Calouste Sarkis Gulbenkian (23 March 1869 – 20 July 1955), nicknamed "Mr Five Per Cent", was a British-Armenian businessman and philanthropist.

He played a major role in making the petroleum reserves of the Middle East available to Western development and is credited with being the first person to exploit Iraqi oil. Gulbenkian travelled extensively and lived in a number of cities including Istanbul, London, Paris and Lisbon.

Throughout his life, Gulbenkian was involved with many philanthropic activities including the establishment of schools, hospitals, and churches. The Calouste Gulbenkian Foundation, a private foundation based in Portugal, was created in 1956 by his bequest and continues to promote arts, charity, education, and science throughout the world. It is now among the largest foundations in Europe. By the end of his life he had become one of the world's wealthiest people and his art acquisitions one of the greatest private collections.

Family background

Gulbenkian's family is believed to be descendants of the Rshtunis, an Armenian noble family centred around Lake Van in the 4th century AD. In the 11th century, the Rshtunis settled in Kayseri, taking the name Vart Badrik, a Byzantine noble title. With the arrival of the Ottoman Turks, the Turkish equivalent of the name, Gülbenk, was adopted. The family had established themselves in the town of Talas and lived in the region until the mid-1800s, when they ultimately moved to Istanbul. Their property in Talas was ultimately confiscated and is currently owned by the Turkish Government.

By 1860, his father Sarkis Gulbenkian was an Armenian oil importer and exporter already heavily involved in the oil industry. Sarkis was an owner of several oil fields in the Caucasus, mainly in Baku, and was a representative of Alexander Mantashev's oil company. Sarkis Gulbenkian also provided oil to the Sultan of the Ottoman Empire. During Hagop Pasha's Directorship, and, subsequently, Ministry of the Privy Treasury under Sultan Abdulhamid II in 1879, Sarkis acquired the lucrative collection of taxes for the Privy Purse of Mesopotamia.

Early life

Calouste Gulbenkian was born on 23 March 1869 in Scutari (Üsküdar), in the Ottoman Empire capital Constantinople (now Istanbul). He received his early education at Aramyan-Uncuyan, a local Armenian school. He then attended the Lycée Saint-Joseph French school and continued his studies at Robert College. These studies were cut short in 1884, when he moved to Marseilles at the age of 15 to perfect his French at a high school there.

Oil business

Immediately afterwards his father sent him to be educated at King's College London, where he studied petroleum engineering. He was a brilliant student and graduated in 1887 at the age of 18 with a first-class degree in engineering and applied sciences. A year later, he went to Baku to examine the Russian oil industry and to further his knowledge on the oil industry. Gulbenkian later wrote an article entitled La Transcaucasie et la péninsule d'Apchéron; souvenirs de voyage ("Transcaucasia and the Absheron Peninsula – Memoirs of a Journey") which appeared in the Revue des deux Mondes, a French language monthly literary and cultural affairs magazine. The article described his travels to Baku and the state of the oil industry in the region. It was eventually published as a book in 1891 in Paris.

After Hagop Pasha's appointment as the Ottoman Minister of Finance in 1887, he had Calouste prepare an oil survey of Mesopotamia. To develop the oil survey, Calouste merely read travel books and interviewed railroad engineers that were surveying and building the Baghdad Railway. Gulbenkian's oil survey led Hagop Pasha to believe that vast oil deposits lay in Mesopotamia (modern Syria and Iraq), to acquire tracts of land for the Sultan's oil reserves, and to establish the Ottoman oil industry in Mesopotamia.

By 1895, he started his oil operation business. He had to return to the Ottoman Empire, but in 1896, Gulbenkian and his family fled the empire due to the Hamidian massacres of Armenians. They ended up in Egypt, where Gulbenkian met Alexander Mantashev, a prominent Armenian oil magnate and philanthropist. Mantashev introduced Gulbenkian to influential contacts in Cairo. These new acquaintances included Evelyn Baring, 1st Earl of Cromer. Still in his twenties, Gulbenkian moved to London in 1897 where he arranged deals in the oil business. He became a naturalised British citizen in 1902. In 1907, he helped arrange the merger of Royal Dutch Petroleum Company with "Shell" Transport and Trading Company Ltd. Gulbenkian emerged as a major shareholder of the newly formed company, Royal Dutch Shell. His policy of retaining five percent of the shares of the oil companies he developed earned him the nickname "Mr Five Per Cent".

After the royalist Ottoman countercoup of 1909, Gulbenkian became a financial and economic adviser to the Turkish embassies in London and Paris, and later, chief financial advisory to the Turkish government. He was a member of a British technical team to Turkey and, later, a director of the National Bank of Turkey, which was established to support British designs.

In 1912 Gulbenkian was the driving force behind the creation of the Turkish Petroleum Company (TPC)—a consortium of the largest European oil companies aimed at cooperatively procuring oil exploration and development rights in the Ottoman territory of Mesopotamia, while excluding other interests. The German interests would be limited to a 25% share, with a 35% share for the British, and the remaining for Gulbenkian to choose. So, he gave Royal Dutch Shell 25% and kept 15% for himself as "the conceiver, the founder, and the artisan of the Turkish Petroleum combine." A promise of these rights was made to the TPC, but the onset of World War I interrupted their efforts. At first, the British Foreign Office supported the d'Arcy group to gain a share and replace Calouste's share, but Gulbenkian worked closely with French concerns, arranged for the French to receive the German's share as part of the spoils of victory, and, in return, the French protected his interest.

During the dismantling of the Ottoman Empire after the war, most of Ottoman Syria came under the French Mandate for Syria and the Lebanon and most of Ottoman Iraq came under British mandate. Heated and prolonged negotiations ensued regarding which companies could invest in the Turkish Petroleum Company. The TPC was granted exclusive oil exploration rights to Mesopotamia in 1925. The discovery of a large oil reserve at Baba Gurgur provided the impetus to conclude negotiations and in July 1928 an agreement, called the "Red Line Agreement", was signed which determined which oil companies could invest in TPC and reserved 5% of the shares for Gulbenkian. The name of the company was changed to the Iraq Petroleum Company in 1929. The Pasha had actually given Gulbenkian the entire Iraqi oil concession. Gulbenkian, however, saw advantage in divesting the vast majority of his concession so that corporations would be able to develop the whole. Gulbenkian grew wealthy on the remainder. He reputedly said, "Better a small piece of a big pie, than a big piece of a small one."

In 1938, before the beginning of World War II, Gulbenkian incorporated a Panamanian company to hold his assets in the oil industry. From this "Participations and Explorations Corporation" came the "Partex Oil and Gas (Holdings) Corporation", now a subsidiary of the Calouste Gulbenkian Foundation headquartered in Lisbon.