Foreign Relations of the United States Diplomatic Papers, 1932, The British Commonwealth, Europe, Near East and Africa, Volume II

890b.6363 Gulf Oil Corporation/46: Telegram

The Secretary of State to the Chargé in Great Britain (Atherton)

Washington , March 26, 1932—4 p.m.

100. Your 116, March 23, 1 p.m. After mature consideration, the Department has arrived at the conclusion that no useful purpose would be served by continuing further with the Foreign Office your informal representations regarding the question of American rights in Kuwait.

In view of the undue delay that has already intervened in this matter and the evident necessity of receiving as soon as possible an expression of the British Government’s intentions with respect thereto, it is desired that you seek an early interview with the Foreign Secretary and present to him at the same time a communication embodying in appropriate terms the following considerations:

1. This Government recalls the inquiry which it made through the Embassy in 1929 as to the policy of His Majesty’s Government in the matter of the holding and operation of petroleum concessions by American nationals in British-protected Arab territories such as Bahrein.¹³ His Majesty’s Government is aware of the solution subsequently arrived at in the specific case of the Eastern and General Syndicate which on behalf of the Eastern Gulf Oil Company was at that time seeking a modification of the Nationality clause, the inclusion of which in any oil concessions granted by the Sheikh of Bahrein was being insisted upon by the Colonial Office. The arrangement then agreed upon had appeared to this Government only just in view of the extremely liberal treatment accorded in the United States and in its possessions in regard to the operation of petroleum concessions by British controlled companies. This Government had therefore supposed that the policy of His Majesty’s Government would be no less liberal in the matter of according open-door rights to American nationals in Kuwait than it had shown itself to be in the almost identical case of Bahrein. This Government sincerely trusts that it has been correct in this assumption and would appreciate an early indication that such is the case.

2. This Government understands that it is the policy of His Majesty’s Government to require of companies seeking concessions in Arab States such as Kuwait, that such companies obtain the prior consent of the rulers of such States to the entry and operations of such companies in the territories in question. This Government is informed that contrary to the impression that seems to have prevailed in the Colonial Office the Sheikh of Kuwait is understood to be quite agreeable to the specific entry of the Eastern Gulf Oil Company and to the granting on behalf of that company of an oil concession without the inclusion of the “Nationality clause”. This Government trusts that in view of the apparent willingness of the Sheikh in this matter, the British Government will see its way clear to taking up in the case of the Kuwait concession no less liberal an attitude than was assumed in the case of the Bahrein concession.

3. This Government understands that despite the fact that the Colonial Office as early as 1925 gave its full and unqualified consent to the negotiation by the Eastern and Central Syndicate of an oil concession with the Sheikh of Kuwait that office later qualified its consent by insisting upon the inclusion of the Nationality clause in any agreement arrived at with the Sheikh for the apparently specific purpose of preventing the entry into that territory of the Eastern Gulf Oil Company which had meanwhile arrived at an understanding with the Syndicate as to the transfer of any concessions that it might obtain from the Sheikh. The continued insistence of the Colonial Office on this point and its apparent unwillingness to accord to that Syndicate the same treatment as was accorded in the case of Bahrein has seriously handicapped the Syndicate in bringing to a conclusion with the Sheikh the negotiations which that concern was authorized by the Colonial Office to undertake.

The above situation is further complicated by the fact that at the very moment while His Majesty’s Government had under consideration the petition of the Syndicate for the elimination or modification of the Nationality clause, permission was granted the Anglo-Persian Oil Company, a rival concern, to send a small party of geologists to Kuwait for the purpose of studying the surface geology of the ground. It will be recalled that the Embassy on repeated occasions requested of the Foreign Office that the Company in question not be permitted to proceed with its operations pending a decision by His Majesty’s Government on the question then before it regarding open-door rights for American nationals in Kuwait. Now, this Government has been informed, this study of the surface geology has been followed by a second expedition equipped with drilling machinery and plant. This Government greatly regrets that no effect has been given to the Embassy’s request in this matter but would appreciate being assured by His Majesty’s Government that this fact will not be allowed to militate against the position of the Syndicate and its affiliate, the Eastern Gulf Oil Company, in the eventual granting of an oil concession in Kuwait.

Stimson

13. See telegram No. 61, March 28, 1929, to the Chargé in Great Britain, Foreign Relations, 1929, vol. iii, p. 80.