The following is a brief history of how the largest oil reserves in Iran were discovered. This does not include every possible detail. Please refer to the sources listed below in order to get more details.
William Knox D’Arcy was born in England on the 11th of October, 1849. He was the son of a local solicitor, studied law as a youngster, and then moved to Australia with his family. There he joined his father’s new law business and waited for opportunity to knock.
Mozaffar al-Din Shah Qajar was the fifth Qajar King of Iran. He inherited a bankrupt Iran that was quickly deteriorating due to his predecessor’s financial debts to Russia and Britain. He didn’t do much to reverse the situation but instead spent the remaining money on luxuries and trips to foreign lands.
The Morgan brothers, Fredrick, Thomas, and Edwin, were the sons of an Englishman whose death sentence was pardoned and was instead exiled to Australia for stealing some cloth from a tailor. Thomas and Edwin Morgan grew up to become prospectors. They were hunting for silver when Edwin veered off course and decided to swing his pick at a boulder. The boulder chipped and the insides gleamed. Edwin Morgan had discovered gold.
Excited about their find as they were, the Morgan brothers were unable to raise enough capital to fully exploit their find. They needed to raise capital and they were referred to the manager of the Queensland Bank and a solicitor, William Knox D’Arcy. Together they raised 2000 pounds and then formed a syndicate to develop the mine.
The tale of the Morgan brothers ends at this point because they decided to pull out of the venture in 1884. After the mine started up, they decided to sell their shares and made a very decent 100,000 pound profit. However, the tale of D’Arcy just begins at this point. Using all his knowledge of the law, he was able to ward off claim-jumpers who tried to move in on the mine. After substantial legal battles, he was able to establish the Mount Morgan Gold Mining Co. with one million one pound shares. Shortly afterwards, the prices of the shares shot up and he became a millionaire.
Realizing that he had gained all he could in Australia, D’Arcy sold his law business and returned to England to fulfill his social ambitions. There he lived a life of luxury, living in mansions and traveling around Europe. His accomplishments were known to many members of the upper echelon of society and was soon approached by the British government to persuade him to take on another mining challenge. He was asked to find oil in Persia. Running low on cash due to his lavish lifestyle, D’Arcy accepted the challenge.
Meanwhile, Mozaffar al-Din Shah Qajar had recently borrowed more money from the Russian Czars in order to visit France. He bought the cinematographe technology from the French and brought it back to Iran so he could show the movies to his poor servants. His rich life style, and lack of revenue was quite a burden on his bank account so he was always on the look out for a source of funding. This source of funding soon arrived at his door step in the form of an emissary sent by William D’Arcy. The Shah was offered 10,000 pounds cash for complete rights to “search for, obtain, exploit, develop, render suitable for trade, carry away and sell natural gas, petroleum, asphalt and ozokerite throughout the extent of the Persian Empire with the exception of five Northern provinces” for sixty years. Mozaffar accepted the deal.
This was the start of British Petroleum. In 1908, seven years after the D’Arcy Concession, huge oil reserves were eventually found in Iran and D’Arcy once again made an enormous fortune. This event was the big bang that set off a domino effect in modern history:
* The large source of oil fueled the British Military and helped determine the outcome of World War 1.
* Russian and Iranian diplomatic ties suffered because they wanted Oil concessions as well
* Russia and Britain invaded Iran during World War 2 to secure Oil reserves and supply routes
* Prime Minister Haj Ali Razmara was assassinated because he wanted to renew oil concessions to British Petroleum
* Prime Minister Mossadegh was made prime minister and he nationalized Irani oil reserves
* Britain and the United States successfully over threw the Mossadegh government using the CIA
* British Petroleum was once again granted access to Irani oil reserves by the replacement autocratic leader of Iran
* British Petroleum continued to operate until the Islamic Revolution in 1979 when religious hardliner, Ayatollah Khomeini, took control of the government by force and took complete control over all of BP’s assets in Iran and ejected BP from the country.
* Iran wants payments in Euro rather than dollars for their oil
The future of Iran is unknown but if we use history as a guide then it seems very likely that there will be many attempts by many groups to control the oil reserves for their own interests.