Page 221 - The Persian Gulf Historical Summaries (1907-1953) Vol III

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Article 3
for dnU for*3nroHnrnbJ„8,|ra,n■S t0 l,hc Company the exclusive right to explore search

Mate or for export and to export or otherwise deal with or dispose of the Sub­
stances, and the right to import export pump ship or otherwise transport the
Substances across or to any country or place at the Company’s discretion and the
right to do all things necessary for the purpose of these operations.
Article 4
If hereafter any neutral Zone is created adjacent to the territory of the State,
wherein the Shaikh shall have a co-equal and joint interest, the Shaikh hereby
agrees to grant to the Company an oil concession over such neutral zone on terms
to be agreed between the Shaikh, the Company and the joint ruler of such Neutral
Zone.
Article 5
In consideration of the rights granted by the Shaikh by this Agreement the
Company shall pay to the Shaikh:
{a) on signature of the agreement Rupees one hundred and fifty thousand
(Rs. 1,50,000/-) only;
(b) Rupees two hundred thousand (Rs. 2,00,000/-) only within a period of
sixty (60) days from the date upon which the Company declares in
writing to the Shaikh that substances have been discovered in com­
mercial quantities. If the Company should fail to declare so sooner,
then the date of discovery of substances in commercial quantities shall be
that date upon which the Company 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) Rupees fifty thousand (Rs. 50,000) only at the end of each year from the
date of signature hereof until the Company declares in writing to the
Shaikh that Substances have been discovered in commercial quantities
in accordance with the Sub-Clause (b) of the Article 5 or until the Com­
pany commences Production from quantities less than commercial
quantities. In the event of such production by the Company from
quantities less than commercial quantities either Rupees fifty thousand
(Rs. 50,000/-) per year or Rupees 3 (three) per English Ton of 2,240 lbs.
in respect of the Substances so won and saved shall be payable, which­
ever is the greater.
(d) At the end of every year from the date upon which the Company makes
in writing to the Shaikh the declaration that the Substances have been
discovered in commercial quantities Rupees ninety thousand (Rs. 90,000)
only or Rupees 3 (three) 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) Annas 2 (two) 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 Company in its operations or used by the
Company’s employees within the State, necessary for their use, nor of any water
or foreign matter which may be produced with the Substances.
Article 6
The Company shall not carry on any operations within areas occupied by or
devoted to the purposes of mosques, sacred buildings or graveyards.
Article 7
The Company shall conduct its operations in a workmanlike manner and by
appropriate scientific methods [and shall take all reasonable measures to prevent
the ineress of water to any petroleum-bearing strata and shall duly close any
unproductive holes drilled by it and subsequently abandoned]. The Company
“hill keeD the Shaikh informed generally as to the progress and result of its drilling
operations but such information shall be treated as confidential.