File 10/5 II Hasa oil: CASOC's activities in Hasa; development of Ras Tannura; Political Agent's visit to Hasa [‎104] (221/656)

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A rticle 1.
Text of the Oil Agreement between the Standard Oil Company of Califo rn i
and His Majesty King A hdul Aziz-al-Saud.
THIS agreement made between his Excellency Sheikh Abdulla Suleiman-al
Hamdan, Minister of Finance of Saudi Arabia, acting on behalf of Saudi Arab
Government (hereinafter referred to as the " Government "), of the one part and
L. N. Hamilton, acting on behalf of the Standard Oil Company of California
(hereinafter referred to as the " Company "), of the other part.
It is hereby agreed between the Government and the Company in manner
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The Government hereby grants to the Company on the terms and conditions
hereinafter mentioned, and with respect to the area defined below, the exclusive
right, for a period of sixty years from the effective date hereof, to explore
prospect, drill for, extract, treat, manufacture, transport, deal with, carry away
and export petroleum, asphalt, naphtha, natural greases, ozocerite, and other
hydrocarbons, and the derivatives of all such products. It is understood, how
ever, that such right does not include the exclusive right to sell crude or refined
products within the area described below or within Saudi Arabia.
A rticle 2.
The area covered by the exclusive right referred to in article 1 hereof is all
of Eastern Saudi Arabia, from its eastern boundary (including islands and
territorial waters), westward to the westerly edge of the Da liana, and from the
northern boundary to the southern boundary of Saudi Arabia, provided that
from the northern end of the westerly edge of the I) ah an a the westerly boundary
of the area in question shall continue in a straight line north, 30 degrees west,
to the northern boundary of Saudi Arabia, and from the southern end of the
westerly edge of the Dahana, such boundary shall continue in a straight line
south, 30 degrees east, to the southern boundary of Saudi Arabia.
For convenience this area may be referred to as the " exclusive area."
A rticle 3.
In addition to the grant of the exclusive area referred to in article 2 of this
agreement, the Government also hereby grants to the Company a preference right
to acquire an oil concession covering the balance of eastern Saudi Arabia
extending as far west of the westerly boundary of the exclusive area as the contact
between the sedimentary and igneous formations. This preference right includes
such rights as the Government may now have, or may hereafter acquire, in the
so-called Neutral Zone bordering on the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. to the south of Koweit.
The nature of this preference right is to be hereafter agreed upon. The term
oil concession '' as used in this article means an exclusive concession covering
the same products which are covered by the present agreement. Furthermore,
the Company's geologists shall have the right to examine the region covered
by the preference right just referred to (excepting the Neutral Zone referred
to above), in so far as such examination may be necessary or advisable for a better
understanding of the geological character of the exclusive area.
A rticle 4.
Within the time agreed in article 18 of this agreement, the Company shall
make a payment to the Government of £30,000 gold, or its equivalent.
A rticle 5.
The Company shall pay the Government annually the sum of £5,000 gold, or
its equivalent. For convenience this payment is termed an " annual rental " ana
it is payable in advance. The first annual rental shall be paid within the tiro 6
agreed in article 18 of this agreement; thereafter so long as the contract is
terminated, the annual rental shall be due upon each anniversary of the effective