Page 98 - Historical Summaries (Persian Gulf - Vol II) 1907-1953

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(iii) A letter from the company submitting to the income-tax decree.(2,i)^
(iv) A letter from the company regarding arbitration under the decreed °)
Under the first of these documents the concession was extended for a further period
of 17 years. The islands of Kubbar, Qaru and Umm al Maradim were specifically
excluded from it, but it was extended to a distance of six nautical miles from the
base line used for delimiting the territorial waters of Kuwait. Apart from this the
continental shelf appertaining to Kuwait was specifically excluded. The royalty
remained at the same rate as in the original concession but all payments were to be
made in sterling. Provision was made for payments in the event of the suspension
of operations on account of force majeure and for a contribution towards the
education of Kuwaitis at universities and schools outside Kuwait. The company
made a payment to the Ruler of Rs. 100 million in full settlement of all his claims
up to December 1,1951.
99. In view of the change in the character of company effected by the
assignment of November 30, 1951 (paragraph 96 above) His Majesty’s Government
deemed it necessary to execute new and separate Political Agreements with its two
components, the D’Arcy Kuwait Company and the Gulf Kuwait Company. These
agreementsC17) were signed on January 6, 1953, and were formally accepted by the
Kuwait Oil Company.C1") The agreements are identical except for one article which
takes into account the different nationality of the two companies. The agreements
follow closely the Political Agreement of March 5, 1934. There is some modification
regarding the manner in and extent to which business with the Ruler is to be
conducted through the Political Agent, and articles have been added covering
frontier delimitation, navigation, fishing and pearling, and the special treaty
relations existing between Her Majesty’s Government and the Ruler. Copies of
the agreements were sent to the Ruler with an explanatory letter(2,°) and he was
asked to confirm that the arrangements set out in the letter exchanged with his
predecessor in May 1934 would continue to apply subject to one small modification.
He replied accepting the new agreements^20) but did not specifically confirm the
arrangements made with his predecessors. The Political Agent considered that this
omission was unintentional and that the confirmation asked for was implicit in
his reply.(aai)
100. The amount of oil produced by the company in Kuwait rose steadily
from the time of the first shipment in 1946 and was rapidly increased after the
Anglo-Iranian Oil Company’s evacuation of Abadan in 1951. In May 1953 it
reached the rate of a million barrels a day. As a result of this and of the agreement
reached with the Ruler at the end of 1951 his revenue from oil in 1953 was expected
to reach the figure of £60 million.
101. Article 4 of the Political Agreement of 1934(2aa) provided for the appoint­
ment of a Chief Local Representative by the company who would be responsible for
their relations with the local authorities and prescribed that except as regards routine
commercial business these relations should be conducted through the Political
Agent. Colonel Dickson was appointed as the first Chief Local Representative
under it and still held the appointment in 1953 when he reached the age of 72. In
the beginning the company consistently failed to comply with this article and
conducted their business with the Ruler or his staff without the intervention of the
Chief Local Representative, except at times as an interpreter, and the Political
Agent. The Political Resident called attention to this irregularity in 1949 and
suggested that a new Chief Local Representative should be appointed and that the
position should be regularised in accordance with the provisions of the Political
Agreement.( ) Discussion with the company followed, but it was generally agreed
that it would be very difficult to persuade the Ruler to concur in Dickson’s removal
and no improvement in the situation was effected. The matter was raised again
annually up to and including 1953. Dickson continued to be Chief Local
Representative m name but at the end of 1952 the company appointed a Mr. Doyle
(*“) No. 1 (e) II. O.A.C.
(*'•) No. 1 (/) II. O.A.C.
(1,T) Nos. 3 and 4 II. O.A.C.
<*w) Nos. 3 (a) and 4 (a) II. O.A.C.
(m) No. 4 (b) II, O.A.C.
(”•) No. 4 (c) II. O.A.C.
P) NoW2lYoFAC 303/10/53 of August 8> 1953 (EA 1535/3 of 1953)-
(*”) P R- to F.O. 122/26/49 of May. 2. 1949 (E 5827/1531/91 of 1949).