D'Arcy affair

In 1904, the Board of the Admiralty projected that petroleum would supplant coal as the primary source of fuel for the Royal Navy. During their investigation, the British Admiralty learned that William Knox D'Arcy—who later founded the Anglo-Persian Oil Company (APOC) in April 1909—had obtained a valuable concession from the Persian government regarding the oil rights in southern Persia and that D'Arcy was negotiating a similar concession from the Ottoman Empire for oil rights in Mesopotamia. The British Admiralty purportedly initiated efforts to entice D'Arcy to sell his newly acquired oil rights to the British Government rather than to the French de Rothschilds (Lockhart, 1986).


In Reilly: Ace of Spies, Robin Bruce Lockhart repeats one of Reilly's oft-recited tales of how, at the British Admiralty's request, Reilly located William Knox D'Arcy in the south of France and clandestinely approached him in disguise. According to Reilly, he boarded Lord de Rothschild's yacht attired as a Catholic priest and secretly persuaded D'Arcy to terminate negotiations with the French Rothschilds and return to London to meet with the British Admiralty. Biographer Andrew Cook is sceptical about Reilly's involvement in the D'Arcy Affair, for in February 1904, Reilly was purportedly still in Port Arthur, Manchuria. Cook further claims that it was Reilly's intelligence chief, William Melville, and a British intelligence officer, Henry Curtis Bennett, who undertook the D'Arcy assignment (Cook, 2004).


Although the extent of his involvement in the D'Arcy Affair is unknown, it has been verified that Reilly stayed in the French Riviera on the Côte d'Azur after the incident—a location very near the Rothschild yacht. After conclusion of the D'Arcy Affair, Reilly journeyed to Brussels, and shortly thereafter, in January 1905, he arrived in St. Petersburg, Russia, (Cook, 2004).


An alternative scenario put forward in The Prize by Daniel Yergin has the Admiralty putting forward a "Syndicate of Patriots" to keep D'Arcy's concession in British hands, apparently with the full and eager co-operation of D'Arcy himself.



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