890B.6363/6–1448: Telegram

The Secretary of State to the Embassy in the United Kingdom

secret

2221. 1. Reps of group independent American oil companies known as American Independent Oil Company inform Dept that Company has been granted oil concession by Sheikh Kuwait covering his undivided interest in Saudi-Kuwait Neutral Zone subject Brit Govt approval which Sheikh awaiting before signing agreement. Company states Brit Govt through Political Agent Kuwait requests inclusion in concession agreement of provision in Anglo-Kuwait Treaty 23 Jan 1899 purporting limit Sheikh’s power grant land for occupancy within his territory without previous consent of Brit Govt.

2. Company objects to inclusion such provision which it believes would not be acceptable to Saudi Arabian Govt whose consent necessary for development concession in Neutral Zone. Company states no such clause included in Sheikh’s oil concession to Kuwait Oil Company [Page 20]Dec 23 1934 covering Kuwait proper and claims Brit cannot properly insist inclusion such provision relating Neutral Zone in which Sheikh has only fifty percent undivided interest and cannot commit corresponding Saudi Arabian interest to Brit authority or jurisdiction; Company regards proposed provision discriminatory since by making Brit permission prerequisite to securing land for occupancy it would tend subject operations American company to Brit control.

3. Company requests Depts assistance and we have suggested they approach FonOff London after conferring AmEmbassy. Harley Stevens representing Company to fly London this purpose. Meantime since time element important pls inquire FonOff as to nature of and reasons for reported Brit request to Sheikh Kuwait mentioned above. Dept is confident Brit Govt does not intend use its special position Persian Gulf Sheikdoms to prevent or impede US interests obtaining and developing concessions that area or to discriminate against them. Telegraph report and extend Stevens appropriate assistance.1

Marshall
  1. London’s reply on June 16, after discussing the British Government’s desire to sign a political agreement with Aminco, stated: “Foreign Office confirmed emphatically Department’s understanding set forth penultimate sentence Department’s reference telegram.” (telegram 2648, 890B.6363/6–1648)

    Aminco representatives at London advised the Embassy on June 23 that an understanding had been reached with the British Government on a political agreement. The draft agreement provided that “in time of war or emergency (which HMG alone can declare) HMG has the right to preempt Aminco installations and production against indemnification and payments by HMG. HMG also retains the right based on 1899 Treaty to construct airfields and harbors anywhere subject to the agreement of the Sheik.” A clause was to be added to the draft “limiting it to rights of Sheik of Kuwait in Neutral Zone, i.e., nothing in either concession or political agreement will prejudice rights in Neutral Zone possessed by SAG.” (airgram 1371 from London) The political agreement was signed on June 26 (telegram 2930 from London). Both documents are dated July 2 and are filed under 890B.6363/7–248.

    Copies of the concession and of the political agreement were furnished to the Department by Aminco on September 7; they are filed under 8906.6363/9–748.