William Fraser’s Announcement To Stockholders
| Arash Norouzi |
On December 16, 1954, following the Iran Oil Consortium Agreement of 1954, the Anglo-Iranian Oil Company (AIOC) changed its name to the British Petroleum Company Ltd (BP).
The following press release was placed in newspapers, publications like The Economist and oil trade publications around Dec. 23 through early Jan. 1955.
• Anglo-Iranian Oil Company (AIOC/BP) | Archive
• Iran Oil Consortium | Archive of Documents (1953-1954)
ANGLO-IRANIAN OIL COMPANY
LIMITED
NAME CHANGED TO
THE BRITISH PETROLEUM COMPANY LIMITED
CAPITAL INCREASE AND SCRIP ISSUE APPROVED
At an Extraordinary General Meeting of the Anglo-Iranian Oil Company Limited, held on December 16, in London, England, the proposed increase of capital and scrip issue and the change of the Company’s name to The British Petroleum Company Limited were unanimously approved.
Sir William Fraser, C.B.E., LL.D. (the Chairman), before putting the proposals to the meeting, in the course of his speech, said: —
First of all, certain adjustments will have to be made in the balance sheet as at December 31, 1954, of the parent company, and also in the consolidated balance sheet, arising from the settlement made in connection with our interests in Iran. The main differences on the Liabilities side will be the disappearance of the Special Contingencies Account; there will also be adjustments in Provision for Taxation. On the Assets side we shall be eliminating all those relating to our former interests in Iran. It is anticipated that all necessary adjustments can be effected without drawing on General Reserve Account.
As described in the statement posted to Stockholders on October 30, the Company is to receive, over a period of years, a net payment of £25,000,000 from the Iranian Government and, related to production, approximately £214,000,000 (at the current dollar exchange rate) from the other Companies participating in the Consortium as a result of the agreements recently concluded. It is intended that these sums should be utilised for the further development of our business, and it is reasonable to expect that they, together with depreciation provision, should go far towards meeting our future capital requirements.
It may be recalled that from 1946 onwards I have frequently stated that but for unusual circumstances larger dividends on the Ordinary Stock would have been warranted.
For the whole period from 1947 to 1953 £107,500,000 were allocated to General Reserve and £6,000,000 to Preference Stock Reserve, a total of £113,500,000, while during the same period the distribution to Ordinary Stockholders totalled £24,750,000. Total capital expenditure during the same period was over £340,000,000, largely financed from depreciation provision and amounts placed to reserve.
In 1953 our capital expenditure amounted to £75,000,000, and in the current year is about £55,000,000; the principal capital projects now in hand should shortly be completed, and during next year and for some time capital expenditure will, I expect, be on a smaller scale.
It should therefore be possible in future to distribute as dividends a larger proportion of the profits available. It would remind Stock holders that our profits depend on conditions prevailing throughout the entire industry and that the oil industry is liable to severe fluctuations from time to time. It is your Board’s intention in future to make any interim dividend payment larger in relation to the expected total annual payment than has been the case in exceptional circumstances of recent years.
I will only add that our profit margins this year are less than last, but with the increased quantity of our sales I expect that our earnings for 1954 will not greatly differ from those of 1953.
The new name proposed for the Company conforms with its overall operations and changed position in the Iranian Oil Industry. The Company’s main trade mark remains BP, as first adopted in 1921, and of recent years incorporated in the titles of most of our subsidiary and associated marketing companies.
Proposing a vote of thanks to the Chairman, Board and Staff, Sir Arthur Evans said: Had it not been for the patience exercised by the Board and the guidance given by the Chairman, I do not think we should have been meeting thus today. We wish to thank the Chairman, Board and Staff at home and overseas for splendid teamwork in unparalleled times.
Related links:
Sir William Fraser’s Statement on Oil Consortium To AIOC Stockholders | June 1954
Anglo-Persian Diplomatic Relations (Resumption) | December 7, 1953
Iran, Texas and Oil Imports | U.S. Congress, August 13, 1954
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