If, at the end of the exploration period Canmex Holdings (Bermuda) II has fulfilled the obligations for that period but needs more time to evaluate or appraise the results of the exploration work performed, it may extend the exploration period by giving written notice to the Government prior to the end of the exploration period. The request should include all the results of the exploration work performed and the evaluation of the appraisal work to be accomplished during the appraisal extension. Canmex Holdings (Bermuda) II can also request for extension of the development period through a written notice to the Government prior to the expiration of the existing period. The extension is subject to new terms and conditions mutually agreed upon by the government and Canmex Holdings (Bermuda) II, and is not binding on either party unless a law is issued approving such an extension according to the constitutional procedures in Puntland.
Resources include petroleum which means liquid crude oil of various densities, asphalt, dry gas, associated gas and all other hydrocarbon substances that may be found in, produced, obtained or saved in the agreement area.
Canmex Holdings (Bermuda) II, a limited liability company organized under the laws of Bermuda and a wholly owned subsidiary of Canmex Minerals Corporation and Range Resources Limited, a company existing uder the laws of Victoria, Australia.
Art. 33.1
Puntland Department of Minerals and Petroleum on behalf of the Government of Puntland.
Art. 1.52
الصفحة 9
مصطلح
The term of the contract includes an exploration period and a development period. The exploration period is divided into a first exploration period of commencing on the effective date (i.e. the date on which the law ratifying the contract is passed), and at Canmex Holdings (Bermuda) II’s sole election, a second exploration period commencing on the day after the end of the first exploration period or any extension thereof. Canmex Holdings (Bermuda) II has the right to elect to enter into the second exploration period by providing written notice to the Government prior to the end of the first exploration period or any extension thereof, provided that Canmex Holdings (Bermuda) II has fulfilled all its obligations under the contract for that exploration period or its extension. Either exploration period may, at Canmex Holdings (Bermuda) II’s election, be extended upon written notice to the Government prior to the end of the applicable exploration period.
The development period commences on the date of the first commercial discovery of oil and continues for a period agreed upon and can be extended upon the written notice prior to the expiration of the development period provided, however, that any such extension is subject to new terms and conditions mutually agreed upon by the Government and Canmex Holdings (Bermuda) II within the specified period, and is not binding on any party unless a law is issued approving such extension according to the constitutional procedures in Puntland.
Art. 3.3
In the course of performing the petroleum operations, Canmex Holdings (Bermuda) II, its contractors and its subcontractors are subject to the laws, decrees, other rules and regulations with respect to environmental protection and safety of the country and conduct its operations in accordance with accepted petroleum industry practices.
Canmex Holdings (Bermuda) II shall pay the Government within the specified time after the effective date and each anniversary thereof during the term of this contract, and any extension thereto, the specified sum of US $, as training bonus for the purpose of training Puntland employees, institutional bonus and social development bonus. Canmex Holdings (Bermuda) II should also pay production bonus at the rate of production specified and shall not include production from any sole risk projects of the government except if Canmex Holdings (Bermuda) II exercises its option to share in such sole risk production, and only from the initial date of sharing. Each production bonus should be paid only once, and only at such time as a specified production level is achieved. All taxes, bonuses and contributions are not recoverable from the cost oil under of this contract.
The Government, Canmex Holdings (Bermuda) II, Range Resources, their contractors and subcontractors are permitted to import from abroad -machinery, equipment, vehicles, materials, supplies, consumables, and mobile properties, exempt from all customs duties and related taxes. Imported goods should be used solely in the carrying out of petroleum operations, under this contract. Foodstuffs and alcoholic beverages may also be imported. The exemption does not apply to imports of materials if comparable materials are manufactured in Puntland and can be purchased locally. They also have the right to export free of customs duties and related taxes any material, equipment andgoods which are imported to Puntland for the purpose of the petroleum operations
under this contract irrespective of whether they were exempt or not from customs duties and related taxes, provided that Canmex Holdings (Bermuda) II and/or Range Resources, notifies the Government of such exportation.
Canmex Holdings (Bermuda) II, Range Resources and the Government and their customers are exempt from any duty, tax, fee or any other financial impost in respect of the export of crude oil, cost oil and its share of production sharing oil. Canmex Holdings (Bermuda) II and Range Resources, their contractors and subcontractors are exempt from the need to obtain import and export permits for equipment, machinery, and any other goods required for their activities, and from paying concession royalties to Puntland corporations or companies.
Every foreign employee of Canmex Holdings (Bermuda) II or its affiliated companies or its contractors and subcontractors are permitted to import from abroad, exempt from customs duties, a reasonable quantity of household goods, personal belongings, and a car to be used only for personal and family use.
Whatever an employee imports may not be sold in the Puntland except and after customs duties and related taxes are properly paid, unless sold to another foreign employee of Canmex Holdings (Bermuda) II.
Canmex Holdings (Bermuda) II, and its contractors and subcontractors are exempt from foreign exchange controls in the Puntland, with respect to their activities under this contract. Canmex Holdings (Bermuda) II and its non Puntland subcontractors should supply all funds necessary for its petroleum operations in Puntland in freely convertible currency from abroad and have the right to buy Puntland currency whenever required, and the conversion should be made at Puntland banks according to the official Puntland rate of exchange at the best rate officially prevailing in the Puntland, which rate shall be at least as favorable as the rate available to any other international petroleum company conducting similar activity in Puntland. Canmex Holdings (Bermuda) II has the right to pay its expatriate employees working in Puntland in foreign currencies outside of Puntland. Such employees are required to bring into Puntland such foreign exchange as required to meet their personal living and other expenses in Puntland.
Canmex Holdings (Bermuda) II on its own behalf and on behalf of Range Resources) should pay a fixed tax of the amount specified, of all of its actual exploration expenditures incurred and paid in conducting its exploration operations. Such payments should be made to the Puntland tax authorities and shall be accompanied by statements authenticated by the Government. The Government should furnish Canmex Holdings (Bermuda) II with official receipts evidencing the payment of such tax.
Expatriate employees of Canmex Holdings (Bermuda) II, its contractors and its subcontractors working in exploration operations are exempt from all personal income taxes and similar taxes in Puntland during exploration operations on all income or reimbursements paid by Canmex Holdings (Bermuda) II, its contractors and subcontractors on all income from any sources outside or inside of Puntland. Expatriate employees of Canmex Holdings (Bermuda) II, its contractors and subcontractors working in development and production operations, on the date of the first conversion to development area and thereafter, are subject to all personal income taxes and similar taxes on all income paid by Canmex Holdings (Bermuda) II, its contractors and its subcontractors on all income from any sources outside or inside of Puntland.
Art. 9.1
الصفحة 31
ضريبة الدخل: معدل
The total taxable income of Canmex Holdings (Bermuda) II and/or Range Resources is calculated as follows:
The total value of all crude oil received by Canmex Holdings (Bermuda) II and/or Range Resources in such tax year, less the costs and expenses of Canmex Holdings (Bermuda) II and/or Range Resources. If the total value of such crude oil received in any tax year by Canmex Holdings (Bermuda) II and Range Resources is equal to zero, then Canmex Holdings (Bermuda) II and Range Resources are not required to pay any income taxes for such tax year. Canmex Holdings (Bermuda) II, Range Resources, their affiliated companies are exempt from all of the taxes and related taxes during Petroleum Operations with the exception of the fixed tax.
Art. 9.1.2
الصفحة 32
الإتاوات
The Government can take royalties from the total crude oil produced and saved from the development area and not used in petroleum operations prior to the deduction of cost oil, a non-recoverable amount of the monthly average daily new production commencing with the first barrel produced and saved from the development area and not used in petroleum operations in the percentages specified.
Canmex Holdings (Bermuda) II should undertake to replace gradually its staff by qualified Puntland nationals in coordination with the Government and in accordance with the approved Puntland plans.
Canmex Holdings (Bermuda) II and its contractors and subcontractors should give preference to local contractors and subcontractors as long as their performance is comparable to international standards and quality, and prices are not higher than the prices of other contractors and subcontractors by more than the percent stated in this contract. Canmex Holdings (Bermuda) II should invite local contractors for bidding when it requests bids for any required services. Preference must be given to locally manufactured materials, equipment, machinery and consumables so long as their quality and time of delivery is comparable to international standards.
Canmex Holdings (Bermuda) II should prepare and carry out specialized training programs for all Puntland employees engaged in operations according to this contract and with respect to applicable aspects of the petroleum industry. Such training programs should be in line with and satisfy the requirements of the Puntland plan.
Canmex Holdings (Bermuda) II commits to undertake a program of exploration work in the contract area, as minimum work as set out in Annex C, during each exploration period. The work program can be amended and changed with the approval of the government and must be fulfilled even if the expenses are in excess of the minimum financial obligations. If Canmex Holdings (Bermuda) II expends less than the minimum amount required, it shall pay an amount equal to the difference of the minimum amount and the amount expended, to the Government. Canmex Holdings (Bermuda) II in consultation with the work program and budget sub committee should prepare a work program and budget for further exploration and development for the for the remainder of the year in which the commercial discovery of oil is made as well as an annual production schedule, work program and budget for further exploration and development for the succeeding financial year. The operating committee shall review these and giver appropriate directions to Canmex Holdings (Bermuda) II. Canmex Holdings (Bermuda) II should consider the changes proposed and make the changes to the proposals. Thereafter the work program and budget is to be presented to the Government for final approval.
In case a dispute arises under this contract between the Government and Canmex Holdings (Bermuda) II, the two parties should use their good faith efforts to settle their differences by mutual agreement. Otherwise, the they should submit their dispute to arbitration. The arbitration will be held in Paris, France, and conducted in english and in accordance with the rules of conciliation and arbitration of the international chamber of commerce. If no provisions are made in these rules, the arbitration tribunal should establish their own procedure. The arbitration can be initiated by either party to the dispute ("First Party") by giving notice to the other party to the dispute ("Second Party"). The first party appoints an arbitrator who is to be identified in the notice. The second party should notify first party in writing within 45 days identifying the arbitrator that has been selected. If the second party does not so appoint its arbitrator, the first party has the right to apply to the court of arbitration of the international chamber of commerce to appoint a second arbitrator. The two arbitrators should within 30 days, select a third arbitrator, failing which the third arbitrator can be appointed by the court of arbitration of the international chamber of commerce at the request of either party. The third arbitrator cannot be a citizen of Puntland or of a country in which Canmex Holdings (Bermuda) II and/or Range Resources is incorporated, and cannot not have any economic interest in the oil business of Puntland or of any party to the dispute.The parties can extend to the arbitration tribunal any information required for the proper determination of the dispute. If the decision or award recognizes that the complaint was justified, provisions for reparations should be made in favor of the complainant. Judgment on the award rendered may be entered in any court having jurisdictionfor a judicial acceptance of the award and an order of enforcement.The provisions of this contract relating to arbitration shall continue in force notwithstanding the termination of this contract. The interpretation and application of the provisions of this contract with respect to the arbitration should be in accordance with Puntland Laws.
The Government reserves the right to assign part or the whole of its rights and obligations in this contract to one or more establishment, corporation, authority, company or any department that belongs to it in Puntland, during the period this contract is in effect, and reserves the right to restore all of its rights and its obligations at any time it desires to do so. The transfer of rights and obligations is binding on Canmex Holdings (Bermuda) II and Range Resources only when the Government has delivered to them the document effecting such transfer.
The Government has the right to cancel this contract under the following circumstances; if Canmex Holdings (Bermuda) II knowingly submits in writing any false statements to the Government, which were of a material nature for the execution of this contract. If Canmex Holdings (Bermuda) II assigns any interest hereunder contrary to the contract. If Canmex Holdings (Bermuda) II is adjudicated bankrupt by a court of competent jurisdiction. If Canmex Holdings (Bermuda) II does not comply with the final decision reached as the result of arbitration proceedings conducted under this contract. If Canmex Holdings (Bermuda) II intentionally extracts any mineral other than petroleum not authorized by this contract or without the authorization of the Government, except such extractions as may be unavoidable as the result of operations conducted hereunder in accordance with accepted petroleum industry practices and which should be notified to the Government as soon as possible. If Canmex Holdings (Bermuda) II commits any material breach of this contract. If Canmex Holdings (Bermuda) II causes, by gross negligence or willful misconduct, material or substantial damage to any oil and gas field or any relevant facilities. In the event of such cancellation, Canmex Holdings (Bermuda) II has the right to remove from the contract area all its personal property.
Canmex Holdings (Bermuda) II and Range Resources and their contractors and sub-contractors should not at any time during the term of this contract or for 2 years thereafter, disclose any information acquired as a result of the petroleum operations under this contract for their benefit or the benefit of any third party. Information includes, but is not limited to, data, designs, methods, formulas, processes, reserves and other technical, financial or trade information. Any third party to whom the disclosure is made has to submit in writing the same confidentiality requirements as Canmex Holdings (Bermuda) II and Range Resources.
Except as provided in this contract, Canmex Holdings (Bermuda) II and Range Resources and their contractors and its subcontractors are subject to all the laws of Puntland including the Puntland contract of work to the extent that it is not inconsistent with this contract and regulations including any regulations for the safety, environment, health, labor and efficient performance of operations carried out pursuant to this contract and for the conservation of the petroleum resources. This contract, its annexes, and any modifications are governed and interpreted according to the laws of the province of British Columbia and the federal laws of Canada applicable therein except the laws which are inconsistent with this contract.
The non-performance or delay in performance of any obligations by the Government and Canmex Holdings (Bermuda) II (on its own behalf and on behalf of Range Resources) other than the obligation to pay any amounts due or giving notices shall be excused if it is caused by force majeure. The period of non-performance or delay, and the period to restore damage done during delay shall be added to the time given in this contract for the performance of obligations.
"Force Majeure" means any order, regulation or direction of the government of a country (i) asserting jurisdiction over, or (ii) which is the jurisdiction of incorporation of, Canmex Holdings (Bermuda) II and/or Range Resources, whether promulgated in the form of law or otherwise, or any act of god, insurrection, terrorism, riot, war, strike (or other labor disturbances), fires, floods or any cause not due to the fault or negligence of the party invoking force majeure, and beyond the reasonable control of the party invoking force majeure.
The Government incurs no responsibility whatsoever to Canmex Holdings (Bermuda) II for any damages or loss due to force majeure. Canmex Holdings (Bermuda) II has the option upon prior written notice to the government to terminate its obligations hereunder without further liability of any kind in case of force majeure, except for those accrued payments under this contract.
This contract and the annexes attached hereto supersede all other previous oral and written communications, representations and agreements between the parties hereto. This contract can be modified only by all the parties to the contract and ratified according with constitutional procedures in Puntland.