'File 39/2 (1 B/8) Effect of abrogation of APOC concession by Persian Government on oil market in Bahrain' [‎20r] (39/80)

AMGLO- PERSIAN OIL.
20 © ^
THE ROYALTIES DIB RITE ,
COMPANY *3 EFFORTS FOR SETTLEMENT .
The Persian Government’s reply to the British
Government’s protest against the annulment of the
Anglo-persian oil Company’s D’Arcy Concession was
delivered on Monday. It is understood to maintain
that the Persian Government was fully justified in
the annulment.
In a communication to its stockholders(printed
in full on page 9)the Anglo-persian Oil Company gives
the text of correspondence between itself and the
Persian Government about the annulment of the
Concession; recounts attempts it has made on differ
ent occasions since 192; to settle questions outstanding
between the Persian Government and itself by negotiation;
and expresses its determination M to take no action which
will stand in the way of the ultimate prospects of
reaching an amicable settlement”.
Recalling the early history of the Concession,
the Company points out that Mr. B’Arcy and his associates
spent some seven years in prospecting, at heavy cost,
before the existence of oil in commercial quantities was
proved, and that the Persian Government took no part of
the risk involved and at no time provided any of the
capital.
Successive Recognitions .
Moreover, except for a clause, since become
inoperative, providing for the event of failure of the
concessionnaire to work the Concession, ”there is no
provision in the concession entitling the Persian
Government to cancel it”. The D’Arcy Concession was
granted in 1901, M in due preoer and legal form”, by
the then Persian Government, and the Anglo-Persian Oil
Company, which was formed in 1909 to acquire the
Concession, ”has since been recognized throughout by
all successive Persian Governments, as the owner of
this concession”.
After some 15 year’s work, when profits were
first derived, ’’questions arose between the company and
the Persian Government as to the manner in which the
net profits on which the Persian Government was to
receive its 16 percent ought to be calculated”. After
negotiation, agreements were signed in 1920 settling the
question of the basis of the royalties, and providing
for the payment by the company of £1,000,OCX) to the
Persian Government in final settlement of outstanding
questions.
In 1928 further discussions were begun at the
instance of the Persian Government, for a revision of
the Concession. Agreement was reached on most points,
but on the Persian Government’s desire for increased
participation in profits, and in 1931 negotiations
were again opened for revision.