REPUBTIG OF YEMEN å+LJll {u¡r{4lt PRODUCTION SHARING AGREEMENT GL¡ll crr ¡sJÉ.$ å+¡t¡it BETWEEN i-i MINISTRY OF OIL AND MINERALS ¿rh,ollg.hÅill ðJljú ANI) ¿¡-. ð¡ (BLOCK l- occIDENTAL OF YEMEN 75),LLC 613r*ll (25 ¿tå!¡ ¿nJ d'l cJtjiU *.¡l -1 ?- TG HOLDINGS YEMEN INC. ¿¡! ¿+ J++drÀ É d -2 3- YEMEN GENERAL CORPORATION jtilts åttlt ¿¡¡¡ å¡all ¡,,".,J"$ -3 FOR OIL & GAS IN MARKHA AREA (t¡.¡") ¡¡LL r'¡ BLOCK (7s) (75) : É¡ et¡s MARIB - SHABWA GOVERNORATF^S ôJ*,i' - ç¡L o:låts. M L nl - -l- f4E laR\ î. ¿,ll É r.à:il REPUBTTG OF YETE]Iì ¡d¡+I fuúaá+Jf PRODUCTION SIIARING AGREEMEI\rT G&Ttd åsrur.l Í¡tttit BETWEEN d'# N4INISTRYOF OIL AND MIIIERAI.S ¿rte.cll3 .h¡ilt ðJt ji3 AND :o¡ cjs¡ 1- occTDENTAL OF YEMEN (BLOCK 4il),LLC 2- TG HOLDINGS YEMEN INC. lr3rult (7S ¿tåi¡ ¿1.¿,.¡l cJEi+¡¡sJt As.¡¿ -t 3. YEMEN GENERAL CORPORATION FOR OIL ¿i! O"¡ j+¡J¡lJÀ ,{+,; -2 & GAS jtiltr.h¡i¡¡ ¿¡'¡¡ å¡:all , ".,ú¡l -g IN MARKHA AREA (tÅJi.) ¿¡hj¡ BLOCK (7s) MARIB . SHABWA (75) ¡¡ ¿tå! GOVERNORATF,S tJH,t - ,r.¡L.¡Eåt .n Preamble This Agreement was made and entered into in Sana'a on the day of 14----H ¡ güJyt corresponding to the ---,----day of ------.-- N0---, rt¡: ,¿ ç-å oi-.1 ptl¡-+!Ë= between the Ministry of Oit and Minerals f.$3i.ll (hereinafter referred to as "Ministry" or "MOM" ¿rt rrl3åti--$ SJtjú û.,__-r ÊiOOJJ_ )and: 3l " Ë¡lji..¡Jl ,,-t r .¡ r .tÂJ Ljl r et1 Fãlt -li4_t_l_ :rt" )tS¡ ("1 ir¡" Occidental of Yemen (Block lS),LLC, a company 6r3.u-ult gr--h!¡ *,rl duly organized and existing under the laws-and (25 ¿,--d.-i,l cJrijU ås¡__,1 regulations of the State of Detaware, United States of c¡hyJll ,.,¡ç¡[r !T3 L"åiJ¡ i,clt$ åti ås¡.i u.r3 America (hereinafter referred úo as "Occidental") 3,(cluiry"s3l) + .+ t -;Âg urÀ t+ltl .¡tfu) å+s_¡"Tf ¡ri¡¡r and; TG Holdings Yemen Inc. a corporation ir¡llJi ,:,r.9.d ¡.iü ¡iJl y'c ,cU! åjrlJÀ ç6,f,, trÉ organized and existing under the duty Lris LiÀ t+t! ¡t¡*¡) €l .J*t#.o; j¡Á¡rÁ J u.úJ¡ G ¡-¡¡t, regulations of the Turtrs & Caicos laws and ¡ .(,_r. ¡h .ll¡r) + + (hereinafter Islands, B.W.I. referred to as ("TransGlobe") and; L¡:' tl ¡-.rl¡l¡ j ,: ,rf å-.-^..¡¡f the Yemen General Corporation for Oil and Gas, a å--.¡A!. q¡--¿¡ jt-*illJ corporation duly organized and existing under the lir;jlJ--i ¡-.rt¡J laws of the Republic of Yemen, (hereinafter referred t-..a¡¡¡ l-{.J. ! ¡t_4¡ å_-+i$Jf to as ('rthe Corporation") Occidental, TransGlobe JL.i¡ (e-,.*,,,J"Jf Lr. ;) _+ and the Corporation are hereinafter referred ¡ J+*,¡jlJ¡3 dL:i+*¡SJl) .(,,4.,*.,,þJf jointly to .(.btill) a ð¡.trtj¡,e ¡¡.h. L#ll and collectively as the "CONTRACTOR". . \ryHEREAS, all natural resources including all their 'lrr : 'J Lt¡t i¡¡.tt3 L¡tt ;cü$t¡ t¿¡Uf rJtJ-I cls Operations described under this Agreement. oJ t-¡+tl ¡r tnjl¡ *t¡¡"¡ll ûL-Jl.rrJt+ fL+¡ll NOW, THEREFORE, the Parties hereto agree as to .å+!t¡l¡t oi¡ the following: : ,rlc t sÞ ¿'l.rLtl d¡¡l r¡å dtl¡l ARTICLE 1 l3lt6,rt-tt DEFIMTIONS ('¡ Ulti) 1.1 An "Affiliated Company" means a company: :fs¡Å¡l htå-o,,å+t¡tl åsJ,*ill" :l-l a. in which the share capital confening a majority cl-r,-!t ¡¡Å,¡t l-dL of votes at stockholders' meeting of such E+tè! u.fJ ff*f úJ.s,,.jI (f company is owned directly or indirectly by a AS-,¡*iI oi¡ dL-J_l ð*f å1"- etc'L.i¡ios , Party hereto; or ,l ,i,¡tiiyt .il elf r.! i¡u";rp 3li¡t- b. which is the owner directly or indirectly of share e{*! $$ ¡+' ¡1 J.il.r" ,JS+ ã3r-I ¿3,Si él(ç capital conferring a majority of votes at 4l¡s r¡tol,.3+l # ôlJ--!t t+l¿! åJ3i. j.-l_¡' . stockholders' meetings of a Party hereto; or ¡l ,1gtöYl,ìl eit¡ùl .uf ¿¡*f c. whose share capital confening a majority of # djri-lt ¡+|lèT a:.rr"¡t l.clt-*lJ æ-f ¿_ñ dt (e votes at stockholders' meeting of such company dlJl U!,fJ Ê(*lJ AS l.ill òl-ô Ê(-l ãLs c¡Lst¡+l and the share capital conferring a majority of ¡J". oLot ¡¡l ôlJi,-ïl ¡++lè! Ll votes at stockholders' meeting of a Party hereto ê¡*f ç-¡ rÅ.ll are owned directly or indirectly by the same _p ¡f ö¡'åu ålJ"" r+¡t î,tt ô¡a ,-¡lJ.bî û".¡Jt company; or Jl ,åSJ,ill L,$! ä-úþ d. which directly or indirectly controls, is controlled oi.ô.,-¡lJÀi .uf ål_,¡'-¡ s_¡l.r,o ¿363 çiI Jf JÊ-ì: ç¡ll (.r by, or is under common control with a Party s.¡! iSrl-Utl ô_ll¡Yf ,", -i ¿¡Si ç-¡lf ,l¿+Wrf hereto. Lrq" .J¡l+" -¡e ¡i -*t+ cJS¡ t¡yt '.re eit_.¡Àf re MrntBrock(75) ,:P (75) ¡-¡¿txr¡r.ut {5M l I T--.-- 1- For the purposes of this definition, the word ú-Jl uÀ ,-irj trä¡lr!" åJS Ob .¡.Jrill li¡ cÈ-rrl¡ "control" means the right to exerljse m91e. than e/ogol4",^ i,e r,._i i¡"i¡ ."r, . *t Lj""; fifty percent (50vo) of the voting rþhts _at .*l''ri.. or-t ur ; crr¡r.-rrì ¿y- c" i¡uó shareholders' or parrners' meetings. Fo_r the ¿ì-l.ir*.¡,irr ru.Jã;lfs¡ri.ùr¡J purposes of this definition, the term "party : iJ;¡t .¡i herèro,, means rhe MrNrsrR" - i'ji v çl rf *¡ (úlÉl "-tl. sþ-: entities comprising "iïå ..J¡Ul t'c- ¿É çill ÔlSJóll the CONTRACTOR. 1.2 "Agreement" shall mean this production Sharing ú,-JrllJ ôr¡ CEjll çJ eSJLi¡ll årã- till ,*¡'j "¡C¡tl¡l " :2-1 Agreement and the attached Annexes. .te+ Aiå-rll 1.3 "Agreement Area" means the area as described in () dÞtll .*'s eJ^-Ct ¡¡Li¡¡l .j¡ "å$üill ¡¡L¡.,' :3-l Annex "4" and shown on the map labeled Annex "Bu ri*+ ,¡.å" ¡ll (ç) ¿.L¡t ¡t*..,^¡t åÀ-JÅll ç-¡ AjJ¡.olfJ which are attached to this Agreement. This area may .:'!¡ ir ¡¡f¡"¡t it¡ ¿-t.,* .jÈJi$ #- tÉ .4pr¡yr I be reduced from time to time in accordance with tiìyt ,¡À¿". "¡ i .4J¡- (S¡'iUf .*. * Jt) 1 Article 5 of this Agreement. I jL-tl I 1.4 ,,Associated Gas,, means the Gas which is # ç¡-ll J---i "u¡[-,a¡Jtjt-iJl" ; {-'l associatedwithCrudeOilwhenitirp."¿,iËiffi 3.-1-s..l-.rff +-'êl-ill L¿i llfr'. L-¿¡ any well in the Agreement Area, b";ä;;ä P cJ-'"'--''¡t ¿,-l"i€t : tl rÍ 'å-i. tiiYl afier separation at the lease "rç¿1¡ separators. The afoiesu¡à l.Hl *1r" ç---- descripiion includes all th; elements that are å-iJ$ J,-..--U'll d-S ' r J l\ + cl¡-4.1 components of the Associated Gas prior to its ç--¡.{-iålt'¡ d-$ c+.l---Ji ;t-;Jl processes through the extraction, condensation, I ¡i , ¡ ,x*lj u,ÐtÅi-*yt c¡L-¡¡" distillation and liquification facilities. -'-¡.t¡rl. .db",,ll J 15 "Barrel" or "BBL" consists of forty-two Ç).US d,- ¿È (42) ga¿l¿¿+$l ,.¡" ¿¡st¡ "cl---l¡¡+ll ,' :S-l gallons measuring a liquid at a temperarure of sixry .*r. * ilú \r G"_Tf i¡-uff À_r-,yr¡f odJç degrees Fahrenheit (60oF) and atmospheric pressure .j!. L. .. J ,.,ie )6å f-. (60) ¡_rG of |4.70PSIA. *r* ¡ ¿u¡-* .¡*,.J^lt ã-.Ct t t)L¿(14,70) 1.6 "Commercial DÍscovery" means a discovery which +jf cJ¡LiJt l¡l'frSl rr€Jr¡'lll L¡Lï¡isTl" the CONTRACTOR derermines ," U" iÏ.*'r"ü irr-r+ JJ¡J çi+ :6-l commercial Development, as set forth in e"l"fË ¡.! o¡¡ iJ-o (5 -3) i'rtJl o'å ilå+ JÅ lJ e-Lr.-¡lJll A+"¡lt+ of this Agreement. .Lã" tiiYl 1.7 "Commercial Gas Well" means the first well on any ç-, J+ d3l çr---&.." A-4Jl+ltl jl ¡tl É" :7-l geological feature which, after testing for a period of ¡, .t L-¡_,ÍjÀJ . ..+ e_-åËå ¡l¡*+ .,, J(j crf not more than thirty (30) consecutive Days where , JS å_¡, tI" 1_yi:O) e. . y *r-¡r C.¡¡j ¿_--c lË Ë:i:":i;ffii,îil3åTfi#'lJïil3,ïf.ï::'',Í:i E-,T' .'il'-'; 'r '<* +* JLj by MoM, is found to be capabl" or proa'üä;ä; Ï, 6¡ rrjJs¡ll þr¡ ll '#-å å-¡'ü"llr a rate that, in the CONTRACTOnT :opini* JJl 6B! .r-Jc i-¡rL'! t-+.J ¿¡. öJf jll d-Lì3 economically justifies the undertaking oi rpö;imi cr-.'-tJr!{lçlJ ç--.,* rJ-H cJ' .,.q work. The date of discovery of a Commerciãl Gas .Ê*-+üll oL--¡J"'.¡ ÊLJlt +¡¡l--:ðyt L-+',Ull Well is the date on which such well is tested and ç.rJl ç¡l3l ¡¡ ¿+-i+il jlJl ;rl¡ {-¡l.fsl g+ji O-Ér completed, according to the above. Written notice of .o)-ol .r_,¡19 ¡ø tJ t¡g¡ É,ll é¡l¡ JL.üilJ Jq + ¡ such discovery shall be given to the MINISTRY, 6- ôJtjll J! ç¡l.tsYt ell.rl or.Eslt _.,H)t e¡.li: ê.¡ together with a report of the test results .and olher ô-ÉJl^ll crt-¡!.Jl d,- LÂJJê;t¡i. yl Gjgj.,o ,j information available from the well, no larer rhan aJU UJi y *r"i]¡¡i; thirty (30) Days following the conclusion of such ¿ ¿¿ t¡ól \vvl ¿*X v' tL*lJ ¿¿- deL¡) testing. .drlJLúiyl 1.8 "Commercial Oil Well" means the first well on any ,,, i(j çl' æ -¡-r¡ cJ¡f *+ "l+Jt+Jl .h¡tll J.4t' :8-1 geological feature which, after testing for a period of .ur.;Ë Y ä'' J I r_jjÀl' q C-4 o+ J¡+ not more than thirty (30) consecutive Days in rt¡-l r îåj L-+115" L-.-eJ (30) dË--l)l û,.,-- ac|ordancer/with..sound ./ nr:"rt and auu accepted açL;ePteu r9[rt)lcum] Petroleum llì ,lil-rEtf r4.-rJ.5¡rr¡.Jl ¡--U:....-¡f 4.ctt AJr$"¡f3lSfr-,,ff LIJ$"llJ ôJ5l:,Jl õlJjyl .,.ouuuu *ìJ A|-jjyl production practices, .,.,J, '// prcvuvvù, is rù capable v.LFrrrutç of ur t-¡r ttALå vtvvsvttwtr t' ol-,"5* O,+ "_¡ | ll åi¡_ll ,r_l¡r ô_¡l_! f_+Ì AgreementBlock(751 4 e J;_¡if_f e ¿,-_.il_n ,A 27 Fq.r_¡¿ur1g-u /V o',¡rt I ì g* I I producing Oil at a raûe that, in the CONTRACTOR's L---+.Ulf û'----. eLlgl:¡"ll çl-¡.,.,,- ¡J-Ht I opinion, economically justifies the undertaking of I eJJf i¡¡4r.fÉ-+üll c¡l +L+ Êl-i¡ll 4#l--:lyl 't appraisal work. The date of establishment of a l Commercial Oil Wel[ is the date on which ç..r-Jf gr"_¡l-ill ¡-r l-¡.r¡¡tÀ¡¡_¡t .+ ôLj. ! ! . CONTRACTOR the ül-+ f-Jr.llS õJl ì!t Jt¡--.iþ dJl-_¡"lt r_+å ¡+_ir. that notifies rhe MIMSTRy in writing rl¡t J r iÃJ L¡Jt+it¡ l+ll,S! Êj J+lt éL_l¡ such well has been completed and tested _¡tr-,ill lì t according to the above. Such notice is to be given, -!-r^,Ë ¿-.-. f*r-i Ê¡-JJ .àn -cf together with a report of the test results and other d,¡l-¡J¡üll iF- l-¡JJo¡ ot_¡l-r:i. )l 6r:t-it ¿-c' information available from the well, no later than jJl-+it Y r--o¡" s-! ú !-!ll i¡'-c ã ÉF-i4Jl thirty (30) Days following the conclusion of such eL{ êL-rï a-Jrf o$ (30) i,+_t)j testing. .d¡rsiYt 1.9 The "COMRACTOR" means the companies set oL¡ i-.ri¡; i¡¡r"lt d¡tSJÞåll r-+ ' . õ.- "dJLL{,' g_l forth in the preamble to this Agreement and any of irlJl o-s ûJ+" r.è t-S # çJ¡r-,:"lt .þ çll {+¡llÍyt their assignees, as provided for in Article 20 of this .4r¡LriYt .¡¡ r¡" (20) Agreement. 1.10 "Cost Oil" means the Crude Oil allocated for .tls¡3*) u-_-Å¡ll ¡tJl L¡¡ tl çi+ ,,¡lKlt.Lu' ;lQ-l recovery as defined in Article 7.1 cost- tÞ (1-7) ð¡lJl (É-r ç¡JÉ¡ ,r I oS ,-ir"illttl of this Agreement. .4+¡liiYl àra 1.11 "Customs Duties" means the customs duties Le+,"I Jt J^+lr,Ë¿rffi :t{-t referred to in Article 12 of this Agreement. '"lr¡rs- ,ïr#m:" l.l2 "Dependent Unit" means any corporation, Jf ¡j¡a JÍ L'L-" ¡f i*3* ¡.j *+ "l¡.¡.U¡¡l õr-¡.¡¡I', :12_l authority, board, company, or directorate of the ¡¡¡J ,J+ Cr ¡-åJ¡^ ¡_¡l ''¡ll i4.r.E ôJ{ ,l ¡JJ pressure of 14.70 PSIA and at a base temperature of sixty degrees Fahrenheit (60oF). +-rl ¿¡-St ç\ I Ê-r-ill r.rÀ" rtdgf¡ fHi' :47-1: 1.47 "Working Da¡I" means a Day on which banks in är-l¡l-r"l å--ji" ä¡l- ür.i-lt ç-¡ c¡Jl-á"ll YEMEN are customarily open for business. .l.6lt""l V4/ YgreementBlock (751 (75) t'J ¿rÀ¡ 4$l¡:l N+4 I I +-.-. - I 1.4E Program and Budget" AJ-r".ltr i{ "lVork means the annual ç!'Jl gU¡**J "¡#lj¡ttJ dl.dl CaUJ{" i48-1 I work program and budget for Exploration and/or oå.l o--:¡+l -Ct. çT i 1+^fIJ út iliôU ç.¡Jl ,1 Development under this Agreement. .¡+¡tiTjt I l.4g ttYeartt or "Calendar Year" or "Tax Yeor" or 3l "4#åJ.,ållfur.$" "l Lr*¡¡'31 .,.tf" "Financial Year" means a period of twelve (12) 3l J^*rtq "l: :4g-1 consecutive Months, according to the Gregorian fJ{l (12) ã.'.i" ç+3 "¡+lt lll: ..q rr "JlsJ¡å fãfL ¡+lls¡ calendar, starting on January I't, unless another ¡t fu &,-r¡l+ cj¡l ¿,.1¡¡.çOt¡ll ¡lFIl starting date is indicated in the applicable provision o\J i.r-ålill elJ,rll ir- çf # ¡ri.Í ot.r:i.¡ gJJU Jl of this Agreement. .å+¡L¡iYl 1*s0 t'YEMEN" or "ROY" or "STATE" means the ¡ .JJ( -rtl ,riri "Ll3rllr, gl "ç. e'J "CFFJI', :50-1 Republic of Yemen, and "GOVERIIMEIYT" ¡ t.'-rf¡+ll A.*é- rr-il l--0.Á-ll-¡ ,l ltgll means the Govemment of the Republic of Yemen å-¡JF.. l-JS ,¡ i as defined in the constitution of ROY. .Jtr¡-..t/rJ çr-å cr--¡ t¡ Cl .lÉct ?i¡¡e Cl ARTICLE 2 l¡r3t;Ltt AhINEXF,S d$Lll 2.lAnngxgs " A ", tt B tt, t' C t', " D tt, " E tt, t'F ", " Gtt, ( ¡ ( ç) ¡ ( I ú-...--)-.I :l-2 and " H " attached to this Agreement are hereby made e ) ) -r--i¡¡ part hereof and they shall be considered as having ¡-¡Àl (c)¡( j)_¡(¡)¡( a)¡(")¡ equal force and effect with the provisions of this l-tr--- t",l T fo j--' l-üLi¡Yl Agreement, provided that if there is a conflict between rr.L-ii di-JJl o\ e I ¡¡¡-4¡ ¡-+t¡3Yl oi-¡ any Annex and the provisions of the main body of this c-i¡ ¡-¡¡Li3Yl oì q U- o--o¡ ,J¡ .i^¡ 6J-¡ Agreement, the provisions of the main body of this ú'---t çl C-+ çl l¡ ¡¡ L--Jtr Agreement shall prevail. .rJ.ú él ,áÀ 1$i3Yl o.r u-J-i ¿lr Lt- l'¡3YI Uâ¿-¿J 2.1.1 Annex rrAtr is a description of the Agreement a-ü¡¡l '1" .!--r.lo$ 1-1-2 Area. .4$L¡jyl 2.1.2 Annex "8" is an illustrative map indicating ¡-itj^l i--åS ',C'd-¡t¡I 2-1-2 the Agreement Area. h the event of any di-JJË¡,o UåJ-ri A-i- ,r-¡ .¡"-iili:fl inconsistency between the contents of Annex (er.) ir-.Llt H(l) é_.l"lt "4" and Annex "B", the content of Annex "4" .rr-Å ¿il .-ç,J (l) ¿.U¡t eL,¡t* shall prevail. ét,¡ ¿þ 2,1.3 Annex "C" sets out the Minimum Work ,r-j$l r-sJlÉlJ+¡t O¡--+ "G" c!--.lnll 3-1-2 ' Obligation and the Minimum Expenditure / ¡Js_)" ¿!-i otlr,--.ll;.rït . -ll¡ cj*ll Obligation during the Exploration Period(s), .l*.1+¡¡ ùÅ J rr-il.Kl-)l çlsl¡,o and extensions thereof. 2.1.4 Annex ,J..Lq J$l ¡l-ic,Yl r-.¡lJ'i, i.tg-- ¡-r rrJ' Ci-¡l¡ll 4-1-2 "D" is the Form of the inevocable :r;Ë¡ll Letter of Credit. (a) The Operator on behalf of the Contractor ¿¡S-r c+Cl þ-¡ti ¿F Lrr (30) i,rrÐ3.J>Li (f) shall deliver to the MINISTRY, within Thirty ö- ¡-.,.ç di-.i"ll C-"J- ¡Ui¡l g+.¡l-i rl l+_lt* (30) Working Days from the signing and ¡L-clcl çl----Li õJtjll s-J dJ---i"ll becomes valid on the Effective Date, an' 4-¡Å-¡xll ¡rc--¡t+ u:iLJ cl-{l¡¡-Jè irrevocable letter of credit in substantially the o_¡l* .¡! f-; ($-aeYf er.l--Li) (r) ¡j.-JX form attached as Annex rrDtr ("Letter of å *tCl A-iJj(r.+ll'oJ'"J...¡l' rj ¿-r Credit") issued by a local bank in the ROY o_¡.u-J¡ ËJljJ-ll- TJ-+ "l-rl #F+ ,¡¡--å¡ to the MIMSTRY in an amount of ¡Y"f (6,000,000) ir-l-+!¡ 28-.' stx MillÍon United States Dollars ,[--¡s*¡Tf ð.u--rl¡Jl' ûLcfd ÊþI3r i¡¡-, ) which corresponds with the ."-.¡¡!t, .rì-àll ût-¡lj¡lÏ Yrli-'.3 imum Expenditure Obligation for the First -rÀJl--"tl ,ø Agreement Block (75t 9 (75) ¡¡¿tt"l i$.ul ' o lt^. 1 'Ì j = Exploration Period: The Iætter of Credit shall s-¡y qil---iÉL¡Il å,-.L.¡n¡ å-.al¡llr :l l remain valid and effective for six (6) Months ¡l-icTl ¡J ." .J çl---ål cJJr"¿ :T after the end of said period. Within thi"tylfl) s_-a ¡ç-¡| (6) ¡t-l f¡_¡Ur fâJt-- I i working Days after the end of the First ,¡r, h I drL¡"li .-_jr-.å__rrlt ct_-ajrl I Exploration Period, the CONTRACTOR shall, 1' .- l: ". är,r ..1 ì\r r., I if the coNrRAcroR has erected," lP,e.l (30) i'¡----$3 cÞt--i I the second Exploration period, ""iJiÏä .¡l-ls3'¡Yt i-J'¡" a-JtC I ¿rr¡u"ä'tlrä .,?T I '],"-'-. ¡LJ" j-iÅl MINISTRY a second l-et¡et of Cre¿it. in t¡J ç¡l-'ìs:-)l e¡ tJF J cJJ'iJl .¡ ¡t--¡]el r+ öJjiËl i form and on the same conditions as tit" ritri Ê*l-i¡+ 'å-¡¡lilf l .rl---.ÍoYl { çl-JiJ -UJJ-,i'llJ ¡JS-$U ¡ lætter of Credit, in the amount tfr, ¡,-i.l j Minimum Expenditure Obligation "f -ll ll¡ cJ¡ll i for the ' Êljr-jll çJl-H è+'a I Second Exploration Period which is equal L¡l-iSt-Yt¡-Ll r¡.JL-.-,4¡ll.-¡.rTt l I to six million United States Dollars irr+fu-.l o-F-I¡¿.l¡+U¡"it¿+t¡tt i I (U.S$ 61000,ü)0) Iess any credits for exce,ss c¡t-¿T¡ll €rl.¡T3.r ¿¡- ¿T3r (6,000,000) t- work previously carried out by the ¿,)-s.¡,-o .,l f . fu ¡--*,,nyt ô¡-rLi coNTRAcroR in the first Exploration ,.. i._¡i6À_jtjJt ,j-_-"!lkj_.;ÀtÊr period. If within fifteen (r5) workinå.D}yr J¡!i.¡r-¡s.,yt -iL,-r.**,tLj"I cJ+¡'¿x 3ffi:,1i$'H"ÍiàySf^üffå'ffi"ll;l ll ijsÍi 1.,^,Þ- i,r--:"1 d*i.',,¡!r deliver to the MINISTRY the requiredil"; *.1- f30) Û+j)3ll å:lJ: i'-'"e ¡,-; of credit, this Agreement shall u" .onri¿ãi"ä I :ïY' -' :+ 6Jlill rJl-'+ à)-ef ¡¡'' - Jl null and void witiout any frrther procedure or 6¡-åfj J+èJ ¡+rt J+'j ¡+¡Lii)l o¡¡ ,.I-å JJS.I- ll notices. 4$1.åt ôlJLi! 3l elrl¡s.. ! A-rJ t! l-. tJt ¿_eq (b) If, at the end of the First Exptoration Period or the ¡-r"t{j ç--3 cJ3t--iJt ú---jÅÍ l¡! (-. Second Exploration Period or at tlte termination of ¡_LJ,. Jt .,_l,!l ,_¡t-igt-ll L_L,;r ) this Agreement, the CONIRACTOR has failed,to LjújJ ¿__iJll,lf L¡L,iSt*yt tulfill its Minimum Work Obligation for the åjl ùå .r_¡.:Tt r.Jt c.U .,_:-, applicable period, and neither the -í:^: cl-{3il r ì' Jl¡'-Ji"ll C0NTRACTOR nor the bank un¿", irri 'l-J¡liSYlo!-¡ applicable Letrer of credit has paid rh" ;Jire dl*'^f-Ì ¡Jr 'å-lL'll ¡l[ amount corresponding to the amount of t¡" + l-{1" çl ,l '¡t ¡l applicable Lelter ol Credit (reduced as ¡' ¡ Jlè-J¡"ll d-lS ¡-åtjll ¡l----q3o)l piovided below), then the MINISTRY shall ,(olJJ ¿u+ ¡n l-S uåii-llJ) ¡LcioYl .J.l!À # beentitledtodrawtheamountof saidlætterof ¡l¡lpYl çtJiq¡sr¡¡6jjlX js;-t t,t- Credit against the bank in accordance with its I J --,illf ãtL él-!lJ i+*¡ Jé¡--ll terms. .¿ JÅ 6JJJI (c) As to each Exploration Period, the amount of 4iål-Kt-t å--J*J d-s .r-l+ r+ (e) the l-etter of credit shall be reduced .L*rr çL--åi a+ uÈ+-iÅi when each part of the ",t,,111 - Êr-J Minimum Work .,- e-i..+ ,T '' obligation is performed by the ;;;;ì ''-r'ül 'r-'-'ll ¿'-" c[ '¡3 '¡n corresponding tò the work ás ,p..iri"ã-in |{d¡L-++d : .'lt crl-l-¡lY Annex u C ". Each reduction shall be ."e" 1SJI çJ Ù¡4.3'-o l-S di-o'll ÉLl¡ effected by a letter signed by the MIMSTRY ãJl--,¡ ó-+Jt ù- Ê]i- e+--¡r¡ cJ--S and delivered to the issuing bank in éLjill J ¡.¡-""J 6jjll ¿- å-.i-¡i" substantially the form attached as Exhibit II s-¡ ¡.r--åd A¡J-á11.+J ¡l-ioYl il-¡ to Annex "D". Provided, however, if the .(Ð dF-tll cl-- (2) ?--!JðJl¡:-Yl operator on behalf of the ¿rt-itr iF-.- a-+$ ¿¡---¡^lt ¿f -u-r-i., CONTRACTORdeliverssuchalettertothe ¡ i iJt ,_¡ãlt .11 ,gt h oJ_.,3¡ ^_¡¡ MINISTRY for its signature, specifying the ;+** J¡i."lr ñrt.r-*.'L-¡" *+¡, amount of the reduction, and no objection to ,l . , , - o m; trj * ;äit*ii ärt[tr;'d^tisltfiTÏ: dï'Ë È ^ issuing bank from the MINISTRy *itr,| 'rl-¡jcYl c3L-å 'gl tlll¡ d¡tjJt ¿:-o 4-tt¡ /"\ sixfi'(øo¡ Days after said delivery, then the t-¡l (60) ¿É- Lul ôJl ill cl-S cr- ( lr--rCf'evant reduction may be effected by the ccrL-¡å¡lt ¿!-l rf¿I--¡il ,¡t li \ ar v V Operator on behalf of the ó-,"Jt oi-o çi;r+.4-,ll -¡t----^i..ll Zl , AgreementBrock(7sr l0 å (zs) S¡¿ul{¡urr fr On sending to the issuing ¡-r.lJi CONTRACTOR dJL--i"ll i,r fJI--.¡ bank a copy of the letter delivered to the ¡¡l-"¡l il*,jt cIS g* l¡*; ¡l*fcTl iE éllll MIMSTRY, as aforesaid certifying that: -:¿X$ Ë¡lC.i¡ o).el _¡S LS eõjjl (1)a letter in such form was delivered to the ,¡l ht¡ll-,jlËJlj.4lt r)j;ììl (1) MIMSTRY, and. (2) the MINISTRY did not object to the (60) ¿*-ùr.¡Jtill Élriel ," -, (2) letter within sixty (60) Days after such él-ilJ öJ'--.¡i Lêe)5-tg.¡t-: ü- l-.3¡ delivery; and instructing the issuing bank ¡Å*,¡ ,+¡Ëi to effect the reduction stated in said copy élS # _¡¡Sr.lt uåi¡Åít rtúÞYl etu of the letter. .ålLJ¡t 2.1.5 Annex "8" is the Form of the Charter of the d[i-.fr1t ¡+l d-" ÊUii AiJ-- "J" ,lsl¡ll 5-l-2 Operating Committee to be formed as ¿a. ie r-l t J f îÀJ l 6'uJ<î HJ ll provided for in Article 6 of this Agreement. .4$öYl oil ¡ (6) irtJ ."J 4jl' 2.1.6 Annex rrFt' is the Accounting Procedures. .1þlJlolrl¡¡)l 'rJ" 6-l-2 *Grr d¡lÁll 2.1.7 Annex is a Sample Calculation of i¡l$llÅi¡ Royalty, Cost Oil and Production Sharing úfjiyl r-,r. [*r-tC¡J^¡ "j" dsl¡ll 7-1-2 oit. ,Hrr .Gt¡i}l cF ¡SJt i.ll liiJ 2.1.8 Annex is the Form of Request for åjti" ,,.1r rrcrr Conversion to Development Area. J! dbJñll 1i+-,o d-rl¡ll 8-1-2 .qJ¡,¡l ARTICLE 3 åi¡ri¡r¡¡r¡r GRANT OF RIGHTS AND TERM órdlg ç!¡frJ ¿Or 3.1 Grant of Rishts f i- ¡-Ët¡íll oi--r .,. i¡ÅÉ1|Lc! :1'3 The STATE hereby grants to the CONTRACTOR jr'-ll¡ îJ,oi¡-llll # and the MINISTRY the exclusive right to conduct rt----+l¡ åJl cJet----jJl ! Petroleum Operations in the Agreement Area subject å-¡¡liîyl ¡-iti" ç-¡ ¡-¡1. J¡qI crt-;I-lt¡ to the terms, covenants and conditions set out in this ¿l' edll3.t3J'-.illf - itL Agreement. The Operator shall conduct the ô5-a ,# û.¡l-.--s,¡ll ôl.tl ü--¡TlJ Petroleum Operations Only as operator under this cl-¡L'lt¡ ¡Hlt cþ-Ull J¡-¡l r-i¡,-^.r .i"-$LiiYl Agreement. X-i-i" 41i.-Jár d-å¡UlYl oi--t .--5i+ AJ¡jlt .¡+¡LÅi)l oie ,..¡Jrt liå This Agreement shall henceforth govem all the interests, rights and obligations of the Parties, and Ct-" ¿+"+ fæt -i ¿Yl ,y fJL:el i¡l. Ëill oåa é=i the STATE shall in its name retain the title to the f+rSl4 l.ú¡*l+ ålJJl -L¡:.iJ ç¡llll ci¡ljüll3 c!y.¡ Agreement Area. Except as expressly provided by LLê¡-i t-..- el$-I+ .¡ JËl-l3Yl å-iti¡ this Agreement, no other rights or privileges are Llf el-l T .¡-¡¡LiiYl oi r Ll r- ¿ ¡l^ granted to the CONTRACTOR with respect to either ¡ iLiü L-l úJ'4 t-Ji dJti"ll crJÁl qlj" ¡l r.i-É. the Agreement Area, Petroleum produced from the drlJJ¡ å+l J 4:"j¡ti3Yl titj" ü Aii^ll dJJ¡+ll Jt ¿ì$Li:Yl Agreement Area or any other mineral resources in dli-L¡l J*ii ¡.lLr*É.-d,ËU3yt ¡jl¡" # 4;J-l 4+.rr*. the Agreement Area. In the event of any change in å-iålC f,--ålÅ J' #i$l ,gt li d-L ¿¡Sl- the Operator, such change shall be subject to the .åi+-"ltäJtjJl prior approval of the MIMSTRY. 3.2 Rovalties gl¡ :c,l¡t4l :2-3 The STATE shall own and be entitled to take as -t¡jlt dt--.1 ¿¡-r ot-¡tiþ ¿f+ ,¡.J k¡¡ åIJ.IF Royalty from the total Crude Oil produced and saved, ¡4e¡ å4"Sll uúlE.o" å¡ti4 dl¡ a+ L;Ì- Jl, ëïJl Êl¡l a f¡om the Development Area(s) and not used in ¡üKll J*À¡ -.^ ql4 ,l-d. ¡¡foll út+L¡ll cj pr¡.'i '*Jr /\fetroleum Operations prior to the deduction of Cosû cJ¡--ll ¿¡- .llr-pü åj.E'J+ ÊtJl litJ i¡.. i+"S Z L,{ pil, a non-recoverable amount of the Monthly 4? t1E\ t /fU -rrri.âPr U Agreement Block (75) I I (75) $¡ gt.tl i¡t-ut, çÀ{\^ Average Daily Net Production C'MADNP") it.rt¡t 1ç .l .,-r..,j.Ð r¡Ct elj]Tl *,stJ ¡¡_x¡lt commencing with the first Barrel produced and óLLi"u ¡it¡¡ irr l¡ L¡r -.n, Cij¡ cJ+¡J cj¡f ¿¡-c saved from the Development Area(s) and not used in ''l Ìl¡ l+l¡i$ úLJ4¡ll o-.å ¡'¡r ..'J ¡+e3 "å.¡rlll Petroleum Operations the following percentages: ¡1S)l så,. ç-¡I . J.{ 3.2.1 three percent (37o\ of the portion or ,r,r +tr'¡t ,l o¡¡t éllil ¡Ju¡t{ (703) åjUJ il-2-3 increment of production up to and including ¡*,¡Å GE¡yt èl+.¡, d¡¡+ cj¡l rr twenty five thousand (25,000) Banels of dr.*.ll ¿r d-r¡ (25,000 eill 6Ei)f Monthly Average Daily Net Production; ) ¿p.g¡o3 I ../C" Al$Tl çilJ ç-x¡lt 3.2,2 five ¡rcrcent (57o') of that additional portion cllt ¡,".r or increment of production which exceeds ,f ;t--alt cj+lJ iF fuLJh (%5) iZ-2-3 twenty five thousand (25,000) Barrels of .¡¡+tp¡ r.4i jJl+.!€Jl Clt¡)l cÉ ttjl Monthly Average Daily Net Production up to çJc-ill db¿.ll ¿r cj+¡t (25,000) .åJ and including fifty thousand (50,000) Barrels .iJ ¿u*¿ el+.J-, e.Ct Etriyl *FlJ of Monthly Average Daily Net hoduction; ç'ål--l cf¡Jlt cj¡--.lt ¿r cJ+: (50,000) 3.2.3 six ¡rercent (6Vo) of that additional portion or .ç.C"1õlijll increment of production which exceeds fifty o+ r¿l¡ill rÍ ciCl éllil ¡rull+ (%6lU*": 3-2-3 thousand (50,000) Barrels of Monthly Average (50,000) riJf ¿u*¿ ¡rl-¡i¿ Daily Net Production up to and including ç.r'Jl 6lJ:Yl seventy five thousand (75,000) Barrels of ç.Cl CLïYI *¡U ç¡e-ll dr-.ll r-r cl¡: Monthly Average Daily Net hoduction; d¡.: (75,000) .¡l i¡;'+-¡ å.""Å ¿l# si¡J .dCl GEìfl,,åtJ çç-X¡lt cj¡'-.ll .-r. 3.2.4 eight percent (87o) of that additional portion or increment of production which exceeds ,l ;t--:yt cj+lJ ctlt ir" fuul\,(%S) ¡+¡rJ i4-Z-s seventy five thousand (75,0@) Barrels of ix'+*_¡ ¡-,,*i jJt++ €il| etii)l # -J¡rlt Monthly Average Daily Net Production up to ç¡Jt dr-...11 Cp. cJ+.r (75,000) .L¡l and including one hundred thousand úi ¡i- è-l'"¡., çr'¡'+llCt.:i)l çFåt*l (100,000) Barrels of Monthly Average Daily ç'ålJ ç¡c-¡t d¡.-¡ll ¿¡" dru (100,000) Net Production; .ç-clGtsiyr 3.2.5 ten ¡rercent (107o\ of that additional portion 'Cl or increment of production which exceeds one çsl-.åYl c éll3 ù" fuUJIJ (%l0l S¡Ée ;g-!-3 hundred thousand (100,000) Barrels of úi Ai- jrl+ii €il| GLi¡)l çj +t_¡I ¡l Monthly Average Daily Net Production. +U ç¡e¡lt du.ll ,¡" .l¡¡ (100,000) The MINISTRY's Particinatine Carried Interest .cfClelli'ït 3.3.1The MIMSTRY's operating âml, the : 4Sl¡ÉllJ ålJrs.ll 6¡lj¡Jl f,¿¡ :3-3 Corporation, shall acquire as of the Effective t t_jjc,Ll ¡*3Jl r-¡¡-. :1-3-3 Date of this Agreement a carried five ú- f_¡l-r:ol ãJl ìr-ll i¡l¡i-fill r lll percent (SVo) of the CONTRACTOR's 4¡-J f+lffflo\ l3l-iillGJ-: rights and working interests under this ',lè e Agreement. The entities constituting the úr---i¡ ù-" ¡-iL.ll{ (%5) å--*".Å CONTRACTOR (except the Corporation) s-.5t¡t å-ltÞ å----.-rS3 cLl-¡"ll shall acquire the remaining ninety five cl$*l¡l .J-¡ül el-.¡ol eé .4+ll¡Yt oJ¡ percent (957o) of the CONTRACTOR's ilr+r-..¡iJ å-,r,"Å "J ,J.--.1\ (e*Ct rights and working interests under this Al"lJl cJsLïJl ¡je-rr ¿* ¡-¡t¡t+ (Yo95l Agreement and shall fund, bear and pay all clU+ eyl-11;EüiYl oi q d¿ii"+ costs, expenses and expenditure ofPetroleum úlji¡ll¡, åJll <'ill å-il5 ei.r_9 (L"iJ Operations conducted according to the .'ill a+l¡-',rlJ o\t'X 4-{Jt^lt +Jt-ã¡JlJ provisions of this Agreement on behalf of the ol-e ¡15-l f ãlL dJiiJl i).Ê e-.S CONTRACTOR. çrJ-+J (a) .4¡sljiYl 3.3,2 Upon, Initial Commercial rt¡ !.io :| -2-3-3 Production, the entities constituting the #-¡Ttç-l!-:lJ elJiYf M CONTRACTOR (except dJti"ll .*.:¡s"ll ôLil+sJl d--.t, Agreement Block (751 l2 F øs)ÉJ¿rÀï1*iriir Corporation) shall collectively receive ¡it .rþ (¡,*..'Cl cl$.'l¡l ¡r.f+" one hundred percent (l00%o) of the Cost ¡ilsll .b-ii i,- rjlll+ (7o100) Oil allocated to recovetr all costs, ç4¡t.S¡ll cJ-lS ¡t.r.¡¡*y,.¡"-.-r"ll expenses and expenditures incuned and ¡-J"..lt q¡åJl-.a¡ll J ôLiÅillJ paid by them in conducting Petroleum o!¡l-\ Êl+X êd¡, ¿r. å.o¡Å.r..lle Operations under this Agreement on ¡1¡{¡tiiTr'" behalf of the CONTRACTOR. --irH¡J 3.3.2 (b) The Corporation shall receive ¡*Cl d.-á¡3 i+2-3-3 five percent (SVo) of the ¡-jt ¡-,,¡f CONTRACTOR's share of Production i¡- ¡l+ (%5) ,,Je Sharing Oil allocaæd the ç¡ ¡SJl..l"ll.Lii ç,i dJ¡J {.r,-.-* CONTRACTOR as provided for in iJJl .r-å JJlJlJJl.rl" et¡Tt Article 7.3 of this Agreement, and the cJ.-.J 1-5 d=rilifJl r¡¡ +. (3-7) entities constituting the CONTRACTOR ¿¡l¡Yl drL¡Jl fjéJ oLil¿SIl (except Corporation) shall collectively ¡,,,.Å ¡.t-¡,Þ (¡*3.oll etiü-l¡l receive ninety five percent (957o) of the cj-ts ¿¡. ¡Jt tl+ (%9$li,rr-.l1J full CONTRACTOR's share of åsJl-Lll J-i: ¿:" djj"lt ¡--. Production Sharing Oil. .el¡)l ,J 3.3.2 (c) The entities comprising the t<¡ åul+slt ie AA-3 CONTRACTOR (including the ¿-él çJI ¡s3.å_9- Corporation) shall not later than sixty (60) ùÅ (å*Cl éll¡,J l-r) drli"¡l Days after the signing of this Agreement ¡,+ Ls (60) iS- j¡l+5 Y ô¡-¡ enter into an agreement among themselves cj¡-¡lt+ 4+lif1l o.r-l ,rJo e+¡Cl to provide for the procedures whereby they crlcl¡,-r. ¿.e l"*s ólS\ shall exercise their rights and fulfill their .r:lil )l t ¡¡¡ î,g¡J-¡. å*¡t- c'îJ¡{ ñ¡l¡J obligations as CONTRACTOR (such d¡l-åJl fi$*i ¿6!L-cl;ill i ¡¡n, agreement being hereinafter referred to as L+g.r b ql _i4 úliill hÀ d3") the "Joint Operating Agreement"). .("élj¡.i"ll dl+i.frll LIL¡it{ " r,+ 3.4 Term : :+r The term of this Agreement shall include an a-LJ.: ¡ãts.ït ôi-----¿ Êù-c , \4! Exploration Period and a Development Period as ,-lÞ ,sl l!, ¡.-¡.o$ll ã--J-¡,ca follows: -:ç'iïl Jrill 3.4.1 Exploration Period and ExtensÍon : uÅLt$g$ åÀ¡¡il-4-3 (a) The Exploration Period shall consist of the +¡¡ill¡ First Exploration Period of ThÍrty Six (36) å--L;r J! ,-il-iSl-,Ylå-l¡.;r" Ê--JX (l) Months, commencing on the Effective ij+jËJ &-llair-. .,Jj L¡l---.iSisl Date, and at the CONTRACTOR's election, .3l-jillEJ_¡l-i ¿,-o l' ,r f¡-i (36) a Second Exploration Period of Thirty Six JL-+ 'rr ¡{r ,i-.,',$tl '-¡l--,iSi-l åJ-¡,o¡ (36) Months commencing on the Day next ,f¡-.¡ (36) ¿,¿.l1fu 4i* tCr" r¡lslJJl following the end of the First Exploration å-'.1.d ç-¡*çil| çJUll êCl *j f"$ Period or any extension thereof if the çl J r-¡lt úl-K3-Tr å------l¡,_¡r CONTRACTOR elects to enter into such ,LÀJl iJeLjJt Jl-lÀl lI Lel . J'l; extension and such extension is approved iJ- éll¡ l.islJ,.ll ,',¡9 q.r;ll élI¡ ú^ by the MINISTRY. sJÞ sf .ôJrjJr d$ The First and Second Exploration Periods L¡l--Ki-Yl J-dS,J-S"J may each, at the CONTRACTOR's $--iLJr. election, be extended for six (6) Months Jl--.,5 i.r ¡n-,¡-¡13113,"-l3!l uBon prior request to the MINISTRY and ¿,, å-L¡,. dSl JÉl ( 6) ¡l- ö.r-.! rLl¡LLll íts approval. The CONTRACTOR shall ¡¡.r-ö elJi ú+.+ ül .,leJ q¡l-iSi-Yl rriLJF have the right to elect to enter into the ú-ll cj¡l,¡Jl.+r,$l ,Þ å¡årCl äJjrü Ct second Exploration Period by providing r¡iti¡l c¡l-K:-Yl i-L-r*+ .JJ+.l.lt Jl=riiI{ written notice to the MINISTRY at least u-4.r. _je i,. thirty (30) Days prior to the end of the First e,f¡.!-lS JL--lål,Jt cl--.ire! ,ø Agreement Block (751 t3: (75) ¡l¿uþut b+4. Exploration Period or its extension then in (30) ü+-$15 i,--e d-4 ) t...-t ËJl ì!! effect therein, provided the MIMSTRY úl;..iST-Yl ¡-å^ L+l.dl ¡¡+l*, f-.¡r¿ agrees that the CONTRACTOR has efr.-¡l-' :' trl- dUl¡ \J . J', ú çl J J¡$l fulfilled all its obligations under this r¡ cLE"ll O¡å ¿l+¡-jj¡ll ú¡t¡ Of ¡å-É¡ Agreement for the First Exploration Period oi-a .r-'ali+ 4-il-lJ¡l d-.-.ct+.-i¡l or its extension. JJ$ üt--.isi-yt LJ-! i--ã.,ilÄyt (b) Subject to approval of the MIMSTRY, the .¡.r^ìç! _el First Exploration Period and/or the Second drl-j"ll d*r (ãJljll Liål¡ r-lr;t-+ (+) Exploration Period, or extension(s) thereof L¡l-is3-yl 1-l¡_¡ ù-dù.: may be extended for appraisal and s-¡!l ¡i" q¡l-.isi*Yl evaluation, if the CONTRACTOR has ,¡l.l-+¡,ü çÍ J $ll ¡l=J"J fuÍ fulfilled the obligations for that period but ¿lJ l.i! ç-+*Elt Ji.l¡ J f{+ll éLl¡r lrd needs more time to evaluate or appraise the ,¡LJ"¡t é!-b¡ {3t lj¡¡l idii¡i tL! r¡ cl_etj"lt results of the Exploration work performed, Jl ,.J+õll ol¡+T ct¡-¡¡t +. ¡+-r"l et¡+ ¿¡Sl¡ and requests in writing an extension for a ¡Ëiii"ll s¡l-i5i-yl cJt-"| 6:tst \r-#Ëll Jir¡l term not to exceed nine (9) Months by é!-b ,-¡l-Kj-Yt åL-f J-JJ"¡ :-¡t¡*l a-:l-l written request to the MIMSTRY at least A*..3,Je +-! Y i¡Sl eLIå-¡ $ .r;:,0 thirty (30) Days prior to the end of such ,l+ çl _el period. Such written request shall include J!r-c+¡t qd.ES ¡t¿À! .,lÞ J{-il (9) the results of the Exploration work ¡.ô.t- L¡u (30) ¿,r$l ô- d+ ) L+ ¡_jjCl performed and the evaluation or appraisal éIl¡ d3e ü,..å¡J ¿l ..¡a.,¡.¡L-rll élS odt¡il work to be accomplished during the É .oJI fus. l-iSl-Yl dt-eïl CjLi JLÀiYl appraisal extension. çÞJ çill ,r.#< J¡Jt J Ê#¡3ll cllLç,lr tiiÉs t rD.,:. p (c)The MIMSTRY may during the .¡ôl* ui"lgï +rúll ¿l Exploration Period at its sole discretion, L¡¡1..i:1L¡år L¡L.iS:*)t LL+. dU t¡;¡ 1U¡ give due consideration to ongoing crl--¿l*tl l+-8" f¡t-¡tot ,f-t'3 Ul I '-i¡^ll Petroleum Operations and give reasonable ¡+ÃJl ol.r;r,.tlt gi-C ¿f3 ã-¡l+ll AJ¡¡t¡¡t extensions to allow the CONTRACTOR to C.t¡¡,¡- 4+¡t L l¡nr.J¡l¡Jl e..ú o3ll fulfill its remaining Work Programs under "¡,ri .¡ì$täYl'rd IEt cj"'lt this Agreement. 3.4.2 DevelopmentPeriod jet6¡E :å¡"¡ll ål¡¡ i24-3 The Development Period shall commence on çc¡1+3 -¡UrS dr.4¡"sll ¡Ly l¡É the date of the first Commercial Discovery of o5+ cL[o (20) rf¡-t ôùl J,ói-^i¡l¡ill Oil and shall continue for a period of twenty (5) LJ.'-r Jl ¿---.¡ ã " J l¡¡+¡"t (20) Years and may be extended by up to five o-Ji6,., ll ,rJ" ol4 eûl¡-¡- (5) Years upon the written request of the fl-_¡ ck¡l ir" J¡jl (6) ol- cJ+ d¡l¡Jl ,¡. CONTRACTOR at least six (6) Months prior ¡tS-! e-¡¡+. ¡r.u ¡.¡"¡rtll dli dj" .1+¡Sll to the expiry of the Development Period. Such ôJl i¡Jl cJ+¡ ¿r t t*1. .!lJï11 e+ù¡F_r extension shall be subject to new terms and él-E (6)J{iïl Ai*Jl6Jji dHÅ t . d3tiJ¡ conditions mutually agreed by the MINISTRY o.r.o eil¡Ål ö" , åJt çl ol+¡ L-¡L ¿-É .¡¡¡ and the CONTRACTOR within rhe specified 4l¡ LiÅlCt+ y1 å-¿lLi:Yl six (6) Month period and shall not be binding "Jr uJ¡l-¡ J¡r-,¿+ to any Party hereto unless the issuance of a o-..å o+¡j*lrll olcl '+il f älL r J.uðll law approving such extension, according to .åJi.ill ,gJ ce.o+ll the Constitutional procedures of the ROY. :.hÅ¡ll ø.¡l+ill r-iL*!i$Jl ;g-f 3.5 Commercial Discoverv of Oil .sl¡ ¿,.S. ¡liill çJt+Jl q¡l,SSYl ,jJS!. r¡ :l-5-3 3.5.1 A Commercial Discovery of Oil may consist of o$¡ a*i¡"lt ¡15^ll ¿". å-o¡r¡. ¡l ¿¿i one producing reservoir or of a group of (l) J¡ +i¡.t-q-e.l+¡t+¡ r-.1¿t dÊl*ü producing reservoirs worthy of being developed o '+S ,e¡{ ül+ r¡+t cJ¡li"ll ¿!å Liill fuJl+3 commercially. After drilling a Commercial Oil .,-¡L-.!Sj-Yl+ UrolJII aaoU-¡a ü'-¡ A Well. the CONTRACTOR shall undertake as fi-.'¡¡3i éll¡J s¡l-Ël)t /f l ,part of its Exploration program the appraisal of Jl+Yl ù- ¡Sf ¡l É J*+ lW the discovery by drilling one or more appraisal dÊL{,-¡1,ËSYl tål. ¿tf 11! t ¡":Ël4r*iilt' - wells to determine whethen such discovery is Jl-+oyl ,r-¡ ¡lY 6_o,l-+-j+3',#l d.¡f rV), worthy of being developed commercially, taking (7')t',¡¿rx1gr & Agreement Block (751 14 F vtn, into consideration the recoverable reserves and d.l¡ll LålS.¡ rgl'lÅs-*)l åJ¡till ot4ttgYl all other relevant technical and economic factors. .A^fl*ll ol3 .¡¡!l i¿.:1,-1ãYt¡ t¡ill 3.5.2 The CONTRACTOR shallgive writæn notice tJ''.]lsãJjll .¡À+ ¿l dj-íJl ,JÞ iFJJ:2-5-3 of a Commercial Discovery of Oil to the ¿¡1 Ol ¡-+ l¡¡¡ ÀiiJl ç-¡l-:lJ,-¡t-SiSTl+ MIMSTRY immediately afterthe discovery is 4+.¡ úÊir,..¡ r-¡l-.SSTl Of ¡¡ r.¡ cLl-¡"ll considered by the CONTRACTOR to be .-¡l-5STl+ Jll{ cjJË"ll ú-¡ .t+_lt+: worthy of commercial Development. êJå-ô Notice of a Commercial Discovery of Oil may u åL¡ çl ¡-U¡ .rË¡ gÍ çi l.¡¡l¡ çJl+¡l be given by the CONTRACTOR at any time .q¡l.iS:-Yl dh.lJ,. during the Exploration Period. '¡À e, ç.r.ll i-r,-¡LllJ ti¡ll É U-!áÅr l¡åsJ With respect to a Commercial Oil Well drilled élJ¡ dJlJ^ll ,rlr+- s¡l-åSi-Tl å-L¡,. .r-a after the Exploration Period, the u¡t ll,S;lstlt ,-¡t-ìKYl+ i-'alJt _j-tiYl CONTRACTOR shall give such notice of .Jt¡.,!l i," dL a.,,! ¡l+ .,1ç.11, ri,,.-¡Llll Commercial Discovery of Oil, not later than J-,J ¡l É cJt-sf AcIr t-¡¡ (30) ¿p>i5 u,Þ thirty (30) Days following the completion of ¡"$ cJ J{-il (9) å,..ü r'+ J 4i¡l3ll Ê#frll any relevant appraisal well(s) or nine (9) .úi*,f L{¡J rcl-b ä"a-¡l-ilJ Låt lt }+ dt-¡Sl Months following the date of completion of Jlli! s-t'J i,,l f-årj cl3lJll ,JoJ such Commercial Oil Well, whichever is el ¿*S. çT f+tl+Àiill ç-¡l+ill e¡l,frSYt+ earlier. The CONTRACTOR shall also have ¡l r.I ¿S ¡¡¡.Þ.-rtS. !f the right and obligation to give a notice of çill -¡t-,Jl C Commercial Discovery of Oil even if the . å¿Jlj úU.l.Jrr ",frl+Lii É" tay- é discovery well or wells are not Commercial o-g ¿l-J l3l, "å-r.rç¡l Lår ll J-!." Oil Wells within the definition of Commercial å-...c¡r"+.. ,f t ¡"S" ¿l ¡J¡l-iJ çl-¡ Oil Well but is in the CONTRACTOR's i r.^iî ¡ úÊ3*¡ grl-S.ll opinion, a reservoir or a group of reservoirs .tiJ+rre u.t' considered collectively worthy of commercial fJl,-.i! l-å.j ij-iJl = Development. çrJ,+ ¿l ,JÞJ The CONTRACTOR shall also give notice of ¡laiilt+ ce-r AJl.' çi .Löll ç¡l¡ill L¡LrÉYl+ a Commercial Discovery of Oil in the event it ls.l ù+ êl l- 6jL¡J üi= Ë.:t-eY t¡ '¡+ wishes to undertake a Gas recycling project, i-+"S ¿--. fe j,+, e{-..--l r-i ¿¡;r-Llt unless such project is already a part of the f+_j+¡ Lål-Ësl 4j)¡,! ú{* çJl+: -!frl Development of a previously declared Commercial Discovery of Oil. Låì ll ç¡t+¡lt úl-EsYt eJlj úJé The date of a Commercial Discovery of Oil d¡Lj"ll 4-c¡ if,À.J çLJl E¿¡l-:ll 5: will be the date on which the CONTRACTOR s¡l-fiSYl 4li iÀ.chãJljll JJ fJl¡-.i! gives notice to the MIMSTRY of the .bJt+i Gl.bsl declaration of such Commercial Discovery. q¡l-rSlçl-+ 3.5.3 Following the notice of any Commercial çJl...+j -¡t$l -r¡-¡:3-5-3 Discovery of Oil as provided for in Article 3.5 (5 -3) i¡l-oll o-i cr ¡ l-S -b¡¡-l¡ of this Agreement, the MINISTRY and the C¡¡- ú¡ +¡U:llô¡-À (F CONTRACTOR, within thirty (30) Days, (30) i,å$3 ¿Þi drti^llr ôJljll ù- cjs shall sign the Request for Conversion to å--iti" J! d-JJJI ,.. lL..-le I ¡* Development Area in the form set forth in "C" diJ"I ç# åJJ+"ll 4t+-.olt+ L+"¡ Annex "H", whích will identify the .#¡.i+"¡ll Liti" r¡àJr ç\ ll¡ Development Area. Simultaneously, the õJljll ËL,ii dJLiJl e+,1.¡¡- d.¡Jl ",,ij CONTRACTOR shall submit to the .å, nll å¡trl i!¡ MINISTRY a preliminary development plan. s¡l-fiSYl Lja "òrJldl ÊLSÀll ¿! :4-5-3, 3:5.4 The provisions set forth herein contemplate Ë.ul¡ Çl.rrJ dj"¡ i-¡"SJl åi}.j"¡ €¡t-+¡lt the unity and the indivisibility of the concepts ç-lt+llt q¡llSSYI ¡¡lt-iJ il¡'4'.,,¡'+¿¡ of Commercial Discovery and Development .LiiJl ,,Jo I {lJtLr ú +-¡ å¡.Ill iät¡.¡ Area and they shall apply to Oi[ unless etu rr¡.¡ lr lu l-¡å A otherwise specified. .élh¡ f¡Xi $ *\r ? V Agreement Block (75) 15 ./ (75) ¡-¡ ¿tJ*t {$ti:t' c I 1 = l 3.6 Soiç Riskllgiect : 6r¿¡¡¡11 6¿L. t3¡ll :6-3 ,l 'i ff Crude Oil is discovered but is not deemed Uy úe^ dJti"llôJ=g+Ê+ d-å. t ¡,.¡t--.fslt-¡ t¡l 1 I coNTRAcToR to be a commercial Discovery of r ¡ir u¡¡ rr r f¡l-ï,st ¡ oil under the above provisions of Article 3.5, êL--s.T *j+: { .St ot .. r'.t r -lJ r-¡!¡ ,u ^,f[S'-3) irt-lt I ffi:ffii, $lh :ffi,åi'.ÍlÌ,iä]i,ffä li: î-'',,v ^ii..-.rr i'.rr ok¡,r J *, (r) J{-å coNTRAcroR can give notice l|.il elle! drl-¡Jl e--*j"i.,'É 1iu;' --l of "i;'ö;;;.d -r¡-r- r'+ ¡¡ ''¡ll s!'r¿ ùÅill ç-j+¡lt c¡LiKYl+ Discovery Oil, have the right afte6i-,y ôi;ñ;;; 4- from providing .a written noii.ã ' ã - ri; .¡lel.¡J.Es éll¡+ dJu"ll JlÀil råråi r¡. t-¡r (60) CONTRACTOR, and at the MIMSfni's *t" tirL ' i r.ÆJCl¡¡u*¡¿Í .ç¡U.-9t$¡l--r¡-''¡Jt¡Sii and expense, to develop, produce and dispose of all çjll r.r-- ¡l¡+¡l-. t AS-Èll æ ¿rtill fl3ll -b¡¡J tåtS o-å Crude Oil from the geological feature in which said iló*åi ¿f .¡¡¡9 .fi,þ ¡-l¡ l-S -bÅLtl 4$ l-{d¡ .i.iüSf Crude Oil was discovered as aforesaid. Said notice õJÅlÁ¡llåit¡") ¡¡.1-*.ll ¡sl.-,"11 .qrrl ¡lÀ)l l.r.o shall state the specific area (the "Proposed Sole Risk s¡Jt i-^".3l3g+lt ¡+s-Élt é¡-b.É-tË lt (lrliJt Area") covering said geological feature to be {rilleu¡yl cj-å,ly¡e >i¡iei3.-ét ,t:trrtlg.cs developed, the wells to be drilled, ú: {T9u",1o-l åi.*-,I,cÍsu¡rr .l¡rsr$ r¡¡ri JÉ, ,Lr!;* facilities to be installed and the MIMSTRY'r c¡i-.-Uit i,^L-,J (30) ¿HÐ{i-,}Ë ¿r,¡"¡r æ"¡ estimated cost thereof, provided however that, within i r rl i¡ÅlJl ¡i¡'j" t+"¡ t--.ts JÞ ¿,1 ili)l rhirty (30) Days arrer receipr or ,uiä ää' ffi :t*' coNTRAcroR may, in wriring, ;"ð;"ld ¡rä.l¡îYl o.Å .¡i t$lÞ d-r*-i"lt ,ts.St IEt 4-i¡Lll the Proposed Sole Risk Area as "l; for in this çiî g!'å ¡iJl élE çsJ úçti+i,{-¡l'ñsl ¡¡+-¡ eJ-.i in the case lrovided M ¡r*úI+ I (iil!.'¡ Jvf!.+s A+¡Ë$il oia ,.¡-¡'.--i Agreemint of a Commercial Discovery, å-JlLll E-r¡iialle¡ÅtJl in which event, all terms of this Agreement shall continue to apply to the Proposed Sole Risk Area. Ir the coNrRAcroR elecrs nor to dev.etop such ilürtÈï;ffi1#tli"rl'H#Ji Proposed Sole Risk Area, the said area (thenceforth f'ôs_t-ii¡I a¡r---i.tf ¡ iLì^J, r ar 14¡ the "Sole Risk Area") covering said geological ì "rrrt*rtt, ,r._r.tl,¡t h"_JJ,_ff feature shall be set aside for sole risk operations by t-,__ii.tì l¡f_i,,tic¡L_+Le i, ,a. .f, _^. the MINISTRY. The Sole Risk Area shall be ,' r.,¡ r d , . , i¡t '''Jl t-*t mutually agreed upon by t¡e rvrnusTËvïä ,h; :-*' \ciJ'ú-''¡ '"-l' er¡l coNTRACTOR on rhe basis of g;;- Þ"rt"Ñ t:l-J' ËJÀt-å'¡ll ¡iti" 'r+ ól-¡3yl i-¡r Industry practices. The MIMSTRY shatl b" ;"titi;¡ L¡åJ é¡ ri-'i^ dls'l{ dru"¡l¡ i¡li¡Jl tl;+ to havð the Operator or a third putty p"rfono .u.ft sa,,: ¿f ¡-lliC é-J.L'l-J-.JÈ¡l AÞlt ' ll ç's.44LJ operations for it at the MINISTRY's sole risk and .-Jr¡ \-ltJ ol¿!"'Jl étfl¡ Êt$ll ¿,llå, åJtl J dh"i"ll expense, provided that such third parties's operations cl.l', 'ri y ¿l ¡.¡-.r-l rã¡Jr-ij¿ t6¡l ¿.-,-, I e-iäå¡ shall not interfere with the Contractor's Petroleum ôL--+LJ| ¿_o,", ll3l , åJ LI crl--$e Operations and should be conducted according to the å^eu.-lt .J¡-! t+ Le+ ÊU¡J ,i ,.¡l¡ .J¡u"tl 4+b_É+lt good international petroleum industry practices. ûrJ¡*l JäõJtjJl u¡Éj Lc$cj.ËUrtt i.r^llJt a+l¡-É.,I When the MIMSTRY has recovered from the Crude^ qi lr¡ii.lf ¡JÅLi.^lt å-iti^ ¿r. Uttt'-at¡' ¡Ul' ¿" oil produced from the Sole Risk Area a. quantity of ¿ g"ZOOlUr¡y: t"¡*¡ J ¿iu,r-itr ¡¡¡Jt i,- Crude Oil equal in value to three hundred percent I .ì,' L'eü'J ,#i¡l lsill ¿''' åjul (3lovo)of rhe cost ir has incurre¿ ¡n .öiöffi# ,ts' d:-rlill '-¡J" sole risk operarions, rhe coNTRAcroä;f"ll;;;; Jl-JÀll cLl--i"ll rör.¡*iiJ å+1"ó-""11 c'l-al"'a the option,^only in rhe event rhere hur b;;;;;;ñ;; c¡!+* i,- :J"i"ll ç#^él-l¡ -r-'a cl-¡l-r'¡ ¿1 *+ Commercial Discovery of Oil or Gas ÛJljC i+ ¿l -r,¡ ä:¡oi"ll "ôJÅLi.ll ¡;t-r.; i,¡sll within the Agreemeni Area, share "ts"*tt"rr I ('ìl ¡ài '¡l h åilJl+ (%tOO) ¿-:t- to in further dt' "¡lt +lt:tl1 ¿¡r Development of the Sole Risk Area upon paying the *+ )l .r-ll h-ô dJ$^¡l ¿J+ fÍ .=Je .ôJljdl MINISTRY one hundred percent (l00%o) of the costs ¿15. çt # üt,* qrJL¡: jB ¡l L åi '-¡l .",Àvr_, ,lot_ã.o!l ,t--.,,it a ¡¡l¡ ú-\l . _¡¡ ,iijll writtennoticetotheCONTRACTORandallowthe : .- 1'-r r! ¿ ¿ rP'dJ li,HTriäî:','"'i*åff iîäiïTHårif ä.f,"S*Ëdåfl ffi t":'il. A The one hunáred percent (l00vo) payment shall not 'åeJÊr"ll åjL'll' /t l, be recovered bv the CONTRACTOR. Z l'fr--z ø vv- (75) Z /,t g l-,\ Agreement Block 16, á (75) t'¡ ¿tI¡ $at following such payment the Sole Risk eËs¡iiJlãJÀlJl¡¡L¡" ¡t¡.Jt cllS t¡-rr-r Immediately (1) ij¡ -Êf "þ¡ Area shall either revert to the status of an d.l,,!,s l¡rb ¡+"¡ ¡¡t¡" J! 16-.' ¡ cl¡+ ¿l (l) :t l ordinary Development Area under this Agreement os-e r.p¡-¡l li+ éll3 ¡r+'cbi,fi çåJJ å+îLi5Tl o3¡ and thereafter shall be operated in accordance with dLilÁ l5J l- ¡-lt' s-¡r (,41\ I cLr+S (2) J ,¡.+t¡ilt the terms hereof; or (2) alûernatively, in the event éll5 # fJõ õJljrl å-r.till ú1. -¡lt r¡¡-! ,f i¡t¡¡ that at such time the MIMSTRY or its Dependent slD'J ã+iill i¡Àlj Jt ¡it¡" lyrI cr!14 ei3lt Units are conducting Development operations in the çfå Sole Risk Area at its or their sole expense and the ÊlJll .rJ J¡l-..rT ¿l;¡¡¡t cr-¡13å{e,þr -¡ L¡iüi MINISTRY elects to continue operating the Sole ð.r_¡-iill ËJÅt-i¡ll ¡-¡t¡^ ¿!-! eôl-aLJa Risk Area, that area shall remain set aside and the 4lt-il-¡å cJ¡t:"tt úñ-+J L-+b. Ll--lål CONTRACTOR shall only be entitled to its ._-lc -t 'i.Yl .j-! ¡S_,l----.i"I -Lii ir-.r percentage of the Production Sharing Oil as specified .ol-¡¡l (3-7) iJ.-ll ,É-3 ¡' - Jt J-$t in Anicle 7.3 below. The Crude Oil from the Sole ôr_¡-iiJ Ëjâl3.oll i..ili.c ¿r eliJll¡Lll û+rb êt+J Risk Area shall be valued in the manner provided in çf åJt.r et.Ø-7) i.rlJl os l.#lÞ uár^-Lll QJII+ Article 7.4. In the event of any termination of this ö.ilJt _el (l-4-3) ËslJl ¡lSsl ç+r4r år¡.lAYl o¡el ote! Agreement under the provisions of Article 3.4.1 or cj-bt 4-i¡1i:Yf à¡-a ¿!-l o)-,| e-4-3) Article 3.4.2 above, this Agreement shall, however, 'Ul ì!l c¡L-+l*l ¡i 4+Jl-,¡l li continue to apply to the MIMSTRY's operation of ",rlt+ ËJtlÅ-l¡ å,-lrJt any sole risk project. .ð.r¿iiJl t¡¡¡" ç! -r ARTICLE 4 å4J¡tËJ.I woRr( PROGRAM(S) AND BIJDGET(S) FOR THE út*lsLyl ål¡¡ ol¡ilj¡ll3 dt¡¡ll C¡tJi EXPLORATION PERIOI) 4.1 Exploration Work Proeram and Budeet : l¿¡tjr¡t¡ r-¡t¿si*y,J¡¡t A.U* ;1-4 (A) Subject to the provisions of this Agreement, the ú-+q,¡ lil$lt o\ ¡ ¡l_S.rl¡t -t¡ f- () CONTRACTOR agrees and commits to ¡-LJ," ol---ri[fFr¿ r.J-+ ¡j:lr¡ cJ3t-iJt ¡-¡e" q¡l-åS3sYl undertake in the Agreement Area during the L--.ì$.¡ft dL.--."XI 6.1-i¡¡¡ Exploration Period a program of Exploration ¡o l-S ç3t isl-Yt ÊljÉUl;.rl -r.S i$iÌYl ¡¡t¡" çfå work as a Minimum Work Obligation as set out iréT çi-j13 (d c!--.Ult ç're*¡ in Annex "C" which cannot be changed or .6Jf jJ-ll åiål¡r û$ +rú 3l o_j|----g¡i amended without the approval of the dl-..-...---ti i ;nú-9--J MIMSTRY. The Exploration work should be r -ll ¿,.- ,:-E¡lt Ljå-¡+.rl h s¡l--ill.,Yl fulfilled notwithstanding the Minimum e-}-¡lJ .úl-¡¡yl ol-l¡ily,r-¡JTt Expenditure Obligation. The first Exploration d-'.ltEJ-i¡a d¡l .:l', .þ d¡l-¡"ll Work Program and Budget should be prepared ðJljll r+.rõ¡ 4-ijljÉlllr tj¡lt o¡t-¡S-yt and submitted to the MIMSTRY for its jJl-+s Y ô¡--o dx----J ¿ ¡1. ¡-¡Àlj"¡l approval not later than three (3) Months after å,J.Elr (3) ai>:itr the Effective Date. .3rÅilr eJ¡El J(.ìTr (B) During the First Exploration Period, and any ¡ l-Jr Lb[--Å dJt---i"ll "-J ü*r+ (,J. ) extension thereof the CONTRACTOR enters | 6l L+S çl¡ .o-l3ït .it-lS-Yt into, the CONTRACTOR shall meet the ., trTt r-ãJ.f ,#+ ùl dJ-¡Jl {-+ d-¡-+ respective Minimum Work Obligation for such d.-'ll É[-elj]IY qÉ-----¡'-oll period as set forth in Annex "C" of this çrr-¡ e1---+ 1-.1f ãiL ¡--l-J"ll ,¡l lil Agreement. In the event that the o-ir .L--+lä)lô¡----a ù- (g)ú-U¡t CONTRACTOR timely gives the required l-J..tiS 6Jl 'uJl Jl LÀþ d_et ii J1 et-+ i-lt- written notice to the MINISTRY to enter into ,-¡t-iSi-YliJ.>" n-! LIJÅ. tt 4--{Þ t# the Second Exploration Period; the ,+ ¿l ¿J3L-iJl ,r-le d,+rir¡ ,¡ ,still CONTRACTOR shall meet the respective 1.,i..ì[ ¡rs- l-å]t úU¡yt¡ j-,Jt crL-t¡i$, ;$t _r-*tt-, . Minimum Work Obligation for such period; and Llir-r. t .' 4-LJFll ,¡ì' lit any extension thereof the CONTRACTOR ûl J.u3 çl_¡¡ enters into; as set forth in Annex "C" of this oi-a cps (g) ú-'Ult s# ir¡.+" ¡'.0 luS cJ¡tjJt a4l' A Agreement. .4*ït¡tYl ¿-l lN/ \-/, Agreement Block (75) 17 I :l + I (C) The CONTRACTOR shall have the right to d-,'¡ r.r- ."ìr ¿J¡t-i"ll (g) I ¿l ú+ l 1 withdraw before the end of the First ,-¡$ úL---iÉ-Tl å-l¡Jr t-Jtç T i Exploration Period or any extension thereof the cLl---i"ll r-¡i d*¡-+r cl s-;r; .f çl -¡l I CONTRACTOR enters into, and this ¡ f¡li3ll o5-¡ ,r---$$J I Agreement shall terminate on the date a written I Jt-tiT ãJl ìJ-ll pl3-l ç"¡l-3 r--¡ I notice of such withdrawal is received by the Ì MINISTRY from the CONTRACTOR; l\ q + JJ--+ dJL--¡^¡l i¡--r qf+t--i{ I provided that the CONTRACTOR has fulfilled dJl-¡¡ll iJJ--é Ol aA-+ cçls,-^.iYl the Minimum Work Obligation for the ,r-¡.:Tt r-Jt ol,---.|;ilþ ",-.å¡f r i applicable period in effect at the time of .çL-.,,i)l ¡', åJËi-¡tjll å-LJ"X d....-rl withdrawal. In the event the CONTRACTOR dJL-i"!|,.,- .-ìf ll!l-r e,-i¡ withdraws having expended less than the --$t J.-.J ¿'- rJ-¡l ;.- r¡l r ¡ ¿l-J¡ Minimum Expenditure Obligation allocated for ¡-.L-¡"l¡ i tJlL ll dlr¿ll crL-"l¡ill ¿'--¡ the Minimum Work Obligation required for the I cl ¡-+¡¡¡ çT ¡l ,r-J9Tl ¡Je" l--K3*)l First Exploration Period, and any extension the "---1" ûtsi¿ 4-jG rçt¡l-i.Jl + cji. I CONTRACTOR into, i¡_1 óJl-ill õJl ir-X e+ ¿l qJ¡l-i"ll CONTRACTOR shall pay to the MIMSTRY ,É-!i¡l ð--+¡¡lr r-Ñt r -lf él--$ + an amount equal to the difference between such ¡i" l-iSi-ft dl-cll s--lÞ ó-tiJl Minimum Expenditure Obligation and the jJt--- +f I ô:-" ù-t' ¡4,¡l¡-.,¡il ,-. âJ amount actually spent on Exploration activities, (3) å-l)tl d|r......--.-Tl ¿-. cj- çcf-+ such payment to be made at the time of the s¡l-Ki-)l å.-t¡r cL--a3il ' a{ J{-il withdrawal, but in no event later than three (3) .dl--ll ç¡.-r/¡st e I H.¡ J .,-!!l Months after the expiry of the First Exploration çl Period or such extension, as the case may be. å-i!ú"lt t"-¡ j-----,+.c çl Any shortfall in aggregate Exploration activity d-+ o-âAr¡- t-iSi-Tl A-t*illl çJr=. þ expenditure by the CONTRACTOR at the end q¡1,----.i63-Tl ¡ l-¡o å-rJ,F ,"--¡ dJL-il of the Second Exploration Period or any d¡l-iJt d,i' ¿1 (l r J.ui çl ¡l a-,¡" 6¡¡ extension thereof the CONTRACTOR enters i-+ ij-{ drl-i"ll e-Ll* ú_r-.4 into, shall oblige the CONTRACTOR to pay ,4 l¡J .,---*.lt ,¡l l! F-l+ Ë¡l i-¡-ll the amount of such shortfall to the MIMSTRY tJ.¡," c[--g.il ¿r..-. ¡,6-í (3) ¡-3): ù----Å within three (3) Months after the expiry of the ... ..,-l ¡¡-+¡"ill él-l¡ J ¡-riJill L¡l-iSl-Yl Second Exploration Period or such extension, .dtJ,-.Vt as the case may be. D. Excess work in any portion of the Exploration i¡.... c 'r+ çrf *-.i dL..J¡ll o-¡ i.rl-rj çl (Ð Period (including extensions) may be carried ûlr $¡¡ll l+ l-{ ,-¡1-"å11*Yl l-.L,-r forward to satisfy the work in a subsequent ç-! d-'Jt+ #3 *-ll d-¡ ¿l ¿'-a portion of the Exploration Period (including 1,1-l ijJjt 4Jål-isi-)l åfl'l ir cj+ll cLli extensions). .ol+r"¡lt Subject Article 4.1A, at least three (3) Months 4.2 to d-+i,cj¡l-iJl .¡iJ Gt-¿) ¡¡l-ll ðt-clJ," e- i2-4 prior to the beginning of each Financial Year or at ,éJÞ J(-il (3) ål)3t A-'I. åj- Cl-s 4+l+ such other times as may mutually be agreed to by êI-J ç-$lor.-i'Tt ' l'l¡rll *-.å ¡l d--iSJl MOM and the CONTRACTOR, the ,J<--+ rJ¡l-Llt¡6Jl i¡Jl i,J-+ L-{+¡Þ úL-jfYl CONTRACTOR shall prepare an Exploration Work i-+lj¡¡ d-c 6J-j¡a ¡l' -þ .cl;¡-L Program and Budget for the Agreement Area setting l-ìS5-Yl forth the Exploration operations which the f-JåL¡3Yl å-¡tiJ Arå. dl-ÞTl CONTRACTOR proposes to carry out during the ç-l¡l{-¡l---is:sYl oL-;Lo L-6¡Ä c¡l+ ensuing Year. During each Exploration Period or ¡j-*Jl ù--l' e I ¡L-¡ll d¡l--¡^ll CJ-i¡r. extension, such Work Programs and Budgets taken t¡¡-1.¡.n¡ 31 1+ål-i53-l ¡J.-r cJJ el--üÍ #¡.L+I¡t together shall be at least sufficient to satisfy the di--Jjlj,rLJlJ Cl-'ll Cll¡-+ üJ+ ü[ ',' 1.¡ CONTRACTOR's Minimum Work Obligation and, eUl¡ËI! siÑl rsJJ ctll rJilt *1" ¡r¡" ts f'. ô)sr.ll Minimum Bxpenditure Obligation for the period it ¿. l+Jtii,rillåLll r.¡e úl¡i)l¡ d"'\ A-UJI drË"ll covers, taking into account any credits for excess LJ ,/.J.rtill lÁùit ç¡ll d-elf ,¡ i."f ¡$oYl ç¡ iåT! work previously carried out by the CONTRACTOR .ç¡l,iS3-Yl âLy Uá åÅþ el¡J in prior portions of the Exploration Period, /' w (75) l +$tlt \ I Asreement Block (751 ¡-,r ¿tt i t.- 43 Exolorafion AÊvisorv,Conmitteer Tfie Exploration Work Program and Budget shall I be dJL-i"¡lJ õ-djJ-Jl trt .rs@ Uê-=fi by a joinr commitree to be established I fIgryed by .J-"'J g.l-i¡¡ l--i¡Uîl_l o\ + jl-i¡ Cd-j r r{ I MOM and rhe CONTRACTOR after the Effectivl .dl----.¡S3-)t dt_--.et{ ¡_.-lÅJ i_¡r¡4, Date. This committee, hereinafter referred to as the L--ja l. o\ I "Exploration Advisory Comniúee',, shall consist of e¡lt ó*14çJtt¡_+¡!l ^ u.¡.1!¡ six (6) rnembers, three (3) of whom shall be il-..,¡ "i.r._¡L-,iÍ-ll {-¡l--.ilÍ-ll i_-¡+^!, :_r¡ I -Ji3 appointed by MOM and thrce (3) by the êqL-,¡,J Ê{-'-.< (3) ¡-l)J ¿! .- -i (6) ft_- CONTRACTOR. The Chairman of the Exptoration i¡l ,--¡" J¡l-Llr ffr_+¡J (3) i__$jr ãJtjj_J Advisory Commínee shall be designated by MOM t þ rEJt-Lyt {-¡LJistdyt l:;l.x+-:¡ ¿¡-S.¡ from among the members appointed by it. The {r+-jJ."ll 'L--aoi¡t rË-{ dF- ãJtiF-ll J-+ i}..- Exploration Advisory Committee shall review and idJL-.ä*ft úl-i$*yt L-åJ e#s.U_d+ ¿¡_ give such advice as it deems appropriate with respect Ê--4.¡,¡s r-f¡ll ¡-J¡tiJtJ Jl--""$ G.tjJ{ u¡ê_-rE to the proposed Work program and Budget. cl--e:¡Tl .r,-..,.3 Ir*,U" .rrJ ji*¡' Following review by the Exploration Advisory . çL-S .çitr Committee, the CONTRACTOR shall make suci EJLb-y úL-:St*yt L+J &+ã ¿r- ¡,".*ítr ¿-_ revisions as ir thinks appropriæe and submit t-ôl¡g çiIJ c¡lr+llt ,¡l h rtlL¡ dJ_íJ êJé Exploration Work the ¿É-élÅi ¡"+ilj*JlJ r-l_o"lt G^U.1+ er4¡ A+*U" ilr approval. Program and Budget to MOM for jr---+t I¡ .t-a$tl ãJljill *iL-.iS3*Tþ Following such approval, the ,JL+ J i CONTRACTOR shall not subsrantially revise or ¡l +-+¿ úf .i.iåtr"lt .¡ E q dJL_¡.tl modifu the Work Program and Budget without the ¡-:f-*Jt-l j-..'lt 6.L-j¡ ¡--¡¡¡¡+ -o¡.e_*; approval of the MINISTRY. The MIMSTRy or its úr-.-ãJ .6JljJ-J å-iit¡r uJ+ ¿ÐJSr_Jr authorizcd representative(s) shall have fourteen (l+) JH¡D l-a¡J ù.- g-¡liO þ,f."¡ I (Þ* J (ÉJtj¡J¡ Days within which to communicate its approval of élt3 ClJt A.uJ+t i+.t{itt L{Íålr¡ r..e úf L-* (la) such Work Program and Budget, failing such ¿* i-Ste"lt¡ .r¡ pti*l ¡-r-c. f_Jt^r .j¡,eLE ¡-$t-þJt; communic¿tion approval shatl be deerned to have ¡-ll=,p¡J.r',rir ¡! o¡¡t¡"¡ -p¡ r"âjiill étE uÞU;-,¡r;¡ì been given. In the event of no approval, the ,*'i ¡+J-f*fl L¡l-i$-)t i-,+: g¡r- åjit/ ¡..o Exploration Advisory Cornmittee shall meet in an .¿$åJ"Jl J.l l.d" ibt - attempt to resolve the issue. 4.4 The CONTRACTOR shalladvance attnecessary i-j)Jt êÌ-.r.lt H"+ dJL_iÁ¡l ¡ué :4-4 funds for all materials, equipment, supplies, ùtLJl U-¡i_i¡ eùj*Jl¡ ecrl,:-aI¡ e.¡t . .I personnel administratiop and operations pursuant to Í.-¡¡tj+I¡ ù-'J A.I-¡JC f *¡ crL__þI, the Exploration Work program and Èudget and sJljJ*X ù¡¡--S ¿¡-lr ç¡l-.isÍ-yt+ ¡*tÅJt MOM shall not be responsible to bear or repay any .+JLl¡ll ir..-.ri ¡l ' .. ¡l ,l-...¡ ¿-s i.l.1:_* of the aforesaid costs. The CONTRACTOR it¡all ¡e i¡r YJL-,"" dJl-¡"lf û¡j-¡. ..¡St-Jttã!t* responsible for the preparat¡on and performance of i-$t+Jt¡ iJ-¡ 6J_i¡ ¡_-JÃi¡ ¡t, .,! the Exploration lVo¡k Program and Budget which ¡i -¡ån ç-..+J çì ll¡ ül----,iS3rYl{ 4--.-Lilr shall be implemented in a workmanlilce ¡uanner di*JL¡Jl H.,---.ìeÍ¡ I q i-+lt.o -rcLjS consisænt with good Petroteum Indusry practice.s. 6-:¡á+ .¡-+l¡Élf ¡Elt . -I o.-i LJ ..tt All contracts for arnounts greater than One Hundred çi¡ rj..-""It ë¡L-i.¡¡ \ r¡ìîr i*t¡jl ! ;.tl and nfty ûrousand Un¡t€d States Dollars ¡T$ r-iJi ¿ug¡¡åJ l-s. (150,000) +, tçJr .:_r; (US.$150,0û0) relaæd ro the performance of Work L--q.¡lt 6r--ôÍ¡¡ ÉL-ryCt rÉl¡Tgr ¿,.-r Program should be approved by the MINISTRy or ,}j ¿¡- L-{dt" ,,, .:* its duly authorized representative(s). The rúR. -rlirt¡.r-lt ó_¡t} úi MIMSTRY or irs authorísed representative(s) shall ' J .6JtjtC 6¡r.¿¡.,-¡i.lt ¡_jjCl 1"-n"") r!- have fourteen (14) Days within which to (14) tsi" ¡-l-¡í t}t.-;' "ø.r--¡^ll (' i:ft t communicate its writtcn approval or disapproval of ..f--S L-13'àr-.1 é!l5r ++.1J1 Months from the date of the MINISTRY receiving 'irl+l Ltsl "'JliJl each statement. å-3$alr-á.r--!-¡ Within three (3) Months from the date of receiving g:t-l i,.-- (3) J{-lf such statement, the MIMSTRY shall advise the _,,ïu 6Jr jlr rri r$,ldìffiI CONTRACTOR in writing if itconsiders: a. that the record of costs is not correct; or .4.rJ"- ''' 'rlr-4¡ltSlt ¿f (f) b. that thecosts ofgoods or services supplied are not ,j.i¡õ ) fu¡,. !l ol-.riJl J iLå+ll ,.i,l.rS ¿l ¡11-. ¡ in line with international market prices for goods g¡þr ¡tl ,l6it--.a¡ll Ll¡.ll .3J-Jl Jlr-.,| ê-. or services of similar quality supplied on similar .", ËJ lriLJl rr;Cl .t¡-É¡ e.re¡Jt o-s ¡ilJl terms prevailing at the time such goods or os *lt ùl "þ ¡d¡t¡¡åll ,l ¿iU¡t oi¡ ,-lr¡,¡ services were supplied, provided however, that d...-.lt Êi o3ll úl-rållJ úLJ¡.iáI ¿l ¿l.ilt t.u purchases made and services performed within ,y (261i.rUl ¡l5rT êË ( ç.e) *# L{+!' , ROY shall be subject to Article 26 of this .å.$liiTl oire Agreement; or c. that the "Condition" (as defined in paragraphs c'3-r'6) .J¡Hl ta.r¡¡,/!l .rlll åJtr ¿l ¡l (e) 2.4.2, 2.4.3 and 2.4.4 of the Accounting ,Y (4-4-2) t Q-a-2)'(2-4'2') ålJiill çr Procedures in Annex '.F ' of the materials ¿..- c¡*tiü I ("i' úrJll ,ã,rl*'lJl å--}ú!l furnished by the CONTRACTOR does not agree ._lé¡"ll úÞtll ç.å ¡+Jl -lt -,!l with their prices set forth in the said Annex; or ¡iø ¡+Jt" .,*, T_S d. that the costs incurred are not reasonably required "i$lg,, for Petroleum Operations. t¡l o¿-4J shall confer with MOM in J¡t.-----Q,j.J¡t s-----lÞ The CONTRACTOR Jl---! åls-i"çl ¿L-i ç-¡¡Jljill C- cannection with any problem arising under this ,(5 -4) ã¡L*ll c¡+ ¡' llli + .r-3 ^ f.nicle 4.5, and the Parties hereto shall attempt to ,r-J dr-Jl)rt-J ¿l ¿¡. >-UJt .+ A /reacna setilement which is mutually satisfactòry. "àJl ì!f Fö FJ li! L-+ãtlSl4r¡-* l¡¡*¡ l/V m within the time limit of the thiee (3) Month J+i 1$5¡6¡r -.ll'or Jl dni Lbti"ll JÉÅþ period provided: for in this Article 4.5 the l"c-ålJ¡Þl ¿J-Þ (5 -4) ã.rUt ài-ö çrãÐlll (3) .ø,. Agreement Block (751 20 â (75) f*,¡¿rxþr-i:r /Ú r NÄ MINISTRY has not ¿dvised the CONTRACTOR úÉlJÉ J+Í+, ¡r * ol+.I cLl¡ ¿!-¡ ,¿1-;¡ çl "le of íts objection to any statemenL such statement cJ+¡ ,¡- ¡+l!l fLål¡ O¡S.lr Çr;e I 'J*i {+le shall be considered as preliminarily approved" ,l.u-[..![ d.rlc l=¡s. (4- 1) ËJll L¡¡L sJl jll )l,y subject to audit by the MIMSTRY according to .{$1¡iYl'+l (-r) úi.f¡t paragraph 1.4 of the Accounting Procedures of Annex'F' of this Agreement. ARTICT,E5 å*""t¡.tt¡¡t¡t RELINQTNSHMENTS c¡l--.JlÅill 5.1 Mandatorv Relinquishments ' {uçYt ÉlJå5¡l :1-5 5.l.lAt the end of the First Exploration Period, and ä-LJ" i-iti ç-¡ dJL-iall ,j-lÊ, (=r..+,J :1-1-5 any extension(s) thereof the CONTRACTOR t<* d.r+ t-6J ' ¿'d çl J Á!t q¡t-.is:-ll enters into, the CONTRACTOR shall te_¡l.l.i" LJlt¡¡.! LL.,* C¡o .,J+ ¿l .¡.!¡Li.ll relinquish a total of twenty five percent (25Vo) ú'r A-íJ! (o/o25) r¡_l---.io¡ of the original Agreement Area, provided that ,É-¡ \JÊ fu (¡.rl Tta-$jfxtå-îtj" if the CONTRACTOR does not elect to enter cJ¡EJt ù+ Flt o,cJl¡-....Tl ¿-++ into the Second Exploration Period or any L¡l--"åS3-Yl ¡.-LJ" ç-¡,J¡r-¡l Jl--iÅl r-¡ extension set forth in Article 3 then the f ãtL r . lilt CONTRACTOR shall relinquish the ¡iJai" cl Jl,i ç9t_+ J ¡_-¡" remainder of the original Ageement Area not i,_o çrj,rr"I ¿* .l+ ¿T .13¡ i:t-.tl then converted to a Development Area or cJ.-.¡ Ê-l ç-$l 4È--!l Í l¡L¡Yt Development Areas or for which the L-+"s ó.H--i^ rli--åti".-lJ i-j$Þ CONTRACTOR has applied to the er-¡3 i,l dJl-í"ll &* ç-rll ,¡l h 3l MINISTRY for approval for conversion to a .-I l-*¡.il t---¡5ltr^ ,,. ìLt öJl jll Development Area. .4r¡ ¡¡f¡" 5.L2 At the end of the Second Exploration Period, L-¡ti¡ d-;lS ù..--.o d¡t-iJ ,,-l+ i2-l-5 and any extension(s) thereof, the L¡l-iSisYl å-l¡,ir¡ ¡-,J"e. ç-å ¡--+iL¡fll CONTRACTOR shall relinquish the whole ,l-6J (ôh-rùü) H¡¡ çl¡ i--¡:Utt Agreement Area not then converted to a úll--i" rlt-iti",r-{ dJ_:s Development Area or Development Areas ,¡t h i-J¡liiyl .:. -l,-jt pursuant to this Agreement or for which the J i¡r{ A-¡s CONTRACTOR has applied to the .-J cll-îJl ¡r-i: ¿f ¿l-,,É-3ll MIMSTRY for approval for conversion to a t e lt -: ,JÞ r e"ir{rc ,,. lll ôJl ìJ,_ll Development Area in accordance to this ôLA Agreement. .å,$i1)l 5. 2 Voluntarv Relinouishments :¿¡J=friTt eblÅ¡ll i2-5 The CONTRACTOR may voluntarily relinquish all ,.¡,----o o¡l-;Lil L,:" -4.J.J+ ¿l j¡t---i"ll iJ-<¡* or any part of the Agreement Area subject to having ¿l l, .r, å-¡¡. uîrt Liti. i¡--¡ cj+, çf J d-S fulfilled all of its obligations at that time required to qU.lt^ll 4--iLljËll ¡-¡l5.l jj r-¡ ì ir¡Þ ûJ-4 be performed under Article 4.1 of this Agreement. .i-+¡U3Yl oi---e ¿'-c (1-4) ut-ll s--.åi¡"t lÁ\ Jån Any voluntary relinquishment shall be credited (J,. .¡¡- Q¡l$il t+t qJ¿JË ¡jti" toward the mandatory relinquishments required È.áål iJJl "JStt ç13 under Article 5.1 above. .')¡,1 (1-5) os6Jéróll,fJt-.Jl o.L:ll crlsl*e 5.3 Requirements for Relinquishments I :c'ldlü¡l Ljilll Èl+t!f¡,¡ll :3-5 The size and shape of the relinquishments made LåÄ3 (ì.: çJÅ3"lt ,ljËù. !l df-iJ e-+-: r $s3 ¿ia, unde¡ this Article 5 shall be determined by mutual eÀli-iu¡ cl_.¡i:"lt i¡rJ-ù¡l útil+ (5) iJ-llo\J agry'ement, provided that, unless otherwise agreed; ¿¡'-t ¿l r,¡l li {-i)t-j. út-¡iYl ¡-+ a-t t- A afi areas relinquished shall, at a minimum, be cjJyt ,.r-1" L+¡c ç--lÅt¡¡l ó,tL-j"ll6-¿"¡ [.ftontiguous and reasonablyr accessible for, and ü-l""ll ¿,-3 ,l-6jJ cJ¡--Jl )-"Jr¡J A--iE" Wapable of, further Exploration and Development. .¡i*}ll ¡.-+"nlt3 s¡l-iSi-Yl dt--Þb t-C+i el-Jill Any part of the Agreement Area shall be considered .JÅ lI.l-! ¿+tl3Yl å-¡ti" ür_. e ',+, çi >++¡ ,-Z Agreement Block (751 2l :-_ (75) é¡¿tr¡þrlt /Yt- ¡  to relinquishment, includíng any such part d-3t . ej+ el-13 l-..4 r.---b subject çl ,,.-¡ corresponding to a geological feature in which ,r-le,fJl+ . I l-.o ¡-¡'.. J¡JÉ+ ¡-.4Sj*r-s Petoleum may be present or has been determined to ¡-*,f àùr-¡. J,j.iàl r ¡ ü¡-l¡ ¡l cj¡.1-¡+lt be present after drilling a well, provided that f-iil .r-¡¡ L-e É¡¡l r-i-.¡-.¿l-l .J+ -,r--ir notwithstanding the foregoing the CONTRACTOR s--l+ ¿l cLt---j"ll -¡-¡¡J flå)-f'.r shall not be obliged to relinquish any part of the "-J' åjt¡. Agreement Area corresponding to a Development útL¡" ¡l ¡jtL drL+ l+¡lilYl ir ej+ çl C¡- L{+, . ¡ j¿ 1Þ. aS" ¡itL J þÍ Area(s) or to the surface area of any geological -¡,li JrÞ ¡ ç! el- L feature in which a Commercial Oil Well has been ¡' -^I d-.!l ¿lJ l¡! fj ó¡'-rJ+ åt established, unless the time provided for establishing d-3. uj ç_tt-# '-¡l-ËSt ,"t rì J-i-Ël a Commercial Discovery has expired pursuant to . 1$¡fl or i,." (3) lrtJl fLt .,.åôìl r¡ ej¡ll 13 Article 3 of this Agreement. l-.a : ,r¡i¡lt+.¡låiïl :4-5 5.4 Notice of Relinquishment (30) ü¡-3)5 d-+i drl,-¡"ll ej-l¿ At least thiay (30) Days' prior to the date of each .çr--$ d--lgr"¡l-: ir--. cJi¡t ,r--JÞ relinquishment, the CONTRACTOR shall submit to .'3!l ç¡t-iSi-¡Yl clt el c¡" ¡¡lj¡lt JJ t-¡¿-¡E e¡+ ¿f the MIMSTRY a report of its completed Exploration l+¡Þ sJåítE;r-:iJt úÀl-j"ll ,r-! L-{l"Sl activities on the area proposed to be relinquished and J3J-s, I .l ål----]^ll ll-¡¡ll gl¡i- l' -l¡r the coordinates of the connecting points of the åil¡"lt élb boundary line of such area. ARTICLE 6 L¡l*¡llirLdl OPERATIONS AND DEYELOPMENT PERIOD ¡+¡¡!JlUr¡,.3 c¡qf.rll 6.1 O¡reratinsCommitt€e r$ 6.1.1 Within thirty (30) Days of a Commercial 4-JE ' (30) rl*-U: cÞ-Å :1-1-6 Discovery, the Exploration Advisory d.--* e.-i eç-¡l# L¡l-fiSl Committee shall be dissolved and an el-¡¡. J ¡iJl-Ë-¡Yt '-¡l-iSi-ll i it I Operating Committee shall be established. .clþ.tll 4¡+l 6.1.2 The Operating Committee shall consist of bix å i.lde-Sid-9- i2-t-6 (6) representatives, three (3) representatives (6) ¡l-, rr--.-..c clg-f¡t appoinæd by the MINISTRY and three (3) Ê+ (3) ¡-Ð3.u+-E¡¡ representatives appointed by the (3) L-l)ir ôJl )r-ll d-........'i CONTRACTOR. The Chairman of the dJl---i"ll ¿,+-fr"" Operating Committee shall be a representative I ¡tl ee+ of the MIMSTRY. The Vice-Chairman of the U+-i¡ ü¡-$¡ Operating Committee shall be a representative cp+it +iUJ rä-¡l j¡Jl 13-.-¡ d+i-fll of theCONTRACTOR. .,J¡ü )1"" d+r.fiI f¡+l 6.1.3 The responsibilities of the Operating crtrl. ¡i-.*l! j¡----tlt A---+l ¡.li :3-1-6 Committee are as follows : :¡jJl 6.1.3.I Generally review and supervise the ¡l---e rJS--¡+ e ,¡lj :1-3-1-6 implementation of the Development å,rv"ält o\to ú++j.l,JÞ .¡ t jü¡ and production operations under this läYl Agreement; .¡r¡" ore .¡¿ii+ e$)l¡ 6,1.3.2 Consider and approve the Work G.lJ+ gJe ,¡¡l-f¡ Jl--üeYl+ ¡sb :2-3-1-6 Programs and Budgets presented to it ir- LúJjJ å..riJf ûHtjdlr d-'Jf by the Operator on behalf of the i¡^¡ cj¡tj"Jt ù- å-r.l¡ dL.i.i.oll Ci.iË- CONTRACTOR and the Work ¡Je'Jl g.U-.¡u A.-lJl å+ÞJ¡I ejJJl Program and Budget Subcommittee. .¿+t-'yll¡ 6.1.3.3 Receive proposals from the Operating d[i.fr]l OL+J cl¡ otr..¡li.cll ¡)t5ul ;t-l-l-f r)-J Subcommittees; .4ieJdli / V AgreementBlock(751 22 (75) f¡¿tJ*l f'5ilt 6.13.4 Endorse or suggest changes to the ,i¡}Jù-tll gJÊ--u J ú-¡!JË t4-3-14 proposals refened to in Article 6.1.3.3 i$Jl o-å LCCII Jl,i-ll út-rJÉ¡.cll and submit same to the MIMSTRY ôJjr-J ,rJr-3¡ (3 -3-1-6) and the Operator on behalf of the ¡ tell\ cj¡tiJl ,.¡" fui+i dlil"llr CONTRACTOR;and 6.1.3.5 Assist the MIMSTRY and the d,9 ¡-r.l+¡ d¡-LIIJ ¡¡liCl ¡oL.ó :5-3-1-6 Operator on behalf of the I -c{++l_g el--r¡l! dJl--i"¡l CONTRACTOR in carrying out their o\ ell ãrL¡,+¡|¡ll l-r€f-dj¡llJ respective duties and obligations .4igliî11 under this Agreement. fJoJ¡¡l ¿Fi-il cl¡S.f ú"lJå" ds-t{ t rrl ¿t+l ¡+:4-1-6 6.1.4 The following Operating Subcommittees shall I rS d$__filt el-+Ë ê._r be established contemporaneously with the ¡ :,É+ formation of the Operating Committee : t-+ ¡--l;Jl r ¡ilt d--¡+tlt :1-4-l-6 6.1,4.1 lVork Program and Budget A.t_¡¡. .crtl.l¡Jl3 Subcommittee; .4¡!i.filt/ e+iill ¡ì¡eJ¡ll åj+Xl :2-4-l-6 6.1.4.2 TechnicaUOperations crlú$lt¡ ¡..,-Lill ¡-,"¡I a¡.¡¡ 234-l-6 Subcommittee; tcrlqlél¡ 6.1.4.3 Contracting and Procurement _e Subcommittee; and åiið]"l+å--tJl*r-||iJr"¿i4-4-1-6 6.1./,.4 Yemenization and Training Subcommittee. ¡.-Li ,J$.jti t¡-¡¡Jt+ d"Þ ú;R Ct;.i"ll er-ô :5-1-6 6.1.5 The Operator shall as appropriate form l-{Ërå åSJl,Ltl ãJljjl ,¡l¡" ËJtÊ! üfu çill "Project Teams" to which the MIMSTRY's cj-lr.l.¡¡- .dþi-bll å-¡.J iiål¡r" .,lÞ ,l+ employee(s) may be seconded upon approval ô.:l-llo--å Ðlll JJI,JÞ ¿¡¡l--ll of the Operating Committee. The secondments .i$ifrt o¡Â i, (4 _l _1,7) shall be effected as contemplated in Article 17.1.4 of this Agreement. ¿la'l_¡ ¡ 6.1.6 The Operating Committee, Operating d-r ó¡-¡¡ J.Jill dg--illt Subcommittees and Project Teams shall ËÐtll êll+l I ril L-ú¡+1. Ji,*^ t¡¡¿lt conduct their business in accordance with the e+l d-" el}l (r) ú'.rLll # ãiJF.áClr provisions set forth and described in .dJi,fill Annex "E', Operating Committee Charter. f+¡tjr¡lt¡,J-lt I ill. , tîl : A.U* i2-6 Work Prosram and Budget d$rbll Êl-;! iJ.- Ê¡:f (90) rrJr--^.Ë r-"r Ninety (90) Days after the date that the Operating _¡el---õfu3 di-i^ll ¡¡--+ o)-ef (1-l-6) Ë¡[..-ll Committee cornes into existence in accordance with di.....¡'ll 6.1-j¡a¡ ¡--l¡l f-JÞJÊll ¡.-¡+Xl e- Article 6.1.1 above, fhe Operator, in consultation el-,¡,-r'. ! i+l¡¡"¡ dLrÞ e.lJ-¡l ¡l' .þ å-¡¡l*Jl¡ with the Work Program and Budget Subcommittee, ¡,-+^SllJ L¡L-K3-YI gL--+l"e oJ .' +¡ shall prepare a Work Program and Budget for further ."-îll ¡ JltJl ¡i-Jl d,-.r-i$"ll e ''+Jl Exploration and Development for the remainder of a.r-c Låi ll s¡t--,fiSYl ¿!+å ,i-l+ the Financial Year in which the Commercial o-! ç_lL-+¡lt å----Ð3ll jrl+.i Discovery of Oil is made, and not later than three (3) å-J"t{j cJ--+¡ J{-il (3) Y Months before the end of the current Financial Year ,- rl r--cj¡.áf *-å -¡l) ¡-¡" ul ¿.¡'-Jl (or such other date as may be agreed upon by the JJLiñI+J dh-¡"ll êriJ us (d¡-.il 4+1,# 4+l' ú4 Operating Committee), the Operaton, in consultation J.rcþ 4¡l¡s"I-r cj"'lt e¡U-.¡4¡ å.,-l¡l þJill 4!¡Xl ê" with the Work Program and Budget Subcommittee, 4-+rtjy¡ d.-'ll G.U¡¡ ç3i-Jt 6tjiYl C.Uf shall prepare an, annual' "Production Schedule", 1+l,¡i, .¡iJül A+IJI ¡j*'U A+".üllJ Läl-iSi-Yl Work Program and Budget for furthen Exploration tÂlJ¡ tjll llJLIl+ kll.H+-É etlol31'+l-r Il¡ Cl$.fill and Development for the succeeding Financial Year. tll_l 6;riiJt ¡i" I'jÉ^llJ j.'Jl g.t-:¡ç úI+ t^$ ¿r-tl" The Operating Committee shall'review and give such .å,llJll ,!,,,-f ,årj.lj$lr iþJl g.cU¡r 6Ei)l .lr* directions as it deems appropriate with respect to the d.ùt¡r .'ilf çal ¿¿l iJ¡t'--j"llr,rJ"'¡' îiJ, proposed Work Program and, Budget andlor ,¡lr hç;r......sr. clg¡-sllii ial ¿.- åi--r ¡tJl Froduction Schedule, as the case may be. The i-ll J ot---r cùUr.--.-ill CONTRACTOR shall consider changes proposed by .¡ ds-ì¡t+ .riÅ"lf ç-¡: Ä orecmenf Rl¡r¡k l75r )7' I t7s) J,Pttstu¡b' K' "¡^ the Operating Commitæe and will make such cJ û'll g.l-3¡ ¿t-å.lLJi r-*.¡.J .l| 'Lin olJ-t changes in the proposals as it deems appropriate. ßet tïl cJ¡¿----+. t¡Jt, the Work hogram 6.cl--i¡.¡ rf ¡r,A--ri. Thereafter, and Budget and/or ¡---¡ t oS.¡JJl {rr r,-r 6å+iljÉ¡llJ cj-'lt Production Schedule, as the case may be, aÍi .r-¡¡õ ê-i úJrd,' cJ. *.. ¡l , .l- c!-ål¡. endorsed or amended, will be presenûed to the .,Jo¡ .++1" l.¡ltelt tt 7.3 Production Sharine Oil ås¡r,i¡¡lt.LÀ¡ The Crude Oil remaining after deducting Royalty L å i ll : at¡y (J¡ :3-7 and Cost Oil from the total Crude Oil produced and G-i-J ç,.-¡ ç¡J-..dllJ êl-l.îyl È-l+ å-rl" ¡jt¡" L å'ï saved from the Agreement Area, and not used in çr erÅ3..,^¡l ¡ç¡ ti:Yl rJ- 4+ - JIJ Petroleum Operations, shall bè taken and disposed of ö- AJKI l- ¡¡, irL5)l Ê¡ái &+ ç¡J:"dlJ å.1" ¡jrl cJ¡L,Jl separately by the MIMSTRY and the d.-¡1" CK-r,t¡Jtill¡ cJ¡liJt cJ+,y.J"ÅLll éLli çX-+J CONTRACTOR in accordance with the sample :ot/t e.ilt .,Je¡ (j) ,jÊtlt ç-å r-r.1..3r)l C¡Jdl lqt calculation in Annex "G" and as follows: 7.3.1 For the portion or increment of production up ç¡-llctiiTt oj.r-rJ¡Ëlt 3l oj, r,lt ell3-l:1-3-7 to and including twenty five thousønd !¡-liôJJr-rieJ cJ"j¡ d-..--i (251000) Banels of Monthly Average Daily AE¡ït ostJ C_x*¡t l*¡Ë^ll r.l" cJr: (25,000) Net Production: :tf¡'rl' t sixty four percent (@7o) to the MIIIISTRY, and 6¡li-dl (Yo64l fui"tt¡ ¿u¡-¡ er¿¡î thirty sixpercent (367o) to the CONTRACTOR dJt¡¡ll (0llo36l fut-I+ ùJbÊJ iL, 7.3.2 For that additional portion or increment of -r--j¡ill ,l ;t-:ylej rJl él¡\ ì :2-3-7 production which exceeds twenty five r.i.Jt O¡.¡'.!o¡ å-.""¡ cr .' il çr-ll Al-iITI ;¡ thousand (251000) Banels of Monthly CEiyl dlJ ç-x-¡lt L..,¡.Jl tl" d¡¡ (251000) Average Daily Net Production up to and (501000) LÅi i,J,¡¡Å Cl".åiJ ¡J-¿.irr*#ill including fifty thousand (50,000) Banels of :çr.¡r¡!l *ptJ ç-x¡lt l--È"ll ry cJyr Monthly Average Daily Net Production: EE:)l seventy percent (70Vo) to the MINISTRY, and tJUJll (o/o7 01 fut.lt¡ ù${* thirty percent (30Vo) to the CONTRACTOR d¡lt"ll (%30) tut lt¡ ¿úÐÊ 7.3.3 For that additional portion or increment of çill6tiiYl s# +tJ.lt ,Í ;L-^:yt s l.+ll éll¡l :3-3-7 production which exceeds fïfty thousand À--ÉJl ¿r cJ+¡ (501000) r-Åi iX-¡¡Ä Le' iiJ ' (50,000) Banels of Monthly Average Daily ¡,""Å d"åJ d^4.rJ- ç+Ct 6t:iyt *jt*l çailt Net Produetion up to and, including seventy ç-r<-¡lt å--¡Jl r¡- cJ+¡+ (75,000) r-iJi il¡r+*,¡ five thousand (751000) Barrels of Monthly :,¡elt6tüYt oltJ Average Daily Net Production: Seventy fïve percent (75Vrt) to the MINISTRY, and ô¡llll (%751fut-lt+ ¡u,r+-¡ l.,Å Twenty fivç,perce4t(25V0) to the CONTRACTOR dJ$¡ll (olozslfut¡t+ ¿¡¡¿o¡ f,.."¡ M (75) (75) Agreement Block 29 é: ¿tl"¡ {Ft¡t I .J :l r* I I 73.4 For that additional portion or increment of ç.r.Jl6l-ü)r .-rr ql-irl .,f ;t-.ayt 'j+lJ étl\J :43-7 n production which exceeds seventy-five thousand Cr d+.¡ (75'0001 ¿i ¿ur;-..¡ ¡-,".å s5-r-ri¡ I (75r0O0) Barrels of Monthly Average Daily Net d-¿t ,r,J¡ çt'¡lJll GU¡TI dt-i €¡e¡lt À*,j"ll I Production up to and including one hundred 1 l*,rl"ll Cr cJ+; (1001000) citl L¡t d!"lr T thousand (100,000) Banels of Monthly Average 4 :.fC" t Gl$ll ç¡lJ ç-x¡¡t T Daily Net Production: I I ôJi¡ll fuLll+ J Eighty percent (80Vo) úo the MIMSTRY' and f/oSo) ùill . Twenty percent (207o) to the CONTRACTOR dJl¡¡¡l (Yo20l fut-¡þ O¡¡-1" 7.3.5 For that additional portion or increment of çJl6Etll .¡+ ù.JJ.lt -,l ;t--ayt e 'cl éll$:5-3-7 production which exceeds one hundred À--f.ll (J,. cJ+: (f00r000) r-ii fut-.er;,J thousand (100,000) Banels of Monthly :ç¡"1" I CE¡lt ç¡lJ ç-x¡lt , Ouerage Daily Net Production: ¡iUll+ I' ô¡l¡rill (0tloS2l iu.ljJ i¡$l Eighty two percent(&2%o) úo the MIMSTRY' and drttull (%1S) ful*It J-ie 1+ïl Eighfeen ¡rercent (l9%o) to the CONTRACTOR 7.4 Valuation of Crude Oil : ¡Lållåi¡ll.p¡ ¿rii :4-7 7.4.1 lt is the intent of the Parties that the value of ¡ilSll-t-i¡ t-$ ¿rl --1" iÉ¡tll i .¡i s¡r ãr¡l :l-4-7 the Cost Oil (and the CONTRACTOR's ,j"--Å.ll Êl-å'll.Li.i-ll ù- cJsLLlt ä--¡l) Production Sharing Oil for the purpose of ¡'+JJ'&.+ll LliJ a#.'-å r Js3 ,r: uil ¡SJl-Lll ROY Income Taxes as provided in . å¡." (otiJ Q-l-g) istJl o-e eL+'l-"s ¡.+ióJl Article 9.1.2 below) shall reflect the prevailing A +ÅJl úJ-Jl ç-å ril*Jl J'-.Jl L¡,'-l¡l market price for Crude Oil. For the purpose of 4$J-Jlå titl ,+$ g,a '-¡l¡.eti.¡l L¡i ll evaluating the prevailing market value of the leã-'ì ..t,rill ¡-¡lSll L å¡ i J¡Sl6r3l-Jl quantity of Cost Oil to which the ¡-ji" CONTRACTOR is entitled hereunder during ,i4a¡Ë Í;- ¿+-,r cJS oLnf t¡iYl +.rJ¡+ ij¡tiJt each Calendar Quarter, the weighted average åi.t¡ U*+ úiå4¡l l**"ll e+J-ll l--f'.ll rJ"'L{ price realized in freely convertible culrency, tl¡lr++¡ úÞôðjlij¡ ¡4e OlåiJ -r-lt ,¡+r":tt from F.O.B. point of export sales to non- (n.O.B+¡*) ål¡till 'È Êl-'l drlj"lt ,l;-¡t-¡¡Jt Affiliated Companies during any such Quarter J.öJt¿a ¡-¡úc i-stSll-¡+t éIl¡J ¡¡.r-'.tll ¡jô çj at arms length by either the MINISTRY or the J ¡+liî!l ¡jt¡" ùá éllijl ,dJ,'i"ll å+JL- êt¡l CONTRACTOR under all such Crude Oil C-il ¡l li.þ[3 A-.r.8 J+ dis r-i sales of the Crude Oil from the Agreement d¡li"lt, ôJtjJ-ll (-3I diSJ-.iI¡ äj-lt A¡ea then in effect, but excluding any L¡¡ ll c¡t-'++. s-à,. L-{+b J-¡lJ government to government sales that do not . tÁf Å-l.ll reflect intemational oil market prices and any fuJl- ¿¡,-S¡,#ll t-i¡tÅiyl Ljti.ql el-i.ll Crude Oil sales contracts involving barter, Y ,'ill å-é.J L ¡<- ,y CË .yo eÉü-l¡ dJ'iJl whichever is higher, shallbe used. Prices shall Ft+ ¡¡-ie3 4 +Áll.'ll ú}-Jl Jl'-..,| L,nI'I be appropriately adjusted to credit terms &t-+ ¡-i!l ÉF- ¡-åJå.ll+ et-iJl.t¡¡-ll providing for payment within thirty (30) Days 6.. c'r*,üE t * rt -..'Tl c$ dl¡,¡ ê+ .rl-^i¡ çf from the date of bill of lading. Currencies 6-rt5 ir t.s (30) ¿"ÉiÑ iù ùÅ ¿lrll I ¡-r s other than Uniæd States Dollars shall be .sJåll dù--Jl t'.,,, d-r"J.i ¡¿-, .¿*.ilt ¡. ¿l¡l converted into United States Dollars at the rate el¡"ì,¡*,,r AÉ-rTt ¡ .-t ^ll ûl¡Y¡ll drl-¡Y¡.1 -¡¡¡è for buying United States Dollars with such ll ¡l^,ll élS dr.li" {¡S._xTt ¡ '-rJl d¡l¡J¡ll _¡Y¡.: currencies as quoted by Citibank London, at ôJFiLJl åcUl ¿''tll Él+,#¡t- él+,J cþs-y st l0:30 a.m. London time, on the bill of lading ¿*ill i..-¡!a e_lt4 ¿¡.¡l d'+¡-i3+ Cl r. . å . lll3 date for any such sales, and if this is not a el4ll ¿t-S lSJe ot-'1¡ll cLb ¿'" ç! e+Jt éll¡ *+ banking Day in London, on the next dJl ù$l éll¡ q¡ lilr. succeeding banking Day in London. êJ+ ->.*. êrÅi+-å çÉ êJ,¡l"l .a+! ç$t It is understood that in the case of C.I.F. or , ,JL'*É ail other sales on delivered bases, appropriate år"î ri (C.I.F) r,.,c¡1,+¡ll ¡-¡6i"ll't-r.r deductions shall be m¿de for applicable freight di-å"iÀiillçr*r pl*¡¡t,/L-i *& ¡.9¡'il ot4¡ and insurance charges to calculate the F.O.B. ,-rl-.".J )...áJ¡ ¿¡*^bI¡ djill .-i¡l.ll3 d!li^ {-Þl ¡ryint of export price. 4l¡i # (çY) Y'¡l /)^ Æ 4,," (751 (75) !¡t¡t /\- Agreement Block 30 -*?)$.'ill i¡ ¿t¡¡ N'/V\ 7.4.2 11, during any Calendar Quarter there are no such äJtill ,ì+il+ drir c¡lr#¡ll oå-¡ di^ r.jj Ë t¡! iZ-4-7 sales by the MIMSTRY or the CONTRACTOR ,¡. tJâ .t+.ùôlj*,¿-r.-l,Jl ùi, ¿rt-i.tt ,f then in effect, the MIMSTRY and the Êæl+ I r.^11J ¿l j¡l-i"ll¡ ãJljll ,sJÞ CONTRACTOR shall meet as soon as practicable, irl ¡l+JJ ,r ll "Jl L-¡.. Ull irJ ü-S¡¡,'. ãJ but no later than ten (10) Days after the end of such ¡-,þ ' ¡L-rJ (10) ãJ-lD, ¿, ^ .r-r.¡Ë I Quarter, and mutually agree upon the price of -L-¡¡ll '+ l-- elti Crude Oil to be used in determining the value J.r.^.,,r-le 4ll¡d*l e-+¡lt mentioned in Article 7.4.1 above taking into ç+;lés-ll L¿Ëll +'-i d ¿s¡rrj ç$l ¡lÅll account prevailing market prices for crude oil of Jt*.,,| JLÞT| ¿u.+ r.iïl6-.å-J.t .r (l-+-7¡ l.¡Af similar grade, quality, quantity, sales' å-._¡. J¡¡l J¡ Låï ll ö$l-Jl I terms in ll--_ill .!r-lt i similar geographical markets during that period. dtJr*Tl çr ÀJÉlJ {åL++¡llJ L+.SllJ A-JÞC|J I ¡ Pending such mutual agreement the provisional JJ cj¡-¡lt ¿u-l¡.e¡iil,t clb dl¡ ¡St "lt 4¡ÀtJÅ+Jt i price used shall be the last price determined iL,t-Yl .,t+tJl é¡J¡.i"Jt t¡À î , pursuant to Article 7.4.1 or under 3a .r.îJ.{ ¡Jt ¿¡g ót¡T1l I this Article 7.4.2 oiA tl0-4-7) ö¡Åill .,.tJ¡¡.rr-l ¡.,¡ ¡ÄJ - and appropriate adjustment will be made thereto rd'13 år*.UJl cùl+r-Íll rf_n:. ¡ (2-4-7) ËJjiill i after determination of a mutually agreed price by -1" Ì .t . d¡li"ltJ ¡¡lj¡ll t¡b ú¡l-É _¡..¡ .rpsi rr+ the MINISTRY and the CONTRACTOR. 'r*"¡l I 75 Tanker Liftins ,". ir _ :cùEull clrv¡¡j ¡g-/ At a reasonable time prior to Initial Commercial ff-¡ 6Jtj r-Jt #_-ri drL_G Production, the CONTRACTOR shall submit for qe-¡l--+¡¡t el-iiïl çi ". lll cJ-+ä dJ-i¡. consideration to the MIMSTRY a procedure for cùLil-jll crY¡¡-or LJ35 dJel JÊ.. !-1,#+!l scheduling tanker liftings from the agreed upon l--{+1" ú'--i3¡ll ¡¡, tll (ùt-¡¡) å-!ô ¿-.- point(s) of export and shall negotiate with the å-L,{Llt .:¡-i¡ll cj_l-6Jl ì!l ê---{ er-.rliÐ MINISTRY acceptable provisions relating to iF Jlsïl ûTJF4rllJ d-t'lt oVr.*r.lt rJ6-Åt ejllJ underlifting and overlifting of production. Such ¡l ++_l¡.ll fu*.ûll d_¡r¡ U. d5-Tt élh d".jüJ .Ctijyl provisions shall include periodic and at least ûYj-s.lL r.ilj¡t+ ,3YJ'-rX carLJl e.-tt cJSlt **, Quarterly settlement of overlifls and underlifts in .6JtjJt Jlc.l f+ f¡Je J f$i t-! uâ¡t¡lt+ cash or in kind at the option of the MINISTRY. 7.6 Ontional Purchase of Crude Oil :¡t¡ll åÅ¡ll ¿i¡ 4ut+iyt c¡t¡,¡¡¿¡¡t :6-2 The STATE shall have the option, to be exercised ùj cLl-¡"ll Jl¡-.iJ .r-,a _¡latJlå*_¡t-.t- lJ¡"ll upon at least ninety (90) Days'written notice to the cj-¡ cllj # f-¡l (90) i'rJ--..íi¡- d-¡ Y äJiå CONTRACTOR to purchase from the elj3ïl ç-å ¡SJl--.i"lt-t-ii ¿,.- clsl-i^lt å-^' ¿r.-. CONTRACTOR up to fifty percent (50Vo) of the ¿'- åJt-ll ,É-3 (%50) ûHrci J! cJ--J t .r CONTRACTOR's Production Sharing Oil. .¡.--ll élb The price for the Production Sharing Oil purchased cJ+,¡-.jlJ.i ê.rçJl GtiiTl ç3 åSJl.i"lt.t¡¡ -¡*,j! by the STATE shall be as mutually agreed by the C l¡lr .drli"¡lr ËJljr¡l ix+ !¡¡ ql" ,J¡rtl ÊrJ- ålrrlt MIMSTRY and the COMRAC-TOR. If no ¡ø ¿¡S¡*, ++ d"+-' ¿b .!t-iit )--t agreement is reached then the price applied shall be çJl J'-..,11 ,J! Cr d¡l-åJl ¿+1" ¿.-. çiJl ¡.ll L ..-É^ the weighted averuge price received by the .,isl Lt."- 4l ¡*r.E e-. ''-.Jl CONTRACTOR for its sales to non-Affiliated or.tr.t t li- J+è t3ts-É J! 4$*¡t" Companies as calculated in Article 7.4.1 above os ¡l ti1, e ,fiJr g.-tr rlr¡ o).cl (l-4-7) l.rrJr during the applicable Quarter. If there have been no ¡ ç.ll '-..J1 d+LJ*,¡ ú¡Jl éll¡ çFå úL'i+" år"l é¡tiÀ such sales then the price reached under Article7.4.2 l.i* ¿-,._ll éll5l (2-4-7) "o.rtJl o.å ol+ l-S LI d.--Éll for the applicable Quarter shall apply. .çj'¡ll All purchases by the STATE pursuant to this oprion .l ¡S3* Jl+ill lJ-ô ,r-lo cl-¡ LJ¡ll crl¡ 'i-i,¡ dl shall be on credit terms providing for payment within in-$l clL¡ ¡l' .,,t1 Url*f ,r-lÞ ¡-ii" t lSlåJ L-Í{ thirty (30) Days from the bill of lading date for sales ot-a¡ll åJ*.¡lq ¿'--.lll ¡-41" J+ 6_lLi ix ,L¡l (30) by tanker shipments, and from invoice date for othen c.l*t.ll L-..,¡lL' Ë r-rf ¡¡:ù!Ull¡ ¡j3à.l-ll ' ¿¿ 3Ji sales. '.iüll ' 'ctJÅll 7.7 FroductionForecast : é,'lJ*jf i7-7 The CONTRACTOR shall prepare and furnish to the. frEjy.l MINISTRY not less than thirty (30) Days prior to the ¿..+ fS ) ô.l-cr-Ë_j i¡Jl ¡¡j-,'¡ cJ¡l-j"lf ' t start of each Year and updated quarterly in that Year, ä:+J_r ê-. ¡ji,.l5 c.r-¡ c.l+¡ f-.S (30) ¿¡-Ð9, Agreement Block (75) 3l -Z (75) dr ¿t¡¡ +r¡r re yearly and quarterly production forecast report(s) f.>ltËAj-Jl '¡l h ¿¡-r J(-il åi)i c$,¡l li and setting out the total quantity(ies) of the ¡-+¡S,rJL¡.! r. -¡ 6tjj)l r:J:-+q t-r"¡l- Petroleum that the CONTRACTOR estimatei can be {-¡l cLu"ll Jr--.r¡.--¡t dr=¡-+!t ci-J¡S J used in Petoleum Operations, and produced, saved c\ Cl Uil | $! .l Cr .ELi3¡Tl¡ rL-6¡EiJ úl¡i and transported according to this Agreement in the ¡j-'ll i¡- C-_r cJJ, a¡*¡l ù---Å f-J¡t¡lYl Year and in each Quarter in accordance with good .4rlJ-Ér¡t 4ÊLiJl ,rr l+ul ô[-JlJl [iåJ Petroleum hdustry practices. The CONTRACTOR shall use its best efforts to ¡,+"Sll AlJ¡y D¡Jb{+ ¡¡¡l-aË cJ!,¿ ¿l dJi"lt sJÞ produce the forecast quantity in each Quarter, as å+r+3 ir- Uçþ ç-r+l lr¡ eåj- CnJ dSl ttr¡ -Ln.ll updated from time to time. '¡Y ct!¡ r'r The CONTRACTOR shall, in accordance with good rrl-r¡tø dJ--! f ärl clSl-iJt eJ---+ Petroleum Industry practices, store the Crude Oil in lij-ll i,Jj-Ái'rl "Jl d,J-¡¡ll Ã.clr storage tanks constructed and maint¿ined by the let¡' .JJ t¡U Q ci-jljÅ,-J eL---ill CONTRACTOR in the Agreement Area or each ,¡.-J"¡ L+j¡ c}l,r--å J ¡-$.lsyt ¡--it¡^ ç--¡ Development Area, as applicable. .cIJÊTl .,'.,- Measuring and volumetric determination of Crude .Lô LjåJÉT i+ ú¡* êLill -t¡¡Jl f+= +râ5J UIL$ Oil shall take place for the purpose of this :drj,.6jl+5lt ¿ir¡jjt åJ"i¡ ;1gri:Yr Agreernent at the point of custody transfer such as: (l)The tie-in point where the Crude Oil is delivered , ì ..Ll ¡l-ilt L¡¡ tt t++å C+ Ctrl",.jt ¡j¡i (l) to any third party for transportation or sale; or ,l ,¿¿¡lt Jl cJ¡ill .J+l ,¡ e'I3 (2)The point where the MINISTRY takes possession ¿r" Ë:.u.ll r('ï. - k+ ¡_jj¡lt JiÍi çill ¡!6iI (Z) of its share of Crude Oil; or J .êLillLi¡ll (3)The export flange of the storage tanks located at ¡,-åJÉÉ"ll ù-Ëi¡l Gf¡l+-t _¡gr^-üll ål.ii futr (3) the agreed upon points of export. .l.eJc' ú¡t^ll ¡gr^.tl J.l¡¡.+ The MINISTRY shall take Royalty and title to its åsJt-Llt-t-i: ¿,- l('ì -J6JljTI6Jljlt ¡it¡ share of Production Sharing Oil (in accordance with (3-7 6J-ll¡ 2-3 ô¡1-..-ollr Trl.) rÉ-¡ Articles 3.2 and 7.3 respectively), and the ¡j¡Sll ¿.J-Å+ CLiill CONTRACTOR shall take title to Cost Oil and its a3-,as¡ -t-ii úÞq L. d9ti"ll is[¡ share of Production Sharing Oil (in accordance with Ë¡l_-ollf ãlL Gl_i¡ll fÉ_! asJLl"ll L år ù!r Articles 7 .L and 7.3 respectively) as provided for in ¿ ,¡l¡ this Agreement at a metering point at the storage ¡l +j¡¡ll G+¡t<-,rÉ,/$lt iÀi¡.r¡ 4$1¡ï11 o¡Â *s tanks or at a point mutually agreed upon by the .¡_jj¡lt¡ drl¡"ll l.ëlc ú+ ç$l ål¡¡ll J¡o CONTRACTOR and the MIMSTRY. ARTICLE 8 å¡ri¡t¡rr.¡l TITLE TO ASSETS dJ=¿$ I Jtt 8.t MOM shall become the owner of all assets acquired *-$l dj--!l å--ålsJ å . cl---tst+ CONTRACTOR is entitled to the full use free of dJ-+l^,Jt+ ãl---,.i"ll¡ L-jl.+ t-#lJ charge of all the fixed and movable assets referred to 4-J¡UiTl ol I Jt-.Llt above in connection with the Peholeum Operations .¡_åi+ç¡"a,3 ç-tll ¡-+LJtuit hereunder or under any other petroleum operation 6 r--.-il ¡-+¡¡-h, ,t * å-r"f s--biË"+ Jl entered into by the Parties. The CONTRACÎOR ,¡l h ¡i C-J¡ .úlJr.JTl L+¡r.¡l C+g .J.u+ shall not dispose of such assets except with the û- å--.ES 1ïål¡"+ YJ dJ.-Tl o¡Â ep ,-¡Jrátlt ó- cj¡tilt written approval of the MINISTRY and subject to .àuJ ( 7-12 s 6-12 ,s-[z¡ ¡t9cll rãrLr ËJtjJr Articles 12.5,12.6 and 12.7 below. t : 8.3 The CONTRACTOR may freely import into +tell .-'¡tásJ JJc,"-*+ r rJ¡.-+ ¿l j3LiJl u¡S+ :3-8 ROY the ôfYl rj-{¡i*Yl ¡-,Jd o-.å L">+ J:-oÐ and use therein and freely export at the end of ot*¡L..ll f iÈ 6Jtráll i¡.. h-..*lt cl¡* crl.r-r-.113 such use, machinery and equipment which they éll¡ 3l . ll .l#- d"-fuJ ,Ai. å.elt U¡l*"tt either rent or lease in accordance with good "$ JJ¡J| ; Petroleum Industry practices including, but not crr-lJl ôl.r---o _¡l;s-l c l--¡ll y cli-j.lt limited to, the leasing of computer hardware and .o+.1>.¡ e$l software. ARTICLE9 ll...,EtlË¡L.Jl TAXF"S AND BONUSES e-¡¡ll3',' rltÊll 9.1 Iæ (a) : r¡-¡1.¡åll :1-9 9.1.1 The CONTRACTOR shall pay a fixed å-jJ.lJ t.-r-r. A+*j dJLî-CJ e-+ :l -t-t-g percentage tax ("fixed tax") equivalent to i-Ð-i I "¡"ø ¡ru,_^ålt) . three percent (37o) of all its actual 4i+Jl-4.¡ r¡t.¡i" (å¡.t¡lt Exploration Expenditures incurred and paid cJ- ¿,- tJl*lt+ (%3) in conducting its Exploration operations. q¡l--,å-Si*Yl+ å--UJl A-f!-¡ll This fixed tax shall be paid within three (3) Êt--=Éll å--...-e Jrr-.ll ¡ å-!.0-'-.ll Months after the Tax Year in which the ê-¡-l .¡.--d- l-iSi*)l l-it+l--+ relevant Exploration Expenditures are (3) ù-J. åir.till L.rrJ-åll ò¡-è incurred and paid. Such payments shall be ¡-¡rr. ¡i-ll J--{-il made to the ROY "J-åll tax authorities and shall be ,-ir¡Jl--¡ll ,¡l lt "i "-ill ¿-åJ t-{UÅ e¡ accompanied by statements authenticated by L,L,-" J! ðta"lt ü "'-r¡t the MINISTRY setting out the relevant eq¡ø å..;i"¡ll eor.l$1,K3-yl Exploration Expenditures in reasonable L+JJ&.+ll ,j ç.tt-¿lt, detail. Within one hundred fifry (150) ,gl hl ås.åJa¡ ËJljJl Ur¡ ôJ¡i'i d,rt¡¡*ìSl Days êJi:J .cbi'¡ ,-! . ;.r å+åt-ist-Yl dltiiÅill after the end of each Tax Year for which this L¡l- ¡¡-n ùLÅ dJLi"ll r;¡¡.¡ ôJlj¡Jl fixed tax is paid, the MINISTRY shall årru-.åll åill Ly" (150) furnish to the CONTRACTOR official o3 i,.jii¡ÀJ evidencing the payment of such tax. ,1,1J.' X élS +¡.,i ..:¡+f 4F..,J d,¡)lkih ffireceipts v Agreement Block (751 33 (75) $¡¿ul{$tut Expatriate employees of the 4-¡1. dJlJ.ll ,..¡-¡l+Tl :ç -1-1-9 9.t.1(b) and their Jl¡"J ù¡"bdf' s-i+ CONTRACTOR, its conhactors c-tl-llJt+ iJdiLl"I ¿rtl+ll ir ¡+,1-¡Li"¡ subcontractors working in Exploration ch-lt r-r3tl¡-a ¡+ ir- å+¡t-l$-fl operations shall be exempt from all s¡ ¡itJ .+t¡-lt¡ çlall .,...Kt ¡...olÅll personnel income taxes and similar taxes in c¡l-+I.ll LU-=Å 4-$dl- l å-ÐJ'6.+JJ the ROY during Exploration operations on ûl-.åÐÉll J cJåJl s-le fiåL-lSl-Tf all income or reimbursements paid by the rrl. 4ÞJeùll CONTRACTOR, its contractors and e6ll¡ti"¡ ¡tÅ.¡ cJ¡l¡^ll cJ+¡ 1',tr subcontractors on all income from any gltå -¡rt-" fuJ ..¡.,J..lt "Þ ,.¡tt+¡t .¡ sources outside or inside of the ROY. .¡r¡dll fuJr{¡..lt dJr J 9.1.1.(c) Expatriaûe employees of the d. ¡li"¡ drl-¡"ll -,.r.it'. !l irr.ÞCl êiË+ :e -l-l-9 CONTRACTOR, its conhactors and their c¡t+Le sr! uglij"i,.lt .Èt+¡t r¡ ¡c+U,i.-r subcontractors working in Development and ,:. 'Á , ,,',1r.. ¿lJi eJ"+J 6Eilt¡ i¡"fll production operations shall be subject to all ,o.l 4-EtJl t-l3l)-ålt¡ di'.t¡l ,sJÞ cJ-,Jl personnel income taxes and similar taxes in i¡l g;¡E ir l-¡t.ú"| (4+.J.1 å+JJF+tl the ROY as of the date of the first conversion ,rlt 4¡¡ r'+ t+$¡ 1+"S ¡it].o J! .!-n of the Agreement Area to a Development ¡l}TI .,Je d¡¡ b-,r-.- çfr ClÅJl Cl"ls Area and thereafter on all and any personnel å.olr"ll +,1. cJ¡tiJl cJS o" income paid by the CONTRACTOR, its 6:1" rlLr ¡li"¡ t contractors and their subcontractors in i r^Tïl| *1_¡þ,jJ+ *¡ ott-+lt ¿¡- respect of Development ând production g-lt-i 3l iJ.: ¡.rt--.. a-,J C¡. gsTl¡ Operations from any sources outside or ¿¡t-il r itL ¡ jtCl 1-*Jr¡¡+1. I inside of the ROY according to the income .¡ì*¡"Jll e.¡JJ(¡+Jl ç3 ãriüll 1þsll ,,'rl_,¡,.a tax law in force in ROY. : d:Å$ ¡+Ð-å z2-l-9 9.l.2lncome Tax t-61e-^+ þ çT 3l ,=,rl '.¿ll dS ¿1! Any and all taxes to which the CONTRACTOR "i¡l¡ of ROY that are .fl¡ A+"rt"t ¡+JJ{-+IJ ¿gl¡É r.-ç-¡a cJ3tiJl is subject under the laws the 6¡¡¡ ¡l ,E+-;rll ¡l ,çþ-r.Jl ,JÞ l.c.lt-À ê measured by income, profit or tumover are , uil¡":" + t¡¡ t+rl.J ¡1*Ìç, å¡." c!3 cjtJ ul¡ hereinafter referred to as "ROY Income Taxes". ¡-¡31 r--a ,-n-Ås ."år¡^Jl å--JJ&.+ll cjiJl For the purpose of ROY Income Taxes, the total t 4+JJ{¡+X LJiÉ ! ¿!-r iai.rl. dår-ll taxable income of the CONTRACTOR with ç1t..'. tu*J..åll respect to any Tax Year shall be an amount å-,çi* úJdt¿ L"iå ¿--tsJl ,J¡61 calculated as follows: :*:Ut ,.:tt -Jo +J...:st "lJ fil+ i+>¡ (Ð The total value of all Crude Oil (determined o.ârrÂi tJ+Já{ 6$À.I) i4¡üll çJ-+l (l) as provided in Article 7.3 above) received by êBll-ti¡ll .J..; (ô).c1"3-7" ËJll the CONTRACTOR in such Tax Year ¡j*,ll él-b.t' cJ.¡UJt 4+lÞ d.-.' ç5ll pursuant to Article 7; plus .frilj (7) ã.:l¿ll f{t 4i#J.åll (ii)An amount equal to the CONTRACTOR's 1+ 'Jt-+ll .,,i1 r.:J¡¡¡1..--Cl*çf (2) ROY Income Taxes. ¡.r$¡l dl-jls l¡.! .dlåJl s-lÞ r+"ill If the total value of such Crude Oil received d--. #ij elJl .L¡¡ll élhl t*d" t -Jl in any Tax Year by the CONTRACTOR as -¡ø LS'ç+l-'- å! å+f ."f cj¡l¡"Jl qlt set out in Article 9.1.2(i) above is equal to çr¡1,+ o).cf (l) 2-l-9) iJJl os cx+ zero, then the CONTRACTOR shall not be f+ltl" cJ¡tjJl ¿¡å ¿l U.¡" rf j- required to pay any ROY Income Taxes for çJ t-,åJJÉ" cl-i.t ,,,',1 ,-.a,ál i-+ such Tax Year. .4#J.åll fu.Jl él]jJ ¡+¡"Jl 4+J$-+ll 9.1.3 The MINISTRY shall assume, pay and +lJ.å ir d¡tjJ ç¡JÀ r)Åh 6JljJl e¡Ë :3-1-9 discharge on behalf of the CONTRACTOR, i.:Jlr A.+i"Jll ¡+Jr{-+ll # U¡¡*ll ClÀJl the CONTRACTOR's ROY Income Taxes out Êl:ll-ti¡ll ¿p r(r, - cr cj¡t.ïJt ù- å-,.1$ of the MINISTRY's share of Crude Oil under .4iEtö)loie ,+-eni+ A this Agreement. /h l/ \/ =P Agreement Block (751 34 (75) é"rEtxa+¡u:t 9.f.4 Within one hundred fifll, (150) Ðays after the ¡'+ L$ (150) iH.""fu ¡jL ùÅ ¡Jj¡ll ¡S :4-1-9 end of each Tax Year, the MIMSTRY shall 4*..,J düLá{ e*¡¡+ ¡t¡+¡..- ¡.i*, ds ¡+t{¡ furnish to the CONTRACTOR official çLjl .-il dJL-i..¡l ¿-ir,". rìr,j¡L-ï-oll receipts evidencing' the payment of the I :lJJ t 'î ìl ç-å ¡--åJJj4ll d-i¡Jl CONTRACTOR's ROY Income Taxes for ¿l rJ.c, .* ltt-l .' tl L¡*ll,¡llt I' J, Jll such Tax Year. Such receipts shall be issued LâL¿-o ¿¡-c ã¡Jr- dr)I,..--#l cJS ¿¡S, by the proper tax authorities and shall state the UlllJ å-i4ar¡ ¡.,. ll;p¿-ll amount and other particulars customary for db-" ¿Jl-+"X such receipts. .úYt ¿¡Jl élb cF" cÉ ttb L¡Jbi¡I 9.1.5 In calculating its ROY Income Taxes, the d-rJl çr-jl-"-åJ l+Jt*¡i-al :5-1-9 MIMSTRY shall be entitled to deduct the öJljll dr-Å:,å J ¡ -J ll 4-+Jr-C-+'ll ROY Income Taxes of the CONTRACTOR ¡.-...cJ'¡ù..11 cJ-å.Jl r..r:. l-,¡,.¿ ê-a.s..¡ paid by the MINISTRY on the .c!U-.lt ¿- å+t+rõJljdl d-+¡ ir- CONTRACTOR's behalf. 9.1.6 The CONTRACTOR, its Affiliated Êël-JL¡"J ¡-rt¡ll 4ilSJiJ cJ¡tjJt ,.i+ ;f-t-! Companies and their contractors and diJl -1JJ.åC+"+ r¡-,.¡tt+lt ,¡ eC¡tL¡ subcontractors are exempt from all ROY l-o¡ åiL:^lt çr|.,-lt¡,¡¡!l +lJ.åll LålSJ Income Taxes and all other taxes and related *# i"ll ¡.-r-.JJl L<-y ¿tl.fl I e ^<- ..j taxes of any nature whatsoever payable in ,,Jc Aå.13t¡"rdÉl ¡..cç ¡dpl,l åÐj{¡+ll ROY with the exception of the fixed tax as (Lt-t-q) i.rlJl oj l-{clÞ c}.J--i"lt J¡sll stated in Article 9.1.1(a) and the ROY Income .Jr.ll "þ 4*¡"*ll år"JJ6.o+ll 1*-¡- lS¡ o)ol Taxes as stated in Article 9.1.2 above. .r)el (2-l-9) lltJt *s l.Hlo' Ljr-J"-¡"ll 9.1.7 Tax Staúements shall provide the :ç¡l¡^å$ eri¡*nS i7-l-g The CONTRACTOR eil-"is,l¡ ¡--Hl r5i¡"Kll 6rf+ clJi"ll ¡¡rrl statements concerning the calculation of the (1-l-9)$,lJ *# L{+l! Jl-Lll å3]jll 4#J'.åll fixed tax stated in Article 9,1.1 above, within çill d-- Ê¡r (30) ilJlJ-tll rJ)ls o)-cl thirty (30) Days after each Quarter ilJi ç¡lj ¿- clri-rJ å-i* e-t-l ¿:;¡ commencing after the Effective Date of this A--Lill diiJF.KIl e¡:¡i lrs,å$lîXl o!-¡ Agreement, and shall provide st¿tements f Íll ¡-¡¡¿l¡l ¡ .-..fe *J ¡þ.r,,.t|¡'..a erl.o]¡.la concerning the ROY lncome Taxes according Ls (30) ix3)llll r}t¡. o)-ol (2-l-9) $rtl to Article 9.1.2 above, within thirty (30) e\ ¡" a+¡..¿ ¡j- ú ,lsi{l Working Days after each Tax Year 6t31Yl dlll¡ C ç¡ll commencing after Initial Commercial oLå¡,.iSll e"J\ e-¡+ "JeTt ç*¡t$ll Production, and shall provide statements ¡+ l-S st¡åll é ,Ji"lt ia-¡.-l å--l¡l concerning the personnel income tax as stated ù-Þl (C-1-l-9) L¡ll ,r,.r Lël' in Article 9.1.1 .(c) above, within fifteen qkJ çt " cJ."" ¡3'r (15) J.i" ¡*,"À ùi. (15) Working Days following the end of due .óliàl-Yl J#i Month. 9.2 Bonuses : t-Å] fl') 9.2.1 Sjg¡glure Bonus ¡-j" äJljr-¡l : ¡.*¡¡Ëll¡åj¡ il|-g The CONTRACTOR shall pay to the e-+i-É J drU^ll 6sr-+ MINISTRY as a signature bonus, one million él-¡T3.t (>, l¡I3r (1,000,000)ir¡-¿L United States Dollars ,(U.S.$f,000,000) (2) ¿p¡+l 6s l-¡grll ô!*î¡ll c¡l+TJll within two weeks (2) after the signing of this ê' ïl å-¡!.ll¡Yl oi---¡ .r--l' CJC| C¡...-" Agreement the CONTRACTOR shall provide ¡l-otol çl-JaÀ ð-¡l-,¡.-ll J d¡l-¡"Jl to the MINISTRY an irrevocable Letter of *-s él+ çl ,Y l¡.rl+ .L!:oi¡.ll ,J-.t¡ ¡.;¿ Credit issued by any bank in ROY, using the (3) ËJl.oi-Tl CII¡ri*l.t e-Ji"J" I a-JJ¡t.o+ll form set out in Exhibit Itr of Annex "D", èlt" ùlS LS ,(.) 'ist¡f ç,i l.#le U,.J.-j"ll covering the full amount of the signature o\J ilJill þ-Ii e.# *f i.ll ¡lr$. erËél L'j" bonus, payable on the Effective Date of this .1gl-¡if l Agreement. Asreement Block (75) 35 (75) é-.¡ ¿tt¡ 4$.ür Dr\ Tiairutns Bonus 9.2.2 The CONTRACTOR shalt pay to the (30) o¡¡x dili 6Jri!¡ u:rffi '2'2-s MIMSTRY, within thirry (30) Days after the fJt-,ÞlJ ¡j-- cLJ {-;tl i¡- f n* starf of each Year stafing on the Effective 5. - çþL-Å ¡j-.. dlJ ¡l-i¡¡l ëjj ú,r Date and each anniversary thereof during f +rl gl u+r¡úfJ¡-=õ¡.!tls!--¡ the term of this Agreement, and any (100,000) ú-Í {-Ju oJ' ãr f-Jt extension thereto, a lump sum of one hundred ðr-.-ri.ll c¡t-CTCI tål¡T¡r +l thousand United States Dollars r+Jr-3 ìi i¡- l¡T¡r ru.S.$100,000) for the purpose of training l.eil' uåJ--rl,gl cÞt_..¡ 4_{fu"I1 Yemeni employees of the MIMSTRy and its - ¡.¡ ôJl tF-l¡ ¿F;ú¡J ¿HiEJJl Dependent Units. .¡+trll 9.23 fnsfitutional Bonus ß'2-9 The CONTRACTOR shafl pay ro the fJri*ËJtjr-x MIMSTRY, within rhirty (30) Days after the f-i_ t--l t-i!,. _-¡.¡.¡ju t--.s.j-S start of each Year starting on the Effective l¡T3r (50,000) L¡-ll ---t oJ. år Date and each anniversary thereof during the ö l-.-¡.î¡ll,:,t-CyJll Ërl¡TgJ term of this Agreement, and any extension elr '¡J 6t-lg (30) ¡¡¡--,>g d1_l thereto, a lump sum of fifty thousând United åj- dl ¡L¡ilt States Dollars (U.S.$S0,000) as an !$lJ" ¡-l C¡-l¡ er-JLj ¿,- "Institutional Bonus". 13;l LÞL-å.3 L-+U¡YI oi â Ë. s ¿þ_-:. 9.2.4 Social Develonment .tC +"¡ The Bonus CONTRACTOR shail pay to rhe : þt¡+yt 4¡¡¡¡t ¡s¡, 24-Z-g MIMSTRY, within thirry (30) Days after rhe EJL-..6Ji@ start of each year starting on the Effective å-iL. o_¡ú_e Uþ 4-pW*y¡ 4;s!t j. i.rX Date and each anniversary thereof during the Él-ryJll rÍrl¡Tsr ¿¡-r l¡T3r (100,000) !Àll term of this Agreement, and any extension cl.úl eLrr (30) ¿,rlill CHÅ Ls._J.Tt ¡¡¡jJt thereto, a lump sum of one hundred tì- d-l ¿,-.o: ¡l-jjlr j- thousand Uniúed Statcs Dollars -3 6¡J¡_ L¡iYl ol-r =_.r_: (U.S.$100r000) as a "social Development LÞt-i J ð¡-" (ÞÁ 4-J$J" Bonus". .td +.r,c çf 9.2.5: Research and Development Contribution :.lr*¡bil¡ e¡¡+¡l L¡L¡¡ :S-2-g The CONTRACTOR shall pay ro the 'oJlj r-ll !r, ." del-ÃJt iLr_ c¡F* MIMSTRY within thirty (30) Days after rhe L+.l; gf, i-giiVt å_-_J¡_¡ ô_-l st¿rt of each year starting on the Effective ir ¡T,¡r (501000) r.¡fl ¿i¡*,,.i'J$ fili" kJ Date ¿nd each anniversary thereof during the ,L¡u (30) ¿gt)f d)'Å ðl¡i¡I (3tdïJlt et¡T¡l term of this Agreement and any extension ûl Êl ú--"_l iLjill 6r.J-i ùi.-r etü+t thereto a lump sum of fïfúy thousand United .L+LilYl ¡l-¡ ô¡--c,Þ-j A-+¡l+ ¡¡- States Dollars ru.S.$50r000) as a Research ,"! -,Jl A-oÂl .".S L-¡oJ å--""i cJ¡-.-. ¡-¡o å-J- thousand (25,000) Banels per day for a t-3; JJEII period of thirty (30) consecutive Days. (30) ü*iX5 6r-ôl erË¡l+ d+": (25,000) .AJ.l5. Two million Unit€d States Dollars r3l¡I3r i¡-r.¡T¡r (21000,000) fu+L ¿r+il -t: (U.S.$2,000,000) within thirty (30) Days ¡+_¡ill after the first date when the total average L¡¡ (30) úÉU3 dtÅ ôr¡i.ll ,å-l'JJll daily production of Crude Oil produced L ..-Éoçlt-+J ,'i, tìlð-¡l-¡,J¡l . ..1 and saved from the Agteement A¡ea, and .Ll3--s.cll-e L¡¡ n I not used in Petroleum Operations, has A3i¡f ¡lJl ./Fl" GlJjyl been sustained at the rate of fifty ç-å erÅ3.*^ll ¡+¿¡ {altiiYl å-it¡. dr-" 4-+ (50,000) ) .ilf ¿,¿rcå' cl¡-'-. ¡io å-,l-¡j.ll ol-;!cJl thousand Ba¡rels per Day for a L¡l (30) i,Jil3 ãJÊil ÊCl # cJr+ (50,000 period of thirty (30) consecutive Days. .4¡lts" d- Three million United States Dollars Él¡Y3r ¿¡r ¡Y3r (3,000,000) Õ*d" å5¡3 -l (U.S.$3,000,000) within thirty (30) Days i¡l)l ùl å-cfuÉll ðr-J¡ll ,ål-,JJtl after the first date when the total average .-,J -, t-¡l (30) daily production of Crude Oil produced ç¡-'. ! fJ C1.-lU cJ¡l ' t- and saved from the Agreement Area, and Asjll pßl t-¡r n.r#JteEjYl *-É^ not used in Petroleum Operations, has çe erål-"ll ¡gê3 4$-f¡fl ååLi" tJ,ó q -Eä..113 been sustained at the rate of Seventy five .iJf ¿'¿'+-¡ ¡.""i dJ.. ¡¡o ,U¡-É.I crl¿!"'Jl thousand (75,000) Barrels per Day for a l--* (30) drp:)l6ji¡l Êdl *,, ú.r (75,000) period of thirty (30) consecutive Days. .4dI5" Four million United States Dollars r:rl¡Y3r ¿¡-r ¡T3r (410001000) iUrJ. tr.¡.Jl --À (U.S.$4,000,000) within thirty (30) Days ü*-$lJ ù-l ¡ t+:-'tçl er-1, .çJjlJ"L-f related facilities, shall be carried out through a ¡rlet-ii¡ å-,J ,l t4ti 4--åI!l "Republican Resolution", duly notified to the ¿-¡ . u+ ¡¡J-rc JIJ-I L-e+ Al-.1" CONTRACTOR. .l-r-,¿ lJtli! cbli^ll 19.3 Indemnification except a final : clå-*y¡¡lt ¡l-l! In the event of any requisition, e)+i--.")l l¡-e e)rü-J çl å-ll5(Éi--* requisition referred in Article 19.1.1, the (1-1-19) õ¡l-oll ùJ-+"Jl ,rJl--+¡ll GOVERNMENT shall indemnify the er'--S ç-i x CONTRACTOR for the period during which the ã ' Jl (P dJL-iJt cirgJ'-4 '¡<-ll requisition is verified, including: .l\ I d;.f,# e)ãú-Yl q$tE ¡ Ct l9.3.lDamages if any from any such requisitions, rc)+i-)l el-Ji ¿'¡ crr--+J ¿l ¡l¡'--aTl :1-3-19 except for any damages resulting from enemy iJ- æçi-Jl JJ-åll çl$-t¡ attack on any Development Area or to the t +ü ¡-¡t¡" çl ,* J' Jl ê.¡l-r'l ultimate recovery of Crude Oil from any et-ålll¡i-l! s-r{Yl u!á}Å3-Tl J Development Area. .å+"¡ A¡li. çl ,.¡¡. 19.3.2 Full payment each Month for the cJS.-r- cj¡U"lt å.-.1tj"3 l{Jei åLlS c¡l¡å¡ :2-3-19 CONTRACTOR's share in all Petroleum !q ¡-^Ji ¡l indirectly, any of its rights, privileges, duties or ¿-:Lsl¡ Jl 4-+ A+-lJl l-dljJl ,l r-iri- çf obligations under this Agreement without the prior tli)l o5----¡ 4-:Ll¡il written approval of the MIMSTRY. The r¡9' J 1-râ. ,_.å:¡^+ Jf cJ3t-iJt ,s+t.õJl 'UJl ¿-. i;¡-'- iiål¡, CONTRACTOR shall guarantee the performance of rull f-{+ll -å-,,.tlS such assignee, in, accordance with the terms of this l-iå31 cl djl et.:ï ú-------:¡- ¿f Agreement. An entity comprising the .a.-+Uífl â!-À ,-å i.r-¡l¡--ll .tJJ'-.åll CONTRACTOR shall give to the MINISTRY a ¿.e-S3¿çi tt ¿1-¡$t cj-.ll# e¡i¡ pJompt written notice of any assignment to an' Jl djlJ çl ,y L#lls ðJljCl ¡Uaå1., drt-¡Jl 4i" Company,. .4*..8 ¡S-¡.i Cffifated , ,ø ll, ( Acreement Block (751 48 (75) S-,r¿rx4¡u *N\ 20.2@ ninety (90) Days from the d¿te of the :i¡|.¡uJlllål¡¡ iZ -20 Within f.-.¡s (90) ¿¡,-¡ ù--å,ãJl)JJt ,r---h3 fulfillment of the last condition under this Article rr-,-äS¡i r,.--,,5!t L.-lll ì Jåil e"Jl-3 iF..r 2O.2 as required by the MINISTRY by any entity ç¡--Jl J..-.-.ill (2 -2016¡l-ll oLa constituting the CONTRACTOR of a proposed 4--j¡ "--1" ,ryöJljJJf 4-+tl'l assignrnent under this A¡ticle 20, the MIMSTRY i,JÈSi¿ ¿t-;S Lfl shall give its approval to the assignment by any s-áË^r CJ-lí.ll cj;t---¡lt iJL--.iç dJL---¡.lt entity constituting the CONTRACTOR of all or part ü-c djljll "J' t-c$åt.r ôJljJl çr.t'i,(20) ö¡tlt oi¡ of its rights, privileges, duties or obligations under a-¡y. ,¡ oj+ ¡l ,JS ,,1" cl¡li"ll r:^ OÉ r-rt$ çl ¿¡ this Agreement only if the following conditions ¿re t¡J X"r¡bTll orÅ ,,,âJo{ +5l-lJll ,l +:çt, 3i oþ¡* ¡l met: :+$Tl l¡¡llÅ¡å.",J-lr ?ß.2.1 The obligations of the assignor deriving ¡j-åtjll j_¡t-t"lt crL..J¡ill ¿..-Si,¿l :l-2-20 from this Agreement must have been duly c.¡,-:J uq lðJl fulfilled as of the date such request is made *--Jr å-¡¡" o3-l i¡,.-e and remain fulfilled on the date of the ¡.r-l çi ll ç_¡l-llt ,r-là q¡lJ ¡-r¡ assþment. .djtsll e¡¡E ¡¡ ôtå,.1*,Þ¡,.j¡cJLll 4+å 2O,2,2The proposed assignee or assignor must CJFir"ll q-J cJjt----¡¡"lt sJÞ +.+i :2-2-20 ,:. ..1ì¡ et-r3. ! ¡t¡-J i¡t-f"I produce reasonable evidence to the ¡.+il| ôellsllJ l+lLJli¡r:-ill ðJl _91 MINISTRY of the assignee's financial and ¿.-e ill technical competence. .+l d¡t¡"ll 20.2.3The instrument of assignment must include cj_lt-¡lt A-¡iÌ. J d"-S ùl ,,. ¡J i3-2-20 provisions stating precisely that the assignee is +J j¡tsr^ll ij,È C*et rSJÊ êtS-t .,lÈ bound by all covenants contained in this i-r_¡l-5J ¿¡¡r r1ll Agreement and any modifications or additions, o-¡ e ê++ ej-¡L in writing, that up to such dÖ[dr-ri l-tl¡ ¡ tsli¡:tt à¡----À time have been e.JlJ.-j¡,", l¡¡f u+.ts crtål-:l 3l made. ..JjtÄll A ^draft of the proposed assignment and all dSJ ¡-'JÊ¡"ll djl-Sll ô1.¡-"¡ ôjjC relevant documents supporting the request, cþ ,,. tutt 6.r-r¡Jl ¡.r-Ë¡¡ shall be submitted to the MINISTRY prior to C¡¡¿Jt e¡l¡tt ¡iåtCt ,$úil the date of the proposed assþment, for the .å,¡.^,,jt É-Él,djtIll purpose of official approval. o\J t tlu å-- å.Jy ).1,s l-lt! djls"ll é :4-2-20 ?.0.2.4As long as the assignor shall hold any interest t'. +J cjjl¡ill¡ cjjt¡-ll r¡" r-K ¿!¡ ¡å¡ätl3)l under this Agreement the assignor together dl+ rlrJtt úÉ¡å" l-S3á i,*j"qt-.å l-J#, å,J ." with the assignee shall be jointly liable for all oi--o .+¡ii,+ cJsljJt ôl-lj¡llJ ôtJr.JJ duties and obligations of the CONTRACTOR .4$w,lt under this Agreement. n3 Any assignment by any entity constituting the ôië Lalt- 4,ó tJ-tS _¡l ej+ i¡e cj¡ti"ll d$ il" djtl çl ß-20 . CONTRACTOR of all or part of its interests under e¡--l ¡l +lJ.å ¡r.T t -ålÅ iJJ+ i,l,-¡J* 4ì$tiiYl this Agreement shall be free of any taxes and fees q's l-+ rki++t d.ils L6. ¡didl lJ¡t.+ll os l+tl- of any nature whatsoever applicable in the ROY (ê+tl di$le.ft "J" ,,,11-p¿ll .,lÞ ."---$ )-¡ ¿Ili including, but not limited to, taxes on any sales cUil*.h .¿.:r--rll-l ú¡1" ll3llJ,J-,r"J"¡ll .,lo .,.T r.åll¡ proceeds and transfer taxes, charges and fees, eÉt- .¡ ¡-ijC ejUtr (%15) Ji' ä*"À å+*,'i. except for the payment to the MIMSTRY of fifteen ç.ål--' elt.-¿llJ.oLi.J ¡¡... ¡o l-S rg,¡ll el.rJe percent (líVo) ofthe Net Sales Proceeds, as defined ,-¡f-.,ú¡Yl ù- ClUl çùi¡ll èli"ll çri+ "C+ill úlú!Þ below. The term "Net Sales Proceeds" means the :/UIt -ttt amount resulting from the following calculation: 'tc' 20.3.1The total consideration paid to the respective ¿pt_¡t-tr.U) d_¡t-r-ll t¡-.lt Ér-ll CL.*! il-3-20, assignor(s) in convertible cunency in the form ¿l3 rl.¡- !f d.,"JJl ¡lil3 å1"4 (¿,J+r'.!t of cash, check, or other readily negotiable ¿-sr {¡*3 ¡+Íi JÍ él}"t{ ¡Íçú dS-i "J" instruments for any interest under this ç-¡ åÂ!¿¡ åJi! L.,.ill+ ell53 ç9¡Ål õJ,.åt¡ & Asreement Block (75t 49 + (75) ær¿tL¡4$t¡t *¡t Agreement that is assþed to any person, ,l unÅ-i ç! L{þ ,Jjl-r:lt ei+ å+¡t¿îJt o¡¡ firm, or corporation other than to an Affiliated åriill ÉlSJÞlll JJ l* ¡SJHI ¡lal .*" Company of such assþor(s) in accordance cra ¡LS! lär élJ¡J (ir[tjtJr¡¡Ð d¡t-¡:^tl with the provisions of this Article 20, less the (2) èþ¡ (l) êþ \ir I . ,irn (20) r.rtJl sum of (i) and (ii) below: (1) all costs, expenses, bonuses paid to the ãEJsr¡ll gJls crliÅill¡.--qlL{ill g:"+ (l) STATE, fees and expenditures of any L,J oti¡-,¡,.-"113 ¡+JI natue whatsoever incurred by the iJtS tJ*jlJ assignor(s) with respect to the interest so (dr.l. j|J^ll) dj|ell I e I -1 çjll t 6.crÉ assigned prior to the date of said dJ4 t4å rçJ¡t-slt ,.. lL þ¡l.i d+Ê assignment, and .l.rÞ djlJ"¡t¡sL-"Jt+ (2) all taxes ofany nature whatsoever (except r,$-¡ìtr'r-¿ù d¡ilS LJ d v¿lt 6ra+ (21 the said fifteen percent (líVo) of Net Sales i¡.r ¡jlll+ (o/oL!) '.ls ¡-..,¡åll ¡J-..ú Proceeds itself) of any taxing authorities c¡lÀl- ArJ U" e(k-¡iËll rilJÞ çd.- whatsoever that are incurred by the djt-r:"lt I (l -i ¡ri¡-ilS t-¡J {+-p¿ assignor(s) with the respect to said Y3 r¡_¡SLll ,Jjl.rîll ¡+*¡ll{ (ù¡1" jLî"ll) assignment. The aforesaid fifteen percent Aí-¡t+ (%15) r*-rll åa*.i (líVo) of Net Sales Proceeds shall not J*ic' ¡li-. ç_rt apply to any consideration received by the JJI "J" di-++ll æt-.a +. assignor(s) for said assþment where such ¿ $' dl-"a¡i c;ÀJ-o ç91-lt J-É3..oll consideration is in the nature of work elJi ¿ls tJtt d¡t¡lt éll¡ -$j drli"lt and/or expenditures to be performed ¡l ,:r.-¡t-.o., d."t dS-i "Jt ,-=¡-lt and/or paid by the assignee with respect to JÊ iår+ ç.r.Jl ¡l 4+èti # k¡ çf the Petroleum Operations under this å+ -ill+ 4-r¡r J ¡J+¡b d ¿J_¡l--s"lt Agreement. .4¡¡ËiYl o3l ç¡3 r â.1- _¡_,Ê-ll *þ1"'ll 20,4The CONTRACTOR shall, with the approval of the d-,ar"ll ¡-i¡ ¿.-c djL4 ¿l j¡t-i"ll ú.-.-J :4-20 MIMSTRY have the right to freely mortgage, pledge c¡t+LJl ùJ"3 dJ.-¡X 4i¡tiÍYt o¡Â 4-ù¡t-¡+ or otherwise encumber its inûerest under this åiål¡"+ cll¡¡ "þ o.r Agreement for the purpose of obøining financing for cr¡¡ll ¡l cl¡¡ LUÅ ù. a;l¡-È.tll the Petroleum Operations which mortgage, pledge or _j_¡*.1çl ¡J¡tslt éll¡,,.-. r Y ¿f iJ-"¡ eð_¡tj¡lt other encumbrances shall be without prejudice to the .i$ifXl oil o.-aii+ 6JljJl ú-¡¡*.1 MIMSTRY's right under this Agreement. ARTICLE2T ¿¡.¡,idl3 l¡rtrtl irLll BREACII OF AGREEMENT AND POWER OF rtifl i]L3 ¡+¡t¡îJl{ ôlÅTl , CANCELLATION 21.1 The GOVERNMENT has rhe tr,gn, ,o cancel rhis 4-J¡UiIlo5---¡ rl-4 .# ú-Àlt¡.-¡rS-X :1-21 Agreement by a Republican Resòlution with respect rL¡3l-i"¡L¡ ú--JrtJ l-+,qe¡j+ Jt )-il to the CONTRACTOR, in the following instances: ;l¡gjt ql¡sïtoå 2l.l.l lf the CONTRACTOR has knowingly ¡-+l¡_j-i-*X submitted any false statements to the ¡j ,:r..- cJ_el-ill Êr-¡ t¡! il-l-21 MINISTRY which were of a material o\ Éì ¿[-S3 åsJ-- LJè di-jþ consideration for the execution of this oì t ¿l >¡J o-s t-¡lt- lJlJÞl drUt;+ll Agreement. .4¡¡Li:Yt, 21.1,2 If the CONTRACTOR assigns any interest o- oj i.L-",¡ çt,.¡- .JrHl cJ¡ts ti¡ i¡-l-Zl hereunder contrary to the provisions of ú, (20) i.rtJl ¡lS.! ¡i¡lå. å¡r"JÀ+ 4$t¡lt, futicle ?.Dhereof. o¡¡ .¿¿!1.¡3Yl 21.1.3. If the CONTRACTOR is. adjudicated ¡-Ss. 4'òUl bankrupt by a court of competent i¡n _r¡t- é! dJfïJ J,{.,if l¡! :3-l-2tr jurisdiction. 9 .åi-3À.¡, rcw^ ßA Agreement Block (75) --/ (75) t'-¡¿trt!¡trt If the CONTRACTOR 21.1.4 the final does notcomply with ¡lJl Ak¡lt JlJill cLti.lt È,aii d t¡.! :4.1-Zf decision reached as the result of .". d ¡+¡l---.å¡ ôtcl.l-+T f al'ri arbitration proceedings conducted under oi-r i¡,-c (23) iJ-ll /J'T t ¡¡, Article 23 hereunder. .¡rgüifl 21.1.5 If the CONTRACTOR intentionally exhacrs urLr¡ çf t' - cJ¡l---i"lt E_;Êi--l t¡J :5-l-21 any mineral other than Petroleum not oå-¡ a-.t e^J I t..-. cJ-l>-:¡lt authorized by this Agreement without the ¡-.JS.ll "¡+¿ authorisation of the GOVERNMENT, except u*.¡ LF+{)i ¿rr 9l å-¡tSyt such extractions as may be unavoidable as i+J:i 4+lJÉ,3*[ r.r ìri úlS.¡'f Tl- el^û-l¡ the result of Petroleum Operations conducted o5-ò ,,. ìJri L"¡t+lt ¡-+l¡-Ê.,11 et-¡l"r.ll hereunder in accordance with accepted LJj+L¡l dil*Jl¡4l¡ I i¡J L_J¡tiIyl Petroleum Industry practices and which shall çi-Jl¡ A-J¡-É¡lt ¡.ctr lf ,r-¡ be notified to the MINISTRY or its t (h', rf irt ir--lt Jl-ti! ,,J .t representative(s) as soon as possible. .irs¡¡ ú¡J ¿! .-f a+ (kif¡" ) 21.1.6 If the CONTRACTOR commits any material oi-ú+t-;.t Y)t--jJ cJet-iJt cJ-¡J t¡l :6-l''.l breach of this Agreement. .4tgri3yl 21.1.7 If the CONTRACTOR causes, by its gross j negligence or wilful misconduct, material or '-¡ ì...êi op êJ-+ dlt¡Âb dJi¡ll çte^ü ll!:7-l-21 subst¿ntial damage to any Oil and/or Gas çt+,ç-re-9+ 3l ç.rL J*,âaLrc !o,il field or any relevant facilities. c¡ü-ì¡.ll i,-.pl+ ¡f çJ¿ J *l¡¡ dLi= .t-"e+ ¡iJlt . Such cancellation shall take place without prejudice to any right which may have LbL-Å! u3r el-ilïl ,gl li cLL \ år¡ accrued to the GOVERNMENT against rhe .', ,..J r ¡ ,;¡-Sl óF-¡à ¡-'J+ CONTRACTOR in accordance with the I ãôJ dJLi"ll cJ_+E ¿,-- provisions of this Agreement and, in the t lãt¡tjlo-\ I el..---S'¡Y event of such cancellation, the ct--rìll li r A-JLr q--3J CONTRACTOR shall have rhe right to ¿-a d-¡+ ¿l ¡Jrt--i"ll ú-...*J remove from the Agreement Area all its ¡--i}lJ^ iJ r.rI 4,-¡l5l3"¡ personal property. i¡.-...-. 2l.2If .å:$ËíIf the GOVERNMENT deems that one of rhe ¡ aforesaid causes (other than a Force Majeure ú,- L-.-ili l+{* éll-ia ,,j "¡.-tt c.¡L-:_.1 li! 2 -21 cause referred to Article 22 hereofl tiiYl tt exists to e-r¡. oL---¡ eL-¡lY ¡Si å{t- U*Tl cancel this Agreement, the GOVERNIVIENT L-#l! îll ô.-ill ç,¡-. -r. rl) shall give to the CONTRACTOR ninery (90) J-Lll!$l ç¡¡ Days' A--.S-ll ,r-Jo .:, îJå ((22) llt-..-ll .r-¡ written notice personally served on the ¡Ut _rr.' J dt*JÉ C.L¡s Jt-Li'þ drU"¡tè$ ¿f CONTRACTOR's General Manager in a legally ¡-¡Í c'.¡3¡'J- ...-,llå--ir.Jtll+ti ..ì d_el ã^ll official manner and receipt of which is 4-h*l ,' ¡ +-j)S¡ , -f ¿pi* acknowledged by him or by his legal agent, to ¡l-ill .Jl ¡l r_¡ remedy and remove such cause; but if for any ¡¡l' o *.-¡ f--¡lte¡l..oiJ..,f li-l å-Jl_¡) reason such service is impossible due to cl¡*,,fT è' - l¡! iFllJ rL.-,.o¡¿ (90) ûJ'---,3 unnotified change of address, publication on the )+àl-,¡ ê-.jl¡ll l¡--a er-. I ¿l çt+-!t ¿,- Official GazÊtte of the GOVERNMENT of J'+,,úll li<+ Jt--tÅ)l ¡.r-ca ij 'i'Jl J+'i.!,1 .!+ such notice shall be considered as validly ii---tlô\ JJÊ.IJ j-Lill li r l-i¡ ¿l-å served upon the CONTRACTOR. If at the end g- ¿)-el å-r.ll"i JF-++ å-..S.I t--.-{till of the said ninety (90) Days'notice period such +*Jl l¡-è ålljjr å.-¡ltJt ei: t t¡Jr.drt--¡"Il, cause has not been remedied and removed, this (#J,rÌ' lî l-.J$ (90) i,J'---^,!l i--rJa.i o-s Agreement may be cancelled forthwith by a ¡ Jãtö)l oi--l ot l[ j¡+14-il.å JtJÀTl öJiå Republican Resolution, as aforesaid. . .¡-l¡t-+ -i-r+ -l¡tll "þ /f Agreement Block (75) 5t (75) iJerÀ¡q¡u:l ÞÉ ARTICLE22 O¡u¡i¡[¡ þtitt irW FORCE MAIET]RE ô¡r-al-ålltË¡l 22,1 The non-performance or delay in performance by the ä+Lt.-,.o üþ..-¡,çt¡t-j.ll, ôJtjJ--lt r#'¡ al -22 MIMSTRY or the CONTRACTOR of any ç! ,u-lrq JJil-ilt ¡l or ¿¡t ei ^ obligation under this Agreement other than the ¿L-51¡1 ,{--;3ll!Yl oir-¡ c¡....a.J¡i Cj-jt obligation to pay any amounts due or giving notices 4-+ rt-¡Jl L:tt or Årìt shall be excused if, and to the extent that, such non- ¡li" rl e. ^ "-i ã 6-F--i ti .r.U performance or delay is caused by Force Majeure. ".ar-l .ô$l i¡-.----Þ The period of any such non-performance or delay, èlt--+" å-+l i. I Êlj-jÌll ,gl lr iF- together with such period as may be necessary for {-¡l--¡5.ôlJl---Jiyl et--_bc,l rî 4t :_-,* the restoration of any damage done during such L:lt . t$=fl*t delay shall be added 5" _¡lrt-l_¡lt Ê' çf--jlt¡¡-qlt to the time given in this å-j) ¿¡,-s: J-¡ çiJ ¡,, Jt l\ <¡ rl_¡J¡t s_3 Agteement for the performance of such obligation ,S. L:tt li I cÞt-. I .r¡ ,¡-¿ çf 6>.--y and for the performance of any obligation dependent oUJl f-¿fläTl oL-ò ç-¡ ðJJ--¡¡ll 6r-qI J! thereon and consequently, to the ûerm of this Êlj-ill ,fL+ c1-!3lt¡ êtj,-3lyt él--l¡ d--1"+ Agreement, but only if the extension of the term of iJJ-+ ¿l u---l+ a-f¡$!. L.J ¿ +lc ,,. rrif this Agreement is relevant to the performance of éJ¡ ).^-i" digityt _¡--S.l such obligation. .êljlYl iÉi'i ò¡À ir.l q:"ilt clll X\.2"Force Majeure", within the meaning of this oi-e e¡r-tnçll.Jj ç-.i (i¡LillãJill) ôJLr'., ^ . \:2-22 Agreement, shall be any order, regulation or Jl A-Js.lt ir- {+-f J A-.iy tl yl cal L+Lf¡.jl direction of the GovERNMENT, or (with respect to ç-tS ojll ,lt¡l¡t ,+ çrl ¡-.é- ù- (dJlå"ll l+-¡ltr) the CONTRACTOR) of the government of the ù$L¡ dfi # ¡e el¡r, istiJl fué^ll ols¡rill t4rlt country in which any of the entities comprising the cl--¡! (3. -J l_-.- rl ,¡l li 3l CONTRACTOR is incorporated, whether ,,rr .åu -_+¿ promulgated ¡l ¿þ--o dS-å ----1" 3l l¡,' ¡, in the form of law or otherwise, or any cIJJÀ-"å)l i,- éLl3 _.¡,p ¡l¡ d ,--l 3l ç l..- el act(s) of God, insurrection, riot, war, strike (or other ,¡J ¡1.,.1 ."çl el ouL¡¡å ¡l .!-:t-- rl 6-tu,ft labor disturbances), fires, floods or any cause not due .J-jl+ ir-. q¡ þá: c¡*., ¡l dl-.Âl J f t-¡. ¿-o I ¡'rLi to the fault or negligence of the Party invoking Force ,l xt*,¡ll ft¡- rË$Lilt ôétr.4...d! çil| ,-¡J,Ht Majeure, whether or not similar to the foregoing, ) t-o. ,,,¡-... ¿¡+ ¿l L, .*, co¡S! , ;l .., U llti. provided that any such cause is beyond the çl , å-,llt reasonable control of the party invoking Force *+.+1" 6È¡Jl i¡líll i-fll .roJ ç.ùl ËL:.,,J Majeure. .åJ_eóJl r3.r=ll ?2.3 Without prejudice to the foregoing provisions o r-Si úi* I q è{----i.Yl l' ^ and except as may be otherwise provided herein, *i éÌ-li ú)-i. "-i-l ÈJ l-J o)l-ol neither the GOVERNMENT nor rhe MIMSTRY å...-.-Js.*¡t "Jo y ¡--gwyt -:3-22 shall incur any responsibility J d--..s oi-r whatsoever to the cJstJ"lt cJ-+¡ cgiS I e ¡J¡-- å-J ¡;rlj¡lt CONTRACTOR for any damages, restrictions or ¿-¡,-Si ô¡t---",À ¡l .r¡--$ ,l ,tr-:l ¡-rJ ¿¡..- loss arising in consequence of such cause of .hll ¡l*lll¡tilli¡Ëll c¡yt- r,¡o iJts gc å..*t: Force Majeure. ?:¿.4 fi the Force Majeure event occurs during either the L¡L-,i,Si-Yl LLJ pr il ¡$LiIt 6¡¡lt 4-ltà c$r.-r ti! ;{-!! First Exploration Period or the Second Exploration çl rf ¡--+1311 ¡-¡L---ìSi-Yt L-Jr_p JI .'-¡!t Period or any extension(s) thereof and continues in úJ,êî*lJ I ,6+n ç! cJ. ¡.1-ol ¡i l-s ,Ll._¡i+ll o!þJl cf e"+ Operations, as aforesaid may þe treated by the c-rl.-¡tJl ti+ dJt¡¡ll cJ.¡¡ t¡- {.Xr. iJS"J CONTRACTOR in accordance with good .fo!¡j.,ll åÞu.-¡l aaut Petroleum Industry Practices. "s l\t (l -27) r itllã' : .l¡- - ç (b) Subject to Aticle 27 .1, tf the STATE considers a-l¡" ts"l c!t-i¡ ùf å-J,$ dJJ the possibility of entering into an agfeement çl '._,úl-¡il,ál ..j d-¡s'' tt with any party for the export and sale of the ¿-+lJr;¡--¡lt¡ ¡q,-¡Jt-t Associated Gas and/or its delivery to the ¿J--,lJ crrrt-,-"ll jl-ill MIMSTRY for local consumption (the "Gas étxc------..;$ 6Jl jri-ll Development Agreement"), the MIMSTRY ¿l--1.(¡l-ill ¡¡.o-Lî r :{Sl) and the CONTRACTOR shall meet and discuss A¡ r¡1Æ14¡ ¿t¿fþ tJelÍ"ltr lJljil in good faith for the purpose of reaching a ¿*+ mutual agreement on the terms and conditions .,-lÞ él-,3-.L úlJt f! dJ'--Jl LüâJ-+ of the Gas Development Agreement' Any such el.l3 c.F*¡ .¡ti'lt .¡rl¡ 1$-iilbJr.iJ oas'a¡ Gas Development Agreement shall be based on Íj:L-+ll ,r-lo Î lrt n iJJS ii *, ffil the following PrinciPles: (1) The STATE'S share in the Gas JÉJ-jl ã-+L¡:t *-! ¡-lJ$ ¡.--- (1) Development Agreement shall not be æ d-ü Y ci ',' ¡J ¡t-;Jl less than sixtY Percent (60 Vo). .åjlJ+ (%60) ¿É- (2) The CONTRACTOR shall initially q¡$l3lt d-ls 4+t+ll t' cJrti"jt cJ".{ (2) bear all costs and expenses related to ,,-s l-+ jtll ¿JJ.l"{ å-.ol¡l crlüill¡ the Gas project including those related óúit¡*ll dþi-br LEþ ¡.-tJl élli éll¡ to the construction and operation of the jt-¡Jl ç¡'Jt :f¡)l U,ó 1¡¡ Ë+.i¡--¡ facilities and shall be reimbursed from -¡g."-Ll 1-+¡ü11 LJ-J,--¡! I ãrl the "Annual Gas Revenue" according . juJl to the terms of the Gas DeveloPment Agreement. úr-àil JJ d---Ct é-r ¡J t¡l (3) (3) If the terms of the Gas Development ù-i o)-c>l irJ--+"ll ,.-'ill ..rJÞ Agreement could not be agreed as ¿l.iÀJl ú_. JFil (6) ¡¡- l-.-:¡ contemplated above within a six (6) ,,-,--¡Jl éll¡-l \ ã'rJl dÄf Month period from the first meeting ¡J t_o, ,Ll¡tiJl3¡¡tj¡-Jl O¡-+ n devoted to that purpose between the ä r_j¡¡l ,¡l: lî c[-_5 \ J¡¡¡ Ê3-r", /1 MIMSTRY and the CONTRACTOR, d,-=ll "ôJl jllå, eli¡-Ì,o ót-ö31¡ nU and unless such period is extendod by ¿_c drt--.å¡l'i.c .tJ--+ iJ+ // u mutual ugr""rn"it, the MINISTRY i-r¡" Uf el¡+ï CLiS .i.'-L ç[' Agreement Block (75) 56 (75) $¡¿tx{¡tt-tt' rc N have the right to conduct ditss T i,Ílh-Þl jlill 014 shall ¿rJ.i" negotiations with any third party and to c¡l-JL¡lt ê..¡ ¡-J¡Ui)l elJ crlaLo conclude an agreement on the Gas .¡ .{gutft {¡t¡" ç¡.l-ril U¡-É¡lt project, provided that the operations s¡.r-bçLJ¡.!t¡-.Jt,¡l l! under such Agreement shall not elr-¡-iie d3l-¡"ll ù--S4å C.-¡lJ interfere with the Contractor's , .-,¡' L Petroleum OPerations in the e .,-il c+-jl;.-I ¡l Agrcement Area. In that context and as å-eE lJljll l! r;5 cr-ro 6r-Ë a third partY, the CONTRACTOR maY, ai-+"+ t -¡ L.ü--,Ì.tJ -,tJl e¡-¡.-^ir alone or together with any other pafry, rj-ls'òJl lJJl ¿r-¡ dlr,-.!t submit a new ProPosal to the d-åål -¡L-frÅ.- I ç+ ¿-J-tJl MINISTRY for the establishment of I .l r ãlL,¡¡}_rll the Gas project. Provided, however the --¡ I l'i¡l-,| (.¡.-,. --À o-r r-õ MINISTRY shall be completely free to årl- t-rj d.-.3,¡l ¿¡-+¡ proposal its 3i-,. l+ select the best according to dJl--i"ll ot+l''' "lS own discretion without assuming any UJS¿=J e '--Àl c¡-'-t çl J liability whatsoever to the 6¡l¡3-¡T .L-¡¡ lÍ-'ï "'^ d3l-i"ll CONTRACTOR or anY other PartY, ,-¡l-isl-Tl+ ¡.--tåll +ir¡t---,c and the CONTRACTOR shall be ,F(7)ô¡r-$*.r.#;"j entitled only to recover its exploration and appraisal expenditures pursuant to Article 7 of this Agreement. :s¡t+I jtill i3 -27 27,3 Drv Gas öJjj-ll ¿lrJrt-i"ll ,.-lÞ (D (a) The CONTRACTOR shall notify the jr-ill út-frsl u,-o MINISTRY of any discovery of Dry Gas on any çl ,-¡l+ll separate geological feature within the *fJ-l.lrl+',' ¿(j,ff ,o--¡ Agreement Area. The CONTRACTOR and the .: JãtjjYl ¡-it¡" Jt--4 *--¡ d-á¡¡" MIMSTRY shall promptly meet for the purpose ,ÈFS f-r¡-¡ ËJl jillr d3L-iJt êir+-r of discussing whether there is a basis for the dJl-i"Il UFI-,| éJt-¡a ¿t < 15! L-_o å-lãtj" CONTRACTOR ANd thE MINISTRY tO {.rl.âJl.-¡ll dJ.. éljx-,L .J<-+ éLiÐtl ¡-ij+ll¡ mutually agree on the terms and conditions ¿l-¡ Ut-.af^¡ dJE^ll . cil çill.t¡ÉlJ under which the CONTRACTOR shall él-l¡ dj" .:¡JrJ.3J f+?ri¡{ 4-iür. eJiJ ditigently undertake in accordance with good '-¡L-fSYl f¡.rl--:Ël¡ l+' ."¿¡-,¡.Ì-l Petroleum Industry practices, the appraisal and ¡gl.-'.ll LiÄ5 ¡. ¿ll ¿1! or¡ Ljr+J .U. ¡.eu.-ll (É.À a*i-,tt development thereof, if feasible and óJs3 ij ¡-ÉrI economical, of the discovery (the "Project"). rj ',' îi "¡lJl ¿¡¡Ë,J ¡llJit" çf¡ '6¡il¡ i'-räll3)l Provided this Agreement is in effect, any "Gas :l.riJl ¿e.rLull .J' t+.¡ Oé Project Agreement" relating to the Project shall be based on the following principles: l--+tÞ é"i31 r ã il¡-l¿ r- ts-e (1) Jl l--'¡i" ûéJ* eisll C+l¡f ¿!¡ ¡éll-rl tÐl'Å (l) Unless otherwise agreed, the appraisal program jtll éllil ú¡*Jt -j*YL 3-iTl y (J.l¡ shall be in stages taking into account the market dlJÞ.TlJ éll¡ cl..l¡" C^ú Cl -¡t*-!t¡litJt for such Dry Gas, the prices to be received çill d;JÅTl d.lcl¡ +."]tJt l¡¡llr Lu"ll therefor, the markets then available, the fiscal éll¡ di" ¡t-åSy dJ¡'. #-tr åJ.Jl" ,¡JS $ conditions and such other factors as may be å-,lJ å*,t-¡:4i" Jtl LLJ,"JI ¿¡Si ¡lét reasonably required to make such decision with ¡-+ll¡ åÀt" iS, ,i+."¡ll ¿+¡t--iãYl L9J' îll the first stage being preliminary feasibility study {tJl ål-'"ll w.i and each subsequent stage being dependent on eU¡!Cl+..1,a the successful completion of the previous one' , äÐr ,,, ît lJ,Ç¡;Ê¡ll diL+!"'ll during the execution of the Petroleum Operations. The .r,"j.-åll l\¡.¡ ö-¡.ÍJl' Uilill ol-¡l':lt3 CONTRACTOR shall abide by tho laws of Y,EMEN and lawful instructions in this regardr .>ø / Ãgræment Block (75i 6l á (75)$-,¡¿rxLíõr hM that the Parties hereto base their ê$Sr uJ+r l\ cf ütJ-$l ¿l ¡t-¡"t .,JÊJ :4 -30 ll.4 Considering good will and g.l-,f i-*¡Ël¡loi--¡ relationship under this Agreement on it)-' ¿- 'Je s.J¡t good faith, the Partíes hereto agree that in those dJ--t$ ú-i:l J-¡¡ {-,.ilÞJ elaill r¡'-,,¡¡ r î.ll provisions of this Agreement where a Party hereto is ,.. lLrr'¡ i-r¡" {rill Uîlt dl¡l ¿¡-Si ¿l s-lÊ.lt-c+ required to obtain the consent, approval, {ful-¿¡ -¡l Liå|9.,s-l¡Þ cL--rll ' i-'l çl C¡- determination, or agreement of the other Party åi¡lJ"ll o.r-l ù!j -.jFÅTl úJ'À¡l lJåt¡¡ rl ,¡t-iUt hereto, such consent, approval, determination or .d-Ér. .=,..u Çl r¡J ,..ì-ì d,¡ ,+J.¡ll ,l il.rt'-"lt, agreement shall not be unreasonably withheld. 30.5The MIMSTRY, on behalf of the GOVERNMENT, tp ¡---it¿¡6JljJ'-ll ÊJf!-:5 -30 shall upon the request of Contractor coordinate the dJl---j¡ll U,-ô,:' ìL,rJe ;l-¡r.J å.-JSsll CONTRACTOR's dealings in relation to Petroleum drL-fLJl+ å--CX¡ll dJi cjiL--"J úJ-¡ü{ Operations with other state authority or governorate ¡-trlJl J ¡ trJl c¡[tl- C.-._.A-ilt¡ill conducted in accordance with this Agreement. .4$¡iTl ,rel f+t cj¡l¡"ll te e.9lr."¡ll ¿ubtitt¡ rd3ll ðJ-ll assIcNMENr ffifikåt-lzarloN BY rIrE ð-jj¡ll.l+¡ Cr oåtJ¡¡llJ Üulll ^ MINISTRY I ôJljll The MINISTRY reserves the right to assign part or the dl--ls 3l ,p-"a ¿,-' ¡J¡u-rJta eã't whole of its rights and obligations in this Agreement to d,- çY a-jtl3)l ol--¡ l+t"liill¡t C,¡r- ã-L,p l-,J (ç . ''-¡ ¡-+l$l kil' -¡ any of its Dependent Units in the ROY during any period "- e) rÉ-3 when this Agreement is in effect, and reserves the right to ú-+ t---S.¡ tät$Tl o!---.,¡ 'j--+I'l¿J-*l¿. ¿-" recover all of its rights and its obligations at any time it l-úcl! ûlJj¡Illo3-e3 úJiill o5-r .r-4r3 úl L-úl desires to do so. The MIMSTRY has the right to assign to öJl jj'-ll lJ.eti,'. iJ.fl,j él-l¡ ç-s dL+èJ 13! and/or to deputize more than one (1) Dependent Unit to ú,-q ð.r-r.¡ i¡- J,lS! d-SJ3 3i ¡J3t---s ¿l-¡ 6'-lt exercise its rights and perform its obligations under this j i+¡l¡yt oie .+5i+ l{lt"lill ip¡¡ tsr-É. L¡L+ l.eilo¡ Ageement throughout all the stages of the execution of år+ y dÍJj¡Ill 31 6¡-l! dr"J-r çl .tai *¡., i-.1¿. ¿=t^;. this Agreement. Any such transfer of rights and J.¡¡ ç-3¡l åj,i. J¡l dru"ll6Jljdl C; ¿l r-+ f! dru"ll l-jL obligations shall not be binding on the CONTRACTOR .di3-$l éll¡ ú^ l+¡+¡"+ until the MINISTRY has delivered to the CONTRACTOR the document effecting such transfer. urnffiH8lrffiaxr ¿,¡rill¡t¡ lt¡rt3lt i*"lt çr*.,Jll cJá-j¡l This Agreement is written in the Arabic and English ¡ ;;¡Li. )le f-#-"ll ùFtllt-r l-$ti3Yl oi---e cr¡-,¡'-^ Languages both of which shall have equal legal force and (¿Hi¡¡l-¡ll t l effect, provided, however, before GOVERNMENT )-j!l3Ë."-¡ll d,-il ^e ¿l-3llt-e l+ ûllLJl å+liiyloi-r authorities in the ROY, the Arabic version shall be ¡+JJ¡.+J. 44"-É.ll eul r-13 "È 'il¡ referred to in interpreting this Ageement; and in any ÈS-l,fl ill- ojJ e ¡.1å3*,¡ ç.ll ¡¡ çCrl ,¡-iJl ¿ts Lp,gll arbitration proceedings under this Agreement the Arabic '*+.:rll úå--ill ¿l-¡ i-rf" $ll ¡5-¡ .,_.¡iïa ç¡'-¡'J and English versions shall be referred to in interpreting ;--,13 rr----r r .'J ¿Lrii "r¡", çj-*)le Agreement. ËiYl oi¡ this .ä,rã- ¿,¡rbtitt3 åjlÉll ôrLll covERNfrHïfA1f Íir*ouo" t ., .^tll-tål¡- This Agreement, signed by the MINISTRY and 6Jlj Jl cj-..rã ¿l- l#j êi çá-illr å.-;â133)l o3-o the CONTRACTOR, shall not be binding upon either of r_.+ )f L+Jt ir---.f! å-jt ü'--si ùJ drl-¡.llr the Parties hereto, until the issuance ofthe law approving I ãtL L+,1" ¡-iåtd4 ¿¡t-! JJJ-.'â this Agreement according to the constitutional procedures A4J A--JJJ¡¡+ll+ å+J..]-Jl d'¡lÞl t ¡Ð in the ROY and giving the provisions of this Agreement, I (ã-\.,st l!,# t + L-{-tS*l ert-, ç\ tt including the Annexes, full, force and effect of law ø¡s- e;sçt uÊ J,å¡ll ei-¡'.a¡ i,J$Jitill JÉllJ 63¡ll d"ls notwithstandingr arry, contradictory GOVERNMENT .l.el.¡lU. enactment .4 62 (75) t'¡¿txqtt't:t /f/ AgreementBlock(751 ARTICLE 34. ¿LJili¡lJ ltrtJl ¡ ¡l-¡l. THE SIGNATT]RES råL--r-¡J¡Åll Certifying the foregoing, the Parties hereby sign this + ¡4!r¡¡r or¡ ,& r:r ¿rl¡Åll d+ ¡rri rrt lJ1Jl :l -34 Agreement on the datc which appean¡ in the Preamble :tt!ú uI ue.rtl ÈÐlltl of this Agreement.: MIMSTRY OF OIL ANI) -¡¿rlrdl3 !¡¡¡l¡j¡ -l """"""" :C{Jllll THE CONTRACTOR: 'd3l-¡¡ll -2 1. OCCIDENTAL OF YEMEN (BLOCK 75),LLC 8s3.rr.dl .(75 i,.r.¡lcJU:+.,sJ fs¡¿ -1 ¿tåÊ¡ Date: . .2l,.:..Q. -3..... ?.A.a..7.... :êÐull 2.TG HOLDINGS YEMEN INC. ¿t¡! O+åjJJÀ ,â,;ÂsÅa :å'oA/. Daæ: . .3(. :. 113. 3. YEMEN GENERAL CORPORATION FOR OIL & GAS ;;;;;;;;î. nv' .4.,4.'l î-..rr*.Ì{tor MooeementBlock (75) 63 (75) ¡¡¿txçtlt t\.^^ TW' ¡d¡r¡tJt ltbi¡! ANI\EX ¡..t¿¡ DESCRIFTION OF TIM AGREEMENT AREA 6¡r¡ - ç-¡1.lålt¡. Lt¡. åÅL¡. Markha Area, l\darib. Shabwa Govemorates, (zs) ¡r¿¿ui (BLOCK 7s) l¿¡Ctlur¡+tt REPTIBLIC OF YEMEN The Agreement Area measures approximately 1050.06 ã-iJ'.ll sq 105û.06 , ¡ ¡åLiîTl å-i¡r. JÈ-A square Kilometers and is defined by the corner points (¿) å--t¡Jl s-irr (l ) C-- L-¡¡r ¡__+isjttL_¡jtr{ numbered from "4" through "P" closing at uAu connected I ú å-¡EJJ'¡ L.L--.L+ ¡l---.-i^llJ (l) . r- ,-¡S.¡ by straight lines as shown in Annex "8". .(ç) d¡.L¡t çe a++" c¡ The co-ordinates of such corner points are given in the dJÈ +ll # l-{jl# ã"Jl!l t{ildlt' -h -LLiilt oì-o .r.r-ri .o, J- following able: : çriYl Markha Area : :ti¡. åltj. Point x Y drÅ¡råå (ÊJlråi år¡ill A 45.6167 t5.tt67 15,lt67 45.6167 B 45.8024 15.2632 15.2632 45.8024 C 45.807s 15,2523 1s.2523 45.8075 D G 45.7989 t5.2325 15.2325 45.7989 J E 45.8165 15.2232 15,2232 45.8165 ¿ F' 45.8423 Ls.2226 15.2226 4s.8423 J G 45.8928 15.1720 ls.t720 45.8928 J H 4s.9151 15.17s3 15.1753 45.91s1 c I 45.8852 15.1505 15.1505 45.8852 å J 46.n86 14.9298 14.9298 46,2786 ç K 46.3893 14.823s 14,8?ß5 46.3893 él L 46.4690 14.7797 14.7797 46.4690 d M 46.4520 14.7{r9 14.7479 46.45?.0 N 4s.8864 Ls.0414 Ê o 15.0414 4s.8864 ¿) 45.7274 15.0592 15.0592 45.7n4 ul P 45.6647 15.0399 15.0399 4s.664ít A 45.6t6ir ls,lt67 e t5.tt67 45.6167 / tu (,/ oonment Block (75) 64 (75) ¡-¡¿ut$trl NM ( ) d¡l¡ll AN¡IEX "B'' 'c AN ILLUSÎRATIVE MAP OF THE AGREEMENT ¡+¡l¡Ttl ¡¡bi.¡ ¡{¡#åJ¡ låJÅ AREA :cP3¡tP(ç)¿¡L¡t Annex "8" is an illustrative Map of the Agreement Area, (t-å'J") ¡ ¿tLü¡/l ¡--¡LiJ4p¿----åJ3 i LÐ'l "Mflrkha, Marib-Shabw¡ Governorates, @LOCK 7Ð (ZS¡ a-lr¿r L¡'!#--!- s.J+¡J¡ls¡ REPUBLIC OF YEMEN", which outlines the Area il--it Il Lt-r.¡l ¡¡-ri s-iltJ 1 a---¡r^¡tt A-UJ{¡+JJ) covered by this Agreement and defined and bound by the .r.ie ,r¡5ú-r (,¡) ifi¡¡t "¡-¡ (D ¿--Lt&Ia;-:sJ¡ L$-rill o'qa points A through P closing at"N'. .(¡ uitl  nraamanf Rlnnl¿ fTll 65 (75) ÊL?tl¡4sL$r, - ^¡l ..C' (A) cFtI, ANNEX lHE MINIMT]IVT WORK OBLIGATIONAND MINIMTJM "¡tJl,o.llJ,J-l¡,,jrill J¡ll':¡l¡li¡ll EXPENDITURE OBLIGATION i¡t¡s¡-IlL¡.JU¡ DTJRING TIIE E)(PLORATION PERIOD The First Exnloration Period (Oblieatorvl :14ÐUil),&Tl r.iunsr*$ 1l¡¡ -1 l.l The First Exploration Period is ttrirty six (36) Months g..ji ù- l"+,(gO) ¿¡Ê:t3 i-., J¡lt .¡t¡s¡-Vl lL-, ðr. :,|-i sørting on the Effective Date. , 1.2 The CONTRACTOR is obligaæd to conduct the dL",!r{ e¡+ ¿l+ Á$.¡tisu\$AÈr+ïi# i2-1 following Exploration work during the First Exploration Period: ¡-E t-,lill dilL+ltjljlt ol-¡,ul å--¡JL-Ê¡L¡! (D (a) available seismic dat¿ related to Block ll Reprocess .(75) ¿ll¡I+ titi"ll (7s). A ¡[.-¡ t ¡ (b) Conduct, acquire, process and interpret a minimum il- C-.-r. î-.5175.'¿ri3J -+ ¡L'al- 1'-.r. lT5square kilometers of 3-D seismic data. (3D).rt-.'.!l I f,\: å Jtlj¡ill ci-r,-*.ll (l) .4ls.s (c) Drill and evaluate one Exploration well ¡.1¡ with a minimum depth two hundred (200) -r- (200) ú*+ (1) çiLKi-l ¡l ¡$* r.-la. (e) meters in the basement. .6.¡ptilt JJi.á.*f "+f ..S Minimum fïnancial conunitment for such Exploration ;ct! t¿$,i*!,Tl dt eïf (,l9 dl¡¡yj d$Jl lâll c¡t liÉll work: (a) Reprocess available seismic data U'S.$50'000 -)Y¡ 50,000 ¿tLil!l¡lt¡l¡lt úLr¡Jl åJt -ã$Þ! (D (b) Conduct, acquire, process and interpret a minimum 175 ol-3*ll ur" ey é175 J#,öJ ¿+ll*J dJ-^llJ el$lt (ç) square kilometers of 3-D seismic dat¿ U.S.$2,950,000 ¡Y¡ 2,950þ00 .¡l ss (03)s-,.T1 4rbÉ iJ"lj¡jll (ct nr¡U one f tt nxplor ,000,000 -lT¡ 3.000.000 (ll ¡-l-r -st ìs-l i¡+ esð¡ -lÉ' (6) Tot¿l U.S.$6,00o'000 ¡ï¡O,OOO,OOO - olt*Yt 13 The CONTRACTOR is obligated to spend a minimum of úþ!3t ¡1¿!¿t (6,000,000)ir* {¡*út¡þ ¡¡Ël¡ :3'l six million United States Dollars (U.S.$6'fi10'0ffi) on "lrtÅJl Exploration work during the First Exploration Period. s¡l-^ìS¡.,T| eÀJ" dIj',r$l r-S 4fu.y1 íJ-rl.ll úUyJll .J-ilr 1'4 In the event the CONTRACTOR elects to extend the First å¡-¿.ul .¡l-i$-Yt åÀ-p ¡ll.. :4-1 Exploration Period by an additional Six (6) Months, the r f¡ll +.i drlåll Jt È Ç CONTRACTOR is obligated to conduct the following ¡i¡lg¡ll crL-,|¡oll clæþ ¡ljilYl dJE.ll "-1" (6) J+ll Exploration work during such extension G&G and well ùé ül .-þ .db -rrrr;lli¡ drr. rçü Lrl_¡.r_e ¿$h*¡+lt¡ studies. The Minimum Expenditure Obligation for such úi ¿,+.".fu 0+1i1. él.E +¡.iJlåL-.¡" ùÅ úL¡ÐJ C-¡it ;J . additional Exploration work is Two llundred Fifty .¡+E¿.Tt ¡rÂl¡ll ,i¡ldïJll ,ål¡Y¡r ir ¡l¡¡ (250,000) Thousand U.S. Dollars ruS$250'000). ål¡¡ Exoloration Period (Optional) : I 4¡t+¡i!) å+jtlll r-¡l,isr-$ -! 2.The Second i-,J+ ¡'+ l+ (gq lJf.f åJ4lJ lÍ".¡tiSi-Yl âL¡," ã'r."¡{-l 2,lTlrc Second Exploration Period is thirty six (36) Months ,lrül Jl-lÀt l¡! ikl +r¡çl rl Á$ r-¡LiS:uYlå-t¡r starting on the Day after the end of the First Exploration .4,Ä" ll3Yl..l¡l f+t t{+ drÀJl Period, or any extension thereof the CONTRACTOR has entered into, if the CONTRACTOR so elects aLJF ùÅ ¡jill ArÄ.l,!s-Yl dt "Tl1Êl+¡ll dJlå^ll e-A :2'2 pursuant to the Agreement. '4iÊll s¡I.ìSi-Yl 2.2The CONTRACTOR is obligated to conduct the following (200) ú-'J! (2) ü*Èl-is3.¡l tlÉ e+¡¡ i= (l Exploration work during the Second Exploration Period: . ¿lill rÈ- ç¡ (a) Drill and Two (2) exploration wells with a "uuluute 200 meters in the Basement' minimum depth ôf /L/ (75) 66 (75) e-r ¿t¡¡ ¡+¡t¡t ' \-/ AgreementBlock .bôA lln¡ncial ComnÍûnent for such Exploration q¡[-Jns¡¡r.yl dt-reTt,-¡¡ dtJÐU,rJsTt r-¡tt *1fl Minimum work: (a) Drill and evaluate Two (2) exploration wells '-r.2OO ¿^¿ (21 (JÉ"J+ f*-Jü. r JÅ (l) u.s.$6.000.000 ¡T¡6.000.000 ¡¡still -¡i- -r Total u.s.$ 6,000,1x10 ¡Y¡.6,000,000 s¡.+Tl 2,32 The CONTRACTOR is Obligated to spend a minimum ¿,. (6,000,000) l¡Y3r fu+t fu- úti¡!+ cj¡li.lt e¡l* :3'2 of Six MiIIìon United States Dollars (U.S.$ 6'000'000) on dl-cTl .J" ¡-rq¡Tl 6r-r¡.ll,åL-JyJll r3l¡ìl3r Exploration work during the second Exploration Period. üt^ìS3,,Tl ÃL¡,}lÅ rs5 .Ar¡JËlt .¡tl fu¡l,iSi",Tl 2.4 ln the event ttre CONTRACTOR elects to extend the å.L¡. ¡-lLr Second Exploration Period by an additional Six (6) ¡¡- ¡¡-.1A$$ út Ì$,,¡yl +,¡ dJti.ll Jl+À ,¡ Z4'2 Months, the CONTRACTOR is obligated to conduct the ' ¿¡.rl-$rll c¡u¡¡[ rl¡L d¡tyt drtiJl "J'(6) Jsll following Exploration work during such extension G&G ¿rJS ül .& ,¿lE +,.iI ãJÊå rltr -rçü t*,l;r.l¡ ¿Ét*¡+. ¡+Jl-r and well studies. The Minimum Expenditure Obligation .iÍ i¡...fu iJÉ¡lU ét! J¡!¡I ¡LJ," ùÅ,it¡ül at¡ll ;J for such additional Exploration work is Two Eundred .¡¡q¿ lt tr¡t¡ll ÉþyCl crl¡I3r ir.rT¡¡ (250,000) Fifty Thousand U.S. Dollar"s (US$250'000) 3. Excess work in any portion of the Exploration Period éll¡ sÉ L.i) úl.!s¡.¡Yl åL-r u. rj+ ç;l + rJt*Tt *j;-rþ çl - ! (including extensions) may be carried forward to satisfy the ¿r ¿lJrJt r-,+ll çÉ d*lt c¡l=ùEr,. ¡#hl ll-i: ûS"J (úl¡¡.l"rll work in a subsequent portion of the Exploration Period (al-ìr,úll él$ *e l-i) i'¡llll fulE¡l eil,ÌÑ.rYl tL¿. (including extensions). M Agreement Block (75t 67 (75) $-¡¿ulr¿ut ' AI\INEX'ïÌ' ( I ) dål¡¡l FORMOF'IRREVOCABLELETTER ¡l¡þTl ¡¡c,.e OF CREDIT rti$J $tå.¡iJtl ',ctL¡ DATE: MINERALS I I : êÐlill' MIMSTRY OF OIL AND ¿rtull.g.htill ð¡l¡¡¡ (Address) (¿icoll) (Atûention) . tctht OUR IRREVOCABLE LETTER OF CREDIT Re: r[-b ¡tJl ÊLiÞl,Jr.t3 J+ll lL¡ lJ¡l¡iol çÉÅ.: e¡'¡f No.: ( --*-" ) i-r Gentlemen: our client, (name of company) (hereinafter ;ð¡l--.r¡ll By oG;f t rlJnc referred to as the "CONTRACTOR") we hereby establish cf+ç¡-J (ãSJr-,illi-D ir-" ;loî-{ this irrevocable Letter of Credit No.: éJL----t Jr--r¿i (dJl--i"ll) :_.+ l--orå.31 ir your according to which we herebY undertake and l¡-À ¡l'-cleYl favour, pay to you unconditionally the amount rf-¡Ut cj-tl! '-Jill --r '-¡.1---.LÅ guarantee to ¡¡¡-¡ Ot-+ 4-iå,.. JÉ+ ¿*-åiJ ¡;:li çrJlr (--) #-l ñereinafter referred to, without any question and reference i-9a.-tf se.r,t-ìÀ ¿-'l-t -¡t-¡^ltèJ+"ll-tll ürr+ ¡3 to the CONTRACTOR, in the event that the ¡rÉ' ¡'--A--i- .--å ¡3¡ .qj-tl--Lll çi3*, 3l CONTRACTOR has failed to fulfill its technical or LrÐ ó¡,-JL!t-¡ å-'i¡l- t ûlJtj¡IYl jt--ri. ¿'- financial obligations (including the clean up of work sites) ili o-.å ! under the Production Sharing Agreement for Markha ¡S-.t-Llt ¡-Jätiit r--.ai¡"+ (4.-*lt 3-¡l-.. ' å -¡l'ii --',¡! *-;1,-. å4 ¡-lL¡.lzl-3¡Tl Area, Marib - Shabwa, Governorates (Block 75), ís-¡ - ;,.rlit-"¡ 1t Republic of Yemen (the "PSA") entered-into between ¡j¡.¡ 1t-- ttri¡ ¡-l+tt¡-¡-¿¡r..+lt (75 gu-bå¡ the Ministry of Oil and Minerals (the *MII\ilSTRY') , ¡!, L( (ðJliJr-ll) i¡rl-.dl3.L¡¡-Jl./il Ot-+ of the first part, and OCCIDENTAL OF YEMEN ã¡r-r.dl iZS ¿t:li ¿,-.-r .¡l ¡JtüqF,,¡s3l ts¡J¡ .t¡i (BLOCK 7í\-LLC and TG HOLDINGS YEMEN INC' ¡-.,,.l¡tt¡ g-.¡l O_l+ åjl-13À (# ëåSJ-'i J and the CorporatÍon of the other part , effective as of ú---LllJ 1¿¿¡t-$) ¿,..-r f-¡l-¡:ot çit-i' t-l I Í (daæ) and its Annex "C" (hereto attached), which .r-¡rTt s--l 6"U¡p -r.u.¿ ç.r-JlJ (!:t ¿-¡¡¡t) (e) specifies the Minimum Work Obtigation and Minimum I t-rn rJ)s-e.tii¡ll ùl-li¡IY ;-r!t r--llJ d.-*-ll Èxpenditure Obligation during the Exploration Period' .ç¡l.iSi.,Tl The amount guaranteed hereunder is '-'--'-' million 9 tir ¿lrJl t*-t" d+"ll ii United States Dollars (U.5.û------) for the C----) '¡tE¡ êþ t-¡5¡¿.1 t-¡Y3: CONTRACTOR's commitments during the First i-!¡á ¿ru-i"tr c'r-.r3r d-rli" Exploration Period. .J3Tt-iuri-vt t. Pavments under the teffer :¡t¡PTt ,-¡.tb¡,¿¿&t r¡þrér.ll (l Payments under this Letter of Credit are available to l\ + ¡t-¡]e)l t U. etøYr J¡ ,¡ you against presentation of a request by you for -. "---;+ a copy of å¡d.-ll+ t4l! ','- ',]l f+It é4.3 dtt¡" É¡-''"'-r ¿¡-l a¡¡¡tf è\ referred to above) .4i¡ullc¡USl-Yl åLJ"l Period. of Letter of Credif {r.¡ (4 Extension automatically ¡L-do)l 4JJ-; Ë r-ii ¡-¡"¡¡i ë-J tffi of credit dhall be til3 ËJljJl La-rió -r;-r,ó ¡-F¡ d¡l¡3 ã¡'l 13¡ extended for a period equivalent to any extension cJel-iJl çl the MIMSTRY to the õJill ,,.1..,r u +¡,¡ çl ¡l 6wyt i ¡SJl-Í,l¡l {$ä! period granted by pr:J e-. ASJLLII å.¡üliÍl "- ð$lill bONTRACTOR under the PSA or any extension as a ' ¡r+ a$, gE¡yt çJ '=' iJ' result of Force Majeure under the PSA after the .¿lJIl rfu l-¡t¡lt g,. crþ$ii¡ ..-¡¡¡ ' Jl issuing bank has received instructions to that effect ,J. ô¡.1¡,ojll¡-l-lt from the MINISTRY. 'ôJl¡3-Tl di",ii liÀ ¡l¡3oYl ttÀ ç¡ ¿! (3) *¡öJui-Tl J (1) e.ult ú.l"tt, (3 ,2 '1) t'-r The defined ærms in this lætter of Credit (including þ asru.l"tt 4+'äli:l çj ¡¡¡.-:ll,ÉjlJl tJi.'.i¡ ü--^åü- Exhibits I, II and III as well as Appendix I to Exhibit eti¡ïl Itr) shalt have the same meanings as specified in the PSA. ,¿_¡¡¡l _5 5. Suspension: i¡oLiltËrjl! 6Ji dÞt-¡ ¡l-rcYl çÉi d+¡¡ ¡; p-r¡r::mFl-force Majeure the Iætter of Credit shall be iejlt6r¡-j¡ct$l ' ..rt *e.-lr*diüí sutp"ñd"d and continue in force thereafter during such period of Force Majeure. åi*, õr-¡l Ë¡L-ill i¡-ðl ¡-lL drJ'¡¡-l l¡J If tlre Force Majeure event continues for a period of r i,r^ ¡-:t-jitL rL-e¡þ dJl'i"ll el-i¡ 'J(-31 (6) six (6) Months, and the CONTRACTOR terminates its çl-.!å ¿!-¡ 6t-ü)l o=-! åSJl-i"ll äJi" llfï obligations in accordance with the hoduction Sharing +"K-! fqt f+l¡b o¡3+ ei-r 15¡ ¡l¡icU Agrõement this Letter of Credit shall automatically be cancelled according to its terms. s¡¡ l-l LEt LiåiÅl d .J èll.¡"ll,JS g+ t!À à6'ii Ui! -f ¡¡¡' .¡¡ élli¡ o)'cl payment of all amounts not ....r:Str 5rt-Ury t¡"1-- ¿r-erri We hereby guarantee the ' .,c--l å¡- t ¿Ã ¿¡lcl>. ! e-,J J! a-. [-tl ¿¡'t having been reduced in accordance with the above withiñ ten (10) Days of receipt by us of your written : (-¡r.-.lt él¡rl notice, without further juridical procedures' e-l) : ¡-Tl (Name of Issuing Bank) ' ri ó¡l By: : äiJr Signature:- ?-J-l ' ^r 'l¡ll Title: Date: lv (75) 69 (75) t'-¡¿tx{$n Agreement Block 1 ( I õ¡ut*t EXHIBIT ) NOTICE FOR PAYMENT I]NDER IRREVOCABLE ¡ÉDll d+t¡ ).Jill rlrþTl +-.Lr ,-.åü4 e¡l.Jl Jt¡-.i! LETTER OF' CREDIT NO.: ..................... ( ):É¡ DATE: ISSUNG BANK) / / : tEÐLi$ TNAME AND ADDRFSS OF (¿t*lt ¡-f çS d¡+ll iiJÐJ r-l) Re: Irrevocable lætter of Credit No.: . (-) : p-r rtrl¡tJ ùÉ rill ¡l¡þTl çtLi : e#l Gentlemen: payment under ¡ ðJ*,$ þl Please be advised that we hereby request ..,rltl liÀ c! the above referenced Letter of Credit and that: ¡l,.ciÞTl çl}Å .,-¡i¡¡+ éJ j ','¡Jøi CJt .r+l t "¡rt- f.ils-l él!i3 r)ol e-. ¡Jt+ l. (Name of Company) (the "CONTRACTOR") has not completed its obligations under the Production Sharing 4+'¡tilY t+t 4iLljËll --{li # (drU.lt) (ås}i¡l Ê*,t (1) Agréement for Markha Area, Marib ' Shabwa S3a..i -ç¡L sig¡1.4 t rr¡ l3bi.elAt:ill *+ ¡sJLLll Govemorates (Block 75), Republic of Yemen (the (c+Jutl) si¡utl (1+iLhlD ¿+$ t i¡¡r-+t(75 et¿Ð '?SA"), effective as of (date) entered into between the ¡s¡¡¡ ,Jcl . ¡¡ u. (ã¡tj3iJt) ¿rtr.rll3.LiiJl6.¡l¡s ¿s+ Ministry of Oil and Minerals (the "MINISTRP) of ç.+,ëts¡,i ¡ Ër3r.r.rtl (75-¿t¡¡) ¿r¡ ril cJt¡+ss¡l the finst part, and OCCIDENTAL OF YEMEN t+ 4l¡J.çj$,-¡-.jùS l-".,,¡.ll¡ ¿¡! ¿rt i¡¡JJÀ (BLOCK 75) LLC, and TG HOLDINGS YEMEN "-+ ¡ crt-+1"" ¡l ,J."*¡t ôlJjËlt iF,r$$ r-.ll INC. and the Corporation of the other part, with ¿-!l¡., ¿un l{Þ respect to the Minimum rffork Obligation or the clean çr 4¡ål^Jl rrL*-¡lJl üeJ ,sl$^ll é.ti"¡l çts d"'ll up of work sites in relinquished areas according to :L+il13'y å+-lt+lt {-¡l-iSi-Yl å-LJ"l fJ¡¡.,11 A.eEJI good Petroleum Industry practices for the cunent iFi¡.1-{# l-{+le U!.J.-¡"ll 'ô¡,ôll DlÅ et¡¡)l *É âSJl.Lll Exploration Period of the PSA within the period ¡l.-ore)l ,-.1åiJ Ur¡ iJ ¡ f.¡UUlt *+ ¿-ll ul éll+ specified therein and we are entitled to request .¡é-ll payment under the Iætter of Credit. 4-¡f rt .r.i, ¡ã¡-ii¡ J-+rll ¿'lJj¡l)l (2) 2. We certify that in respect of the obligations not ¿þ!f 3r .rl-ioYl çrli r--i¡+ Ê. Jä i.ll+ ¡lJll ¿le performed, the notice of payment made under the ãtoyt ,¡ ¡sJl-Lll 4$l¡l .*É cJrli"lt ¿,¡.., E¡Jr qlc ó¡3"J1 Letter of Credit is the sum agreed between us and the ¿t r.ì. oe r-s dlueïl él$t ú.l.lsilt ç¡u+ èl+"lt l5e ¿13 CONTRACTOR in the PSA as coresponding to the ,r-år¡4 juiyt ,t¡ul srrïl r.llr ¿þl;.rTl d' c¡lv costs of such work as provided in the Minimum Work . l¡j'-ll s¡tìS3-ll åLl # ¡SJt i"ll ¡,+¡tiil Obligation and Minimum Expenditure Obligation At¡iTl under the PSA for the relevant Exploration Period. J-iÞ A-'.rJ+ cJ¡t-i"tt cr-rl¡l ' 6'oJtjJ-lt i, (3) 3. The MIMSTRY has notified the CONTRACTOR at j*Jl ¿c oxof -¡$.r.^lt e"tl:ll r'j+.JTyt ,JÞ ts (14) least fourteen (14) Days before the date hereof of the lS ¿- úÀ¡,.3 o.r¡ii't * C élli ¡'+ cJ¡låJl ..J-r + | ç$t work that has not been performed and the - . cJ¡liJ Jl cJ--r ¡t¡ ç.dS"ll -¡l*'iYl dl5 ¡å¡'.t CONTRACTOR has subsequently not performed such work. A copy of the written notice to the f-¡T3.r dJ-+ iJ l.r-t _¡l.l-i" (4) CONTRACTOR is attached hereto. ,r-å t¡ilã,Jr¿.4Á-rTl 6r-àl"ll d.,l-,JJl crl-¡Y3.r ¿r 4. This notice for payment is in the amount of .-.¡1-,.,,¡.ll ,-.â r '¡l i.. ,United States Dollars ir-. êLj (10) ËJ-iÊ d;f--À (U.S.$. ,...). Please transfer these funds to our JIHTI lrÀ ù:-l Account No..... ....... in. ..Bank ô¡li¡ within ten (10) Days of receiving this notice' ü¡t¡..11¡.hijJl MINISTRY OF OIL & MINERALS, Ëll By: å1,áll Signature: d¡tt Copy to the CONTRACTOR t-l-l- è+Jrjilt (Address) (iiJ!.ll) i¡¡¿) cl¡t¡Jl .ntBlock(75) 70 (75) é.,r¿ulþrst ,ø -ÊþÃru \D'rM IX ( 2 ðJt¡í.¡l EXHIBIT ) NOTICE OF REI}UCTION OF' IRREVOCABLE tttlill ùt¡ JÉ¡l $¡bTl q¡l.B iF uå$å3lh Jlr.i! LETTER OF CREDIT NO.: f-) : F¿ DATE: lrrevocable LetÛer / / : åÐlill (Name and address of Bank issuing .¡dlt ¡l¡¡yl çt-hi ¡r-,al €3Jl dl+ll i,lJJeJ f-¡J) of Credit) .(ruS't ¡!É Re¡ lrrevocable Letter of Credit uåi¡¡t ù.t¡ ¡$ll rlrbTl çt!Å: g¡¡l No.i ......... (-) : É¡ This is to notify you that in accordance with the f iÅJ L¡lY Production Sharing Agreement entered into between the "--¡ ¡SJl-.Ì*ll å-Ë- Mnistry of Oit and Minerals (the í'MINISTRY') of {s¡¡¡ ,¡l , ¡¡". (ð¡tj¡¡l} ¿sb.ll3.hti$ 6¡lj¡ r* t+s 6ts}! the first part, and OCCIDENTAL OF YEMEN ,ê.;ås¡l ¡ r6.r3r.r.dl (75 ¿É!¡ i,4 úl iuilt¡-*r3l (BLOCK iS',l tl'c, and rG HOLDINGS YEMEN 'lt ¡-f) r'J,t C" "CONTRACTOR") of the work corresponding to the ¡1¡3cll .-¡.l-tå' e¡¡,l¡*¡+ tS-lyUS l!-l "'¡¡,l'r dJJ-'-Jr" amount stated below. You are hereby authorized and et-r)¡ll c,'IJYJ: ir l-¡Y3-r jt*^l¡-r !J+.l instructed to reduce the amount of the Letter of Credit by a-.åll du'tl LjÈJiiill ¿c'@ 4É¿^!l ãrãi.lt the amount of ..... ....United States Dollars .é-,J -l!¡ è!¡+ oü.:l (U.S.$ ...'...) and to notify the CONTRACTOR of this reduction. û¡l¡¡ll¡.Ll¡$ 6¡1.¡u MINISTRY OF OIL & MINERALS By: : ¡*Yl - : å¡Jt Signature: ilâ Åll ?-tJ- *¡ 'Ell Agreement Block (751 7t (75) ¡l-¡¿t.l"t$tlt (3) lJrt-¡ IU EXHIBIT FORM OF IRREVOCABLE LETTER OF CREDIT rl"Sl úl¡ ¿è rtrlel 'J¡¡ liJ.e DATE: OF OIL AND MINERALS' REPTIBLIC : Û+rl3l MINISTRY ¿rlr.dl3.h¡¡ll ôJljJ OFYEMEN (i,frbll) (Address) .¡+&t (Attention) Re: OUR IRREVOCABLE LETTER OF CREDIT lle rtiDlJ ¡J¡lt liÀ U¡l¡Ícl çlåi ; NO:......... Ê¡J .¡rlrll J"üJl Ci.¡l . (_) Gentlemen: (name of company) (hereinafte : ð¡L¡ll By order of our client, establish t ¡!¡c f-+ refened to as the "CONTRACTOR"), we hereby your Ljl .re\ I çi-Jl (åS '-iil ¡-'D Cl- -r this irrevocable Letær of Credit No.: ............ in and ¡L-cloTl .,.lli é.ll--l ¡.r.-,ai (cl-9t-.¡"ll)-+ .:-41-oÀ- ¡ favour, according to which we hereby undertake 4rå,.. irc.å¡J (_) c1+f J+rll liÀ guarantee to pay to you unconditionally_without.any Jr+ Êj¡b f¡¡J i-l "t'Þf of -------- united:,ift^?:^lTl ----:--l ---------:------..--....- C+" ¡¡ dÐJ¡.i$ üü question rhe amount Amou",::,3j:1.::,:: ¡r¡_¡l r- ta_,r" ¡t ¡-j. r_tiÐ F"-f ¡y_Ê ( (u.s.$ ---*--l (rhe "Guaranreed the Production ñl_l ¡JÈL ?rr_3¡Tr ç_¡kJLj¡r i-+rurr *j the signature bonus) as required under ù;il; !--f ;---T-;. rt Sharing Agreement for Markha Area, Maib^- lsru I Governorares (Btock 75), Repubti" or'f"-ã;i,il 1-lriiCl (qï. Tl çj ,", -å-'¡' '¡tl l: ¡tl .psA't ;¿"".d ¡oto betwôen ttte urinirtry of oit and kJ-.¡ J dJi dJ-hs ¿rl-Jl3 lti-ll 8¡li¡ ¿l-+ Minerals (the'MII\üSTRY') of fhe first part, and eðr3' -^tl(75¿tJ!¡ OCCIDEI\iTAL OF YEMEN (BLOCK 75) LLC, and ¡.-...,,¡"ll¡,4 tl c¡-* i¡:¡-19 (-| sJ l^sJ-.iJ TG HOLDINGS YEMEN INC. and the Corporation of ,,. rr"+ ¡200 lJ_e¿_i-¡¡,¡t-5, ¡ u---l the other part, dated ...200-- under the terms irlt¡lll¡ll and conditions stipulated below: l.Validitv : cl¡¡¡¡ll OltUp, - I This Iætter of Credit shall be effective from ,-r. O8.00 a.m. (date) and expires on earlier of the ¿* lst¡.- ej"Bll äetJl *-s l* ¡l-¡io)l Uaå d¡ri¡ ç¡9 LaÀr _l _e¡lÉ ç'4¡ following: e_t -r{,,S, s a. immediately upon payment of the signature A-¡" lJÞ bonus Oy itre COÑTi{ACTOR as róquired l-ti- ti:l ,r. .:-¡¡ l-aS C. ¡ill f+ clrti"lt eé -1 underthé pSA; or J r6ts)l çi ¡SJl.i^ll b. immediately upon payment by the Bank to the ç1-Lå. ++J^i èl+¡l 6Jlj3Jl i¡t+ ¿-,+¡t fJiJ l-ll- -2 MIMSTRY under this Letter of Credit; or 3l tlb sl.oic)l c. on the thinieth (30ft) calendar day from the Jl. . I ¿JJl-3 i,- i,*l)lll il,-Jll *# -3 date of issuance of the law approving the PSA; l.öil ¡-iÀiCl4 or ASJI-tull ¡-rã- ,-1" JIJ-ill 3l r 6u:)luj d. (date) (being six (6) months from the effective ir J¡.if (6) ;r- r.'+ (¿JJull) -4 date of this Letter of Credit). cll+t- E+-lu "+-" .-J'Jai .11¡ .¡l¡lpYl L!J,rÂ. All claims must be submitted to the Bank before 5.00 p.m. on the appropriate expiry date mentioned herein ç¡u cx;L* i.^-lÅll ADtJl d$ ébll JJ a.:ii crtüJ""ll 6r"+ iailing which this Letter of Credit shall become null and' ,!rY, ¡'*,,- 11¡ ¡l-oio)| ,-r.lti ¿þ Y!'3 ctia Jérnll eki¡Yl void. ,¡L+t¡.2 : .¡g¡lt 2- Pavment Instruction you 4-i$al ,¡-S'"J 15-¡ .:L---¡le)l r-rlJå",' ìJt i-J Payment under this Letter of Credit is available to g-¡lt c'r-..r ËjjËl ir- sr.!é '.' lL¡, against a written request from the MINISTRY fon C¡r,-.,c3lt 4$ payment in the form attached hereto as Appendix I Þ¡t¡=r"-i¡ úe j+e s d¡U'irt+ Js+ (1) 'iåL¡r qJr /ß"26*mentBlock (7s) 72 (75)t'-¡trxi¿rr.,:r Æ U* that the coNTRAcTOR has failed to pay the OJ.-Jåè {r-c él-lir CtjlTI ,¡-.å åSillt [¡ffi)f f ¡¡i srating as required under the PSA on the .litiiltþ_rtl) sþature bonus Effective Daæ. 4¡$ 6¡þTl.3 f ¡¡J : ,Jl 3- Return to the Bank pursuant to paragraph I .r---io¡ ù-cl (1) Ë--üll ct4Yl gr"I-: *j On ttre relative expiry date .-r. lJi above or upon receipt of a claim for full payment ¡l--cle!l çl-Jaå dJÞ--¡" rl-{iil r--¡Þ ¡[ -rl ^1o!l under thís Letter of Credit or upon early payment and .él¡dJ Jl ,i-ll .,s tt ¿ ¿l {.+d ¡l¡3cTl ,-r. tÀi ¡J.-l ¿þ termination of the Letter of Credit, the original of this Letter of Credit must be returned immediately to the r-¡. Bank. : ¡l¡3cïl thÅ ++i - 4 ol-;¡.d ç-¡+l l\ ^ .$-q3oll çl-tå. d¡-,,tû üü Leffer of Crqdit i îJ n õJljll i¡- .'' ll e)lj-l r-b 4- Renewal of lrrevocable e ¡i¡l¡".rlo o¡.t-S 4hJl ébrlJ The validity of this Letter of Credit shall be extended Ctll éll! dl.ás r¡ cj,¡ti"ll ¿-É ii J! upon a written reguest from the MINISTRY to the .¡¡lj¡lt ,1. Bãnk provided thatthe CONTRACTOR has consented to such request from the MINISTRY. :(¡r,¿.¡ll ¿l¡¡ll ¡.,1) (Name of Issuing Bank) :d+ il. : è-SJ¡ll By:......... : å{årJl Signature: fitle:....... z7 ÆÃ*mentBtock (75) 73 (75) ¡¡¿tLt$n S/"\ (1) (f g¡ulld¡L¡l Aplrcndix ) NOTICE OF DRAWING TITE LETTER OF CREDIT ( ) É¿ st ¡cTl +t!t',''* r¡*.¡1' NO.:........'- DATE¡ - (aiç ¡.r- c¡¡,1 él+$) : ('l! To: (Name of IssuingBank) ¿rbJl3 .Liil ð¡l¡¡, ; ct. FTon:TITE MINISTRY OF OIL AND MINERALS .(-) É¡ o¿úitt ùl¡ JSll ¡l¡þTl çt!å : ci¿J"á+ Re:Irrevocable Letter Of Credit No: .......... 'We, the Ministry of Oil and Minerals (the "MIMSIRY") úl-+ (6Jtjj-j) dl ',rl5li¡-Jlã¡lje rc .tt certify that (name of company) (the "CONTRACTOR") (P ji Þe ' Ë (dJl-¡.Jl) (c¡lS--ill f:-,1) has failed to pay the signature bonus of t¡JÈ-¡êll-rlJ ê.-r- ill 1--i. +r-¡ Unit€d States Dollart (U.S.$-'--"--l (the (tu!.-¡ê.ll è--t+.ll) c-*.l.l ¡I¡¡ (------) íGuaranteed Amount") within ( '....) Days .¡rl$ çil ¡lyll ¡¡¡- guE ir Lg- ¡-¡¡ cÞt¡ ftom the date of issuance of the law approving the - tilL,¡g¡lr..¡ Li+.lll¡^¡ Ct:iyl ,*# ¡sJl-LI 4+¡1ill ,rþ hoduction Sharing Agreement for Markha Area, Marib .,.i ¡sJL,i-ll ¡+t¡¡l) ¡+¡.rllf ,..,Jt¡+ll+ (75 gLåÐ i.r+.lr - Shabwa Governorates (Block 75)' Republic of Yemen 4s¡¿ ¡,J¡l , i.¡t . ¿.rl*ll3lttll ðJliú i,# L'¡Cl (etsjt (the ¡?S^{') entered into between the MIhIISTRY of ñ,,.r¡lJl 3,ãs¡r.r.ll (75 gL-Uf¡ i,-c .¡rl dEi+-,,sJi the first parÇ and OCCIDENTAL OF YEMEN fJl+cl dJ,i.ll ¡.ÐL- çiti, åJ L< ¡-r¡^,¡¡nll¡ ¿t¡! O"¡ i+.¡¡¡¡ (BLOCK 7í)LLC,and TG HOLDINGS YEMEN INC. . cBj}l ç¡ ¡SJLi"ll 4¡ilfrf fiå¡ ?_lJ_ U and the Corporation of the other part, effective as of (date), as required under the PSA. 4+ li-ë çlJi,J" LJaJ'.-i"lt ¿tc-,':ll èl+"+,+Jtå¡ û,-à¡J We hereby claim under your Irevocable I-etter of Credit Ê-¡J t¡J-"sl è-li"ll d+Jå3 J*. J . sJljll eJt--l ¡l-3eYl No: . ......... for the Guaranteed Amount payable to the ùÅ él¡,/ MIMSTRY. _¡l-)l h ê):-t (J,. etJi (10) 6J"le Please transfer the Guaranteed Amount to our Account i¡¡trdl¡.htill 8.lt¡u No.: .. in ..... Bank within ten (10) Days of receiving this notice. : cqcll MINISTRY OF OIL AND MIIYERALS : ¡AErl By:......... (cJ¡tiJl ¡.r¡-) Signature: Title:....... Copy to the CONTRACTOR (Address) eement Block (75) 74 (75) t'¡¿ur {¡-ut ßrur ( ¿ ) d..¡¡.ll ANNEX'38 ' ,J+¡¡ll ¡+¡(Jh" d$qt.. FORM OF CHARTER OF TIIE OPERATING COMMITTEE ARTICLE 1 (,t¡Tt ) ðJrll PERIOD e-J.¡¡tl l-Jr¡r.3 &L{l-dl OPERATIONS AND DEVELOPMENT All provisions of this Chartcr shall be subject to (6) sr-I rtrrl di¡¡ll¡-ò dslg-,.+-î*ïl"il provisions of Article 6 of the Agreement' l4itjttis.tt ARTICLE 2 d+..!¡tt fj+l OPERATING COMMITTEE ¡,'. ãJ ,# d$-Ell t ttl d'¡lrl-i+l :-i*! :1'2 ç1 ôJljrl tl+ 2.1: Operating Committee meetings shall be held at any ti+J,r.t cilSr,¿rU"tt ù. J i¡-r ','lL,Þ time at ihe request of either the MINISTRY or the .¡jtll 4+ èl+l Lri (30) irpti .,J,o r¡r. dñ Y ¡lll.! CONTRACTOR, upon at least thirtry (30) Days *tol;r. )l-cl$.r.i's ¿l .,'¡t ¡.ll-¡oïl 6r+ çs¡,¡il notice in writing to the other Party, but in any event .4J"¿-É åj- ë¡ dS qrå df-Yl .J'¡-* shall be held at least once per Calerdar Quafer' ë-j.:jlt ûiá-åi,i',' îJ¿lri+lç!.¿[..& Jtlrl çl z2a 2.22 Any notice for any meeting shall include the date, Þ¡,* cJ¡¡+ r+ l¡åJÁ r¿l4irJl ell.rl ¿tS.ll¡ ro¡^I¡ time and location of such meeting, along with a list L Vrr*" ¡-¡llJ r.s¡¡-¡ r-r.iü ¿¡s¿* .t{li¡U" Êå-,.i¡l of the items to be discussed. The Vice Chairman iF.å¡J rj , ,.ìJ ¿Uc.¡ .áT ,,.iLdlt ¡.130¡lt .rl.ro! shall be responsible for preparing the final agenda ç.rJl-e ¡-.-¡¡¡"ll u, i.+r for any meeting, which shall include all matters .-*, J. "*- cj$ ..¡" ui'liill ¡¡"!l proporêd to be discussed by the Chairman and the t.í¡fTr J útel.i.Jl i.3|ra'¡.rÊ ¿1..'¡¡ .15tll Vicè Chairman. Agendas shall be provided to the .¿u¡lt eirþ eb"l (Ð t+- .,Jo .Jü Y ¡* Parties at least seven (7) Days prior to the meeting' uia¡ fl! är..,ilL )"¡S.,¡itill r-¡t'-ilt .¡¡a i3-2 o ¿U$l s.l3 2.3t A quorum shall be deemed to exist if each Party has ..¡Jt.JS ¿ro LF". one rePresentative Present. å+ d'¡tetüàJ '4'2 held in e[ri- oj 'i''¡ r¡l ',' îc dl+i-fill 6+ 2.42 Ãll Operating Committee meetings shall be Jll 4+t' ü4 ¡¡l ¿tS" çl .r¡ J iii"itt ãÐJ{¡+ll'f Sana'à, the ROy or at such location as the Chairman "F¡" .+rit¡ and'the Vice Chairman may otherwise agree upon' Committee must be . Pt"+yl+ \þ ¿¡1* ¿l .'q Cl$'frll e.¡J c'l¡ly ¿1"+ :5'2 2.5: All resolutions of the Operating t*yq úl-¡l J! ,J--él irs¡J Y ¡l oir ti¡ approved unanimously. If matters arise which cannot U I r.¡iît .+-l¡ clel'L'o¡ bè'unanimously agreed the Chairman and Vice flrtJ ¿l*¡U¡ u,¡"JJI ,,Jc Chairman shall meet, in an attempt to reach such irÉr3r 4.¡l¡ e çlLliYl éll¡ d5" dLiÀ l¡lr .ótfrl d cJ-r¡lt agreement. Failing such agreement, the À çl d-'llJljCl¿-.ô¡il- -¡¡l-fill cjru"ll .,JÞ C-O¡ffneCfOR shall consult directly with the .ólr. MIMSTRY to resolve any outstanding matter' c5; ;$-l eiL.i+ (iJS"¡ d¡ t¡l+¡ ,e-û ûl g,JJI ciu ¡rÞ 2.6: As soon as possible, but in any event not later than J* t*+ r--.1"-¿f-u3l ç.¡s,o Ës,0""¡¡ '-ilJÅTl Oays, after each Operating Committee cflLcr. forty-five 14S¡ i-"*å. JJJ-. r-.t U+l dlJ,--!l C+ #¡ Yl mt"ting, the Vice Chairman shall submit to the ,It-rtl 4l¡J o$'i ,JSl å+tE t-; (45) ¿¡'a-¡f3 Parties draft minutes of the meeting summarizing the ¿1.-.3¡l Jl éIb drtÞu:à)l F*.es ,lt " results of such meeting' Unless approved earlier by ;r:l ¿r-r.¡[ '+. minutes shall be presented at the next þ iìlr¡t ,",.¡3 rË üsl C t" ,tßrlo ailtCl¡.t<+ >Litl the Parties, the the Operating Committee for a¡'d el-S -,¡,iü,,J ú¡- .ci.þ c,,ô¡ # e¡lÞlt cJ+ + meeting of shall be u+¡lf .+U-¡..'+-Jt ,;^ e C+; J-¡¡'c¡ '"'^'i rã considðration and approval'. Such approval J" e ôtct,¡¡. UI!' evidenced by the signature of the Chairman and the rt* Tt ¡ø1r.. O!'å 'ri¡+ '¡';Ul Vice Chaiiman. Thereafter, the minutes shall éU¡ o-å ú¡iil o¡lt drtrt¡U l+^t3å LiLl-,¡a d.o-S constitute conclusive evidence of resolutions .ËL¡-Jt adopted at such meeting. I ¡Wu^"n Block(75) 75 (75) t'.¡¿txr'$'ðt hM 3 &lÊll irt ll' ARTICLE {+J¡tl d-Ê,lüll ¿t4J' OPERATING ST]BCOMWTTEES 3.1: Each Subcommittee shall consist of four (4) rù¡-8". (4) 4*,Jî i,.l+'¡s d$.b U+l cJS ¿-És' t¡ ' :1-3 representatives, two (2) representatives appointed by (2) ¿ljft¡6Jlj}ll cJ-¡¡,C¡- ¿t-l¡u"ff¡r (2) i,ljl th; MIMSTRY and two (2) representatives d-3.drt-¡"¡t d-+¡ ù-. irl-+J ¿tr--iït appointed bY the CONTRACTOR. Each .L-'s I r¡s e-ij sùùcornmittee shall receive information from the -¡¡-¡lJtl Lå15 rl.ueþ t.ii*J di-i-ll ¿'-. ol-¡lJl Operator, and shall make all necessary reports and i irl ¿ rlLr çLJl ....-¡¡ll sJÞ å._cÞI crts¡lLll¡ prbposals requested by the Operating Committee' .d¡¡.f¡l 3.2: Subcommittee meetings shall be held at any time at er ir,'. ËJ ,91 ëA+J¡ll d*r-Sll ¡i.l drt-cLl+t the request of either the MIMSTRY or the Jlr-,å! ,,. lJ.i,qj¡tiJl ,li-¡t3rJt '.' tt .,Jc CONTRACTOR, upon at least seven (7) Days notice rJ,iil . åJ Lll el-rJ (7) å,r-, ¿-- cj-l Y in writing to the other Party, but in any event shall be di.-Þl-:¡Jl el-b . i.: ii ,,, ¡t dlJ.-åIle+ held at least once per Calendar Quarter. Any notice 'r-å¡ for a meeting shall include the dâte, time and .oa¡Jrlr ¡j*Jt C-.il ç-ô dJ$ "Je i.¡'- location of such meeting, along with a list of the CF . l¿ rj ,., ri tl ',¡Tl+ ¡t'-^ii arl items to be discussed. The CONTRACTOR's (¿l-.¡¡Jl élli-J ¿t--J^ll¡ å+Jlr ç"¡l-ilt representative shall prepare all agendas and minutes LJÊ¡I-I .i¡- ,¡lt g'--tCt+ a-.¡U c¡ Liå¡,' of Operating Subcommittee meetings. A quorum j3l.ra' rt-r-c! çJ3lJ"ll dLj"' sJe .,' l.j shall be deemed to exist if each Party has one (l) H:'+, "¡- ".: r-,¡rll d¿r-Hll ¡-j.l ålrt"¡àJ present. All Subcommittee meetings r-¡. representative ¿f-r:r. Yl J-å¡ l5! ),ó¡-S,. rt.r¡ltill L-¿ill strãtt Ue held ip Sana'a in the ROY or at such other i, .1.,-¡¡-t rJ-_S ¿' ' (1) u--l¡ d-3"' location as the representatives agree upon. Any r'lr¡- ui i*Jttl drû-tll i¡¡-+l d¡tr'L.i+1 r ï'n ¿f recommendations or proposals of the ôJ-F+ ¿lJ. qrl J ¡'-Ji"J" I 4-+JJ{¡+ll Subcommittees, whether unanimous or not' shall be -¡'-i'i ç-..å c.t+,--f duly recorded in an appropriate report and efJ,- (tieJ¡ll d;l+ll d.t--Ét ¡l çl .¿-98""1t communicated to the Operating Committee by the crr-,ti.o -¡-'r-Ê*J +õ i,l .'r+J o+ P C al ¿U+)t+ c"c CONTRACTOR' s rePresentative. ..J¡Ul LB"" dts u¡ d+¡"bll a+l o+ êl+ 3.3: The Work Program and Budget Subcommittee shall ê- d.-l¡îl+ ¡r¡.ljr"llJ cJ^'-lt q.U¡.*r'l] 4j+lll e-Ê :3-3 liaise with the Operator and report to the Operating ú¡+ us di+r-lÊll å.j+J J! b*¡lö a' î'¡ di-Lll Committee with respect to the following: :lsTl LliL^',*ll+ 3.3.1: preparation and implementation of Annual ¿+lj¡ll¡ jJl çJ¡-Jl A.UJ,IJ \¿Ñ3 ':l'toJ :1-3'3 WorkProgram and Budgetfor : :éu o Exploration, and . úl.i53-Tl r Development and production operations eEiïl d¡l+Ler 4#rI 3.3.22 preparation of current Work Program outlook; rç-¡l+Jl LJ",J C'Ui iJ¡.''fu¡-lt ¡l¡cl :2-3'3 3.3.3: Crude Oil marketing and entitlements; and 3.3.4: The form of Statements of Expenditure and J lftLJ,¡^ll L'-.-.llJ êl¡l.L¡ill r-hg :3-3'3 statements of Liquid Crude Oil production' r*,¡t-,.o"ll U+'- elJlÀiill 6tir! c.rtit+r ' crt-:l++ :4-3'3 3.4: The Technical/Operations Subcommittee shall liaise .d3tJl with the operator and reports to the operating Committee with respect to the following: cjL,-ld! ôl.,+l-ll¡ +¡ilr ¿¡u¡j4+"Jill ¡¡=llJ e¡ii :4'3 ^- dJi-fill 1$l Jl to-.r*-j$ ¡ri$3 ùi'Ì,'lt of the Development Work i¡r-,*ltr ú1414 3.4.1: technical aspects :4$Yl Program for development, production, maintenance and other production lr+Jl :l-4'3 atijll¡ 4i"nl+ u!.lÀll dl¡'ll C.uJ+l1S¡ll *i. development activities concerning: .i¡"sll¡ 6t$)l :J-i:l c¡ b-lp¡ ful+.áltJ o geological and geophysical programs; .å¡l+¡¡sj;+ll¡ 4Þ. J¡rÞll CalJ+¡l 4/¡ drilline locations; and ',;'-i:;-", aV AgreementBlock(75) 'ø*o . major facilities projects, ¡i,¡,,rri¡ll .Sl¡,cll ¿a¡l'L 3A.2¿ fieldand marine operating activities. .åÐåillJ fuf¡sjl clrr"üll ¡l¡¡l :2-4-3 3.5: The Contracting and Procurement Subcommittee d..,-lCt{ crt¡-..-¡Cl¡ ûlr.3l,ill i*J¡ll I :5-3 shall liaise with the Operator and report to the ê.- f$ t¡-u¡lfi -å-j.ll. ÊJ¡-E Operating Committee with respect to the following : :+$yt .¡t'""¡t + d+'.fill Jl ¡s¡ cJi"LIl 3.5.1: Implementation of pre-qualification process, 4li ¿¡.5t l-.r.ic el5!l i¡blt crt.=¡l"' \l¡n ;l-$-J when aPProPriate; .t"il- 3.5.2: review of bid lists; .c¡lctl"ll el9 i'+l-* :2-5-3 3.5.3: preparation of bid solicit¿tions; .¡h*!l tþty d¡lct.Lc.¡l¡c! :3-5-3 3.5.4: review of bid evaluations and recommended .'..êCl crlct-¡)l¡ d¡letLJl ôh#Í i'+l-r" :4-5-3 , awards. rþ d--l$l4 ...r. I r¡ C l+J¡ll Ai+Xl :6-3 3.6: The Yemenization and Training Subcommittee shall ¡.r-3ll¡ l-l¡sJLË ftJ fJ-i liaise with the Operator and report to the Operating d.i¡;,-ñlli-:+l J! e' dli-i"ll ê.¡ Committee with respect to the following : ;4¡rlt .JitJt; 3.6.1: review of the CONTRACTOR's organization rLlel¡"ll L+l¡¡t dSt*J A'd-r :1-6-3 charts; 3.6.22 laúning and Yemenization plans presented by erLli.ï*ll g* L$Jl Aii.rllJ i,r¡Jñltlti:2-6-3 the Operator; and 3.6.3: recommendations for Project Team & ¿rr¡"¡t ,åJ Jl t¡.-¡L*ll ¿'t! d.l+.-él :3-6-3 Secondees, as set forth in Article 5 of this J.àU¡l (5) iJJl os.r¡l3Jl ¡-¡ll Annex "E'; and å-.-JJJ| with annual Work Program and O¡gJ-Jt <-u. 4i'.'*ClJ a4'6'3 3.6.4t in connection training for -.¡o-3¡ ¡J¡ll-¡ Budget, review and recommend d;.r'll 6.e1-i¡¡¡ i,*-ii+ll Yemeni employees and a schedule (which .+-+) tC¡¡-. ¡+..i*Jl c't-+tj¡ll¡ with ¿¡S¿ ¿l ¡ j¡*lJ schedule or schedules shall be consistent d.rt*¡tø e- ¡j{tl'3" ¿l..h tj¡l¡-+lt ¡l international Petroleum hrdustry practices) for úùlJll+JÊ,il 1 aaJUlt c+l¡-É+lt ôl.,Þtj--ll training of specialized Yemeni personnel to ttll ,j..,Þ+l ix.á^áâr4¡l ûÈi.*lt replace expatriat€s' .-i. ARTICLE 4 1*r.t¡ iS-tt Êt-¡¡¡ll EXPENSF^s of Operating l.cü--ll *-s a+j-il ¡-L¡Tl¡ út-l+Jl 61,--clJ,ô ê- Reasonable out of pocket costs and expenses drU¡iJ.¡-¡-¡t ç++lJ eir-¡l-,an ù!-¡ re-+ÀllJl L+l¡-É+ll Committee representatives and Subcommittee ú._"l çrill i+JIl ¡i+Xl ,#--8""J d*r,--Ë¡l +.,Juo" representatives, incurred traveling to and from meetings Élrl¡i+TlJ ¡ ¿'- -¡,i*J el r+' cl- outside Sana'a, the ROY shall be reimbursed by the 6-¡tiör-i'i"ll CONTRACTOR according to the same policy the ¡-,ç¡t ,;rui¡l t i.,t dJU"ll ¡J+s ¿¡. ¡r "'i r-iJr* el¡j-"a CONTRACTOR applies to its own employees. Project .¿-l ¿u+r-ill üåiL..Jl s---lÞ djl-¡"ll I rilh,rill Team Secondees shall have all reasonable out of pocket t-¡:¡--ult ú-+-rs,r-¡ ¿¡-+*¡l ùJJr-ll d--'J'i¡- costs and expenses reimbursed by the CONTRACTOR JrSl cJ-¡I ¿¡- J.:*l c.t-iii¡ åJJi'. ',' ¿î ' åJ¡t-o'o,r$ according to the same policy the CONTRACTOR applies ü$LJ-JI ,JÞ drU"ll t eãl\,fil AJ+JI ,'il t i,u to its own employees. Such costs and expenses shall be ¿Ji ¡-¡J,r otÀ3>.-- !l¡ diti¡ill '¡ì lr, .a-J ¿g*.t:lt cost recoverable. :lr¡idJ å-li! /1 Agreement Block (75) 77 (75) $¡ ¿tx i$-tt L\l.A ARTICLEs lr".t¡J ð¡t ¡l PROJECT TEAM SECONDEES ¿¡¡trtt,fu¡"Jt ùtJlt'll The Yemenization and Training Subcommittee shall d$.Sll Aåt J! l.6ll+.áJl çt¡¡rill¡ ¡ ¡¡,$ å-te;Cl 4blll ij recommend to the Operating Committee, for its approval, ir- L!+J c!5 J! Jlr¡ll ãJl ill ' ¡ LJ ¡ ¿L-.1 LaSlt¡ a MINISTRY employee for secondment to each of the :cJ¡tiJl å¡i5lt å+¡EI ¿rJ.i"ll óJ following Project Teams of the CONTRACTOR: eJ¡5 r4¡l¡s,.ll¡ dh'll G.EJ.J Etii)t ;l-J "Production Schedule", Work Program 5.1 lc-í¡l*Jï and Budget; r 4¡¡ill :2-5 5.2 TechnicaUOPerations; c¡l¡lt¡úll Procurement; and ¡ f drl.rr.-¡-¡Êlt¡ :3-5 5.3 Contracting and 5.4 Yemenization and Training .c+¡$ll¡ ¡.¡i+ll :4-5 the Yemenization and Training Subcommittee shall .,u¡o-3ll3l r¡C¡ ¿'JiltL-=þJ!eÞ review the perforrnance of any such secondees and shall þ¡ol Lel.r,¡--¡L-'-lt éL.iLl ÞLel ct.:l å'-'+l¡,q have the right to recommend to CONTRACTOR or,.r,rr r¡*-å L_+ .a-+Álå¡ .,,10.Ë,r,rËl disciplinary actions, including dismissal, if appropriate. ARTICLE 6 L¡l..ll ã¡Lnll CONtr|TDENTIALITY It is understood and agreed that each of the Operating A-+t *_8"" d-S ùf-+ ¿ .¡l^ ú'ii^llJ e¡$lt ¿t-' Committee representatives, Subcommittee representatives ,¡¡-.¡1-u!13 f ;^¡ill clS-fI ¿tal3 d+-flt and MIMSTRY Project Team Secondees shall treat all úê¡l-t .-¡Jr t¡->.,'"lt .!-r-il ãJljll cJ-+¡ ¿l- information obtained through the performance of their ¡-l ç-{l ûL--o-¡J'.cll ¡-!lS,,-J" duties in strict confidence and shall not disclose same to a+-r-'t 6il-+-¡t È-{JJ cÞ-r ir""- L-ël' any person, whether verbally or in writing, without the ccr-Å-ìçT bt-li¡ 1,.-.Jñi Cl-l¡ e-qg othei Party's consent. All such representatives (of the ,-¡JF-tll f-iål¡" å¡U-i cl¡,-' CONTRACTOR's and the MIMSTRY's) and secondees úJr-+.t tlr< J shall be required to execute a confidentiality undertaking ¿¡--frJf ,¡t tì¡i d--J . '¡l 15 "-J" '-r)l to the forégoing effect. Any breach of the aforesaid ¿¡l-, ¿3¡t-ullJ(6Jlj.. -llldrt-{ confidentiality obligations shall result' inter alia, in the .U-r¡ .et ¡.,¡lll éIU 4+!l+ r.6i -l'e+¡Cl e<-,- t+Jl" removal of said representative or secondees, if mutually ¡l¡=ú-l .dJÅl -¡¡-l u++ rl e i' Cüt ei3.u '¡lh t+-"J d',1'l-!l! agreed by the MINISTRY and the CONTRACTOR' .éll¡ "þ cl¡liJt ,6JljJ "iâå11 l¡! r-)lJl ¡l CB""ll éll¡ ARTICLE 7 FINAL AGREEMENT l¡rt.,llã¡tdl charter is the final, complete and sole agreement ¡-crt+lt1 å-¡3tiill This with between the MIMSTRY and the CONTRACTOR 6Jl ''!l r+Jl ót-¡i)lr ).LS¡ lJî.l.É êlJill l¡-ô J-+i'd respect to the formation and regulation of the Operating ú¡.+ dts-i\,i-l'+ lJiÀ cJ¡üJt¡ Committee and the Operating Subcommittees, provided Ju¡, C[r-!]tAiJ êll¡r 4-jl ,¡-ÞJÉll that the Operating Committee may approve more detailed ,;¡-.åtj ¿l d¡-$ ã.-i'.ll ¡.. +.+ ,Jo d[r*Ëll procedurei for the Operating Subcommittees, as deemed ,*ljú¡f ¿r-¡.lt e+lF-ái$l úlel.¡'-¡.)l ù- r-+-F .,-! necessury, in order to fulfil their responsibilities under l.Él+1,ó-""+ cLÄ¡ll éLJi3 l+-l-l-¡¿ cLJl ¿u \-^l< (A-ÞJill this Chaner. .êlåill l¡À s-ål¡¡i A^ ; Agreernent Block (75) 78 (75) t'¡¿tx1$-ut lfrl.\ ( AIII\TEX"FO' J) d¡L¡l ACCOT]NTING PROCEDTJRES' {*rgl¡.ll é¡l¡lJ+Il Definitions : r.i*,i¡J The definitions contained in Article I of fhe Agreement shall $-¡ åSJl-L¡l f?üL¡:l üF (l) lJJl çJ ''ÐlJJl +rLill ú4In apply to this Accounting Procedures and have the same . ,r&.¡l .t¡ çJ,..:¡ oie å'¡-Ul r:rlcl¡¡! uÞ 6Uilt meanings. 1.1 Purpose of the Accountine Procedures : å#*,,¡tå¡ll ,3lel¡¡Tl ir ¡fd :1-l 1.1.1 The purpose of this Accounting Procedures is to ¡i¡L..tÂ.¡l crlel-¡,-a,!l o,i-l ¿=o gr.¡;lt ¿l :1-1-l est¿blish methods and rules of accounting for the ¡:#-.,t¡i l-ol¡Ë¡ Un-..,| C*¡ -¡---¡ Petoleum Operations under this Agreement' .¡+¡üîIl oir ,¡.¿ñ+ ll¡¡rlJ c¡l+l¡¡tl 1.1.2 Any procedures established hereto may be LIr'3 j¡¡++ ll .r r.i" cl r+! ul :2-1-f modified by mutual agreement of both Parties ólJ3l+ ..,..,- çÍ hereto subject to future arrangement. .¡+ltît."Jl c.l+¡i-Êll i,$Jtll ¡-¡¡ r-¡. ¡É5¡ 1.1.3 No charge dhall be made or accounted for the r ll¡-u¡ll úL-Cl¡rll s. t.-¡¡å. d-.J Yl ,., -J :3-1-1 Petroleum Operations unless it is related to the Arl" ¡j¡ll ci+lJtr tL- c¡li dits 15! YJ ¡ilsl ¡rJ Petroleum Operations covered by the Agreement. .i$'i¡Yl tct 'n ét 1.2@ 13 c¡tlt¡ll 1.2.1 The CONTRACTOR shall, pursuant to A¡ticle : ¿l+:2-l of the Agreement, which this Annex is made a part ç5llr åJ¡" ll3ït +. (13) 6¡1*lt f ãrL cJ¡ËJt ?A il-z-l of render to the MINISTRY within thirly (30) iþu.t¡¡rJt LÉ ej¡ úJll h¡ J,{:¡+ Days after the end of each Calendar Quarter a ¡¡-¡t Ë¡-.ú{ 4cli l-g Statement of Expenditures reflecting all charges or Ul+ ¿r._l i_få dS u. (30) irÞJ credits related to the Peholeum Operations for the cl¡¡r-ll-l .tJltldl Ci-+"+ L¡J'J +Jl-á¡Ir period, summarized by appropriate classifÏcations r,r.¡l3¡ ¡Ë Jilf dl-bl4+LJ¡¡ll Él+l¡'Jt{ Cl-.i"Jl indicative of the nature thereof together witl the I (1-#L Àl å--.¡l¡ gir¡l-ir.r¡ å--it summary of such information on a cumulative "J" o3l åÄ.åf! basis from the Effective Date as wetl as Year-to- (JnL-l ,JlÞ *Ul-u! ü'.c, ,Jlo.it J! date. .å,r-¡LJl ¡j*llJ ¡Liill 6lE u.lJl+Þl ç¡Sli¡ 1.2.2 T]tre CONTRACTOR shall render to the L-.3s (30) ül--5)3 ù_i' drl-¡J e.t-i¡ 2-2-l MINISTRY within thirty (30) Days after the end å- 4"lrEåi- tt-4Jj-Si-tJai ¿'- of each Quarær a Statement of Expenditures ¡ ! l-il+ reflecting all charges and credits related to the ¡'nll¡ '-¡l-¡Sl-,)llt-q Development and Exploration operations for that úl+L4 å--lJl ¿e¡ll¡ ¿l-tj¡IYl e-flS 4+¡ iri+i Quarter summarized by appropriaæ classifications å--ÅL ËJJSr-.ll L y.-il ç¡l-iSi-YlJ ¡,+¡Äll indicative of the nature thereof except those iûems rJ¡ .k¡ rJS ¡-trL r'J+ r-u. ùl -p "þ ¡i}- ¡$ of controllable material and unusual charges and _¡¡rr o*.l¡ or.i.rl'rffiff credits shall be detailed. d {,d 1.2.3 The statement of estimated expenditures shall be .J¡61 t¡ " ++l$l¡ l¡t-,o.ol\ üt+ :3-2-1 sent to the CONTRACTOR according to approved JJ e.+, ' Work Program and Budget, at least thirfy (30) cJ+ ¿ll¡¡ ¡¡-ó'-ll ¡+rl-*Jl¡ cjJl C.UJ$ Ë+L Days prior to the beginning of each Quarter, and a .& Ct-r cJs år"tq,¡ cl¡lt ,rb t-$ (30) û$l copy of such statement will be transmitted to the .EiI r.¡"! _¡t-ì"ll , r 'tSll ¿," i¡-¡, öJljll çslJj MINISTRY. The estimated expenditures to be Jc-i ds ç5¡x- çill 4+JÈrïlll +Jl,á.ll JS*:J made in each Month of the Quarter are the cf . ¡l-¡L- ll ¡i¡t estimated cash outlay for such Month, including eülJ q-,¡grfiI åa$il| *+ ëJ (Jl^ any payment for liability incurred during previous st¡ll li'¡-"" 6X-¡l å-.r.r A+f éIl3 c# L.+ æ¡lt Months. The estimate for the first such Month ,F13ll *¡Åll OJ .¡Å.tJl J reill LLi ''' -^tr shall, at the Operator's option, constitute a request LJt clr-Lll Jl-;i,,,'.,- dS-¡r- cj¡cJt J,{-ilt+ for advance. The estimates for the second and third ¿,iJ(.ill drl¡¿.r.$ O¡S3¡ L¡Ë" ¡^r. & cJ..-.ll succeeding Months shall be tentative only and may i$.y crlSll¡ ù#l$l be revised in the subsequent submittal. The ct' k!",ü üs"i!-:¡Å çjt'3ll aforesaid statement shall indicate the currencies in' , å .rKlt ç+ g-j-¡ ¿Ll¡ ¡-.1eú çfjll c¡L+ltll which sums are needed for the Petroleum Llll¡ Lë èJ¡lI ¿rs ç¡Jt"ll diX.'ll Jé.:.all Onerations. .fo¡¡j+ll d,il+l¡'ll, lt' /,.'f - I/ \-/ Agreement Block (751 ,, (75) ¡-¡ ¿tx 4¡.at rew\ -¿=='- ln case tunds provided by the CONTRACTOR for l-$Jl dLjlS ll! t.2.4 given Month are not sufficient ûo cover the .'c'-il dli.¡l ¿r- èlt-+^ll I :4-2-1 dre requirements (within the limits of the ¡-#¡¡ll úl-+llú.!l ¡.-=ù$¡ t-"ütS J*Jè r cash or authorized, ovemrn), the jJl+i¡l ,lt' ¡,'.Jl ¡-Jlj*"ll r-¡r--.* ¿r-:) approved, budget to the CONTRACTOR t¡-K dJU^¡l J! d¡-i.¡l ¡J*,¿ (a-+Ej"-,¡,"¡l Operator shall transmit tJ¡i¡, , - .ir,ill ¡r¡l-åyl ii,-.¡^ll dr¡ /',, ,, l-rLñ with a copy to the MIMSTRY supplementary ¡ . .Jrr¡' . t ! q¡lLi jjll ã Jl l ri,J É r i.! -t-¡.ll oi¡ +j .¡ilt ru r st¿tements showing such additional amounts to be r J Js advanced, and the date the ft¡nds a¡e required. .ã¡;ï.; 1.2.5 The Operator shall keep records of funds advanced ¿lt+lt Cr dù+-,ijåtj3¡Yl d[-i^ll g-.1,Þ,,, î., 2S-2-l and expended in all currencies and submit a , ¡.t< ¡.:-ü¡ dr)-ll fjK ¿x c¡iiil él å-$.ll statement to each Parg hereto showing such å-¡¡"ll c¡l-irllo5-è 4+ ¿,_-t l'iÀ .¡.¡-t dll advances and expenditures. 1.2.6 Within thirty (30) Days after the end of each g¡ é q.r¡ r-r. L¡l (30) ü*U5 ùÅ drLll Éõr '.6-2-l Calendar Quarter, the Operator shall submit to each ç¡ll ¿¡¿rll.¡ rÞlLl t¡.ls ú 'L dsl ! ufr åj- Parly hereto a statement of the chæges and credits et¡lt ¡¡.¡*.. Ct+"I¡-¡r ¡J é¡lÅ ç-å L^) la"¡Si (including any payment for liabilities incurred é(A.U¡t l.i*,ll cÞi,', during previous Calendar Quarter) for Exploration, s".¡*¡.¡lt ¡-.-r -ir appraisal, Development and other Peholeum CrÇ*lt¡ .¡ J îìll, fr+¡I" lJ ¡cil-"iSi.'Yl oLa¡"c Operations. Such statements shall be in Yemeni ¡l-ll{ä+a., i¡.1<\ " ¿¡S¡.¡g;nTl il.¡-Ér$ cunency and United St¿tes Dollars. '5.0 c,l .iÉ;.!t JYrÈltr.r 4¡¡"Jl Records :cri-+rll :3-l 1.3.1:The Operator on behalf of the CONTRACTOR, '¡l ."c ¿l .lrül ü- A-,r.ç ü-Lll ,r-lc' ,., rjs :1-3-l shall open ¿nd maintain in the ROY original and .-!Éll¡ll¡ r'l¡-V df ¡i¡^'1" I ¡r.JJ(^ll d !:år-Ð supporting documents for all the accounts and o¡l ti¡ Y! rcJ¡-Jl3 el.¡L."JlLåtSlã.:43,.11 records, unless the MINISTRY agfees otherwise, to ú+fu i¡-fa d+*,1 ,rJl .,¡l l\ r+¡i âJl ''!l record in sufficient detail and in separate accounts rÉ-il dù-l-.--l.ll .ll*i¡. d.¡t+l-s+J the hansactlons relating to Exploration operations, .eJ-JË!lJ ¡r-Àt-.iÁ3gYl úl-JL+ d'J'! appraisal and Development operations and other Í oL-þJl3 ¡-d"¡Jl ci-JLcJ Petroleum Operations, in accordance witlt ,g-¡,-iTt rt.àill t ïiJ,rl li, generally accepted and recognized accounting ¡j+i"ll 4#-Ul ,J"-,,!J principles consisted wittr modern Petroleum dJ'-l ê- ¡r¡,ì"il|J i-lro å-¡3,-¡ L{+,-¡Ji-llJ Indusny practices all in accordance with and ¡.åsll AiL¡¡!. ll çøs-Åy r-!iÛ t-r.J | ¡Þlt subject to the provisions of the Agreement. .¡+íril ÊK':fr 1.3.2: The Operator shall maintain appropriaûe cost år,li^ll dù+-Jl+.LlJL)l di-L¡l .J' .r,+É i2,{.-l confiol records as required to meet requirements cr!¡ll'i"lt¡ cLå3ll ,.rl li, fjù L ,,,,,,- ¡ilslll ¡{l!J'l and obligations under the Agreement. .A$iT$,råf.+ eLl¡ilYl-¡ 1.4 Adjustments and Audits :c¡l¡+lll¡ cùl+¡¡ll :4-1 Each Süatement of Expenditures for any Quarter shall ili-Yl .LLÅi , ¡r.x , ¡.r< conclusively be presumed to be true and correct according [¡sJ L¡t . ,y ç¡¡- êi.t dS J+r+ to paragraph 1.2 of ttris Annex 'F', twenty-four (24) L,¡|d t¡-+r-J- ,r t jL, (l) úJll l¡À ,r (2-t¡ erüU Months following its submission to the MINISTRY, ,+J i_¡t i-¡Jt ¡Js,-rt ¿-. I )4J (24) +¡-,ie-e ¡-.-j .-¡ unless within the said twenty four (24) Month period, the ¡-Ð!l "à rå ¿Þ-i ÊJljll 4-+lÞ , ", . '-j. I l¡J Y! MINISTRY takes written exception thereto. During the .l-¡j.lls I .'l-Þl e"oté\ J1 tJ+-5 (24) e#t said twenty four (24) Month period, the MINISTRY shall (24}A;-!.ri-+J$ ô Lii ¿Þ-lËj ì!l ú.-sr have the right to audit the Operator's or the dr-Í.ll c.l: dii .* ûl'.Jé¡-Í l¡-i CONTRACTOR's accounts, records and supporting tå¡ e-l-É documents for such Quarter during regular business hours ê+ dl ¿.+' t-a.lir,¡Jl úl,n ."Jl l\ S¡ cJ¡tiJ¡l upon reasonable . notice in YEMEN and, if necessary, ,#-3 ¡-!ú¡"ll {Jsjl d.-'ll c¡l,ol- cÞ-j. åj- abroad. In addition, the MINISTRY may require the ,l lj¡ h-r¡ '-¿,gt lj ùll liJ6-,¡t-sJl o-s 5l ¿i¡Jl CONTRACTOR to engage an international independent ël--ú éL$,Jc åJ)-o dJi'- Jl- .il 4-r.-.J¡ r-t+ auditing firm selected by the CONTRACTOR and the l.#i, ", ¡ *lll ¿r' Ull J¡l-Ålf CONTRACTOR tlrough the exercise of reasonable .J¡ff èLi;+ d Jål ¿+L çV rf ostrn'lt ¡i {ã>Jl dffince. The CONTRACTOR shall turnish the ,rWomentBlock (75) MINISTRY wr¡tÍen nor¡ce of damages or losæs incuned ¡-is õ-Jjr-$ Jr-tåþ d¡lj.$ in excess of fifty thousand Uñ¡æ¿ States Dollars t..l-çltt ¡4*¡ (U.S.$50,000) per occurrence, as sootr æ practicable ¡Y¡ {50,000} 4 ¿c--å d,- +-Éé[ ;1."åi after report of the, same has neen r,eceived by the ..{ i,<.¡,:r¡rE¡i {F9¡ r.lr¡l ¿-Í*l¡ ¡+.¡¡t+ sfui.t CONTRACTOR. .t$Lâlt .¡r¡¡ tJÉ$ d¡U.I afa"t Z8lqrue_a¡¿Glains Tu .gu of any public liabitiry, property damage and r& ú'* L riur,il ..Eír.-#HËlP '9'2 otlær insurance against liabilities oi tt¡ð COfUUmOn ¡l¿rb ¡Äsr, to ¡ts employees and third partiæ as may bc required by :.t.' +1U." rr*_çl út+-G i,LqÀ the lanc, rules and regutations of ûe SIAïE or æ the i-.ú+|l a;;s$ aliFiÍltr,3Ls$^¿fu JJl J Parties hereto may agree upon. The proceeds ofany such ..1JÉ.¡.i¿L 1+¡ ¿HttJI dJu"ll rj-r{¡[ ¡¡-¡.*¡r insur¿nce or claims colteaed shall be credited .i"ioo çL.s,r,l túI *'. É 4jü. ¡i ¿,.f¡,¡i .U¡e .irUx Petroleum Operations. If no insurance is canied for a ¿¡*. ,r-Li r-;e llü¡ r:¡bl"J particular risk, all related acn¡al expenditures incured C+.+s iFJ,¡ fJ .LI¡-AS an{ egd by the CONTRACTOR in æutement of L¡¡r!Ð La' fiË -rr¡t é¡li+ ¡-.alÅS ¡,+lr¡¡ ..!j*lt and all losses, claims, judgnrcnts, any el.,'¡ltl.lt3 ¡r.r..,ls jrf-i.tr other expenses, damagee, ana any d¡tÂü.lt ¡Ët--."iJt ¿r..e,ji J .lSI including legal servicæ shall not be .tll¡ *j U+gç-,=f ç¡tJL..á¿ Ç, afS*lf, charged be to FeEoleum Operations, .irl. ¡¡eÍ cr$*lt tJJÊ l{¡t "ÍàtJ tclj..¡ i, úl eSj6¡t 29 lleal Q&eand Fietd Exeenses tn yEtdEt{ !¿lplll , j,-¡r¡i il r .rLiüll .¡r r 2.9.t The cosr of sEffiÇiãffirnuining rhe ¡.¡ÍS-rjl {.¡5¡S CONTRACTOR.s head office in YEMEN. dJ- od¡ ¡Jrìtjl . . '< -tI _i-,Xål +¡_li il-g-z 2.92 .iFJx # çús.¡ r.þ ¡tiirytJ úùtJl+ Camp overhead and f¿cilities such as shore basg wa¡ehouses, water systeÍìs; road systems, salaries "& Lt¡"¡t i.r¡trllã-ulilt¡ €jJÉ4"¡.r¡€lÄll ¿t$¡lf t2.9_2 and expenses of ñeld supervisory personnet, field óJr..tX cl{¡.i3cLd..h c,ilS-L.ìJ 6r:JK ¡r¡tl! clerks, assistants, and onu gènðrat employees +¿r+J d*eÏ ¿¡_¡.1¡.¡d.-J Jr-o¡ indirectly serving the .{geement Àrea. úrr4 ùif "J" ¿pJ-iY ¿ùt*J¡ C*'*¡, ¡-,tt"tt; 2.t0 LeealErþens€s .åSôTt ¡ÍL¡" # ãJ¡ft" JÉ út-"å All costs and expenses of lirigation. or legal services otherwise necessaÐ/ or expenditures for the protection of J ,LlJt{d¡rit¡¡t úl-¡ÁI ¡¡#J¡lål rluf.É"J, : 10-z úe Agreement Area with reqpcct to tl,irO prrti", l|.grHL,5lélJ3*.i .¡l ,o_;tatr@ils including atrorney's fees and eipenses as he¡e'inafter t*rg.öfr ¡¡l' i¡Ã our¡,., qrovided, rogether with all judgrnenæ obtained against d5*yt +--{ n*yt*. r^Jr ìtq t.j¡ ¿¡+. ¡¡ rx¡ïr-,¡ the parties hereto or any of them oa accorint of the :* ql ,l .a-r¡!t Hr" # ,l J ul kr é=.rrr Petroleum Operatiom under the Agreemørl and acu¡al LF¡'JI s-.:6.J L¡t¡¡¡ll d+¡."Jl -rJd¡,slÊ-irJS ê{s expenses incurred by any p¿rty or panies heæto in {S.üyt ".n drt$ f . i¡L çl r".,r' ll!-r . ) r çl ç5å+ l¡lje ¿¡li¡ll cji¡ ¿l Üs"J .j= to begin so that the MINISTRY may be represented when Lt irrs3.i3*. r-.;,¡ dlt4l^' ful ,¡ ¡¡- ¿-S ¿l U^iJjJ¡l any inventory is taken. Failure of the MINISTRY to be .r-r¡-.¡Êr ãJtJl 4b çj ¡y+ cJel-iJl ol.¡¡l ç':'Jl Ð'+Jl dr+ represented at an inventory shall bind it to accept the clß 1¡-,le-llj¡ll inïentory taken by the CONTRACTOR, who shall, in that 15! )! rLJ¡- ¡-x'll c!13 & r**r.-r¡JJ r.,r event, furnish the MIMSTRY with a copy thereof' Such élli ú)Å "Þ ó$l inventories shall take place annually or as otherwise agreed' åå.tå¡ :l¡+ll e¡l¡Ê ùgú¡ :2-3 r shall be made by the 6¡lj¡I¡ ,J¡Ul d+ .¡- r¡plt t'l¡É ¿¡a 1-. åji.L"I ¡; necon"itiation of inventory f¡+¡ ,åS¡¡-1",6 rJ,.-at 1r¡l¡Êl¡ eil'iS ç'n¿l CONTRACTOR and the MINISTRY, and a list of overages "¡l¡-lt+ and shortages shall be jointly determined and the inventory .é11¡l L$ r¡¡lt ¿:l3i ù"¡+,J¡l'¡Jl accordingly adjusted by the CONTRACTOR. lì {-il-5Á)l .:-a \ J¡til Låi d¡llç¡t+ll sJslJJt ¡ci¿¡ ;l-t 33 After the frst Commercial Discovery of Oil the .cj¡tiJt iJ'4+l$ 4 t¡J d.ll-l-!I CONTRACTOR shall cany out the foregoing inventory obligations of CONTRACTOR. 14t¡ ist-tt ¡.ll$ll rlr¡--iul ARTICLE 4 COSTRECOVERY ¡-Â,riS : 1-4 4.1 Statement of Recoverv of Costs and Cost Recoverv J! i,l r$ilil u(7) Ë¡lll li+t tl-¡tLll ,rb CrudeOil !'.9¡-jj-¡ll e.+ .+ u* ji++ T ¡e-¡^ e.jl éll¡l t¡,i6 ån ë.-¡,$ (30) ùHÐfi The CONTRACTOR shall, pusuant to Article 7 of the .4.,! l-..J¡ ajJl i'. Agreement, render to the MINISTRY not later than thirty (30) Dãys after each Quarter a statement for that Quarter showing: ¿l ei¡:tJl A-r,*I ur^ ål*ll-r -rlr-,¡i.t)J å'\låil +lls:ll 'l ¿fi.-.¡l .û+J a. Recoverable costs carried forwa¡d from the previous Quarter, if anY. .çFj-ll åjJl dl rlt-i.:l.r¡ii).la-tlill +ll53ll .ç b. Recoverable costs incured during that Quarter' lïlL sJr c¡^ (ç- l) ot-*lt rlri¡ùil å-L,.lill +lts'Ìl Ju+! .e c. Total recoverable costs for the Quarter (the sum of the .,)..,l(i-4) amounts in paragraphs z1.l (a) and (b) ) above' ¿-,.-! S-t-! ,,Jc -. ú ,,áiJ d3l¡Jl o:Àl ç'rll iÀlsJl.l¡¡ â'a¡ä '"r d. Quantity and value of Cost Oif øken and separately ¿lli å-¡-Jl disposed of by the CONTRACTOR for that Quarter' .élß Aj.Jl g.-¡l;r ¡*lt ,-iJ- t5ill -,¡l:i^ .-4. e. Amount of costs recovered for that Quarter' (75) é¡¿tx4Ft¡t ,ø tu Agreement Block (75) btt4 Amount of recoverable costs to be canied into the ç¡ll åj-Jl C/.J J! ål--*ll J-r¡i-)J ililill s¡åll5ill Jhi" 'r succeeding Quarter, if anY. .c,53 ¿l .qlr. Excess, if any, of Cost Oil taken by the "ort-rj drtj^I oi-il ,¡+¡ ú! ¡ijlSll Li¡ uãl-¡ j CONTRACTOR over costs recoverable for the ¿".e ç.r.Jl .rl-r¡iill åili¡l ci¡ll$¡l ' .tu Jl e,.-i Quarter. r'xll lil h. Excess, if any, of Cost Oil taken by the ûl.eJir,"ll åjl53ll 1+"S Ëir.-; CE åJ.¡ l¡À ,JÞl ' ü15 .C CONTRACTOR over costs recoverable for the ãúljll ä.+"$l o3.o LIJ-J t-+ *t + ¿l i3tå"ll *l0 .i'-lt"' tt shows an excess amount of ¡sJÊ.i"ll f$jt^ll çi årr" didJl ol-))¡r¡ Quarter. If such ståtement , ¡'?.c1;5. c,y¡tJl fuJ'åX Income !t, J-rTt e-.'., ê+lJt Gross-up Value = =çJLaJl¿J +Jl¿+$ ¿¡S Provisional Income X Tax Rate. ¡¡,.¡-¡lt d¡- x ':¡-dl cji¡ll I - Tax Rate 4#J^åilcJ¡*-t Where the tax rate is expressed as a decimal. årr.J^åll rl+ .fujr -,¡.É d.¡-".¡e 'erJ- The above equations are illustrated by the following numerical example. Asùming that the Provisional Income is Ten United :ujulr,¡¡Xtt ç.rr*!l cli.lt+'>-ol i¡rlt dJYrtJl e',*" i ê Staæs Oollars (U.S.$IO), and that pursuant to Article 9'1'3 of the Ag¡eement that ROY Income Taxes rate as applied to the ¿.¡l¡ (-rT¡ l0) aÉ"-Fl.rl¡)9Ë "!o $c:,âCl $J ¿l cÈ-ËÅil CONTRACTOR would be sixty percent (6OVo), then the Gross- å,¡",tl'¡rJr{"JÍ LJiJt ¡.rl.J,- dlå-' 4$ljJyl i," 3- l -9 ã$J ' , 't¡ o+ up Value is equal to: ¿**ji*"*,iiléta$" , ¡jlJl+ (To60l ùt-,,*+ dru^¡l4+-jJt+ ' J L-¡L* U.S.SIO X 0.6 = U.S. $15.00 1-0.6 l$ 0.6 x ¿sÐal ¡T¡! l0 é.J.i ¡T3.r = Therefore: 0.6 -1 U.S.$ Provisional Income t0.00 : ¿S¿ ll¡s Plus Gross-up Value 15.00 Taxable Income 25.00 c,3þll cJ¡$l * Less: ROY Income Taxes at 60Vo 15.00 . JT$ 10 CONTRACTORs Income after taxes 10.00 , -rT¡¡ 15 ,r¡¡+Yl e{*14^:'j : . .¡I¡¡ 25 4uJ*åll e¿lÅlf cJÅJl * . 15 %60 4+*¡+ 1å¡.!.1 ¡+JJ{4+l¡ ¡.þ'tl la¿a ¡t'aÊU * JTJ¡ L#J¿¡t +ü .u{ d¡t¡¡lt cJ¡¡ * . -rT¡r 10 Agreement Block (75) (75) ¡¡¿txr¡'tl 0Ì,v1 ANNEX G ( i) d¡¡¡J SAMPLE CALCT]LATION OFROYALTY' COST OIL' l¡t{l!¡¡ r6st3[l AND PROI}UCTION SIIARINGOIL - çuelrl e¡J^¡ AE¡yl ,r¡ ås¡un I .htl3 Assuming that the Monthly Average Daily Net Production ,¡ru-Jl GlJiTl e¡t--l ç-,rc-¡lt db-.,.11 ¿l ¡At-,¡-:itç ("MADNP') is 80,000 BBL, then calculation of the shares of j¡Lilt¡¡-é.ltL^ çl---,o t'.!.r,J-¡¡ 80,000 (ç | ,¡,j t) MINISTRY and CONTRACTOR would be as follows: :uÐls ¿¡S¡.¡ L Deduction of Royalty owned by the STATE from the total L¡r I ! ¿,- å-¡<-ll ËJ-rTl f-.-r (1) amount of 80,ü)0 BBL according to Article 3.2 of this Ci-i¡lt ,¡ll-¡ e¡t-¡ å:,¡liîIl .*J (2-l¡ lS-U t¡ù cl¡.r (80,000) Agreement, ROYALTY - Royalty is calculated on the basis of the eêt^ I L c-r.,¡r fu^¡-,.+¡ a-i ¡r.t-l ,rle ç¡..i6JlJTl ;õ315{l percent¿ges provided in Article 3'2 of the Agreement as :otrlts {$tsYl ,Y (2'3) ;'ilJl ,os follows: d¡¡ 750 = d¡: 25,000 ðsl ,Y'o/o 3 3 9o of first 25,00088L = 750BBL cJ¡* 1,250 = d:':25,000 ,olt¡lt ,¡ o¿ S 5 7o of next 25,00OBBL = l,250BBL rl¡: 1,500 = cl¡":25.000 ,Jt$t ¿r ø 0 67oof next 25,00088L= l,500BBL d¡;400 = cl+¡: 5.000 *ll¡lt r..p % I g % of nexr 5.00088L = 4OOBBL cj*A¡ 3,900 = Ëruyl Royalty = 3,90088L after the deduction of . çllBll5 ¿¡S:- e3t$/l e-r .r'+ ( ç | ,--,j e ) ,¡ ¡r¡iiJl å+¡SllJ And the remaining amount of MADNP - . ùfi6.100 = d:.¡ 3,900 ¿¡lsyl -cl*.:80,000= Royalty would come to be: BBL 80,ü)0 BBL - Royalty of 3,900 BBL = 76,100 l"¡¡ U.,-À .:'a olol år.J..,.-ll (ç I ,¡ ,-Ë ,y 4$¡"ll ¡'J"Sll (2) e) å;Klt 2. From the remaining amount of MADNP calculated above :,rílts i-*lilt a+-: we deduct the Cost Oil as follows: ,-,nïtl !¡i Lli¡ ¿P rJ¡ Û¡hL,rll 4+.Jd '.¡lsll gËt-Éål+ -l a. ÄssumÍng the daily recoverable costs exceed the íll-lf ,rr eiJ..Jt l+i&ll ly"ttl $o q¡Jg,¡¡¡ll ¡Äsllå¡¡t value of the m¡ximum Cost Oil calculated at the .(þ "*t sþlr lâlr) ¡cgt¡õTl oh oÉ (1-7) percentage sûated in Article 7.1, ol this Agreement ("maximum Percentage" ) ¿J¡¡+3B,o5o = uoÌ;lr* = iÂrsr.hr¡ Cost Oil jþ1¡gg¿¡¡q= 38'0s0 BBL 100 are L¡i fuuil3 trl¡i,"¡ll 4t¡cl ¡lßll o.liåti +i b. Assuming the daily recoverable costs $300,000 1300.0001 ¡+å and are less than the value of the maximum Cost Oil f¡,.r*tt å¡s¡r ¡¡¡¡ .,"iñll r¡ll ¿r úl c¡¡ ¡l¡l calculated at the maximum percentage; and ¡t¡¡ ¡*¡ ¿l .¡t¡it¡ ,l+J¡"ll 4tu':tt sr¡ffJl ¡-¡ll üe assuming the Cost Oil value ¡s $20 /BBL. . d¡+ ûsl ¡l3r (20) ¿il.ig ¡llfll Cost Oil = Dnilv Recoverable Costs ô¡l¡i¡,¡¡Jl ¡.+.Cl L¡lsJl = ü¡gt-L¡¡ Vatue (per barrel) of the Cost Oil (3-7) ô,rr-r r4h ¡lrsl *.tqIF,; under Article 7.3 of the Agreement Costoil= $3oo'ooo ¡T¡.¡ 300.000 = å-Äls'll-hli $20/BBL rJ¡¡¡ #1.il.¡r 2o Cost Oil = 15,000 BBL d:.+ 15,000 = f¡lsll .Li¡ Note: :å_å¡)l-ô fot ttt" purpose of this Annex G, "daily recoverable costs" å.-.áÅ.ll rl.r¡3i)J åI.$ll l¡^Cl +ltSll Ol¡ (¡) ¿"l"lt l- means the recoverable costs allocated to the applicable Quarter t "¡¡l¡ by the number of days in such Quarter. .dlb 4j-il ¿.,.J Êl+l uo ,rl" ¡¡ "Í 9¡Çl il' erll divided 3.The remaining MADM ("Production Sharing Oil"), i'e', ,¡,j ¡) sjt.+ (ctijylåSttl^Ë) (ç | çr.Åd Cx qr+t"t! (3 MADNP after deduction of (i) Royalty and (ii) Cost Oil (2a or ,o)..o1 ç/ 3t 12¡ i¡lsl Ë (2) r ãrull (l) ê,-À .-.,(ç | 2b above, as applicablel according to Article 7.2 of this :çYls elli: L¡li3Yl ôrÀ ,y (3 -7) ô.rtJl tiÄ3 (r-i'L ¡¡ tx Agreement. M AgreementBlock(7s) (75) ¿-¡¿tltl$ltt À"r Share The Production Sharing Oil L åï t¡l¡¡-ll MINISIRY's = Cl!5iyl e-åKJl---Lll = ."t,¡f-¡ multiplied by the MIMSTRY's percent¿ge of Production et-3¡yl rr-¡ ¡SJI-LI l-¡i lJ 1+¡>-.-" Sharing Oil calculated as the weighæd average of the i.{Jl ,rJ i¡l¡Jl iJ.,¡Xl ir e¡.¡- t "'Jt nS l¡.¡¡¡¡. ËJljJ¡l+ UiâlÅJ percentages provided in Article 7.3 of this Agfeement as : silt rÊXl .,lÊr {$l¡ftl '3À i," (3-7) follows: 64Vo of ftrst 25'000 BBL 16'000 ¡,þ+ 16,000 = l.lïl rJr* 25,000 Jo/o64 BBL = 17'500 c!¡¿ 17,500 = ¡+I5¡l rJ¡¿¡ 25,000 )o/o70 70 Vo of next 25,000 = cl¡¿¡ 18,750 = ¡+I¡¡l dr+ 25,000 Jo/o75 75lo ofnext 25'000BBL= 1t'750 rJr¿¡ 4,000 å¿friJl dr¿ 5,0001%80 t0 % of next 5'000BBL= 4'(X)0 = l16.lXÐ+17.5lXlr1E.75llr4.fi Xl)BBL=UnnSrny,S pERC.¡¡{TAGE (Gp) Zo (c L¡s.'¡t 1#,,J+.Jt 4.03ft1õsd1õsõï 1 ?.s00+ 1 6 E0,0ooBBL ¿) =5É25-BIr 7o.3tzs% cp 0/o70.3125 = LJÉ¡ll ¡,á¡ ¡+-,¡ =-¡låå-5$!59 80,000 BBL cjr.¡180,000 MINISTRY's Sha¡e = GP x Production Sharing Oil GEjTI åSJt i" .Lii x _e u - ËJljJl i. - PRODUCTION SIIARING OIL = MADNP minus Royalty -¡l ,1i¡g¡1J.ii + a3$!l) LE¡tj ($ I o^ ,i a)= 6tii)l ¡SJLi^.li¡ minus Cost Oil (either 2aor 2b) .þz:llz¡ Production Sharing Oil = 80,000 BBL - 3,90088L - 38'050BBL (2a) cj+r 38,050 -.1¡:3,900 -cl*^+ 80,000 =6Ei)l åS-¡l'i' l-¡t Or -(tz) Production Sharing Oil = 80,00088L- 3,900 BBL- 15'000 BBL (2b) ,l Production Sharing Oil = 38,05088L(2a) - ù++.3,900 -cJ+¡ 80,000 = 6t-i:)läS;l-L t ;t Or .(ç2)d¡-rl5,000 Production Sharing Oil = 6l,l00BBL (2b) X 38,050 BBL (2a) .(-.2) d¿^_,¡161,100 ¡l (lZ) tþ:38,050 = ctijïlåSJLi^.L¡l MIMSTRY's Share= 7O.3l25Vo Or 0/o70.3125 J 02) .J+.J 38,050 x 0/o70.3125 = Ë*,¡l 'r-¡Jl l-as MINISTRY's = Share 7O.3125/o X 61,100 BBL (2b) (-.2)d¡"¡ 61,100 x MINISTRY's Share = 26,753.91BBL (2a) or .(+2) ù-¿a2,960.94 J (12) cl¡;ll 26,753.91= å-¡l-¡rll¡' - = 42,960.94 BBL (2b) CONTRACTORs Share of hoduction Sharing Oil = å..-- - GEiTIASJLå"Lir = 6lJr)l¡SJLLJ*ii ¡ ¡-t¡liJl ã,-- of Production . ctü)l tS¡li..L¡¡ Cr eJ¡¡ll Production Sharing Oil less MIMSTRY's Share Sharing Oil J d2) clr"j 26,753.91- d*.v38,05[ =Ll3liJlå"á¡ BBL- 26,753.91BBL(2a) . (ç2) clr+ 42,960.94 - cl*¡ 61,100 = CONTRACTOR's Share = 38,050 å.-¡ or J (f2) dr"jl1,269,09 = drl¡"ll (*.2) .J+¡¡ 18,139.06 = 61,100 BBL- 42,960.94 BBL (2b) CONTRACTOR's Share = ll,269.09BBL (2a) or = l8,l39.06BBL(2b) AgeementBlock (75) 90 (75),.f ¿tllfuut bn IIi AIINEX FORMOFREOT]ESIF1OR CONVERSION TO DEVELOPMENT AREA Nameof theCONTRACTOR: Address: Date: I I å¡¡ll .júi¡ 6.lh*,¡ ¡¿Í-r,.lt ¿.tlr.rJl3 H.E. MIMSTER OF OIL AND MINERAI.S ¡¡.irll s¡r. Honorable Minister: We, the CONTRACTOR, hereby declare that a Commercial L¡r ll ç¡l+5I L¡L-fSTl ¿f-, t r^ ü.-Jd d:t-¡.lt iJ.-! Discovery of Oil has been notified to the MIMSTRY on Êir-tiÐr)l ¿l ,-----1-{6JljFll Jl-i! ÈlL¡ ",fl:*,,H*tü-,i: .*üJ-S.jlfJJüI" - I : îJ'îi< drilling of Exploration Wells to ú.¡uJÉ¡l l-s lrÀ u+JE å:Él'is-l .............. .. .. . . .. .. . J¡- date, and including geologic, geophysical and engineering d^.'lH J! J1.,i of the structure in which the L¡l-i$ll .,S. ú.r¡¡ l+lt*lJl:+lt¡ t^.. studies that indicate the size d ç¡Jt . ¡.lt e+- Ct: i**sell¡ J¡$.J Commercial Discovery of Oil was made. The summary of the :çry| JÊ¡tl .J" ÊJSl- I G.ü¡ t¡ ,-¡-L: +¡ J'ii! ç¡LilJ appraisal program is as follows: \Mell No. I Well No. 2 (etc') (.. .JÅr J! )2 ¡¡: -x'lt l eJ-JÁlt Thickness ofPav: ll.lJl ¡¡¡l"ll é¡* Zone No.l Gross- ft. ft. .etr_ Êt _ *-Kll (l) C¡4fut Net ft. ft. . êt- Êtí-,Jul Zone No.2 Gross-ft. ft. d_.,Élslt(2) d¡e¡lt - ft. ft. .¡l¡ ê¡ #tJr Summar.v of Test Results: ItJiYl ,-¡U Zone No. l- ¿ú15:l Zone No. (l) cra"ù (2) É¡r¡+u Range of Estimated Reserves for Development Area: BBLto MillionBBL $ þnll riLì1fu.J#ôll otll¿i-ll .tr Million .¡l¿"¡ ¿et- J! .l¡+ 4¡t- (Summary of any other relevant information) . ( ¿¡-3.\ a;Urll 69!l cl'¡lJl ,J'åf ) Based on the shuctural interpretation resulting from the ¿-6:t-:lt å +gt-lttt f tJJÀll .lJ¡fi"-Jt.rl5-rl¡ geologic, geophysical and engineering studies, the structure in ¿t-i-,å; .'sçJlJ ¡-+úL..¡r¡. JÉi.lt¡:--*-. ¡l¡+ll Ûl '"lJJl wtrictt t¡e Commercial Discovery of Oil has been made is þr-tt itç-rr ¡:tt L¡l--.fÁYl $a-çtll ,É-.lJJ+ll ','J