Coll 28/67 ‘Persia. Annual Reports, 1932–’ [‎57r] (113/644)

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Khaniqin were organised and led by Persian officers as reprisals for the help
supposed to have been given by the Iraqi authorities to the rebels in Persia.
61. The special infantry battalion was withdrawn from the frontier in
November.
Frontier Relations.
62. Except in the Avroman and Shatt-el-Arab sectors of the frontier,
there seem to have been few incidents, possibly because of the direct contact
between frontier authorities established by the exchange of notes of the
6th December, 1932.
63. Very few of the Jaf tribe entered Persia during the year.
Naft Khaneh.
64. Early in the year the Persian Government communicated to the Iraqi
Government the text of a draft agreement for the settlement of the Naft Khaneh
oil-field dispute. This dispute arose from the fact that the field lay athwart the
frontier, that the Anglo-Persian Oil Company declined to work the Persian side
of the field on the ground that to do so would be hopelessly uneconomic, at any
rate in the absence of an arrangement for the entry of the oil into Iraq without
payment of customs duty, and that the Persian Government believed that the
working of the Iraqi side had the effect of draining away Persian oil to earn
royalties for the Iraqi Government. On top of this the Persian Government had
a general grievance about the “ transferred territories ” (see paragraph 96 of
1932 report).
65. The general purport of the draft agreement was that the area lying
between the actual frontier and the 1913 frontier should be regarded as a “special
zone.” In this zone technical operations should be carried out with a view to the
possibility of exploiting the whole field in common and sharing proportionally
the profits arising therefrom. The investigations and the exploitation were to be
carried out by the Anglo-Persian Oil Company. Pending a final agreement the
Iraqi Government were to pay to the Persian Government half of the royalties
received by them from the Anglo-Persian Oil Company or its subsidiaries on
account of the exploitation of the Iraqi side.
66. The one-sided nature of this bargain was obvious, especially as the
provisional period was likely to last indefinitely. The proposals went beyond
the agreement reached when King Feisal visited Tehran (see paragraph 98 of
1932 report), and altogether there was little chance of the Iraqi Government
accepting it. But shortly afterwards the Persian Government succeeded in
inducing the Anglo-Persian Oil Company to undertake the exploitation of the
Persian side as part of the price of their new concession, and for the time being
they may be assumed to have lost interest in their proposals.
Treaties and Agreements.
67. No progress was made in the negotiation of any of the five instruments
mentioned in paragraph 91 of the report for 1932, but they formed the subject
of consultation between His Majesty’s Government in the United Kingdom and
the Iraqi Government. The Persian Government did, however, express anxiety
for the early conclusion of a treaty of neutrality, and this was also, owing to
the Anglo-Iraqi Treaty of Alliance, the most important of the five instruments
from the point of view of His Majesty’s Government. The Iraqi Government
were advised that, while it was for them to decide whether a treaty of this kind
was politically desirable, the most suitable form for such a treaty would be a text
based upon article 1 of the model bilateral treaty of non-aggression drafted by
the Third Committee of the League of Nations and the treaties of non-aggression
concluded by France and Poland respectively with the Soviet Union.
68. An exchange of notes respecting the settlement of frontier matters took
place on the 6th December, 1932, with a validity of six months. The period has
since been extended to the 6th June, 1934.
69. The cc Accord provisoire ” of 1929 was duly renewed each six months,
and the present renewal is valid till the 11th February, 1934.