Kuwait's modern history is inextricably bound up with the discovery and exploitation of its oil wealth.

The development of the oil industry over the last decades provides the very foundation of economic progress in Kuwait and the welfare of all its citizens
This special file sheds light on the history of the oil industry in Kuwait, the story of KPC from its inception, the trying phase during the Iraqi occupation, and the challenge of rebuilding the oil sector after liberation.
In 1921, Sheikh Ahmad Al Jaber Al Sabah became the Amir of Kuwait.
A brave and resourceful leader, a man of vision as well as a valiant warrior, Sheikh Ahmad was to steer his people through difficult times as the 1920s drew to a close. The cultured pearl industry became a serious, and ultimately overwhelming, competitor to Kuwait's main industry, pearl-diving. In spite of this, and despite a worldwide decline in trade as the thirties began, he kept his faith in the future. This was largely because of several strange black patches of a rough bituminous substance which had long been observed in different parts of the desert.
The Ruler and his people were well aware of the activities of the oil prospectors in Bahrain, Saudi Arabia and Iraq - to say nothing of the Anglo-Persian Oil Company's successes in southern Iran. Their expectations raised by the Bahrain oil discoveries of 1932, Kuwaitis were hopeful that these surface deposits betokened underground reservoirs of a commodity which could stimulate and revitalise their trade.
Oil Concession Agreement Signed
On December 23, 1934, Sheikh Ahmad Al Jaber Al Sabah signed a document who was to increase his country's wealth and international importance: the first Kuwait concession agreement granted to Kuwait Company Limited. Kuwait Oil Company was formed by the Gulf Oil Corporation (presently Chevron Oil) and the Anglo-Pers Oil Company (presently British Petroleum).
Oil Discovered
While drilling continued in Bahrain, attention turned to Burgan and to the recommendations about this area in the technical report of Cox and Rhoades. Geological surveys were carried out and the company drilled in this area through 1937 and early 1938. It was here, on February 22, 1938, that oil was discovered. Moreover, this oil was under such pressure and in such quantity that it blasted through the well-head valve with such force that it could not be controlled. It was a gusher that was "difficult to hold".
Lack of sufficient drilling mud to block the hole meant that other means had to be found to block the well, and found immediately. Donald Campbell, then chief accountant, finally located a 60-foot wooden pole in the town bazaar that served as a temporary stopper. That was how they brought in Burgan No 1 at 11 am on a rainy Thursday morning.
This first well is still producing today.
June 30, 1996 marked the 50th anniversary of exporting the first Kuwaiti oil shipment. This enabled Kuwait to join the ranks of the world's major oil producers. At 7 o'clock in the morning of June 30, 1946, a grand celebration was occasioned by exporting the first Kuwaiti oil shipment.
The celebration, held under the auspices of the late Sheikh Ahmad Al Jaber Al Sabah (then the Amir of Kuwait), was attended by the country's senior officials, the Political Resident in the Gulf area, the Political Agent in Kuwait and a distinguished audience of guests.
Southwell, director of Kuwait Oil Company, London, started the event by receiving Sheikh Ahmad Al Jaber Al Sabah and his companions and escorting them to the ceremony site, where the silver wheel had been placed to herald the occasion. Sheikh Ahmad turned the wheel to start the first Kuwaiti crude oil shipment flowing smoothly through an off-shore pipeline to the British tanker Fusilier. 10,567 tonnes of crude oil were loaded in 11 hours and 13 minutes, an average of 950 tonnes per hour.
Nationalisation of the Oil Industry
A new era of historic importance began on December 6, 1975 with the nationalisation of Kuwait's oil industry.
In line with all the other Arab oil producing states, Kuwait began negotiations in the early 1970s to restore control over its own natural oil resources.
By mutual agreements with the company's two original partners, the state's shareholding in Kuwait Oil Company was increased progressively until full control was achieved.
On March 5, 1975, an agreement was signed by Kuwait and the two oil companies (British Petroleum and Gulf), giving Kuwait complete control of its oil resources.