File 3877/1912 Pt 3 ‘Turkey in Asia: oil concessions’ [‎214r] (193/372)

CONFIDENTIAL.
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Sir Edward Grey to Sir L. Mallet (Constantinople).
(No 297.) R. v Foreign Office, July 7, 1914, 3*15 p.m.
YOUR telegram No. 405 of 3rd July: Mesopotamian oil concession.
It may be necessary for Turkish Petroleum Company to constitute a subsidiary
Ottoman company to work Mesopotamian concession, but, as you say in your telegram
No. 393 of 30th June, these matters should be conducted by Company’s representatives.
Question of presence of Turkish director, though there may be means of providing for
this is not a minor point, in view of protracted negotiations between the several parties
respecting distribution of shares and representation on the board, which preceded the
agreement reached in London on 19th March last. It might have the effect of depriving
the British element of control, and, though question must be settled by the Company
with the Ottoman Government, I hesitate to abandon lever of monopolies agreement
until it has been settled. At the same time I have no wish or intention to convey any
threat to the Grand Vizier. As to payment of indemnity to third parties, the Company
have always appreciated that they would have^ to compensate in some form or other
(probably in the same way as the Anglo-Persian Company did m Persia) the local
inhabitants who have derived profit from the wells in the past. As to other claimants,
such as Ihose indicated in the second paragraph of your Excellency s telegram
No. 405^ if the Ministry of Finance would furnish a list oft hem and the Ottoman
Government would give an assurance that the list was complete and that they considered
other claimants, who plead under the Mining Law, were without any vahd title, it
might be possible to induce Turkish Petroleum _ Company to indemnify the Ottoman
Government. But what Company particularly object to is an unlimited liability, which
has been rendered still more formidable by the decision of the Council of State on
4th June (a decision which, according to Silley merely confirmed one given two
years before), and by the unfortunate indiscretion by which it has become generally
kn ° V As to Silley, whilst I am mindful of the arguments contained in Foreign Office
letter of 20th May to his solicitors, an answer must now be sent to the reply which
that letter evoked' and I should therefore be glad to receive a detailed reply to the last
paraerauh of my telegram No. 292 of 2nd July, and to learn what is the exact position
of th?Council of State. Silley maintains that the d , ecisio “ ^react
of the House of Lords. A copy of latest correspondence with his solicitors will leacn
you by post.
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