Anglo-Persian Oil Company
The British Anglo-Persian Oil Company (APOC) was founded in April 1909 with the discovery of a large oil field around Masjed Soleyman , Iran . It was the first company to produce oil in the Middle East . After the conclusion of a new concession agreement with Iran, the APOC was renamed Anglo-Iranian Oil Company (AIOC) in 1935 and the British Petroleum Company , now BP , in 1954 after the conclusion of the new consortium agreement .
Founding history
Jacques de Morgan
In 1892 Jacques de Morgan published an account of his travels to Persia. In 1891 he had visited Marcel and Jane Dieulafoy's excavation work near Qasr-e Shirin and reported in the magazine Les annales des mines about oil deposits near Qasr-e Shirin. The report by de Morgan was read by Antoine Kitabgi Khan , former General Director of Persian Customs, who lived in Paris as a pensioner. Kitabgi Khan contacted Sir Henry Drummond Wolff, the former British ambassador to Persia, and asked if Wolff could not find someone interested in the exploitation of the Persian oil reserves. Wolff met William Knox D'Arcy in London , who had made his fortune in Australia with a gold mine.
William Knox D'Arcy
In 1900, William Knox D'Arcy promised to finance the search for oil in Persia. The first explorations were carried out by the geologist HT Burls under the direction of Wolff, Kitabgi and Cotte. In 1901 negotiations began on a concession . The British Ambassador to Tehran Hardinge turned to the former Prime Minister Mirza Ali Asghar Khan Amin as-Soltan , who campaigned at court for the award of the concession to William Knox D'Arcy. The negotiations with Mozaffar ad-Din Shah were successfully concluded on May 28, 1901. For £ 20,000 in cash and £ 20,000 in shares in the joint-stock company to be founded, a 60-year concession was awarded to explore oil deposits for an area of 500,000 miles² with the corresponding exploitation rights. The northern provinces of Iran, which fell under Russia's economic sphere of influence, were excluded from the concession. The concession stipulated that D'Arcy should finance the entire exploration costs. In return, he received the right to hold 90% of the shares in the "First Collecting Society". 10% of the shares went to the Iranian state. 84% of the profits should be distributed to D'Arcy and 16% to the Iranian state. D'Arcy was also subject to Iranian income tax on the profits from the collecting society. After the concession expired in 1961, the entire real estate assets of the collecting society should go to the Iranian state. Atabak also received £ 25,000 in shares in the company to be formed in return for his brokerage work.
A drilling team led by George B. Reynolds immediately began looking for oil wells. In 1902 the oil drilling began in Chia Surkh in western Iran. The first oil was found in 1903, and D'Arcy founded First Exploitation Co. Ltd (FEC) . However, it quickly became apparent that the well did not deliver enough oil to be economically exploitable. The oil exploration was now moved to an area inhabited by the Bakhtiars . In order to secure their protection, a separate concession agreement was concluded with the tribal leaders, in which the tribal leaders a 3% stake in all oil companies in their district plus an annual payment of £ 3,000 starting from 1905 for the protection of the oil facilities and pipelines. By the end of 1905, D'Arcy had invested £ 250,000 in exploring for oil with no significant amounts of oil found. D'Arcy then began negotiations to sell the concession to the French Rothschild line . However, upon intervention by the British Admiralty , the Burmah Oil Company, founded in Glasgow by Sir David Sime Cargill in 1896, took over the concession. In compensation, D'Arcy received 170,000 shares in Burmah Oil and an unspecified amount in cash.
Burmah Oil
Burma (written Burmah in Victorian times, now Myanmar ) became part of the British Empire after the invasion of British troops in 1886. The Burmah Oil Corporation had been quite successful in finding oil. In 1899 the oil, initially only sold in Burma, was also shipped to India in our own tankers. In 1905 the British Admiralty had signed a long-term contract with Burmah Oil for the supply of oil to the British fleet, which was switched from coal to oil at the beginning of the 20th century.
Burmah Oil pledged a further £ 100,000 to fund the Iranian oil exploration. At the beginning of the drilling, Burmah Oil should also fail. It was not until three years after taking over the D'Arcy concession that a well in Masjed Soleyman hit 360 meters on May 26, 1908. Burmah Oil had discovered one of the largest oil fields in the world.
Foundation of the APOC
In April 1909, the concessionaires founded the Anglo-Persian Oil Company (APOC), which was supposed to extract, process and sell the oil found in southern Persia. The company had a share capital of £ 1 million and was a nearly wholly owned subsidiary of the Burmah Oil Company. D'Arcy was appointed to the board of directors of the APOC and remained in this position until his death. The rights to explore, produce, process and sell Iranian oil were transferred to the APOC by the "First Collecting Society", which held the concession granted by the Iranian state, in return for payment of a concession fee. With the transfer of the rights to the APOC, the Iranian state was no longer involved in the company that operated the oil business. It now only had a 10% share in the APOC's license fee to the "Erste Verwertungsgesellschaft" and a 16% share in its profits. With the establishment of this second company, which preceded the "First Collecting Society" holding the oil concession, the rights of participation granted to the Iranian state in the concession were curtailed.
In order to be able to sell the oil, a pipeline, a refinery and a loading station for tankers first had to be built. The APOC chose the city of Abadan for this . This area was administered by Sheikh Khaz'al of Mohammerah. In 1909, after negotiations between the Persian Gulf Residency and Sheikh Khaz'al, an agreement was reached that provided for a payment of £ 650 per year for ten years, payable in advance. The Sheikh was also granted a loan of £ 10,000. It was also promised that the guards for the APOC facilities would be recruited from the tribe of the Sheikh.
In 1912, Burmah Oil, headed by Sir John Cargill, refused to provide further funding for the APOC. Winston Churchill , First Lord of the Admiralty at the time , negotiated new agreements with Burmah Oil. The UK government acquired the majority of the £ 4 million share capital with a 51% equity stake, at £ 2,001,000. In addition, a long-term supply contract was concluded with APOC to supply the British fleet. Through this partial nationalization and the acceptance contract of the British Navy, which was guaranteed by the British state, the APOC had been saved from financial collapse. In 1913, oil production could finally begin. At that time it was not foreseeable that the world's largest refinery would be built in Abadan in a few years.
APOC participations
In 1912, APOC took a 50% stake in the Turkish Petroleum Company (TPC), which was founded by the oil trader Calouste Gulbenkian , among others , in order to secure income from the oil wells in the Ottoman Empire . The participation in TPC proved to be very valuable after an interruption in production in the First World War . After an oil well was found near Kirkuk , oil production was intensified. The Turkish Petroleum Company was after the establishment of Iraq in 1927 Iraq Petroleum Company renamed.
In order to get the support of the local sheikhs and the tribal leaders of the Bakhtiars , the APOC founded the Bakhtiari Oil Company, involved the tribal leaders in this company and distributed corresponding profits.
Concession payments until 1918
From the time of the first oil production in 1908 until the outbreak of the First World War in 1914, the annual concession fees paid to the Iranian government were only a few hundred pounds. After the outbreak of the war, the APOC completely stopped paying the concession fees to the Iranian central government. Even though Iran had declared its neutrality, the country was occupied by British and Russian troops. APOC's concession payments to Iran have been suspended for the next five years.
The Armitage-Smith Agreement
After the war ended, Iran was also confronted by the APOC with a claim for damages equivalent to the equivalent of $ 2 million for war damage to the oil pipelines, which allegedly came from acts of sabotage by German agents that had been tolerated by the Iranian government. In December 1920, the dispute between the Iranian central government and the APOC was settled by the Armitage-Smith Agreement . The agreement substantially changed the way in which the profits, which served as the basis for concession taxes, were calculated to be borne by Iran. All profits from tanker transport were excluded from the calculation. The profit calculation of APOC participations was limited to companies in which the APOC had a majority stake. In addition, considerable deductions were agreed upon in the profit calculation.
As compensation for the concession fees withheld from Iran from 1914 to 1920, Iran received £ 933,000 as a one-off payment. For comparison: The World Bank had found in a report drawn up in 1950 that in 1919 alone the APOC had achieved a surplus of 6 million British pounds. In its report, the World Bank comes to the conclusion that the amount paid did not exceed a concession fee of 3%. Had the D'Arcy concession been implemented correctly, Iran should have received £ 8 million in concessions for the period mentioned.
The importance of oil revenues for the Iranian state is demonstrated by the fact that the 933,000 pounds paid made up almost a quarter of the entire Iranian national budget. The acceptance of these unfavorable agreements for Iran can only be explained by the ongoing political unrest and military interventions on the part of the British. By paying substantial bribes to Ahmad Shah and leading Iranian politicians, the Iranian government signed the Anglo-Iranian treaty of 1919 , which would have made Iran a kind of British protectorate if it had come into force. The exposure of the bribery, the withdrawal of British troops from Iran and the coup of February 21, 1921 prevented the entry into force of the treaty.
In 1923 the APOC paid 565,250 British pounds ($ 2.8 million) to the central government in Tehran. The American consul in Bushehr reported an APOC surplus that year of $ 28 million. The concession fee paid to the Iranian state thus corresponded to around 10% of the surplus. According to the APOC's own calculations, the share of concession fees paid to the Iranian state was 4 shillings per ton of crude oil.
The 1933 concession
From 1920, the APOC tried to renegotiate the D'Arcy concession. The first thing they wanted to do was delete the clause stating that in 1961 all rights and the entire facilities would fall to the Iranian state. Then the oil levy should no longer be linked to the company's profits, but to a fixed amount per ton of crude oil. From 1930 the negotiations were conducted by Court Minister Abdolhossein Teymurtash . After the negotiations were unsuccessful, Reza Shah intervened and brought the negotiations to a conclusion. A new concession agreement was concluded between Iran and the APOC on April 23, 1933. Reza Shah had unilaterally terminated the D'Arcy concession. The new contract provided for a concession fee of 4 shillings per ton of crude oil with a minimum output of 5 million tons.
The main points of the 1933 concession agreement were as follows:
- The area covered by the exploration rights on the concession has been reduced from 500,000 to 100,000 square miles.
- Iran receives 4 shillings per barrel with a guaranteed minimum of 750,000 pounds.
- The APOC pays Iran 4% tax on accruing profits with a guaranteed minimum amount of £ 230,000.
- APOC is hiring more Iranians in management and technology.
- The APOC is exempt from all other taxes.
- The concession has a term of 60 years (until 1993).
- APOC's monopoly on oil transport is lifted.
- The APOC is paying Iran 1 million pounds to settle any further claims.
In its 1950 report, the World Bank had calculated that the APOC's assets at that time were £ 46 million.
After Persia had Iran as the official state name, the APOC was renamed the Anglo-Iranian Oil Company (AIOC) in 1935.
The 1949 Supplemental Agreement
Prime Minister Abdolhossein Hazhir had been mandated by parliament to start negotiations on a new concession for the Anglo-Iranian Oil Company, which was to replace the concession from 1933. The parliament wanted to get a higher share of the revenues from the oil production for Iran. Hazhir drew up a 25-point memorandum, but could no longer negotiate with the AIOC himself, as he had to resign as prime minister due to the ongoing demonstrations against him. Ayatollah Kaschani had insulted Hazhir as an agent of British colonialism and a spy and called for violent demonstrations against the Prime Minister. Finance Minister Abbasqoli Golshaiyan of Prime Minister Mohammad Sa'ed Maraghei's cabinet then conducted the first negotiations with the AIOC on the basis of the paper drawn up by Hazhir.
Finance Minister Golshaiyan reported to Parliament on his negotiations with the AIOC. He had called for a 50% stake in the AIOC's profits, a new agreement regarding the duration of the concession and a review of the concession terms every 15 years. Prime Minister Sa'ed Maraghei decided that Golshaiyan should negotiate a contract with the AIOC. In the end, an agreement was reached in July 1949 and an agreement supplementing the previous concession was signed by the representative of AIOC Gass and Golshaiyan. The concession fee for Iran was raised by 50% from 22 cents to 33 cents per barrel. Prime Minister Mohammad Sa'ed Maraghei sent this agreement to parliament for a vote. Fierce discussions broke out and Mohammad Sa'ed Maraghei was accused of betraying the rights of the Iranian people. The agreement was not ratified by Parliament. Instead, some members of parliament proposed nationalizing the AIOC's oil facilities.
The nationalization of the Iranian oil industry in 1951
The concession agreement negotiated with Reza Shah in 1933 led to constant criticism in Iran after the Second World War. The actual Abadan crisis occurred under the government of Prime Minister Clement Attlee in the 1950s. The transfer of profits by the international oil companies to the oil-producing countries had fundamentally changed as a result of the contracts between the US oil companies and Saudi Arabia. The American oil companies were ready to give Saudi Arabia a 50% share of the profits. The concession between the AIOC and the Iranian state provided for a profit sharing of only 20% to a maximum of 25%. After the board of the AIOC initially refused to renegotiate the concession, the Iranian parliament decided in March 1951 to nationalize the oil facilities of the AIOC in Iran, including their holdings. The parliamentary decision on nationalization was made by Prime Minister Hossein Ala on March 15, 1951. The APOC's oil facilities were taken over by the newly founded National Iranian Oil Company (NIOC) and the oil business was continued "for its own account". The UK then filed a lawsuit against the Iranian government in the International Court of Justice, but it was dismissed. The reason was "no jurisdiction of the court", since the court only had jurisdiction for intergovernmental contracts, but this was a contract between a private company, the AIOC, and the Iranian state.
The British government had also turned to the UN Security Council to seek a solution to the conflict. Great Britain had in the meantime imposed an embargo on Iran and made the sale and transport of Iranian oil virtually impossible by blocking the Persian Gulf.
The 1954 consortium agreement
It was not until the overthrow of the Mossadegh government (→ main article: Operation Ajax ) and the renegotiation of the concession that production activities began again. A consortium agreement with a term of 25 years was negotiated between the Iranian government and a consortium of international oil companies. The extraction, processing and distribution of the oil products were no longer reserved exclusively for the AIOC. In addition to the AOIC, Shell from the Netherlands, Jersey and other smaller companies from the USA and the Compagnie Francaise de Petroles (CFP) from France were also involved.
As part of the consortium agreement, two London-based companies based in Iran were founded under Dutch law, Iranian Oil Exploration and Producing Co. and Iranian Oil Refining Co. These two companies were 100% owned by Iranian Oil Participants Ltd, which was also newly founded . based in London, whose shares were shared by the companies named in the consortium agreement. Another newly founded company based in London is Iranian Oil Services Ltd., which supplies the technical equipment for oil production and refining. This company is also 100% owned by the consortium partners.
50% of the profits of the companies were transferred to the Iranian state. As compensation for the nationalization and the abandonment of the monopoly on the extraction of Persian oil, so to speak as a transfer fee for the concession from 1933, the AIOC received $ 20 million from the oil companies of the consortium agreement for 10 years.The Iranian state paid as compensation for the nationalization of AIOC's industrial facilities $ 2.5 million per year. After the conclusion of the contract, the "old AIOC" ceased to exist. The name of the existing company was then renamed from AIOC to British Petroleum Company, today's BP.
In this agreement, the NIOC was only responsible for the "non-basic functions" such as training of employees, public transport, maintenance of the roads, houses for the workers and employees, their medical care and social services. All that remained for the NIOC to manage was the sale of the oil products in Iran, the yield from the small Naft-i-Shah oil field and the operation of the refinery in Kermanshah connected to it via a pipeline.
From 1955, the consortium's oil production increased from 14.7 million tons in 1955 to 76.5 million tons in 1964. The revenue for the Iranian state grew from £ 32.3 million in 1955 to £ 171.5 million in 1964.
The British Petroleum Company
In 1904 the Deutsche Petroleum-Aktiengesellschaft (DPAG) was founded in Berlin , which in 1906 became part of the European Petroleum Union (EPU). In 1906 they founded a subsidiary in Great Britain called the British Petroleum Company to distribute their products. After it was confiscated by the British government at the outbreak of World War I, this company became the property of the Anglo-Persian Oil Company in 1917.
From this point on, "BP" was the product trademark, from 1922 in raised quotes and from 1930 also with a shield-shaped border, mostly in black or blue.
Corporate colors
At first, the company's pumping stations were red. Due to public pressure for ugliness, the pumps were painted green around 1927. Between 1927 and 1931, the APOC standardized the general company colors to green and yellow, which was first registered as a registered trademark by its French branch in 1928. These company colors could be enforced in Germany from 1931 with the exception of the subsidiary OLEX . In Germany, NITAG used these colors as company colors.
The BP trademark was changed to a green shield with a yellow border and yellow initials with black shadows in 1946. When the company changed its name from AIOC to British Petroleum Company in 1954, the product trademark also became the company logo. In order to be able to use the company colors yellow-green in Germany as well, the Anglo-Iranian Oil Company asked NITAG in Germany in the early 1950s to give up the colors. The subsequent re-signaling of the NITAG gas stations to the new company colors blue-yellow was paid for by the Anglo-Iranian Oil Company .
BP product trademark (until 1922)
BP product brand (from 1930)
BP product trademarks (from 1946 to 1958)
See also
Web links
- Anglo-Persian Oil Company . In: Ehsan Yarshater (Ed.): Encyclopædia Iranica (English, including references)
- Early documents and newspaper articles about the Anglo-Persian Oil Company in the 20th century press kit of the ZBW - Leibniz Information Center for Economics .
Individual evidence
- ^ Rouholla K. Ramazani: The foreign polica of Iran. University Press of Virginia, 1966, pp. 70f.
- ^ Mohammad Gholi Majd: Great Britain & Reza Shah. University of Florida Press, 2001, pp. 240f.
- ^ Rouholla K. Ramazani: The foreign polica of Iran. University Press of Virginia, 1966, p. 73.
- ↑ Zuhayr Mikdashi: A financial analysis of middle eastern oil concessions: 1901-65. New York 1966, p. 296.
- ↑ English documents on the strangulation of Persia. Verlag Der Neue Orient, Berlin 1917, pp. 55–57
- ↑ Peter Frankopan: Light from the East - A New History of the World . 1st edition. Rowohlt Berling Verlag, Berlin October 2016, p. 473-474 .
- ^ World Bank: Nationalization of the Iranian Oil Industry. 1950, p. 7.
- ↑ Archive link ( Memento of the original from April 8, 2010 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ World Bank: Nationalization of the Iranian Oil Industry. 1950, p. 11.
- ↑ a b Gholam Reza Afkhami: The life and time of the Shah. University of California Press, 2009, p. 118.
- ↑ Gholam Reza Afkhami: The life and the Times of the Shah. University of California Press, 2009, p. 198.
- ↑ Our Industry. Anglo-Iranian Oil Co. Ltd .: An introduction to the Petroleum Industry for the use of the Members of the Company's Staff. 2nd ed., London 1949, p. 73
- ↑ Zuhayr Mikdashi: A financial analysis of middle eastern oil concessions: 1901-65. New York 1966, p. 223.
