Coll 30/216 'Development of oil supplies in the Middle East.' [‎22v] (44/131)

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(iv) The Neutral Zone between Sa'udi Arabia and Iraq.
61. The treaty of Mohammerah which Iraq and Najd (now Sa’udi Arabia)
concluded in 1922 provided inter alia for the rhomboid known as at-Tawwal,
which is situated between the two states, to be neutral ground. This area, which
covers approximately 2,750 square miles, was defined (but not delimited) by
straight lines joining the Shaib Auja and the wells of Amghar, Uqubba and
Ansab.
62. Anyone wishing to obtain exploration and exploitation rights within
this area has to get the said rights from the Governments of both Sa’udi Arabia
and Iraq. The Arabian American Oil Co. has already, as stated above, obtained
the grant of Ibn Sa’ud’s rights in that area, but it is not known whether the
company has also approached the Iraq Government.
63. Any company obtaining a concession over this area would encounter
difficulties because its boundaries have never been demarcated.
64. In view of recent discoveries of oil in the province of al-Hasa, it is
thought that oil may also be found in the neutral zone.
N.B.—For the neutral zone between Sa’udi Arabia and Kuwait, see
paragraphs 70-72 below.
(v) T rans-A rabian P if e-line.
65. The United States Government, the Arabian American Oil Company
and the Gulf Exploration Company had under consideration the ambitious
scheme of constructing a 1,200-mile pipe-line from Jabal Dhahran right across
Arabia to the Eastern Mediterranean to either Haifa or Alexandria, with a
feeder line from Kuwait and a possible branch to the Red Sea. If this project
had been carried out, the Petroleum Reserves Corporation, a concern formed and
controlled by the United States Government, would, by agreement with the two
companies concerned, have constructed, owned and maintained the main
pipe-line; the companies themselves would have constructed the gathering lines.
The United States Government, however, are no longer likely to participate in
this scheme, but it is nevertheless possible that the companies concerned may
themselves put it into operation at a later date.
66. Although the construction and maintenance of such a pipe-line would
be feasible from the engineering point of view, it is clear that, unless a very large
quantity of oil (minimum 6,000,000 tons per annum) could be guaranteed, the
pipe-line would be unable to compete with the alternative means of transport
provided by tankers.
67. From the strategic aspect, the construction of the pipe-line would have
the following advantages :—■
(i) It would provide an alternative to the already existing I.P.C. pipe-line
from Kirkuk to the Mediterranean.
(ii) In time of war it would save sea transport and reduce escort duties.
(iii) It would probably render the United States more inclined to participate
in the defence of the Mediterranean sea route.
XIII.— Kuwait.
68. Attempts to obtain an oil concession covering Kuwait date back as far
as 1911, but none proved successful until 1934. On the 23rd December of the
latter year the Shaikh of Kuwait granted a concession valid for 75 years for the
whole of his territory (6,000 square miles), but excluding the neutral zone (see
paragraphs 70-72 below), to the Kuwait Oil Company, Ltd. This company, which
is registered in Great Britain, has a capital of £200,000; the shares are held in
equal proportions by the Anglo-Iranian Oil Co. and the Gulf Exploration
Company, a subsidiary of the Gulf Oil Corporation of Pennsylvania, U.S.A.
The British Government have, by agreement with the concessionaire, a pre
emption right over any oil produced during an emergency.
69. After an abortive attempt to find oil at Bahra, on the northern shore of
Kuwait bay, two successful wells were drilled in 1938 at Burghan, 26 miles south
of the town of Kuwait. Other productive wells were subsequently drilled, but
operations were curtailed at the beginning of the war and were discontinued in
1942, when the British military authorities plugged the wells in order to deny
their use to the enemy. It is now proposed to rehabilitate the wells and later to
resume drilling operations. The reserves are known to be very large. Two oil
jetties have been constructed at Shuwaikh, 2^ miles west of Kuwait, and a refinery
may be built.