Sadchikov expresses the Soviet government's interest in exploring a joint oil company using Northern Iranian oil.
April 4, 1946
Message from Prime Minister Ahmad Qavam to Ambassador Sadchikov About a Joint Oil Company
Letter of [Prime Minister Ahmad] Qavam to Sadchikov about a joint oil company
4 April 1946
In addition to the verbal discussions held between us, I have the honor to report to you that the government of His Majesty the Shah of Iran has agreed that the governments of Iran and the Soviet Union form a joint Soviet-Iranian company to explore and exploit oil fields in northern Iran in the following conditions:
1. For the first 25 years of operation of the company 49% of the stock will belong to the Iranian side and 51% to the Soviet side; for the second 25 years 50% of the stock will belong to the Iranian side and 50% to the Soviet side.
2. Profits received by the company will be shared in accordance with the size of the shares of each side.
3. The boundaries of the initial territory of the company intended for carrying out prospecting work will be those designated on a map which you handed me during a conversation on 24 March, with the exception of the part of the territory of western Azerbaijan situated along a line leading from the intersection of the Soviet, Turkish, and Iranian borders to the south along the eastern shore of Lake Rezaye, to the city of Miandub, as is additionally indicated on the above map of 4 April 1946; the Iranian government commits itself not to give the territory situated west of the designated line in a concession to either foreign companies, Iranian companies with foreign participation, or [those] using foreign capital.
4. The capital of the Iranian side will consist of the oil-bearing land mentioned in article 3 which, after conducting technical work, will have oil wells whose production will be used by the company. The capital of the Soviet side will consist of all the kinds of expenses, equipment, and wages of specialists and workers who will be needed to extract and process the oil.
5. The period of operation of the company is 50 years.
6. On cessation of the period of activity of the company the Iranian government will have the right to buy the shares of the Soviet side or extend the period of operation of the company.
Guarding of the region where prospecting work will be conducted, and [where] the oil wells and all the enterprises of the company [are to be located] will be conducted exclusively by Iranian security organs.
A treaty about the organization of a Soviet-Iranian oil company, which will be concluded later according to the text of this letter, will be presented for approval as soon as the new Majlis [Translator’s note: the Iranian parliament] begins its legislative activity, in any case no later than 7 months, counting from 24 March of this year.
Please accept, Mister Ambassador, expressions of my highest regard for you.
The Shah of Iran agrees to starting a Soviet-Iranian oil company using oil from Northern Iran. The letter contains Iran's conditions for this company and the promise that a treaty will soon follow this letter.
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