Sleeping With The Devil (14 page)

    

    

    

    

    FROM THE CAPITAL of Arabia, the chief town of the Nejd, the center of
the Wahhabis, and a tent just north of His Majesty’s palace, I send you greetings,”
twenty-nine-year-old Thomas C. Barger wrote to his young wife, Kathleen, back in Medora, North
Dakota, on the last day of summer 1938. “There have been fewer than four dozen Europeans here,
and I don’t believe that many of them sent letters out.”

    Geology had landed Tom Barger in Riyadh. To the west of the capital,
located roughly in the center of the kingdom, lies the Arabian Shield, a volcanic mountain
range with peaks as high as nine thousand feet, stretching from Jordan, in the north, all the
way south to the Gulf of Aden. (The last Arabian volcanoes went dormant only seven centuries
ago; broad black lava beds, known as
harrahs
, can still be seen running down the
mountainsides toward the Red Sea.)

    Eastward, as the Arabian highland drops toward the Persian Gulf, the
underlying volcanic mantle gives way to sedimentary rock formed from the remains of ancient
aquatic plants and animals, left behind from prehistory when seas covered this lower land. As
the waters receded and the earth’s crust roiled and buckled, these sedimentary deposits were
pushed deeper and deeper beneath the surface, and as that happened, the heat and pressure from
above combined with the decomposition of the organic remains below to produce the fossil fuel
we know as petroleum, black gold, oil.

    Oil had been successfully brought out of the ground by drilling in
1859: Colonel Edwin Drake’s famous little well at Titusville, Pennsylvania. Eleven years later,
John D. Rockefeller incorporated the Standard Oil Company in Ohio, and oil was primed to become
the new fuel of the industrial revolution. Before the century was out, Russia had joined the
U.S. as the world’s major producer. Indonesia, Romania, and Mexico all had fledgling oil
industries by the start of World War I. Fighting was breaking out in Europe when oil was
discovered in Venezuela and elsewhere in the Caribbean Basin.

    Among the Persian Gulf states, Iran led the way. The first well there
came in in May 1908. By 1913 a 135-mile pipeline tied the field to a refinery at Abadan, atop
the Persian Gulf. The giant oil field at Kirkuk, in northern Iraq, was tapped in 1927. By 1935
it was delivering petroleum via a pair of six-hundred-mile pipelines to the Mediterranean coast
at Tripoli in Lebanon, and to Haifa in what was then Palestine. Bahrain, the tiny island
sheikdom in the Persian Gulf between Qatar and Saudi Arabia, came on-line in 1932 with help
from the Gulf Oil Corporation. It was only a matter of time until eastern Saudi Arabia -
geologically of a piece with western Iran, Bahrain, and southern Iraq - would join the party.

    Tom Barger was part of the second wave of engineers and geologists sent
by Standard Oil of California to make oil happen in Saudi Arabia. Working under a royal lease,
the SOCAL team had already brought in the kingdom’s first well to produce oil in commercially
exploitable quantities: Damman Well Number Seven, near Dhahran, begun on New Year’s Day, 1938.
By September of that year, when Barger showed up in Riyadh, the prophecy was about to be
fulfilled.

    SOCAL, one of many offshoots of the court-ordered 1911 breakup of
Standard Oil Company, would go on to become a principal in Aramco - the Arab-American Oil
Company, formed to exploit and manage Saudi oil, the world’s largest depository. Tom Barger
would rise to CEO of Aramco in 1961, a post he would hold until 1969. And oil would upend
almost everything about the capital, the kingdom, in some ways the entire Muslim world, and of
course, the Western world, too, because oil, the West, Islam, and Saudi Arabia can never be
wholly separated.

    It is amazing to think how new Saudi Arabia is, given the hold that it
has on the Western consciousness and the wallet of the industrial world. The Saudi Arabia that
Tom Barger flew into in 1937 had been a united kingdom for only five years. As late as the
mid-1920s, the vast interior of the Arabian peninsula existed in almost total isolation from
the rest of the world - a place characterized not by oil and its riches but by poverty,
religious xenophobia and fanaticism, and, at its heart, an almost impenetrable desert culture.

    The Arabian coast had long been known to traders. A thin trickle of
European explorers had tackled the peninsula’s vast arid reaches in the nineteenth century. The
holy sites at Mecca and Medina had been subjects of fascination in the West for centuries, but
it wasn’t until 1865 that the coordinates of Riyadh, the future capital of the future kingdom,
were fixed on Western maps.

    Syria, Iraq, Egypt, and the African Muslim states of Algeria and
Morocco were all undergoing modernization to one degree or another in the years after World War
I. Kuwait, on Arabia’s northeastern border, had been packed with colonial intriguers for
decades. Not so Saudi Arabia: It remained as it had been for centuries, a medieval Arab society
rent by internal and external aggression.

    Ibn Sa’ud had seized Riyadh on January 15, 1902, with an army of fewer
than two hundred warriors and a raiding party of forty men. He was then in his early twenties.
Intent on restoring a family dynasty that had been waxing and waning since the eighteenth
century, he would spend the next two dozen years doing battle on all sides - against the dying
remnants of the Ottoman empire, against competing Arab rulers, especially the Hashemites in
Jordan, and finally, against his own supporters when they wouldn’t honor his authority. He won
control of Mecca in 1924 and of Medina the following year. Both had been part of a short-lived
ancestral realm.

    By 1927 Ibn Sa’ud sat atop a dual kingdom that covered most of the
peninsula. Five years later, he combined the two parts into a single realm and named it for his
family: Saudi Arabia. But even as first-world oil interests came calling, his capital remained
an unelectrified city of some thirty thousand deeply isolated people, surrounded by a mud wall
and almost never visited by foreigners.

    Ibn Sa’ud’s offspring, and their offspring, would become some of the
world’s richest people, famous from the casinos of Monte Carlo to the brothels of London for
their profligacy; the lords of billion-dollar palaces, owners of the best thoroughbreds and
yachts, donors of university chairs and college laboratories, buyers of influence in every
capital of the West, ready to whisk around the world at a moment’s notice on fleets of private
jets. In the mid-1930s, though, during the dark years of the Great Depression, the king’s
minister of finance, Shaykh ‘Abdallah Sulayman, was still hauling the national treasury around
in a tin trunk. Revenues from taxes on livestock, cereals, fruits, trade, and other
commodities, as well as other royal prerogatives, went into the trunk for safekeeping. When the
king decided on an expenditure, he would write the recipient a chit, which ‘Abdallah would, in
due course, redeem from the trunk. When the trunk ran dry of riyals, ‘Abdallah would simply
disappear until the stores were built back up.

    It was the many barren periods within the royal trunk that led
‘Abdallah and his king to agree so readily to exploration terms clearly favorable to Standard
Oil of California. The agreement granted SOCAL “the exclusive right, for a period of 60 years,
to explore, prospect, drill for, extract, treat, manufacture, transport, deal with, carry away,
and export” oil and oil products in an area of over forty thousand square miles, twice the size
of France.

    In return, the company promised to provide the Saudi government with an
immediate loan of £30,000 gold or its equivalent (about $1.56 million in 2002 U.S. dollars), an
“annual rental” of £5,000 gold, and an advance royalty of an additional £50,000 gold ($2.6
million), plus an identical payment once oil had been discovered in commercial quantities, as
well as ongoing royalties when the business expanded. Acting on the king’s behalf, ‘Abdallah
Sulayman signed the pact on May 29, 1933. The first two SOCAL geologists arrived four months
later.

    World War II, in a sense, brought Saudi Arabia into the world. Britain
and Germany both vied for the kingdom’s support, the Germans in part to use the peninsula as a
back door for attacking Russia through its underside on the northern border of Iran. Officially
neutral, the king favored the British, not from any long-standing love but because Britain and
its colonies remained Saudi Arabia’s principal food source.

    Saudi oil, too, came to assume ever greater importance as other sources
of petroleum were cut off during the war. The Japanese invasion and occupation of Burma and
Indonesia closed two critical sources. After never extracting more than 5.1 million barrels of
oil annually through its first six years, Aramco ramped up to 7.8 million barrels in 1944 and
nearly tripled to 21.3 million barrels in 1945. By then Saudi oil had become vital to the
Allied cause.

    Despite the kingdom’s newfound - and largely unsought - importance on
the global stage, it wasn’t until February 14, 1945, that King Sa’ud, then in his mid-sixties,
met his first Western head of state: Franklin Delano Roosevelt.

    Roosevelt had been courting Ibn Sa’ud for several years, and not merely
to secure oil for the war effort. FDR had his eye on the strategic value of the vast Saudi
reserves for the postwar years, and he was well aware that he would have to overcome British
dominance in the Middle East if he was going to make the Saudis America’s new best friend in
the Islamic world. On February 8, 1943, Standard Oil of California had written to the secretary
of the interior, Harold Ickes, encouraging the Roosevelt administration to counter British
influence by bringing Saudi Arabia under the umbrella of American lend-lease assistance. Ten
days later, Assistant Secretary of State Edward Stettinius declared the kingdom of vital
interest to the United States and extended direct and indirect aid that would eventually amount
to almost $100 million.

    Until the war, the American ambassador to Cairo had borne
responsibility for the Saudi kingdom as well, but even before the lend-lease deal, the Saudis
had been given their own chargé d’affaires, stationed in Jeddah. (From 1944 to 1946, the post
was held by William Eddy, a onetime intelligence officer and experienced Arabist. In what would
become the great tradition of the U.S.-Saudi relationship, Eddy would go on the oil dole after
the war as a consultant to Aramco.)

    Roosevelt sent his own personal envoy to Saudi Arabia in the spring of
1943. In the fall, the Saudis responded with two delegations. First Crown Prince Sa’ud and
later Prince Faysal and his brother Khalid visited the United States, where they met the
president and key members of Congress and the administration. The crown prince stayed for a
month, with all the trappings of a state visit.

    Just as the Saudis were leaving the capital, a group of American
geologists was handing Washington a report on the future of oil. They predicted that the center
of extraction would shift from Mexico and the Caribbean to the Persian Gulf region. Reserves
there were far greater. Gulf oil wells were up to thirty times more productive than the average
wells in Latin America and up to 150 times more productive than average wells in the U.S. And
the proximity of the Gulf made transportation cheap, or would make it cheap once an oil
infrastructure had been put in place. In the meantime, the fragile Saudi economy had gone into
the tank. The lend-lease program was slow in arriving, and a relative trickle when it did.
Muslim pilgrims fulfilling their obligation to visit Mecca provided the bulk of the country’s
prewar revenues. Fighting in both the Pacific and European theaters had severely curtailed that
and cut off most of the kingdom’s trade with the rest of the world.

    In a February 7, 1944, telegram from Dhahran to his corporate masters
in the States, SOCAL’s Floyd Ohliger wrote, “food situation… regarded greatest urgency by his
majesty as starvation conditions becoming widespread.” A government warehouse in Jubail had
about two thousand tons of foodstuffs for Riyadh, but government transportation was on the
verge of collapse, “although some dates going from Hofuf by camel.” SOCAL could help, Ohliger
wired, but only by delaying construction on the vital oil terminal at Ras Tanura.

    In January 1945, in a top-secret memorandum to then Assistant Secretary
of State Dean Acheson, Wallace Murray, head of the Office of Near Eastern and African Affairs,
provided a “description of the character and extent of the American national interest in Saudi
Arabia, together with an analysis of the situation which makes it necessary for this government
to consider what positive steps it must take immediately in order to afford adequate protection
to this interest.”

    The United States wasn’t alone, Murray noted, in having an acute
interest in the kingdom and its oil. “If the Saudi Arabian economy should break down and
political disintegration ensue, there is a danger that either Great Britain or Soviet Russia
would attempt to move into Saudi Arabia to preserve order and thus prevent the other from doing
so. Such a development in a country strategically located and rich in oil as is Saudi Arabia
might well constitute a
causi belli
threatening the peace of the world.”

    The first priority of American policy, Murray argued, should be to
safeguard and develop “the vast oil resources of Saudi Arabia, now in American hands under a
concession held by American nationals.” The memo doesn’t envision the U.S. becoming the Saudi’s
primary petroleum customer; that would come later. The expectation was that the Western
Hemisphere would continue to be largely petroleum self-sufficient. But by filling Europe’s
postwar oil appetite with Saudi oil, instead of oil from Venezuela, Mexico, and elsewhere in
the Caribbean Basin, the United States could preserve its region’s resources and maintain a
reserve it could fall back on in times of military emergency.