On 26 August 1951, the Allied troops invaded Iran from north and south under the pretext of the presence of German nations in Iran. Their main objective was to carry military personnel and munitions from southern Iran towards then Soviet Union. The Shah of Iran ordered the Army not to resist foreign troops which occupied Iran. The British government asked Reza Shah to expel the Germans while at the same time Adolf Hitler sent a letter to the Shah, praising Iran's neutrality in World War II. In an attempt to satisfy both sides, the Shah gave a vague response to Britain. He described German residents in Iran as civilians employed in industries. Having done so, the Shah refused to expel the Germans to curry favor with Hitler while satisfying the British. But since Iran was the key target of Allied forces, surprisingly Britain and the Soviet Union launched a simultaneous invasion of Iran to catch the country.

The British troops stepped into Iran's territory from Kermanshah, Khorramshahr and Abadan under the pretext of protecting oil equipment against possible German attacks. The Soviet forces crossed the Jolfa border and occupied Tabriz, and simultaneously, they embarked on maritime and air raids on Anzali Port off Caspian Sea to make advances towards Iran's capital.

The Russian and British troops arrived in the city of Qazvin together and Iran was gripped by Russia and Britain. From August 24 to 27, 1941, clashes broke out between ordinary people and service workers at the Abadan oil refinery and Indo-British troops, leaving several Iranian workers dead. Service workers at the Kermanshah oil refinery were stranded for three days on the site of the facility. On August 27, the Iranian government declared the end of resistance.

On 15 September 1941, Reza Shah abdicated. His son Mohammad Reza succeeded him before his departure of the capital.

AIOC Political Activists

After Reza Shah's abdication, Iranians had freedom to take part in political activities. A large number of political prisoners were released; banned newspapers resumed printing while political parties were revived. The "Tudeh Party" was one of the first parties that had taken shape amid instability in the country following the Allies' invasion of Iran. It was backed by Russia.

The formation of the "Tudeh Party" by Mostafa Fateh (a senior official of Anglo-Iranian Oil Company) was aimed at ending hostility between two longtime enemies, i.e. Soviet Communism and US-British Imperialism. The "Tudeh Party" started its cooperation with AIOC just after the time Iran was occupied, but it was alas short-lived.

The British government and AIOC initially threw their weight behind AIOC in order to not lag behind Russia.

The "Tudeh Party" was playing well into AIOC's hands to push ahead with its objectives including struggle for the nationalization of petroleum industry in Iran. By calling for demonstrations and general strikes, the "Tudeh Party" was buying time in favor of the British government.

Sadchikov in Tehran

Contrary to what the heads of Allied governments agreed in Tehran in 1942, including foreign troops' withdrawal from Iran six months after the end of WWII, Russia dishonored its pledge although other powers quit. The Russians knew quite well they would have to pull out of Iran soon; therefore, they were trying to leave a foothold in Iran.

In late 1944, following some negotiations with Iranian officials delegates from US oil companies attempted to win oil concession in Iran. The Russians also became active to win a toehold in Iran's oil sector, bidding for oil projects in northern Iran.

In December 1944, the National Consultative Assembly adopted legislation banning awarding concession to the foreigners who sought to win oil concession in Iran. But the Russians did not step back and they established the Azerbaijan Democratic Party to trigger unrest. This confrontation persisted until 25 January 1945 when Qavam came to power. A year later, the Iranian government filed a lawsuit with the UN Security Council against Russia. The Security Council called on the parties to the dispute to opt for negotiations as the solution to the dispute.

Qavam was seeking a remedy. In a bid to bring about détente and settle Iran-Russia discrepancies, he travelled to Moscow on 18 February1946. He stayed there for 17 days, holding talks with Stalin and Molotov. The Russian officials did not accept to disable the Azerbaijan Democratic Party and let Iran improve its politics and economy. Qavam tried his best to conquer the Russians' hearts; however, upon his return to Iran and the ensuing appointment of Ivan Sadchikov as Russia's ambassador to Tehran, negotiations were resumed. Finally on 4 April 1946, the talks came to fruition. It is noteworthy that the UN Security Council's call for Iran and Russia to reach agreement on one side, and US President Truman's threat to bring back the American troops to Iran on the other, were instrumental in the Russians' compromise.

Qavam-Sadchikov Mutual Promises

In return for ending its sabotage in Iran, the Russian government had demanded that Iran fulfill three obligations: Establishment of a local autonomous government in Azerbaijan, establishment of an Irano-Russian oil company (51% Russian, 49% Iranian) and non-discriminatory behavior vis-à-vis Russia in case of return of equilibrium to northern Iran.

In response to such excessive demands, Qavam had said that granting autonomy to Azerbaijan was anti-Constitutional and ran counter to Iran's territorial integrity. He had also said that Russia could keep its troops in Iran in case a third party decided to invade the Russian territory via Iran, and Iran could not counter such an aggression. By such promises, Qavam quenched the Russians' thirst for oil. The Russian troops left Azerbaijan, and general elections were held for the 15^th National Consultative Assembly. The new assembly gave its go-ahead to the signature of agreement with Russia, fulfilling their longtime wish for Iran's oil in the north.

Stalin had picked Sadchikov to prepare the ground for Iran oil concessions because he was assured of winning concession from Iran. Finally on 4 April 1946, a seven-point agreement was signed between Sadchikov and Qavam.

The government of the Shah of Iran agreed that the governments of Iran and the Soviet Union form a joint Soviet-Iranian company to explore oil and operate oil fields in northern Iran. The main conditions set out in the agreement were as follows:

- 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 Union side; for the second 25 years 50% of the stock will belong to the Iranian side and 50% to the Soviet Union side.

- Profits received by the company will be shared in accordance with the size of the shares of each side.

- The period of operation of the company is 50 years.

- 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.

An immediate outcome of this agreement was Russia's withdrawal of its troops from Iran up to 24 March 1946. From that date for seven months, the agreement on the establishment of the joint company was required to be submitted to the Assembly. In return for the Russians' withdrawal from Azerbaijan, Iran undertook to carry out some reforms in that province within the framework of the Constitution.

In March 1947, Sadchikov handed a copy of the 10-point agreement to Qavam to have it approved by parliament. That was when some differences of view emerged between Sadchikov and Qavam as the latter was determined to have the government endorse the agreement after parliamentary clearance. That was while Sadchikov insisted on the submission of the signed agreement to parliament for approval. Qavam dismissed Sadchikov's demand as illegal, seeing its acceptance as precarious. But Sadchikov was in Iran only to emerge as winner. In his last note to Qavam on September 15, he dismissed his arguments, recalling his government's insistence on the immediate implementation of the agreement.

Regardless of Sadchikov's remarks, Qavam passed the agreement over to parliament. After hearing the Prime Minister's report, the MPs proposed a single-clause article demanding that the Qavam-Sadchikov agreement be declared null and void.

The legislators heaped scorn on Qavam for the agreement. In an attempt to restore his prestige, Qavam embarked on a face-saving attempt and reminded the MPs of Iran's conditions before the agreement had been signed. He insisted that the agreement was in Iran's best interests. But the MPs rejected the agreement by 102 votes, out of 104, against the agreement. The other two MPs abstained. They shattered Russia's dream of winning a toehold in Iran's oil sector.

Courtesy of Iran Petroleum