Arab drill operatives working on rig 53 in the Dukhan oil field in Qatar during the early 1950s
As Europe rebuilt so did Anglo-Iranian, investing in refineries in France, Germany and Italy plus new marketing efforts in Switzerland, Greece, Scandinavia and the Netherlands. BP gasoline went on sale for the first time in New Zealand.
But this fragile new stability would soon be shattered by political crises in the oil-rich Middle East, with tremors that would shake the ‘Iranian’ right out of Anglo-Iranian’s company name.
William D’Arcy’s hunch that the Middle East might be an overlooked gold mine for oil had transformed the region, giving previously impoverished countries new income and political influence.
But was that enough? Nationalists throughout the Middle East angrily questioned Western companies’ right to profit from Middle Eastern resources. With Britain’s imperial hold on the region rapidly unravelling, Anti-British sentiment escalated especially.
Fourth-year fitter apprentice Turner JL Rees receives refinery maintenance training at the British Petroleum Company's Llandarcy oil refinery
Among the nationalists, Iran’s prime minister spoke vehemently against Anglo-Iranian’s presence in Iran. In 1951 he convinced the Iranian Parliament to nationalize oil operations within the country’s borders.
Women and children had already evacuated. The refinery creaked to a stop and was shut. Three months later, all political debate exhausted, the last of Anglo-Iranian’s expatriate employees boarded a cruise ship and were gone.
An impasse followed. Governments around the world boycotted Iranian oil. Within 18 months, the Iranian economy was in ruins. Mobs in the streets demanded the prime minister’s resignation. When the parties returned to the table, they hashed out a new arrangement allowing a consortium of companies, including Standard Oil of Indiana (Amoco) and others, to run the oil operations in Iran. Anglo-Iranian’s stake was 40%.
The gentlemen’s agreement between the former Shah of Persia and William D’Arcy had run its course. In 1954, the board changed the company’s name to The British Petroleum Company.
Amoco fuelling crew at the New Orleans to St Louis powerboat race in 1958
By the 1960s the technology of oil exploration had come a long way. It was still, however, a time-consuming and inexact science. Malta looked promising, but had nothing. Australia? Very little. Papua New Guinea? Well… no. Expeditions in Abu Dhabi, Nigeria and Libya were all more successful. The company had looked for oil in the UK for nearly 50 years without a single large discovery. Then in 1964 the United Nations extended countries’ rights over territorial waters.
The following year, BP found natural gas in the southern North Sea, enough to power a medium-sized city.
After searching for almost half a century for a major source of British home-grown hydrocarbons, BP found success in the winter of 1965 with the Sea Gem – the company’s first offshore drilling rig in the North Sea.
A pioneer of what would become a major industry and one of the greatest economic success stories in UK history, Sea Gem and its crew discovered the UK’s first commercial source of natural gas at West Sole Block in 48/6, some 40 miles east of the Humber estuary.
The rig was completed and towed out from Smith’s Docks, Middlesborough, in May 1965 and successfully spudded the first of two planned wells on 5 June 1965. By September 1965 gas had been produced but was not thought to be significant until December’s final test of this first well, when BP reported that Sea Gem was drilling at close to 10,000 feet and flowing at more than 10 million cubic feet a day.
Sea Gem – BP’s first offshore drilling rig in the North Sea
Tragically, just over six months after it spudded that first well and only weeks after confirming the historic discovery, the Sea Gem became the North Sea’s first major oil rig disaster. On 27 December 1965 during a moving operation to its second well site, the Sea Gem capsized and sank plunging the crew into the icy cold waters of the North Sea, only two days after they had celebrated Christmas.
By chance, a British cargo ship, the m.v. Baltrover, was in the area and following unsuccessful attempts to contact the Sea Gem by radio, the crew alerted Humber Radio, triggering the launch of the Humber lifeboat.
Meanwhile the Baltrover launched a lifeboat of its own, and almost four hours after the collapse, the Baltrover and a helicopter had rescued most of the crew.
On completion of rescue operations, it was found that of the 32 men aboard the Sea Gem at the time of the accident, five were dead and eight were missing. The Baltrover landed at Hull that evening. Of the 19 men that were rescued, one sadly passed away in hospital a few days later.
Media news following the accident
Many engineering and safety lessons were learned from the Sea Gem tragedy which led to critical changes in the UK oil and gas industry.
A far bigger find awaited in Alaska, where in 1968, after a decade of drilling dry wells along the North Slope, BP was on the verge of abandoning its search. The equipment was already packed up and awaiting shipment when a rival consortium made a suspiciously extravagant offer for BP’s Alaska acreage along the edges of Prudhoe Bay. Atlantic Richfield (ARCO) and Humble Oil (Exxon) weren’t telling, but they had struck oil in their own last-chance well in the centre of the Prudhoe Bay structure.
BP got back to the search and in 1969 tapped into its share of the largest oil reservoirs ever found on the North American continent.
Forties discovery 1970 press release
Back in the UK, offshore exploration had moved dutifully from the English Channel into the North Sea, although hardly anyone, even within BP, believed oil would be found. “There won’t be oil there,” Sir Eric Drake, BP’s chairman, told Reuters in April 1970. Six months later, crews found the Forties field, which could produce 400,000 barrels of crude oil a day.
The Iraq Petroleum Company begins construction of new pipelines parallel to existing ones.
Petrol rationing in the UK ended. Refineries in Llandarcy, Wales, and Grangemouth, Scotland, are expanded and construction of a new one, on the Isle of Grain, in the Thames Estuary, England, begins.
At the end of April, Iran’s oil industry is nationalised. In June, Anglo-Iranian begins evacuating staff and families from the country and by 5 October everyone has left.
With no income, Iran accepts a new partnership proposal, including a 25-year contract to manage the country’s oilfields and refineries and a 50-50 profit split between it and a new consortium called Iranian Oil Participants, of which Anglo-Iranian has a 40% share.
In December, the Anglo-Iranian Oil Company changes its name to British Petroleum.
BP acquires its first concessions in Libya and in 1961 discovers a 6.5 billion-barrel field at Sarir.
BP forms two joint ventures to sell Middle East crude oil in the US and to begin exploration in Latin America.
The Organisation of Petroleum Exporting Countries (OPEC) is formed.
BP enters Malaysia and in 1964 opens its first service stations in newly separated Singapore.
On 27 December BP North Sea exploration barge Sea Gem collapses and sinks due to metal fatigue in the suspension system, claiming the lives of 13 crew members, and one further crew member passed away in the days that followed.
Output rises to 3.8 million barrels per day – up from 740,000 in 1954 and 1.5 million in 1960. Two-thirds of BP’s refining is carried out in the UK and in mainland Europe.