'File 5/14 Continental shelf and marine area' [‎6r] (11/286)

/ 4 .
S-S C R E T
(C)
COPY
FOREIGN OFFICE, S.W.I,
24th Hay, 1948.
(E 6276/276/91)
SECRET .
Dear Chancery,
Will you please refer to your letter No. G 59/-/48
of the 24th March about the principles to be adopted for
the territorial division of the waters of the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran.
and the exploitation of off-shore oil. We are very glad
to find that In general the State Departments thinking is on
the same lines as our own. In giving you our further observat
ions on the State Department's preliminary views, we think it
would be convenient if we referred in each c a se to the para
graphs as numbered in your letter.
2. Paragraph 3 of your letter presents no difficulties as
the State Department agree with our view that existing
concessions do not cover after acquired territory unless this
is expressly provided for in the terms of the concession.
3. Your paragraph 4. Two things are Involved here, the
assertion of sovereignty by the rulers over the sea-bed and
sub-soil of the areas wfcich would fall to their shares, and
the grant of rights to exploit the oil in the sub-soil. On
the first point our view is that the rulers should annex the
sea-bed when they annex the sub-soil. We do not see how they
can very well do one without the other. A different sovereignty
over the sufface from the sub-soil is hardly tenable. As
regards the second point, the Amerlcanx view ± as we understand
it is that the right to exploit the sub-soil does not include
a right to make any use of the sea-bed above and that nothing
the oil companies do in the sub-soil must prejudice the
existence of the fisheries or pearling beds on the sea-bed
above it; In principle, we agree and we think that navigation
rights must be similarly protected. This point will present
no difficulty in the case of new concessions or in the case of
those companies whose concessions do not include the continental
shelf territory. In the few cases where existing concessions
will include the continental shelf after it has been annexed by
the State concerned, it will, however, have to be made clear
to the companies that whatever their theoretical rights they
shall only exploit the sub-soil provided they reppect the sea
bed above it and navigation rights in the sea. It will also
probably be necessary to issue rules and regulations similar
to those which we understand have been Issued by the States
of Texas and LoulMana to control exploaatory methods in
off-shore areas in the Gulf of Mexico and likewise something
on the lines of the Trinidad Submarine Regulations for the
protection of shipping, an extract from which we enclose. This
is, however, a detail which can be settled at a later date.