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The National Iranian Oil Company (NIOC) (Persian: شرکت ملّی نفت ایران, Sherkat Melli Naft'e Iran), a government-owned corporation under the direction of the Ministry of Petroleum of Iran, is an oil and natural gas producer and distributor headquartered in Tehran. It was established in 1948. NIOC ranks as the world's third largest oil company, after Saudi Arabia's state-owned Aramco. and Gazprom.
The NIOC is exclusively responsible for the exploration, extraction, transportation and exportation of crude oil, as well as sales of natural gas and liquefied natural gas (LNG). Having provided the domestic refineries and manufacturing plants with crude oil required for the petroleum products, the NIOC exports its surplus production according to commercial considerations in the framework of the quotas determined by the Organization of Petroleum Exporting Countries (OPEC) and at the prices prevalent in the international markets. The NIOC also signs some long term contracts on "buy-back" basis with foreign companies in order to exploit national oil fields and export its products. The NIOC exports natural gas and liquefied natural gas via the "National Iranian Gas Export Company".
NIOC's oil and gas reserves in early 2005 was as follows;
Recoverable liquid hydrocarbon reserves in early 2005, 136.99 billion barrels (21.780 km3) 10% of world's total.
Recoverable gas reserves in early 2005, 28.17×1012 m3 (15% of world's total).
Current NIOC production capacities include over 4 million barrels (640×103 m3) of crude oil and in excess of 500 million cubic meters of natural gas per day. In 2008, the average extraction cost of oil was less than $5 per barrel. This does not include processing (refining) and distribution costs.
Iran's cumulative oil production has reached to 61 billion barrels (9.7×109 m3) by the end of 2007, most of these volume produced after 1951, under the supervision of NIOC.
Iran's overall export crude oil was valued at US$85 billion in 2010.
In April 1951, the Majlis nationalised the Iranian oil industry by unanimous vote, and the National Iranian Oil Company (NIOC) was formed, displacing the AIOC. The AIOC withdrew its management from Iran, and organised an effective worldwide embargo of Iranian oil. The British government, which owned the AIOC, contested the nationalisation at the International Court of Justice at The Hague, but its complaint was dismissed.
By spring of 1953, incoming US President Dwight D. Eisenhower authorised the Central Intelligence Agency (CIA), to organise a coup against the Mossadeq government, known as the 1953 Iranian coup d'état. In August 1953, the coup brought pro-Western general Fazlollah Zahedi as the new PM, along with the return of the Shah Mohammad Reza Pahlavi from his brief exile in Italy to Iran. The anti-Mossadeq plan was orchestrated under the code-name 'Operation Ajax' by CIA, and 'Operation Boot' by SIS (MI6).
In 1954, the AIOC became the British Petroleum Company. The return of the shah did not mean that British Petroleum would be able to monopolise Iranian oil as before. Under the pressure from United States, British Petroleum reluctantly accepted membership in a consortium of companies, founded in October 1954, to bring back Iranian oil to the international market. It was incorporated in London as a holding company called 'Iranian Oil Participants Ltd' (IOP). The founding members of IOP included British Petroleum (40%), Gulf (later Chevron, 8%), Royal Dutch Shell (14%), and Compagnie Française des Pétroles (later Total S.A., 6%). The four Aramco partners - Standard Oil of California (SoCal, later Chevron) - Standard Oil of New Jersey (later Exxon, then ExxonMobil) - Standard Oil Co. of New York (later Mobil, then ExxonMobil) - Texaco (later Chevron) - each held a 8% stake in the holding company.
All IOP members acknowledged that NIOC owned the oil and facilities in Iran, and IOP's role was to operate and manage on behalf of NIOC. To facilitate that, IOP established two operating entities incorporated in Netherlands, and both were delegated to NIOC. Similar to the Saudi-Aramco "50/50" agreement of 1950, the consortium agreed to share profits on a 50--50 basis with Iran, "but not to open its books to Iranian auditors or to allow Iranians onto its board of directors." The negotiations leading to the creation of the consortium, during 1954-55, was considered as a feat of skillful diplomacy.
In Iran, IOP continued to operate until the Islamic Revolution in 1979. The new regime of Ayatollah Khomeini confiscated all of the company's assets in Iran. According to the company's Web site: