Page 142 - The Persian Gulf Historical Summaries (1907-1953) Vol III

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(/;) The Company shall have the right to treat such sums as an advance against
Convention Payments which become payable after the Company has completed
the fulfilment of its undertaking under paragraph (a) of this clause.
3. The undertaking under clause 1 shall, in respect of any year, be satisfied
by the receipt by the Sheikh of: —
(a) Qatar Income Tax in respect of that year,
(b) Convention Payments in respect of that year, and
(c) such sum, if the total of (a) and (b) is less than an amount equal to 50 per
cent, of the Oil Profit during that year, as is equal to the deficiency
(herein called a “ Make-up Payment ”). This sum will be paid in
sterling in the manner provided in Article 10.
4. In this Article and hereafter in this Agreement the following expressions
shall have the meanings respectively assigned to them below.
“ Oil Profit ” means the profit arising in Qatar on Exported Oil and on asphalt,
ozokerite and natural gas produced by the Company in the Concession Area freed
of water and foreign substances and exported from Qatar.
“ Profit arising in Qatar on Exported Oil ” means, for the Initial Period
and for each year thereafter, the difference between the Border Value per ton
of the Exported Oil in such period or year and the cost per ton of such oil multi­
plied by the number of tons so exported ascertained in each case in accordance
with the provisions of Article 9 hereof.

Article 9
1. —(a) The Border Value as at the date of signature of this Agreement of
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crude oil of 40-0° A.P.I. and of the quality then being exported from Qatar
established in accordance with the definition of Border Value in Article 1 hereof
is eighty-two shillings and three pence sterling per ton, and such Border Value
will be adjusted by the amount in shillings per ton by which the Posted Price of
such oil increases or decreases after the date of signature of this Agreement. Such
Border Value as so adjusted from time to time will be the Border Value of Exported
Oil of the like gravity and quality.
(b) In respect of Exported Oil of any other gravity or quality the Border
Value shall be ascertained by adding to or subtracting from the Border Value on
the day in question of Exported Oil of 40-0° A.P.I. mentioned in paragraph (n)
above the amount in shillings per ton by which the relevant Posted Price for
the actual gravity and quality of the Exported Oil concerned is greater or less
than the relevant Posted Price for Exported Oil of 40*0° A.P.I. Border Values
established in accordance with this paragraph will be appropriately adjusted by
the amount in shillings per ton by which the relevant Posted Prices increase or
decrease after the date on which such Border Values are first ascertained.
(c) The Border Value shall be ascertained for each day and shall be applied
to the tonnage of Exported Oil on that day.
2. The tonnage of Exported Oil shall be ascertained in respect of each day.
3. The cost of Exported Oil shall be ascertained by sound and consistent
accounting methods as follows: —
(a) by determining the total of all costs and expenses of the Company (but
excluding any sum in respect of Convention Payments, Qatar Income
Tax and any taxation on income or profits levied outside Qatar) for
the Initial Period and for each year thereafter which are fairly and
properly attributable to the operations of the Company in the Conces­
sion Area and elsewhere in Qatar for the purpose of producing and
exporting therefrom crude oil (freed of water and foreign substances).
Such costs and expenses shall consist of
(i) operating expenses and overheads,
(ii) amortisation of survey exploration and development costs incurred
by the Company prior to the date on which the Company
commences the installation of storage and oil loading facilities
for the purpose of making regular exports of oil (such date to
be advised to the Sheikh by the Company in writing) at a rate
not exceeding 15 per cent, per annum until such expenditure
is fully written off, and
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