Concessions in Bahrein [Bahrain], Kuwait, &c: correspondence, 1932-Jul 1933 (Colonial Office Secret Print, Middle East No.49) [‎44r] (89/284)

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informed in regard to additional information we required. 1 think we should ask for a
report covering the following points :—
(1) Geological work carried out and areas examined.
(2) Drilling. Particulars of wells drilled.
(а) Location of wells (indicated on map).
(б) Date of commencement and completion.
(c) Depth reached to date.
(d) Occurrences of oil met with and depth.
(e) Result of production tests, if any.
(/) New locations selected or projected.
(3) Personnel. Description and nationality.
(4) Buildings, tankage, pipelines, fyc., erected or laid.
A report on these lines would enable us to judge how the Company are carrying
out their work, and give us a better idea of the probable value of the concession, and
they might, I suggest, be asked to supply a similar report, bringing previous reports up
to date, every six months on the 31st December and the 30th June. Such a report would
be on the lines of those furnished by the 'Iraq Petroleum Company to the 'Iraq Govern
ment. There are also other precedents of which particulars can be furnished to you if
necessary.
P.S. —I have sent copies of this letter to Moore, Rendel and Laithwaite.
Yours, &c.,
F. C. STARLING.
18135/33 [No. 129].
No. 80.
The TREASURY SOLICITOR to COLONIAL OFFICE.
Sir , Storey's Gate, St. James's Park, 18th May, 1933.
I have to acknowledge the receipt of Mr. Williams's letter of the 11th instant,*
on the question whether the Bahrein Petroleum Company are entitled to demand an
extension of their prospecting licence under the Agreement entered into on the
2nd December, .1925, between the Shaikh of Bahrein and the Company's predecessors
in title, the Eastern and General Syndicate, Limited.,
An extension of the prospecting licence for which this Agreement provides may
be granted either under Article IV of the Agreement or under Article VIII of the
second Schedule thereto. It is, as I understand, not alleged by the Company that
they have been prevented by causes beyond their control from carrying out the
work of prospecting, and consequently it is not necessary to consider the effect of
Article VIII of the second Schedule.
The question therefore falls to be determined under Article IV of the Agreement
itself, which provides that " the prospecting licence . . . may be extended for a
further period of two years on the Company showing to the satisfaction of the
Shaikh, acting on the advice of 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. , that such
extension is justified." I assume that the condition precedent to an extension
prescribed by the proviso to this Article has been 1 fulfilled and that no question there
fore arises with regard to it.
The Agreement does not expressly provide that English law is to apply to the
solution of any disputes which may arise between the parties to it, but I can, of course,
only advise on the matter on the assumption that the rights of the parties are governed
by principles of that law. On this basis it is clear that where the rights of one party
to a contract are expressly declared in the contract to depend on something being done
to the satisfaction of the other or on that person being satisfied as to a certain state
of affairs, the second party is not entitled to act in an arbitrary or capricious manner,
or to declare himself as not satisfied by a set of circumstances which any reasonable
man would regard as satisfactory. He must take into consideration all the facts of
* No. 78.