By: Mir M.Hosseini
The attempt to revise the terms of the oil concession towards a fair basis for Iran led to long negotiations that took place between Abdolhossein Teimurtash and Anglo-Persian Oil Company officials from 1925 to 1932. The British government had injected new capital into the company in 1913 and acquired a controlling interest in APOC, therefore in October 1931, Reginald Hoare was appointed Minister to Persia to safeguard the interests of APOC.
After seeing no outcome from negotiations, Reza Shah asserted his authority and personally got involved in the negotiations. In 1932, after publicly rebuking Teimurtash for his failure to secure an agreement, the Persian government cancelled the oil concession granted to William Knox D'Arcy in 1901. The British government on behalf of APOC brought the dispute before the International Court of Justice at Hague. Reza Shah suddenly retreated to British demands and a new agreement with the Anglo-Persian Oil Company was agreed in April 1933. The agreement was ratified by Majlis on May 28, 1933 and received Royal assent the following day. Teimurtash was arrested and sentenced to five years in prison where he died in solitary confinement on Oct, 3, 1933.
The agreement reduced the area under APOC control to 100,000 square miles, required annual payments in lieu of Iranian income tax, as well as guaranteeing a minimum annual payment of £750,000 to the Iranian government but it also extended the life of the D'Arcy concession by an additional 32 years, and company's operations were exempted from import or customs duties. APOC changed its name to AIOC in 1935. Abadan became the world's largest refinery before Iran's Nationalization of Oil in 1951.