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I think that people would question whether the agreement was in fact good-faith. The British company had agreed to various obligations to improve the working c

by Imnimo 6y ago

I think that people would question whether the agreement was in fact good-faith. The British company had agreed to various obligations to improve the working conditions of Iranian workers, train more Iranians to work in administrative roles, and generally contribute to the development of infrastructure in the country. It had done none of those things in the decades since signing the deal. Under that light, it's not really a case of buyer's remorse, where Iran signed a fair deal, and unjustly decided to renege on it. It's a case of the British company acting exploitatively, violating their agreement, refusing to renegotiate, and the Iranians declaring the agreement void as a result.

totalZero 6y ago
Are we talking about the D'Arcy Concession? I ask because none of what you are describing is found in the text of that agreement. It's immediately obvious upon observation of modern Iran's highly developed petroleum industry that concessions sparked the development of infrastructure on a massive scale. > Under that light, it's not really a case of buyer's remorse, where Iran signed a fair deal, and unjustly decided to renege on it. I think it's precisely a case of buyer's remorse. In Iran prior to the development of infrastructure, 16% share in profits generated by AIOC with no initial capital commitment from the Qajars sounds like a great deal. In Iran after the wells are pumping, 16% share in profits sounds like a pittance. I reject your framing of the issue as an exploitation by British interests. That may be a palatable narrative for the times we live in today, but it's a distorted perception of the actual facts. Petroleum production was the single greatest driver of wealth and development in 20th century Iran. If not for foreign investment, the industry could not have boomed as it did. D'Arcy took massive personal risk and even took the British government as an investor, but he failed several times in the process of exploring for oil before he was ultimately successful. Risk is the nature of the wildcatting business. If you study the process of oil rights and nationalization in the Middle East, you will see that it is a topic marked by extremely brutish behavior from local parties as well as faraway beneficiaries like the US and the UK. Even OPEC is full of deception about production numbers as it sets production amongst member nations. For that reason as well as others beyond the scope of the current conversation, there aren't many clean hands in the oil production business. Look at the massive corruption and cronyism taking place in Venezuela's PDVSA. Iran has the same kind of problem, where the country's dictators finance their corrupt practices using petroleum income.
- wz1000 6y ago
  > Are we talking about the D'Arcy Concession? I ask because none of what you are describing is found in the text of that agreement. The agreement was re-negotiated in 1933, according to terms that the grandparent pointed out. At this point I have to wonder if you are being disingenuous on purpose. The rest of your comment is a moral appeal making a case for why D'Arcy "deserved" the profits. You have to pick a lane, are you arguing on the basis of who "deserves" a countries natural resources, or from the point of view of adherence to contracts and agreements?
  - totalZero 6y ago
    The financial risk of the initial investor is a reasonable justification for his profits. This applies to D'Arcy as well as AIOC. Their cut of the concession deal was reflective of their risk premium. Iran didn't take the risk -- or the cost outlay -- of building rigs, importing engineers, etc. The idea that the British were somehow exploitative by resisting renegotiation is ignorant of this fact. Both the 1901 agreement and the 1933 agreement laid out responsibilities for the Article 16 of the 1933 agreement covered the introduction of more Iranian nationals into the petroleum business, which AIOC did in fact carry out. Article 17 talks about sanitary and public health facilities for workmen, which sounds like bathrooms and medical tents/clinics to handle workmen's injuries and treat their families. However, I see nothing in the 1901 agreement nor the 1933 agreement that says AIOC will invest in the general infrastructure of Iran. That is what the grandparent said ("generally contribute to the development of infrastructure in the country"). That idea is at best a false pretext for breaking the deal, and at worst just a blind restatement of something on Wikipedia. Actually, the text of the 1933 agreement says that AIOC would require Iran's consent to improve AIOC's infrastructure (including aviation and telephone). If I'm wrong, find it in the text of the agreement (https://link.springer.com/content/pdf/bbm%3A978-3-658-00093-6%2F1.pdf https://link.springer.com/content/pdf/bbm%3A978-3-658-00093-...) and paste it into a reply for all to see. If I'm right, stop calling me disingenuous.
    - wz1000 6y ago
      Fortunately, the specific violations have been compiled by the world bank, as pointed out in a sibling comment. I just have one part I found incredibly funny > The idea that the British were somehow exploitative by resisting renegotiation is ignorant of this fact If overthrowing a democratically elected government is not exploitative, I don't know what is. "Resisting renegotiation" is a very Orwellian way of phrasing such. I'm guessing something along the lines of "we will topple your government and hand over absolute power to a brutal dictator if the terms are violated" was also part of the the agreement? What about all the other Iranians, the ones that had nothing to do with APOC or oil or the government. Did they also "deserve" their fate?

by Imnimo 6y ago

totalZero 6y ago

Are we talking about the D'Arcy Concession? I ask because none of what you are describing is found in the text of that agreement. It's immediately obvious upon observation of modern Iran's highly developed petroleum industry that concessions sparked the development of infrastructure on a massive scale. > Under that light, it's not really a case of buyer's remorse, where Iran signed a fair deal, and unjustly decided to renege on it. I think it's precisely a case of buyer's remorse. In Iran prior to the development of infrastructure, 16% share in profits generated by AIOC with no initial capital commitment from the Qajars sounds like a great deal. In Iran after the wells are pumping, 16% share in profits sounds like a pittance. I reject your framing of the issue as an exploitation by British interests. That may be a palatable narrative for the times we live in today, but it's a distorted perception of the actual facts. Petroleum production was the single greatest driver of wealth and development in 20th century Iran. If not for foreign investment, the industry could not have boomed as it did. D'Arcy took massive personal risk and even took the British government as an investor, but he failed several times in the process of exploring for oil before he was ultimately successful. Risk is the nature of the wildcatting business. If you study the process of oil rights and nationalization in the Middle East, you will see that it is a topic marked by extremely brutish behavior from local parties as well as faraway beneficiaries like the US and the UK. Even OPEC is full of deception about production numbers as it sets production amongst member nations. For that reason as well as others beyond the scope of the current conversation, there aren't many clean hands in the oil production business. Look at the massive corruption and cronyism taking place in Venezuela's PDVSA. Iran has the same kind of problem, where the country's dictators finance their corrupt practices using petroleum income.

wz1000 6y ago
> Are we talking about the D'Arcy Concession? I ask because none of what you are describing is found in the text of that agreement. The agreement was re-negotiated in 1933, according to terms that the grandparent pointed out. At this point I have to wonder if you are being disingenuous on purpose. The rest of your comment is a moral appeal making a case for why D'Arcy "deserved" the profits. You have to pick a lane, are you arguing on the basis of who "deserves" a countries natural resources, or from the point of view of adherence to contracts and agreements?
- totalZero 6y ago
  The financial risk of the initial investor is a reasonable justification for his profits. This applies to D'Arcy as well as AIOC. Their cut of the concession deal was reflective of their risk premium. Iran didn't take the risk -- or the cost outlay -- of building rigs, importing engineers, etc. The idea that the British were somehow exploitative by resisting renegotiation is ignorant of this fact. Both the 1901 agreement and the 1933 agreement laid out responsibilities for the Article 16 of the 1933 agreement covered the introduction of more Iranian nationals into the petroleum business, which AIOC did in fact carry out. Article 17 talks about sanitary and public health facilities for workmen, which sounds like bathrooms and medical tents/clinics to handle workmen's injuries and treat their families. However, I see nothing in the 1901 agreement nor the 1933 agreement that says AIOC will invest in the general infrastructure of Iran. That is what the grandparent said ("generally contribute to the development of infrastructure in the country"). That idea is at best a false pretext for breaking the deal, and at worst just a blind restatement of something on Wikipedia. Actually, the text of the 1933 agreement says that AIOC would require Iran's consent to improve AIOC's infrastructure (including aviation and telephone). If I'm wrong, find it in the text of the agreement (https://link.springer.com/content/pdf/bbm%3A978-3-658-00093-6%2F1.pdf https://link.springer.com/content/pdf/bbm%3A978-3-658-00093-...) and paste it into a reply for all to see. If I'm right, stop calling me disingenuous.
  - wz1000 6y ago
    Fortunately, the specific violations have been compiled by the world bank, as pointed out in a sibling comment. I just have one part I found incredibly funny > The idea that the British were somehow exploitative by resisting renegotiation is ignorant of this fact If overthrowing a democratically elected government is not exploitative, I don't know what is. "Resisting renegotiation" is a very Orwellian way of phrasing such. I'm guessing something along the lines of "we will topple your government and hand over absolute power to a brutal dictator if the terms are violated" was also part of the the agreement? What about all the other Iranians, the ones that had nothing to do with APOC or oil or the government. Did they also "deserve" their fate?