London (May. 20)
Both Haifa and Tripolis in Syria are to be the ports for the Iraq oil pipe-lines, under the agreement between the Iraq Government and the Iraq Petroleum Company, which, according to to-day’s “Times” was ratified on Monday by the Iraq Parliament.
By the agreement now ratified in Baghdad, the “Times” says, many of the provisions of the original Convention have been redrafted, ambiguities have been removed, and the interests of both parties have been more clearly defined. The company has surrendered its rights to the proceeds of all sales by Government of oil-bearing plots within its former concessionary area and has in return obtained sole concessionary rights over that part of the provinces of Mosul and Baghdad which lies east of the Tigris. The Iraq Government is thus free to offer concessions for oilfields west of that river.
The company has also agreed to construct a pipe-line from Kirkuk to the Mediterranean, with two terminals, one at Haifa, in Palestine, and one at Tripolis, in the Lebanon. The two branches will fork at the town of Haditha. The Tripolis branch will pass through Palmyra, in French Syrian territory. The Haifa branch will pass by the Rutba Wells and into Transjordan, and will be carried across the Jordan into Palestine and reach the sea through the Plain of Esdraelon.
The two pipe-lines must be completed by 1935, the Haifa branch within six months of the completion of the branch to Tripolis.
IRAQ GOVERNMENT WANTED TERMINUS IN HAIFA: FRENCH INTERESTS IN IRAQ PETROLEUM COMPANY PRESSED FOR TERMINUS AT TRIPOLIS: BRITISH AND FRENCH GOVERNMENTS BOTH SATISFIED NOW WITH SOLUTION OF PROBLEM OF TERMINUS
The history of these negotiations, which have been conducted with equal skill and patience by Sir John Cadman, the “Times” recalls, begins with the Convention signed between the Iraq Government and the company on March 14th., 1925. The Convention, which covered the provinces of Mosul and Baghdad, contained several clauses which could be variously interpreted.
Oil was discovered in such quantities in the Baba Gurgur field near Kirkuk, for instance, that it was doubted whether the area allotted to the company by the Convention would cover the oilfield. If it did not, the terms of the Convention made it possible for rival companies to secure part of the oilfield and start that competitive drilling which has proved so injurious to the oil industry in America, and would have been unfair to the company which had secured the concession and discovered and tested the field. The company also desired the Iraq Government to remove the ambiguities on the subject of its taxation from the Convention.
The Government agreed, but on condition that the pipe-line to the Mediterranean provided for in the Convention terminated at Haifa in Palestine. The French interests represented in the company pressed for a terminus at Tripolis, in the Lebanese Republic, a French Mandatory State, both for political reasons and on the ground that the route from Kirkuk to Tripolis was more direct and cheaper.
The duration of the concession is 70 years from 1925, after which it will be taken over by the Government.
The new agreement and the transit conventions with the Governments of Palestine, Transjordan, Syria, and the Lebanon, the “Times” explains, enable the company to proceed with the construction across the desert of some 1,200 miles of pipe-line required for the transport of Iraq oil to the world’s markets at a cost of from Â£10,000,000 to Â£12,000,000. The company has already spent over Â£4,000,000 in prospecting and testing the oil-bearing region.
The company has thus gained a free hand and sole concessionary rights over the rich oilfield east of the Tigris, with the certainty of bringing its oil to the Mediterranean. The Iraq Government, which has shown exceptional bargaining powers, obtains an immediate and assured revenue, regains its rights of concession west of the Tigris, and can hope that employment in the oilfields and on the construction of the pipeline will improve the state and temper of its Kurdish subjects.
The problem of the terminus is solved to the satisfaction of the British and French Governments.
The delay in reaching agreement has been due to the variety of conflicting international interests which sought satisfaction, the “Morning Post”, the only other paper reporting the ratification of the agreement, says. The British desired the pipe-line to debouch in British Mandated territory, the French in French Mandated territory, and the Iraq Government wanted the maximum in the way of royalties and taxation. The present convention is one which is considered to meet equitably the claims of all parties.
The convention, it adds, will add a potential annual output as from 1935 of 2 million tons of oil to that already produced in the British Empire or in territories under British influence. During 1930 3,315,000 tons of oil were produced in British territories: 1,247,000 tons in Trinidad, 1,097,000 in India, 772,000 in Sarawak (Borneo) and 199,000 in Canada.
The total output last year for all countries was about 188 million tons.
BENEFITS WHICH PALESTINE WILL DERIVE: CONSIDERATIONS BECAUSE OF WHICH PALESTINE GOVERNMENT HAS GIVEN SPECIAL FACILITIES TO COMPANY: BIG FUTURE FOR HAIFA BAY AREA
The convention regulating the transit of the mineral oils of the Iraq Petroleum Company through Palestine territory was signed on January 5th. by the High Commissioner, Sir John Chancellor, and Mr. J. Sklires, on behalf of the Company, and was published in the Palestine “Official Gazette” on February 2nd. In consideration of the benefits which the country will derive, the convention said, the Government desires to facilitate the undertaking, and accordingly the terms of the convention provide for special facilities for loading and unloading ships by day or night and on public holidays. The Company’s ships will obtain reduced rates on oranage and wharfage, and the Company will be entitled to construct its own ports. Specially reduced railway rates are granted in view of the large tonnage and passenger traffic, and the Company may construct its own railways and roads.
The Company undertakes to employ local labour, but is allowed to import labour if the local supply is insufficient. The Company is exempted from property or income tax. The Government undertakes to lease on a nominal rent State lands, and to expropriate private lands. The Company will require normal protection to be given for the undertaking and the Company’s employees. The Company is allowed to provide at its own cost for education, police, sanitation, water, light and other services, ordinarily provided by the local authority.
At the expiration of the concession at the end of seventy years, all rights, immovable property and fixtures will become the property of the Palestine Government, free of charge, unless the concession is extended for a further period or is renewed.
The laying of one of the two Iraq oil-pipe lines to Haifa, the building of the Haifa Harbour, which is now in progress, and the contemplated building of the Haifa-Baghdad Railway, which is understood to be imminent, will make the Haifa Bay area in Palestine, it is believed, an important industrial and commercial centre, with warehouses and factories growing up around the Harbour, and a big agricultural hinterland all along the Haifa Bay area able to meet the needs of this growing entrepot of the East, which authorities claim it is bound to become.
Most of the land of the Haifa Bay area, along the coast between Haifa and Acre, is in the possession of the Jewish National Fund, which acquired a large tract about two years ago. Zionists have since the earliest days of the movement placed great hopes in the development of this area, and Dr. Herzl, in his “Old-New Land” dwells on this part of Palestine (Haifa, Carmel and Haifa Bay) as being of special importance.
When the Palestine Guarantee Loan of Â£4,500,000 was voted by Parliament in 1926, Mr. Amery, then Colonial Secretary, pointed out in the course of his speech the natural advantages of Haifa for becoming one of the great harbours of the Middle East. The building of the Haifa Harbour (which is being carried out under the provision made in the Palestine Loan), he said, would enable a great development to take place not only in Palestine, but perhaps throughout the whole Middle East, and. I am not excluding the possibility of railway development from Haifa across to Iraq, he added.
Sir John Hope Simpson, in his report of October 1930, also refers to this question. The future of this tract, he writes, will be advantageously affected by the construction of the Haifa Harbour. Work is already in progress and is advancing rapidly. The harbour will greatly assist the development of the export trade in oranges, and perhaps other agricultural products. There are hopes that the pipe line from Iraq may be constructed to Haifa. If this development occurs the Acre Plain will of course benefit still further.
Mr. Frank Owen, one of the Liberal members of Parliament, suggested a little while back that the building of an aerodrome in Haifa in connection with the new harbour works would make Haifa the centre of the direct London to India air-route, and by connecting the Cape to Cairo service with Europe, Haifa would also be, when Russia becomes more important for air-travel, a centre for the European-Far-Eastern air services.