Page 320 - UAE Truncal States
P. 320

The External Influences

          Willi the signing in 1922 by all Ihe Trucial Rulers of undertakings
        nol lo give oil concessions to any company which was not supported
        by the British Government,51 their privileged position in these States
        was being turned to potential economic advantage. This move was
        made not because there was any evidence of oil deposits in the
        territories bordering the Gulf, but, after the traumatic experience
        which British companies had had in securing exploration rights in
        Turkish Arabia (later Iraq) where oil deposits were known lo exist,52
        it was deemed judicious to ensure that if there was any hope of
         finding oil in the territories belonging to the semi-independent Arab
        Rulers, Britain should have the first option. The Trucial States were
         thus simply brought into line with Kuwait and Bahrain, who had
        signed similar agreements regarding oil concessions in 1913 and
         1914 respectively, and with Oman, which signed such an agreement
        in 1923. As for the principalities of south-western Arabia, the
         possibility of obtaining the first option for oil concessions was taken
        for granted because of their colonial and protectorate status.
           But the British monopoly over the granting of oil concessions did
         not arouse much interest among the British oil companies already
         working in Persia and elsewhere in the Middle East. Eventually some
        geologists of the Anglo-Persian Oil Company (a predecessor of
         British Petroleum) visited parts of the Hajar mountain range within
         Oman and the mountains of Dhufar in search of surface evidence of
         oil-bearing rock structures. The result was not encouraging enough
         to initiate negotiations for concessions anywhere in eastern Arabia
         until after oil had been discovered in commercial quantities in
         Bahrain in 1932.53 Surface rock structures similar to those of the
         Bahrain field were observed near Dhahran in ai Hasa and on the
         Qatar Peninsula. By default, a concession for the former did not go to
         the British company, while prolonged negotiations for the latter
         resulted in an agreement in 1935 between the Ruler of Qatar and the
         London-based multinational Iraq Petroleum Company (I.P.C.).54 This
         company, which was in part owned by the Anglo-Persian Company
         (later BP), had been established specifically to develop the resources
         of Iraq. In order to prevent other companies from entering the area,
         the IPC formed in October 1935 a wholly-owned subsidiary called
         Petroleum Concessions Ltd., which secured concessionary agree­
         ments with the Rulers and governments of the entire Arabian
         Peninsula, excluding only the newly-proclaimed Kingdom of Saudi
         Arabia.55

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