MONGABAY.COM
Mongabay.com seeks to raise interest in and appreciation of wild lands and wildlife, while examining the impact of emerging trends in climate, technology, economics, and finance on conservation and development (more)
WEEKLY NEWSLETTER
|
|
Iran
Index
Commercial extraction of oil began at the turn of the century,
when exploration and exploitation rights were granted to
foreigners. The first of these was an Englishman, W.K. D'Arcy, who
in 1908 discovered commercial quantities of petroleum. D'Arcy's
discovery led to the formation of the Anglo-Persian Oil Company in
1909, which, after 1935, operated as the Anglo-Iranian Oil Company
(AIOC).
Disagreements over revenues arose almost immediately between
the government and the newly formed oil company. The interpretative
agreement reached in 1920 temporarily quieted matters. When
revenues fell sharply at the beginning of the Great Depression,
however, Iran canceled the concession, causing Britain to take the
case to the League of Nations in 1932. Before the league came to a
decision, a significant modification of the original concession was
negotiated by Iran and the company acting on their own. Royalty
payments, previously a share of company profits, were supplanted by
a fixed payment per ton of oil produced. Minimum payments to the
government were established, and the life of the concession was
extended by 32 years (until 1993), although the concession area was
reduced about 80 percent.
After continued disputes over the terms of the contract with
the AIOC, the Majlis voted to nationalize the petroleum industry in
1951. In 1954 the AIOC was renamed the Consortium, reflecting the
40-percent ownership held by British Petroleum, 14 percent by Royal
Dutch Shell; 7 percent each by Gulf Oil, Socony-Mobil, Esso (later
Exxon), Standard Oil of California, and Texaco; 6 percent by
Compagnie Française des Pétroles; and 5 percent by various
interests collectively known as the Iricon Agency. The Consortium's
concession was to run through 1979, with the expectation of
negotiable fifteen-year options. Instead, at the request of the
Iranian government, in 1973 the Consortium agreed to form a new
agency to market Iranian petroleum. The Consortium members in
return received a privileged buyer status for a twenty-year supply
of crude petroleum.
This agreement was interrupted because of strikes in the oil
fields in 1978 during the rebellion against Mohammad Reza Shah.
Petroleum exporting was not resumed until his departure on January
16, 1979. Subsequently, the NIOC canceled the 1973 marketing
agreement with former Consortium members, offering them instead a
special nine-month supply agreement, after which they lost special
buyer status.
Data as of December 1987
|
|