Initial exploration produced disappointing results but in 1935 (1353/54 AH) a well drilled in
Dhahran found indications of
oil in commercial quantities. The following year, Socal, now operating through its subsidiary the Californian Arabian Standard
Oil Company (Casoc), put into effect Article 32 of the 1933 (1351/52 AH) agreement and sold one-half of its concession interest to the Texas
Oil Company.
Oil production began in 1938 (1356/57 AH), by which time the vast extent of the
oil reserves was becoming apparent.
With this confirmation of the commercial viability of the oil reserves, another supplementary agreement was signed on 31st May, 1938 (1357 AH), adding six years to the 60-year life of the original agreement. This second instrument, known as the Supplemental Agreement, enlarged Socal's concession area by almost 80,000 square miles. It also included rights in the Saudi government's half interest in the two neutral zones shared with Iraq and Kuwait.
