Anglo–Iranian Oil Company (AIOC) A few months later, Myanmar’s oil company, the Concessions Ltd and Lord Strathcona, a British financier, set up AIOC. All of D’Arcy’s concessionary rights were transferred to AIOC. D’Arcy also became a member of the board of the newly established firm. Some steps had to be taken for the production and export of crude oil. It was decided that oil should be transferred to Abadan, where a refinery was to be built. Tankers were to carry oil products from there.
A 138-mile long pipeline was to be constructed for transferring the crude oil to Abadan refinery. Some plans were also raised for construction of a number of storage and loading facilities.
Sheikh Khazal, ruler of Khorramshahr, who had longstanding ties with Britain’s diplomatic representative in the Persian Gulf, provided AIOC with the needed site for construction of the refinery. In return, the Sheikh was to receive an annual lease and a loan of 10 thousand pounds. The British diplomatic representative also assured the Sheikh and his family of his government’s support and protection.
It was evident that AIOC was strengthening its position with the help of the British diplomatic officials, neglecting Iranian central government. The Company’s ties with Bakhtiari tribal heads and Sheikh Khazal
were examples of such
measures. But Reza Shah put an end to these ties by launching a crackdown on the sheikhs and tribal heads.
This situation lasted for 15 years. However, the previous ties were re-established more vigorously- after August 25th 1941, when the British military forces entered Iran.
Export Operations in Iran Refinery Construction job began in October 1909. Company’s employees, initially limited to several drillers, mechanics, an accountant and a physician, rose to 2500 in 1911 and the Company’s airplane landed in Iran for the first time and the first Iranian crude oil cargo was lifted for export in 1912.
By 1914, 30 oil wells were drilled in Masjed Soleiman area. The Company and the British government reached an agreement in the same year whereby the latter became the majority shareholder of the Company.
From then on, the British government had two members on the Company’s board. They had special powers to veto the decisions made by the board which they thought were contrary to the British interest. The arrangement was approved by Britain’s House of Commons on June 17th 1914, on the eve of the First World War. Based on a confidential agreement negotiated with the British admiralty, the Company undertook to supply all the fuel requirements of the British Navy at low prices.
The First World War (1914-1918) proved the tremendous importance of oil.
The use of oil in wars dates back to old times. All the awesome movement and firepower in today’s ground, sea and air combats are possible, only because of oil. Without it, personnel carriers, tanks, and fighter planes are not able to move. That is why after the First World War, Lord Curzon said that the war was won on waves of oil.
