refresher

The Anglo-Persian Oil Company (APOC) was founded in 1909 following the discovery of a large oil field in Masjed Soleiman, Iran. It was the first company using the oil reserves of the Middle East. APOC was renamed 1935 in Anglo-Iranian Oil Company (AIOC) and eventually became the British Petroleum Company (BP) in 1954, as one root of the BP Company today.

negotiated an oil concession with the Shah Mozzafar al-Din Shah Qajar of Persia in 1901 giving away control of Iranian oil reserves to Britain for 60 years. However, within a few years D'Arcy was almost bankrupted by the cost of exploration and so to raise capital he sold a large portion of the stock to the Burmah Oil Company Ltd. who created the Anglo-Persian Oil Company (APOC) as a subsidiary and also sold shares to the public.^[1]

Volume production of Persian oil products eventually started in 1913 from a refinery built at Abadan. The British government, at the impetus of Winston Churchill, First Lord of the Admiralty, partly nationalized the company in 1913 in order to secure British-controlled oil supplies for its ships. ^[2][1] APOC took a 50% share in a new Turkish Petroleum Company organised in 1912 by Calouste Gulbenkian to explore and develop oil resources in the Ottoman Empire. After a hiatus caused by World War I it reformed and struck an immense gusher at Kirkuk, Iraq in 1927, renaming itself the Iraq Petroleum Company.

By this period, Iranian popular opposition to the D'Arcy oil concession and royalty terms whereby Iran only received 16 percent of net profits was widespread. Since industrial development and planning, as well as other fundamental reforms were predicated on oil revenues, the government's lack of control over the oil industry served to accentuate the Iranian Government's misgivings regarding the manner in which APOC conducted its affairs in Iran. Such a pervasive atmosphere of dissatisfaction seemed to suggest that a radical revision of the concession terms would be possible. Moreover, owing to the introduction of reforms that improved fiscal order in Iran, APOC's past practise of cutting off advances in oil royalties when its demands were not met had lost much of its sting.

The attempt to revise the terms of the oil concession on a more favourable basis for Iran led to protracted negotiations that took place in Tehran, Lausanne, London and Paris between Abdolhossein Teymourtash, Iran's Minister of Court from 1925-1932 and its nominal Minister of Foreign Affairs, and the Chairman of APOC, John Cadman, 1st Baron Cadman, spanning the years from 1928 to 1932. The overarching argument for revisiting the terms of the D'Arcy Agreement on the Iranian side was that its national wealth was being squandered by a concession that was granted in 1901 by a previous non-constitutional government forced to agree to inequitable terms under duress. In order to buttress his position in talks with the British, Teymourtash retained the expertise of French and Swiss oil experts.

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