BP: 100 Years of Moral Failure
by Saeed Rahnema Professor, political science, York University; media commentator on the Middle East.
As oil continues to leak into the Gulf, Iranians might remember the company's dark history in their country.
If I were superstitious, I would say that the catastrophic situation BP currently finds itself in vis-a-vis the disaster in the Gulf of Mexico is Mossadeq’s curse. This is, after all, not the first time the oil company has made a mess of things in another country.
British Petroleum, the third largest “supermajor” has its origins in Iran. Over 100 years ago, a colonial concession by an inept and corrupt Iranian despot gave full control of Iran’s oil exploration and production to the British for 60 years. Iran was to receive 16 per cent of the declared profit, but lacked any right to review the books. Soon after, the Anglo-Persian Oil Company (APOC) was established in 1909, later renamed the Anglo-Iranian Oil Company (AIOC) in 1935, and then British Petroleum in 1954.
The company plundered Iran’s most valuable resource and viciously exploited Iranian workers who laboured under inhuman conditions and lived in abject poverty. With access to the massive and cheap Iranian oil reserves, the British government substituted coal for oil in the Royal Navy, and in 1914 bought up 51 per cent of the APOC shares. The company then signed a contract, guaranteeing a steady supply of Iranian oil to the British Navy for 30 years at fixed prices.
Apart from supplying almost free oil to the British, for decades Iranian oil revenues provided hundreds of millions of pounds in dividend and taxes to the British government. To collect the meagre share of profit it received, the Iranian government also had to purchase all the products that were used in the vast company from British manufacturers and producers, paying high prices and taxes. The company ruled with utmost arrogance, humiliating Iranians and interfering in all aspects of political life. In 1933, Reza Shah tried to make some changes to the original concession, and although some very minor adjustments were made on paper, almost nothing changed in practice.
Anti-British sentiment and calls for changes in the oil concession led some Iranian MPs in 1950 to call for a 50/50 share of profits, similar to what the U.S. had given Saudi Arabia. The company unequivocally rejected the idea and nationalist sentiments eventually brought the democratically elected government of Dr. Mohammad Mossadeq to power in 1951. Mossadeq nationalized the oil industry and an Iranian company, the National Iranian Oil Company, was put in charge.
In response, the British imposed a brutal embargo on Iran and the AIOC used every trick in the books to topple Mossadeq. Despite the lack of oil revenues because of the embargo, the Mossadeq government survived by issuing government bonds that even poor families managed to buy to support his government. After failing to oust Mossadeq, the AIOC and the British government asked newly elected President Eisenhower for help. The Americans agreed on the condition that they would have a major stake in the shares of Iranian oil, and in 1953 a CIA/MI6 supported coup toppled Mossadeq.
The victors created a consortium and “democratically” divided the Iranian oil among themselves: 40 per cent went to the AIOC, which would soon become British Petroleum, 40 per cent to the American oil giants, 14 per cent to Royal Dutch Shell, and the remaining 6 per cent to the French CFP (compagnie francaise des Petroles), now known as Total. The conditions of the contract were so harsh that even the Shah, who had regained his power after the coup, cried foul.
BP and the other oil companies benefited from a new round of dictatorship in Iran, while generations of Iranian intellectuals who demanded independence, social justice, and democracy for their country rotted in prisons, or were executed or exiled. Concerned solely with the Iranian nationalists and the political left, BP, the British and American governments, and the Shah himself ignored the threat posed by the mullahs who eventually stole the secular revolution of 1979 and established the present Islamic fundamentalist regime in the country.
BP has created lots of messes of different types and magnitudes around the world. This time it had the bad luck of doing it in the backyard of a more powerful contender, and had to apologize and pay for it. BP never apologized to the Iranian people for the bigger crime of killing their chance of living under a democratically elected secular government in the early 1950s.
Many Iranians sympathize with the American people living in the southern states who are bearing the brunt of BP’s avariciousness, but surely they have no tears to shed for this company.
As oil continues to leak into the Gulf, Iranians might remember the company's dark history in their country.
If I were superstitious, I would say that the catastrophic situation BP currently finds itself in vis-a-vis the disaster in the Gulf of Mexico is Mossadeq’s curse. This is, after all, not the first time the oil company has made a mess of things in another country.
British Petroleum, the third largest “supermajor” has its origins in Iran. Over 100 years ago, a colonial concession by an inept and corrupt Iranian despot gave full control of Iran’s oil exploration and production to the British for 60 years. Iran was to receive 16 per cent of the declared profit, but lacked any right to review the books. Soon after, the Anglo-Persian Oil Company (APOC) was established in 1909, later renamed the Anglo-Iranian Oil Company (AIOC) in 1935, and then British Petroleum in 1954.
The company plundered Iran’s most valuable resource and viciously exploited Iranian workers who laboured under inhuman conditions and lived in abject poverty. With access to the massive and cheap Iranian oil reserves, the British government substituted coal for oil in the Royal Navy, and in 1914 bought up 51 per cent of the APOC shares. The company then signed a contract, guaranteeing a steady supply of Iranian oil to the British Navy for 30 years at fixed prices.
Apart from supplying almost free oil to the British, for decades Iranian oil revenues provided hundreds of millions of pounds in dividend and taxes to the British government. To collect the meagre share of profit it received, the Iranian government also had to purchase all the products that were used in the vast company from British manufacturers and producers, paying high prices and taxes. The company ruled with utmost arrogance, humiliating Iranians and interfering in all aspects of political life. In 1933, Reza Shah tried to make some changes to the original concession, and although some very minor adjustments were made on paper, almost nothing changed in practice.
Anti-British sentiment and calls for changes in the oil concession led some Iranian MPs in 1950 to call for a 50/50 share of profits, similar to what the U.S. had given Saudi Arabia. The company unequivocally rejected the idea and nationalist sentiments eventually brought the democratically elected government of Dr. Mohammad Mossadeq to power in 1951. Mossadeq nationalized the oil industry and an Iranian company, the National Iranian Oil Company, was put in charge.
In response, the British imposed a brutal embargo on Iran and the AIOC used every trick in the books to topple Mossadeq. Despite the lack of oil revenues because of the embargo, the Mossadeq government survived by issuing government bonds that even poor families managed to buy to support his government. After failing to oust Mossadeq, the AIOC and the British government asked newly elected President Eisenhower for help. The Americans agreed on the condition that they would have a major stake in the shares of Iranian oil, and in 1953 a CIA/MI6 supported coup toppled Mossadeq.
The victors created a consortium and “democratically” divided the Iranian oil among themselves: 40 per cent went to the AIOC, which would soon become British Petroleum, 40 per cent to the American oil giants, 14 per cent to Royal Dutch Shell, and the remaining 6 per cent to the French CFP (compagnie francaise des Petroles), now known as Total. The conditions of the contract were so harsh that even the Shah, who had regained his power after the coup, cried foul.
BP and the other oil companies benefited from a new round of dictatorship in Iran, while generations of Iranian intellectuals who demanded independence, social justice, and democracy for their country rotted in prisons, or were executed or exiled. Concerned solely with the Iranian nationalists and the political left, BP, the British and American governments, and the Shah himself ignored the threat posed by the mullahs who eventually stole the secular revolution of 1979 and established the present Islamic fundamentalist regime in the country.
BP has created lots of messes of different types and magnitudes around the world. This time it had the bad luck of doing it in the backyard of a more powerful contender, and had to apologize and pay for it. BP never apologized to the Iranian people for the bigger crime of killing their chance of living under a democratically elected secular government in the early 1950s.
Many Iranians sympathize with the American people living in the southern states who are bearing the brunt of BP’s avariciousness, but surely they have no tears to shed for this company.