Coll 6/48 'Oil: Concessions in Saudi Arabia. (Hasa)' [‎459v] (920/1153)

Article 10.
As soon as it becomes possible {i.e., the Company will be allowed a leasonable
time for ordering additional tools and for their shipment to Saudi Aiabia to
meet the additional work after the date of discovering oil m commercial
quantities), the Company should continue digging, by means o wo iggmg
machines, till it completes digging all over the fixed zone, m confoimi y wi v
the practice observed in first-class oil-fields, or until this agreement expires.
Article 11.
The Company shall pay to the Government royalty on all crude oil drawn
out or stored, and which runs or flows from the field storage, aftei deducting
First: Water and other foreign substances.
Second : Oil which will be required by the Company for its oidmaiy woik
within Saudi Arabia.
Third : Oil which will be required for the purpose of manufacturing
quantities of benzine and kerosene, which will be supplied fiee to the
Government every year in pursuance of article 16 of this agi cement.
The amount of royalty on each ton net weight of crude oil will be {a) 4s. gold or
its equivalent, or (b) in accordance with the choice which the Company may make
at the time of payment of each instalment, 1 American dollar on each ton of
crude oil, plus the difference in the rate of exchange in accordance with the
average of the rates of exchange for the three months before the payment of the
instalment. For instance, if the average rate of exchange is 1 dollar or 14 cents
United States currency for each 4s. gold {i.e., that the value of £1 gold has
become equivalent to 5 dollars and 70 cents), the amount of royalty on each ton
net weight of crude oil will then be 1 dollar and 4 cents.
Article 12.
If the Company extracts, stores and sells any kind of mineral oil, it should
pay to the Government a royalty equivalent to one-eighth of the revenue from
sales. Nevertheless, it is understood that the Company is not bound to extract,
store and sell any mineral oil, and it is also understood that the Company is not
bound to pay any royalty in respect of the oil which will be used by the Company
for its ordinary work, machines and other establishments in the Saudi Arab
Kingdom.
Article 13.
The Government have the right, through representatives properly authorised
on their behalf, to inspect during working hours the work carried out by the
Company, in accordance with the provisions of this agreement, and to check the
quantities produced. The Company should keep correct accounts and measures
of quantities of oil gained and stored and which run from the depot of the
field, in accordance with the practice observed in the first-class oil-fields.
Government representatives who are properly authorised have the right to check
the said accounts at all convenient times. After the expiration of one half-year
as from the date on which the oil is discovered in commercial quantities, the
Company should submit to the Government a half-yearly account within a period
of three months following the said half-year, and submit a statement showing
the amount of royalty due to the Government for that half-year. The Govern
ment should treat these accounts and statements as confidential, with the exception
of figures which the Government may find it necessary to publish for certain
financial purposes. The royalty which will be due to the Government should
be paid at the end of each half-year, as from the date on which oil is discovered
in commercial quantities, and such payment should be made within the period
of the three months following that half-year. In the case of any dispute which
may occur in respect of the amount of royalty due for a half-year, the Company
should hand over to the Government within the fixed period that part of the
rovalty which is not in dispute. The dispute which may arise between the two
parties should be settled by them, and if they do not come to a settlement in this
wav. then such dispute may be settled by means of arbitration provided for in
this agreement. Any amount which will be decided after this settlement should
be paid to the Government within sixty days, as from the date on which the
decision is given.