Oil Is Discovered, and the Anglo-Persian Oil Company Is Born
A British concession that took seven years and half a million pounds to pay off
Quick facts
- D'Arcy Concession signed
- May 28, 1901
- Oil struck
- May 26, 1908, at Masjed Soleiman
- Anglo-Persian Oil Company founded
- April 14, 1909
- Concession term
- 60 years
What happened
In May 1901, the Qajar government granted British entrepreneur William Knox D'Arcy an exclusive 60-year concession to search for and produce petroleum across most of Persia, excluding five northern provinces bordering Russia, in exchange for 20,000 pounds sterling in cash, an equal sum in paid-up shares, and 16 percent of annual net profits. Drilling dragged on for years without success, and by early 1908, having sunk more than 500,000 pounds into the venture, D'Arcy's partners nearly abandoned the search entirely. On May 26, 1908, the drilling crew at Masjed Soleiman finally struck oil, with the well gushing more than 80 feet above the rig. On April 14, 1909, a new company, the Anglo-Persian Oil Company, was formed in London with 2 million pounds in capital to develop the find.
Why it matters
This was the first major oil discovery in the Middle East, and it created the commercial and political relationship between Britain and Iranian oil that would shape Iranian politics for the next half century, from the British government's 1914 acquisition of majority ownership in the company to secure fuel for the Royal Navy, through to the nationalization crisis and the 1953 coup decades later.
How we know
The D'Arcy concession survives as a signed legal document reproduced in full, and the 1908 oil strike and 1909 company formation are documented in contemporaneous petroleum industry records studied by historians of the oil industry.
Sources
- Mohammad Mossadegh Project (primary document text). The D'Arcy Concession: Text of 1901 Agreement on Iranian Oil · Primary source (author-declared)mohammadmossadegh.com · Cited as a "primary" source (no stronger domain match). · Link is live and its text matches the event's key terms (Jul 2026)
- American Association of Petroleum Geologists (AAPG Explorer). The First Oil Field in the Middle East · General sourceaapg.org · Cited as a "reference" source (no stronger domain match).
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