52 STAT.] 75TH CONG., 3D SESS.-CH. 851 -JUNE 30, 1938 oil-shale reserves, contained in the paragraph entitled "Investigation of Fuel Oil and Other Fuel", and embodied in the United States Code, title 34, section 524, be amended so as to read as follows: "The Secretary of the Navy is directed to take possession of all properties within the naval petroleum reserves as are or may become subject to the control and use by the United States for naval pur- poses; to conserve, develop, use, and operate the same in his discre- tion, subject to approval by the President, directly or by contract, lease, or otherwise, such use and operation to be for the protection of the aforesaid reserves or for carrying out the provisions of this Act; and to use, store, exchange, or sell the oil and gas products thereof, and those from all royalty oil and gas from lands in the naval reserves, for the benefit of the United States, subject to the applicable limitations and restrictions of this Act; and to exercise exclusive jurisdiction and control over those lands within the borders of naval petroleum reserves numbered 1 and 2 which are embraced by leases granted pursuant to the provisions of the Act of Congress approved February 25, 1920, entitled 'An Act to promote the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain' (41 Stat. 437). "In order to consolidate and protect the oil lands owned by the Government the Secretary of the Navy is authorized to contract with owners and lessees of land within or adjoining such reserves for con- servation in the ground of oil and gas and for compensation for estimated drainage in lieu of drilling or operating offset wells, and to exchange Government land in naval petroleum reserve numbered 1, the right to royalty production from any of the naval petroleum reserves, and the right to any moneys due to the Government as a result of the wrongful extraction of petroleum products from lands within naval petroleum reserve numbered 1, for privately owned land or leases within naval petroleum reserve numbered 1: Provided, That no lease of any portion of the naval petroleum reserves, no contract to alienate the use, control, or possession thereof from the United States, no contract to sell the oil and gas products thereof, other than royalty oil and gas products, no contract for conservation or for com- pensation for estimated drainage, and no exchange of any land, any right to royalty production or any right to any moneys as herein- above authorized shall become effective until approved by the Presi- dent: Provided further, That the Secretary of the Navy shall report annually to the Congress all agreements entered into under the authority herein granted. "In the event of the inability of the Secretary of the Navy to make satisfactory exchanges of land or agreements for the conservation of naval petroleum with the private owners of lands or leases within or adjoining naval petroleum reserve numbered 1, as provided for in this Act, he is hereby authorized, with the approval of the President, to acquire such privately owned lands or leases in naval petroleum reserve numbered 1 by purchase or condemnation. There is hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this Act. Such sums shall be expended under the direction of the President, who shall submit to the Congress estimates therefor in the manner prescribed by law: Provided, That the Secretary of the Navy shall report annually to the Congress all purchase and condemnation proceedings entered into under the authority herein granted. "Leases of lands of the United States within the naval petroleum reserves, in existence prior to July 1, 1936, excepting those leases which have become a part of an approved unit or cooperative plan and agreement, shall terminate at the expiration of their initial 1253 Possession of prop- erties within, by Sec- retary of the Navy; conservation, opera- tion, etc. Disposal of prod- ucts. Jurisdiction. 41 Stat. 437. 30U.S.C. s181; Supp. III, ch. 3. Contracts for con- servation purposes. Exchange of lands in reserve numbered 1 for privately owned lands or leases therein. Provisos. Approval by the President. Annual report to 'Congress. Acqulisition by pur- chase or condelloina- tion. Appropriation nu- thorized. Proviso. Annual report to Congress. Termination of leases existing prior to July 1, 1936, at expira- tion of initial periods; exception.
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