D'ARCY CONCESSION (1901)

Oil concession granted by the Iran to British national D'Arcy in 1901.

William Knox D'Arcy (1849–1917) was a successful British entrepreneur who in 1901 obtained from the government of Iran a sixty-year concession to search for and produce petroleum in an area of central and southern Iran covering 480,000 square miles. In return, the Iranian government received 20,000 British pounds in cash, paid-up shares of an equal value, and a promise of 16 percent of the annual net profits. In 1905, after failing to find oil and having spent most of his capital, D'Arcy assigned his concession rights to Burma Oil, in return for 170,000 barrels of petroleum. Oil was discovered in commercial quantity at Masjed-e Soleyman in 1908, and Burma was reincorporated the following year as the Anglo-Persian Oil Company (APOC, later, the Anglo-Iranian Oil Company, then British Petroleum). In 1914, the British navy decided to convert its ships from the use of coal to oil as fuel, and in tandem the British government became a majority shareholder in APOC. The concession subsequently proved highly profitable for Great Britain. Up to Iran's nationalization of the concession in 1951, APOC paid nearly $600 million in profits and $700 million in corporate taxes to the British government; the Iranian government received a total of $310 million in royalties.

See also Petroleum, Oil, and Natural Gas; Petroleum Reserves and Production.

Bibliography

Ferrier, Ronald W. The History of the British Petroleum Company, Vol. 1: The Developing Years, 1901–1932. New York; Cambridge, U.K.: Cambridge University Press, 1982.

daniel e. spector
updated by eric hooglund