Page 44 - Historical Summaries (Persian Gulf - Vol II) 1907-1953

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willingness to cede Bainah al Kabir Island, provided it did not carry with it
territorial waters, if he could obtain rights over the eastern half of the Bu Sa afah
shoal.(M) Since then largely at the prompting of the Bahrain Petroleum Company
(paragraph 72 below) he has from time to time urged Her Majesty’s Government
to endeavour to reach a settlement with the Saudis which would give him possession
of this shoal and he mentioned the matter in his conversation with the Secretary of
State for Foreign Affairs when he visited London for Her Majesty’s Coronation
in 1953.(*") About the same time the Bahrain Petroleum Company presented to the
Foreign Office a long memorandum on the subject of the Bahrain claims.(,0°) Salman
does not have the same strong feelings about this claim from the purely territorial
point of view as he does about his claims to the sea-bed between Bahrain and Qatar
and to Zubarah but at the end of the year the Political Resident reported that he
was becoming increasingly impatient at the inability of the Bahrain Petroleum
Company to find any additional oil resources for him.f01)

V.—Oil
59. In December 1925 the Ruler granted to the Eastern and General
Syndicate a concession(l0a) which conferred on them in the first place an exploration
licence entitling them to explore the whole of his territories for oil for a period of
two years. (This concession with its subsequent indentures and supplementary
agreement was printed by the India Office in 1934.H103) In 1927 the licence was
renewed for one year. In 1928 it came to notice that the Syndicate were proposing
to transfer the concession to an American group. To prevent this it was proposed
to insert a British control clause in the concession before it was renewed again.
This led to much correspondence with the Syndicate and intervention by the United
States Government. The Syndicate explained that it was only after they had
failed to dispose of the concession to a British company that they had turned to
the Americans.(104) After much discussion and in spite of objections from the
Government of India His Majesty’s Government informed the Eastern and General
Syndicate that they were willing in principle to consent to the participation of
American interests in the Bahrain concession provided certain conditions were
observed.(l03) The following conditions were subsequently prescribed: (a) that the
company formed to take over the concession should be and remain a British
company registered in Canada and that it should maintain a registered office in the
United Kingdom in charge of a British subject who should be the recognised
channel of communication between the company of His Majesty’s Government,
(b) that one of its five directors should be British and the nominee of His Majesty’s
Government, (c) that the company should maintain in Bahrain a Chief Local
Representative whose appointment should be approved by His Majesty’s
Government and who should be the sole representative of the company empowered
to deal direct with the local authorities, and (d) that as many of the employees
of the company in Bahrain as was consistent with the efficient carrying on of the
undertaking should be British or Bahrain subjects.(10‘) On representations made by
the American interests slight modifications were made later in conditions (6) ancl
.
(c) (,0T) The concession was then assigned to the Bahrain(10') Petroleum Company
an associate of the Standard Oil Company of California, and an agreementO0*) was
executed with the Ruler in June 1930 whereby the exploration licence under it
was extended to December 2, 1930, and its assignment was approved.(ll°) His
Majesty’s Government’s conditions were attached to this agreement as a schedule.
60. The first party of the Bahrain Petroleum Company arrived in Bahrain in
May 193 K"1) and drilling started in October. In November the Ruler agreed to

(••) P.R. to F.O. Despatch 124 of October 20. 1951 (ES 1081/55 of 1951).
(**) F.O. to P.R. Despatch 107 (EA 1057/3) of July 3. 1953.
(,M) (EA 1083/52 of 1953.)
M p R-10 F.O. Despatch 107 of December 7. 1953 (EA 1539/4 of 1953).
( ) No. 1.1. O.A.C.
(,#s) I.O. to F.O. P.Z. 378/34 of January 16. 1934 (E 395/83/91 of 1934)
(,M) C.O. to F.O. 59115/28 of January 16. 1929 (E 281/281/91 of 1929)
('•*) C.O. to F.O. 69035/29 of June 4. 1929 (E 2843/281 /91 of 1929).
(I0‘) C.O. to F.O. 69035/29 of September 18. 1929 (E 4798/281/91 of 1929)
(!") C °-'O69035/29 of January 8. 1930 (E 140/28/91 of 1930).
( ) Until 1953 the company used the spelling Bahrein in its name.
(,##) No. 1 (a) I. O.A.C.
("•) £2 t0 18135/33 of January 31. 1933 (E 2139/167/91 of 1933)
( ) C.O. to F.O. 98035/31 of August 24. 1931 (E 4323/1420/91 of 1931)
46639
F