File 1421/1908 Pt 3 'Persia: oil; negotiations between the Shaikh of Mohammerah and the Anglo-Persian Oil Co.' [‎267r] (99/338)

Q-. CD O CD
[This DocumeiH is the Property of His B
PERSIA.
CONFIDENTIAL
[43455]
No. 1.
Foreign Office to Anglo-Persian Oil Company
gj r Foreign Office, December 19, 1910.
I AM directed by Secretary Sir Edward Grey to acknowledge the receipt of your
letter of the hthGnstant, relative to the proposal of your company to bore for oil in the
territories of the Sheikh of Mohammerah.
It appears from this letter, and from the private communication of the same date
addressed by you to Mr. Mallet, that your company are prepared to conclude an
aoreement with the sheikh by which they would pay him in respect of any lands
where they desire to bore for oil adequate compensation for any disturbance, and a
fair rent while they occupy the land, and would restore it to its present condition if no
oil were found there, or buy or lease it, as might be arranged, should oil be discovered.
They w^ould also pay the sheikh, should he demand it, a certain share of the profits
derived from his land.
Sir E. Grey farther understands that, should your company agree to make the
last-named payment to the sheikh, they would propose to deduct an equivalent amount
from the sum which, under the terms of the concession of 1901, they are bound to pay
to the Persian Government under the same head, and that they would then solicit the
support of His Majesty’s Government in inducing the Persian Government to acquiesce
in such a step.
Before pronouncing an opinion on this proposal, Sir E. Grey is anxious to be in
possession of the views of His Majesty’s Minister at Tehran, and has accordingly
forwarded to Sir G. Barclay copies of the correspondence above referred to, with an
explanation of the circumstances and instructions to express his views on the case,
and, should he consider your proposal justified, to authorise His Majesty’s consular
officers on the spot to support the local agents of the company in their efforts to
conclude an agreement with the sheikh on the lines suggested by you.
With regard to the misunderstanding referred to in your letter, I am to transmit
to you herewith copies of correspondence between the acting British consul at
Mohammerah and the company’s agents, which has reached Sir E. Grey in a despatch
recently received from Sir G. Barclay, ” from which it will be observed that the lattei
was justified in the apprehensions which he felt as to the line which the company
appeared determined to take, and therefore in sending the telegram which formed the
basis of Mr. Mallet’s letter of the 18th ultimo, the first of the present correspondence.
In his despatch referred to Sir G. Barclay expresses the opinion (which is also
that of His Majesty’s consul at Bushire and of the acting British consul at
Mohammerah) that, whatever may be the strict legal rights of the company under
the concession of 1901, their best interests would be seived by tieating the sheikh
in such a manner as to keep him favourably disposed towards them as he has been
in the past.
Sir E. Grey concurs in this opinion, both on general grounds and because the
settlement of the legal question referred to, if possible at all, could not be effected
without endless delay and difficulty, which could not fail to be prejudicial to the inteiests
of the company and without incurring the hostility of the sheikh, who could in practice
make all their operations impossible. He is accordingly glad to obseive fiom
letter under reply that the company are prepared to treat the sheikh m a generous and
conciliatory manner, and to abstain from insisting on the couise indicated m t it
enclosed correspondence.
I am, &c.
LOUIS MALLET.
* Printed elsewhere.