100 yrs of the demise of Ot­toman Em­pire


May 16 2016 marks the 100-year an­niver­sary of the Sykes-Picot Treaty, a se­cret agree­ment be­tween Bri­tain and France dur­ing World War I to carve up the do­mains of the Ot­toman Em­pire upon its de­feat. In com­mem­o­rat­ing this event, blame has been heaped upon the ar­chi­tects of the treaty, Bri­tish diplo­mat Mark Sykes and French diplo­mat Fran­cois Ge­orges-Picot, for draw­ing up the “ar­ti­fi­cial” bor­ders of the Mid­dle East, Iraq in par­tic­u­lar.

While sig­nif­i­cant at­ten­tion is given to Sykes and Picot, Mr Five Per­cent, the nick­name of the oil bro­ker Calouste Gul­benkian, cer­tainly de­serves at­ten­tion a cen­tury later. Gul­benkian served as a mid­wife of sorts to not only Iraq, but also to the birth of the world’s ma­jor oil cor­po­ra­tions.

Gul­benkian was born in 1869 to an Ar­me­nian fam­ily in Usku­dar, a dis­trict on the Asian side of Is­tan­bul. He studied en­gi­neer­ing at King’s Col­lege Lon­don, and in 1887 went to Baku, then part of the Rus­sian em­pire.

This hub of the bur­geon­ing oil in­dus­try was where il­lus­tri­ous fam­i­lies such as the No­bels, of No­bel­prize fame, and bankers such as the Roth­schilds in­creased their for­tunes.

The em­pire’s oil re­serves

It was also where a Ge­or­gian, Ioseb Jughashvili, re­mem­bered to­day as Joseph Stalin, be­gan his rev­o­lu­tion­ary ca­reer among the work­ers in the oil in­dus­try.

As a re­sult of Gul­benkian’s so­journ in Baku he wrote ar­ti­cles about petroleum that gar­nered the in­ter­est of Ot­toman of­fi­cials. Em­ployed in their ser­vice, he lo­cated sev­eral ar­eas within the Em­pire that could con­tain oil re­serves.

Euro­pean com­pa­nies ap­proached Gul­benkian due to his tech­ni­cal skills, cul­tural knowl­edge of the Em­pire, and his con­nec­tions with im­por­tant Ot­toman of­fi­cials.

There was no of­fi­cial ti­tle for his role. Gul­benkian was es­sen­tially the world’s first oil fixer, bro­ker, and deal-maker, although he would have ob­jected to all of these terms, pre­fer­ring to see him­self as an “ar­chi­tect” of petroleum ar­range­ments.

In 1912, Gul­benkian bro­kered an in­ter­na­tional con­sor­tium known as the Turk­ish Petroleum Com­pany (TPC), to ex­plore and ex­ploit oil re­sources in the Ot­toman Em­pire. De­spite its name, the Turk­ish role in this ar­range­ment was min­i­mal.

As a re­sult of bro­ker­ing the TPC, Gul­benkian was granted a 5 per­cent non-vot­ing share in the com­pany, hence his nick­name. An­other ma­jor oil group Royal Dutch Shell (to­day’s Shell) owned 22.5 per­cent of TPC shares.

BP’s pre­de­ces­sor, the par­tially UK govern­ment-owned An­glo-Per­sian Oil Com­pany (APOC) bought 47.5 per­cent of TPC shares, be­com­ing its largest stake­holder.

How­ever, when the Ot­tomans sided with Ger­many dur­ing World War I, Bri­tain had es­sen­tially in­vested heav­ily in an oil com­pany sit­u­ated in en­emy ter­ri­tory.

The se­cret Sykes-Picot agree­ment be­tween Bri­tain and France al­lo­cated the Bagh­dad and Basra prov­inces of the Ot­toman Em­pire to Bri­tish.

Basra, in to­day’s south of Iraq, was the site of po­ten­tial oil fields that could be ex­ploited in the fu­ture. Sykes-Picot was es­sen­tially a rough draft of im­pe­rial con­trol in the Mid­dle East.

The em­pire’s fron­tier

This Treaty did not set up the cre­ation of the bor­ders of Iraq as we know it to­day. Those bor­ders would come into shape a re­sult of more treaties af­ter World War I, nev­er­mind the fact that the bor­der be­tween Iraq and Iran was es­tab­lished as a re­sult of cen­turies of war­fare when Iraq was the fron­tier of the Ot­toman Em­pire.

What would be­come Iraq was not an ar­ti­fi­cial cul­tural en­tity. Cen­turies of shared ge­og­ra­phy in the ter­ri­tory be­tween the Euphrates and Ti­gris had al­ready forged in­ter­ac­tion among Shias, Sun­nis, and Kurds that would make up Iraq’s cit­i­zens.

Rather on fo­cus­ing on ar­ti­fi­cial­ity of bor­ders, it is the in­ten­tions be­hind the cre­ation of Iraq that have to be ques­tioned. Were the Bri­tish of­fi­cials who au­gured in the Man­date of Iraq cre­at­ing a vi­able a state, or an oil com­pany with bor­ders?

A fair share all of the Ot­toman Em­pire’s oil was pri­mar­ily in its prov­inces of Mo­sul, Bagh­dad, and Basra, and those prov­inces were amal­ga­mated into the Bri­tish­con­trolled Iraq Man­date.

It would be sim­plis­tic to at­tribute that oil was the pri­mary fac­tor in the Bri­tish cre­ation of the Iraq Man­date, con­sid­er­ing that it was known that petroleum seeped out of the ground in Kirkuk and Basra, but the first oil fields wells were not op­er­a­tional un­til the late 1920s.

Rather the Bri­tish sought to cre­ate an Iraqi state that was vi­able enough to check Turk­ish and Ira­nian hege­mony in the re­gion, yet not strong enough to im­pose its hege­mony on the Arab world.

Nev­er­the­less, the cre­ation of a sin­gle Iraqi Man­date did make it eas­ier for the TPC’s suc­ces­sor, the re­branded Iraq Petroleum Com­pany (IPC) to ex­ploit the oil fields from Kirkuk in the north to Basra in the south within a sin­gle po­lit­i­cal en­tity.

Bri­tish con­trol over Iraq

APOC’s shares in the new IPC were re­duced to 23.75 per­cent, as the Bri­tish had to make room in the com­pany for Com­pag­nie Fran­caise des Petroles (to­day’s To­tal), in ex­change for France re­lin­quish­ing the area around Mo­sul that it was promised in the Sykes-Picot Treaty.

It was this area that in­cluded the lu­cra­tive fields around Kirkuk. The IPC that Gul­benkian cre­ated thus al­lowed a way for France to ac­qui­esce to Bri­tish con­trol over the Iraq we know to­day.

Gul­benkian re­mained the para­mount fig­ure in the new com­pany, still con­trol­ling 5 per­cent of its shares. By his death in 1955, Mr Five Per­cent had a net worth of $840 mil­lion.

As for the IPC, the govern­ment and peo­ple in Iraq had lit­tle con­trol over it or the riches it pro­duced, giv­ing rise to re­source na­tion­al­ism in Iraq that lingers on this day.

For ex­am­ple, while I was con­duct­ing re­search on Iraq’s oil his­tory dur­ing my doc­tor­ate at Ox­ford Univer­sity, I usu­ally worked in the stu­dent study hall, named the Gul­benkian Read­ing Room.

I as­sumed it had been en­dowed by the Gul­benkian fam­ily, which in turn had been fi­nanced by oil pro­ceeds from my na­tive Iraq, which made me feel en­ti­tled to sneak the var­i­ous news­pa­pers from the Room back to my apart­ment where I could read them at my leisure.

I re­turned the news­pa­pers back to the Read­ing Room af­ter 70 min­utes, since that was five per­cent of a day. It was my cheeky way of al­low­ing Calouste a chance to pay me back.

That was in the year 2000. Gul­benkian might be re­mem­bered un­favourably in Iraq for ac­quir­ing his wealth from Iraq’s nat­u­ral re­sources, but I could have never imag­ined back then that Sad­dam Hus­sein would be over­thrown, only to be re­placed by cor­rupt Iraqi politi­cians.

Iraq’s prob­lems to­day are not as a re­sult of Sykes-Picot or Gul­benkian. Rather it stems from a mul­ti­tude of of Mr. Five Per­cents in con­trol of the coun­try.

• Ibrahim al-Marashi is an as­sis­tant pro­fes­sor at the Depart­ment of His­tory, Cal­i­for­nia State Univer­sity, San Mar­cos. He is the co-au­thor of Iraq’s Armed Forces: An An­a­lyt­i­cal His­tory.

Mark Sykes.

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