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Abstract
The paper explores how the calculative work of three different formulas shaped the history of oil in Iran in the first half of the twentieth century. British investors, Iranian government officials, oil workers and other actors battled over the construction and employment of a formula during the course of three different but interconnected disputes over oil profits, labour and production rates. Opening up the dynamics of a petroleum formula exposes how, on each occasion, certain political possibilities were opened or closed in the co-assembling of the Iranian state and Anglo-Iranian Oil Company. Scholarship on oil and Iran has not been able to account for the kinds of non-human actors, tools and machinery involved in the building of such a large-scale political project as an oil industry. Thus the paper draws on the current research on formulas and markets in science and technology studies but takes a different direction by looking at their political construction in the resolution of not just financial and economic problems, but social and political ones.
Acknowledgements
Many thanks to Michel Callon, Tim Mitchell and three anonymous reviewers from Economy and Society for their helpful comments on earlier drafts of this work.
Notes
1. The British company was first known as the Anglo-Persian Oil Company from 1908, when it was established, until 1935 when it was renamed AIOC. As a consequence of Iran's oil nationalization dispute, the company was formally named British Petroleum in 1954. The country was known as Persia until 1935 when the ruling monarchy changed the name to Iran. For consistency, I refer to the company as AIOC, the country as Iran, rather than Persia, except in direct quotations, and domestic labour and government officials as Iranian, rather than Persian, except in direct quotations.
2. Also see the official history of AIOC in Ferrier (1982) and Bamberg (1994), both of which laud the company's consistent showing of human ingenuity in confronting setbacks posed by oil operations and political groups in Iran.
3. The concept of the ‘rentier state’ serves as the dominant paradigm for studying the impact of oil on state formation. Oil is factored only in terms of its economic properties as a rent, overlooking its physical or material properties as well as the role of oil workers and the oil company in shaping the powers of the state. Hossein Mahdavy (Citation1970) coined the term from an investigation of the history of oil in Iran. Studies of the company's relation to the Iranian and British governments have framed the issue as a conflict between private, commercial and public, governmental interests (Nowell, Citation1994; Ferrier, Citation1982), rather than leaving the distinction as an open issue.
4. See, for example, Callon (Citation1987) on electric cars and Latour's (Citation1996) study of the building of a new rail system in France.
5. Hecht's (Citation1998) study of French nuclear power uses the concept of ‘technopolitical regime’ to nicely map some of the larger socio-technical processes at work in the building of the nuclear industry and national state. Lussac's (Citation2010) recent study of the building of the Azerbaijani oil network is another example of the extent to which energy and politics intertwine when one follows more carefully the connections between the so-called state and non-state actors (human and non-human) involved.
6. Bowker's (Citation1994) investigation of the oilfield services company, Schlumberger, remains as one study of the oil industry that draws on methods from STS but stays focused on the building of Schlumberger's laboratory and its world rather than drawing out the further connections for our understanding of politics. For a socio-technical history of Iran's British-controlled oil industry and the consequences for politics, see Shafiee (Citation2010).
7. See Michel Callon's postface to the edited volume by Vatin (Citation2009, pp. 247–69). Callon explains that formulas are a central apparatus or site for studying the process of economization through the concept of ‘qualculation’. The interdependence of prices and qualities lie at the heart of processes of valuation and are made visible through the notion of formula and/or formulation. Guyer's (Citation2004) investigation of West African currencies points to this interdependency of quantities and qualities. Also, Caliskan describes the political deliberations, the process of bargaining and discussion, through which a market price for cotton is actualized and in which a formula (weighed average) is used (Caliskan, Citation2007, pp. 252, 257).
8. ‘The oil prices in Persia’, Mostafah Fateh to APOC, 1932–3, enclosure A, 88373, BP Archive, Coventry.
9. AIOC was bound up in demands by the Iranians for more control over oil production and profits as well as its obligations to control Middle East oil production in alliance with the largest international oil companies. Cadman, AIOC's chairman at the time, travelled to Achnacarry, Scotland with these concerns in mind. He agreed with the heads of the major international oil companies (e.g. Standard Oil of New Jersey, Royal Dutch/Shell, Gulf Oil and Standard Oil of Indiana) to enter into a ‘Pool Association’ or ‘As Is’ Agreement. The central aim was to establish a uniform selling price so that consortium participants would not have to worry about price competition (American Gulf Coast price plus the going freight rate from coast to market even if the oil was coming from a closer location). A few months later, the group agreed to control world oil production as well, enabling the companies to increase their output above volumes indicated by their market quotas, but only as long as the extra production was sold to the other pool members. See Cadman to Jacks, 15 November 1928, no. 7, 71398, BP Archive, Coventry. As Nowell explains, the agreement formed part of a much larger ‘hydrocarbon cartel’, concerning not just oil but the chemical and coal industries. It extended to the control of technology to ensure that chemical firms were blocked from using new hydrogenation technologies to make chemicals, synthetic rubbers and fuels from the conversion of coal into synthetic oil. The I. G. Farben chemical industry made a collaborative deal with Standard Oil concurrently with the ‘As Is’ oil negotiations. The coal industry was effectively paralysed and so unable to compete. See Nowell (1994, pp. 223–79)
10. ‘A basis of royalty payments’, 1933, Appendix 3, 70223, BP Archive, Coventry.
11. ‘A basis of royalty payments’, 1933, Appendix 3, 70223, BP Archive, Coventry.
12. See ‘A basis of royalty payments’, 1933, Appendix 3, 70223, BP Archive, Coventry. for illustrations of the other two schemes.
13. See ‘Scheme 1. Draft clause’, ‘Scheme 2. Draft clause’, ‘Investigation of the problem in general terms’, n.d., 70223, BP Archive, Coventry.
14. By 1925, the new Shah had implemented his tribal policy to homogenize the state ethnically through a string of military campaigns against semi-autonomous groups threatening his power particularly in the oil regions of Khuzistan, ousting Shaykh Khaz'al, confiscating oil shares controlled by the rival Bakhtiyari confederation and forcing its chiefs to sell all their land and disarm. See Abrahamian (Citation1982, p. 120) and Cronin (Citation2004).
15. I am building on Michel Callon's concept of translation. See Callon (Citation1999, p. 68).
16. Accounts of the concession crisis in Iran (1932–3) mention the dispute only in passing. See Katouzian (Citation1981), Keddie (Citation2003), Abrahamian (1982), and Fisher et al. (Citation1991, pp. 643–8).
17. ‘Persian concession, 1933–1993’, 10, 70223, BP Archive, Coventry.
18. The Iranian parliament voted to reopen negotiations concerning Article 16 on Persianization, along with the rest of the terms of the revised 1933 concession, in 1947.
19. Shafagh-i-Surkh Wed., 22 and 23 April 1931 nos 12–16, L/P&S/12/3453, India Office Records, British Library, London.
20. ‘Persian concession. Article 16 – personnel in Persia’, 16 November 1933, 1–5, 52889, BP Archive, Coventry.
21. Or at least the recognition of common words like ‘steam oil’, the use of various measuring devices such as thermometers, hydrometers, gauges and the operation of boilers and pumps. See ‘Persian concession. Article 16 – personnel in Persia’, 16 November 1933, 1–5, 52889, BP Archive, Coventry.
22. ‘D–Organization of the Oil Co. apprentice trainees’ in ‘List of proclamations and pamphlets published during the recent strike and disturbances’, 1951, March/April, 68908, BP Archive, Coventry.
23. On the history of AIOC's racial design of living and work conditions in the oil regions of southwest Iran, see Crinson (Citation1997) and Ehsani (Citation2003).
24. Social histories of Iran's oil workers for this period focus on the question of unionization, political ideology and degree of organization without considering how oil's technical properties and the terms of the concession contract concerning Persianization shaped disputes. See Bayat (Citation2007) and Halliday (Citation1978). A conference paper has investigated more carefully the terms of Article 16 of the 1933 concession but still reads the problem as a mere reflection of the ‘negative attitude’ and ‘anti-Iranian’ sentiment of AIOC managers (Abdelrehim et al., 2010). On the specificity of the oil worker as compared with coal workers and the consequences for democratic forms of politics, see Mitchell (2009).
25. See graph, ‘Percentage of foreign to total personnel’, in ‘General Plan’, 16 July 1936, 126413, BP Archive, Coventry. The graph shows an overall decline in the percentage of foreign personnel to total personnel (including unskilled labour) from 14 per cent in January 1932 to about 8.5 per cent in August 1935. Not including unskilled labour, the value shifts from approximately 27 per cent to 17.5 per cent for the same period.
26. See ‘Report on visit to Tehran 31st August to 26th October 1948’, p. 36, 126407, BP Archive, Coventry, referenced in Abdelrehim et al. (Citation2010, p. 30). The latter series of negotiations pressing for Persianization had occurred in the context of AIOC's attempts to renegotiate its oil drilling rights with the ruling government.
27. As noted earlier, Reza Shah changed the country's name from Persia to Iran in 1935. The terminology used in British archival documents after 1935 notes this shift by referring to ‘Persianization’ as ‘Iranianization’. For consistency, I have kept the term as ‘Persianization’.
28. In 1954, the consortium members were BP (AIOC), Royal-Dutch/Shell, Compagnie Française des Pétroles, along with the five American oil majors, Exxon (Standard Oil of NJ), Mobil (Standard Oil of NY), the Texas Oil Company (Texaco), the Gulf Oil Company and Standard Oil of California (Socal or Chevron).
29. As Mitchell explains, ‘Prices in Texas…following the passage of the Texas Market Demand Act of 1932 were protected by production quotas set by a state body, the Texas Railroad Commission, and later by federal import quotas.’ This US government regulation combined with the 1929 agreement (dividing the world's oil resources among each major oil company and limiting production to maintain prices) ‘prevented the emergence of a competitive market and thus assured extraordinary profits to those who controlled the cheaply produced oil of the Middle East’. The pursuit of an anti-market arrangement based on an artificial scarcity and exclusive control of oil production by major oil companies occurred at a particular moment in the mid-twentieth century, during which time ‘old methods for producing global antimarkets – colonialism – were in the process of collapse’. See Mitchell (Citation2002a, pp. 6–8).
30. Iricon Agency Ltd. grouped six smaller American oil companies, which together held the remaining 5 per cent of consortium arrangement. The signing of the consortium agreement on 29 October 1954 marked this increase in American participants from eight companies to fourteen.
31. According to Fesharaki (Citation1976), British Petroleum was the most important force in determining production volumes, and together with any group of small equity holders (adding up to 30 per cent), it could ‘impose its will on the others’.
32. On the history of the international oil industry's use of monopoly arrangements in creating an artificial scarcity in supplies to keep prices high in the mid-twentieth century, see Mitchell (2002a).
33. I am grateful to the anonymous Economy and Society reviewer for having brought this point to my attention.
34. The modern oil corporation emerged at a moment of empire shifting in the mid-twentieth century. This shift coincided with the collapse of an imperialist older form of empire. See Mitchell (Citation2002a, pp. 7–8).
35. See Cadman on ‘Gas pressure problems on Maidan Naftun field and conservation of resources’, 26 July 1923, BP 70503. The report, marked confidential, reveals the circulation of published and unpublished information concerning Iran's oil reserves among scientists and AIOC's chairman. They conclude that there is an urgent need to develop more formulas in order to manage Iran's oil reserves, which are indeed ‘calculable and limited’. On similar controversies in the US, see Bowden (Citation1985).
36. As an anonymous reviewer has noted, this was true up to a point, but Royal Dutch/Shell was formed before AIOC, and American oil companies such as Standard Oil had been around since the 1870s, so the credit is not solely or even originally with the British.