Page 169 - Historical Summaries (Persian Gulf - Vol II) 1907-1953

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of 65 years.C1) Payments are to be made in sterling but otherwise the terms are
similar to those of the Superior Oil Company’s concession. There is an obligation
to drill withing five years. The Ruler accepted in writing the principles involved
in the accompanying Political Agreement.(“)

(c) Dubai
81. The first oil concession in the Trucial States was obtained by Petroleum
Concessions Limited from Dubai on May 22, 1937.(or) It contained a clause
permitting its transfer to Petroleum Development (Trucial Coast) Limited. It
covers the State of Dubai, including all islands and territorial waters, except Hatta
(paragraph 19 above) and the area in the Dubai creek “ surveyed by Imperial
Airways.” It is provided that when the territorial limits of the State have been
determined the area covered by the concession will be coterminous with the limits
so determined. The annual payment to be made to the Ruler until oil is discovered
in commercial quantities is Rs. 30,000.
A well was drilled in the Jabal Ali area west of Dubai in 1951 and 1952 but
no oil was discovered. No further drilling in the State has yet been undertaken.
82. In June 1949 the Ruler issued his declaration of jurisdiction over the
sea-bed. As in the case of Abu Dhabi (paragraph 79 above) a dispute arose between
him and Petroleum Development (Trucial Coast) Limited over his right to grant
a separate concession for his sea-bed, and it was agreed that it should be referred
to arbitration. On April 24, 1950, the Ruler granted a concession for his sea-bed
to the Superior Oil Company on payment of Rs. 100,000 down with an annual
payment of Rs. 100,000 and a royalty fixed at one-fifth of the proceeds of sales.”(“)
The company had previously entered into a Political Agreement with His Majesty’s
Government^64) the principles involved in which the Ruler agreed in writing to
accept. In May 1952 the company gave notice of the termination of this concession.
The Ruler thereupon offered a concession for the sea-bed to Petroleum
Development (Trucial Coast) Limited. For domestic reasons the company as such
was unwilling to accept the concession and it was obtained in the name of its
General Manager in the Persian Gulf, Mr. Heseldin. The agreement was signed on
August 7, 1952, for a period of 60 years.(6C) It provides for a down payment of
£15,400, an annual payment of £4,000 until oil is discovered in commercial
quantities and a royalty of 4j. 6d. per ton. Except for the provision that payments
are to be in sterling the concession conforms generally with the land agreements
held by Petroleum Development (Trucial Coast) Limited. There is no obligation
to drill within a specified period. The Ruler accepted in writing the principles
involved in the accompanying Political Agreement.C7) At the same time as the
concession was signed the arbitrators who had been appointed by the Ruler and
Petroleum Development (Trucial Coast) Limited gave an agreed award based on
the findings in the Abu Dhabi case (paragraph 79 above).

(d) Sharjah and Kalba
83. The Ruler of Sharjah granted a concession to Petroleum Concessions
Limited with the right of transfer to Petroleum Development (Trucial Coast)
Limited on September 17, 1937.(c“) It covers the State of Sharjah, including all
islands and territorial waters, except for the area being used by Imperial Airways
and the Royal Air Force, and provides that when the territorial limits of the State
have been determined the area covered by the concession will be coterminous with
the limits so determined. Under a schedule attached to the concession the
company is debarred from undertaking the work in two areas, Jabal Faiyah and
the Wadi al Hulu, (which were considered unsafe) without the Ruler’s permission
in writing. The annual payment to be made to the Ruler until oil is discovered
in commercial quantities is Rs. 40,000.(6#) Under the schedule the company is
(“) No. 3 IV. O.A.C.
(M) No. 4 IV. O.A.C.
(”) No. 5 IV. O.A.C.
(•«) P.R. to F.O. Despatch 40 of May 11. 1950 (EA 1273/38 of 1950).
(") (EA 1273/32 of 1950).
(“) No. 7 IV. O.A.C.
(") No. 8 IV. O.A.C.
(••) No. 9 IV. O.A.C.
(••) Rs. 30,000 is mentioned in the body of the concession and an additional Rs. 10.000 in a
letter attached to it.