Coll 30/124A 'Koweit (Neutral Zone) Oil Concession: Negotiations with Petroleum Concessions Ltd.' [‎29r] (57/883)

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z 4 *^/^ Graft Letter from C.R. 0. to Political i _
Resident, Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. .
Crf*] u y/ At a recent inter-departmental xaseting with the Ministry of Fuel and
* ^ , I / Pcgver and tne Foreign Office the position regarding bids for the petroleum
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/y**>jr*V rights in the Kjfwgit Neutral Zone was reviewed and the question as ~£c: whether
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ffiiM 1 would be desirable to try to influence the Sheikh in favour of a particular
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</ ^ oil coiipai^y or group of companies was specially considered. X-wouId
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F your co-^r ients on ray -oboorvationcs -foliow.-
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t / ^2# -At the moeting^lt
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^2, -At the mocting^lt was generally felt that a stage in the bidding bad ****
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beea^-resohed wheri the large sums involved might soon na- longer be cornnensurate
with the oil prospects of the area. Q»- tha other ha*»d I feel thM: ^here may
be companies^rWhi«h nave as yet no concessions in the Middle East^ which may
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still wish to raise the stakesj Furthermore-, -yt ie obvious tha-t is not
in the position of being- able to influence the American companies in their
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decision as -te how much they may- choose to offer. I— would r however? be
interested to know whether you consider it likely that the Sheikh may close
the bidding at an early date or prolong the auction for an undefined period,
3* The latest definite bid r rogordiBg which we have information^ is that
of the Anerada Petroleum Corporation, which offered an initial payment of
$ 3i million, a minimum annual payment of $ 300, (XX) and a royalty of 25 cents
per barrel. I#* this conueotion- *e have recently heard that if Auer a da
succeed in gaining the concession, it will be joined by the Continental Oil
Cowpary and the Seaboard Oil Compaiy, both of which have been successful
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in their operations in U. S.A. /I a» advised that Amerada, in conjunction with
the other two companies, would make a strong team and have sufficient assets,
knowledge and ability to make a success of developing the concession.
4.
Ao not k>Kour
We have-*©- information whether G-ulf Oil Corporation intend to advance
its latest offer. However, as you are aware, it nas been mutually agreed
between Anglo-Iranian Oil Compaiy and Q«lf that if either of them should
obtain KjprwfcLt’s rights in the Neutral Zone it would share them equally with
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the other. For the present/A. 1.0. C. are debarred from bidding even as an
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equal partner with Gulf in Kjiw6.it Oil Company. This position may alter
when the Red Line Agreement is revised, negotiations regarding which are still
proceeding, though it appears unlikely that ary settlement will be reached
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h«f©ye 3 oi 1 "4 months at the earliest.
5.
By the time you receive this letter you will no doubt have seen Abraham,