'File 19/176 V (C 81) Bahrain Finances' [‎23r] (54/524)

I found| on my first examination of the Bahrain
State Finances} that no very serious attempt had been
made to put on paper an estimate of the amount of money
which the State would draw in the form of royalties from
the Bahrain Petroleum Company or to prepare a preliminary
programme for the purpose of building up a Reserve against
the day when oil ceases to flow and for the expansion of
public services meanwhile. It is clearly impossible for
any progress to be made so long as these matters are
dealt with in a haphazard fashion without any definite
objective, and without a clear realisation of the amount
of money that may bee cane available from time to time.
..v
I have 9 therefore, recorded the attached note which is
intended to be a preliminary effort to clear the air.
I have throughout taken the most pessimistic view pos
sible and I have little doubt in my own mind that the
sums which will come to the State in the form of royal
ties will very greatly exceed the figures which I have
adopted. In the first place the estimate of a 15 year
life for the oil field as its present boring depth is,
I believe, far behind the expectations entertained by
the Company themselves; though it is impossible to in
duce anyone in the Company to offer anything like a firm
opinion. Quite apart from this, even Mr. Deacon is pre
pared to admit that the deep boring so far undertaken
is really hopeful, and I understand that three more
deep bores are to be undertaken feero in the near future.
Then again I have made allowances for local consumption
of oil (on which royalty is not paid) fa " in excess of
the average quantity so used up-to-date. Similarly
I have assumed as an average future State income from
sources/-