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FIRST AMENDMENT AGREEMENT
relating to
the amendments to the Production Sharing
Contract relating to the Cilia Sutlh Block
between
TIIF. KURDISTAN REGIONAL GOVERNMENT OF IRAQ
and
FORBES & MANHATTAN (KURDISTAN) INC.
and
PETOIL PETROLEUM AND PETROLEUM PRODUCTS
INTERNATIONAL
EXPLORATION AND PRODUCTION INC.
and
GENEL ENERGY INTERNATION AL LIMITED
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION...................................................................2
2. AMENDMENTS TO CONTRACT...............................................................................2
3. REPRESENTATIONS.................................................................................................16
4. GENERAL PROVISIONS...........................................................................................17
Him Amendment Agreement (Inn Nuikh
FIRST AMENDMENT AGREEMENT
I bin ugrccincnt (the "Agm-mmO is entered into it* of I August 2010 (the "Agreement Bale")
between:
"Government");
(2) FORBES & MANHATTAN (KURDISTAN) INC., a company wtnbllxhcd ami
existing under the laws of Burbndov. wlmsc registered office iv tit Suite 20.1 I nuriston
House P.O. Box 1132. Collymore Rock. St. Michael. Harbado* 1111 IKHKI. an
afliliote of Foibcs & Manhattan (Barbados) Inc., a company existing under live laws
of Barbados. wlx-vc registered office is at Suite 203 Lauritfon House P.O. Box 1132.
Collymore Rock. St. Michael, ll.uk.dos BB 11000 (“Forbes'');
<3) PETOIL PEI ROI.EUM AND PE I ROI.EUM PKODI CI S INTERNATIONAL
EXPLORATION AND PRODUCTION INC., a company established and existing
under the laws of Turkey, wliose registered office is at I diom l add»i No. 16.
(..O P.. 06700 Ankara, Iuitcy ("Petoin;and
(4) GEN EL ENERG) INTERNATIONAL LIMITED. a company established and
existing under the laws of British Wc»i Indies, whose registered office i» at
Caribbean Suites. The Valley. AnguilU. British West Indies TV I I IP (Genel)
teach a Party" and collectisets, the Parties”).
RECITALS
(A) The Got eminent. GcneL Forbes and Petoil ate part*.-, to a Production Shanng Contract dated
11 June 2001 in respo.1 of the Chit Surih Block in the Kurdistan Region of Iraq (the
-Contract” >.
(B) The Parties wish to amend the Contract to obligate each of GcneL Forbes and Petoil. and
future holders of all or pan of the participaung micrwt. held by Gend. Forbes and Petoil at
the Effective Date, and future holders of all or any partKipating interest (except in respect of
the Government Interest) to pay capacity buildmg payments to (he Government Gend.
Forbes and Petoil are willing to agree to charge her participating intcrcstv with the capacity
building payment obligations, and the Panic, arc willing to agree to the appropriate
amendments to the Contract
The Government will deposit ail capacity building payments into a segregated account for use
(C)
wiclv to support and finance infrastructure and capacity building project* in the Kurdistan
Rcgwa
Firvt Amendment Agreement C’hia Surkh
1. DEFINITIONS AND INTERPRETATION
1.1 Unless otherwise defined herein |including ihe recitals) capitalised term' have the
meanings ascribed lo them in the Contract (before amendment by this Agieenvcntl
As used in this Agreement:
"Agreement" is defined in the preamble.
"Agreement Date" is defined in the preamble.
"Contract" is defined in Recital (A).
Tor lies" is defined in the preamble.
fiend" is defined in ihe preamble.
Cos eminent" is defined in the preamble.
Parly" and "Parties" are defined in the preamble.
I’etnll" is defined in the preamble.
"Third Part) " is defined in Clause 4 2.
1.2 The descripcisc headings in this Agreement are for coosenicnce only, do nor
eonsiituie a pan of this Agreement, and do not affect the conunxtioo or
interpretaiiiM) of this Agreement. A reference to a -Clause" is a reference lo a clause
of this Agreement.
2. AMENDMENTS TO CONTRACT
2.1 The Contract is amended as provided in this Clause 2.
2.2 The recitals are amended.
(a) by adding a new paragraph
“(D) This Contract was amended pursuant to the first Amendment
Agreement between the Parties dated I August 2010.';
(bl by renumbering the existing paragraph TBT:
(c> by renumbering the existing paragraph (F.) IF)", and
id) by renumbering the existing paragraph (I I "((«)".
:
IIIvt Amendment Agreement Chin Surkh
2J In Aniclc l .l. the definitions of "CONTRACTOR" and C ONTRACTOR Entity”
ate deleted in their entirety and restated as follows:
"CONTKAC 11 )R means, individually and jointly, each ( ontr.u'tor Entity.
CON I K AC I OR Intity means each of Gcnci, Forbes and Pctoil and their respective
permitted assignees pursuant to Article 39. A holder of the Government Interest is
not a CONTRACTOR Entity. At any time when there is only one entity
constituting the CONTRACTOR, any reference to "the entities constituting the
CON IRACTOR" or the "CONTRACTOR Entities" or similar reference, shall be
deemed to mean "the entity constituting the CON I R \C TOR As of the Effective
Date. Gcnel. lorbcs and Pctoil. as CONTRACTOR Entities, each own an undivided
interest in tli« Petroleum Operations in respect of the entire Contract Area:
Crenel 20%
lorbc* 40%
Pctoil 20%“
2.4 New definitions arc added in Article l.l. in the appiopriiitc alphabetical order, as
follows:
"Annual Reconciliation Statement is defined in Article 32.6.2(c).
Capacity Building Account means a segregated bank account »ith a reputable bank
in the name of. and mamtained by. the GOVERNMC.NT. the sole purpose of which
1% to support and finance certain mfrastrueiure and capacity building projects to h:
identified b> the GOVt RWIFN f ta as sole discretion in the Kurdrstan Region.
Capacity Building Pay meat mean.
(a) m respect of a trend Interest Holder, the obligation of the Crenel Interest
Holder to pay an amount espial u. the Crenel Capacity Building Value.
(hi in irspevt of a Forbes Inkiest Holder, the obligation of the Forbes Interest
Holder to pay an amount espial u. the Fotbcs Capacity Budding Value: and
(c» m respect of a Pctoil Interest Holder. the obligation of the Pctoil Interest
Holder to pay an amount espial to the Pctod C apaerty Building Value.
Capacity Building Payment Instalments means each obligaikn of a Charged Interest
Holder to pay an amotml equal to the C apwty Buikhng Value attributed to such
Charged lmercst Holder m provided by Article 32fc
Capacity Building Value mean* the Crenel Capacity Building Value, fotbcs
Capacity Building Value or the Pctoil C apacity Building Value
Charged Interest means all or any part of the participating interests hereunder
deemed held by Crenel. Forbes and Pctoil » of the Effective (kale
< harpd uirrm Holder meats a C O' IH \( IOK Inoiy .find to the am « »
*c holder of i( barged Interest A,o(lkl flee live Date. (kocL Forte and Petud
•n the only Charged Inierai Holders
< barged lilmtl Holden Monthly Statement n defined in Article 32.b-2(a).
(kwentmcrrt.Cicncl. Forbes and Petoil dated I August 2010.
I orbet Capacity Building Value meant, in respect of any period of determination:
for each Charged Interest Holder of all or pan of the participating in terras held by
Forbes, an amount in Dollar* equal to the value, established in accordance with
Ankle 27. of forty per cent 140°.I of the Profit Petroleum attributed to such Charged
Interest Holder pursuant to this ( on tract as at any time and period of detennnution.
Forbes means a company established and existing under the laws ol Barbados,
whose registered office is at Suite 203 I.nuriston House. IH) Box 1132. Collymotv
Rock. St. Michael. Baibudo* HII I 1000. an nlliliate of ForbcK .V Manhattan
(Barbados* Inc., a company existing under the laws of Ifcubados. whose registered
olTicc is at Suite 203 Laurision House. IH) Box 1132. ( ollymore R«>ck. St. Michael.
Blibidos BB 11000.
I orbes Interest means the forty per tent (40“..) panicipatmg interest in the Contract
held by Forbes as of the Effective Dak.
Forbes lolcresi IMkr mem* a COMRUlOi Fonts if and to the extern Im
CON TRACTOR Fntity which ■» a holder of the Forbes lateral, those
COMRAirOR Entities A» of the Effective Dale. Forbes is the sole Forbes
Interest Holder.
IV Valley. AngtalU.British VmImbaIVI IIP
Article 27. of thirty per cent
Interest Holder pursuant to this ( onliact ua at any time and period of determination.
(ienel I me Id meunv the twenty per cent (20M purticipuling interest in the < unlniu
licit! by (icttel as of the Effective Dale
(lend Interest Holder means a CON I RACTOR Entity if and to the extent ii is n
holder of the Genel Interest, and ul any time wlien there is more dun one
CONTRACTOR Entity which is a holder of the Genel Interest, feat
*
I iivi Amendment Agreement Chiu Surkh
CON IRACTOR Entities A* of the Effective Dale. Gend is the sole Geod k*aat
Holder
I.OW or Expense Ls defined in Article 32.6.8(c).
IVloll mean- Petoil Petroleum and Petroleum Products Intcmalinnal Exploration and
Producliofl Inc., a company established and existing under the laws of Turkey, whose
registered office is at Filistin C'addesi No: 16. Ci t) P.. 06700. Ankara. Tuitey.
Petoil < apacitv Budding Value means. in respect of any petard of detennkuxion
fix each Charged Interest Holder of all or pan of the panwipaimg merest* held by
Petoil. an amount in Dollars cs(ua1 *> the salue. established in accordance with
Article 27. of forty per cent l-W.l of foe Profit Petroleum attnhuted to such Charged
Interest Holder pursuant to thn Contact as at any time and penod of drtenimnaikn.
Petoil Interest means the twenty pet cent (20%) participating inteicsl in the Contract
held by Petoil as of the Effective Date.
Petoil Interest Holder means a CONTRACTOR Entity it ami to the extent it is a
holder of the Petoil Interest, and at any time when there is mote than one
CONTRACTOR Entity wlneh is a holder of the Petoil Interest, those
CONTRACTOR Entities. As of the Effective Date. Petoil is the sole Petoil Interest
Holder.
Rights Sale means a sale, assignment, or other disposal of the GOVERN'IEM s
rights to i excise Capacity Building Pay mem lnstalmmts from a Charged Interest
Holder, whether fora lumpsum payment or m mstalmem payments, and whether foe
purchaser assumes ail paynw* risk and all nsk as to foe amore* of Capacity Buildmg
Payment Instalments, or ceherwne "
2i The first paragraph of Ankle 42 is dekred in its entirety and restated
The Public C'ompuiy will not have any liability to foe CONTRACTOR to coomfcuie
«s Goscmmeni Interest share of all Petroleum Costs. Petroleum Costs are the
excluuse obligation of the CONTRACTOR Entities in axwdanc* with each
CONTRACTOR Entity's respective pankipating micrests in the Cooaaet. Each
CONTRACTOR Ereity is entitled (through the CONTR V< TORi to recover all such
Petroleum Costs in accordance w oh .Ankle 2$. The Public Company shall contribute
ks share of Production Bonuses attributable to foe Goscmmeni Interest and payable
pursuant to Ankles 32.7 through 32.11."
2.6 In .Ankle 16.14. after foe words in the first sentence IK- GOA ERNMKNT and” foe
following is inserted:". subject to Ankles *2 6.6(a) and (hi.
2.7 In Article 26.9. the following sentence is added to the end of the Article
“Notwithstanding the other provision* of this Article 26.9. where a Charged Interest
Holder is in breach of any of its obligations in respect of the payment of Capacity
5
Buildmg Payment Instalments under Anick 32.6. the CON ERNMKNT -ill have the
righu set forth in Ankles 32 fob through 326 K "
2Jt .Ankles 27.1 and 272 and Paragrafris 7 aid K arc amended by adding. after the word
"Quarter" ia each usance is each Ankle and Paragraph. the word, and Mcmifc". and
in Paragraph 7.2. the words Twenty -one (21 >* .« deleted and replaced by "ten (101".
2.9 Ankle 27.4 is deleted and restated in its entirely:
*'By the tenth (I0"l day of each Month, the COM MAC I OK shall provide a statement
to the GOVERNMENT show ing the CONTRACTOR'S calculations of the value of
Petroleum produced and sold from the Contract Area for the previous Month Such
statement shall itKlude the following information:
(a) quantities of Crude Oil sold by the CONTRACTOR Entities during the
preceding Month constituting Amt's Length Sales together with
corresponding sale pr ices:
(b) quantities of Crude Oil sold by the CONTRACTOR Entities during the
preceding Month that do not fall in the category referred to in paragraph (a)
above, together with sale prices applied duting sikIi Month:
(c) inventory in storage belonging so the CONTRACTOR Entities at the
beginning and at the end of the Month, and
qiuMt.es of Natural Gat sold by the CONTRACTOR Emilies and the
GOVERNMENT together with ale prices resitted
Concurrently with the delivery of the monthly tutcmcl. the CONTRACTOR shall
deliver the Charged Imereti Holders Monthly Statement to the GOVERNMENT as
provided ui Article 32.6 2(a)"
LM In .Anisic 29 I. after the words dull be m Dollar, and dull', the following w.mls are
added
“except at pros tded u> the next sentence and Anklet 32.6.10 tfirough 32.6 12.";
and the following sentence it added at the end of Ancle 29 I:
The right of offset provided in this Article 29.1 vs41 not apply m respect of the
obligjUon ofaOurged Imereti Holder h. nuke Capacity Building Payments at further
provided m Angles 32 6 10 through 326.12"
211 In Article 32. Articles 32 I to 32 5 are deleted in then entirety and restated
-Forbes latrrrtt Holder
321 The GOVERNMENT required Forbes . as a condition of entering into the
><
Fin! Amendment
Contract. io pay 10 the GOVERNMENT a signature boom of five hundred
thousand Dollars (US S500.(K)0) (‘Signature Bonus') and the
GOVERNMENT confirms timely receipt of the payment.
.'2.2 I he (GOVERNMENT required Forbes . as a condition of entering into the
Contract, to pay to the GOVERNMENT a capacity building boons of
nineteen million five hundred thousand Dollars (US SI9.500.000►
( '< .parity Building Bonus - First Tranche'*) and the GO\ ERVMENT
eonfinns timely receipt of the payment.
32.3 The l orhes Interest Holder shall pay to the GOVERNMENT a capacity
building bonus of twenty-five million Dollais (US S25.000.000) <~Capacit>
Building Bonus Second Tranche") in five (5) monthly instalments of
five million Dollars (US S5.000.000l each. The Forbes Interest Holder shall
pay the first instalment on or before 15 August 2010, the second instalment
oil or before I September 2010; the third instalment on «< before 1 October
2010. the Ibuilli instalment on or before I November 2010. and the fifth
instalment on or before I December 2010.
32.3.1 The Gt>\ I R.NMEN I dull iransfer the Signature Roans and the Opacity
Building Bonus into the fund established by the Martyrs. Anfaliscd and
Victims of Genocide l aw of the Kurdistan Region Iraq (Law So 37 of
2007).
h'HI IlMvrvM Holder
32.4 The I'ctoil Interest Holder shall not be liable to pay to the
GOVERNMENT any pan of the Signature Bcnus or Capacity Building
Bonus, or for any other payment in the nature of the Signature Bonus or
Capacity Building Bonus, except a> provided in Article 32.6.
32.5 The (iend Interest Holder shall not be liable to pay to the
GOVERNMENT any put of the Signature Batus or Capacity Budding
Bonus, or for any other payment in the nature of the Signature Bonus or
Capacity Building Bonus, except as provided in Article 32 6 ~
2.13 la Article 32. a new Article 32.6 is added as follows.
32.6 l ad. ( barged Interest Holder is bound by the pros isions of this Article
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l ira Amendment Agreement Chia Surkh
32.6.1 The obligations of a CONTRACTOR Entity, to the extent it is a
Charged Interest Holder, as set foith in this Article 32.6. attach to.
and may not be severed from, the Charged Interest.
32.6.2 In respect of the Capacity Building Payment Instalments:
(a) on or before the tenth <10") day of each Month, in the
Development Period, the CONTRACTOR shall provide to
the GOVERNMENT, together with the monthly production
statement prepared by the CONTRACTOR in accordance
with Article 27.4 and Paragraph 6.1. and the monthly valuation
statement in accordance with Article 25 and Paragraph 7.1. a
statement (the "Charged Interest Holders Monthly
Statement") setting out the CONTRACTOR’S calculation of
the Capacity Building Value attributable to each Charged
Interest Holder for tlie ptveeding Month. In each Charged
Interest Holders Monthly Statement, the CONTRACTOR
shall detail each item taken into account in making its
calculation of the amounts due from each Charged Interest
Holder, the quantities of Pro lit Petroleum produced dining the
Month covered by such Charged Interest Holders Monthly
Statement, the volumes of such production sold, the Capacity
Building Value attributed to such sales, and the Capacity
Building Payment Instalments required to be paid with respect
thereto by each Charged Interest Holder:
(b) on the same date on which the CONTRACTOR provides the
Charged Interest Holdeis Monthly Statement to the
GOVERNMENT in accordance with Article 32.6.2(a). each
Charged Interest Holder shall pay (except as provided in the
next sentence) the Capacity Building Payment Instalment as
shown as owed by such Charged Interest Holder in the
Charged Interest Holders Monthly Statement. If:
(1) a Charged Interest Holder has sold its Profit Petroleum to
(i) the GOVERNMENT or a Public Company (or a
company or an entity owned and controlled, directly or
indirectly, by a Public Company or the GOVERNMENT).
(ii) tlfc State Oil Marketing Organisation (SOMO) or any
entity owned and controlled by the Government of Iraq: and
if
(2) any such counterparty as identified in (I) has not paid the
Charged Interest Holder for the Petroleum lifted by such
entity, then:
First Amendment Agreement Chia Surkh
(3) the Charged Interest Holder is only obligated to pay the
Capacity Building Payment when, if, and to the extent the
Charged Interest Holder has received payment by such
counterparty.
The preceding sentence docs not apply w ith respect to. and
to the extent of sales of a Charged Interest Holder’s Profit
Petroleum to any other counterparties.
(cl within thirty (30) calendar days following the date on which
the CONTRACTOR delivered the Final End-of-Ycar
Statement to the GOVERNMENT for each Calendar Year in
accordance with Article 26.13 and Paragraph 10. and based on
the infoimation in such Final End-of-Ycar Statement, the
CONTRACTOR shall provide to the GOVERNMENT, in
respect of each Charged Interest Holder, a written
reconciliation of the aggregate amount of the Capacity
Building Value and the aggregate payments of the Capacity
Building Payment Instalments during such Calendar Year
period (the "Annual Reconciliation Statement ’):
(d) if the results of an Annual Reconciliation Statement show that
a Charged Interest Holder has. in the aggregate over the
Calendar Year period covered by live Annual Reconciliation
Statement, made Capacity Building Payment Instalments in an
amount less than the aggregate Capacity Building Value
attributed to such Charged Interest Holder during such
Calendar Year period, such Changed Interest Holder shall pay
(subject to the same exception as provided in the second and
third sentences of Article 32.6.2(b)) the amount of the
underpayment as shown in the Annual Reconciliation
Statement w ithin thirty (30) calendar days follow ing the same
date the CONTRACTOR delivered the Annual Reconciliation
Statement to the GOVERNMENT:
(e) if the results of an Annual Reconciliation Statement show that
a Charged Interest Holder has. in the aggregate over the
Calendar Year period covered by live Annual Reconciliation
Statement, made Capacity Building Payment Instalments in
excess of the Capacity Building Value attributed to it during
such Calendar Year period, and if and to the extent the
GOVERNMENT has agreed with the CONTRACTOR and
the affected Charged Interest Holder in respect of the amount
of such overpayment, such Chaiged Interest Holder may
deduct such overpayment to the extent that the
GOVERNMENT has agreed with the amount of such
overpayment from the next following payments of Capacity
I "M Amendment Agreement Chin Surkh
Building Payment Instalments. In no event will n l lunged
Interest Holder be entitled to deduel more than fifteen per cent
following payment* of Capacity Building Payment
Instalments. The right of set-off aguinal Capacity Building
Payment Instalments will l»c a Charged Interest Holder’s only
remedy in respect of any overpayment, and the
GOVERNMENT will have no obligation to make any
reimbursement ot other compensating payments to the
Charged Interest Holder.
tO if a Charged Interest Holder fails to pay all or patt of a
Capacity Building Payment when due. the Charged Interest
Holder shall pay interest on the unpaid amount at an annual
rate of LIBOR plus two per cent (2%) compounded monthly
fiom and including tire date the payment was due to. but not
including the dale paid: and
(g) if any Capacity Building Payment is due to be paid to the
GOVERNMENT on a day that is cither not a banking day in
either the place where the Capacity Building Account is
maintained, ot the location of live financial institution through
which a Charged Interest Holder will make such payment, then
the Capacity Building Payment will he due oa the next
following hanking day A -funking day" n a day (other than a
Saturday. Sunday, or puhbc holiday) oa which hanks are open
for general business in ihc specified locations
Lm?atHi acc^b;
32.6.3 Ihc GOVERNMENT slr.dl
(a) establish and maintain the < lipacity Building Account: and
4b) deposit all Capacity Building Payments received by the
GOVERNMENT into live ( apacity Building Account
KMHs Salt
32.6.4 Pic GOVERNMENT may enter into a Rights Sale without the
consent of the CONTRAC TOR or any CONTRACTOR Entity.
UaWii'v
32.6.5 I .ich Charged Interest Holder is separately liable (and not jointly
and severally liable with any other Charged Interest Holder) to the
GOVERNMENT for its obligations, duties and liabilities under
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l ira Amendment Agreement Chia Surkh
this Article 32.6. A CONTRACTOR Emily that is not a Charged
Interest Holder will have no liability to the GOVERNMENT for
any claim by the GOVERNMENT arising out of or related to the
breach of any Charged Interest Holder's obligations under this
Article 32.6.
Breach; Indemnity
32.6.6 (a) If a Charged Interest Holder fails to pay a Capacity Building
Payment in full when due. the GOVERNMENT will,
notwithstanding any other provision of this Contiact. any
lifting agreement, any sales or marketing agreement, or any
other agreement, automatically be entitled on not less than
sixty (60) days prior notice to the defaulting Charged Interest
Holder and the CONTRACTOR in the case of the first
default, and not less than thirty (30) days in the case of any
subsequent default, to;
(1) in the ease of a defaulting Genel Interest Holder.
(i) lift, at the Delivery Point or at such other point as the
GOVERNMENT may decide, up to thirty per cent
(30%) of such defaulting Genel Interest Holder’s
Profit Petroleum; and
(ii) continue to lift up to thirty per cent (30%) of such
defaulting Genel Interest Holder's Profit Petroleum
for the remainder of the Dev elopment Period.
(2) in the case of a defaulting Forbes Interest Holder;
(i) lift, at the Delivery Point or at such other point as the
GOVERNMENT may decide, up to forty per cent
(40%) of such defaulting Forbes Interest Holdei’s
Pm fit Petroleum; and
(ii) continue to lift up to forty per cent (40%) of such
defaulting Fotbes Interest Holdet’s Profit Petroleum
foi the remainder of the Development Period, and
(3) in the ease of a defaulting Petoil Interest Holder;
(i) lift, at the Delivery Point or at such other point as the
GOVERNMENT may decide, up to forty per cent
(40%) of such defaulting Petoil Interest Holder's
Profit Petroleum; and
II
Him Amendment Agrecim-ni I liia Suilh
(ii> continue to lilt up to fairy per cent (40".I of *u«li
defaulting IVn.il Interest Holder’s Profit Petroleum
for the remainder of the Development Period
(hi A defaulting l lunged Inleiwl Holder will have a 'ingle etnv
penod of lliiity (.III| days only in respect of its fust delimit. If
the defaulting ( lunged I mere-l Holder pays the defaulted
Cupacity Building Payments in lull plus interest in accordance
with .Article 32.6 2fft in such thirty (30| day period, the
GOVERNMENT dull not exercise ns lifting right, uihler tin.
Article 32.6.6 in l»sp*M of Mich defaulting Charged Interest
Holder. In the ease of any subsequent default, the
GOVERNMENT nc> exercise it. right to lift whether .* me
the defaulting Charged Interest Holder cures its default m the
thirty <30l day notice penod
J’6.7 The liftng rights of the MIX ERNMENT pursuant to An.lc
32 6 6 arc exercisable by way of set-oil .nW first resort to legal
process. and without any liability or claims of tire defaulting
( barged Interest Holder, the CONTRACTOR, the Operator, or
any other Person, and regardless of any provisions of any lifting
agreement m provision of a joint updating agreement or any other
agreement to which the COM U ACTOK or a defaulting t lunged
I mere si Holder is a party The CONTRACT OH dull ensure that
all agreements in respect of the lifting or sale of Petroleum reflect
the GO\ ERNMENT a pr..«ny rights as set forth m Article 32.6.6
and An Article 316.7.
32 6.1 (a) A defaulting Charged Interest Holder dull indemnify the
GOVERNMENT from any Loss or Expense las defined in
Article 32.6.8(c). below l llut may in any way arise I’rom the
cxcrcbe by the GO\ ERNMENT of it. right, m reaped of
such defaulting Charged Imereti Holder under Arnclo 3266
and 32.6.7.
(hi lhc GOVERNMENT will retain conuol over Uk- defence of.
and any resolution or settlement relating lo. such Loss or
wnh the GOVERNMENT and provide reasonable molan
m defending any claim, against the GOV ERNMENT
(c) ‘T oss or Expense" menus any liability, loss, claim, settlement
payment, cost and expense, interest, award, judgment.
law. any court filing tee. com cost, arbitration tee or cost.
12
HiuSdih
witness lee. and each other fee and cost of investigating and
defending 01 asserting a claim for indemnification, including
attorneys' fees, other professionals’ fees, and disbursements,
but does not include consequential damages. A claim set forth
in a notice from the GOVERNMENT to a defaulting Charged
Interest Holder will be conclusively deemed a I-oss or Expense
if the Charged Interest Holder fails to dispute
GOVERNMENT'S liability by the end of a thirty
period following tlw effective date of the notice from the
GOVERNMENT. The Charged Interest Holder shall
promptly pay the deemed Loss or Expense on denund.
32.6.9 The GOVERNMENT"* rights undeT Articles 32.66 through
3261 .re not cuhtuvc and are -about prej-bee to the
GOVERNMENI'. tenmnata* rights undo Article 45
32.6.10 Except as provided in Article 32.6.2
provision in this Contract to the contrary, each Charged Interest
Holder shall pay all Capacity Building Payment* without (and free
and clear of any deduction for) set-off or counterclaim.
32.6 II Each Obliged lute tea HoUlei acknowledge* and accepts that a
fundamental principle of tin. Article 32.6 is that such Charged
Interest Holder mud pay the ( apacity Budding Payment, owed by
under this .Article 32.6 only md except as provided in Article
32 6.2(e). each Charged Interest Holder hereby waives any light to
raise by way of set off or invoke as a defence to its obligations to
pay Capacity Building Payments pursuant to this Article 32.6.
whether in law or equity, any failure by the GO\ ERN.MEN I or
any CONTRACTOR I ntily to pay amounts due and owing under
the Contract or any alleged cLiun that such Charged Interest Holder
may have again* the GOVERNMENT. Operator, any ocher
COX TRACTOR Entity or any other Poison, whether such claim
an** under or relates ui this Contract or otherwise
32.6.12 Each Charged Intact Holder shall make Capacity Building
Payments to the GOVE RNMENI by wire transfer of immediately
available funds in Dollar, in accordance with wire instructions
provided by the GOV I RN VIENT The nuking of any paynamt.
acccpoace or aar of any payments by the GOV ERNMEYT. does
not impair the right, of such C harged Interest Holder or the
GOVERNMENT under Article IS. Any dispute between the
13
Flirt Amendment Agreement Chia Suikh
GOVERNMENT and a Charged Interest Holder in respect of the
calculation of each of the Capacity Building Value and the
Capacity Building Payment due with respect thereto, is subject to
Article 15.9.
Vssjgnrornt. Reversion
32.6.13 (a) If a Charged Interest Holder assigns and novates all or any part
of its Charged Interest, the assignee will be a 1 hatged Interest
Holder to the extent of such assignment and nos atm
tb) If (i) a Charged Imeicst HoMci withdruwx a* a
CONTRACTOR Entity, or the GOVERNMENT
terminates a Charged Interest Holder n» u CONTRACTOR
Entity; and if in the cases of clause* (i) or (ii) nil or part of the
Charged Interest of the Charged Interest Holder is either
assigned and novated oi reverts to the remaining
CONTRACTOR Entities, ns pmvided in Article *15. then, in
either such ease, such assignee or each remaining
CONTRACTOR Entity, as the case may he. will be a
Charged Interest Holder to the extent of such assignment and
novation or reversion, as applicable, provided that the
withdrawing or terminating Charged Interest Holder will be
solely liable for any unpaid Capacity Building Payments
attributable to n» Charged Interest prior to the date of
withdrawal or termination.
2.14 In Article 32:
the existing Article 32.6 ■« renumbered “32.7";
the existing Article 32.7 is renumbered “32.8“;
the existing Article 32* i» renumbered -32.9“;
word bonus", the words "or payment" are added, and
the existing Article 32.10 i. renumbered "32.11", and in that .Article.
(ii) the words “or by hanker s draft and on receipt thereof the
GOVERNMENT shall forthwith issue a written receipt to the
CONTRACTOR duly executed by the Minister of Natural
Resources of the GOV ERNMENI or such other officer of the
GOVERNMENT who shall be duly auhorised to issue such
I-I
First Amendment Agreement Chiu Surkh
receipt under Kurdistan Region Law" are deleted.
2.15 Article 39.2 is deleted and restated:
“Except as provided in Article 32.6. each CON IKACTOR Entity dull have the right
to sell, assign, transfer or otherw ise dispose of ull or part of its rights and interests under
tins Contract to any third party (not being an Affiliated Company or another
CONTRACTOR Entity) with the prior consent of the GOVERNMENT and each
otlicr CONTRACTOR Entity (if any), which consent shall not be unreasonably
delayed or withheld Any CON I R ACTOR Entity proposing to sell, assign, transfer or
otherwise dispose of all or part of Us rights and interests under this Contract to any such
third party shall request such consent in writing, which request shall be accompanied
by reasonable ev idence of the technical and financial capability of the proposed third
party assignee.'*
2.16 In Article 41. the following is added at the cod of the Article
“Notwithstanding the foregoing, th.% Article 41 will no* apply lo the
GOVERNMENT in respect of any claim or proceeding arismg .nit of or related to
the exercise of rights by the GO\ ERNMEVT as set forth in Articles 32 A 6 through
32.6.9. in respect of which the GO\ ERNMEVT expressly resenes all sovereign
LIT In Article 42 I. the following sentence u added at the end of the first sentence
"This Article 42.1 does not apply to any Dispute arising out of. of relating to. the
exercise of rights by the GOVERNMENT as set forth in Article 32.6.6. which
Disputes shall, except only as provided in Article 32.6.12. be subject to the exclusive
jurisdiction of the courts of the Kuidistan Region located in Erbil
2.IK In Article 4S.6. after "31." is added “32.6.".
2.19 The following further amendments are nude:
(a) in the definition of “Production Bonus" in Article 1.1. the words “32.6 or
32.7" are replaced with "32.7 or 32.8";
(b) III Paragraph 3.1.9. the words "with the exception of Taxes described in
Aiticlc 3I.2| and bonus payments" are deleted and replaced with “with the
exception of Taxes described in Article 31.2. bonus payments. Capacity
Building Payments, and any other payments";
(c) in Paragraphs 4.4 and 13.3.2(h). after the word “bonuses" in each instance,
".Capacity Building Payments, or other payments" is added.
lilt Paragraph 4.1 is deleted and reslated: “Taxes described m Article 31.2 and
specifically excepting, without limitation, taxes and duties that may be
15
lira Amendment Aei ecincnt ('Ilia Suikh
included in the costs of material ai>d equipment purchased for the Petroleum
Operations:”
(e) in Article 10.2(e). the word "thirteen” is deleted and replaced with "twenty".
<0 the heading for Article 32 is deleted and restated:
'ARTICLE 32 - BONUSES; CAPACITY Bl II.DING PAYMENTS'
(g) in Article 39.6. the follow ing is added at the end of the sentence following the
words "Article 4":
"and Article 32.6.":
(h) in Articles 4.2 and 4.3. the word "other" is deleted in each instance; and
(i) in Article 33.9. “. provided that where the GOVERN MIN I is participating in
its capacity as a CONTRAC TOR Entity pursuant to Article 4. it shall be
liable for its share of Petroleum Costs'* is deleted.
REPRESENTATIONS
3.1 Gcnel. Forbes and Petoil each foi itself make the follow ing rc prescMations.
3.1.1 its entry into and performance of dun Agreement ha\ c been authorised b> all
3.1 J thu Agreement constitutes a valid, legal, and binding agreement of it
3.1 J it ha« received all auhotisation» and consents required under the law under
which it u organised that arc or will he ncevsvary for the entry into and
performance by a. and the validity and enforceability against it. of this
Agreement.
3.M except as presided in the next sentence, there is no law or agreement to
which it is a party that conflicts with or prevents entry into, delivery, and
performance by h of. or call. -Ho question the validity, legality and
enforceability against it of. this Agreement. No representation is made in
respect of the laws of the Kurdistan Region or Iraq;
3.1.5 it >s not a party to any adramrstraiive ce judicial pmc ceding. Imaation. or
arbitration that could affect the validity or cnforwsbdity of this Agreement a>
•o H. and
neither u not any of it. Affiliates has made, offered, ce authorised (and has not
3.1.6
agreed to male and does not expect will he madek with respect to the miners
which «e the subject of this Agreement or the Contract, any payment, girt,
promise or .-her advantage, whether directly or through any other Person, to
Him Amendment Agrccmew ('lint Suikh
or fot the use or benefit of any public official (»«•.. any person holding a
Icgidativc. administrative of ymbeial office, including any person cn«|»W.>cd
by or acting on behalf of the (Rnvmmcni) or any political p*m or political
pony official or Candida* fot oflkv. where such payment, gin. promise ot
advantage violates (i) the law. or the Kurdistan Region or of Iraq, (ii) the law.
of the place of incorporation or it. principal place of business, or (iii) the
principles described in the Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions, signal in Paris on 17
December 1997, which entered into force on 15 l ehnutty 1999. and the
Convention's Commentaries. No p.iii of its participating intcivst under
(including any profits it may derive in icspect of) the Contract is held (or to be
held putsuant to this Agreement I oi payable to. directly or indirectly, to <>t for
the benefit (directly or indirectly) of uny public official or any political patty
or political patty official or candidate for office of the Kurdistan Region or
Iraq
4. (.I'FRM PROVISIONS
4.1 Aitides 36 Vnformaiion and ConfldenttuUty). 39 {Assignment and Change ,-l
Coninil), 41 (IFiiAvr of Sow reign Immunity), 42.1 {SeguOai.oa Medial** a»J
ArbUrution) and 44 (Noth «v) of the (oatr* t .lull apply to this Agreement.
4.2 This .Agreement doe* no! create any tight under the Contracts (Right* of Third
Parties) Act 1999 that is enforceable by any Person who 1* no! a party (a I bird
Party The Parties may rescind or vary the terms of this Agreement w about notice
to or the consent of any Thud Party
4.4 l-*ch Party shall timely exercise all endeavors 10 take, or
cause to be taken, all
43
ordy by a Party ;
17
i hu \uiih
exercising any light or Miwh. or in requiring the of any condition. under
this Agreement by 111'mly. and no act, omission 01 cihiihc ol dealing between any of the
Panic*, will operate a« a waiver or estoppel of any tight, tenuity, or condition, A waiver
made in writing on one occasion will be effective only mi that instance and only lor the
puipoae stated. A waiver once given is not to he Cisuliurd a. a waiver on any future
occasion. No waiver ti amendment in icm»cs1 of lint Agreement will convtitute a
** The p*t*» «•> rue* this Agreement * lour couacrpartv each of winch
CMwiituus an original. and all of which, coilcci.sety, conunuie onK one agwonci
The signature* of all of the Partws need wol appeal .« the same rn---rrpT. and
deUserN »V an • \cv tiled counterpart signature pam by tin simile ot ckcuonic scan is
as effective as executing and delivering tins Agreement m the picscnce of the other
Parties. This Agreement is effective upon ds livery of one executed counterpart from
each Party to the other Parties. In pros my this AgreviiHiit. a Parly must produce or
account only for the executed counterpart of (lie Paity to he charged.
4.7 If this Agreement i» reasonably proven to have been obtained in violation of Kurdistan
Region Law or the law* of Iraq concerning cnmiplioo. thi> Agreement shall be deemed
void iib Inllla
4.K This Agreement (and any IMMb«OMwrtHri obligaiiaiv arising ou of or in connect ion
w*h k) is governed by I nghvh law
IX
First Amendment Agreement - Chla Surtdi
I or and on behairof Forbes & Manhattan (Kurdistan) Inc.:
Signature.
Title Jb/TCC^-OT.....
Name.... Aw-M£b.....
For and on behalf of Crenel two International Unhed:
Stgnatutc.....................................
Title:..........................................
Name...........................................
Fot and on bvhnll of Petoll Petroleum and Petroleum Product* International Isploratlon and
Production Inc.:
Signature.....................................
Title:..........................................
Name ..........................................
lot and on behalf of the Kurdistan U.glniiul Government of Iraq:
Prime Minister
Kurdistan Regional Government
On bclialf of I he Regional Council for (Ik Oil and
Oai Affairs of the Kurdistan Region Iraq
Signature:....................... .
H.irtiuin Salih
Minister of Natural Resource*
Kurdistan Regional Government
On behalf of ll*c MiniMiy of Natural
Resources in live Kurdistan Region
Slgnaiuni .......
Ashti Kawrntni
(Slgnatuir page to the ( hi* Surkh First Amendment ABreement.|
First «-rm:cicr' A* cOWMt - CWH
forand on F«»ulf o/Fnrt** A Manbadiin (Kar Jinan) lix.:
Slwiutun. »••••»* ••
VHlr...........................
Nnnxt.........................
Fur ml on bobulfofXfoael Lorry laccrmiMMal United:
Mfpaarr.
T»i :
Hum: ...
For ml on hcf i of P(M Peaoljam aw« l'«rnlrum Prod am Tnteroaiitfnl Erptoralioa iwd
Pro«liaclli>n lact
fllgraiiiir .............................
Till*. .....................................«■'
Natiw ..........................................
For and on Mldlt ot (be Kardistan RcgraaaKtomnmcnt of Iraq:
Mm MtHirtr
K m*.lit an Prrir*« GeunMME
Cn FrMf rt |) *cgfon>l Cotr^! far Uk C>.«
Gil A flair; »T«M Kajd.iiat Regw.i - b*l
Signature.......................
Sal*
Wir-a« of'iaiwal RowurMi
Kadhoi femoral Orm-rwcrt
Cab* aKoftfas Matmy efNaaaral
Atfri imwl
|S>|na
1*
liret Amcndmcni Agreement Chia Suifch
For and on behalf of Forbes A Manhattan (Kurdistan) Inc.:
Signature.....................................
Title:..........................................
Name:..........................................
For and on behalf of Gend Energy International limited:
Signature.....................................
Title:..........................................
Name:..........................................
I or aim) on behalf of Petoil Petroleum and Petroleum Products International Exploration and
Production Inc.:
For and on behalf of the Kurdistan Regional Government of lra(|:
Prime Minister
Kurdistan Kcgimiiil Government
On behalf of the Regional Council for (he Oil and
Gas Allaire of the Kurdistan Region - Iraq
Minister of Natural Resources
Kurdistan Regional Government
On behalf of the Ministry of Natural
Resources in the Kurdistan Region
|Sq>naturr page to Ike Chi* SnrWh First Amendment Agreement-!
19
First Amendment Agreement Chia Suridi
tor ami on behalf of Forbes A Manhattan (Kurdistan) Inc.:
Signature.....................................
I or and on behalf of Gcnel F.nergy International limited:
Name: ....
For and on behalf ot I'ctoll Petroleum and Petroleum Products International Kxploration and
Production Inc.:
Signature....
Title:.........
Name: .......
For and on behalf ot the Kurdistan Regional Government of Iraq:
Prime Minister
Kurdistan Regional Government
On behalf of the Regional Council lot the Oil and
On* AITnirs of lire Kurdistan Region Iraq
Minister of Natural Resources
Kurdistan Region*! Government
On behalf of the Ministry of Natural
Resources m the Kwdrsian Region
/Will It a* rami