Jim_Krane]_Energy_Kingdoms__Oil_and_Political_Sur

THE OIL AGE ARRIVES37

developing Saudi Arabia. The administration, research, and engineer-
ing roles that Aramco pursued on behalf of the king went far beyond
the usual profit- maximizing roles of a shareholder- owned company.
Many of Aramco’s pursuits were, in fact, governance duties normally
overseen by a state. Duce argued that the company’s work could
even  help stabilize the Middle East, as long as it was protected from
expropriation:

The industry provides and will continue to provide housing, schools,

training, pays good wages, maintains hospitals, does research on health

problems and particularly on endemic diseases, such as trachoma, and

does many other things which are so necessary to build up the stan-

dard of living in the area.... All these will add to the prosperity of the

area and form a base upon which a flourishing economy can be built

providing, of course, the resultant funds can be efficiently used. The

industry should, therefore, be protected from raids on its financial posi-

tion so that it can continue to make its full contribution to the wealth

and stability of the Middle East.^20

Aramco’s projects helped create the foundations of the modern Saudi
state. These included eradicating malaria and smallpox; undertaking
port, road, rail, and other infrastructure projects; building waterworks
and desalination plants; and training a Saudi workforce, which created
a commercial class.^21 Aramco’s presence shaped governance and insti-
tutional design, particularly in the kingdom’s newly founded Eastern
Province, formerly al-Hasa, which had been annexed by the al- Saud in
1913, just two decades before the American wildcatters arrived.
Saudi Arabia and its oil were so strategically important to the West
and its allies— then referred to as the “Free World”— that control over
these vital realms could not be entrusted to a private company alone.
The US government, as Duce’s correspondence shows, stayed deeply
involved. There were a host of reasons for close US engagement. As early
as 1960, Saudi Arabia was understood to hold about a fifth of global
crude oil reserves, at a time when its population was just 4 million—
pointing to a major long- term source of supply. A decade later, Saudi