First oil was struck in Iraq at Baba Gurgur in 1927. Thereafter, the company changed its name to the Iraq Petroleum Company (IPC) and was constituted by six shareholders. Interests were split equally in shares of 23.5% among the Anglo-Persian Oil Company (later Anglo-Iranian), Shell, Compagnie Française des Pétroles, and the consortium of American oil companies called the Near East Development Corporation. The remaining 5% was given to the Armenian businessman Calouste Gulbenkian. The companies established the so-called
“Red Line Agreement,” a decision to favor cooperation in territories of the former Ottoman Empire. In short, IPC dominated production inside the red line for twenty years while the arrangement remained in effect.
By the time the League of Nations recognized Iraq’s independence in 1932, a single company had established control over all of the country’s known and potential oil reserves. IPC shareholders with ongoing major crude production elsewhere – including Anglo-Persian and Shell – remained reluctant to initiate extraction in Iraq for fear of creating a market surplus and forcing prices to plummet and thus IPC restricted its exploration to just one half of one percent of land in the country. In other words, the Iraqi government had sold control of its oil to a company that had no intention of developing its potential in the near future.The Atlantic Charter was decreed in 1941 and, accordingly, imperial discourses of conquest were reproduced as promises of progress for the territories under British control in the Middle East and elsewhere. By this time Anglo-Persian had established Abadan as the site of the world’s largest and most productive oil refinery. Poor labor conditions and meager profits inspired broad support among Iranians for nationalization of the oil company, and in 1951 the Majlis (Parliament) voted in favor of this move. Mohammed Mossadegh was elected Prime Minister and championed a movement to nationalize Iran’s oil facilities, resulting in
major labor strikes across the country.
Ultimately, Anglo-Iranian
evacuated its operations in Abadan and the British state called for an international boycott of Iranian oil. In the immediate aftermath of the so-called "Iran oil crisis," the Iraqi government used its increased leverage with the British company to renegotiate the existing terms of the IPC concession as a 50-50 profit sharing agreement, following the precedent set by ARAMCO in Saudi Arabia. Iraq’s output increased dramatically to fill the vacuum left by the hiatus of Iranian oil production for the world market. Iraq then established a national Development Board to funnel increased oil revenues into development programs that would play a major role in shaping the social, economic, and material environments of these young countries.
The rise of Arab nationalism, the Israeli occupation of Palestine in 1948, subsequent Arab-Israeli Wars and later the Suez Crisis in 1956, fomented existing discontent among oil workers and citizens across the region who viewed petroleum companies as reincarnations of British Empire. Sustained British military presence in the country and its support for the Israeli occupation of Palestine fueled populations and governments not only of Iran but also its neighboring Arab countries to challenge the British oil companies’ advantageous position in the region, and namely their total control over oil production. The IPC management’s explicit concern with the circumstances are expressed in a confidential 1948 IPC report Anti-British Sentiment in Iraq, which reads, “one thing is certain, as long as Great Britain has
bases in Iraq she is bound to attract hostility. A foreign occupation, however tactfully and discreetly disguised, is never a pleasant thing, and Iraqi opposition to this is natural and certain.
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From the late 1940s onwards, the production of publications and documentary films dominated the efforts of oil company public relations offices from Iran to Kuwait
. The decade saw the simultaneous rise of postcolonial nation-states in the Middle East and the rise of multinational oil companies during the Second World War. This marked a historical moment when oil companies had to operate on new terms and communicate with citizens as opposed to heads of state alone. As the following section will examine, IPC’s cinematic representations of modern Baghdad worked within Iraq to justify Britain’s ongoing neo-colonial project of oil extraction.
