The Secretary of State to the Embassy in the United Kingdom 1


451. Embtel 267, Jan 21.2

Dept agrees possible contest by foreign Govt such as SA of Shaikh’s claim to exclusive ownership of islands wld raise question on which Brit advice to Shaikh wld be proper. However, Dept is gratified to note that once advice given, UK wld not endeavor influence his course of action. It also notes with satisfaction UK wld not withhold consent new contract covering islands.
Qualifications of FonOff on above assurances wld seem to fall in different category on which US might not be in agreement. E.g., for Brit to block Shaikh from making separate contract re islands until any difference of opinion with concessionaire settled wld seem interference of sort envisaged in Deptel 132 Jan 11.3
AMINCO has decided request Shaikh clarify status islands by letter, in such form as remove basis any fears concession might open claim by outside power to islands. In AMINCO’s draft of proposed letter Shaikh wld affirm its right undertake operations in islands subject only any claims which KOC might advance. AMINCO instructing Stevens request Brit inform him in writing they wld not object Shaikh clarifying in writing his intentions re oil concession rights for Islands. AMINCO says such letter necessary since Shaikh would not otherwise write letter while matters still pending in London.
Pls inform FonOff foregoing and state Dept hopes Brit will find AMINCO suggestion satisfactory. In this event, AMINCO proposal wld both meet Brit argument re possible SA claim and place dispute on normal basis as between interested companies. Dept wld be prepared support similar request from Gulf Oil.4
Pls continue facilitate Stevens access to Brit authorities.
For urinfo AMINCO reports pol agent recently told Shaikh he wld soon receive a letter re islands from FonOff and discussed nature reply he shld make, implying Brit may have endeavored influence such reply. (Emb London and Cons Basra shld continue watch negots and report any development not in line with Brit assurances para 1.)

  1. This telegram was repeated to Baghdad, Cairo, Basra, and Jidda.
  2. Not printed.
  3. Not printed; it expressed the hope of the Department that “in the spirit of the Anglo-American informal conversations on social and economic affairs in Middle East in Oct 1947 Brit Govt will not interpose through political channels objection to independent decision of Shaikh on this matter. Should that decision be contested by one or other concessionaire Dept believes matter could then be settled by methods prescribed in concession contracts.” It also requested, “In your discretion”, that the substance of the telegram be conveyed to the Foreign Office (890F.6363/1–649). For the “Summary Memorandum of Informal Conversations Relating to Social and Economic Affairs in the Middle East” that took place In October 1947, see Foreign Relations, 1947, vol v, p. 614.
  4. In a letter of February 8 to C. W. Hamilton, Vice President of the Gulf Oil Corporation, Mr. Mattison informed him that “the representations made by the Department [concerning the islands] have been confined to ensuring that one of the parties of interest had free access to the British officials concerned and the Shaikh of Kuwait. Should the Gulf Oil Company experience any difficulties of such nature the Department would be prepared to invoke similar representations on its behalf. The Department has taken no position regarding the merits of the claims involved.” (890.6363/2–849)

    A new agreement was signed at Kuwait on September 22 by the Shaikh of Kuwait and AMINCO, which gave the company concessionary rights on the islands. A copy of the agreement was transmitted to the Department by Basra in despatch 97, December 28 (890G.6363/12–2849).