British Petroleum and Global Oil, 1950-1975: The Challenge of Nationalism

Published by EH.NET (February 2002)

James Bamberg, British Petroleum and Global Oil, 1950-1975: The Challenge of

Nationalism. Cambridge: Cambridge University Press, 2000. xxviii + 637 pp.

?80 or $130 (hardback), ISBN: 0-521-25951-7; ?25 or $40 (paperback), ISBN:

0-521-78515-4.

Reviewed for EH.NET by Jonathan Brown, Rural History Centre, University of

Reading.

Oil is the fuel of modern economies. So important has it become that the

post-war world has faced a succession of oil-related political crises, as the

mainly western oil-consuming powers have tussled in their relationships with

mainly middle-eastern oil producers.

It is with one of the first of these crises that this book opens. In 1951 the

Anglo-Iranian Oil Company faced a major shock to its system when the government

of Iran decided to nationalize the firm’s oil concession. What might have

appeared a local problem for this one company soon broadened, as its resolution

drew in the British government, majority shareholder in Anglo-Iranian, to

negotiations with the Iranian government. The eventual solution widened the

scope of the matter again, with the formation of a consortium of international

companies to operate Iran’s main oilfields.

This crisis was but a precursor to many others, of steadily increasing

international importance. There was the Suez crisis of 1956, the Arab-Israeli

war of 1967, the rise of radical nationalist governments in several

middle-eastern countries during the 1950s and 1960s, marked most strongly by

the accession of Col. Gaddafi in Libya. The series of measures to nationalize

the assets of international oil companies that Gaddafi sparked off in his own

and other countries led on to the OPEC crisis of the early 1970s, when oil

prices were dramatically increased and production reduced for a time.

This was the international context in British Petroleum (BP) had to develop its

business. In 1951 the Anglo-Iranian Oil Company might have been looking forward

to a moderately peaceful post-war existence. It had its large oil concession

and refinery at Abadan, which represented about three-quarters of the company’s

production of crude oil. The extent and importance of the Iranian oilfield was

that, even with such concentration of resources, Anglo-Iranian was included

among the seven major oil companies of the world. The firm had established

reasonably good working relationships with its Iranian hosts, while its own

management culture was akin to a branch of colonial administration, with

managers doing service in Iran before returning to London to gain seniority in

headquarters administration.

The loss of its major concession shook the company out of its established

habits. The firm’s management acted quickly to secure new sources of supply,

and to bring refining capacity in Britain and Europe into action. By 1954 the

firm, now renamed British Petroleum (BP), had refocused its activities. It was

more broadly based in its exploration and production, with oil concessions in

many more countries; it was developing new markets; its financial position was

stronger. Although it regained a place in Iran as the major shareholder in the

new consortium of international oil companies, BP was now set on course to

become a truly international business.

British Petroleum and Global Oil, volume three of a series on the

history of BP, describes that transformation. By 1975 the firm was still among

the leading international oil companies. It had achieved outstanding success in

exploration, especially, for example in Alaska and the North Sea. It was weaker

than many of the oil majors in other respects, nevertheless BP was now refining

and marketing petroleum-based products in nearly every continent and had

diversified into petrochemicals, and even computer consultancy. Global

expansion had also necessitated major changes to its management into a more

complex structure.

British Petroleum and Global Oil is business history at its best,

weaving together the twin themes of the global expansion of the one company and

the international politics of oil with great dexterity. It is a readable

account that should appeal beyond those primarily interested in the oil

business. It is intended to stand alone, so one does not have to read the other

volumes in the series. On the other hand, you are very likely to want to go

back and read the others, and, even more, to be impatient for the next volume

to appear, which will take us through the 1980s and 1990s.

Jonathan Brown is on the staff of the Rural History Centre, University of

Reading, and recent writing includes a contribution on the state and the

National Farmers’ Union in Agriculture and Politics in England,

1815-1939, edited by J. R. Wordie (Palgrave, 2000).