Page 164 - The Persian Gulf Historical Summaries (1907-1953) Vol III

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(/]) Abu Dhabi means all the territories of the Ruler including the territorial
waters thereof and to the extent of the Ruler’s rights therein any neutral zone that
may in future be created subject jointly to the Ruler and to other Rulers or
Governments including the territorial waters thereof and all other areas in or
over which the Ruler either alone or jointly with other Rulers or Governments
exercises jurisdiction and control and shall include the area described in Article 3
hereof.
Article 2
The Ruler of Abu Dhabi having issued his Proclamation dated the 12th day
of Shaban 1368 Hijri, corresponding to the 10th day of June, 1949, claiming
jurisdiction and control over an area of the seabed and subsoil lying beneath the
high seas of the Persian Gulf contiguous to the territorial waters of Abu Dhabi
and being satisfied that in respect of such area no prior obligation exists toward
any individual or company, hereby grants to the Company in conformity with this
Agreement for a period of sixty-five years from the date of signature hereof, the
sole and exclusive right to explore for, drill for, develop, produce, transport and
dispose of oil within the area described in Article 3 hereof.
It is understood and agreed that this Agreement is subject to any rights which
may be established under any existing concession in accordance with the machinery
provided for in said concession.
Article 3
The area covered by the exclusive right described in Article 2 above shall
include all of the sea-bed and subsoil underlying the spring tide of the waters of
the Persian Gulf which fall within the jurisdiction and control of the Ruler of
Abu Dhabi which lie beyond the territorial waters of Abu Dhabi.
When the precise boundaries of this area shall hereafter be determined then
a map shall be prepared showing these boundaries and shall be attached to this
Agreement as a part thereof.
This grant of concession shall also cover and include any and all islands, islets,
shoals and bars which may after the date of signature of this Agreement rise
from, accumulate, build up or be created by nature or the Company, or otherwise,
above spring tide of the waters within this concession area.

Article 4
On the date of signature of this Agreement, the Company shall pay to the
Ruler the sum of £112,500 sterling. The sum of £75,000 sterling so paid on
signature shall not be returnable under any circumstances whatever. The sum
of £37,500 sterling being the balance of the total sum paid on signature of this
Agreement shall represent an advance payment on royalties and shall be returnable
to the Company in the manner provided in Article 5 hereof.

Article 5
The Company shall pay to the Ruler annually the sum of £75,000 sterling.
The first payment to be made one year after the date of signature of this Agreement.
Upon discovery of oil in commercial quantities this annual rental shall cease,
but the amount payable thereafter to the Ruler as royalty under the terms of
Article 8 hereof shall in no circumstances be less than the sum of £75,000 sterling
annually. For this purpose calculations shall be made on the expiry of each period
of twelve months from the date of signature of this Agreement.
The Company will pay to the Ruler annually as advance payments on royalty
provided for under Article 8 of this Agreement, the sum of £37,500 sterling.
The first payment will be made on the date of signature of this Agreement and
will constitute a part of the total sum of £112,500 sterling payable on signature
as hereinbefore provided. Subsequent payments will be made annually until oil
is exported from the concession area, whereupon such payments shall cease. From
and after the export of oil from the concession area, the Company shall have the
right to recover all such advance payments on royalty theretofore made by
deduction from all royalties accruing to the Ruler over and above the sum of
£75,000 sterling per year; it being understood that the amount paid the Ruler
in any one year shall not, as a consequence of such deduction, be reduced below
the sum of £75,000 sterling as provided elsewhere in this Agreement