National Iranian Oil Company

The National Iranian Oil Company ( NIOC ) is an Iranian company with headquarters in Tehran. The company is a state- owned company and is part of the Iranian Ministry of Petroleum. The Department is responsible for the development and organization of the oil market in Iran. The company was founded on 30 April 1951.

History of establishment

The establishment of the NIOC is closely related to the nationalization of the Iranian oil industry. The parliamentary decision to nationalize fell under Prime Minister Hossein Ala on March 15, 1951., The oil facilities of the Anglo-Persian Oil Company was taken over by the newly established National Iranian Oil Company ( NIOC ) and the oil business " on own account " continued.

After triggered by the Mossadegh government Abadan crisis and the overthrow of Mossadegh (→ Main article: Operation Ajax ), there was a renegotiation of the oil producing concession. With the Iranian government from 1954 a valid consortium agreement with a term of 25 years, was negotiated between a consortium of international oil companies. The mining and processing and the distribution of oil products were no longer exclusively reserved for the AIOC. In addition to the AIOC and the shell from the Netherlands, the Jersey and other smaller companies from the U.S. and the Compagnie Francaise de Petroles (CFP ) were involved from France. As part of the consortium of two companies, the Iranian Oil Exploration and Producing Co. and the Iranian Oil Refining Co. was founded with its headquarters in London to Dutch law and domiciled in Iran, These two companies were among 100% of the newly established Iranian Oil Participants Ltd.. based in London, whose shares, the company said in the consortium shared. Another newly established company based in London is the Iranian Oil Services Ltd. , Providing the technical equipment for oil production and refining. Also, this company is 100% owned by the consortium partners. The profits of the companies were paid to 50% of the Iranian state. As compensation for the nationalization and the function of this monopoly to promote Persian oil, almost as a transfer fee for the concession of 1933, the AIOC by the oil companies of the consortium received 10 years, $ 20 million The Iranian state paid as compensation for the nationalization the industrial plants of the AIOC $ 2.5 million per year. After conclusion of the contract that had "old AIOC " ceased to exist. The name of the existing company was then further modified by AIOC in British Petroleum Company, BP today.

The NIOC remained in this Agreement only responsible for the "non -basic functions" such as staff training, public transport, maintenance of roads, houses for the workers and employees whose medical care and social services. A word from the Director of the NIOC remained only the sale of oil products in Iran, the yield of the small Naft -i - Shah oil field and the operation of the refinery in Kermanshah.

The term of the consortium agreement ended in 1979.

Expansion of oil and gas production

After the conclusion of the consortium agreement, the oil production was resumed in Iran and constantly expanded. 1968 promoted Iran 2.84758 million thousand barrels per day and thus became the largest oil producers in the Middle East and the USA, the USSR and Venezuela 's fourth largest oil producer in the world. In 1968, the objectives of the NIOC by the then President Manouchehr Eghbal following were described:

With the expansion of production capacity, the revenue increased significantly. During 1954, the revenues of the NIOC amounted to 3.1 million British pounds, so there were already 1968 337 700 000 British pounds.

The launch of a small on an international scale oil company becoming one of the leading oil producers was conceivable difficult. 90 % of the oil market was controlled in the fifties by the international oil companies. For Iran remained the only way to develop its oil industry, when it was possible to do business with other partners. Shah Mohammad Reza Pahlavi made ​​contact with Enrico Mattei, the President of the Italian oil and energy company Eni SpA, on and in 1957, the Iranian Parliament passed a law to that of the legal basis for the exploration, production, processing, transportation and sale Iranian oil was created outside of the grants awarded to the consortium assisted area. In the closed in the same year contract with the NIOC of Eni, a division of de profits had been established, in which the NIOC 75% of Eni flowed 25 % of the profit. In May 1957, Howard Page, director of the former Standard Oil of New Jersey, who warned against a contract with NIOC Mattei. The Shah, however, explained that the NIOC such warnings should be disregarded. On August 1, 1957 sat Shah Mohammad Reza Pahlavi with his signature the said Act came into force and the contract between the NIOC and the Eni was signed on August 3, 1957.

Founding of OPEC

On 9 August 1960, the consortium informed the Iranian government that it 'll be around 12 cents and the price of heavy oil to lower the price for Iranian Light oil by 6 cents per barrel. Thus, the price of Iranian oil from $ 2.04 to $ 1.78 per barrel was lowered by the consortium. Shah Mohammad Reza Pahlavi declared in a speech on 28 Mordad (August 19 ):

" ... Is it okay that the oil companies to raise the price of oil at will, or can reduce without, to involve us, the owners of the oil in the decision? In this case, as in all other cases, we will think of our legitimate rights and interests and take the necessary measures to protect our rights and interests. "

On August 28, 1960, the Shah said in a press conference that an Iranian delegation will attend the meeting of oil -exporting countries in Baghdad. On September 14 saw the founding of OPEC, the Iranian delegation was instrumental in the formulation of the founding documents. Logically, then the Iranians Fuad Rowhani 1961 Secretary-General.

It should take some time to OPEC was recognized by the international oil companies as a negotiating partner. The representative of Iran at the OPEC was founded in May 1965 Jamshid Amuzegar. He led between 1965 and 1975 presided over numerous OPEC conferences where historical decisions were taken. So a price increase of 30% was decided by the OPEC member states and enforced in the oil market at the OPEC conference in Tehran in 1970 for the first time. Furthermore, the taxation of profits from producing country of the oil companies was set to a uniform 55 % corporate income tax.

The " Purchase and Sale Agreement " of 1973

The terms of the consortium agreement, signed in 1954 had been very unfavorable to Iran. Shah Mohammad Reza Pahlavi was looking for a way to terminate the contract prematurely valid until 1979 and replaced by a new contract. In the Treaty in a general clause had been determined that the consortium would have to protect the interests of Iran in the course of their business. Over the years a number of violations of the consortium partners were urged against the interests of Iran by the NIOC. Thus, the consortium invested no technology to intensify oil production; they torched the gas produced during the promotion from simple, although it would have liquefied or sold through gas pipelines can be; they refused to increase oil production, despite a request by the Iranian government, arguing that increased Iranian oil production ran counter to their interests in other oil-producing countries; and they refused to renegotiate the distribution of profit rates, although they had now increased the distribution of profits in contracts with other countries clearly in favor of these countries. On 23 January 1973 Shah Mohammad Reza Pahlavi announced in a speech on the tenth anniversary of the White Revolution, that he wanted to end the Consortium, as the oil companies would have it broken by the lack of consideration for the interests of Iran. At the same time he offered the consortium to preferential treatment if they would agree to a new contract. The negotiations led then to a new contract, which was signed in July 1973 with retroactive effect should apply from March 21, 1973 for the next twenty years.

The NIOC now assumed full control over all activities related to oil and gas in Iran. The former consortium partners were henceforth only " buyer on preferential terms ." The companies in the consortium, which had previously operated the exploration, production and processing of Iranian oil, was dissolved. From a consortium Oil Services Company has been established that the NIOC provided the technical services in the next five years. The budget and all activities of the Oil Services Company requiring the approval of NIOC. The NIOC sold to the consortium, only the quantities of oil that they needed not for internal use or for export transactions with third parties. The minimum amount of 200,000 barrels per day were defined, where the amount over the years should increase to 1.5 million barrels. All technical investments was henceforth in the hands of the NIOC. Services in Oil Services Company were paid on a discount for purchase of oil by the consortium of 22 cents per barrel.

Under the new conditions ended contracts for exploration with the oil discovery. The exploration costs were assumed by the companies at your own risk. After an oil discovery in the oil field was developed jointly by the NIOC and the exploration company. Products terminates the exploration, the NIOC took full control of the oil field. The exploration company had only the right to fifteen year oil to buy at a discount, the discount is calculated according to the cost of exploration.

Shah Mohammad Reza Pahlavi had reached with the newly negotiated Purchase and Sale Agreement for the first time in the history of Iran have full control over the exploitation of Iranian oil and gas deposits. 1953, although the Anglo -Iranian oil facilities of the Oil Company had been nationalized. With the 1954 set by the international oil companies consortium control was above delivery, prices and investments continue with the foreign oil companies. Only with the Purchase and Sale Agreement of 1973, to speak of a nationalization of the Iranian oil business.

As of 1975, the international oil companies made ​​it increasingly complain about the conditions of the Purchase and Sale Agreement and demanded a renegotiation of the contract terms, as they would under the current conditions to high revenue loss. Negotiations on a change came, however slow in transition and were up to the Islamic Revolution not completed. Oil to new, improved conditions were the groups only after the Shah had left Iran.

Oil production today

NIOC promotes and delivers crude oil and natural gas. The company has its own tankers, conveyors and oil platforms. In addition to his operational focus in Iran, the company is engaged worldwide. In the North Sea NIOC has a 50 percent share of the UK gas field Rhum.

Corporate investments

  • Central Iranian Oil Fields Company
  • National Iranian Gas Export Co.
  • National Iranian South Oil Co.
  • National Iranian Offshore Oil Co.
  • National Iranian Central Oil Co.
  • Khazar Oil Exploration and Production Co.
  • Petroleum Engineering and Development Co. ( PEDEC )
  • Pars Oil and Gas Company
  • Pars Special Economic Energy Zone Co.
  • National Iranian Oil Terminals Co.
  • National Iranian Drilling Co.
  • North Drilling Co.
  • Iran Petrochemical Development Co.
  • Ahwaz Pipe Mills Company
  • Petropars
  • Iranian Fuel Conservation Organization
  • National Iranian Tanker Co.
  • Exploration Service Company ( ESC)
  • Kala Naft ( London) Ltd..
  • Kala Naft (Canada) Ltd..
  • Naftiran Intertrade Co. ( Switzerland )
  • Iranian Oil Company ( United Kingdom) - Rhum (gas field)