Page 47 - Historical Summaries (Persian Gulf - Vol II) 1907-1953

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Force and the aviation fuel, at any rate after the last war when the Bahrain
Petroleum Company ceased to produce it, was supplied by the Anglo-Iranian Oil
Company. The matter, though from time to time broached locally in Bahrain,
remained as it was until 1952 when the Anglo-Iranian Oil Company raised with
Her Majesty’s Government the question of their being officially recognised as
Government Agents at Bahrain and authorised to construct airfield tankage.(,2‘)
There was much further discussion and various alternative proposals were
considered including suggestions that either Her Majesty’s Government or the
Bahrain Petroleum Company should build the tankage and lease it to the Anglo-
Iranian Oil Company^27) but the action to be taken had not been decided by the
end of 1953.
67. In 1946 the construction off Sitrah Island of a causeway nearly three
miles long terminating in a wharf was completed. This wharf is used exclusively
for tankers and bunkering and for the unloading of freight consigned to the
company. Freight for the general public is unloaded into lighters from ships lying
in the adjoining anchorage and taken to Manamah. The management of the port
is entirely in the company’s hands. Regulations for it have been drafted and it is
proposed to ask the Ruler to issue these and then to apply them to persons subject
to the Order in Council by a Queen’s Regulation. The crew of tankers and
freighters visiting Sitrah are ordinarily not allowed to land. The company have
from time to time had under consideration a project for building some ldnd of
club or institute for them but nothing has yet been done. The Ruler will not
permit them to visit the towns.
68. The royalty payable under the 1934 Mining Lease was subject to
revision after 15 years’ payment and the matter was taken up by the Ruler early
in 1949. Much haggling ensued in which the political authorities refused to
participate.^2*) Eventually the Ruler insisted that the rate should be raised to
Rs.10/- and the company after three or'four months of further argument gave way
and agreed to pay the rate proposed with effect from January 1, 1950.0”) The
matter was settled by correspondence and there was no formal modification of the
1934 Lease.
69. In 1951 in view of the trouble between the Persian Government and the
Anglo-Iranian Oil Company, the conclusion of the fifty-fifty profit-sharing
agreement between the Saudi Arabian Government and the Arabian American
Oil Company and negotiations for a similar agreement which were in progress at
Kuwait, the company decided to offer further payments to the Shaikh. They
originally proposed to offer a fee on oil imported from Saudi Arabia, a matter
which had previously been raised by the Ruler but not pressed, and a royalty on
the natural gas used in refining imported oil,(,3°) but subsequently changed their
minds and on June 28 wrote to him referring to the large revenues other Middle
East Governments were receiving from oil and the fact that he received no income
from imported oil and stating their intention of voluntarily paying him an additipnal
Rs. 500,000 a month with effect from June 1, 1951 .(,31) The Ruler replied briefly
thanking them. On July 21 they wrote him another letter saying that the new
payments would continue until a “ comprehensive overall plan ” was determined
upon and assuring him that under any such plan he would not receive less than he
was receiving on the basis of their letter of June l.('33)
70. At the beginning of 1952 the company decided that in view of the
negotiations for fifty-fifty profit-sharing agreements which had been completed
or were in progress in neighbouring countries, they must enter into some similar
arrangement with the Ruler. Negotiations went on throughout the year, delay
being caused by the Ruler’s insistence to begin with on payments which would give
him an income for oil comparable to that received by the Ruler of Qatar, and by
haggling between the Ruler and the company over the payment to be made on
imported oil. A supplemental Agreement^33) was eventually signed on December 8.
Its main provisions were (a) the payment of a fee of 2id. per barrel on all foreign

('”) M.C.A. to F.O. No. SG 284/258/032/O.R. 3 of July 16. 1952 (GA 60/16 of 1952).
(l,r) F.O. to M.C.A. GA 60/46 of December 29, 1953.
(»*•) P.R. to F.O. 28/4/50 of February 9, 1950 (EA 1534/9 of 1950).
/**•) p R. to F.O. 28/25/50 of April 21, 1950 (EA 1534/24 of 1950).
(»••) Tel. from P.R. to F.O. 157 of May 29. 1951 (EA 1532/15).
p*«) No. 2 (g) I. O.A.C.
(>**) P.R. to F.O. 15319/15 of July 26, 1951 (EA 1532/24 of 1951).
F”) No. 4 I, O.A.C.