Page 377 - Arabia the Gulf and the West

374 Arabia, the Gulf and the West

They temporized, hoping rather wistfully that something might materialize
which would save them from the fate looming before them.
To the east Muhammed Reza Shah, who had been watching the participa­
tion quadrilles de haul en bas, decided disdainfully that what was good enough
for the Arabs was not good enough for him. Persia had dropped out of the
group of Gulf states negotiating with the companies in June 1972, when the
shah let it be known that he was not greatly interested in acquiring a percentage
of the assets of the companies which made up the Persian consortium - BP,
Shell, Esso, Mobil, Texaco, Gulf, SOC A L and CFP. Instead he indicated that

he was prepared to confirm the companies’ existing option to extend their
concession by three consecutive five-year periods from 1979 - when the
original concessionary term of twenty-five years was due to expire - in return
for the consortium’s undertaking to double its oil production to 8 million b/d
and to make part of it available to the National Iranian Oil Company for
marketing independently. It was, on the shah’s part, a Punic pledge. In the last
week of January 1973 he announced abruptly that when the 1954 consortium
agreement terminated in 1979, the provision for the extension of the conces­
sion to 1994 would lapse with it. After publicly reviling the companies in his
now familiar fashion for what he alleged was their neglect of Persia’s interests,

he went on to offer them only two choices. They could continue to operate up
to 1979, on condition that they doubled Persia’s oil-producing capacity and
paid for the oil they shipped at rates not less than those obtaining elsewhere in
the Gulf, after which, as he graciously put it, ‘they would have to stand in a long
queue of customers for Iran’s oil’. Or they could agree to the termination of the
concessionary agreement there and then, hand over all oil facilities and installa­
tions not already under Persian control, and undertake to expand their export
capacity to 8 million b/d - in which case they would be accorded preferential

treatment in the purchase of Persian oil for the next twenty to twenty-five
years.
The companies temporized in framing their reply to the ultimatum, con­
scious that they were fast approaching the end of the road in Persia. Declaring
his patience to be at an end - and also with an eye to upstaging a special 0
conference which was to open at Beirut in two days’ time - the shah announce
on 20 March 1973 that his government was taking charge of the consortium s
operations and transferring control of the oil industry to the National Iranian
Oil Company. Weary of coping with the Lion of Persia rampant, l e 01

companies surrendered the next day. A new agreement was signed whic was
ratified by the Persian majlis on 16 July 1973- The companies wou
permitted to buy oil over a period of twenty years, but only in ^mou^s
Persia was willing to deliver and at prices not lower than t. ose
elsewhere in the Gulf. They were both ominous reservations The comp
were also required to provide technical staff and expert advice or P

and development of the Persian national oil industry. Nothing