Page 19 - The Persian Gulf Historical Summaries (1907-1953) Vol III

16
It shall be the duty of the above-mentioned head of the guard to keep order
m the areas in his charge to such extent as the Company may order him, he shall
have no right to interfere in any disputes among the Company’s servants unless
asked by the Company to do so.

Article VII
In case of misconduct the said guards are subject to dismissal or fine by the
Company. In the event of any heavier punishment being needed, the offender
shall be handed over to the representative of the Shaikh, and the Shaikh undertakes
that punishment shall be inflicted and to use his utmost endeavours to uphold
the authority of the Company’s employees, thereby avoiding unnecessary troubles
to both parties of this contract.

Article VIII
Should the Company succeed in finding oil in commercially exploitable
quantities they agree to pay half-yearly to the Shaikh in place of the annual
payment of Rupees 10,000 provided for in Article III, a royalty of Rupees 3.8.0
(three rupees and eight annas) per ton of net crude oil got and saved, i.e., after
deducting water and foreign substances and oil required for the customary
operations of the Company’s installations in the Shaikh’s territories.
This rate of royalty to be subject to revision by mutual agreement at the end of
10 years payment and in default of agreement either party shall have the right to
demand that the question at issue shall be submitted to arbitration as provided in
Article XIV below.
Article IX
Subject to the “ delay ” exception mentioned in Article V of this lease the
Company hereby undertakes that the amount received by the Shaikh in respect of
royalties shall not be less than Rupees 30,000 in any completed calendar year in
which the Company continues work, beginning with the year after the date on
which the Company shall have declared that oil has been found in commercially
exploitable quantities.* In the event of the Shaikh acting under the advice of the
Political Resident in the Persian Gulf disputing the Company’s decision as to the
commercial exploitation the Company hereby undertakes its readiness to submit
the matter to arbitration as provided in Article XIV.

Article X
The Company shall carry on work within the leased area with all proper zeal
and diligence and shall maintain at least two rigs in continuous operation, except
in so far as they may be prevented by causes beyond their control. In the event of
the Company failing within five years of the commencement of this lease to declare
that oil has been found in commercially exploitable quantities the Shaikh shall have
the power to call upon the Company either to give forthwith the declaration
mentioned in the present Article or to abandon the lease.

Article XI
In the event of the Company failing within six months of the end of any
calendar year to pay to the Shaikh the royalties due in respect of that calendar year
or failing, save for causes beyond their control, to carry out their obligations under
this lease’ the Shaikh shall have the power to terminate the leases, in which case
the provisions of the last sentence but one of Article II shall apply.

Article XII
The lessees shall take all practical measures to prevent an injurious access of
water to any oil-bearing formations which may be encountered either while
operations are in progress or upon the abandonment of any well.
• Under paragraph 3 of the Supplementary Agreement of November 21, 1933 ((c) on page 20),
the minimum payment of Rs. 30,000 per annum will be payable in respect of the year 1934 and
rubsequent years.