Concessions in Bahrein [Bahrain], Kuwait, &c: correspondence, 1932-Jul 1933 (Colonial Office Secret Print, Middle East No.49) [‎95r] (191/284)

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Persian Oil Company has more than once suggested that if they had received a little
more help at that time from the Government Departments concerned the Eastern and
General Syndicate would never have become interested in these territories. The
Anglo-Persian Oil Company has represented that at the request of His Majesty's
Government they had agreed not to approach the Shaikhs directly, but to negotiate
only through the Political Eesident in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. . Major Holmes, however, on
behalf of the Eastern and General Syndicate obtained promises of concessions from
the Shaikhs of Bahrein and Kuwait by approaching them personally, with the result
that the Anglo-Persian Oil Company forfeited their chance of obtaining concessions,
while a lengthy correspondence was taking place between the Government Depart
ments concerned, the Government of India, 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.
and the High Commissioner for 'Iraq.
(2) In 1925, Major Holmes, acting on behalf of the Eastern and General
Syndicate (which was then purely a British Company) made certain proposals to the
Shaikh in regard to the grant of a concession which were not, however, acceptable
to him. The Anglo-Persian Oil Company also continued to negotiate without success.
(3) In March, 1926, the Eastern and General Syndicate commenced operations
(by arrangement with the Shaikh) to drill for water in Kuwait, and undertook to sink
two wells within the area surrounded by the town wall of Kuwait. After several
failures the first well reached a depth of 700 feet without striking water. It was
apparently as the result of information disclosed by these water-boring operations
that the interest of the Syndicate in the oil prospects of Kuwait was further stimulated.
(It should be noted that these operations had nothing ostensibly to do with prospecting
for oil, the Shaikh having refused to grant to Major Holmes an oil-prospecting licence.)
(4) In September, 1928, however, Major Holmes, with the permission of the
Political Besident, again approached the Shaikh for the grant of an oil concession,
and submitted a draft agreement.
(5) In November, 1928, it was realized that the point concerning a British
Control Clause had been overlooked in the Bahrein Concession, and the Eastern and
General Syndicate were informed that in any concession in Kuwait which might be
granted, a British Control Clause must be inserted similar to that imposed in the case
of British Companies operating in British Crown Colonies. No question of American
participation had, up to this time, arisen and the suggested inclusion of the nationality
clause was in fact put forward partly as a precautionary measure in order to bring
the concession into line with British practice in other oil-producing territories (such
as India and Trinidad), and partly because the Shaikh of Kuwait expressed himself
as being unwilling to grant a concession to any Company which was not under British
control. It was not until 19th December, 1928, that the Syndicate informed the
Colonial Office that they had concluded agreements with the Eastern Gulf Oil Company,
under which they assigned to that Company such rights as they possessed to explore
the territories which they were interested in, with options to form Companies under
British or Canadian Laws to acquire, and work any territories taken up under the
terms of their options.
(6) In March, 1929, the Political Eesident reported that Major Holmes had
arrived in Kuwait and left for Baghdad, but that apparently he had not renewed with
the Shaikh the negotiations for an oil concession.
(7) In August, 1930, the Eastern and General Syndicate drew up a second draft
concession, which they forwarded to the Colonial Office, asking that it might be
discussed with the Directors of the Syndicate and Major Holmes in London. The
Colonial Office replied that before the matter of the concession could be discussed it
would be necessary to consult the other interested Government Departments, and
also the Political Eesident in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. . In the meantime Major Holmes had
written to the 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. at Kuwait stating that the proposed British Control
Clause, was causing much difficulty with the Company's American Associates, and that
it was their intention to take up the question of modifying it with a view to making
it conform with the modified form of British Control Clause, which had by that
time been incorporated in the Bahrein Agreement. The Shaikh of Kuwait on the
other hand is understood to have informed the Political Eesident that under no
circumstances would he agree to a concession being transferred to an American
Company, and to have been insistent that the nationality clause should be inserted
and the concessionaires remain British. This attitude of the Shaikh accorded with
the policy of the Government of India, who were entirely opposed to the entrv of
United States interests into the area of the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. .