The Prize: The Epic Quest for Oil, Money & Power Paperback – Illustrated, December 23, 2008

THE PRIZE by Daniel Yergin is an 884 page history book about the oil industry. High points include the discoveries of oil in Pennsylvania, Texas, Baku, Sumatra, Iran, and in off-shore locations. (Baku was an independent duchy that was taken by Russia in 1813, by way of the Treaty of Gulistan. But now, Baku is the capital of Azerbaijan.) High points of this book also include info on collaborations between companies, e.g., Standard Oil of California, Standard Oil of New Jersey, Texaco, Socony, Gulf, Royal Dutch Shell, British Petroleum, and Compagnie Francaise des Petroles (see page 503). The book avoids chemistry, and avoid disclosing innovations relating to the detection, drilling, and refinement of oil. The book is mainly about politics. For me, the most exciting part of the book was about oil supplies for the Allies and Axis countries during WWII. For example, we read that U.S. General Carl Spaatz, under Eisenhower, led an attack on May 12, 1944 of 935 bombers against Germany's I.G.Farben synthetic oil factory in Leuna, Germany (page 346), and on May 28th attacked Germany's oil facilities located in Rumania. The book is essential reading for anyone interested in WWII, in the Middle East, or in how the world is put together. The book is abundantly readable, and can be understood in its entirety by any intelligent high school student. Difficult words rarely occur, and they make their appearance on only a dozen or so pages in the entire book. For example, we find imbroglio (page 477), condottiere (page 501), disquisition (page 521), nostrum (page 570), and hegemony (page 638). That's about it for the difficult words in this book!PHOTOGRAPHS. The book contains 32 pages of glossy B & W photos showing, e.g., an oil well in Pennsylvania (1859), an oil field of 15 oil wells in Pennsylvania (1865), George Bissell, John Galey, Spindletop oil well (1901), Marcus Samuel, oil well in Sumatra (1885), Calouste Gulbankian, King Ibn Saud, Germany's synthetic fuels plant before and after being bombed, Mossadegh, George McGhee, etc. The following (below) outlines some of the highlights of this book.JAPAN IN WWII. In entering WWII, Japan believed that it had enough oil to last for two years, and that afterwards it could get oil form the East Indies (Borneo, Balikpapan in Borneo, Sumatra). In fact, the Japanese were able to capture enough East Indies territory to provide 50 million barrels/year, sufficient for the Japanese fleet. Japan discovered a huge oil field in Sumatra, called THE MINAS STRUCTURE. However, a problem was that Japan did not bother to provide convoys to protect their oil tankers. Eventually, Japan provided convoys, but the US used the radio signals from the convoys as homing devices. US submarines, by early 1945, cut off 100% of Japan's oil supply. In desperation, Japan tried using tug boats pulling rubber bags filled with oil, but the oil dissolved the rubber. Also, Japan decided to build coal-burning ships, but these sailed slowly. Also, Japan turned to pine roots, which were dug up and distilled in thousands of small stills, producing 75,00 barrels of oil/month (pages 73-75, 318, 350-364).RED LINE AGREEMENT. This concerns Mesopotamia and interest by Anglo-Persian Oil Co., and by Turkish Petroleum Co. Turkish Petroleum Co. was assembled by CALOUSE GULBENKIAN, son of a wealthy Armenian who imported Russian kerosene into Turkey. In 1917-1918, that is, at the close of WWI, England realized that it would need oil for any future wars, and thus decided to invest in Mesopotamia and Persia. Three groups, (1) Anglo-Persian, (2) Royal Dutch, and (3) American companies, in 1925 sent expedition to Iraq, and on October 15, 1927 at BABA GURGUR discovered a huge source of oil (page 204). A contract was then signed, giving Royal Dutch/Shell (24%), Anglo-Persian (24%), French (24%), Near Eastern Development Co. (24%), and Calouse Gulbenkian (5%) the indicated percentages. The contract included a map with a red line circling Turkey, Saudi Arabia, Israel, and Iraq (but not circling Persia or Kuwait) (page 204-205). The RED LINE AGREEMENT provided that participants in the Iraq Petroleum Co. (IPC) could not operate independently within the red boundaries. They were required to act in unison or not at all (page 282). After WWII, American companies (Jersey and Socony) argued that the RED LINE AGREEMENT was no longer valid, but France and Mr. Gulbenkian argued that it was still valid (pages 413-414). France needed the RED LINE AGREEMENT to be intact, because without it, France would have no access to middle eastern oil. Gulbenkian wanted it to remain intact, because IPC and its predecessor (Turkish Petroleum Co.) was his life's work. The book then details the formation of ARAMCO, a company that was totally American, with the concurrent dissolution of the RED LINE AGREEMENT (page 419). The book discloses the plan of STANDARD OIL OF NEW JERSEY and SACONY to merge with STANDARD OIL OF CALIFORNIA and TEXACO, in order to form ARAMCO. This merger agreement was signed on March 12, 1947. Aramco means, "Arabian-American Oil Co." Initially, Aramco was only Standard Oil of California and Texaco (p. 410), but later it consisted of the above four companies. The book highlights one aspect of the Aramco merger, namely, the opinion of KING IBN SAUD. King Saud was interested in only one thing, namely, assurance that none of these four companies was controlled by the British. In particular, he was worried about Jersey and Sacony being controlled by the British. But as it was, Aramco was 100% American.CRITICISM. A failure of this book is that it does not explain the practical consequences of dissolving the RED LINE AGREEMENT, and the expansion of Aramco into four companies. In other words, the reader is not told if Gulbenkian's access to particular oil fields, or if his fees and profits were changed. Also, we are not told if Aramco's access to particular oil fields, or if its fees or profits were changed by dissolving the RED LINE AGREEMENT. Please note the following general criticism of this book. If you ask a person who was "really there," and who experienced first hand the events in history that are disclosed in this book, it is possible that you will learn that some of the narratives in THE PRIZE are not accurate. But type of shortcoming typical of many newspaper reports, and it might also be expected to result in a book that is based on newspaper reports. It is thus the case, that THE PRIZE is mainly trustable as starting point -- good for initial orientation -- should one be possessed to embark on a career relating to the oil industry.SPINDLETOP. Patillo Higgins, a 1-armed mechanic and lumber merchant, noticed gas bubbling through springs at a hill called SPINDLETOP, near Beaumont, Texas. In 1892, he organized Gladys City Oil Co., but geologists investigating the area called it nonsense. Higgins found a partner (Anthony Lucas), and Lucas went to Pittsburgh, PA to attract the interest of wildcatters (John Galey and James Guffey). Galey was a geologist. Guffey was a politician and promoter who dressed as Buffalo Bill. On January 10, 1901, Higgins' team struck oil at 880 feet deep, and oil flowed at 75,000 barrels per day. Land that previously sold for $10/acre now went for $900,000/acre (page 85). The result of SPINDLETOP was that the focus of America's oil production moved from Pennsylvania to Texas and Oklahoma. Shell Oil. Co, located in London, and run by MARCUS SAMUEL, took an interest and signed a 20-year contract with Guffey for marketing oil from SPINDLETOP.REZA PAHLAVI and MOSSADEGH. At the halfway point in this book we find an account of goings-on in Iran. This part of the book is fairly dense, and so provide the status of things by way of these bullet points:(1) Reza Pahlavi (the father) (1878-1944) was pro-Germany. He died in exile in South Africa.(2) Reza's son, also Reza Pahlavi (1919-1980) became king at age 21.(3) Islamic fundamentalists led by Ayatollah Kashani hates all foreigners, and hates the fact that Reza allowed women to not wear veils.(4) Bribery is the rule among all politicians in Iran.(5) In Iran, it was almost universal to hate foreigners, especially the British.(6) Elevated hatred was directed against Anglo-Iranian Oil Co., a British company.(7) United States, represented by George McGhee, Asst. Secretary of State for Near Eastern Affairs, was afraid of Soviet's taking control of Iran, and in order to fend off the Communists, the US told Anglo-Iranian Oil. Co. to increase royalties to Iran. The result was a hike in royalties in the year 1949, paid by Anglo-Iranian to Iran.(8) US urged British government to pressure Anglo-Iranian to make Iran a bigger offer. But William Fraser (1888-1970), head of Anglo-Iranian (later named British Petroleum), had from experience realized that Iranian attitude was one of "ingratitude, deception, backbiting, and new demands." (page 420).(9) Fraser was aware that other oil producing companies were winning 50/50 agreements, and at that point (autumn 1950), decided to give more money to Iran.(10) Mossadegh became prime minister of Iran in April 1951, and nationalized Iran's oil, and declared that Anglo-Iranian Oil Co. to be abolished.(11) Britain made plans to attack Iran, but to limit its attack to the capture of ABADAN island. The US was against this, since this might inspire the Soviets to attack Iran from the north.(12) But Britain countered that if it did not attack, all middle eastern countries would begin to nationalize the work-product of foreign investments, e.g., Suez Canal (pae 458).(13) In July 1951, AVERELL HARRIMEN arrived in Tehran to act as a broker. Harrimen stayed in a mirrored room in Shah's palace. Harrimen tried to make Mossadegh understand the expenses entailed by Anglo-Iranian in marketing the oil, e.g., expenses for wharves, storage tanks, pumps, roads, rail tanks, and a fleet of tankers (page 462). But Mossadegh refused to allow Anglo-Iranian Oil Co. to resume business in Iran.(14) On Sept. 25, 1951, every last British employee of Anglo-Iranian escaped from Iran.(15) The British set up an oil embargo, preventing all Iranian oil exports, and within a few weeks, Iranian oil production dropped from 666,000 barrels/day to only 20,000 barrels/day.(16) George McGhee tried to persuade Mossadegh to allow ROYAL DUTCH/SHELL (not a British company) to operate what was formerly Anglo-Iranian (page 466).(17) At this point in time (1943), rule under Mossadegh involved murder, chaos, and poverty.(18) On August 18, 1953, Reza Pahlavi ordered Mossadegh out of power (details on this accomplishment not explained by this book), and Reza Pahlavi became extremely popular in Iran (for reasons not explained by this book).(19) On October 29, 1954, Reza Pahlavi agreed to let a consortium operate in Iran (page 476). This consortium consisted of *Anglo-Iranian, *Standard Oil of New Jersey, * Socony, * Texaco, *Standard Oil of California, *Gulf, *Shell, and *CFP (a French company).

This is the definitive book on the "Age of Oil" and its journey from fruition to modern day. Incredibly well researched and insightful. The Prize describes how this once seemingly useless substance served as a platform for building global economies and increasing human productivity. Oil; money; power ... the terms are synonymous. Rockefeller, Getty, Rothschild, and others became the wealthiest to have ever lived at the time. You must read this book to understand the true nature of oil's impact on our society."""1853: George Bissel visits oil springs in western Pennsylvania.1859: "Colonel" Drake drills first well at Titusville.1861-65: American Civil War.1870: John D. Rockefeller forms Standard Oil Company.1872: South Improvement Company stirs war in the Oil Regions. Rockefeller launches "Our Plan".1873: Baku oil opened to development. Nobel family enters Russian oil business.1882: Thomas Edison demonstrates elec­tricity. Standard Oil Trust formed.1885: Rothschilds enter Russian oil busi­ness. Royal Dutch discovers oil in Suma­tra.1892: Marcus Samuel sends the Murex through the Suez Canal; begin­ning of Shell.1896: Henry Ford builds his first car.1901: William Knox D'Arcy acquires a concession in Persia. Gusher at Spindletop in Texas; be­ginning of Sun, Texaco, Gulf.1902-04: Ida Tarbell's History of Standard Oil Company serialized in McClure's.1903: Wright Brothers' first flight.1904-05: Japan defeats Russia.1905: Revolution of 1905 in Russia; Baku oil fields ablaze. Glenn Pool discovered in Okla­homa.1907: Shell and Royal Dutch combined under Henri Deterding. First drive-in gasoline station opens in St. Louis.1908: Discovery of oil in Persia; leads to Anglo-Persian (later British Pe­troleum).1910: "Golden Lane" discovered in Mex­ico.1911: Agadir Crisis. Churchill becomes First Lord of Admiralty. U.S. Supreme Court orders dissolu­tion of Standard Oil Trust.1913: Burton "cracking" process for refin­ing patented.1914: British government acquires 51 per­cent of Anglo-Persian Oil Com­pany.1914-18: World War I and mechanization of the battlefield.1917: Bolshevik Revolution.1922-28: Negotiation on the Turkish (Iraq) Petroleum Company, leading to the "Red Line Agree­ment." 1922: Los Barroso discovery in Vene­zuela.1924: Teapot Dome scandal erupts.1928: World oil glut leads to meeting at Achnacarry Castle and "As-Is" agreement. French petroleum law.1929: Stock market collapse heralds Great Depression.1930: Dad Joiner's discovery in East Texas.1931: Japan invades Manchuria.1932: Discovery of oil in Bahrain.1932-33: Shah Reza Pahlavi cancels the Anglo-Iranian concession; Anglo-Iranian wins it back.1933: Franklin Roosevelt becomes President of the United States. Adolf Hitler becomes Chancellor of Germany. Standard of California wins conces­sion in Saudi Arabia.1934: Gulf and Anglo-Iranian gain joint concession in Kuwait.1935: Mussolini invades Ethiopia; League of Nations fails to impose oil embargo.1936: Hitler remilitarizes Rhineland and begins preparations for war, in­cluding a major synthetic fuels program.1937: Japan begins war in China.1938: Oil discovered in Kuwait and Saudi Arabia. Mexico nationalizes foreign oil com­panies.1939: World War II begins with German invasion of Poland.1940: Germany overruns Western Europe. United States puts limits on gasoline exports to Japan.1941: Germany invades Soviet Union (June). Japanese takeover of Southern In­dochina leads United States, Britain and Netherlands to em­bargo oil to Japan (July). Japan attacks Pearl Harbor (December).1942: Battle of Midway (July). Battle of El Alamein (September). Battle of Stalingrad (begins Novem­ber).1943: The first "fifty-fifty" deal in Vene­zuela. Allies win Battle of the Atlantic.1944: Normandy landing (June). Patton runs out of gas (August). Battle of Leyte Gulf, Philippines (October).1945: World War II ends with defeat of Germany and Japan.1947: Marshall Plan for Western Europe. Construction begins on Tapline for Saudi oil.1948: Standard of New Jersey (Exxon) and Socony-Vacuum (Mobil) join Standard of California (Chevron) and Texaco in Ar­amco. Israel declares independence.1948-49: Neutral Zone concessions to Amin­oil and J. Paul Getty.1950: Fifty-fifty deal between Aramco and Saudi Arabia.1951: Mossadegh nationalizes AngloIranian in Iran (first postwar oil crisis). New Jersey Turnpike opens. 1951~53 Korean War.1952: First Holiday Inn opens.1953: Mossadegh falls; Shah returns.1954: Iranian Consortium established.1955: Soviet oil export campaign begins. First McDonald's opens in suburban Chicago.1956: Suez Crisis (second postwar oil cri­sis). Oil discovered in Algeria and Ni­geria.1957: European Economic Community es­tablished. Enrico Mattei's deal with the Shah. Japan's Arabian Oil Company wins Neutral Zone offshore conces­sion.1958: Iraqi revolution.1959: Eisenhower imposes import quotas. Arab Petroleum Congress in Cairo. Groningen natural gas field dis­covered in Netherlands. Zelten field discovered in Libya.1960: OPEC founded in Baghdad.1961: Iraqi attempt to swallow Kuwait frustrated by British troops.1965: Vietnam War buildup.1967: Six Day War; Suez Canal closed (third postwar oil crisis).1968: Oil discovered on Alaska's North Slope. Ba'thists seize power in Iraq1969: Qaddafi seizes power in Libya. Oil discovered in the North Sea. Santa Barbara oil spill.1970: Libya "squeezes" oil companies. Earth Day.1971: Tehran Agreement. Shah's Persepolis celebration. Britain withdraws military force from Gulf.1972: Club of Rome study.1973: Yom Kippur War; Arab Oil em­bargo (fourth postwar oil cri­sis). Oil price rises from $2.90 per barrel (September) to $11.65 (Decem­ber). Alaskan pipeline approved. Watergate scandal widens.1974: Arab Embargo ends. Nixon resigns. International Energy Agency (IEA) founded.1975: Automobile fuel efficiency standards established in the United States. First oil comes ashore from North Sea. South Vietnam falls to communists. Saudi, Kuwaiti, and Venezuelan concessions come to an end.1977: North Slope Alaskan oil comes to market. Buildup of Mexican production. Anwar Sadat goes to Israel.1978: Anti-Shah demonstrations, strikes by oil workers in Iran.1979: Shah goes into exile; Ayatollah Khomeini takes power. Three Mile Island nuclear plant ac­cident. Iran takes hostages at U. S. Em­bassy.1979-81: Panic sends oil from $13 to $34 a barrel (fifth postwar oil crisis).1980: Iraq launches war against Iran.1982: OPEC's first quotas.1983: OPEC cuts price to $29. Nymex launches the crude oil fu­tures contract.1985: Mikhail Gorbachev becomes leader of Soviet Union.1986: Oil price collapse. Chernobyl nuclear accident in USSR.1988: Ceasefire in Iran-Iraq War.1989: Exxon Valdez tanker accident off Alaska. Berlin Wall falls; communism col­lapses in Eastern Europe.1990: Iraq invades Kuwait. UN imposes embargo on Iraq; mul­tinational force dispatched to Middle East (sixth postwar oil crisis)."""

What a book. I don't really enjoy reading super long and dense history books as they are typically boring and too many facts to digest. However the prize has been written in a way that captures your attention throughout.It's full of insights I certainly didn't realise about the role of oil in politics and war and it's was fascinating to me to have learned all this from this book.It's really a must read if you want to better understand geopolitics and the levers that drive them.