'File 5/2 II Kuwait Neutral Zone' [‎100r] (204/496)

i*3.c111t«ids etc. sue. tde insteXlHtion end operation of the
machinery, equipment and facilities for drilling wells.
article 9.
Upon the discovery of oil in commercial quantities the
Company shall advance to the Grovermaent the sum of fifty thousand
pounds gold, or its equivalent, and one year later the further
sum of fifty thousand pounds gold, or its equivalent. The due
date of the first advance shall he the date of discovery of oil
in commercial quantities, as provided in Article 8 hereof, and
the due date of the second advance shall he one year later. In
each case the Company shall iiave sixty days following the due
date within which to make the advance. Both ,of these advances
are in account of royalties which may be due/the Government and
consequently the Company shall have the right to recover the
amount of these advances by way of deductions from one half of
the royalties due the Government.
Article 10.
Since it has been agreed that the annual rental of five
thousand pounds gold, or its equivalent is payable to the date
of the discovery of oil in commercial quantities, and since it
has been agreed also that the annual rental is to be payable in
advance, it may happen that the last annual rental paid prior
to the date of discovery of oil in commercial quantities will
cover a period beyond the date of such discovery. In case that
this period should be equal to or greater than one-fifth of a
year, the proportionate amount of the five thousand pounds gold,
or its equivalent corresponding to such period shall be treated
as an advance on account of royalties due the Government, and
consequently it should be ^ recoverable by the Company by way
of deductions from one-half of the royalties due the Go*vernment.
Article 11 .
As soon as ptacticable (i.e. allowing a reasonable time for
ordering and shipping further materials and equipment to Saudi
Arabia and commencing further work) after the date of discovery
of oil in commercial quantities, /the Company shall continue
operations connected with drilling by using at least two strings
of tools. These operations shall continue diligently until the
proven area has been drilled up in accordance with first class
oil field practice, or until the contract is terminated.
Article 12 . \
The Company shall pay the government a royalty on all net
crude oil produced and saved and run from field storage, after
first deducting:-
1) Water and foreign substance; and
2) Oil required for the customary operations of :
the Company’s installation within Saudi Arabia
and
3) The oil required for the manufacturing the
amounts of gasoline and kerosene to be pro
vided free each year to the Government in
accordance with Article 17 hereof.
The rate of royalty per ton of such net crude oil shall
be four shillings gold, or its equivalent.
Article 13.
If the Company should produce, save and sell any natural
gas.