I 4 - 1 il REPUBLIC OF YEMEN - I !r i PRODUCTION SHARING AGREEMENT I ij BETWEEN . , . , ir i i MINISTRY OF OIL AND MINERALS i ; i- DNOASA AND [ '!- ANSAN WIKRS (HADRAMAUT)LTD 5 LL 3- TG HOLDINGS YEMEN INC. C THE YEMEN COMPANY (A SUDSJDJARY OF ' YEMEN OIL AND GAS CORPORATION) 1 IN THE ALAIN AREA ' ib BLOCK (72) A (' HADRAMAUT GOVERNORATE i, 1 :I REPUBLIC OF YEMEN I !I PRODUCTION SHARING AGREEMENT j I -. I ; i BETWEEN I ! 1 MINISTRY OF OIL AND MINERALS : I. i 1 AND $4 ' ' 1- .NO ASA [ I2- ANSAN WIKFS (HADRAMAUT)LTD i ii 1 3- TC HOLDINGS YEMEN I NC. L I ? i 1 4- THE YEMEN COMPANY (A SUBSIDIARY Ol? -. I 11 YEMEN. OIL AND GAS CORPORATION) -, -T .. IN THE ALAIN AREA -. . . I [P BLOCK (72) I y: I I HADRAMAUT GOVERNORATE I ' 1 .rrea mble Agreement was made and entered into in Sana'a on - - day of - 14-H corresponding to the -- -day of - 200---, between the Ministry of Oil and inerab (hereinafter referred to as "MINISTRY" or ) and DNO ASA (hereinafter referred to as NOn), a corporation duly organized and existing under t e laws and regulations of Norway, and Ansan Wikfs 1 Ihdramaut) Limited (hereinafter referred to as .d .u) 4 L"r%b W! J%J) %! .w! .U .d! .#A IdNSAN"), a corporation duly organized and existing SrUIJ ~991-1~ GI95 '34 W3.J +J (A under the laws and regulations of the Cayman Islands and -! % (a99 0 W! JUJ) W (QJ-"+) uJk G Holdings Yemen Inc. (hereinafter referred to as (JkWI JA %&IJ &I&! &b &G &UU& yb3(irldI) a corporation duly organized and existing under and regulations of Turks & Caicos Islands, U L* +J y& 4JS b$j Indies, and The Yemen Company 99 @&uJ 44 Jh -Ii, o$ &k referred to as the "Yemen Companyn), a Lg h6 *> &A &J C~I &flIJ '&??I bsidiary of Yemen Oil and Gas Corporation, organized ir;14 adJ LL jUI J U Lm and existing under the laws of the Republic of Yemen, (.&I bgj) -, yi) w! J~J L411 L~I 0, ANSAN, TC and the Yemen Company are to jointly and collectively as the &! JG.(Wl &.AJI)J. '#-+ '& cG!~ 4 i)! l$J .(&Wl) + &J&J m all natural resources including all their types -1 L,lJ& G d energy sources existing in the surface or subsurface of UUI JJ~ J lgc19;) / the ground, in the territorial waters, or the continental bgl (TL b;r,4 4 3 &J~I @- & bdl and the entire exclusive economic zone of the ulill %J~YI -IJ *JUI d&Yl J! OF YEMEN are the property of the STATE; .aJ& Illr l,&,$l I "d. I ' 'WHEREAS, the STATE wishes to promote the JJJ-~I 4 GJi UJd :dl bd f development of potential Petroleum resources in the UkYlU+;L;W q93 Il~grwment Area ddned in this Agreement md the dJ -1 bh (i JJ!~! 1 kONTRACTOR wisllcs to join and assist the STATE In l@GUUJO 4 dy the Exploration, Development and production of the /potential Petroleum resources in the Agreement Area, Id :rg 449 Lil *!t:ull QJ ! ALAIN, BLOCK (72), Hadramaut Governorate, eu (MI) 43UI"~l - '#A LKn -I ; 1 REPUBLIC OF YEMEN; and .&&I! &&.$I 'Q*JA wlu (VI) / /WHEREAS, the STATE sutl~orized tile MINISTRY to 1 hegotiate and execute this Agreement in accordance with terms negotiated herein between the MINISTRY and the FjCONTRACTOR; and [; WHEREAS, a law sl~all be issued expressly ratifying tllis 1 i~~reemenl; and 1 ' WHEREAS, the CONTRACTOR is willing to undertake he obligations provided under this Agreement as a ontr tractor with respect to the Exploration and bevelopment (including production, storage and transportation of Crude Oil in the Agreement Area) and all the necessary financial resources and the [ itechnicsl and professional competence to carry out the Petroleum Operations described under this Agreement. F" 1 ;NOW , THEREFORE, the Parties hereto agree as to the following: 1 ARTICLE 1 L. DEFINITIONS -. iil An "Afiliated Company" means a company: 1 ' a. in which the share capital conferring a majority i of votes at stockholders' meeting of such company is owned directly or indirectly by a k k Party hereto; or b. which is the owner directly or indirectly of share w9 &b & >I Zp&.+a d@ &!I (+) capital conferring a majority of votes at hh &L&l$ &!&I WL a,, &I* [ stockholders' meetings of a Party hereto; or J! 'GWI bh dl>! IL( 4 I c. whose share capital conferring a majority of 1 ; votes at stockholders' meeting of such company and the share capital conferring a majority of votes at stockholders' meeting of a Party hereto 1 are owned directly or indirectly by the same company; or t d. which directly or indirectly controls, is controlled by, or is under common control with a Party i hereto. L 1 For the purposes of this definition, the word "SJIJ!" U db -91 lh &JA, rp . "control" means the right to exercise more than 4;?1 &&I LJL & j;rl UI + I fifty percent (50%) of the voting rights at J+ + L~Q (%o .) %J rl shareholders' or partners' meetings. For tlie dbwl ,I wv~ ~bk1 udl r : purposes of this definition, the term "Party d) + & djyijI13n &IJ~$', ,rK$lI hereto" means the MINISTRY or any of the dfi $1 cr)Kfll & q1 J! ; J!j$ &J (~i1&1 rl entities comprising the CONTRACTOR. .3,u1 1 '1'2 "Agreement" shall mean this Production Sharing -1, DL b)tI j iSJUdI QUilu;j "vl&lM :Y-\ T J Agreement and the attached Annexes. .b i.13 "Agreement Area" means the area as described in +MI & LiFdI WI ,+i "vlh71 ZIhir " :Yo\ Annex "A" and shown on the map labeled Annex o& (v) @dl sUl $ w, (I) ! ! "B' which are attached to this Agreement. This area d, +, ~1 LL @ ri) .+y~ 1 j may be reduced from time to time in accordance .$%TI oh & (0) 2~Ldl ++J+ +v r r with Article 5 of this Agreement. "Associated Gas" means the Gas which is associated with Crude Oil when it is produced from any well in the Agreement Area, or can be acquired after separation at the lease separators. The aforesaid description includes all the elements that are components of the Associated Gas prior to its processes through the extraction, condensation, distillation and liquification facilities. "BBL" consists of forty-two (42) US "Barrel" or gallons measuring a liquid at a temperature of sixty (60 OF) and atmospheric pressure degrees Fahrenheit of 14.70 PSIA. ! ?6 "Commercial Discovery" means a discovery which 1 A+ 3,Ul J> UZSl yLu+ 1'q31$!I 6WI" : 7. \ , I . the CONTRACTOR determines to be worthy of bh ir iJul 6QJ4;11 w4 commercial Development, as set forth in Article 3.5 1 [ of this Agreement. .$by1 I I i, 1 ! 1.7 "Commercial Gas Well" means the first well on ! ( F any geological feature which, after testing for a eriod of not more than thirty (30) consecutive Days I I, p 1 where practical, and in accordance with sound and 1 accepted Petroleum Industry production practices I' I and verified by MOM, is found to be capable of producing Gas at a rate that, in the 1 CONTRACTOR'S opinion economically justifies tlie 1 undertaking of appraisal work. The date of discovery of a Commercial Gas Well is the date on which such well is tested and completed, according to the above. Written notice of such discovery shall be given to the i MINISTRY, together with a report of the test results and other information available from the well, no 1 1; later than thirty (30) Days following the conclrlsion of such testing.