PUBLIC RECORD OFFICE
Reference :-
C.O. 885
22 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
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it should be borne in mind that the Governor retains the right to impose excise duty on all other products of refining.
In this section the duty of the company with regard to the keeping of proper books of account has been set out in some detail, with a view to the method afterwards laid down for the calculation of the price payable for residues purchased by the Governor.
In clause 6 the obligation "originally thrown upon the company to expend a certain sum annually in extending the output has been replaced by an obligation to sink wells to a certain aggregate depth in each year until the total output reaches 60,000 tons per annum. We have already stated our opinion that deep sinking may be required for the proper development of the oil field, and our reasons for thinking that substantial progress in this direction may fairly be insisted upon as a condition of the grant. The amount of work required of the company in developing the oil field may be fixed on the basis of (a) cash expenditure, () output of oil; or (c) aggregate depth to be drilled. Of these basea the first is unsatisfactory, as there is little guarantee for the proper expenditure of the money; and the second cannot properly be The third is that adopted in some applied to an unproved field. American and European oil fields, and seems best suited to the circumstances of Trinidad. In fixing the amount of boring to be required annually, we have been guided by the advice of Dr. Boverton Redwood.
Clauses 7 to 11 require the previous consent of the Governor for the sale or disposal by the company of any of the crude oil pro- duced, provide for the erection of a refinery and storage tanks, regulate the Governor's right of pre-emption of oil residues, and require the company to produce residues of such description ay the Governor may specify and deliver them at such places as he may indicate. The considerations that have led us to recommend the inclusion in the contract of these conditions have already been explained. The Governor's approval is required for the sites of the refinery and storage tanks in order to ensure that they shall be secure from the effects of gun fire from the gea.
Clause 12 makes provision for the increase of supply of fuel oil in case of emergency and gives the Governor the power, in the event of war, to take control of the works of the company, who will be entitled to compensation for losses sustained by them through the exercise of this power. The provisions of this clause have been adapted from the similar provisions of laws governing cable companies in certain Colonies.
Clause 13 fixes for a term of three years the price to be paid for oil residues purchased of the company, and lays down a method for fixing the price annually after that period.
The question of price is one of considerable difficulty, and we have been guided in the matter by the advice of Dr. Boverton Redwood. On the data before us, we consider that the terms offered are favourable to the company.
Clause 14 requires the company, to convey the oil residues purchased by the Governor by pipe lines to the place of storage or shipment. We consider that this work should properly be done by the company in the ordinary course of their business.
Clause 15 provides for the notice to be given by the Governor of the minimum quantities of oil required to be purchased. In the interests both of the Government and the Company the guarantee is fixed annually for two years in advance.
Clause 16 requires the company to send to the Government Analyst, weekly, samples of the oil residues produced. The question of the addition that may be rendered necessary in the staff or remuneration of the Government Analyst may properly be con- sidered when the extent of the company's operations is better known.
Clause 17 requires the company to carry on actively the work of mining during the term of the concession, and is intended to prevent any intentional restriction of the output.
Clause 18 provides for the regulation of the company's opera- tions to the satisfaction of the Inspector of Mines for the Colony.
Clanses 19 and 20 are taken, with alterations of detail, from the original draft, but certain provisions of the contract have been excluded from the operation of the arbitration clause.
We recommend that this draft should, as far as circumstances permit, be used as a model in any future concession of oil-bearing lands in Trinidad, and that no material provision of this draft should be omitted from such a contract unless it should be shown to operate as a serious check to the proper development of the oil field.
June, 1904.
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PUBLIC RECORD OFFICE
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22 UBC RECORD OFFICE, LONDON | ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC. | COPYRIGHT PHOTOGRAPH-NOT TO