Foreign Relations of the United States, 1946, The Near East and Africa, Volume VII

800.6363/11–646

Memorandum of Conversation, by the Chief of the Petroleum Division (Loftus)

[Washington,] November 6, 1946.

Participants:	Mr. E. E. Jones, Petroleum Attaché, British Embassy
	Mr. Thomas E. Bromley, British Embassy
	Mr. George H. Middleton, British Embassy
	Mr. Henderson—NEA
	Mr. Minor—ME28
	Mr. Freeman—Le29
	Mr. Loftus—PED
	Mr. Robertson—PED30

The representatives of the British Embassy called at their request to have a preliminary discussion jointly with NEA, PED, and Le of a problem which had been presented to them by London. It has to do with the disposition of the sub-sea oil resources of the “Continental Shelf” of the Persian Gulf. It appears that the entire Persian Gulf has at all points a depth not exceeding 100 fathoms; so that by the concept of the Continental Shelf, adopted by the United States Government in its proclamation,³¹ the entire expanse of the Persian Gulf would be underlain by a shelf.

The British Government feels that it has at least a three-fold concern with this matter:

(1) The rights in this territory of the various “protected States” on the northern and western shores of the Gulf are a responsibility of the British Government,

(2) The present contractual rights of British oil companies may be involved,

(3) Because of the importance of Middle East oil the British Government has a keen interest in the basis for allocation of rights to explore and develop such oil resources as may exist under the waters of the Persian Gulf.

It appears that the authorities in London had instructed the Embassy here to confer preliminarily with the Department, pointing out that there appeared to be three alternative courses of action the British Government might pursue.

(1) Unilaterally to instruct the British-protected shaikhdoms of the Persian Gulf littoral what rights they should assert in the waters of the Gulf,

(2) To expound to those shaikhdoms the British concept (when it had been developed) of an appropriate basis for the disposition of rights in the Gulf, and to advise the shaikhdoms after consultation with other “riparian” states to assert their respective rights in accordance with the advisory opinion of the British Government,

(3) Before taking any action vis-à-vis the shaikhdoms, to have an exchange of views with the United States Government on the technical, political, and economic aspects of the problem, and to proceed after some common agreement had been reached between the two governments as to the most equitable basis for allocation of rights in the waters of the Gulf.

Of the three alternatives the British Government much preferred the third; and specifically it was hoped that the State Department would agree that the forthcoming oil conversations in London³² would be an appropriate occasion for a preliminary exchange of views on this subject. Such exchange of views would be entirely without commitment and on ad referendum basis. The British experts would be speaking without prior consultation with the Cabinet—without, therefore, any authority to take a firm position. It was assumed that the U.S. experts would be similarly situated.

It was pointed out to the British representatives that the United States Government, of course, did not have a direct political interest in the settlement of this problem, although it did share with the British Government a general concern over the basis upon which oil rights in the Gulf might ultimately be allocated when and if petroleum development operations became commercially attractive. It was also pointed out that the United States Government probably would not a priori favor a disposition of the problem which would assert the extension of presently established oil rights but would rather favor the determination of some orderly and equitable basis for the acquisition of new rights.

After further discussion of some of the more technical aspects of the problem it was agreed that, subject to confirmation, there appeared to be no reason why it would not be appropriate and useful for Messrs. Loftus and Rayner to discuss this problem with the British Government in London this month, provided the discussions were as had been previously stated entirely non-committal and ad referendum.

28. Harold B. Minor, Chief of the Division of Middle Eastern and Indian Affairs.
29. Alwyn V. Freeman, Assistant to the Legal Adviser.
30. David A. Robertson, Assistant Chief of the Petroleum Division.
31. For documentation on the formulation of United States policy on the Continental Shelf from 1943 to 1945, see Foreign Relations, 1945, vol. ii, pp. 1481 ff. Actually, President Truman issued two proclamations on September 28, 1945, asserting the jurisdiction of the United States over the natural resources of the Continental Shelf under the high seas continguous to the coasts of the United States and its territories, and providing for the establishment of conservation zones for the protection of fisheries in certain areas of the high seas contiguous to the United States; for texts, see 10 Federal Register 12303, 12304.
32. For extracts of the record of informal Anglo-American talks on oil questions, from November 19 to November 30, 1946, see p. 44.