155
76. It may be noted that the Rulers other than Umm al Qaiwain andFujairah have accepted responsibility for the safety of survey parties of PetroleumDevelopment (Trucial Coast) Ltd. in their territory and have undertaken to punishthe culprits and pay compensation if such parties are attacked.(**) A specimenundertaking is included in the Appendices (Appendix G).
(b) Abu Dhabi77. The Ruler of Abu Dhabi granted a concession to Petroleum Development(Trucial Coast) Ltd. on January 11, 1939.(56) The text of it had not previouslybeen agreed with His Majesty's Government and there was some discussion aboutits terms but it was finally approved in its original form in May 1940.(**) TheRuler was not required to take cognisance of the Political Agreement(**) between HisMajesty's Government and the Company which was based on it. The concessioncovers the whole territory subject to the rule of the Ruler of Abu Dhabi and itsdependencies and all its islands and territorial waters and provides that if in thefuture there should be carried out a delimitation of the territory belonging to AbuDhabi, by arrangement with other governments, then the area shall coincide withthe boundaries provided in such delimitation. There is a further provision givingthe company oil rights in the Ruler's share of any Neutral Zone which may beformed adjacent to his territory. The annual payment to be made to the Ruleruntil the discovery of oil in commercial quantities is Rs. 100,000, but this sum isliable to be increased by 25 per cent., if the company does not discover a drillinglocation within four years and thereafter by a similar percentage every three yearsif the company does not begin drilling or surrender its rights.
78. A well was drilled at Ras Sadr east of Abu Dhabi in 1950 but no oil wasdiscovered. Relations between the Ruler and the company at this time were notvery happy, partly because of the dispute over the sea-bed concession (paragraph79 below). Strikes amongst local employees, believed to have been fomented bythe Ruler, occurred at Ras Sadr and the Royal Navy had to be called in to stabilisethe situation. In 1953 another well was drilled at Murban near Tarif west of AbuDhabi close to the frontier claimed by the Saudis. Oil was discovered but thecompany had not yet stated by the end of the year whether it was available incommercial quantities. From the autumn of 1951 until April 1953 the companywere restricted from operating in the area claimed by the Saudis in the western andsouthern parts of Abu Dhabi territory the ownership of which was under disputewith the Saudis (paragraph 98 below).
79. In June 1949 the Ruler issued his declaration of jurisdiction over thesea-bed. Petroleum Development (Trucial Coast) Limited claimed that theirconcession automatically gave them rights in the sea-bed thus annexed to AbuDhabi territory. The Ruler refused to accept this contention and the dispute wasreferred to arbitration as provided for in the concession. The arbitration tookplace in Paris in August 1951 when it was decided that the company's concessionincluded the subsoil of the territorial waters (including the territorial waters of theislands) but not the subsoil of the submarine area contiguous with Abu Dhabioutside the territorial zone. Meanwhile the Ruler had on December 2, 1950granted a concession for his sea-bed for 65 years to the Superior Oil Company, anAmerican company, on payment of Rs. 1,000,000 down with an annual paymentof the same amount and a royalty fixed at one-fifth of the “ proceeds of sales.”(59)The company had previously entered into a Political Agreement with His Majesty'sGovernment, the principles involved in which the Ruler agreed in writing toaccept.(60) In May 1952 the company gave notice of termination of this concessionand of other sea-bed concessions which they held in the Persian Gulf apparentlybecause they decided that they could not afford further investment in the area.
80. On the relinquishment by Superior Oil Company of the concession theAnglo-Iranian Oil Company entered the field and the Ruler granted a concessionon March 9, 1953 to their associate, the D'Arcy Exploration Company, for a period
(55) 1.0. to F.O. P.Z. 939/37 of February 16, 1937 (E 1000/12/91 of 1937).(56) No. 1 IV, 0.A.C.(57) 1.0. to F.O. P.Z. 2505/40 of May 9, 1940 (E 360/360/91 of 1940).(58) No.2 IV, O.A.C.(59) P.R. to F.O. 1535/15 of March 22, 1951 (EA 1272/20 of 1951).(60) (EA 1273/31 of 1950.)
