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them for the addition of such an area to their concession as soon as the boundary
had been demarcated. At the same time the Company wrote to the Ruler
announcing their intention of improving the facilities ol Dohah as a port. It was
agreed in the correspondence that amendments to the original concession based
on the decisions reached should be drafted and agreed by the parties.
34. An Amending Agreement was drafted but when it was presented to the
Ruler in February 1952 he refused to sign it unless the company wrote him a letter
agreeing to its immediate revision. This was a consequence of the recent signing
of fifty-fifty profit-sharing agreements in Kuwait and Iraq. The Amending
Agreement was accordingly dropped and negotiations were initiated for a fifty-fifty
profit-sharing agreement^) which was signed on September 1, 1952. Under this
the company agreed to pay the Ruler royalty and tax commutation at the previous
concession rates plus the sum necessary to bring the Ruler’s total receipts up to
50 per cent, of the profits arising in Qatar on imported oil. All payments are to be
made in sterling but the company subsequently agreed to pay in Indian rupees
instead of sterling such proportion of them as the Ruler might require for so long as
the present freedom of exchange between the Indian rupee and sterling prevails.!45)
The agreement was accompanied by a number of letters. In the first(43) of these
the Company (a) mentions its understanding that the Ruler will issue an Income
Tax Decree and (b) agrees to pay a sum of Rs. 5,000,000 in satisfaction of any
claims to additional payments in respect of the period prior to the agreement (which
the Ruler had sought to make retrospective). The Ruler replied!5') confirming that
it was his intention to issue the Income Tax Decree and accepting the payment
offered. The Income Tax Decree, the object of which is to enable the company to
apply for income-tax relief in the United Kingdom, had not been issued by the end
of 1953 as the Ruler had not agreed to the terms of the draft presented to him.(44)
In a second letter(4‘) the company asked for an option for any territory eventually
found to belong to the Ruler outside the limits of the existing concession. The
Ruler replied!57) refusing a formal option but gave the company an assurance that
he would not enter into negotiations with any other company without first giving
Petroleum Development (Qatar) Ltd. the opportunity of concluding an agreement
with him. The other letters!58) covered the free supply of petrol and kerosene to the
Ruler, a payment to be made until the end of 1953 as an interim measure pending
the calculation of profits, and payments by the company for the use of ports.
The Political Resident was asked to make it clear to both parties that the Political
Agreement of 1935 and the letters then exchanged between him and the Ruler
(paragraph 26 above) applied to the new agreement and to obtain their
acknowledgments.!59) When this had been done(r,°) the agreement was approved
by Her Majesty’s Government.
35. The company have drilled some 35 wells in Qatar and their production
at the end of 1953 was at the rate of 4 k million tons a year. Their relations with
the political authorities, the Ruler and their Arab labour have not always been
happy. Until 1949 there was no Political Officer in Qatar and they became used
to conducting their relations direct with the Ruler. Subsequently they found it
difficult to conform strictly with the terms of their Political Agreement and some
friction resulted. The whole matter was discussed at the Foreign Office in 1950.(“)
The company have annoyed the Ruler by trying to be too clever in their dealings
with him and by their selfish attitude for a time over the grant of facilities to others
at their port at Umm Sa’id and their landing-ground at Dohah. Their machinery
for dealing with their Arab labour appears to be unsatisfactory and there were
serious strikes in 1950, 1951 and 1952. Under some pressure from the political
authorities they have taken steps to improve the accommodation for their Arab
employees!65) but their arrangements for providing them with both academic and
(Sl) No. 5 III. O.A.C.
(») P.R. to F.O. 1534/2/9/53 of March 4. 1953 (EA 1531/5 of 1953).
(1J) No. 5 (a) III. O.A.C.
(54) No. 5(6)111. O.A.C.
(*») The decree was signed in March 1954 and applied to persons subject to the Qatar Order
in Council by Queen’s Regulation No. 1 of 1954.
(i4) No. 5 (c) HI. O.A.C.
(JT) No. 5 id) HI. O.A.C.
(4*) No. 5 (c) to (j) III. O.A.C.
p») FO to P R- Despatch 203 of November 22, 1952 (EA 1536/34 of 1952).
(•°) P.R. to F.O. 55 of June 16. 1953 (EA 1531/10 of 1953).
b.M.E.O. to F.O. Despatch 51 of September 19, 1951 (EA 2185/5 of 1951).