THE NATIONALISATION OF THE ANGLO-IRANIAN OIL COMPANY, AND THE ENDING OF BRITISH PARAMOUNTCY IN THE MIDDLE EAST: A BRITISH DEBACLE, AND THE BIRTH OF BRITISH PETROLEUM COMPANY LTD.

THE NATIONALISATION OF THE ANGLO-IRANIAN OIL COMPANY, AND THE ENDING OF BRITISH PARAMOUNTCY IN THE MIDDLE EAST: A BRITISH DEBACLE, AND THE BIRTH OF BRITISH PETROLEUM COMPANY LTD.

There was a rise of 10/- in the value of the Anglo- Iranian Oil Company’s shares to 142/- (in 1951 they had fallen below 90/-) and by the start of 1954 they were back at 190/-. Following several trips to Iran by Herbert Hoover, special oil advisor to the US Secretary of State, John Foster Dulles, in order to lay the groundwork for negotiations to settle the oil dispute between Britain and Iran, on 1st February 1954 an announcement by the AIOC was made. The Anglo- Iranian Oil Company said that it was meeting with seven other large oil companies with interests in the Middle East to discuss ways of resolving the difficulties which prevented Iranian oil from returning to the world markets.

 

Later in the month, a mission of twenty technical experts headed by a one-time Anglo-Iranian Oil Company Fields Manager, representing the eight interested companies, flew to Iran to inspect the refinery at Abadan. This was described as a fact-finding visit, to estimate the cost of putting the refinery into full working order again.¹

In the beginning of March 1954, after a positive report by the mission which went to Iran in February, the oil cartel heads met in London, the oil consortium was financially established, a plan was drawn up, and a representative mission left on 10th April for Teheran to conduct negotiations. The mission’s members were J.H. Loudon of Shell, H.E. Snow of the Anglo- Iranian Oil Company and Orville Harden of Standard of New Jersey, respectively Dutch, British and American. When Anthony Eden on 12th April was announcing in the House of Commons the news of the mission to Teheran, Herbert Morrison, the Secretary of State for Foreign Affairs in the Labour administration, took the opportunity to declare,

It is better that these things be settled in due course by friendly discussion than that they should have been sought to be settled by means of war and force. If we had sought to settle them by force the statement would not have been possible today.²

On 14th April 1954, formal talks began. Negotiations went forward until the middle of May when the three Negotiators returned abruptly to London for consultations. ‘The main difficulty was over the question of effective management of the oil fields and refinery,’ ³ and how any agreement could be fitted within the terms of the Nationalisation Law. On 20th June the negotiators were back in Teheran, ‘a formula was,after much heart-searching, found that satisfied the Persian Government’s idea of sovereignty while giving the consortium the control they considered essential over the operations.4   On 5th  August 1954 the International Consortium and Iranian delegation announced full agreement.

The companies making up the Consortium were the Anglo- Iranian Oil Company, Standard Oil of New Jersey, Standard Oil of California, Gulf Oil Corporation, the Texas Company, Socony Vacuum Company, the Compagnie Francaise des Petroles, and Royal Dutch Shell.

I.O. C. with a 40% share, Royal Dutch/ Shell with 14%, the Compagnie Francaise des Petroles wit 6% and five U.S. (major) oil Companies each with 8%; Standard Oil of California, Standard Oil of New Jersey, Socony Vacuum, Gulf Oil and Texas Oil.5

 

      1. 1. J. MARLOW, The Persian Gulf the Twentieth Century, (London: The Cresset Press, 1962), Chapters 10, 12.
      2. 2. Parliamentary Debate, Commons, Vol. 526, Col. 796, 12th April 1954, in ENAYAT, op. cit., p. 177.
      3. 3. PRO, London, FO 371/114805, The General Correspondence of the Foreign Office, Sir Roger Stevens, British Ambassador in Teheran to Sir Anthony Eden, the Foreign Secretary, Confidential, 4th June 1955, p. 3.
      4. 4. Ibid.
      5. 5. PRO, London, FO 371/11076, The General Correspondence of the Foreign Office, Persia, Brief for Lords’ Reading.

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