'File 10/37 Bahrain Petroleum Company - Dollars' [‎4r] (9/44)

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needed for Its current improvement schemes. But even when th
are completed the remittances of surplus funds to U.S.A. will
continue and no dollars will accrue to the Sterling Area Exchange
Control from the activities of B.P.C.
(b) (i) T he Kuwait Oil Company Limited. K.O.C .
Is considered a British resident for exchange control Durpoes and
is controlled jointly by the Anglo-Iranian Oil Company Limited of
London and the Gulf oil Corporation of Pittsburg, U.S. Crude
O d1 produced at Kuwait is normally shared equally between the two
shareholders. A considerable capital expansion programme is at
present on hand to enable production to reach a level of 488,000
barrels a day in 1961 and the company expected last year that
for some 2i years from then until the end of 1949 it would le
incurring capital expenditu e at the rate of roughly £6 millions
a year alout «bne half of which would Ve in dollars. These
dollars would be found from the Gulf Oil Company's 50^ subscription
towards the funds of K.O.C.
(ii) Dollar earnings accrue to us from Kuwait Oil only
when Anglo-Iranian Oil Company or the Gulf Oil Corporation sell
this crude oil to American firms for consumption outside the
Sterling Area, but even in so far as such sales do in fact
take place the dollar earnings from them have to be set against
the profits which the Gulf Oil Corporation earns on its sterling
sales of Kuwait Oil and which H is allowed to transfer into
dollars and to remit to America. The time when Kuwait can
claim that its oil is not only a dollar saver but also a net dollar
earner for the Sterling Area would also seem to be'still distant
and the operations of K.O.C. thus provide no grounds on which the
local ruler can claim to receive additional dollars from us.
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