'File 10/14 III Bahrain unallotted area' [‎65r] (138/636)

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P.Z. 233/40. | PETROLEUM DEPART? EHT,
I (MINES DEPARTMENT),
, / ^ ,J V DEAN JTANLEY STREET,
21/12/1. ^ MILLBANK, S.W.I.
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Dear Peel,
11 til January, 1940.
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I am sorry it has not been possible to reply "before to
your letters P.Z.4023/39 of 5th July, and P.Z.6005/39 of 13th
October regarding the drafts of the Political Agreement and
of the Concession Agreement in connection with the Bahrein
Petroleum Company* s new concession over the Bahrein
"unallotted area", "TT
2. As regards the Political Agreement :- ' I
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(a) We have £o comments on the draft as submitted in
your letter of 30th May. We note that the Agreement is «
intended to apply over the whole area covered by the »
Comp any * s cone e s si on. > v
(b) We have no comments on Powle 1 s letter of 10th July
(enclosed with 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. printed letter P.Z.4559/39 of
28th July) but it is interesting to note that Weightman has
to some extent anticipated the Company's difficulties
regarding pre-emption.
(c) There is little on which the Petroleum Department
need comment on Ballantyne's written observations on the
Political .greement dated 26th June and in your Department* s
note of provisional comments. We see (Gibson*s note of
^ 26th June) that Ballantyne is apparently not going to press
his objection to Article 7 . On the question of pre-emption,
see (ej below* . , y. ^ \
(d) As to Ballantyne's comments on Article 3 of the
Political .greemsnt (see Gibson's note of 26th June;, we note
that, as indicated in your note of provisional comments, the
words "obligations and benefits" in this draft article, to
which Ballantyne particularly objects, were taken from the
Koweit Political Agreement and do not appear for instance,
|f in the Dcbai and oharjah Political Agreements, For our part
we should agree to the deletion of these words, if this
satisfies Ballantyne. But we do think that it would be
desirable to insert something on the lines of the further
sentence in your note of provisional comments (i.e. "It is
understood His Majesty's Government").
(e) As regards the difficult question of pre-emption
( Article 10 and >chediile ) the particular point which the
Company are making, namely, possible upsetting of their
marketing arrangements following on disclosure of their
„ pre-emption obligations, has certainly never been raised
before. Ballantyne admits, however, that his Company's
contracts duly make provision for "force majeure"; the
"pre-emption clause" is really only designed to provide for
the procedure and to afford a measure of price control in
the event of a particular type of "force majeure" being
exercised. In these circumstances, it might perhaps meet
Ballantyne's difficulty if the Company, instead of being
asked to agree that His Majesty's Government shall have the
right of pre-emption, are merely asked to agree that, in the
event/
R.T.Peel, Esq. , C.B.E. ,
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. , _ ^ ,
S. W. 1. «/-o /v—eU-iK. V Jit-