Anglo-Persian Oil Company

The Anglo-Persian Oil Company (APOC; Persian: شرکت نفت ایران و انگلیس) was a British company founded in 1909 following the discovery of a large oil field in Masjed Soleiman, Persia (Iran). The British government purchased 51% of the company in 1914, gaining a controlling number of shares, effectively nationalizing the company. It was the first company to extract petroleum from Iran. In 1935 APOC was renamed the Anglo-Iranian Oil Company (AIOC) when Reza Shah formally asked foreign countries to refer to Persia by its endonym Iran.

In 1954, it was renamed again to The British Petroleum Company, one of the antecedents of the modern BP public limited company. The government of Mohammad Mosaddegh nationalized the company's local infrastructure assets and gave the new company the name National Iranian Oil Company.

In 1901, William Knox D'Arcy, a millionaire London socialite, negotiated an oil concession with Mozaffar al-Din Shah Qajar of Persia. He financed this with capital he had made from his shares in the highly profitable Mount Morgan Mine in Queensland, Australia. D'Arcy assumed exclusive rights to prospect for oil for 60 years in a vast tract of territory including most of Persia. In exchange the Shah received £20,000 (£2.7 million today), an equal amount in shares of D'Arcy's company, and a promise of 16% of future profits.

D'Arcy hired geologist George Bernard Reynolds to do the prospecting in the Persian desert. Conditions were extremely harsh: "small pox raged, bandits and warlords ruled, water was all but unavailable, and temperatures often soared past 50°C". After several years of prospecting, D'Arcy's fortune dwindled away and he was forced to sell most of his rights to a Glasgow-based syndicate, the Burmah Oil Company.

By 1908, having sunk more than £500,000 into their Persian venture and found no oil, D'Arcy and Burmah decided to abandon exploration in Persia. In early May 1908, they sent Reynolds a telegram telling him that they had run out of money and ordering him to "cease work, dismiss the staff, dismantle anything worth the cost of transporting to the coast for re-shipment, and come home." Reynolds delayed following these orders and in a stroke of luck, struck oil shortly after, on 26 May 1908. However, according to Arnold Wilson, "The service rendered by G.B. Reynolds to the British empire and to British industry and to Persia was never recognized."

On 14 April 1909, Burmah Oil created the Anglo-Persian Oil Company (APOC) as a subsidiary and also sold shares to the public.

Volume production of Persian oil products eventually started in 1913 from a refinery built at Abadan, for its first 50 years the largest oil refinery in the world (see Abadan Refinery). In 1913, shortly before World War I, APOC managers negotiated with a new customer, Winston Churchill, who was then First Lord of the Admiralty. Churchill, as a part of a three-year expansion program, sought to modernise Britain's Royal Navy by abandoning the use of coal-fired steamships and adopting oil as fuel for its ships instead. Although Britain had large reserves of coal, oil had the advantage of greater energy density, allowing a longer steaming range for a ship for the same bunker capacity. Furthermore, Churchill wanted to free Britain from its reliance on the Standard Oil and Royal Dutch Shell oil companies. In exchange for secure oil supplies for its ships, the British government injected new capital into the company and, in doing so, acquired a controlling interest in APOC. The contract that was set up between the British Government and APOC was to hold for 20 years. The British government also became a de facto hidden power behind the oil company.

APOC took a 50% share in a new Turkish Petroleum Company (TPC) 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.