HC Deb 30 March 1925 vol 182 cc918-9
12. Colonel WEDGWOOD

asked the Secretary of State for the Colonies whether the concessions made to oil concessionaries in Iraq involve the payment of royalties and, if so, on what basis; whether the revenue is ear-marked in any way for the reduction of the debt of the Iraq Government to this country; and, if not, why no steps were taken to obtain security for the repayment of capital or interest on this debt, when these concessions were under discussion?

Mr. ORMSBY-GORE

I understand that the terms of the concession recently granted by the Iraq Government to the Turkish Petroleum Company provide for the payment to that Government of a. royalty based primarily upon output; so far as I am aware there is no intention on the part of the Iraq Government specifically to assign future revenue from this source to the extinction of their debt to this country. His Majesty's Government consider that the Financial Agreement made under Article XV of the Anglo-Iraq Treaty affords sufficient security for the due discharge of that debt.

Lieut.-Commander KENWORTHY

If large royalties are being paid, are we to get no repayment for the heavy cost of the garrison and Air Force in Iraq which made these concessions possible?

Mr. WARDLAW-MILNE

Is it not the case that these royalties are only paid when the oil is actually flowing.

Mr. ORMSBY-GORE

At the present moment there is no oil flowing. I said in my reply that the royalties are based on output, and we are not yet sure that, there is going to be any output.

Lieut. - Commander KENWORTHY

Surely the time to ear-mark this is now, when we are uncertain.

Mr. ORMSBY-GORE

There is absolutely no intention of ear-marking. That would be highly reprehensible in view of our position in Iraq.

Lieut. - Commander KENWORTHY

Then if there is no oil, we are going on paying, and, if there is oil, we do not get any of our money back?

Mr. ORMSBY-GORE

That would be absolutely contrary to the spirit of the Covenant of the League of Nations and to our whole position in Iraq, and I should like to repudiate that suggestion most strongly.

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