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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."
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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:
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"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
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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
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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 ________________________
_________________________________________________
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