What is the exact meaning of the following passage? It is about the oil agreement between Iran and England in 1953. Of course, there were few passages before this one, which were related to one another as a, b, c, and so on. If more details or information were needed, I can add them. Its economic terms, due to their multiple meanings, make this sentence ambiguous for me."balance due the company" is problematic.
"If in any year the amounts deposited pursuant to (b) above less than one-twentieth of the balance due the company after the deduction of payments under (a) above, the company shall be entitled to receive and Iran shall deliver free crude oil equal to 25 percent of the amount, if any, by which Iran’s exports of oil and oil products in that year fall short of 20 million tons."
Best Answer
I will assume this slight error in your transcription:
Now, suppose you are an oil company. I buy some oil from you, and make an arrangement to pay for it over time. If we agree that I will pay $1000 for the oil, the balance due your company is $1000. It's a formal way of saying the amount that I owe your company is $1000.
Now, let's plug an amount into the language in your sentence, say $125,000. Suppose I'm Iran. I have two agreements, a) and b). I have to make some payments under a). Each year, after those payments are deducted from what I owe, I have to pay five percent (1/20) of what is left.
Suppose, at the end of the first year, I have paid $25,000 in accordance with the agreements in a). The remaining balance is $100,000, five percent of which is $5,000. Now, if I don't pay that $5,000, the rest of the stipulations apply. If my exports are 20 million tons or more, I don't have to do anything. But suppose my exports are only 12 million tons. In that case, I have to deliver 2 million tons of oil to the company at no charge: