File 3877/1912 Pt 1 ‘Turkey in Asia: oil concessions’ [‎21r] (50/834)

[This Document is the Property of His Britannic Majesty's Government ]
[A]
ASIATIC TURKEY AND ARABIA.
CONFIDENTIAL.
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[August 9.]
Section 2.
[36771] No. 1.
Board of Trade to Foreign Office.—(Received August 9.)
(Secret.)
Sir, Board of Trade, August 8, 1913.
I AM directed by the Board of Trade to acknowledge the receipt of your letter of
the 1st August, from which they understand that Sir Edward Grey desires to have the
views of this Department, after consultation with the Admiralty, as to the maximum and
minimum requirements to be insisted upon by His Majesty’s Government with regard
to the proposed oil concession in Mesopotamia.
In reply, I am to state that the maximum requirements of His Majesty’s Govern
ment, in the interests both of the navy and of British trade, are naturally that the
concession should be given as promised by two Grand Viziers to Mr. D’Arcy or his
assignees. The Board, however, presume that this course is not considered practicable,
and they pass, therefore, to the question of minimum requirements.
As regards the latter, the Board desire me to point out that, from the nature of the
case, no minimum requirements can be stated wdthout reference to a number of
conditions, some of which are very imperfectly known, e.g., the degree of the danger that
the concession may be given without our consent to some foreign combination, the
composition of the body to which it is likely that the concession may be granted, and
the mutual relations of the different elements which compose that body.
It follows, therefore, that any detailed proposal based upon existing data for the
solution of this difficult problem must be in the highest degree tentative and
provisional, since, as soon as negotiations are effectively begun, it is probable that some
of the assumptions on which the sch§|§Bge is based will be found to be unwarranted.
Subject to the above consideration! I am to say that, so far as the Board are able
to judge, the essential points to be kept in mind, from the point of view of British
interests, are as follows :—
1. The desire of the Admiralty to secure supplies of fuel oil from the Mesopotamian
oil-fields, with the minimum risk that that supply may fail them in time of war or of
strained relations
2. The desire of the Admiralty for other reasons to preserve the independence of
the Anglo-Persian Oil Company, and with that object to prevent any company con
nected with the Shell combination from using the supplies of oil obtained from the
Mesopotamian oil-fields to undersell the Anglo-Persian Company in the Middle
Eastern markets, which it has ’made peculiarly its own, thus forcing the company to
choose between ruin and absorption into their system. # rvi rr
It is believed, further, that the independence of the Anglo-Persian Oil Company
is also an object of solicitude with the Foreign Office in connection with theii general
policy in Persia ; but the Board of Trade are not clear as to the precise weight attached
by the Foreign Office to this consideration. .
3. The general desire of His Majesty’s Government to support British enterprise,
and in particular the obligation of the Foreign Office to fulfil any promise of support
given by them to Mr. D’Arcy and his assignees.
Taking the above points in order. As regards (1), it seems to the Board that, m
ordinary times of peace, the object of the Admiralty would be sufficiently at amed by
an option on fuel oil up to a sufficient amount, or proportion of the total output. In
time of war or of strained relations, however, such an option might become valueless^
and in these circumstances the Board consider that the only possible security that t e ,
fuel oil shall reach the navy in time of strained relations is the predominance on the
board of the company of British directors, who in such times will, m the last resort,
obey the instructions of His Majesty’s Government on matters of vital importance to
Imperial safety and defence. It also seems necessary that this predominance on the
directorate of the company should be coupled with such marketing arrangements as
will ensure that the oil destined for the use of the British navy will actually be aval-
able for that purpose, and not be diverted by middlemen to other destinations. n
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