Page:United States Statutes at Large Volume 70A.djvu/517

459 459 (2) contracts for joint, unit, or other cooperative plans with respect to lands or leases authorized by section 7426 of this title; he may acquire, with the approval of the President, such privately owned lands and leases— (1) by purchase, inside the naval petroleum reserves, or outside those reserves on the same geologic structure; and (2) by condemnation, inside naval petroleum reserve numbered 1, or, if there is substantial drainage, outside that reserve on the same geologic structure. (b) The Secretary shall report annually to C o n f e s s all proceedings for purchase and condemnation under this section. § 7426. Cooperative or unit plans affecting naval petroleum reserve numbered 1 (a) The Secretary of the Navy may contract for joint, unit, or other cooperative plans of exploration, prospecting, conservation, development, use, and operation of lands owned or controlled by the United States inside naval petroleum reserve numbered 1 and lands owned or leased by private interests— (1) inside naval petroleum reserve numbered 1; or (2) outside naval petroleum reserve numbered 1 on the same geologic structure. (b) Each contract under this section shall require that the United States will be assured of receiving currently its share of the total production from each of the commercially productive zones underlying all lands covered by the contract, as determined from time to time on the basis of estimates of its original share of the quantities of recoverable oil, gas, natural gasoline, and associated hydrocarbons in those zones on the date fixed in the contract. (c) Any party to such a contract, other than the United States, may be permitted by the contract to produce and to receive, and shall have charged to its share in the total production from any zone, petroleum in such quantities as are necessary to compensate that party— (1) for its share of the current expenses of protecting, conserving, testing, and maintaining in good oil-field condition the lands, wells, and improvements thereon, and its real and personal taxes levied or assessed thereon; and (2) for surrendering control of the rate of production from its lands. The quantity of petroleum permitted to be produced as compensation for surrendering control of the rate of production may, in the discretion of the Secretary, be reduced or eliminated at any time on reasonable notice if the Secretary is not then having petroleum produced for national defense under section 7422 of this title. (d) I n no event may the quantity of petroleum produced under subsection (c) from any zone for any private contracting party exceed one-third of its share of the recoverable petroleum in that zone as estimated on the date fixed in the contract. (e) No contract may be made under this section until the Committees on Armed Services of the Senate and the House of Representatives have been consulted as to all its details.

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