The company shall cause environmental impact assessment studies to be prepared by persons with special knowledge of environmental conditions similar to those in Seychelles, such persons being acceptable to the government, in accordance with the following arrangements:
(a) An environmental impact assessment, relating to seismic surveys, shall be conducted and submitted by the company as part of the company’s seismic programme;
(b) An environmental impact assessment, relating to exploration drilling, shall be conducted and submitted by the company as part of the company's drilling programme in the agreement area;
(c) An environmental impact assessment, relating to appraisal drilling, shall be conducted and submitted by the company as part of the company’s drilling programme;
(d) An environmental impact assessment, covering field development and production activities, shall be submitted by the company as part of its development plan.
Each assessment shall be carried out in order to determine the prevailing situation relating to the environment, including marine life and bird life, in the agreement area and in the neighboring areas and the effect of the respective petroleum operation on the environment and an environmental impact assessment shall be undertaken at the end of each field production and submitted to the government not later than 6 months following the cessation of petroleum operations for that field in order to determine the effect or effects that petroleum operations have had on the environment.
The environmental impact assessment studies prepared and submitted by the company shall include proposed environmental management plans to minimize environmental damage, and to provide for the effective implementation of environmental duties and obligations of the company and, establish procedures for the monitoring of operations and the effects on the environment.
The environmental management plans prepared by the company shall include measures concerning wildlife and habitat protection, marine resource protection, fuel storage and handling, waste management and disposal, protection of cultural and archaeological sites, selection of drilling sites, blow-out prevention, flaring during completion and testing of gas and oil wells, noise control and, site reclamation and rehabilitation plans.
The company shall ensure that environmental management plans are made available to its employees and to its contractors and that there is adequate and proper awareness of the measures and methods of environmental protection to be used when carrying out petroleum operations; and that any agreements entered into between the company and its contractors relating to the conduct of petroleum operations shall include the terms set out in this agreement and any established measures and methods for the implementation of the company's obligations in relation to the environment under this agreement.
The company shall act in accordance with the relevant provisions of environmental laws and regulations in force from time to time in the Seychelles, including with respect to requirements for the conduct of environmental impact assessment studies and the terms and conditions of any approval or authorisation granted to the company under the relevant environmental laws and regulations. In the absence of such laws and regulations, or when such laws and regulations are inconsistent with best international petroleum industry practice, the company shall act pursuant to the relevant provisions of this contract.
The company shall employ techniques, practices and methods of operation and take other steps as are necessary and adequate in accordance with best international petroleum industry practice, in order to:
(a) protect the environment and the living resources of the sea and prevent pollution;
(b) ensure the protection from contamination of strata containing potable water or treatable water;
(c) provide an effective and safe method for the disposal and discharge of drill cuttings and drilling muds generated during drilling operations;
(d) provide an effective and safe method for the disposal of waste materials generated by the company’s operations;
(e) control the flow of petroleum so as to prevent avoidable waste and escape into the environment; and
(f) ensure adequate compensation for injury to persons or damage to property proved to have been caused by the carrying out of the activities under this agreement by the company.
The company shall, at all times during the term of this agreement, keep physically located in Seychelles full and correct accounts, in a form which is in accordance with the provisions of the Petroleum (Taxation) Act supplemented by the accounting procedure to this agreement.
The accounts shall contain true, complete and accurate entries relating to the company's petroleum operations and shall include detailed information covering production, receipts, credits and expenditures with entries shown separately, for each agreement area and petroleum field.
The government shall have the right from time to time to appoint any independent and qualified auditors to inspect and audit, for the purposes of government revenue and compliance with this agreement, the books, records and accounts of the company with respect to its petroleum operations.
The company shall pay petroleum income tax in respect of its activities under this agreement in accordance with the provisions of the Petroleum (Taxation) Act at the rate of 35%.
The company shall be liable to pay to the government petroleum additional profits tax (PAPT) in each calendar year, in accordance with the Petroleum (Taxation) Act, in respect of each separate petroleum field, determined on the basis of the rate of return that the company has achieved from the effective date with respect to such field as of the end of that calendar year.
Application of FANCP and SANCP to the determination of PAPT:
For the purposes of determining PAPT, the following definitions of FANCP and SANCP shall be applied under this Agreement:
"FANCP" is the first accumulated net cash position of the company in respect of a particular field, and refers to the amounts determined by the formula in paragraph (c) below at the end of a given year; and
"SANCP" is the second accumulated net cash position of the company in respect of a particular Field, and refers to the amounts determined by the formula in paragraph (d) below at the end of a given year.
FANCP in respect of a petroleum field for any calendar year shall be calculated according to the following formula:
FANCP = A1(100% + B1) + NCR
where:
"A1" equals the FANCP at the end of the calendar year preceding the calendar year for which the calculation is being made. If for any calendar year the FANCP is a positive amount, the FANCP at the end of that calendar year shall be deemed to be zero for the purpose of calculating the FANCP for the subsequent calendar year; and
"B1" equals fifteen 15% and corresponds to the First ROR Threshold.
SANCP in respect of any petroleum field for any calendar year shall be calculated according to the following formula:
SANCP = A2(100% + B2) + NCR – PAPT1
where:
"A2" equals the SANCP at the end of the calendar year preceding the calendar year for which the calculation is being made. Where the SANCP is a positive amount in any calendar year, the SANCP at the end of that calendar year shall be deemed to be zero for the purpose of calculating the SANCP for the subsequent calendar year;
"B2" equals [X]% and corresponds to the Second ROR Threshold.
PAPT1 is the amount paid in each year as First PAPT, equal to the value of any PAPT due to the government in that year in relation only to the FANCP.
In the calculation of the FANCP and SANCP for the first calendar year of this agreement, "A1" and "A2" in the formula for FANCP and SANCP shall be respectively deemed to be zero.
Determination of First and Second PAPT payable:
The amounts of PAPT payable to the government in respect of each field in any calendar year, shall be determined as follows:
If the FANCP and SANCP are both negative, the PAPT for the calendar year in question shall be zero.
If the FANCP is positive but the SANCP is negative, the PAPT for the calendar year in question shall be equal to 25% [the First PAPT Rate] of the FANCP for that year.
If the FANCP and SANCP are both positive, PAPT for the calendar year shall be equal to the aggregate of 25% of the FANCP for that year plus [X]% of the SANCP for that year.
القيود المفروضة على المعاملات مع الأطراف التابعة لها
In the case of services rendered to undertake the activities under this agreement by an affiliate of the company, the charges shall be based on actual costs without profits and shall be competitive, as if the arrangements were made on an arm’s length basis with an unrelated entity.
The charges shall be no higher than the most favourable prices charged by the affiliate to third parties for comparable services under similar terms and conditions elsewhere and shall be fair and reasonable in the light of prevailing international oil industry practice and conditions.
Where such services, or a succession of such services, devoted to a single defined task, are expected to cost in excess of two hundred thousand US$ 200,000 the services shall not be provided by an affiliate unless that affiliate has been selected by competitive tender.
The company shall, if requested by the government, specify the amount of the charge which constitutes an allocated proportion of the general material, management, technical and other costs of the affiliate and the amount which is the direct cost of providing the services concerned.
If necessary, certified evidence regarding the basis of prices charged may be obtained from the auditors of the affiliate.
The company shall pay to the Seychelles Revenue Commission in respect of each month during which petroleum is produced under this agreement a royalty as provided in this clause in respect of all petroleum produced and saved in the agreement area in that period.
Natural gas:
The royalty rate for natural gas shall be 5% and other terms concerning royalty under shall apply mutatis mutandis to natural gas, with the exception of the right to take the royalty in kind, which shall not apply to natural gas.
Crude oil:
In respect of crude oil produced and saved from each petroleum field in the agreement area, royalty shall be payable at the rate of 10% of the market value, of such crude oil produced and saved from each field in the relevant month.
In respect of crude oil obtained from each marginal petroleum field in the agreement area, royalty shall be payable at the rate of 5% of the market value of such crude oil produced and saved in the relevant month from each marginal petroleum field.
If for any month the market value of the crude oil produced and saved from each field has not been determined by the time the payment of royalty is due, the market price for the last month for which the price has been determined shall be used in the interim in valuing the quantity of crude oil produced and saved from each field in the month, and any adjustment to the amount of royalty ultimately due for that month shall be made as soon as the market value for the month has been established.
The company shall, to the maximum extent practicable, employ nationals of Seychelles for petroleum-related work in each phase of its petroleum operations.
Subject to the law in force from time to time relating to entry into Seychelles, the company shall be permitted to bring the skilled workers and experts (including their spouses and dependent children) into Seychelles for the purpose of petroleum operations only to the extent that the local supply of manpower with the necessary experience and qualifications may be inadequate.
The company shall, to the greatest extent possible, engage local firms in Seychelles (including companies incorporated in Seychelles) to carry out any works for, or supply materials to, or provide services for, the company but nothing in this clause shall be taken as requiring the company to engage local firms at an uneconomic rate or to engage local firms which are not competitive with non-local firms in terms of costs and standards of workmanship.
The company shall provide to the government, on each calendar year anniversary of the effective date, a report demonstrating the evolution of local content involvement in its petroleum operations and a plan of action to increase the level of local content.
The development plan shall include, amongst other things, a detailed scheme for the protection of the environment, along with an environmental and social impact assessment study and an environmental management plan covering the life of the field.
The company shall use best efforts to train nationals of Seychelles with respect to and in each year of its petroleum operations, concerning petroleum-related work including technical, administrative, executive and management positions.
The company shall implement a programme of on-the-job training for nationals of Seychelles in the company's petroleum operations in Seychelles and at its offices and operations overseas. The company shall provide to the government full details of such training programmes which it runs inhouse. The government and the company shall agree annually in advance on the particular on-the-job training to be conducted by the company.
At the commencement of each contract year of its petroleum operations the company shall make available to the government an annual contribution of US$ 100,000 during the exploration phase and of US$ 200,000 during the development phase for the purposes of:
(a) sending suitable nationals of Seychelles selected by the government on petroleum and energy related courses at universities, colleges or other training institutions;
(b) attending petroleum and energy-related conferences and workshops;
(c) purchasing for the government technical and professional publications, scientific instruments or other equipment required by the government for the purpose of implementing this agreement; and/or
(d) supervising/monitoring of petroleum operations.
The company shall maintain all apparatus, appliances, equipment, physical infrastructure and all wells in the agreement area that are not abandoned under this agreement in good repair and working condition.
The parties to this agreement shall give priority to gas plant projects, LNG plants, transportation pipelines and facilities jointly coordinated with other companies active in Seychelles for their construction, exploitation and/or use of such facilities, providing for appropriate third party access.
The company shall carry out with expedition and due diligence in the agreement area the minimum exploration programme of work specified in any period referred to or identified in part I of the second schedule to this agreement (which states that such commitments are to be agreed between the parties).
In the event of a dispute arising between the parties concerning the interpretation or application of this agreement, the parties to the dispute shall seek to resolve the dispute by consultation and negotiation.
Where a dispute cannot be resolved through consultation and negotiation within a period of 3 months, either party may do one of the following:
(a) where the company is duly incorporated, constituted, set up, or otherwise duly organized under the law of a state party to the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of other States, refer the dispute to the International Centre for Settlement of Investment Disputes (‘ICSID’) for arbitration pursuant to Article 36 of the Convention;
(b) where the company is not duly incorporated, constituted, set up, or otherwise duly organized under the law of a state party to the Convention, refer the dispute to an ad hoc arbitral tribunal in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (1976), subject to the following provisions:
(i) The arbitral tribunal shall consist of 3 arbitrators. Each party shall select an arbitrator, and those 2 arbitrators shall then appoint by mutual agreement a third arbitrator, the chairperson, who shall be a national of a third state. All arbitrators shall be appointed within two months from the date when a party informs the other party of its intention to submit the dispute to arbitration under this paragraph.
(ii) If the necessary appointments are not made within the period specified above, either party to the dispute may, in the absence of any other agreement, request the Secretary-General of the Permanent Court of Arbitration to make the necessary appointments.
(iii) The arbitral award shall be made in accordance with this agreement.
(iv) The arbitral tribunal shall reach its decision by a majority of votes and shall state in the award the basis and reasons for its decision.
(v) The decision of the arbitral tribunal shall be final and binding and the parties to the dispute shall abide by and comply with the terms of its award.
(vi) Each party to the dispute shall bear the cost of its own arbitrator and its representation in the arbitral proceedings. The cost of the chairperson in discharging his or her duties in relation to the arbitration and the remaining costs of the arbitration shall be borne equally by the parties to the dispute. The arbitral tribunal may, however, direct in its decision that a higher proportion of costs shall be borne by one or other of the parties to the dispute, and this award shall be binding on the parties to the dispute.
The company shall be entitled to retain copies of the petroleum operations information solely for its own use and subject to the confidentiality obligations contained in this agreement as set forth below.
The government shall be entitled:
(a) at any time, undertake or commission data collection activities, including the acquisition of seismic and other geological and bathymetric information in the agreement area at any time, provided that such activities do not cause interference with the petroleum operations of the company;
(b) to make use of any petroleum operations information for the purpose of preparing and publishing aggregated returns and general reports on the extent of petroleum operations;
(c) at any time, to make use of appropriate summaries of the petroleum operations information for use in connection with the promotion of unlicensed areas, including significant information on the presence of petroleum encountered in any well in the agreement area;
(d) at any time, to make use of petroleum operations information for the purpose of any arbitration or litigation between the parties;
(e) to release petroleum operations information after 3 years from the date when the petroleum operations information was acquired by the company or upon relinquishing any part of the agreement area to which the petroleum operations information refers, whichever date is the earlier;
(f) to disclose petroleum operations information to its advisers and consultants, and those of the government;
(g) at any time, to make use of topographical survey information, including submarine topography, for any purpose whatever; and
(h) at any time, to make use of information regarding economic minerals other than petroleum.
The company shall have the right to use the petroleum operations information for any legitimate purpose in connection with the company's petroleum operations and to disclose such information, provided an undertaking of confidentiality is obtained from the disclose, to:
(a) outside consultants engaged in connection with the company's operations hereunder;
(b) a bank or financial institution from whom the company may be seeking to obtain financing; or
(c) any third party who has a bona fide interest in acquiring by purchase, exchange or otherwise all or a portion of the company's rights and interest in this agreement.
This agreement is a public document and the government shall have the right to publish and keep publicly available and distribute such information and reports concerning this agreement as may be required by the law of Seychelles, or otherwise consistent with internationally accepted standards and norms concerning transparency in the extractive industries, including the publication of production and financial data relating to revenue, together with information concerning any additional payments made by the company to the government, or other indirect fiscal benefits offered by the company and received by the government in relation to this agreement.