File 1421/1908 Pt 3 'Persia: oil; negotiations between the Shaikh of Mohammerah and the Anglo-Persian Oil Co.' [‎279v] (124/338)

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I forward a copy of the official record of the understanding on the matter,
for your information, in case you have not seen it.
Extract from enclosure 2 to 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. 's No. Q‘Commercial t dated 25th
July igog, to the Foreign Office {forwarded to Foreign Department under
endorsement No. lyggof the 26th July).
Notes on the details of the Anglo-Persian Oil Company’s agreement with the
Shaikh of Mohammerah, dated 16th July 1909.
Article ij .—This article differs somewhat from the Company’s draft. It
was thought best to specify only what treasure trove did cover, and not to put
ideas into the Shaikh’s head by stating what it did not cover. He himself raised
the question of the possible finding of oil in his limits. The rights of the Company
in this eventuality were explained to him, but he was given to understand verbally
by the Company’s Agent that in the event of separate springs of oil being tapped
within his limits, the Company would be inclined to come to some friendly
arrangement with him.
Dated the 26 th August 1910 .
From—The Managing Agents, Anglo-Persian Oil Company, Limited,
To—His Majesty’s Consul for Arabistan.
We have the honour to advise you that when we cabled to London regarding
the issue to His Excellency the Shaikh of Mohammerah of 3 per cent of the
ordinary shares of any Company which might be formed to produce oil at Ahwaz,
we had before us the notes made by 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. in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. at
the time an agreement with the Shaikh was being drawn up, an extract from
which is attached to your letter under acknowledgment.
Further, in replying to us, as per extract and remarks submitted to you
yesterday, our Managing Director had a copy of these notes before him also.
Our understanding of the note on article 13 of the agreement is that it was
carefully explained at the time \y the Shaikh of Mohammerah that, although he
had no mineral rights whatever, under his firman A Persian word meaning a royal order or decree issued by a sovereign, used notably in the Ottoman Empire (sometimes written ‘phirmaund’). from the Persian Government
which holds against the Company’s concession, still the Company might be
willing to make him some gratuitous payment in the event of oil being tapped in
Arabistan.
This has, however, nothing to do with the prospecting and drilling work we
propose to undertake at Ahwaz. His Excellency the Shaikh would probably
bring the matter up, in the event of oil being found as a result of our operations
at Ahwaz, and in such case we would be pleased to ask our Directors for their
instructions in the matter.
We think it very improbable the Directors will submit again to the extor
tionate robbery they had of necessity to suffer at the hands of the Bakhtiaris.
No, 904 , dated Mohammerah, the 27 th August 1910 .
From— Lieutenant A. T. Wilson, I. A., Acting Consul for Arabistan,
To—Anglo-Persian Oil Company, Limited.
I have to acknowledge receipt of your letters of 25th and 26th August re
garding your proposal to bore for oil at Ahwaz.
2 . I gather that your Company claims that it has the right under article 1
of its concession to prospect for oil anywhere within the provinces covered by the
concession, without asking leave or paying rent to anyone, the provisions of
article 3 being held to apply only to article 2, and that in Consequence your
Company is not prepared to make any payment to the Shaikh of Mohammerah
for the rights to prospect oil in his lands.
Lii