'File 10/37 Bahrain Petroleum Company - Dollars' [3r] (7/44)
The record is made up of 1 file (20 folios). It was created in 20 Sep 1948-17 Sep 1949. It was written in English. The original is part of the British Library: India Office The department of the British Government to which the Government of India reported between 1858 and 1947. The successor to the Court of Directors. Records and Private Papers Documents collected in a private capacity. .
Transcription
This transcription is created automatically. It may contain errors.
A
OF.89/46/1.
/ .
3
STERLING AREA DOLLAR RECEIPTS FROM OIL
These receipts are of two kinds
Dollar r oysl tles . Practicelly the only example of
these Is provided ly the concession recently awarded \y the
Shaikh of Kuwait to the American Independent Oil Company in
respect of his share of the Kuwait-Saudi Arabian Neutral Zone.
Under the terms of that concession the Shaikh will, we understand,
>y now have received the sum of ^7,876,000 and will from 1949
onwards receive an annual royalty of at least ^626,000. Although
Kuwait is not required to surrender these dollars to the Sterling
Area pool, the existence of this income is bound to affect the
amount of the net hard currency quote which will be made availalle
to Kuwait from the pool.
(?) D pi 1 r receipts from Amer i c a n 1 s + r i > ut s w h o t h em -
selve s re-sell Sterling Area oil q-' the St er ling Are^ .
As the Kuwait Neutral Zone, Qatar and other concessions are not
yet producing oil In commercial quantities description of the
financial arrangements in force is limited to the two cases of
(r) Bahrain and (h) Kuwait proper.
(a) (1) The Bahrain p etro le ^ni Company Limited (B.P.C. )
Is norminally registered in Canada and owned jointly ly two
big American oil companies (60" 7 by Standard Oil Company of
California and 50> of the Texas Company). B.P.C. Is administered
and controlled from New York. It sells its oil through its
subsidiary the California Texas Oil Company (Caltex),Bwh1cb is
nominally registered in the Bahamas, but Is also considered as
American for exchange control purposes and must therefore pay
dollars in respect of all oil shipments from Bahrain to countries
outside the Sterling Area. When oil produced or refined at
Bahrain is sold by Caltex Inside the Sterling Area sterling revenues
accrues to B.P.C.
(ii) B.P.C. requires sterling for local expenses in
Bahrain and for purchases of equipment, etc., elsewhere in
the Sterling Area. It requires dollars for purchases of
Saudi Arabian Crude Oil fpom the Arabian American Oil Company,*
for American equipment and materials, for the salaries of
Americans it employs at Bahrain and elsewhere, and for remittances
of trade profits (agreed with the Bank of England) which are
transferable to U.S.A. because B.P.C. is an American controlled
company.
(iii) B.P.C. is allowed to use its sterling revenue to
meet its sterling requirements and for the purchase of dollars
for the above purposes. Since its dollar reqi irements far
exceed its dollar earnings we should' expect B.P.C. in an average
year to remit a seven figure sum in dollars from London to
New York. Thus on balance the Sterling Area pays and does not
earn dollars in respect of B.P.C. operations, and the existence
of some dollar earnings, which are accounted for to the Bank of
England cannot justify any claims by the Shaikh of Bahrain for
dollars to le spent on inessentials.
(iv) At present any dollar remittances of profits
to U.S.A. may well largely be re-invested by B .p C. in equipment
The Deeds of 1936 and 1940 supplementary to the mining lease
of 1934 are intended to ensure that these purchases will not
lead to a reduction of crude oil production in Bahrain itself.
About this item
- Content
The file contains correspondence between the Political Agent A mid-ranking political representative (equivalent to a Consul) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Agency. in Bahrain, the Political Resident A senior ranking political representative (equivalent to a Consul General) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Residency. in Bushire and representatives of the Bahrain Petroleum Company Limited (BAPCO) on transaction in dollars for BAPCO oil.
There is an index at the end of the file (folio 19).
- Extent and format
- 1 file (20 folios)
- Arrangement
The documents in the file are arranged in chronological order. There is an index at the end of the file (folio 19). The index is arranged chronologically and refers to documents within the file; it gives brief description of the correspondence with a reference number which refers back to that correspondence in the file.
- Physical characteristics
The foliation is written in pencil in the top right corner, begins on number 1, on the first letter, and runs through to 21, ending on the inside of the back cover of the file.
- Written in
- English in Latin script View the complete information for this record
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Copyright: How to use this content
- Reference
- IOR/R/15/2/460
- Title
- 'File 10/37 Bahrain Petroleum Company - Dollars'
- Pages
- front, front-i, 1r:20v, back-i, back
- Author
- East India Company, the Board of Control, the India Office, or other British Government Department
- Usage terms
- Open Government Licence