section_path: History/British era and discovery of oil
section_name: British era and discovery of oil
paragraph_text: British era and discovery of oil
  
  During the 19th and early 20th centuries, the pearling industry thrived, providing both income and employment to the people of the Persian Gulf. The First World War had a severe impact on the industry, but it was the economic depression of the late 1920s and early 1930s, coupled with the invention of the cultured pearl, that wiped out the trade. The remnants of the trade eventually faded away shortly after the Second World War, when the newly independent Government of India imposed heavy taxation on imported pearls. The decline of pearling resulted in extreme economic hardship in the Trucial States.
  
  In 1922, the British government secured undertakings from the rulers of the Trucial States not to sign concessions with foreign companies without their consent. Aware of the potential for the development of natural resources such as oil, following finds in Persia (from 1908) and Mesopotamia (from 1927), a British-led oil company, the Iraq Petroleum Company (IPC), showed an interest in the region. The Anglo-Persian Oil Company (APOC, later to become British Petroleum, or BP) had a 23.75% share in IPC. From 1935, onshore concessions to explore for oil were granted by local rulers, with APOC signing the first one on behalf of Petroleum Concessions Ltd (PCL), an associate company of IPC. APOC was prevented from developing the region alone because of the restrictions of the Red Line Agreement, which required it to operate through IPC. A number of options between PCL and the trucial rulers were signed, providing useful revenue for communities experiencing poverty following the collapse of the pearl trade. However, the wealth of oil which the rulers could see from the revenues accruing to surrounding countries remained elusive. The first bore holes in Abu Dhabi were drilled by IPC's operating company, Petroleum Development (Trucial Coast) Ltd (PDTC) at Ras Sadr in 1950, with a 13,000-foot-deep (4,000-metre) bore hole taking a year to drill and turning out dry, at the tremendous cost at the time of £1 million.
  
  The British set up a development office that helped in some small developments in the emirates. The seven sheikhs of the emirates then decided to form a council to coordinate matters between them and took over the development office. In 1952, they formed the Trucial States Council, and appointed Adi Al Bitar, Dubai's Sheikh Rashid bin Saeed Al Maktoum 's legal advisor, as secretary general and legal advisor to the council. The council was terminated once the United Arab Emirates was formed. The tribal nature of society and the lack of definition of borders between emirates frequently led to disputes, settled either through mediation or, more rarely, force. The Trucial Oman Scouts was a small military force used by the British to keep the peace.
  
  In 1953, a subsidiary of BP, D'Arcy Exploration Ltd, obtained an offshore concession from the ruler of Abu Dhabi. BP joined with Compagnie Française des Pétroles (later Total) to form operating companies, Abu Dhabi Marine Areas Ltd (ADMA) and Dubai Marine Areas Ltd (DUMA). A number of undersea oil surveys were carried out, including one led by the famous marine explorer Jacques Cousteau. In 1958, a floating platform rig was towed from Hamburg, Germany, and positioned over the Umm Shaif pearl bed, in Abu Dhabi waters, where drilling began. In March, it struck oil in the Upper Thamama rock formation. This was the first commercial discovery of the Trucial Coast, leading to the first exports of oil in 1962. ADMA made further offshore discoveries at Zakum and elsewhere, and other companies made commercial finds such as the Fateh oilfield off Dubai and the Mubarak field off Sharjah (shared with Iran).
  
  Meanwhile, onshore exploration was hindered by territorial disputes. In 1955, the United Kingdom represented Abu Dhabi and Oman in their dispute with Saudi Arabia over the Buraimi Oasis. A 1974 agreement between Abu Dhabi and Saudi Arabia seemed to have settled the Abu Dhabi-Saudi border dispute, but this has not been ratified. The UAE's border with Oman was ratified in 2008.
  
  PDTC continued its onshore exploration away from the disputed area, drilling five more bore holes that were also dry. However, on 27 October 1960, the company discovered oil in commercial quantities at the Murban No. 3 well on the coast near Tarif. In 1962, PDTC became the Abu Dhabi Petroleum Company. As oil revenues increased, the ruler of Abu Dhabi, Zayed bin Sultan Al Nahyan, undertook a massive construction program, building schools, housing, hospitals, and roads. When Dubai's oil exports commenced in 1969, Sheikh Rashid bin Saeed Al Maktoum, the ruler of Dubai, was able to invest the revenues from the limited reserves found to spark the diversification drive that would create the modern global city of Dubai.