Since oil was discovered in the Gulf 90 years ago, relations between foreign oil companies and GCC governments have passed through various phases – from shared interests to a change in ownership and management of projects.
However, the GCC states have dealt with all such issues in a flexible manner that helped strengthen their role in managing oil-generated wealth over past decades. Initially, these countries, through concession agreements, gave foreign companies full rights to produce, manage and market oil in exchange for a portion of the oil revenues.
Manna from the heavens
At the time, it was akin to great wealth falling from the sky after years of decline in the pearl industry due to Japan s discovery of industrial pearls. Accordingly, the Gulf states did not bargain and argue much about the concession terms. They did not have the basic knowhow of this industry.