Page 94 - The Persian Gulf Historical Summaries (1907-1953) Vol III_Neat

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profit of the Company on such sale, and the share of the Government therein, shall
be computed on the same basis as in the case of a sale to any other party, so that
the Government will receive a discount equal to the amount of such share. Any­
thing herein contained to the contrary notwithstanding, the Company, within one
year of the date of the signing hereof, shall have the right to assign this agreement
and the concession and rights granted hereunder to an operating corporation
*° • u.f?rmed lii subject to the requirements of this agreement as to
desirability to the Government, and such operating corporation shall stand
in the place and stead of the Company hereunder. The reassignment
of said concession and rights to Pacific Western Oil Corporation, by such
operating corporation, other than for cash, shall not be deemed to be a sale
within the meaning of this Article. The Government reserves the right to approve
or disapprove, from the point of view of desirability to the Government, of the
shareholders of such operating corporation and employees thereof or employees of
the Company within said Neutral Zone, and the wishes of the Government in this
respect shall be carried out. It is understood and agreed that the Government has
no objection to Pacific Western Oil Corporation as a shareholder of such operating
corporation, and that it will not unreasonably withhold or delay any approval
required under this Article.
If the Company assigns the concession and rights hereunder to a corporation
organised by it for the purpose of conducting the operations hereunder, and such
corporation shall, subsequent to one year from the date of the signing of this agree­
ment, issue or offer for subscription any shares of its capital stock for cash to any
person or corporation other than Pacific Western Oil Corporation, the Government
or any Saudi Arabian subjects approved by the Government, for a period of thirty
(30) days after notice in writing by the Company of such corporation’s intention
so to issue such shares is received by the Government, shall have the right to
subscribe to twenty-five (25%) percent of the shares so issued or offered for sub­
scription at the same price and upon the same terms, including the currency in
which the subscription price is payable, upon which such shares are issued or
offered for subscription to others.
Article 16
The Company may enter into any agreement or agreements with any other
party, not deemed undesirable by the Government, having any rights to or with
respect to the oil, gas or other petroleum products pertaining to the remaining
undivided one-half interest in said Neutral Zone, for conducting any or all of
the operations hereunder as joint operations; provided that the rights and
obligations of the parties hereto shall in no way be altered or modified by any
such agreement, the Company shall be responsible for the observance of this
agreement by such third party; and any such agreement shall refer to this agree­
ment and contain an express provision according due respect hereto.
The Company shall have the right to delegate to third parties the execution
of operations covered by this agreement; provided that the prior approval of the
Government, which approval shall not be unreasonably withheld or delayed, shall
be obtained to the employment of contractors not otherwise entitled to carry on
business in Saudi Arabia, and provided that Saudi Arab contractors be given
preference under equal conditions and circumstances. In the event of such delega­
tion, such third parties, for whom the Company shall be responsible, shall enjoy
all the rights and privileges guaranteed to the Company by the present agreement
in so far as such rights and privileges shall pertain to operations of the character
carried on by them in connection with the concession hereunder.
Article 17
The Company will, within nine months after the signing of this agreement,
commence exploratory operations, for the purpose of discovering oil in said
Neutral Zone. Such operations shall be conducted in a good workmanlike manner
and in accordance with modern accepted practices and methods.
Within one year from the date of the signing hereof the Company shall
commence drilling operations and, prior to the expiration of the second year from
the date of the signing hereof, shall have completed drilling a minimum total
acerecate depth of six thousand (6,000) feet. Prior to the expiration of the third
year from the date of the signing hereof, the Company shall have completed
drilling a minimum total aggregate depth of sixteen thousand (16,000) feet. All
drilling shall be done in a good workmanlike manner and in accordance with