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 THIRD AMENDMENT TO


PRODUCTION SHARING CONTRACT


• - - - (AREA A - OFFSHORE NE BIOCO)


This Third Amendment (hereinafter referred to as this “Amendment”) made and


entered into as of the day of > 1994, by and between The Republic of


Equatorial Guinea (hereinafter referred to as the “State”), represented for the purposes of


this Amendment by the Ministry of Mines and Hydrocarbons of The Republic of Equatorial


Guinea (hereinafter referred to as the “Ministry”), and UMC Equatorial Guinea


Corporation, a corporation organized and existing under the laws of the State of Delaware,


U.S.A (hereinafter referred to as “UMC”), represented for the purposes of this Amendment


by Coy H. Squyres, its Executive Vice President - International.


WITNESSETH:


A WHEREAS, the State and United Meridian International Corporation


(“UMIC”) entered into that certain Production Sharing Contract dated the 18th day of


August, 1992 (hereinafter referred to as the “Contract”), but having an Effective Date of


September 10, 1992, covering the area described therein which is referred to as Area A -


Offshore NE Bio co; and


B. WHEREAS, by that, certain Assignment made and entered into the 21st day


of October, 1992, UMIC assigned DuPont E&P No. 2TB. V. (“DuPont”) an undivided


seventy-five percent (75%) of all of the right, title, interest and obligations under the


Contract, and said Assignment was approved by the Ministry on 29 October 1992; and


C. WHEREAS, by that certain Assignment (Area A) made and entered into the


14th day of December, 1992, DuPont assigned an undivided twenty-five percent (25%)


interest in and under the Contract to each of Clyde Charter Company Limited to be


renamed BP Exploration (Equatorial Guinea) Limited (“BP”) and Den norske stats


oljeselskap a.s (“Statoil”) and said Assignment was approved by the Ministry on


23 December 1992; and


D. WHEREAS, by that certain Assignment dated the 25th day of June, 1993,


DuPont assigned to UMIC all of its rights, titles, interests and obligations under the


Contract and the Ministry consented to such assignment on September 9, 1993; and


E. WHEREAS, by letter dated September 16, 1993, UMIC elected to proceed


into the Second Subperiod and has paid the bonus to proceed into the Second Subperiod


in accordance with Section 9.2 of the Contract and has paid the rentals due in accordance


with Section 9.5 of the Contract; and


F. WHEREAS, that certain First Amendment To Production Sharing Contract


was entered into on the 17th day of September, 1993 by and between the State, represented


by the Ministry, and UMIC; and


G. WHEREAS, by that certain Assignment made and entered into the 15th day


of October, 1993, United Meridian International Corporation assigned one hundred percent


(100%) of the right, title and interest under the Contract, as amended, to UMC Equatorial


Guinea Corporation and said Assignment was approved by the Ministry on the 15th day of


October, 1993; and


H. WHEREAS, the State and UMC entered into that certain Second Amendment


To Production Sharing Contract (Area A-Offshore NE Bioco) dated as of the 1st day of


March, 1994; and








I. WHEREAS, by that certain Assignment dated the 28th day of March, 1994,


Clyde Charter Company Limited (to be renamed BP Exploration (Equatorial Guinea)








Limited) assigned to UMIC all of its rights, titles, interests and obligations under the


Contract and the Ministry consented to such assignment on May 10, 1994; and


J. WHEREAS, by that certain Assignment dated the 30th day of March, 1994,


Den norske stats oljeselskap a.s assigned to UMIC all of its rights, titles, interests and


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 obligations under the Contract and the Ministry consented to such assignment on May 10,


1994; and








IC WHEREAS, by that certain Assignment dated the 7th day of April, 1994,


UMIC assigned to UMC all of its rights, titles, interests and obligations under the Contract


and the Ministry consented to such assignment on May 10, 1994; and








L. WHEREAS, the State, represented by the Ministry, and UMC have agreed that


certain amendments to the Contract, as amended, hereinafter set forth should be made for





the benefit of the Parties.


__*


NOW, THEREFORE, in consideration of the premises and the mutual benefits to the


parties hereto, the State and UMC agree as follows:








1. Words or phrases defined in the Contract, as amended, and used in this


Amendment shall have the meanings set forth in the Contract, as amended, unless the


context otherwise provides.








2. Section 4.3 of the Contract, as amended, shall be deleted, and the following


language shall be inserted in the place thereof:








“4.3 In order to carry out the exploration obligations set forth in Sections 4.2(b),


4.2(c), 2.1(c)(i), 2.1(c)(ii) and 2.1(c)(iii), the Contractor shall expend at least


the following amounts:


L


z\ (a) If the Contractor elects to proceed into the Second Subperiod, the


"w- amount of Three Million United States Dollars (US $3,000,000.00) for


/ the exploratory Well the Contractor obligates itself to drill in the


Second Subperiod.











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(b) If the Contractor elects to proceed into the Third Subperiod, the


amount of Three Million United States Dollars (US $3,000,000.00) for


the exploratory Well the Contractor obligates itself to drill during the


Third Subperiod.


(c) If the Contractor extends the Initial Exploration Period pursuant to


Section 2.1 (c)(i), Section 2.1(c)(ii) or Section 2.1(c)(iii), the amount of


Three Million United States Dollars (US $3,000,000.00) for the Well


the Contractor obligates itself to drill during each such extension.


(d) If at the end of any Subperiod of the Initial Exploration Period or the


end of an extension of the Initial Exploration Period under


Section 2.1(c)(i), Section 2.1(c)(ii) or Section 2.l(c)(iii), the Contractor


has performed its work commitments included in the minimum Work


Program as provided in Section 4.2 and the amount expended by the


Contractor is less than the sum specified for such period in this


Section 4.3, the Contractor shall be deemed to have fulfilled its


investment obligations relating to that period. If (i) at the end of any


Subperiod of the Initial Exploration Period, (ii) at the end of any


extension of the Initial Exploration Period, or (iii) upon the date of


termination of this Contract, as the case may be, the Contractor has


not expended a sum of money at least - equal to the minimum


expenditure tor Petroleum Operations required under this Section 4.3


to be expended at the applicable time and has not performed the


minimum Work Program as provided in Section 4.2, or in


J Section 2.1(c) in the case of an extension, Contractor shall pay to the


State a sum of money equal to the unexpended minimum expenditure


for Petroleum Operations which this Contract requires be expended at


that time. Such sum shall be payable to the State within thirty (30)


days after the termination of the applicable period.





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(e) Unless the Parties otherwise agree in writing, each Well to be drilled


by Contractor that is a part of a minimum Work Program under


Section 4.2 shall be drilled to a depth not less than the depth for such


Well set forth in the Work Program and Budget of Petroleum


Operations Costs notwithstanding that the performance of such


minimum Work Program may result in Contractor exceeding the


expenditure amount set forth in Section 4.3 of such minimum Work


Program; Provided, a Well may be drilled to a lesser depth if the


continuation of drilling in accordance with good international


petroleum industry practice is prevented by (i) encountering basement,


(ii) danger due to the^existence of abnormal formation pressure,


(iii) formations the hardness of which prevent the continuation of


drilling or (iv) petroleum formations the drilling of which requires, for


the protection of such formations, the setting of casing which will


prevent the minimum depth from being reached.”


3. Section 6.l(j) of the Contract, as amended, shall.be deleted, and the following


language shall be inserted in the place thereof:


“G) make all reasonable efforts to employ and train citizens of The Republic of


Equatorial Guinea in Petroleum Operations. The Contractor may employ


non-citizens if no Equatorial Guinea citizens can be found with sufficient skill


and technical qualifications to perform a particular task or job. The


Contractor shall make similar requirements of any subcontractor. At intervals


of not more than one (1) Year the Contractor shall submit to the Ministry


reports detailing the personnel employed and their residence when employed.


Commencing with January 1, 1994, the Ministry may require that the


Contractor establish a program to train personnel of the Ministry and citizens


of The Republic of Equatorial Guinea to undertake skilled and technical jobs


in the Petroleum Operations provided that the costs of such required





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 programs shall not exceed Seventy-Five Thousand United States Dollars


(US $75,000.00) annually; Provided, for Calendar Year 1994 only, the sum of


money that is to be expended in accordance with this Section 6.1(j) shall be


increased to One Hundred Thousand United States Dollars (US $100,000.00).


Commencing with Calendar Year 1995 the sum of money to be expended


each Calendar Year in accordance with this Section 6.1(j) shall be Seventy-


Five Thousand United States Dollars (US $75,000.00). In the event the entire


Seventy Five Thousand United States Dollars (US $75,000.00) is not expended


in a Calendar Year, or One Hundred Thousand United States Dollars


(US $100,000.00) for 1994 only, the sum not expended shall be carried


forward to be expended in the following Calendar Year or Calendar Years as


may be agreed with the Ministry. When a Commercial Discovery has been


determined by the Contractor, the sum of money to be expended for training


may be increased by the mutual agreement in writing of the Parties. All costs


and expenses of training citizens of Equatorial Guinea, who are not


employees of one of the parties constituting Contractor, for employment in


the Contractor’s operations, as well as costs and expenses for a program of


training for the Ministry’s personnel, shall be included in Petroleum


Operations Costs.”








4. The following language shall be inserted in the Contract, as amended, as


Section 6.1(s):


“(s) in the event it is necessary to hold a meeting outside Equatorial


Guinea in order to discuss matters relating to this Contract and


one or more representatives of the Ministry or the State or both


are required to attend such meeting, the reasonable costs and


expenses incurred by such representatives who are required to


make such trip shall be paid by the Contractor subject to the


Contractor and the Ministry agreeing in writing to such payment





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 costs incurred by Contractor in accordance with this Section 6. l(s)


shall be included in Petroleum Operations Costs.”





5. Section 13.4 of the Contract, as amended, shall be deleted.


6. The following language shall be inserted after the word “following” in the eighth





line of Paragraph 2 of Section 2 of the Accounting Procedure attached to the Contract, as


amended:








‘ ‘which may be incurred by Contractor, with a third party or with an Affiliate of a party


constituting the Contractor”.








7. The following language shall be inserted after the word ‘ ‘following’ ’ in the third


line of Paragraph 3 of Section 2 of the Accounting Procedure attached to the Contract, as


amended:


“which may be incurred by Contractor, with a third party or with an Affiliate of a party


constituting the Contractor”.








8. The Contractor has agreed with the Ministry to pay on the date of this


Amendment the rentals that are due on or before December 1, 1994 under the Contract, as


L- amended. Upon the execution of this Amendment by all the parties hereto, the Contractor shall


[ ■-----deli-ver-to-the-Ministry a check^n"the~amount^of~One Hundred Sixty-Three Thousand Six


Hundred Eighty-Five United States Dollars (US $163,685.00) which shall pay all the rentals


under the Contract, as amended, to December 31, 1995.


| ’ JeX- 9. In consideration of the premises and of the mutual covenants and agreements


I contained in this Amendment, the State, Ministry and Contractor hereby ratify the Contract, as


amended, and hereby confirm that it is in full force and effect as of the date first above written.








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9. In consideration of the premises and of the mutual covenants and agreements


contained in this Amendment, the State, Ministry and Contractor hereby ratify the Contract,


as amended, and hereby confirm that it is in full force and effect as of the date first above


written.








10. Except as amended by this Amendment and the above described amendments,


the Contract, as amended, shall remain in full force and effect as originally written.








IN WITNESS WHEREOF, the parties hereto have executed this Amendment in four


(4) originals in the English and Spanish languages, as of the day and year first above written.


THE MINISTRY OF MINES AND


HYDROCARBONS OF
































By:








225:2219 / 940620



































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