Chargé Dorsz reported from Baghdad on March 12 that H. H. Wheatley, the second ranking officer of the Iraq Petroleum Company, had arrived at Baghdad on February 21 to undertake renegotiation [Page 119]of the company’s oil concession agreement. The Chargé advised that Mr. Wheatley “was prepared to demand reopening Haifa pipeline, port and refinery as a corollary to renegotiation oil conventions on his own terms.” He also offered to raise the royalty rate from the current eight shillings per ton of crude oil to 18 but the Iraqis scorned the offer.
Mr. Wheatley returned to London on March 12 for consultations with his Board of Directors concerning the high terms demanded by the Iraqis. Prior to his departure “Wheatley said that chances reopening southern pipe[line] much before June or July seemed remote and that policy of even suggesting to Iraqis that their crude might be used to supply Haifa refinery was out of the question at this time.” (airgram 108, 890G.6363/3–1249)
The IPC pipeline bifurcated at Haditha, Transjordan, the “southern pipeline” continuing through Arab Palestine and Israel to Haifa. The northern section continued through Syria and Lebanon to Tripoli.