IN AUTUMN 2015 I WAS THE RECIPIENT of the inaugural Maynooth University Ken Saro-Wiwa bursary. My interest in Saro-Wiwa’s life and works emanated from research I am conducting in the History Department at Maynooth University. My PhD thesis entitled ‘The First Oil War: Britain, Germany, and the Race for Oil, 1896-1921’, seeks to trace the origins and evolution of policy which led to a technological transformation and transition from coal to oil.
From early government measures to recognition as a vital strategic resource, and from driver in societal change to economic necessity, the development of oil is a fascinating, complex and curiously unexplored history. In a world that has now become obsessed with its acquisition, a complete understanding of the role of oil in strategic and political decision-making remains elusive. Today, oil has become fundamental to global infrastructure and those who control its supply possess the ability to arbitrarily influence world markets, but few have attempted to trace its origins as a factor in the development of policy and international affairs. My transnational and comparative project proposes the theory that the twentieth century saw the earlier focus on manpower replaced by a new paradigm: the belief that the acquisition of superior forms of energy revolutionised industry, and therefore military strength, allowing for a concept which would become known as ‘Total War’.
Over the past 100 years, oil has weaved itself into the very fabric that maintains our society as we know it. From fertilizers to plastics, and credit cards to cigarette filters, oil has placed the world’s economy in the difficult position of almost complete reliance, and with that dependence the importance of control emerges. My research attempts to confront the relationship between government and corporation with respect to a crucial resource underpinning our world today. By looking at the genesis of this relationship it will help us to understand how a trickle of influence grew to be an overwhelming force in the formation of policy. This force would eventually lead to the creation of major corporations with unparalleled financial backing to acquire the necessary agreements for further exploitation. Saro-Wiwa’s life’s work highlights this threat to, not only the environment, but also to how money, power, and natural resources influence a people or way of life. In my view, it is essential to examine where this record began so we can further recognise the significance of Saro-Wiwa’s achievements. Indeed, his life and death underscores the need for us, the global community, to continue to understand and probe the societal impact of the oil industry.
The founding of the Anglo-Persian Oil Company (later British Petroleum or BP as they are more commonly known) and its acquisition by the British government in 1914 set in motion a scramble to ensure a strong and secure supply of oil for the Great Britain. In turn, this spurred other emerging oil companies such as Royal Dutch Shell, Standard Oil and the Burmah Oil Company to seek out and acquire vast areas to explore and exploit or fear falling behind the competition. Where a national interest existed, such as in the cases of Great Britain and Germany, pressure was placed on territories and nation states where oil could be accessed to give concessions and guarantees for specific companies, like those of Royal Dutch Shell and BP. As oil became linked to economic prosperity and military strength through advanced technology, it took on a very prominent political dimension. Demand for this emerging and superior source of energy grew rapidly with powerful states seeking to ensure they remained strong in a transforming world.
With Great Britain installed as the dominant naval power, though waning, as some authors would argue, in Europe in 1900, the discovery of oil as a source of energy levelled the playing field for those who could harness and develop technology which used it, and, in turn, rival powers sought to challenge the status quo. Germany, seeking to improve its political position on the continent, was gifted an opportunity to confront British ascendency. As industrial rivals, Great Britain and Germany initiated a game where both were forced to assess the significance and utility of an emerging resource in an age of rapidly developing technology. A comparison of how both states came to understand and utilise this resource is essential to producing a definitive account of their relationship before the war, their wartime attempts to expand into significant areas of the globe, and of the post-war implications for Europe and the Middle East.
Domestically, both states entered into programmes for research into the potential of oil-based technologies. With Great Britain and Germany spending ever increasing amounts of time and vast sums of money to understand how best to exploit this emerging energy resource, policies introduced by both governments suggested a growing relationship with a number of oil companies. As mechanisms for helping to steer foreign policy, oil companies operating in the Middle East and in colonial territories helped to solidify a national presence there and ensure an important element of security in an area of interest. The origins of this practice, and the purpose of this project, can be clearly observed, and remain evident today.
Ken Saro-Wiwa’s political activism centred on environmental destruction and the effects of a large multinational on government policy – effects which are still resonating in present day Nigeria. My work focuses on the origins of a framework, which undoubtedly, led to a competitive structure of exploitation by developed nations, desperate for access to oil, on developing states. As such, this analysis and evaluation will be on the how and why government policy at this crucial juncture in time became so intrinsically linked to the issue of oil. By examining the beginning of this relationship, which effectively started in Great Britain and Germany due to, primarily, military rivalry and conflict, my research establishes a definitive approach for looking at the interaction between governments and corporations in both large and small oil producing countries.
What follows here is a detailed account of how the Maynooth University Ken Saro-Wiwa bursary enabled me to go in search of answers to difficult questions I posed in my research. Most of the answers I sought could only be found at the Bundesarchiv in Berlin, Germany. The records held by the State Archive was integral to my investigation, and as such, crucial to producing a comprehensive analysis of the wider implications of the early history of the oil industry in Germany. Before I left for Germany, however, I spent a few days in the National Archives in Kew in London. After the Second World War many German documents and records were taken by the Western Allies back to the United Kingdom and the United States. Copies of these documents, relating to many aspects of the German government from the early 20th century until the end of the Second World War, are now kept in the National Archives. The specific documents made available to me involved letters and memoranda from the German Foreign Minister sharing his concerns over what was to happen to the German oil industry after the war. More precisely, the primary concern was whether or not Germany, in the aftermath of 1914-1918, would be able to access a quantity of oil commensurate to the needs for rebuilding a devastated economy. The war had shown that while coal had, and continued to be, a suitable and abundant resource for industry, oil was found to be superior and without any doubt, would open up the frontier for more efficient and powerful technology. The concerns shared by the German Foreign Minister indicated an emerging policy which had transformed from an important issue before the war, to something fundamental to the reconstitution of the post-war German economy.
After London, I made my way to the Bundesarchiv in Lichterfelde – a suburban district not far from the city centre – in Berlin. The archive is in an old army barracks occupied by U.S. forces in Berlin up until the 1950s. By comparison to the National Archive in London, it is quite dated and unfortunately appears to receive very little funding. It was here, however, that most of the records and documents on the German Chancellery, the Foreign Ministry, the War Oil Department, and the Reich Economic Council were to be found.
Although I went to Germany with specific questions requiring clear answers, it didn’t take long before I discovered additional lines of enquiry. Initially, I conducted research on the subject of Romania’s participation in the First World War. At the time, Romania was one of the largest oil producers in the world and given her proximity to Germany and Austria-Hungary, coupled with her neutrality status up until 1916, I wanted to know how the Entente allies and the Central Powers engaged with the government in Bucharest. Romania’s opportunistic entry into the war in the latter half of 1916, spurred by signs of a strong Russian offensive and Anglo-French efforts during the Battle of the Somme, was a grave misstep in calculation, short-sighted, and ultimately, a complete disaster. The consequences of this blunder led to the ‘greatest single act of economic warfare in the war.’ In a bid to prevent Germany occupying and utilising the oil industry of the world’s fifth largest oil producer, the Romanian government agreed to allow a British taskforce to destroy and make obsolete as much of their industry as possible. What followed was a whirlwind of sheer destruction which disabled the vast majority of Romania’s oil producing refineries, drill sites, and transport services. General Ludendorff of the German army later chronicled his thoughts on John Norton-Griffiths’ exploits: ‘…materially reduce[d] the oil supplies of our army and the home country’ and that: ‘…we must attribute our shortages in part to him.’ What the records in Berlin revealed was that the German forces, which later occupied Romania, invested a large amount of time and effort attempting to rebuild the crippled oil industry. In short, I discovered detailed files listing the exact weekly quantities being exported back to Germany from Romania, with a clear increase in output from January 1917 until the end of the war. My calculations show that in a little over two years, German forces were only able to restore output to forty percent of total production prior to Norton-Griffiths’ raid. The extent of the destruction caused by British forces had a detrimental effect on Germany’s ability to make war. Furthermore, the meticulous and relentless effort to disable the Romanian oil industry, and, consequently, the scale of the recovery undertaking exemplified the importance of oil by the British and German governments.
In the immediate post-war period, Romania, financially distressed from a disastrous war against the Central Powers of Germany and Austria-Hungary, was facing extortion. A key oil producer for Germany before the war, Romania was facing a reconstitution of her oil industry in favour of Allied interests in exchange for what was, effectively, a bailout. After a German annexation, the Romanian oil industry was controlled by German financiers, companies and banks acquiring the rights over oil rich lands and associated assets. By early 1919, however, Britain and France moved swiftly to request that all German presence from Romania’s oil industry be removed and replaced by interests more favourable to doing business with London and Paris. A series of loans desperately needed by the new Romanian government was contingent on this particular prerequisite. The Romanian case, particularly its aftermath, is a good example of two powers vying over the resources of a lesser power and the impact – notwithstanding the fact that the circumstances were far more precarious – an aggressive policy had on the economy and environment of a smaller state.
Indeed, German interest in the potential of oil manifested in many different forms. From the Treaty of Brest-Litovsk in 1917 promising 75% of all the oil produced from the oil rich area of Baku to be exported to Germany and her allies, to Deutsche Bank investing heavily in companies and establishing banks such as the National Bank of Turkey which had access to concessions that would be important for the search and exploitation of oil in regions of the Ottoman Empire, Berlin pushed ahead to not only aggravate British pursuits in oil but also to see where she could gain any advantage over her adversary. The records held at the Bundesarchiv went as far as to show efforts to secure oil from the U.S. and Mexico; such was the desperation of the German government.
Likewise, Britain, and to some degree France, began to systematically decide which companies would be given access to oilfields in the various mandated territories and protectorates. With areas in North Africa being identified as potential zones for exploiting oil, the British were content with allowing the French government to oversee that operation. The same was afforded to the British who now sought to administer Persia (present day Iran), Mesopotamia (Iraq) and Palestine. Even the European states were not free from British and French interests. The re-establishment of the state of Poland also saw British and French influence pique as the borders, yet to be determined, would possibly include a rich oil basin from the former Austro-Hungarian Empire. How this would be determined was of particular interest to London and Paris.
In the post-war Weimar Republic of Germany, the lessons learned from technological inferiority were felt the hardest. Many of the documents I discovered related to the efforts made by numerous German ministers trying to secure new sources of oil for a dysfunctional economy. Even within Germany itself, industrialists and operators at refineries wrote to the economic minister in Berlin asking if and when they would be able to manufacture goods or refine what oil they still had access to. The smothering effect of the Entente economic blockade and strict terms of the Armistice ensured Germany would not only be unable to produce material, but also utilise resources associated with war manufacturing. To be sure, while Germany may have adopted an apathetic opinion over the viability of oil prior to the war – especially as she did not have any domestic supplies to exploit – Berlin’s attitude reflected a remarkable reversal of policy after it.
In summary, the research trip to Germany provided a substantial number of documents and records on how the oil industry cooperated and collaborated with the German government, before, during and after the First World War. When compared to the same practice by the British government, there is a clear transition from indirect and sometimes direct support, to becoming a primary objective for existential reasons. The British government identified this fact much sooner than the German government and this is reflected in its policies and actions towards oil-prolific regions and the companies seeking to exploit them. However, the German government unsatisfied by the terms of the Versailles Treaty began a desperate struggle to ensure ease of access and abundant supply as it sought to rebuild its economy after the war and prepare for the next European conflict.
This project will shed a light on the history of the relationship between the oil industry and powerful government. The modes and practices that would seem questionable even for the time they were carried out would lay down a framework and precedent for unsavoury policies and action for the decades to come. As oil became intrinsically linked to not only economic prosperity, but also technological superiority, its acquisition necessitated policies to ensure a plentiful supply because without it, powerful states would see their reach diminish and status decline. Furthermore, with the rise of large corporations and the free market principle, governments came to rely upon these suppliers to maintain their growing economies – as more recent times have demonstrated, the movement and sale of oil now possesses the ability to influence the global economy. Through this project and the support offered by the Ken Saro-Wiwa bursary, my work offers some insight into the origins of this relationship between government policy and the emergence of what would become the dominant source of energy in the twentieth century. Moreover, I would argue, the beginning of this great rivalry and scramble to analyse and discover the importance of oil plays a key role in understanding our modern world.