Taimoortash , the powerful court minister was appointed by the government to negotiate with the company . The government wanted an arrangement on the basis of which Iran could own 25% of the company’s shares , a two Shillings royalty per ton of oil produced , the return to Iran of ¾ of the concession area , payment of tax by the company according to the Iranian taxation rules and recognition of Iran’s rights in all company operations even after the termination of the terms of concession . Once those conditions were accepted , the government was ready to extend the agreement for another 20 years period . Negotiations continued until 1931 . In that year , Iran’s oil revenues plunged to 300 thousand pounds or a quarter of its income of 1,28 million pounds in the previous year . The company blamed global recession for the fall in revenues , but Reza Shah who was unhappy with lengthy negotiations and repeated company pretexts , lost control , got hold of the oil files and threw them in the heater to burn .He then ordered his ministers to abolish the D’Arcy concession . The company was immediately informed of the Shah’s instructions and the parliament ( majlis ), in its 10th session confirmed his decision .
IN the strongly-worded memo , the British government voiced objection to the action taken by Iran . Several warships were dispatched to the Persian Gulf , and a complaint filed with the League of Nations – The antecedent of the present United Nations . The Security council of which , however , advised the two sides to find amicable solution to their problem through negotiations .
Iranian officials and company representatives held their talks first in Europe and then in Tehran until the 24th of April 1933 . They reached agreement on all matters , except the renewal of D’Arcy Concession , which was to terminate in 1951 , but one of the British , insisted that it should be extended for another 30 years . Finally the Shah himself intervened , and a new agreement was inked , which included the much Britishly desired extension to the concession.