Chapter 30 Britain's Battle for Oil Supremacy

Before the ink was dry on the Treaty of Versailles, American oil giant Rockefeller Standard Oil quickly realized that their British allies had skillfully excluded them from the spoils of war.Through Britain's secretly owned Royal Dutch Shell and Anglo-Persian Petroleum, the British government had de facto control over the newly drawn borders of the Middle East and postwar European markets. In April 1920, the ministerial meeting of the Supreme Council of the Allied Powers was held in San Remo, Italy, and the details of the division of the oil interests of the former Ottoman Empire in the Middle East were drawn up.British Prime Minister Lloyd George and French Prime Minister Alexandre Millerand reached the San Remo agreement, the British gave up 25% of the oil exploration share in Mesopotamia, and France agreed, in the new international Under Union protection, Mesopotamia was administered by the British.

And Britain's shares to France were snatched from the Germans, and these shares were once Deutsche Bank's 25% stake in the former Turkish oil company, as part of the spoils of the Versailles peace. The oil rights to the remaining 75 percent of the vast remaining Mesopotamia remained firmly in the hands of the British government through Anglo-Persian Petroleum and Royal Dutch Shell.The French government creates a new state-backed company, the Petroleum de France (CFP).The following year, under the leadership of the French industrialist Ernest Massey, the Petroleum de France developed a number of new interests in Mesopotamia.

Sir Henry Deterding, the Englishman who headed Royal Dutch Shell and a trusted spy for the British Secret Service, promised France a portion of the oil rights adjoining French Syria, in exchange for Britain's firm control over Huge untapped oil reserves in Mosul and Mesopotamia. The San Remo agreement itself was the work of Sir John Cadman, then director of the Imperial Petroleum Policy Committee and later head of the Anglo-Persian Petroleum Company owned by the British government.Cadman and Deterding had privately hammered out the terms of the San Remo deal. Not surprisingly, Britain's national oil hegemony was thus greatly strengthened.

Under the San Remo Oil Agreement, Britain gave France 25% of the total oil extracted in the Mesopotamian region.In exchange, France generously authorized BP to build an oil pipeline between French Syria and Mediterranean oil ports. Oil pipelines and all businesses related to this are exempt from French taxation.Cadman calculated that, because of France's lack of substantial oil production capacity, Britain would inevitably have a de facto monopoly on the growing oil wealth throughout the Middle East.The San Remo agreement also includes a clause allowing the UK to exclude any foreign companies from mining in its territory.

In addition, an agreement was reached at San Remo that France would adopt a coherent policy with Britain in its oil relations with Romania and the Soviet Union. The implications of this agreement soon became clear.Since France suffered far more economically than Britain in World War I, the San Remo agreement appeared to be a windfall for London, securing French support for Britain's global oil landscape, which Centered on the oil wealth of the Arab Middle East of the ancient Ottoman Empire.