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3. that BAPCO would always have a Chief Local Rcprcscntalivc resident in
Bahrain whose channel of communication with the ruler of Bahrain would be
through the Political Agent;

4. that as many employees as possible of BAPCO in Bahrain would be British or
Bahraini subjects."

But the nationality clause for the Kuwait concession still existed, and GOC was still
prevented from participating in it. Pending an outcome to a resolution, Andrew Mellon
co-incidcntally became US ambassador to London. Mellon’s family had founded GOC in
which he personally had substantial interests. Although the Department of State appointed
the Charge d’Affaires at the US Embassy in London to negotiate with the British government
for the removal of the nationality clause, in order to spare Mellon the embarrassment of doing
so himself, there can be no doubt that his presence in London in an official capacity promoted
the ultimate lifting of the clause. And here, the Foreign Office was instrumental. It wanted to
discontinue what it saw as Britain’s “dog-in-the-manger” attitude regarding the entry of
American oil companies. At a Cabinet meeting in London on 6 April 1932, it suggested that
Sir John Cadman, the Chairman of APOC, first be consulted, and, pending his approval, the
nationality clause be removed.9 Cadman had no objection, and so on 13 April 1932, the
Cabinet formally approved its removal.10

The Open Door policy had at last been officially sanctioned. Events moved very quickly
after that. On 31 May 1932, oil in commercial quantities was struck in Bahrain. In July 1933,
just over one year later, a major forward step for US interests occurred when SoCal signed an
oil concession for Hasa with King Abdel Aziz despite the competition of IPC. SoCal assigned
its Saudi concession to the California Arabian Standard Oil Company (CASOC) which in
1936 brought in The Texas Company (later known as Texaco) on an equal basis. In 1944,
CASOC became the Arabian American Oil Company (ARAMCO).

The story of the conclusion of the Saudi conession had an ironic twist. The King was
known to have been in favour of granting the concession to a British company on the grounds
of“better a devil he knew than one he did not”; he had had a long history of relationships with
British officials, but was unfamiliar with Americans. H. St. John B. Philby, who was present at
the time, explained that the King” ... strangely enough, like a bird mesmerized by a snake, was
known to be personally desirous of giving this very Hasa concession to a British company, if
only he could get something in return.” 11 Stephen Longrigg, who negotiated on behalf of the
IPC, realised why the American company had won through: “the IPC Directors were slow and
cautious in their offers and would speak only of rupees when gold was demanded. Their
negotiator, so handicapped, could do little.” 12

The die was cast. The official sanctioning of an Open Door policy regarding the entry of

American oil companies together with the conclusion of the SoCal concession in Saudi Arabia

had suddenly thrust major American business interests into the most jealously guarded of

British-dominated areas. This event marked the beginning of the change in US policy in the

! Arab world. The British reaction to these events evoked the old suspicions, this time based on
the very real fears of gradual US encroachment. An examination of the ensuing rivalry will

reveal a number of interesting features peculiar to the Anglo-American relationship.

Private Interests and Government policies

During the 1920s, the US government, mainly through the Department of State, took an
official interest in promoting equal rights for US companies. After the Open Door policy was

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