Appendix I Chronology of Events 1908: Oil is discovered in Persia by a syndicate of the Burmah Oil Company, the Anglo-Persian Oil Company (APOC) 1911: United States Supreme Court orders the dissolution of Standard Oil Trust 1914: The British government purchases a majority holding in APOC 1914-18: World War I and the mechanisation of the battlefield 1920-23: The British government considers selling its holding in APOC 1922-28: Negotiation of the 'Red Line' and the 'As-Is' agreements 1932-33: Shah Reza Pahlavi cancels Anglo-Iranian Oil Company's (AIOC) con­ cession; AIOC wins it back 1934: AIOC and Gulf gain joint concession in Kuwait 1938: Mexico nationalises its oil companies 1939-45: World War II 1950: Fifty-fifty (participation) agreement between Aramco and Saudi Arabia 1950: Mohammed Mossadegh nationalises AIOC assets in Iran 1951-53: Korean War 1953: Mossadegh is overthrown and the Shah returns to power. The manage­ ment of Iraqi oil operations is contracted to an international consortium and AIOC obtains a 40 per cent majority stake Reports surface that the Conservative government is to dispose of its 56 per cent holding in AIOC 1956: Colonel Gamal Abdel Nasser of Egypt announces the appropriation of the Suez canal 1957: European Economic Community established 1960: Organisation of Petroleum Exporting Countries founded in Baghdad 1964: First round licences are awarded for exploration in the North Sea by the Department of Trade and Industry 1965: British Petroleum (BP) discovers gas in the North Sea 1965: Britain imposes sanctions against Rhodesia 1967: Six Day War, Suez canal closes 1967: Government's shareholding in BP drops below the 50 per cent mark to 48.2 per cent 1968: Oil is discovered on Alaska's North Slope 1968: Prime Minister Harold Wilson announces the end of British military presence in the Persian Gulf, completed by 1971 1969: Oil is discovered on the Norwegian side of the North Sea 1970: Oil is discovered on the British side of the North Sea by BP 1972: Gas Act creates the British Gas Corporation from the Gas Council 1973: Britain joins the European Community 1973-74: AOPEC countries cut back supplies to the United States and the Netherlands 192 Appendix/ 193 Shell and BP refuse to give Britain preferential treatment in the supply of oil 197 4: The Department of Energy is established International Energy Agency is founded 1975: Government's shareholding in BP increases from 48 per cent to 68 per cent through the purchase of Burmah's holding in BP First North Sea oil lands in Britain 1976: The British National Oil Corporation is established 1977: First sale of oil assets: British government sells 17 per cent in BP, reducing its shareholding from 68 per cent to 51 per cent 1979: Government sells another 5 per cent shareholding in BP, reducing its holding to 46 per cent Iranian revolution - Shah Reza Pahlavi goes into exile and Ayatollah Khomeini takes power 1980: Iraq launches war against Iran 1981: British oil production in the North Sea surpasses domestic consumption 1982: OPEC agrees to first quotas BGC is instructed to sell its stake in the onshore oil field, Wytch Farm Oil and Gas (Enterprise) Act enabled the government to sell BNOC and BGC's oil assets BNOC split: production half becomes Britoil, 51 per cent is sold to the public 1983: Britain becomes the sixth largest oil producer in the world BGC's oil assets are sold as Enterprise Oil Government sells another 15 per cent shareholding in BP, reducing its holding to 31.5 per cent 1984: BGC's interest in Wytch Farm is finally sold 1985: Government sells remaining stake in Britoil BNOC is disbanded, replaced by the Oil and Pipelines Agency 1986: Oil price collapses 1987: Government sells its remaining shares in BP in the midst of the October stock market crash 1988: BP takes over Britoil Ceasefire in Iran-Iraq War 1993: Department of Energy re-merges with the DTI Appendix II The Bradbury and Bridges Letters THE BRADBURY LETTER Treasury, Whitehall, S.W. 20th May 1914 Gentlemen, With reference to the Financial Agreement which has been duly settled on behalf of His Majesty's Government and sent to your company for signature, I am directed by the Lords Commissioners of His Majesty's Treasury to offer the fol­ lowing observations regarding the provisions of the amendments proposed to your Articles of Association: I. By the Article 91A it is provided than an ex officio director shall have the right to negative any resolution which may be proposed at a board or committee meeting, but that the other directors, or a majority of them, shall have the right to appeal there from to His Majesty's Government, which, for the purpose of the Article, is defined as meaning the Treasury and Admiralty. His Majesty's Government, which, for the purpose of the Article, is defined as meaning the Treasury and the Admiralty. His Majesty's Government are of opinion that it would not be prudent, or, indeed, practicable, to qualify the generality of the right of veto. On the other hand, it is felt that the ordinary directors (meaning by that expression the directors other than the ex officio directors), and incidentally the members of the company, should have some safeguard in the matter. It is thought that the right which is to be given by the new Article to the ordinary directors of appealing to the two Departments will afford the requisite safeguard. The ordinary directors will, by appealing to the Departments, be in a position to ensure in regard to any particular question that the right of veto is not exercised until the question has been considered and adjudicated upon by the Departments. I am to add that His Majesty's Government do not propose to make use of the right of veto except in regard to matters of general policy, such as- (1) The supervision of the activities of the company as they may affect questions of foreign, naval or military policy; (2) Any proposed sale of the company's undertaking or proposed change of the company's status; (3) The control of the new exploitation, sites of wells, etc.; (4) Sales of crude or fuel oil to foreigners, or such exceptional sales to other persons on long contracts as might endanger the due fulfilment of current Admiralty contracts; 194 Appendix II 195 and that their interference (if any) in the ordinary administration of the company as a commercial concern will be strictly limited to the minimum necessary to secure these objects. Further, in the case of any such interference, due regard will be paid to the financial interest of the company in which, under the proposed arrangements the Government have themselves so large a stake. While His Majesty's Government are not prepared to enter into any binding agree­ ment in regard to the exercise of the veto, you are at liberty to treat the above as an assurance as to the general lines upon which they will act in the matter, not only in regard to the Anglo-Persian Company, Limited, but also in regard to the subsidiary companies. 2. By the word added to Article 96 it is provided that the ex officio directors shall be members of every committee of the board. His Majesty's Government do not, however, contemplate that both the ex officio directors should always be present at committee meetings. Occasions may arise when it may be desirable that both the ex officio directors should be present, but as a general rule the presence of only one of them would be necessary. Indeed, at some meetings it may not be necessary that either of them should be present. 3. You are at liberty to make such use of this letter as you may think fit at the pro­ posed meetings of the shareholders. I am, Gentlemen, Your obedient Servant, (signed) John Bradbury Messrs. The Anglo-Persian Oil Company, Limited Winchester House, Old Broad Street, London E.C. (As reprinted in Hansard, House of Commons 1928-29,26 March 1929, Vol. 226, col. 2263-4.) THE BRIDGES LETTER 12 April 1951 Gentlemen, I am directed by the Lords Commissioners of H.M. Treasury's concern to recent developments on Persia and their possible effect on the Anglo-Iranian Oil Company. H.M. Government have in mind not only their own large financial inter­ est in the Company, but the vast importance of the Company's operations to the economy of the United Kingdom, and indeed to the Sterling area as a whole. 196 Appendix II The relationship between H.M. Government and the Company forms the subject of the letter sent by Sir John Bradbury to the Company on the 20th May, 1914, following the signature of the Financial Agreement between H.M. Government and the Company of the same date. H.M. Government do not feel that it is neces­ sary to amend the terms of Sir John Bradbury's letter. While recognizing the close co-operation that has existed between H.M. Government and the Company, they feel sure that the Company will appreciate that it is more than ever necessary, par­ ticularly in the present critical circumstances, for H.M. Government to be kept in close touch with the development of the Company's general policy and above all that there should be mutual consultation in good time, and at the appropriate levels, about any developments likely to affect substantially the Company's posi­ tion in Persia or in other territories where it has a concessionary interest. I am, Gentlemen, Your Obedient Servant, (signed) Edward Bridges (As reprinted in Hansard, House of Commons, 16 February 1977, Vol.