'F-81 82/1-V A.P.O.C. Kuwait' [‎32r] (80/393)

5V
production, and here the provision in the Eastern and
General Syndicated draft, allowing a cessation of
operations should not "be lost sight of. The rate oi
royalty offered by the Eastern and General Syndicate
is the same as that in India, "but there is a j.ocal
market to absorb all the production. The rate
offered by the Anglo-Persian Oil Company is
approximately the same as that levied oy t/ie Ii^q.
Government.
In Venezuela the rate of royalty is
understood not to exceed 2/- a ton in most instances,
while in Trinidad there are many leases with a royalty
of from 1/6 to 2/-> although in recent years a royalty
of 3/- has been imposed. In the case of both these
countries, over 90 per cent of the oil has to be
exported.
Customs Duty : The Company ) Customs Duty. Jo
undertake to pay the | similar provision.
Sheikh a Customs Duty of )
1% on all oil produced )
from Kuwait territory, )
calculated on the value )
of the oil at the wells. )
Comment.
It is not usual to impose a Customs Duty in
addition to royalty. Such a charge might with some
justification be levied in a country where the State
does not own the mineral rights and desires to secure
some financial consideration for the loss of a
wasting asset such as petroleum. But where the
State is the owner of the minerals it is regarded as
preferable that the State should take the whole of its
financial return in the shape of royalty. Apart
from the principle involved there is bound to be
some difficulty in assessing the value of the oil for
purposes of the duty, whether at the well head, oi
port of shipment. There are some cases in which
royalty