The Iraq Petroleum Company (IPC), formerly known as the Turkish Petroleum Company (TPC), is an oil company that had a virtual monopoly on all oil exploration and production in Iraq between 1925 and 1961. It is jointly owned by some of the world's largest oil companies and headquartered in London, England. However, today it is only a paper entity with historical rights and plays no part in the modern development of Middle Eastern oil.
In June 1972, the Ba'athist government in Iraq nationalized the IPC, and its operations were taken over by the Iraq National Oil Company. The company "Iraq Petroleum Company" still remains extant, although only in paper form. One associated company – the Abu Dhabi Petroleum Company (ADPC, formerly Petroleum Development (Trucial Coast) Ltd) – also continues with its original shareholding intact.
The related Iraq Petroleum Group was an association of companies that played a major role in the discovery and development of oil resources in areas of the Middle East outside Iraq.
History
Turkish Petroleum Company
The forerunner of the Iraq Petroleum Company (IPC) was the Turkish Petroleum Company (TPC), which grew out of the growing belief, in the late 19th century, that Mesopotamia (Iraq and parts of Syria) contained substantial reservoirs of oil.
Since Mesopotamia was an Ottoman possession, early negotiations for an oil concession centered in the empire's capital, Constantinople. The first interest was shown by Imperial German banks and companies, already involved in building the Berlin-Baghdad railway. In 1911, in an attempt to bring together the competing British and German interests in the region, a British company known as African and Eastern Concession Ltd, was formed.
In 1912, this company became the Turkish Petroleum Company (TPC), formed with the purpose of acquiring concessions from the Ottoman Empire to explore for oil in Mesopotamia. The owners were a group of large European companies – Deutsche Bank, the Anglo Saxon Oil Company (a subsidiary of Royal Dutch Shell), the National Bank of Turkey (a British concern) – and Armenian businessman Calouste Gulbenkian. The driving force behind its creation was Gulbenkian, and the largest single shareholder was the British government-controlled Anglo-Persian Oil Company, which by 1914 held 50% of the shares. TPC received a promise of a concession from the Ottoman government, but the outbreak of World War I in 1914 stopped all exploration plans.
Deutsche Bank brought a concession granted to the Anatolian Railway Company to explore for minerals and oil along a -wide strip on either side of its proposed railway in Mesopotamia. On 28 June 1914, the Turkish grand vizier confirmed the promise of a concession to TPC, but the outbreak of World War I ended TPC's plans.
When the Ottoman Empire was broken up in the aftermath of the war, the question of shareholding in TPC became a major issue at the 1920 San Remo conference, where the future of all non-Turkish and Arab-majority areas of the former Ottoman Empire were mostly decided. A rising demand for petroleum during the war had demonstrated to the big powers the importance of having their own sources of oil. Since one of the original partners of TPC had been German, the French demanded this share as the spoils of war. This was agreed upon by the San Remo Oil Agreement, much to the annoyance of the Americans, who felt excluded from Middle Eastern oil and demanded an "open door". After prolonged and sometimes sharp diplomatic exchanges, U.S. oil companies were permitted to buy into the TPC, but it would take several years until the negotiations were completed.
Oil found in 1927
TPC obtained a concession to explore for oil in 1925, in return for a promise that the Iraqi government would receive a royalty for every ton of oil extracted, but linked to the oil companies' profits and not payable for the first 20 years. The concession required the company to select 24 rectangular plots of each for drilling operations. During the 1925/6 season, an international geological party, comprising representatives of the shareholding companies together with an American contingent, conducted a wide-ranging survey of Iraq. Two wells were selected for drilling at Pulkanah and one each at Khashm al Ahmar, Injanah and Qaiyarah. Kirkuk was included as the sixth location. The well at Baba Gurgur was located by geologist J.M. Muir just north of Kirkuk. Drilling started, and in the early hours of 14 October 1927 oil was struck. Many tons of oil were spilled before the gushing well was brought under control, and the oil field soon proved to be extensive.