890b.6363 Gulf Oil
Corporation/163
The Ambassador in Great Britain (Mellon) to the Secretary of State
No. 516
London, November 26, 1932.
[Received
December 7.]
Sir: I have the honor to refer to the
Embassy’s despatch No. 483 of November 12, 1932, with reference to
the Koweit oil concession, and to enclose a copy of a Foreign Office
note, dated November 23, 1932, on this subject.
The text of this note has been discussed with the representative of
the American company in London, who surmises that the terms of the
American draft proposals for a concession are more favorable than
those of the Anglo-Persian Oil Company.
I shall take occasion when I visit the Foreign Office at a not
distant date to make inquiry as to the status of this matter.
Respectfully yours,
(For the Ambassador)
Ray
Atherton
Counselor of Embassy
[Enclosure]
The British Under Secretary of State for
Foreign Affairs (Vansittart) to the American Ambassador
(Mellon)
[London,] 23 November,
1932.
My Dear Ambassador: Since I wrote you
on November 11th about Koweit oil, I have been considering the
question, on which, as you know, I was not in possession of full
details at the time of our interview. I have, therefore, come to
it with a fresh mind, and one or two points have at once struck
me.
- 2.
- The memorandum which you left with me on November 2nd
might be interpreted as implying that His Majesty’s
Government have been purposely procrastinating in regard to
the participation of American interests in the development
of Koweit oil for over four years. But, apart from the fact
that the Anglo-Persian Oil Company were in the field in
Koweit long before the British concern which is now acting
for the United States interests, I wish to make it clear
that the decision of His Majesty’s Government (which was
[Page 25]
communicated to the
Eastern and General Syndicate in November 1928) that any oil
concession which might be granted must contain a clause
which would confine it to British interests, was taken on
grounds of general policy and before we had heard anything
of American participation in the matter. The decision was in
fact taken in pursuance of the then existing general policy
of His Majesty’s Government which had been in force for many
years, and also because the Sheikh of Koweit, whose
interests they are, of course, under an obligation to
protect, expressed himself as unwilling to grant a
concession to any company not under British control. It was
not until December 19, 1928, that the Syndicate informed the
Colonial Office of their agreement with the Eastern Gulf Oil
Company, by which the concession, if obtained, was to be
transferred to United States interests. His Majesty’s
Government did not however feel able to change their
decision until, in December 1931, your Embassy first made
representations in the matter. Then His Majesty’s
Government, in their desire to go as far as they could to
meet the United States Government, reconsidered the question
and decided after much deliberation that, while they could
not commit the Sheikh of Koweit, they would, for their part,
not insist in this case that any concession granted must
contain a clause confining it to British interests, if the
Sheikh for his part was willing to grant a concession
without such a clause, and we so informed your Embassy in
April.
- 3.
- Your memorandum also reverts to the representations made
in Atherton’s official
note No. 231 of the 6th September, to the effect that the
American interests concerned are labouring under a
disadvantage as compared with the Anglo-Persian Oil Company
owing to their ignorance of the provisos which His Majesty’s
Government would require to see embodied in the concessions
granted, in order to safeguard their own interests. But
surely these representations were satisfactorily answered in
Sir John Simon’s
reply, No. E 4582/121/91 of the 16th September. As I
understand it, the “safeguards” are a matter for discussion
after the Sheikh of Koweit has made his decision from the
point of view of what is to the best advantage of his own
State. (I am advised that though no final decision has been
taken on the point it is not unlikely that at least some of
them would equally have to be embodied in any concession
which might be granted to a purely British Oil Company
wishing itself to operate in Koweit). As these safeguards
are not primarily the concern of the Sheikh, and will not
affect the comparison of the two draft concessions on their
merits, they do not in our view affect the matter at the
present stage.
- 4.
- As you know, that stage is that the latest draft
concession submitted by the Eastern and General Syndicate
and the draft submitted
[Page 26]
by the Anglo-Persian Oil Company have
been compared in London by the department concerned on the
technical side in order that the Sheikh, who is naturally
not well versed in such technical matters, may understand
what in fact will be the effect of the main provisions of
each offer (e.g. the financial side, conditions of working
the oil, etc., etc.,). The resulting document is now on its
way to the Persian Gulf and we must await the result of the
Sheikh’s examination.
- 5.
- The two offers made for the concession are thus being
treated concurrently, and that, I feel sure you will
appreciate, was the only correct course for His Majesty’s
Government to take in order to secure the most acceptable
terms for the Sheikh. If only in his interest, His Majesty’s
Government were naturally bound, as Sir John Simon informed
Atherton in his
note No. E 1733/121/91 of the 9th April, to allow any
interested company to consider whether they wanted to apply
for a concession, and if so to give them time to do so. The
Anglo-Persian Oil Company formally renewed their efforts to
obtain a concession in Koweit in August, 1931 (not October
as mentioned in your memorandum).
- 6.
- I regret that there has been delay in the whole matter; I
cannot of course at this stage say exactly when the Sheikh
will decide to grant a concession; I do hope, however, that
in the light of the preliminary information I have now
given, you will be able to assure your Government that there
has been no desire on our part to cause them embarrassment
by any avoidable delay.
Believe me [etc.]
