In 1957 , or three years after the signing of the consortium agreement , the first Iranian oil Bill passed into law , which allowed for the signing of agreements based on participation with foreign investors , outside the area where the consortium operated . The participation formula , which was an innovation at the time , triggered the dissatisfaction of major oil companies . They , however , gradually changed their attitude and found it a more proper approach to ensuring there continued cooperation with oil producing countries . Iranian participation agreements were 50:50 agreements . 50 percent of shares belonged to the National Iranian Oil Company and the remaining 50 percent went to one of several foreign companies . Foreign partner or partners paid 50 % of their 50 percent shares as tax to the government of Iran . As a result , those agreements came to be known as 75:25 agreements .Tax payment was revised later on and was raised to 85 % . Also , foreign partners were obliged to pay another 20 % as royalty to the National Iranian Oil Company ( NIOC ).