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National Iranian Oil Company

NIOC is the second largest oil company in the world. It is owned by the government of Iran and was founded in 1948. Net revenue in 2009 was $78 billion. NIOC is a member of OPEC. It is headquartered in Tehran, Iran.


The NIOC got its start as the Anglo Persian Oil Company in 1908. The APOC was the first company to extract petroleum from the Middle East. In 1935 it was renamed the Anglo Iranian Oil Company and in 1954 it became the British Petroleum Company, one of the antecedents of BP.

Due to poor negotiations, the AIOC was able to exploit the Iranian government in a 1933 agreement that basically gave the company complete control over all oil in Iran. The agreement was so uni-directional that in 1947, when the AIOC reported profits of £40 million, Iran received only £7 million. Wages for the average Iranian worker were 50¢ per day and there was no vacation pay, sick leave, or disability compensation.

The 1933 agreement was one of the direct causes of the 1951 coup mounted by then Prime Minister Mohammed Mossadegh. Initially, the U.S. government was reluctant to become involved in Iran even though British interests were asking for assistance and the U.S. government needed British help in the Korean War. As Mossadegh gained power throughout 1952 and early 1953, U.S. and British governments decided that the “communist” leanings of Mossadegh presented reason enough to remove him from power.

Immediately following the coup, Iranian oil was divided up among a consortium of foreign countries. The AIOC was given a 40% share, American companies split a 40% share, and Royal Dutch Shell and Total were granted a 10% share each. The consortium agreed to a 50/50 profit sharing plan with Iran. In 1954, the Islamic revolution nullified the Consortium agreement and took control of all oil in Iran.

Holdings and Industry Segment

As of 2006, the NIOC had recoverable reserves of 138 billion barrels of oil, a number that has since been upgraded to 300 billion barrels. It controls 40 total producing fields and is involved in all five industry segments.

Production capacity is 4 million barrels of crude and 500 million cubic meters of natural gas per day. Its total cumulative oil production reached 61 million barrels in 2007. NIOC accounts for 5% of the world’s oil production.

NIOC has heavy investments in petrochemicals and fertilizer. Iran plans to invest $200 billion through 2025 in this segment of its industry.


Revenue from NIOC is very difficult to ascertain. Estimates in 2009 concluded that net revenue was $78 billion. It is estimated that 60% of total government revenue is from oil. Iranian officials estimate that total oil and natural gas revenues could reach $250 billion per year by 2015.


In 2011, an oil spill that resulted from damage to a corroded pipeline resulted in a 25 km-long oil slick off of Iran’s Gulf Shore. The spill took 2 months to clean up, even though the problem was corrected within a day.