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The Nationalization of the Iraqi Petroleum Company

Published online by Cambridge University Press:  29 January 2009

Michael E. Brown
Michael E. Brown
Affiliation:
Cornell University, Ithaca, New York
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Extract

One of the more important developments in Iraq since the 1958 overthrow of the Hashemite monarchy was the nationalization of the Iraqi Petroleum Company on 1 June 1972. The nationalization of the IPC was the culmination of a long-standing power struggle between the IPC and the Iraqi government. This analysis is concerned with that power struggle and the consequent nationalization of the IPC.

Type
Articles
Information
International Journal of Middle East Studies , Volume 10 , Issue 1 , February 1979 , pp. 107 - 124
Copyright
Copyright © Cambridge University Press 1979

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References

Authors' Note: The author would like to thank Gabriel Sheffer, William Quandt, and Mary T. Mearsheimer for their comments and assistance on earlier draftsof this article.

1 Except when specified, IPC refers to the Iraqi Petroleum Company and its two wholly owned subsidiaries, the Mosul Petroleum Company (MPC) and the Basra Petroleum Company (BPC).

2 Qasim withdrew from the Baghdad Pact soon after seizing power.

3 Basra is on the Persian Gulf.

4 E.g., a 1956–1957 stoppage owing to the destruction of transit facilities in Syria.

5 Arab Report and Record (ARR), 17 07 1969.Google Scholar

6 Ibid., 25 September 1970.

7 Ibid., 23 July 1970.

8 Ibid., 24 July 1970, emphasis added.

9 Ibid., 14 October 1970, 27 October 1970.

10 Through 1971 one Iraqi dinar (I.D.) = U.S. $2.80. In 1972 one Iraqi dinar U.S. $3.04.

11 The demand to increase the tax rate from 50 to 55 per centwas part of an OPEC-wide strategy to increase governmental oil revenues. See Michael, E. Brown, John, J. Mearsheirner, and Walter, J. Petersen, “A Model of Cartel Formation” (Santa Monica, Calif.: Rand Corporation, 1976), Rand Corporation Paper number P-5708, pp. 20–28.Google Scholar

12 ARR, 7 06 1971.Google Scholar

13 Middle East Economic Survey (MEES), 7 01 1972.Google Scholar

14 Ibid., 4 February 1972, insert added.

15 Ibid., 19 May 1972.

16 This will be discussed in more detail below.

17 Ibid.

18 Ibid.

19 The INOC started production in April 1972; the IPC accounted for over 99 per cent of Iraq's oil production before that time.

20 George, W. Stocking, Middle EastOil (Nashville, Tenn.: Vanderbilt University Press, 1970), p. 272.Google Scholar

21 Middle East and North Africa (Yearbook) 1973–1974, p. 270.Google Scholar

22 The pipeline to Tripoli passed through Syria and it was also expounded.

23 Middle East and North Africa (Yearbook),1973–1974, p. 334. BPC production (in southern Iraq) was transported through the Persian Gulf and was unaffected by the Syrian stoppage.Google Scholar

24 ARR, 23 12 1966.Google Scholar

25 Ibid., 22 January 1967.

26 Ibid., 12 December 1966.

27 An additional 0.5 per cent of the original concession areawould have been returned to the IPC.

28 ARR, 23 01 1967.Google Scholar

29 Oil from southern Iraq was transported through the Persian Gulf and did not utilize the Syrian pipeline system.

30 According to the government.

31 Ibid., 18 February 1972.

32 Ibid., 7 January 1972.

33 Ibid., 14 May 1972.

34 Ibid.

35 Ibid.

36 Ibid., 4 June 1972.

37 Ibid., 25 December 1967.

38 Ibid., 2 June 1969, 4 July 1969.

39 Ibid., 30 August 1970.

40 Ibid., November 1970.

41 Ibid., 11 April 1971.

42 Ibid., 14 August 1971.

43 Foreign Broadcast Information Survey (FBIS), 11 04 1972.Google Scholar

44 Current Digest of the Soviet Press (CDSP) (Pravda), 5 04 1972.Google Scholar

45 FBIS, 11 04 1972, emphasis added.Google Scholar

46 The IPC cutbacks.

47 Ibid.

48 Ibid.

49 ARR, 1 06 1972.Google Scholar

50 These tankers were later purchased by Iraq.

51 Note the distinction between Rumaila crude and nationalized crude.

52 Hungary, Spain, Greece, Japan, Romania, Italy, Ceylon, Brazil, West Germany, and India offered to buy Iraqi nationalized crude.