[US VS UK / MIDDLE EASTERN OIL] Historically significant long and content-rich manuscripts on Al-Jazeera, Mosul, Baghdad oil, written by the Turkish officer of the Standard Oil Company of Constantinople, to the headquarter of the company in New York

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EDHEM (A representative of the Standard Oil Company of Constantinople, signed by), Manuscript, Constantinople (Istanbul), (1914-1921).

COMPLETE TITLE: [US VS UK / MIDDLE EASTERN OIL] Historically significant long and content-rich manuscripts on Al-Jazeera, Mosul, Baghdad oil, written by the Turkish officer of the Standard Oil Company of Constantinople, to the headquarter of the company in New York in 1914 and 1921.

Original manuscripts on thin paper with the watermarks of "the Century Linen" and its logo, in the original "Standard Oil Company of New York, Constantinople" envelope. Envelope size: 27x13 cm; manuscript size: 33x20,5 cm. Text in entirely Ottoman script (Old Turkish with Arabic letters), with proper nouns such as company and personal names in Latin letters. Two different manuscripts written in 1914 and 1921. 3 p.; 2 p. Full. A legible riq'a script in black ink. The manuscript note in pencil on the envelope is "Istandard Oyil'e memûriyetime dair evrâk" [i.e. Documents of my representative to the Standard Oil Company].

The historically significant long and content-rich manuscript reports on Al-Jazeera, Mosul, Persian, and Ottoman oil written by the Turkish officer of the Standard Oil Company of Constantinople, to the headquarter of the company in New York. The autograph manuscript includes two detailed reports on the situation of foreign relations of the period, initiatives, press, and new information, written in 1914 and 1921, giving an invaluable resource and insight into the British and American oil rivalries as well as people who played a significant role in the oil and international relations conjuncture of the period Calouste Sarkis Gulbenkian (1869-1955), William Knox D'Arcy (1849-1917), Sir Edward Grey (1862-1933), John Davison Rockefeller (1839-1937), etc. Signed by "Edhem" on the envelope and the second report.

The first document, which started with the title "Al Jazeera Oil Mines", includes a detailed account of the British attempts at the Ottoman Government in March 1913 regarding the Mosul oil. The first issues of the first report are Baghdad Railway Company, Baghdad petroleum, Germany, Britain, United States, National Bank of Turkey, D'Arcy and the Concession of Persian oil, Turkish Petroleum Company, Shell, the diplomatic note by Edward Gray Cabinet to the Ottoman Government through the Constantinople British Consulate. The documents report the international secret agreements made under the period conditions of the oil question with 8 articles and the conclusions drawn by the author's thoughts. The rights of Britain in the Najd land, the oil mines in the Basra Province and possible changes in their regulations, the situation of Kuwait land, and how the Ottoman Government will be committed to the concession to be given to D'Arcy constitute the critical issues of these eight articles. The next paragraph has important content documenting the negotiations between Germany and England regarding Iraqi oil, which resulted in the establishment of the Turkish Petroleum Company, and how much percentage Germany, the D'Arcy group, and Deutschebank will receive from these concessions.

The next chapter of a very detailed account consisting of ten articles contains the analysis of the legal and economic situations of the D'Arcy Group, Britain, Germany, Ottoman Oil Company, Deutschebank, Anglo-Saxon Oil Company, and Gulbenkian. This part of the document gives an invaluable insight into the subject, apparently written by a person with a great command of the legal language. The last three paragraphs of the first document contain the account of the agreement between the British Foreign Office, the German Government, the National Bank of Turkey, the Anglo-Saxon Petroleum Company, Deutschebank and the D'Arcy Group, and the events that followed, from the beginning of 1914 until the date of writing the documents on 22 July. Overall, the first manuscript deals with the international conjuncture dragged into World War I in the context of Middle East oil.

The second historical document was written 7 years after the first (1921) and refers to it in the content. A document reported in a British newspaper published in the period that no concession was granted to any country or person for Al-Jazeera oil by the Ottoman Government according to a representative of the Standard Oil Co. in the UK. Questioning how this British journalist got to this news, the reporter wonders if the news was leaked from one of the representatives. In 1921, a 2-point summary of the correspondence between the Germans and the British during the Sait Halim Pasha cabinet, the head of the Ottoman government at the time the document was written, and the latest situation regarding the oil mines of Baghdad and Mosul is at the end of this second document.

The selected English translations from the document:

1-) On Al Jazeera Oil Fields:

The British government has begun approaching the Ottoman Government regarding Mosul petrol in March 1913. The same year in June Sir Edward Grey’s memo to the Ottoman ambassador states that it would behoove the Ottoman government to agree with the British government regarding the petrol in Baghdad for the Ottoman government’s four percent customs duty addition can be agreed upon. When Hakki Pasha, London ambassador of the Ottoman government, reported the aforementioned issue to the Sublime Porte, touching on the fact that since they had the right of preference to mining the mines within twenty kilometers on both sides of Baghdad railway lines, and the previous year a treaty has been signed between Hazine-i Hassa [i.e. Privy Treasury] and Baghdad Railway Company regarding aforesaid petrol, it would be beneficial for the British and the Germans to reach to an agreement on this matter. In fact, the Germans merged with a group in London by the name of “Turkish Petroleum Company” and to examine the Iraqi petrol a board of scientists have been sent to that area under Kissling’s chairmanship. The British government, however, favored that the privilege is given to the D’Arcy group. The Ottoman government, on the other hand, didn’t want to exclude the Germans and therefore inquired the British government if it was possible to have a composite organization. The British government, on account of the candor of Germans, agreed to yield 25% to Germans, 50% to the Turkish National Bank, and 26% to D’Arcy and it has been confirmed by the aforementioned bank. Among those who partook in the distribution, Shell was a well-known English company that traded petrol, but since most of their shareholders were foreigners and especially Dutch, the British government didn’t want to hold that company equal to the D’Arcy group. In the memo, given on the 12th of March 1914, by the English Istanbul Embassy to Bâbiali [i.e. Sublime Porte] it has been noted that if over 50% of the petrol privilege was to be given to any company but the D’Arcy group, the issues of customs and exclusivity will be strictly refused. Furthermore, even Sir Edward Grey, having heard that an Ottoman company has been formed for petrol in Baghdad, addressed Hakki Pasha in the following manner:

  • Turkey is under obligation to D’Arcy for this privilege.
  • The British government will not be content if the D’Arcy group isn’t granted a share of 50% of the privilege.
  • If no agreement is reached, the British government will not agree to any exclusivity in Turkey.
  • This issue has been stated and confirmed by the British government on July 29, 1913.
  • [.]
  • The Kuwait borders outlined in the map should be excluded from any privileges regarding Basra.
  • Some British citizens are involved in the petrol sources in Basra in compliance with mining regulations.
  • Considering the political situation, the British government will aspire to uphold that British groups have the right to preference in the Najd area. Establishing a foreign union may cause disturbance in the area.

As a result of the agreement between England and Germany regarding petrol in Iraq, legal privilege will be distributed thus: 50% to the D’Arcy group; 20% to Deutsche Bank, and 20% to Anglo-Saxon Petrol Company. It has been suggested that this distribution will be agreed upon in the future within the framework of possible conditions.

  • The stock certificates belonging to the Ottoman Petroleum Company will be distributed. Türkiye Millî Bankasi [i.e. Turkish National Bank] will receive all it owns, and the rest will be divided between Deutsche Bank and the D’Arcy finance committee.
  • Likewise, eighty thousand stocks each with a price of one lira will be gifted to the Ottoman Petroleum Company and thereby increase its capital to one hundred and sixty thousand liras.
  • [.]
  • The presidents of the companies are eight in number: four of them will be selected by the D’Arcy finance committee, two by Deutsche Bank, and two by Anglo-Saxon Petroleum Company.
  • [.]
  • [.]
  • The subsequently founded companies will be provided with necessary fund-privileged stock certificates and market-accepted currencies for increased transactions and even these will be put to sale by Ottoman company’s members in the amounts they choose.
  • [.]
  • S. Gulbenkian of the Ottoman company, who doesn’t have the right to cast vote, will have the right to claim a five percent dividend.

The aforementioned five percent will be disbursed through the share price owned by the D’Arcy finance committee and the Anglo-Saxon company. Gulbenkian undertakes the repayment of the non-disbursed share price. Fifty percent share of Ottoman Petroleum Company belongs to Turkish National Bank and the bank yields ten percent of the share to Gulbenkian, and thus the individual earns the right to intervene in the matter.

  • Each of the three parties that are stakeholders of Ottoman Petroleum Company will have the right to enterprise and allot on their own behalf and on the behalf of other companies they own. [.] But these companies will not be beneficiaries of the raw petrol production in Ottoman lands directly or indirectly. Except for the permission given by the Ottoman Petroleum Company, these companies will not engage in activities on Kuwait soil with the Egyptian government.

This agreement, put to paper on March 19, 1914, in London, in the Foreign Affairs Office has been signed by Von Kölemann on behalf of Germany, Krav on behalf of the British government, Babington Smith on behalf of Turkish National Bank, Detreno Samuel on behalf of Anglo-Saxons, Bergman on behalf of Deutsche Bank, and Greenway and Parpis on behalf of D’Arcy group. British, German, and Istanbul embassies have appealed to the Sublime Porte with a collective memo, asking for the petrol privileges, given to Hazine-i Hassa [i.e. Privy Treasury] due to Sultan’s edict and thereafter passing to Hazine-i Maliye [i.e. Ottoman Financial Treasury], to be delivered to the Turkish Petroleum Co. Ltd. The Sublime Porte responded to the embassies, stating that the existing and prospective petrol mines in Mosul and Baghdad will be given over, but that its own perspective shares, the agreement, and the regulations will be discussed carefully, thus if anyone incurs a loss, it should be guaranteed that their loss will be compensated.

           In the memo in response, dated July 4, 1914, the issue of compensation has been contested, and in the telegram sent from Foreign Affairs Public Debt Department to Hakki Pasha in London, dated July 14, 1914, it has been stated that the issue of compensation has been abandoned and this issue will be discussed in the agreement that will be signed with the company. In another telegram dated July 22, 1914, to the same person correspondence continues. It is stated that the Iraqi petrol privilege will be given to Turkish Petroleum Co. and the Ottoman government’s share thereof will be decided. Since this issue will take a long time, both Ottoman government’s goodwill is beyond doubt, and the demanded outcome is of great importance, it has been brought up by the company that a representative, with the permission of the company, should be sent to Istanbul. The matter of Iraqi petrol has stayed in this phase. Fî 6 Mart sene 1914 [i.e. March 6, 1914].

2-) MEMO:

Recently in one of the English newspapers, an article has been seen which states the Ottoman government has given nobody mining privileges in the continent of Al Jazeera.

Our company would like to know whence the reporter received that information.

Has this idea been born from the statements of our delegations during their trip to England? Or did our report prepared by our present company and given to our managerial department in New York help illuminate the United States government and subsequently resulted from the discussion of official correspondence between the British government and the US government? The documents of evidence spoken of in the attached report are of concern to us.

Summary: New information demanded about oil mines in Baghdad:

With various phases of oil mines in Baghdad and Mosul, governments of Ottomans, British, and Germans corresponded and among them those that Sait Halim Pasha chanced upon were put together with their vouchers as a historical document. This document is concerned with the various phases and events of the aforementioned mines in 1914 and covers the period right after the world war was declared.

Inquiry of the company:

  • Predating that era, i.e., 1906, 1908, 1910, 1911, etc. the correspondence regarding the aforementioned mines.
  • [.]

Historical context:

"In the 19th century, the Ottoman Empire was sitting on top of a great resource: oil. The competition between the colonial states, the developments in the industry, and the discoveries in the automobile engine made this resource even more attractive.

American giant Standard Oil: The British Empire discovered Mesopotamian oil reserves in 1871. Immediately after, it sent oil experts to Ottoman lands under the guise of archaeologists. In America, the first oil was extracted in Pennsylvania in 1859, and the Standard Oil Company was established in 1870 under the leadership of John D. Rockefeller. By 1880, Standard Oil had turned into a giant cartel that controlled 95% of the American oil market. 

With Germany's participation in the colonial race, albeit late, fierce competition began between the United States (Standard Oil Company), which owned more than half of the world's oil production, and Britain (Shell) and Germany (Deutsche Bank) were trying to have a share of the cake that was Middle Eastern oil.

Sultan Abdülhamid II knew that Mesopotamian oil was whetting the appetite of his rivals and the real intentions of the men working on his land under the label of archaeologists. He bought time by maintaining a balanced foreign policy between Britain, Germany, and the U.S. He had reports prepared on the oil of the region. In addition, he bought the oil fields from the state treasury, the Hazine-i Hümayun, and registered them in his personal treasury, namely the Hazine-i Hassa, so that they would not be lost after a possible war due to escalating competition.

Gulbenkian: Istanbul-born Ottoman-Armenian Calouste Sarkis Gulbenkian was an oil genius. His father was a tax collector for the Ottoman Empire. Gulbenkian knew Ottoman geography well, as he traveled a lot with his father. In his youth, he worked in Baku at Mantashev Oil Company, a subsidiary of Asiatic Petroleum, whose main partners were Royal Dutch, Shell, and the Rothschild family. After his experience in the Caucasus, Gulbenkian did his internship in London with Frederick S. Lane, who ran the Rothschild family's oil operations. He was instrumental in the merger of the British Shell firm and Royal Dutch of the Netherlands in 1907 so that it could compete with the near-monopoly of Standard Oil.

1908 Revolution: In 1903, the Ottoman Empire signed the Baghdad Agreement and granted Germany a concession on the oil reserves within a 25-kilometer (15-mile) radius of the Baghdad Railway. Toward the end of 1907, rumors spread that Deutsche Bank was trying to establish an oil monopoly in Mesopotamia by using its political influence over the Ottoman Empire. The Germans wanted to extend the Baghdad Railway from Konya to Baghdad into Mesopotamia. This gossip meant the end of the game played by Sultan Abdulhamid.

Gulbenkian opened an office in Istanbul on behalf of Royal Dutch Shell. With the Young Turk Revolution of 1908 that followed, the monopoly dreams of the Germans were destroyed: Now the British were also in the market. As soon as the Young Turks came to power, they transferred the sultan's private oil fields back to the Treasury. They also appointed Gulbenkian as a financial advisor to the government.

Turkish Petroleum Company: Standard Oil was split into smaller companies such as Exxon, Chevron, and Mobil in 1911, on the grounds that it had become a monopoly. Rothschild also sold his shares in Baku oil to Royal Dutch Shell in 1912. Gulbenkian founded the Turkish Petroleum Company (TPC) in the same year. The share distribution of TPC was as follows: Deutsche Bank, 25%; Gulbenkian, 40%, and the Turkish National Bank, which was established in Istanbul by the British after the Young Turk Revolution, 35%. The interesting thing was that although both companies were Turkish in name, neither the Turkish National Bank nor TPC had any Turkish shareholders.

Gulbenkian later transferred 25% of his own shares to Royal Dutch Shell. The Turkish National Bank was dissolved after the inclusion of the Anglo-Persian Company (APOC, later British Petroleum) belonging to the British government. The new distribution of TPC shares was as follows: Deutsche Bank, 25%; APOC, 47.5%, and Royal Dutch Shell, 22.5%. Gulbenkian's share fell to 5%. After that, Gulbenkian would be famous as "Mr. Five Percent." As the shareholders of the company, Britain and Germany agreed to share the oil fields of the Ottoman Empire among themselves. On June 28, 1914, one month after the Young Turk Government gave the concession of oil reserves in Mosul and Baghdad Region to TPC, World War I would begin.

WW 1: Although it made promises, Britain did not want Germany as a partner in Mesopotamia. It opened the London Stock Exchange, which had been closed to the Russians since the Crimean War, to the ministers of the tsar, and drew Russia to its side. It forced the Young Turks to approach Germany, and the expected world war began. Along with the war, Britain placed a lien on German shares in the company. Armenians under Russian influence in Anatolia, who prevented oil transportation, were exiled by the Young Turks. Two years later, the Bolsheviks, including Stalin who had risen in fame with his strikes at the Rothschild oil refineries, seized power in Russia. Thus, Standard Oil, which disabled the British companies, then made an agreement with the Bolsheviks for Baku oil. 

Britain offered an independent Arab state to Sharif Hussein and drew the Arabs to its side. While the English spy T. E. Lawrence was distracting Sharif's son Faisal with the aforementioned offer, the British Mark Sykes and the French Georges Picot had already concluded the agreement dividing Arab lands between Britain and France. Palestine, the Persian Gulf, and eastern parts of Iraq were Britain's, while parts of Turkey, including Mosul, Syria, and Lebanon, would belong to the French. The remaining lands were to be divided into semi-independent Arab states. However, APOC, which discovered Mosul oil before the war, was not satisfied with this agreement. It didn't want to leave Mosul - which had huge reserves - to the French. Then, Turkey, with the collapse of the Palestine Front that included Mustafa Kemal Pasha, withdrew from the war. Thus, the war ended and the Turks and Germans left Arabia and Mesopotamia. England, not content with Arab lands, took the armistice as an opportunity and landed soldiers in Mosul.

Mosul oil: England, which controlled the inland seas thanks to the Suez Canal, did not want to lose control of the Dardanelles and Bosporus straits. Arms dealer Basil Zaharoff, one of the shareholders of APOC, talked to his close friend, British Prime Minister Lloyd George, and persuaded Greece to occupy Anatolia. Britain would use Greece under its control as a shield to protect the straits by placing it in Istanbul and Çanakkale. 

In April 1920, England made an agreement with France in San Remo. The French left Iraqi oil, including Mosul, to the British in exchange for Syria and a 25% stake in TPC. Thus, the shares of Germany – which was defeated at the end of the war – and Syria – which was promised to Faisal – were given to the French. Britain, which created a new state called Iraq, put Faisal, who was left idle, as the head of this state.

Zaharoff owned companies, banks, and newspapers in France. Here he was acting on behalf of both Royal Dutch Shell and APOC. He was meeting with some prominent bureaucrats and politicians in France and was giving these politicians shares in the company. That's why France was tolerating Britain's selfish policies. But America was not willing to leave the cake to the British government.

The Greco-Turkish War: Standard Oil became a partner in Banque de Paris et des Pays Bas (BNP Paribas) controlled by Rothschild in France and made a rapid entry into France by purchasing the Matin newspaper. Through the bank, Standard Oil's French arm was established: Compagnie Standard Franco-Americaine. The company bought some politicians and lured them to its side. The American government announced to France that all aid and oil shipments from the other side of the Atlantic would be stopped if the interests of Standard Oil were ignored. The Treaty of Sevres, which disabled Standard Oil, became void at the request of the United States. 

France, which was dependent on the United States for oil imports, had to approach Standard Oil. French politician Henry Franklin-Boullion went to Ankara and signed the Ankara Agreement with Mustafa Kemal, the new leader of the Turkish National Movement. In return for the assistance to be given to him, the operation of all the oil that is or will be found on Turkish soil would be given to Standard Oil. Thinking that Mosul would remain with the Turks, Standard Oil hoped to get Mosul oil in this way.

The victory of Mustafa Kemal, who received the support of the Bolsheviks in exchange for Baku oil and the support of France and America in exchange for Mosul, was now inevitable. Mustafa Kemal first marched on Izmir, then on Çanakkale and Istanbul. He succeeded in driving the Greeks out of Anatolia, which in turn led to the overthrowing of the government of Lloyd George in Britain.

Unable to withstand the pressures of the United States, England, in Lausanne, agreed to put the straits under the control of an international commission. The Mosul issue, on the other hand, could not be resolved. The file was referred to the League of Nations. After long negotiations with British companies, America gave up its demand in the Ankara Agreement. Thereupon, the League of Nations returned Mosul to England. In return, Britain agreed to give the Americans shares in TPC in 1928... (Daily Sabah, M. H. Bulut).

Overall, these manuscripts contain some kind of historically significant international information reported clandestinely on the Middle Eastern oil subject to the Standard Oil Co. and the policy of the Ottoman Empire in the last period of its existence against these attempts.

Provenance: Ali Çubuk (?-2020) Collection includes mostly rare navigation and important books, manuscripts, maps, and portolans. This manuscript has been made transcription by Çubuk to an unnamed specialist and translator in Old Turkish with Arabic letters, and several 'reading errors' is re-edited by our specialists before our presentation. English translation of the documents is made by Baris Tanyeri (1986-) who is a Turkish translator and author. For a complete English translation and/or Turkish transcription, please contact us.