OIL: Under the Big Globe

The directors of Anglo-Iranian Oil Co., Ltd. meet in the cream-walled board room of London’s Britannic House. They sit around an oval mahogany table beneath a huge, hanging globe of the world which helps them follow Anglo-Iranian’s worldwide operations. This week, they were there for the company’s 40th annual meeting. With a Scottish twinkle, gaunt, grey Sir William Eraser, for eight years Anglo-Iranian’s chairman and operating head, imparted the good news: Anglo-Iranian had turned in 1948 earnings of £50.7 million ($204.3 million) before taxes, the biggest in its history.

Bloody Focus. Anglo-Iranian, which runs its affairs in the old-fashioned capitalist way (for all that the government owns 52.55% of its stock), stands out like a healthy thumb of prosperity amid Britain’s near-bankruptcy. The company has, in fact, never ceased to prosper since the day in 1909 when it acquired the rich Persian oil concession that William Knox D’Arcy, a wandering Englishman, had bagged for a mere $20,000.

The fabulous riches of Anglo-Iranian’s fields, in Persia and neighboring Iraq,* have been the focus of almost endless bloody struggles. The eastward-thrusting Kaiser coveted them in 1915 as did Panzer-probing Rommel in 1942. Between times and since, there have been such threats to meet as the overthrow of the Ottoman Empire and tribal revolts provoked by Soviet Russia. Through all, Britain and Anglo-Iranian, bending but never breaking in the storm, have kept control. Now Anglo-Iranian has assets of £76,753,472, is the third largest crude-oil producer in the world; only Standard Oil Co. (NJ.) and Royal Dutch-Shell are bigger.

Silent Partner. Sir William is the undisputed boss of all the commercial aspects of Anglo-Iranian; only in strategic matters can he be voted down by Lord Alanbrooke, wartime Chief of the Imperial General Staff, who represents the government on Anglo-Iranian’s board.

Sir William learned oil chemistry at Glasgow’s Royal Technical College, worked as an office boy in his father’s oil shale company. In 1919, Anglo-Iranian (then called the Anglo-Persian Oil Co.) took over his father’s company and “Willie came with the shale.” He moved up to a directorship, then became Anglo-Iranian’s deputy chairman. In 1931 he helped form Shell-Mex & B.P., Ltd. to market Anglo-Iranian and Shell products in Britain, and set up the Consolidated Refineries, Ltd. subsidiary which built such huge Anglo-Iranian installations as the refinery at Haifa. Fraser moved into, the top job when Sir John Cadman died in 1941.

Policy Arbiter. For Sir William and Anglo-Iranian, trouble is always in the offing. World War II cost them 44 of their 93 ships; during the Palestine fighting, they lost control of the Haifa refinery. But Sir William speedily got the refinery back, and he has rebuilt the tanker fleet to 121 ships, greater than ever. Since the war he has helped Anglo-Iranian boost its crude-oil production from 16.8 million tons in 1945 to 28 million tons in 1948.

Since the U.S. took a dominant role in Middle East oil, Anglo-Iranian has no longer been sole arbiter of policy in such matters as royalties to the Middle Eastern shahs and potentates. Within a year, two U.S. independent oil groups, seeking concessions in the sheikdom and “neutral zone” of Kuwait, have agreed to pay royalties that are far higher than any paid before. Sir William, who knew that this would bring Persia knocking at his door, quickly took the initiative himself. This week he reported: “I had the privilege of two audiences with His Imperial Majesty, the Shah-in-Shah, and was made most welcome . . .” Nevertheless, Sir William said, Anglo-Iranian had agreed to boost its royalties to Persia from four to six shillings a ton.

*Anglo-Iranian shares Iraq’s Mosul fields with Royal Dutch-Shell, Jersey Standard, Socony-Vacuum, Compagnie Française des Petroles, and C. S. Gulbenkian, its partners in the Iraq Petroleum Co.