File 10/5 II Hasa oil: CASOC's activities in Hasa; development of Ras Tannura; Political Agent's visit to Hasa [‎105] (222/656)

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date hereof, and shall be payable within thirty days after such anniversary,
provided that upon the commercial discovery of oil no further annual rental shall
be due or payable.
A rticle 6.
If this contract has not been terminated within eighteen months from the
effective date hereof, the Company shall make a second payment to the Govern
ment, amounting to £20,000 gold, or its equivalent. The due date of such payment
shall be eighteen months from the effective date hereof, but the Company shall
have fifteen days from the due date within which to make the payment.
A rticle 7.
During the life of this agreement, the Government shall be under no
obligation to repay the initial loan of £30,000 gold (or its equivalent), or the
second loan of £20,000 gold (or its equivalent). The Company shall have the right
to recover the amount of these two loans by way of deductions from one-half of the
royalties due the Government. If the amount of the two loans, in whole or in
part, shall not have been so recovered by the Company upon the termination of
this contract, the Government shall repay the unrecovered amount in four equal
and consecutive annual instalments, the first instalment to be paid within one
year from the date of the termination of this agreement. Furthermore, until
such unrecovered amount has been repaid by the Government, the Company's
preference right referred to in article 3 hereof shall continue in force.
A rticle 8.
Upon the effective date of this agreement the Company shall commence plans
and preparations for geological work, so planning the work as to take advantage
of the cooler season for more efficient work in the field, and of the hotter season
for the necessary office work of compiling data and reports. In the event the
actual field work shall commence not later than the end of September 1933, and
it shall be continued diligently until operations connected with drilling are
commenced, or until the contract is terminated.
A rticle 9.
Within ninety days after the commencement of drilling, the Company shall
relinquish to the Government such portions of the exclusive area as the Company
at that time may decide not to explore further, or to use otherwise in connexion
with the enterprise. Similarly, from time to time, during the life of this contract,
the Company shall relinquish to the Government such further portions of the
exclusive area as the Company may then decide not to explore or prospect further,
or to use otherwise in connexion with the enterprise. The portions so relinquished
shall thereupon be released from the terms and conditions of this contract,
excepting only that during the life of this contract the Company shall continue
to enjoy the right to use the portions so relinquished for transportation and
communication facilities, which, however, shall interfere as little as practicable
with any other use to which the relinquished portions may be put.
A rticle 10.
The Company shall commence operations connected with drilling as soon as
a suitable structure has been found, and in any event if the Company does not
commence such operations within three years from the end of September 1933
(subject to the provisions of article 27 hereof), the Government may terminate
this contract. Once commenced, these operations shall be continued diligently
until oil in commercial quantities has been discovered or until this agreement is
terminated. If the Company should fail to declare so sooner, the date of
discovery of oil in commercial quantities shall be the date upon which the
Company has completed and tested a well or wells capable of producing in
accordance with .first-class oil practice at least 2,000 tons of oil per day for a
period of thirty consecutive days.
Operations connected with drilling include the ordering and shipping of
materials and equipment to Saudi Arabia, the construction of roads, camps,
buildings, structures, communication facilities, &c., and the installation and
operation of the machinery, equipment and facilities for drilling wells.
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