Coll 6/48 'Oil: Concessions in Saudi Arabia. (Hasa)' [‎469r] (939/1153)

{c) Payment of £3,000 a year for “special protection’’ in half-yearly pay
ments, to begin sixty days after date.
(d) Payment of £6,000 under pain of nullity of the concession, sixty days
after date.
(e) Arbitration in the event of any dispute.
It is not clear what, if anything, E.G.S. did to implement the undertaking
to start operations. It is known that on the 26th April, 1924, two geologists of
theirs left Koweit to make a preliminary survey in “ Nejd, Koweit Neutral Zone
and Hasa," but it is not known to what this led. Anyhow, Major Holmes was
in difficulties with Ibn Saud in October 1925, because, according to Bushire
telegram to the Colonial Office of the 31st October, (a) Ibn Saud had refused to
alter a clerical error of date, and (b) E.G.S. would advance no more money. There
was also apparently difficulty in obtaining financial support in London owing to
the non-existence of British diplomatic representation at Nejd. It was probably
at this time or a little later that E.G.S. and Major Holmes estranged Ibn Saud
by refusing a payment which he claimed.
There is no evidence that Ibn Saud formally cancelled the concession at this
juncture. When, however, E.G.S. entered into an agreement with the Gulf
Company on the 30th November, 1927, in regard to this, the Neutral Zone
Concession and the hoped-for concession in Koweit, they admitted that both the
former were “at least subject to forfeiture and cancellation, if not actually
null and void.’’
The negotiations which led to the grant of a concession in Hasa to the
Standard Oil of California are understood to have been conducted by that
company directly, and not through the intervention of the E.G.S.
(6) Koweit Neutral Zone. —On the 17th May, 1924. an oil concession is
alleged to have been granted jointly by Ibn Saud and the Sheikh of Koweit to the
E.G.S. The E.G.S., by an agreement of the 30th November, 1927, transferred any
rights which it might possess or acquire or which could be reinstated in Hasa or
the Neutral Zone as well as in Koweit to the Eastern Gulf Oil Company. The
history of the concession is somewhat obscure. A recent Colonial Office memo
randum concludes from a review of the known facts the “impression ....
that Ibn Saud did actually grant the concession on his own without the consent
of the Sheikh of Koweit." As against this, E.G.S. definitely claimed to have got
the concession from both, and it seems hardly likely that they would have
committed themselves to this statement if it were untrue, in their definite legal
agreement with the Gulf Company of the 30th November, 1927, as they certainly
did. In any case, however, the grounds for considering this concession to have
lapsed are even stronger than in the case of the Hasa Concession. E.G.S. not
only admitted in the agreement with Gulf that it was like the other “at least
subject to forefeiture,” &c., but stated in a letter to the Colonial Office of the
19th December, 1928, that it had “never been made operative.”
The Sheikh of Koweit’s account of this concession is given in a recent despatch
from 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. dated the 6th July, 1933, which states that the Political
Resident had an interview with the sheikh and discussed the matter. The
sheikh’s recollection was that Ibn Saud gave the Hasa Concession proper to
Major Holmes in the spring of 1923, its chief clause being that unless Major
Holmes started work within three years the concession would lapse. Ibn Saud
wrote in the summer of 1923 and sent the sheikh a draft draft joint concession in
respect of the Koweit Neutral Zone, which he wished to give to Major Holmes’s
company, the E.G.S., and asking the sheikh to sign it. His Majesty’s Government
informed the sheikh that he could sign the joint concession. The concession was
actually signed in April 1924, and consisted of only four pages, and it was duly
sent on to Ibn Saud. About a year afterwards Major Holmes had a disagreement
with Ibn Saud, who informed Major Holmes that the joint Neutral Zone
Concession was there and then cancelled. Ever since the Sheikh of Koweit has
assumed the joint concession to be a dead letter, that is to say, from about April
1925. The Sheik of Koweit has been unable to ascertain whether Ibn Saud has
included the Neutral Zone in the Hasa Concession recently granted to the Standard
Oil Company of California.
(7) Farsan Islands, now also a 'part of Saudi Arabia. —E.G.S. would appear
to Jiave obtained some sort of a concession for the Farsans (and possibly the
mainland of Asir) from Hasan-al-Idrisi in 1926. It is not clear what became
ot this concession, if the grant was complete, but it was superseded by a concession