FRIDAY, MARCH 24, 1961.
The morning air off Ras Tanura, Saudi Arabia was warm and humid. A light haze burned slowly away as the sun bore down on the piers and storage tanks of the Arabian American Oil Company's deepwater terminal.
A pickup truck sped along the narrow, two-mile sand causeway that links the port facilities to the desert mainland and the company's refinery.
Nine tankers, each flying a red loading flag amidships, were berthed at the two T-shaped Aramco piers. They were taking aboard Saudi Arabian crude oil, bunker fuel (some of which would power their own engines) and other refined products, all bound for distant ports.
The low silhouette of another tanker moving slowly toward the piers rose above the pale, green-blue water of the Persian Gulf. Scattered clouds hovered above. A nine-knot wind out of the northwest stirred the ships' flags. Fluttering lazily above the fantails of the array of vessels could be seen the national ensigns of Finland, Panama, Norway, Spain, Great Britain and the United States.
The world demand for oil had grown beyond the most optimistic predictions of oil men for more than ten years. Nothing in 1961 better symbolized this amazing demand than the steady 24-hour flow of oil past the loading couplings at the Aramco pier on March 24.
Between six a.m. Friday and six a.m. Saturday—the official clock day of company operations—more than 1,300,000 barrels of crude oil were pumped aboard the waiting tankers. All told, 13 of the big oil cargo ships came and went.
It was a remarkable day at the terminal. A record number of tankers were "topped out"—filled to the hatches. And the terminal pumps moved a record volume of oil into the deep holds.
However, the dockside achievement was only one aspect of an historic day. Throughout the Aramco operations network—from oil fields to precisely metered storage tanks to crude oil delivery points—new high levels of oil movement were entered in log books.
Before the day began, dispatchers knew that an unusual number of tankships would arrive. But there were no changes in routine. Shift workers were at their posts, but the rest of the company was enjoying the second day of the Aramco "weekend." This was Friday, the Muslim day of rest.
As the day wore on, the meters at various delivery points showed that a record day was in the making. In round numbers, 270,000 barrels of crude oil were delivered to the Ras Tanura refinery, 203,000 flowed through submarine pipelines to a refinery on nearby Bahrain Island, and 460,000 barrels streamed into the Trans-Arabian Pipe Line bound for Sidon in Lebanon on the Mediterranean Sea.
By six a.m. Saturday the operations day had ended. The gauges and meters told the final story: 2,255,472 barrels of crude oil had been delivered from monitored storage tanks into the economic lifestream of world oil consumption.
This amount of oil, incidentally, would fill a convoy of tank trucks stretching from New York to Washington, D. C.
More than half-a-million barrels of refined products were also delivered—most of them to the 13 tankships—during the day.
Friday, March 24 may have been a routine day to the men who guided the crude oil and product deliveries, but the magnitude of the results provided the company with a difficult target for the remainder of the year. As a result, the company kept its sights high and rounded out 1961 with its highest levels of achievement.
The peak day provided the momentum for the peak year of Aramco history.
Aramco is wholly owned by four American corporations: Standard Oil Company of California, 30 per cent; Texaco Inc., 30 per cent; Standard Oil Company (New Jersey), 30 per cent, and Socony Mobil Oil Company, 10 per cent. These companies are owned by more than 1,200,000 stockholders.
Following is a summary of Aramco's record year:
Annual crude oil production increased for the eighteenth consecutive year and reached 508,269,201 barrels. This was an increase over 1960 of 51,816,028 barrels.
Total cumulative production at the close of 1961, after 23 years of commercial production, was 4,764,882,568 barrels.
A factor in the record production of 1961 was the increased demand for crude oil from the Safaniya Field, one of the world's largest known offshore oil reservoirs.
REFINERY OPERATIONS AT PEAK
At Ras Tanura the Aramco refinery processed 90,810,070 barrels of crude oil, the largest amount in the 16 years the refinery has operated. This was an increase of 10.6 per cent over 1960.
During 1961 the refinery produced 81,160,423 barrels of saleable products, of which 94.6 per cent were exported. A total of 3,164,490 barrels of unsaleable excess naphtha was injected into the Qatif Field as a conservation measure. Late in the year asphalt was exported for the first time.
At the company's marine terminal, a record 319,710,146 barrels of crude oil and refined products was delivered aboard tankers flying the flags of some 25 nations. The Ras Tanura terminal loaded 2,142 tankers, an average of almost six a day.
REFRIGERATED LPG EXPORTS BEGIN
In December Aramco began a new operation: the export of an increasingly important product, liquefied petroleum gas, or LPG. The first shipment, 30,000 barrels of refrigerated propane and 20,000 barrels of refrigerated butane, went to Japan.
Completion of the plant for commercial production of refrigerated LPG at a cost of $7,685,000 climaxed a six-year effort that had required 79 "man years" for engineering studies and design alone. Located at the company's marine terminal, seven miles from the Ras Tanura refinery, the plant was designed to handle for export an average of 3,400 barrels of refrigerated LPG daily. At year's end work had begun on a project that will increase the daily capacity to 12,000 barrels.
NEW BLENDER INCREASES DELIVERIES
A new installation contributing to increased crude deliveries at the marine terminal was a $596,000 in-line blender. This device blends different types of crude, or mixes crude with almost any product in any desired combination as they pass through pipelines en route to waiting tankers. Largest of its kind in the petroleum industry, the blender can mix as many as 20,000 barrels an hour and is operated from an electronic console about the size of an office desk.
NEW RESERVES OF CRUDE OIL FOUND
Drilling and exploration activities during the year ranged from Safaniya in the north to the southernmost sands of the Rub' al-Khali ("The Empty Quarter"). New reserves of crude oil were disclosed in the Safaniya and Abu Hadriya Fields, and in the 'Am Dar area of the Ghawar Field.
Total estimated proved reserves at the close of the year were 47,695 million barrels of crude oil.
Increases in estimated proved reserves over the past three years, the result of the company's continuing drilling, exploration and reservoir research programs, are shown in the following table:
at Year's End
|| (In millions of barrels)
EXPLORATION PARTIES PROBE RUB' AL-KHALI
Exploration activities again centered on the Rub' al-Khali, one of the great uninhabited desert areas of the world. There, two stratigraphic-structure drill parties and two seismograph parties continued to probe an area often masked by fantastic formations of sand.
These parties, some transported and supplied by air, completed a total of 1,758 miles of seismic surveys. One seismograph party continued work in the difficult terrain of the Sand Mountains in the eastern Rub' al-Khali.
During the latter part of the year, in the offshore concession area stretching from Safaniya Field southward to the Bay of Selwa, 1,988 miles of marine seismic work were completed.
Continuing geological studies shed new light on the correlations between exposed rock formations in central Saudi Arabia and the oil-producing subsurface in the Eastern Province.
These and other exploration efforts added much to the company's and the Government's fund of knowledge of the Kingdom's petroleum potential. As hi other years, Aramco kept the Saudi Arab Government fully informed of all geological findings.
MORE NATURAL GAS IS UTILIZED
Programs designed both to conserve natural gas and increase the efficient production of existing oil fields were improved and expanded during 1961.
All natural gas in Saudi Arabia is produced in association with crude oil. Although crude oil production increased sharply last year, and correspondingly larger amounts of gas necessarily were produced, a greater percentage of the by-product gas was utilized. The company injected into the underground oil reservoirs, used as fuel in its own operations, or sold 45 per cent of all the gas produced. This was an increase by volume of 24.4 per cent over 1960.
Gas utilization will be further increased in the future through sales to other industries, recovery of liquefied petroleum gas, or injection.
In another program aimed at efficient crude oil production, water injection around the Abqaiq Field averaged 263,404 barrels daily in 1961. The test water-injection program begun in the 'Ain Dar area late in 1960 was continued throughout 1961 and averaged 10,892 barrels daily. In this project the injection well is opened underground to both the oil reservoir and a higher water-bearing formation. The water is thus permitted to flow downward under gravity. The water so used is unsuitable for agricultural or other purposes.
Completion of a liquefied petroleum gas injection plant in Abqaiq further expanded conservation facilities. This plant was designed to process and conserve daily 55 million cubic feet of low-pressure gases.
These gases are to be converted into raw liquefied petroleum gas and pumped through a new 32-mile pipeline to the 'Ain Dar gas injection plant. There the LPG will be commingled with injection-plant gas and pumped into the oil reservoir.
As markets become available, portions of this LPG can be transported to Ras Tanura for export as refrigerated LPG.
At the close of 1961, Aramco had 14,066 regular employees in Saudi Arabia, of whom 10,949, or 77.8 per cent, were Saudi Arabs.
The average Saudi Arab employee was 35 years of age and had been with the company for 11 years.
For purposes of illustration, an imaginary employee might be called Sa'd ibn 'Abd Allah, and he might be a field maintenance machinist in Dhahran. He and his nearly 11,000 fellow Saudi Arab employees are vital to Aramco's success.
On a given day Sa'd may be called upon to help repair a pipeline or gas-combustion turbine. Another day he may work on equipment at the power plant, the photographic laboratory, the hospital, a water well or an air-conditioning system.
Member of a farming family in the Hofuf Oasis, the fictional Sa'd started in the oil industry as a laborer. He took a special interest in the machines he saw around him—bulldozers, trucks, heavy cranes, engines. Within a few weeks Sa'd was selected to attend general industrial training classes. For three hours every workday afternoon Sa'd studied basic Arabic, English and shop mathematics.
Some months later Sa'd was assigned to shops and maintenance work in Dhahran as a trainee. There he began to learn various machine and tool skills. Gradually he progressed to the job of field maintenance machinist.
Sa'd is a family man and the father of three children. He lives with his family in West al-Khobar, about fifteen minutes from Dhahran, in a new home of five rooms, kitchen, two bathrooms, roof veranda and walled garden.
Like more than 3,300 fellow employees, Sa'd built his house through the company's Home Ownership Program. He received the lot free, under a special Royal Grant. Construction of his home, by a contractor Sa'd selected, was financed through an interest-free Aramco loan. Sa'd eventually will repay 80 per cent of the loan in monthly installments.
Sa'd enjoys working in his flower and vegetable garden. He has both television and radio. Television offers him readings from the Koran, lectures on history by prominent Arab scholars, Arabic-English language instruction, travelogues, and health, child care and home economics programs, along with sports and other entertainment. The programs are broadcast daily in Arabic by Aramco's TV station.
Sa'd likes to swim and fish. He plays soccer, basketball and sometimes watches his friends play volleyball and table tennis.
Looking ahead, Sa'd monthly puts ten per cent of his salary into the company's Thrift Plan. The company adds reward credits to his account and, within four years, will have matched his savings.
A pension plan introduced in July 1960 automatically includes all non-American employees and credits them with past service. Sa'd has accumulated credit based on service and total earnings and will do so until he retires, with all expenses of the plan borne by Aramco. Upon retirement at age 60, Sa'd will receive a lifelong monthly pension.
During 1961 Sa'd had 28 days' paid annual vacation and special leave, and seven company holidays. His regular work week at year's end was 40 hours, with Thursdays and Fridays off.
He is protected by sickness, temporary or permanent total disability and termination benefits. Sa'd and his family receive free medical care in company-operated or designated facilities.
TRAINING PROGRAMS EXPANDED
More than 1,400,000 hours of formal training were given within the company during the training year 1960-1961, and the out-of-the-Kingdom training and scholarship programs were broadened.
Industrial Training Center classes were held during regular working hours for an average of 2,600 employees, while enrollment in voluntary classes held after hours averaged 2,100 employees.
In the 1961-1962 academic year, Aramco sent 53 Saudi Arab employees outside the Kingdom to schools or colleges on training assignments, 34 to the United States, the rest to the Middle East.
SAUDI ARAB SCHOOLS
Two Intermediate Schools were completed during the year by Aramco at a total cost of $721,000 and were turned over to the Ministry of Education of Saudi Arabia. One school is in Hofuf and the other in the Eastern Province capital, Dammam. Each accommodates 150 students. Aramco, which earlier built 11 elementary schools under an agreement reached with the Government, also agreed to build and maintain schools for girls in the future. Although the company builds the schools, maintains them and provides funds for teachers' salaries, they are operated by the Ministry of Education as part of the Saudi Arab Government schools system.
A new program offering 22 scholarships in higher education to Saudi Arab students was established during the year. Areas of study are agriculture, the sciences, engineering, teacher education, medicine (including nursing) and business management. The initial scholarships were offered at Alexandria University, American University of Beirut, American University at Cairo and Beirut College for Women. By 1963 Aramco plans to increase the number of scholarships to 60.
Aramco continued its Arab refugee scholarship program, inaugurated in 1960 and administered by the United Nations Relief and Works Agency. Thirty-six students from Jordan, Gaza, Lebanon and the Syrian Arab Republic were studying under these "Aramco Scholarships Through UNRWA" in Middle East colleges.
HEALTH: A TRACHOMA VACCINE IS DEVELOPED
In 1955 Harvard scientists and Aramco specialists, working in laboratories in the United States and Dhahran, set out to find the causes of trachoma and ways to prevent this eye disease that afflicts 15 per cent of the world's population and is the main cause of blindness. An original five-year study was financed by an Aramco grant of $500,000.
By 1960 the Trachoma Research Program had made important gains. New procedures and techniques for combating the disease had been developed. Field studies in the Eastern Province of Saudi Arabia, Portugal, Ethiopia, Pakistan, Hong Kong and India had supplied valuable new data. An additional $585,000 was granted by Aramco to continue the program.
During 1961 definite progress and a possible break-through were made; the program reported development of a trachoma vaccine that was tested in Portugal and other areas with encouraging results. A trachoma vaccination campaign using the new vaccine was then scheduled to begin in 1962 in the villages of the Eastern Province. Directors of the program and the Ministry of Health, which approved the vaccinations, are hopeful that new gains lie ahead.
Progress was made, too, in other preventive medicine work and in family and general health education. For the first year since 1955, no case of smallpox was diagnosed in an Aramco medical facility. Employees and dependents suffered only 21 cases of typhoid, a 43 per cent drop over the average of the previous five years. Under the continuing immunization program against these and other diseases, more than 200,000 immunizations were provided to employees and dependents during 1961.
Control measures contributed to a decline of tuberculosis among employees; 15 cases were diagnosed against a five-year average of 55. Intensified searching for tuberculosis among dependents revealed 89 cases during the year, and plans were completed for more effective control of the disease in this group. A tuberculosis vaccine (BCG) was given selected infants.
ARAMCO AND THE COMMUNITY
The economy of Saudi Arabia was visibly expanding. New Government-built asphalt highways reached out in many directions. Commercial jet planes from many countries used the modern Dhahran and Jiddah airfields. New plants were being built. In this expansion, petroleum products played a growing part.
Sales of asphalt produced by the Ras Tanura refinery rose to 277,995 barrels in 1961. Sales of the relatively new product, aircraft turbo fuel, climbed to 117,250 barrels. In all, Aramco distributed 3,984,204 barrels of petroleum products within Saudi Arabia during the year, a 12 per cent increase over 1960.
Natural gas deliveries began in September to the Saudi Cement Company, first large industrial plant in the Kingdom to take advantage of this low-priced fuel.
Fifty-six new service stations were opened in the Kingdom during 1961, raising the total 358.
A VARIETY OF EXPENDITURES
As the largest company in the Kingdom and one engaged in the country's most important industry, Aramco spends large sums annually within Saudi Arabia for materials and supplies and in many other ways. For example, in 1961 the company and its employees channeled approximately $72,000,000 into the economy of the Kingdom in addition to money paid to the Saudi Arab Government in royalties and income taxes on its oil operations. This amount includes payments to, or on behalf of, non-American employees (for benefit plans, medical services, voluntary and out-of-the-Kingdom training, home ownership), payments to local industry for goods and services, income taxes paid by non-Saudi Arab company employees, public welfare expenditures, and customs, freight and miscellaneous payments to the Saudi Arab Government.
Aramco capital expenditures for new construction for the year were $26,800,000.
Payments to Saudi Arab companies for services in 1961 totaled $10,560,000. Widely diversified services provided to the company included road paving, residential land area development, printing of Aramco's weekly Arabic employee newspaper, construction of schools, installation of a large-diameter pipeline and assistance in testing, inspecting and overhauling such facilities as large refinery units.
In cooperation with the Government's agricultural program in the Eastern Province, technical advice was given to Saudi Arab farmers. These farmers achieved their most productive year in 1961; their farms yielded almost 1,800,000 pounds of produce, representing income of about $179,000. Of the total produce—lettuce, tomatoes, cabbage, carrots, onions, watermelons and other minor crops—about 25 per cent was purchased by Aramco and company employees. The rest was sold in local markets.
PURCHASES WITHIN KINGDOM DOUBLED
During 1961 the amount of money spent through Saudi Arabian sources for Aramco supplies more than doubled, reaching a total of $11,277,000.
Items totaling $5,054,000 were purchased from Saudi Arab suppliers for the first time. These included large-diameter pipe, casing, valves, catalysts, drilling additives, steel plate and sheets, new types of automotive vehicles, bronze tubes, rock bits and chemicals.
Twenty-five miles off the Saudi Arabian mainland, around-the-clock crews were drilling Safaniya Well No. 46 and putting down new underwater pipeline. Eighty miles to the south, other drilling crews bored Abu Hadriya No. 12 into the center of an oil reservoir to be produced in the months ahead.
In the Rub' al-Khali, where the unknowing visitor may suspect he has landed on the eerie, wrinkled surface of the moon, exploration parties were pushing northward, having completed geological reconnaissance of the vast area.
On drafting boards in The Hague, Netherlands, engineers were designing equipment that will more than triple refrigerated liquefied petroleum gas capacity. In Dhahran negotiations were being completed for the purchase through a local businessman of more than a million dollars worth of pipe to be fabricated in Japan.
At Perth Amboy, New Jersey, harbor experts were ready to train two Saudi Arabs as berthing masters. At Columbia University's graduate school in New York, a Saudi Arab employee was studying education administration. At Beirut College for Women and the American University of Beirut, two young Saudi Arab women on Aramco scholarships were preparing for teaching careers. At the A.U.B. medical school, another Saudi scholarship student was working toward a career in medicine.
The year 1961 was ending. Aramco and its employees were moving into a new year, toward new challenges.