On 4 August, after more than five million barrels of oil battered the Gulf of Mexico for over 100 days, BP proclaimed the success of its “static kill strategy.” Pumping the blown out well with mud and cement was working to stop what BP calls the “leak” or alternatively, “the Gulf of Mexico incident.” The company, its website explained, was “doing everything we can to make this right.” In the meantime, the environmental and economic devastation of the worst spill in US history and the world’s largest accidental release of oil, promises to outlive both BP and its relentless search for petroleum.
Two months ago as the estimates of oil outpouring into the sea soared and demonstrators in the U.S. proclaimed “the Death of the Gulf,” Pierre Terzian, director of the Paris based Petrostrategies, compared BP’s actions to its colonial past: “This was nineteenth century behavior—where the safety of people and the environment were neglected and put ahead of higher profits and production.”
Terzian was referring to the birth of BP as the Anglo-Persian Oil Company (APOC) at the turn of the last century. The Qajar government of Persia granted an oil concession to William Knox D`Arcy in 1901 in what would be “the prototype for subsequent oil concessions” in the Middle East. It cost D’Arcy just 40,000 British pounds to obtain eighty-four percent of all the rights to all of the natural resources of all of Persia, except for the five northern provinces under the Russian sphere of influence. Seven years after this sweet deal drove D’Arcy to bankruptcy, APOC came into being. BP’s “nineteenth century behavior” consisted of drawing lines around and claiming territory in order to usurp natural resources.
The company couches its enterprise—historically and in the moment—in the language of development and progress. BP narrates what one could aptly call the company’s “collateral benefits” in turn of the century Persia, as the stuff of legends:
"The company’s British contingent included a medical doctor, Morris Young. He had come to Persia to look after the original exploration team and had found himself giving medical care to most of the people who lived near the drilling site. From a tent at Masji-i-Suleiman, he went on to found a hospital there and another at Abadan….These would become two of the major medical centers in southwest Persia, helping the area cope with epidemic diseases and the problems of the poor water quality. As for Dr. Young, within Persia he would become something of a legend in his own time."
But APOC’s legendary status did not rest with two hospitals and some clean water alone. After World War I, the company became the fourth largest oil producer after the United States, Russia, and Venezuela. Throughout the company’s initial jumps and starts, it had the support of an erstwhile “believer” who convinced parliament to endorse “coal’s upstart rival.” BP’s website proudly features Winston Chruchill’s instructions to his colleagues: “Look out upon the wide expanse of the oil regions of the world!” And look out they did; by 1914 the British government became a major shareholder in the company.
In 1933 Reza Shah, the authoritarian leader and founder of the short-lived but brutal Pahlavi dynasty, extended the original sixty-year concession to ninety years, scheduled to expire in 1993. Iran’s share in the profits of its own natural resources rose from sixteen to twenty percent. But APOC made some of its own adjustments. To accommodate Reza Shah’s and his project of forging an “Aryan” and “pure” nation, BP explains: “Persia changed its name to Iran in 1935, and to stay modern the company followed suit.” The good times abounded for the newly renamed Anglo-Iranian Oil Company. As Stephen Kinzer reminds us:
"Britain’s standard of living was supported by oil from Iran. British cars, trucks and buses ran on cheap Iranian oil. Factories throughout Britain were fueled by oil from Iran. The Royal Navy, which protected British power all over the world, powered its ships with Iranian oil."
In Iran, AIOC ran an autonomous territory, fully equipped with its own roads, airports, and security arrangements. “But,” in BP’s words, “the good times wouldn’t last much longer.” Mohammad Mosadegh, after his 1951 parliamentary election as prime minister, quickly ushered in a unanimously approved bill to nationalize Iran’s oil. AIOC’s reaction to nationalization was boycott and sanctions. The fall-out of Mossadegh’s anti-colonial endeavor was a military officer’s coup aided and abetted by the Central Intelligence Agency in August of 1953. The confluence of British interest and US intervention worked to overthrow Mossadegh and the bid for nationalization as well as reinstating the royal dictatorship. BP’s twentieth century behavior was to build alliances with authoritarian regimes and circumvent parliamentary and constitutional rule.
But we should not relegate the strategy of parliamentary circumvention to the dustbin of the last century just yet. Less than a year ago BP announced its takeover of the Ruamila oilfield in Iraq. BP and the Oil Ministry directly negotiated the energy deal, circumventing parliamentary approval. The British media hailed the move as “the first important energy deal since the 2003 invasion.” But, the Times article pointed out, there was uproar among local politicians who were haunted with “resentful memories of their nation’s colonial past.”
Iraqi MPs argued that the deal was illegal and that the constitution gave them, not the Oil Minister, the final say over the country’s vast resources. The article’s description of Iraqi critiques as “resentful memories” positions claims to constitutionalism and natural resources in the realm of the emotional as opposed to the rational. Indeed: “after years of stagnation, Iraq appears determined to exploit natural resources to fund infrastructure improvements.” Yet the fear is that “Iraq’s energy wealth could be creamed off by a corrupt elite.”
What better way to alleviate this fear of the elite, and Iraqi emotionalism, than assign BP as midwife of oil-induced development and progress? Set aside Iraqi claims to constitutionalism and natural resources and never mind BP’s colonial history in Iraq.
The Iraq Petroleum Company had received a concession to explore for oil in 1925. APOC, as it was called at that time, along with Royal Dutch/Shell, the Compagnie française des pétroles, and the Near East Development Corporation, each received about a quarter of the shares of the new company. IPC won a seventy-five year concession at the time and blocked the Iraqis out of any shares or ownership in the company—resentful memories, indeed.
For the last one hundred and two years, BP has mapped, consolidated, and controlled territory, aligned with authoritarian regimes, and consistently circumvented parliamentary rule in order to usurp natural resources. We can trace than a strong continuity in BP’s behavior. But there are ruptures too.
This last June, in the midst of the Gulf of Mexico drilling disaster, a BP project named “Liberty” was actively moving forward. Two factors facilitated this project to drill three miles off the coast of Alaska. First, federal regulators, in a shift from standard practice, allowed BP to author its environmental review, offering yet another example of the “dangerous coziness between industry and regulators.” Second, “Liberty” circumvented the Obama administration’s moratorium on offshore drilling. The project’s “onshore” status is a result of BP’s construction of an artificial island, “a 31 acre pile of gravel in about 22 feet of water,” to house “Liberty.” (BP is not alone in creating territory; several companies are now building artificial islands to facilitate offshore drilling).
BP continues to draw borders and lines around oil rich territory, as it did in the nineteenth and twentieth centuries. But it is now adding a new technology to its array of strategies: building territory in order to claim territory. Just as in 1935, the company is doing all it can “to stay modern,” promising collateral benefits from the Persian Gulf to the Gulf of Mexico and consistently delivering the sort of deep and irreparable damages that have the power to transgress historical divides.