Page 188 - The Persian Gulf Historical Summaries (1907-1953) Vol III

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Article 3
The Shaikh hereby grants to the Concessionaire the exclusive right on and
after the 7th August 1952 to explore search for drill for produce and win natural
gas asphalt ozokerite crude petroleum and their products and cognate substances
(hereinafter referred to as “ the Substances ”) within the area mentioned in
Article 1, the exclusive ownership of all the Substances so produced and won, and
the right to sell or dispose of the Substances.
Article 4
In consideration of the rights granted by the Shaikh by this Agreement the
Concessionaire shall pay to the Shaikh: —
(a) on signature of the Agreement £15,400 Sterling.
(b) £15,400 Sterling within a period of sixty days from the date upon which
the Concessionaire declares in writing to the Shaikh that Substances
have been discovered in commercial quantities. If the Concessionaire
should fail to declare so sooner, then the date of discovery of Substances
in commercial quantities shall be that date upon which the Conces­
sionaire has completed and tested a well or wells capable of producing
in accordance with first class oil practice not less than two thousand
(2,000) English tons of clean Substances per day for a period of thirty
(30) consecutive days.
(c) £4,000 Sterling at the end of each year from the date of signature hereof
until the Concessionaire declares in writing to the Shaikh that Sub­
stances have been discovered in commercial quanties in accordance
with the Sub-Clause (b) of this Article 4, provided that in the event of
production of Substances by the Concessionaire from quantities less
than commercial quantities, the Concessionaire shall pay to the Shaikh
either £4,000 Sterling per year or sh.4/6d. Sterling per English ton
of 2,240 lbs. in respect of the Substances so won and saved, whichever
is the greater.
(d) At the end of every year from the date upon which the Concessionaire
makes in writing to the Shaikh the declaration that the Substances have
been discovered in commercial quantities £7,000 Sterling or sh.4/6r/.
Sterling per English ton of 2,240 lbs. in respect of the Substances other
than natural gas won and saved during the preceding calendar year,
whichever is the greater.
(e) 3 pence Sterling per 1,000 cubic feet of natural gas produced and sold.
In calculating royalty for the purpose of this Article account shall not be taken
of any of the Substances used by the Concessionaire in his operations or used by
the Concessionaire’s employees within the Shaikhdom, necessary for their use, nor
of any water or foreign matter which may be produced with the Substances.
Article 5
The Concessionaire shall conduct his operations in a workmanlike manner
and by appropriate scientific methods and shall take all reasonable measures to
prevent the ingress of water to any petroleum-bearing strata and shall duly close
any unproductive holes drilled by him and subsequently abandoned. The Con­
cessionaire shall keep the Shaikh informed generally as to the progress and result
of his drilling operations but such information shall be treated as confidential. In
particular the Concessionaire shall forthwith notify in writing to the Shaikh the
date of discovery of Substances in commercial quantities.
The concessionaire’s operations shall be conducted with due regard to the
character as high seas of the sea overlying the area mentioned in Article 1, and in
particular the Concessionaire undertakes that in the exercise of his rights and
fulfilment of his obligations under this Agreement he will interfere to the minimum
extent possible with, and will take adequate precautions for the protection of,
navigation, fishing and pearling and that he will comply with all reasonable
requirements of the competent authorities of Dubai affecting fishing, pearling and
the navigation of ships or aircraft.
Article 6
Within three months after the expiry of each calendar year, the Concessionaire
shall deliver to the Shaikh a statement of the amount of the Substances won and