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Transferred Territories (Khanaqin Oil Company--a subsidiary of the Anglo-Persian Oil Company). The production of crude oil at Naft Khana, though capable of satisfying a larger demand, is at present restricted to the requirements of the Alwand refinery which is now supplying Iraq with petroleum. The company have nine wells drilling in this area, but progress has been slow on account of the exceptionally high gas pressures met with. Although there is little doubt as to the possibility of this field, the company do not consider that sufficient evidence has yet been obtained of the structure as a whole to justify laying a pipeline for export. If the Persian Government grant the facilities which have been asked for, it is expected that the Persian sector of this area will be developed more fully in the near future.
Well No. T. 6 has been open to production at intervals during the year in order to meet the requirements of the refinery at Alwand. The latter amounted to 1,483,000 gallons during the month of October. Two of the wells have now reached a depth exceeding 3,000 feet, and progress at the other wells has been good. Considerable work has been done in connection with the making of roads and the erection of tank storage and petroleum depôts. The erection of six 5,000 gallon storage tanks for fuel oil, kerosene and benzine at Baghdad was completed during the month of August.
PERSIA. At the General Meeting of the Anglo-Persian Oil Company held on 2nd November, 1927, the Chairman reported that the principal producing oilfield at Masjid-i-Suleiman (formerly known as the Maidan- i-Naphtun field) had maintained its production satisfactorily and was under perfect control. The production during the financial year ending 31st March, 1927, had amounted to over 4,800,000 tons, which compared closely with the estimate of 4 million tons given in the previous year's review of the company's operations. It is expected that the current year's production will exceed 5 million tons.
There have been two outstanding features in the operations on the main fields during the year. For the first time in their history drilling has shown a decrease, and for the first time the company has started to produce motor spirit on a commercial scale from natural gas. As regards drilling it is considered that the structure which constitutes this remarkable oil field has been practically demarcated and drilling is now mainly confined to the marginal areas. The reduction in drilling has made possible not only large field economies but also the release of personnel and material for testing new areas in other parts of Persia. The testing of seven other areas in Persia has been proceeded with and a total of over 37,000 feet has been drilled, but the main oil pro- ducing limestone has not so far been reached in any of them, and several of these wells are at a depth which will make further progress difficult and slow. During the year the capacity of the pipeline has been added to by laying a further 100 miles, and it is considered that increased "throughput" could be secured at any time.
INDIA. No official information relating to 1927 is yet available, but according to an apparently well informed press article production of petroleum in Burma showed a slight increase during April, May and June over the low figures of January and February, and the total crude output for the first six months of 1927 amounted to 491,000 tons. This is higher than was anticipated, but still below the first six months* production for 1926, which amounted to 500,080 tons.
SARAWAK.-Production
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remains
at
practically unchanged 515,800 tons up to the end of September, 1927, as against 526,300 tons for the corresponding period of 1926. Arrangements are being made by Sarawak Oilfields Limited for launching another sea loading line early this year at Miri Bay which will in all probability be of 10 inch diameter instead of 8 inch as formerly used. A new 8 inch sea loading line was successfully launched on 23rd April, length 14,330 feet, depth of water at terminal (low water) 36 feet 6 inches.
OIL THE FUTURE.
(Summary of Article in the American Paper," Foreign Affairs," for October, 1927.)
It may be worth while to draw a picture of what may possibly occur within the next decade. In this picture we see the United States producing at an annual rate of five or six hundred million barrels, Venezuela and Colombia contributing one hundred and fifty or two hundred million, Russia one hundred to one hundred and fifty million and Persia with Mesopotamia contributing some hundred million, with the remainder of the world's supply coming from a large number of lesser resources. In each case the increase in production will tend to elevate the standard of living and to increase government revenues for a time at least, but the restrictions imposed by decline of production and curtailment of revenues have great potentialities for trouble.
Referring again to the three broad areas in which the world's reserves appear to be concentrated, it is of interest to note that the first is, of course, under control of the United States; in the second (Gulf- Caribbean) the ownership of concessions is divided between British and American interests; while the third (Black Sea-Caspian) is largely within the British sphere of influence. Thus, it seems that even though the rates of production in the various countries change substantially it is likely that the world situation will be dominated by America or Great Britain, especially as Britain and America are the dominant financial powers of the world and the oil industry is firmly intrenched in each.
As a result Britain or America, or both together will have to do with oil development in one country after another, as the focus of operations shifts from time to time; one or both will be involved in legal and diplomatic tangles that may arise, and the extent of their co-operation and the fairness they show will determine to a large extent whether the control of the world's oil supply shall be in the interests of peace or of war. If England and America would support opposing factions in some weaker country, each working to give the control of the local oil supply to its own nationals, the possibilities for trouble would be very real. Each country may count on receiving support from its nationals on the plea that oil is necessary for national defence, even though the controversy may be fundamentally one of commercial competition rather than a matter of national defence.
No doubt America will feel no small irritation when she is no longer able to supply her own demands from domestic production, and when
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