File 3877/1912 Pt 2 ‘Turkey in Asia: oil concessions’ [‎6r] (20/308)

[This Document is the Property of His Britannic Majesty's Government.!
^ TURKEY.
CONFIDENTIAL.
[11676]
No. 1.
Sir H. Babington-Smith to Foreign Office.—(Received March 17.)
National Bank of Turkey, 50, Cornhill, London,
Sir, March 16, 1914.
IN accordance with the request conveyed in Sir Eyre Crowe’s telegram of the
14th instant, with reference to the question of petroleum in Mesopotamia, I have
the honour to state in writing the proposals which I explained to him verbally on the
12th instant.
The Anglo-Saxon Petroleum Company agrees to give to Mr. Gulbenkian a sub-
participation of 2|- per cent., without voting rights, out of the 25 per cent, which that
company holds in the capital of the Turkish Petroleum Company. Mr. Gulbenkian
will be satisfied if, in addition to this 2J per cent., he is given a sub-participation of
2^ per cent, in the share of 50 per cent, which, in accordance with the wish of
His Majesty’s Government, would be assigned to Mr. d’Arcy’s group. The shares
representing this 2^ per cent, would stand, not in Mr. Gulbenkian’s name, but in the
name of the Anglo-Persian Oil Company, or whatever other name represents the
d’Arcy group, and the votes attaching to them would be exercised for all purposes by
that group. Mr. Gulbenkian will sign any document that may be deemed necessary
to remove any doubt on this point, and, further, he will enter into a binding engage
ment that this interest should not be transferred to anyone else without first being
offered on defined terms to the d’Arcy group.
As an example of a method by which the price may be defined, I may refer to
the article of the statutes of the Turkish Petroleum Company which deals with this
point.
This arrangement would secure to the d’Arcy group complete and permanent
control of 50 per cent, of the share capital if, as I assume is the case, His Majesty’s
Government have taken measures to ensure that the shares held by that group at the
outset shall continue to be held by it permanently. Mr. Gulbenkian would have a
financial interest, amounting to 5 per cent, in all, in the business, but he would have
no voting rights of any kind.
As regards the procedure to be followed, the shares in the Turkish Petroleum
Company held in the name of the National Bank of Turkey (50 per cent, of the whole)
might be transferred half to the Deutsche Bank and half to the Anglo-Saxon Petroleum
Company, and then transferred afresh to the d’Arcy group. This was the procediire
originally suggested by the Deutsche Bank. As an alternative, the shares might, with
the concurrence of the Deutsche Bank and the Anglo-Saxon Petroleum Company, be
transferred direct to the d’Arcy group. So far as the National Bank of Turkey is
concerned, either procedure might be adopted.
The question would arise whether the partnership thus to be established between
the d’Arcy group, the Deutsche Bank, and the Anglo-Saxon Petroleum Company should
apply to the whole of Turkey (as does the Turkish Petroleum Company) or should be
limited to Mesopotamia, the region to which the attention of the d’Arcy group has been
directed. But once the question of principle decided, this matter could be settled
without difficulty between the parties concerned.
If there are any other points on which you would desire to have further informa
tion or explanation, I beg to hold myself entirely at your disposal.
I am, &c.
H. BABINGTON
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