Coll 6/19 'Arabia: (Saudi Arabia) Hejaz-Nejd Annual Report.' [‎32v] (65/540)

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137. At the end of November the Foreign Office, after correspondence with
the Colonial Office, sent to Sir R. Bullard comprehensive instructions, in which
the chief points were these :—
(1) Financial assistance should not be offered in the name of Transjordan Used in three contexts: the geographical region to the east of the River Jordan (literally ‘across the River Jordan’); a British protectorate (1921-46); an independent political entity (1946-49) now known as Jordan .
(2) His Majesty’s Government held to their attitude of inability to accept
the contention that the line was an indivisible whole to be both owned
and controlled by the Moslem Advisory Council to be set up under
the Bompard Declaration (of January 1923), though this did not mean
that they could refuse to agree to the establishment of an advisory
council of Moslem representatives to make recommendations for the
upkeep of the line and the improvement of traffic conditions for
pilgrims.
(3) If the Saudi representatives at the proposed conference should show any
disposition to pursue the question of the joint administration of the
various sections of the railway, an endeavour should be made to induce
them to abandon this sterile subject and to concentrate on the task
of reconstruction.
(4) The services of the Palestine Railways administration should be offered
to, and, indeed, pressed upon the Saudi representatives for the purpose
of the reconstruction, but not, at any rate for the present, for the
operation of the Saudi section.
(5) A suitable opportunity should be taken to repeat the warning, that
although His Majesty’s Government were anxious, out of regard for
Ibn Saud, to assist him within the limits of their ability in this
matter, they feared that the fulfilment of the project might be a
disappointment to him
(6) His Majesty’s Government could not make their financial contribution
towards the cost of repairing the Saudi section, or begin the recon
struction of the Maan-Mudawwara section, until the whole of the
money necessary for the Saudi section has been provided.
138. The last paper in the year is a note which was sent to the Minister
for Foreign Affairs to explain the discrepancy between the various estimates of
the cost of the work which had been communicated to them : the higher figure
represented what it would cost to bring the line up to the pre-war standard,
the lower, the cost of the absolute minimum of repairs essential to permit the
operation of a train service.
139. The French Government had not replied to the invitation by the end
of the year, and it seemed unlikely that the conference could be held in January
1939.
Pecuniary Claims.
140. The situation remains as described in paragraph 125 of the report for
1937.
Oil Interests.
141. The prospects of the Red Sea oil concession seem to be poor. Core
drilling has continued in the Farsan Islands and has been begun near Jizan,
but with no success so far.
142. In 1937 th* Saudi Government appealed to His Majesty’s Government
to assist them in escaping from what seemed to them a deadlock over the Saudi
rights in oil in the Koweit Neutral Zone. At a moment of great financial stress
Ibn Saud had given C.A.S.O.C. an option on his half of the oil in the Koweit
Neutral Zone for a nominal sum, and he feared that they would do nothing
because it was to their interest that that oil should not be developed. Investiga
tion in London eventually showed that the option which C.A.S.O.C. had acquired
covered not only half the oil in the Koweit Neutral Zone but all the oil in Saudi
Arabia proper that was not already covered by the concessions granted to
C.A.S.O.C. and to the Petroleum Development (Western Arabia) (Limited). The
terms of the option require that if any other company should make an offer for