The company shall pay to the government in United States dollars or other acceptable currency after the date of commencement of operations a single payment by way of production bonus on the following rates:
(1) When daily production during the preceding month averages nineteen thousand (19,000) barrels a bonus of United States dollars [X];
(2) When daily production during the preceding month averages thirty-eight thousand (38,000) barrels a bonus of United States dollars [X];
(3) When daily production during the preceding month averages seventy-five thousand (75,000) barrels a bonus of United States dollars [X].
The amount agreed between the parties shall not be a deductible cost for the purpose of calculating the taxable income of the company.
The company shall pay to the government in United States dollars or other acceptable currency during each year as provided starting from the first (1st) anniversary of the effective date of this agreement an annual rent payable in advance in respect of the subject area held from time to time by the company at the following rates:
(1) During the second (2nd) year after the effective date of this agreement at the rate of United States dollars [X] for each square kilometre then held by the company;
(2) During the third (3rd) year after the effective date of this agreement at the rate of United States dollars [X] for each square kilometre then held by the company;
(3) During the fourth (4th) year after the effective date of this agreement at the rate of United States dollars [X] for each square kilometre then held by the company;
(4) During the fifth (5th) year after the effective date of this agreement at the rate of United States dollars [X] for each square kilometre then held by the company;
(5) During the sixth (6th) year after the effective date of this agreement at the rate of United States dollars [X] for each square kilometre then held by the company;
(6) During the seventh (7th) and each subsequent year after the effective date of this agreement at the rate of United States dollars [X] for each square kilometre then held by the company.
If prior to the commencement of any of the foregoing years, the company has drilled at least three (3) wells in the subject area, no further rental shall be due under this agreement.
If, prior to the commencement of the eighth (8th) year (i) the company has not drilled at least three (3) wells in the subject area, or (ii) the date of commencement of operations has not occurred, the annual rental shall continue at the rate of United States dollars [X] for each square kilometre then held by the company.
Foodstuffs, beverages, tobacco products, toilet articles, and clothing, imported by the company and destined for personal use and consumption by its personnel, shall not be exempted from any duty except, as regards clothing and similar goods, where the principal use of such items shall be of a specialised character relevant to the mining operations and which have been approved as such for duty-free importation by the government.
The rate of income tax to be assessed and paid in respect to income derived by the company from operations under this agreement shall be 51% of the taxable income derived.
Restrictions sur les transactions avec les parties liées
Sales to affiliates shall be taken into account at the market value of the products sold. It is the intent of the parties that such sales shall be accounted for at prices at which the sales would have occurred if the buyer and seller had not been affiliated.
The company shall pay to the government a royalty of 12.5% of the wellhead value of the petroleum produced, either in kind or in cash, at the option of the government.
Commencing with the first issue of any voting shares of the Ethiopian company to any person, firm or corporation other than [X] and/or its respective affiliates, and continuing thereafter with respect to all subsequent issues of such shares, twenty-five percent (25%) of each issue of such shares issued or proposed to be issued by the company shall first be offered in Ethiopian dollars to the government and/or its agents for subscription by the government and/or its agents for a period of four (4) months from the date of the offering of such particular issue.
To maximise the regional economic aid and social benefits which the operations can generate, the company will also:
Assist and advise the government in its planning of the infrastructure and regional development which the company may deem useful to the operations and to the existing and future industries and activities in the region of the operations.
The company shall employ Ethiopian Nationals in the various phases of its activities to the maximum extent possible and shall to this end educate, train and give experience to same in the various branches (both technical and administrative) of the petroleum industry, it being understood that the company shall:
(1) Always give priority in employment to Ethiopian Nationals possessing the requisite qualifications;
(2) Give equal treatment, facilities and opportunities to all employees in the same job classification regardless of nationality;
(5) Cooperate in programs of grants to educational institutions in Ethiopia, after the date of commencement of operations;
(b) The company shall furnish free medical care to all its employees and all government officials employed in the operations area as is reasonably adequate and after the date of commencement of operations shall establish, staff and maintain a dispensary, clinic or hospital which shall be reasonably adequate under the circumstances. Provided, however, that whenever the company employs more than 250 employees in any one region, it shall maintain a dispensary or hospital headed by a medical director; and
(c) After the date of commencement of operations, the company shall provide, free of charge, primary and secondary school education for children of all employees residing in or around the subject area, if and when there is no school or a shortage of schools. Rules, regulations and standards established by the Ministry of Education shall be strictly observed.
In the conduct of its activities under this agreement the company and its contractors and subcontractors shall utilise Ethiopian services, materials produced from Ethiopian sources, and products manufactured in Ethiopia to the extent that such services, materials and products are available on competitive terms, delivery, availability of parts and quantity basis.
The company shall employ Ethiopian Nationals in the various phases of its activities to the maximum extent possible and shall to this end educate, train and give experience to same in the various branches (both technical and administrative) of the petroleum industry, it being understood that the company shall:
(1) Always give priority in employment to Ethiopian Nationals possessing the requisite qualifications;
(2) Give equal treatment, facilities and opportunities to all employees in the same job classification regardless of nationality;
(5) Cooperate in programs of grants to educational institutions in Ethiopia, after the date of commencement of operations;
(b) The company shall furnish such free medical care to all its employees and all government officials employed in the operations
area as is reasonably adequate and after the date of commencement of operations shall establish, staff and maintain a dispensary,
clinic or hospital which shall be reasonably adequate under the circumstances. Provided, however, that whenever the company
employs more than 250 employees in any one region, it shall maintain a dispensary or hospital headed by a medical director; and
(c) After the date of commencement of operations, the company shall provide, free of charge, primary and secondary school
education for children of all employees residing in or around the subject area, if and when there is no school or a shortage of
schools. Rules, regulations and standards established by the Ministry of Education shall be strictly observed.
The contract contemplates the construction, operation or maintenance of buildings, installations, plants, machinery, appliances, storage and loading facilities obtaining and furnishing materials, supplies, dams, railways, roads, pipelines, communication facilities and other facilities or services, and ancillary operations carried on either on or off the subject area in building roads, camps and other facilities obtaining, maintaining and transporting employees and their families, contractors and their personnel, services, materials, supplies, equipment,, housing, storage, and transportation, processing, treating, refining and marketing facilities, insurance, accounting and supervision and other things useful in carrying out mining operations.
After the date of commencement of operations the company, if requested by the government, shall effect feasibility studies and, if favourable, construct or cause to be constructed a refinery in Ethiopia, provided that the company need not construct a refinery if the local regional market conditions and prices, supply conditions and prices, cost of labour, equipment and materials, cost and availability of financing or any other factor or matter would not make the refinery operation a profitable and economic refinery operation or investment.
The company shall promptly after the effective date of this agreement and subject to its rights of surrender commence and diligently pursue the conduct of the work program in the subject area referred to in schedule B. The work program and time limits, mutually drawn up by the parties, are attached as schedule B and by reference the same becomes an integral part of this agreement.
If at any time during the continuance of this agreement or thereafter, there shall be any question or dispute with respect to the construction, meaning or effect of this agreement or arising out of this agreement or concerning the rights and obligations under this contract, which cannot be mutually resolved by the parties within sixty (60) days, either party shall have the right to refer the dispute to the International Centre for the Settlement of Investment Disputes by Conciliation and Arbitration. Any of the parties to such dispute may commence conciliation or arbitration proceedings by giving notice to the other party and to the Secretary General, International Centre for the Settlement of Investment Disputes (including in such notice a statement of the question or dispute and of the claim or contention of the person giving notice).
Ethiopian Law shall govern the conciliation and arbitration.
The place of conciliation and arbitration shall be in Addis Ababa (Ethiopia) or such other place as the parties may mutually agree.
This agreement shall be governed by the laws of the Ethiopia, including the Mining Proclamation of 1971 and Regulations issued thereunder, as such laws are set forth in duly adopted and published legislation, and the company shall in all its operations hereunder be entitled to the benefit of such laws; provided that the rights and obligations of the parties specified herein shall not be enlarged, reduced or otherwise modified by any future laws or regulations in force in Ethiopia, unless such future laws are laws or regulations relating to conservation or ecology, or standards of safety and working conditions of a type and kind consistent with those then in force in the mining industry throughout the world.