NOTICE: The text below was created automatically and may contain errors and differences from the contract's original PDF file. Learn more here

First Amendment Agreement to Production Sharing Agreement

Between

Ministry of Oil and mineral Resources

And

Ansan Wikfs (Hadramaut) Ltd of (Cayman Islands), Norsk Hydro Yemen a.s of (Oslo, Norway), DSO ASA of (Oslo, Norway) and Transglobe Energy Corporation of (British Columbia, Canada);

This First Amendment Agreement is made and entered into in Sana'a on the day of 22nd Rabi'a Al-Thani 1420 H, Corresponding to the 4th August 1999, Between:

1) Ministry of Oil and Mineral Resources of the Republic of Yemen hereinafter referred to as (the "Ministry "or " MOMR").

2) Ansan Wikfs (Hadramaut) Ltd of (Cayman Islands), Norsk Hydro Yemen a.s of (Oslo, Norway), DNO ASA of (Oslo, Norway), and Transglobe Energy Corporation of (British Columbia, Canada), Jointly are hereinafter referred to collectively as ("CONTRACTOR") and represented herein by DNO ASA (The "Operator").

WHEREAS the MINISTRY and the CONTRACTOR are Parties to a certain Production Sharing Agreement ("PSA") made and entered into in Sana'a on the 16" day of Rabi'a Awal 1412 H corresponding to the 24" day of September 1991, and approved by the Law issued by the Republican Resolution no. 18 for the Year 1992.

WHEREAS, on currently available technical and economic evaluation data for The Agreement Area, Block 32 ((HOWARIME), Hadramaut Governorate, ROY) the Parties hereto agree that the development potential of Block 32 is marginal.

WHEREAS the MINISTRY and the CONTRACTOR have agreed to amend the PSA in the manner provided in the First Amendment Agreement, approval of which is subject to the Constitutional procedures of the Republic of Yemen.

Page 1

NOW THEREFORE the Parties herein agree to the following:-Article (1):

The Parties agree to make the following amendments to the PSA:



а) Royalty Percentage (Article 3.2 of the PSAV.



Royalty Percentage is amended to become Three (3%) percent of the total crude oil produced, saved, and not used in Petroleum Operations, for Production rates between Zero (0.00) BBL/day to 25,000 BBL/day only.



For all levels exceeding Twenty Five Thousands (25,000) BBLS/day, the Royalty percentages shall remain Ten (10%) Percent.



и) Cost Oil Percentage (Article 7.1.1 of PSAV.



Cost Oil Percentage is amended to become up to Sixty (60%) Percent maximum.



с) Recoverable Rates (Article 7,1,1 of the PSAV



The Recoverable Rates for Exploration and Development Expenditures from maximum Cost Oil percentage allocated for recovery of costs shall be amended to become;



a) Exploration Expenditures: At rate of (50%) per annum.



b) Development Expenditures: At rate of (50%) per annum.



d) Production Sharing Oшд (Article 7.2 of the PSA)



The percentages with regard to Production Sharing Oil, to be shared and disposed of by MOMR and CONTRACTOR, shall be amended to become;

Monthly Average Daily



Net Production MOMR Share Contractor Share



Zero BBLS/Day to 65% 35%

25,000 BBLS/day

Page 2

[signature] [signature]

This Amendment shall not apply to level of Monthly

Average daily net Production exceeding 25,000

BBLS/day, to which the original Terms and Provisions

of the PSA shall continue to apply.



Article (2):



In case and to the extent that:



a) Proven Recoverable Reserves exceeds Thirty (30)

million Barrels, or,



b) Monthly Average Daily Net Production exceeds

Twenty Five Thousands (25,000) BBL/Day,



then the amendments described in the Paragraphs:

a,b,c, and d of Article (1) of this First Amendment

Agreement above, shall cease to apply and the

original Terms of Articles (3.2, 7.1.1 and 7.2) of

the PSA shall prevail and continue to apply.



The MINISTRY and the CONTRACTOR will jointly ask an

independent company with international oil and gas

experience (as mutually agreed) to perform the

reserve calculation .



The first certification of Proven Recoverable

Reserves should be available before the start of

commercial production.



The definition of Proven Recoverable Reserves shall

be the same as that u£ed by the Securities and

Exchange Commission in their regulations. The

evaluation of Proven Recoverable Reserves will be

revised at the end of each two (2) Year period

commencing with the date of the first crude oil

production.



The costs of carrying out the Proven Recoverable

Reserves evaluations shall bp born by the CONTRACTOR

which costs shall be fully recoverable according to

the PSA.



Article (3):



Except as provided in Paragraphs: a, b, c, and d of

Article (1) of this First Amendment Agreement, all

Terms, Conditions and Provisions of the PSA

and its Annexes will remain in full legal force and

effect.







Page 3

Article (4)



Terms written with capital letters, in this First

Amendment Agreement, shall have the same meaning as

defined in the PSA.



Article (5):



This First Amendment Agreement is written in the

Arabic and English languages both of which shall have

equal legal force and effect, provided however, before

GOVERNMENT authorities in the ROY The Arabic version

shall be referred to in interpreting this Agreement,

and in any arbitration proceeding under the PSA the

Arabic and English versions shall be referred to in

interpreting this First Amendment Agreement.



Article (6):



This First Amendment Agreement shall become effective

only from the date of its enactment as a law

according to constitutional procedures of the Republic

of Yemen.



Signed Tor and on behalf of Signed for and on

the Ministry of Oil and behalf of

Mineral Resources of the CONTRACTOR

Republic of Yemen.





By: Mohammed Al-Khadem By: Magne H. Normann

Al-Wajih General Manager

Minister of Oil and DNO Yemen

Mineral Resources



Signature : [SIGNATURE] Signature : [SIGNATURE]

Date : 4-8-99 Date : 4-8-99







DNO-ASA, YEMEN.

P.O.Box.16133 Sana’a ROY

Tel. 248457, 243388





Page 4





DNO ASA Yemen Phone DNO

P.O. Box 16133 +967-1-248457

Sana'a +967-1-243388

Republic of Yemen Fax

+967-1-267761



E Mail:- magne@dnoyemen.com.ye



Fax Transmission





To: DNO — H Eide/SE Lie Fax:



Ansan Wikfs - Dr. Don Sheridan



Transglobe - Ross Clarkson



Norsk Hydro - Per Songstad



_______________________________________________________

Cc: From: Magne H Normann

_______________________________________________________

Cc: Date: 19.9.99

_______________________________________________________

Cc: Total pages: 5

_______________________________________________________



Dear Sirs,



Attached please find the approval of First Amendment of PSA for Block 32 signed by the President and with cover letter issued by Minister of Oil.





Best Regards,



[SIGNATURE]



Magne Normann





_______________________________________________________ Translation



REPUBLIC OF YEMEN



Ministry of Legal Affairs and Parliament Affairs

______________________________________________________



Republican Resolution for the Law No. 42 for the year 1999 approving the First Amendment of the PSA between MOMR and the Norwegian (DNO), the (operator) on behalf of the contractor of

Block 32 (Howarime, Governorate of Hadramaut)

____________________________________________



The President.



According to the Constitution of the Republic of Yemen.



And according to the Presidential Resolution for the Law No. 18 year 1992 approving the PSA between the Yemen Government and Clyde Expro Company and Norsk Hydro a.s. Company and Orange Nassav Yemen and Ansan Wikfs (Hadramaut) limited in Hadaramaut Governorate.





Resolution





Article (1) We agree to the First Amendment Agreement of the PSA between MOMR and the Norwegian Company (DNO) the (operator) on behalf of the contractor in Block (32) Howarime Governorate of Hadramaut signed in Sana'a city on 22 Rabi Awal 1420 corresponding to August 4, 1999 (and the agreement for this resolution by the law).



Article (2) This resolution is to be valid from the date of issue and circulated on the official paper issued at the Presidential office in Sana'a on: 12 Jumad Awal 1420 corresponding to: 23 August 1999.





Dr. Abdul Karim Al-Iriani Ali Abdulla Saleh



(Signed) (Signed)



Prime Minister President of the Republic









. Translation



REPUBLIC OF YEMEN



Ministry of Oil and Mineral Resources

_______________________________________________________



To : The General Manager of DNO ASA, Yemen



Attention : Magne Normann



Date : 13/09/99



Our Ref No : 62/401



Subject : Approval of First Amendment for PSA Block 32





Dear Sir,



Please find attached a copy of the Presidential Resolution for the Law No. 42 year 1999 approving the First Amendment between the Ministry and the Company on behalf of the contractor for Block 32 (Howarime), Govemorate of Hadramaut.



For your attention and necessary action.



Wishing you luck in the execution of all the approved programs and success in your work. Please accept our outmost greetings.







Sincerely,





Mohamed K.Al-Wajih

Minister of Oil and Mineral Resources



CC: Deputy Minister

Chairman PEPB

Chairman Consultative Office

General Legal Affair











REPUBLIC OF YEMEN

Ministry of Oil

And Mineral Resources





Date : Our Ref :

Your Ref :

























































Cable : Momr Sana'a – Tlx :2257 Momr Ye – P.o. Box : (81) Sana'a – Swich Fax: (202314) Tel : (202313 / 202310 / 202309)Translation from Al Thawra Official Newspaper

Issue No. 12704 Tuesday 241h August 1999,13th Jumad A1 Awol 1420 Hegira





Republican Decree



Saba'a News Agency

First Amendment to the Production Sharing Agreement in Block 32 (Howarime) Hadramout was approved by the Republican Decree Law number 42 of 1999 declared yesterday.

Article (1). First Amendment to the Production Sharing Agreement between DNO ASA, Yemen (the Norwegian Oil Company, operator of Block 32 - Howarime, Hadramout Governorate) was signed in Sana'a on 22nd Rabie A1 Thani 1420 H, 14" August 1999. This article is valid from the date issued on the official newspaper.





REPUBLIC OF YEMEN



Ministry of Oil

And Mineral Resources





Date : Our Ref :

Your Ref :





















































Cable : Momr Sana's. Tix :2257 Momr Ye - P.o. Box : (81) Sana's – Swich Fax: (202314) Tel : (202313 / 202310 / 202309) Translation



REPUBLIC OF YEMEN



Ministry of Oil and Mineral Resources



Minister Office



To : The General Manager of DNO ASA, Yemen



From :Mohammed Khadm Al Wagih

Minister of Oil and Mineral Resources



Date : 14th August 1999



Our Ref No : WNM 384162





Subject : Request of Extension Period for Two Months on the Present Exploration Phase of Block 32



Reference is made to your letter ref. DNO/MOMR/0042-99 dated 17 July 1999 regarding the above subject and your need for extra time to finish your work program and drill the commitment oil wells.



Ministry of Oil and Mineral Resources hereby agree to provide with an extra extension period for two months starting from 1st October 99 to 30 November 1999.





Best regards,





(Signed and stamped)





Mohammed Khadm Al Wagih

Minister of Oil and Mineral Resources