Page 320 - UAE Truncal States

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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