File 10/5 II Hasa oil: CASOC's activities in Hasa; development of Ras Tannura; Political Agent's visit to Hasa [‎155r] (314/656)

ceremonial opening of Has Tanura as an oil porti a nri so on
could only havo the effect of whetting the appetite of Ibn
Saud Bind his Ministers for ever-increasiiqg royalties* The
market for this oil must be in the Eastern Hemisphere and
that market was already apportioned among the various Companies*
Arabian oil could break in only to a limited extent and it
seemed to me that they were deliberately committing themselves
to a vast programme of uneconomic production since the prospect
of inducing Ibn Saud, after all he has seen on his recent tour,
to agree to restricted production must be remote in the extreme.
Would it not have been better to develop the Dharan field slowly
and to have gone about further exploration leisurely — and
silently t I gathered that these views (more or less) are
actually held by the Texas people and by soae of the California
people also. But there is a strong California group, headed
by the President himself, which maintains that there must be
rapid development for four reasons i-
(a) that the concession calls for it;
(b) that the Company are required within a now brief period
to select the areas which they wish to retain;
(c) that unless they exhibit great activity Ibn Saud may
tear up the concession — and they would have no prospect of
redress;
(d) /"put very amateurly7 each Company* s share in the oil
market depends on its potential and not on its actual production.
If C.A.S.O.C. can prove by actual test that they have a potential
production of say 100000 barrels per day they can then claim
possibly an additional 25,000 barrel share in the Eastern Hemi
sphere markets. ( N.B . Bahrain obtained a totally dispropor
tionate share merely by being included in the total California -
Texas share.)
All/-