BP, Iran and the ‘Supermajor’ Culture

soldier_1452607iThe contemporary energy markets are dominated by subsidiaries of the same, few, gigantic corporations. Known as the ‘Supermajors’, five (sometimes with an additional sixth) companies have grown and acquired over the decades, even centuries, to produce huge business bodies: those firms are British Petroleum (BP), Chevron, ExxonMobil, Royal Dutch Shell (RDS) and Total SA – with ConocoPhillips occasionally thrown in for good measure. The history of BP in the oil markets is perhaps one of the most interesting business stories to tell – from the D’Arcy concession in Iran in the early 20th century, to the Deepwater Horizon oil spill just three years ago, BP has held much political as well as economic power both at home and in the Middle East – note that such power has come with enormous public relations problems. The future of this particular Supermajor could be equally eventful if concerns over sustainability and resource distribution intensify as they are predicted to. It is interesting to note how BP’s focus has generally shifted from Iran and the Middle East, to Russia, Canada and other emerging energy markets over the last few decades in a somewhat neo-colonial format.

The Contemporary Giant

BP’s stats and figures are impressive. The company is ranked as follows:

  • 6th – Global oil and gas operators by market value – after ExxonMobil, RDS, PetroChina, Chevron and Gazprom, a stat slightly skewed by holdings and BP’s future tar sands proposals in Canada
  • 2nd – British companies by market value – after HSBC Holdings, incidentally another relic of the colonial era, this time in the Far East
  • 5th – Global companies by revenue (after ExxonMobil, RDS, Walmart and Sinopec) – incidentally, BP also has some of the highest costs in the global economy too

BP’s 2012 revenue was around US$380bn, double that of Glencore and Samsung, two up and coming giants, and triple that of Ford Motors, a traditional money maker. There is no doubt that, despite the drawbacks of public relations nightmares and market complications, BP remains an incredibly strong and powerful company. The projects with which BP is involved at present are spread wide and deep into the world’s assets and materials, providing insurance and options for the company’s management to maintain revenue and continue to develop opportunities in new fields, such as renewable energy (see http://wp.me/p3g0mz-1u for a more detailed discussion on global energy consumption and markets).

The Origins

Certain historians will point to BPs colonial roots as criticism of the nature of the company, just as they will criticise the continued activities of ex-Zaibatsu corporations in Japan (http://wp.me/p3g0mz-r), and industrial actors in Germany, for their wartime pasts. Upon obtaining the D’Arcy Concession in 1908, which was effectively a sale of the rights to oil supplies in southern Persia, British financiers created there and then the Anglo-Persian Oil Company (APOC), which would become the Anglo-Iranian Oil Company upon the renaming of the country by Reza Shah Pahlavi, a Cossack commander, in the 1930s. The company, as did the British and Russian governments, dictated much economic, and indeed political, policy (as was common in the colonial era) in Persia/Iran throughout the first half of the 20th century – the most significant instance of this was in 1932-3. The Shah, in an attempt to regain autonomy from the international powers playing chess across Iranian lands, cancelled the D’Arcy concession, but the APOC fought back to impose an even more exploitative contract on the Iranian oil industry. Many historians regard this particular event as crucial to the political conflict that would engulf Iran for years to follow.

Historian Mohammed Majd goes so far as to call the history of Persian/Iranian oil in the early 20th century ‘the thirty year plunder’; a 1952 World Bank report shows why. The APOC held concessions worth 92% of the total value of Persian oil, and between 1911 and 1926, deprived Persia of $450m – around 150% of government expenditure in the same period. The rewritten concession in 1933 granted the Persian government a return of just 1% for stock ownership of its own oil, and further deprived Iran between 1933 and 1952 of around $1.2bn. One can assess British colonial activities in many ways, but there is little denying that Iran was stripped of its own wealth and, to an extent, modernisation (better termed development for fear of sounding orientalist). The lack of British subtlety in the matter probably had something to do with the growing resistance to capital accumulation in existing colonies, such as India and parts of the Levant.


It is clear to see that the structure of the contemporary global oil economy has been built on unequal dealings. Even today, much concern over the supply of energy is focused not on oil reserves, but on the strategies oil Supermajors use to maintain profits and demand – i.e. the holding back of stocks so as to equalise the market at a price favourable to the supplier. But as the methods and tactics of the Supermajors are called further and further into question, such a structure is bound to change. New forms of energy are being developed that will revolutionise the world economy, not only in who succeeds within it, but how it functions altogether.


Majd, Mohammad Gholi, 2001. Great Britain and Reza Shah. Gainesville, FL: University Press of Florida

World Bank, 1952. ‘Nationalization of the Iranian Oil Industry: An Outline of it Origins and Issues’. US State Department of the Treasury, file 306/7/362, doc. 541. February 19, 1952


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