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

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Trust Company of New York and will become the unconditional and exclusive
hereto*^ ^ovcrnmcnl uPon the signing of this agreement by both parties
I
Article 5
(a) The Company will pay to the Government a royalty of fifty-five cents ($ • 55)
in currency of the United States of America for each United Stales barrel of
crude oil which it obtains from said Neutral Zone, including any crude oil which
u re£eiYJs *or lts own account or is credited with from production not carried on
by the Company or production carried on jointly by or on behalf of the Company
with another party or parties, but not including any crude oil produced by the
Company, or from any joint operation by or on behalf of the Company and any
other party or parties, which the Company is required to deliver or account for
to any person or any body corporate or politic by reason of the nature or extent
of the undivided interest hereby transferred to the Company, it being the intention
of the parties that only crude oil retained by the Company shall be subject to such
royalty and that no crude oil shall be subject to more than one such royalty.
Such royalty shall not be payable in respect of crude oil reasonably consumed in
or incidental to the operations of the Company hereunder, but shall be payable in
respect of any crude oil delivered to the Government pursuant to Article 11 hereof.
The crude oil in respect of which the same is payable shall be measured after
deduction therefrom of water, sand and other foreign substances.
(b) The Company will also pay to the Government a royalty of twelve and
one-half per cent. (12]%) of the gross proceeds received by the Company for its
own account from the sale of any natural gas or natural gas products and by­
products produced, manufactured and sold from said Neutral Zone by the
Company, less the cost of handling and transportation of such natural gas or
natural gas products from the place of production to final destination or point of
consumption. The Company shall be under no obligation to collect, save or con­
dense any such natural gas or natural gas products. If the Company shall save,
collect or condense any such gas or gas products it will inform the Government
thereof. It is understood that natural gas and natural gas products shall mean only
petroleum gas and the products and by-products thereof and the products and
by-products of petroleum.
(c) Such royalties shall be payable monthly on or before the 30th day following
the termination of the month in respect of which the same are payable; provided,
however, that no such monthly payment on account of the royalty payable under
(a) hereof shall be made, unless and until and only to the extent that the aggregate
amount of the royalty owing to the Government by the Company pursuant to (a)
hereof, in respect of the year for which a payment has been made by the Company
as hereinafter provided in Article 6 hereof, shall exceed the amount of such
payment.
Article 6
Commencing with the date of the signing of this agreement and annually
thereafter on each anniversary of said date, the Company will pay to the Govern­
ment the sum of one million dollars ($1,000,000) in currency of the United States
of America as an advance to be credited against the royalty payable by the
Company in respect of the ensuing year, as hereinabove provided in Article 5 (<?)
hereof. In the event that the royalty payable pursuant to said Article 5 (a) shall
in any year, aggregate less than the said amount of one million dollars ($1,000,000),
the Government shall, nevertheless, be entitled to retain the advance payment
made on account of such royalty payable in respect of such year, and the Company
shall not be entitled to the return of any part thereof, except as provided in
Article 42 hereof, in the event of a curtailment of production by the Government,

lnP currency of the United Slates of America, pursuant to this Article 6, which
enm has been deposited with Guaranty Trust Company of New York and will
become the unconditional and exclusive property of the Government upon the
signing of this agreement by both parties hereto.