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Suez Canal: Suez Canal Company
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The Suez Canal (Arabic: قناة السويس, Qanā al-Suways, French: Le Canal de Suez) is a canal in Egypt. It lies west of the Sinai Peninsula . The canal is 163km long (101 miles) and, at its narrowest point, 300-m-wide (984 ft). It runs between Port Said (Būr Sa'īd) on the Mediterranean Sea, and Suez (al-Suways) on the Red Sea. It was built by a French company. The canal was started in 1859 and finished in 1869.
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To the policy makers in Britain, the Suez Canal was a vital link between Britain and its oil interests located in the Middle East. The company that had ownership rights to the canal was Anglo-French. In a 1936 Anglo-Egyptian 30-year treaty forced by the British, the British had the right to station troops in the canal zone.
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For the first two years of operation the Suez Canal Company made such a loss that they could not even pay its statuary minimum 5% on its shares. In 1872 the canal company made its first profit, and thereafter the profit increased each year. Two years later Britain bought all of Said's shareholding and, therefore, had a great influence over the canal company. Britain had now changed its position from being a hostile opponent of the canal to one promoting its benefits. By 1883 seven directors representing user interests were installed onto the board.
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At first, international opinion was skeptical and the Suez Canal Company shares did not sell well overseas. Britain, United States, Austria and Russia did not buy any shares. All French shares were quickly sold in France. A contemporary British skeptic claimed:
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The Suez Canal was constructed between 1859 and 1869 by French and Egyptians interests with a cost of about 100 million dollars. The opening of the Suez Canal in 1869 brought forward a new era of European influence in Pacific Asia. The journey from Asia to Europe was considerably reduced by saving 6,500 km from the circum African route. In 1874, Britain bought the shares of the Suez Canal Company and became its sole owner. According to the Convention of Constantinople signed in 1888, the canal was to be open to vessels of all nations in time of peace or in war. However, Great Britain claimed the need to control the area to maintain its maritime power and colonial interests (namely in South Asia).
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The Suez Canal is considered a geographic “chokepoint” due to its influence in the world oil trade and because its narrow-width could be easily blocked, causing disruption to oil transport. In 2001, the Suez Canal transported approximately 1.3 million bbl/d of petroleum. The Sumed Pipeline has the ability to transport around 2.5 million bbl/d from the Ain Sukhna terminal at the Gulf of Suez to the Sidi Kerir at the Mediterranean Sea. Oil from the Sumed Pipeline is exported mainly to Europe and the United States. The pipeline consists of two parallel 42-inch lines and is owned by the Arab Petroleum Pipeline Company. By 2010, the Egyptian government hopes to have widened and deepened the Suez Canal enough to accommodate the passage of very large crude carriers (VLCCs) and ultra large crude carriers (ULCCs).
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