Following the immense expansion of oil industries in America, Russia, and South East Asia, a number of entrepreneurs attempted to seek similar fortunes through the acquisition of concessionary agreements across the globe.
One such example of this practice was conducted between William Knox D’Arcy and Persia (Iran). He acquired the rights to extract oil across Persia in the 1901 Concessionary Agreement, and eventually struck oil in 1909. Due to the immense costs associated with the drilling and refining of oil, new investors stepped in to rescue D’Arcy from bankruptcy. One such investor was the British Government which purchased a 40% share under the instruction of then War Minister, Winston Churchill, in order to convert the British naval fleet into oil, rather than coal fuelled ships. The Anglo-Persian Oil Company was eventually formed which grew rapidly, in turn diversifying vertically to manage the drilling, refining, distribution and selling of oil. Since this moment, the company expanded to several new territories including South East Asia and other Middle Eastern countries, such as Kuwait.
A series of labour strikes alongside growing political opposition to foreign involvement led to a series of renegotiations to the concessionary agreements, such as in Iran in the 1930s. Tension continued until the Anglo-Iranian Oil Company was kicked out of Iran in 1951 after Prime Minister Mohammed Mosaddeq nationalised the oil industry. This however did not last long until he was removed form power through British and American intervention in 1953 through a Coup D’état. Their impact in their host nations was largely self-serving. It is true that they developed key infrastructure in their host nations, providing schools and hospitals to serve their ever-growing workforce. However, this was devised through a series of controls and limits which maintained company interest.
The AIOC returned to Iran following the coup as part of a consortium agreement with the ‘Seven Sisters’ (array of British, American and French oil companies). Since this, BP has been investing in an array of oil possessions across the globe and remains one of the most influential and wealthy companies in the world (12th largest turnover in the world), with the ability to bring affluence, whilst also dispersing strife. With operations in 70 countries worldwide, and a supply chain that links source to finished product, they are the epitome of a MNE.
Sources:
J. H. Bamburg, The History of The British Petroleum Company, Vol. 2, (Cambridge; Cambridge University Press, 1994)
Katayoun Shafiee, Machineries of Oil: An Infrastructural history of BP in Iran, (Cambridge; The MIT Press, 2018)