The geology of southwest Iran is dominated by the Zagros Mountains. These mountains originated from the collision of the Arabian Plate with the Asian Plate during the Cenozoic. Prior to this collision, the Tethys Ocean separated these two tectonic plates. The shelf and deepwater sediments of Tethys outcrop in the Zagros Mountains and are also present underground.
As the Zagros Mountains uplifted, a foreland basin formed and new sediments were laid on top of the Tethys sediments. Thus, a 12,000m sequence of Paleozoic-Mesozoic-Cenozoic sediments exists in southwest Iran. This huge sedimentary sequence is bounded by salt deposits (which are a very efficient petroleum seal rock) both at the bottom, just below Cambrian sediments (the "Infracambrian" Hormuz Salt), and on the top, the Miocene Gach-Saran Formation, below the Zagros clastics and conglomerates. The intervening strata contain several layers of organic-rich shales (petroleum source rocks) as well as thick fractured limestone and sandstone (reservoir rocks) which have been folded and faulted, thus creating enormous oil and gas accumulations in southwest Iran.
In the second half of the 19th century European geologists mapped and published seminal papers on the stratigraphy of Zagros. What particularly drew the attention of European entrepreneurs to Persian oil were the works of the French geologist and archeologist Jacques de Morgan. In his 1892 paper in the Annales de Mines and in the second volume of his Mission Scientifique (1895), de Morgan reported on the abundance of oil seeps in western Iran and the possibility of establishing a successful oil industry in the region.
The D'Arcy Concession
In 1900, at the Paris Exposition, Kitabchi Khan, Persia's representative at the Exposition, and Monsieur Edouard Cotte, a European business agent, talked about de Morgan's papers. Kitabchi Khan was an Armenian who had become at age fifty-seven director-general of Iran's customs, and thus held the trust of government officials in Tehran. He approached both the French and the British investors to explore Persian oil. In Paris, he also talked to Sir Henry Drummond Wolff, who was recovering from a mental breakdown that had ended his career as British Minister in Tehran a few years earlier. Wolff introduced him to William Knox D'Arcy, a native of Devonshire who had made a fortune investing in a gold mine in Australia and was then living luxuriously in London and on look for new commercial ventures.
In March 1901, D'Arcy sent his agent Alfred L. Marriott together with Cotte and Kitabchi Khan to Tehran to negotiate for a concession from the Persian government. He also separately dispatched a geologist, H.T. Burls, for verification of oil seeps in the areas that de Morgan had mapped. The timing was just right: Burls' report was optimistic ("the territory as a whole is one of rich promise") and the Persian King Muzaffar al-Din Shah Qajar badly needed money to finance his expensive trip to Europe. Sir Arthur Hardinge, then the British Minister in Tehran, helped D'Arcy's team to meet with Persia's Prime Minister Amin al-Sultan. Marriott is reported to have paid £10,000 to the Persian government officials to secure a concession.
On 28 May 1901 the concession was signed by the Shah. It granted D'Arcy to explore, drill, produce, and export petroleum in Iran (with exception of five northern provinces close to Russia) for a period of 60 years. D'Arcy was required to form a company within two years for this purpose. The Persian government was to receive £20,000 in cash, £20,000 in shares from the company, and 16% of profits made by the first or any other company formed by this concessionaire. Kitabchi Khan was rewarded too; he continued to be on D'Arcy's payroll (£1,000 a year) but acting as representative of the Persian government! D'Arcy formed the First Exploration Company in May 1903 with a capital of £600,000, half of which belonged to him.
For field operations, D'Arcy hired George Bernard Reynolds, an Englishman graduated from the Royal Indian Engineering College and served in India, and a self-taught geologist who had drilled in the Dutch oil fields of Sumatra. Working conditions in western Iran, as Reynolds soon learned, were harsh - the climate was hot, the drill sites were remote, and the local tribesmen were suspicious of foreigners in their territories and did not care about government concessions. Reynolds had to hire local laborers and security guards and pay to tribal chiefs for their cooperation. He also put together a technical team of Polish and Canadian drillers, an Indian doctor, and a wiry American engineer C.B. Rosenplaenter as his deputy.
In November 1902 drilling started at the seepage area of Chiah Surkh (one of the key areas mapped by de Morgan) in far western Iran. In the summer of 1903 a slight show of gas and oil was encountered at 505 m. In January 1904, a second well hit oil at a similar depth. However D'Arcy's excitement was short lived; the oil production rapidly fell from 180 barrels a day to merely 25 b/d.
D'Arcy, now disappointed, was willing to sell the concession, and some German, French and American companies were interested in a deal. Sir John Fisher, who had become First Lord of the Admiralty in October 1904, was planning to convert the Royal Navy from coal to oil fuelling, and wanted to prevent the D'Arcy' concession to slip out of British hands. On his initiative, a new company, the Concessions Syndicate Ltd., was formed in 1905 in Glasgow, to take over D'Arcy's operations in Persia and with new financial contributions from the Scottish Burma Oil Company and a retired wealthy Englishman Lord Strathcona. D'Arcy remained the director of the new company.
Drilling at Masjid Sulaiman
Concession Syndicate, now dominated by the Burma board, decided to abandon Chiah Surkh and move the drilling to the southern Khuzistan Province. Two years earlier, D'Arcy had sent a geologist, W.H. Dalton, to report on oil prospects in this province. Dalton had singled out Shardin, some 90 kilometers east of Ahavaz City, as "by far the best." Based on this report, Reynolds drilled two test wells at Shardin: One in 1906 reaching a depth 662 m, and the other in 1907 to 592 m deep. Both wells were dry.
Reynolds decided to try a third (and final and his most favorite) area, located about 90 kilometers northeast of Ahavaz. This area was traditionally called Maidân Naftoon, literally "The Plain of Petroleum." It was also home to the ruins of an ancient Zoroastrain fire temple, and for this reason local people (mistakenly) called it Masjid Sulaiman ("Mosque of Solomon"). (The official name for this rapidly growing oil town, Masjid Sulaima, was given in 1926). This place was favorably mentioned in the geological reports of de Morgan, Burls, and Dalton, but it was particularly attractive for Reynolds because in November 1903 on a brief trip to Kuwait he had heard stories about oil seeps at Maidân Naftun from a British historian, Louis Dane, and had even gone to this desolate place in 1904 and 1906 to observe the sedimentary rocks saturated with oil.
The drilling of Well No. 1 at Masjid Sulaiman began on 23 January 1908. Reynolds was enthusiastic about this well and his optimism was also shared by Boverton Redwood, a petroleum advisor to D'Arcy, and Cunningham Craig, a geologist of the Burma company who had visited the Iranian field. However, the Burma board of Concessions Syndicate, having already spent so much money, was beginning to loose heart. Arnold Wilson, a young lieutenant of the British Indian Army who was before classmate of George Reynold's son at Clifton College in England and who had brought twenty gunmen with him in 1907 to protect the drilling operations in Persia, writes in his autobiography, S.W. Persia: A Political Officer's Diary, that Reynolds had received a telegram from the company to stop the drilling but had cabled back that the drilling should go on.
A gusher - after seven years
Reynold's devotion paid off. On 16 May 1908 a strong gas smell in the rock was noted. Reynolds kept on drilling, and on 26 May the well hit oil - the gusher shot more than 20 m above the rig. Reynolds, in high spirit, called for a camel courier and sent off a message to the telegraph office in Baghdad to inform his company: "I have the honour to report, that this morning at 4 a.m. oil was struck in the No.1 hole at a depth of 1180 feet." Wilson, who had been sleeping close to the rig, also broke this important news to the British government but in a coded message so that clerks could not notice: "See Psalm 104 Verse 15 Third Sentence and Psalm 114 verse 8 second sentence." Un-coded, the telegram read: "That he may bring out of the earth oil to make him a cheerful countenance ... the flint stone into a springing well."
The following day, Well No. 1 was tested to flow about 297 barrels of oil a day. On 5 June, Well No. 2 at Masjid Sulaiman also hit oil at 1,010 feet - another gusher.
In mid-June, Reynolds received an official letter dated 14 May from the Burma board at Glasgow to the effect that if no oil was found to the depth of 1,600 feet, he should abandon the drilling, pack and ship the equipments to Burma! History was repeating itself: A half a century before that, Edwin Drake had received a similar letter from his bosses just as he struck oil at Titsuville. But this time, we have a record of Reynolds' sarcastic reply: "The instructions you say you are sending me may be modified by the fact that oil has been struck; so on receipt of them I can hardly act on them."
By the end of 1908, two more producing wells had been drilled at Masjid Sulaiman. It took seven years to discover this first oil field in the Middle East.
A giant field
The oil at the Masjid Sulaiman field came from Oligocene-Lower Miocene limestone of the Asmari Formation - so named (in 1924 by R.K. Richardson) after the Asmari Mountain ("Kuh-e Asmari") located about 32 kilometers southeast of Masjid Sulaiman.
The type section of the Asmari Formation mapped at a place called Tang-e Gel-e Torsh (on the southwest flank of Asmari Mountain) is 314 meters thick (almost the same thickness encountered in the discovery well) but the Asmari Formation varies in its thickness regionally from a few meters to 518 meters. The Asamari limestone is usually cream to brown in color and contains several joint sets - the main permeability for fluid flow in the rock. Both the Asmari Mountain and the subsurface Asmari reservoir in the Masjid Sulaiman are gently folded by tectonic compression. Later studies found that the Asmari anticline is actually situated on the hanging wall of a major thrust fault formed at deeper levels in southwest Iran.
The oil from the discovery well at Masjid Sulaiman field was light crude (39.4 API degrees) and contained 1.3% sulfur. Until the 1979 Iran's revolution, 314 wells had been drilled in the Masjid Sulaiman field, having produced a total of one billion barrels from the Asmari, and in 1979 the reservoir was still producing about 7,000 barrels a day. Although today Asmari limestone is no longer a producing reservoir at the Masjid Sulaiman field (production comes from deeper reservoirs), Asmari limestone is still an important reservoir rock in many oil fields in the "Simply Folded Belt" of the Zagros basin.
A true oil finder
The Masjid Sulaiman discovery had enormous commercial and geopolitical implications. On 14 April 1909, a new company, the Anglo-Persian Oil Company (APOC), replaced the Concessions Syndicate Ltd., with a capital of £2 million, registered in London. D'Arcy remained its director until his death in 1917. In order to secure oil supply for the Royal Navy at a lower price, in 1914 Winston Churchill's government decided to buy 51% of the APOI and appointed two government directors (with veto power) on its board.
In his best-seller The Prize: The Epic Quest for Oil, Money and Power, Daniel Yergin remarks: "George Reynolds was the man who held the whole thing together. Already around fifty when he first arrived in Persia in September of 1901, he would proceed to carry out an unusually difficult enterprise, under endlessly trying circumstances. He was at one and the same time engineer, geologist, manager, field representative, diplomat, linguist, and anthropologist." Alas, Reynolds did not receive the respect and credit he deserved for all his work, while, as Arnold Wilson wrote in his diary, "The men whom he saved from the consequences of their own blindness became very rich." Reynolds continued to work for two more years as field manager in Iran, but the new bureaucratic management of APOC did not have nice words for him. In 1911, Reynolds was fired - receiving a slim bonus of £1,000 (which was less than Reynolds' annual salary of £1,500 when he was first hired by D'Arcy in 1901). Reynolds, truly an oil man and hardworking spirit, then joined Shell and went on to discover the major La Rosa oil field in Venezuela in 1922. He died in 1925.