841.6363/412
The British Ambassador (Lindsay) to the Secretary of State
Sir: I am directed by His Majesty’s Principal Secretary of State for Foreign Affairs to inform you that the Secretary for Mines has received from the Anglo-American Oil Company a number of applications for oil prospecting licenses under the Petroleum (Production) Act, 1934,8 covering in the aggregate several hundred square miles. The Anglo-American Oil Company, which is controlled by the Standard Oil Export Corporation of New York, have also expressed their desire to have assigned to them in due course a licence which has been applied for jointly by two British nationals, and which it is expected will shortly be issued to them.
- 2.
- This Petroleum (Production) Act, 1934, vested in the Crown the property in petroleum existing in its natural condition in strata in Great Britain and gave power to the Board of Trade to grant licences to search for and get petroleum under the conditions contained in Regulations to be made under Section 6 of the Act. These conditions are contained in the Petroleum (Production) Regulations, 1935, to which are scheduled the model clauses to be incorporated in licences. Copies of the Act and Regulations are enclosed herewith.9
- 3.
- With regard to the question of the nationality of applicants
or licensees, the following is the substance of the main
provisions of the Regulations:—
- (a)
- In the case of aliens and Companies incorporated outside Great Britain or Northern Ireland it is a condition that an operating Company must be formed and registered in Great Britain or Northern Ireland for the purpose of receiving the grant of, and exploiting, any licence (Regulation 2 (3)).
- (b)
- The Licensee may not assign the rights granted by the licence to any person other than a British subject or a Company incorporated [Page 737] in Great Britain or Northern Ireland (page 9—“Assignment of Licence”).
- (c)
- In the event of a licensee being controlled by an alien or a Company incorporated outside Great Britain or Northern Ireland, or if a licence is assigned to a foreign controlled Company at least one of the Directors of the Company and a majority of the persons employed in connection with operations under the licence must be British subjects (“Special clause” on pages 10 and 11).
- (d)
- A licence may only be held by nationals of those countries, the laws and customs of which accord comparable rights to British nationals (page 11).
- 4.
- The Secretary for Mines is prepared to grant the licences for which the Anglo-American Oil Company has applied, subject to the completion of formalities and to his being satisfied on the question arising on “(d)” above. For this purpose it will be necessary to ascertain the present position regarding the grant of oil concessions in the United States to persons who are not nationals of that country.
- 5.
- The position is apparently governed by the Mineral Leasing
Act, 1920, as amended by an Act approved on the 21st August,
1935 (Public No. 297½—74th Congress—S. 3311).10 A proviso to Section
1 of the original Act reads as follows:—
“And provided further, that citizens of another country, the laws, customs, or regulations of which deny similar or like privileges to citizens or corporations of this country, shall not by stock ownership, stock holding, or stock control own any interest in any lease acquired under the provisions of this Act.”
- 6.
- I am therefore directed to enquire whether, having regard to the new Regulations now in force in Great Britain, that country is regarded, under the Mineral Leasing Act, 1920, as a reciprocal country, so as (in the wording of the “Special clause”) to permit British subjects or Companies incorporated in Great Britain or Northern Ireland or Companies incorporated in the United States controlled directly or indirectly by British subjects or Companies incorporated in Great Britain or Northern Ireland to acquire, hold and operate petroleum concessions, where the grant of such concessions is within the power, or subject to the approval of, the United States Government, on conditions which are reasonably comparable with the conditions upon which such rights are granted to nationals of the United States with the addition of conditions corresponding to those imposed by the clause entitled “Special clause”.
I have [etc.]