875.6363/99
The Minister in Albania (Grant-Smith) to the Secretary of State
[Received July 5.]
Sir: I have the honor to report that in spite of all the arguments and facts brought to their attention, the Albanian Government continues to contend that the Anglo-Persian Company has right of preference which will persist until after the National Assembly has taken definite action on their proposals for a concession for the development of a certain proportion of the oil resources of the country. Mr. Hunger, the Financial Adviser, during our conversation, reported in my despatch No. 102, of June 2nd,9 last, appeared to hold the opinion that the British Company had forfeited any preferential [Page 388] rights it may have enjoyed but Mr. Sheffield, of the Standard Oil Company, informs me that during a conference yesterday the Financial Adviser stated that he had become convinced that the Anglo-Persian Company had done nothing to forfeit these rights. Our case seems so clear that I cannot but presume that some agreement, of which we have no knowledge, must exist between the British and the Albanian Government[s] which could account for Mr. Hunger’s change of front.
Up to the present we have succeeded in bringing about modifications in the Anglo-Persian proposals which will materially increase the cost of production and operation on their part and which go far towards nullifying their efforts to establish a complete monopoly of the oil industry of Albania. Even should they succeed in obtaining the first choice of lands to the extent of fifty thousand hectares, and should the National Assembly, as is considered probable, decline to accord an exclusive privilege of a year or more of exploration over a much larger area, the American companies would have an opportunity to take up concessions in the supposed oil bearing lands remaining, the total of which is variously estimated at from 150,000 to 450,000 hectares. The latter estimate, however, has been put forward chiefly by the representatives of the Sinclair Oil Company, whose proposals are for 150,000 hectares. In conversation some days ago the British Minister mentioned 150,000 as the probable figure and, I am confidentially advised by the representative of the Standard Oil Company that, according to his opinion, all the territory worth developing could be included in 35,000 hectares or even less. It appears that British geologists have been for some weeks past busily engaged in making a careful study of the lands involved and will doubtless be prepared to indicate those desired immediately upon the reassembly of the National Assembly in the Autumn.
The declarations made to the Albanian Minister for Foreign Affairs at the instance of the Italian Government, by the French, Italian and American representatives in support of the application of the principle of the “open door” might also be reckoned among the advantages thus far gained in spite of strong British opposition.
I have [etc.]
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