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thestar.com: THE PRIZE: The Epic Quest for Oil, Money & Power

THE PRIZE

By Daniel Yergin
Publisher: Simon & Schuster, 928 pages
(ISBN: 0-671-79932-0)

Review by KAM RASLAN

OIL is the dominating commodity of our age. In 1900 oil was only used for lighting and for the handful of cars owned by the rich. 

Today it’s impossible to imagine our lives without oil: wars are fought to control it, economies survive on it and you can’t go to the shops without oil.
 
Daniel Yergin’s brilliant Pulitzer Prize winner, The Prize, charts the history of oil: the first gushers in Pennsylvania in the 1860s, Standard Oil’s monopoly, two world wars, global cloak-and-dagger prospecting, and the coups and plots that are its saddest impact. 

The people involved are the who’s who of the 20th century: Rothschild, Getty, J.P. Morgan, Hitler, Saddam Hussein, as well as Shell, Esso, BP, and many others. 

Oil companies work hard at creating a sanitised image but after reading The Prize, filling up the car will never be the same again.

Despite the impression that oil brings great wealth, Yergin shows that there haven’t been many winners. 

Persia/Iran’s destiny, and economy, has been shaped entirely by oil. In 1900, a mysterious man who called himself General Kitabgi arrived in Europe wanting to sell Persia’s petroleum rights, something he had no right to do. 

At that time, Britain had the world’s largest navy but its ships used bulky and inefficient coal. Soon, she would make a momentous decision by converting its navy to oil, something all other navies would have to follow. 

But, the problem was, where would they get their oil? America and Russia had it, but both were rivals. Where could they control supply, and near the vital sea route to India? 

Persia sounded good. Stories of oil seepages here had been heard since the time of Alexander the Great but it was only used as an antiseptic or for waterproofing. The nascent British Petroleum, then wholly owned by the British navy, sent a tough engineer, George Reynolds, to search for oil. After eight years of immense hardship, he struck. Iran has never been the same since.

Iran’s story is like many others. The military/commercial needs of a western power determined the search for oil. They then controlled the oil, either directly or through proxies, i.e. the Shah of Iran. Wealth, coups, assassinations, nationalisation, revolution and wars followed. And the biggest downside – complete dependence on oil revenue.

Once an economic backwater, Iran has become a powerful political player that can, if it wants to, hold the world to ransom. 

But, after oil, Iran’s second largest export is pistachio nuts. Its economy seems to be reaping the benefits of high oil prices but its people teeter on the edge of dependence. Oil addiction is a double-edged sword. 

America looks like one of the few who gained from the story of oil. Its oil companies trace their roots from the break-up of John D. Rockefeller’s Standard Oil monopoly. 

With a vision and ruthlessness that would make any Malaysia Inc businessman weep with envy, Rockefeller took control of the anarchic paraffin industry and turned his company into the largest the world had ever seen, or may ever see again. 

Rockefeller’s upbringing was humble but Yergin describes him as being, even at a young age, “pious, single-minded, persistent, thorough, attentive to detail, with both a gift and fascination for numbers, especially numbers that involved money. At the age of seven, he launched his first successful venture – selling turkeys.”

In 1865, at the age of 26, he bought out his uninspiring business partner for US$72,500. He later described that day “as the beginning of the success I have made in my life.” That success didn’t grow from oil production but from refining.

Paraffin quality before Rockefeller was so variable that people didn’t know if it would burn safely or if they would die in an explosion. 

His refineries made paraffin predictable, or standard. His high quality and well-packaged paraffin was so successful that, by 1866, sales exceeded US$2mil. 

He bought control of rival refiners, then transportation, retailing and finally, oil production. Soon he controlled America and all potential rivals were instantly quashed or had to go elsewhere. 

In London, a small-time Jewish trader liked to collect seashells. His sons named their company after this hobby. Shell Oil won success through transportation and a daring capturing of the Asian market before Standard Oil. 

Shell was essentially bought out by Royal Dutch – helmed by a remarkable and ruthless Dutchman – which had discovered oil in inhospitable Sumatra and Borneo.

Yergin’s book takes us from America to Russia, and Persia to Borneo, in charting the quest for oil. 

The world has been shaped by this quest; some have won but many have lost. 

Oil addiction shapes our lives and in The Prize, Yergin gives not only a magnificently researched history but also a witty and character-filled story. 

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