LNG regasification plant is closed.
1980 (january) - Iranian 'shah'
deposed. The second
'oil shock'. Oil production
of 2 to 2.5
million barrels a day disappears from the market. 'The second oil
crisis'. Oil price
literally skyrocketed straight up from $US15 per barrel to nearly $US40
per barrel (dollars of the day), also partly fuelled by a surge (and
speculation) in the prices of commodities in general. In 2004 dollars
this is estimated at about $US110 a
barrel.
1980
(january 23rd) - following the deposing on the US supported 'shah' of
Iran
and the Russian invasion of Afghanistan, US
president Jimmy Carter establishes
what became known as 'the
Carter Doctrine', the doctrine of openingly using the presidents
military for
economic purposes - to
both secure
other
countries oil resources for USA use, and keep Middle East supply lines
under USA control.
"Let our position be absolutely clear: An
attempt by any
outside force
to
gain control of the
Persian Gulf region will be regarded as an
assault on the
vital interests
of the United States of America, and
such an assault will be repelled by
any means necessary,
including
military force." - President Jimmy Carter (emphases added)
The USA
presidential office will in
future use his soldiers to kill and maim civilians (including
children), to fight and themselves die, to either maintain direct
access
to (mainly)
Middle
East oil reserves, or maintain other nations oil-supply
access to the Middle East, whether via the Straits of Hormuz, or in
general.
A blockade in the Straits would make
no direct impact on USA as it gets less than 20% of its supply from the
Middle East; but if other countries cannot obtain Middle East oil they
will bid up the price of oil from other sources outside the Middle
East, oil that USA relies on.
1980 - USA
funds
and
supports Saudi
Arabia's Osama bin
Laden, amongst others, to fight the
Russians in
Afghanistan. He, and others like him, promote the brutally violent and
chauvinistic Saudi Arabian
fundementalist version of their religion - including killing anyone who
doesn't hold their particular religious views.
1980 - Saudi regime agrees to pump excess oil to keep prices low so
that Russia will have insufficient revenue to spend on the arms race at
the same time as it has to finance a brutal invasion of Afghanistan.
1980 - Saudi government given retroactive
ownership of all
Saudi
National oil via full ownership of Aramco. In addition, all financial
benefits of the company since 1976 are given to the Saudi government. Payback
time.
1980 - (september 17) Iraq unilaterally breaks the 1975 treaty with
Iran over territorial rights in the Shatt al-Arab waterway
and claims it in its entirety for itself.
1980 - (september 23) Iraq
invades Iran. Both sides bomb each others oil installations.
Iraqi
oil production falls by 2.7 million
barrels a day.
Iranian oil production falls by 600,000 barrels per day.
Oil prices reach an all time high - $US35 a barrel by years end, or
$US92 when translated to todays (Q1 2005) dollars (some commentators
compute it at $US80 in inflation adjusted terms, others at $US100,
inflation adjusted).
Gold price is
inflated by speculation to an all time high - $US840 in dollars of the
day.
1980 - Post
oil shock deep recession
in
the west. Structural oil-inflation helps overall inflation reach 10%,
unemployment in USA is 8%, interest rates reach nearly 20%.
Double digit interest rates mean some businesses and households can
no longer pay their savings and loan debts. The USA Federal
Deposit Insurance Corporation fails under the sudden burden of savings
institutes declaring bankruptcy, and has to be bailed out.
1980 - the deep recession
results in global "demand destruction" and
a
consequent drop in demand for crude. More than this, it prompted a move
to
insulation in new homes, retro-insulation of existing homes, attention
to energy efficiency in industry as well as in housing, and in
countries with heavily taxed petrol, a re-focus on fuel efficient cars
and public transport.
1980 -1988 - US and the UK governments and businesses supply Saddam
Husein with armaments, chemical and biological
weapons of mass destruction precursors, naval
support, military training, and access to satellite targeting.
As the Iraq-Iran war drags on, great
damage is done to oilfields and civil infrastructure on both sides.
Oil supply is interrupted. More than a million people are killed,
combatants and civilians alike.
1980-1981 - Oil supply shortfall
has created actual shortfalls in
supply in some countries. Some countries institute a system of carless
days, when private automobiles may not be driven on a self-selected
designated day. The car-less day is indicated by a sticker on the
windscreen. Transgressors are heavily fined.
1980-1981 - winter
heating oil in USA tips over $US2.50 a gallon in 2004 inflation
adjusted dollars.
1981 - US government removes price control on US domestic oil
produced, domestic producers raise their prices rapidly.
1981 - (january) major offensive by Iraq against Iran is beaten back
by the Iranians.
1981 - USA residual petrol price and allocation controls are lifted.
1981
- (march) 'oil shock' gasoline prices in USA reach an historic high -
$US1.42 per
gallon; inflation adjusted, about $US3.10 per gallon in 2005
dollars.
1981 - Predictions of crude oil prices reaching $US100 a barrel sets
off an oil exploration frenzy within USA
1981 - USA
has 324 refineries whose total capacity to refine crude oil is18.6
million barrels a day.
1981
- USA strategic reserve capacity is increased to 257
million barrels.
1981-1982. In the period 1979 to 1982
global oil demand growth
falls off by 9.6%.
1981 - the
East-West Crude Oil Pipeline (Petroline) operated by Mobil Oil Co is
completed. This single, 48-inch pipe line (AY-1) transports Arabian
light and super light crude to refineries in the Saudi Arabia's Western
Province and to terminals on the Red Sea for export to Europe. Capacity
is 1.85
million barrels a day.
1981-1982 - Recession drops demand for oil at the same time Saudi
Arabia completes major new pumping capacity. Oil glut results. OPEC
temporarily loses control of price setting for oil.
1981 - Saudi's Ghawar super-giant
field (the world's largest) peaks at a little less than a massive 5.7
million barrels a day.
1981 - Saudi's Safaniya field
peaks at a lttle more than 1.5 million barrels day.
1981 - Mexicos giant Cantarell complex reaches
peak of supply at 1.1 million barrels a day.
1981 - Russia giant
Samotlor field peaks
at about 3 million barrels a day. The around 16,700 wells of this
giant field produce close to a quarter of Russias oil, almost 150
million tons a year.
1982 - USA -
Texas oil production has now dropped by 29% since peak of production in
1972, in accordance with the curve described by Hubbards theory of oil
production in a field increasing, peaking, and declining.
1982 - Number of rigs
looking for oil and gas in USA (due to 1980
oil shock) has doubled
from 1980 levels.
1982 - (march) Syria closes the 400,000 barrel a day trans-Syria
pipeline carrying Iraqi oil in support of Iran.
1982 - (june) tide of war turns against Iraq. Iraq announces a
ceasefire. Iran pushes into Iraqi territory. Iraq responds by launching
missiles into Iran.
1982 - (august) Mexico defaults on the vast debt owed to banks recycling
petrodollars.
1983 - Colombia - USA's Occidental
petrol commence production from the giant Caňon-Limon field (with
reserves of 1.1 Gigabarrels).
1983 - Trading
in contracts for future supply (betting on whether oil will have
increased or decreased in price at a defined future date) commences on
the New York Mercantile Exchange. The previously used fixed long-term
supply contracts decline in importance. The existance of numerous
traders and re-traders helped keep willing supply ahead of demand, and
increased the quick replacement of oil lost from source (for whatever
eason) with oil from another source (via intermediaries). Targetted
embargoes are now virtually impossible - any oil sold to a trader can
be re-sold numerous times, and end up literally anywhere. The producing
country no longer controls the destination.
1983 - world consumes
reduced oil due to higher prices and recessionary effects - still only
roughly 55 million barrels
of oil a day.
1983 - (july - October) Heavy fighting between Iraq and Iran, with
Iraq
close to capturing the Kirkuk pipeline, and the USA threatening
military intervention to keep open the Persian Gulf tanker navigation
ways.
1984 - Iraq Iran war moves
into the "tanker war" phase.
44 ships and tankers - Saudi Arabian, Iranian, Iraqi, Kuwaiti - are attacked and damaged by Iraqi or
Iranian warplanes or mines.
1984 - Saudi LPG production capacity is now 600,000 barrels of liquid a
day.
1982 -1985 - Oil is now over-supplied, partly due to the 'demand
destruction' lingering on from the second 'oil shock', with Norway, UK
and Nigeria
cutting prices in 1984. Oil drops to about $US60 in
2004
dollar terms (in 1984 light crude
was around $US57 - $US69 in adjusted year 2005 terms). OPEC members
regularly exceed
their OPEC quotas as
there is no method of enforcing breaches. Saudi Arabia regularly acts
to cut its own output to try to prevent the price falling too far. OECD
and US escape the recession slipping into depression - resume
previous growth off the back of the balanced budgets of 1979/80.
1985 - after a series of oil price dips due to dampened demand
due to
previously high crude prices and OPEC lack of discipline, Norwegian and
North Sea oil comes on
stream creating even higher supply, OPECs market share falls by 50%.
New capacity allows better market balance.
These finds mark the very
temporary return to 'cheap oil' for
the next decade or so, until they
start to peak and the Middle East fields once more gain greater world
market share.
mid
1980's - Cheap oil and US government need to artificially back its
dollar with oil, combined with US 'petrodollar' greed, start to destroy
western manufacturing and jobs as USA banks, via the IMF,
require
deeply indebted third world countries to make their natural resources,
infrastructure assets,
and labour available very cheaply to foreign firms ('globalisation') as
a
price of rolling over their crippling
petrodollar debt. A debt now totally unmanageable due to interest
rate increases. A debt denominated in dollars, supporting USA ability
to print money. 'Outsourcing' starts to erode the viability of European
and USA manufacturing businesses as they can no longer compete with the
semi-slave conditions and absent pollution regulations of third world
labour and industry.
1980's - USA - uneconomic oil refineries are closed down.
1985 - continuous decline in USA capacity to produce oil
relative to
the previous years confirms USA oil fields have indeed passed their peak of
production and are declining overall. [2]
1985 - USA - increased local production plus residual demand
destruction keeps imports of oil to USA at 3.2 million barrels a day,
about half pre-oil shock levels.
1985 - Iraq and Iran commence heavy bombing of each others
cities, Iraq responds with lightening raids into Iran, Iran responds
with strikes against Iran's Kharg
Island oil terminal, from which a large part of
Iran's oil is exported.
late 1980's - Iran - work starts on rebuilding the war damaged
economy.
Hydrocarbons - oil and gas - are earmarked for sale to earn foreign
exchnage to fund reconstruction. Work starts on rebuilding the Bushehr
nuclear power plant to provide replacement electricity now provided by
oil and gas burning generators.
december 1985 - OPEC in
disarray as members undercut agreed prices in
order to secure market share. A price war develops. OPEC countries are
allowed to produce and sell oil in proportion to their reserves. The
more reserves a country reports it has, the more its share of the OPEC
quota it gets.
1986 - USA oil exploration industry is severly cuts as oil prices drop
(one of the biggest one day drops was from $US29.00 to $12.00 for Gulf
coast sweet). Staff cuts of experienced oil personnel reach 50% in some
firms. Many experienced riggers leave the industry entirely, as no jobs
can be
found. No young staff are taken on. As the domestic industry implodes
into depression,
some oilmen commit suicide, some escape to drugs and alcohol. Many take
enforced pay cuts.
1986 - Saudi
Arabia stops trying to keep prices up by cutting its
own production and links prices to the spot market. The Saudis increase
production from 2 million barrels a
day to 5 million barrels a day, substituting volume for reduced price.
In the face of this huge oversupply,
prices collapse below $10 a barrel (dollars of the day).
Expressed in todays dollars (Q1 2005), oil prices will once more
remain, on
average, around the $US38 - $US40 level for the next 15 years. Drilling
becomes much more cost effective, using enhanced techniques such as 3-D
seismic data, targeted directional drilling, and CO2
flooding to
maximise success and enhance productivity from existing reservoirs. In
spite of these techniques, exploration in USA is increasingly
unproductive, and exploration falls away steadily. The wells that are
drilled are much more successful than in earlier years. Technology
allows far more accurate
decision to be made about whether to drill or not, and only highly
prospective formations are tested.
1986 (may) - Iraq bombs a refinery in the capital city of Iran.
1986 (june and july) - Iraqi jets attack a satellite station and the
city of Arak in central Iran. Iran threatens to use missiles against
any gulf state supporting Iraq.
1986 - (august) Iran launches missiles against a refinery near
Bhagdad. Iraq responds by damaging the Iranian export terminal at Sirri Island.
1986 - (december) -
USA - unleaded petrol is now US0.80
cents a gallon.
1986 - Peru - The gas Camisea fields are discovered. Reserves are
estimated at 13 trillion cubic feet of natural gas and 660 million
barrels of condensate.
1987 - Monday October 19th - Global
stock market crash. Under conditions of cheap oil, frenzied buying and
selling of stock, some in 'shell' companies that produced nothing,
leads to insider trading and clampdown by regulators. In reaction,
institutional investors buy heavily into futures contracts to cut loss
in case of stock devaluations. In the USA, computers are now widely
used to automatically trigger 'sell' orders if stocks reach a certain
low point. As the USA dollar is devalued, the dollar-based Hong
Kong exchange is sold down. A cascade of more sellers of both stocks
and futures contracts than buyers leads to a lack of
buyer confidence, panic selling of stock and (wildy leveraged) futures
contracts. The Hong Kong market crashes, followed by Europe. In
USA a cascade of selling occurs, quickening pace as further computer
generated automatic sell
trigger points are reached, and with no time for buyers to step in..
$US500 billion of value in the Dow Jones index is wiped out - within 1
day. Other markets had similar experiences, with Hong Kong's crash the
most spectacular - over 45% of the value of the stocks on the
market wiped is out.
USA responds by creating the 'Working Group for Financial Markets',
known cynically as 'the Plunge Protection Team'. It is made up of of
the US Federal Reserve, the Dept of Treasury, the Securities &
Exchange Commission, and a few powerful banks & Wall Street stock
broking firms.
1987 - the UK government after many years finally ends its very
close association with the oil industry by abandoning its shareholding
in British Petroleum and relinquishing its seat on the board of this
private company.
1987 - The Saudi
(Aramco acquired control in 1984) East-West Petroline is now expanded due
to the 'tanker war' in the
Gulf to 3.2
million barrels a day, and a parallel 56-inch
pipeline (AY-1L) is added.
1987 - Iraq/Iran war continues unabated.
1988 - Iran accepts a ceasefire offered by Iraq.
1988
- Article in Scientific American called “The End of Cheap Oil” predicts
world oil production would peak in 2002 (it didn't) and warns “what our
society does face, and soon, is the end of the abundant and cheap oil
on which all industrial nations depend"
1988 - Vast Russian Shtokman gas field discovered in the Barents
Sea. It is believed to contain 113 trillion cubic feet of gas
and 31 million tonnes of condensate. The hugely difficult arctic
environment, and lack of capital, makes it impossible to develop.
1989 - Prudhoe Bay, which had
produced around 1.5 million
barrels a day for nearly 12
years reaches peak of its production.
1989 - Russia
Samotlor oil field now
produces about 2.75 million barrels of oil a day, and, only eight years
on, enters a period of very steep decline.
1990 -
Saudi Arabia re-estimate of its reserves takes them from 170
gigabarrels to a claimed 258 gigabarrels "overnight".
1990 - (august 2) Iraq invades Kuwait. Oil price almost
instantly
doubles, from $US15 to more than $US30 (dollars of the day) as 4
million barrels a day (544
000 tonnes/day) are removed from supply.
1990 - (august) USA
secretary of defense Cheney notes “Our
strategic
interests in the Persian Gulf region, I think, are well known...We
obviously also have a significant interest because of the energy that
is at stake in the gulf.” He was (in part) referring to Iraq acquiring
a further
10% of the world oil reserves by invading Kuwait. “Once [former Iraqi
President Saddam Hussein] acquired Kuwait and deployed an army as large
as the one he possesses,
he was clearly in a position to be able to dictate the future of
worldwide energy policy, and that gave him a stranglehold on our
economy and on that of most of the other nations of the world as
well...”
1990 - (august) USA's Bush (Snr) invokes the Carter Doctrine
to send military to guard Saudi Arabia against the possibility of an
Iraqi invasion.
1990 - (august 27) OPEC agrees to make up the shortfall by increasing
production. Oil prices plunge lower again.
1990 - (august) the IPSA pipeline, a 48-inch Iraqi pipeline running
across Saudi Arabia to the Saudi Red Sea port of Mu'ajjiz, just
south of Yanbu, is closed by Saudi Arabia "indefinitely" due to the
Iraqi invasion of Kuwait. The line has capacity of 1.65 million barrels
a day.
1990 - (september 21) USA refinery problems generate reports that
200,000 barrels of crude a day may not be able to be processed. This
news, coupled with Saddam Hussein saying he would strike first against
regional oil facilities if threatened causes oil prices to soar once
again.
1990 - (october) UK asserts force will be used if Iraq does not
withdraw from Kuwait.
1990 - (november) UN Security Council approves a U.S.
sponsored resolution that if Iraq does not
withdrawal from Kuwait by january 15th 1991 then force may be used to
remove Iraq from Kuwaiti territory.
1990 - (december) Iraq agrees to withdraw from
Kuwait if it can keep the Rumailah oil and gas field and keep Bubiyan
and Werbah islands. Peace talks break down.
1991 -U.S. launches cruise missiles into
southern Iraq to help defend the Kurdish safe
haven
areas of northern Iraq. This is followed by an historically large
over-pumping
of oil onto the world market, reduced Asian demand due to the Asian
financial
crisis and warm winters in the West cutting demand for winter fuel oil.
1991 - (january) Oil prices spike upward by $US5 to over $US30
a barrel in dollars of the day as the 'deadline' draws near for Iraq to
quit Kuwait.
1991 - (january 16) USA declares war on Iraq and
commences air attacks on Iraqi military targets. On the same day, USA
releases over 38 million barrels of oil from its strategic
reserve for sale or use. Oil prices immediately drop by up to $US10 a
barrel on the news.
1991 -
(january
17) USA liberation of Kuwait - Operation Desert
Storm begins;
17.3
million
barrels of USA 'strategic petroleum reserves' are
dumped
on the world market by Bush snr. The International Energy Agency also
release oil and oil products from members strategic reserves. The price
of
oil
drops even further to about $US15 (dollars of the day). Saudi Arabia
uses excess productive
capacity to help increase supply.
1991 - (january) Iraqi missiles launched against Saudi Arabian oil
facilities.
1991 - USA bombs Iraqs
civilian electricity generation stations. USA destroys around half the
Iraqi generating capacity - reducing it from about 5,100 megawatts to
about 2,300 megawatts.
1991 - (february 28) End of war. Saddam Hussein orders his troops to
return. Iraqi forces set fire to or sabotage 700 Kuwaiti
oil wells as they retreat.
1991 (november) Last damaged Kuwaiti oil well finally capped.
Millions of tonnes of oil have been lost since January.
1991 - Columbian Cruz Beana oil field discovered, the largest oil
resource found in the Western hemisphere since the 1970's.
1991 - $US256 billion surplus taken from US Federal Social Security Trust Fund
(alone) to help finance budget deficit rather than let it accumulate to
finance the coming increased rate of retirees due to the 'baby boomer
bulge'. This trend increases
year-on-year as USA to fund gross oil dependance.
1991 - Russias
Samotlor oil field has just experienced precipitous decline, and now only produces about
0.75 million barrels a day, partly as a result of poor field management
practices.
1991 - (october) - Soviet Union suspends exports of petroleum
products as a domestic shortage grows. Oil prices rise by about $US2 a
barrel.
1991 - Qatars North gas field comes into
production.
1991 (december)
- Collapse of the
Soviet Union, US oil companies were barred from bidding for the
reserves.
Early 1990's - high expectations that significant amounts
of the world's new oil and gas resources would come from the countries
of the former Soviet Union and from China. Canadian consortium takes up
concession in Sudan to develop its oil.
Early 1990's - expert
opinion in the oil industry generally agrees oil demand will remain at
66 million barrels a day far into the future
1992 - China
imports oil for the first time ever.
1992 - USA oil field service and
drilling costs per well (adjusted to 2005 dollars) are $US582,510.
1992 - Kuwait is now able to produce 400,000 barrels of oil a day. It's
OPEC quota was 1.5 million barrels a day.
1992 (december) - Canada and Mexico sign a 'free' trade agreement with
USA by which they are obliged to sell oil and gas to USA ahead of
conserving it for their own future domestic needs.
1992 - Mexico produces an
historically high amount of oil for the year, 2.75 million barrels a
day.
1993 - Europe - about 20%
of passenger cars are powered by diesel engines.
1993 (november) - OPEC and North Sea overproduction weakens demand.
Prices drop to almost $US15 a barrel.
1993 - Saudi Petroline
capacity is now
increased to 5 million barrels a day
by boosting the pumping capability on the line. This was a strategic
move, in case the Gulf was blocked by war.
1993 - China
- as demand for fuels continues to surge, China becomes a nett
importer of refined oil products.
1994 - Oil prices reach their lowest
point in inflation adjusted terms
since 1973 following the post Gulf War (1) recession. OPEC disciplines
its members to cut oil
production
to drag the price off the ridiculously low $US10 per barrel mark (in
inflation
adjusted dollars, the lowest prices ever.). As supply decreases
and demand increases again as the US and Asian economies pick up, we
are
back to about US$30 per barrel.
1994 - end of the
flurry of oil exploration offshore in Saudi Arabia that started in 1987
and spurred on by the Gulf war. No wells capable of a
million barrels a day are found, in contrast to earlier explorations.
1994 - China fills
almost all its demand from oil from domestic supplies. China uses only
about 3 million barrels of oil a day, but even so, China is now the
world's fourth largest oil consumer, after USA (more than 15 million
barrels a day), Japan and Russia. Coal is in
temporary short supply, forcing a turn to oil as a substitute.
mid 90's - Columbian
Cruz Beana oil fields production peaks
at 500,000 barrels a day
1994 - USA gas fields
in the 'lower 48' states (excludes Alaska) reach their peak of
productive capacity, at 55 billion cubic feet a day. Production slides
from this point.
1994 - Mexicos Cantarell
complex, the second biggest oil producer in the world, continues down
the decline side from peak,
producing only 890,000 barrels of oil a day. Cumulative production from
its very high initial reserves at the time of commencement of
production is only 4.8 billion barrels.
1994 - USA
imports about 600,000 barrels of oil a day from Iran.
1994
- The Baku-Tbilisi-Ceyhan pipeline contract is signed between US and
British oil interests and Azerbaijan's Heydar Aliyev ( head of the
local KGB in Soviet times).
The objective is to secure oil for the US and Europe from other than
Russian or
Middle East sources.
1994 - some international
financial institutions may now be commencing to artificially manipulate
the price of gold so that it remains at about $US400 an ouince less
than the expected price relative to currencies, and 'de-links' from the
price of oil. Central banks, prohibited from selling more than 500 tons
a year under the Washington Agreement, have devised various means to
sell gold. One system is to 'swap' gold with each other, with each
central banks 'swapped' gold being 'leased' to a lower tier bullion
banks (who also trade in oil) at a very low interest rate, virtually
'on call'. These bullion banks sell the gold and invest the proceeeds
in bank and treasury bonds at a yet higher rate of return. But if the
central bank ever wants its gold back, bullion banks would then have to
re-buy the gold at current market rates...Other manipulations involve
complex forward hedging of undelivered gold. These schemes may fail
when forward contracts are written for a higher volume of gold than is
physically traded on the markets....
1995 - early - USA signs a rescue package with Mexico, loaning $US50
billion. In return, Mexico agrees to deposit a portion of oil revenues
with the USA federal reserve as collateral for the loan, thereby
helping back the USA dollar with oil.
1995 - Norwegian oil and gas companies sign a long-term
supply contract with Gaz de France to supply 1.4 trillion cubic feet of
gas to France starting 2001 and running to 2027.
1995 - Russia's
Yeltsin, with the country nearly bankrupt following the breakup of the
Soviet Empire and disasterously low oil prices, signs a $15.2-billion 'Production Sharing
Agreement' (PSA) with
ExxonMobil to develop oil and gas fields
offshore Sakhalin Island at desperate 'giveaway' prices.
PSA’s are highly weighted in favor of the oil companies, and are
usually used by
major Anglo-American oil companies when dealing with weak and corrupt
third world countries to maximise profit and minimise risk to the oil
company. The PSA stipulates Russia will get nothing
until all costs have been recovered, and only then will receive a share
of oil or gas that is eventually produced. In effect, Russia pays all development and production costs. The deal also allows the oil majors to pay no tax to the Russian
government.
The project - dubbed 'Sakhalin
1' - will develop the Shayvo, Odoptu, and
Arkutun-Dagi fields. These fields are estimated to contain about 2.5
billion barrels of oil and about 15 trillion cubic feet of natural gas.
Exxons stake is 30%.
1995 - (april) USA unilaterally announces an oil embargo against Iran.
No USA company may buy Iranian oil.
1995 - July 6 - Venuezuela commences a regime where it will open
up exploration concessions to foreign companies, so long as the
government retains a majority stake in developing fields where oil is
found.
1995 - Saudi Arabia gives the development of the 7 billion barrel Shaybah oil field to the USA Parsons
Corporation. When it comes on line it is expected to produce 500,000 barrels of crude a day.
1995 - Mexico starts
pressurising the declining Cantarell formation with nitrogen gas to
increase oil flow back to earlier
levels.. New holes are added to increase the extraction rate.
1995 - US president signs an Executive Order (12959) prohibiting US oil
companies from oil exploration or development with Iran.
1995 (august) - Iran
cannot find a market for 200,000 barrels a day of crude oil since the
USA imposed its unilateral oil embargo on Iran. Before the USA embargo,
USA companies were buying about 400,000 barrels of oil a day from Iran
so far this year.
1995 (october) - a rare late-season hurricane, hurricane Roxanne
(category 3), stalls for days over the southern Bay of Campeche and
severely damages much of Mexico’s production
facilities in the Gulf of Mexico. Around 40 million barrels a day
production - is lost for eight days. Production falls from
2.59 barrels a day to 600,000 barrels a day. Most of this would have
been sent to USA refineries on the USA Gulf coast. The refineries
have insufficient time to fully compensate for the sudden disruption to
their throughput planning.
1995 - Mexico now oil production increase to 2.85 million barrels a day
by years end. This is the highest flow rate yet, and comes about from
application of aggressive new technologies such aas horizontal
drilling.
1995 -
Mexico's revenues from oil exports are $US1 billion.
1995 - nearly 80% of
Mexico's oil is exported to USA. In august it
increased to 83%, about 1.25 billion barrels a day.
1995
- Iran
commences a promotion of natural gas as an automotive fuel and
electricity generating source. The objective is to conserve the oil
reserves for export, as it is easier to ship oil than to ship
compressed gas.
1995 - Syria is now
producing 600,000 barrels of crude per day, and about 2 million cubic
metres of natural gas per day.
1995 (december) - Angola is now producing about 690,000 barrels of oil
a day.
1995 - Peak of
funding in USA for research into hydrogen as a fuel. A CRS report for
Congress notes "Since considerable energy is consumed in the
extraction process [of hydrogen from coal or gas or water], hydrogen
should properly be considered an energy carrier rather than an
energy source...hydrogen is somewhat like electricity, which
must also be produced from some other energy source". In spite of this
obvious fact, congress seems oblivious; funds are spent researching
hydrogen fuel cells and storage systems, rather than exploring
renewable energy sources such as photovoltaics.
1996 - Syria crude oil production
peaks at around 604,000 barrels per day.
1996 - China is now a
nett importer of crude oil for the first time.
1996 - The
China National Petroleum Corporation, owned by the Communist Party
government, buys a majority stake (40%) of the Sudan/Indian/Malaysian
oil consortium (the Greater Nile Petroleum Operating Co). It builds
Sudans largest oil refinery in conjunction with the Sudanese Energy
Ministry.
1996 - The
Iran-Libya Sanctions Act 1996 passed in USA. Having
prohibited US companies from joining Iran in oil and gas development,
the US administration attempts to frighten other countries away from
benefiting from Iranian oil and gas. The chief purpose, however, was to
prevent US oil companies investing in a proposed pipeline from the
Caspian oil fields through Iran to the Persian Gulf. For strategic
reasons, USA wants the Caspian oil to flow west to Turkey via the much
longer and more expensive
Baku-Tbilisi-Ceyhan pipeline. The objective was to break the
Russian monopoly on oil exports from the region, and further isolate
Iran.
1996 onward - From 1965 up to about 1996 the price of both gold and oil
have been highly co-related. From about 1996 the price of gold
'de-couples' from the price of oil in the face of central bank
manipulation of gold supply and a huge credit bubble from run-away bank
lending for
housing and lifestyle in both Eurasia and North America.
1996 (april 30) - USA - 28.1 million barrels of crude sold from the
strategic
reserve to raise money for the USA government. There are a total of 3
sales. The purpose the money was applied to was ostensibly to 'reduce
the federal deficit'; but in truth it remains unclear.
1996 - Asian economies booming, with Asian banks making ill-advised
business loans for expansions, mergers and aquisitions.
1996 - Start of trend of
global growth in per capita consumption of coal, oil, and gas,
structurally more heavily weighted to developing countries (initially
low due to late industrialisation) with large, urbanising, and
expanding populations as industry is out-sourced from the West. The
Wests per capita consumption (already high due to early
industrialisation) increase is less or level, as it has a smaller and
slower growing population that is already urbanised, and whose per
capita engagement in industry is falling with mature efficiency
practises and outsourcing, while at the same time per capita engagement
in less heavily oil dependant financial and service industries
continues to rise. Even a small increase in demand per capita in China
and India translates to a huge increase in global consumption demand.
This means, even as decline in global production commences, higher oil
prices are botth supported and made relatively price insensitive. When
West Eurasian and North American demand for cheap goods is destroyed by
internal recession and unemployment, then so to is per capita demand in
East Eurasia, and recession and unemployment there is equally
inevitable.
1996 - Russia exports over one
billion
barrels of oil a year, bringing in 20% of its foreign exchange
earnings.
1996 - Cantarell flows are now producing 1.08 million barrels of crude
a day as the fields are pressurised.
1996 - the Straits of Hormuz in the Persian Gulf now see 15 million
barrels of oil a day tankered through them.
1996 - Venezuela signs a joint venture deal with USA's ARCO
to develop and upgrade about 200,000 barrels of very heavy (9° API gravity) crude a day from the
270-billion barrel Orinoco Heavy Oil Belt. Once upgraded to
25° API it will be exported to USA refineries. A similar deal has
been signed with Conoco Oil.
1996 - USA - The national
average per-well production for natural gas wells is about 174 million
cubic feet of gas per day.
1997 - Over the last 7 years daily oil consumption has increased by an
additional 6.2 million barrels a day, mostly driven by new Asian
demand. OPEC increases its members quoatas to meet the increased demand.
1997 - Iraq - Looking ahead to when UN
sanctions are lifted,
- France's
TotalFina Elf enters an agreement in principle with Iraq to develop the
Majnoun (containing "up to" 30 billion barrels of crude) and Bin Umar
oil fields.
- Russia's Lukoil signs a 23 year contract with Iraq
to jointly develop the West Qurna-2 oil field, and invests heavily in
preliminary work.
- China's China National Oil signs a deal with Iraq to
jointly develop the huge North Rumailah field, near the Kuwaiti border
and the Halfayah field, which may yeild 300,000 barrels a day
- Italy's ENI
signs a deal to develop the large oil fields in the south, at Nasiriyah
and Halfaya.
- Malaysia and India also sign small development agreements.
- US oil
companies are not on
the list
With costs
of production the lowest in the world, rates of return of up to 20% are
available to favoured oil companies. No non-US or UK oil company
will
be allowed to fulfil it's
agreement.
1997 - UK - continuing its long association with the oil industry,
British Petroleum Chief Executive David Simon is made 'lord' Simon of
Highbury, and takes a place as an unelected Parliamentarian in the
class-ridden British house of 'lords'. Simon is given the job of
Blair’s Minister for European Trade and
Competitiveness. In Blairs governemnt, at least 12 BP executives will
hold government positions or be appointed to government advisory
committees.
1997 - total 'North American' oil production (presumably USA and Canada
combined) peaks [2]
1997 - USA - The strategic Petroleum Reserve capacity remains at a
nominal 750 million barrels, as it has for the last 5 years. But the
reserve has never been filled to capacity, usually holding around 550
million barrels of crude.
1997 - Oman's Yibal field
peaks at 225,000 barrels a day. The field is intensively produced with
all the latest technology of the day to maximise production flow.
1997 - Qatar
inaugerates the world's largest liquefied
natural gas (LNG) exporting facility, with a total output capacity of 6
million tons of LNG a year. An associated new sea port will have a
capacity to handle 25-30 million tons of LNG a year. Qatar claims
natural gas reserves of about 237 trillion cubic feet.
1997 -
Norway - the
Ormen Lange offshore field is discovered, containing an estimated 375
billion cubic metres of gas.
1997 - Nigeria - Shell oil experiences 210,000 barrels a day of
disrupted production at its Bonny terminal due to local protests.
1997 - Colombia - USA's Occidental Petroleum and Colombia's Ecopetrol oil pipeline from the Cano Limon field is repeatedly attacked by
dissendents, significantly disrupting oil exports.
1997 - (december) Slump in Thai Baht triggers Asian currency crisis and
economic slump.
1997 -
Commencement of deregulation of USA electricity supply. Commencement of
wildly fluctuating prices in the energy daily 'spot market'.
Commencement of un-cordinated overbuilding of plant based on gas
tubines.
1998 - Asian economic crisis sees
a reduction in demand in Asia coupled
with an
increased OPEC production quota. Weak consumption/demand leads to
falling crude prices.
1998 - (december) The
OPEC meeting of the previous month fails to reach agreement to reduce
excess pumping. Oil again sells for 'give-away' prices of $US10 a
barrel, a 12 year low. Some crudes hit a price slump of $US8 a barrel.
1998 onward -
Dirt cheap oil and gas fuels an economic 'good times' boom in the
'developed' western countries. Natural gas sells for around $2 a
Gigajoule (around US0.08 cents a cubic metre), even in winter.
1998 onward -
major oil producers experience squeezed profit margins. Needed capital
intensive new refineries in USA and Europe are pushed off the drawing
board. Refineries provide less profit than pumping oil, and even
pumping oil out of the ground is not that profitable right now.
1998 - Russia is in trouble
at the new democracy falters in the face of
low oil revenue and the
cessation of international financial aid. Russia defaults on its debts
after continually rolling over
its (worthless) short term treasury notes finally fails. Unregulated
and highly indebted hedge funds betting on currency value movements
(long
term capital "management") lose heavily,
the US Federal
Reserve (US taxpayers) then subsidise the financial 'geniuses'
stupidity by bailing them out.
1998 - Extremely low oil returns coupled causes the Saudi budget
deficit to reach 10% of GDP. Loans from the Gulf oil state of Abu Dhabi
cover the cash crisis. With no cash on hand to pay for 'make work'
schemes, unemployment rises to around 17% and 20% in those aged 20-29.
Disaffected youths become prime recruits for the violent factions
within Saudi Arabia's already extreme fundementalist version of Islam.
1998 - China - With its huge
internal economy under state control, subsidised industries continue to
burgeon, worsening the recurrent fuel shortages and requiring
increasing levels of imports.
China allocates 11 billion yuan (about $US1.31 billion) to the
countries largest (state owned) coal producer to research and develop
coal to liquids technology.
1998 - UK - Brent field starts its collapse. Decline rate doubles to an
astonishing 20%. Production is now about 11,000 barrels a day.
1999 - UK North Sea fields
reach overall peak of production at approximately 6 million barrels a
day (small
fields come into play, but nett of consumption there is an overall
loss).
1999 - India - Reliance Industries Ltd's Jamnagar refinery, with a capacity to refine 660,000
barrels of crude per day, commences exporting petroleum products.
1999 - UK is the world's 9th
largest oil producer. UK is an important nett oil exporter. A third
of the North Sea oil production is exported.
1999 - BP buys Amoco
oil for $US55 billion. BP would like to use AMOCO's sophisticated
imaging technology in the deeepwater Gulf of Mexico, where, to date,
its exploratory wells have been dry. Each well costs about 10 million
dollars.
1999 - Canadian
Ladyfern gas deposit discovered in Northern British Columbia - the
largest natural gas discovery in North America. This deposit initially
thought to be large enough to meet 25% of Canada needs. It is produced
at a rate of 785 million cubic feet a day.
1999 - South Korea's Korea
Gas Corporation (KOGAS) takes delivery of its contracted 4.9 million
tonnes per annum of Qatari LNG.
1999 - (january) oil drops below $US10 a barrel. One estimate is that
in real terms, this is half the price that oil was in the 1950's. Pump
prices in USA are around 90 cents a gallon. Smaller oil companies fail.
Hundred of thousands of long-time experienced oil employees lose their
jobs. No one in their right mind signs up to work in explorations and
drilling.
1999 - Saudi Arabia is now the single largest supplier of crude oil to
the USA. Saudi Arabia preferentially supplies the USA as the USA
guarentees the Saudi regimes safety from democracy. Oil sent to the USA
earns less due to distance than if the oil was sent to adjacent Asian
markets.
1999 - (february) US energy secretary persuades the Saudi
regime to restrict the output of oil in order to push up the price and
save the Russian economy. The US 'expects' oil to reach a more
realistic $US18 a barrel.
1999 - (march) Saudi
Arabia announces moves to cut its output from over 8 million barrels a
day to 7.4 million barrels a day, and OPEC
to cut output more than 2 million barrels a day
1999 - (may) oil prices recover steadily, now stand at $US18.
1999 - Saudi dictatorship panic
levels rise further as sharply
decreased oil revenue from the past few years impairs the ability to
pay for social benefits for the unemployed. The huge and youthful
population increase has been created out of years of oil plenty. The
current population is about 21.3 million, up by about 7 million people
from a decade ago, when the population was about 14.4 million.
1999 - (july) Oil
expert tells a British Parliamentary Committee that oil production has
peaked, that after many years of growth "we may then experience a new
downward trend", and that in his view it was absurd that "the depletion
of the
world’s supply of its most important fuel should be left to a few
feudal families controlling the Middle East."
1999 - Dick Cheney, Chairman of
Halliburton oil services company, (and soon to be vice president of the
USA) notes the
difficulty of
finding enough oil to "offset our seventy one
million plus barrel a day of oil depletion, but also to meet new
demand". He bemoans the fact that nations and nation-owned oil
companies are in control of 90% of their own oil resources, rather than
USA and International private businesses owning it. He predicts "by
2010 we will need on the order of an
additional fifty million
barrels a day" above existing world oil
production. He notes, from an American oil business perspective, "the
Middle East with two thirds of the
world's oil and the lowest cost, is still where the prize ultimately
lies", but that while American private companies want access to oil
owned by nations of the Gulf, "progress" in gaining access is slow.
1999 - USA Central
Command has a plan to quickly invade and control Iraq.
"When I was commander of CENTCOM, we had a plan for an invasion of
Iraq,
and it had specific numbers in it. We wanted to go in there with
350,000 to 380,000 troops. You didn't need that many people to defeat
the Republican Guard, but you needed them for the aftermath. We knew
that we would find ourselves in a situation where we had completely
uprooted an authoritarian government and would need to freeze the
situation: retain control, retain order, provide security, seal the
borders to keep terrorists from coming in." - General Anthony Zinni
1999 - after 3 years of exploration and the expenditure of $US410
billion, oil companies around the world have found only enough oil to
keep their production static at 30 million barrels a day. While
declining production from existing wells is compensated for by the new
wells, not enough is found to meet rising demand.
1999 - Following the election
landslide victory for Hugo Chavez in 1998 Venezuela adopts a new
Constitution banning further foreign investment
in the oil sector, in order to prevent oil profits enriching already
wealthy foreigners when Venezuela is wracked with poverty - according
to government figures, about 12% of people live in "extreme poverty",
25% in "poverty". The democratically elected government has a
huge
social deficit from years of corruption, breath-taking International
Monetary Fund 'debt for oil' loans, dictatorship, and sequestration of
national wealth by the 'self-privileged' few. This minority of mostly
white people with racist attitudes live in luxurious 'gated
communities' isolated from the rest of the impoverished population,
and
regard the wealth of the nation as 'belonging' only to them. This small
group has controlled the oil profits for their exclusive benefit more
than a century. Venezuelas birth rate
means it will be constantly
playing catch-up even to stand still; a situation analogous to the
exploding populations of the Middle East. Venezuela's economy and
social well-being is utterly
oil-dependant. 70% of Venezuelan exports
are oil; 60% of government tax revenue is from oil.
The major oil
companies
currently in Venezuela are foreign
owned American
and West Eurasian - ChevronTexaco, Royal Dutch Shell, ExxonMobil, and
British
Petroleum. Venezuela has estimated
reserves of 78 billion barrels of crude, and 1.2 trillion barrels of
'unconventional' super-heavy crude. Venezuela is relatively close to
the USA, supplies 10% of USA domestic oil, and therefore likely to be a
target
for
installation of a puppet
regime
under USA control.
1999 - First substantial
revenue from Sudanese oil fields. Revenues reach $500 million. 80% of
the money is used by the repressive Sudanese government to buy
predominantly Chinese armaments, and build armaments factories to kill
resistance fighters.
1999 - OPEC continues to try to reduce supply to meet slower demand.
Prices start to regain from a 30 year low (inflation adjusted to year
2000 prices) of about $US10.
1999 - (september) - Iraq reduces exports by 1.2 million barrels per
day in order to restrict supply and further drive up oil prices, which
quickly reach $US22.
1999 - (november) Iraq suspends
its
UN sanctioned oil-for-food sales.
1999 - USA and the IMF discover
there is a willing market for 'unused' central bank gold reserves when
some stocks are offered at auction. Both banks are unnerved by the vote
of confidence in gold versus the US dollar, in spite of moves to hold
gold prices artifically low.
Washington Agreement signed with 15 central banks - "Gold remains
an important element of Monetary Reserves" and banks will not sell more
than 400 tonnes of their gold reserves in any one year for the next 5
years.
1999-2000 - (december- January) increased world oil
demand growth coupled with OPEC and Iraqi pumping cut backs causes
rapid rise in oil price.
2000 - (february) oil prices reach $30 a barrel.
2000 -
(jan-feb) - USA shortage of heating oil in Northeast USA as very cold
winter conditions increase fuel oil demand and hamper deliveries.
2000 - (march) Traders betting on future price oil price spike crude
above $US30 per barrel.
2000 - Iraq resumes selling oil for food at the new higher price, and
increases its smuggling of oil, mainly to Turkey.
2000 - Iraq
takes payment for part of its oil in Euros, setting a
precedent for other Middle East nations, and removing some of the value
of the US petro-dollar. This move shakes USA's
administrative/business/military complex deeply.
2000 - Two US professors at the University of Houston (and energy
advisors to corporate America) state oil supply cuts could be used to
damage the American economy, and that nothing short of a 'military
response' could counteract a reduction
in oil production by Saddam Hussein. They make no mention of Saudi
reductions in supply.
2000 - (march) US administration does an 'about face' and threatens
Saudi Arabia and OPEC that if they don't increase
oil production to bring down the price, the US will dump it's strategic
oil reserve on the world markets to flood them with oversupply and
drive down the price.
2000 - Most OPEC suppliers - except for Saudi Arabia - are now pumping
at full capacity to meet global demand.
2000- The world's oil tanker fleet is now operating at 97% of capacity
- the first time since 1973.
2000
- global production of light sweet crude peaks, as predicted by Hubbard
(the prediction was in effect for light crude as it was based on the
production curve for West Texas sweet). From now forward, the amount of
easily refined crude
will fall year on year. Most light crude comes
from OPEC countries. Saudi Arabia's Ghawar,
Abqaiq and Berri fields supply almost
all of the Saudi light crude supply. Non - OPEC countries have
relatively small amounts of light crude, and it is this that has been
in demand, and has been produced first. The world must increasingly
turn to those refineries