'File 4/34 Kuwait Territorial Waters' [‎48r] (95/112)

cone under the control of Iraq, Kuwait, the Kuwait-Saudi-Arabia
Neutral .one, Sandi-Arabla, Bahrein, uatar, and the Trucial
States. In each of these petroleum rights are already held
under concession contracts by oil companies, the sole exception
being the Kuwait share of the Neutral Zone, for which several
companies are now bidding. I am, however, not in a position
to advise you as to how these contracts may affect tenitcrial
or extra-territorial waters.
As reg rds the Sheikhdoms (as distinct from the Kingdoms
of S&udi-Arabia and Iraq), which are under an obligation not
to grant any oil concessions in their territories without the
agreem fit of H.M.G., it is thought that it would be advantageous
to the companies to make any approach with the co-operation of
the local British political authorities. Ve would, however,
prefer that any such approach should wait until we have concrete
proposals to make to the rulers on the subject of the ownership
of submarine petroleum rights. In the case of the Trucial
States the situ tion is particularly fluid; thire are 6 States
involved, none of which have as yet any defined bound ries, and
it is doubtful whether it would be worthwhile (even if practicable
to allot in any map separate strips of the sea-bed to individual
states. In any case, it would oeem unlikely that any advantage
would oe gained by being the first to make an approach to the
rulers as they would certainly consider all offers on a
competitive basis.
In the case of Saudi Arabia and Iraq, which differ from
the others in not being under our protection, it is for the
company to decide If and when they desire to approach the ruler,
but we would like advance notice of any such intention.
Finally, we must point out th t the Treasury will
undoubtedly scrutinize in considerable detail applications for
authority to do more than make preliminary soundings Measurements of the depth of a body of water. ,
particularly in the light of the present outlook for steel
supplies and as regards any payments or oblig tions to pay in the
equivalent of gold. They will also have to be satisfied that
there is no legal doubt as to the right of the particular ruler
to the areas in question.