Page 90 - The Persian Gulf Historical Summaries (1907-1953) Vol III

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Article 7
Within 90 days after each anniversary of the date of the signing hereof, the
Company will pay to the Government:
(a) An amount in currency of the United States of America equivalent to
twenty-five per cent. (25%) of the net profits realised by the Company
during the year ended on such anniversary from the sale of products
and by-products, including gas and gas products and by-products,
obtained by the Company from said Neutral Zone and not refined
by the Company at any refinery built by the Company in said Neutral
Zone, and
(b) An amount in currency of the United States of America equivalent to
twenty per cent. (20%) of the net profits obtained by the Company
during such year from the operation of any refinery or refineries built
by said Company in said Neutral Zone.
It is understood and agreed that there will be no duplication in the interest of
the Government in its share of the profits, respectively, under (a) and (b) hereof.
It is further understood and agreed that the share of the Government in such
profits shall be in the nature of a “ carried interest,” that is, the amount thereof
shall be determined after the deduction of all charges properly allocable thereto,
but no liability for the amount of any of such charges or any other loss shall attach
to the Government. It is also understood and agreed that the share of the
Government in such profits shall be free from all taxes of any other Government
and shall be determined without deduction for any such taxes owing by the
Company. It is further understood and agreed that the amount of annual profits and
the share of the Government therein shall be determined in accordance with oil
accounting practice accepted as standard in the Mid-Continent oil-producing area
of the United States of America, and that at the time of such payment the amount
of such profits shall be certified by the Company to the Government.
Article 8
Payments by the Company hereunder shall be made at Jeddah or at any bank
within the United States of America or the United Kingdom which may be desig­
nated, for each specific payment, in writing by the Government. The receipt of
any bank at which such payment is so directed after the signing of this agreement
shall be full discharge of the Company in respect of the amount of money for which
such receipt is given.-
Article 9
In addition to its rights to receive products in kind pursuant to Article 11
hereof, the Government shall have the right to purchase for its own use and use
within Saudi Arabia, but not for resale to others abroad or for export, upon the
same terms, including the currency in which the price is payable, upon which the
same are sold to any other purchaser, less a discount of five (5%) per cent., an
amount not in excess of twenty (20%) per cent, in value of petroleum and petroleum
products and by-products and natural gas and natural gas products and by-products
produced and retained by the Company for its own account within said Neutral
Zone, including any such products which it may receive for its own account or
be credited with on account of any production not carried on by the Company or
from production carried on jointly by or on behalf of the Company with another
party or parties, but not including any such products produced by the Company,
or from any production carried on jointly by or on behalf of the Company with !
another party or parties, which the Company is required to deliver or account for
to any other person or body corporate or politic by reason of the nature or extent
of the undivided interest hereby transferred to the Company.
:
Article 10
;
When crude oil produced or received for its own account from said Neutral
£°ne, including any crude oil which it may receive for its own account or be
credited with on account of any production not carried on by the Company or
irom production carried on jointly by or on behalf of the Company and any
otner party or parties, but not including any crude oil produced by the Company
or from any joint operation carried on by or on behalf of the Company and any
otner party or parties which the Company is required to deliver or account for