Coll 30/216 'Development of oil supplies in the Middle East.' [‎25v] (50/131)

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both the British and Soviet Governments protested strongly, the former because
of the alleged infringement of the A.I.O.C.’s rights and the latter because of the
terms of the 1921 treaty. In order to surmount the difficulty occasioned by this
treaty, the Persian Government addressed a note on the 12th December, 1921, to
the Soviet Diplomatic Representative at Tehran to the effect that the Majlis
desired the retrocession of Russian concessions to be without reserve or condition,
and therefore asked for the treaty to be revised accordingly. On the same date
the Soviet Diplomatic Representative sent a purposely vague reply. After
stating that his Government had “ never sought to place any restriction upon
the progress and prosperity of Persia,” he went on to say : “ I would be prepared
.... should friendly relations be maintained between the two nations, to promote
negotiations with a view to a total or partial revision of these articles on the lines
desired by the Persian Government, as far as the interests of Russia permit.”
117. As matters had reached a deadlock, the A.I.O.C. and the Standard
Oil Company agreed to act together on a footing of equality, with the result
that the latter acquired a 50 per cent, interest in North Persian Oils, Ltd. The
two companies then sought jointly to secure the grant of a new concession, but
the Persian Government refused, partly because of the difficulty with Soviet
Russia and partly because a new competitor, the Sinclair Oil Corporation, had
appeared on the scene (see paragraph 119 below).
118. Although North Persian Oils, Ltd. has never renounced its claims
in northern Persia, it is now many years since it last attempted to press them.
In 1935 the name of the company was changed to North Iranian Oils, Ltd.
(b) The Sinclair Concession.
119. While the A.I.O.C. and the Standard Oil Co. of New Jersey were
making their joint endeavours to obtain a new concession, the Sinclair Oil
Corporation opened negotiations with the Persian Government and succeeded in
1924 in securing a concession. This company failed to proceed with the matter
because (i) it was unable to raise the necessary money for a loan to the Persian
Government, (ii) charges of bribing certain Persian officials were brought against
it, and (iii) the company’s prestige had been very adversely affected by its
implication in the Teapot Dome scandal in the United States.
(c) Societe Franco-Per sane de Recherches.
120. A I ranco-Belgian group began negotiating for a concession in
northern Persia in 1927 and formed the Syndicat des Etudes Franco-Persanes.
This concern carried out some prospecting work, the results of which were
sufficiently encouraging to lead to the formation, in 1930, of the Societe Franco-
Persane de Recherches. The new company sent out a party of geologists and
engineeis and sank a shallow well at Naft Chal, in Mazandaran, a few miles
from the Caspian coast. Late in the same year, however, all operations were
abandoned because of difficulties encountered with the Persian and Soviet
Governments.
(d) The A miranian Concession.
l^L In 1936 the Seaboard Oil Company of Delaware, U.S.A., with
a view to possible operations in Persia, formed a subsidiary, the Amiranian Oil
Company, in which it took up 50 per cent, of the shares, the remaining 50 per cent,
being allocated to the Texas Corporation.
122. On the 3rd January, 1937, the Persian Government granted the
Amiranian Oil Company an oil concession valid for 60 years in north-eastern and
eastern 1 ersia. This concession was subsequently approved by the Mailis. Its
teims, which followed very closely those of the A.I.O.C. concession of 1933, bound
the company to select within 3 years exploitation areas not exceeding 100 000
square miles in the aggregate from an exploration area covering 200 000 square
miles. Although the greater part of this exploration area was in Khurasan
4,500 square miles of it were m the adjacent province of Astarabad (now known
as Gurgan) and so to this extent overlapped the Khostharia concession
m i 23 i 7 hen ^ S° k vl f .^rmnent heard of the grant of this concession,
they lodged a protest, but instead of basing this protest, as might have been
expected, on the infringement of article XIII of the 1921 treaty they ohiected
on the grounds that the existing good neighbourly relations between the two
coun ries and the benefits conferred on Persia by the Soviet Government, had
entitled them at least to be informed in advance of the granting of the conces
sion, which, if granted to the nationals of certain other countries might have
been a matter of serious concern to them. ’ &