Chapter 140: The Company Line

Tehran

5 September 1950

Nehru called on the British Ambassador that morning. Sir Francis Shepherd received him with great courtesy in the Embassy’s tall, cool drawing-room, listened for twenty minutes to a gentle, well-argued plea that the Company consider an equal division of profits, and answered with the formula the Foreign Office had been using since the spring.

The Concession was a freely negotiated contract. The Supplemental Agreement was a generous improvement. Iran’s remedy lay in the Majlis. Sir Francis was sure the Indian Foreign Minister would appreciate that Britain could not discuss the commercial arrangements of a private company with a third government.

Nehru came back to the hotel pale and very quiet, and said only, "He has been told what to say, and he says it beautifully."

Ram went to the Company’s offices alone, with Shroff and K.P.S. Menon. He had decided in the car that he would raise nothing that sounded like a demand.

The Anglo-Iranian Oil Company offices,

Tehran

Lord Strathalmond had flown in from London the night before. He received them in a handsome, over-furnished office with a view of the Company’s private garden. Eric Drake, the General Manager for Iran, sat on his right, a thin, tired, correct man in a grey suit. Sir William Fraser sat on his left. A secretary took notes.

"Prime Minister," Strathalmond said. "I am glad to see you in Tehran. The Company has always valued the interest of its Indian shareholders."

"I am a very junior one, Lord Strathalmond. Burmah’s holding carries the nomination of a director, and I should like to know the Company I have nominated to."

"I understand you called upon Dr. Mossadegh yesterday."

"Mr. Nehru and I paid a courtesy call. He is a leader of the Majlis, and it would have been strange to visit Tehran and ignore him."

"He is a demagogue, Prime Minister."

"He is a man who speaks a great deal about your contract," Ram said mildly. "I thought it prudent to hear what he says. A shareholder who does not read the opposition’s pamphlets is not reading his risks."

Strathalmond’s mouth tightened, but he said nothing.

"I have three matters, Lord Strathalmond, and none is a complaint. The first concerns the contract itself."

"The Concession of 1933 is not open to discussion."

"I do not propose to discuss it. I propose to ask a question, as a holder of a fifth of your equity." Ram opened a folder. "In 1949 the Company earned about sixty-one million pounds. Iran received sixteen million in royalties. The British Treasury, through taxation and its fifty-six per cent holding, took a good deal more. Meanwhile, in Saudi Arabia, Aramco is negotiating a division of profits on a fifty-fifty basis. I am told the American Government has encouraged it. I should like to know what the Company’s plan is if the Majlis rejects the Supplemental Agreement."

"The Majlis will accept it in time."

"And if it does not?"

"Then the existing Concession stands, as it has stood for seventeen years."

"For a shareholder, Lord Strathalmond, that is the heart of the matter." Ram kept his voice even. "A concession that stands only so long as the other party is too weak to repudiate it as an asset with a hidden maturity date. I should be failing in my duty to the Government of India’s investment if I did not ask whether the Company has considered offering fifty-fifty itself, before it is demanded. A gift is cheaper than a surrender, and it lasts longer."

Drake glanced at Strathalmond. Fraser put down his pen.

"The Company’s position," Strathalmond said, with great control, "has been conveyed to the Foreign Office. It is not one we propose to change. I must say that I find it curious to hear the sanctity of contract questioned by a man who invoked it so effectively against His Majesty’s Treasury in the spring."

"I am not questioning it, Lord Strathalmond. I am asking how long it will hold." Ram closed the folder. "I see I have not persuaded you. I should only like it recorded that a shareholder said it, in a civil voice, in good time."

"It will be recorded," Fraser said drily.

"The second matter is a commercial one, and I hope a more welcome one." Ram turned a page. "India imports about sixty per cent of her refined fuel from Abadan, Bahrain and Kuwait, and the Visakhapatnam refinery will need crude from next year. The Government of India would like to enter a long-term contract with the Company for three million tons of crude a year, delivered at Abadan, at the Company’s posted price less the usual volume discount. We would charter our own tankers. It is a good customer’s request, and I think a profitable one."

For the first time, something like warmth crossed Strathalmond’s face. This was a language he understood.

"The Company is always glad to sell, Prime Minister. Three million tons is a considerable commitment. The sales department would wish to discuss price and duration."

"I should be glad to leave it to Mr. Shroff."

"I shall be pleased," said Shroff, with a small bow.

"And the third?"

"A pipeline." Ram laid a sheet of paper on the desk, a rough sketch of the Gulf, the Makran coast, and Karachi. "The Company ships all its crude by sea from Abadan. A line from the Khuzestan fields across southern Iran and the Makran to a port on the Indian coast would shorten the haul to our refineries, avoid the Straits of Hormuz, and give the Company a second outlet if the Gulf were ever closed. I do not ask the Company to build it. I ask whether it would join a survey. India would bear the cost."

Strathalmond looked at the sketch for some time.

"The Company has examined pipelines to the Mediterranean, Prime Minister. It has never seriously considered one to the east. The distance is over twelve hundred miles, through country with no roads. I cannot say it has any commercial interest."

"Not at present."

"And Iranian territory would be crossed."

"With Iranian consent, which I should seek separately."

"That is a matter for the board, and the board will not meet until the Majlis has voted on the Supplemental Agreement." Strathalmond pushed the paper back an inch. "I do not say no. I say not now."

"I understand perfectly."

"Is there anything else?"

"One small favour." Ram smiled slightly. "I have never seen an oilfield. My training is in chemistry, not geology, and I should like to see how your wells are worked, and how the crude is gathered and stabilised. I should particularly like to see the field installations at Agha Jari and Masjed Soleyman, and the refinery at Abadan. I am told one can see the fires for forty miles at night. A man who owns a fifth of a thing ought to look at it."

Drake blinked, and then, as a man will when asked for a favour that costs nothing, he looked relieved. "The Company would be honoured, Prime Minister. I shall arrange a Dakota for tomorrow."

"You are very kind."

Strathalmond rose, which ended it. At the door, he held Ram’s hand for a moment longer than courtesy required.

"Prime Minister. I shall say one thing, as one businessman to another. I admire what you have done in India. I do not think you will find that Tehran resembles Delhi. The men who talk loudest here are not always those who decide."

"That is true everywhere, Lord Strathalmond."

"Then you will understand why I should prefer to wait."

"I understand that very well," Ram said, and he did.

In the car, Shroff leaned across and said quietly, "You did not mention the gas."

"No."

"You will not?"

"Not here, and not now." Ram looked out of the window at the plane trees. "I have just asked a man to improve a contract by half. If I follow it in the same week by asking to take what he burns, he will conclude that I am a thief with a plan. Mossadegh has already half concluded it. The gas has waited forty years. It can wait until the English and the Majlis have settled their quarrel, or have failed to."

"And if they fail?"

"Then it will not be ours to buy, and I shall have lost nothing but a few months." He was silent for a moment. "I should still like to see the fires."

Agha Jari and Abadan

6 September 1950

They flew down in the Company’s Dakota in the morning, across the red-brown plateau and the long white salt flats. Drake sat at the front with a map on his knee and pointed out the fields as they passed: Masjed Soleyman, where oil had first been struck in 1908, and Haft Kel, and Gach Saran in the far hills. He spoke in the dry, even voice of a man who loved the country and did not expect anyone to believe it.

At Agha Jari they landed on a gravel strip beside a cluster of silver tanks and low sheds. The heat struck them like a hand. A Company engineer in khaki shorts, a sunburnt Scot named Robertson, led them across the desert in a lorry to the wells. There were forty of them in sight, each a small knot of valves and pipes at the head of a steel casing, each connected by a buried line to a separator station a mile away. Oil rose from the ground under its own pressure, bubbling and hissing as it fell into the separator, where the gas came out and went up a pipe.

"That is the gas line," Robertson said cheerfully. "It goes to the stack."

The stack stood at the edge of the station, a tall steel chimney with a ring of white heat shimmering at its crown. Even in the daylight, a pale flame stood in the air, a flat tongue of orange as long as a bus. The sound was a continuous low roar, like a train that never arrived.

Ram walked to within fifty yards and stopped. The heat on his face was like a furnace door. A dozen sparrows, which had somehow made a nest in a gantry nearby, flitted in and out of the shimmer.

"How long has it burned?" he asked.

"Since the field opened, sir. Nineteen thirteen, give or take."

"How much?"

"We don’t measure it, sir." Robertson shrugged. "There’s no point. Nobody wants it."

"Not metered," Ram said, half to himself.

"Beg pardon?"

"Nothing. It is a very fine installation."

He stood a little longer, watching the flame. Shroff, beside him, had taken out a handkerchief and was mopping his face with an expression Ram recognised. It was the look he wore when a ledger refused to balance. K.P.S. Menon, a few paces behind, was watching Ram, not the flame.

Robertson took them to a derrick, a wellhead, a pump station, a laboratory where a young Iranian chemist in a white coat explained the testing of crude samples with obvious pride. Ram asked about the viscosity of the oil, the pressure of the reservoir, the depth of the wells. He asked nothing more about the gas. At noon, they ate a plain lunch in the Company’s mess, under a ceiling fan that stirred the hot air without cooling it, and Drake, who had been quietly watching Ram all morning, said, in a low voice, "Prime Minister, you ask very good questions."

"I ask the questions of a man who does not know."

"The Company’s own directors rarely come here."

"I think they should."

"I have said so for years." Drake looked at his plate. "I will say one thing more, and I do not say it as the Company’s manager. The men who work in these fields are mostly Iranian. They are paid less than their British colleagues, they live in worse houses, and they are not promoted past the grade of foreman. I have written to London about it eleven times. I should be glad if someone else asked."

Ram met his eyes. "I shall remember it."

"I do not ask you to do anything."

"I know," Ram said.

They reached Abadan at dusk. The Dakota came in low over the Shatt al-Arab, and the river lay below them, black and shining, with the refinery spread along its western bank like a city of steel. Ram looked down at its pipes and towers and tank farms, at the ranked chimneys, the long jetties with their moored tankers, and thought of the little plot plan on the drafting table in Bangalore. Three million tons a year. This does twenty-five.

Then the sun went down, and the fires came out.

They stood along the horizon, to north and east and south, as far as he could see: tall, wavering columns of orange; each one miles from the next, each one burning against the dark. They lit the underside of the smoke. They lit the river. Over the flat land they made a ring, so that the whole of Khuzestan seemed to be encircled by a slow, silent conflagration. The pilot, in a voice hoarse with familiarity, said, "That’s Gach Saran, sir, and that’s Agha Jari, and that one, that’s Haft Kel. You can see them from forty miles at night. The old hands say it’s the only place on earth where you can read a newspaper at midnight in the open desert."

Nehru had come forward and stood at the window beside Ram. He said nothing for some time.

"I have always known it in the abstract," he said at last. "The waste. I had not thought it would look like this."

"What does it look like?"

"A burning crown," Nehru said. "With nothing inside it."

Shroff came up on Ram’s other side and pressed his forehead against the glass. He spoke very low, so that Drake, in the cockpit doorway, could not hear. "Prime Minister, I am a financier, and I should like to say that what I see out there is somewhere between fifty and a hundred million rupees a year, if Dr. Brandt’s figures are right."

"They are right."

"And you are not going to touch it."

"Not yet."

"It is the most offensive thing I have ever seen," Shroff said, with feeling, and withdrew his forehead from the glass.

Ram did not answer. He was looking at the fires, and thinking of an old man in pyjamas who had wept in front of him, and of a Company that had said not now with a courtesy that was worse than a refusal. He had come to Iran to buy something. He was leaving with a promise of crude, a map nobody would sign, and an uncomfortable certainty that the very thing he wanted was tied, by invisible threads, to a quarrel he could not mend. If the two sides came to terms, the gas would be his for the asking. If they did not, it would be burning still, and he would not be the one to take it.

The Dakota banked over the river and began its descent. Below them, the fires burned on.

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