To find oil in Persia, George Reynolds and his caravan of explorers had lived through seven years of harsh heat, gastric illnesses and disappointments. The next seven years would be no less difficult for the Anglo-Persian Oil Company, which would one day become BP
Hard work and community in an unforgiving place
The Field of Naphtha was 210 rugged kilometres from the mouth of the Persian Gulf, where Anglo-Persian was building a refinery complex to turn the flow of thick crude oil into a usable product. Just getting adequate exploration equipment to the site had taken months. Now a pipeline would have to be built across the winding, mountainous route.
Segments of pipe arrived in bulk from the United States, and crews took them as far as they could upriver by barge. Mules dragged them the rest of the way, with labourers taking over where the land was too steep for animals to pass. The work was slow and painstaking. It took two years.
Meanwhile construction delays plagued the refinery site. At its completion, Abadan refinery would be the world’s largest, supported by a diverse workforce: fitters, riveters, masons and clerks from India, carpenters from China and semi-skilled workers from the surrounding Arab countries.
A legend in his own time
The company’s British contingent included a medical doctor, Morris Young. He had come to Persia to look after the original exploration team and had found himself giving medical care to most of the people who lived near the drilling site.
From a tent at Masjid-i-Suleiman, he went on to found a hospital there and another at Abadan. These would become two of the major medical centres in southwest Persia, helping the area cope with epidemic diseases and the problems of poor water quality. As for Dr Young, within Persia he would become something of a legend in his own time.
Back from the brink of bankruptcy (again)
By 1914 the Anglo-Persian project was nearly bankrupt for the second time in its short history.
The company had plenty of oil but no one to sell it to. Cars were still too expensive to count as a mass market for fuel, and more established companies in Europe and the New World had the market in industrial oils cornered. Standard Oil of Indiana (later called Amoco), for example, had been in business for over 25 years. Besides that, refining couldn’t remove the Persian oil’s strong, sulphurous stench. It couldn’t be sold as kerosene for home heating, one of the main consumer uses for oil at the time.
“This Persian business seems to get more complicated every day,” complained the chairman of Burmah Oil, Anglo-Persian’s parent company.
Enter Winston Churchill
Enter Winston Churchill, who had taken a new role in British politics as First Lord of the Admiralty. Britons were proud of their navy, and oil-powered vessels were the latest innovation. But while Anglo-Persian executives had courted the Royal Navy for years as a prospective customer for its oil, the old guard at Whitehall had been hesitant to endorse coal’s upstart rival.
Churchill was a believer. He thought Britain needed a dedicated oil supply, and he argued the case in Parliament, urging his colleagues to “look out upon the wide expanse of the oil regions of the world!” Only the British-owned Anglo-Persian Oil Company, he said, could protect British interests.
The resolution passed resoundingly, and the UK government became a major shareholder in the company. Churchill had ended Anglo-Persian’s cash crisis, and no one had long to quietly ponder the long-term implications of a company entwining its financial interests with a political entity.
Two weeks later, an assassin killed the Archduke Franz Ferdinand in Sarajevo. Six weeks after that, Germany attacked France. The Great War had begun. By its end, war without oil would be unimaginable.
Two big purchases and a roaring decade
Despite its name, the British Petroleum brand was originally created by a German firm as a way of marketing its products in Britain. During the war, the British government seized the company’s assets, and the Public Trustee sold them to Anglo-Persian in 1917.
With that, Anglo-Persian had an instant distribution network in the UK, including 520 depots, 535 railway tank wagons, 1,102 road vehicles, four barges and 650 horses.
That same year, with the war in its final throes, the Royal Navy complained that the oil from Anglo-Persian was causing engine problems in colder climates. Anglo-Persian bought an 18th-century mansion at Sunbury-on-Thames, near London, and set up a research laboratory in the basement to address such scientific challenges.
Over the next decade, gas and electricity would largely replace kerosene for home heating, gasoline-fuelled delivery vehicles would challenge the railways for freight, and the age of the automobile would truly begin. These social changes would open a door that Anglo-Persian would step adeptly through, expanding its sales both in Britain and in mainland Europe.
The prospectus for a new company, the Anglo-Persian Oil Company, is issued on 19 April in London and Glasgow.
A 145-mile pipeline running from a new pumping station at Tembi to the banks of the Bahmashir River at Abadan is completed in April and construction of a refinery there is underway.
The first shipment of crude oil leaves Abadan in April – bound for purchaser Royal Dutch-Shell.
The Anglo-Persian Oil Company signs a deal with the British government to supply the navy with 40 million barrels of oil over the coming 20 years in return for £2 million and a majority shareholding.
Six weeks later, the First World War begins.
Anglo-Persian buys a Georgian mansion in Sunbury-on-Thames, England, as a centre of research focused on oil-refining.
The British Tanker Company, a subsidiary set up in 1916, reaches a capacity of 150,000 tons across five tankers.
Research by Hungarian geologist Professor Hugo de Böckh leads to the discovery of oil in commercial quantities at four new locations in Persia.