Post-war – 1946-1970

Like many companies, Anglo-Iranian, which would later become BP, lost a lot in World War II. But like many companies, it also gained the resolve it needed to keep moving forward

As Europe rebuilt so did Anglo-Iranian, investing in refineries in France, Germany and Italy plus new marketing efforts in Switzerland, Greece, Scandinavia and the Netherlands. BP gasoline went on sale for the first time in New Zealand.

But this fragile new stability would soon be shattered by political crises in the oil-rich Middle East, with tremors that would shake the ‘Iranian’ right out of Anglo-Iranian’s company name.

An era ends, an era begins

William D’Arcy’s hunch that the Middle East might be an overlooked gold mine for oil had transformed the region, giving previously impoverished countries new income and political influence.

But was that enough? Nationalists throughout the Middle East angrily questioned Western companies’ right to profit from Middle Eastern resources. With Britain’s imperial hold on the region rapidly unravelling, Anti-British sentiment escalated especially.

Among the nationalists, Iran’s prime minister spoke vehemently against Anglo-Iranian’s presence in Iran. In 1951 he convinced the Iranian Parliament to nationalize oil operations within the country’s borders.

Women and children had already evacuated. The refinery creaked to a stop and was shut. Three months later, all political debate exhausted, the last of Anglo-Iranian’s expatriate employees boarded a cruise ship and were gone.

An impasse followed. Governments around the world boycotted Iranian oil. Within 18 months, the Iranian economy was in ruins. Mobs in the streets demanded the prime minister’s resignation. When the parties returned to the table, they hashed out a new arrangement allowing a consortium of companies, including Standard Oil of Indiana (Amoco) and others, to run the oil operations in Iran. Anglo-Iranian’s stake was 40%.

The gentlemen’s agreement between the former Shah of Persia and William D’Arcy had run its course. In 1954, the board changed the company’s name to The British Petroleum Company.

New finds in some unexpected places

By the 1960s the technology of oil exploration had come a long way. It was still, however, a time-consuming and inexact science. Malta looked promising, but had nothing. Australia? Very little. Papua New Guinea? Well… no. Expeditions in Abu Dhabi, Nigeria and Libya were all more successful. The company had looked for oil in the UK for nearly 50 years without a single large discovery. Then in 1964 the United Nations extended countries’ rights over territorial waters.

The following year, BP found natural gas in the southern North Sea, enough to power a medium-sized city.

Sea Gem – a pioneer of North Sea oil and gas

After searching for almost half a century for a major source of British home-grown hydrocarbons, BP found success in the winter of 1965 with the Sea Gem – the company’s first offshore drilling rig in the North Sea. 

A pioneer of what would become a major industry and one of the greatest economic success stories in UK history, Sea Gem and its crew discovered the UK’s first commercial source of natural gas at West Sole Block in 48/6, some 40 miles east of the Humber estuary. 

The rig was completed and towed out from Smith’s Docks, Middlesborough, in May 1965 and successfully spudded the first of two planned wells on 5 June 1965. By September 1965 gas had been produced but was not thought to be significant until December’s final test of this first well, when BP reported that Sea Gem was drilling at close to 10,000 feet and flowing at more than 10 million cubic feet a day.  

Tragically, just over six months after it spudded that first well and only weeks after confirming the historic discovery, the Sea Gem became the North Sea’s first major oil rig disaster. On 27 December 1965 during a moving operation to its second well site, the Sea Gem capsized and sank plunging the crew into the icy cold waters of the North Sea, only two days after they had celebrated Christmas. 

By chance, a British cargo ship, the m.v. Baltrover, was in the area and following unsuccessful attempts to contact the Sea Gem by radio, the crew alerted Humber Radio, triggering the launch of the Humber lifeboat. 

Meanwhile the Baltrover launched a lifeboat of its own, and almost four hours after the collapse, the Baltrover and a helicopter had rescued most of the crew. 

On completion of rescue operations, it was found that of the 32 men aboard the Sea Gem at the time of the accident, five were dead and eight were missing. The Baltrover landed at Hull that evening. Of the 19 men that were rescued, one sadly passed away in hospital a few days later.

Many engineering and safety lessons were learned from the Sea Gem tragedy which led to critical changes in the UK oil and gas industry. 

BP taps into largest oil reservoirs ever found in North America

A far bigger find awaited in Alaska, where in 1968, after a decade of drilling dry wells along the North Slope, BP was on the verge of abandoning its search. The equipment was already packed up and awaiting shipment when a rival consortium made a suspiciously extravagant offer for BP’s Alaska acreage along the edges of Prudhoe Bay. Atlantic Richfield (ARCO) and Humble Oil (Exxon) weren’t telling, but they had struck oil in their own last-chance well in the centre of the Prudhoe Bay structure.

BP got back to the search and in 1969 tapped into its share of the largest oil reservoirs ever found on the North American continent.

Movement in British waters

Back in the UK, offshore exploration had moved dutifully from the English Channel into the North Sea, although hardly anyone, even within BP, believed oil would be found. “There won’t be oil there,” Sir Eric Drake, BP’s chairman, told Reuters in April 1970. Six months later, crews found the Forties field, which could produce 400,000 barrels of crude oil a day.