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As a result of the concession granted to william knox D'arcy by mozaffarol din- shah of ghajar in 1901 for the extraction and production of oli in Iran- excluding the 5 northern provinces - drilling bits rotated for the first time in the middle east, registering Iran as the prmier birthplace of middle east oil industry, in the history of oil operations of this resources - rich region of the world. It is now a fullcenturyfrom that date and the oil industry of Iran is preparing to enter into the second century of it's life.
In the course of the past one hundred years, the industry, as a technical and industrial phenomenon, opened the doors of the modern day sciences for the Iranians, while in connection with foreigners' immerests, it acted as the cornerstone for many political, economic & social deyelopments of the conutry.
To study each event, one has to have a deep & profound look at the nation's develoments of the past ,ne hundred years.
Eruption of oil from the first well drilled in masjid-e soleim an in 1908 construction of the abadan oil refinery in1913, he unsuccessful revision of the D'Arcy concession in 1933, the victory of the oil industry nationalization movement in 1950, the negotiation of a futile agreemem with the consortium of oil companies in 1945 which brought the domination of foreigners over Iranian oil reservoirs a symbolic approach to petrochemical and gas industries in 1961, and finally, the wasteful utilization of the country's oil resources, are some of the tragic events from which many lessons may be learnt.
The victory of the Islamic revohition caused the cancellation of all previous rules and regulations, and following the witharawal of forign emlpoyees from Iran's oil industry, domestic expert man power took full control of it's affairs . Although heavy damages were inflicted on the industry during the imposed war, massive reconstruction efforts were launched after the war to repair them.
The oil industry opened a new chapter in the country's growth and develoment process as the basis of all profound changes.
How was the first middle-east oil field ?
signing of the notorious D'Arvy concession on
28 may 1901 marked the foundation of the oil
industry of Iran, now celebrating its one -
Oil and bitumen, in seepages, were used
intraditional and primitive ways in the olden
times Iran. In the second half of the 19
century, when the U.S oil industry came into
being (1859),several concessions were granted
in Iran for the extraction of oil. Drilling
operations were carried out in several parts
of the country, but none ended in
The first phase of drilling operations
carried out on the hasis of D'Arcy's
concession in ghasr-e-shirin and chah- sorkh
were not very satisfying either. Although
drilling activities had provdn the existence
of oil, the wells' output ratio did not
justify the continuation of operations in
thoes areas.Next drilling rigs were moved
furher south, to shooshtar area. Experts were
optimistic about the outcome of drilling
operations in that region, but the major
obstacles were the insufficiency of D'Arcy's
finances. Related projects required heavier
investments, for which, D'Arcy was personally
unprepared . By 1904, he had spent 220
thousand pounds, which was a huge amount at
the time .
The impediment was removed by a scttish oil
compny, which had obtained a concession in
burma, and had constructed a refinery in
At the time, the british admiralty had decided to replace oil for coal, to fuel its warships, and for that purpose, needed 50 thousand tons of oil per year.
The british government resorted to the scottish entiy- the burma oil company - to procure the required amount of oil.
That company's oil reserves, hower, were not sufficient enough to enable it to undertake a long- term commitiment. Technical experts did not recomment a further expansion of oil operations in the burmese concessionary area. D'Arcy had a much better concession for the solution of the british admiralty's problem, provided the burma oil company's financial capabilities were dirverted to his area for further investment . Negotiations of D'Arcy and the burma oil company resulted in the establishment of the concessions ltd, in 1905 its headquarter was in glasgow, south central scotland. The syndicate was to carry on with drilling poerations in the masjid - solaiman area, with the financial support of the boil company. To that end, the syndicate negotiated a contract with bakhtiari tribal chieftains, and they agreed to guard and protect the company's properties and installations in return for a set amount of wages.
The government of Iran never recognized the contract, which was negotiated by the british consul in the absence of country officials, and reza shah officially cancelled it in 1924.
Meanwhile drilling operations continued in several spots. Two wells drilled north of ahwas did not show favorable results. well drilled in masjid - e - solaiman, however, struck oil on 26 may 1908. Tests proved that experts had come to what they were looking for. Second and third wells were also proof of a huge oil reservoir, and as a result, masjid - e - solaiman was registered as the first middle- east oilfield in the oil history of the world It was very surprising, because reynolds,head of drilling operations, who was happily on his way back tk ahwas back to ahwaz, had received a letter dated 14 may from the company headquarters in scotland. The letter, written less that two weeks earlier than the majid - e - solaiman drilling success, indicated the disappointment of company authorities with the operations . They had instructed revnolds that should drillings not reach oil at 15 10 16 hundred feet, all company machinery and equipment were ti be transported to mohammara (khorranshahr).
- Persian Oil Company
few months after the masjid - e - solaiman
oil the burma oil company, the concessions
syndicates Ltd ; and Lord Strathcona, a
British financier, established the Anglo-Persian
Oil Company. All of D'Arcy's concessionary
rights were transferred to this new company
and D'Arcy himself, became a member of its
board of directors. Then, steps had to be
taken for the production and export of oil.
It was decided that oil should be transferred
to Abadan, where a refinery was to be built.
Tankers were to lift oil products from there.
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