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 PETROLEUM AGREEMENT



GOVERNMENT OF THE REPUBLIC OF GHANA.


















GHANA NATIONAL PETROLEUM CORPORATION




















GNPC EXPLORATION AND PRODUCTION COMPANY LIMITED





AND











;AGM PETROLEUM GHANA L D.














IN RESPECT OF

SOUTH DEEPWATER-TANO CONTRACT AREA

















DATED 10* SEPTEMBER 2013


 TARI.KOK CONTENTS





ARTICLE Page No.


ARTICLE 1: DEFINITIONS................................... 4


ARTICLE 2 SCOPE OF T! IP. ACiKLEMLN I . INTERESTS OF THF


PARTIES AND C< IN I RACT AREA...............................................................12


ARTICI T 3. EXPLORATION PERIOD.............................................................,-..15





ARTICLE 4: MINIMI ’M EXPLORATION PR

ARTICIT. 5: REUNQ11SHMI NT............................................................. -23





ART RLE 6: JOINT MW AG Ml-NT COMM) IILE..~ ..............- . 74


\RTICI.h7:OBLIGATIONSOl tONlRACTOR AND OK PC'; RIGHTS<)l


CONTF A CT( >R ........---.................................................................... .................~...V>


ARIlCLE 8 COMMITtClALlTY......................... • •••••• ••••••••••••<•• 3i


ARTK ’I K 9. SOLE RISK ACCT N M................. ......................42


A RTKXT 10: SI IA RINO ()F CRUDE Oil............ ......................45


• •in


ARTICI.). II MEASURES*I .N l AND PRICING OP CHI Dh Oil *••••••••••••••••• • • • • 5 1


ARTICLE P TAXATION AND OTHER IMI’OSI S...................... .....................54


ARTK'J.It 13.1UKLION I XC.IIAN« iF. TRANSACT IONS ... . •••*••••••••••••••••••^7


ARIlCLE 4 SPECIAI PROVISIONS FOR N.\11 RAL GAS .............**


ARTICI4t 13. DOMESTIC Slim y RfcOLTRFMTNT(CRUDE OIL).. 63


ARnCLT \f> INI OKMAIIOK AND PI PORTS: COKFIW \ HAITI Y *6


ARI ICIT. 17 LNSPLCm»N,SAITTY ANDENVIRONMENTAL


PROTECTION...............---............................................---.........71


ARTICLE 18 ACCOUNTING AND ALDITIMV.......................~..................73


ARTICI-E IV. TITLE TO AND

AKIICLE 2f>-PURCHASING AND PRCK'l RI.Mb.NT..-........... ...-77





ARIICLE 21: LMH OYVII N1 AND TRAINING ........---........--- ...-78


ARTICI T. 21: FORCE MAJHIRIi ........---.......--- _ ------ .....Ro


AR I ICLE 23: TERM AND IKRMNAIION .-......... ...-•I


ARTICI r 24- NM

I EXPERT.......---.........................................---...........


ARTU IH2S ASSIU.N.Ml NT ......... ...........-..N6





\l{lit | F .V*- MISCTT 1 \\h(RJS ...............---88


VI


ARTICI K 27: NO IK L ... ... ....... ..•••I in ■ >|ii' III'• ftttt " t Ml ’ • f•* • f ■ • •••»»»»*»«••••••••••••• w •


--- --- ^ ~ ^ ^


ANNEX It CONTRACI AREA l A A A A A ft A * SAft ft & ft ■! AAA Aft. ft ............._ 94


•••••••••••••••ft•• •• •••••w 9S


AWT X 1 UIARNT1NC’. (.1 11)1 (itaMaiiitftitftiaaaaftft* r a


--- ---


AVKEX 3: SAMPI K \OE CA1CIIIA1 ION........---........- 114


ANNEX 4: CONE IHKNTIALITY AGREEMhN I 115























































































































































































































iU


THIS PETROLEUM AGIOI.Ml'iM, made '.his lO'Mav of Sepi ember 2013 by iirnl


among;


«li THE GOVERNMENT 01 Hit REPUBLIC OK GHANA (hereinuller


i-elerrevl ti? .is the "Suite"). roprosonlud by the Minister foi Energy fhcicinn’Icr


refwml .o in ihe “Minister")


.2) Till* GHANA NATIONAL PETROLEUM CORPORATION, a public


corporation established by die (Ihinn Nulioiutl Petroleum Cotpornliun Luw


1983 PNDC I 6'1 ^hereinafter referred io m “(iMT');


O) GIN PC EXPLORATION -AND PKODICUO.N COMPANY LIMITED, a


company incorporated ii (ihmui and having ils registered o lice al Petroleum


House. Harbour Rond, loma (hcremaPcr referred to as “Exploron"); and


;•» AGVI PETROLEUM GIL\NA LTD a company Incorporated in Ghana and


having its registered oMitc al 39 Ring Road. Genital A cord. Ghana (hore:nalU'i


referred to as “ACM Ghana").


Each oE Ihe Stale. GNPC. Exploreo and AGM Uliana are referred to as a ‘Tarty" and


collectively the “Parties"


WITNESSES THAT:


I. All Petroleum existing In Its natural .note within (iliaroi is ihe properly ol‘ ihe


Republic of Gh.mi and held In tivst by the state on behalf of the people of


Ghana.


' lr is cvHiarre with ix Petroleum lav, the Mir car- has prepared u reference


map sKming arras ol‘ potcu.tal Petroleum fields within the jurifdlaioc of


Ghana, divided into numheiee areac and r-ch «r « ik i i> described as z


-mock*’.


3 <»MH‘ litis by sin nr ol*ihe Peunleun lam hr rii-K to undnukr Exploration.


Drve opivTv and Produc-.on of Petroleum over all Mock* dec ared in ihe


Minister in l»e oj*ei lor Petroleum Opaa.ions.


GNPC s fi.r.hr- an hiriv-.t to eiirr into awociaiion by ncans of a Petroleum


Aarcmcnt with a contractor tor the purpose of I xptoralion. Dcvctopuivni and


PivJucikm «jl PeltoL jm.


a The Crnr.( i Area iKii is ihe subject matter of this Petroleum Acrecmem s


within the .u.sciction of Ghana arc has been declared open fi» Petroleum


Ox- iiiM.a by ih*. Mu'..s:cr and the Sutc dcsucs :o ciwcmugc and pro.iMc


I spkHdlNin. Dcvelopctc . uikJ Pmdacjan wiiiin ihe said area.


Contractor havirj tire financial ability , technical tumpeUmce juk| pmle»io i,il


«U1< necessary ibi carrying out the Petroleum Operations herein describee,


desires to associate vvith

Hroduclion of. ihe PelroL’iini resources of the suit! area.


? Comdor “dal ueir1) *uh *1 nppiieahlc la*» oi IIhnbi in effect from Lmc


us liwvr :-vksrmc »it vmi I »■ ' i'hh an> fcsulatsous a dirtvusr- bmjhI by ir


other act* of*,he Pctfvk.ua Caarnvnon »r the Primleum Caaffitisinrt


AcL 201 It Awl S21) M mfutrvd liy appIxaNc im* f'iw t!mr to litre.


h TV Parties are contmined m ptouJia* Ghanaian national* emploync-il al all


level* in I ic Petroleum Murk). including ‘crhntcal, adminismive ami


managerial poMlkms. anJ Contractor acconfirjriy commits lo providing And


supporting ai ukojn r projptmnK of training lor Oharaan nationals as an


integral part of this Agreement


9. I: is a g(u of Ihc Mate that v* th» a pen.x1 of llf'ccr 05) years frr*w the


Effective Date or ins At-rtrrrm there shall he an iKJige-*** company with


oper.itnrihip capacity and qittllficdthun p »n.h itaada.-tf as :ofired to perform


the Pcrroleum t»|<.-i.ilu.m, m a rale oi piiu^rt manner. Ik Gommctcr la


committed to providing 11m te.iinic.il assisuncr noccw«s> iti eruhle [he Slate to


fulfil such aspii.ihuns.


(' The Panics aie coi tmtiled lo providing ait annual lwc.il uunieni plan for rilltiling


ilic applicable Ghanaian wmieni requirements with rcitped u> ill*- provision of


goods and .services.








NOW rilFREFOkh', in ciMMilomiion of the mutual covenant* herein curtained, it ■


herein Ji'tve.1 and decurcd ns frllcwv*


 \ivnn*: i





DEFINITIONS


i In this Agreement:


i i "Accounting Guide" means the accounting guide* which is alliuhed hereto •i'>


Annex 2 and made a par? iieretif;


1.2 Addiiinnal liiicrc-si" has the irm:.uir»c- such term is given in Article 2 5;


1.3 “Affiliate” means any person, whether a natural person, corporation,


partnership, unincorporated association or other entity, which directly, or


indirectly through one or more intermediaries, controls, is controlled by, or is


under common control with a Party', l or t iis purpose "control" means the direct


or indirect ownership of an aggregate of more than fifty pc: cent (50%) of voting


c.ipii.i* or voling rights of or the entitlement (directly or indiiuully) i

majority of the directors or equivalent mar.iigeinoiii body of, or to direct the


poltcics or operations of the other entity:


i • “Agreement" means this Agreement between the State ONI'C and Contractor


an I includes the Annexes attached hereto in each case, tvs amended from time to


lime,


i s "A<>r." lui.s the meaning such tern: is given in Article 10.2;


1.0 “ApiuuiMil” means operations or activities carried out following a Discover of


Petroleum for the purpose of delineating the accutmiUif.oiv of Pcnc'.ctm io


whi.N |H; Discovery rehilei i lm« of ihicLrro rxl otcr.i rvlml *kI


est.mai.ne the quanllt) of recove able l*eiroleu:ii tfverein and all operation or


activities to resolve all ur.ccr.amiks i

of a discovery:


I“Appraisal Programme" means a programme for the corxtwt of A rpr.'.isah


I S “Appraisal \> HP means a well .rillrJ ptssuar.t to an Appafan: Programme;


I.« “Associated means Natural Cias produced from a well m. aaocuiiou with


Crude 0:1;


1.14 “Darrel" mciu a quantity ot uni; of Crude Oi: cyu.'l to forty wo (42) United


Slates gallons at - leirpcral nv of * xty <50) dr/.-re' I ahrtrilicil jiaJ ai taurteer.


tstkI sixty-five ore-hundredlhs per squire rich at atmospheric (D f>S psa)


pressure;


: ii “Kluck" means an area of approxim cly 685 sspu e siVin ci e* .i' .icptcicc >n


the reference nip prepared by far Nfini'irr ir acoordnncc wi'h the rov-iicns oi


fie Pcln:lcto-i !.**»•;


i i» "Radget" near' a statement prepared in accordance w ith i.v Auccunling Gu dc


indicating cxpcrcittircs to be ira.h- n *,v,nfaince wilh an aeciwr.ianying Wwk


Prugranmc;


r











l It *11 a*iso* Day* "XX* .1 day on which hanks art- .

New Ya< jixJ Accra


1 .a “C alendar \«ar” meant Ae pclcd of twelve (12) rvr h» of he Grecian


calendar, laarmcrcin# on Jariary I end oJir« on ttu succeed m* DiwilK; il.


I 15 1 arrird laicunl*’ autos An merest held by CrNP< ‘ rwr mini to this A&tcma*


in reaped ot wliu.li Cowractor pays fur iV conduct of Petroleum Opcmlivr.r


wilhaul any entitlement ui reimbursement fi'om GM*C other Ihan for Production


Operation ■*;


l ift "Commercial IHwiviry" means a Duenna1? which Is determined lo be


commercial in accordance with .he provisions of Article 8 cl this Agreement.


; .7 “t oanucrcial Production Period" rooms m respect or each Development and


Production Area ihc period nom the Dale of Comnvrtvcireot m ( nmmcrcuil


Production tutti! ihc icrmimniaa of this Aefsemenl ••• r* I ci relinquishment of


such Development and l*roductii« Aic*.


t.lM ‘CoiiMiicruiioiT means npgrcgftie uish consideration, plus itie i«iir martcct price


of ur.y other consideration, payable hy any party. For these purposes determining


rniuirod approvals, the value yl Project Cotr.racis uml'i’r aracndinonts thereto


dcnomlrnlei! m currencies other than U.S. Dollars shall he trutishikvl into US


Dollars in accordance with Article 1 1 ol'ihe Awwmtfag Guide;


i ii ‘‘Contract Area' wcttn» the area covered by this AftPOrment In which


Contractor .• aulhonsa.1 in association with (iNPf in exp lore for develop. and


produce Petroleum. which as ai ihc Effective Date cocupntr* iptrwimJ»d>


J.I82 ons arfcl * dr- -dvd a Annex 1 adaiJied V-r*i >* nch Anne* s nu.le u


pan of Mis Ajpccacai) hut any po.lxms of suJ area n respect of


s*h:ch Contract is- . right* hereunder arc from lime to tine reluqiinhal nr


miiichIctw! pursuant to this Agreement;


l .11 “Crwilruct Award hrM* means (*•>ii ihc caiiKt of ti e Proied Coronets


contemplated by Article O.lWc) » awarded between January 1 and Jirae^O of


-oy Cooiiac; *1 car. Lie pencil fhxa Jammy 1 of such Contract Vcm through


Juw.io o* ihr r.iltowtog Gan Year, end (b)lf the earlier of the P-oKvt


Contract' con rmpk.rd a Article 6.10(c) a awarded between Ju..' I iid


Ihffto .'1 of any ('ADtrac; Yew. tbc period from JuK i q Mich Contract Yov


ttaoLgh fX\ember 31 of die tblhn mg Contract Year


I *1 Coniract Year ninirs n period ot twelve 112) * aim Jai i&jmhi, commencing


on the fc fleet, ve I X»*e .* i> fc.mvcoa.-y L-iaeaf;


i 22 * Contractor" mei.MH uollcvlivclj (j)AGM (iliai a iukI ii» jfcrruttcd successors


nml ussigns and (b) I stpln > i* und its permitted successor. jiR] or to ihc


extern iluii one CouUJKtor l'ftttv u;idrrtases ihr Pclrol.nnu Opcralhins, it «■» if


mean -Jut Contractor Party and Corrractor Party" means any one of ihcm ns the


eontexl requi-es


-’J "Contractor Service* Arrangement" means the arrangement between the


Conlruc'or -mil I lie Operator lyr the provision ol Icctmicvil services to I he


Operator, which ugreemc.il w I 'ie pre-appmvttl by CiM’C a: .signing and


initialed by < iNI'C* In confirmation of such approval;


12- "Crude Oil” means hydrocarbons which arc liquid at fourteen and sixty-five


ore-hundredth* per square inch til ulmospheric (M.6S psia) pressure and sixty


(60) degrees Fahrenheit ntul inc'iules condensates and dlstlllnlM obtained Horn


Natural (ias;


I 25 "Date of Comineiicciiionl of Commercial Frodnctlon" mcnr.s. in rex pec of


each Development find Production Area, the date on which production ol


Petroleum .miter ti prog i amine of regular product lot. liMir.g and sale commences


as defined in an approved Development Flam


i ?6 "Date of i ommrrrlnl Discovery means the date referred to in Article K 14:


1.2? "Day" me.ms a day in li e (itego iuu calendar;


t ?$ ••Default Rale ' menus 1 JBOR p a« three per cent (3%);


i ?*> "Delivery Point" mentis the point of the loading liidllly at which Crude Oil


reaches the inlet flange of the lifting, (ankships intake pipe or such other point


which may be agreed between the Minister and the Contractor;


l :-u "Development" or "Development Operations' means the following activities


carried out in connection with » Development Plan: the building « id installation


of facilities for Production, and includes drilling of Development Wclb.


construction and instalbbor. ef equipment, pipelines. faci'.ities. plans and


systems, in and outside the Contract Am. which are required I«ir achieving


Production, treatment. transport storage i'd lilting, of Petroleum, and


piel.mmary Production activities carried out prior to the Date of Camftviux ki


of Commercial Production, and indudes a I rlaic.I planning ai d administrative-


worit, and may also include the construction and ireullaiion of approved


secondary and tertiary reoovey systems:


l j "Development Covtv" means Paroxnm Costs ranni ir Development


Opnuiiivu;


1.12 “l)c% rlopnwut and Production Area" mean* that portion of the Cooliact Area


rett'onaNy determined K the Contractor fin consultation with he IMC) or b>


GNPC if n Sole Risk Operation on the basis of iho available w: *nt:c end at I


data hi cover the aieai extent of an accumulation or accumulations of Pctfclcum


conr-tuting a Commercial Discovery, eniaivvd in area b> ten pcive.it eh


such calargomcm to extend uniformly around the perimeter of suth


accumulation and to be Further enlarged by the crwi covering ary extension of


the accumulation^ i which is revealed by farther Petroleum i tperations;


I “Dcvrlupimnt Period" means ir. respect ef each Development a *1 Pnxli.ciioti


A*vu. the Tx-iod fiwi the Dale of Commercial l)i«nrr) mill the Date of


CommeRcemert of ConuKcrcial Production.





i


i l» “Do chip meat Plan” means I tv plan for development of a Commercial


Discovery prepared by Contractor in rnrv linhor. with t.v JMC and approved hy


taa Minister pjrsuni '<> Article 8.


i.i; “IH>vtk»piiicut Well” mentis u well dnllod in nccmlnrce with a Development


Plan li>- prixlucing I’d: vile urn indurlinjf wlh for Pleasure maintenance or for


increasing die Production rule


I W “Discovery" means finding within n well nl ihe end of drilling during


F.xploniiion Operations iwio or more accumulations of Petroleum the existence ul


which, nniil that finding wax improve I by tin ling. anJ which can l« or is


recovered at ihe xurlncc in » How me as arable by uonvanlionul international


pdrolcum industry icstiny iiwiIskK (which, in the ciue of water depi'w greucr


than lour hundred (400) marcs, may incliKk- Modular Formation Dynamics


Iesting, rtlv> rvfifrvd in ns ’^fT> T** by Schluniherger);


i J7 "Dixovcry Area" meant ilwi portion of Ihe Contraai Area, dc'.cnrmcd by the


Conlruvtor (subjec- In appnval by 1MC ) or G>JPC if a bole Risk- Operation on


tlv had* «iT the available seismic and well dm* Ui cover the areal extent ol ilw


geological simcii-re ill which it Duiovuy i* made. A Discovery Aral mny lv


mudilia) si any lunc by il* Cm traclur (nr by ONPt. i: applicable! »1 jiadllrd


on the basis of new ip formation, hut inay run »*• modified after the date of


completion of the Appraisal Programme and subiruss.on of a nqvrt under


Artie! a R •>:


1.38 “Discovery Not Ice" means a written notification in ihe Minister Petroleum


Commission and CiNPC providing information which shall include, i!*- v


mid local ion of ihe well from which i ic duj'i aim vnf»> have been foui.a. Lte


depth intervaMs), tslrniHlva vl mow and net pay duck' esc Mrjugmphy, inn: type


ofrcscrvoii and fluids encountered.


•> “Effective Date" shal. have the meaning k jbed (v it in 20 13.


to “luhliog Project Coat met" nviinvProject Carmel existing at the tine of a


Kievan Project Comr.ici Amendment a* previously amendeJ. suppiatcctcc or


otherwise modified.





I 4 “Exploration" or "Kiplnralhia Opuartons" mean* the search for Peln.Irani


by geological, geophysical and Mlici methods and Ihe dulling ol Exploration


Well(s) and include* any activity in cmnaciian therewith or m preparation


llx-icof and any relevant processing and Appraisal , Including technical and


economic feasibility stud lea, tliui may he funded out lo determine whether a


Discover ol* Petroleum oonmituica a Commercial Discovery;


411 ‘ Exploration C.'unCn mean* Polrolouni Coats incurred, boib within and outside


Ghana. m condnctiitg Exploration Operations hereunder determined in


accordance with the Accounting Guide attached hereto an Annex 2;


mi "Fiplomtiuu Period" means ll* pnriixl commencing on liw Effective Dale uml


continuing during nc lime provkfed Tor in Ankle }.l within which Contractor is





authorised to carry out l-xploration Operations and ihr.ll include any peiioda or


extensions provided for in ±u> Agreement. The period shall terminate with


rospcc: to any Discovery Area on I he Dale of Commercial Discover* :n respect


of such Discovery Ami;


1i “Exploration Well" means » well drilled in the course of Exploration


Operations conducted hereunder during the Exploration Period. I>uc docs nol


include an Appraisal Well;


1.45 “First Extension Period" lias the ti'.e.iiiiiig given to such tom in Article 3.1(a)


hereof;


;.4(i “Force Majenre" means any even I beyond the reasonable control of the 1'arty


claiming to be ufi'ecicd by such event which has not been brought about directly


or indirectly at its own Instance or which lias not been brought about directly or


indirectly at the instance of an AIfilliius; pro''tied that the State shall not be


considered for this purpose a:i Affiliate of GMT’C or Explored. Force Mnjeure


events may include, but arc not limited to. cuiil»|u)il.e, storm, flood, lightning or


other adverse wculhcr condition. war, terroi i«m, embargo, blockade. riot 01 civil


disorder.


1.47 "Foreign Nut ion ill Employee" means an expatriate employer

Affiliates, or it;5 Sub-contractors who is not a citizen of Ghana;


DIR "(lhana" means the territory of the Republic of Ghana nod Includes rivers,


snvnins, wui« courses. Hie ieniuirial sea. seabed and subsoil, Ibe contiguous


/one l\e exclusive economic 7orc. corrincntal shell lie airypaoe ant ill other


areas within the jurixcic <»n of Gh uu;


im “GNPC Law" it cans the (it.ana National I’cuc.cum Corporation law I9K~»


(PNTX1-M) as the same may he amended bom lime in lime.


“l.rosv Production" means the total arcoun of Petroleum produced and saved


riom a Development imd Product iur. Area dur.:ig l*roduclion Operations «vfc eh


is noi used by Contnicinr ir. Petroleum Open I Kins and is as ai table for


distribution to the Parries in accordance will* Article 10;


I <: Gross Ne^feettefl" moans any eel nr failure to act (wbcUw sole, join


concurrent) wlridi was m-.le in ruckle* disregard to harmful cunwcuence*. nidi


person knew «* ‘hexild have known, such act or failure would have on another


person or entity;


152 Indigenous Ghanaian company" means .i company incorporated under Lite


Companies Act (Acl 179) .d Ghana.


:.i) having

citizens of Ghana; and





l»» where practica having Clunuian citizens holding at least eighty percent ,,i


senior management portions and one hundred pcroenl ol ron-tnanagerja]


and other |>05i?lons:


1.51 "Initial Eiploraikm Period' has the meaning jpvn to sixa ki :n it


Ankle l.l hereof


>: “ Initial tateftM* means me imprest of GNPC :n all Petroleum Operations


provided foi ji \rk-le 2.4;


i 55 "IniLmatmial ttaod Oil l*irfcl Practice' moor.' il! hii'e me* snd practices that


aie generally ncvq>!cd in the intemalkmal petroleum mJattry j> good. »tc.


economical and efficient in exploring firproducing. processing ami inirspurimj;


Petroleam:





:.J*i “Jaint Management Committee or “JMC" h.ji\ i »c txarjuiltcc e«ul>l»lj:J


pumoti ui Article 0 hereo?.


I if "Jn:it Operating Agreement” or =JO4" means the Jo »t oper .hi*- agTeoroM


to be one red iry» among AGM Ghana. hvplo*«. *j>J 'Ah Operator in review I »»|


the Contract Art*-


UI "L1BOK mnn* he rate which ihe Firancial Time*. «v <1 tl* I maKul Tunes is


noc » pchlis'*n1 the Wall street Journal, certifies to oc tlx London l.iicrbunk


OTercd Rix in the I nwirni Interbank Etxodollai market on tluny (Ml) l>i>


deposits on il c l**t business l)a> ol"the immediately preceding ni*vh; provided


that. in the event ttai n*i:hrr the Financial Times nor the Wall Street loam. I are


published, the Panic* ihull rn'ciw? *o agree on a vimr «atifcalioa foe


LIBOR in reference to marker pr-vnee ** J. il the Partes ax. una e u» ^ice im a


MMirce of certification for I.LBOR. any l*an> may elo the- matter to a Sole


Lx pen for edification.


139 " Major Coal raft” means a Project Contract anda which the Considers ion


exceeds l11IS ID WO.OW:


mi "Market I’rlra" ineirns the mar.ccr price for Crude Oil realized by CoolraUiir


under ih:*t Agreement a. detenmred in accoidance with Anisic 11.7 hereof:


1.61 -Market RcUlrd Strvlcea" means Erty service* incliaiirg ihc province of


a; are. provided by an Atfillaxe of a Contractor Far> which in ihe ordinary


coarse rftariMU pv •» • lo »udx services on an tna a-length third party fevi> u»


me marls! £ctKiaL>.


t a? -Matfrfa! Om tract Airendrrcnr mm a Pro-cit Contract Acwd---( or


anr series of Projo. t < Vatiact Aoccdir^nio. dsn involves:


(a) fi:r Krcicci Contract Arrcn ments of any I • Protect Contrail* jll*ei


:han Major Confraets an uk-towt lo the Cocadciaiion payubb urrfcr such


coon.vr by iltc Contractor {or any A If lime. agent or oilier thiol party


txling or- behalf ol Use Contractor) which would make such Existing


Project Conirnct a Mt\jor Conrad; or


• t>* fcr Project Contract AcKodmeoB or any Existing Project Conitada


Major C oakKte Coo abraitur. in excels of l .’S$ 1 ft.000.n00;





a. -M.-ath “ ivtv -nyn/± of the C a end^r Year.


“Natural Uas“ .n.a.c* all hydiocarbutB which arc gascnui ui iciurecn and six*y-


li>c 0tt.'--TtndreJt» per >qaarc inch ai atmospheric (14.63 p*ia) p-ejsv. _nJ


sixty (60) dcgrvev Wnrici’ *:nipcra!»irc «l include* wet ga*. dry gas anJ


rcsiJ-je grnmaln.nc after ihe cxOacbor. of liquid .tydn wboos Won wrt gas


1.65 ‘.Noo-Aaociild Gas" mors Natural Gas produced from a well olhcr than u


JKurialioD wkh C'nulr Oil:


f* "Operator” me air the prison as nay he jotoll> proposed by the Paftifi* und


approved hy the Minister (vclfch approval shall rot he unrtricablv withheld),


being either C.KTf a CoBtractor Pa.-r. or nr entity wtwlly-ovuied by l«o or


nn*nr Conwr Cant. in fc«ir, ,ki Fetrofeuxa Operation* he'cvraJer on behalf of


the Parties.


1.67 "Participating Interest mean* fctr GNPC, ihc interest held by GNPC ;n


accordance with ti e pruviuoitf of Aitick2.4 und Ankle 2.3, and Tor ihe


Contract. Ok interval iirkl by Ihe Contractor ir. acnmlaner with the provision*


of Article 2.1«.


i 68 “Paying Inftno" u vtuu an interest field l>> OKPC in rcspcc: of which GNPC


iwy# lot Ihe conduct ol Petroleum Operations as expressly provided for in


Article 2 7;


I «»-* "(trnHin ’ mean* a natural petm*i or any corporation, unincorporated nssociarion.


taut. partnership or other legal entity;


n> “Petroleum' means Cm tic Oil or Natural Cias or u combination of both


" “ Petroleum Covviviun" rac.v.s a body c the Fr.ro4cvB»


bb- i Act. 201: for the rcyuklwn arvJ the numgamtn*- of flv initiatMi


of petroleum ie*mi.n m the upstream bkuh.


1.72 Prtroleaui CommhMnn Art" means the Petrolex i Comcnaioa Act 201'.


(Act 821) es the same may he amended hum lime to lime.


1.71 “ Petroleum Costs" nwnrs all expcndilum made and eo«w incurred, by the


Contractor or the Operator both wiilun and mitnde Ghana, ui conducting


Pc.rrfcOT Operai.o*„ l«rmindn determined in a.e.-dance with Ihr Accounting


Guide attached hereto as Annex 2;


'4 **l*rtrulram larenr In l.aw" mean Ihe Prlukuio ixoor lax 1987


i I'M * I I hi i uj Ihe smxk may be Bir.cndBd Irom live lo tune,


I ;• “Pttrolrum laa" mean* the Petroleum (I \|«Umtior and Pioducaoal Law.


19*4 (PNDCL M) as the san e may be amended Uoni tir.«c :o h ue.


I .k "Palmbom Operalka*" incurs nil acttvirici. hom in and oulthk Ghana.


Mla'ing ui ihe Exploration for Development, ProducLon. handling. storage,


processing and i ai *pnriMiiu( (lo fee Delivery Point )o Peli 'lejn contemplated


ai.Jri tin* Agreement and uuluJr' Pxplaniuoo OpetaLons Derefapniem


Ope; at. i j and Production Operations a.'aJ all activii os in unvocHon tfceKwith








*


i .77 “Petroleum Product” means any product derived from Petroleum by any


refining or other process:


I 71 “Pre-Award A Much men t metuuj any order, decree, iiyunelion or other decision


(however dunnmiriatcd) of liny court, arbitral body or other competent authority


requested by a Potty one issued prior to n final arbitral award issued pursuant to


Article 24 of llii.s A Kiev tie til Ihul alhiches, seize*. Irenes or oUierwisc restricts


11k- U'C Or alter uiiun ulany p.-upert) (whether (.uigihle or iriLuiei de) tff'L'te olhwr


Party pending issuance of the final orWtral award, whether such property is ir.


the possession oe control of a Party or of s third pany:


l.'S “Predudkin" it “Production Operation'" mean* activities oilier liun


fcxplorarion Operations o« Development Operations undertaken in occcr to


c\ met, save, treat, measure, handle, store aitd transport (to the DcPvery Point j


1'ctfoleum to Storage and or loading, points and to cany out any ty pe o! primary,


acvoodny cr t.r.-uy operator.*. jKluJing reeve line, iceompioriua. utKvlkv


tar iiuinMuiu i»l pressuro u.*J water Hooding and al related activities such as


planning and administrative work and shall also include maintenance, repair,


zbandonnaml or dccoir.missioning and replacement of facilt-ies im.! 'veil


workovers in every case, cerd»*«cd ullcr the Dale uf Cor urcnccinr it id


Commercial Production ;>l die reflective Development and Piocucuun At .a.


i so "Production Costs” mean* Petroleum Una incurred in IVoductwit Operations;


i ki “Project Contract" means a contract between he (ontraaor tor any Affiliate,


agent or other third party uciing on hchttlf of he Cortmeuw) and .«•> other


person or entity tor the performance of any of the obligations of the Contractor


hereunder or under any related njaeanen:. bu: shall exclude conlracls solely for


I lie Iran,s.mru processing or Nile uf Pelrolcum » ier the Delivery Point;


S? "Project ( mill act Amendment1' mean, an amendment, supplement or other


modification uf any Project Contract (inch,ding any change order or similar


discrc: ternary modi lion lion of any Projed Conlrnd in connection with the


implementation or administration thereof), or any aeries of such amendments,


supplements or other modifications;


S' “Quarter" means .i period of three < i) Months, commencing January I. April 1.


July! nr October 1 nnd ending March 31, lime *0, September 30, or


December 31. respectively:


.«- “Second Eiteitsiou Period" has *h. mcanans given to such term in


Article 3 1(h) hereof:


X' “Sole F.xpcrl” imranv. ibr partem appointed Ur resolve a dispute pursuant Ui


Articles 2^ here.'-.


:sc "Sole Uisk” means an operation conducted at the sole cos' rusk and expense of


GNPC.


IT **Specified kale” i kt.ii ' I HU »K One per cent (i%).


8* "Standard Cubic Fort” ar **SCF" mean the quantity of gas hail occupy we


(1) cuNc font at 14.65 psvi mcnurc and sixty «60) degrees Fahrenheit


temperature;


8> -Stoic” means :he Guvrr-imer-. • *1* i' kt Republic of Ghana, specifically cxc: jJm*


GNPC and Lxpkuco;


1.9C "Subcontractor" means a thud party with whom GNPC or (xnKracior aas


entered into a ciwilrac for .he provision <• goods or services in cor.r.cc::on with


the PcUO cum (»pen»tio:\s.


i.‘>t “Tcrminaiiuu" means termination of rttis Agreement puasuanl to Articled)


hereof;


I.9I "Work Programme" means the annual plan for .lie conduct of Pctrokuai


Opcnitiona prepared punuunt hi Articles 4.3, t»A and 6 5. and


1.93 “Year" nears h uuntinutius twelve (12) MotrJt period.


ARTTCI.F, 2


S(()P_F OF. III>;_\(.RFFMF.M< INTERIMS Ob 1111. PAR IJKS AND


CONTRACT AUK A


2 1 I I'lS Ayvcm;' il provides lor the r.xplomlion lor urld Development arid


Production ol Petroleum in the Contract Area ty GM’C in association with


Contractor.


2.2 5»ut»'ccl to t.ic provisions o: this Agreement, Contractor shall be responsible for


(he cxmilion of such Petroleum Operations us ure required by the provisions of


this Agreement and subject to Article 9, is hereby appointed the exclusive entity


to conduct Petroleum Operations in the Contract Aren. In order that the Parties


Tiiiiv cooperate in the implementation of Petroleum Operations, GNPC and


Contractor sha.l establish a Joint Management Committee, to conduct and


manage Petroleum Operations


2} in the event thal no Commercial Discovery is made in the Contract Area, or that


Gross Production achieved from the Contract Area is insufficient fully to


reimburse Contractor in accordance with the terms of this Agreement, then


Contractor shall bear its own less: GNPC and the Stale shall have no obligations


whatsoever to Contractor in reaped of such loss and the Contractor, arter bearing


ii.x own losses, including all liabilities arising from Petroleum Operations, shall


have no further obligation nr liability to GNPC and ihe State tis to such mailer,


excepting only as otherwise expressly provided in this Agreement.


.1 GNPC shall have a ter. percent lii.tu. Inte.cst ,:i all l\tiolcuin Opciativns


!/


ur.dcr this Agreement With respect to all Exploration and Development


Opererioas GXPC's Initial Intcrt-' ahull be a Carrie;! 1 merest. With rvtpcct ro


all Productu>o Operation* CiNI'l * Initial Intercc shall be a Paying Interest


2S In addition in live Initial Iriieres: pmv ded fei in Article 2 4, (iNPC sluill have the


option ir. respect of each Development c:vl Production Arm to acquire an


mVJatonal interest of up to I5°A in the Petroleum Operation* :n such


Development i»d Production Area t Additional latemO. by contributing an


equal percentage of a.I the Development and Production Costs incurred alter the


Date of Corrmcrrial Discovery in respect of such Development and Production


Arc (yr make anangearenis v*t'*i aitory to Contractor to that effect/ GNPC


dull notify Coair actor of the exercise of ils option to acquire an Additional


Interest within ninety (90) days of the Dec of Commercial Du.uvery.


Coniraclor 'hull provide to GNPC within seven (7) days of !ic Dare of


Commercial Discovery notice dcrai.ing Contractor s calculation of tfv


Contractor I bad Parts Kate

2S> If GNPC oprs to take an Additional Inter*-'i tea pnwitlrd l.ir ir Article 2 5 tl*r.


within >i* (A> Martlii of die date ot it* election. GNPC shall reimburse


Contractor lor «i. expenditures attributable to GNPC» Additional Imereti and


incurred fruoi the Dale of Commercial Diwovery to liar cate GM’L notifies


■■ ^





i





Contractor uf iia election together wilh iniere* at a rale (The “I ftnlraclvr Third


Part} Kale") nn higher than <3 I the weighted average I»lc applicable to iui) lliiid


runy JcN financing |»*»mi ( ty which tire Conradur (ui b Affiliates) ha*


financed such Additional Intorad from and including the .lain of ihr relevant


cxpendi'a-ie to ami mduding the date the Contractor is reimbursed or (h) l


(ontnictor has no third |«an> .Irhi fmarcing, the Specified Rale Wilh uipect tu


all Devdormew and Production C'vstt inclined subsequent 1o the Date oh


Commercial l>i*wcry m any Dcve upuwiit umi Production Area the Aildliionul


Intctcs: shall Ik a Paying liiimwl.


: 7 I'or the avoidance of doubt C.1NPC shall only be liable ui cnnlribuic lo Petroleum


Coma:


Incurred in respect of Development Operations ui any Developnirni and


Produetioi Are.. uikI ty the extent only «>l un\ Additional Interm acquired


in such Development and Prod action Area uzxlcr Article 2.5; anti


!» incurred In respect of Production Operations in any Development and


rnHluaion Arce horh to tl«e extent ofc


< i ils icn percent (10%| Initial Iniere*: and


< A any Add.I.uiul JiilerrM. acquired in such Development and Pnwliw.i.ui


Area under Amdc 2.5


? t fiVPC may contribute to Petroleum Opcuiltoiti by providing relevant at ' k»- .


tluil! he ngiwd with tiiO OpRUCa I pun compljrion of the work jsmk inu-.l «v:ih


said cor.irihulksn. GNPC shull invoice the Cinintcl 'r for the costs ircui ed :u*J


riluill provide reasonable W^ipanir* documentation in -e*|>«xt of such costs.


Contractor shall pay GNPT •* i!iv.»«.=«l umyunl within tiiiiiy (3fl) da>> of


receipt of the invoice. GNPC may eKet U> «;> credu fyr he invoice amotr:.


incurred lywa«l its share, irany, at Deve^pekss! Costs Such crwlit «hsK itwur


.nterenc at li e Specified Kate annually ftwr the respcxrivc dale* AKh c»*f*ribued


costs were inclined umil they nr; utilised as credit* kmmj GNPC j >lia(« ot


Development Cost If during the exploration Period GM’C lus eamei; such


credit and ifliWcleds not to hold an Addilkmil Interest or no Commercial


Discovery i» male in the Cor.uati Area, Contractor .hell reimburse GKT'f Ir. an


amomil equiuilcnt to the credit within sixty ((50) days following the end nl Ihc


Exolorntlott Period or Contractor's relinquishment of Ibe entile Conti net Area,


whichever occurs first. I he actual << mount of any credit earned l*y GNPC uhilll


be the fair market rates at which such services could be obtained under Ihsely


coni petit; vc condition* at ihc iine they were performed.


’9 Upon notifying C.mtraclor of its decision lo acquire un Additional Interest


pursuant ly Aitivlc2.?. CiMf. mqy ul the same time elect to buvr Con met it


advauec 0|) to fifty percent (50%) of

Devefcipncnt Costs as they are incurred, including «ucti Cutty h» will ahead)


have horn i-mirred aom the Date of Commercial Discover)' aixl "Iik.Ii arc


rciirhursoHc under Article 2.6 on term* (i.c., period of payment and inure*:


r.no) no wane than the Contractor Hurd Party Kale,


lift Conuai'lor's Participating l-iterrsi *n all Pctrolcunt Operations and i-i all ntdrfs


uidcr this Agreement shall fte ninety pc' cent (9fWK reduced proponaauiely ji


any given time and in any jpwn part of llie Cool rad Area by Ihr Additional


Imeteu of GNPC pursuant to Article 2.5 or the Sole Risk Interest of (*NPf


purauaiit y> Article 9.


 ARTTCI F 3





I. XrLOUAllO.N PERIOD


J. i 1'hc Exploration Period cull l>cgin or die I'tlective Date and shall not extend


lieyvnd seven (?) years except as provided lor in accordance with this


Agreement and the I’euvitcum Law.


in) The Exploration Period shall he divided into aft Initial Exploration Period


«>l' three and one half years ( Initial Exploration Period") and, first


extension jwiot. of one a:id one hull' vtwrtt (“First Extension Pcriml ’).


And second extension period of two <2) years (’Second Extension


Period") and where applicable the f.irihor periods for which provision is


made hereafter.


eh) Where Contractor has fulfilled its work obligations set nut in Article 4.3


before the end of he Initial Exploration Period or. as the ease may he, the


hint Extension Period, and has exercised its option by applying to the


Minister in writing for ;ui extension, the Minister will be deemed to have


(Maned an extension into the Firal or, as the ease may be, inlo .he Second


Extension Period.


(cl For each wet drilled by Contractor or with Contractor's participation


during the Initial Exploration Period beyond those refened to in Article 4.3.


the Initial Kxplnraiion Period ahflll ho oxiondod by three (1) Months and the


commencement of subsequent periods shall he p- opened ir their entir:-.


iuvnlingly.


12 Follow ini- the nd ol‘the Second F xurxkir Period. subject k) the pmviM.ins of


.Article 3 4. Contractor will be entitled ro an extension or extensions, by


reference to Article X. of the Exploration Period w> follow*:


lai Where at '.lie end ol'the SrciMhl Extension Period fin'iDdiir :s drilling .«r


irsting mty well, Comraeicr shall be entitled to an extension for such


further period a* may he reasonably repaired to ernNe (.V«Uactor hi


complete such wort, and assess the results and. ir. tl»c event that Contractor


non lies ibc Minister that the results from any such well show a Discovery


vhvF merits apprzisal. Cors rector shall be entitled to a further even non


for «uch period as may he reasonably required !n car y out ai Appraiul


Programme and dctcraunc whether the Discovery eoas.iancs a Conmtacui


Dkoreiy;


>i Where at -Jir ci d:he Sewre Extension Penod Contractor »s engaged in


Jtv' conduct Of an Appraisal Pro-cramire in re'pgcl ol a l)iM.;!'ei> which


Ims col been completed. Contractor shall be carried to a tether extension


lol.ow.ng ihe end of the Second F.xiensifii tbr turli prriivl is may he


reasonably require*! lo complete that Appraisal Programme and determine


wherkerthe Discovery cnrwmues a Commercial Discovery.


" ^


-vr




undertaken work not falling under paragraphs (a) or

completed. Contractor will be entitled to a further extension following li e


end .it' the Second Extension Period lor such period as the Minister


considers reasonable for the purpose of enabling such work to hi’


completed.


•:d) Where pursuant to Articles Contractor has before the end oft te Second


Extension Period, including extensions under (a), (h) and (cl nhovc given


to the Minister a notice of Commercial Discovers-. Contracts: shall, if the


Explore I ion Period would otherwise have been Icnniniied. be entitled li> a


further extension of the Exploration Period in respect of the Discovery


Area during which it must prepare the Development Plan in respect of the


Commercial Discovery until either


(:j the Minister has approved the Development Plan as set mil in


ArlieV 8. or


h i in the event that the Development Plan is not approved b> the


Minister as set out in Articled and the matter or matters in Issue


between the Minister and Contractor have been referred for resolution


under Article 24. one (1) Month alter the dale on which the tina


decision dieieutidtr has been given.


1 Without preudice to the requirements of Article 31. where at the end of the


lullin'. Exploration Period ot. at Lx cue nu> be. * Uac end of the First Extension


Periuc Contractor ha* Idled to complete n.. minimum work and expenditure


oh igaiicrrs as specified in Article 4 ir respect of Put period bin has made


reasonable arrargements during the Initial Fxplor.-.tior. Pc-iec or the Firs


Extension Perod, J.;>pl««i»hV. to remedy U ftlelai.il, nr ix in the course of


drilling or testing anv well piaMur.i u an apjxo\«d Work Progranuix.


Contractor shall be entitled to on extension o: tlx then current applicable Period


o erubte it to (aj to complete such work anil (b) to submit ary application for an


extension under Article 3 l(b). subject to such reasonable terms and conditions


a* Lk Munster may stipe.ate to axsuic performance o: .he work.


? a Save in resrcct of a Discovery Area:


la) in thecireumstarves and subject In tie- limiuuccvi set forth in Scelkm I2{3)


of the Petrole-mi I .aw: or


ib; in a ease falling withm the provisKts of Ankle


subject to .Article 3.5 and 8 nothing ir. Article 3.2 shall be read or construed as


requiring or permitting the externum i»l the I xpkiratiOli Per.od teyond sever. (7)


>xars from the Effective Date except lor reasons of l one Majeuw.


3.5 The provisions of Articles 3 2faj, 3^lb) and 3.2(c) and Article 3 3 in so far as


they relate to he duration of the extern) period to *l’kh Contractor will be


entitled shall he rend and construed as requiring the Minisler to give elTect i

provisions of Article 8 relating to the lime within which Contractor must meet


the requirements of that Article.


ARTICLE 4


M1MML.M EXPLORATION PROGRAMME


4.1 Exploration Operations shall begin as soon as practicable and in any case no:


Jicr than sixty (60) days after the I I'cciive Dale.


a.: (a) In recognition of the work conducted by (iNI’C prior to the date of


execution of this Agreement in bringing the (.'oiitiact Area to its curient


level of prospectivity, within ninety (CO! days after the Effective Date.


Contractor shall pay to GNPC ar amount equal to Twenty Million United


States Dollars (US$20,000,000). Such expenditure shall he considered a


Petroleum Cost.




of Oily of the type, described in Article 16.1 Unit holds as of such me n


respect ol the Contract Area to ComjacIoj. Such data sha.l oc considcted


Project Data for the purposes of Article 16.2.


tc) CiM’C shall, nt the request of Contractor, make available to Contractor


Mich records and information relating to the C attract Area as arc relevant


m llie pcrJomiiuuie i»l Exploration Operations by Conlraotsir ttntl atr i


CiNPC’s possession, provided that (Vinimctnr shall reimburse CNI'C dr


reasonable costs of licensing the data arising after the Effective Date and


foe other costs reasonably incurred in procwinn or ottcrw.se un -u.e sik.i


rtscoids and in lot unit ion available lot iKilrackir.





i 1 Subject to the provisions «>t thi. Article, in di>, itr^c ol • *d ^-'Hin* tci _.ii •


out Exploration Operations in tin. Contract Ana, Cuntr-Mot stall Curing die





several pht.sn into which the Exploration Period is divided cany ou: .he work


speciHoi berdnufter


if Initial hioloratiou Period. Commencing t. die Effective Date ai.U


lennimtirg a: the end of the first half of the «T' Cor.'ntct Year (a total cf >2


Months)





Mpcyipnon of Hork


By ihc end of the Initial Exploration Period, contractor sh= II have


uihiertiiken the work. desert bee below:


(i> Acquire. process :r*l inrnr. sevm hundred If.y (7*0) MiiHrc





kilometres of 3D seismic data: and





•hi Drill a minimum of two (2) Exploration Wclb





Minimum tnicmjinirv Comractor’s minimum cxpendjtac lot the work


in the Initial Exploration Penod stall lie Uni Hut drod Eifty-Niic Million


United states DoUara

As security for Corurwtnr'* minimum expenditure <*]».< ««n tor t*k work


in llie Initial fcxploraikm Period. AGM Ghana srull provuk. k> C.NPC


within ninety (90 ► 'lavs 01 the effective nte a pcrfornuircc ixtiul oi hank


puonintuu In Mil a financial iiwlitulxm. in ^ fonr. and from u jurisdiction. m


each caw, acceptable m (»MH- ud idw amount rtv 1cm than One


Hundred Mi I" ion linked Stale* IX.IIars (USS100.C00 O00|

Performance l*cn

In inldition in the Inria! P*. kimuntt Hood. if al an> tine on or prior lo ihe





la*t Jay of the Initial f«pUiradon Period. GKPC Jctaau-> * (■• sole


disciclivr.) that the Contractor is not «r has not been ciakJmting I’cUolcuni


Operations in .1 manner or

woii obligation* lor 1 ie hiiLul bx^lcrabcn Period, GNPC nun b\ notice to


ACiM Ghniw require S(iM Ohmw to provide to UNI’* . »

(4>) days after «uch coder is given, an aUiuunol /erh naaui. bvaJ or


hank guarantee Uvm a financial trsounirev. in ■ atre imd ran a


Jurisdiction, h cjc:i can accept :'c •»> (iMC and m nn amount up to the


difference between (0 Two llu.*J*cd FifU-Koe Million United Sutes


Dotes (U5S299,000.000 .. \) (»ne Ihndrcd HOk n» IfntedStataa


Dotes (usskh),000.000) plus (H) the tanouni t Vmnkm •««*


expended in furtherance ot the nintanim w.irk obligation m iv t.me of the


.notice

C.NTC may. ;n its role diwetion. deliver notice » AGM Char* .hiriae the


Initial fxplorr.linn Period that no Additional Pa&vm .r^e lioal shall be


icqiuicd. for the avoidance of doubt, in :hc event that GNPC give* no


twi ce m reaped cl an Additional Performance Hood Juring die Initial


l-'.xplorntkm Period. lire Additional Performance Hond shall trot he require*;,


nnd upon liter Minister's certiliiaiioo ol the completion of the minimum


work .ihllgatlon for ihe Initial hxplondion Period, the Ini'.itil Pertormancc


I kind and any Additional Performance Rond may Imnirwie and GNPC


shill pnMii|4l> realm any associated iastramcnisU> ACiM Ghana.


• b' Kit>i i.xtcr«ton Period- Commencing a: ibe end of the Initial Exploration


Period nnd lei m uting ar th.* end of further 1.5 Conlinct Years.


Hru ripiion of Work





R\ Ihe end ol the hirst Exlcnvion Period, ctvv.rncuir shall haw undeilaketi


die work described below:


Rc|«r*«ct-u erhune data where requited: mxl





(u| Drill n inlnimui]! of one fl) llxploraucn Wdl.





re: Contractor’s minimum h\pcnditmr fin ihe work


in :hc FiTsl I * tension I’ci.od sluill be One Hundred Twumy-Six Million


I'niird Staten Dollars (USS126.bOO.WO).











V








1C) SinmJ rm-nsiun FtriuJ Commcucing * tlx ad o: the Fin» Exlcsmxi


ai*d icrminailng a: die end of n f)irili«*r two Contract Years.


i>nvrmiiuu.»Qy.»il>


ri) Reprocess exist.or data where required: and


(ID Drill a minimum ol'onc 11) nxplimilion Well.


Vliriiiimin lUiieruliiniy Minimum Expenditure ter work iii the Second


Extension Period shall he One Hundred Twenty-Six Million United Staten


Dollars fUSS 126,000.01)1)).


;.tl Work accocnplMwd in any period in execs. of the above obligation* rnuy


he applied as credit in satislaction of work obligations called tor in any


other Period. The llillll.uont of any work obligation shall relieve Contractor


ni“ the correspond ini* minimum expenditure obligaPon bill the liiUllmenl of


any minimum expenditure obligation shall not relieve Contractor of the


corresponding work obligation. Should llic Contractor fail to perform any


of ts minimum work obligations under Article 4.1 within the relevant


Period, the Contractor shall pay to GNPC, any unspent amount of the


Minimum P xpcrdilure obligation under Article'll for the fniiinl


exploration Period. Ihe I'irsi Extension Period Or He Second lx ten' on


J’er.od as the ease may he. Notwithstanding the second wnleiuc of tlui


paragraph. in the event ‘hat such a payment is nude u icmc.i ui Tv Inin id


Exploration Period and there has been u Discovery il* (V-iirac ;r di d \%


deemed to have Ail filled the work obligarion for rhe Initial Explorr.tion


Period; provided however llml Contractor's ny it to advance to 1h= First


Extension Paiod in such event shall be at the discretion of Ibe Minister.


4 a No Appraisal Wells drilled or seismic surveys carried out by Contractor m purl


of an Appraisal I'loguinine undertaken pursuant to Article H and no expenditure


incurred by Contractor in carrying out such Appraisal Programme shall be


treated us dihiduirging the minintum work obligations umln Article 4.1.


1.5 The seismic programme '» Article 4.3(»1, when Combined with existing. data,


shall he Nile I; as will enable ,i study of Ihc regional geology of die Contract Area


and the preparation of a report thereon with appropriate maps, crons sections and


illustration* ns well as n geophysical survey of Ihc Contract Arcu which, when


combined withexistingdata, ahull provide:


mi a minintum seismic grid .•.rlcquaio to define prospective drill sites over


prospective closures as Interpreted from data available to Contractor: and


ib; a seismic evaluation of structural and stratigraphic conditions over the


remaining portions of the Contract Area.


«.« Each Exploration Well shall be drilled at a location and tv an objective depth


determined hy Contractor in consullulior. with (INPC. Except as Othemise


provided In Article 4.7 or 4 * Mow. the mir.in um de|H;i of each obligatory


I xploralion WeD shall be whichever of ihe following is finl rticour.wicd.


(hi the depth of run less than 2.000 metres below the mud-line, to reach close


to Uk bote of the syn-rift succession; subject to operulMiiuil condition*, and


as determined by wellsite micro-pnlcooio’ogy:


0 • the Jeplh o!'500 metres into the primary objective,


lc > thr drpih at which Conlwior encounters geologic basement; and


f-; the depth at which a Discovery is made and tested,


i 7 I he minimum depth of one (I > of Ihe obligatory Exploration Wells in Article 4 7


siuil be whicheverofihe following is first encountered:


(hi the depth oi not less than 2.UW metres below the mud-line. in reach clow


lo the base of the syn-rili succession, subject to operational amdhinas


permitting, and as Jeternincd by wrlKix mxto-pol.vulul"^.


(b! u depth sufficienl lo penetrate 300 metre* into the upper nlhinn formationi


or


(r i i he depth at "hid Contractor encounters geological btuoimnil.


u.j II m the course of drilling an obligatory F spluratiou Well I be C ontractor


conclude* llisl drilling to the mirhrimi depth specified in Article 4.b or-7


abuse % iinpoMribie, ixaptacftK-ablc«r im-mcctu ir acrord inoc with h*« jikuI


Good Oil Held Prauius. An Ccotrsctoc nu> plog and thr Kxplnraiujo


Well and CNFCand i!«e Minuet shill »w\e il* opfwu of ether


m waning the minimumdcpJi roiunement. :n which cu«e Contractor will be


deemed to hove satisfied tl c ubligatiou lodnll iwh 1-xplonttiun Well or


b) provided that a mw«Hii»hle amount or lime (.*nd for llm purpose. fifteen


(IS) Months dull x a reasonable amount of lirvi thall be fil owed lur


Cenuncaar to souse a m.i.x4c criiLatf ng, requiring CooBacsor io did: a


subst.tur f-xplrrunon We* at ■ kxuuui dvtw mmol h* « .'orrscicr In


ttKBufathtn with GNPC >1 to iIk- minimum depth *«: lerJi ic Atfce 4 *»


or 4.7. except tluit U ** the course of drilling such sub. me Itxplomuun


Well CcmlrucbM ouoI^iks dial drill** io tfce mm mum dapdi specified in


Article 4.6 or 4 7 obtnv is .mpuss.blc. w|*>*»icahlc or impudent In


accooknrr with International Good thl I'KUi I'mtuc then Contmcioc


may anc abandon hr sutwtiane hxpkirst »*n W ell anc will be deemed


to lute satisfied i < oNIgsdon to drill one (I) hxpkxniur WdL


P c *hwe ofticn shall exercised by GNPC *>d lk Minuter (actn^ topetheri


wit.iui sixty |60> Jays from notice given by C'.mhi*.fcir to (iKFC of he


ft«mplcjiii of the plugwu g a «l aKuvdmmcri «*r the I xpierntwn Well. anJ


tliilinc to exercise such opuou sluiU const hate a waiver by fiXIK nnd i m


Minister of the minimum depth requirement pgrsuar.i to 4.6 or 4.7 ns ihr i-u'e


-4








ir.a> he. Whilst the Contractor is sourcing a tu tablc drilling rig or drilling or


testing a substitau txploiauon Well as contemplated by this Article AS. the


Contnu or shall hr denned i«i be “in the wnirevr u di I n l l>r u*ti»t any well


pursuit ui an approved Work Programme" for the purposes of Article * 3


4.9 During the Exploration Period. Contractor ahull have the right to perform


additional Exploration Operations subject lo llw terms i>l this Agreement and


applicable law (including, without limitation, gravity and magnetic surveys,


drilling stratigraphic wells, reprocessing two and three dimcnsior.nl seismic data


wilhin Ihc Contract Area, environmental mid mclucean studies, technical anc


economic evaluations of each Well and additional geological and geophysical


studies), provided that:




nnd




dull Contractor may elect l»i perform such additional Exploration


Operations in the absence of any required approval by the JMC, at their


sole risk but only ir the event of n subsequent Commercial D icovery


associated with i*ucli uddi1

suv.li Exploration Operations be considered allowable Petroleum Cost* or


AOE purposes iirnl nny such subsequent Conmercial Discovery shall be


re,He'd hereunder in the tame manner as if such Commercial Discovery bad


beer, made in cmnccticn with operatiers that were nr* perfo-med as sole


risk operation*. including, without limitat.m. participation by (.MV In


such Commercial Discovery.


4.in IXuing the Exploration Period Contractor shall deliver to GVPC End the


Minuter reports on Exploration Operations conducted dui hj each Quarter


within thir.y (3D) days following liter end ul Us. Qua ter. l ather requests foe


iitfh-TTHlirr by the Mmitfer rat.br Section *>(1) of the Petroleum Law shall be


complied whh within a rcasonaalc time and copies of documents and other


material conlauung such information shall he provided zc*


 AH I ICLfc 5





RELINQI IMIMfcM


5.1 Txccri is provided in Article 5.2. 8 }. *11, 8 17. R IR. R 19, 8.20. 14 0 arJ


14 16 Contractor shall relinquish portion* oI the Contract Area in. the manner


prv‘ ided hereafter.


la) If on cc before the expiration of the Initial Exploration Period. Contractor


elects enlcr into Ihe Fi-s* I Ales mm Period pursuant 10 Article 1 i(b)


llier. subject to Article 5.2 ji the commencement of the hirst bxKnsioo


Period (he area retained shall i exceed anrmv percent (70*4) or the


Contract Area as ai the HlTeciKe Dale.


it>; If or. ot before the expiration u: the hirst Extension Period. Contractor


elects .o ewer into the Second Extension Period pursuant to Article 3.1 llwi


mb «n.i In Artick- 5 1 ai Ihe cnnwnercrmeM «| the Second Ijiewainn Period


the area retained * anil not exceed fom-.fi vc percent (45%) of the Contract


Area as at the Effective Dale


ic) Or ihe rxptr inn of ihe Second F> onion Pcr .';l. C.ini-aelor shall suhieci


to Article 5 2 relinquish the remainder of the retained Contract Area


PROVIDED I lownw* THAT Sl‘He end of the Ir.iiial Exploration Period or


the l ira Extension 1‘ervd 2* the ate ir.ay be C ontracror elects net to enter into


the Fiul or Second Extension Period Conk.*, tor ahull rclimp *h ihe =:»t-e


CunliuCt Area.


5.2 Hie provisions of Articles.! shall r.ot he read or construed as rectiirine


Contractor to relinquish any portion of the Conti,ut Aio* which ««n»i ii-tc* or


forms pari of either a Discovery Area (excluding a Discovery Area determined


by the terms of ihis Agreement io neither merit Apprawiil nor ;o be commercial)


or a Development and Production Area


.1.1 Each urea to he relinquished pumuant ui iliis Article shall he selected by


Contractor and shall he measured as far as possible in icrms of contiiiuaw an.:


compact innits of a size and shape which will prrrr.il Ihe carryir, mu


Petroleum Operations in Hie relinquished portions,
































n


 ARTICIF.6





JOINT MASaGKMIM < «)MMI I 11 1C


6.1 In order iha. GNPC mii> .11 nil times participate :n respect of the implementation


rtf Petroleum Operations. GNPC mui Contractor shall not later that thirty (.10)


days after the Effective Dote establish a Joint Management Committee. Without


prejudice '0 the right* and oblii&ttlions of Contractor for day-to-day management


ol' the operations, llie JMt shall oversee, supervise and, as specified in this


Agreement, approve the Petroleum Operations and ensure that all approved


Work Programmes and Development Plans arc complied with and also that


accounting for co»l» and expenses and the nwintcnance of records and reports


concerning the Petroleum Operations are carried out in accordance with tins


Agreement and the accounting principles and procedures generally accepted in


the internal inntiI petroleum industry.


62 Idle cuui|Hisitio;i ol and diHlrihulion of functions within ihc JMC shall be as


provided hereout Her.


(a) I lie JMt shall he composed ol two (2) representatives ol CiNPC and two


(3) rcprcsentnlivcs of Contract™ Any Contractor Party no: represented on


1 he INK may appoint 11 represeriaiive lo attend all JMC meetings as mi


observer mid shall receive copies of all notices and materials distributed to


the member* of the JMC concurrently with the distribution of such notices


and malei a Is lo tin? JMC members. GNPC and Contractor shall also


designate 11 substitute or alternate for each member In the ease 01 alienee


or incapacity of a member of the 1MC such alternate shall automatically


assume the right* and obligations ol the absent or it* lpaci'.i'd iiicr.her.


(hi Hie Chairperson of the JMC’ shall hr dt-siprated hv Irorn amongst


ihc members c * the JMC.


(ci Conmotar shall be responsible in consultation with GNPC for Ihc


po-pir <«m of agenda nml supporting ilacumems for eucb meeting of the


JMt' ane for seeping records of the meetings and decisions of the JMC.


GNPC’ M have the right tv inspect al. records vl the JMC at any ante


Contractor .vull circulate ’.lie amentia and support 1^ documents tor each


meeting to all members and the auhsiinnc* or altomsics dedpaued


pursuant lo Article 6 2fa)


(d ■ Al am inccl.ng »»t lire JMC three(3) rcpre**nlalives .dull lorn j i^aoum.


Meetings of tie INK! shall be held and decivon* taken as follows


la.i All meetings nt'ihn IVK" shall lv hekl in Accra Oslo London or such otto


place ns may be agreed upon ay members of rhe JMC.


(b; lire JMC dull meet .11 kresl twice yculy .trxl ui such time* as lire- mar hers


may agree.




than twenty (2D» day notice tn the other or, in a case requiring argent


hi ion, notice of such lesser duration »s the members may agree upon.


td) Decisions of the JMC “hull require unanimity, provided, however, that


decisions and approvals requited Ibt budgetary and day to day operational


mutters associated with Appraisal. Development and Production


Operations., the expenditures, outlay# or advance# lor which Contractor will


be required to make on a o:ie hundred per cent. (100%) basis shall require


approval of I he Contractor's representative only




another member.


«:) Decisions of the JMC may be made without holding a meeting lr‘ all


representatives of bulb Panics or such representative# as are required to


make a decision on ouch mullet pursuant to Ibis Article 6 notify their


consent to such decision In the mnniicr provided In Anlele 27.


is! ONPC and Contractor shall luve the right to bring expert advisors to any


JMC meetings to tissist in the discussions of technical tind other mailers


requiring expert advice.


|h) I lie JMC nay also *8Ublixh such subcomn.itlttv as it deems appropiulc


lor carrying out it. functor' including:


(i a technical subcommittee.


ilii an audit suhcirnir.iitcc,


(lift an accounting subconumttcc. a.*J


pv) ii cunlrucl and procurement subcommittee


li) Costs and expenses related to attendance by GNPC in or outside Accra,


(e g. travel, trutupnrt. linn, lodging, per diem and insurance) in wconlarce


with applicable laws, regulations and ONPC policies and procedures shall


be borne by Contractor and treated as Petroleum Cos..


t - The JMC shall oversee Exploration Operations (except Sole Risk Operations or


h>’c risk operations carried out pursuant to .Article 4.9) as follows:


Not Inter than ninety j90) days hcllm- the commencement of each Calendar


Vear. I ontractor shall prepare and submit to the JMC for its review Olid


approval a detailed Work Programme and Bud gel covering all Exploration


Operations which (\mtraclor pro|H»sos to carry out in the coming Calendar


Year nnd shall nlso give an indiention of Contractor’s tentative prcliminaiy


exploration plans (or the Hitecocding C'ulemltir Yem provided that where


the Effective Date occurs Inter titan 30 June tn any' Calendar Year


Contra el or shall httve the option of submitting a Work Programme and








is


B jJtui coveting the retraining months of the Calcndwr Year in which the


n O.UVC Dale ocean and the succeeding Calendar Year, within ninety (90)


cays nrta the Effective Date;


flu l pua 110Lee lo the Minutes tote GNPC, Contractor may amend any Wotk


Programme or Budget submitted to the JMC pursuant to {h » Article which


notice will stale why in Crcitracior's opinion the tiineiulnient is accessary


o* desirable: provided that art) maicriul amendment of such type shall be


submitted to the JMC for review and approval (ter which purpose an


ircrease siull lx material it it exceeds 5% of the line item oc 5% of the


tcttl BudgetK


;v. I. .crv Wori IWramme submitted to the JMC pursuant uj this Article 6 4


and even icviskm or amenJrtcnl Ihereof shall be consistent with be


rcquinnucnb sci uul in Article 4.3 relating to minimum "ixW and


expenditure thr the period of the Exploration Period in which such Weak


Programme or Budgrl falls:


iJ) Contractor shall report any Discoveiy to GNPC immediately following


such Discovery and shall place before (he JMC for review its Appraisal


Programme (or hit ainmdrxr'. thereto) prior to submission lo ihe


PcUoL'un. Commission. « copy of which submission shall a bo be sent to


i he Minister lot intoimataoiul purposes;


(n Within thirty (3(1) days of completion of an) Appraisal Programme a IMC


meeting to discuss the results of the Appraisal Programme dial: be


convened lo lake place Iwlbre submission of Ihe defiled Appraisal report


to the Petroleum Commission and the Miiiislci provided for .a Article 8.9,


(tl the JMC will review and approve Work Programmes and nudge Is ami any


nmendmerits i>: revisions thereto, and Apprcitfl Programmes and any


relevant amendments or revisions thereto, .submitted to it by Conii actor


pursuant to this Article, and timely give such advice as il dccn h appi*iprb»


which Contractor shall consider before submilling ihe Work I’roginmincs


and Budgets or Appraisal Programmes, as applicable, for approvals


required by law or pursuant to this Agreement a* »“•« J' reasonably


practicable, and GNPC and Contractor shall use tejjj'.ubk b.st .ftors to


cause their respective renwscnhitives to complete their rev vw. uul uiniinr.


it* ntvicr. approval or non-approval, as relevant, within sixty (60) days of


their subnussioa;


after ±c Date of Ctxmrcvcia] Discovery, Contractor ahull 'eek the


concurrence ol GNPC* 1\« representatives. which concurrence ‘hall r.oi


l>e unreasonably withheld, on any proposal for the drilling o: ar.


Kxploratior. Weil or Wells rail assixiulcd with the CouMuaual Du*x»«r>


an! not otherwise required io be drilled under Article 4..1 ui 4.S. If


concurrence is net secured by Contractor, Contractor mn> -Kvcnhcfcft


a*


elect .0 drill die hxploraikm Well or Wol> bin only ir ihc event of


>uhsrqiri-i Commercial Discovery associated wit 1 *he Well Or Well* »h~U


rbc cost? of iurh Weil or WdU be cneidnd Petroleum Con for AtH;


punnet.


*> From ihc Dale of Comrcniial Discovery, the IMC dull have tupervikKN wf


l*ei solemn Oixraticns at follows:


1,1) VS Hhin sixty (60) days after the l>aie of ConmcTcial Discovery. Contractor


shall prrpmr and sennit to the JVK' for appsovul any rr»hum to 1U jiiouaJ


Wort IVogmmme and Budget that may be nccctuu-y for tlie remainder of


thnt Calendar Year and for the :esi of the Ixplonilkiit Pciiotl;




Calendar Year. Contractor shall submit m the JMC for review and approval


?. detailed Work I’rnywnme and Budget scrt.ni; forth all Dcvelojmiurn anil


Production Opcnitlona which C'ontrucior proposes to entry out in thnt


Cnlemlur Ytsnr .ind the estimated cost the tool ami »hull olxo give an


indication of Contractor s plans for tlie succeeding Calendar Year, and


let Within sixty (60) days ol" the Date of ('omtrienccmonl <»!' Commercial


Production mill IhereiilU- not later than one hundred and twenty {120) days


before the commencement of each Calendar Year. Contractor shall submit


to the IMC Iyi i|» review and approval an aimuul production seheiiule


(addressing all of the Work Programmes and Budgets proposed hi the


('onir.ict Year) which shad he in accnrduncc wig- hurr-vciorxil Good Oi.


1’iekl Practice, and shill be desipned to provide the m.«t cllkicnl.


beneficial and timely pmdaclun ol lire Petrofcvan rescxrrecs.


provided that :hc JMC will make such review uml approval (if it decades to give


approval) a* soon as reasonably practicable and IM and Contractor shall i«e


reasonable best efforts to jim l eii reaped :vc UTtesemtives to complete thru


oiew aikJ confirm tbeir approval or nnn-uppnival within sixty (60) cays of


submission of the relevant Work Prupiimrar und Budget.


66 Lifting schedules and .xlicr supplementary agreements providad for ukIci


Article 10.7 shad be subject *a> JMC approvul


* .• The JMC shall review a.1 or Co«-.>*ci.ii» icpurla on ihr conduct of Petroleum


Ope ratio**


o.s Contractof1 s insurance pmjnaimne .wl ihc rrovramir.es for training Operator


personnel and technology Iran'lei *utwn •lied by Contractor a>J (be


accompanying budgets for such scheme? anc progranmw> s'ull be

JMC approval.


M Fxeepi as cyhcr.v.se agreed in writing •> liie p*ri»c*. il* JMC jdv I be enUlkc to


(a) review -nJ appovc tender pfocedims. inc’ jding without Hnv aiioo


detenrining ihr terns and conditions of competitive tender procedure*.


reasonable pre^palitkatlnn criteria for bidders and ihr forms o'cnnimcl


Lxrcroc and cciUlyav ibe winner of sub tender* to Project Contracts


linker which J-.c ( iwwidiralMin (\cnd> l.Sjl.WXl.lXW.


ib) levies and approve Major Contract* and contracts for Market Related


Service*;


(»i review are approve all Material Cmiruc*. AnonJr.en«;


(di aciicg through a conimcl and pracureinenl mi! (Committee. review arJ


approve in; Protect (dtfraa or Project Cermet Amendment under which


the Consideration exceeds USSI.OftO.iXK> based cm its compliance or nor.


compliance with il»e requirements of this Agreement or of Ghanaian iw in


effect aonr ante to unc;


{c> appoir.t such subcommittees as it shall iicerr appro: >rlaie each such


subcommittee having .ucli authority as is cc.ecated to it by the JMC in


accocdancc with tlus Agrccmciu aaJ related documents;


II) consider any other matter arising trader or relating lo ihi- Agreement or any


related agiceiDcn .hal is referral to t!kr IM( hy any or all of the parties;


one


|vo* fed ihet all matters corning acforc the JMC promt to this Article shall lie


presented and decided scpan cl> Irota decision* with respect to proposed


Rtodifkalor* or Ibe Devetopmei . Plan or proposed ai-iual 'Vork Programmes


ami IJudgcts (01 nmcmlracius thereto; pursuant to Article 6 4, jvov Jed. lurtbci.


that the JMC will mtiku it# review and give Its approval (If it decides li* five


approval) as soon as reasonably practicable, and GNPC tmd Conmiutor shall use


(licit reasonable best cflorte lo cause tl-rir respective representatives lo complete


(heir iwicw and confirm their approval oinoa-appioviil wuhin sixty (Ml) day.


6.10 Contractor shall provide GNPC ten 110) Busimws Days’ prior written notice nf


the award of a Project Control when such award:


(a) has not teen approved hy the JMC or the contract and pioeuremoiit


subcommittee, as applicable;


i hi does r.rn rcsul: from a competitive tendering process;


ic) would, result in the award of more th-ui one Project Contract with the same


vendor or Afiiliules of such, vendor for la) the same, substantially sixvilri •>”


interchangeable goods, or the same, s ubs lunli til ly similar or equivalent


services, within the same Com met Award Period and in such ease, would


result u the aggregate value of such Project Contracts exceeding the


threshold for Major Contracts.


In the event that such a notice is required, such notice shall set out the


to nincrcia':, financial, technical or operational reason for which the Contractor


belie'-es that the award o; a Kpaiatc contree to Ihc wn: vendor it. _u.itif.fd


wilhnu1 prejudice Ui ISNrC's right to review «Kh fC&ttni pursuant to the


Accountant Guide.


If during any meeting nf the JMC the Ponies arc una'olc ui ranch ngreenen:


concerning »uy ol Ibe mnUers provided li»r in Article 6.5, 6.6: ft 7, 6.8 and 6.9


the matter shall 3c dctcrivd lu; reconsideration at a Airthcr meeting to be held


not Inter than fifteen (15) days following I he original meeting. II'alter such


further meeting the Parties are still unable to ranch agreement, the matter in


dispute shall be referred to the Pnitle.t forthwith Failing agreement within fifteen


(15) days thereafter, the matter in dispute sluU. at the tee u.*i *t any Party, lx


relemr.; liir revolution under Article 24.


ft. 2 'll*; concurrence or approval of M.' representatives shall nor be -.mrc’scnabh


wufcbdd or delayed with respect :o any Work Programme or BuJgH or any ..tl-e«


mat Ur: suhrniltoc by Ccirtruclor in acconlaiK* with this Article ft.




























































































i')


 AUTH'l.l* 7





RIGHTS AMlOai.HSATIONS


7.1 Subjevi lo the provl5:0us of this Agfoanew, Comment aK.i'1 be responsible fee


the conduct or Peimlmm Operations and shall perform it* obligaiora in a


workman’ike manner. with &x core ar*l c*pa!ilio< and in accorjaucc with


International Good Oil Field PraclKC. including without prejudice ui the


generality of the foregoing;


(ut conduct Petroleum Opetalions with utmost diligence, efficiency ainl


economy, in accordance with accepted international petroleum industiy


practices. observing aound technical mul engineering pniilieei using


appropriate advanced technology iind effective equipment, machinery,


miilcrials and methods;





(t»l lake sill practicable stqts to ensure compliance wilh Section 3 of (he


Petroleum 1 jw; including ensuring the recovery and prevention of waste of


Petroleum in the C.’oniuci Arc

peholeum imlusuy practices;





;ui prepare and maintain in Churn fill’ and accurate records of nil Petroleum


Operations performed under thU Agreement;


'il 1 pirpiirc and maintain accounts of nil operations under ihis Agreement in


such a nnnnrr as lo present a full nnd accurate record of the costs of suck


Petroleum Operations, in accreditee with ihe Accounting Guide;





>:i diMkHe In ONTO and the M.nistcr any operating or miser ..rrerwi'


among the l*artiM that co nil iliac Contractor relating to tltc Petroleum


Operation* hereunder, which agreement shall 1*4 he iiscomulcnl with the


provisions of this Agreement;





irj Prepare anil '-nplcrricni arrangements for ensuring at all rimes, the


Operator ? capacity as a competent operator;







incidental to all amice*, equipment and supplies iseccswuy for the


execution of the activities to be conducted by lk Icodxtor under this


Agxcmcnl ai*J the related documents;





ih) prepare am! submit in accordance with this Agreement tor ipprnvd hy 1 *■


fkfC (il the Development Plan and (ii) such other matters arc specified


in this Agivcmcal aaJ the icialcJ document' as suhjec. lo afpmvul by iht-


JMC;





(•;. take all measures creMUteui wills liicnm: .huiI Good Oil FxM PracLcc


(ijto conno the flow ^»J prevent loss or wade of Petroleum, (ii) lo


preven; any injurious ingress of w-.net unJ dumugc 10 Petroleum bearing


MraLi ai d (;ii) 10 nuim..y reservoir pre.oniftr.


.j) r.ot to flare any Natural Gw except to the extent ncccssaiy to mitigate or


prevent «m emergency or lor Mile operation* a* proviilcj in the Development


Plan;


ill keep the Minister and GNI’C promptly advised in writing of a.I material


developments which occur, or the occurrence of which i& reasonably


foreseeable, affectim: tir likely ui .1 lire I Petroleum Operations;


(I) to take such steps in case r»t emergency. and make such immediate


expenditures as arc necessary in accordance with International Good Oil


field Practice, l.nvirurmienlnl, Industrial Hygiene arid Salcly l.egis jiicm


and/or this Agreement and the re luted documents for the protection of health,


life, 1 he environment aril property , aril to report in ren sonublc deiiiil nil such


steps taken and expenditures made prompt.y to the JMC;


in 1 notify promptly the Minister and (rNI*< ‘ If the < ‘ontractor becomes aware of


any unusual event or circumstance occurring in the Contract Aren nr such


either arcus where Contractor is undertaking activities contemplated under this


Agreement 0: the related documents dial could reasonably l*c expected to


adversely affect the environment;


f;il implement and administer contracts entered into with Affiliates in the same


fashion as ii would contracts entered into with non-Affilmlu fiirtl purlin 1


comparable transactions negotiated, implemented -rid -iir is ers-d .11 lm


nnn'sdcngjh basis:


i->» maintain or on. as approprailc. ail aiding facilities arc assets


and all other a«c:? used of hold for u* in correction with Petroleum


Operations, in accotttarc with btcmdonal Good Oil Field Practice.


applicuMe law andthi* Agreemat. and


(W perform and observe each it?ie» Um, covenant and agreement of die


Contractor contained in this Agreement and tv related documents


In connection with its per rmuncc of Pc-.rolcinr Operations. Contractor shall


have the right within the terms or oral pursuant to applicable law and regulations


:n effect from time to time:


lay to establish offices in Ohara and 10 assign to those offices auch


representative* as i: shall consider necessary fer the purposes of his


Agreement.


;hi to usr public land' for Installation and operation of shore bases, and


terminal* harbour* and related facilities, petroleum scrage and processing


pipeline* iron: fields to terminals anc delivery facililic*. comps «od other


housing;


(c) to receive licenses and permission to install ami operate suets


comimmicuiimis ;uul transport ul km lauilUies as shall be neccsstuy fo: the


efllclcncy of Its operations:


Id) to bring to (ihana. provided that reasonable efforts are m-alc to identity


Ghana i.ui pciNonnel with I tie rei|iiihile skill and experience in accordance


with Contractor's plan for training and developing Ghanaian nationals


referenced in Article 8.13(») ml Article 21.5. such number of I-Vi reign


National Employees as shall be necessary for its operations, including


employces assigned on permanent or resident status, with or without


Ibmllies or well as those assigned on temporary basis such as rotational


(rota) employees;


:e) In provide or uiT.uige tur reasonable housing, schooling and other


amenities, |>cnnanciu ar.d temporary, for its employees and to import


personal and household effects, furniture and vehieles, for the use of its


personnel In Ghana,


it> to be solely rcapotwiblc for provision of health, mie dent. pension and life


insurance benefit plans on its Foreign Natior.nl Hmployocs and their


families, and such employees shall not be required to participate in any


insunmcc, compcnsalion or other employee »« **

esi.ihlihlied in < iliau.i,


Cu> to have, together willi its p«*4el. at all rimes *hc right of ingress to and


egress from its offices in Ghana, the Contract Area, .ml die ’.sc lines


associated with Petroleum Opera'ions te-eunder in Cili.ua ic.admg Jw


ollshore waters. using its owned or chartered itksuh of Lind, ca xl r


transportation:


(hy to engage such Subconlrutuirs, e\p.:lriaie and national, including j..sj


consultants. and to bring such Subcontractors and their personnel In Ghana


?.s are necessary’ in order to carry out the Petroleum Operaii

economic, safe and expeditious raanocr. and said Subcontractors shall have


Ihe same rights as Contractor specified in this Article 7.2 to the extent they


are engaged by Contractor for Ihe Petroleum Operations heicuidei, and


(it to establish the Operator to ael on behalf of Contractor In fulf.llinp h*


obligations l.eiciiiider and to allow the Operator to benefit from Ihe righls


afforded lo the Contractor hereunder.


? J Provided that Contractor Iras complied with all or its obligations under thit


Agreement as i: is required at such time. (i.NI'C (or an agcucy of the Slate, a*


appropriate) shall reasonably assist Contractor ir currying mil Contractor's


obligations expeditiously and efficiently us stipulated in this Agreement, and in


particular (i.M'C (or such agency) shall use its reasonable best dibits to assis


Contractor and its Subcontractors, as long ms they appropriately complete


 applicable procedures anc other requirements proscribed by irlo :ini authorities


to:


(•) establish supply bases end obtain reccssary conwranicaiioas facilities,







tel subject lo Article 7.2(d) hrror. ciNain ci try v «as and work permits or any


ocher documentation that may fce required front time to tunc for such


r .amber of foreign National Employees of Contractor and its


Subcontractors engaged in Peirolruir Operations and members of lltcir


fami ic«% wiki mill lx: resident m Ghana. and make arrangements lor il**’?


travel arrival medical services end other necessary amenities;


(d« comply with Ghr.ru customs procedures ami obtain permits for the


-.mporixiNNi «.!' necessary materials:


fe: obtain the necessary permits ro transport eoatmenis, samples ;n ;*hn


forms of c.itn to foreign countries fcr ihe purpi** of analysis or procc*iii^


if -Hell t Jreined necessary tor the purposes of I’ctrclcum Operation*:


:l) coniaci gmerirrent agencies dealing wrh ris;ur.p meteorology. nHVKpfMW


and communications as required:


:-i identify qualified Gh_-viuir perMn ne. as candidates for employment by


Contractor in Petroleum Operattoos; and


(h| procure access on competitive conimcrciuf terms for me stecase.


processing, transportation andor marketing of Petroleum produced under


tbit Agreement through facilities owned by die Slate. (.MV (or its


Afrllintcsi or :my third purly


7.4 All rumonuble and documented expenses incurred by liM’C in connexion with


tiny of the rmitiero set out in Article 7.1 above shall be borne by ( onlniclor.


7.5 (APC shall use its best reasonable efforts to render a»»i»Uuxc lo « nntrnctor in


emergencies and major accidents, and such other iwhislatice as may be requested


by Contra dor, provided that any rwasonable expenses Involved in such usaisluneo


siwII be borne by Contractor.


76 Provided ( i.ntrucior lias met nil pre-conditions, if any. Ini any Government


approval, permit, waiver or similar action required, then If any mtch approval


jcrntil. wuiycr or similar action required in the performance of the Petroleum


Ope ai ions by the Contractor has not been obtained alter d\1y (on) days from me


application for such approval, permit, waiver or similar uaiim. and due to such


delay, the Petroleum Operations under an approved Work Programme ami


budget cannot be conducted by Contractor, on the receipt by GNPC of written


notice of cucf delay in obtaining the relevant Gcvcntmnu approval, permit,


waivei or similar action. the relevant provisions of Hus Agreement shall be


suspended for the period of delay caused by (lie Government's delay in giving


the necessary approval, permit, waiver or similar action and any deadline set


herein for the completion of any act required or permitted to be done hereunder,


shall accommodate the period of tune equal to (be delay caused by such


Government junction and die Parties shall take all reasonable measures to


n iriimi ?c the consequences of the delay on (he Petroleum Operations.


 \TOTC Lt h





i ii»iH»n\i it\


• I Connaaor dmll v. bwil a Owtrecty Nr-tn* \» the Minister. Petroleum


Commission and ONIt: in veiling ns *wu as poidbk oliei ary Dbk\n cry is


made. hut in m* event no* later tlur. thirty (TO) dny« aflrr :hc date any n.ich


Disco* cry» nijie.


« ? As soon a* possible after th.

coir|4clc x*J in any event nut aiet limn nac hunt red (100) days from the dele of


such Discovery, Conlmcfoe shall by a (briber notice in writing ro the Mimuei


uulkatc whether in the opinion o’Contractor k* Discovery irerih nrt*auoL


U Where Jx Contractor di?e» i>'i make the indication iwprred b% 4iiclci2


uiitar ihe period Mlcad or ioJicatct the’ kr D.seover\ does n. *


appraisal. r<*nif*lor shall subject w Aitk V « 7 a-*J 8 19 befcw. rclua^i the


T>sreverv' Area lv&ociairJ with Ju Discovery.


A W"k-c Conlreoter indfe-iev tku sh- Dilwery rvrrhs Appraisal. < lontracM skdl


within me hunlied a’vJ etc.**' tlWt> days b>>m ihc date ol' su.ii Dstovery


«iKnit to the rorokum Cvnir.uMua tor approval and to the Minwlcr for


irIon uium p-^poscs an ApproiMl Program nc to be carried out by <‘n»n»ic».'r in


wi'et.l ol anch Discovery Ihc pru.mirmr shill tru-ludc n plan for delineating


the ncrumulation of Pemileutn to which rtu»t Discovery elite* ut terns of


thlclmew iincf lateral cxrcnt and nr mat mg ;k quantity of recoverable PeUoieun


therein and all operation* or activities to resolve all uricerliiinlics required for


determination of commercial ily ol .i Discovery. Unless otherwise imimcie.l by


liKj Petroleum Commissko, Contractor hIiuII conduct n separate aaprnlval ihr


atch Discovery where Contractor Indicates that such l iiscovery mem* Mppraiittl.


8 5 L. ibe absence of regulation* i»!hrf\tma governing the process. the Minister shu'l


uve till icaoonablc efforts to procure lhai in considering the Appraisal Programme


salTiiiir.1 imler Ankle S.4. rite fetmleuii Comm »vor. shall .wrt reasonably and


timely aitd Adhere t*> the procedure set foitl. in tin* Article H.5. The PvuoicuiT)


Con»n mu'i shall within sixty (ftft) «Ui>v of sutaniasioo of the Appraisal


Iho^iamine, give liio Contractor a notice in writing suiting:


tu> whether ttie Appraisal Programme lias been approved (outright or


vex kIu tonally) or not.


«,M if not «pproved, an reviskir.s ce improvcmcni' roquired b> the l’ctrokwti


Commission to he inadc lv the proposed Appraisal Programme, imii the


rcaK* « lhcre:«,«


ici If condtionally approved, the condition iy the aporoval of the projxt>ed


Appraisal rroerarnre nj Ik* reasons Item tor


II he Km'kuai Commi

day period, unci Appm-sfll Programme thal he dectrod approved.


If the Petroleum CQrur.iuam notifies ibc Contractor that tl»c Appcaisal


Programme u not approved or tails ui satisfy such uW jy.rron to notify the


Contractor within the limcfhtmc provided or the Contractor notifies the*


Petroleum Conmiissiivi ihai it does not accept the revisions or condition*


required for nny approvnI pur «uant to this Article 8.5. the Petroleum Coromwiou


and the Contractor shall um.uli within thirty (30) days of the earlier of lx) the


date of the notice by the Petroleum Commission and (y) the d.:tc sue i notice was


due with a view to amending the Appraisal Programme to Iv acceptable to ImmIi


.Should the Petroleum Commission not agree to so consult or should the


Petroleum Commission and the Contractor lixil t» agree fl ange, required t«>r


such appro uni wilhin fourteen < II) days following said consultation, Conuactor


may lodge a complaint w.th the Minister and request reaohainn. If such dispute


is ml resolved by the Minister within thirty (30) days thirn liter date such


complaint was lodged, siu-h dispute shall be resolved in accordance with Article


24 If the Petroleum Commission lias not given a notice in willing pursuuul to


ilu» Article 8.5, tl'.cil the arbitration pane, ‘hall determine wliethei die Petroleum


Comm isxkms failure to give inch notice was reasonable and ImvtAil. If t!ic


Petroleum Commission law giver a nolioe in writing pursuant to .Article 8.5(b) or


8.5(c), 2nd the revisions or conditions cannot he agreed on. then the arbitration


Imuk:I -tiiill determine whether the Petroleum Commission’s giving such


revisions or condition* pruptiKed was reasonable and lawful In each case, the


arbitration panel shall also determine ilie appropriate damages and-ur other


award flowing iron any such unreiuonafclmess or unlawfulness.


S.o Where Contractor seeks to amend on approved Appraisal Program: no. it dull


a.ibmii such amendment to the JMC for review pur-Lont to Article 6 -(.• i mfive


submission rn the Petroleum Commission foraport'vnl


»7 Unless Contractor and the Minister otherwise agree i any panuul.e w.e


Contractor shall have a period of two (2) years from the date ol Discovery i.t


complete the Apnr.iii.il Programme; provided dial such period shall be extended


by which the period from the submission of the Apprt-ivil Pi oy am me lor


approval until it# approval exceeds 60 days, lit the event Contractor require* a


period of more titan the two (2) ywire (adjusted as described in (he print


sentence) to complete the Appraisal Programme. Conn-actor sluil! submit tvijncsi


to Ihe Minister for tin extension with a firm programme with timeline* to justify


llic request.


SJ Contractor sluill cunmiemu un Appraisal Programme within one hundred and


fifty (150) days from the date of approval of the Appraisal Programme by t ie


Petroleum Comm ssion. W here the Contractor is unable :o commence appraisal


work within one hundred and filly (150) days from the elite of approval of the


Appnrsw Programme by the Minister ONPC shall he entitled :o exercise the


option provided lin in Article 9.1 to enable proir.pl appraisal, provided however


lhai after Contractor actually embarks on appraisal work or obtains an extension


ot time tor such work this option may not be exercised.


jS Not Inter itw i ninety («#i> day* from the date :n which said Appraisal


Programme relating to the Discovery is completed CcutmUir will submit to the


Petroleum C .vmnibMun with - copy u the Minister a report contain Jig the


results of the Appraisal Progninrr.e Such report shall incline al! available


technical ,.i»d economic data relevant to a determimdon of cornmmaaliiy-


iachrimg. bul r.ot limited to. gcolog**! and geophysical cooAioni mch a3


siniaur.il configuration. phyMul properties and die extent of reservoir rwiu.


areas, thick nov. and depth at pay zones, pressure, volume and icinpcrauiic


analysis of the reservoir f.uids. preliminry estimate*! of Crude Oil and'or


Natural Gas reserve*, recover, di characterisites, anticipated production


performance j*r icvccvoir and pc: well: 9oJ charactaislkx inc uefi gravity,


sulphur percentage. srdimcnl and vraicr percentage and refinery assay pattern.


1.10 N« «tn ih;.n ninety (90> day* from the date or, which said Appraisal


Programme is completed Contractor shall, by a looter notice in wrifing. inform


the Minister whether the Discovery in the opinion orContractor is or is noc a


Commercial Discovery.


» I 11 Contra,.tor laih to nuWy the M.nistcr as provided n Article S iO or informs


:he Minister that the Dtocovoy is not ccnnncrciul, Ihen subject Uj Article 8.18,


Contractor shall relinquish siu-h Discovery Area: provided, however, that in


appropriate Mars, before declaring that a Discovery is not commercial,


Contract*ir »JuII consult with die other Panics and may make appropriate


representations proposing ntinoi chungr* in I he Iwcal and other pun .tioro ol'thu


AKreetncnl which niuy, in the opinion of Contractor, affect the tfcturnriiMtroi of


commercialiiy. The other 1‘artics may. where feasible, and in the best interests


of the Parties agree to make aueh change* «>r modifications m the existing


arrangements.


r 17 li t (vendor pursuant to Article K. 10 informs the Minister that the Discover is


a Coiiunctcial Discovery. Coiimlor >lt" I ioi later man one hundred and eighty


< 180) duys iha euller, prepure and -uhniit to the Minister a Development Plan.


s.i-i The Development Plait referred to In Article 8.12 shall be based on detailed


engineering studies and shall include;


(ii Contractor’s proposals on the ilelinemeil of the proposed Development unil


Production Are® and for the development of any reaevvoirfsj, including die


method for the disposal ol A woe titled Gas in accordance with the


provisions ol Purl II of Article 14;


Cb) the way in **hic"i the Development and Production of the reservoir is


planned to be financed;





(c; Contractor’s proposals relating to the spacing, drilling and completion of


wells, the production, ‘forage, processing. gas utilization transportation


delivery tacilitics and necessary mli.istr.icuuv development required for





rJ





r


the production, .storage and irar.sportntion of' the Petroleum, including


witho.it limitation:


(II the evliirwicil number. size nxi produeiinn cirpirHy of production


ac i lilies if any,


(to the en.mated number v: Production Wells.


(m> the particuhrs of Icasiblc alternative* for i-Hiw.'oiuiic-n of tx


Pei*ol«urv including /sipelincs;


>1 the parueulair. of onshore installations required. including. the type


nnd spec il’iciii ions or size thereof, and


(v) (Ik particulars of other technical equipment required for the


opoi ill ions:


■:»li the e.irinuite of tl»c reserves together with Hie cslinniled tmnual production


profiles throughout the life of the field to he developed piirsuitni to the


Development Plan for Crude Oil and Natural Gas trorrt Hie Petroleum


rcncrv«ilra;


(«) Ikr-uts with other |*tr,.krjir fields where applicable;


if) Infiirtnfulon on operator and m.iinierwDtc.


f*1 a deschplim of technical vclutiocs inrlut'ng

t • | cittmarci of caput «nd opew*u-* cxpcndiauea:


(1> the economic feasibility studies carried «* K or *tw Carwctoi n r.spcri


of ul emativc methods tor Deve opn»r»| vl lie Discovery. ,rJU


account


til location;


In) water depth (where applicable),


ini meteorological conditions;


lb» cMinutes ol cupilal ar.d operating cxpemMlnroi; and


» any oilier relevant data and evaluation tl eieol.


(Ji the Mifc:v measures to be adopted in rite cmir*< ul lie Development and


Production Operations, including measure* tv deal with ciaci&ctxics,


fit environmental impact assessments required h> dr applicable laws of the


kcpublir of Ghana ir. eTori snd as anKttird from lime to time.


I*) »:•«*' c» iv protect die environment and n evnilrgcnc} plan for handling of


CUKigencies (including the provision ami rrw nlmiiwo of Cviuipmmt


vuukpilci. Ii> icsinnd io an emergency;


 Contnfcrw's pioposab with respect 10 the pmcuK/ncnl of goods and


services oHniruhle in (item;


(n) Contractor * technology transfer plan.


fu> Contractor % plan tor training and employment of (rhamian nationals


wtikh slwJ contain among cUks tiirp* reasonable procedunM for


identilying (iluoaian personnel:« all anpUnmen * icancies ir. Ghana;


i the t mciflNc for effecting Dcvdopmcri Operations; and


;qi a plan tor dccourarissioacg and abandonment


5.14 l he date cl the Minster's approval of the Development Plan shall be -he Daa of


Commercial Diecovety.


8.15 The M.insicr shall within liinepr (00» T>i>» following ;ubmiss:on of ti c


Development Plan give Contractor a not cf ir writing stating*


in whether or nr* Jrr Development Plan fa subm.ttcd has been approved 01


i iiaditionalh' approved:


(H) if not approved, any revision' propound b> the Minister :o the Development


Kan as suborned. and the reasons ’hciwf: or


l«r if conditional!} approved, any conditions pursuant to which the


Development Plan is approved


If Iho Minister does not provide such notice die *uch ninety (00) ca> pric.i.


such Development Plnn ahull he ilaamed not approved.


1; ihc Minister rntil’ies the < Ynuiactor that the Development Plan k hoc approvvc


or tail), to satisty its obligation to nolily the Contract!* within fir timeframe


provided under this Article#..5 or the Contractor noli >. the Min.rer that it


does not accept the revisions or condition puipiwxd Lie Conlnctor ard the


Minister shall commit (ana shall include <1M*C' :n such consul I ul ions) with a


view tw wi h n 4 period of thirty (30) days fron the curlier i»T(k) the date of such


rx'iuc by Uic Maiistci and (y) the due dale <»l *.*ch i.odec above Enter dir j1 the


Development Plim to be jcceplaNe to both. Should the Nimbler not apree to so


tenuh or should he Minuter and the Car.nruor fuil to agree chapes required


Jot >uch approval within fourteen (Ml follow mg said thirty (30) day pervKl.


•die icsuhing dispute arising out of tliis Article K. IS shall K* vrartvrd in


accoolazKc with Article 24. It die Minister bn not given ^ ■oiicc in writing


pufMiani to tbi* .Vrr.clc ? 15. ihcn the dibit .uiun panel sliall dctcnniac w Kihcr


the Minister's failure to give audi notice wai rcasiTubk* arc lawful. l! Un:


Minister bms given h kHk-c ii writing pursuant to Article 8.1 Sfl\> nr X 1 ((c), and


the Parlies ucuk* agree oc the revisions or eordilioni. ti*n the arbitnrion pnrrl


shall iKnc-mmc whether fie Minirccrc giving «K'li revisions or cor.cituns


pn**vucd was reasonable and lawful. In cjJ tese. tin; art'-.uauon pane) avail


also determine :he appropriate damages andor wher award flowing from any


sjch urreasonablene» or unlaw Urines*


5 .6 Where the issue in dispute re I cm: .01 resolution pcrauar. ui Ar c c 24 is finally


decided in favour of Comnctor ttie Minister shall forthwith give the requisite


approval to it* Dcvdo-rrcrt Plan submitted by Coniracirr


8.17 Where the issue in question referred fo- resolution pursuant l«’ Article 24 s


finally decided ir favour of hr Minister in whole r- ir par Cmnracinr sl-il


forthwith:


rat -mm: die prop.***! IXtveliifuneM Plan u> give erteci to the final dedson


rendered icvder Article 24. and the Mciitfcr shall give the requisite


approval 10 such revised Development Plan, or


suhiccl to Anklr X 20 below relinquish the Discovery Area


8.ix Notwithstanding it* i J.iqiiriMcnt juvnaonsctAnklesU andl.ll above,.


Contractor indicates that 11 Discovery docs not at the time mcr appraisal or


nlier appruisul does rml appcur «’o be a Commeicial I>-sc<>\*crv hr ruy met t


further appraisal or potentially become a Commercial Discovery at a later date


during the Exploration Period, then Contractor need act rclinqi • 11 ■. Hi*.. . it*


Area and may eonlinue its I xplorulkir. Operuiiixts :n the Ci> il;ael \rtu Ju ug


the Fxploratior. Period: provided that the Contractor shall cxulair .0 the


Petroleum Commission or th: Minister as a-plicablc what adchitoiul


evaluation*, ineludli ». L \p.vrt or work or Studies, nrr

oritur 10 dcternuie whether M.wcqueiu appraiui u warrantee o: that the


Diseovciy is commercial. Such evalua: on* sh..II be pci iTTreJ by Cuntracmr


according to a specific inrr nble (which 'hall not exceed ll»e tirne frame


specified under Article S.19) to lx approved by JMC wh eel to Contractor's


right o: cai.ic: relinquishment o: ±c Discover) Area Alter completion of the


evaluations. Contractor shall make the irhliculkm* culled for under Article 85


or S 0 and either proceed with iippnihul, confirm roirrnercblity or relinquish die


Discovery Area.


6 :•* In any case, if a Diseovciy i' made in ihc Iniinl Exploration Period or First


Ex ensim Period the Contractor ahull hy 1V rr.l ol he subsequent phase (that is


the l irsl Ddmion PeriiM or Second I xicnsiou Period .vi the case may be), take


a decision to appraise die Dis«x>vciy at iclmcuisk such Dias every Likewise. 1


the Contraetcr has completed the appraisal of u D waiver, in fee Initial


Fxnluraiion Period or I s: Fvieiision Period, the Clontmcoi shall by the cud of


the subsequent phase (that is. the hint Extension Period or Second Extension


Period us the cw may bch lake a devitou lo dderrmuc commerciality or


relinqush such Discovery. II at the ei c >11 ^ Kxrlo.raiiixi Period the Contractor


has neither indicated its intent to proceed with an Appcaaal Programme ror


declared the Discovery to be a CommeTvi.il Dissove*v, I her hr Discovery Area


Shall Ac relinquished











-Jr*





SJO Upon completion of an Appraisal Programme and he lore Contractor makes a


deiaiwiaiUon of noo-vonuncrcialnv. Contractor may consult with the other


Parties ami nay nuke app-opnaic icprcscirat:on5 propping minor dwnges ir.


I he fitcui end other provisions <>T '.his Agreemeni which may. in Ihe npi-iinn oT


Contractor, affect ihc determination of conntcrciahtv Ihc other Panics may.


a^rec to nuke «cn Changes or nodificjlion* in ilie existing arrangement* Ir.


the ever.! ih- t'.vtks dc* nor agree on such changes or inodificaiicos, Umi ,ul> eel


lo A nick's 8. 18 and 8.21. Contractor shall rcfinqiiidt the Discovery Area


*?i Nothing in .Article} 8 3. 8.11. 8.1? or S.i8 above shall be nn*J or construed «»


rsqu.in.j Contractor U» relinquisii:


<■) any area which CMMriuiies or forms part of another Discovery Area in


respect ol which'


10 Contractor 'w*. giver ihe Minister h separate notice •Jaiirg ilvi such


Discovery naerits appraisal; or


iiii Contractor lias given die Minister a separate notice indicating 'hal


aich Discovery is a Commercial Discovery; or


i'll- -my area which cim'dilu.es or forms pm of a Devclopnienl an.1 Pindudkm


Area.


i.22 For the avoidance of doubt, where Contractor cukes a Discovery after the


exp inil ion of llie Fxploralion Period Conuacuir shall notify the Minister t»f such


Discovery pursuant to Article K 1 and s ir render such Discovery to (iNI’C


s.2? In the event a field extends beyond iIk boundaiics fl the Louu.-et Ate*, tlx


Minister may require die Ciniliuctor lo exploit *fd eld in asM^mlmn with » e


third party holding tlic rights ar»J ohligctmn .mdrr a petroleum agreement


covering tin •wml field (or G\*PC as (he ease mu> be) The eepUlellon in


association wil i end ihiiJ party «ir (SNPC . ull Ik- pursuant lo good unitization


one cnpncaing principle* and in accordance with accepted imernauow]


petroleum industry pucticc*









































41








V


 ARTICLE 9





SOLE rUSKACCOLINT


v ) Subject to Article 8.2. GNPC may no lily Conlmclw :h;il il %vill nl ils Side Risk,


commence to appraise a Discovery, provided litai within thirty' (30) days of such


notification from GNPC, Contractor may elect to commence lo appraise ihat


Discovery within Us Work Programme (whether as

t .. (tractor Parties or a sole 0|tctulinn (1 a Contractor Party ).


o 2 Where an appraisal undertaken under Article 9.1 a: the Sole Risk of GNTC


ixnjIis in a determination that a Piscovciy is a Commercial Discovery,


Contractor may develop the Commercial Discovery- upon reimbursement to


GNPC of all expense? Incurred In undertaking the appraisal and after arranging


with GNPC satisfactoiy terms for the payment of a premium equivalent to seven


hundred percent (700%) of such expenses. Such premium shall not he reckoned


as com of Petroleum Operations lor die purpose of die Accounting Guide. Jn the


event that Contractor declines to develop snid Discovery, Contractor shall


relinquish ihe Development and Pruduclion Area established by the Appraisal


Programme conducted hy«iNI’C under Article 9.1.


9.3 During the Exploration Period, GNPC may at its Sole Risk, require Contractor


to continue drilling to penetrate and tent horlaons deeper titan those contained in


the Work Programme ot Contractor or required under Article <.M‘C may also


,ii its Sole Risk require the Contractor to lest a /one or aonca which Coolr actor


lias not included in Contractor’? test programme Notice ol any -uch


requirement shall be given to Contract;* in writing as early as possible fxifir to


or liur 11 the drilling of the wed. but ir. any case not after Contractor has cegin


work lo complete or abandon the welL lhc exercise by GNPC of this righ ?hul


he in an agreed manner (such agreement mil to he unreasonably withheld or


ddapd by ('ontractor) which does not prevent Contractor from complying with


its work obligations under Article 4.3 and takes mto account the availability of


nccvMWy third par * equipment R« h re. including a drilling rii


q i At any lime before commencing deeper di king as required by GNPC punuon


to Article 9 3. Certrsetor may elect to embody the required drilling ir in own


Exploration Operation, n which c*«c any resulting Discovery shall rot I*


ailed*! :>> die provisions ol this Article 9 shall :wt apply to any Ksultin*;


Discovery -


9 ! W;».;c any Sole Kmk deep:: drilling required pursuant lo this A 'ic V 9 i


a Discovery. GNPC dull lave Ihe right, a ils Sole Risk, to appraise, cevclop,


produce and depose of ol' Petroleum from such Discovery and if il desires to do


m shall connikrt such sole Risk orvratiens unless GNPC proposes otherwise .n.1


CcxiU -.'or agrees Provided however In-’ .fat il«" me suck l*e*i oleum is tested


from Ihe p*vducu.c b.a /oa ir. a we.I, Contractor's Work Ptogiammc ux.uJes ;


well pi wells i" fv drilled to the sons producing horizon, tin: provided that


well or wells drilled hy Conimelor result* *) n a Petroleum p-odurin^ well


4!


producing HO n lie wane horbo •. Contractor slmll, after reimbursing GNPC lor


all costs associated with its Sole Risk deeper drilling u; saJ well, !wvc llu- n^ltj


to include production from Ihnl well in iu> loud production lor the purposes of


establishing a Commercial Discovery, and, if a Commercial Discovery is


subsequently established, to develop, produce and dispose of the Pelrolemn in


accordance with the provisions ol this Agreement.




a we;I pursuant to a Sole Risk operation Contractor's Work Programme dues run


include a well to be drilled lo said lmrv.oo. Contractor has ihe option ro appraise


iiml /or develop, as the case may be. the Discovciy for its account under Ihe


tcrinr. of this Agreement if it so clods within n period of silly (dflj days after


such Discovery. Ir. such ease. CoMtnclor shall reimburse (INPC for nil expensos


incurred

satisfactory arrangements with GNPC for Lite payment vl u premium equivalent


to seven hundred pcrcenl (700%) ol Midi expenses. Such premium sha.l not be


reckoned us Petroleum Costs for ilw purposes of the Accounting Guide.


0.7 During ihe term of this Agreement. ON PC shall have die right, at il» Sole Risk,


and upon six (6) months prior notice to Contractor, lo .lull one III nr two (2)


wells per Calendar Year wiihin the Conirucl Aren provided that the work


intended in he done by (iXI’C had ioi been scheduled for n Work Programme lo


be performed by Contractor and the exercise of such righ by GM’C and the


unargemenl made by ONTO for underukmy such drilling do not interfere with a


Work Programme or prevent Contractor from satisfying iK wsirk ohligirfiur.v.


Within htny (JO) Any*, niter receipt or such notice Contractor may elect to drill


the required well re well* as part of Contractor's Exploration Operations.


Ox In ilie event that a well t.rilled at the Sole Risk of GNPC m accordance with


Article 0 7 above revrllv ir a Discover.. GNPC sliall notify Co---ractor and shall


have hr right to .:pf*.>i*e jivI deve.op as die ease may be or rccuirc Contractor


to develop, aha UNIX, declares a Commercial Dwwtt>, v«-h Commercial


Discovery for n mutually agreed service fee. so king as Contractor lias an irxerest


in ihr Contract Am, fiNTC inking ail the interest risk and cost! and hence


having the r.pht ro all Petroleum produced from the Commercial Dnauwery,


provided however t mi Conlrav'yi >«s -hr option in appraise a.-vlor develop, as


Ihe ease may he. .he Discovery lor its account uncci Use terms of this Ajuvvaient


ir it so elects within a period of alxry (60) days after receipt of GNPCs written


notice of such Discovery


v** Contractor ‘hull rvinhurn: GNPC fur all expert-«s incurred by GNPC ic


connrctiiMi with iucIi Sole Kak operations, and shall make saus lac.on.


arrangements wi*h GNPC for the payment of a premium equivalent to


huikiicil percent <71Mr..> or such qptrtts before exercising the option under


Article 9 8. Such pr.oxiuin shall not be reckoned .=« Petroleum Costs for the


propnvoi rtf the Accounting Guide.


9.iu In the even: dial Coatoacmr declines to develop the Commerenl Discover. or no


ugreetmmi is reached on the service fee ananccmera as provided far in


Article 9 8, Contractor shall rctoqutah lv tevclopmcnt and Projection Area


ftMftCiated »ith such Cot urcrviul Discover) .


*».l I Sole Risk operations under tl * \-licit 9 ihr.ll mu e»tmd -he Vxpknuicn Period


ror he inn of this Agreement provided however thet Caoeraaor s »all complete


any agreed programme of w-oik corimcnccd b> ii under this Article al QXPC'i


Sc-k Risk. aad subject to sacli j*uvisiu:is Inreol js llie Pjr: dial! I *n .igiec.


ev-cn though ihc Exploration I’cr.td as defined in Article v or the term of this


Agreement may have expired.


M.i: Ihc cxcrcis. In CiM’C ol its Sole Risk rights under this Article9 shall he


per 'ontie'l in «n iigroed nunnn with Contractor, which includes a financing


plan, and which .kies not prevent <»r interfere with Contractor from complying


with its work obligation* under Article 43, an Appraisal Ingram me »ml <«


Development Phm.


«• > CINPr shnlI indemnify anti hold harmless Contractor njzninst all actions, claims,


demands and proceedings wlnil soever brought by any third party ox the Stale,


wiring out of or m connection with Sole Risk 0|>eiatioiis under this Article 9,


link's*, sm'li actions, clnlma, remands and proceedings are caused by


Cent motor's Gross Negligence or wilful misconduct.


 ARTICLE 10





MI\KlN<;ufrTKI'IH Of!


lai Cimss Prccncnon of Crude Oil i«»m e*.!i llcv.lofxncsl jpJ Production Area


shall |o+jeci to a Calendar Year adjustment «tev eloped unfcr die provision of


Article 10.7) be distributed bttimpu iHc V ink-> m the following bc^i ci „c and


proportions:


fa> Ten percent tI0*>) of ihc Criws Production of Crude Oil shall I* Jelnacd


to the Stale ROYAI TY, pursuant to the pTwhinus of Ac Perrakun


I av\. Upon notice to CccUikIvi. if e Sinte ‘t all have the right to cKt to


receive cash ir hen id «» ruyaT.v riuic ol such Ciu. c <» I Hie State %


aniioe 'dull ins giver. to Contractor .1. W. nmit) (VO| days in advice of


each lifting period. vich prdrata to 3c ctMblufaJ fununil to the


provisions at Art.e e 10 In such *.««. vaM dure of C rude Oil itu.ll be


delivered » Contac:^ whI l •»«■ u> to the su«c the vulue of sawl d .re


in cash at the relevant weighted iun.\ Maiuct Price tor iv reevart


rer:.*d cetermiBed in ncrwuirco with Article 11.7-


Jb) After disttibubon o:such am. .mu o* l ovle 0:1 as are it\f nml per «. ant to


Article 10.1(a). the awani ol Cn.cc UiL if .my, shall he delivered 10


GNPC to 1 he e^etx n a curled Ir* Su e Rnfc operations ode Artick *>.


K) Alter distribution ot such * meail* «»i Petroleum as arc required pursuant 10


Ankles 10.1 (a)

Development and Producikr Ami *ull be ditlrilnJBtd »Ccou»vU* -I


aubjcct to Article 10.1(e) below, to (iM*C on tfic buna ot hen respecuvt


Participating Intermix pursuant to Article 2:


«d) 13c Suite's AOr (h>« hereiriattor define*1.). if any, shall l*e distributed 10 the


SihIc out of the Contractor's shnrr <*r C'n»n: Oil (fcterminod uiular


Article lO.lfcL The Stale shrill also have the right to elect to receive cadi


in l eu ol H e At *l‘ diaic of Crude Oil acouded to 11 pursuant to


Article 10 2 NodficulbMi of said bIeciuki dull be given in the mow n»

in which the Suie luitiilm Contractor of its riedwn In ie.e.v< cash m lieu


or erode Oil unfer Article 101(h). In such case, suit! shurc shall I*


de.ivcicd to CouliMlor and it shall pay to the fcrarc the value of wild shore


in cash hi the relevant weighted average Murid Trice for the refcvant


|ierind as liatciminod in nccordiixe with Article 31.7;


isj'i iii the event that GNPC Iwa ailed 10 pay any amounts due 10 Contractor


pursuant to Article 15..I of this Agreement (awli amount* with interest


thereon in accordance with Ante Is 2f*.7 being hereinafter called "Default


Amounts**) and for so long 111 any such advances and interest thtiwoa


remain unmtxivered Ivy Contractor. an inrmini or (‘rude Oil shall be


delivered to ONPC sufficient in value w reimburse it for iis share of


Production Costs pa.J by it 10 ilia: date, unu Mich dure of Production





-v-


I osi. hut been fully reimbursed to it, after which a volume of Cnidc Oil


shall be delivered to Counselor equivalent in value u> the oiitttunding


aniounlb I’l ilie >i !i»res.'iiil Delimit Amounts until such. Default Amount* are


Ililly recovered by Contractor. The value of the Crude Oil for the purpose


of this Article 10 shall be ihc Market Price determined puniuant to


Article 11.7.


’ At any time the State shall be entitled to a portion of Contractors share of Crude


Oil ihf’.i being produced from each separate Development and Production Area


(herdnaftor referred to t& “Additional Oil Knfitlements" or “AOE”) on lie


basis of Utc nllei-ta\ inflation-adjusted rale of return (*ROR'( which


Conductor Ini' achieved with respect to such Development and Production Area


as ol'ih.11 time, Contractor's ROR shall be calculated on its NCF and slui 1 be


determined separately for each Development imd Production Area hi the end of


etch Month in accordance with the following computation:


Cut Definitions:


“NCI ” means C.iMiirutuu s net cash i*.mv for the Month tor which the calculation


Is being made, and .hall be computed in accordance with the (< flowing formula:


NC F x-y ■ t


where


“x" equals all revenue* received during such Month by ConlnK.-tor iron., the


Development and Production Aren, ii.lui.mg an amount compute J b>


multiplying :hr amount of ('rude Oil tnken by Contractor dining such Month in


accordance with Articles 10.1(d) saJ 10 He): excluding such Crude Oil taken by


Contractor for payment of inietrai ir respect of Petroleum Costs incurred by


Contractor on CiMfs behaJt by the Market Pike applicable to such < nnleOil


daring the Month when lifted phis any other pn^eeds specified m die


Accolirg Guide received by CciniraUnr including, without limitation, the


pnK.ce.ls t om the sale of any assets to which Contractor continues lo have title


For the avoidance of doubt. “X shall iwt ux! hIc revnuo from t >.*ic 0.1 lifted


by Contactor which is part of another Party's entitlement (eg. Royalty. AOE


(HI delivered to Contractor because the Stntc bus elected to rcccivr tarth in lieu


of < aide OiL Cnidc Oil purchased by Contractor from GNPC nr ihr Mote) but


>1 oil include revenue? limn Crude Oil owned by Contractor vut lifted by another


Party (c.g. Cnidc OJ purchased by GNPC os the Vial* lxotu C«»nln»v <•)


“y" equals coe-Twelfth > of the incontc tax paid vy tV Coni mi. ir to tin.* State


w ill respect to tl>e Calendar Year in respect of the Development nrvJ Production


Area. If there ate two (21 or more Dcvclopmcut and fkmludivn tt.c total


ncuine u.\ paid by Conlrxuir In accordance w.th die Pctrolcuir. income Tax


I aw 1MX** dial, for purposes of this c-lculntfoi he ul loaned to ha Development


an.! Production Ara- ,.n i*v basis orhypodieucal tax calculations Kir the separate


Development and Production Areas. Ilic hypothetical *ax calculation for each











-V


Development and PttkIucIkh; Area sliall lie determined by Bllocattaf? the total


amount ol tax incuned fur ouch Calendar Year by Contractor under the


Petroleum Income Tax law to each Development and Production A:c« based ot>


the ratio that ihe chargeable Income from a given Development ami Production


Area bears to the total chargeable iucotne of (.'onuaeiur. The < hargonblc Income


of Contractor is determined under section 2 of the Petroleum Income Tux Law


mid the chargeable income of it Development and Production Area dull be


calculated by deducting from the gross tncoir.c derived from or allocated to that


Aron ihnvr «*\-

I aw which are reex>wbl> allocable to ilia: Area. A negative chargeable income


hii Arva dull x treatasl.« /«ro for pu-TXwes of this allocation nivl ro- more


(w less) than :1c I0C1I income tax paid h> CmMrsetor shall be allocate.! between


I lie Amn


"r" equal), .il Petroleum Costs sj'ecilinl in Ik* Accounting Ciuide and expended


by Contractor or die Operator during such Month with respect to the


Dtveluptnunl and Production Aren, including any Petroleum Costs paid by


(Ymitncuir on GNI*C"s behalf, find ng| reimbursed by CiM't- within the month,


provided that .ill Petroleum Costs for rxplunilion Operations not directly


attributable :o a spec die Development and Production Area skill for purposes of


i.iis culculmiod be allocated u. the Development and Product^* Arc« having the


earliest dace <»rCo-nmcvcmcnr of Commea i*l Pioducton. »:»d arov ii*d lurl w*


Ihm for the purpose of the ROR cikuhrion I’etmtoxa Csnoa ddl ars krhde


ary amounts in respect of iixcie-l os obtamoJ for the puifnass of cw> tag


out Petroleum Opemimw


"FA,", **bA,’ “TAr" and “7A„" uxjot fust Account, Second Account. Ihird


Account wid Fourth Account, respectively, and represent amounts in of the Imm


day ol the Month in question us delennincd by the formulae ir >» - .v»


“I'Vi". "TA. and “ZA..r, respectively, mean ilic V-var ol (i) the


I a „ JyAm l A,., or ZA» as Jw case may be. us of the Inst day of the Month


immediately preceding the Monlh in question or (II) yero Stated otherwise.


I A, i ahull equal FAC as of the Inst day of the Month immediately precedmg the


Month in qacsiiou ir tadi FA. was a negative manlier, but shall equal zero if


Mich PA. was a positive number. Likewise. hA. i shall equal SA, ns of the last


it.* ot the Month uuncdaieiy pirunlmj* the Month in question iT tut-h SA. was


a negative number, but shall equal /om if *>rh SA, was a positive numher


Like* *c l'Aa | ahull equal TA„ as of the Inn day of the Monlh immediately


prefix!tm* the Month ir. quest on if uadi TA was a negative numher. but shall


equal zero .1 *uch TA„ was a positive uunilwr. I.ikcwiac, ZA„.j shnll equal ZAB


,I> of Ihe last day of the month immediately preceding ihe Mmuh in question if


s.ich /A, wiis u negative numkr, but slwill oqu.il zero if such ZA was a pos live


number In the ROR calculation for the tlrsr Vtonth ol Petroleum Opeialioiu.


PA*.,. SA„.|, TA.., and /A., *.‘ull lw zero,


T for the month in question equals one (':} subtracted from the quotient of tic


Un 'cJ SlEtcs Industrial Goods Wholesale Price lr.cok fLSlGWPI) for the


Month second preceding Die Yhnlh ir. question (c.y. u-c August data fur


October's compjtaiwr i as f-s; reported in Die International financial statistics


o' (ho Intcmarionffl) Monetary Fund, divided by the USIGWI'l for the same


second preceding Vlonih <>l the immediately preceding CVendai Year

reported ir. Die InwmatiunJ Financial Statistics of the International Monetary


Fund If the USIGWIM censes to be published, n substitute I. S. Dollar-based


price1 ini lev shall be vised


• r.' refers to the nth Month in quci on.


n-1" refer* to the Month ; nmediately preceding Lie nth Month


ip’ Formulae:








It ft). ITS 11) )) hcf


12








In the calculation of'SAn tin iiinouni shall he subinieted Ihnm NH1' identic.:! to


the value of any A OF, which would be due to the State if reference were made


hereunder only to the FA.


lr. the calculation ot I A an amount shall be Subtracted imm NC.T identical to


the value oi any AOt which wauxl be cue to Die State .t reference were node


hereunder only to '.he TA. urn: SA..


lr the calculation of ZA, an amount shat! be subtracted from Nt I- identical to


II* value of any AOIi which would be Joe to tbc Stair if rvlcrcncc hoc made


hereunder oal> :o the IA . 3 A, and TA*


(*: Prospective Application-


The Slum's AOF measured in barrels o: oil will lie as follows:


«i> If FA.. SA. TA. unJ ZA. me all negative. the Stale's AOE for the


Month ji question shall l« >ero;


li; If I A, * positive uni SA* T A. arc / A. are all negative, lx States


AOE fcff the Mon* in qucs.uu »t«oJ be equal to the absolute amourt


■mulling from I he following monetary calculatin' i:


10% of the PA, for that Month divided by the weighted average


Market Price aj determined in accordance with Article 11.7.


jiill If both FA, und SA„ arc positive, but both TA. and 7 A , utv 'Wgativr.


the State’* A OP for the Month in question ihal! he eq«u u» an


baolire amount resulting from the lo lowing monetary calcu-aiko.


tin* aggregate of I IIS oTPAn for that Month plus [I? $S] of the SAn


i.ir that Month nil divided by the weighted average Muriel Price u*


determined n acc.vrda.tce with Article 11.7.


t><; If FA,. SA, and 1A„ arc nil positive hui 7A, is negative, the State’s


AOP for the Month in question shall he equal io the absolute arnvunl


resulting from the t'ollowii u monetary calculation:


the aggregnte tif 10% of he FAn for that Month plus 12..5% of the


SAn for that Month plus 20% of the I An for Unit Month all divided


by ihe weighted average Market Price as determined in accoiiliinue


with Article 11.7.


lv» If FAH) SA„ TA, and /A, me all positive, the Slate’!! AOE for (lie


Month i:i question dull be equal to the absolute amount resulting


from the follow mu monetary calculation.


the aggregate of 10% of the f An for that Month plus 12 5% of the


SAn tor :liai Mm ill p:u« 30% of the TAn Itx that Moula plus 2t>% of


the ZAr. lor that Mood* all divided by (he weighted uvemgc Maikct


Price a' tlelemm ad in accordance with Article 11.7


;j, Ihe AO»: calculation* >u!l be made in U.S. Dollars with all non-doPai


expend.'.urcs convened lo U.S. DuKars m accordance with Section 1 ? of


Annex 2. VV in the AOE calculation cannot he definitively made became


of disagreerten: i«n the Weir'd Market Price or any other factor :n the


formulae. then a provisional .401' ccleulatkm shall be made on die baits of


bes cjlar.rtlc* of such tActrcx. and such provisional calculation shul! be


haJjo.. Ii» con net i on and revision jpor. the conclusive deiemiirutiin of


such factors, and appropriate retroactive adjmiraute shall be made


{e> Ihe A OF sloill be calculated on a monthly basis with the AOli ui hr pom


Cvuur.cr.euic with the lirM. Monlh following the Month ui which the FA*


SA*. TA . or ZA» (as applicable) becomes positive fVccusc ihr precise


ammuti of the AOP lor a Calendar Year cannot be determined with


certainly until a tier the end of Thai Calendar year, deliveries (or payments


ii Ikm) of '.he AOE with reject :o a Month shall :xr made dur ng .uci


amounts owing, with any adjustments following the end of the Calendar


Year to he settled pursuant in the procedures agreed to pursuant to


Artie!© 10.7 Pina! calculations Of the AOP. shall he made within thirty (111)


days following the filing by tin. Comucto; of the annual tax return for such


Calendar year putsuoiu to the Petroleum Income Tax Law, and the amount


of the A01 shtill he appropriately adjusted in the event of a subsequent


adjustment or* the amount of tax owing on such term.


.11., OM’t- shall uct as agent rot the State in the collection of nil Petroleum accruing


to the State under this Anlclc and delivery to GNPC by Conn-actor shall


difccliurjjc l ontractor’.s liabi ily in deliver the share of the Slate,


10.4 The State or GNPC, having met the requirements of Article 15.1. may elect, in


accordance with terms nn.l conditions to be mutually agreed by the Parties, that


.i I or purl of the Crude Oil to be distributed III the State or to GNPC pursuant to


this Article shall be so.d ami delivered by the State or GNPC to Contractor or its


A Hi little for use and disposal and in such cuso ( onlruclor or ils Affiliate shall


pay to the Suite or in GNPC, its the cine trmy he, ilie Market Price tor any Crude


Oil so sold and delivered. Market Price tor purposes of this Article 10.4 shall be


the air.om-.ts actually realized by Contractor oi said Affiliate on its resales of said


Crude Oil in arm’s length commercial iranstielions. nr for its other resales or


dispositions ol'suid (’rude Oil, bused upon world market prices determined in the


manner specified :n Article 11 7(b)


in- Ownership and risk cf loss or all Crude Oil produced from the Contract Area


which is purchased urn! till of its percentage Interest orcih - C-ude Oil by


(’oi lra>.liM dial lii Conirjcfcir ai iltc outlet tlar.ge of trie manne terminal o«


otfca storage facility toi loading uiio tankers or other transportation equipment


rcfcm-d to in Article 111


166 Subject to ’he provision* of Article 15 Hereof. Confcacior shall !uv< the tight


freely :i> e\|*»rt ar.4 di»|H>se of all the Petroleum allocate- ai.u n dcli'crod u* if


pursuant to this Article.


if 7 The Parties shall through consultation crier inio supplement-ry agreement*


concerning Crude Oil lilting procedures, lining and larger schedules, loading


conditions. Crude f >»! metering, and the scrlcir.cn: cf fifing imbalances, if any


among tV Parties cl .hr end of each Ca!cr»lar Year. The Crude Oil in be


distributed or odtcrw *e made ava table to ihe Par* et :n each Calendar Year in


accordance with the preceding provisions of this .Hick shall u.solar as possible


be in reasonably a|iial monthly quantities


to* To a»ist in the tanking of the AOE calculation in accordance » th Article 10 2


llic e is attached as Vine* 3 u: this Agreement a worked ©rumple o: the


ca leu lot. on using hypotlictteai figures, rale? and thresholds, for the purpose of


ilhKlmbun only.


 ARTICLE 11





MJ-AHKtMUNl \M> PHIC-LNC; or CRIT>F Oil


I. I Crude Oil shall be delivered by Ccotracior to storage tanks or cxhrr vutaMr


holding facility constructed, mainlairrJ and operated ir accordance with


applicable laws and good oil Hold practice. CmJr Oil shall I* metered or


Otherwise measured for qnimiiiy and tested lor quality in well storage lacililiw


for nil purposes of this Agreement. Any Party may ivquesl Ihut measurements


und tests he done by an internationally recogniaod inspection company.


Ccmiraclo: shall arrange and pny for the conduct of any measurement or test »o


requested provklal. however, that ir !hc ease of (I i a ted requested lui quality


purposes and'or (2) a ’«» requested on metering (or iiKx»u.cmr:iri devices. or


where the test remits demonsuatc that such devices lire arcura'c within


acceptable tolerance-* *,-Kcd lo by the Paine* or if not eMahlhJw.1 by the Panics


d*en in accordance will* Inc-national


requesting ihe test shall reimburse Contractor for the c-u* s»oc.aud with tl*


lest or tesas


II. ? fiNPC or ib authorised .igenis shall have the rii-hi


(r lo be prtsem ai and to observe such measurement of Crude Oil


Or* to examine and c-a whatever appliance* ..re ukvI b> Cuiuxaclo. Dof «e.


a: id


f«) to install ur require Contract.** it* :uitell device or e*|mrn et i ter the


pmpusc nl'dcicrmlnitig the quantity and quality of CivJc OjL


11.3 In ihe exeat tlui CiMT considers Contractor’s method* of measurement to lx?


inaccurate liNPi! •I.nll notltV Contmcuir to (hieeffect and the Panics shall meet


within ten (!l>) day i of such notification to dl*cn

(30) days the Parlies cannot agree over the issue tiny shall icier Tor resolution


under Article 2*. tin* sole question ol whether Contractor's incdMxi of incnsurinj?


Crude Oil iv accurals. Retrospective ndiiutmcntr m raivuirancnts shall I* made


where r.ece"ui> lo give cfrVci t** the decision rendered under Article 24


H4 If upon the emui mulKir. or testing of appliuntc* provided for in Article 11 2 tiny


such appliance* shall be diiwovcfcri to l*c delect'vc*


r»p rimiractor shall take m mediate slept to itpaii «*i i op lace such appliance;


and


iS» subject hi i m eslttblishmciK of the contrary, such error shall be deemed lo


have existed for three (3) months or since the ilulu ol the last examination


mid testing. whichever occurred more recently


. u In the event lhal Contractor desiie. to mljusL repair or replace any imaiMirtap


jiyiCsncc, it dull .:#*«? CNPC reasonable nonce io enable

aucKV.tcd agccl h; be presen.


il.fi Contractor shall keep full ml uciurati account* concerning oil Petroleum


nuMMHol MS aforesaid and provide GNPC with copies thereof oil a monlhly


basis. not later than ten {10) clays tiller -lit? end of each month.


\.1 The Market Price for Crude Oil tlchvtted to Comae tvr hereunder shall he


established 'viih resp«xi m each lifting ot utlxi period ,w provided elsewhere u>


tint Agree me nr as follows:




(drfiral in Article I! 7(c) sclow). the .Martel Price dull be the puce


actually realized by Contractor on inch Males;


in) on sales of Crude Oil b> Contractor not in or. aim's knglh commercial


transaction, on exports by Contractor wilhinil side nr on sales under


Article 15.3, ihe Market Price shall be dctennlned by lufcrcnco to workl


market prices of comparable *.’r«*le Oils sold In arm's ktiKih irmniclUms


foi export in Ihe major world pctroklUll market#, find adjusted for oil


qunliiy, location, timing ami conditions of pricing, delivery and payment;


provided that in the case of allies under Article 13.3 where Much sales iclaie


to part only of Contractor's entitlement, price-, actually realized b>


Contractor in sales of the balance* of its proportionate share felling within


\ntclc 11.7(a) above ttki.il! :tc taken into account in determufaw Martel


Price. For putposea of this Article 11.7(b). "coir parable Cmic Oila' ih*ll


mean trade Gils of similar API pivity, sulffiur content. and a. day ji «i d


CvulmclQr earxfcU >i£ntir\ comparable Crude Oi's fur fu purposes of th a


Article, the Parties na> we v" mm a te mat ve rook-d for csubl sbmg *


ccrafSBcble CruJe Oil;


fit sales in “arm's length commercial transact far*." %hdl mean ales m


purchasers uxkpaxkD’. vl the tdfa, which «W*> not involve Cnslr Oil


exchange or barter Irut -oauM**. (Kwcnuucnl Ic government transaction,


sales (fired > or rxliroctly to AflB la lea, oi sate* involving cooridcuUon


oilier tiian payment in US. T>ol or carrencitfl convertible hc-ctu. in


affected ji whole c» m p i convkleratIona ether than ;hr imuil


cciroiric incentive* for commercial anr. i length Crude«1:1 udes;


.;«T the price oTCrude (hi shall be capfcmxl fa l.*.S Italian pa Barrel. F O B


the point of deli* cry by 1 urtrixtor.


:cj :r Crude Oils of various quulilie are proc JeeJ fn«» ihe Contract Area. the


M-rkd Price shall k* drtrmireJ sepmnely lor each type sokJ -rxHr


exported b> Con iact.i, >h.I> in ihe extent that the d* Tenr* unliiy grades


rarviin segregMd i.*- ^ i iu the point where lhr> me whl and if pvkt of


differem quality arc c.-nirB-ykxl ii*' a uwaaroa •-Learn. Cw*«J»r and


GNPC shall agree on an e-juiiah . mcihodofag) * «**•*> mg »elr..v; valua¬


tor rack grade of Cmic Oi‘ coraf-ridr;- >r Mend and shall mi'lemeiii die


 agreed methodology for having rhe pnxlucer(«j of higher quality Crude


Oifc's) be :eui:ourscd by lac prod jcerfs i of lower quality Ciudc Oil(s>.





I: .8 Ccr.tnKior shall provide io GMt (for use by rhe Star; and GXlt'i information


on each hiring which shall mclux the buyer of the carey sales bas:s with


respect to Beochrnx-fc crude oil the pricing ba>is. die differeatial, an> dec je:ic*a*>


arc the Market Price detennired ay ii for each lifting not later ±an thirty five


(3-5) days after the end of such Hftme. For the purposes of this clause he


obligation yf Contractor *hall he several


I o Il‘ CATC considers :hal the Market Pree notified hy Contractor -aas not


correct h determined :n accordance with the provisions of \riclc 11.7. it shall so


notify Contractor no* later than thirty (30) day* alter notification by Contractor


of such puce, and GNPC and C»KiUa.Uir shall meet not later tan tweaP- (20i


di>s thereafter to agree on the correct Market Pnee


i. .4 In the cvcr.t ±al GNPC anJ Cuoit actor full to agree jpon the conn eiccmcnt of


ncc.iag' for the p.irpow do-cr.bcd in Article 11.9 dlxive. ll e Market Pnee shall


rv referred lor doerminadoa in accordance with Article 24 of this Agree men:


II Pending a determination icrdc: Article 11.10, tlx Market Price * .11 be deemed to


he tlx las: Market Price agreed or dc:cnnir.cd. as ;hc ease may hr. or if .1 ere has


been no such previous agreement or determination the urioe notified by


C«ti irucUw It*' the lilting in question under Article 10.7. Should the determ.ned


price be Jillcicp* from that used in accordance with tlx- forviioing then the


difference plus inlcrc-1 at ihe Specific Rate sai l be paid in ea'h by or U*


Contractor, .is the cane n > within thirty (30) Dayti i eh determination.


 ARTIfl.F. 12





TAX A 11<)N A>1) QTHFR IMI*OS|>


12.1 SjtHcvl i«» u|filiCAhIe laws ord regulations! aa :h.- same muy he ani.ixLd Iron


lime ui time, the duly, fee and other impost* ihac Khali bo iminrojil by the


State oi any entity or any political subdivision on Contraolor, in Sulicontrnctorb


or its .A II'Hues in respect of Hcliviiies related :o Petroleum Operations and ihe


sale .hhI evpor of Pcirolemn dial! include bui not limited to t:iw lolkov ng


faxes |r. accordance "ith tlx Petroleum Income lax Law 10*7 (PMX*


LIS*» and income tax stall be M at the cate ol thirty-five percent


(wm


(h> I ux in respect of gain (calculated as tlx- consideration received less the cos:


base nl the time of realisation) from for ilic direct oi indirect .ale. transfer


oi mkhinlinent of (a)n partinl or ilie entire intoreal in this Amccmcni


|b) au.cU acquired or used in I'ctroloinr. Opcraiinna under this Agreement


or (c) shares of Contractor. at llx- rule under Ghanaian law in effect at the


time of the sate, transfer aoaftnmcal.


(wi Payment* for rental of Gove own property, public lunds or fo: the


ptovivtim of specific revive* requested by Con motor from public


enterprises; provided, however, that tlx- rule, charged Contraclof IVw such


rentn s or services si till not exceed trie prevail inn rale* tiuitjed to othxr


iiK-mbci* of the public who receive similar revive* m rental*.


:41 S irlacr rentals payable to lire State puiiuani lo Section 18 of the Petroleum


l-'.w per square kikandiv of die irva retraining at the bcgi in'ng of each


Ccc ract Year as pel of the f <>tr Ki Area, in the -iwxcrls as set forfh


below.





I1i»«* af Openlhn Surface Ken la. t Per Annum


Inilul Fxpluralkm I'crual US 5 >0 per «*: km


Ut lAlension Period I>S SICK) per sq. km.


2nd bvicnsxjr Period US fl00 per sa. km





Devclopiacui A Pn»l action Area l '* S20

Ihoc ‘cnrah ahi’l ^ peo-raa-J wo -r J* tag-muig of a Pc- • -i • ndite end of a


Pcr«*l nr the creation of a Development and Prccucuuo Aim occur* during **


course ofaCalcndm Year.





i?.2 Save for withholding tax at tlx- tule provided fee undci appi* ihle law from the


unmint due to a rariJeni Subcontractor or mm resident Subcontractor,


Contactor shall nut be uNiged to withhold urn- hmount tn ic pen. of ux from


any sum due fn-m Coocractu: lo Suhcomroeior m Rupees of work ard


services lor or m corned urn with thu Acioctna* Momith Handing the


foregoing, the withholding tax in respect of serv ices provided to Contractor by


or. Affiliate of any company comprising Contractor ahull bo vvir'ved provided


such service* arc charged wl com


Conraeior shall not he liable for any export tax on Petroleum exported from


Ghana and ho duty or other charge shall be levied on such exports Vessels or


olher TQvai'* of Iran* port vised in Ihc export ol ContraeiOM Petroleum from


Ghana sii.'II not \«e liable lor uivy tax. duty or other charge by reason of their use


for that purpose.


Subject to Ihc local putdwsc obligations hereunder. Contractor and


Subcontractors may import into Ghana all plant, equipment and materials to be


used solely and exclusively m the conduct of Petroleum Operations without


payment of customa and other di ties and tuxes on imports save administrative


tees and charges.


PROVIDED THAT


(a) UN PC shall have the tight of lun refusal for any item imported duly free


undo Ibis Article which is Inter sold inCIhnnu; and


(li) where G\PC.’ duo rot. exercise its right ol'purctaase Contractor may sell to


any other person subject to the relevant law.


: 2.4 Contractor shall not he liable to pay YA1 ir. respect of plant, cquipmcni :«n.l


m»leri*1*, nod related service* tupplicd in (iliaiu ui oe used solely and


exclusively in the conduct o: PetroleumOperations


.2.5 Foreign National Employees of Coctraetor or in Amiirnev im»1 i»r its


Subcontractors, ahull be perm i tied hi import nto Char a free of mport day their


pentonal and household effects in accordance w.tfc Seel** 22.7 ol PNDCI W.


provided, however, that no property imported by *uJi employee sJa.1 be resold


by sue!) employee in

:2.

foreign National Employees shall hnvc the tight lo export from Ghana all items


imported duty free pursuant to Article I 2A Such exports shall l>e exempt from


all custom* and other duties, taxes, fee3 and charges on expotrt save minor


administrative charges.


'.2.7 Parties will negotiate in good faith to ensure that Contractor is nforded tax


credits for corporate uxes paid in Olunw However no adverse etTect should


occur lo the economic rights oIXiNI'C or tile Slate.


2.s the Ghana Income lax law applleable generally re individuals who arc not


employed ut the petroleum industry shall apply in Ihc c Jtohion and *>t the


same rale, to employees, of Contractor, its Affiliates and ns Subcontractors,


provided. huwcvvt, that Foreign Nulionul Employee ol Contractor. its


A TtliaiuK, and its Subcornrncuirs filial I he exempt from the income rax and


withholding tax liabilities unless they are resident in Ghana lor more dinn thliiy


(U1) consecutive davs or sixty- (60) days in aggregate in nny Calendar Ywir


i2.y Subject to guidelines to be issued by the Minister, the Cwilriicior shall rinihc


contributions to a decommission fund based on estimated costs ol'uhnTulommmi


Such contributions shall be allowed a» deduction Iron’, ajutfts.uhle income from


the year of assessment the contributions commenced. In tiic ycai of asscKir.cnt


in respect of which decommission has been completed i:i accordance with an


approved decommission plan, the surplus funds shill hr treated ns cHur^tuiHle


income and subject to tax. The amount ett alter the tax shall he subject to


Add.ticmal Oil fcntibemenl a: the highest rate at which the Contractor paid AGE


during the puriixl of conlribntiona to the rclevani docomiimsiim luiul. Any


surplus alter payment of the tux mid AGK shall revert to the Contractor.


12.13 Parties will iicyotiate in good laitli to ensure that Contractoi ;s afforded tax


credits for corporate taxes paid in Glumii However no adverse dlecl should


occur to :he economic rights ofC.NPC or the State.


Notwithstanding the jbove provision nl this Section, the Taxation Laws of


Ghana to the extent that they are applicable shall be applied to the Employees of


Contractor. Affiliates or in Subcontractors


12.11 It is the intent oi the Parlies I hut payment' by Contractor of lax levied by the


Petroleum Income Tint I uw or any other lux imposed on Contractor qualify- as


creditable against the income tax liability of each company comprising


Contractor in its jurisdiction. Should the iiscxl authority involve determine il.u


the Petroleum Income Tax I jw does mx mpewe a ncJu.-le tax. lx l’ai ..v


agree lo negotiate in good fahh with a view to csta il.:: iir; : vice tuNc ix ir he


precondition that no adverse effect should occur to the economic r .-his orGNPC


tir the: Stale.


12.12 All tax teams prepared and payments made by Cor.uaciot and its Affiliates or


Subcontractors and Foreign National Employees thereof sh.i'1 be made in I’nNed


Slutes Dollars.


 \RTICL£ U





>QREKiN I.MH1NNr.F TRANSACTIONS


Mie provisions of this Article 13 shall be subtcct to applicable legislation governing


foreign exchange troniaeliooi m OJi&ia in force Irom time to rime.


11.1 Contractor shall for the purpose of this Agreement be cnl tiled to receive, lamit,


keep urul utilise ficvly abroad all the foreign currency obluimxl from the sides of


the Petroleum umigned to it by this AgrwtmW or purchased hereunder, or front


Inins fat. u 'veil j* its own capital, receipts from liwnvi nnd in general all ai'eia


thereby enquired abroad Upon making adequate arrangemenu with regard to it*


commitment m coodact Petroleum Operations, Contractor shall be five to


dispose of this foreign cuDCDCy or assets as it deems Hi


M.2 Con true lor s.'ull tine live right to eper. and maintain ua Ohaaa bar-» accounts in


foreign currency and (ihaiuun cunCTKy. No rcttriclmti d ull be made on the


import by <\mlraclor .n an authorised manner of Hinds assigned to the


performance of Hie Petroleum Operations ami Contractor shall he entitled H»


purchase Ohunautn currency through mtthorised meant, without iliscriininalion.


at the prevailing rate of’exchange; provided, hi.mevcr, that well prevailing mie


applicable to Connector liereundcr lor all transactions lor converting (ihareiltm


currency into U.S. Dollars, and vice versa, shall he at a buying nr selhng, as the


case may :«c. rale u( exchange not less favourable in Contractor then that quoted


by the Slulc oi its foreign rxchungc control autlwdv •.,» My pcr»vn m coat* on


tic dares cf ‘uch C4.nvf-tioo lOKepring iW->c ul rau» .voided by the Sui.-


lodiarrc-cly defiaeJ group* lot special. limiU- parj***').


V. t ssaaaor shall he cilMd ic convert in an auti.in»c«l manner into !«e.gn


currencies c»f its choice funds inpcT.cd by Contractor l«w the Parueian


Oacraiions and t cld :n Ghana wtiich exccciN its (mil requirements at the


l»c»nilmK talc of cxclur^e referred to in Article II 2 mI remit and retain such


foce.gn currencies out side < ilura


ij - In the eve it of rcj^lc by Coafesctor or its Afiil ate of ( rude Oil piichusnl rrt.m


t* C Stale oc CINIH; the Suic or GNTH: sh.ll to:ve .he right to rrquen nay neni


tor vLth ae of NJ 3harc m* pc nineties to Contractor or it* Atli ule tv b. tuid at


the foreign cummey n whkh*»e rs&r.e insn**. ;y« look glx* or US Du I Lira


t; ; Contractor shall hove the right m make cttcci payr-orrs ei^tide i«r Ghana Iruia


.» Inure offices it iKr I Ailed Slates of America, u ■! elsewhere. lo US Foreign


National Fmplmecs and to thuxe of its Subcontraclurv and suppliers 'not


resident in t .lun-‘ «✓.» ihal term j, ietir*c ir Sextion 160 of ihe Irierra! Revenue


Act 2000 (Act eV2)> for wag^. salaries, parcfsises of gi»ods nnd performance <>l


services. *vtinher imported into GH.mn or s-.ippHed or pertoor.cd therein lor


Pctiuknm Operations carried out herettvier, in accr*,Lu».e -itt lie proviMuos


of m*s Aprrenvr-u. :n rcs|vcT of «e»x cc» per lonr.cd withir. tl*e Iwmework of this


\frr.trerr. zni mch payrva s sh*J be cun' Jered as par of the costs nrjr-rd


in Petroleum Operation*. In lire event of aav change* in Ibe location ol


Operator’s home or other offices. Operalur * wB n* KdiTy GNPC o:»J tire


IJ.6 All payments which lab Ajffccoenl obligate# Contractor to make to GNPC or


thr Stale, includin' income iuxov slull lx nude m l.'nited Sutes lXrLars. except


as requested otherwise pursuant to Article 1A. I above. All puyncnls shall he


made ay telex *Tr_rt>fcr in irnmerfiiiielv ivnlltibV turds to Kmk in l>c dc.ipnatec


by GNPC Or the State, and reasonably accessible to Contractor by way of its


being able to receive payments made by Contractor and give a continuation i>l


reccini thereof, cr in such other manna .:s may be mutually act ecu


1J.7 All puyaenb which -.his Agreement obligates GNPC or the Stare to ir.nkc to


Contractor s ail be made in United States Dollars. All payments sha I he made


by electronic trawfer (or m Mit’ri oilier manner as may lx iiuCuaLiy agreed) in


immediately available I’ands to a har.x to be designated by CnntnK.uir. and


reasonably acccwihk to GKPC or the Suite by way of it- heiry able to receive


iwymanls nude by GNPC’ or .he State and give coortraation of receipt thereof.

























































































58


 ARTICLE 14


SI*I ( IAL PROVISIONS FOR VaTI R aI CAS








PAH I 1-G


All rvii-iral gas prodirad by Corrractor in association w;ib G\IK* under this


AgaxSKEi shall be Jk property of the Corporation in accordance with (he provisions


of Scciwn 16.2 « hr P«tn*.cu:n law. >ubcci s- Pans iU and IV oflha A 'tele.


;4.| CoolrjcKir shall luxe the Hg.it to esc Natural Gas rrodurcvl from ui>


I)evek»pc:*e:it and I’loduction Area foi Petroleum Open*lN '" 'vithin the Contract


Aica such as reinjection To- pressure rrair.ciuncc and or po^ci tKOcnlioc al no


cost.


'1.3 (.nntracior shall not flare not ven: Natuml Gas except


(*) to the extent provided for in an approval Development l!' i!





;h) during production testing operalionsi


Cv: when required tor operational safety and the safety of prisms ety-v«i; in


Petroleum Operations m accordance wih intematioril Petroleum induwy


practice;


id I >i> otherwise authorised by the Vliiuster.








14 j Cotiirjielor shall have the right to »-urw and dispose o: l quul Indn-vailxxa


pumiftm to the provisions of this A^cemcni Txrbiine u? (Inkle 0:1 Kcsic jal


N'al.iri.l Gas r.:nairing ■‘•tier the extraction of liquid bjsfcocarboos b subject to


die pnwiskms of this Article ; 4.








r^RTii - associated <;as


h A Al. gas ptoduccd a oskhiuIku' w.th Crude Oil, and no: used pursuant u*


A-lielc 14.1. is die property of UM1. Ok Dcvdofancnl P jm i»l each


Development and Predactuo Am shall tnJuJe j plan of utilualiec for lb;


Associated Gas.


is t If Contractor considers liial proiuctKs^ srocvsuajt juxI uii iMtion of Attociited




f>tatc appointed agency. bodv or suhcnntricxor sail have the option to ut uikc ull


Awcialed

generation pursuant ;c* AilKk 14.2 «l the outlet fange of the gas-oil separator i*i


the erode oil production futility X iIn vile Risk for its tmu use ONPT *«">l


Contractor shall work together to develop the npprupimie iiiIctIjlc between Gas


inffasaueture owned by the Stute anchor C.\PC urul Cornrtwtor’s Dc\ clopntcnt


Fion ard to that end t!»c Development Plan proposed by Crr r.dor shull irdode-




Associated Gas; anil





>4


(b) a plan lor llic nricjectkin of Associated (ia* into the reservoir if needed for


pressure support aod


(c! a plan for pow vr- generation


i* 6 The decision afC.NPT _s to wliciheror not to exercise ttx opltou pK'iiJed k m


Aniclc 14 J shall be made in a timely manner In truk ng suJi decisum and iu


its subsequent conduct GNPC shall avoid the prevention of 01 delay It* the


orderly «U1 up or continuation of the production of Crude Oil as enviv^ed in


ilie approved Development Plan.


H.7 If GNPC elects to offtake Associated Gas muter Article I4 A above. CrSPC dull


be responsible tor any .Gdiliwal in.tlii»o. needed tor the dch’rry of the Gas to


GNPC. provided lltuU


.ir CtHiiracitN 'ui>*eqnenfly wishes to participate ir GKPC's gas miKsation


programme. it shall icunburx GNPC tor the coos of such facilities plus a


premium r»Tthree Immlicd |*r\:eni (300*-s|;or


(b> if Conlnaeliw M.lwequently develops a eas wilisaf.on programme and


uplines the use of GNPC * gas AkiIhkts Contractor shall pay GM*C an


agreed Ice for such .ive.








PART 111 - NOVANMKT VI Kl» GAS


M.8 ConUaeioi shall Ua*. the right to co tu ic ciali/e a Discover of NcnAssoralrd


Gas in I he Contract Area in acco:da:»cc with the pxt»v»ion* o this Agreement


Hxcepi as otherwise provided in this Avreetnef _ ll:e terms appLvob.e to a


Discovery as provided under- Article K of this Agreement sh.fl upry Ul ■*


Discovery- of non-Associatfd Gas.


14.9 Where Contractor submits notice purstunl ui Arti.le X I oiai pumant lo


Article 8 18 indicates that iho Discovery dr«- not at that tine mnil Appr.t -.il


but may merit Appraisal or addition*. evaluation at a Inter ihiie during the


F'pkirutior. Period or dx-mg the uulwl pencil u*dcr . new Agreement made


parsuaal to Ardclc 11.1 (if a) below. Him Contractor iwed not submit a noposcd


Appraisal Prognrrrae at llml time bu: instead dial! indiurc whx o her MoJies or


evaluation*

an Appai&d 1’rogjamnK i* end. i-.\cn Where Contractor's Notice indicates that


rbe Discovery wi 1 not mem upprjisa. a: any time dunag the Exploration Period


t>» during the initial -xatod uniter u ten Agreement made px'iaa.il t«j


Ancle 14.16, then Conlrmer shill -rlini|ii:sh trie rights to :he Non-A v* k uicd


Ga* within that D »cover> Area


11 o Not later than nine^ (W) days from tlx date on which the App-auxl Pioiuautme


rclating to a Discovery is t-umrli ded, Contractor shall submit to the mid Min stei


a report containing, the results of tlx Appraisal Pn..-r i-nr-»e (it* “Appraisal


Report”). Tbe Appraivd Rqmri nmy cone ale that the Discovery irrriis


commercial mcamcm. If -J»c Appraisal Report coetcluies that Lx Discovery


n-CTiib cirnmcrviul uarsflnrnt. GunlMdor shall submit to ihc Minister wilhin


thirty (»0) days from the dale of submission of the Appraisal Report .1


programme irxocponding t specific timetable for conducting such commercial


assessment for approval b> the Minister. If the Minister approves Jus


programme. 'ucli commercial uh'«Mmenl tfrall be conducted within ihe


I'xpluration Period and. if applicable, during the initial period unde* a new


Ac»cement made punaant to Ankle 14 16 Nowitostaaling *he above, tx


Minister may approve li e conduct of other studies « evaluation in accordance


with a specific timetable. winch may lx warranted before a commercial


asrcwntcnl is undertaken. if Contractor notifies the Minister that commercial


av«ev*mml or tlx Discovery is ml WTirnmlcd .11 that thne hut the Discovery may


merit such assessment at a later cate during the Rxrlomion Period or during tx


initial pcrxxl ufoarx

ti l The pursue <.r tlx cmnmerclril assessment 'hall be to study the uses to which


pn>1 Kition front He Discovery Area separately. can be devpled j?*1 whether


involving exports cm domestic util /at >1.. As part of the assessment, the l’aitxs


shall msu pursue ducjsvwns on the required contractual arrangements for


cSspiwitlm of the Natural tins to CA W Contactor *nny imden.ike the

comrwrc ilir.'t on project At a evel th.t w II facilitate the achievement of the


Contractor’s rate of uita.ii. and si all jw die Sates gas infrastructure if


h variable.


11 2 Contractu r may consult with the Minister mid G.VPC an may make ppropriate


representations proposing changes in the liseal and Other provi.siotis ol tin?


Agreement which may. in the opinion of Contractor, affect the above


deierm{nations made pursuant lo Articles 1 0 and ft.4. The Minister and CINPf


may. where feasible and ir. the best interests ot the Parties, agree to make such


changes or modifications in the existing arar.gcmcnts.








PXUT IV NATI R AI. G AS PRO. 1XMK


1113 if a: any time during the commercial assessment Contractor informs the Minister


in writing dial the Discovery can be produced commercially..; s ail within (one


hundred iinii eighty) 180days subm I lo the Mini ler .inti li> (INPC its proposals


Ihran agreement relating to the development of the Discovery on 1 ie principles


set forth in this Pan IV of Article 14. I .ie State and GNPC undertake on receipt


ol it ch notice to negotiate u: good faith with Contractor with a view to reaching


agreement on lerms lor such prcHluclion. Any such ugreemnil will be hir ed on


terms and Uacn.l requirements which 'hull hr lift less favournhlc lo Cftntmctoi


than those provided for in Articles 10 nr.d 1 and which take rtill recount of the


legitimate inlerest of llie State -i« the renoune owner.


n il If ill any time during the commercial assessment Contractor lius idmitillcd 1


market for the reserves of Mon-Assoeinted Gas or ar.y pnri thereof lhai am he


wived without prejudice 10 an export project., the Parties shall proceed :n good


I'ui'.h lo ne^oiiiile the .:ppntpri!iie conlrm:U:iil iirninyerreris lor lhe disposition of


the Natural (.ini In the event of a market for such Gas. Contractor shall receive


lor delivery it* share of the Natural Utis at a price to be agreed in good faith


between (INI’C and Coir.racior. taking into account among otliei things, the cost


of finding and developing the Natural Gas. it reasonable return on exploration


tint! development investment and the uses which will be m:n!o of the Nmunil


Cia$.


it 5 In the event ofti Discovery of Natural flits in the Coiiincl Area which s to he


developed and commercially produced The provisions of this Agreement in


icipcet to interests, t ights and obligations of the Parties regarding Crude Oil


shill I apply to Niiluntl Otis, with the ncccswuy dtanges in poinLs ofiieu I. except


w ith respect to spool lie provisions in tins Agreement concerning Natural

different or ndditionul provisions concerning Naturnl Gas which may be agreed


by I be Parties in the future.


The system for the allocation of Natural Gas among the Parties shall follow


the same general format as Article It). I provides for t rude Oil. with the


exception that the royalty to be delivered to the State on Natural Gas shit I


tie .ii the rale- of live percent (5%) of the annual (Irons Production of


Naturnl Gas as an incentive :o enhance the viability of a (ins project on lie


Nisid herein provided for


(hi The Pat lies recognise that projects for the Deveh pir.eul aid PtoCucti >:i of


Natural Gas arc generally k»np term in nature tor both the project


dcA-elcperr arc the customer? who purchase ihe Natural Gas. Substantial


investment* and dedication of finalities require onmitnerta on


both sides. Ibis Agreement, being fi* a tpcvdlc tenc of years, may not


cover toa length o: time for which cjstocaas ir. given eases will require


commitments in ihr purl of the Parties to bis Agreement to deliver rieir


respective stiares ot the output. Accordingly the Parties agree to consider


j»Jcrtak.ng such comm.iLncals where reasonably required for the efficient


and viable develupnM af a Natural

unless otherwise agreed by the Parries hereto Contractor will have r.o nght


or interest in the project or the Natural Gas -reduced and delivered after the


term or this Agreement lia* exp.red.


•cj Ir. the event thei Contractor or an Aftlliate by mutual agree men" with


GNTC and the State constructs facilities to receive Natural Gas from the


Development a*kI ftoduv'.ion Area for further processing or for u»c .i* .


feedstock or fuel in order lo convert such a Natural Gas .alo one or mure


commercially^ marketable produces, the Contractor shall be entitled to pay


GNTC or the Suic for such gas the price, if any pritl by the Stale or GNTC


under Article 14.14.


id) The Punk* will on-uider eolbbarafon in ohahin* am common external


iir:inrii-x available for Natural (ias production poMibiiilK.-*. including


pu.;«i III ancirg, iv*»cw. each Part?' shall remain lice u» finance


cMcnttlh its stuic o! soch taciliiies to the extent ii prefers todo so.


M. h (a) Whore Conlmetor has during the continuance of me Exploration Pen.nl


made a Discover}* of Non-Assocklcd Gas but lias not before the end of Che


Exploration Period declared that Discovery u> l>c conintoruiul. the State and


CVNPC will, if Contractor so requests, enter into u new Petroleum


Agreenum: with C«minictor in respect of the Discovery Aren to which that


Discovery re latest


(b) The Slate und GNPC 'Pall not he under arr obligation to crier into nn


Agreement pirmani to this Ar.iclc 11.16 unless before the end of the


Explors-on Period Comrade* has carried urn n Appro vi! Programme in


rcspcvl of hat Duccvciy pursuant lo Article 14.* and submitted w Use


Minister u re|*orl '.I croon pursuant to Article 14 10. or hes commenced an


Appraisal Programme and has notified .he Minister of reasonable


armr^rricTis lo undertake and complete sneh an Appraisal I'rogianirc


during the period provided for b Article M.lWcXi) below*.


tej A Petroleum Agreerrem entered inio pursuant o Article II 16:


(i) shill, Lr.kv* the Discovery in respect

been -tunIc is drekred by Contractor to be a Commercial Discovery,


continue In force Ibr nil Iniiiul period not exceeding five (S) yours:


fii> shall ia the event llut the Discovcty is declared by Coattactor to :

Commercial Discoveiy;


iAi continue in force for an aggregate perkKl not exceeding 25


< I wenty-live) yean;


(n> include, or be deemed to include, all the provisions which,


mutati* hiuUihIis. would have applied to a Coimncrcwl


DiiCOVCiy of Non-Associated Gas puiMunt ui Article 14.15 if


Contractor had declined nich Discovery to Iv a Commercial


Disco very under lit hr Agreement;


fiil) shall contain in respect of the initial period or of any renewal period


details of ihc evaluations or studies i in aceonionce with n specific


timetable) which Conliuetor propo'e* to mVr ike in order to


determine or keep under review the comment* itv of the Discovery;


and


(iv) siiall confer on GN'Pf* prr-emfXive rights in reaper. of the Ghs


com.-im.-d in -h: reservoir 10 which the Discovery relates substantially


Jl the Inn!) .»l The pn*vi'un« hcrriiu.fier yri vul in Article 14 16.





u











(cj Whore Contractor hfw nol. before the end cl' the .nui;d period, declared :lie


Discover)' to be commercial arid the Miniver lats in his discretion


dcici mined l hill fort her evaluation or studios may be ix*«|uiro»i before the


Discovery can be declared commercial, the right or‘Contractor to retain iher


Discovery Area shall continue for a i'urtlwr period not exceeding m the


aggregate live (5) yews. The right of Contractor to retain die Discovery


Area aforesaid .shall no neciimi by the renewal of the Agreement referred to


in Article 14.16 or where necessary by a new Agreement entered into by


the Parties (hr that purpose.


(cl h) Where Contractor lias mil declared the Discovery to be a Commercial


Discovery, if UN PC has Idem! lied a market for the Gas contained in


die reservoir in which the Discovery relates, or any part thereof, it may


at any time during t ic inii.inl period ui foe aggregate period referred to


in Article 14.16(d) above sene on Contractor a notice giving


particulars of die quunilim of Gas required to serve the.: iwirkei and


the price offered; and on the basis of ihr procedure detailed in


Article 9. exercise the right referred to in Article 14 16(c)(iv) above


(ID Within direr (3) months from the receipt of a notice as aforesaid


Contractor may ibclurc the Discovery to be commercial mid in


accordance with the Agreement and the Petroleum Law prepare and


submit to Use Mmistu a Development Plan for the production of the


Gas in association with (IN PC.


(<.j If Contractor has net. within the period ol tln«<>> nynl « Nfovc*akL


declared Hie Discan ay to he commercial (iNl*C may at ts sole nsl


and expense develop the Discovery anJ m that event the Ccocreeror


dial eaisc to have any rights L-i respect of the Gcx in the reservoir


required for that purpo'*.


in? Ifoc the pwposc of calculating the State's live percent (?*» royahy share on


Natural Ids if the Stale elects to take fcs royalty i*r Natural Gas in cash, the


virtue of such Natural Cioa stuill hr ihr actual realized price received by the


Coniniclor, less transportation, compression and marketing costs which shall be


in accordance wit • the principles indicated in Article 11.


 All I IC.’LL 15





i.CR.l7>F.OII j





15.i I'tmk Oil lor ('onxuinptini m i il ana (in this Article called the “liomestic


Supply Kc-: JHcir.cn: I ilull be juppLe j. to the extent possible, by the State w»J


(JNPC Irom lheir r»» pee uve enUllerims under ihis Agreen eel aid JiiJer any


other contract for the production of Crude Oil In Ghana


1.2 (iocKJinplior. sliall |i> .lie puqx^ci oflu- Article . k. aJc cu.ce Oil pr.'.cs*cd


< dram arid the equivalent ofcrude oil derived products imported into Ghana


135 Cnuacter stall be obliged together with any third panics which ptoducc Crude


Oil in Ohara within 2 mouth* notice from the Stole, to supply a volume of Crude


Oi' in Kr used fnr such Dwrioiic Supply Requirement. calm luted or the basis


of the ratio of Contractor’s entitlement to Crude (under Article 10.1(d) to the


sum o! the similar entitle menu ol all suwh third patties and provided tha:


ConUaclur's obligalxir to supply C'uJc Oil lot purposes or merlins' hr


IXmtcmIc Supply Requirement vial I ttoi exceed the total of Contractor's said


criHInrcnr under this AgTccmcr.-


IS.-t lit Slate shall pa J a»e ary Crude Oil supplied by Contractor pursuant to tus


Article a: ihe Marker Price drlermired mder Article 11.7 for the* Month of


delivery, and die state shall pay such pr.ccs in accordance with Article 13.'


wit lain thiny (30) days after receipt of invoice, failing which Om-actor**


obligations :i respew: of the IXmiestic Supply Requirement auk; this Article If-


shall be 8UKpoiujbd uniil payment is made good, at which time deliveries shall be


•vMirm’d Hiihjivi to nny tiltcrruitivc commitment* thin mny have beer rc-:iv<>r:.-ly


enrered into by Contractor lo dispose of the Domestic Supply Requirement


Crude Oil during the pwuod of default u payment. Contractor shall recover any


iiimmni due und unpaid by I he Stale, plus intcrosi ai ihc Specified Rule from


(IN PC.


Hie calculation of the Domestic Supply Requirement shall be done on a


Calendar Year basis, broken down by Month. The calculation sluill begin with


the determination of the quantities of Crude Oil requited lor Consumption in


Glia on in Hi relev nut Yloni i (the ••Monthly Domestic lloiwnnplion”) di in&


the applicable Cakndai Year.


 AIM ICl I 16








lo i Contraci.ii shall keep (iNl’(‘ regularly .ind fully i ilormcd ul operations being


c.nrico out by Contractor .indci tins Agreement and provide with all


information, data. (lilin. paper and dig'url limns), dimples, interpretations and


reports, (inolvklir.n progress and completion reports) Including bul ni't limited lo the


following:


(a) processed seismic data aid in cprclations (hereof;


ibi well data Including hut not limited to ckwlrie logs and other wireline


surveys, tiud mud Logging reports and logs, oil or hydrocarbon samples,


samples ol cuttings and cores and ;ui.ilyses made '.herefrom;


{c> any reports prepared from drilling data or geological or geophysical data,


including maps or illustrations derived therefrom:


(rtj well testing and well completion reports;


(e! report' deal ng with location surveys, seabed conditions and seafloor


hazards and any other reports dealing with well, pint form or pipeline


locMlkms;


ffi reservoir investigations and csmnarcs regarding reserve.; field limits and


economic dvuluatlom relating in ‘mure operations


(*> daily, weekly, monthly ar.d oilict tegular report* on Petroleum Operands





p) comprehensive final reports upon the completion of each specific project or


operation;


(i) contingency programmes and reporta on salotv nnd acciderc-t;


(j) procurement plans, subcontracts and contract* for the provision of services


to Contractor;


(ks for such subcontracts and contract* for *l»e provision of services In


<;.ontrucu.ir bid documents and then evaluation reports a statement showing


the values, exec id rig companies, award and completion dales.


I>ata dull he provided on (iln., papa and in digital formal as available in an


acceptable format to CiM’C. In respect ul lire reports, including lexi and


graphics, paper and digital copies shall be submitted


16.2 Contractor, iis direct parent company m:d .Ire Operator shall have lire light ;o


retain for its use in connection with lire comma of Petroleum Operations in


Ghana under this Agreement copies of dtiin. well log', maps, magnetic tape


Other geological and geophysical inlbrmnti.m, pnninna of core samples and


copies of reports, studies and analyses ("Project Uata’1), referred to In


Article 16.1, and to disclose such Project Oulu, with llu* prior written consent ol





«r.


(iNI’C, in wholly-owned Alllliulus of its ullinulv parent company, the Operator


and ot its subcontractors subject in enc.-i cnac to Article \6.6, as it may


reasonably require to conduct Petroleum Operations in Gh-ma hereunder


16 > No! bier .ban thirty (JO) days following the end ui each Calendar Yew.


r.mt-aciiw vhall vihoii ci C.NPC a -trsorl enverir Peiridaiir. Operators


performed in *e ( •v*ra:t Vea dur ae rvh C a lend: Year. Such reper s.vt .1


-•Kh.cc. but act b*c Lmilcd ir


u: a Jtatcircr' of the number of I xrlorannn Wells, Vnprcisal Wells aivl


Dc\*rJopneal '^cils dr.Bc-J. the ifcplfc of «».b si.ch well. e-*J a nap ,*•


which drilling locutions arc indicated;


i v j -tateirci - • any l\u. .eu i encouitcr:>' irmc I'crrnkum Operations •»


well as a statement o: s:iy fresh water a>cn encountered ami of ar> other


mineralx c«co\«:ed.


Ic} a statement of the quantity of Petroleum pro,Inc eel and of all other minerals


produced therewith Iron the same rcservoit or dcpoMli


|.1j a summary t>l* the rtuiuro (ind cKlcnt of nl explicit Ion activities in the


Contract Area:


tel a pcncinl mimnuuy of all Petroleum«>peinticms :n the Contract Aren: nr.d


•0 a statement of the number of employees cntuiKd in Petroleum Operations


in Ghunu. iikamlicd as Ghanaian i»r non-Ghui uiun. ( (Milracuir will inform


the ianer ih»: details « In nationality are required by CiNPC and that


Contrartx is available to aunt then-. :o surply cut iafcrtnanon


16* All d=c information anJ report1 ijk .Uii • .rcrpatalxc, and analysis supplied by


Contractor rursinn to his V^nrinru-n: >h II ’-r Ire tied as conlfckvr.ial art I 'luiil not


be disclosed b>- Cor tractor to am other person whhoot the express written consent


o: the ouci Panics. Howeva subuxt to Article 16.6. GNPC stwll tame he ugh to


diseliyve sbu, irloniutioi ju: rq*>’’> nciuding interpretation and analyst .a


rc*pcct of Petroleum Operation :o any other person


16.3 1 lie provision* ot Article 16.4 ih*|J not prevent disclosure by Conti actor


(h to it* Affiliates, udviseis or consultants.


(ii> to n Bonn l-idc Porcnrinl Assignee (: c. a company in rc

i

Contra.'ax aid oopicd to tJNPC confirming that in .lie opinion ot muI


executive that company has the finnneial wherewithal anil tcvltnieul


competence to rvet the obligations associated with the interval heii--


o'lcre«L>*Migtv'. aid l a* considered the Mttaia! Acquisition at a


tuUKKZtl} senior bvl w^lun its cijwusaika ic order .or k fc< be


regarded us u genuine puieciml purchaser of such irtcn»l> ol all or


 P^t of lnicrrs: lu-tvundcr F> evident (»\PC i> gjvcn prior


notice uich potential »tsirrre;


id) Ui hanks a ocher kaJinf it *4iiuUic» (x U* purpose

cxirrral financing of eras of ihc Pwu'eun Opnralioat;


iiv) it* mm-AffiliaS* wtc sh*L provide «rvw far Ac Pctrnlnan


Operations, inriud:ri* bubcuaftacton. vendors ami after 'erv.ee


coriracsnr* where this fe essential for B*-r provision ut such services.


»r.c provided ON PC b notified about such di^lorurc.





<«; tr governmental agcncm .or obtaining arceMuy rulings, permit*


Kecnscs r.nJ approval* or at may be rct|ii red by applicable law m


liraroal stock exchange, accounting >ir reporting practices. and


provided GNPC is $■>«! rtior naiec of such dfoc'orarr;


IVI) lo ihc extent neee*.\»ry in any ArtntniiKMi Proveniin^v tw |H'«ccccmgs


heliire c Sole I xperi or in peoeccdirgs he Tor* any court or


(* •; "'ib respect in dun. ere. which ahead) iluvmJi. »l» fault of ihc


disclosing Party h :n ihe public dtxtu.n





166 Any Party disclosing nfcimsacion or pwkunw diU *•» u * third patty urea this


Article (other ihan in the persons fxvi.ed m Anrvk h-5<*)) shall leqti jc >u.b


person' to observe the confi«k-r of etch data by executing a unnlidodolity


agrmrrnl in the form attached hetcro as Anne' 4 Tba Partrs ‘hal uke


■easxuhk ocas net to ensure ihax Those t.vird tsank* prmmied to receive


infbtnuition mill diu under Articles 16d2, J6.5t:k 16 5(h). I* *tW> n*»J 16 5(ivi


shall observe die cnriti Jentialiiy of such BifunraUion and -Ua In .Uhrr c*cv'i* ng


u suitable conlWcnciality agrccmenl or incoqwrauv l » eh- uni «,* uiiJeniiality


provisions in their service agreements. Disclosure unde- \rtkk* 16 2. I6 5(ik


I6.5(ii), I6.5(iii> mid 16.5fiv) shall not be made unleu before such (Kvcliwi re


ibe disclosing Party has obtained ii writuw; unde Hake in hum U- rev pent party


to keep the inform ill ion u-icily confidential end * me -lit in ik:ii.iIk>u lx Ik


sole purpose described in Articles 16.2. 16 <(i>. 16 'll i 16.*ni) uni IA.S

whichever applies, with respect h> the i ndoor# Party.


16 7 I'jWk statements and press release.' regarcing the Prjo

undertaken under ihi* Agreement shall be issued (ohiil) b> die Contmeor avl


GNPC . . J Bw Parties shall a*acc on the limme a«>l wime of »«+


roko«cs lo the p*K. ^ howoci. a Par: * is irvp* ^ to make a prABc


arcvH -icareni <* ‘laiemer- under ihc apphcible j«s > Jet or xcgulalioua of ■■>


gt.vcn--- at. k;a pncr.'tfags cr a «xl e«> hanfte having jm sc id km over such


Party oi an of its Al lao to the extent T^rrriiu%l by k*v. tna: Parr, >ball


nform U*«

animunccnwrU _i siaicircm Iit utcncox aj>d oi af»>rv*»'l Shoukl a Party fail ic


respond lor mm than five t5) Cays (or such shmw» pt!lod as may be r^

in U e event of ar. emergency or di-«racr iir roquir»\l iu ca ble t •* d ichsic;





< <7


‘-*4





party :o comply with applicable law or regulation) to request for the approval of


a pubiic statement or announcement (br xucli purposes, such failure 'hoi! he


deemed approval of the request.


16 it To the extent required hy the Contractor and/or its Affiliates for compliance with


the obligations of the Contractor and/or its Affiliates under the regulation* of ny


•lock exchange or similar pltjlliirm upon which llie securities of the Contractor


midair its Affiliates are traded, each. Party will use reasonable efforts t.i * to


ensure that information received hereunder which iruy mpac-i the valuation «■:


any *U,'cl of the CVmlnxIcu* and-br their AfF.IUlc* ('li »ide Information') il to


the extent poss.btc only disclosed to such person: that hsvc a need fo such


Inside Information in their wxirk for the Parlies and {ii) to use reasonaMe


rodi-asMur- in maintain a Rsl which .diall state ai lease fa) the identity of any


pcrwr. wort an? for them having access to Inside Informs lim; fb) ihe rr^'-T why


uay xnh person i* oa the list: and (c) the dare at which the list was created and


u» update tikis list (x) whenever the*e :s a change in the reason why a person s on


the list- (y) to add additional persons ro the list, ace (z> to remove Ma.h persons


fn.n- the lisr who no longer have access to such information and transmit such


hu to a Contractor Parry within a reasonable time of such Contractor Par.y’%


tcquol therefor. provided, however. that Contractor shall (I) reimburse liNIH


for .fl re.iMJiuble expenses bi conneclkMi with such cooperation ar.e (IT»


indemnify and hold h^nr.less GKPC and the State :10m. and GNPC .ire llie Suuc


shall have r.o liability for, any fines or penalties levied by any *uch M-mriiics.


exchange: or Cited regulator in connection with Any such riles


16 9 Subject in nil case* to die terms of tuiy technical services agreement:, all


intellectual property rights ro any and nil invenliom. discoveries or


improvements made or conceived in connection with Petroleum Operations


either through a Contractor Party s employees, conliacivi* (including the


Contractor Parties). Bub-contruclora, seconders, GNI’C's employees or


otherwise, shall he jointly owned hy (IN PC and Contractor


16.10 Notwithstanding any provision to the contrary ir, this Agreement, iln Contractor


Party or an Affiliate of n Conlrttclot Parly has used its Own confidential


information, proprietary intdleciuiil property or technology In Petroleum


Operations then, subject to GNPC (or its successors or permitted assignees)


entering into a usual and customary nuu-vltsclosare and licensing agreement


(which such agreement slut I he on term*. tli;*l me wtnuieivially reasonable under


the ciniunsinncds), such Cottimetor Party nr its Affiliate shall provide GNPC (or


its successors or permitred assignees) with rights to use such confident ini


information, proprietary inUlIccimil properly or technology in other operations


of GNPC (or its successor or permitted assignees) outside of the Contract Aaca,


Hie terms and conditions of the foregoing rights will bo provided for in separate


nv.r.vnicnis in be agreed heiween GNPC (or irs successors or permillfd


nsslpncca) and such Contractor I’nrty or its relevant Affllimo Further, GNPC. (or


il« sviccoisory nr periniiicd asuignecH) and such Contractor Party' or ~-


Affiliate will enter into a usual and customary confidentiality agreement relating


to confidential information disclosed to GNPC (or its successors or permitted


assignees) pursuant to any suck licensing agreements, which confidentiality


agreement shall restrict, inlet alia. (iM’C (or its successors or permitted


assignees) from making disclosure of such informs lion to such Contractor


Party's oil and gas industry competitors.


























































































































&


?<•








v


 AKllCLfc 1?





IftUH YTTON. S \FTTY AND ENVIRONMENTAL PROTFrriHV





i" I GNPC ‘hull wvr the right of access ui all silo mid offices of CooklCtor a»J the


ripla :© iiispea all buildings and installations t*>©J by Coi .ri.ciiu relati:** k<


Petroleum Openuinm. inspections and a.kliB slull take place in


cnr.-

to interfere with the notmal operation ofC'ontrecioi


17 i Contractor shall! lake nil necessary stepa. in accordance with International Good


Oil Held Practice to perforin acriviret puioum to the A.jrccmcnt in a sate


maimer aitd shall comply wid» jJ retjtiu.aicuu of Gc*em’ir> laic*. inciting


labour, health safety aivl cminxmu-nu aws. and regjlallons issued by ±c


ritviroenrenul I Vowel ion Agency of (ihana nnJ other idevanl Stale agcrcies


ITJ Coiuractoi shall p.-oviJc an .ilcctiv; safe system :o* disposal of we.icr and


waste oil oil base mud aid cuttings ui oceorJuncr with applicable la*", and


accepted in*cnr rionnl Petroleum irduitr. practicr, an;: shall provide for the safe


woiplctionor «t«rtiukMH >cn1 of a II -.irrlioie* and welll.


r.i Contractor shall exercise iu rights and carry our its responsibilities under tin*





Contract in accorJnnrc with accepted inm.it:oa-.l Petroleum indu-ir> practice,


anc shall hive stops in such iranrcr at to:


(a) result in minimum ecological damage or dcsouction.





ib> control the How and prevent ±c escape or ihe »v„kbhlr waste ot


Petroleum discovered in or produced from the Contract Area.


t.) prevent damage to Petroleum-hearing strata;





i.1) prevent the ontitmcc of water through boreholes mid wells to Petroleum-


beurinjj slrsitti, except for the purpose ol'secondaiy recovery;


CO prevent iluin.i^e lo onsluire liindj. and to trees, crops, buildings or other





structures; mtd





(fl avoid any notion* which would endanger the health or safety of persons.


17.3 In the event of a rclcnao of Petroleum or other materials on the seabed in the sen,


ou la id or in Ireah water, or il Contractor's operation* remlr in any other form of


pollution orolhetwise cause harm to fresh water, marine, plant or an nml lire,


Contractor shall, in accordance with Inter.wuorul (ruixl Oil field Practice,, to


control the pollution, lo dear up Pecmkium or other released material, ui to


repair, to the maximum extent feasible, damage resulting from any such


circumstances H stiph release »r pollution revuIlM directly fiom negligence.


Gross Negligence or willful misconduct of the Conti actor, its A llilu.tc or


Sub contractor, the cost of subcontract dc.in-up mid repair activities shall be


borne by Contractor and shall not bo Included as Petroleum Coal under this


Agreement








i








Contractor shall notify O.NTC immediately in the event oi any emergency or


major accident or major release of materials into the environment (and promptly


in the event or any oilier accident or twleine of materials into the


cnvlronmcnt)and shall take such action as may he prescribed by ti.M'C the


Operator's emergency procedures and by accepted international Petroleum


ii.du.stiy practices.


I?.? If Contractor doe* not act promptly *0 a» to control, clear up or repair any


po.luion or canu^c. tiM'C ray, u:tci giving Contractor reasonable notice in


‘.he c iromanos, tnkc am Miens vviiich arc ncccsonry, in accordance with


applicable laws ard accepted intcmNionsI Petroleum industry practice in the


same or similar circumstances and the reasonable d*u anJ evperices of such


actions shall be borne by Contractor and shall, subject to Ar..cLc 17.5 be


included as I’cUriecm Cost*.


































































































• r


 amici r ia





AOTI > IIX. AM>.\!,J)J J IMi


is i Contractor shall maintain. at its office or registered address in Ghana hooks of


account anc supporting records in the mantlet required by applicable law and


accepted accounting principles generally used in the international petroleum


industry and shall 1:1b reports, lax returns tmd any oilier documents and any oilier


tlrinnciul returns which are required hy applicable law.


IS 1 In addition ui die books and reports required by Aiticks 18.1 Contractor shall


maintain, nl its office or registered address In Ghana, a set of accounts and


records relating io Petroleum Operainoj under this Agreement Such accounts


shall be kepi in accordance w !h I he requirement* of llie applicable iaw and


accepted accounting principles generally c*cd m the i:v..;iu.ional Petroleum


inJiauy


I8J The account* required by Articles 18.1 and 18 2 steal be kept in United Slate*


DoP.ii' «ir such other currency ajiOKPC and Contractor n:u> agree


■8.4 Contractor will provide GNPC with quarterly and annual (unaudited) financial


statement* and summaries of die Petroleum Cost* incurred onJci ibis


Agreement.


185 GNPC »w'l review - I liiwr.ciul ylatemcntt SubmiBed l»> the Contractor as


required by lus Agreement, aiui stall signily its provisions approval or


disapproval c; such statements in writing within itrciy <90) days of receipt


tailing which the finQiidnl statements an submitted by Contractor hall tv


deemed approved by GM'l.; In the event rhnt GNPC indicates disapproval of


any *uch statement, the Parlies shall meet within fificcn (15) day* of


Contractor's receipt tifi'ie mil ice of disapproval Ui review die mallei


IS 6 \u|wilh*1mid ig .my |*rov xionftl approval pursuant to Aitlde 18 5 GNPC shall


haw ’.he light at its sole expense and upon giving reasonable notice in writing lo


Contractor to audit the books and accounts of Contractor rotating lo Petroleum


Operations within two (?) yours IVnni the submission by Cnntracinr of’any report


of financial statement GNPC shall not. in carrying out such audit, interfere


unreasonably with the conduct ol Petroleum Operations. Any such a edit »lu*l' be


undertaken by ;;n independent auditing firm und shall be completed within nine


(9) month* alter commencement Contractor shall provide all nccessaty facilities


for auditors appointed hereunder by GNPC Including working space and timely


hccos to all relevant personnel, records, files and other material*.


If GNPC desires verifiiv. lon of charges from an Affiliate, Contractor shall at


GNPC’s sole expense obtain for GNPC or its representatives an audit certificate


lo tins purpose from the sbilulviy wuOilors of the Affiliate concerned. Copies ot


audit reports shall be provided to the Contractor and UNl'L. Any unresolved


audit claim resulting from iueh audit, upon which Contracts and GNPC arc


unable in agree sh»f be submitted In the .1MC for decision which rmWt he


unanimiKM !n die event that a xnaanous decision is :mI reached in respect vf


any audit claim, then sixh unresolved aisJit cluirn sta'.l .*e sNfariiiled for


revolution in ^..onlancc with Article 24. Subject tc 1U" adjustment* resulting


from such audits. Contractor's accounts and fiiMncial suioments shall be


coiuicered to be correct on expiry of a period of six ((ft yean dom die dale of


their suh*nitt*km i miens before the expiry of such six (6) yrjr period

notified Contractor of any exceptions ui suh account? and statements


it 7 Nodung in this Article dull be read or ux*uucd as placing * luiul yn C.N'IX' «


access to Conimci.rr’s hooks a:»d account in tespeu uf milter* aiisuiB u»Jer


Article 23 4(a).


ikk In die event of any chnngm in location ol Uk CoQtractoi a office cir registered


address in Ghana Operulnr dull no nrrify GNPC and the Stale.


ix.Q Petmlct-ri Costs incurxed with raped to Jic Contract Area ihali have no bearing


tin allowable or non allowable costs under any other contract area oi Cor.': do *


eligibility or otherwise for deductions in computing Contractor'' net incline


Ixc'in Pelwlruin Operations for income tax purposes in :*ny other contract area


Sinnlu:l> Petroleum Cosis inclined in any oilier contract area shall have no


bearing or. allowable or non-allowable costs in respect of the Contract Area or


Con I rector's ePy.ihlllty m otherwise lor deductions in cumputing Contractor's i:.l


income from Petroleum Operations for income tax purposes in respect ol i ic


Contract Area.


 Alt I K i t: ii





AM> t:QU.iP>iF-vt





19.1 CiNII' «h II hr'I ■■ v»lr mii.I HKuihHiunaliMiRTOr:


•'«! I’rir. ileum produced and recovered a* a result r>l* Petroleum Operations


except tor rueh Petroleum as « distributed to the State and to Contractor


iMisuial to Article 10 or 14 hereof;


(b) nil physical assets other than those to which Article 19.3 or 19 4 apph





which an: purxhdMxl, insMllvd coarfru,tce or used b> Contractor ir


Petroleum Opctations .•* from tin. lime;


!:) the n il cost thereof ha* occn fully depreciated aeeorcing to appl.cable


law or recovered in a* conjancc with the provitiiru of lie Accovnfng


Guide (whichever fun occurs): or





t ii) th:s A freemen i is terminated and Contractor has not disposed of such


assets prior u* such termination, whichever occurs «L





I-J.2 Comrocuir 'hall hove the line of Ihe assets referred to n Article 19 T(hi for


purposes of its operations under this Agreement without payment provided that


Contractor shall remain liable lor mainlcnancc. uwiraacc ace other


associated with Hitch use. Where Con I rue lor has failed to Keep any s.i.h asset in


good working condition (normal wear c:kl tea: excepted),

np,hi lo recover the cost o f repair or replacement of such a‘sets front Contactor


Contractor shall indemnify (INPC against all losses, damages, claims o» legal


action resulting from Coe trie tor’s use of such -acts, if and .n as far us such


osscs. damages, claims or cgn actions were directly or indirectly caused by


Cbnmclitr’s Grass Negligence or willful mbronducl


I*.? Equipment ar any otl er umcIs rented .» .caned by Cor raw which i« imported


.nto Ghana for use in Petroleum Operations ur.1 *i •• wqi.mil> re-exported


i Here from, which is of the type ctistomcriSy cased for such use in aceordar.cc


with Interi atonal (inod Chi field Practice ;x w u.Ii n> olhcrai'c ml Owned hv


Contactor shall not be Uaosicircd to GNPC. No equipment o: assets owned or


eased by a Suboonlniclur d all by reason of the pruviakirs of this Ancle 19 be


deemed to be Hauler red in G\PC


:9.A A.l assets acquired l" ConLucto: u? which the p.-uv_Moi^ ol .\rliclr :v.l(b|


above do ml apph may. where required tor further Petroleum Operations, be


retained by (i\W I5ir sm+ c^terulkms provided :h:it GNPC shall thereby he


liable to pay a rea*or.ahlc and nnirualK agreed fee for such u*e.

the cost of repair oi replacement upon failure to keep such assets u; c.od


working condition (nunnil wear ami ;car excepted), and further provided that


Contractor does tur require s.ich assets for its Petroleum Operation*.


.9.; Upon tae termination o: Peholeum Operations in any Arc-, t -iStacur si.a I p'e


GNPC the option 10 acquire any movable and immovable a o'.: used for »uch


??


Petroleum Operationa and mil affected by the provisions of Article 19.1(b) at a


reasonable and mutually sliced price, always provided that Contractor doc* not


require men assets for Conns- nr's Petroleum Operations in ilie Contract Aicj.


■ •.fi All assets which arc no l alTocVed by Ailicic 19.1(b) nor subject to Article 19 4


or 19 5 above, and ell subcontractor equipment. :uay be freely exported by


Contractor or its Subcontractor, respectively. at it3 discrclion.


 AIM H I I 20


UimrilASlNc; A!NI) I’KOCtlRKMll VI


-‘-.l Subject 10 all applicable laws. Contfncwi, its subcontractors or other entitles


which cooperate with them shall:


(*i acquire materials, equipment, machinery uikI consumer good* produced or


provided in Ghana by an Indigenous Ghanaian company in Ghana which


me of the same or approximately the same quality as foreign muteriuls.


equipment, machinery and consumer goods and which are available lor sale


mid delivery in due lime at prices which are no more thfti. ten percent


higher than the imported items including transportation and .nsurancc costs


and elision* charges due;


(ii) contract local Ghanaian service ptovided by Indigenous Ghanaian company


to the extent to which the sendees they provide arc similar to these


available on die internalioi al market and Uicii prices when Mihjecl to li e


same tax cliaiges are no more than ton percent higher than the puces


charged by foreign eonir.teiivrs for siirilar services.


30.2 For Hie purpose of Article 20.1, price comparisons shull he made ini a c.idl


Accra delivered hails.







































































r


 AKTK'I.F 21





» MPIO\ MI NT ANDTHATMNG


2 1 lo mMc tbc cstaMafaraet* or p-ujpanrn.** *o rrair Oamlan r««wrri for


if. fdroteuni Operauunei and for the rainier of manapeman and »echa»»«l


4.1U reamed for ihc cHk-ief*: rnajnrt of K-rofcum Contactor


hat poy in fVPC within #iirty (30) d*>* ol the k-umir* of each Con r»t


Ycar or In rr$?ec1 lo lire fust Conr*.. Year, nincly (90; Jay* of I ho MVotliva


Halo, One Million United Suurs Dotlus (ISSl.OOO.OOfty Such payments shall


lx considercd Petroleum Costs nl’llte Comraclor


21.2 In ftdilllKm ||» Ihc payment made |>umiwul i«i Article 21.1; Conuaiilnr dnill pity u>


Explorer) within I wo hundred and seventy (270) days of the Effective Dale


t.O Fifteen Milton United Sls:»l Dollars (USSI5.000.000) for :hc p anning,


licvdvpmcnf aixl constr ue lit* 1 «il a university ir. Ghana aHaring petroleum


engmeoring. geology and perroiiuta-mlauxl courses, such arnesmt to be


paid pursuant m ihc krtcr of credit described in Article 21.4: and


0») Liiuit Million United States Dollars (USSft.000,000) for Explorer* *


corporate development need'*. rireh amount to be paid pursuant u» the Idles


of credit described in Article 21.4


21.1 Hie expenditure* under Article* .'I 2(o) mid 21.2(h) ami interest on such


expenditures ji the Specified Rate nho'.l rvil K- considered a Petroleum Cost of


die Couliaciov. and lor.irecmr rrviy recover such amount puninnl to the JOA.


21.4 MoiwithsUccmw iayth'i.J to l!w uvrfniry in Article 21 1 nr 21.2. wttbfti ninety


(901 days of the Effective I lose. A

credit in the amniirt of Twenty. Ilwe Milium United Stales IMILat.


(l*S?2*.00O,OCOj in ravur .•! Citato Lit* is Jra'safclc wiiion wo tanked


«ofih (2~0) days of tbc ttlevtivc Ikt ajar prsaranrion by fcxpkwen.


.* • Where qaaKlkd Ghanaian person -re «.a-liblc for cnipiuymait in the


ccnd'xr of Primleura Opctuoni, Uoritradur ‘hall canvc that as tar a%


Horbl> possible opportunity .«* uo employ-nem af such penomc: sh«l ae


provided. Tur this pwuosc, Contractor 4**11 from ftmc *o time submit t*> GNfC


an employment plat staling the foaeseCAMe number of pciscos land tfsc reeuired


prolrviuru ;ud technical capab liter I .-u uu.d prior to and during !he conduct


of Petroleum Operations. UNPC shal l*e given the opportunity to provide t»*o


• *4lilkd pcrsoraxl :«>r engugnrrai according to iv mid phm


21 >; Contractor shall. :fso requested by OM'C. provide opportunities fur . mutually


agreed number of personnel nominaard In (INFC lo be seconded to the Operator


•or vn-lhc-job training or attachment In all phures of lu Petroleum Opcraflon*


under a mutually agreed secondment contract. Such scconlmeui coiiim* 1 , i.dl


include condnuing education nnJ short industry countcs mutually identified 4'


hneficial to the vet.irakc Cv»l aad other ex|>o -c- u* ncvlcd with such








Y


assign; uni Of GNPC pownnc! shall be home by the Cnkaay ami shall he


considered os Petroleum (’osis.


21.7 C cob actor shall regularly provide m GNPC lrlbnr.aura and dam relating to


worldwide Petroleum science and technology. Petroleum ccotoieks and


engineering available to Contractor, and shall a<»iu GM*< personnel rn rvci*


wy k' acquire Knowledge and skill- n all npxu y. ibe Petroleum industry.


• $ ll i* agreed that there will be no disclosure or irons Ict of mv documentt. data


* new-how. !rcK-tcili>£> or ether infonaaricn owned or suppled h> Contractor its


Affiliates, or non-Attiliate*. to third parn.-s witbcut Contractor s prior written


consent. and then upon agieetnexr. by tie ox pwri* In retain Mich


mrorinalior. ir. strict confidence


 VRIICLL 22








22. The iNiluf« of a Party :o lull'll! air :e.m or condition of this Agreement c«vcp«


lor die payment ol tnonie*. shall be excused if and lo the extent rhnt snch failure


urates fioir. Force Majeure prmidrd ihai. if the ever: h reasonably foreseeable


saxh p.my shall hnvc prior ’hereto taken all appropriate piecmitiorn uni all


reasonable alternative measures with the objective of cariying out the term* and


conditions ol' iliis Agreement. A Puny u fleeted by an event of Force Mnjourc


shall promptly give the other 1‘nitie* notice of such event and ill*' of the


rMtoraiKjn ol’normal conditions.


22,2 A Party unable by an event i'f force Maicutc to perform any obligation


hereunder shall take all reasonable rrmi-.siires in remove its inability to fulfill the


terms and conditions of this Agreement with a minimum of delay, and the


Parties shall take all reasonable measures k< minimise Ihe wurequcnees of any


event of Force Majeure,


22 A Any period set herein for the completion by a I’aiiv of any act ic\|uir«l or


permitted to be done under (he lerms of this Agreement, slull be extended for a


period of time equal to that during which such Puny wits unable to pet form such


actions us a result ot' Force Majeurc, together with such lime ns may be required


for the resumption of Petroleum Operations.


22 4 Except in the case of:


iij a law of general application which iv i*•! disc.iuiu story .


lbs ar. action taker. in cornequerce of an err cry mo sviyng them a condition of


Force Mifjeurc:


CJNPC may rail claim Force Majeurc in respect of any action or provision of the


Slule or any agency of the State


 ARTICLE 23





1PKM MSI>.T>;RM!NATK)N


r.i.i Subiccl 10 this Article 23 the term of this Agreement ihall be twenty-five <25)


years commencing from the KITeclive Dale.


>*.2 Inlcs.t this Agreement has been earlier terminated, all l ig hts and obligAtioitt ol


the Panici shall cease and this Agreement shall terminate at die end of the term


provided lor in Article 2VI, above,


23.5 Subject to Article 22, Termination of this Agreement -hat' icftull upor the


oecuiier.ee of any ol the following:


(a) the relinquishment or surrender of the entire Contract Area;


(b; the trimiunrion of the Exploration Period including extensions pursuant to


A Hide 3 without notification by Contractor of comncrc’tiiiiy pnrstmri to


Article K in inspect of a Discovery of Petroleum in the Contract Area


provided however Termination shall not occur wtoil* Coo'joewr iias ti e


right to oviiUi.uo a Discovery for apfvnisal or commerce lity aixl or nioposc


a Development Plan puivauni UI Articles R or 14. or once a DcvehiprKtV.


Plan has boon approved, nor when die provisions of Arr»s8l3


through K. 10 are oppkjMc.


if. following a notice that a Drier very I; a Commercial Discovery die


Txplorulion Period erminnica under Article 3 wifcom a Dcvclopmcc* Plan


being approved, proviced however that terminal;mi » all nee » when


the provisions of Articles 8.13 through 8.19 arc applicable, oi


<.lj the failure of Contractor through any cause other than Force Majeure to


commence preparations with respect to Development Opcnitivrs


to Article 8.12.


?i.a Subject to Article 22 and pursuant to procedures described in Article 23.5 below


tlNPC: and/or the State may lerminule this Agreement upon the uiieorreelwl


occurrence of any o: the events (or failures to act listed) below:




Oonlruck" knows or should have known to be false. in a material


parti*ahir; or the release by Conlraclor lo uny print nr electronic media or


to a stock exchange o: a written statement regarding the Petroleum


Operations in Ghana in breach of Article 16.7 in a form which Contractor


knows or Should have known to he l-ilsc in a material particular pmvuld


Unit in the event of intent or. the part of Contractor to cause serious damage


to (iNI't or ihe Stale, a period for remedy ol such liilHB statement shall not


be given:


tW ihe ds>igunwn1 or purported assignment by Contractor of Jus Agreement


contraiy to the provisions of Article 25 hereof;


:»’i i lie insolvency or bankniptcv of Contractor, the entry by Contractor into


any agreements or composition with its creditors, taking advantage of any


law Tor flit; henelii of debtors or Contractor's entry into liquidation, or


receivership, whether compulsory' or voluntary, provided rlia: if Contractor


is more than one Parly, then the insolvency or bankruptcy of one


Contractor Party shall not lead :o a termination of Hie Agreement if the


other Contractor Party will assume .he rights and obligations of the


defaulting Contractor Puny under tills Petroleum Agreement In such a


case. (S\PC shall have the right to acquire a share of the interest of the


defaulting Contractor Party proportionate to the total of GNPC’s Initial


Ihtcicsl and Additional Interest. provided that such proportionate share


shall not be carried or financed by Contractor. CNPC may exercise tins


right by notice to sill Commclnr Punier within thirty (30> days following


insolvency or bankruptcy of the defaulting Contractor Party. GNPC’s


written notice shaf state flic percentage share of the interest of the


defaulting Cunlrueior Party which GM’C proposes to acquire;


id) the intentional extraction lw Contractor of any material of potential


eco:nimiL value odie: than aj authotised under this Agreement, or nnv


applicable law. Where, however, in the course o: Petroleum Operations


conducted in accordance with Intcrwitioiuil Good Oil field I’uctiec, ,


Cont ractor unavoidably extracts any mineni'., Contractor aha 11 Immediately


notify- :kc Minister of Mines and m mender such mineral to the Snap .


(e) lilt lure by Conlrmtnr


(i) to I ul II minimum wo it obligations pumant to Articled » wv


(A) where the Minister ha;, waived the default or iB) where there has


been a Discovery and ilk; Contractor ho* paid the minimum


expenditure amount to GNPC pursuant 10 the final snwixc i*l


Aitidc 4.3(d) «>r ((*) where the requirements of Article-I 8th) lave


been satisfied.


if.i m carry out ar. approved Appraisal Programme undertaken by


Coctraclcr pursuant in Article K. unless Contnekr nol:fi« (INK',


.he Petroleum Commission aaJ the Minister that the Appraisal


Programme should be amended .iixl sahtniLs saic amendment tv the


JMC mvd the Petroleum Commission for approval; or


lie) to ca-ry ljI tire terms of an approved Development Plan


>n Iallure by Contractor to comply with any of iu mat.-ini obligation*


porsuxil to Article 7. l(.t) to (<>) or any odrer material of tire


Conlraclii ciMiuincd ir. this Agreement (let which piypose. and wim


limitation, the Contractor's obligation in Article ^.8 iiuil not be a iraim-t


obligation!:


 failure by Contractor to make an> laymen! of any sum due to GNPC nr the


Slslc pur^ujni ui this Agreement wrthrn thirty <30> day* 'ter receivin'!


nor ice that such Daymen! is due. exec,*: wl»ae liability fe payment of »i*li


sum is disputed in good faith by < ootrnctor in which ease the mc-ler shall,


if agreement in relation to it cannot be reached afcr :hiit) (30) days, be





referred to arbitration nki Article 24 or





ib) failure by Contractor to amply with any decisions reached as a result ol


any arbitration proceeding* conducted pursuant to Article 24 hereof


23 v If GNPC* and/or die State believe an even: or fiiilurw h* Jit as described .n


Article 23.4 above has occurred, u written notice shall he given lo Contutlor


desen sin;; (be even*, yr failure. Contractor shall have thirty |*0j days from


reuei|x of said r.oLcc to commence and pursue remedy of the event or failure


cited in the noiicc. If after said thirty (30) days Coon actor ha* failed U>


commence apensriaie remedial action ONPC and/or the Stale nay tier .ssuc a


written notice of lerminaion to Contnic or which shall become effective ihiry


130) days nom receipt of wid notice by Contractor unl;« Comr do- has


referred ihe mauer hi arbhratkic. In Lre event that Contractor depute* whether


an event specified :n Article 23.3 or ArlK le 23.4 lu* occurred or c*:cc remedied.


Contractor may, any .me up m the effective date of any Duties «r Termination


re rr ihe donate lo areitraiioo punuerti to Article 24 hereof. If so referred.


GNPC and or the Slate may not Icnnmate this Agreement in raped nT such


event oncept in .u.ci loulims arbitrator. award as


provided for in Article 24.


2-vfi In .he event that A(»M Ghana fails to novice either the Initial Performance


liotul or any required Additional Performance Hand :o GNPC pursuant to. -nd at


the time roqitirwl by, Article 4.3(a), this Agreement shall immediately aod


automatic* I ly terminate


-V1 I pon Termination ol Ih.ia Agreement. all rights of Contractor hereunder shall


cease, except for such rights as may ni mcli time have accrued, iiml without,


prejudice lo any obligation or liability Imposed or incurred under this Agreement


prior co I'ermmatkm nnd :o such rights and obligations as the Parries may hiivr


tinder upplunblc law.


:-JJ Upon Tcrminaiion of this Agreement or in the even I of tin assignment of all the


right* of Contractor, all wells «nd n«ociatei1 facilities shall he let! in a si,tie of


good repair in accurdmtce with applicable lawt and Inlonalional Good (HI Field


Practice


 ARTICLE 24





LTA I K>>: AKBITKAIION AiND I.NDKPLNDK >J JAfiJiT





M I'scent hi I lie cases s-pecll'icd in Article 26.3. ;he Parties shall lirxi al'cmp-. lo


rcsoivc any dispute ansmg cut of « in connection with this Agreement,


huzluiirg ;ty dispute rcganling ils validity (a "Dispute") by way o cors illation


and ne.iili./'iin heiween tenio-amtawi/ed personnel.


H1 In Lie c'cnl tlttl no agreement «s readied svitl:.:i thirty (30) _a>* .4 U* date on


svnich a I’crty notifies the ether of the existence of a Dispute |»armin', to


Article-4.1, or such longer period specifically uerred lo by the Panics or


specified elsewhere in this Agreement, such Dispute shall be referred to and


finally resolved by arbitration u*k; the auspices of the hues national Clamber of


Commerce (the ICC ) and adopting the Rules o Arbitration of the


International Chamber of Commerce (the "ICC Rules"), which ICC Rule* atv


deemed incorporated bv reference nto this Article 2*.


21 ? None <»f the Parties to this Agreement shall seek any P re-A ward Attachment


Any step taker in breach of the agreement to refer disputes to arb trat:on ir


accordance wif i tl >* Article anJ-or the seeking of any Pre Award Alluctriicnil


shall In: Jecu.J a .reach of this Agreement by such Party. I:t tl»c c‘..it of a


breach of:): • Article, each non breaching Pam shall, without prejudice :n any





expenses, including reasonable attorneys' tees, that sum rv.n-brcp.enii - Pam


was thereby required lo incur.


'I l Hie tribunal shall consist of throe (.3) aiMinium. The arbitrators shall be


appointed in accordance with the ICC Hales


24 * No arbitrator or Sole Expert hnl have any economic interest or relationship


with any such Party or any such Pony's ul mate pomt company


■* t. The k*I of :hc arbitration oroeccJings shall be in London. England, or at such


other location as .be Parties may agree in wrilirg The pr.Ktwdings shall In:


coubcted in the English language.


: t ? I he award of -he tribunal shall he final and binding upon rise Paries, lhe Paries


undertake to cany our any award without delay arsJ waive their right to nr* fonr.


vl recourse based or. ground; irthci Juo those conimacd a the Lniled Nations


Convention or. the Recognition and Fjiforarnrenl ui Arbitral Awards ul y.;8


two far as suefc waiver can be validly made Judgement upon the award may be


e-itered by any court having juri.«fiction thereof «»r |-a' ing ji-nvlicti.*n over ll»e


relevant Party or its assets.


.*4* The right :o arbitt;itc disputes arising out of this Agreement shall survive the


lermirutinn eftM* Agreement


34.9 l he Parties lo a dispute arsing unfits ibis Agreement, including .h= AwCOUfiting


(wide. may cure:. by muaual written agreement, tc refer a dispute for expat


determination by n sole expert to be appointed by agreement of the Parties who


is a rccoguised speeialisi with respect to ihc subject of the Dispute (a "Solo


F.\port"). In such ease die Parties shall agree on the Icmis of reference for such


proceeding, ihc schedule of prcsar.a;:on of evidence and testimony of w itnesses,


and other procedural matters. The decision of the Sole Hxpen shall bo limit arid


binding upon the Parties. Hie Sole Kxnert shall have ninety (%) days nrtcr


receiving siihriiMon* from the Parties to decide the case, subject to any


extensions mumally agreed to by ihc Parties to Ihc dispute. Upon failure of the


Sole l Xpert to deckle the matter within such time, any Party dial! have Ihc right


to hav.- such Dispute retard! to arbilrution under the fbiugning provisions of


this Article 2*.


2-t in l ad' Party :,>

of'JlC arbitration tribunal nnd the ICC shall be allotted In accordance with (he


decision of the tribunal. I ho coats arid fees of ihc Sole Expert slutll be home


equally by Ihe Panics lo the dispute.


24.11 Each of Hie Suic. ON PC’ and Contractor hereby irrevocably ngiw »h«l to extent


Hint such pnny, has any right ofiinmunity from any legal proceedings whether in


Geneva. Givi mi. England or elsewhere m connection vvitli or arising from tarns


and condition* o tb s Agreement, including immunity from service of process,


immunity from jurisdiction or judgenau or any arbitration tribunal, immunity


from execution of Judgement or tribunal award, such parly hereby expressly and


irrevocably waives any such immunity and agrees not to assert or invoke any


such rights nr claim in any guvll proceedings whether " Cicncva. <1> jtu.


IngUnd or elsewhere. No(wi:I.Mandirg the Ii’crguuvg, the provisions of this


Article dial] not cunatkutc a waiver by the State ami (ATf «' n\ rzhi that


either has under applicable law to clarn sovereign immimhy for kxlf or any of


its assrtv in rwpeel of any effort to confine, enforce o~ execute en> Pre-Award


Attachment


2-.I* In Ihc cut.; of n manor being referred for resolution under this Article 24. the


Parties* oMigchoni hereunder (whether related hi tlw matter referred for


resolution or Mherwi*e) dia l continue to apply, unless die Panto Jc-^rr '-ha; any


*uch obligation shall be suspended until s.iJi mat r has beet resolved


:i :; Ko Party shall be Isold linb.c ro any other for any construct01 »L special, indirect


or punitive damages | iK'luding loss of profit or .i*ss ol prixiuctioii) arising


directly oi jsJuecfy r or in relation or in connection to this Agreement,


regardless of cause or fhuh


 ARINL* 25





ASSHiNMtNf


;S.i Other Juui LansfciS of «r>) wi'cre»l in fflis AKttvmer.i 10 a wholly-owned


Affiliate c»f such ConhacUx Tam's ullmu.ic pwm entity, no mi« ,i in this


A^rmrrtn dnl he a-> rncd by a Coniraclw Tom ducclly «.r indirectly in whnk


«in pfi^- wil-kh* the rrinr wnner cmseni of GNPC’ (winch ctaseot stall n*« he


xwe*onabl> wjihfeM) *»h1 the MhetCT. CAI*(' and'os the Mminttr may


hrpesc such rc«v-i»hlr uwd.uo&s jpoo tbc giwiae of cotter jodrr ihk \r a c


as may be deemed by OKFC «* he Minister appiopnaic »the tircumsiimorv


29 2 Amy assignment of ±ii Agiecmciil shall bad tfv mdgnee x« a Pail) In ihi*


Agreement to al. the umi' and wond.-on- beteof un e*i otherwise agreed ar.it u


a condition ui any asUgnircm Conlnituir shall pnh’tle an onceavcUneral


undertaking by the awlgurr ui oasumc all obligations jsj.iuwJ by Contractor


under this AgfecmeM


25J Where in ccrooquBncc an asagnrreru haMUtde: CooumAnr is more than otic


person.


iij any operatic lt mi kx agreement made -enuMK The persons who constitute


cort-sctiw and avatmp to the Petroleum OpaatK* > hereunder shall ho


cisek-xrd to (,NPC and the Minister and -hul ik.-i * uwoiuutai with the


pro\ usots of this a ^reemenr


(b) an operating ag-vnnrni sluill be esl-bli*k*d by tu JV1( t*> liable rhe


C undue I «*t I'eliolcum Operations 11 wr carter including cash-calls anJ 'J»r


limits of authority;


( take glace without the prior


approval in writing of CKPC which approval did I nut be Utecasunsldy


delayed in WilldwIA and


(ill the duties and iihligiv.lnin of Contractor hereunder shall be joint and several


except those relating to the payment of income tux pursuant to Article I?


which slia.l be the several obligation of each Hitch fie won.


2>.i OMHi's acquisition of un Additional Intcresl under Aiticlc2 cr h Sole Itisk


Interest purawU Ui a it tele shall not he deemed to he tin assignment within the


meaning ol tins An id. 2$


•> v The transfer or disposal by a Contractor Puny (tin "tolling Tarty-) or all or part


of iu Participating Interest, whether directly or InChcctK by usatignment. uxitfct.


consolidation oi sal. o: stuck or other conveyance, ocher thnn with at ui a


wUilly-owned AHilmte of such Conlrach* Purty'i ultimate parent entity, shell


'oc subject m ilie following procedure;


(m Once die Selllitg Party and a imposed transferee have hilly ticgotimni ilir


'iuiI temn and eonditiorm of a tramfw. such tinnl terms and conditions


shall be promptly disclosed in full detail to

frcta the transferor. GNPC >hal have the riche to acquire the Pnrticirairig


bueresl Inn* the transferor cn tl:e same terms and condition* agreed » by


ihe fwposed tiarafefcc if, within thirty (30) Day*. ol IruuMerot'* notice,


GfJPC delivers to the ran?feror a awner- notice that it accepts the agreed


term* 4»d conditions ot'the transfer without reser\ nitons or conditions. If


(INPC (toes oot deliver such counter-notice, U* tra >«fcr to rh: proposed


tranvfenv nay be made, inject to die other p.'uvjnous of tin* Agircn»ent


-rid the law* aad regulations, urxkv icrm* jia! conJit.ons no more


favourable to the transferor than those set forth :n the notice to GNPC and


il*c suite. pro\ klcd that xx transfer 3hsll he crmcluiled w thin or.c huralrcc


and cieht> 1180} Days from Lx dale vf the notice phis such reasonable


addilHMml ,ie mhI as may I* requacd to Ki'ttC requisite uppwnl'


:bl In the evert Ibat the Sell.ng Patty's proposed transfer of pin or ali of its


Partidpaling I:itc.cs; involves consideration other than ca«h or involves


other properties included u» a wider transaction then the I'artxipaUn*


Interest tor part thereof! shall he allocated a reasonable justifiable cash


value by ihc transferor in any notification to GNPC iml tl*r Stare. (iNIH.


.-nay satisfy t.x rcquiicuxnls of this Article 25 5 by agreeing to pay M.ch


cash value in hea ol the consideration payable m the said proposed transfer


In the es eni of any r uputc between the iramlcn*' and (rMHJ as to the -ash


value of any considcmivr paid, GNPC ar»J tie Selling Harry shall meet ut a


mutuwMy convenient time and place to attempt to roavc the dispute and to


agree upon a cash vtiliniuyn, In the event such I'nnics fnil to reach


agrjomcnl within ninety (90) calendar days from ihc d-Hc on which such


roillicatiofi is received by GNPC or lie State liom the Unnifcror.


Article 24 of this Agreement shnll apply


 ARTICLE 26





Misrrt.iANROi:s


21.1 I |;is Agreement ami ihc rc aliimship hdvvccn the Slalc ami (INPC on otic hand


nnc Contractor on the other shall he governed by and construed in accordance


with the laws of the Republic of Ghana in effect from time to time,


26.2 I tie State confirms that il will uccord to each Contractor Patty treatment


consistent with the minimum slumlord of treatment required to be accorded to


foreign investors unde: custom,v> mteii-miooal law.


•t i Without prejudice :o the rights and obligations of the parties under the


Agreement, :n the event that tiller the Effective Date any applicable Law. Rule


Decree, or Regulation of the Republic of Ghana is trade or amended, that makes


further observance of the original terms and conditions of this Agreement


impossible or Ilia: has .1 material advene died on the rights, obligations and


benefits arising from the economic, fiscal and tlmirdal provisions of thi*


Agreement (a "Material Change of La»' rite Pomes stolL if a Party- sc


requeals, meet as soon .is pue»:blc to ikgoiutc possible tr.vdilKaiior,s to Jic


Agreement as provided under Article 26.4 o.kJ 2o,5.


2ti Where a Party considers th’t t Material ( u :; of 1 aw or a ..gmfcaat change


in the circumstances prevailing at tlx time the Agieeux.it was entered into, has


occurred affecting the economic balance of he Agreement, the Party affected


hereby shall notify the other Paries in writing of the chimed change, with u


statement of how the claimed change has affected the relationship between the


Parties,


6 ' Within 11 periisi of three (3) months of receipt of notification under .Article 264.


the othri Parlies llftall indicate in Anting then reaction 10 «i-ch -*otit»culk>n and


shall meet to engage in negotiations «iUi a view to amending. oc rectifying, *Jte


provisions til tbit. Agreemeiu n* they agree i- ncca.-«> 10 restore Ihc relative


economic position of the Puri left at the time of the Agreement


26 6 This Agreement and the right* and obligations specified herein may net be


modified, amended, ulionsl or supplemented except upon he execution and


delivery of a written agreement executed by the Parties \o waiver by any Party


of any 0:' its rights hereunder shall be construed or implied, but shall be binding


on such Ptirly only if made specifically, expressly and in writing.


'r> 1 r.xecpi for payment obligations arising under the Petroleum Income Tax Law.


any Party iailing to pay any amounts payable by it under litis Agreement


f including the provisions ol Annex 2) on the respective dates on winch such


unuuima arc payable by sueh Pony licrrundcr shall be obligated to pay interest


on such, unpaid nmoimuj to the Party to which such amounts are payable The


rate of sueh interest with respect to each day of delay during, the period of such


nonpayment shall be the Default Rate. Sueh interest skill accrue from the


respective dales such .mimuilh ura payable until Ihc amount* .ire duly pakl. He


m


Party :o whom any such amount is payable may give notice of nonpayment :o


die Parly in default and if such amour is nrt peid wilhilt F(Wn * alter


such notice, ihc I’ary 10 which ±e amount is owed may, in addition to if a:


Tnicrcsl retired to above. seek remedies available panuaM lo .Article


* The rights and ubligutiWB ur«irr Jfs Agreement of die Stale ami GKPC on ife


:«oe fun;-, ami Contractor on the other shall be separate nnd proportional and not


joint. I his Agreement dial I nut be construed fi« creating a partnership or joint


venture, nor an association or trust {under any law other than the Petroleum


Law), or as nwhorisiiig any Party to act as agent. servant i*r employee fen any


oilier Party liir any purpose whatsoever except us provided ir. Article HU


t he duties and obligations of each Parly conRtituiing Contractor hereunder shall


be join: and several nnd it is recognised that each such Part)' shall own and be


responsible for its undivided Interest in the rights und obi i gut ions of foninclor


hereunder; provided I owever, that the following, payments shall be the separate


obligation of and shall no made by each Party which constitutes the Contractor;


hi Payments under the Petroleum Income lax Law;


Payment* of royalty taken in cash under the provisions of


Article 10.2(a): and


<.ii) AOS share under the provisions of Article 10.2(b)


?e.in Incunslruing ihi*- Agreement:


la} no COO• 1 B shall be given to the captions of ihe Article*. StttiOM, or


SulKcctions which are inserted for CiMVcaicnce in locating tlx provisions


of this Agreement and not as nn aid in its const ruction.


Sb) the wved -includes" and ib derivative* nK-m "includes. but :» not limited


to ' a;h1 cones|K>ndiiif derivative c\|xecsitxis.


;cj .1 ce- ted term hat its de* *tfd meaning throughout this Agreement one each


annex, and attachment to that Agicctncal. .cgaxdlcss of whether .t appear*


before or nrtcr the place where s defined:


•;d) tile P nrul slull he deemed In x lude I n* Singular, and vice verva;


if, ead1. gender ilialt be denned to Include the other gendent;


(h each annex and aitelantw to this Agreement is a pan of Jus Agreement,


but it i x-e s any conflict ur inconsistency between the man body of this


Agreemer t mid any annex or attachment, d»e provisions of the main body


of this Agreement shall prevail; nnJ


(t) each reference to an Art a c. Section or Subsection refers to on Article.


Section or Suhsectiivi of the* Agm-nmi unles* expressly otherwise


provided.


2<>.\ \ lfcu* Agreemcr coraptiscs the I\t\\ and cmnpWic ...rrccracn: of the Parties hemci


with respect ui ihe subject matter hereof and supersoxs and cancels al. prior


communications. jnderiijiHjmgs mu) agreement* between Jie Parties hereto,


svl ei icr written « oral, txpte? >ol.


2t 12 Contractor ?*a1 at all rime* comply, u**l shall ensure that its agents,


subcontractors and .MTiiiatcs while ui Uliana currying uut activities contemplated


l*> ti i« Agreement and related documents comply, with die laws of Ihe Republic


of Ghana in effect from lime 10 time during the term of this Agreement to the


extent thill the Contractor lias notice of or, with the exercise of rc>i«ontibic


inquiry, would have knowledge of. .inch laws, Nolhir.it ;n this Agreement or any


rclntcd document sha: l require the Contractor or any of iK agents, subcontractors


or Aililiuie# lo violate the laws ofllie Republic of Ghana in effect from litre lo


time, l o the exten: any conflict exists between ihr terms of this Agreement and


tor liiw‘ of the Republic of Ghana in effect from time to time, the Contractor


shall ml be found to be In breach of this Agreement to the extent die ConlnicUn


compile* wiih ihc leans of Laws of the Republic oTGhuiu in effect at such rime.


26.13 This Agreemenl stall not take effect ur.te« and until the dale ©o which (a) tt ':*<


been ratified by the Paflutncnl of Ghana aisl (l» each «l the JOA and the


Shflrehokkii* agreement of tt*? Operator bus been executed by each i*r the


ccicvaiu parties Jierdo (the "DRtIhe l>ate').


•o.u Ih: state cootir n\ ihul the Ghanaian l*uMic I’.xicureinenl Au dues not. as o?the


FI fee live Dale, apply to (/onlracior.


 ARTICLE 27





NO IK F





‘t. Ain- \o:.cc. ApflK3lKC.Rojtcsl‘- *iwrera. Corner. Apprmal !nstn»ak>fv,


l>clcfiauor, Waira or atm dwimu-ucaato rcqurvd cr *> be given


herrerAr *>ull he ia writing and dal! be Jenned Hi lu>c been pccpcrti gi»en


"(•cn *cred Ui peraon re an cuAm^d rrfreieiaavc ol ilir P,m* j» whom


*Kh notice u d .ret led «r wVen actual? received b. v «> Pa.*ij ihn’Lgh


*cpi

,«.!ilrcv. ut i‘ie Party shall spccTy in wiilTig !**)•«' (13) ca>iw ad'antr


rOR TlihSTATt:


MIKIS’ll KIOKhNtKOV


MINISTRY OP ENERGY


PRIVATE MAH RAG


MINIS IKY it'iST OFFICE


ACCRA. GHANA


Telephone: 233 (OfllC 667131 - 3


Tdex: 2430 ENERGY G1I


Ickfix. 233(0)302 66*262








m* c;/h.\a vvi7TOW1 /. nrntoutut co*PoXATto\:


i ill chief i xiirimvK





GHANA NA110NAL PETROTFI M CORPORATION


PE I KOI HUM IIOUSi :


HAimoi.lt HOAD


I’RIVAIE MAIL I3AG


TEMA


GHANA





Telephone: 23V(f))3ov204720


Tdellu 233-) 0)303-202* S4








/'OK COM tLlC Wk:


GNPC r.XPI OR A I ION AMD PRODUCTION COMTA.NY LIMITED


PhlEOLFUM IIOUSi:


IIAKBOLRROAD


I I'M A


GHANA


 Idapbanc: 23.M*»)WV:04?M


Tcktas ?33-<0>3fl3-202854





ACM PFTROLEl M GHANA I.TD


39 RING ROAD


C1NTRAL ACCRA


UJIANA


Telephone: 2V, 302225770. ‘233 2446K2154


Telefax;


With copy lo:


AC.V {GIBRALTAR) UMI’ITD


57/63 LrN'H WA1J ROAD


(iinRALTAR


Telephone. - 350 :00W«WI


Telefax:


Hrnail: in‘r:3jmincxcoine com





IN WTTNHSS WIirRr OF (he parties ltave caused Ihis A moment to he executed by


ilieir














































c$y>


FOR GHANA NATIONAL IM"! KOI.KI M





CORPORATION








M


r\T0 ofciUA








Its.......*±UOjOL..........


I, L i\-I (Lr*. *- W.














FOR CONTRACTOR Witn essed:








C■’\l’(. KXIM.ORATION AND


PRODUCTION COMPANY I.IMITIT)

















Its...................














AG.M (JUANA l'ET'ROLELM L IT)


..............q/i......





By


6-it***: *, •








Its......! P / K4i(Te»'• Ilh......:.7T.-, JiibJj.±.A.ad........


 ANNfcX1





CONI KAC T AREA























co.ntk\«;iahi:a


 ANNEX2





ACTOIlMlXCCUlltK


live purpose of thir Accounting Guide i» U» o«r.»li*h equitable methods as between


the Panic- li»i determining charges iuJ Ctedits applicable lo operations under the


Agreement Principles established by lln- Amounting Guide ihali truly reflect the


Cortrteior'* urnal ciw i


SECTION 1


1.1 ISV.NFHAI. PKOVUtlO.NN


1.1.1 Words und Icnna tippe.i ini. 111 Annex shall have the same meaning


as jji the Agreement and lo Owl end shall he defined in accordance with


Article I of the Agreement.


1.1.2 This Annex may be amended by an unatiinterns decision of the JMC


1.1.3 In the even: of a conflict between the provisions of ihe Accounting


Guide and the provisions of the Agreement, the provisions of Ihc


Agreement shill) prevail


1.2 STATEMENTS REQURJW TO HE St null I IKD BY CONTRACTOR


'..2.1 Within sixty (60) days from ihc Blleelive Date. Contractor sliall propose


to ON PC an outline ol lire chart of hccouiiix, operating records and


rvyuwis to he prepared aai maintamed. which -Tull doerhe ihe has is ol


llsc accounting principles and procedures to be jwU during the term of


the Agreement, and siul! lx consistent With applicable luw as in effect


from time lo iirac and with .accepted accounting principles generally


used in the international pc^o’.curn industry iWm- lime to time..


1.2 2 Widrin ninety (90)

either accept it « request such revisk*» •*' (iNH deems necessary


Failure m notify Contractor of any requeM**.* revisions within a ninety


(90) day nrr>

1.2.3 Within one hundred xiJ eighty 1180) days from il* Effective Hate, the


Partus » *11 either agree on cueh outline or submit any outstanding Issue


for determination by u ‘kile Expert pur-uam to the provisions or Article


24 of the Agreement


1.2 4 Following agreement over the outline Contractor dull prepare and


subtr.il to GNPC K»nral copiea of the char of mvounis rcluuug ui the


accounting. rex ending and reporting lunct.oiu listed in such outline.


Contractor shall Ure* pan it GNPC t«» inspect its memuls and *o review


all procedures which nir to be followed under the AgcciiKail.


Contractor's Allowable Cost f» Kcntcnl ar*l Final Yea: Suteineoc shall


he Miaied by an independent m termuonolly-rccogr i zed auditing


compacy GNPC xlmll he permitted to audit or site of all of lire


Contractor's records that evidence any of the reports issued by the


Contractor under the Agreement in accordance with the procedures ict


forth in Aniele 1R of the Agreement.


1.2 5 Without prejudice to Hie generality of rhe foregoing, Contractor shall


make separate stuleiiienW ruliiiim*. to Petroleum Operations for ouch


Development nnd Production Areu as follows;


(«) C*i«h Call Statement (nee Section S)


i h) I'ruJuction Statement (see Section 6)


(c) Value of Production Statement (see Section 7)


(d) Allowable Cost Statement (see Sectier. R)


ic) Statement of Expenditures and Receipt* {see SccIk*- *))


it) Pinal Tnd-of-Ycar Statement .’see Section 10)


!g) Budget Statement (-.re Section i 1>


(h) Long Range Plan arc Forecast (see Seeon 12)


t 3 LAXOtlAOK, MKASlJKKYTKVr, AND UNITS OF ACCOrNTS


1.3.1 The U S. Dollar being the currency unit roe investments an.1


compensation hereunder shnf therefore he? the uni o' currency ?i al


I >ook keeping and report .rig under the Agreement. When irainaaions tec


an asset or liability a:c in Uliana cedis or currency other than the I '.s


Dollar tlw respective account* shall he kept In such other currency as


well as the I'.S. Dollar,


1.3.2 Measurement requited under tin* Annex shall be in the metric system


and Barrels


1-3.3 'Ihc English language shall be employed.


1 3.4 Where new'ary l“r purposes of clarification. Contractor may also


prepare financial reports ir other languages. nr is of measurement and


currencies.


1.3.5 It is the intent of Ihc Parlies tint I no Party shall experience any gain or


loss at the expense of or to the benefit of the other as a result of


exchange of currency. Where any such gain or loss arises it shall be


charged or credited to Ihc accounts uiulei the Agreement.


I 3.6 The rate of exchange I..: the conversion of currency shall be the rate


actually incurred (which shall be at the prevailing rate at the date of


acquisition). Where actual rates arc not sttown, ihe arithmetic average of


 ’lusino'. on ihe daie ot'such cuncncy conversion skill he .i-*c.


I 3.7 Current AsscU

the date of srttlcrvn of the uccuiinl


1.^,8 To Iran* I ate transactions in Uluuu cedis into Jollm* or '

year end lor revenue iihI expenditure the rates of the ran-aciions «■ r


average monthly rates where rcrtcmr.hle vi" he .i**L


1 3.9 To tninslnli* tnu'.sactiona in Olmiui cedis »*o del lais or >xc vj» -l ilr











SECTION 2


2.1 CL ASSIIlC’Al IO>' AND AIIOIMI.M OF COSTS A\*D


F.XPKNDITUKK


2.1.1 All expenditure relating to Petroleum Operations dial he classified, as





follow*:





(a) Exploration Expoiuliiure;







(cl l*roduction KxpcndirtTV'


Sen ice Ccslv. and





fc) General aid Administrative expenses





-ikI shall he detune and allotted as fccicir bciow prov.ded





2.2 F\PI .OR ATI ON LXrtINDITIRE


2 2.1 Exploration Ixperdiiure dial, consist oi all circct, hulireci jnd allotted





vVfl> TKunal ir. tlie seath tor Petroleum in he Cinitric- Area


inducing but not lir-ited to* «rqvm!ilimson:





(it) aerial geographical, gcocltcmica^ pakvaluleupt«•!. ger*:«.cical.


lopofcrapmeal and *ci.ihk; surveys and rudv* iml iheir


interpretation;





(h» K>relK»le dri.lmg aisd water driUina.


(c) labour, materials and service used in dr.llinp wells with the


objective of finding new Pc.ru cum reservoirs o: Jot tlu purpose


ul appraising oi Petroleum reservoir* alreacy discovcred.


provided such wells are no: com.plelwl as prixl wing well'








« A


 (d) facilities used solely for Exploration Operations, including access


toads, where applicable, and p irrha'al geological nr*:


geoph) 'ical mfonna.ion;


(Cj all service coms allotted to Exploration Operations on tl*c b*M* of


procedures proposed by the roMmclor or ar cqcilab’e kith; .*.-*1


(D all General and Administrative Expenses allotted to Expktrutiuii





Operations based on the percentage "hare of projected hudgei


expenditure which will be adjusted to actual expenditure r the


end of each year


2.2.2 Exploration cost shall te tied to resultant commercial discoveries.


Where explonilion activity is undertaken alter a commercial discovery


ih.it exploration cost shall he regarded as capital work-in-progress. If


the exploratory activity results in commercial discovery n shall be


regarded as cost of new the discovery and subsequent Held 'Vhere there


is no commercial discovery il skill be charged to the pro ions discovery'


field.





2.3 DEVELOPMGN l tXl’KINUI lUKfc


2 3.1 Development Expenditure shall consist of of. expenditure incurred in


Development Operations, including but rot limited to expenditure on


(ft) drilling well* which lire completed a* producing wells and


drilling welk for purpiYtos of -nxkicmg a Pelrulrun reservoir


a caJy discovered, whether these wel . ore dry or producing;


' way of mstal.atioo


of casing or equipment «ir nlkTwisc after a well has been drilled


far the nurp*» of bringing M.ch well in n use as a producing


ssviU


(c) in.ir .*ible dri'lmg cosl5 tu.h as labour. coosuruble maler r and


services having no salvage value which arc incurred in drilling


and Jecpciuag of wells fo: pioduemg purposes,




treatment units, wellhead equipment, subsurface equipment,


enhanced recovery systems, i»ll shore platforms, Petroleum


storage facilities and access road* lor production activities;


to) engineering iiml design smdlot for field taeilities;


(0 all service costs allotted to Development Operations on equitable


basis;;


(g) .11 General and Adminislrtflnr Expenses alio;ted to Deveopireni


Operations eased on the percentage projected buJgel expenditure


 which will bo adjusted u> *iual expenditure as the end of the


yciir.





(h) Capital allowance for development expenses shall be granted


under the following conditions;


(i> Development activity hns been uppmved by the Miuiwer.


(ii> Development activity I ni Iwi completed: hd«J


(iii) l*roduct.on activity k» started after the cmupktlan of the


development activity


: 4 PRODUCTION EXPENDITURE


Production Expenditure shall consist oft but not limited lo all axptiidjtutc


incurred In Petroleum fenerations inclmJirt|£ »ipprO|>riate abandonment charges,


after the Date of Commencement of ConunetX'iwI Production, such ospemlltaro


bein’ other than Exploration Expenditure. Development Ivxjwndhurc, General


ami Administrative Expenses and Serv ice

Administrative Expeme* and Service Cunt' not allotted to Rxptondoil


Operatium or to Development Opciatioitt tl>k" flection 2.2 and - ' '':-H he


allotted to Production Expenditure


2.5 SERVICE COSTS


2 5 1 Service Cwtl« thall consul of but not I* limited lo nil direct arid indir, t


expenditure incuned in support of Petroleum Opcniu^e*. ii v.aduu! lu


conitnretlon or in slut Union of Wurehuuttft. piers, n «r»e veueb.


vehicles. imitoriscd rolling wquipenent. aircraft- fire «eeur v >n


workshops, walei and *cwciwjie Hams, power plants, ftous.nn-


cotiwnuuly nod recreational fncMitics and lumuiae. luuli Und.


equipment used in such erntaruction i*r u»ullatx*c.


Service Com in any Calends Year shall include the total costa ii»i.rred


;n such yea- lo purchase and corMric’ oi inatnll jik:H I'ucililMf as well a*


the annual cents of maintaining uml (ipcaiing aucii faciliiie*.


2.5.2 All Service Costs will be icyi.larlv allotted on an equitable basis In


Exploration Expenditure. Dcvolupirver* hxpcndiuae and Production


l-xpendhure.


: 0 GFNF.RAI. AM> ADMINISTRATIVE EXPFNShS


General uml Administrative Expenses ahall esmwa. of;


7 6.1 All main office, field and general iidtmm.native costs. in the Republic


of Ghana, including bur not limhud lo supervisory, iiuxiunun# anti


employee relations services;


 2.6.2 An overhead charge for the actual coat of services rendered outside the


Republic or GVwinu by Coni met nr and its Affiliates foi managing


1'ctrolcum Operations nncl Ibr a'.all advice .mcl ahsiM.uue, including but


not limited to financial. lentil. accounting »i» «i employee relations


services in the following amounts-


(a) For the Ifeptorotion PI mu: l-.S. Dollars ft 20 million - One


point two live pcrecnl (1.25%) U> >i cup of 1JS$2(MUX)0.00 per


annum.


(b) For Development Phase; U.S. Dollars 0 50 million (Me point


nvo five percent (1.25%) to a cap of USS50O.00ft.OO per annum.


(c) For Production Phase: U S. Dollim ft HI million 1 percent


(1 %) to a rap of USS200.000.00 per annum.


2.6.3 All General and iidvnim strati ve Expenses will be regularly allotted as


specified in subsections 2.2(1). 2M& and 2.4 to Exploration


Expenditure Development Expenditure and Pitnlnelion r.speniliiure.





SIX’ I ION 3


3.1 COSTS, FXPFNSFS. KXIMCMHTl.'ltKS AND CT( EDITS OF


CONTRACTOR


1.1.1 l ’ontractor for the purpose of tliis Agreement dial' charge the fallen mg


allnwahle onstv to the accounts





(a) costs of

(b) lubuur and asancurcd costs:


ic) Uar^poitatioueo^ti:


(dl cKirgo for se-vicev;





(cl nuicf ul ootfc.


t r) renta.s. dories s_id ether ,«svr

(gl insurance and tosses;





(h| legal expenses:


0) turning expend


(j) general and jdmininrath-e expenses;







(l) oil ice l-olu> charge*.







(n) ecological and environmental chorees:





(i«) abandonment cost; mid


ip) such 1'ihcr costs iKCC»i«ry lor the Petroleum «>p«-railor.s








1 2 COM Of ACQl 1KINC SUHPACt RIGHTS ANI» RF.I INOI IM1MLNT


C'cw: of acquiring surface right* shall cotttwt ol all clrrct costs mirihuahlc In


the acquisition, renewal or relinquishment of M.rtacc rights ucqui:ed and


mainlined n force over the Conimoi Aiva.


V I LABOUR AM) ASSOCIATFI) I.AIIOtK COSTS


3.3.1 Lubcmi tud associate.* lnSoi r com shall include hut jk«I be lilRlcd to





la) gross salaries ami wage* mcluduiy be*'»«' of those employees


aeunutee* ol Cwilrrulor and of it'* A filiates om-iged in


Petroleum Operations who are pcnnanmily or temporarily


assigned to Chimo;





0*) C’usls legaiilmu holiday*. vacation. sickness and disubility


pasmenl* applicable to the salaries and wugw uliAiftfiblc order


O):





fcl expenses oc eonh lbutm i* made p-j-*u.-!ii to as^ssment* oi


obligations imposed under he hws of the Rcpjal*; of G*uno


which are upr'icoHe to c«r erf alaiK» b.tJ »ag£* caarjreaHe


under (a):


(d) coal of established plans for cir.ph>yce«' ofc cc.








cnsramarily punteC J> employ*^ and


(«) r.-wn»ble travel an.* per^ina! expert of cmnfayo* «*


secsaaler.* and then t..nd es incljiug thvae trade for tmvrT .«d


relocation «>1 lira (nstsotncL





3.4 TKA.VMMR 1 AT ION COSTS


11. .(vrr.M nut j!kl o±cr -elated c.-4s of trarjps of mpknrr r*


sex .«**• In- of t c Contractor »f u \fIUu.o. equipment. materials and


rxxrvu-s h r u»e w&oJwcl nt I'et** fin Operatim;





33 CHARM s t OK SFRVfCF K





1 5.1 < liaiv.es fur «TKn -lull laetude:


(a) ihe coni'* of tfilril paily contracts which tiro Ihe actual costs of


contracts liir technical mill other wrvicc* entered ink* by


Contractor or it# Affiliate# lor Petroleum i iperatioiu made wilh


third parties other than (he Contractor or A milates of Contractor,


provided dial the price- paid by Conlrmtlur we no higher than the


prevailing tales lor such services in the regional market;


0>) cost of technical and other services of pmonnel assigned by the


Contractor nml Its Atllllutea when performing management,


engineering, geological, geophysical. administrative, legal,


accounting, trcawiy. tax, e nploycc relations, computer sendees,


purchasing, and all other functions for the direct benefit of


Petroleum Operations; providod thnl charges lur such services


shall be at aclunl tost;


(c) cost of general services, including, hut nut without limitation,


professional consultants and others who perform services fix the


direct benefits ul Pr .rolciim Operations.


3.5.2 Ml Services finished by Contractor nnd its Affiliate* (other 'linn the


Operator) shall he perlbrmed hated on n form of Services Agreement to


be approved by the JM<' and at actual cost, on no gein no loss hauls,


without element y; profit ami with no allocation of fixed costs in the


determination of the service fees, nml nn administration charge of *■»


mure thun 5 per cent (3%) of the service fees


i 6 RENTALS, DITTIES AM) OTHER ASSESSMENTS


All rentals taxes duties, levies. charges, tees, contributions and any other


assessments and dcigcs levied by the

Peir;ileu:i Operations « paid for the bcnctii ol Petroleum Operations, with hr


exception ol ihe income ax specified in the Article 12 ofrtie Agree mem


3 7 INSURANCE AND LOSSES


(a) premium and costs incurred For insurance, provided


that if such inst.-arce ts wholly or partly placed wilh an Alliliate


of Contractor. such premium a:Ki cost* shall he recoverable only


to lire extent not in excess of ■!*•'* generally charged h>


competitive insurance companies other than Affiliaui. eevl


(b) costs and losses incurred as a consequence of events, which arc


ui-ofai u not made good by insurance, allowable irxlr Article


17 of the Agreement.


(c) Costs or expenses necessary lor the repair or replacement of


property rciulth* a cm damage «x incurred.











•M


3.8 LEGAL EXPENSES





AU citHH vuul expenses «f litigation 2:vl legal or related services nccae «ir


expedient lur the procuring. perilling, retaining and ptotcctmg the n^hls


hereunder and in defending «ir prosecuting lawsuits involving the Contract Aren


o- am ihlid party c'a:m arising out «r activities under :hc Agreement, or sums


paid ia res peer of legal services necessary or expedten; lor the protection of the


joint interest of GNl’C and Contracroi. provided lhat where legal services are


rendered in «*.l> maters hy salaried nr regular y retained Inwyen of Contract* >r


or an AfTilintc of Contractor. such compensation will he included instead under


either bcction 3.3 or 3.5. as applicable. The preceding www and expenses shall


nut i •elude curt* of any nature tfr.chding attorney* fee# .mil i ie lees


ICC. arbilmloiN, the Sole Expert. other experts, professional t uml imnnlnlors)


incurred in connection wilh any consultation. arbitration or Sole Expeii pruceai.


under ArticleI of the Agrocmsnl.


3.V TRAINING COSTS


All eosis and bxponHes Incurred by Contractor or the Operator in training o; ius


employees mul nominees of (1NPC to the extent Ihal such training is


attributable to PcirolcJin Operation* under Lie Agreement.


.1.10 CENTRA! \N!> ADMINISTRATIVE EXPENSES


CJcncral and Administrative Expenses shell consist of the costa described in


Subsection 2.<>. 1 and the charge described in Subsection 2*7


3.11 UTILITY COSTS


Any water, electricity, hcatht*. fuel nr other energy and -lility cose used anJ


consumed Ibrihe Petroleum Operations


3 12 OFFICE FACILITY CHARGES


The cost and expense* nfcnnwrudhig, establishing maintaining a *J operating


offices, cam ns. ho.tjir.j; ami any other finalities in Ghana nccoswy to tbc


cendue: of i’cLolcum Operation*. Il«e w* of contracting or othcrwiy


claWidling am* operating facility which may be use! al am time in operations


of more than one field shall be

the facility :s fir* used Cows incurred Iberealwr shall be allocated in a


ira.son.ihlc marine:. consistent with uUc.'Oilicaal account.. y practice, to the


ficidl for wfcich the facility is iu«i.


3.13 rOMMIlNir.ATION CHARGES


The wit* or inquiring, leading. Installing, operating. "Turing and mainmirJn*


eommi:r.icfliioo syslar*. including1. radio and microwave fiieiUlira


1. A KOI <)(.IC \L AND ENVIRONMENT A L CHARGES





All chirks for environmental protection and safety measures Conducted in I tic


Coni met Area n accordance with Article 17 oflhr Agreement


3.15 ABANDONMENT COST


Civit reining 'o the decommissioning and abandonment of operations and


facilities, .site restoration and other associated opinions accrued 'nwn a


reasonable Jute in advance b'C.; on estimate of such cost (v»ilh *.jfc«n;ien


adjUMtrncf' • to

3 16 OTHER COSTS


Any other coils not covered or dealt with in the forego in. provisions which a;c


incurred nnd not mentioned in this Section 3.16 for the necessary and proper


conduct of Petroleum Operations.


3.17 COSTS NOT AI.J.OWAHl.F. IJNDF.R TIIF. AOREMYIFAT


3.17.1 The* following costs shall not be allowable under the Agreement:


(a) commission paid to intermediaries by Contractor;


(b) charitable donations and contributions, eveept where p ir.


approval ha\ been obtained V.m

(c) interest incuicd »>n loons raised by the C.< -ir.ra.tot a.' well a.* any


Other borrowmi>. cost* gr co>i« to «ccurc finance (including


professional and advisory fees nnd expenses):


(d) costs iincludir.’c Juir-1 ji mi -z Inna I c r.uuketitig .;t processing


Petroleum or Ir.u spnrhil**i ol l*etni cum hevood ti c delivery


Point:


(c) Uu costs ol my IIji.a (iuxat.tee uiioet liic Agivcir.cui and ail)


other jrfciin'. *|«ci!t on indemnities with regard to nor -fulfilment


ofrnntr.ietnil ob’ignforst


(I) pnanium puid a* a mult of (INPC* exercising a Sola Rish option


under Article 9 of this Aiaecm. nl.


Cg> wmis of any nature (including utlnrney*' lew arxl the lees of the


ICC. arteatorv the Soic Expen. other experts, profcssioou s ami


translators} uacurrcd ui coooccuon with any consultation,


arbitral .on or Sole I Xpert pmces* under Article 2- of the


Agreement;


(b t fine*, penalties and interest due punuant to any applicable .aw *


regulation and/of imposed by a competent administrative os


judicial body;





101


l:) costs, danegcs and Olhcr iiabiliiics incurved as a result or (1) a


breach of any provision of the Agreement other than a eentracljai


staidaiU ol cu;«. (2) Gross Negligence widi respect to any


contractual »i ji ,!*rd of care set forth in this Agreement, md er


(3) Willlul Misconduct, ir. each case by hie Contractor, the


Operator then respective AfTihulo unii/or '■uKajntraciors, arklof


any other entities or persons for whoa the Contractor bt


responsible under ihe Agreement;


0» (1) income taxes (including any taxes on the nc’. income of


j»e: manenl «»ul>lishmenls ir. Gnaia acd any capital ^ms taxes or


tH«es or *»' .-nincni of interest}, with hotline taxes z^l-or royalty


shaves or ether Petroleum cniiilefneni*, in each case pckl to


audtoritics in Ghana in connection with or related to Uie


A^rcvtiKuL (2) any taxes paid to authorities outside Ghana,


except any foreign value aided taxes or other foxier, xxes paid


w *tli -re-pect *.i> products or serv ices iinpemed :nto Ghana. (3) any


IHXSS subject to reimbursemcnl « refund .uni; |4l am oilier Uixc:


dm slioukJ be deemed con-allowable costs;


(t) coals incurred by ilie (juntracbir under contracts or amendments


there*., that were subject Ui (1) approval by the JMC or GNPC


and were net so approved, or (2) award or approval in aeeordaiKC


with render procedures and were not awarded or approved in


accordance with rt>e applicable tender procedures:


(I) costs dial (i) arc not inclined in accordance -ill. * lludget In


force at the time rite cost was incurred, or (2) exceed by more


than 10% tiny budget line :tent acr forth In the Budget in force al


the time the cost wits incurred. chccjjI lor mists that are incurred


;n accordance with Ihc Agrvcmcnl in response uian emergency:


(nt) coals that are nol iloctmiunind in accordance with applicable Inw


or this Agrcwmcnl; and


(it) any bonus payment* payable by the Contractor to the kittle, tiny


other goverrmufiiii! hotly in Ghana, GNPC or any Affiliates of


GNPC tinier the Agreement.


j. 18 ALLOWABLE AND DEDLCTU»U I TV


The costs and expenses set forth herein shall be for the purpuau of determining


allowable or non-allowable costs and expenses only and shall have no tearing


on Cmiir-iUor's eligibility or otherwise tor deductions in computing


Coninie.iVs net income I rum Petrolviun Operation* for income tax purposes


under the Agreement.














i«*


3 l«> CRI-IM I* UNDER THE ACCRUEMENT





3. \

accounts under ihc Agreement:


(«) the net f*.veeds of any insurance or claim in cu-Mrciinn with


I’erroleuri Operations or am as*c.v charged ui U* accum uix ci


the A^ccriKmLv when each opetauoas os swots were usurxni and


the pmniim itarg.xl to lie accounts under the Afsiccmcr.t;


(h) revenue received from third panics for the use of projiet'.y cw


u»clv charged to t!»e accounts under this Aacement;


lc) any adj'usunen: from the suppliers or manufeaurers or ±cii


agents ir connection with a detective cquipmenl or materia. t:ie


oast of which was previousl> charged to the account under the


Agreement


(d) the [wxwl' received for inventor) materials praviwaily eluded


to the account under Ihe Agreement and subvoju.-ntl> exported


from Uk Republic of Ghana oi u.vwlr*~eil or void to thud panics;


(C) rentals, trfinds i*r other credits received which apply to any


charge which has been trade to Uw account under the Agreement


but excluding &ay award granted under a/hitrntion or Sole Expert


proceeding.


(t) the proceeds front the sa:c or exchange of pia.il or mcili.ie* Iron*


die Development one Product*.*! Area or p arr or fcciifcics the


acquisition cos"5 and the cost of sale:


tgj lln proceeds derived I nun t:K sole ot issue of •-"> uue.lecmai


property the develop n- *• >-• »•* of which were inclined pursuant


to this .Agreement:


thi the proceeds from iiie sale ill .uiy petiole uni infocmalioa derived


from Petroleum Operation* under it u A er cement; and


(ij any General htc Administrative Expenses or Service l x|«onses


th2t benefit any operation or activity other than Pcfcoleum


Operations.


3.20 UI PLICATION OF CHARGES A>U CREDITS


Notwithstanding any provision h* the cooxuy in this Annex, it » the intention


that tbctc stall he no duplication.»!cluiyc» or c.edits ir. the accounts im.lt--- the

















to*


SECTION 4





4 i v alue of materlvl charged to hif. accoi \ts i ndur


TIIK AGREEMENT


Material purchased, leased :* rented by

Opcrdtiixb shiil! be vulued a! hr ccIjjI r cl ual incurred In-' Contractor w .is


Affiliates. I lie ne*. cost shall include mvoxc price less hade and cash


discounts, I any. purchase and procurement fees plus freight and forwarding


charge, between pnim of supply and point of 4iipmeni, freight ft' poll of


destination. insurance, taxes, eustoens dulics. consular lees, '’’.Iwr iieru*


chargeable j.gamsl imported naterraL and any ether icl. od costs aUudlj paid


4 2 VAIJIKOK \U 11 l(IAI.PURCHASED hUOM AN AFFILIATE


4.2.1 Coniacior Uutil notify GfcTC of any goods supplied by an Affiliate of


Coni rack ir. Materials purchased from Affiliate of C ontracter shall be


charged »l he prices specified in Sections 4.2 1,4 2 2 and 4.2 3 below.


4.2.2 New Material (Coodiliua "A") New material shall be c.assifkd as


Condition *A Such material shall he vxli«d *: the [revailing market


price, phis expenses incurred ir procuring such new material*, arid in


moving

4.2.3 Used Material (Condition MB") Used material sull he classified as


* rxMiitinn ’ I!' provided that it is in sound and serviceable condifior and


is suitable for reuse ivHhM recoodiihviu , Such material shall be


valued a: not mote thnn seventy five pen cm (75%) itlilie cur tent price


of new material valued accotdinu to Section 4.2, above.


4 ? 4 Used Material (f tmtliilitn "<*") 1 Ised material which is serviceable for


original function tw good second lutnil ntiileriitl tiller recondilioning and


caiuio: be classified as Condition "131 shall be classified as Condition


"C". Such material shall Ive valued at not more than fifty' percent (50%)


of the current price of new material valued according to Section 4.2.1


above. The cost ol uvn.l l:otr ig .shall be charged l<» die reconditioned


material provided that that the value el such Condition "C materia' phi'


the cost of reconditioning does not exceed the value ol Condition IV'


rraliTi.il.


4 3 < lASSIFIf A7TON OF MATERIALS


Material costs shall be charged to the respective rxpkmilhni Uxporulimrc.


Development Expenditure, Operating Expenditure accounls .u iltc lime Lite


n ulerial is acquired and on the ba»is ol the intended use of the ntalw .'I


Should such material mittwqucnlly lx; used other than as Intended, the relevant


charge will be Transferred to the approprittle account











10?


DISPOSAL OF MATERIALS





Snlc# of property %hnll ho recorded a: tbe noi nrHiuri collected by ihe


Contractor Iruni ibe purchase*.


4.5 WAUHANIY <)l MATERIALS


In Ihe uite ol' delcclivc material or equipment, any adjustment received by


Contractor Irvin ihe supplier* or manufacturers of such mala.a.s or chcii agents


will be credited to ihe account* under the Agreement.


4 0 CONTROLLABLE MATERIALS


4.6.1 I hr Contractor ah/ II directly or via the Operator control the ncquRition,


location, storage und disposition of materials which lire subject io


MCt'ininting record control, physical inventor}' and adjustment for


averages and shortages (hereinafter referred to as Controllable Material).


4.6? I'nlcM additional inventories arc scheduled by the JMC. Contractor


shall conduct one physical inventory of the Controllable Material each


Calendar Year wli.ch Klull be completed prior to the end of the year.


The Contractor shall conduct said inventory on « dale to be approved by


the JMC. Failure on the parr of GNPC io participate in a JMC schedule


or approved physical Inventory shall he regarded ns approval of the


results ol the physical inventory as conducted by Utc Contractor,


4.6 J Tim gain nr low reselling from the physical irveruirv shall V RllcelBl


in the stock records of Controllable -Matera is The Contractor sJw'l


w lpik 4 reconciliation of die inventory writ a reasonable cxplaaa..on


for such gains or losses. Failure on the pert of GNPC to object to


Contractors reconciliation within thirty (3D) day* or* compilat inn of said


rvunei ut'on shall be regarded av approval by GNPC.


SI CTiO\5


5 I CASH CALL STATEMENT


5.1.1 In re*peel id* tiny Cxpl.iTHliun C«'*I' :»> which tiW * conlriN ting iv


liny Development and Produc-lfoc Area ir which GNPC e!«\ i to take a


participating interest and in any ease where Contractor conducts Sole


Kink Operations tor CiM'C’s account, Contractor i..ull ai least fifteen


(I5J dr y a prior to the conracncaneot of wry Month submit a Cash Call


Statement to GNPC Such Cush Cull Statement ahull -ncliKle the


following information:


tal Due Date;


(b) Payment Ins line lions;


let The hula nee prior to the Cash Cull being issued;


iiw


V ......^


-4 i


(dl The cash call ban# issued


(c) Amotinl ol'U.S. Dollars due. and


(I) An estimation of the amount? of U S. Dollars required from


GW lor the following month


5,2 Not Idler than tlx. twwiy fifth day of each Month, Contractor will fjmijh


( ,M*(1 a itatei-’.<■ref cciinc for the previous month:


(a) Payments;


(h) the ratuv of such poyircnts by appropriate cl-csiticaaoiu; arx


(cl I he halnr.ee due to or from GNPC.


5.5 ConUaelix may ia the cate where a large unfercsecn expenditure hecimes


necessary issue ;t specie.I Cash C.:ill S-’tement requiring GNPC to meet sxch


C'aih < all within ten 110! day* of receipt of sunt Statement.


six noN a


(i ! PRODUCTION STATFMF.NT


6.1.1 Subaequen: to the Daw of Comma *e nent of (ommteeeU Production


from il»c Coot Jit Area, Contractor shall suhmii a monthly Production


Statement to GXPC •rfs.iwir^ the folknvfpg informal iin lor each


Development and Production .Arc., as appopnaic:


(a) the quantity of Crude Oil produced and saved;


^h) the qumuiiy of Nijmr.il Gum produced and saved.


(c) the quantities of Petroleum used for the purpose of conducting


drilling and Production Operations, pumping w field storage and


rr-injeclians;


(d) the quantities of Natural Gas flared;


(e) the size of Petroleum stocks held at the beginning of the Month;


and


tf) the size of Petroleum stocks held at the end of the Month


ft : Ihe Production Stalemenl of each Calendar Month shall be tniliniilted In GM'C


not late; tlian ten (10) days siller the end of sueh month.


SECTION 7





7.1 V \LUE OF FRODLC1 ION b l ATl.MKN 1


During each Quarter (’nmnielor shill prepare a statement providing


caleulal.ons of the value of Crude Oil produced and saved based on the Market


Price established under Article 11 of Ihiv Agiccmcnt, :lte amounts of Crude OH


allocated *o each of the Parties during that Q. tarter, the haver oflhc cargo, sales


basis with respect to Benchmark en«lc oil, he pricing basis, the differential


and any deductions Each Production Statement shall be submitted rn the


Minister and GNPC not later than Unity (JO) days following the determination,


notification and acceptance of the World Market Price in G\PC according U>


Article 11 of this Agreement.


SECTION a


8 I ALLOWABLE COST STATEMENT


H.l.l Contractor shall prepare with respect to each Quarter. an Alkiwuhle Cost


Statement containing the Ibllowing h formation with reaped lu costs


that are allowable t(ruler Section 3.17 of this Accounting Guide:


(til Total Petroleum Costs in previous Quarters, if any;


(hj Petroleum Costs for the Quartet in question;


fcl Total Petroleum Costs «th nf the end of ihc Quarter in question


(subjection 8.1.1 fa) plus subsection 8.1.1(b) above.


fd; Petroleum-Costs for Development Operator*. vKnnccd in the


Quarter in respect i>f(JNPC"s Participating Inters pursuant to


Article 2.8 of Uw Agreement, and


(o) L'oflt>. as specified in (il) above which have been recovered during


ilie Quarter pursimnl lo Article D.2 c of (lie Agreement and the


balance. if any, of such costs urccovered and earned forward for


recovery in a later period


8.1.2 Petroleum Qofi-s lor I xpluruliun. Development nnd Production


Operation* -is detailed above shall be separately identified for each.


Development and Production Area. Petroleum Cost* for Ivuilorulkui


Operations not directly attributable in a sped lie Devolopmenl Aiw shall


be shown separately.


8 ? Hie Allowable Coal Statement of each Quarter shall be submitted ro«.b l'(‘ hi


I*i lor Hum thirty < ?l>) days alter the end of such Quarter.


suction v





9.1 S I AI KM I IN1 Ol 11X1*1 NDITLRES AND RECEIPTS


V 1.1 Sufcicqocat to the Date of C ocjiccncvaical of Couanaiinl Production


ft Air. tlx Contract Area. Contractor shall prepare with respect ic each


Qiurer a Statement of Expendfrures and Receipts Ihe Statement will


dniarguish between E\p'or.un»i Ilxpenliiure and Devutoptneot


Expend ilUK and Ptoductica Expenditure xikI will identify major tsm*


or* expeodhure within these categories Tlx statement will show ihe


following.


(a) actual expenditure's and oxcipis lor ihe (.Xurtei in question',


(hi cumulative expenditare and receipts for ihe budget >cjr in


question;


(<) aieei rortcan or cumulative expenditures at tlx year end¬


ed) variations between budget forecast and latest forecast and


explanation* therefore.


(c) price per barrl of crude oil sol*!: a-vl


ft) price per har.el «r oil equivalent of Cias sold


•). 1.2 Ihe Statement of Expenditures and Receipts of coca Calendar Quincr


shall ho .uhnil’lL'd in (iNI’C not later than thirty (30) days niter 'ho etui


oTsuch Qutii x- lor provisional appmvul hy (JNI’C.


SECTION III


1(1.1 FINAL EMJ-OF-V EAR S I'ATEMENT


The Contractor will prepare a Final l-nd-of-Year Statement. The Statement


will contain information in provided in the Production Stniement Value or


Production Statements. Allowable Cost Statement ami SlutomenM ol


Expenditures ar.d Receipts*. as appropriate. The Final End-ol-ycai Statement of


each CJsleud.il Year shall he lubmiitcd to ti.NI'C within ninety (90I days of Ihe


end of such Calendar Year. Any necessary lubsequent ad ititmonts shall be


rc|K>rtcd promptly to GNPC.








n,i ih:w;et statement





II 1.1 The Coniiucii. xluill prepare an annual budget statement This will


distinguish between Exploration Expenditures, Development


Expenditures and Production Expenditures and will show Uw following:











mi


(a) forccatt Fvjvnditurcs a:>j Receipt for ibe budget vwr under ti e


Agreement;


(b) cumulative l xpendirores and Receipts to Ac end of said Uxlgct


>«•». Jltd


(c) the most important individual ilerra of Exp-oral ion. Dex e upowit


uiaI I’rwJxtio.i hxpend.ojes :o« said budget year.


11.12 The budget may incltxlc a bcdgci lire or lino lor un'orexeen


expend.nucs which, Iwwevct, shall not exceed ten percent (10%) of ihe


total budgetary e\per.diture.


112 The Budget Statement shall be submit led to CN*PT ami JMC with rv'pevi in


each budget year no kss than ninety (90) days before the start of such yvut


except in the ewe of the fust year of the Atrccujcul when ;hr


Statement xivall he tuhminec withm sircy (60) cays of the Effective Date


I! 3 Where Connaetoi foresees that during die bodge: pet oJ expenditure' nxe* in


be nude ir. cm.*** of the ten percent i 1(1%) pursuant to section II.Li Ixreul


contr, vior shall >tbni:l a revision oflhe budget toGNPC.


KFCTION 12


12.1 LONG RANGE 1’LAIS AND FOREC AST


12.1 I Conlniclor shall prep.ir«s iitkI suihmit to (INK* the following








i.i) During Exploration Period, an Exploration Plan lor ext year


commencing at or the I rfeetive Onto which shall contain the


following intimnniinn:


(i) l-.sliir.atcd Exploration Costs showing outlays lot each of


rhe years or the number of years agreed nnd covered by Ihe


Plan;


< nl Details of seismic operations for each such yen,


(iii) Domils of drilling activities planned for each such year;








< iv) Details of inlVasIruciure utilisation nnd requirements.


The Exploration Plan shall he rev-wed on each niutivctsmy of the


niTeclive Date. Cmtlraulor shall prepare auu submit to UNi'C the


first Explornlion Plan for the Initial Exploration Period or two (2)


years within sixty (60) days of ihe Effective Hate mnl thereafter


shall prepare nnd submit to GNPC no Imwi tiu i limy live (45)


days before each, anniversary of the Ellcvlivo Date a revised





y


(b) In rhc even* of a Development P’an being approved, the


Contractor shall prepare a Development Forconsi for each


calendar year of the Development Period, which shah contain the


fn 11 owing: nformatio n:


(i) forecast of capital expenditure portions nl Development


and Production expenditures for each Calendar Year of the


Devclopmcnl Period;


(ii) forecast of operating costs for each Calendar Year;


(iii) forecast of Petroleum production for each Calendar year;


(iv> forecttsl of number and types of personnel employed in the


Peliolcum Operations in the Republic ofObana;


(v) description of proposed Petroleum marketing


arrangements;


(vi) dncriplkin of main technologies employed, and


(vii) description of the working relationship of Contrnetor to


(JNl'C.


The Development forccasl shall be revised at the beginning nl


each Calendar Year commencing ?.s of the second year of the first


Development forecast Contractor shall prepare and subm:: to


CiVFC is firvi Development forecast within o;« hundred and


twenty 1120) days of foe dale when 1'ie li-s Dotlupnert I'lan it


approved by the Minister and Contractor commences .hr


Implementation of such plan and thereafter shall prepare and


submit a revised Development Forecast to GNPC no later than


forty live (45) days before each Calendar Year commencing a< ot


tiar second year of the first Development forecast


2.2 CHAN<;«:S <)l 1*1.A IS AM) FOUKCA.SI


1, is i,-cognised by Contractor and CNPC Unit the details of foe 1‘xploration Plan


and Developntenl forecast may require chaises in die .ight of existing


circumstances and nothing herein contained shnll limit the flexibility to make


Mich ch.-.nges Corsislcnl with the foregoing the s.-.id Plan mid Forecast may be


rev ised annually























Ml


 ANNEXJ





CAM, VLATION











Sd'i (»le AOE calculation using Cola and Medea AOE thresholds








fltmui BOB AQt


A


-A 17.5S irvc>9*


TA 17.s»»


A 22.5«*


/• A 77.«S




- itlaimor ; AOCs arc calculated on a monthly basis but *or case of analysis the samule calculations were





asrd on annual figures





inflitiei aw 1%


lAmojrts-o ntiion oltliSf |





YN' NCf ““ AOE 1 £125% 1 MnUll-Mi | AOE 2 IAr^21o% A0t3 IM-M toil fills* Hums* A0C5 TchlAOF


_ U |“1» 23 mi.K M4 14 Payments





125% 12.5% 175% 15.0% 115% 17.5% 27.5% 125% 325% 1 27 5% 1





• I .isecc :c) :k l!E ”i OX (IKKJ ox ;:kw I ox ■liCX OX OK


% I


4 | ,'tCCC, 1 4!!75) OK 1420751 | ox •>2I2SS ox :43s»s; I ox IS4B25) OX OK


'i :: i?:: *:• ox 1*74?; ox itib: 1 CX •J1250* ox MO


1 4 .55CCC :s‘9>u Dffi EJ3M9| i ox (1413S>: ox :i6K6tf| ox li.3U?l 1 ox 3K





s "C

S 'KOCi asauii 5K C£G *21 cx 051279: ox ;*!>4n;| ox i5,T««5»i ox I OK


7 (BOO ! 779.47) MC 132*11 S| :x 0.1BH ox 4416 35 1 ox 5.125-2' ox OK


1 W 'll


i ?xk 4.' OK ox o.’n??: ox ;i 7740j| ox 15354* OK OK


> 147C0! iusumI ok i:sco:ji cx 023* x ox 47K22* 1 cx :3*i» OK OK


to U»K 3293 1 4574 I3S35£« ox (251471; ox 4t:»n:| ox » 55751. oo: 4574





1 ,: 1 ;t:pc I 970K I 12125 CSJ» cx (122721; ox 51*57 cx JUC4: MO mis ,


U :s:k | 7»0C B55 374 55 (2-255*3! ox OM ;-•*** OK w»





I! MHO 1 me o: EX 555 X ST asisw. ox j 7.S5CM ox ;r>i24tfi ox 17425


14 4JMC *iox s: IS 3SS 75 US1 ox OM V,v*Wl ox | MX


15 275C 15 lit’ 361 <31*4* ox HiTJinC OX ^7.74555) ox S65lJ








'Ct* MC» 41449 Mill | OK ox OK 45241


f











 A\\F\4





CONFIDENT! Al m ACKF.KMFNT








THIS AGREEMENT i* entered inio this ............- day of...................... (the


“MTeetive Date") by and between [ a company organized nr«'


e*fcting irder the law s or [ |()ic-rcirnHcr referred to a? the “ Disclosing Party"),


and................................. a company organized and existing andci tl.e laws i»l


.............................Ihcrairallct rcfcrrcJ to a» the “R«*i*in® Parly ’ >


I i- companies named above may collectively be refcrrcc :t> as the Partlca" or


individually as "Part*


WHEREAS in connection ssvh the F\ «iMc Tmrsar.inTi (as Jeilrtn* heli«v) - - ihr


Receiving Party, the Disek-.ini' Pat v . willing, in accordance with Ihc icnr- .ir«


conditions of this Agreement. u>d.»wio«s certain Contidei.ual lnforuuion (j? c»;;.kc


below) relating to Ihc Q Conlntc'. Arc* ( the “Area*’) shown in I xhih i. A i.> I)


attached hereto; and


VVIII.RI.AS die Petroleum Agreement covering the said Contract .Arc; roqtibE* Hal


Ihc Disclosing Party rcc juc tbc execution ol a ccmfidenti-ditv agreerr.eiu by Recco irg


Party prior to the enclosure of Confidential information in order to govern such


disclosure and that a cony ofall such signed conrUentialiry agreements be provided to


GNPC


NOW TlIF REPORT in consideration for the muf.ul underlnlings of ihc Disclosing


Party and the Kccciv mp Party under this Agreement, the Panics agree as fallows'


1. Definition*


As csed m thi Agreement tt* following words and terms shall have ±c meaning


ascribed lo iScm below;


1.1. .Vf filiated Company" iixaiu any Pence which


a Control* direct!) ot indirectly a Party, or


b. It ('or.'-rollcd directly or mdireclly by such Parts. nr


c I* directly or indirectly Controlled by a Person which directly or indirectly


Controls such a Puny


1.2. Confidential Information" means individually or col.c. wlv


1.2.1. any and all data and information obtained ns a result nf petroleum


operations ill the Area, including without Iiiniluli<>rt vvel iliila anil seismic


information together with all other data and information obtained by or on


behalf of the Disclosing Pam' in connection with the Disclosing Party’s


petroleum operations in the Area, as well as geological mid economic


reports, studies, interpretations and analyses prcpaicd by or on behalf of the


Disclosing Party in connection with its petroleum operations In the Area.


Oinfiileriiiul rnlbrniuiior includes certain prnpnViiiry clntii ntul inlbmniiion


il'iii i in the property of ON PC (hereinafter "C.NPC In to ruin t lon’) m


described in bxiiibit U attached hereto.


Provided Hull, the following shall not constitute Confidential Inloimulior


1.2.2. information that can ic reasonably demonstrated by rhe Receiving Party


us I k; lug ill ready lawfully known to Receiving Puny as of the Kftbctlve


Date;


1.2.3. inlornuiiioii dial is or become*! available ui the public other than through


the net or omission of Receiving Party or of any other Person to whom


Confidential Information is disclosed by the Receiving Pam minimm to


Article 4.2 unless public disclosing was made pursuant to Article 4.1:


1.2.4. information lh.ii is uuijuiitxl ndcpcndenlly nmi n third parly that bus u


right to disseminate such information »\ the lime it is acquired by the


Receiving Party: or


I 2.5. information thftl rim be reasonably dernonstniied hy die Receiving Pr.riy


to Imivc been developed by Receiving Pany ndrpcndcnliy of the


Confidential Information received from Disclosju: Party.


J J. “C owtrol" merca the \WKiship directly oi i idircclly of 50% or more <>rtt*e


voting rights ir. & Perron or *hc ability to direct, directly or indirectly, ihe


nurugenwnt or policies of a l*erson. w better Through the appointment of the


dircunrv die ownership of voting s'uro* or other voting rights, pursuant to


written coutaact or otherwise. “Controls'". "Controlled by rad oibct


derivatives shall be constrocd accordingly.


1.4. Fmlnalioa Material' means information lerivcc :n vheV nr -n pcirl fmm


Confidential Infon notice, ai*J generated by or on behalf o: the Roraving


Party, For purposes o: dus Agreement bval.otion Material may include


without limitation models. technical, financial and economic repot studies.


iincTprvluliors. analyses, estimates of reserve*, and evaluations and miles of


documents or meetings


1.5. GNTC” means Ghana National Pcir.jJ«an Cixpurjiiun. a StaUlocy


Corporation established by Provisional Nsiiotu.1 Defence Coni*. I l aw 64 of


|98 > with its Head Office nt Petroleum Horse Harbexr Rond Tc-nx


16. Perkin" rr.«sms an individual, joint venture, corporation. company. firm,


partnership, limilcd pirlmTship, limited liability company l a*h c.su'e.


govcnBKir agency « any other entity, mvludmji auiiKurpt rated hu«inc%<


associations.


1.7. Petroleum Agreement menu '.I* Petroleum Agreement dated


|_ J between the (iovcrmneor of the Republic of Ghana Ghana


National l’ctrolemrs CrT^w.inon. [] in respect of ix fl Cpobact \r&, ( >IMmuv


Ghana (arid all amendment* and supplenienls tl ere-o).


IS.-Possible Transact loci'* means any pcsiKc bmuicjs -uta.gemenr W:*h ±c


Uisclosing Parl> ur*fct whicli Receiving Party would acqure directly or


iixhicdly all 01 pait of the righto md imenwis owned by Disdes n£ Party


*tvl irt Dfrwlnwng Party Affiliates m one rr more offshore hyducurbon


explication. dmc.oprMO*. or production uwh located - ilhir. the Area


2. Disrlosurc


In uHuarcUon with Ibc Possible Tisnauctioo, I) sclrcine Party is w'lSrg in disclose to


RcuKUk Party certain Ccr.fkk»n.*.l Information. I he Panes agree liu: like


(hcelmnrc by the Disclosing Pany and Ihr irvcijx In die Kccchjng Party of the


Confidential InTaenaidn *4uhe;::otbc terms off-** Agreement


3. ladrrtaUtwg ..f CanfulcaTialrv Restriction on I * and Damages


.t.i In cnrtndera'.cn of ihc dtod»a*ure nrtened to in AUkIc 2 £ht>ve the


RccciviBg Party agrees i.ut tc CctifJcnikd Inforaiazicc end ihr Pc In .lion


Material shall be held a:*J treated strictly in confidence and may not he


disclosed, licensed, traded, pnb’.idurd or otherwise revealed in any manner


tvhnlsnever, without tlw prior written consent of Jw Disckn ng Party extent


as provided in Article 4 below.


3.1 I he Receiving Pnrly shill (and shall procure that any Alliliated Company


shall) ihm use or pcnr.ii iho iimi of die CualidcnUaJ Informal *"i andfor the


EvaliMliiNi Material other tiua for Uk p*.rpo*e of evaluation the Aron and


determining windier to enter »nlo nogudmions In conncc:ion with ilw


Posiiblc Transaction uiih |h* Receiving Parly


3.3 Ihc Receiving Puny -slull ta-xl null provuc llwi any Person ’ha* receives


Confidential Information a»*h»r I valuation Xbtcrinl pursuant io nnJ in


acM.inlance with Article 4 2 hereof shill) keep any Cuniiikadiul Information


it receives urn! utiy copies thereof and nry I'.vuluaiiott Material KU-re and


confidential (ir. a maniiei no lew aeciuc mid confidential than RcceMnx


I‘m1y and such Persons keep Ihcir reipectlve confidential information) and to


(xeveni the Confidential InformiiiliMt and any fc’valuulion Mutenal from


W"E disclosed in hr cadi of this AgraaiiMiiL


3.4 Tin Revolving Party agrees not to diavUne U> anyone. cxcqvt as pmvuled Jot


jy Article a he low the fact thnt the CtinfUcnilal Information Im* ,

available or ihm disrjMkXM or ncgolia.iona ure lalutte place or haw la.en


 place between Disclosing I’arty arc Receiving Tarty or any Party's


Alii limed Cnrtjvmie*.








J3 Il.e obligiiliot* ol liie Receiving Tarty liw confidentiality ami non-i*e .«s vel


lortfi in tf-js Agreoren! shall cwbibcdcc frum rcce.Jl of the Confident nd


Infoi-ntniion by the Receiving Party. Further, the obligation i to disclose


shall nni he nlTeeuxI by hiinkniptey, receivership, u^sigmnenl, ntwchrrew or


sci/uru |iiuuxlures, whe.lier initialed by or against llie Receiving Tarty. Kir


by I k- rejection of any agreement between GNI’C anti Disclosing Parly


and/or Receiving Party, by a trustee of Receiving Party in bankruptcy, or by





ihe Receiving Tarty as a debior-in-pussession or the equivalent ol'uny o the


foregoing.





3.6 Hie Receiving Party agrees In indemnify I'bxelining Part) ngainst direct


damages (including, losses, damages, claims, expenses nmi reiisonafcle


attorney's fees) incurred or suffered as a result of a breach of this Agreement


by Receiving Party or its Affiliated Companies. Such direc*. damages shall


he the side exclusive remedy , and nil other remedies or damages at low or m


equity are waived except such equitable relief as may he grim ice. under


Article 11. In no event skill the Parties he liable 10 each other lor any other


damages, including incidental, consequential, special, or punitive damages,


regardless of negligence or fault.








Permitted Disclosure and Obligation of Receiv ing Pam- for Permitted


Disclosure*


The Revci* >ng P^rty imsy .! wk>

Material wtoour the pror written eraser.-. of the Disclosing Party








4.1 To the extent Hie Confidential Information and/or Evaluation Valeris! i*


required to be discloses tndcr applicable law, order decree, rcgvition or


rule of any povemmenial entity having jurisdiction over the Rccciv mp Tarty,


or any regulatory eriity. securities commie-on or slock exchange or. wmeh


the aecurilo of t»c Receiving Party or any of itx Aftiljtcd Companies are


listed or are to v fated, provided that the Receiving Party shall make all


reasonable efforts to give written notice to the I tisclosing Hatty prior to six h


disclosure (including full details of lira ciiviunstauces of such disclosure); oi





4.2 l<> ilie Ibllowing persons or a need to .now basis ar.d only for -he purpose


described in Article 3.2:








4.2.1 employees, officer* a:nl di rectors of the Receiving Hart) .


 4.2.2 employee*. rffwri and directors of an Affiliated Company of ihc


Reccivirg Pa*1s;








4.2.3 any professional consultant or agent retained by Uk Receiving


Patty or it*. Affiliated I ompany. or


4.2.4 any hank, financial irahutkm r» entity tlrancinj; or propu-u^ to





finance lie Possible Tnioaciion, incljd.ng any pco&esswnal


oonwllani relumed b> «««.h h-nk. financial institution or catty


for the purpose of cvultwiirg ihc fonfltWraial Inihmatinn and-oi


K valuation Material








Prior u- nuking any such disclosure to 1’ciscro ---da A rite to 4 2..» ---ii 4 2 4


above, however the Receiving l*am shall obtain an imdennkim* of


conlidcniktli'.y. in trims ro k-vs itringem than contained in thiv Apt cement,


from each such Person- provided, however, that in the cjnc ol out vide legal


counsel. Use Receiving Party vital, only be icq jucJ to procure thm *uch legal


counsel »» bound by m obligation of confidentiality


4J The Receiving Purl) stall be ruptraihfc to die Disclosing I’any rot any act


oe omission of Ihc entities and Persons described in Article 4.2 Thar would


constitute breach of this Agreement as if the action or omission had been


perprtnited hy ilie Rrcriving I’any and shall immediately notify ihc


Disclosing Puny upon becoming aware 'Jiat ConiidaMul Iui« unti-' I •'


been disclosed in breach of Ibis Agrceinent.








5. Ownership of Confidential Information


5.1 Receiving Parly iK.knowledfc-es Hie Confidential Information. ext lull "g the


Ob PC Information, remains (lie properly <>l the Disc losing Party nnd ihc


Disclosing Party may use such Confidential lnfonmiliwi llir any purpose


without obligation to the Receiving Party.


5.2 Receiving I’aity acknowledges thnl the GKPC Inldrrwiimi is mid remains


li e properly ol C'rM’C and GM'C may use such GKPC Informal ion lor any


purpose wilho-.il obligation lo Ihc Disclosing Party or Receiving Party. In


addition. Receiving Party acknowledges Itai in the event that it acquires,


directly or indirect!)' an interest in the Arcu, lliai il may be required to enter


inu» a data licensing agiucincw with GXPC with respect *•«> the GM’C


lufoimillion .m teens ui be Agreed between GNI'C and the Receiving Party.


5.3 '1 he Receiving Puriy hnl acquire no proprietary interest in or title or right to


the Confidential Information.


6. Return ufl i.iifi.k-mial Information





(».l Duelling Party may demand Ihc return «j. the ConJ\lcni a Inform- ion *i


imv ins upn*i giving written noiiec ic Receiving Pam





6--- Within thirty (30) days ol rcvcip; of Ihc notice referred to in Article 6 I oi


upon CTjmpiciico of (be Receiving Party's review aiuror evaluation oi the


Confidential Intormniior.. t.v Receiving Pam shall retain no copies of Ti e


Confidential Information, bui shall:








6.2.1 Return ail of ilie or.fital Confidential Information to the


Dictating Party;


6.2.2 Destroy or delete or cause to be deserved or deleted all copies





and rcprod.aainns (both written and electronic) or Confsdeala:


I nUn-nation end cny Evaluation Mc.cn-I in iu» poise'

m Ihc posscss.on o: oersons to v.-hoci it was disclosed by the


Receiving Party. Confidential Irtomation or Evaluation


Material Thai is in dectmr.ic limrat (incl.ding all elec-rttiic


hack-up :lk=* - subiccl us An 6.3.1) bhall also he added, anti


6.2.3 Provide a tv.nlten ucT.ifiurtion. signed by an .uithori/c.: .•llicer of


ihc Receiving Parly, that Receiving Party has fully «, npicJ « iih


its obligations under this Clause 6.2.


6.3 The provisions til Article 6 I nnd 6.2 do mil apply lo the following:





6.3.1 Confidential InlomiMlwr. or l.vnUwtk>n Valeria I thal is rclaincd





in ihc computer backup system of Receiving Party or a Person lo


whom it wris disc I used under Article 4.2 ir‘ the Confidential


Inlormation or I .valuation Material will be destroyed in


sicconiar.ce \vi|h The regular ongoing records rclenlion process of


Receiving Pam or such Person and if the Confkleniinl


Information is not used prior to its destruction;


6.3.2 Confidential Information or Evaluation material that must be





rcinined under applicable law or regulation, including by «ock


exchange regulations or by governmental order. «V»-cr.


regulation or rule; anc





6.3.3 oay corpoiatc documents or icpocs of die Receiving Party *»Uk.i


contain dau derived from the Confidential Information or


fVdtu «»n Mahrral which were rn-arricd l*’ its executive Iward


 I or tlic cqu.valcnt thcrcol) a-id are required in accordance with


applicable law or hs document retention policy to be retained.








provided ili.ii nny Confidential Information and'tW tvalualion Materia. Hut


is so returnee shall remain subject lo Ihc lemw of chi* Agreement.


7. Remedies


I he Kcociv ing Puny u idc-statuls and acknowledge* that unj aieacft of the term«ciT


ihiv Agreement may cause the Disclosing Party irreparable harm, and images


may not l«c an adequate remedy, iituI Iharefore agrees truf the Disclosing Pam. an


Affiliated Compnny of Disclosing Party stall have Hw light to apply, c* parte


without the need to peril nny tyjie ot bond or security, to a court of compel eta


jur wlitlior. for specific perform uirce and/or an order restraining mid enjoining tiny


»m l> breach or farther disclosure and for such other relic .is-may he deemed


appropriate Such right .s to bo in tiJJalMin CO die remedies otherwise available ro


tire Disc losing Party. an Affiliated Company of Disclosing Puny n; law nr In


tqmty.


N. term


Hus Agreement shall terminate on the later of five yean from thr F.ll«xiiv*


Ihiie or the ilatc on which disclosure by I Mac Ion mg Patty i* hi longer icslitla by


the terms ofihr Petroleum Agreumcni(*l cur rend) covaiotf the Area.


Representations mui Warrautir*


I' »e Disclosing Parly represents and waraznls ilui n ins Uu ngiil iml nut -ii.r% to


disc'ewe thr Confidential Inlonrution k the Revet* *>p liny However i«c


Unclosing Pan*, n* Affiliated Companies and tWr renocTve principals, I Ik**-.


drive (on a-nl employees make ae rrpreseruuoa or wafi-nlir* e-pet ot implied


as to the quality, ucrumcy and compfecirs' of tx CoofiJcotnl Infonnatko


dUrlnsed haandcr and l ie Receiving Parly cxpresrlv ndcramlccgcs :he i» «mu


r 11k "f me* in the *.qui»il>on, (vocessiue. and faMrrprvintkin ot fredogical m*1


geophysical data the Dbdnorg Party, iu Affiliated (aMNpJOKS aid Him


respective prim-ipis. officcis dirvck«n» _ik! employees ill 'll ti. ve no lir-iiiv


whatsoever with rr^pe.. to Ux use c*t or idiaixc upon the Cor lVlenit.il Information


by l1 iv Receiving Puny or il» ArT.liaaed Comtsirirs «

Receiving Party disclose j ConfiJcrikil In forma uaa uraler ArtiJc 4 2.


10. Assign menl


Ihc i ghi>» and obligations of the Receiving Harry uink* fl w Agreemcnl map r.abe


Assigned in "hole or in part by tlx- Receiving Party without Ihe prior wrtner.


confirni of the Disclosing Party. Any alia 'pie*I assignment by Receiving Party


without the prior wrillen approval of Dwclosing Party shall be void. Without


limifng the prior provisions of ihto Article '.0, this Af cement shall bind tmd inure


to the henrlii of the Parties und their respective suvcmuh mid permitted assigns.


II. Governing I (I Depute Kfu.irn








11.1 Thu Agreement shdll be governed K *nt inn-juried in accjyrdarcc v. v iN-


tows Of I r.v larkJ «1J Wales


11.2 Subject 10 Article 7 or ibis Agreement, ar y dispute arising oul of. relating lo.





oj .n conaevtion with this Aprerireiu, im lu.hr* any question regarding n»


evidence, validity or termnafom. slu.ll be settled under iV Rules of


Arfiiimiion of the laaemaimnal rhamixi of (.ommerce by dim arhi .tutors


uppomird a accordance wHh said wlct ihe pla.c of mb xat:en »UU be


Genes a Switzerland. Thr proceedings shall Nr in the Trjthsh language





IIJ Thr resulting arbitral mvjid skoL be find j»J binding without light of


appeal, and judgment uper such award may v mined b> any court kavu*


jurcufidion thereof. A di'jare shall V deemed to fuse arhen -lai either


Party notifies die other Puny in writing to that cifcct. Receiving Pam


tmdenttnds arai uchnowkcgci ±at any bm.h of the toms of th s


Agreement may cause the Ditclotang Paitv i^cparaMc lain, for wind


damages may dpi be ar. adequate fimK Accordingly. thr arbiiralnr mo


au«U both monetary an.i equitable relief, including iiqumr.ive relief nrvl


specific perfom arLc or ether »uch relief as may I* deemed aprcopi «c 1 he


Disclosing Party ira- apply to any cor pctcnl judicial authorit; lo: interim


or eonsmtitorv relief, a:i applkniion for such measures or an applied' •« lor


the cnlbrcctncnl of such flllllf onM b> the nrbrtrntor h!q!I nni Nr


deemed nn Infringement or waiver of th. Agreement m a;hiu.ue and shall


rwl affect the powers of the iirblirulor Am monetary r---J «*•«*! h> the


arbitrator slull tw payable in U.S dollars Knd> ftw-v waives ary riichc *o


damage* other than ihcwr provided in Article J.fi





11.4 INiless the pulicj cxpiculy agree in \vr(in£ to the contrary. the parties





undertake ns a general principle lo It rep confidential all awards in Hieir


arbitration. together with all materials in tha proceedings created fiv he


nx-ose of Pic aibitraiVm and all other documenm produced by another puny


in tiw proceedings not otherwise Ir, ne pi >l;c domain - save and to Uu


exicil lh.it disclosure may he mpiired of a party by legal dun to protect or


pursue a legal right or ur •r.liarv.w or challenge an award in luma IVIe ’egul


proceeding* before a stale court oi other judicial authority.


1 l.l Any Pmly ih.il now or hcranrtcrhu* u right to dtilm immunity for itself or


any of il* amis hereby waives such immunity and tigrcca not to claim such


immunity, in connecrlnn with this Agreement, including any diNpule


hereunder Mils waiver ins hides imnumhy from (A I let>il pnu <-« ol any


*ort whatsoever. II!) jur»n»lielion or udgment, award. detemiinaiion. order or


decision of any court, arbitrator. tribunal or I .spurt. (C) inconvenient forum,


and iinv effort to confirm enforce, or cxccuk any decision, settlement.





c?





 aware, judgmcct service of process, execution ccdcr. al.aehnKUl (incl Ji"S


pre- adiy-rem attachircnt) or other remedy- that results from cn expert


derenrinaticc. arbiirotior or any judicial or adtnir.Bimiive proceedings


commenced purse am to this Agreement.





12. Von-cKclnsivity


The disclosure of Con (VI cm ini Inform?, i ion lo Receiving Party is non-exclusive,


and Disclosing Par> may disclose the Confident^ Informal ior, iu ulletj ai any


time pursuant to the terms arc conditions of du Pcuo.cum Agreements.





I .Wo Rights in (he Area


Unless Otherwise expressly staled in writing, any priorur future proposals Of offerS


made in the course of the disc issions of he Paries are subject to -I! necessary


management mid government approvals ar.ci may jc withdrawn by cidie* Party for


any reason or lor no reason at any lime. Nothing contained herein s intended lo


confer upon Receiving Party any right whatsoever lo !l«r interest ai Disclosing


Partv in the Area.


*


14. No Waiver


No waiver by cirlirr Party of any one or more breaches c:*this Agreement by lire


other Puny shall open lie or he construed ns a waiver of any nnur: breach or


broaches by the samp or oilier Party whether of like or o di Herein ciia.acttJ.


I'xcept as may be expressly provided w this Aw.wawnl no P • *h ill v •ieemtd


lo have Wfli veil, released or modified any of its rights under this Agrixmeni unless


such Pam- has expressly <11111x1 in writing, that i- dres waive, recuse o* mod :>


such right.


15. Modifications


No amendments, changes or modification; i.i il i Afcfecnrei I all I ; »a.»J c.vcc.'I


if the same are m \* .mi; and signed by ft duly authorized represent*! : ->i each of


the Parries hereto.


16. Severability


Jf any term of this Agreement u held by .« court of competent jurisdiction to be


ill. i Mrceab^, then this Agreement, including nil of the remaining


terms, will remain in full fan andafftet as If such invalid Of uncnfotvunblc tenii


hod never ticcr in eluded





17. interpret a ton





I'M Hendries. lire tcph.ul headings t*cd u this Aureci ten; axe loi ceovcnkacc


sic > a:id snail «*t be construed as havu* any subs: ilwc sign tkance or as


II du itiug I I all rtf I Ik- provisions of this Agreement relating to ary topic


arc to be found in iirv particular Article


us





 17.2 Singuhr and Plural. Reference 1o tl»e singular includes a reference to the


plural andMccxersa


17.3 Inc.udc lhc *vt*Js -include' and “incljiu^T have an inclusive menmng.





are used in an UjsrraiHc so** and not h limiting sense: and arc not intended


in limir t ie generality o: the description preceding or following such xniL





l#.Couuterpan Eaecutiun








Th» Agreement may he execircd in counterparts and each counterpart shall be


deemed ar. original Agrcemcnl lew all purposes; provided thil neither Parly shall


he !>ound 10 this .Agreement unlit both parties have executed a counterpart. Fin


purposes ;*r assembling the couTrzpuls ink. one document Disclosing Party ii


anfoori/ed to detach the signature page from one counterpart and, a Per signature


thereof by Receiving Party, anaefa each signed signalize page ui a counterpart.


19. Entirely


This Agreement .urnprises the lull and compile Bgimacnl of Jo: Parties hereto


with respect to dvr disclosure ol the Confidential Information and xupcixedes and


cancels all prior cirmmujucBl.ons understanding* and agreements among the


I'm tie' with respect to disclosure of the Confidential Information to the Receiving


Parly by the DiHoliwIng Party, whethor mitten or oral. expos or nnpl.ee


20. No Third Pttrly Renellcjuries





20.1 I his Agreement is made for Ihe benefit of tlx: Punic,, any AiF.luiicd


Company of the Disclosing Party arid their respective socc®»»r« -»:d


pemiir.eil Oftnigns.








2U.2 it is the inltrnlioti of The Parries that:


laj any person who is an Affiliated Company ;*r:he Disclosing Party, ami


lb) GNl’C? in respect of any CiNPC Infonr.iiion.


las a rift* uodci il*c I K- C.ontract (K.ghts of Third Punks) Ac* 1999 to


enforce or cn;oy the berr": <»r any icr:n of this Agrccntcnl. Except as


aforesaid, a person who :s tksi j puny k> tins Agreement has no r ghi under


such Act to enforce or enjoy the benefit of any icnr. of this Agrconcra.


20.3 S’obvithsla-vFng .ir> provisions c*f this Agreement, the Panel » this





Agreement do rot require tl« consent of any third party v> vary this


Agreement at any use pn«vided iliac foe consent of GNPC will he required


t. r any variation which relates to tiry pmvisum as ii applies to GNPC


In fturrut ion.


IN WITNLSS WHVItKOI- iHc duly aathorizcd ivpuseutatives >*f ihc Panics have


cnuied ibis A^ccmeni to be executed on tbr date first written above.





DISCLOSING I* A MTV


I_ _I








bignaiure: _


Name: _


Title: _ _





Daiir _ _





HK i rVING PAH I V


r_ _





Sifc’iMiiirc;








rule.


Date”
























































IX*


1. Notices





All notices authorised or rwitiired between the Parties by any of the provisions of


this Agreement shall he in writing, in English and delivered in person or by courier


sere cc or by facsimile which provides written confirmation of complete


transmission, and properly addressed to such Parlies as shown below' Oral


wmnt.iiiiuilioi' mid email do not constitute notice for purposes of this Agreement


one entail addresses and telephone numbers for the Parties arc 'isieii below as a


matter of convenience only. A notice given under any provision of this Agreement


shall he deemed delivered only when received by the Party to whom such notice is


directed, unci the time for such Party to deliver tiny notice in response to such


originating notice shall run from the date the originating notice is received.


"Hcceived” for purposes of Otis Article 21 shall mean actual delivery of the notice


lo the address or facsimile address of the Party specified hereunder. Each Party


shall have the right to change its address at any linn- and/or designate that copies


of all si <‘h notices he directed to another person, by giving w ritten notice thereof to


oil other Paries.














Disclosing Parly Name





Address'








Attention


Facsimile:


Email;


1 ckphoor





Kecehine Party Name





Address-





Attention





Facsimile;


Email:


Telephone:


 POLICY NO: SA’i»0/*iWO'U'BP.i^


























PERFORMANCE BOND




















AGM PETROLEUM GHANA LIMITED























PERIOD: 24,n APRIL, 2014 TO 24,a DECEMBER, 2017





§5 INSURANCE








Standard AJrarv.es Insurance Pic








“your i/i /c/ « rvuiirding tiff ‘


I, U*r.; u«.


.! ijcOi








IT IS IMPORTANT THAT YOU READ THIS DOCUMENT


P Th i Puif;n*Tc:x:c Bond

?*u- A|nii ?014 un» ii if’.il o . it'4 ow' terms on a*m Oocw*--- :«


2017 and ■' it IJ* s.atirthte ar y lc. ih« In.r.a Cxs-ar»»on Pc- tv n- .iff •••1


by h* PiTMiim Agr**m*n*


r Th«ii fin'd l X'-Xcq '*• va.-i *;-^v h u««kI and ♦<£»':* • IMU< ca,*a H*


J-1 «* by lb? Pa «dptl c - PHWt.-l EjcCtor**. on


<>-• « in i-»1 of »>* Soul*. 0*o«b W«-*« tone btocA »ho ven' «» -m--


MJC’ *-** ac;c»«Ja xe *•*' »-.* pm. »mni c th® PotfO «. •« rmn


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