Concessions in Bahrein [Bahrain], Kuwait, &c: correspondence, 1932-Jul 1933 (Colonial Office Secret Print, Middle East No.49) [‎70r] (141/284)

Sir , United States Embassy, London, 29th March, 1932.
Acting under instructions, I have the honour to inform you that my Govern
ment recalls the inquiry which it made through this Embassy in 1929 as to the policy
of His Majesty's Government in the matter of the holding and operation of petroleum
concessions by American nationals in British-protected Arab territories such as
Bahrein. His Majesty's Government is aware of the solution subsequently arrived at
in the specific case of the Eastern and General Syndicate which, on behalf of the
Eastern Gulf Oil Company, was at that time seeking a modification of the so-called
Nationality clause," the inclusion of which in any oil concessions granted by the
Shaikh of Bahrein was being insisted upon by the Colonial Office The arrangement
then agreed upon had appeared to my Government only just in view of the extremely
liberal treatment accorded in the United States and in its possessions in reference to the
operation of petroleum concessions by British companies. My Government had
therefore supposed that the policy of His Majesty's Government would be no less liberal
in the matter of according open-door rights to American nationals in Kuweit than it
had shown itself to be in the almost identical case of Bahrein. The American Govern
ment sincerely trusts that it has been correct in this assumption and would appreciate
an early indication that such is the case.
My Government understands that it is the policy of His Majesty's Government
to require the companies seeking concessions in Arab States, such as Kuweit, that such
companies obtain the prior consent of the rulers of such States to the entry and opera
tions of such companies in the territories in question. The American Government is
informed that contrary to the impression that seems to have prevailed in the Colonial
Office, the Shaikh of Kuweit is understood to be quite agreeable to the specific entry
of the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. Oil Company and to the granting on behalf of that Company of an
oil concession without the inclusion of the " Nationality clause." The American
Government trusts that, in view of the apparent willingness of the Shaikh in this
matter, His Majesty's Government will see its way clear to taking up, in the case of the
Kuweit concession, no less liberal an attitude than was assumed in the case of the
Bahrein concession.
The American Government understands that, despite the fact that the Colonial
Office as early as 1925 gave its full and unqualified consent to the negotiation by the
Eastern and "General Syndicate of an oil concession with the Shaikh of Kuweit, that
office later qualified its consent by insisting upon the inclusion of the " Nationality
clause " in any agreement arrived at with the Shaikh for the apparently specific
purpose of preventing the entry into that territory of the Eastern Gulf Oil Company,
which had meanwhile arrived at an understanding with the Syndicate as to the transfer
of any concessions that it might obtain from the Shaikh. The continued insistence of
the Colonial Office on this point and its apparent unwillingness to accord to that
syndicate the same treatment as was accorded in the case of Bahrein has seriously
handicapped the Syndicate in bringing to a conclusion with the Shaikh the negotiations
which that concern was authorized by the Colonial Office to undertake.
The above situation is further complicated by the fact that at the very moment
while His Majesty's Government had under consideration the petition of the Syndicate
for the elimination or modification of the "Nationality clause," permission was
granted the Anglo-Persian Oil Company, a rival concern, to send a small party of
geologists to Kuweit for the purpose of studying the surface geology of the ground.
It will be recalled that this Embassy on repeated occasions requested of the Foreign
Office that the Company in question should not be permitted to proceed with its opera
tions, pending a decision by His Majesty's Government on the question then before it
regarding open-door rights for American nationals in Kuweit. Now my Government
has been informed that this study of the surface geology has been followed by a sceond
expedition equipped with drilling machinery and plant. The Government of the United
States greatly regrets that no effect has been given to this Embassy's request in this
matter, but would appreciate being assured by His Majesty's Government that this fact
will not be allowed to militate against the position of the Syndicate and its affiliate, the
Eastern Gulf Oil Company, in the eventual granting of an oil concession in Kuweit.
I have, &c.,
Eay Atherton,
Charge d'Affaires ad interim.