Concessions in Bahrein [Bahrain], Kuwait, &c: correspondence, 1932-Jul 1933 (Colonial Office Secret Print, Middle East No.49) [‎98v] (198/284)

170
to be based on the general trend of 7 rld . f ; 1 |a ^ t ^\ P thffct
Minimum and maximum rates of royalty should be laid do^n m
(7) ItTs usual to provide for a royalty on any natural gas sokb J^e equivalent
of 2d ( 0 2annas) per thousand cubic feet is suggested as a suitable rate.
It mieht also be provided that in the event of casing-head gasoline being
produced the Shaikh may fix a royalty at a rate not exceeding the equivalent
*(8) The ShaikhV? or His Majestv's Government) should retain the right of pre
emption of oil and the right to control coaling and oil stations, docks,
wharves, &c., in time of war or emergency . ^ ^ „
*(9) It is considered desirable that provision should be made for iefinm c say
50 per cent, of the oil in Kuwait or British territory and that plant should
be capable of producing fuel oil suitable for Admiralty use.
(10) Minerals, other than petroleum and cognate products, should be reserved
to the Shaikh, who should retain the right to lease them to other parties,
provided that the operations of the Company are not thereby obstructed.
(11) The Company should undertake to offer no unnecessary or reasonably
avoidable obstruction or interruption to the development and working of
any minerals (other than petroleum or cognate products) including water,
and to afford to the Shaikh and to the holders of prospecting licences or
mining leases in respect of other minerals reasonable means of access to
such minerals for the purpose of working and carrying awa\ the same.
(12) Provision should be made for local office and resident local representative.
(13) On the termination of the Concession the Company should undertake to
deliver up to the Shaikh without payment of compensation in good order
and repair and fit for further working all productive wells or borings
together with all casings and fixtures below ground level, as well as all
buildings, wharves, roads, pipelines and railway lines.
Other points will need consideration, but as some arise on one draft Concession
and some on the other it will save time if these are deferred until a decision has been
taken by the Shaikh as to which application he desires to accept. When the Shaikh
has made his choice between the competing Companies, it is suggested that he should
make the grant of a Concession subject to the agreement presented by the successful
competitor being so amended as to cover such points as His Majesty's Government
micfht, for whatever reason, recommend him to insist on.
Suggested Provisions for Measuring Crude Oil Won.
Measurement of Production. —For the purposes of such royalty payments the
Company shall measure by a method customarily used in good oilfield practice all crude
oil won and saved, and the Shaikh by his representative duly approved by the Political
Resident of the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. shall have the right to examine such measuring; and to
examine and test whatever appliances may be used for such measuring. If, upon
such examination or testing, any such appliance shall be found to be out of order, the
Shaikh may require that the same be put in order by, and at the expense of, the
Company, and if such requisition be not complied with in a reasonable time the Shaikh
may cause the said appliance to be put in order, and may recover the expense of so
doing from the Company, and if upon such examination as aforesaid any error shall
be discovered in any such appliance, such error shall, if the Shaikh so decide after
hearing the Company's explanation, be considered to have existed for three calendar
months previous to the discovery thereof, or from the last occasion of examining the
same in case such occasion shall be within such period of three calendar months, and
the royalty shall be adjusted accordingly. If the Company desire to alter any
measuring appliance it shall give reasonable notice to the Shaikh or his representative,
to enable a representative of the Shaikh to be present during such alteration.
Production Accounts. —The Company shall keep full and correct accounts of all
crude oil measured as aforesaid and the said representative of the Shaikh shall have
access at all reasonable times to the books of the Company containing such accounts,
and shall be at liberty to make extracts therefrom, and the Company shall, at its own
* See covering note in regard to these two points.