"الملف 82/1 [I]‏ (F 52)‏ أ.ب.و.ك.، والامتيازات النفطية - الساحل العربي"‏ [و‎‎٦‎١] (٣٠٧/١٢١)

Downing Street.
February, 1922,
IWj
(&
MANAGING DIREOTOR
tNGLO-PERSIAN OIL COUPANY.
Sir,
I am directed by Mr. Secretary Churchill to acknow-
ledre the receipt of your letter of the 6th of January
— . No. HSC/OFF, regardine the application of y9ur Company
for the grant of prospecting licences for oil and its
allied products over certain areas of the Arabian
littoral and the Persian Gulf and with regaro. to the
points raised in paragraph 2 thereof to inform you tnau
the Resident of the Persian Gulf is bein^ instructed
to take an early opportunity of nep-otiatin§ witn the
Sheikhs of the Trucial Coast conventions similar to^
those obtained from the Sheikhs of Koweit and Bahrein.
2. After full consideration, Mr. Churchill is
disposed to concur in the view set forth in your letter,
that the grant of exploration licences should be accom-
pani ed by on agreement w'th the Sheikhs concerned
determining in advance the extent of their participation
in the profits which will eventually accrue from the
development of the local oil resources under the
exploitation lease ultimately granted to this Company.
3. This participation should^ in the opinion of
Mr. Churchill, take the form of royalties based upon
the net output of crude oil ajid in this connection, he
would suggest in the special circumstances^the payment
half -yearly of a flat rate royalty of Rs. 3 per ton oi
net crude oil (i.e. after * deducting water and foreign
substances and oil required for the customary operation
of boring plant) received into the Company 's ^ield
storage tanks and reservoirs: plus a variable bi-annual
payment indicated in the accompanying schedule and based
on the average wholesale price at Bombay of kerosene
throughout tne period in question. The fixed rent^or
minimum ioyalty would be put atRs. 30,000, for which
an equivalent amount of oil might be taken.
4. Should the sum of the royalties drawn in one year
^ by the Sheikh equal or exceed Rs. 30,000 no fixed rant
will be paid by the Company, but should these royalties
orove to'be less than that amount the fixed rent would
nevertheless be payable. In addition an annual surface
rent of 12 annas per acre on land occupied by^the
Company under the terms of the mining lease will be
charged.
5. Mr. Churchill does not consider that it will be
necessary in this agreement to incorporate^any detailed
provisions based upon the accepted Colonial models, gover
ning the conditions under whicn the work of the Company:
will be conducted since such provisions may be determined
when the actual grant of the mining lease is under
consideration. He considers^ however, that under this
Agreement, the ri^ht should oe reserved to the Sheikh,
acting on the advice of the Resident to terminate the
concession in the event of the failure on the part of the
Company to fulfil such working conditions as may eventual
ly be agreed upon or to produce adequate royalties.
6.