Page 291 - Records of Bahrain (7) (ii)_Neat

Petrol affairs 681

British Political Agency,
532/32/590) Bahrain.

CONFIDENTIAL . j l,
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December 23, 1959-*
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Will you kindly refer to recent correspondence about
BAPCO Marine Areao (your reference BA 1537/22).
2. Mr. H.H. Arnold, the President and Director of BAPCO,
visited Bahrain on December 16-10. He was accompanied by
Mr. Bernie van Benochcotcn, v/ho is described as Counsel for
the company in New York, and Mr. Macivcr, a Vice-President
of both BAPCO and CALTEX-^ also of New York.
I
3. At the Rulor'o invitation a meeting took place at
Safirah. on December 17 in the morning, attended only by His
Highneos, his three sons1and Mr. Q.W.R. Smith on the Bahrain
side, and by the three visitors and Mr. Lipp on the other.
A long discussion between the Ruler and Mr. Arnold, with only
Shaikh Khalifa bin Salrnun preoent (to interpret), took place
in the middle of this meeting.
4. His Highness, I unlerstand, thanked the company for
relinquishing part of its marine areas (though he had not
yet in fact oigned the second copy); and ha then asked Mr.
Arnold to drill in the marine area retained by the company
"within a year or so". Mr. Arnold promised that lie would
do his utmost to persuadi his other directors to comply with
the wishes of His Highness as regards the murine area. Mr.
Lipp assures me that this will doubtless be effective, as
Mr. Arnold is President, and, therefore, "over" the other
directors; but, of course, they are oharc-holders and must
be perouaded. He aloo told me that Mr. Arnold was still
hesitating regarding the spot to select for drilling; bo
find oil in oinall quantities off-shore v/ould be almost v/orsc
than finding none, as they would bo pressed to produce it
uncconomically.
5. Mr. Lipp added that he himoelf was duo to retire in
July next but that as His Highness was unwilling that ho
should go at preoent and had not got used to Mr. Schmidt yet,
he would take leave about May and would return to resume his
present position later in i960; but he thought he would be
ablo to retire finally within another year.
6. On the evening of December 17, Hio Highness gave a otatc
dinner in honour of Mr. Arnold at his Rifaa Palace, the first

ouch /

R. Walmoley, Esq0, M.B.E.
Arabian Department,
Foreign Office,
London, S.W.l.
CONFIDENTIAL