America's Kingdom

Mythmaking on the Saudi Oil Frontier

By Robert Vitalis

STANFORD UNIVERSITY PRESS; 353 Pages; $29.95

The 125th anniversary issue of CVX, Chevron's corporate magazine, recounts a story of adventure and the bridging of cultures. In 1934, the Standard Oil Company of California (Socal) sent chief geologist Max Steineke and his team to Saudi Arabia, where, after enduring four years of baking heat and mirages in the salt flats of the eastern desert, he finally discovered oil. Steineke bonded deeply with his Arabian hosts -- "he left the most beautiful touches in the heart," said 'Abd al-'Aziz Shalfan, one of Socal's first Saudi employees -- and thus established the foundation for a mutually beneficial partnership between Saudi Arabia and American oil companies that would last for decades.

So shimmers the historical halo around the Arabian American Oil Company, formed in 1944 to exploit the oil riches of Saudi Arabia's Eastern Province. But it is a halo, argues political scientist Robert Vitalis, that has required careful and deliberate cleaning over the years. From the beginning, ARAMCO's camps in Dhahran were set up according to a strict hierarchy of racial divisions. Ostensibly based on skill levels, this system allocated the best housing and amenities to Americans -- of all ranks -- while European and South Asian workers had to make do with significantly less, and Saudi workers were consigned to "barastis," palm-frond huts without floors or lights. A visiting State Department official called the company's camp "a disgrace to American enterprise," while the American vice consul at Dhahran visited the company hospital and reported that "it is apparent that ARAMCO's medical director takes little interest in the health and care of Arabs."

ARAMCO fought hard to preserve its image as an exemplar of enlightened self-interest, and as a bringer of development to Saudi Arabia. It argued that other oil firms in the region treated their workers even more poorly, and blamed the Saudi government for forcing segregation on ARAMCO for religious reasons. Vitalis rejects the company's "exceptionalist" thesis, pointing out that in countries like Iran -- which, before a CIA-backed coup in 1953, had a parliament, a press and unions -- oil company reforms had gone much further than in Saudi Arabia. Further, ARAMCO's camp design was not a unique response to local religious culture, but was rather a direct descendant of the segregated camps set up by mining and oil firms in the American Southwest in the late 19th and early 20th centuries.

Quite naturally, the company also found itself plagued by the same kinds of labor problems afflicting its predecessors in the United States. Between 1945 and 1956 (when Saudi Arabia made inciting a demonstration or strike punishable by two years in jail), ARAMCO's Saudi and foreign workers staged a number of significant strikes and transportation boycotts. The company and the U.S. Embassy reacted by blaming foreign agents and imported communist ideology, unwilling to credit the notion that workers could be motivated by a desire to improve their conditions and achieve greater equality. As one former ARAMCO executive reminisced, "for a lot of people in the oil business back then ... if you weren't pro-ARAMCO you were pro-communist."

A similar defensiveness would come to mark the company's dealings with the Saudi bureaucracy. Though relations with the House of Saud remained close, the well-educated, nationalist bureaucrats who were assuming positions of power during the 1950s and early 1960s (men like Abdallah Tariki, who would soon become minister of petroleum and one of the founders of OPEC ) came into frequent conflict with the Americans, who feared a Nasser-inspired revolution and the nationalization of ARAMCO. Tariki only added to these fears by seeming incorruptible; when warned by ARAMCO negotiators that increasing "Arabization" of the company would mean a loss of revenue for the kingdom, Tariki responded that he was "not interested in profits but in principles."

The American government, meanwhile, had similar worries. With Middle Eastern monarchies being toppled or threatened by nationalist movements, Washington wanted stability preserved in Saudi Arabia, whose regime not only served as a bulwark against communism but had a direct bearing on the future of "our largest single overseas private enterprise," as presidential adviser Walt Rostow described ARAMCO. But since the preservation of monarchies was not one of America's public goals, King Saud found himself hailed instead as a great modernizer, even as he squandered oil revenues on military hardware and empty palaces; likewise, Saud's successor, Crown Prince Faisal, who was proclaimed a reformer even as he clamped down on the press, locked up dissidents and shut down the country's fleeting experiment with local elections.

"America's Kingdom" is a fascinating exercise in what Vitalis refers to as "reverse-engineering" the power of such myths and the process of their construction, a process driven by corporation magazines, popular histories and even the reporting of major newspapers. He is particularly critical of the New York Times, whose reporter Dana Adams Schmidt managed to parrot the U.S. government line almost perfectly, extolling Saud and then Faisal in such similar language that the paper "might as well have pulled the old story out, changed some names, and refiled it when Faisal arrived." Nor, unfortunately, have we grown out of this vice: American and British elites today praise visionary Iraqi and Afghan leaders to the heavens -- right up until the moment it becomes necessary to explain away policy failures by hinting at how disappointing our clients have turned out to be.

Myth, it turns out, is a remarkably flexible tool, and this alone will ensure its permanence in our political culture.