COMPANY MEETING
ANGLO-IRANIAN OIL COMPANY
SATISFACTORY RESULTS THE CHAIRMAN'S REPORT
THE 30th ordinary general meeting of the Anglo-Iranian Oil Co., Limited, was held on June 26th in London.
The Rt. Hon. Lord Cadman, G.C.M.G., D.Sc., LL.D. (the chairman) in the course of his speech, said : The profit for 1938 amounted to £6,109A77, a figure which has permitted us to recom- mend a final dividend of 15 per cent., making 20 per cent. for the year. In the circumstances of the period under review, I think you will agree that this result is satisfactory.
With regard to our operations, net production of crude oil from our fields in Iran amounted to 10,195,000 tons. We received 1,229,000 tons of crude from the Iraq Petroleum Co. and produced 1,320,000 tons from our own field at Naft ' The phases in the life of any individual oilfield—discovery, development, exploitation and decline—make it essential that fur- ther reserves in the form of new fields should be at hand. We are fortunately placed in this respect. Gach Saran, which I mentioned as a new discovery two years ago, is in the early stages of develop- ment. Drilling to define the extent of the field has continued actively throughout the year. Two wells have been drilled at Lali, zo miles north-west of Masjid-i-Sulaiman, and have produced large quantities of gas and a little oil. Drilling is continuing here and also on the Agha Jari/ Pazanun structure, where, in addition to high-pressure gas, crude oil was struck at 8,810 ft. in the Agha Jari section: This discovery fulfils the hope which I expressed last year that this structure might contain oil; and, in conjunction with other facts, it suggests that the field may be of major importance. I am glad to inform you that the surveys which I mentioned last year have been successful in finding a suitable site for a refinery and port near Bandar Mashur on the Khor Musa waterway. We have received permission from the Iranian Government to acquire the site, and plans for development are being prepared. OH. IN ENGLAND. We have constantly applied a policy of scientific investigation to the search for oil here. Every region which might have petroli- ferous possibilities was studied geologically, first by reference to available information, and later by surveys on the ground if closer examination was warranted. Wherever necessary we have sup- ported geological masoning by geophysical examination, and we have drilled in those regions alone where the cost of drilling was justified by scientifically established data. The outlook for our operations in Great Britain, those of the Scottish shale oil industry, has been improved by the guarantee for 12 years of a preference on home-produced light oils and road fuel oils. This has given a security which the industry has not had for many years and has enabled us to accelerate and expand the programme of construction. On the marketing side of the industry, prices of products were generally on a somewhat lower level than in 1937. A cause of this decline was to be found in the economic recession in the United States and in the accumulation of excessive stocks of motor spirit and fuel oil in that country. The effect of those factors, moreover, was aggravated by more widespread dislocations. It is common knowledge that, during 1937, all Governments were taking precautions against emergencies by creating stocks of petroleum products. These special purchases caused a temporary increase in offtake of crude and products, but the international uneasiness which gave rise to them was acting, meanwhile, as a brake on in- dustrial activities throughout the world. In consequence, sales of oil products in commercial markets were diminishing. For a time this trading decline in the oil industry was concealed by the special sales. When the latter ceased, however, the true trend became effective, and during 1938 world consumption of oil products fell below that of 1937. Developments such as these are bound to affect the trade of all companies. We gained, however, more than our proportionate share of the increase in 1937, and we succeeded in maintaining the volume of our sales in 1938. With regard to prospects for the future, the confidence which is essential to buoyant international trading conditions is absent. Moreover, large areas of the world are shut off from normal trade by policies of self-sufficiency, currency restriction, barter arrange- ments and other forms of economic manipulation. In common with all other concerns whose primary interest lies in freedom of international trade and stable conditions,. we must hope that the remainder of 1939 and the years that follow will witness a return to tranquillity. In the circumstances of today, the possibility of maintaining the volume of our sales during the remainder of the current year, and at what prices, are questions on which no one can speak with certainty. So far this year, prices are lower than they were for the same period of 1938. We all hope, however, that international and market conditions will improve. If they do, we are fully equipped to meet increased demands and to derive whatever benefit the level of prices will allow. The report was imanimously adopted.
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