Its origins began in 1933 when the Saudi Arabian government signed a landmark agreement with Standard Oil of California (now Chevron) giving them permission to explore the country for oil.
After an initial unsuccessful campaign, Texaco joined efforts with SoCal in 1936. The first success occurred in 1938 when the seventh well (Dammam Number 7) stuck oil on Dammam field, a group of prominent limestone hills.
This success completely changed the landscape in Saudi Arabia. Decision was taken to build a base camp in the vicinities of the newly discovered oil field to start developing this new discovery.
Dhahran camp, where I currently live, was born.
Shortly after oil was discovered south of Dammam, first in Abqaiq in 1940.
Astonishing, discoveries were made immediately after it, Ain Dar 1948, Haradh 1949, Uthmaniyah 1951, Shedgum 1952 and finally Hawiyah in 1953.
All these fields were hydraulic connected, i.e. there were in reality a single super giant field spanning over 250 km, the Ghawar field.
The oil wealthy had arrived in Saudi Arabia. Saudi Arabia invested these revenues into the development of their infrastructure.
This led to an intense struggle to ensure a constant revenue stream.
However neither the production nor the sales price were under government’s control.
The "participation" issue, emerged in the 1960s.
On August 9, 1960, the Standard Oil of New Jersey, decided unilaterally to shave 14 percent off the posted price, in order to increase its competitiveness in Europe vis-à-vis Soviet crude exports.
Other companies followed suit with the price cut and fueled the outrage of the oil-exporting countries.
The ground was laid down to the formation of a consortium of producing countries, OPEC was stablished on September 1960.