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Anglo-Iranian Oil Negotiations (Resumption)

Volume 526: debated on Monday 12 April 1954

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With your permission, Sir, I should like to make a statement about the resumption of oil negotiations with Persia.

A consortium of oil companies has now been provisionally formed and is about to discuss with the Persian Government the resumed operation of the oil industry in Persia.

The group is composed of the following companies: the Anglo-Iranian Oil Company, with a 40 per cent. share; five American companies, Standard Oil of New Jersey, Socony Vacuum, Standard Oil of California, Gulf Oil and Texas, with 40 per cent.; Shell, with 14 per cent; and the Compagnie Française des Pétroles, with 6 per cent.

The Persian Government have been informed of this, and have invited representatives' of the consortium to go to Teheran for discussions. Three representatives of the group have, therefore, left for Persia. They are Mr. Harden of Standard Oil of New Jersey, Mr. Snow, of the Anglo-Iranian Oil Company, and Mr. Loudon, of Shell.

Her Majesty's Government welcome this development. It is their policy to do all in their power to ensure the well-being and prosperity of Persia. I am sure that the House will share my hope that the negotiations will lead to a durable settlement satisfactory to all the parties concerned.

I am sure that the House will welcome the news which the Foreign Secretary has given, and we hope that it will work out well. It is better that these things should be settled in due course by friendly discussion than that they should have been sought to be settled by means of war and force. If we had sought to settle them by force this statement would not have been possible today. I can only say to the Foreign Secretary and to the House that we on this side all hope that these discussions, which, we gather, are somewhat promising, will result in success, and that our relations with Persia and the oil supply available from that country will, in consequence, be vastly improved.

Would my right hon. Friend bear in mind that, notwithstanding the composition of the consortium, the whole of the asset that was lost—the £350 million refinery at Abadan—was a British asset, and that in the course of any general settlement which may be negotiated will there be suitable contributory compensation by the other parties to the consortium to the British fixed assets vested in that refinery?

I must say that I would have thought that the House as a whole would have welcomed this arrangement in view of the past history and of the position only two years ago so far as Abadan itself was concerned. I would have thought that it would have been generally welcome on both sides of the House. I can assure the House that it has taken a very long and very delicate piece of negotiation to get it to this point. As regards the position of the companies, the other companies, in the event of agreement being reached, will be paying the Anglo-Iranian Oil Company for the interests they will acquire.

Of course, it was never in our mind at any time in the discussion that these arrangements could be come to without the other companies paying the Anglo-Iranian Oil Company for the share they would take in the consortium and the agreement to be reached. I am sorry that anyone could have conceivably thought that I, as Foreign Secretary, would have agreed to anything else. May I add this: The House should also bear in mind, if it will, that these other companies will be able to assist in the problem because they will be able to help in the disposal of the oil, which is one of the problems which has still to be resolved in the course of the discussions with the Iranian Government.

Will the right hon. Gentleman say whether the consortium is to be concerned with the production and the refining of the oil or simply with its marketing? If only the latter, can he explain exactly in what respect payment by this company can compensate the Anglo-Iranian Oil Company?

I quite understand the question and I assure the right hon. Gentleman that it has been very much in our minds in the discussions. But the actual negotiations with the Persian Government have not yet opened, and, as the right hon. Gentleman will understand, I would rather not comment in detail on that now beyond telling him that we have thought of those problems and they will be among the matters discussed. I very much want the negotiations to open in a very friendly atmosphere so far as Persia is concerned, and I am sure the whole House would wish that they should succeed, not only because big British oil interests are at stake—naturally, we care about those—but also because Persia's economy and stability is something which Britain cares for, too.

I share the right hon. Gentleman's views that there will be a satisfactory agreement, but will he deny the suggestion which was put about that one requirement for an agreement was that Her Majesty's Government should withdraw their holding in the Anglo-Iranian Company?

Never at any time were the Government asked to give up their holding in the company. Had we been asked, we would not have agreed, unless for some other reason we wanted to do so.

Will my right hon. Friend see that complete publicity is given to his statement about the other companies in the consortium compensating Anglo-Iranian for the assets? Although it is well known in Parliament that that is what is to happen, it is not well known in the country, and I think there is concern in the country that the other companies are getting something for nothing.

I do not know how anything could have been made known in the country until I made my statement this afternoon. I could not make it on Sunday because the House was not sitting, but I have taken the first opportunity of explaining exactly what the position is. I hope that if anybody has any doubt, my statement will clear it up. We have some way to travel before we get the agreement.

Was it not arranged by the Prime Minister about 1910 that the British Government should own rather more than half of the installations at Abadan, and is this an instalment of the Government's denationalisation programme to get far more than half of these installations now owned by international big business?

The hon. Member is, no doubt, referring to my right hon. Friend's foresight in a very early period of the life of Anglo-Iranian, when, I think, my right hon. Friend was at the Admiralty, when he suggested that the Government should take a share in it. That was a very farseeing action. I do not know exactly where the complaint lies.

New Member Sworn

Eustace George Willis, Esquire, for Edinburgh, East.