The history of commercial development of oil begins in 1901, when W. Knox D'Arcy was granted a 60-year concession over the entire Iranian oil reserves. D'Arcy formed a syndicate with the Burmah Oil Company in May 1905 to obtain the funding required for continuing the exploration.

The first, and one of the biggest, oilfields was discovered at Masjet Soleiman in April 1908. The syndicate then formed the Anglo-Persian Oil Company (APOC) in 1909 with a capital of L2 million, which was renamed the Anglo-Iranian Oil Company (AIOC) in 1935. It obtained a licence to explore, produce, refine and export oil in 1913.

Dr. Mossaddeq, the popular nationalist leader, led a campaign for the nationalisation of oil industry which succeeded in 1951, after he took office as prime minister. The Iranian government took over the industry and expropriated the AIOC. The National Iranian Oil Company (NIOC) was formed to run the related operations.

The picture changed again following the 1953 CIA-engineered coup d'etat that toppled Dr. Mossaddeq, and a new agreement was signed with a consortium of major European and American oil companies.

All the contracts concluded by the pre-revolution regime annulled by the Oil Ministry in 1981, under the provisions of the 1951 Oil Nationalisation Act.

Production The Oil Ministry published its 10-year plan for 1989-99 in late 1988.

And Supply In the first five years of the plan, the crude oil production

capacity of the oilfields has raised from 3.1 million barrels per day (b/d) to 3.6 million b/d, by the completion of the gas injection projects. The average annual growth of the crude oil production is forecast to reach 3.7 per cent ultimately. Offshore production capacity raised from 202,000 b/d in 1989 to 460,000 b/d in 1993, with annual average growth rate of 23 per cent. Consequently, the overall crude oil production capacity raised from 3.3 million b/d in 1989 to 4.1 million b/d in 1993.

The crude oil used as feedstock for refineries increased from 743,000 b/d in 1989 to 1.3 million b/d in 1993, with an annual growth rate of 15 per cent. This was attained by completion and commissioning of the Bandar Abbas refinery, completion and expansion of Arak refinery, reconstruction of the Abadan refinery in two stages, commissioning of Bandar Taheri refinery and raising of active capacity of existing refineries.