ABSTRACT
On the night of 31st May 1932 oil was struck in Bahrain and, when the well was tested next day, proved to be in commercial quantities.
Effect of Bahrain oil-discovery on Kuwait negotiations This event revolutionised previous geological theories of the oil possibilities of Arabia, (59) confounding the pessimists and vindicating Holmes's unique optimism, and immediately accelerated the tempo of negotiations in Kuwait. It greatly increased Holmes's status and reputation, and Gulf Oil Corporation urged the EGS to take every advantage of it in pressing Shaikh Ahmad for an early and favourable decision. APOC at Abadan, who when telegraphing to London on 1st June the results of Chisholm's visit to Bushire and Kuwait had requested permission to reopen negotiations with the Shaikh and offer up to Rs. 20,000 p.a. telegraphed again three days later that 'the Bahrain news must have great influence on Shaikh of Kuwait' and in reply were told by London to go ahead 'up to Rs. 25,000 p.a.'. That Shaikh Ahmad was fully aware of the favourable effect on his own position of the Bahrain discovery, and took full advantage of it, is shown by records of his conversations on 10th and 11th June with APOC's Deputy General Manager in Persia, Mr N. A. Gass (60). The latter had arrived in Kuwait from Abadan to pave the way for his Company's negotiations for a concession, as proposed on 11 th May by the Shaikh when he had rejected their suggested option, and as now agreed by London. In contrast with the close and friendly relations maintained by Holmes over the previous nine years, this was the first occasion since 1923 (when Sir A. Wilson had visited him; see Note 18) that Shaikh Ahmad had been visited in connection with his oil concession by any official of APOC, whose last correspondence (see Note 50) with him had concerned the abrupt termination of their geological survey on 13th April. Consequently Gass did not expect a very cordial reception by the Shaikh and in fact reported that it was 'dignified but extremely frigid. His attitude was one of detachment and it was obvious that under no circumstances would he broach the subject upon which he knew quite well I had come to see him'. Eventually, after recounting the geological and other reasons based on their long experience in Persia and Iraq that had inhibited his Company hitherto from an active interest in Kuwait, and arguing from them that a full concession Agreement as requested by the Shaikh might not be in his best interests pending further exploration of his territory, Gass proposed that his Company should negotiate with the Shaikh for a prospecting licence for three years, in the course of which it would advance their research work in the way which they knew to be to the best advantage of his territory. The Company was prepared to pay generously for permission to go ahead on these lines, and during this prospecting period it would he able to formulate its proposals for a concession.
