Page 145 - The Persian Gulf Historical Summaries (1907-1953) Vol II_Neat

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technical education have so far been inadequate. In 1953 the company offered
the Ruler representation on their London Board. He refused the offer at the time
but reserved his right to accept it at a later datc.O1)
36. In June 1949 Abdullah issued his declaration of rights over the sea-bed.
He was at once approached for an off-shore oil concession by a combine of the
Superior Oil Company, an American Company, and the Central Mining and
Investment Corporation Ltd., a British company. The latter company held only
a 12 J per cent, interest. The concession agreement was signed on August 5,1949.C )
It applied to “ all of the sea-bed and sub-soil underlying the waters of the Persian
Gulf which fall within the jurisdiction and control of the Ruler of Qatar and which
lie beyond the territorial waters contiguous to the mainland and islands of Qatar.”
Provision was made for the payment of Rs. 5,00,000 on signature and of
Rs. 10,00,000 annually until the discovery of oil. The royalty was fixed at one-fourth
of the “ proceeds of sale.” A Political Agreement between His Majesty’s
Government and the company had been signed in July.(GS) Besides the usual
provisions it contained an undertaking that the company would comply with all
reasonable requirements of His Majesty’s Government affecting navigation, fishing,
and pearling in the high seas of the Persian Gulf. This agreement was
communicated to the Ruler who agreed to take cognisance of it in an exchange of
letters. The company formed to work the concession was called the International
Marine Oil Company Ltd. and was registered in Canada.
37. Petroleum Development (Qatar) Ltd. held that their concession
automatically covered the sea-bed and disputed the Ruler’s right to grant a separate
concession for it. Under the terms of their agreement they demanded a reference
to arbitration. The Ruler and the company each appointed an arbitrator, and the
two arbitrators appointed a third arbitrator. The arbitration proceedings took
place at Dohah in March 1950.(cc) The decision reached was that Petroleum
Development (Qatar) Ltd.’s concession covered islands over which Shaikh Abdullah
ruled when the concession was granted, the bed and subsoil of all inland or national
waters and the sea-bed and subsoil beneath the territorial waters of the mainland
and islands, but not the sea-bed or subsoil beneath the high seas contiguous to the
territorial waters.

38. An area which it was considered would almost certainly fall to Qatar
when sea-bed boundaries were delimited, was defined and the International Marine
Oil Company were informed that they might operate within them.C7) This area
included the sea-bed to the west of Qatar between its territorial waters and the
sea-bed boundary between Qatar and Bahrain which was defined in 1947. The
company’s operations in this part of the sea-bed led in September 1951 to a strong
protest from the Ruler of Bahrain who claimed all the sea-bed between Bahrain
and Qatar (chapter 2, paragraph 45). The situation was complicated by the fact
that the company had their local office in Bahrain. The company suspended their
operations in this area, and in December the Ruler of Bahrain agreed that they
might continue to survey provided they wrote to him and asked for his concurrence
in their doing so “ without prcjudice.”(r'N) Correspondence between the Political
Resident and the Foreign Office ensued regarding the exact form which this
communication should take but before a decision was reached the company decided
to terminate their concession. This decision was reached because of the great
expense involved in off-shore operations, the increasingly exorbitant demands of
the Rulers and the uncertain position about the boundaries.C9) The company gave
three months’ notice of the termination of their concession to the Ruler of Qatar
on May 3, 1952.(70) The Ruler claimed a payment of Rs. 1,000,000 was due to be
made under the concession on August 5, 1952. The company refused to pay and
the Ruler demanded a reference to arbitration^7') A reference was made
accordingly and decided in the Ruler’s favour.
(“) The Ruler accepted the offer in 1954 and Abdullah bin Darwish became a nominal member
of the company’s London board.
(“) P.R. toF.O. S/272/49 of December 4. 1949 (E 15334/1271/91 of 1949).
(“) (EA 1273/4 of 1950.)
(**) (EA 1271/4 of 1950.)
(") (EA 1273/63 of November 8. 1951.)
(M) P.R. to F.O. 1539/38 of December 13. 1951 (EA 1272/39 of 1951).
(") Tel. from F.O. to P.R. 196 of March 1. 1952 (EA 15311/1 of 1952).
(T0) P.R. to F.O. 15320/14/52 of May 6. 1952 (EA 15311/9 of 1952).
(M) P.R. to F.O. 15311/37/52 of May 31. 1952 (EA 15311 /17 of 1952).
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