File 1421/1908 Pt 3 'Persia: oil; negotiations between the Shaikh of Mohammerah and the Anglo-Persian Oil Co.' [‎348r] (261/338)

l T - h . 1 L D, ^3E. ent J s Property of His Britannic Majesty’s Government.]
PERSIA.
•CONFIDENTIAL.
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[June 19.]
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Section 2.
[22970]
No. 1 .
Anglo-Persian Oil Company to Foreign Office.—{Received June 19 .
C- Winchester House, Old Broad Street, London,
’ TiTAVTr+^ j i i i . Jwne 18, 1909.
1 HA E the honour to acknowledge receipt of your letter dated the 15th instant
calling my attention to clause 6 of an agreement made on the 15th November 1905'
between Mr. Preece on beha f of the then holders of the Persian concession on the one
hand and the Bakhtian chiefs on the other.
T [ u * "' as the flrst tlm ® t hat my attention was called to the clause in question, and
it has taken me a couple of days to investigate the matter.
r 1 fiuci f rom ^fr. Preece that when he negotiated this agreement with the chiefs and
discussed the question of their allowing Europeans and others under them to go to
live and work m the Bakhtian country, when the chiefs claimed that on the departure
of these people their buildings should revert to the Bakhtiaris he had in his mind that
such buildings would be all or mainly cateha, and that consequently the clause would
be unobjectionable m any case, that it involved comparatively speaking onlv a small
sum or money.
It is true that in all human probability it can only involve a small sum of money
as it does not cover plant, pipes, machinery, or anything of a kindred nature, but ali
the same I think that putting it into the agreement was a mistake.
However that may be, it is a mistake to suppose that the Persian Government has
taken no exception to this agreement. I have to-day obtained a copy (attached
hereto) of a letter dated the 16th August, 1906, from the British legation in Tehran to
Sir Edward Grey, which shows that the Persians took exception to it in the strongest
possible manner.
In any case, I am sure that you will feel that my company cannot now safely
commit a similar mistake, and, besides, the Sheikh’s demand, as set forth in Major
Cox’s telegram No. 486 of the 18th May, 1909, is of a far more wide-reaching nature,
viz.
“ That all the company’s plant of machinery, workshop, and other erections upon
the lands leased to them shall lapse to the Sheikh.”
As on these lands it is proposed to erect an oil refinery and all necessary
buildings, with plant, machinery, and pipe lines, the value involved will certainly not
be under a quarter of a million sterling, and may easily run to a million or more if the
company has before it the successful career that we all anticipate.
In conclusion I ask leave to say that my company has no objection as such to
allowing a reversion to the Sheikh on the expiry of the concession or of any renewal
or extension thereof, but that it is precluded by one of the terms of the concession from
specifically promising such reversion to the Sheikh as against the Persian Government,
and I sincerely hope that Major Cox, when this is clearly put before him (as it will be
by our Persian agents, Messrs. Lloyd, Scott, and Co. on arrival of to-day’s outward
mail, if it has not already been put), will succeed in persuading the Sheikh to either
waive his demand or else to be satisfied with the undertaking given in my letter of the
27th ultimo, paragraph 17.
I am, &c.
E. W. WALLACE, Vice-Chairman.
Inclosure 1 in No. 1.
Mr. E. Grant Duff to Sir Edward Grey.
(No. 213.)
Sir, Gulahek, August 16, 1906.
WITH reference to my despatch No. 196 of the 19th ultimo, I have the honour to
transmit herewith a translation of a note from the Mushir-ed-Dowleh regarding the
agreement signed last autumn between the Bakhtiari Khans and the oil syndicate.
[2306 f—2]