Page 131 - The Persian Gulf Historical Summaries (1907-1953) Vol III

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(iv) The border value shall be ascertained for each dav and shall be applied
to the tonnage of exported oil on that day.
(h) The tonnage of oil exported shall be ascertained daily.
(c) The cost of exported oil shall be ascertained by sound and consistent
accounting methods as follows: —
(i) by determining the total of all costs and expenses of the Company (but
excluding any sum in respect of Convention Payments and any tax
on profits and Qatar income tax) for the initial period and lor each
year thereafter which are fairly and properly attributable to the
operations of the Company in Qatar for the purpose of producing and
exporting therefrom crude oil (freed of water and foreign substances)
in respect of (1) operating expenses and overheads and (2) amortisation
of survey and development costs and other capital expenditure at the
rate of 5 per cent, per annum and depreciation of all physical assets
at the rate of 10 per cent, per annum until such expenditure and assets
are fully written off:
(ii) the Auditors for the lime being of the Company and of the Shaikh shall
within six months after the end of the initial period and of each year
thereafter agree in writing the total of all costs and expenses of the
Company for the initial period or year as the case may be calculated
under paragraph (i) above;
(iii) the figures so agreed under paragraph (ii) divided by the number of tons
of exported oil during the period to which such agreed figures relate
(ascertained in accordance with paragraph (b) of this Article) shall
constitute the cost per ton of such oil for such period or year;
(iv) in the event of disagreement between the Auditors of the Company and
of the Shaikh under paragraph (ii) above a dispute shall be deemed
to have arisen under Article 7 hereof and shall if no agreement can be
arrived at for settling it by any other method be referred to arbitration
in accordance with that Article;
(v) if there shall be no Auditors appointed by the Shaikh for the purposes
of this Article then the Auditors for the time being of the Company
shall certify in writing the total of all costs and expenses of the
Company calculated under paragraph (i) above, and the figures so
certified shall be deemed to have been agreed as provided in para­
graph (ii) above;
(vi) the Shaikh’s Auditors shall be an internationally recognised firm of
accountants.
Article 5
As from the Effective Date: —
(a)—(i) the Company shall within seven days after the end of each quarter
submit to the Shaikh a provisional tonnage statement showing the quantity of
exported oil during such quarter or (in the case of the first provisional tonnage
statement) during the period from the Effective Date to the 31st December, 1952,
and containing all such other information as may reasonably be required to enable
the Sheikh to calculate the amount of the Convention payments due in respect of
such quarter or period and to assess the profit arising in such quarter or period
in Qatar on exported oil for which purpose the cost of such exported oil shall be
based on the Company’s estimate thereof.
(ii) The Company shall within six months after the end of each year submit
to the Shaikh a final tonnage statement containing in respect of that year or (in
the case of the first final tonnage statement) of the initial period the information
required to be stated in a provisional tonnage statement except that the cost of
the exported oil to which it relates shall be tne cost thereof as agreed or deemed
to have been agreed pursuant to Article 4 (c) hereof. The final tonnage statement
either as submitted or as subsequently varied by agreement shall become conclusive
not later than the 31st day of July next following the year or period to which it
relates unless one party hereto has prior to that date by notice in writing to the other
requested that any dispute be referred to arbitration for decision.
M (b) The Convention payments shown to be due in a provisional tonnage state­
ment shall be paid and satisfied by the Company at the time such provisional
tonnage statement is submitted. If as a result of a conclusive final tonnage state­
ment or of any such arbitration decision any further sum is found to be due to