890b.6363 Gulf Oil Corporation/150

The Chargé in Great Britain (Atherton) to the Secretary of State

No. 365

Sir: I have the honor to refer to my telegram No. 272, September 17, 1932,16 regarding the applications of the Eastern and General Syndicate and the Anglo-Persian Oil Company for an oil concession in Koweit, and to forward herewith a copy of the Foreign Office note received in reply to my note of September 6, 1932.

Respectfully yours,

Ray Atherton
[Page 18]

The British Secretary of State for Foreign Affairs (Simon) to the American Chargé (Atherton)

No. E 4582/121/91

Sir: I have the honour to inform you that your note No. 231 of the 6th September regarding the applications of the Eastern and General Syndicate and the Anglo-Persian Oil Company for an oil concession in Koweit has been considered by the Departments of His Majesty’s Government in the United Kingdom concerned.

It appears from that note that the United States company interested in the application made by the Eastern and General Syndicate have represented the situation as being as follows. They state that the Eastern and General Syndicate have not yet learnt from the Colonial Office what alterations would be required in the draft concession submitted to the Sheikh by them, in order to render it satisfactory from the point of view of safeguarding the interests of His Majesty’s Government. They contend that this fact precludes the Sheikh of Koweit from giving consideration to the Syndicate’s application, but that there is nothing to prevent the Sheikh from taking a decision upon the application for a concession submitted by the Anglo-Persian Oil Company. They complain that the Syndicate are thus placed at a disadvantage in their efforts to obtain the desired concession. These contentions appear to be based upon a misunderstanding of the present position in the matter.
As you are aware from my note No. E 1733/121/91 of the 9th April, His Majesty’s Government decided that they could not advise the Sheikh to give preferential treatment to the Syndicate, and that any applications which might be forthcoming for a concession, should be compared in order to see which appeared to be to the best interests of the Sheikh and his principality. The Anglo-Persian Oil Company submitted to the Sheikh last month a draft of a concession; but a copy of this draft concession has only very recently been received by His Majesty’s Government and some time must elapse before a thorough comparison of its terms with those of the draft concession submitted by the Eastern and General Syndicate can be completed. The results of that examination will then be communicated to the Sheikh in order that he may reach a conclusion as to the respective merits of the two offers from the point of view of his own interests and those of his Sheikhdom. In the meanwhile, no expression of the views of the Sheikh on either proposal has yet been received by His Majesty’s Government, and he is not in a position, [Page 19] as suggested in your note under reply, to take a decision in favour of the application of the Anglo-Persian Oil Company, since, as was stated in my note referred to above, he is bound by an undertaking given by his predecessor to grant no oil concession in his territories without the consent of His Majesty’s Government.
It will thus be seen that the application of the Eastern and General Syndicate is receiving consideration equally and pari passu with that of the Anglo-Persian Oil Company and that the question of the provisions designed to safeguard the interests of His Majesty’s Government, which would be required in any concession not confined to a British company, does not arise until the Sheikh has compared the two draft concessions in the light of the comments of His Majesty’s Government. The American interests concerned suffer no prejudice therefore from their ignorance of the precise nature of these provisions, and His Majesty’s Government for their part consider it preferable not to communicate further with either the Anglo-Persian Oil Company or the Syndicate regarding the terms of their respective draft concessions, until their own consideration of the draft concessions and consultation with the Sheikh is complete.

I have [etc.]

(For the Secretary of State)
G. W. Rendel
  1. Not printed.