The Turkish Petroleum Company (TPC) was established in 1912, mainly on the initiative of Calouste Gulbenkian, an Armenian-British oil-businessman and philanthropist. The 1920 San Remo Oil Agreement defined the shares in the TPC: the French Compagnie Française de Petrole (CFP) acquired a 25% share, The Anglo-Persian Oil Company (APOC) 47,5%, the Anglo Saxon Petroleum Co 22,5% and the remaining 5% Calouste Gulbenkian. Calouste Gulbenkian was later known as "Mr. Five Per Cent '' due to the 5% share in the TPC. Gulbenkian made sure that the Mosul oilfield, the world richest, ended up on the Iraqi side of the Turkish-Iraqi border (within the British Mandate region) which was ratified with the Mosul Treaty in 1926. In 1927, TPC discovered the first oil field Baba Gurgur near Kirkuk and on 15 October 1927, the first oil was struck. On 31 July 1928, the historic Red Line Agreement was signed. The 1928 agreement between BP, ExonMobil, Total, Esso and Royal Dutch-Shell defined a collaboration in a joint venture, the Turkish Petroleum Company and controlled the entire former Ottoman Empire in Asia (except Kuwait). Iraq did have ownership over its own oil, but received royalty payments at specified sums per ton. In 1929, the TPC was renamed the Iraq Petroleum Company (IPC). In 1934, the world's first oil pipeline opened going from Kirkuk to Al Hadithah and from there split to Tripolis and Haifa. In 1951, the Zubair field near Basra started its commercial production and in 1953, the super-giant Rumaila oil field was discovered.

"Mr. Five Per Cent" died in 1955 bequeathing his assets to Calouste Gulbenkian Foundation established in 1956. The foundation inherited his art collection, but also the majority of his investment portfolio and Pandi, the holding company through which Gulbenkian held his famous 5 per cent.  Pandi's Iraqi based revenues increased dramatically during the 1950s and the foundation started to undertake its cultural-humanitarian work together with Iraqi governmental bodies. Between 1957 and 1973 the Foundation supported several projects in Baghdad in art, education, health, science and social affairs. These projects included 250 construction grants such as for the National Museum of Modern Art (Gulbenkian Hall) opened in 1962, the sports complex Al Shaab Stadium inaugurated in 1966 and the headquarter of the Iraqi Plastic Artists Society's opened in 1966. 

After the 1958 revolution, when the Hashemite Monarchy was overthrown and Iraq became a republic, the new government with Abdul Kareem Qassim as Prime Minister performed several reforms. In September 1960, he invited leaders of the other oil producing countries to a conference in Baghdad where they formed the intergovernmental Organization of the Petroleum Exporting Countries (OPEC) in order to coordinate and unify petroleum policies among member countries. The five founding members were Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. In 1961, IPC's royalties to the state amounted 27% of the total national income, 45% of the government budget and about 90% of foreign exchange expenditure. Since 1958, oil outputs had increased by 60%, while the royalties to Baghdad had only increased by 40%. Qassim withdrew all unused oil producing areas, which was more than 90% of the original licence, including the distinguished Rumaila-Field in the south, and founded the Iraq National Oil Company (INOC).  

In 1969, meanwhile with the Baath Party in power, Iraq signed an Economic and Technical Cooperation Agreement with the Soviet Union and in 1972, the North Rumaila oil field was inaugurated, which was developed with the help of the Soviet Union.  In the same year, Saddam Hussein nationalised the assets and rights of IPC and founded the state-owned Iraq National Oil Company. "Arab oil for the Arabs' ' was one of the most popular slogans of the Saddam era. While Iraq received 600 million USD in royalties from the IPC in 1968, oil revenues in the mid-1970s amounted to 8,5 billion USD. By literally owning the state sector, the top officials of the Baath Party turned over immense sums of money and enriched themselves immensely during the years of the foreign exchange-induced economic boom. In 1980, there were more than 700 dollar (multi)-millionaires living in Iraq.

The war with Iran in the 1980s reduced Iraq's production and changed the pipeline map. The costs to Iraq's oil sector were severe: loss in oil sector GDP, destruction of infrastructure and many more. Iraq's attempts to rebuild were interrupted by the 1991 Gulf war, Operation Desert Storm, the sanctions and ended with the invasion of Iraq in 2003 led by the United States, the United Kingdom, Australia and Poland.  By 2003, the Iraqi oil industry was in desperate need of renovation and modernization.

This article was written by Hella Mewis and is licensed under CC BY-NC 4.0.