oncession, "serious drilling" was recommended by the High Commissioner and by the general manager of IPC. The latter wrote the secretary of IPC: "You should explain to the Groups that neither the High Commissioner, nor myself, are actuated by a hell for leather rush to find oil; we want to set up a convincing window dressing that we are actually working the concessionâ€¦â€¦the High Commissioner can exert far more justifiable pressure in getting our concession ratified by the succeeding ministry than he would be justified in exerting if we merely stood by, content to watch events, doing nothingâ€¦.."
In outlining to the groups the obstacles which stood in the way of obtaining better concession terms from Syria, the general manager of IPC also revealed the government's opinion of IPC: among the obstacles faced by IPC was the "Government's convinction that we did not intend to find oil, and if we found it we would advance a thousand and one reasons for not producing it. In these circumstances my plan was to obtain terms that would be light to bear so long as we explored without result, whilst conceding to Government that if we did find oil, we would produce or pay."
Not surprisingly, IPC's policies of "sitting on" concessions endowed the company with the stigma of restrictionism. In 1936, the question arose as to whether IPC should negotiate directly, or indirectly through an intermediary, for concessions in Turkey, Saudi Arabia, and Yemen; the general manager of IPC stated that in his opinion:
â€¦..the indirect methodâ€¦..might in the long run produce rather better terms than would be given to a company whose proprietors already hold many oil concessions, who have been identified with a policy of restrictive production, and whose object in obtaining fresh oil territory would not be associated with any irrepressible urge for intensive exploitation.
By 1938, IPC's reputation for obstructionism had become firmly established throughout the Middle East. The general manager of IPC, who had been engaged in discussions on the Bahrein and Basrah concessions, described the attitude of the "various authorities and rulers" toward the IPC in these words:
From the earnestness of their address in my conversation with various authorities and rulers on the subject of production, they will brook no sitting on concessions, regardless of what loopholes the terms may give us, particularly us, whom, one and all, they suspect as capable of cheating on production, the future leaves them cold; they want money now.
The pressure of governments and of public opinion appears to have induced IPC to dispense with some of its restrictions. In 1938, one oil company official wrote:
As regards the BOD and Basrah concessions it is the consensus of opinion of the Groups that it will be necessary to explore these concessions and if satisfactory oil is found, that same should be exploited, even though the production and the reserves from the IPC concession would amply cover the crude oil requirements of the Groups. We are led to this conclusion since we do not believe that public opinion or the Government would permit that these large areas were either left unexplored or unexploited if production were found.
World War II interrupted the operations of IPC in most of its concessions, and political disturbances handicapped its activities since that time. Yet even after allowing for these difficulties, in 1948 production in Iran was seven times larger than in Iraq, while in 1936 production in Iran was a little more than double that in Iraq. In Saudi Arabia commercial production did not begin until 1938, but by 1948 it was almost six times the production of Iraq.
The restrictive policies of the Iraq Petroleum Company during its early years have been summarized as follows:
Following the discovery of oil in Iraq in October, 1927, these three groups (BP, Shell, and Exxon-Mobil) employed a variety of methods to retard developments in Iraq and prolong the period before the entry of Iraq oil into world markets. Among the tactics used to retard the developments of Iraq oil