File 1421/1908 Pt 3 'Persia: oil; negotiations between the Shaikh of Mohammerah and the Anglo-Persian Oil Co.' [‎274v] (114/338)

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. And such pressure can very well be brought to bear when it is borne
in mind that uny claim for damages put forward by the Company for failure
of the Persian Government to secure for it, free of obstruction, all rights under
its concession, can, if necessary, be enforced by forfeiture of the share in
profits to which the Persian Government would in due course become
entitled.
We are unaware what price His Excellency the Shaikh of Mohammerah
paid in 1903 to the Persian Government for rights apparently sold in 1901 to
the Company, but we think it very improbable that he gave a greater quid pro
quo t\\a,n the Company has done, so that, however much His Excellency the
Shaikh claims that his rights must be respected, the Company is in a very
strong position to insist that its prior rights must also be respected. Lookino’
howe\ er to the fact that His Excellency the Shaikh did not claim mineral
rights in June-July 1909, we think it unlikely that he will claim them now.
It appears to us likely that had he seriously considered he had any claim
to mineral r ghts in June-July 1909, he would have produced his Eirmans at
that time, especially as you report that he had a general recollection that he
had complete rights.
e think you will agree that it would be very unlikely for His Excellency
the Shaikh to give up anything that he thought he could legitimately claim
or, possibly illegitimately get by “ bluff.” Undoubtedly this Company would
expect to be compensated, if it were necessary to pay a second time for what
has already been purchased, but then the Company does not propose to act
in any such manner.
We are instructed, as already advised you, that henceforth the Directors
propose to act strictly on the lines of the concession. Paragraph 8 , first
sentence of your letter appears to us to contain the crux of the position. You
suggest financially interesting His Excellency the Shaikh in the prosperity of
the wells at Ahwaz, if worked. The Company lias already given an under
taking to make some amicable arrangement with him in the event of oil being
tapped (naturally in the commercially paying quantities, as you presume), but
that has nothing whatever to do with the Company’s right under its concession
to prospect for oil at Ahwaz.
We cannot agree with your remark that the Company has been unham
pered by the slightest local opposition, but that is a matter into which we need
not enter here. We do not consider it necessary at all for the Company to
thieaion IPs The branch of the British Government of India with responsibility for managing political relations between British-ruled India and its surrounding states, and by extension the Gulf, during the period 1937-47. I xcellency the Shaikh with the wrath of the Central Government
at Tehran. We consider it necessary to threaten Tehran, and if and wl en the
Shaikh obstructs the Company in exercising its rights purchased from the
Central Government, our opinion being as first stated above, that from the
Company s point of view the Shaikh has no locus standi in the matter.
We are sure the Directors will give the subject matter of your letter under
acknowlodgment their very careful consideration, but their instructions to us
indicate the unlikelihood of their agreeing to pay anything to His Excellency
the Shaikh in excess of the surface value of the land taken up for the purpose
of working oil at Ahwaz.
Dated the 26th October 1910.
From —Messrs. Lloyd Scott & Co., Ltd., Managing Agents, Anglo-Persian Oil
Company, Ltd,
To—His Majesty’s Consul for Arahistan.
In connection with past correspondence on the subject of this Company’s
proposal to drill for oil at Ahwaz, we have the honour to attach hereto extracts
from letters received from the Managing Director, dated 23rd and 30th ultimo.
In accordance with the final sentence thereof, we will be grateful if you
will forward the attached papers to the Honourable the Political Pesident, and
seek on our behalf, any expression of his opinion or comment, which he may
wish to make.