Coll 30/124A 'Koweit (Neutral Zone) Oil Concession: Negotiations with Petroleum Concessions Ltd.' [‎343r] (685/883)

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On the 24th October I lunched with the Directors of the
A.I.O.C. and B*0«C« at Britannic House on the invitation of
General W # E*7.Abraham, one of the B.O.C. Directors* So far
as I was concerned the invitation was entirely of a private
nature* During and after the meal however the Kuwait Neutral
Zone was discussed at length*
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Sir William Fraser stated that some time ago the Gulf
Oil Company suggested that the A*I*O.C* should Join them on a
half and half basis in competing for a concession in the
Sheikh f s share of the Neutral Zone, but he had to refuse the
offer owing to the existence of the M red line". He said that
his Company were taking legal advice about the validity of the
tt red line" agreement and that it might be five days or five
months before they obtained a ruling* If they found they
could honourably resile from the agreement and decided to do so
it was probable that Mr. Gulbenkian would contest the decision
and take the matter as far as the House of Lords, but he did not
think that the other participants in the I*F*C* would raise any
objection. He emphasised that his prime concern was to obtain
s exile British participation in the Neutral Zone and urged that
everything possible should be done to prevent the Sheikh from
coming to a final decision until the question of the red line
had been decided*
Mr. Watson of the B.O*C. said that although his Company^
operations were normally limited to India and Burma he would,
if necessary, be willing to compete for the Kuwait Neutral Zone
in order to ensure British participation* They were in a
position to secure a 100% concession, but might perhaps come
to some arrangement to share fifty-fifty with the Gulf Oil
Company. They are not in ary way bound by the "red line"
agreement •
One point that emerged from the discussions is that Aramco
are under an obligation to pay royalty @ 8s.4d. to the Saudi
/Arabian