890b.6363 Gulf Oil
Corporation/56
The Ambassador in Great Britain (Mellon) to the Acting Secretary of State
No. 2
London
, April 11, 1932.
[Received April
20.]
Sir: I have the honor to refer to the
Embassy’s telegram No. 140, April 11, 12 noon,14 relating to the Koweit oil
concession, and to [Page 14] forward
herewith a copy of the Foreign Office note, addressed to Mr.
Atherton, Chargé
d’Affaires, referred to therein.
Respectfully yours,
(For the Ambassador)
Ray
Atherton
Counselor of Embassy
[Enclosure]
The British Secretary of State for Foreign
Affairs (Simon) to the American Chargé (Atherton)
No. E 1733/121/91
[
London
,] 9 April,
1932.
Sir: With reference to your Note No.
1696 of the 29th March regarding the application of the Eastern
and General Syndicate for an oil concession in Koweit, which
they propose, if granted, to transfer to United States
interests, I have the honour to inform you that His Majesty’s
Government have given careful consideration to the
representations made by General Dawes and yourself on this subject and I am now
in a position to return you a reply.
- 2.
- Your Government will appreciate in the first place that
the Sheikh of Koweit, though an independent ruler, is in
special treaty relations with His Majesty’s Government and
enjoys their protection. These special relations lead him to
seek their advice on important matters of policy, and place
His Majesty’s Government under an obligation to watch over
his interests. Many years ago the predecessor of the present
Sheikh gave an undertaking that he would not grant an oil
concession in his territories without their consent.
- 3.
- In paragraph 2 of your note of the 29th March you mention
that your Government are informed that the Sheikh is
agreeable to the “entry of the Eastern Gulf Oil Company and
to the granting on behalf of that Company of an oil
concession without the inclusion of the ‘nationality
Clause’”. As was explained to you in a semiofficial letter
of the 22nd December last from my Department15 His Majesty’s
Government on learning this, felt some doubt as to the
correctness of this interpretation of the Sheikh’s attitude,
since the Sheikh had consistently expressed himself
emphatically to the local British authority as desirous of
confining any oil concession to entirely British interests.
In your letter of the 30th December you were good enough to
transmit for my information a copy and translation of a
letter from the Sheikh to Major Holmes, the representative
of the Eastern and General Syndicate, on which the American
interests apparently based the information on this point
given to your [Page 15]
Government. His Majesty’s Government have caused enquiry to
be made of the Sheikh, who replied that he was still averse
from receiving in his principality a company other than an
entirely British one and that he did not consider himself as
in any way committed by his letter to Major Holmes to grant
the Eastern and General Syndicate the concession which they
seek. It will be observed from a reference to the Sheikh’s
letter that its final sentence only expresses a readiness to
discuss the matter further with Major Holmes after agreement
has been reached between the Syndicate and His Majesty’s
Government.
- 4.
- When examining the necessity for the continued insistence
on the inclusion in any oil concession in respect of Koweit
of a clause confining it to British interests, His Majesty’s
Government have been concerned not only with their own
interests in the matter, but also with their duty to secure
the best terms possible for the Sheikh of Koweit, and in
particular, have had regard to the possibility that it would
be less difficult for the local British authorities to
control the activities of a purely British concern and to
reconcile them with the Sheikh’s interests. On a balance of
all the conflicting considerations, His Majesty’s Government
are, however, now prepared, for their part, not to insist in
this case that any concession must contain a clause
confining it to British interests, if the Sheikh for his
part is willing to grant a concession without such a
clause.
- 5.
- I wish, however, to make it clear that this decision does
not imply agreement in the immediate grant of the proposed
concession to the Eastern and General Syndicate, to which
the Sheikh, as stated above, considers himself in no way
committed. His Majesty’s Government indeed do not consider
that they could properly advise the Sheikh to give prior or
preferential treatment to the Eastern and General Syndicate,
but hold it to be necessary that any application for a
concession which may be forthcoming from any quarter be
examined with a view to decide which, if any, will best
serve the interests of the Sheikh and his principality. I
should add that the draft concession submitted to the
Colonial Office by the Syndicate would in any case need
revision both in respect of the provisos designed to
safeguard the interests of His Majesty’s Government (Clause
8) and on many points affecting the interests of the
Sheikh.
- 6.
- In paragraphs 4 and 5 of your Note of the 29th March you
have referred to the operations now being carried out by the
Anglo-Persian Oil Company in Koweit and reminded me of the
requests made to my Department that this company should not
be permitted to proceed with its operations pending a
decision by His Majesty’s Government as to the exclusion of
all but British interests. I would [Page 16] explain that the Anglo-Persian Oil
Company manifested an interest in Koweit oil, and indeed
made a formal application for a concession before the
Eastern and General Syndicate had even appeared on the
scene, though the negotiations were at that time not brought
to a conclusion, chiefly because the terms suggested were
not satisfactory. Several months before any representations
were made by General Dawes or yourself in the matter, the
Anglo-Persian Oil Company made a request for permission to
carry out a geological survey in Koweit with a view to
decide whether to submit an application for an oil
concession. In order to ensure that any oil concession which
the Sheikh may grant shall embody the best available terms,
it is in the view of His Majesty’s Government desirable and
proper that any interested companies be given every
opportunity in advance of satisfying themselves whether or
not they wish to submit an offer. His Majesty’s Government
therefore raised no objection to the grant by the Sheikh of
the application of the Anglo-Persian Oil Company. I
understand that their present activities in Koweit are
confined to such a geological survey.
- 7.
- The position therefore is that His Majesty’s Government
for their part are prepared to agree to the omission from
any oil concession, which the Sheikh may be prepared to
grant, of a clause confining it to British interests. If
therefore the Eastern and General Syndicate desire to renew
their application to the Sheikh for a concession, which they
would subsequently transfer to the Eastern Gulf Oil Company,
His Majesty’s Government will raise no objection to the
application being taken into consideration together with any
other applications for oil concessions which may be
forthcoming from other quarters.
I have [etc.]