NOTICE: The text below was created automatically and may contain errors and differences from the contract's original PDF file. Learn more here

AN ACT TO RATIFY THE SECOND AMENDMENT OF PRODUCTION SHARING CONTRACT FOR BLOCK LB 14 BETWEEN THE REPUBLIC OF LIBERIA REPRESENTED BY THE NATIONAL OIL COMPANY OF LIBERIA, ORANTO PETROLEUM, AND CHEVRON LIBERIAD LIMITED



APPROVED SEPTEMBER 3, 2010



PUBLISHED BY AUTHORITY

MINISTRY OF FOREIGN AFFAIRS

MONROVIA, LIBERIA

SEPTEMBER 6, 2010







OFFICE OF THE SECRETARY

The Liberian Senate





CAPITOL BUILDING, CAPITOL HILL, MONROVIA, LIBERIA

WEST AFRICA







FIFTH SESSION OF THE FIFTY-SECOND LEGISLATURE OF THE



REPUBLIC OF LIBERIA





SCHEDULE OF SENATE'S ENROLLED BILL NO.6 ENTITLED





"An Act to Ratify the Second Addendum to Petroleum Sharing Contract for



Block LB 14, between the Republic of Liberia represented by the National Oil



Company of Liberia, Oranto Petroleum Limited and Chevron Liberia D



Limited"













APPROVED THIS ____3rd___ DAY OF ______September _______ A.D. 2010





AT THE HOUR OF ______6:12 P.M._______















____________________________________________________________



THE PRESIDENT OF THE REPUBLIC OF LIBERIA





















ADDENDUM TO PRODUCTION SHARING CONTRACT





FOR BLOCK LB-14





This Addendum to the Production Sharing Contract (hereafter "Addendum to PSC" or "Addendum") for block

LB-14 (which Production Sharing Contract was approved by the National Legilature on and published in

handbills on July 23. 2009 among the Republic of Liberia, the National Oil Company of Liberia and Oranto

Petroleum Limited) (the "PSC" or "Contract") by and among the Republic of Liberia, represented for the

purposes hereof by the National Oil Company of Liberia ("NOCAL" or "Government"), a company

incorporated under the laws of Liberia, Oranto Petroleum Limited a company incorporated under the laws of

the British Virgin Islands ("Oranto"), Chevron Liberia Limited and Chevron Liberia D Limited, (the Chevron

entities collectively may be referred to herein as "Chevron" or the "Chevron Group") all of which Chevron

entities are incorporated in Bermuda. Chevron and Oranto are hereinafter referred to jointly as "the Contractor

Group." NOCAL, Chevron, and Oranto are sometimes collectively referred to herein as the "Parties".





WHEREAS, Oranto, the Chevron Group with the approval of the Government of Liberia through NOCAL have

agreed to the attached Deed of Assignment, which transfers seventy percent (70%) of the Contractor's interest in

the PSC from Oranto to Chevron Liberia D Limited and Chevron Liberia Limited as Operator of the PSC, with

thirty percent (30%) remaining with Oranto for LB-14 PSC.



WHEREAS, Oranto, and the Chevron Group are requesting this Addendum to the PSC and the Government

now wishes to grant this Addendum.



NOW, THEREFORE, in consideration of the premises and mutual agreement set forth herein, the Parties agree

as follows:



1) Chevron agrees to make a one-time payment of US $3,333,333 to the Government within thirty (30)

days of this Addendum to Production Sharing Contract being duly published in handbills in order to



2) Chevron agrees to invest in Chevron denominated corporate social responsibility programs in Liberia a

sum of seven hundred thousand dollars ($700,000) per year for the PSC, to a social development

program mutually agreed and managed with the Government, limited to a maximum of five (5) annual

contributions, provided the Exploration Period for at least one of the PSCs remains in effect. The first

of these five (5) annual contributions will be made available within thirty (30) days of full ratification

of this Addendum to Production Sharing Contract being published in handbills. Subsequent to such

contributions will be made each calendar year on the anniversary date of the first contribution.



3) In exchange for Contractor's agreement to commence a drilling program for one well by the end of the

fourth quarter 2011 on any of blocks LB-11, LB-12 or LB-14, the Government agrees to allow a one

year extension of the First Exploration Period in LB-11 and LB-12.



4) It is agreed and understood that the drilling of a well on any of the blocks LB-11, LB-12 or LB-14 will

satisfy the first well commitment for that block.



5) A new Article 6.12 will be added as follows;



"In connection with the Contractor's minimum financial obligation associated with the election to enter

into each exploration phase, Contractor will provide a parent company guaranty pursuant to the form

attached. For subsequent Exploration periods beyond the current phase, the amount of the obligation in

the guarantee will be adjusted according to the subsequent minimum financial obligation."







1





22/08/2010-Addendum LB-14























6) A new Article 6.13 will be added as follows:



"For any Petroleum Operation conducted hereunder, the Contractor will comply with all applicable laws

and regulation, including any requirement for insurance."



7) Article 17.3(a) of the LB-14 PSC is revised to read as follows: "The income tax rate applicable to

Petroleum Operations carried out under this Contract shall be thirty percent (30%). The Contractor

shall pay its income tax and file income tax returns and pay other taxes and file other tax returns,

directly to the General Tax Revenue Account of the Government of Liberia".



8) A new Article 17.4(e) will be added as follows:



"Within three (3) months after the end of a Fiscal Year, each entity constituting the Contractor shall

submit to the competent tax authorities its annual tax return together with financial statements and if

required by applicable regulations, audited financial statements. The relevant taxing authorities shall

furnish to the Contractor upon receipt of payment, the tax receipts evidencing the payment of

Contractors Liberian Income tax and all other documents certifying that the Contractor has, for the

Fiscal Year in question, complied with its tax obligations with respect to the income tax as defined in

this Article. Such receipts shall be issued by the relevant taxing authorities and shall state the amount

and other particular circumstances, according to Appendix 2 of this Contract.



9) Article 17.16(a), is hereby amended to delete 5% and replace it with zero percent (0%) for dividend

withhold tax.



10) Article 18.7 is amended to the Contract as follows:

"18.7 PAYMENT OF ROYALTY The Government of Liberia hereby agrees to expressly be paid a

royalty rate applicable to the gross production of hydrocarbons, whether liquid or gaseous of five

percent (5%). Article 36 of the Contract will apply with respect to stability of conditions.



11) Article 18.8 of the Contract which waived all of NOCAL's equity participation under sectin 3.3 of the

Petroleum Law is replaced as follows:

"18.8 EQUITY PARTICIPATION OF THE GOVERNMENT



The Government of Liberia, through NOCAL will have the sole option to elect to receive, within

ninety (90) days prior to the start of Commercial Production, a ten percent (10%) transfer of interest

from Oranto such that at the start of Commercial Production the equity shares would be seventy

percent (70%) Chevron: ten percent (10%) NOCAL and twenty percent (20%) Oranto. Where the

Government of Liberia, through NOCAL elects to receive the 10% transfer of interest, this interest

shall be deemed a Contractor interest for all purposes of the PSC, including Article 16, recovery of

Petroleum Costs, Production sharing and the Accounting Procedures. Provided, however, NOCAL will

be responsible for payment of NOCAL income taxes and all income tax return preparation and filing

compliance obligations as required by Law. NOCAL will meet its ten percent (10%) share of all cash

calls for all funding of the PSC projects. If the Government of Liberia, through NOCAL cannot meet

its cash calls within forty-five (45) days notice of funding requirements (directly or indirectly through a

third party or as might be agreed between NOCAL and Chevron), Chevron will provide the fending

provided it is allowed cost recovery of additional Petroleum Costs to match the amount plus a rate of

ten percent (10%) per annum. For the avoidance of doubt, the primary cost recovery under the PSC

will always be treated as superior and the recovery of these costs as secondary, with respect of the

timing of cost recovery. Within sixty (60) days of the NOCAL, election to enter, it will enter into an

international joint operating agreement (including accounting precedures) which will be consistent with

best international practices and which will govern the above described relationship and the finances.



12) Article 31.6 is revised as follows:





2



22/08/2010-Addendum LB-14



































"31.6 SOVEREIGN IMMUNITY. Any Party that now or hereafter has a right to claim sovereign

immunity for itself or any of its assets hereby waives any such immunity to the fullest extent permitted

by the laws of any applicable jurisdiction pursuant to this Contract. This waiver includes immunity

from (i) any expert determination, mediation, or arbitration proceeding commenced pursuant to this

Contract; (ii) any judicial, administrative or other proceedings to aid the expert determination,

mediation, or arbitration commenced pursuant to this Contract; and (iii) any effort to confirm, enforce,

or execute any decision, settlement, award, judgment, service of process, execution order or attachment

(including pre-judgement attachment) that results from an expert determination, mediation, or arbitration, or

any judicial or administrative proceedings commenced pursuant to this Contract.



13) To comply with the intent of the Contract for the PSC, the law in other parts of the Appendix II

Accounting Procedures, the phrase"...and those relating to the share of financing of development

Petroleum Operations" which is set forth in Section II.3(c) of the Accounting Procedure is hereby

deleted.



14) Article 26.5 is revised to read as follows:



"Contractor is exempt from customs user fees of two and one-half percent (2.5%) imposed under the

Revenue Code, including fees for the inspection or pre-shipment inspection of goods and on the export

of hydrocarbons. Rather, a custom user fee of $200,000 per year for customs related services and all

materials imported into Liberia for use in Petroleum Operations to be used on the block will apply.

Contractor will be subject to the ECOWAS levy of one half of a percentage point (0.5%)."



15) In Appendix II Accounting Procedures, Section 1.3, the phrase is hereby replaced to state: " in the event

of any conflict between the provisions of this Accounting Procedures and the Contract, the provisions of

the Contract shall prevail."



16) Except as specifically amended herein, all the remaining terms and conditions of the PSC shall remain

in full force and effect. Capitalized terms used in this Addendum that are defined in the PSC and not

otherwise defined herein shall have the respective meanings ascribed to them in the PSC. The

Addendum modifies the PSC and shall have effect from the date of ratification of the National

Legislature and publication in handbills.



17) This Addendum may be executed in counterpart by each of the parties and with all signatures it shall be

considered as one agreement effective as to all parties as if all had signed together.



This PSC, as hereby amended, is hereby deemed to be in full force and effect. The Deed of Assignment is

attached hereto and made a part hereof.





IN WITNESS WHEREOF, the Parties have signed this Addendum to the Production Sharing Contract on the

date as set forth below.









Dr. Fodee Kromah









23/8/2010

Date

_________________________________________________ ______________

PRESIDENT/CEL

NATIONAL OIL COMPANY OF LIBERIA















08-23-10

Date

________________________________________________ _________________

CHAIRMAN, BOARD OF DIRECTORS

NATIONAL OIL COMPANY OF LIBERIA







3





22/08/2010-Addendum LB-14

















































On Behalf of the Contractor





22/8/10

Date ___________________

___________________________________________________

ATTORNEY IN FACT FOR ORANTO PETROLEUM LIMITED







On Behalf of Contractor







22-8-10

Date ___________________

____________________________________________________

ATTORNEY IN FACT FOR CHEVRON LIBERIA LIMITED







On Behalf of Contractor







22-8-10

Date __________________

____________________________________________________

ATTORNEY IN FACT FOR CHEVRON LIBERIA LIMITED







Honorable Dr. Eugene Shannon







22/08/10

Date _________________

____________________________________________________

MINISTER OF LANDS, MINES & ENERGY









Honorable Augustine Ngafuan









22/08/10

Date __________________

_____________________________________________________

MINISTER OF FINANCE

REPUBLIC OF LIBERIA



































4





22/08/10 - Addendum LB-14



















Honorable Dr. Richard Tolbert





[Signature]
CHAIRMAN, NATIONAL, INVESTMENT COMMISSION
REPUBLIC OF LIBERIA




Date 22/08/10


Attested:

Honorable Christiana Tah

MINISTER OF JUSTICE
REPUBLIC OF LIBERIA



Date August 23, 1010



Approved:



Her Excellency



Ellen Johnson Sirleaf



[Signature]

PRESIDENT

REPUBLIC OF LIBERIA






Date August 23, 2010

PRESIDENT

REPUBLIC OF LIBERIA







Ratified:



National Legislature of the Republic of Liberia







Date ________________________

_________________________________________________







































5



22/08/10 - Addendum - LB-14