Strange Colonialism

The interesting point is the situation of National Iranian Oil Company (NIOC) prior to the petroleum industry nationalization. The company symbolized all-out colonialism in Iran.

Ervand Abrahamian, in his book: Iran Between Two Revolutions, writes: “Anglo-Iranian Company was similar to a typical colonial firm. Its news bulletins   ignored the rights of the host country. There was obvious discrimination in terms of fringe benefits, facilities, type of restaurants, etc. between 50,000 staff who received wage in the company and the expatriates. The Britons believed that the only way out to control the local staff was treating them strictly and harshly. At that time, the oil company had caused irreparable gap in Iranian society.

Abrahamian notes in his book: Iran Between Two Revolutions notes a variety of factors such as low wage of workers, lack of accommodation, living in poor conditions, discriminatory attitudes towards Iranian workers, wage discriminatory policies, preventing workers from establishing labor unions paved the ground for strikes and  finally led to oil industry nationalization in March 1951. The discriminatory actions of the Anglo-Iranian oil company and the existence of many similar cases in other areas all were indication of the British colonial power in Iran. For decades, Britain along with Russia dominated the weak central government of Ghajar, and intervened in the faith of Iran in their own favor. This domination intensified after Reza Shah's exile and following the rise of his son Mohammad Reza. "In those years many Iranian political and social activists and people protested more than ever against the continuation of British domination in Iran and the presence of this colonial power."

  .

50-50 Rule

Under such circumstances, the post-war political economy did not let agreements like the 1933 agreement remain in effect. Many countries like Venezuela, Kuwait and Saudi Arabia had agreed upon 50-50 shares in their new agreements. The West could no longer take Iran’s oil in return for meager royalties. The parliament had opposed any concessions to be granted to Russia and thanks to a shrewd prime minister like Qavam, Russia had to pull its forces out of Iran.

In the book called" The Oil Wave", we read: “After the rejection of the Qavam-Sadchikov agreement, the then prime minister assigned the finance minister  with the task of finding a new approach based on the 1947 law and secure Iran’s rights from the Anglo-Iranian Oil Company.”

The Iranian government called on Britain to name a representative to discuss the 1933 agreement. The developments resulted in the overthrow of the Qavam government and everything remained in abeyance. Qavam’s successor, Hakimi, had 54 votes, trailed by Mohammad Mossadeq with 53 votes. That was when the name of Mossadeq emerged in political circles. The Hakimi government fell sooner than expected. Then, Abdol-Hossein Hajir came to power. He negotiated with Britain for some time before leaving. He was replaced by Mohammad Saed Maraghei. Three prime ministers came to power after Qavam, but they all failed to secure Iran’s rights with regard to the petroleum industry.

Gass-Golshayan Agreement

Mohammad Saed Maraghei, the third prime minister to succeed Qavam, thought of a remedy for the petroleum industry in order to save the government while satisfying both parliament and people.

Mohammad-Ali Homayoun Katouzyan, in his book: Iran’s Political Economy writes: “In the 15th Assembly, the government submitted a bill that was later known as the Gass-Golshayan annexed bill. Six days had been left before the Assembly’s mandate ends. The motion was to be adopted, but everything was postponed to be decided upon on the 16th Assembly and the government that was to be born out of the elections.”

Nothing was approved and the issue was shelved to be decided upon by the next government. The Gass-Golshayan bill was more of a political deal to satisfy all powers and deceive Iranian people rather than an action to secure Iran’s national interests in the oil issue. Hossein Makki was the most outspoken in opposing this agreement. “The six-hour speech which was delivered by Hossein Makki in four days was welcomed by majority of MPs and did not let the government’s proposed motion to be adopted. Therefore, the bill was held in abeyance until the 16th assembly came to power.”

The 16th Assembly started out in February 1950. Ali Mansour took power as the prime minister. He had already served as the prime minister under the Pahlavi I regime. Mansour had a neutral view toward Gass-Golshayan bill; however, proposed that the controversial bill be referred to an ad hoc committee. Mossadeq intervened once more in the oil industry related issue, this time with more determination.

“The Assembly agreed with this proposal and set up an 18-member committee headed by Dr Mohammad Mossadeq. This committee was tasked with examining the proposed motion and presenting an expert report in the parliament.” The report led to the dismissal of Mansour who favored the agreement.

MPs vs. Razmara

After Mansour, Ali Razmara came to power. Razmara was opposed to the nationalization of the petroleum industry, but he unwillingly cleared the way for oil to be nationalized.

“Razmara was born in Tehran in 1901. He had entered the military academy after finishing his school he continued studying in military school and joined Cossack forces. As he was very talented he caught the attention of Reza Khan. He was among the first group of military officers whom Reza Khan sent to France. Returning to Iran, he progressed rapidly and was promoted to the rank of Marshal, and was known as a successful military officer, although his critics have described him as ambitious and opportunist. His ambitions were not limited to the military sector. He pursued his political aspirations, too. He was supported by the British government, and was finally elected prime minister in 1950.”

Britain preferred Razmara to Mossadeq. Razamara secured their interests and spared their profits in southern Iran any harm. Razmara had realized that Britain, the US and Russia would not give up before they win profits in the oil sector. He was determined to bring an end to the issue of nationalization of the petroleum industry and while stabilizing its own position satisfy world powers. But Mossadeq spoke firmly against Razmara. Razmara insisted on his position, but he finally faced impeachment. Five members of the oil committee of the parliament firmly opposed the Gass-Golshayran bill. Therefore, Razmara faced serious problems with regard to materialization of his oil objectives. Although Razmara did not openly express his views about oil, he was in secret talks with Britain about oil.

Mostafa Fateh, in his book: Fifty Years of Iran’s Oil, writes: “Razmara was among those who did spare no effort to counter the nationalization of the petroleum industry with a view to serving British interests. Among his measures was exploring avenues to win the approval of the Gass-Golshayan deal, but it faced opposition from religious leaders as well as "National Front" top figures. Due to this failure, Razmara started secret talks with the British Oil Company.”

The Assembly held a session to impeach Razmara. Hossein Makki, Allahyar Saleh and Mossadeq were among MPs who delivered speech criticizing the prime minister. Razamara was adamant on the Gass-Golshayan deal. The censure motion ended inconclusively. However, Iranians showed their firm determination to control their oil.

The issue of nationalization of the petroleum industry was no longer limited to behind-the-scenes games at the embassies. The anti-Razamara rhetoric in the parliament had proven to be effective. The developments were such that no other result than the nationalization of the petroleum industry would be expected.

PM Assassination

Razmara failed in satisfying the Anglo-Iranian Oil Company, and the Oil Committee of the National Consultative Assembly opposed the Gass-Golshayan deal in late 1950. The decision was finalized on 11 January 1951and approved by all the MPs. Some documents on secret talks between Razmara and foreign powers were made public in newspapers, which infuriated the government. Razmara was so angry that he sought the dissolution of the parliament. However, he needed the endorsement of the Pahlavi II regime, but as Shah considered the action inappropriate did not agree. Mohammad Ali Homayoun Katouzyan, inhis book: Mossadeq and Power Struggle writes: “The character of Razmara indicates his autocratic and opportunist spirit. Razmara, in terms of intelligence, violence, audacity, ruthlessness, firmness and political prudence was seen as a second Reza Khan. Like Reza Khan, he claimed to be a nationalist figure. He naturally disliked democracy and freedom and wanted to impose his individual rule on the country. Those characteristics along with Razmara’s practices won him the shah’s suspicion of a coup attempt. The Shah was not mistaken. Many political groups including the "National Front" were also suspected of him. The "National Front" labeled Razmara’s government as a government born out of a quasi-coup and warned against a military dictatorship because it was imagined that Razmara would soon dissolve the parliament.”

The Britons incessantly called on Razmara to allay concerns about the nationalization of the petroleum industry. However, this fire could not be extinguished and it burnt Razmara, too.

On 6 March 1951, Khalil Tahmasebi, a "Fadaiyan Islam" militant, gunned down Razamara, labeling him as traitor.

“News of Razmara’s assassination under such exceptional circumstances where the government was firmly opposed to nationalization of the petroleum industry was very shocking and surprising. That occurred exactly when Razmara was headed towards a mosque to attend a funeral ceremony. The assassination plot had been designed by "Fadaiyan Islam". Razmara was killed when he was stepping into the mosque alongside Assadollah Alam, the then minister of labor. Talking about his motivation for killing him, Tahmasebi said Razmara had humiliated the Iranian nation by telling European governments the Iranian nation is toothless and incompetent. Razmara had openly said Iran could not build a toilet pitcher, not to mention run a cement factory.”

Tahmasebi’s words were reflecting the untold words of MPs and the Iranian nation. Hence, many top political figures and MPs said Razmara deserved being assassinated, and on one should blame him. Therefore, on November 1951 according to a single-clause article, Razmara was declared as someone meriting death and Tahmasebi was released.

Iranian Wishes Come True

Razmara had been eliminated and everything was ready for the parliament to move towards nationalization of the petroleum industry. Hossein Ala was named prime minister so that the portfolio would not remain vacant. The day after Razmara was killed, the Oil Committee submitted a bill for petroleum industry nationalization to the National Consultative Assembly. In the text, the Committee had demanded that two more months be allocated for the continuation of studies on the issue of oil.

The National Consultative Assembly endorsed the Oil Committee’s proposal and the petroleum industry was nationalized.

“In the name of the happiness of the national Iran and for the purpose of global peace, the undersigned propose that the petroleum industry of Iran be declared national in all areas of the country without any exception. In other words, exploration, extraction and production operations shall be in the hands of state,” the parliament said in a statement.

Words Turn into Deeds

With the adoption of the oil nationalization law, Hossein Ala was facing numerous problems. On 26 April 1951 he pulled out and as expected was replaced by Mossadeq. Now, it was the right time to take measures in line with oil industry nationalization, as everything was ready.

Mossadeq introduced his Cabinet to the parliament and based on the Act passed, expropriation of Britons and nationalization of Iran’s petroleum industry started out.

The text of the Act concerning procedure for its enforcement of the nationalization law, was approved by the two Houses of Parliament after amendments by the Majlis.

In the book written by Jalal Matini:"A Glance at Dr Mossadeq's Performance" one may see the articles of dispossession as follows:

Article 1. With a view to arranging the enforcement of the Law of 24 and 29 Isfand 1329 (15th and 20th March, 1951) concerning the nationalization of the oil industry throughout Persia, a mixed Board composed of five selected Senators, five selected MPs and five and the Minister of Finance or the vice minister shall be convened.

Article 2. The Government is bound to dispossess at once the former Anglo-Iranian Oil Company under the supervision of the mixed Board. If the Company refuses to hand over at once on the grounds of existing claims on the Government, the Government can, by mutual agreement, deposit up to 25 per cent of current oil revenues  in the Bank Melli Iran or in any other bank after deduction of exploitation expenses in order to meet the probable claims of the Company.

Article 3. The Government is bound to examine the rightful claims of the Government as well as the rightful claims of the Company under the supervision of the mixed Board and to submit its suggestions to the two Houses of Parliament so that it may be implemented after approval by the two Houses.

Article 4. Whereas, with effect from 29th Isfand 1329 (20th March, 1951), when nationalization of the oil industry was sanctioned also by the Senate, the entire revenue derived from oil and its products is indisputably due to the Persian nation, the Government is bound to audit the Company's accounts under the supervision of the mixed Board 1666 which must also closely supervise exploitation as from the date of the implementation of this law until the appointment of an executive body.

Article 5. The mixed Board must draw up, as soon as possible, the statute of the National Oil Company in which provision is to be made for the setting up of an executive body and a supervisory body of experts, and must submit the same to the two Houses for approval.

Article 6. For the gradual replacement of foreign experts by Persian experts the mixed Board is bound to draw up regulations for sending, after competitive examinations a number of students each year to foreign countries to undertake study in the various branches of required knowledge and gain experience in oil industries, the said regulations to be carried out by the Ministry of Education, after the approval of the Council of Ministers. The expenses connected with the study of such students shall be met out of oil revenues.

Article 7. All purchasers of products derived from the wells taken back from the former Anglo-Iranian Oil Company can, in future, buy annually the same quantity of oil they used to buy annually from the Company from the beginning of the Christian year 1948 up to 29th Isfand 1329 (20th March 1951) at a reasonable international price. For any surplus quantity they shall have priority in the event of equal terms of purchase being offered.

Article 8. All proposals formulated by the mixed Board for the approval of the Majlis and submission to the Majlis must be sent to the Oil Committee.

Article 9. The mixed Board must finish its work within three months as from the date of approval of this law and must submit the report of its activities to the Majlis in accordance with article 8. In the event of requiring an extension it must apply giving valid reasons for such extension. Whilst, however, the extension is before the two Houses for approval, the mixed Board can continue its functions.

Courtesy of Iran Petroleum 

by Ali Bahrami