Iranian and Company representatives held their talks-first in Europe and then in Tehran-until April 24th 1933. They reached agreement on all principal matters, except the renewal of the D’Arcy Concession, which was to terminate in 1951; however, Cadman insisted that it should be extended for another 30-year period. Finally, the Shah himself intervened, and a new agreement was signed, which included the extension of the concession.
The Second World and Oil The Second World War proved the ever rising importance of oil. Allied air forces in the Middle East, the Far East and Europe relied heavily on Abadan refinery for fuel. In August 1944, the former Soviet government sent its foreign minister to Tehran for an oil concession. The negative response of the Iranian government, which had decided not to grant concessions until the end of the war, enraged the Soviets, and the Tudeh (communists) Party held anti-government demonstrations and rallies across the country.
Dr. Mohammad Mosaddegh and the Anti-Concession Law Meanwhile, Dr. Mohammad Mosaddegh took the anti-concession bill to the consultative assembly (Majlis). The bill was passed on December 2nd 1944. The Second World War came ended in 1949, and allied forces agreed to exit Iran in 6 months' time. The Soviets, however, enraged by the Iranian government’s response, did not abide by the agreement. Finally, the conclusion of “Ghavam-Sadchikov” agreement led to the withdrawal of Soviet forces from the country.
Oil Nationalization Some of the major events that further heightened discussions on the oil issue were inclusive of election campaigns of the 16th Majlis,
the assassination attempt against the
Shah on February 4th of 1949, Ayatollah Kashani’s exile, assassination of Hajir by Fedayeen e-Islam on November 4th of 1950, the Iranian National Front’s success in Tehran and the return of Ayatollah Kashani form exile. Negotiations between the Iranian government and the Company led to the signing of the “Gass-Goldshaiyan” agreement. It was taken to the 14th Majlis in its final days.
According to the agreement, royalty earnings of the government were to increase, but the deal did not serve the rights of the Iranian people. This came at a time when agreements such as the 50/50 profit sharing had become prevalent.
The Oil Nationalization Bill and the Government of Dr. Mohammad Mosaddegh Following the assassination of Razmara, Hossain Ala was given the task of forming a cabinet, while the wave of strike had swept oil workers in Khuzestan. Ala resigned on April 27th 1951 and the Majlis gave its vote of confidence to Dr. Mohammad Mosaddegh as the new Prime Minister. The oil nationalization law, prepared by the special oil committee, was approved by the legislative body on April 29th 1951. The Shah endorsed the bill on April 30th the same year. A day later, Mosaddegh’s cabinet presented its plans to the Majlis. As the first step in the oil nationalization process, the National Iranian Oil Company (NIOC) was formed with a three-member provisional board. The board members arrived in Abadan on June 9th 1951. The next day, Iran’s flag was mounted on top of the Company’s main office in Khorramshahr.
The board was ordered not to obstruct Iran’s oil exports. It had agreed that tankers should continue to lift oil cargos, in return for which they were to sign receipts, to allow for pavement at a later time. Oil tankers, which were either owned or leased by the Company, refused to sign unconditional receipts. Thus, oil lifting from Abadan came to a halt. Oil storage tanks were filled and Abadan refinery’s operations were also halted. In addition, 4500 non- Iranian oil personnel resigned collectively. At that time, some 61500 Iranian and foreign workers were working for the Company. Interruption of oil operations led to sharp decline in oil revenues, and forced the government to pay the salaries of the workers.
