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‘File 86/2 XV (C 86) Bahrain Oil’ [‎32r] (65/317)

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The record is made up of 1 volume (156 folios). It was created in 18 May 1937-15 Apr 1942. 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. .

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W 3^
27. A further provision is that the Standard Oil Company of California
shall have the right to recover "by means of deductions from one-half of the
royalties due to the Government" the amount of two loans totalling £50,000 gold
received by the Saudi Arabian Government from the company.
28. On the same date as the conclusion of this modified agreement letters
were exchanged by the company and the Saudi Arabian Government defining the
company's preference rights in regard to {a) '' the balance of Eastern Saudi
Arabia " referred to in paragraph 26 above, and (&) the Koweit Neutral Zone (see
paragraph 7 above). The effect of these preference rights in {a) is to entitle the
company to acquire an oil concession on terms equal to those which may be offered
to the Saudi Arabian Government by another company. If the Standard Oil
Company of California elect not to exercise their right, the Saudi Arabian
Government is free to accept the other company's offer. Otherwise, the Standard
Oil Company of California's preference right shall continue at least so long as the
provisions of the special agreement remain in force.
The Yemen.
29. No concession has so far been obtained in this territory owing to the
attitude of the Imam Yahya, who opposes the exploitation of his country by foreign
interests. The French interests in Petroleum Concessions (Limited) have, how
ever, been successful in inducing the Imam to permit two geologists to visit the
Yemen for a period of six months.
Muscat and Oman.
30. Two concessions( 3 ) have been obtained from the Sultan of Muscat and
Oman by Petroleum Concessions (Limited), one in respect of Muscat and Oman
except the district of Dhofar and the other in respect of Dhofar. Both commer
cial agreements are dated the 24th June, 1937, and run for a period of seventy-
five years. The Sultan at first showed himself averse from being associated in
any way with any political agreement between His Majesty's Government and the
company. This question was, however, discussed with the Sultan during his visit
to this country in April of this year, and the Sultan in the end agreed to be
associated with such an agreement in a modified form.
31. An aerial exploration which it is hoped to carry out in the eastern
portion of the Aden Protectorate will probably include the western portion of
Muscat and Oman.
Refinery Agreement with Petroleum Concessions {Limited).
32. A general Refinery Agreement was entered into between His Majesty's
Government and Petroleum Concessions (Limited) on the 5th February, 1937.
Briefly, the agreement provides that whenever the production of crude oil in the
areas over which the company hold, or may hold, oil concessions in the Persian
Gulf area reaches a total of 500,000 tons per annum, the company shall erect, on a
site to be agreed, a refinery or refineries with a total capacity of not less than
250,000 tons per annum, unless it can be shown to the satisfaction of His
Majesty's Government that this would be precluded by commercial considerations.
The agreement also provides for a re-examination of the question of the refinerv
capacity in the event of the total annual production exceeding 1 million tons
per annum.
Pre-emfption of Oil in the Event of an Emergency.
33. The political agreements entered into between His Majesty's Govern
ment and Petroleum Concessions (Limited), in respect of the concessions secured
]by the company in Qatar, Debai, Sharjah and Ras-al-Khaimah, provide, inter
alia, that in the event of a state of national emergency or war (of the existence
of which His Majesty's Government shall be the sole judge) His Majesty's Govern
ment shall have the sole right of pre-emption of all crude oil obtained under the
concessions and of all the products thereof. His Majesty's Government have also
the right to require the company to the extent of any refining capacity it may have
( 8 ) A separate concession may be granted by the Sultan later for his Asiatic territory,
i .e., Gwadur.

About this item

Content

The volume contains letters, telegrams and memoranda relating to oil production in Bahrain, being undertaken by the Bahrain Petroleum Company (hereafter BAPCO). The volume is a direct continuation of ‘File 86/2 XIV (C 67) Bahrain Oil’ (IOR/R/15/1/662). The principal correspondents in the volume are 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 the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. (Lieutenant-Colonel Trenchard Fowle until August 1939, Lieutenant-Colonel Charles Geoffrey Prior thereafter), 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, (Captain Tom Hickinbotham until October 1937, Hugh Weightman from October 1937 to October 1940, and Major Reginald Alban thereafter), and various local representatives of BAPCO.

The subjects covered by the volume are:

  • Preferences (or preferred markets) for Bahrain oil, with Australia and New Zealand proposed, and British opposition to the principle of preferences, on the grounds that oil production in Britain’s empire is too small (folios 4-11);
  • Changes to the appointment of BAPCO’s Chief Local Representative, with numerous incumbents of the post: John Black, C. Deacon, Dr Kennedy and Milton Lipp.

Most of the volume’s correspondence refers to the impact of the Second World War upon Bahrain and BAPCO activities:

  • Discussion amongst British officials over the possible pre-emption of Bahrain oil (folios 38, 52-53), and BAPCO’s willingness to cooperate with the British Government (folio 49);
  • Discussion of the strategic importance of Bahrain’s oil, the release of BAPCO employees for military service, and defence of BAPCO facilities (folios 57-59);
  • An enquiry from the Air Ministry regarding Bahrain’s ability to produce aviation fuel and at what rate, with a detailed technical response from BAPCO staff (folios 75, 77-78);
  • The Political Agent’s preference for Milford Lipp as Chief Local Representative, because communications have been ‘expeditiously disposed of’ under Lipp’s authority (folios 81-91, 106-08); Lipp’s status as a U.S. citizen, leading to an agreement signed by Shaikh Ḥamad bin ‘Īsá Āl Khalīfah and BAPCO, permitting the appointment of a non-British citizen as Chief Local Representative for the duration of the war (folios 93, 113);
  • Lipp’s suggestion that the Company’s geological plans and records be moved to a secure location (New York), to prevent them falling into enemy hands, a proposal agreed to by all parties concerned (folios 96-103);
  • A drop in oil production in Bahrain in 1941 (folios 109, 116-16A), as a result of reduced demand due to petrol rationing to supply areas such as India, and a shortage of available tankers (folios 119-20); explanation of the drop in royalties to Shaikh Hamad; a subsequent increase in production at the end of 1941 (folios 124-30).

The volume also includes a press cutting from the Iraq Times , dated 9 November 1937, which remarks on the superior quality of Bahrain’s oil (folio 12), and a copy of BAPCO’s accounts for the first half of 1938 (folios 36-37).

Extent and format
1 volume (156 folios)
Arrangement

The volume’s contents are arranged in approximate chronological order, from the earliest item at the front to the latest at the end. The office notes at the end of the volume (ff 137-50) mirror the chronological arrangement. There is a subject index at the front of the volume (f 3) which refers to the volume’s uncircled pencil foliation.

Many items of correspondence in the volume have pencil annotations. These annotations will refer to other items of correspondence in the same volume (indicated by a page or folio number), in other parts of the File 86/2 Bahrain Oil subject (usually indicated by the confidential file number), or other subject files of the Bushire Residency An office of the East India Company and, later, of the British Raj, established in the provinces and regions considered part of, or under the influence of, British India. (indicated by A Series file number).

Physical characteristics

Foliation: The main foliation sequence begins on the first folio and ends on the last folio, using circled pencil numbers found at the top and centre of each recto The front of a sheet of paper or leaf, often abbreviated to 'r'. . A second sequence paginates every page of text between ff 4-203 with some gaps, and a third sequence paginates the office notes at the back of the volume; these numbers are also written in pencil, but are not circled, they can be found in the top left or top right corners of the verso The back of a sheet of paper or leaf, often abbreviated to 'v'. and recto The front of a sheet of paper or leaf, often abbreviated to 'r'. side of each folio respectively. Numbers written throughout the volume in red and blue pencil are part of the volume’s original filing system, and correspond to the office notes index at the end of the volume (ff 137-50).

Written in
English in Latin script
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‘File 86/2 XV (C 86) Bahrain Oil’ [‎32r] (65/317), British Library: India Office Records and Private Papers, IOR/R/15/1/663, in Qatar Digital Library <https://www.qdl.qa/archive/81055/vdc_100023661621.0x000043> [accessed 19 April 2024]

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