Concessions in Bahrein [Bahrain], Kuwait, &c: correspondence, 1932-Jul 1933 (Colonial Office Secret Print, Middle East No.49) [‎118r] (237/284)

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queries. If you see a suitable opportunity, will you try to get some further particulars
from him? Oliphant wishes that, if you do address him at all, you should be abso
lutely frank and explanatory with him.
I enclose, too, a copy of a letter just received from the Admiralty on the same
subject. There has not been time to consider it at all, but you had better see it before
raising the subject with Cadman.
Yours, &c.,
C. F. A. Warner.
G. W. Rendel, Esq., C.M.G.
Enclosure 2 in No. 235.
(Confidential.)
United Kingdom Delegation to the League of Nations,
My dear Christopher , Geneva, 3rd February, 1933.
Mant thanks for your letter of 31st January about Kuwait oil.
I have had a talk with Cadman on the subject and frankly explained the position.
He tells me that what he has been aiming at has been an arrangement with the Mellon
group by which the Anglo-Persian Oil Company would obtain certain advantages in
the United States of America, providing for the formation by the Anglo-Persian Oil
Company of a subsidiary Company to work the Kuwait oil concession. The United
States group would have a 50 per cent, shareholding in this company and would thereby
obtain a 50 per cent, share of the profits; but the company would be a British one and
the Anglo-Persian Oil Company would retain the entire management and be entrusted
with the whole working of the concession.
The chief difficulty at present seems to lie in the question of development. The
United States group appear to be afraid that the Anglo-Persian Oil Company, having
virtually secured the concession on the above basis, might refrain from developing it,
and merely hold it in reserve until the general conditions of the oil industry were more
favourable for its development. The Anglo-Persian Oil Company may have some
difficulty over this question, since', if they secure the Kuwait concession now and
develop it at once, the Persian Government may revive the accusation that they are
frittering away their energies elsewhere than in Persia. Cadman thinks, however, that
there should be no insuperable difficulty in reaching some agreement on this point.
3. Cadman adds, for our most confidential information, that the Anglo-Persian
Oil Company are determined to acquire the Kuwait oil concession under one form or
another, since they cannot allow a rival group to operate so close, as it were, to their
flank. I gather that the necessary instructions have been sent to the Anglo-Persian Oil
Company local representative and that, pending an agreement with the Mellon group,
there is likely to be some brisk bargaining—which is rather unfortunate in the circum
stances as it will presumably only encourage the Shaikh to raise his terms.
4. As regards Bahrein and the Hasa coast, the difficulty seems to be that the
Anglo-Persian Oil Company are excluded from both these areas by an early oil agree
ment of, apparently, March, 1914. There was some correspondence about this agree
ment in, I think, 1927 or 1928, which included a map showing the area from which the
Anglo-Persian Oil Company are excluded. The Library will probably have no difficulty
in tracing it. Cadman is, however, hoping, as he told Hall on 23rd December, to
interest the Burmah Oil Company in the Bahrein concession, although that concession
is no longer held by the Mellon group but by a company known as the Standard of
California, which, though it has struck plenty of oil in Bahrein, appears to be faced
with difficulties over its future marketing programme.
5. As regards the Hasa Coast, Cadman is hoping to secure any concession that
may be going for the 'Iraq Petroleum Company, although he anticipates some difficulty,
should the 'Iraq Petroleum Company secure it, from the consequent introduction of a
French element in the development of oil in Arabia. He is considering the possibility
of interesting Philby in this project by giving Philby's company—though I am not quite
sure what company he has in mind—some interest in the matter. He realises that any
overtures to Ibn Saud in connexion with the Hasa concession must be made through
Jeddah, and is inclined to share a view which I tentatively expressed that the present
financial straits of the Saudi Government may possibly prove a favourable factor in
the situation.
6. From this you will see that most of the fears expressed in Gilbert Laithwaite's
letter of 19th January and in the Admiralty letter of 27th January are, at present at any