File 1421/1908 Pt 3 'Persia: oil; negotiations between the Shaikh of Mohammerah and the Anglo-Persian Oil Co.' [‎256r] (77/338)

Enclosure 4 in No. 1.
Messrs. Lloyd, Scott, and Co. to Acting Consul Wilson.
Mohammerah, October 20 , 1910.
IN connection w itli past correspondence on the subject of this company’s proposal
to drill for oil at Ahwaz, we have the honour to attach hereto extracts from letters
received from the managing director, dat-d the 23rd and 30th ultimo.
In accordance with the final sentence thereof, we will be grateful if you will
forward the attached papers to the honourable the political resident A senior ranking political representative (equivalent to a Consul General) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Residency. , and seek on our
behalf, any expression of his opinion or comment, which he may wish to make.
Enclosure 5 in No. 1 .
Extract from Letter dated September 30, 1910.
Concession .—With reference to your correspondence with Lieutenant Wilson on the
^question of the sheikh’s rights, I would point out that the firman A Persian word meaning a royal order or decree issued by a sovereign, used notably in the Ottoman Empire (sometimes written ‘phirmaund’). of January 1903 only
granted “ the said lands’ and “ to exercise in the said lands the possessory rights of
ownership of every kind.” This in most grants of this nature in other countries does
not cover “mineral rights,” which are usually held as being the property of the original
owner, unless specifically mentioned in the grant. Therefore the sheikh’s claim is w r eak
in two respects :—
1 . His firman A Persian word meaning a royal order or decree issued by a sovereign, used notably in the Ottoman Empire (sometimes written ‘phirmaund’). is of later date than our concession, and therefore w r as subject to the
latter; and
2 . There is nothing to show that the Persian Government, in granting that firman A Persian word meaning a royal order or decree issued by a sovereign, used notably in the Ottoman Empire (sometimes written ‘phirmaund’). ,
ever intended to part with the mineral rights, which, moreover, at the date of the
firman A Persian word meaning a royal order or decree issued by a sovereign, used notably in the Ottoman Empire (sometimes written ‘phirmaund’). , were not theirs.
However, it is obviously to our interest to maintain the good-will of the sheikh,
and if we can, without in any way admitting any rights on his part to minerals, get
him to agree to some such arrangement as that suggested in my last letter it will be
considered by my board. I should, however, like to get (through Lieutenant Wilson)
an expression of Colonel Cox’s views on the subject, as any suggestion from him would,
I know, carry great weight wdth my co-directors.
Extract from Letter dated September 23, 1910.
Drilling at Ahwcuz .—With reference to the correspondence exchanged between
yourselves and Lieutenant Wilson, Mr. Lloyd states that the undertaking given to the
sheikh was neither more nor less than as stated in Colonel Cox’s note, viz., that “ the
company would be inclined to come to some friendly arrangement with him”—and that
it was not in his mind at all that this “ friendly arrangement ” should be on the basis
of that which was made with the Bakhtiaris under quite different circumstances. He,
however, points out that Lieutenant Wilson was not present at the portion of the
interview when this point was discussed, but only came in at the end, when all the
points had been settled.
He says that what he had in mind was that the sheikh might be given in some
form or other the equivalent of the “ 3 per cent, on profits ” which is what the Bakhtiaris
will obtain by means of the shares they are to receive. The difficulty is that these
profits cannot very well be defined in a way that would probably be satisfactory to the
sheikh, without the formation of a separate company—a step which my directors would
not for a moment consider at the present time—but if you think the sheikh would be
satisfied with an undertaking from us to pay him 3 per cent, on the profits of any oil
obtained within his territory (such territory to be clearly indicated and not to be open
to question)—such profits being based upon the same price for crude oil as is paid to the
Bakhtiari Oil Company, and the Aaglo-Persian Oil Company’s statement of these profits
being accepted by the sheikh as conclusive and final, without any question—I will
put the proposal before my board, although I have no reason for supposing that they
would approve of such an arrangement and that they might not rather abandon
altogether the idea of working at Ahwaz.