A few months after the masjid-e-Soleiman oil discovery , the Burma Oil Company , the Concessions Syndicates Ltd. , and Lord Strathcona , a British financier , established the Anglo -Persian Oil Company . All of D’Arcy’s concessionary rights were transferred to this new company , and D’Arcy himself , became member of its board of directors . The , steps had to be taken for the production and export of oil . It was decided that oil should be transferred to Abadan , where a refinery was to be built . Tankers were to lift oil products from there . A 138-mile long pipeline was to be constructed for the transportation of oil to Abadan . Storage and loading facilities , were also planned for construction . Sheikh Khazal , ruler of Khorramshahr who had longstanding ties with Britain’s diplomatic representative in the Persian Gulf placed the land required for the refinery , at the disposal of the company . Based on an agreement , in addition to an annual lease , the Sheikh was to receive a loan of 10 thousand pounds . The British diplomatic representative also assured the Sheikh and his family , of his respective government’s support and protection .
It was evident that the company was strengthening its position on the basis of British diplomatic officials’ influence , completely neglecting the central government of Iran .The company’s arrangements with Bakhtiari Tribal heads and Sheikh Khazal were examples of such measures that continued until Reza Shah’s government took full control and suppressed the Sheikhs and tribal heads . This working style was abandoned throughout the fifteen-year period that Reza Shah was in power . But after 25th August 1941 when the British military forces entered Iran , that same approach resumed more vigorously .