890g.6363 T 84/184
The President of the Standard Oil Company of New Jersey (W. C. Teagle) to the Chief of the Division of Near Eastern Affairs, Department of State (Dulles)
[Received December 1.]
Dear Mr. Dulles: The following are two cables just received late this afternoon from Mr. Wellman:
“Procedure now agreed on by all groups is:
- 1st:
- Turkish Petroleum Company Anglo-Persian Oil Co., Ltd. and Americans will enter into one contract which I am initialing whereby [Page 237] open door plan is adopted and 10% free oil will be delivered by Turkish Petroleum Company to Anglo-Persian Oil Company Limited as nominee of American Group in consideration its support and cooperation at Bagdad and as shareholders and further 23¾% of Turkish Petroleum Company share will be transferred to American group by Anglo-Persian Oil Company, Limited after concession is granted. 10% free oil is limited to 24 areas to be selected by Turkish Petroleum Company under open door plan.
- 2nd:
- Supplementary agreement likewise being initialled to be signed by all groups including Anglo-Persian Oil Co. Ltd. whereby in the event of invalidity above mentioned royalty contract four groups will pro rata to their holdings of voting shares buy 9½% oil from Turkish Petroleum Company and deliver same freely to Anglo-Persian Oil Co. Ltd. and this obligation attaches only to voting shares so that holder may by transferring its shares to Anglo-Persian Oil Co. Ltd. free of cost be released from this contract. Separate contracts will provide that article 10 foreign office agreement is to be cancelled thus leaving all groups free as far as former Turkey in Asia is concerned except Mosul and Bagdad as bounded prior to the war this being area of existing claim of Turkish Petroleum Co. and in addition whatever other territory comes under Irak Convention. As to Mosul in Turkey, if any we have made our participation conditional upon acceptance for purpose Anglo-Persian Oil Co. Ltd. and N. Gulbenkian royalty and of self denying ordinances that either first Irak Convention must apply to such part Mosul or second that Turkish Petroleum Company shall obtain from Turkey by virtue of its existing claim concession not worse as to royalty than proposed Irak Convention and if higher royalty necessary then Anglo-Persian Oil Co. Ltd to assume excess with regard to its 10% free oil and further if Turkey rejects claim and will grant concession 4 groups they are to take it and operate it on equal terms through another corporation and finally if Turkey unwilling to grant such joint concession all groups to be free to act individually. Both these agreements are void if Irak concession not granted by December 31st, 1925. Provision is also to be made for equal groups voting rights under first agreement and also for transfer of additional 1¼% shares and for putting working agreement into effect if and when N. Gulbenkian settlement made. Now planned that Turkish Petroleum Co. directors shall authorize first contract next Tuesday and that four groups shall thereafter sign second contract. Meantime French group now expected to agree settlement N. Gulbenkian on the basis of 1 shilling per ton whereupon discussion with N. Gulbenkian will be resumed. Pressure for early granting of concession seems to be relieved and Keeling advises that concession will not be granted before Dec. 15th. M. Piesse concurs in foregoing procedure. Guy Wellman has arranged to sail Dec. 9th Majestic please advise his office.”
“Other groups urge American group to become participant in Turkish Petroleum Co. and to agree to take shares as soon as same are available even though Irak concession shall not have been granted. In view of previous position American group on this point please telegraph me whether or not it can now make such an agreement.”
To the second cablegram, we have replied this afternoon as follows:
“Have called meeting of American Group for Monday afternoon. It is my understanding that American Group can not safely agree to take Turkish Petroleum Company shares before Irak concession is granted because of attitude State Department which requires that its open door policy shall be definitely realized through actual grant of proposed concession permitting open door plan before American Group can take its shares in company.”
We have called a meeting of the American Group to discuss the same on Monday next, at two o’clock. I shall greatly appreciate it if you will call me on the telephone on Monday morning in the event of your having any comments or suggestions to make in connection therewith.
Yours very truly,