Concessions in Bahrein [Bahrain], Kuwait, &c: correspondence, 1932-Jul 1933 (Colonial Office Secret Print, Middle East No.49) [‎22r] (45/284)

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such extension, as the Company has erected a modern powerful deep-boring drilling
plant with the necessary appurtenances.
This boring plant has been in constant operation since the middle of October, 1931,
to the present date, except when stoppages were necessary to fulfil the conditions
regarding water, as stated in Clause 10 of the prospecting licence.
Further, it is necessary that much additional prospecting work be accomplished
before the value and trend of the oil formation can be ascertained. It is the Company's
intention to pursue with energy a prospecting programme to secure the information
necessary to enter the Mining Lease Schedule with the minimum of delay.
An early decision would be greatly appreciated as delay would adversely affect
the Company's prospecting and development programme.
I am, &c.,
F rank H olmes,
Chief Representative,
The Bahrein Petroleum Company, Limited.
Enclosure 2 in No. 26.
(No. C/64 of 1932.)
S ir , Political Agent A mid-ranking political representative (equivalent to a Consul) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Agency. , Bahrein, 3rd May, 1932.
I have the honour to forward for your information a copy of a letter, without
number, dated the 22nd April, 1932, from the Chief Local Representative of the Bahrein
Petroleum Company, Limited, and my reply thereto. Upon my giving an interpre
tation of the clause, which I feel sure you will agree is the correct one. Major Holmes
immediately forwarded his letter dated the 24th April requesting the Bahrein Govern
ment to change the reading of Clause 9, Schedule 2. The matter was discussed with
His Excellency Shaikh Hamad, and considerable difficulty was experienced in explaining
the matter to him.
2. His Excellency was plainly bored by the details and observed that " By God,
the important thing was that some benefit should be found." He asked me what my
advice was. I told him that if he adhered to the present wording the Company could
defeat his hopes of increased revenue by closing down each well as it approached the
100-ton limit, and that there was nothing to stop them doing this. I also pointed out
that until oil was found " in commercial quantities," the royalty would not rise above
the Rs. 10,000-rate now fixed, and that it was not until five years had elapsed that the
Government could force them to declare that oil had been so found or terminate the
Concession.
3. His Excellency discussed the matter further with the Adviser and myself and
finally gave the reply of which I enclose a copy. I had pointed out to him that the
alteration would require the concurrence of the Colonial Office and I had suggested
that since they had drafted this clause it would be advantageous to take their advice
upon the matter. His Excellency agreed with me, and, as will be seen from his letter,
specially asks for guidance in so technical a matter.
4. My personal opinion is that which I gave the Shaikh. The meaning of the
clause is evidently to force the Company to take out a mining licence at the earliest
possible opportunity. This they have no intention of doing, and to prevent this they
will close down each well as it approaches the 100-ton limit. The State has no recourse
till five years have elapsed, and has no immediate financial gain, whereas by accepting
the alteration they will gain something, though they will have no means of checking
their dues; nevertheless the Colonial Office must have inserted this clause with some
special meaning and the problem, which is strange to us, will no doubt be familiar to
them. I regret I can offer no useful opinion on the arguments advanced by Major
Holmes in his letters of the 22nd and 24th April, for these are technical matters in
which I have no experience.
I have, &c.,
C. G. P rior,
Political Agent A mid-ranking political representative (equivalent to a Consul) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Agency. , Bahrein.
The Honourable the Political Resident A senior ranking political representative (equivalent to a Consul General) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Residency.
in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. ,
Bushire.