Page 141 - Records of Bahrain (7) (ii)_Neat

Saudi Arabia-Bahrain seabed boundary, 1951-1958 531

CQBFIDENIIAL BRITISH RESIDENCY
BAHRAIN
l*J] March 4, 1958

j)crzJt bl
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My telegram No. 235 of February 25 about the Bahrain-
Saudl Seabed Agreement.
2. I now enclose a translation of the text of the agreement
which has been supplied to us by the Ruler. The map is being
reproduced by Bapco but will probably not be available to be
sent in this bag. I will send copies as soon as possible but
you can meanwhile plot the lines roughly from the definitions
and co-ordinates given in the text of the agreement. I intend
to send a comprehensive despatch on the subject in next week's
bag but meanwhile there are certain further developments which
you should know, and some preliminary comments.

3. With regard to the point mentioned in the fourth
sentence of paragraph 4 of my telegram under reference, Bapco
have now heard from Aramco that they have been told by the
Saudi Government to start work in the sharing zone without
delay and as a separate operation from their other seabed
work. This is very satisfactory so far as it goes but it may
well be necessary to keep either Aramco or the Saudi Government
up to the mark in this matter.

4. Bapco's first re-actions were not unnaturally one of
surprise and disappointment that they had been left out of
the agreement. They had of course expected that the
exploitation of the sharing zone would be undertaken by
agreement between them and Aramco and that they would therefore
get half the oil company share of the profit. In the course of
the conversation with the Ruler, reported in my telegram under
reference, I asked him what he thought Bapco's re-action would
be and he replied that he did not think they would have any
grounds for complaint because he had been informed that they
were in agreement with Aramco on the subject and in any case
the majority interest in Aramco was owned by the two parent
companies of Bapco. When Charles Gault Informed the Bapco
Vice-President of the agreement he was at first considerably
upset and started drafting rather wild telegrams to his New
York office and letters of protest to the Ruler. He was
calmed down by Gault and by Arnold Galloway who was fortunately
still here, and subsequently had an interview with the Ruler
which I understand passed off reasonably well, the company
expresssing no more than their disappointment at the result. I
understand that one of their grounds of complaint is that they
had a letter from the Ruler some years ago, presumably about
1949 (I am seeing whether we can trace the correspondence) to
the effect that the Fasht Bu Saafa area was within his
territory and that they should begin work on it. They were
therefore inclined to argue that by now agreeing that this
area was inside the Saudi boundary the Ruler had given away
part of their concession and therefore owed them some
compensation. I shall be seeing Lipp myself in a day or two
and will include any further relevant account of his attitude
/ in
D.M.H. Riches Esquire, C.M.G.,
foreign OFFICE,
S.W.I.
CONFIDENTIAL