File 3877/1912 Pt 4 ‘Turkey in Asia: oil concessions’ [‎111r] (163/176)

[This Document is the Property,:of His Brita nic Majesty’s Govemmeiit.3
TURKEY.
[May 15.]
OONEIDENTIAL.
Section 4.
[21793]
No. 1 .
Sir,
Messrs. Treherne, Higgins and Co. to Foreign Office.—(Received May 15.)
7, Bloomsbury Square, London, May 13, 1914.
R. H. S1LLEY : Mesopotamian oilfields.
We sent Mr. Silley a copy of the statement prepared at the suggestion of the
Foreign Office setting out certain facts with regard to their attitude vis-a-vis the
Turkish Petroleum Company and others interested in concessions in Asia Minor.
Mr. Silley desires us to recapitulate the position at the present time with regard
to Turkish mining laws, which have existed for forty years or more and have been
modified at various dates, the last law being dated the 2Gth March, 1906, a position
with which you are doubtless familiar.
About twelve years ago the deposed Sultan Abdul Hamid granted the Civil List
what may be termed a prospecting concession over Mosul and Bagdad, giving it the
right to take up petroleum concessions in accordance with the then existing mining law,
which was then substantially the same as now. A German group was given an option
to prospect in accordance with the mining law by the Civil List, which they did not
exercise, and which lapsed in consequence. The D’Arcy group then began negotiations
with the Civil List in respect of this option without any definite agreement resulting,
and the option is held to have been cancelled at the time of the forming of the
Constitution for various reasons, among others because a mining concession lapses ipso
facto if it is not worked for two consecutive years. The right to prospect given to
the Civil List was never exercised or worked, and it has already been declared void.
Even if it did still exist, it only confers the right to work two or three petroleum mines
which are really Government property and to take out claims, and eventually to obtain
concessions each over some 5,000 acres, which has never been done, and always
subject to the mining law in force ; indeed, in some quarters it is thought that this
concession only gave the right to work two or three Government mines. Hence it is
the fact that the rights claimed in respect of the agreement between the Anatolian
Railway and the Civil List of 1904, known as the Convention of 1904, have lapsed.
We desire to point out to you that the D’Arcy group do not rely on their
negotiations with the Civil List, but on verbal statements of two Grand \ iziers, both of
whom we understand are dead, made in reply to a proposal from the D Arcy group, to
the effect that if it pleased God they would give the D’Arcy group business if they
were helped in return, and apparently some vague statement to this effect was made to
His Majesty’s Ambassador. It is on a vague statement of this kind, without formal
engagement and in the hope of obtaining some assistance in exchange in some
unspecified direction, that the D’Arcy group’s alleged rights are based.
Article 22 of the Bagdad Railway concession, although it meant a great deal
before the Constitution, is meaningless to-day, except so far as it gives the Bagdad
Railway power to object to the granting of the entire provinces of Mosul and Bagdad,
as the railway company, or those interested through it, maintains that, although they
have not yet taken out any claims so far, they have the right to take out such claims
as are not already covered by other rights. _
If the D’Arcy group thought that their engagement with the Civil List \vas
binding and valid there was no reason for them to buy out the German opposition.
The fact that they were forced to purchase the German opposition oi so-called rights
clearly, shows that the rights of the D’Arcy group could not stand by themselves and
were not indefeasible. Further, the Anglo-Saxon (Shell) Company, which is a Dutch
controlled company, has been given an interest. We suggest that this would not have
been done if the position of the D’Arcy group had been legally unassailable.
The fact is that the alleged rights of the D’Arcy group was of no value in
themselves, and derive their ouly value from the support of the British Government.
The Turks are prepared to grant the D’Arcy group these petroleum mines, not because
they are legally bound to do so, but in exchange for certain advantages conced e y
the British Government in return.
u 1