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 PETROLEUM AGREEMENT


BETWEEN


THE MINISTER RESPONSIBLE FOR


PETROLEUM


REPRESENTING


THE GOVERNMENT OF THE REPUBLIC


OF GUYANA


AND





ANADARKO GUYANA COMPANY


 TABLE OF CONTENTS


Article 1 - Definitions..................................................................................................................,. 3


Article 2 - Agreement, the Operator, Liabilities and Indemnities..........................................8


Article 3 - Petroleum Prospecting Licence and Guarantee.....................................................10


Article 4 - Exploration Programme and Expenditure Obligation,.,.......................................11


Article 5 - Relinquishment of Areas..........................................................................................14


Article 6 - Delegation; Co-operation between Contractor and GGMC.......................... 16


Article 7 - Annual Work Programme and Budget..................... .............................................18


Article 8 - Discovery and Development......................................................................... 19


Article 9 - Records, Reports and Information; Confidentiality.............................................21


Article 10 - Annual Licence Rental Charge........................ 24


Article 11 - Cost Recovery and Production Sharing.................... 25


Article 12 - Associated and Non - Associated Gas....................................................................27


Article 13 - Valuation of Crude Oil or Natural Gas................................................................31


Article 14 - Disposal of Production............................................................................................34


Article 15 - Taxation and Royalty.............................................................................................36


Article 16 - Contracts and Assignments....................................................................................40


Article 17 - Domestic Supply Obligation..................................................................................41


Article 18 - Guyana Resources...................................................................................................44


Article 19 - Employment and Training.....................................................................................45


Article 20 - Rights to Assets and Insurance..............................................................................46


Article 21 - Import Duties..........................................................................................................51


Article 22 - Foreign Exchange Control.....................................................................................52


Article 23 - Accounting and Audits........................................................................................... 53


Article 24 - Force Majcure.........................................................................................................54


Article 25 - Assignment...............................................................................................................56


Article 26 - Sole Expert Determination and Arbitration.........................................................57


Article 27 - Applicable Law'.......................................................................................................60


Article 28 - Protection of the Environment........................,,....................................................61


Article 29 - Termination and Cancellation............................................................................... 62


Article 30 - Effective Date..........................................................................................................63


Article 31 - Miscellaneous .......................................................................................................... 64


Article 32 - Stability of Agreement............................................................................................65


Article 33 - Notices......................................................................................................................66


Annex A --- Description of Contract Area


Annex B --- Map of Contract Area


Annex C - Accounting Procedure


Annex D --- Pre-Approved and Certified Petroleum Operations Ttems


Petroleum Prospecting License


(1AC


i








 PETROLEUM AGREEMENT





This Agreement is made on the......day of............................., 2012, between the Government of


the Republic of Guyana (the “Government"); represented herein by the Minister Responsible for


Petroleum (hereinafter referred to as the “Minister”) of the One Part


and


Anadarko Guyana Company (hereinafter referred to as “Anadarko” or “Licensee”) a Company


incorporated in the Cayman Islands with its registered office at Ugland House, South Church Street,


George Town, Grand Cayman and registered in Guyana under the Companies Act 1991 with its


registered address in Guyana situated at 62 Hadfield and Cross Streets. Werk-en-Rust, Georgetown,


Guyana of the Other Part


WHEREAS





(1) By virtue of the Petroleum (Production) Act, Cap. 65:05, Petroleum existing in its natural


condition in strata in Guyana is vested in the State; the Petroleum (Exploration and


Production) Act, No. 3 of 1986 (hereinafter referred to as the “Act” and the Petroleum


(Exploration and Production) Regulations 1986 (hereinafter referred to as the “Regulations”


make provision with respect to prospecting for and production of Petroleum, and formatters


connected therewith;





(2) The Guyana Geology and Mines Commission (hereinafter referred to as “GGMC”) a body


corporate established under the Guyana Geology and Minj Act (No. 9 of 1979)


has been seised with the responsibility, inter alia, of pi he development,


exploitation and management of Petroleum, as defi so as to ensure


for the people of Guyana the maximum benefits ngtsuch things in


relation thereto; l ^





(3) With respect to prospecting for and producing Petroleum connected therewith


the Act and Regulations, subject to certain limitatio lon^ontained therein


authorize the Minister to grant Petroleum Prospecting Lie etroleum Production


Licences;





(4) Section 10 of the Act authorizes the Minister to enter into an agreement with any person with


respect to, inter alia, the grant of a Licence, the conditions to be included in a Licence, the


procedure to be followed by the Minister while exercising any discretion conferred upon him


by or under the Act and the manner in which the discretion shall be exercised and any matter


incidental to or connected therewith;


(5) Anadarko has submitted to the delegatee a proposal (“the proposal”) for a Production Sharing





Agreement in respect of a certain offshore area of Guyana, on terms and conditions specified


in the proposal;





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Petroleum Agreement


Government of Guyana - Anadarko 9





(6) GGMC has been authorized by the Minister to negotiate this Agreement subject to the


provisions of the Act and Regulations and to the final written approval of the Minister of its


contents and execution thereof and to assist in the administration and implementation


thereof;


(7) Anadarko will have, or will acquire, the financial resources, the managerial, technical and


industrial competence and the experience to carry out Petroleum Operations and will provide


an affiliate company guarantee, in accordance with section 13 of the Act;


(8) Pursuant to the aforesaid recitals, Anadarko made an application to the Minister for a


Petroleum Prospecting Licence in accordance with regulation 13 of the Regulations (as


hereinafter defined), over the area described in Annex A and shown on the map attached as


Annex B, subject to the terms and conditions herein set forth and subject to the provisions of


the Act and Regulations and Anadarko has agreed by execution of this Agreement to accept


the said Licence on the said terms and conditions and provisions.


NOW, THEREFORE, in consideration of the premises and covenants and conditions herein


contained, IT IS HEREBY AGREED between the Parties as follows:




































































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Petroleum Agreement


Government of Guyana - Anadarko


 Article 1 - Definitions





1.1 In this Agreement, unless the context otherwise requires:





“Accounting Procedure” means the procedure set out in Annex C;


“Act” means the Petroleum (Exploration and Production) Act No.3 of 1986;





“Affiliated Company” in relation to the Contractor means, a company or corporation;


(i) which is, directly or indirectly controlled by the Contractor; or


(ii) which directly or indirectly, controls the Contractor; or


(iii) which is, directly or indirectly, controlled by a company or corporation that


also, directly or indirectly, controls the Contractor. For the purpose of this definition


“control” means the right to exercise a vote of fifty per cent (50%) or more of all the voting


shares;





“Agreed Interest Rate” means interest computed on a monthly basis at the rate per annum


equal to the average London Interbank Offer Rate (LIBOR^^g^fplsxiontbs United States


dollar deposits, as published by the Wail Street Jouriyd^^fe'llTst;fiusiness Day of such


month being calculated, plus three (3) percentage pqfWy





“Agreement” means this Agreement and the Annexi a part hereof;





“Appraisal Programme” means a programme carriedof Petroleuin


in the Contract Area for the purpose of delineating the Knro^^nJie^r\qif’, as defined in the


Act, to which that discovery' relates in terms of thickness ahtOhreftaf Earttm t and estimating the


quantity of recoverable Petroleum therein prior to declaration of commercial ity;


“Appraisal Well” means a well drilled for the purpose of an Appraisal Programme;





“Article” means an Article of this Agreement;





“Associated Gas” means all Natural Gas produced from any Petroleum Reservoir of which


the predominant production is Crude Oil and includes the gas-cap which overlies and is in


contact with Crude Oil;





“Barrel” means a quantity consisting of forty-two (42) United States gallons, liquid measure,


measured at standard conditions of atmospheric pressure and temperature (14.7 Ibs/sq. inch


absolute or 1 Kg/sq. cm. absolute and corrected to a temperature of sixty (60) degrees


Fahrenheit or fifteen (15) degrees Celsius);





“Business Day” means a day on which the banks in Georgetown, Guyana are customarily


open for business.





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Government of Guyana - Anadarko


 “Calendar Month” or “Month” means any of the twelve months of the Calendar Year;





“Calendar Quarter” or “Quarter” means a period of three (3) consecutive months beginning


on the first day of January, April, July or October;





“Calendar Year” or “Year” means a period of twelve (12) consecutive Months commencing


on January 1 and ending on the succeeding December 31 provided however that a Year of a


term of a Licence shall be the period specified in section 2 (2) (b) of the Act;





“Commercial Discovery ” means any discovery, which the Contractor in its sole judgement,


considers economic to develop and produce pursuant to the terms of the Agreement;





“Contract Area” means:


(i) on the Effective Date the area described in Annex A and shown on the map in


Annex B and the subject of the Petroleum Prospecting Licence granted to the


Contractor pursuant to Article 3; and


(ii) thereafter any areas which at any particular time are subject to the Petroleum


Prospecting Licence or Petroleum Production Licence(s) granted to the Contractor


under Article 8;





“Contract Costs” means Exploration Costs, Development Costs, Operating Costs, Service


Costs, General and Administrative Costs and Annual





“Contractor” means Anadarko and includes its





“Cost Gas” has the meaning assigned in Article





“Cost Oil” has the meaning assigned in Article 1





“Crude Oil” or “Oil” means crude mineral oil, stillates, condensates


and all kinds of hydrocarbons and bitumens, both in solid and liquid forms, at standard


conditions of temperature and pressure (60 degrees Fahrenheit or 15 degrees Celsius and 14.7


lbs/sq. in or 1 Kg/sq. cm);





“Delivery Point” means in the case of Crude Oil the inlet flange of the lifting tankship; in the


case of Natural Gas shall be the sales point and the point at which custody transfers from


seller to buyer. In the case of LNG sales the Delivery Point shall be the inlet loading llange


for the LNG tanker. In the case of pipeline deliveries, the Delivery' Point shall be the inlet


flange to buyer's pipeline or distribution system, or the inlet to a third party’s pipeline


transporting buyer's Natural Gas. The Delivery Point for LPGs shall be the sales point and


the point at which custody transfers from seller to buyer. In the case of LPG exports, the


Delivery Point shall be the inlet loading flange for the LPG tanker or truck. In the case of


pipeline deliveries of LPGs, the Delivery Point shall be the inlet flange to buyer's pipeline or





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Petroleum Agreement d


Government of Guyana - Anadarko


 distribution system, or the inlet to a third party's pipeline transporting buyer's I-PCs; or in any


case, such other economically viable point for export of Petroleum in the Republic Of


Guyana which shall be agreed to by the Contractor and the Minister;


“Development Costs" means the expenditure so categorized in Annex C;





“Development Plan” means the plan referred to in Article 8.4;





“Development Well" means any well drilled as part of a Development Plan;


“Discover)' Area” means an area which is part of a Prospecting Area consisting of a





Discovery Block or Blocks in respect of which the Minister has been informed under section


30 of the Act;





“Discovery Block" means that as defined in the Act;





“Discovery of Petroleum” means that as defined in the Act;





“Effective Date" means the date on which this Agreemj force pursuant to


Article 30;





“Expatriate Employee” means any employee (other tl: permanently


resident in Guyana w'ho is engaged under a contract <$f service for the f f Petroleum


Operations;





“Exploration Costs” means those expenditures so categ





"Exploration Period” means the initial period, and/or the first renewal period and/or the


second renewal period referred to in Article 4.1, as the case may be;





“Exploration Well” means a well drilled, which is not a Development Well, with the


objective of exploring for Petroleum on a geological entity (be it of structural, stratigraphic,


facies or pressure nature) to a depth or stratigraphic level specified in the work programme


for the exploration work programme;





“Field” means an area within the Contract Area consisting of a Petroleum Reservoir or


multiple Petroleum Reservoirs all grouped on, or related to, the same individual geological


structural features or stratigraphic conditions from which Petroleum may be produced


commercially;





“General and Administrative Costs” and "Annual Overhead Charge” means the expenditures


so categorised in Annex C;








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Petroleum Agreement 2


Government of Guyana - Anadarko


 “Geologic Basement” means any igneous or metamorphic rock or any stratum in and below


which the geological structure or physical characteristics of the rock sequence do not have


the properties necessary for the accumulation of petroleum in commercial quantities and


which reflects the maximum depth at which any such accumulation can be reasonably


expected;





“Government” means the Government of the Republic of Guyana and its ministries and


agencies:


“GGMC” means the Guyana Geology and Mines Commission, established under section 3 of





the Guyana Geology and Mines Commission Act 1979;





“GGMC Act” means the Guyana Geology and Mines Commission Act 1979;





“Licence” means the Petroleum Prospecting Licence and/or uction


Licence(s) or both as the context requires;





“Lifting Entitlement” means the quantity of Crude Oil to w d in


any given period pursuant to Article 11;





“Minister” means the Minister assigned responsibility for Pei is no


such Minister, the President;





“Natural Gas” or “Gas” means all hydrocarbons which at standard conditions of temperature


and pressure (60 degrees Fahrenheit or 15 degrees Celsius and 14.7 lbs/sq. in or 1 Kg/sq. cm)


is in a gaseous state including but not limited to wet mineral gas, dry mineral gas and casing


head gas, all substances contained therein including helium, which are produced from an oil


or gas well, in their natural state or residue gas remaining after extraction of NGLs from wet


gas. For purposes of this Agreement, Natural Gas shall also include liquefiable hydrocarbons


obtained from Natural Gas by condensation or extraction, including ethane, propane, butane,


pentanes and heaviers (“Natural Gas Liquids” or “NGLs”). Liquefied methane shall not he


considered anNGL, but rather Natural Gas in the liquid state.





“Non-Associated Gas” means Natural Gas or Gas other than Associated Gas;





“Non-Resident Sub-Contractor” shall mean a Sub-Contractor the control and management of


whose business are exercised outside Guyana.


“Operating Costs” means those costs so categorized in Annex C;





“Operator” shall have the meaning assigned to it in Article 2.2(a);





“Parties” means the Government, Anadarko and includes its successors and permitted


assignees, and a Party shall mean any of the Parties;





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Government of Guyana - Anadarko


 "Petroleum Operations” means Prospecting Operations and/or Production Operations, as


defined in the Act;





“Petroleum Prospecting Licence” means a Licence issued by the Government under the Act


and the Regulations to Anadarko for carrying out Prospecting Operations and set forth in


Form C of the schedule as specified in the Regulations;


“Petroleum Production Licence'’ means a Licence to be issued by the Government under the


Act and the Regulations to Anadarko for carrying out Production Operations and set forth in


Form D of the schedule as specified in the Regulations;


“Profit Gas” has the meaning assigned in Article 11;





“Profit Oil” has the meaning assigned in Article 11:


“Recoverable Contract Costs” has the meaning assigned in Article 11;


























to the Minister.


1.2 The words and terms used in this Agreement but not defined herein shall, if meanings have


been assigned to them under section 2 of the Act, have, for the purposes of this Agreement,


the same meanings.


1.3 The provision of this Agreement relating to the Petroleum Prospecting Licence shall be read


as part of the provisions of such Licence.


1.4 The provision of this Agreement relating to any Petroleum Production Licence shall be read


as part of the provisions of such Licence.


1.5 The provisions in the Act and Regulations dealing with rights and obligations of the


Contractor shall be read as part of but not nullify7 the provisions of this Agreement and any


Licence issued to the Contractor.











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Petroleum Agreement


Government of Guyana - Anadarko


 Article 2 - Agreement, the Operator, Liabilities and Indemnities





2.1 Agreement


This Agreement constitutes an agreement made under section 10 of the Act consistent with


the Act and the Regulations, and is a production sharing agreement, the objective of which is


the exploration for development and production of Petroleum in the Contract Area by the


Contractor subject to the terms hereof and the provisions of the Act and Regulations under


which the Contractor shall have an economic interest in the development of Petroleum from


the Contract Area.


2.2 The Operator


(a) Anadarko shall be the Operator charged with conducting the day to day activities of


the Contractor under this Agreement.' No transfer of operatorship to another Party





























Operations in accordance with this Agreement, the Licences and any applicable laws


of Guyana.





2.3 Liability





The duties, obligations and liabilities of the Parties comprising the Contractor under this


Agreement and under any Licence issued pursuant hereto shall be joint and several.





2.4 Indemnity





The Contractor shall, at all times, keep Government indemnified against all actions, claims


and the demands that may be brought or made against Government by a third party by reason


of negligence (any act or omission or reckless disregard of harmful consequences which


results in damage to a third party) by the Contractor or the Operator in the exercise or


purported exercise of the rights of the Contractor under the Act or the Licence, provided


however, that nothing in this Article shall require the Contractor to give the said indemnity


for any claim or demand in respect of Petroleum taken by the Minister pursuant to Article 11


after title has passed to the Minister at the Delivery Point or in respect of assets acquired by





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Petroleum Agreement


Government of Guyana - Anadarko


 the Minister pursuant to Article 20 from and after the date of acquisition. Liability by the


Contractor to the Government for damages in respect of Petroleum Operations under this


Agreement is limited to insurance required in accordance with Article 20.2 (a), provided


however, that the Contractor shall not be liable to the Government for indirect, punitive or


consequential damages, including but not limited to, production or loss of profits.
































































































































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Petroleum Agreement %


Government of Guyana - Anadarko


Article 3 - Petroleum Prospecting Licence and Guarantee





3.1 Petroleum Prospecting Licence





(a) On the date of this Agreement, the Minister, in accordance with the Act, the


Regulations and the terms of this Agreement, shall grant to the Contractor the


Petroleum Prospecting Licence for an initial period of four (4) years from the


Effective Date over the area described in Annex A and shown on the map attached as


Annex B hereto.





(b) Subject to Article 4 and the other terms of this Agreement, such Petroleum


Prospecting Licence may be renewed but not more than twice at the election of the


Contractor for consecutive periods of up to three (3)jk«3r£ewintj»^ccordance with


the provisions of the Act and the Regulations.





3.2 Guarantee








The Contractor shall on or before the sixtieth (60th) daWH^hl ttie KtteQtiye'LJ&tenuring year


one (1) of phase one (1) of the initial period in accordance with Aritc\e'£jy{y$(/r) hereunder,


and thereafter, no later than ninety (90) days after the comr alh^msequent work


commitment periods as specified in Article 4.1, provide an affihalecerrfpany guarantee or


other form of guarantee acceptable to the Minister in the amount of ten percent (10%) of the


budget submitted by the Contractor, pursuant to Article 7.1, for each specific work


commitment period. Notwithstanding the foregoing, if the Contractor exceeds its minimum


work commitment in any phase specified in Article 4.1, the completion of such work


commitment shall constitute a waiver of such proportion of the requirement of the guarantee


by the Minister which is the equivalent of the excess work previously completed but which is





applicable to the subsequent work commitment phase.





If the guarantees are Affiliate Company guarantees they shall be in lieu of and satisfy any


obligation to provide a guarantee and/or bond pursuant to the Act, Regulations or this


Agreement on the part or on behalf of the Contractor.



































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Petroleum Agreement


Government of Guyana - Anadarko


 Article 4 - Exploration Programme and Expenditure Obligation








4.1 Exploration Programme


Subject to the provisions of this Agreement, in discharge of its obligations to carry out





Prospecting Operations in the Contract Area, the Contractor shall carry out the minimum


work described herein, during the periods into which Prospecting Operations are divided


hereunder: -





(a) The initial period of four (4) years shall be divided into two (2) phases. Phase one





(1) will consist of two (2) years duration and phase two (2) will consist of tw o (2)


years duration:


(i) Phase One - (2 years)








During phase one of the initial period, the Contractor shall procure available


geophysical data including seismic data or otherwise acquire such data by


way of conducting geophysical surveys over the Contract Area and having


that data processed and interpreted. Contractor will also reprocess sections of


such acquired data as determined necessary. The Government acknowledges


and agrees that the seismic data acquired by Contractor in December 2011


related to the Contract Area shall be credited in furtherance of Contractor’s


satisfaction of Phase One minimum work obligations under this Article


. 1 (a)(i), and shall be cost recoverable pursuant to Annex C, Accounting


rocedure, Article 3.1.





the end of phase one (1) of the initial period the Contractor shall either


linquish the Contract Area or enter phase two (2) of the initial period.





Phase Two - (2 years)





During phase two (2) of the initial period, the Contractor shall conduct in the


Contract Area a 2D marine seismic survey to acquire a minimum of two


thousand, five hundred (2,500) line kilometers of new seismic data and


concurrently conduct work to recover samples of substrate from the sea-


bottom for geochemical analyses.





At the end of the initial period of four (4) years, the Contractor shall elect


either to relinquish the entire Contract Area or subject to Article 5 relinquish


(25%) twenty five percent of the Contract Area and renewr the Petroleum


Prospecting Licence for a further period of up to three (3) years.








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Petroleum Agreement


Government of Guyana - Anadarko


 (b) First renewal period of three (3) years.





The Contractor shall within the first eighteen (18) months of the first renewal period


of three (3) years conduct a marine 3D seismic survey within the Contract Area to


acquire a minimum of one thousand two hundred and fifty (1,250) squared kilometers


of new seismic data, process and interpret same.


At the end of the first renewal period of three (3) years, the Contractor shall elect





either to relinquish the entire Contract Area except for any Discovery Area in respect


of which the Minister is informed under section 30 of the Act and the area contained


in any Petroleum Production Licence or subject to Article 5, relinquish twenty'


percent (25%) of the Contract Area and renew the Petroleum Prospecting Licence for


a second period of three (3) years.





(c) Second renewal period of three (3) years.





The Contractor shall within the first eighteen (18)


period of three (3) years commence to drill one (1


Contract Area to a minimum depth of three thous


conduct downhole geophysical surveys and other


interpret same.





At the end of the second renewal period of three (3) £opkrac t or shall


relinquish the entire Contract Area except for any Discovery AreaTirTrespect of which


the Minister is informed under section 30 of the Act, the area contained in any


Petroleum Production I ,icence and any other portion of the Contract Area on which


the Minister agrees to permit the Contractor to conduct further exploration activities.





(d) The minimum work commitment for a given phase or period referred to in Article


4.1(a), (b) and (c) may be undertaken in an earlier phase or period in whole or in part


and in such a case the work commitment with respect to the subsequent period shall


be deemed to be satisfied accordingly in whole or in part as the case may be.


Contractor may conduct additional work beyond the minimum work commitment in


accordance with the terms and conditions of this Agreement, which shall be subject


to Cost Recovery.





(e) Subject to Article 24 herein and section 43 of the Act, the Minister may extend any


Exploration Period pursuant to a showing of good cause by the Contractor.





4.2 No Exploration Well drilled by the Contractor shall be treated as discharging any obligation


of the Contractor to drill such Exploration Well unless either it has been drilled to the depth


or formation agreed with the Minister and specified in the annual work programme, or before


reaching such depth or formation:





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Government of Guyana - Anadarko


(a) the Contractor has expended on such well and any substitute well drilled pursuant to


Article 4.2 (d) below the amount for such work commitment in the budget submitted


by the Contractor and approved by the Minister as specified in Article 7.1; or


(b) the Geologic Basement is encountered; or


(c) a Discovery is made and the Minister is informed thereof; or


(d) insurmountable technical problems are encountered which, in accordance with good


oilfield practice, make further drilling impractical, provided that if the said Well is


abandoned owing to the said problems before reaching the Geologic Basement, the


Contractor shall drill a substitute well in the Contract Area to the same minimum


depth as aforesaid unless otherwise agreed with the Minister or until the amount in


Article 4.2 (a) less any amounts actually expended on the abandoned well is reached


or one of the criteria listed at Articles 4.2 (b) to (d) is satisfied.


4.3 Expenditure Obligation


The sum actually spent in fulfillment of the work obligation in a specific phase or period


shall be deemed to have satisfied the Contractor's minimum expenditure obligation for that


phase or period. For the avoidance of doubt, in the event the Contractor has performed its


work obligation(s) for an amount less than the amount specified in an annual work
























































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Petroleum Agreement


Government of Guyana - Anadarko


Article 5 - Relinquishment of Areas








5.1 If prior to the end of the initial period of the Petroleum Prospecting Licence issued to the


Contractor under Article 3.1, an application is made by the Contractor for renewal of the


Licence under section 24 (1) of the Act, the Contractor shall relinquish at the end of the


initial period an area equal to at least twenty five percent (25%) of the original Contract Area


less the exclusions provided for in Article 5.


5.2 If prior to the end of the first renewal period of the Petroleum Prospecting Licence an


application is made by the Contractor for a second renewal of the Licence under section


24(1) of the Act, the Contractor shall then relinquish at the end of this first renewal period an


area equal to at least twenty five percent (25%) of the original Contract Area less the


exclusions provided for in Articles 5.3





5.3 The areas to be relinquished pursuant to Articles 5.1 and 5.2 shall:





(a) comprise Blocks, as defined in the Act;


(b) exclude any Discovery Area together with a reasonable


surrounding the Discovery Area;


(c) exclude any Production Area;


(d) be selected by Contractor so that:


(i) the area relinquished shall comprise one (1) di^


any representations made by the Minister with


size;


(ii) the Blocks to be retained for and during the first renbv^yMAt^prtTsuant to


Articles 5.1 and 5.2 shall constitute one (1) discrete area unless otherwise


agreed to by the Minister.


5.4 In the event that an area or areas cannot be identified for relinquishment in accordance with


this Article without including in such area or areas in whole or in part a subsisting Discovery


Area or Production Area or the Minister is of the opinion that the area(s) to be relinquished


will not enable licensing separately or jointly with contiguous unlicensed areas then the


Minister and Contractor shall consult together with a view to agreeing on the area(s) to be


relinquished in the light of the circumstances then prevailing. If after sixty (60) days from


receiving notice of the Contractor's proposed relinquishments the Parties cannot agree on a


proposed relinquishment, the Parties shall refer the matter to a sole expert pursuant to Article


26.





5.5 For the purpose of this Article, a Discovery Area shall not include any Discovery Block


which relates to a Discovery in respect of which the Contractor has notified the Minister that


the Discovery is not of potential commercial interest pursuant to section 31 (1) of the Act,


unless such Discovery Block forms a part (and only to that extent) of another subsisting


Discovery Area.





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Petroleum Agreement


Government of Guyana - Anadarko


 5.6 If a Petroleum Prospecting Licence ceases to have effect with respect to Discovery Blocks


pursuant to section 32 (I) of the Act, such reduction in size of the


treated as an advance relinquishment under this Article and sh


required to be relinquished accordingly.





5.7 Without prejudice to the obligations undertaken in Article 4. the


during the period of the Petroleum Prospecting Licence, on givin]


three (3) months notice in writing of its intention to do so, relinqui


the Contract Area pursuant to section 28 of the Act and in accordant


5.5. Any such relinquishment shall count towards any subseq


relinquishments required under Articles 5.1, 5.2 or 5.3 above as the case may be.











































































































Page 15


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Petroleum Agreement


Government of Guyana - Anadarko


Article 6 - Delegation; Co-operation between Contractor and


GGMC





6.1 The Minister may, subject to the provisions of the Act, or any other law delegate any person


to exercise and perform any of his functions under this Agreement and anything done by the


delegate in pursuance of the delegation shall have the same validity and effect as it would


have if done by the Minister.


6.2 The Minister also hereby authorizes GGMC to perform, inter alia the following functions:


(a) to monitor the Petroleum Operations carried out by the Contractor;


(b) to review any proposed exploration work programme and budgets presented by


Contractor under Article 7 and any Appraisal Programme presented by tor


under Article 8;





(c) to review any Development Plan submitted by the Contractor \f\ cmn


application for a Petroleum Production Licence pursuant to sqctiim





(d) to ensure the maintenance and availability for inspection of oW£nS»§f#QSfja3s.im4


reports for Petroleum Operations in accordance with this Agreement}^..___


(e) to ensure the accounting procedures specified in Annex C of this Agreement are


followed;





(f) to ensure compliance with the provisions of this Agreement, Petroleum Act and


Regulations.


6.3 The Contractor and the delegate shall co-operate in good faith in the exercise of the


Minister’s functions delegated pursuant to this Article and the Contractor shall keep the


delegate advised of all activities taking place during the course of Petroleum Operations and


shall provide the delegate with all available information relating to Petroleum Operations as


the Minister or the delegate may reasonably require. Towards this end the delegate and the


Contractor shall meet at regular intervals, but at least once every six (6) months, to review


the progress and results of the Petroleum Operations and to discuss the work programme and


other activities to be undertaken in the ensuing months.


6.4 With respect to the matters to be reviewed pursuant to Article 6.2, should the delegate wish


to make any specific proposals or revisions thereto, the delegate shall so notify the Contractor


specifying its reasons therefor; within reasonable time thereafter the Contractor and the


delegate shall meet and endeavour to agree on the proposals or revisions. The Contractor


shall consider and take into account the proposals of the delegate and shall attempt in good





Page 16





Petroleum Agreement


Government of Guyana - Anadarko


 faith to reach agreement on such proposals. If the Contractor and the delegate fail to agree


within sixty (60) days of submission by the Contractor, the exploration work programme and


budget (including as appropriate any minimum work programme to be undertaken pursuant


to Article 4) submitted pursuant to Article 7 and the Appraisal Programme (except in the


case of Gas to which the provision of Article 12 shall apply) submitted pursuant to Article 8


(revised in accordance with any amendments or additions thereto agreed by the delegate and


the Contractor) shall be deemed adopted.





6.5 Nothing herein above provided shall preclude the right of the Minister to delegate any


additional function to the delegate or subject to Article 6.1 to delegate from time to time any


functions, including those herein contained, to any other agency of Government. A


delegation shall not increase the obligations or liabilities of the Contractor and notice of any


delegation shall be given promptly to the Contractor.





6.6 Any approvals required by the Minister or delegates of the Minister shall not b;


withheld. If the Contractor requests required approval from the Minister





Minister, such approval shall be deemed as granted if no response is pr


(60) days of the request.





6.7 The Minister and the delegate shall, upon request, either provide to the


the Contractor in obtaining the assistance required for Contractor to ful


the contract including but not limited to the following:





(a) approvals issued by Government agencies or local government institutions which are


required to conduct hydrocarbon operations, including approvals necessary to import


goods and services free from duties and taxes;





(b) approvals for easements and right-of-way to enable Contractors to conduct


operations;





(c) approvals for security for field operations and personnel;


(d) permission for entry and exit visas and working permits for Contractor’s employees,





subcontractors and their dependents;





(e) supply reports, analyses, samples, geological, geophysical and production data


necessary to Contractor from areas inside and outside the Contract Area;


(f) approvals to export hydrocarbons, and use essential infrastructure necessary' for the





economic export of hydrocarbons at normal commercial terms.














Page 17





Petroleum Agreement


Government of Guvana - Anadarko


Article 7 - Annual Work Programme and Budget





7.1 Within sixty (60) days after the Effective Date, the Contractor shall prepare and submit to the


Minister in detail a work programme and budget, setting forth the Prospecting Operations,


which the Contractor proposes to carry out (including, as appropriate, any minimum work


obligations to be undertaken pursuant to Article 4) during the remaining portion of the


Calendar Year. In subsequent years no less than one (1) month before the beginning of the


Calendar Year, the Contractor shall prepare and submit to the Minister a work programme


and budget setting forth Petroleum Operations which the Contractor proposes to conduct


during the upcoming Calendar Year.


7.2 The Contractor may, for good cause, amend the details of any work programme or budget


submitted to the Minister pursuant to Article 7.1 provided that:


(a) notice of the details of the reasons for the amendments is given to the Minister;


(b) such amendments shall not have the effect of reducing I


obligations undertaken under Article 4 without the prior cons


Minister;





(c) any proposed amendment shall be subject to review pursuant t



























































Page IS





Petroleum Agreement


Government of Guyana - Anadarko


Article 8 - Discovery and Development





8.1 Where, pursuant to section 30 of the Act, notice has been given to the Minister of a


Discovery in the Contract Area, the Contractor shall forthwith inform the Minister of the


steps it proposes to take to satisfy the requirements of section 30 (1) (a) (iii) of the Act.


8.2 Where the Contractor, pursuant to section 31 (1) of the Act, has informed the Minister that,





in its opinion, the Discovery' is of potential commercial interest, the Contractor shall, as soon


as practicable thereafter, submit, for the consideration of the Minister, its proposals for an


Appraisal Programme to meet the requirements of section 30 (1) (b) of the Act.


8.3 Where an Appraisal Programme has been adopted by the Contractor pursuant to Article 8.2,





the Minister may, on application by the Contractor pursuant to section 31 (2) of the Act,


stating reasons therefor, extend the period within which application may be made by the


Contractor for a Petroleum Production License.


8.4 Where the Contractor has made an application to the Minister for a Petroleum Production





Licence in respect of any part of the Contract Area in accordance with section 34 (1) of the





























8.5 Where the Minister considers that the application has not met the requirements of ArtK*te4» 4r'


he shall so notify the Contractor within sixty (60) days of receipt of the application, and


GGMC and Contractor shall meet to discuss the application with a view to ensuring that the


requirements of Article 8.4 are met. In the event that the Parties are unable to agree on


amendments to the application to meet such requirements within sixty (60) days from the


date of aforesaid application (or such longer period as the Parties shall agree), or where the


Minister fails to respond to or act on the aforesaid application within sixty (60) days, the


Contractor may refer the matter to a sole expert pursuant to Article 26 for determination


within sixty (60) days of appointment of such expert or such other time period as may be


agreed between the Contractor and the Minister.


8.6 Where the Minister considers that the aforesaid application has met the requirements of





Article 8.4 he shall, within sixty (60) days of receipt thereof, so notify the Contractor. In


such event or where in the event of a dispute it is determined by the sole expert pursuant to


Article 26 that the Contractor has made an application which meets the requirements of





Page 19





Petroleum Agreement


Government of Guyana - Anadarko


{1VL


 Article 8.4, provided the Contractor is not in default under this Agreement, the Minister shall


grant, within sixty (60) days of such notification or determination as the case may be, to


Contractor, a Petroleum Production I.iccnce (in the Form D of the schedule as specified in


the Regulations) over the area for which the application has been made on terms and


conditions consistent with this Agreement and the Act and Regulations which will enable the


Contractor to carry' on Petroleum Operations in the Production Area in accordance with the


Development Plan wherein the level of production set shall be consistent with the maximum


efficient rate of production which conforms to sound reservoir engineering principles in


accordance with good international petroleum industry practice. In the event the Minister


imposes policy-based production limits on production below those consistent with maximum


efficiency rates for the field or fields, any such production limits will be imposed


countrywide and shall be allocated proportionately based upon demonstrable, verifiable field


production capacities.





8.7 While the Contractor holds a Petroleum Prospecting Licence or has made an application


pursuant to Article 8.4 and in accordance with section 34 (1) of the Act ’


not grant a Petroleum Production Licence in respect of al I or part of the Cont


covered by such application (whether on a geographical or geological ba:


party. /





8.8 Where the Contractor pursuant to section 31 (1) of the Act has served notice ol


that in its opinion a Discovery made in the Contract Area is not of potenifc


interest, the provisions of section 32 (1) of the Act shall apply. \





8.9 The Contractor may apply for a renewal of a Petroleum Production Licence for a maximum


ten (10) years. The application for renewal shall be granted as long as the Contractor is in


good standing under the Licence.


(a) Natural Gas. In the event of any Non-Associated Gas discovery within the Contract





Area, in recognition of the fact that Natural Gas projects generally have much longer


lead times from discovery to first commercial production than is the case for Crude


Oil projects, the Minister shall grant Contractor’s request for the maximum ten (10)


year Petroleum Production License renewal so long as Contractor is in good standing


under the Licence.





(b) The Minister shall not refuse to grant the renewal of a Petroleum Production Licence


under section 40(1) of the Act without first providing the Contractor;





(i) Notice stating the grounds of the intended refusal; and





(ii) Ninety (90) calendar days following the date of the notice referenced in


Article 8.9(b)(i) to respond to or remedy the stated grounds for refusal.








Page 20





Petroleum Agreement


Government of Guyana - Anadarko





PJVL


Article 9 - Records, Reports and Information; Confidentiality





9.1 Records, Reports and Information





(a) The Contractor shall, at all times while this Agreement is in force, maintain and


submit to the Minister in accordance with the provisions of the Act and the


Regulations, the Petroleum Production Licence and this Agreement, full and accurate


reports, records, returns and accounts of Petroleum Operations in the Contract Area.





(b) All data, well logs, maps, magnetic tapes, cuts of cores and cutting samples and all


other geological and geophysical information obtained by the Contractor in the


course of carrying out Petroleum Operations hereunder and all geological, technical,


financial and economic reports, studies and analyses generated in relation thereto


(hereinafter referred to as “Petroleum Data”) shall be submitted to the Minister in


accordance with the Regulations.





(c) The Contractor may freely export for processing or laboratory,


analysis samples or other original materials constituting Petrol


that samples equivalent in size and quality or, where such


reproduction, copies of equivalent quality have first been deli





(d) Petroleum Data shall be the joint property of the Minister and the


become the sole property of the Minister with respect to any area\hic1y t;easesj


part of the Contract Area, whether as result of relinquishment, <


termination of a Licence or otherwise in accordance with the Act. from tl


which such area ceases to be part of the Contract Area.





(e) The Minister, through duly appointed representatives, upon providing the Contractor


with at least seven (7) days notice, shall be entitled to observe the Petroleum


Operations conducted by the Contractor at his sole cost and expense and at all


reasonable times to inspect all assets, records and data kept by the Contractor relating


to such Petroleum Operations. In the exercise of such rights under this paragraph the


Minister shall not unduly interfere with the Contractor's Petroleum Operations under


this Agreement.


(f) Nothing in this Article shall be construed as requiring the Contractor or any of the





Parties comprising the Contractor to disclose any of its proprietary technology or that


of its Affiliated Companies which is not acquired in the course of Petroleum


Operations under this Agreement.














Page 21





Petroleum Agreement


Government of Guyana - Anadarko


9.2 Confidentiality





(a) All Petroleum Data, information and reports obtained or prepared by the Contractor


hereunder shall, so long as they relate to any part of the Contract Area, be treated as


confidential and each of the Parties undertakes not to publish, reproduce or otherwise


deal with such Petroleum Data or to disclose the same or the contents thereof to any


other person without the consent in writing of the other Parties, such consent not to


be unreasonably withheld, provided however, that subject to Article 9.2 (b), this


Article shall not:


(i) prevent disclosure by the Contractor:








(aa) to an Affiliated Company or employees of an Affiliated Company;


(bb)


to consultants, professional advisers, data procossjiig centres,


(cc) laboratories and Sub-Contractors where disclosd^'^s^essenti'al toy


work for Contractor; Ay





to a bank or other financial institution where d


work or financing for Contractor or Af


Contractor;





(dd) to the extent required by any applicable law or the re


stock exchange upon which the shares of the Contractor or an


Affiliated Company arc quoted, or by governmental order, decree,


regulation or rule, or to the extent required under any legal proceeding


or any court order binding on Contractor or Affiliated Company of


Contractor;


(ee) to bona fide prospective assignees or transferees of an interest


hereunder of the Contractor or in connection with merger,


consolidation, or a sale of stock of the Contractor or an Affiliated


Company thereof;


(ff) in connection with data trades;


(gg) of data information and reports already known to the Contractor or





Affiliated Company prior to the Effective Date; or


(hh) of data, information and reports acquired independently from a third


party that represents that it has the right to disseminate such data at


the time it is acquired by the Contractor or Affiliated Company;








Page 22





Petroleum Agreement


Government of Guyana - Anadarko


ML


 (ii) prevent disclosure pursuant to section 4 of the Act, provided however that


neither the Minister nor Contractor shall disclose Petroleum Data relating to


any area subject to a Licence to a competitor of the Contractor, without the


prior written consent of the other Party; or


(iii) be construed as imposing on any Party any obligation hereunder with respect





to any petroleum data, information or reports which are, without disclosure


by such Party, generally known to the public.


(b) Any petroleum data, information or reports disclosed by the Contractor pursuant to





this Article shall be disclosed on terms which ensure that the data, information or


reports aforesaid are treated as confidential by the recipient (except for disclosures


made pursuant to Article 9.2 (a) (i) (dd) and prompt notice of all disclosures shall be


given to the Minister.





(c) All petroleum data which becomes the sole property of the Minister pursuant to


Article 9.1 (d) shall continue to be treated as confidential by the Contractor for a


period of one (1) year from the date on which it became the sole


Minister, but may be used by the Contractor in connection with dai


prior written consent of the Minister, such consent not to be unre


subject however to Article 9.2 (b).





(d) Where a Licence ceases to be in force with respect to any area, ti¬


de liver to the Minister originals of all petroleum data and other inf


to such area pursuant to regulation 26 of the Regulations provided 1


application duly made to him pursuant to regulation 28 of the RcguT


Minister shall permit the Contractor to retain copies of petroleum data and


information relating to the Contract Area subject to Article 9.2 (b).





(e) Notwithstanding the provisions of Article 9.1 (d), all the Contractor’s proprietary


technology, except technology for which the cost of development has been approved


as Recoverable Contract Cost under this Agreement, shall remain the property of the


Contractor.



































Page 23


Petroleum Agreement


Government of Guyana - Anadarko


VA^


Article 10 - Annual Licence Rental Charge





The Contractor shall on the Effective Date of the Petroleum Prospecting Licence or the date of grant


of any Petroleum Production Licence as the case may be and, thereafter, so long as the said Licence


remains in force, on each anniversary date thereof, pay without demand to the Government an annual


Licence rental charge in respect of the Contract Area for the entire Exploration Period and such


payments shall apply to those areas remaining after taking into account any relinquishments pursuant


to Article 5 as specified below. Payments under this Article 10 shall be paid directly into bank


accounts held and controlled by GGMC. Contractor shall verify such bank accounts and GGMC


agrees to cooperate, assist and provide Contractor any information it requires to conduct such


verification.








Initial Period, Phase One: US$150,000.00


Initial Period, Phase Two: US$150,000.00


First Renewal Period: US$240,000.00


Second Renewal Period: US$240,000.00

























































































Page 24





Petroleum Agreement


Government of Guyana - Anadarko


Article 11 - Cost Recovery and Production Sharing





11.1 Subject to the terms and conditions of this Agreement, the Contractor shall bear and pay all


Contract Costs incurred in carrying out Petroleum Operations and shall recover Contract


Costs only from Cost Oil and/or Cost Gas as herein provided.





11.2 All Recoverable Contract Costs incurred by the Contractor shall, subject to the terms and


conditions of any agreement relating to Non-Associated Gas made pursuant to.


recovered from the value, determined in accordance with Article 13, of a v^


Oil (hereinafter referred to as ‘’Cost Oil”) and/or Natural Gas (“Cost Gas’'


from the Contract Area and limited in any Month to an amount which


percent (75%) of the total production from the Contract Area for such


Crude Oil and/or Natural Gas used in Petroleum Operations or which is





“Recoverable Contract Costs” means such costs as the Contractor is permit'


from the date they have been incurred, pursuant to the provisions of Annex





11.3 To the extent that in any Month, Recoverable Contract Costs exceed the value of Cost Oil


and/or Cost Gas determined in accordance with Article 13 and/or Article 12, the


unrecoverable amount shall be carried forward and, subject to the limitation stipulated in


Article 11,2. shall be recoverable in the immediately succeeding Month, and to the extent not


then recovered, in the subsequent Month or Months.





11.4 The balance of Crude Oil and/or Natural Gas available in any Month after Recoverable


Contract Costs have been satisfied to the extent aforesaid (hereinafter referred to as “Profit


Oil” and/or “Profit Gas” as the case may be) shall be shared between the Government and the


Contractor for each Field in the following proportions: Contractor fifty percent (50%) and


Minister fifty percent (50%).





11.5 The quantity of Cost Oil and/or Cost Gas actually utilized in satisfying the Recoverable


Contract Costs may be allocated by the Contractor to production from any Field or Fields,


11.6 Subject to the provision of Article 14, the Profit Oil and/or Profit Gas shall be shared


between the Government and Contractor on a Monthly basis according to their respective


entitlements as set out in Article 11.4.





11.7 To the extent that the actual quantities and costs required to determine Cost Oil and/or Cost


Gas and Profit Oil and/or Profit Gas for the Month in question are not known, Crude Oil


and/or Natural Gas sharing shall be calculated on an interim basis each Month using the


following:


(a) unrecovered Recoverable Contract Cost;





Page 25





Petroleum Agreement


Government of Guyana - Anadarko


 (b) estimated current Recoverable Contract Cost by reference to the agreed work


programme and budget supplemented by any other relevant documents or


information which are accepted by Contractor and Minister as being reliable


indicators of the actual position for the Month in question;


(c) estimated production for the Month in question;








(d) Crude Oil and/or Natural Gas price from the previous Month calculated.





11.8 Retroactive adjustments shall be made to the Crude Oil and/or Natural Gas


shall be agreed with the Minister based on recalculations utilizing actual quj


Oil and/or Natural Gas produced and saved and Recoverable Contract C


entitlements shall be made, subject to any applicable lifting agreem


practicable after such elements have definitely been determined.





11.9 The Contractor shall have the right to use in any Petroleum Operations a3


production as may reasonably be required by it therefor and the quantities so


shall be excluded from any calculations of Cost Oil and/or Cost Gas and Profit Oil and/or


Profit Gas entitlement.




































































Page 26





Petroleum Agreement


Government of Guyana - Anadarko


 Article 12 - Associated and Non - Associated Gas.





12.1 Associated Gas





(a) The Associated Gas produced from any Oil Field within the Contract Area shall be


with priority used for the purposes related to the operations of production and


production enhancement of Oil Fields, such as Gas injection, Gas Lifting and power


generation.





(b) Based on the principle of full utilisation of the Associated Gas, and with no


impediment to normal production of Crude Oil, a plan of utilisation of the Associated


Gas shall be included in the Development Plan of each Oil Field. If there is any


excess Associated Gas in the Oil Field after utilisation pursuant to Artic^ed2Vj^^)"^'


Contractor shall carry out a feasibility study regarding the utilisatio Contractor shall carry out a feasibility study reoarHinp the iitilkarinruft£.e&-ti rvt^^/cN


Associated Gas of such Oil Field. Such feasibility study, if e e’xceSss^fr


^ ^befbre \ •5V


submission of the Development Plan of an Oil Field, shall b hided in the Y


Development Plan. In the event that the Contractor conducts a


study of the utilisation of the excess Associated Gas of such Oil


feasibility study shall be submitted to the GGMC for review and d ion^TfTlie;/ */


excess Associated Gas in any Oil Field is utilized, the construction


such utilisation and the production of excess Associated Gas shall be car


while a Petroleum Production Licence continues in force.





(c) If the Contractor believes that excess Associated Gas of an Oil Field has commercial


value, the Contractor shall be entitled, but not required, to make further investment to


utilise such excess Associated Gas subject to terms at least as attractive as those


established for Crude Oil in Article 11 including, but not limited to, cost recovery for


such further investment. If the Contractor believes improved terms are necessary, the


Parties shall carry out friendly negotiations in a timely manner to find a new solution


to the utilisation of the said excess Associated Gas and reach an agreement in writing.


(d) If the Contractor does not believe that the Associated Gas has commercial value, but





the Minister believes the Associated Gas does have commercial value, the


Government may utilize the Associated Gas provided there is no impediment to


normal production of Crude Oil. All handling from the point of separation of Crude


Oil shall be at the sole risk and expense of the Government and will not affect the


amount of Cost Oil and Profit Oil due to Contractor.





(e) Expenses incurred by the Contractor in the production and use of the Associated Gas


of an Oil Field as stipulated in Article 12.1 and those incurred in carrying out any


feasibility study on the utilisation of the excess Associated Gas shall be charged to


the development cost of the Oil Field and shall be cost recoverable.








Page 27





Petroleum Agreement


Government of Guyana - Anadarko


 (0 If the Parties agree that the excess Associated Gas of an Oil Field has no commercial


value, then such Gas shall be disposed of by the Contractor, provided that there is no


impediment to normal production of the Crude Oil, in the most economic manner


consistent with good international petroleum industry practice.





12.2 Non - Associated Gas


(a) When the Contractor in accordance with Article 8.2 has informed the Minister of any





Non - Associated Gas discovery within the Contract Area that is of potential


commercial interest, the Contractor shall inform the Minister whether Contractor


believes such discovery is potentially commercial under the current Agreement terms.


If the Contractor believes that the fiscal terms will have to be revised in order to


economically commercialize the Non-Associated Gas discovery, the Contractor shall


propose revisions to the fiscal terms as the basis for entering into good faith


negotiations to reach mutually acceptable terms for developing the Non-Associated


Natural Gas discovery. The agreement, which shall form an annex to this


Agreement, shall be based on and include the following principles:





(i) For a period of six (6) months from the date of the notice delivered to the


Minister under Article 8.2, the Contractor and the Minister shall engage in


good faith negotiations of such revisions to Article 11 that would be


necessary in order to provide the Contractor with project economics that will


provide the Contractor with a rate of return of not less than a twenty percent


(20%). The Parties recognize that in order to achieve an economically viable


development of Non-Associated Natural Gas, different fiscal regimes may


; considered. In the event the Parties cannot agree upon the


evisions to Article 11, a sole expert shall be engaged pursuant to


Once the sole expert renders its decision, the Contractor shall


eV5tlW decision and shall notify the Minister as to whether it shall


Sead with the development of the Non-Associated Gas discovery under





is Jbf the sole expert decision. In the event the Contractor elects not to


(^jd^he Contractor shall relinquish the non-Associated Gas discovery to


Government.








(ii) The time period between the notice of discover)' provided forin section 31(1)


of the Act and the application for grant of a Petroleum Production Licence


shall be extended pursuant to section 31(2) of the Act. if necessary, to provide


reasonable time, as agreed between the Parties, to conduct an Appraisal


Programme, develop a Gas market, and design and construct facilities


necessary to commercialize the Natural Gas.











Page 28





Petroleum Agreement


Government of Guyana - Anadarko


 (b) Following the signature of the agreement herein the Contractor shall work out an


Appraisal Programme for the discovered Gas Field according to the terms and


conditions determined in the said agreement and submit it to the GGMC for review


pursuant to Article 6.4. The Contractor shall carry out the Appraisal Programme


which was reviewed and agreed upon with GGMC. The expenses incurred in


carrying out the said Appraisal Programme by the Contractor shall be charged to the


Exploration Costs of the Contract Area and shall be cost recoverable as permitted


under the terms of Annex C.





(c) After completion of the Appraisal Programme of a Gas Field, the Contractor shall


submit a report on the Appraisal Programme to GGMC for its review and discussion.





(d) If the Contractor retains a Gas Field beyond the expiration of the Exploration Period


pursuant to Article 12.2, the Contractor shall pay to the Minister at the


commencement of each year of the retention period an annual rental to be arrived at


through friendly negotiations but which shall be no less than fifty thousand United


States Dollars (US$50,000.00). The holding fee shall be refunded to Contractor on a


pro rata daily basis in the event the Contractor relinquishes the Gas Field or declares


such Gas discovery to be a commercial discovery prior tp-*ltJfJl^h*Csuch year.


12.3 General Conditions Applicable to Natural Gas








(a) Subject to the Government’s election to take its pri mg its


rights to market its own production, the Contractor^ sibility


for marketing all the available Natural Gas fro\ and for


negotiating for the sale thereof on a joint basis and terms


common to both the Minister and the Contractor in accord frd Partv Sales


principles. The Contractor will pursue markets both within and outside Guyana and


seek to market Natural Gas to the highest realization outlets after deduction of


transportation costs. The Contractor will seek to recognize Natural Gas’ potential


value at the international value of alternative fuels in the end user market of the


buyers.





(b) The Contractor shall have the right, but not the obligation, to process Natural Gas for


conversion to liquids, chemicals or similar Gas utilisation projects and Contractor


shall have the right to dispose of the liquids or products therefrom. The Contractor


shall have the right to process Natural Gas for recovery' of the liquids contained


therein. Natural Gas Liquids (NGLs) recovered and sold shall be valued based upon


the international value of such products as published in Platts and adjusted to reflect


the fair market value of such products FOB Guyana. In addition, the Contractor shall


have the right to liquefy the Natural Gas for sale as LNG and/or the right to compress


the Natural Gas to accommodate sales as compressed natural gas (CNG).








Page 29





Petroleum Agreement


Government of Guyana - Anadarko


 (c) The Contractor shall have the right to use Natural Gas, both Associated Gas and Non-


Associated Gas, as may be required for Oil Field and Gas Field operations, including


the right to re-inject for pressure maintenance and enhanced recover)' without charge,


fee or royalty.





12.4 General Conditions Related to Petroleum Operations





(a) Subject to the approvals of appropriate governmental authorities, which approvals


shall not be unreasonably withheld, the Contractor shall have the right to construct,





operate and maintain roads, drill water wells and to place and/or construct fixtures


and installations necessary to conduct the Petroleum Operations, including but not


limited to, storage tanks, trunk pipelines, shipment installations, pipelines, cables or


similar lines, liquefaction, processing and compression, located inside or outside the


Contract Area, as well as construct, operate and maintain or lease facilities for the


transportation of Crude Oil and Natural Gas from the Contract Area. Any required


governmental approvals may be conditional on the use by other producers of the


excess capacity, if any, of those facilities. Where the Minister and Contractor agree


that a mutual economic benefit can be achieved by constructing and operating


common facilities, the Contractor shall use its reasonable efforts to reach agreement


with other producers on the construction and operation of such common facilities.





(b) Subject to negotiations on a reasonable price and available capacity rights, the


Contractor may have access to and use of any export facility or pipeline or other


facilities or infrastructure built by the Government or partially


owned Guyana state enterprises on terms no less any other


party having access or use of such facility.








(c) Subject to negotiations as to a reasonable prio in the


facilities, the Contractor may have the right to ruction,


ownership and operation of any of the types of i-clause


12.4(a) above that are built by the Government or owned


state enterprises or by any third parties on terms no those of any


other part)' participating therein.






































Page 30





Petroleum Agreement


Government of Guyana - Anadarko


 Article 13 - Valuation of Crude Oil or Natural Gas





13.1 For the purpose of this Agreement the value of a Barrel of Crude Oil or an Mcf of Natural


Gas shall be the average fair market price determined as follows:





00 as soon as practicable after the end of each Calendar Month in w'hich Crude Oil or


Natural Gas has been produced and sold from any Field pursuant to this Agreement,


an average price (in terms of United States dollars per Barrel or Mcf. FOB, Delivery


Point) for each Field shall be determined in respect of production during that


Calendar Month. It is understood that production from different Fields may be of


differing quality and that separate average prices may aceordjngly-be.determined for


any Calendar Month in respect of production from each





(b) the prices aforesaid shall be determined as follows:





(i) in the event that fifty percent (50%) or more bf safes by


the Contractor during the Calendar Month of of a


given quality produced hereunder from a FieldSwei^siJtuj^UPdlny'^ales, as


hereinafter defined, the price of all Crude Oil or N c h Field


of that quality shall be deemed to be the simple arithmetic average price


actually realised, calculated by dividing the total receipts from all such sales


calculated FOB the Delivery Point by the total number of Barrels of Crude


Oil or Mcfs of Natural Gas sold from such Field in such sales;





(ii) in the event that less than fifty percent (50%) of the total volume of sales by


the Contractor during the Calendar Month of Crude Oil or Natural Gas of a


given quality produced hereunder from a Field were Third Party Sales, the


price of all Crude Oil or Natural Gas from such Field of that quality will be


determined by the arithmetic average of:





(aa) The simple arithmetic average price actually realised in the Third


Party Sales during the Calendar Month of such Crude Oil produced


hereunder, if any, calculated by dividing the total receipts from all


such sales calculated FOB at the Delivery' Point by the total number


of barrels of Crude Oil sold in such sales from such Field; and


(bb) The simple arithmetic average price per barrel at which one or more





crude oils of similar quality to the Crude Oil are being sold, such


price being determined by calculating the average for the Month in


which production takes place of the mean of the high and low FOB


price or prices for each day of those crude oils as quoted in Platts


Crude Oil Market Wire daily publication. In the event that Platt's





Page 31





Petroleum Agreement


Government of Guyana - Anadarko


 ceases to be published or is not published for a period of thirty (30)


consecutive days then the Parties shall agree on an appropriate


alternative publication.


In determining the final price, account shall be taken of any





differences between the Crude Oil and the crude oils quoted in Platt's,


for quality, API gravity, sulphur, pour point, product yield as well as


differences in quantity, delivery' time, payment and other contract


terms to the extent known. Allowance will also be made to take


account of the market area into which the Crude Oil is sold should it


be different from the area used for Platt’s.


The selected crude oils will be agreed between Contractor and the


Minister in advance for each Calendar Year and in making the


selection preference wall be given to crude oils of similar quality to


Crude Oil from the relevant Field.


The arithmetic average aforesaid will be determined by the


percentage volume of total sales of Crude Qj, actor that are,


and that are not, as the case may be, uring the


Calendar Month in question.





(cc) In the case of Natural Gas, the Conti 1 agree


on a methodology for valuation o rticle


13.1 (b)(ii) which represents the fair al Gas


FOB Guyana, taking into account coi\po: ral Gas.


This methodology will be reviewed modified if


necessary.


(iii) all such prices will be adjusted to FOB Delivery Point.





(iv) for the purposes of this Article Iliird Party Sales of Crude Oil or Natural Gas


made by the Contractor shall include any Third Party Sales made by the


Contractor or an Affiliated Company of Contractor on the Minister's behalf


pursuant to Article 14 but shall exclude:


(aa) sales, whether direct or indirect through brokers or otherwise, of any


seller to any Affiliated Company of such seller, unless at


demonstrably arms length price (for example where an Affiliate


Company of Contractor buys and then resells to a third party at an


arms-lenglh price which is disclosed to the Minister);











Page 32


Petroleum Agreement


Government of Guyana - Anadarko


 (bb) Crude Oil or Natural Gas exchanges, barter deals or restricted or


distress transactions, or any Crude Oil or Natural Gas transaction


which is motivated in whole or in part by considerations other than


the usual economic incentives for commercial arms length crude oil


or natural gas sales; and


(cc) Government to government sales.








13.2 Contractor shall be responsible for determining the relevant prices in accordance with this


Article. The calculation, basis of calculation and the price arrived at, shall be supplied to the


Minister and shall be subjected to agreement by the Minister before it is finally determined.


Pending final determination the last established average Crude Oil or Natural Gas price shall


be used.


13.3 During the first Calendar Year of production from the Contract Area the Contractor and the


Minister will meet in order to establish a provisional selection of the crude oils and an


appropriate mechanism for the purposes of giving effect to .Article 13.1 (b)(ii) above. This


selection will be reviewed annually and modified if necessary


13.4 In the event of any difference or dispute between the C


concerning selection of the crude oils or natural gas, the


calculation of the prices and the prices arrived at or generally a


prices are determined according to the provisions of this Arti


issue shall finally be resolved by a sole expert appointed pursi





13.5 For the purposes of this Article, in determining the “quality” of a Crul


given to all relevant characteristics including but not limited to gravity, sulphur and metal


content, pour point and product yield. In the case of Natural Gas, quality of the Natural Gas


shall be determined based on its composition.















































Page 33





Petroleum Agreement


Government of Guyana - Anadarko


Article 14 - Disposal of Production








14.1 Each of the Parties shall have the right to take in kind at the Delivery Point and separately


dispose of its share of the total quantities of production available under this Agreement. The


Contractor shall have the right to use as much production as may be needed in any Petroleum


Operations within the Contract Area and also within the transportation and terminal system.


In the event of third party usage of the transportation terminal systems the quantities so used


or lost outside the Contract Area shall be proportionate to aggregate use of that transportation


and terminal system. All quantities so used or lost shall be excluded from any calculations of


entitlement pursuant to Article 11. The quantity of production to which the Government is


entitled pursuant to Article 11 shall be measured and delivered to the Government at the


Delivery Point and the Government shall be responsible for all costs and risks associated


with the Government's Lifting Entitlement from and after the Delivery Point.


14.2 Within twelve (12) months after the Minister's approval of a Development Plan, or within a


later period as may be agreed between the Parties but in any event no longer than three (3)


months before the first scheduled lifting of Crude Oil, the Contractor shall propose to the


Minister offtaking procedures to govern the method whereby the Paj3


lift their respective shares of Crude Oil. The details of such process


and agreed upon between Minister and Contractor. The majoyp&tftpJ


shall include the following:





(a) Lifting shall be carried out so as to avoid interferenie^with'P£trofe


\


(b) In the event that any Party shall find itself unable for aiKrea^»n_to li


of Crude Oil as are to be lifted in accordance with procedi


the other Parties to that effect. Such procedures shall include such deterrents as the


Parties may agree, to prevent a Party from delaying the lifting of any quantities of


Crude Oil not so lifted, to a later period.


(c) In the absence of any agreement to the contrary between the Parties, the Contractor


and the Minister shall share in each type of grade of Crude Oil in proportion to their


respective Lifting Entitlement.


14.3 The Contractor shall, if requested by the Minister, use reasonable efforts to market abroad on


competitive terms all or part of the Minister's Lifting Entitlement subject to payment by


Minister of costs normally borne by a seller in such transactions and on other terms to be


agreed including an agreed marketing fee in respect thereof. The Minister shall provide the


Contractor with at least six (6) months notice before changing between receiving payments


in kind as provided under Article 14.1 and seeking the Contractor to market the Minister's


Lifting Entitlement under this Article.








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Petroleum Agreement


Government of Guyana - Anadarko


 14.4 Subject to the provisions ol'Article 17 hereof, the Contractor shall have the right to export at


the export point chosen for this purpose all Petroleum to which it is entitled under this


Agreement free of any duty, tax or other financial impost, and to receive and retain abroad all


proceeds from the sale of such Petroleum.





14.5 The Contractor agrees to abide by the laws, regulations, orders, directives and notifications of


Guyana which shall also apply to its Affiliated Companies engaged in Petroleum Operations


in Guyana.





































































































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Petroleum Agreement


Government of Guyana - Anadarko


Article 15 - Taxation and Royalty





15.1 Subject to Article 32, and except as provided in Article 15.2, 15.8, and except as otherwise


set forth in this Article 15.1, no tax, value-added tax, excise tax, duty, fee, charge or other


impost shall be levied at the date hereof or from time to time thereafter on the Contractor or


Affiliated Companies in respect of income derived from Petroleum Operations or in respect


of any property held, transactions undertaken or activities performed for any purpose


authorised or contemplated hereunder other than:





(a) subject to the provisions of Article 21, import duties at the rates specified from time


to time in the Customs Act (Cap. 82:01);





(b) taxes, duties, fees or other imposts for income derived from specific services


performed by the Contractor for the public or commercial enterprises and which is


(c) unrelated to income derived from Petroleum Operations under this Agreement;


rent due to Government in respect of any land rights to the


Contractor;





(d) annual licence rental charges due under Article 10;


(e)


subject to Article 15.7, local government rates or ti s not


calculated by reference to income) under laws of gen ich are


non-discriminatory, are commercially reasonable, and or tax to


Contractor in excess of those generally applicable in Guyana;





(f) (i) stamp duties, (ii) registration fees, (iii) licence fees, and (iv) any other similar


duty, fee or other impost of a minor nature, provided the above-referenced categories


are imposed under laws of general application.





i 5.2 Except as provided in this Article 15, Contractor, Affiliated Companies, Sub-Contractors and


individuals who are expatriates shall be subject to the income tax laws of Guyana, including,


the Income Tax Act of Guyana (Cap. 81:01) and the Corporation Tax Act of Guyana (Cap.


81:03) and shall separately comply with the requirements of those laws, in particular with


respect to filing returns, assessment of tax, and keeping and showing of books and records.


15.3 The taxable income of the Contractor arising in each year of assessment under this


Agreement for purposes of the income tax laws of Guyana, (including the Income Tax Act


and the Corporation Tax Act referred to in Article 15.2) shall include the amounts of


Contractor's income tax and corporation tax paid pursuant to Article 15.4.

















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Petroleum Agreement


Government of Guyana - Anadarko


15.4 The Minister hereby agrees:





(a) that a sum equivalent to the tax assessed pursuant to Article 15.2 and 15.3 will be


paid by the Minister to the Commissioner General, Guyana Revenue Authority on


behalf of the Contractor and that the amount of such sum will be considered income


of the Contractor; and








(b) that the appropriate portion of the Government's share of Profit Oil delivered in


accordance with the provisions of this Agreement shall be accepted by the Minister


as payment in full by the Contractor of Contractor's share of each of the following


levies, w hatsoever the applicable rate of such levies may be, which the Minister shall


then pay on behalf of the Contractor under Article 15.4 (a) to the Commissioner


General, Guyana Revenue Authority:





(i) the share of royalty payable by Contract 15.6;





(ii) the Contractor's share of the income tj of Guyana,


including, but not limited to, income t Tax Act and


corporation tax imposed by the Corpo e at the date


hereof, or from time to time thereaft or charge on


income or profits which may become time under any


laws, acts, statutes, regulations or orders by I ent; and





(iii) any other similar charge imposed and payable in respect of Petroleum


Operations at the date hereof, or from time to time hereafter, except charges


of the type specified in Article 15.1 (a-b).





15.5 The Contractor shall provide the Minister with the Contractor’s income tax returns to be


submitted by the Minister to the Commissioner General, Guyana Revenue Authority so the


Minister can pay income tax on behalf of the Contractor as provided under Article 15.4 (a).


On such returns, the Minister shall note that he is paying the income taxes on behalf of the


Contractor, so that the Commissioner General, Guyana Revenue Authority can properly


prepare the receipts required under this Article 15.5. Within one hundred and eighty (180)


days following the end of each year of assessment, the Minister shall furnish to Contractor


proper tax certificates in Contractor's name from the Commissioner General, Guyana


Revenue Authority evidencing the payment of the Contractor's income tax under the Income


Tax Act and corporation tax under the Corporation Tax Act. Such certificates shall state the


amount of tax paid individually on behalf of Contractor or parties comprising the Contractor


and other particulars customary for such certificates.





15.6 The Government's share of Profit Oil specified in Article 11 includes royalty payable by the


Contractor at the rate of one percent (1%) of Crude Oil produced and sold, and delivery to


the Minister, pursuant to Article 14 of his share of Profit Oil equivalent to royalty shall





Page 37





Petroleum Agreement


Government of Guyana - Anadarko


constitute payment of such royalty in kind. Within one hundred and eighty (180) days


following the end of each year of assessment receipts evidencing payment of Contractor's


royalty shall be furnished by the Minister to the Contractor stating the amount and other


particulars customary for such receipts.


15.7 Subject to the conditions of section 49 of the Act, the Minister may remit in whole or in part,


or defer payment of any royalties payable by Contractor.


15.8 Nothing in this Agreement shall be construed to place an obligation on the Government to


file a tax return declaring its share of production or profit share or to regard such profit share


as income within the meaning of section 5 of the Income Tax Act (Cap 81:01) or section 4 of


the Corporation Tax Act (Cap 81:03)





15.9 The Minister hereby agrees that the Contractor shall be exempted from the Property Tax Act


pursuant to section 51 of the Act and any other act which amends or replaces in part or in


whole the Property Tax Act.





15.10 The Minister agrees that for the duration of the Exploration ■ area within


the Contract Area where exploration activity is in process, theprq •01 lion 10(b) of


the Corporation Tax Act (Cap 81:03), including any siicc€jssor pro vis lion 10(b) of


the Corporation Tax Act (Cap 81:03), shall not apply t- tspect to any


payments made to any Affiliated Companies or Sub-C





Notwithstanding any provision to the contrary in this Article7^4ili[M@d,'(

Resident Sub-Contractors shall not be subject to the provisions of the Income Tax Act of


Guyana (Cap. 81.01) and the Corporation Tax Act of Guyana (Cap 81:03) during the


Exploration Period on income earned in Guyana for any given tax year if the Affiliated


Company or Non-Resident Sub-Contractor has conducted business in Guyana for one


hundred eighty three (183) days or less on a cumulative basis in the tax year of assessment.





15.11 There shall be no tax, duty, fee, withholding, charge or other impost applicable on interest


payments, dividends, deemed dividends, transfer of profits or deemed remittance of profits


from Contractor’s, Affiliated Companies’ or Non-Resident Sub-Contractors’ branch in


Guyana to its foreign or head office or to Affiliated Companies.


15.12 The Expatriate employee of the Contractor, Affiliate companies and the Subcontractor shall


be liable to pay personal income tax in Guyana on income earned in Guyana. Guyana


(represented herein by the Minister) shall cause the proper authorities to issue appropriate tax


certificates to expatriate employees when required.





(i) If an expatriate employee is liable to pay income tax in Guyana on income earned in


Guyana, such expatriate employee shall pay such income tax at a rate equal to the


current income tax rate of Guyana;








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Petroleum Agreement


Government of Guyana - Anadarko


 (ii) Notwithstanding any provision to the contrary in this Article, expatriate employees of


Contractor, Affiliated Companies or Non-Resident Sub-Contractors shall not be


subject to the provisions of the Income Tax Act of Guyana (Cap. 81.01) and shall not


be liable for personal income tax in Guyana on income earned in Guyana for any


given tax year if the expatriate is physically present in Guyana for one hundred eighty


three (183) days or less on a cumulative basis in the tax year of assessment.


15.13 Notwithstanding any provision to the contrary' in this Article, assignments of any kind





between Contractor and Affiliated Companies, as well as any assignment of any kind made in


accordance with this Agreement (including one to an unrelated party) shall be exempt from


any duties or taxes, including income tax and withholding tax, which would otherwise be


payable in respect of the assignment.





15.14 An Order shall be made giving effect to the provisions of this Article in statutory form and


language as specified in section 51 of the Act.













































































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Petroleum Agreement


Government of Guyana - Anadarko


 Article 16 - Contracts and Assignments


16.1 The Contractor shall, upon request, provide to the Minister copies of:





(a) contracts with respect to the sale or disposal of Petroleum (including invoices issued


thereunder);


(b) any deed of assignment of an interest of the Contractor under this Agreement


pursuant to Article 25;


(c) any instrument by which the Contractor pledges, mortgages, encumbers or


hypothecates its interest under this Agreement or the Contract Area.

































































Page 40


Petroleum Agreement


Government of Guyana - Anadarko


 Article 17 - Domestic Supply Obligation








17.1 Terms for Crude Oil.





(a) If the Crude Oil requirements of the domestic market in Guyana (the “Crude Oil


Domestic Demand”) exceed the Minister's total entitlement from all Crude Oil


production in Guyana, then the Contractor shall be obliged together with any third


parties which produce Crude Oil in Guyana, to supply and sell a volume of Crude Oil


to be used for such Crude Oil requirements in Guyana, calculated on the basis of the


ratio which the Contractor's Lifting Entitlement to Crude Oil bears to the sum of


Contractor's Lifting entitlement plus the total entitlement of all other producers in


Guyana subject to Article 17.1(c). The volume of Crude Oil which the Contractor


shall be required to sell under this Article shall not exceed the Contractor's share of


Profit Oil. The Minister shall give the Contractor notice on or prior to April 1 of the


year preceding the Calendar Year in which the Government will have the said


requirement and the term of the supply shall be on a Calendar Year basis unless


otherwise agreed.





For the purpose of this Agreement, Crude Oil kall consist of


those quantities of Crude Oil (i) used to producej ochemicals


in Guyana for end use by business and resident or (ii) used


to produce power in Guyana for end use by b stomers in


Guyana, the amounts for which shall be b! verifiable


government statistics. Crude Oil, refined produc' el for power


generation that are exported from Guyana shall of Crude Oil


Domestic Demand.





(b) The Contractor shall, in any Year, have a right to supply out of Contractor's Lifting





Entitlement the proportion of the Crude Oil requirements of Guyana that the quantity


produced from the Contract Area bears to the total production at the time in Guyana


to the extent that such requirement is not satisfied from any contract entered into


prior to the date of commencement of production from the Contract Area. For the


purpose of this paragraph, the term “the Crude Oil requirements of Guyana” means


the amount by which, in any Year, Crude Oil Domestic Demand exceeds the


Minister's total entitlement to all Crude Oil produced in Guyana. The Contractor


shall give the Minister notice on or prior to April l of the Calendar Year preceding


the Calendar Year in respect of which Contractor wishes to exercise the aforesaid


right and the term of the supply shall be on a Calendar Year basis unless otherwise


agreed. Notwithstanding the foregoing the Contractor shall have the right to supply


the total amount calculated pursuant to the foregoing provisions.











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Petroleum Agreement


Government of Guyana - Anadarko


 (c) The price payable for the sale of Crude Oil pursuant to this Article shall be paid in


United States dollars (or other currency as may be agreed) at a place specified by the


Contractor within thirty (30) days of receipt of the Contractor's invoice by the


Minister, and shall be determined in accordance with Article 13, failing which


Contractor’s obligations in respect of the Domestic Supply Obligations of this Article


17 shall be suspended until payment is made good, at which time deliveries shall be


resumed subject to any alternative commitments that may have been reasonably


entered into by Contractor to dispose of the Crude Oil during the period of default in


payment. Contractor shall recover any amount due and unpaid by the Government,


plus interest at the Agreed Interest Rate, from the Governments Lifting Entitlement


of Crude Oil.





(d) Any sale of Crude Oil as provided for in Article 17.1(a) - (c) shall occur at the


Delivery Point or such other point as the Minister and the Contractor may mutually


agree.





(e) All terms and conditions for the sale of Crude Oil pursu shall be


specified in a contract of sale entered into between the





17.2 Terms for Natural Gas.








(a) If the Natural Gas requirements of the domestic markeVds \ Gas


Domestic Demand”) exceed the Minister's total entitl\netKf[om alT^atiiiral Gas


production in Guyana, then the Contractor shall be oblig^dst^j^Kjp^ith^ny third


parties which produce Natural Gas in Guyana, to supply and seTT^votCme of Natural


Gas to be used for such Natural Gas Domestic Demand in Guyana, calculated on the


basis of the ratio which the Contractor’s Lifting Entitlement to Natural Gas bears to


the sum of Contractor's Lifting entitlement plus the total entitlement of all other


producers in Guyana subject to Article 17.2(c). The volume of Natural Gas which the


Contractor shall be required to sell under this Article shall not exceed the


Contractor's share of Profit Gas. The Minister shall give the Contractor notice on or


prior to April 1 of the year preceding the Calendar Year in which the Government


will have the said requirement and the term of the supply shall be on a Calendar Year


basis unless otherwise agreed.





For the purpose of this Agreement, Natural Gas Domestic Demand shall consist of


those quantities of Natural Gas used for domestic residential, commercial and


industrial consumption, including fuel used for domestic power generation. Natural


Gas liquefied or compressed in Guyana for export or used as feedstock for


petrochemical exports, such as methanol and fertilizer, shall not be considered part of


Natural Gas Domestic Demand.











Page 42





Petroleum Agreement


Government of Guyana - Anadarko


 Any sales of Natural Gas to the domestic market shall be priced at eighty percent


(80%) of No. 6, 1% low sulphur fuel oil price per MMBtu as published by Platt’s for


U.S. Gulf Coast FOB cargoes, plus freight to Georgetown. In the event of a failure to


reach agreement on the price, volume and/or terms of sale, either Party may submit


the dispute for sole expert determination pursuant to Article 26.3.


(b) The Contractor shall, in any Year, have a right to supply out of Contractor's Lifting





Entitlement the proportion of the Natural Gas requirements of Guyana that the


quantity produced from the Contract Area bears to the total production at the time in


Guyana to the extent that such requirement is not satisfied from any contract entered


into prior to the date of commencement of production from the Contract Area. For


the purpose of this paragraph, the term “the Natural Gas requirements of Guyana”


means the amount by which, in any Year, Domestic Demand exceeds the Minister's


total entitlement to all Natural Gas produced in Guyana. The Contractor shall give


the Minister notice on or prior to April 1 of the Calendar Year preceding the Calendar


Year in respect of which Contractor wishes to exerciselije-aiijjesaid right and the


term of the supply shall be on a Calendar Year agreed.


Notwithstanding the foregoing the Contractor sha^i^ftl^i^liFtd^t^ly the total


amount calculated pursuant to the foregoing VCa\


(c) The price payable for the sale of Natural Gas puKuai™i ^s; Ai^rcii Jtaljbe paid in





United States dollars (or other currency as may bV^g^d^aLaqda^ specified by the


Contractor within thirty (30) days of receipt oB^he^Qjntracti^s iiycoice by the


Minister, and shall be determined in accordance wims^^Stv^^^^afk failing which


Contractor’s obligations in respect of the Domestic SupplyTJbTigations of this Article


17 shall be suspended until payment is made good, at which time deliveries shall be


resumed subject to any alternative commitments that may have been reasonably


entered into by Contractor to dispose of the Natural Gas during the period of default


in payment. Contractor shall recover any amount due and unpaid by the Government,


plus interest at the Agreed Interest Rate, from the Governments Lifting Entitlement


of Natural Gas.


(d) Any sale of Natural Gas as provided for in Article 17.2(a) - (c) shall occur at the





Delivery Point or such other point as the Minister and the Contractor may mutually


agree.


(e) AH terms and conditions for the sale of Natural Gas pursuant to this Article, shall be


specified in a contract of sale entered into between the Minister and Contractor.




















Page 43





Petroleum Agreement


Government of Guyana - Anadarko


 Article 18 - Guyana Resources





18.1 In the conduct of Petroleum Operations pursuant to this Agreement the Contractor shall


require that the Operator give preference to:





(a) the purchase of Guyanese goods and materials, provided that such goods and


materials are available on a timely basis of the quality and in the quantity required by


Operator at competitive prices; and


(b) the employment of Guyanese Sub-Contractors in so far as they are commercially


competitive and satisfy the Operator's financial and technical requirements and meet


the requirements of Article 18.1 (a).


18.2 The Contractor shall establish appropriate tender procedures for the acquisition of goods,


materials and services which shall ensure that Guyanese suppliers and Sub-Contractors are


given adequate opportunity to compete for the supply of goods and services.


18.3 Within ninety (90) days alter the end of each Calendar Year the Contractor shall provide the


Minister with a report outlining its achievements in utilising Guyanese resources during that


Calendar Year.



























































Page 44





Petroleum Agreement


Government of Guyana - Anadarko


Article 19 - Employment and Training





19.1 Subject to the requirements of any law relating to immigration, Government shall provide the


necessary work permits and other approvals required by the Contractor for employment of


Expatriate Employees in Guyana for the purpose of Petroleum Operations.


19.2 Without prejudice to the right of the Contractor to select employees and determine the





number thereof in the conduct of Petroleum Operations, the Contractor shall, require the


Operator to employ and encourage Sub-Contractors to employ Guyanese citizens having


appropriate qualifications and experience whenever and wherever possible,.





19.3 During each year of the term of the Petroleum Prospecting License, or any renewal thereafter


the Contractor shall pay to GGMC the amounts of:





Initial Period, Phase One: 1JS$40,000.00


Initial Period, Phase Two: US$40,000.00


First Renewal Period: US$40,000.00


Second Renewal Period: US$40,000.00





for one or more of the purposes mentioned in Article 19.3 (a-< Article


19.3 shall be paid directly into bank accounts held and controllei Contractor


shall verily such bank accounts and GGMC agrees to cooperate^ assist and provide


Contractor any information it requires to conduct such verification





(a) to provide Guyanese personnel nominated by GGMC with on-the-job training in


Contractor's operations in Guyana and overseas and/or practical training at


institutions abroad, particularly in the areas of logistical planning for undertaking


Petroleum Operations, seismic acquisition and interpretation, economic analysis,


petroleum accounting and contract administration;


(b) to send qualified Guyanese personnel selected by GGMC on courses not exceeding


one year at universities, colleges or other training institutions mutually selected by


Contractor and GGMC;





(c) to send Guyanese personnel selected by GGMC to conferences and seminars related


to the petroleum industry;


(d) to purchase for GGMC advanced technical books, professional publications,





scientific instruments or other equipment required by GGMC.











Page 45





Petroleum Agreement


Government of Guyana - Anadarko


 Article 20 - Rights to Assets and Insurance


20.1 Rights to Assets





(a) The Contractor shall have the right to use free of charge assets previously installed by


the Contractor in relinquished areas which are required for its operations in the


remaining portion of the Contract Area provided that in the event of re-licencing of


the relinquished area, such licence shall exclude the aforesaid assets.


(b) Subject to Article 20.1 (c) upon expiry or termination of this Agreement in





accordance with the provisions hereof, the Contractor shall upon notification by


GCMC pursuant to Article 20.1 (d) (i):


(i)


deliver to the Minister, free of charge, in good order and condition, (fair wear


and tear excepted) all installations, works, pipelines, pumps, casings, tubings,


engines and other equipment, machinery or assets of a fixed or permanent


nature constructed, used or employed by the Contractor_»rtljret cator in the


O Anlrtipt A r,»o ■ ---


Contract Area;





(ii) deliver to the Minister, free of charge, any fixe


Operations outside the Contract Area and in


Contractor or Operator and used or employed i


Operations and located in Guyana for which cosi


in accordance with Annex C herein; where o


recovered the provisions of Article 20.1 (b)(iii)





(iii) sel! to the Minister any other assets owned by the Contractor or Operator and


used or employed by the Contractor or Operator in the Contract Area or


elsewhere in Guyana in connection w'ith Petroleum Operations at a price


equivalent to the unrecovered cost of the assets.





(c) The above provisions of Article 20.1 (b) shall not apply to:


(i) assets which are still required by the Contractor or Operator for use in respect





of an area in Guyana subject to another petroleum agreement at the lime of


ex pity or termination of this Agreement;


(ii) equipment and other assets rented or leased by Contractor in Guyana;





(iii) equipment and other assets rented or leased by Contractor and imported in


Guyana for use in Petroleum Operations and subsequently exported


therefrom;





Page 46





Petroleum Agreement


Government of Guyana - Anadarko


 (iv) equipment and any other assets owned or leased by a Sub-Contractor;


(v) household goods and vehicles which are the personal property of employees


of the Contractor and Sub-Contractor;





(vi) equipment and assets otherwise not owned by Contractor or Operator.





(d) The Contractor shall notify the Minister of all assets acquired as provided in section 4


of Annex C to this Agreement.


(i) At least six (6) Calendar Months before expiry of the term of this Agreement,





within three (3) Calendar Months following notice of termination of this


Agreement or promptly following cancellation of all Licences, GGMC shall


notify the Contractor of the assets to be delivered or sold to the Government.





(ii) Subject to the terms and the provisions of this Article, the Contractor shall


not, within one (1) year of the date upon which it estimaj;


of this Agreement will occur, remove from the Con),


assets of a fixed or permanent nature which migh


Government under this Article without the consei]


consent not to be unreasonably withheld.





(iii) Abandonment Programme and Budget





(aa) Within sixty (60) days after the expiration of tfig~teTnr'of this


Agreement or the sooner relinquishment of some or all of the


Contract Area, the Contractor shall carry out to the Minister’s


satisfaction an abandonment programme agreed with the Minister for


all installations and pipelines provided by Contractor under this


Agreement that the Minister elects not to have delivered up to him in


accordance with Article 20.1(b). With respect to the area being


relinquished and/or facilities thereon, such abandonment programme


shall comply with and be limited to internationally accepted standards


prevailing at the time of abandonment.





(bb) Concurrent w ith the submission of a Development Plan as provided


in Article 8.4, the Contractor shall submit for the Minister’s approval


a proposed abandonment programme and budget covering all such


installations and pipelines provided by Contractor under this


Agreement. The abandonment programme and budget may be


revised from time to time with the agreement of the Minister to


account for any changes in the Development Plan.








Page 47





Petroleum Agreement


Government of Guyana - Anadarko


The Minister shall act without unreasonable delay in reaching a


decision on the Contractor’s proposal under Article 20.1(d)(iii)(bb)


and may approve or modify' or impose conditions thereon. Before


modifying or imposing conditions on the proposal, the Minister shall


notify the Contractor of the proposed modification or conditions and


give the Contractor the opportunity to make written representations


within sixty (60) days thereafter about the proposed modi fications or


conditions. After taking into consideration such representations the


Minister and the Contractor shall make their best efforts to mutually


agree on the proposed modifications or conditions of the


abandonment programme and budget. In the event that the Minister


and Contractor cannot mutually agree on the proposed abandonment


programme and budget, either Party may by written notice to the


other Party propose that the dispute be referred for determination in


accordance with the provisions of Article 26.





In the event that the Contractor does not present a timely proposal to


the Minister under Article 20.1(d)(iii)(bb) the Minister after giving


thirty (30) days notice to the Contractor of his intention to do so, may


prepare an abandonment programme and budget for the Contract Area


if the Contractor does not present a proposal by the end of the thirty


(30) day period. When the Minister has so prepared the abandonment


programme and budget, it shall have the same effect as if it had been


submitted by the Contractor and approved by the Minister.





Contractor shall have the right on an ose a revised


abandonment programme and bud 1 be subject


to the approval process in Article^ visions to


the abandonment programme and b vision to


the guarantee referred to in Article





All funds required to carry out the af>pro\ programme


shall be made available by Coritra.«(>lyAW%i the costs for


abandonment are incurred.





All costs included in the approved abandonment programme and


budget shall be recoverable as operating costs on a unit of production


basis commencing during the period when the abandonment


programme and budget is approved. The amount to be recovered in a


respective period shall be calculated by dividing the approved


abandonment budget by the estimated ultimate recoverable reserves,


which may be revised from time to time based upon the actual


performance of the Field(s) and multiplying the result by the units


produced in the period.





Page 48


 (hh) Contractor shall deliver to the Minister within seven (7) days after the


date the abandonment programme and budget are approved an


undertaking from Contractor’s immediate parent company stating that


such parent company shall ensure provision of financial and technical


resources necessary to conduct the approved abandonment


programme. The amount of the financial undertaking shall be equal


to the amount recovered under Article 20.1 (d)(iii)(gg) less any


amounts spent under the approved abandonment programme.





(ii) Notw ithstanding the provisions of Article 20.1(d)(iii)(ff), in the event


the Minister elects to have all or a portion of the facilities delivered


up to him in accordance with Article 20.1(b), the Contractor shall pay


the Minister at the time of transfer the amounts stipulated in the latest


approved abandonment budget for the transferred facilities. Upon


transfer and receipt of the funds, the Minister shall assume all


responsibilities for the transferred facilities and their abandonment


and shall hold the Contractor harmless against any liability with


respect thereto accruing after the date of such transfer to the Minister.


(iv)


Subject to Article 20.1 (c), in the event that the


assets pursuant to this Article, the Govemme


with respect to such assets, arising from and


shall not direct the Contractor to remove or al


to regulation 9 (1 )(a) of the Regulations. T





and hold Contractor harmless for any and


arise from the use or abandonment of any a


acquisition by the Government.





(v) Assets not acquired by the Government pursuant to this Article may be sold


or otherwise freely disposed of by the Contractor subject to Article 21.2 and


the Regulations.





20.2 Insurance





(a) The Contractor shall effect at all times during the term of this Agreement, insurance


as required by applicable laws, rules, and regulations and of such type and in such


amount as is customary in the international petroleum industry in accordance with


good oil field practice appropriate for Petroleum Operations in progress in respect of


but not limited to:


(i) loss or damage to all assets used in Petroleum Operations;





(ii) pollution caused in the course of Petroleum Operations for which the





Contractor or the Operator may be held responsible;


Page 49





Petroleum Agreement


Government of Guyana - Anadarko


 (iii) loss or damage to property or bodily injury suffered by any third party in the


course of Petroleum Operations for which the Contractor may be liable to


provide an indemnity pursuant to Article 2.4;


(iv) the Contractor's and/or Operator's liability to its employees engaged in


Petroleum Operations.





To the extent permitted by applicable laws, rules and regulations, such


insurance may be provided through Contractor’s affiliate insurance company.


(b) Subject to the Minister’s approval, which shall not be unreasonably withheld, the


Contractor, notwithstanding the provisions of Article 20.2(a), shall have the right to


self-insure all or part of the aforementioned insurances in Article 20.2(a).


(c) The Contractor shall require the Operator to carry and to endeavour to have its


Sub-Contractors carry insurance of such type and in such amount as is customary in


the international petroleum industry in accordance with good oil field practices.

































































Page 50


Petroleum Agreement


Government of Guyana - Anadarko


 Article 21 - Import Duties





21.1 The Contractor, and the Sub-Contractors engaged in Petroleum Operations shall be permitted


to import, free of duty, VAT or all or any other duties, taxes, levies or imposts, all equipment


and supplies required for Petroleum Operations including but not limited to drillships,


platforms, vessels, geophysical tools, communications equipment, explosives, radioactive


sources, vehicles, oilfield supplies, lubricants, consumable items (other than foodstuffs or


alcoholic beverages or fuel), as well as all items listed on Annex D. The aforementioned


items, including but not limited to the items listed on Annex D, shall be deemed approved


and certified by the Chief Inspector to be for use solely in carrying out Petroleum Operations.


The Contractor shall give prior notification to the Minister of Suj^^i^rjwi^engaged in


Petroleum Operations.





(a) Subject to Article 21.1, and for as long as this Petrole,


the Contractor and Sub-Contractors engaged in Petro


be required to pay to the relevant authority a ten pero


imports, where such imports have been certified by


solely in carrying out Petroleum Operations in any an





21.2 Subject to Article 20, any of the items imported into Guyana may, if no longer required for


Petroleum Operations hereunder, be freely exported at any time by the importing party,


without the payment of any export duty or impost; provided, however, that on the sale or


transfer by the importer of any such item to any person in Guyana (other than the


Government) import duty shall be payable by the importer on the value thereof at the date of


such sale or transfer as determined by the Customs and Excise Department in accordance


with their applicable rules.





21.3 Each Expatriate Employee of the Contractor (including any Affiliated Company) and of


Sub-Contractors, who have been assigned to work in Guyana for the Contractor or its Sub-


Contractors shall be permitted, subject to the limitations and conditions set out in the


Customs Act, to import into Guyana free of import duty and taxes within six (6) months on


first arrival his personal and household effects including one (1) motor vehicle per Expatriate


Employee of Contractor (including any Affiliated Company) and of Sub-Contractors;


provided, however, that no property so imported by the employee shall be sold by him in


Guyana except in accordance with Government regulations and upon the payment of the


prescribed customs duties. Any importation or replacement of motor vehicles by Expatriate


Employees of the Contractor (including any Affiliated Company) and of Sub-Contractors,


shall be a matter for consultation with the Minister.


21.4 Each Expatriate Employee of the Contractor (including any Affiliated Company) and of Sub-


Contractors shall have the right to export from Guyana, free of all duties and taxes, and at


any time, all of the items imported under Article 21.3.





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Petroleum Agreement


Government of Guyana - Anadarko


Article 22 - Foreign Exchange Control





22.1 The Contractor shall, during the term of this Agreement have the right:


(a) to retain abroad all foreign exchange obtained from the export sales of Contractor's


Petroleum and to remit and retain abroad all foreign exchange earned from sales of


Petroleum or assets in Guyana;


(b) to finance Petroleum Operations hereunder in any currency through any combination


of equity, inter-affiliate or third party loans, inter-company open accounts, or


production payments but no payments of principal or interest in respect thereof shall


be made from any source in Guyana other than the bank accounts referred to in


Article 22.1 (c);


(c) to open and maintain bank accounts denominated in Guyanese dollars and/or United


States dollars in Guyana and freely dispose of the sums deposited therein without any
































(e) to purchase and, with the approval of the Bank of Guyana, to sell Guyanese currency,


through the authorized banks, without discrimination, at the rate of exchange


determined by the Bank of Guyana for authorized banks at the time of purchase or


sale.


22.2 Expatriate Employees of the Contractor or of Affiliated Companies and of Sub-Contractors


engaged in Petroleum Operations shall be subjected to all Exchange Control Regulations that


may be in effect from time to time. Expatriate Employees of the Contractor and Sub-


Contractors shall be entitled to remit freely abroad any portion of their salaries paid in


Guyana and any investment income that may be earned on the portion of their salaries paid in


Guyana.


22.3 Where Contractor, Affiliated Company or Sub-Contractor by notice in writing to the


Commissioner General, Guyana Revenue Authority has guaranteed the full and proper


discharge by an Expatriate Employee engaged in Petroleum Operations of his liability to


income tax under the laws of Guyana, that Expatriate Employee shall be entitled to receive


payment of the whole or any part of his remuneration in the country in which he is normally


resident.





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Petroleum Agreement


Government of Guyana - Anadarko


Article 23 - Accounting and Audits





23.1 The Contractor shall be responsible for maintaining accounting records relating to Petroleum


Operations under this Agreement in accordance with the Accounting Procedures set out in


Annex C hereto.


23.2 The Minister shall have the right to audit the accounting records of the Contractor in respect


of Petroleum Operations in accordance with Accounting Procedure.


23.3 Nothing in this Article shall be construed as limiting the right of Government or any officer


of Government pursuant to any statutory power to audit or cause to be audited the books of


the Contractor.



















































































Page 53





Petroleum Agreement


Government of Guyana - Anadarko


Article 24 - Force WHajeure








24.1 Any non-performance or delay in performance, wholly or in part, by any Party hereto or any


of its obligations under this Agreement or in fulfilling any condition of any Licence granted


to such Party or in meeting any requirement of the Act or Regulations and any Licence issued


thereunder, shall, except for the payment of monies due by Government to Contractor or


monies due to Government under section 43 (4) of the Act (unless such failure to pay is


prevented by any action of the Government), not be a breach of this Agreement, the Licence


or the Act and Regulations if and to the extent that such non-performance or delay, wholly or


in part, is caused by Force Majeure as defined in this Article.


24.2 In this Article, the term “Force Majeure” shall mean any event beyond the reasonable control


of the Party claiming to be affected by such event which has not been brought about at its


instance and which has caused such non-performance or delay in performance and, without


limitation to the generality of the foregoing, includes acts of God, natural phenomena or


calamities, earthquakes, floods, tsunamis, epidemics, quarantines, fires, wars declared, or


undeclared, hostilities, invasions, blockades, riots, strikes, insurrection, civil disturbances,


mining of the seas, piracy, international disputes affectir if the Contract Area and


any governmental action or inaction, that would preyqn1 of an obligation or


ability of the Contractor to export Petroleum (exo&£t> cle 14.5).


i


24.3 Where any Party is claiming suspension of its obligations on accoiinf oj Fcrce Majeure, such


Party shall promptly notify the other Parties in writing of the ri^u/rerice thereof giving


particulars of the Force Majeure and obligations affected. Eaclr~l^rft'^hall promptly notify


the other Parties as soon as the Force Majeure has been.remov^a qprffo longer prevents it


from carrying out its obligations hereunder.


24.4 Where a Party is prevented from exercising any rights or performing any obligations under


this Agreement due to a Force Majeure, the Minister hereby agrees pursuant to section 43 (3)


of the Act, subject to the proviso therein, that a period of additional time necessary for


restoration of damages caused during a Force Majeure delay shall be added to the time


allowed under this Agreement for the performance of such obligation and for the


performance of any obligation or the exercise of any right dependent thereon and to the term


of any Licence issued pursuant to this Agreement. In the event the Parties cannot agree on


whether the occurrence of the event in question is considered a “force majeure” event, or if


the Minister does not agree an additional time period should be added, pursuant to section


43(3) of the Act, then a Party may refer the dispute to Arbitration pursuant to Article 26, to


determine the nature of the “force majeure” event and its influence on the contractual


obligations of the Party concerned. The Contractor shall have the option of terminating this


Agreement without any further obligation if Force Majeure exceeds one (1) year.











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Petroleum Agreement


Government of Guyana - Anadarko


24.5 Without prejudice to the other provisions of this Article, the Parties shall meet to discuss the


consequences of the Force Majeure and the course of action to be adopted in the


circumstances.


24.6 The Government shall not invoke Force Majeure due to any order, regulation or written





directive of the Government which affects the Government’s performance of its obligations


under this Agreement.





































































































Page 55





Petroleum Agreement


Government of Guyana - Anadarko


(\M_


Article 25 - Assignment








25.1 Subject to the regulation 20 of the Regulations, the Contractor shall not assign, or transfer in


whole or in part, any of its rights, privileges, duties or obligations under this Agreement, or


any Licence issued pursuant to this Agreement, to any person, firm or corporation, without


the prior written consent of the Minister.


25.2 The Minister shall give his consent under Article 25.1 where:


(a) the assignment or transfer will not adversely affect the performance or obligations


under this Agreement;





(b) the assignment is not contrary to the interests of Guyana^


/ i


* / * Uv


(c) subject to (a) above, the assignment or transfer is to an appipvfedfe








assignment or transfer by Contractor w'ithin sixty (60) days (A reeaipt nf »





consent shall be deemed to have been given by the Minister.





25.4 Any assignment made pursuant to this Article shall hind the assignee to all the terms and


conditions hereof and the terms and conditions of any Licence issued pursuant to this


Agreement unless otherwise agreed, and as a condition to any assignment, the assignee shall


provide an unconditional undertaking to the Minister to assume all obligations by the


Contractor under this Agreement or any Licence issued pursuant to this Agreement.





25.5 An application for assignment or transfer of a Licence shall be made in accordance with


Form E of the schedule specified in the Regulations. The applicant shall submit such


additional information relating to the intended assignee w hich the Minister may reasonably


require to enable him to dispose of the application.












































Page 56





Petroleum Agreement


Government of Guyana - Anadarko


Article 26 - Sole Expert Determination and Arbitration


26.1 The Parties shall make reasonable efforts to resolve amicably all Disputes by negotiation. A





notice of the existence of a Dispute shall be given by a Party to another Party in accordance


with Article 33. In the event that no agreement is reached within sixty (60) days after the


date on which a Party notifies the other that a Dispute exists, or such longer period as


specifically agreed by the Parties, any Party shall have the right to have such Dispute


determined by arbitration or a sole expert as provided for in this Article 26.


26.2 Any claim, demand, cause of action, dispute, or controversy arising out of or in connection





with this Agreement, including any question regarding its formation, existence, validity.


enforceability, performance, termination, or alleged breach (“Iti hich cannot be


settled amicably by negotiation shall be resolved by binding sole expert


pursuant to Article 26.3, Article 26.4 or Article 26.6, whip





26.3 Any matter required to be referred to a sole expert for deb ement,


including under Articles 5.4, 8.5, 12.2(a)(i), 13.4, and ai! Parties


expressly agree in writing to refer to a sole expert, shall1 pert for


determination, by a Party giving notice to such effect pursuafrtdo ly^ole expert


shall be appointed by agreement between the Parties, and in the s fail to agree


on the sole expert within thirty (30) days after receipt of the WTitten notice from any Party


proposing the appointment of a sole expert, such expert shall be appointed by the


International Centre for Expertise of the International Chamber of Commerce (“ICC”). A


sole expert shall be an independent and impartial person of international standing with


relevant qualifications and experience. The expert, once appointed, shall have no ex parte


communications with any of the parties to the Dispute concerning the expert detennination or


the underlying Dispute. ITie Parties shall cooperate fully in the expeditious conduct of such


expert determination and to provide the expert with access to all facilities, books, records,


documents, information and personnel necessary to make a fully informed decision in an


expeditious manner. The sole expert shall act as an expert and not as an arbitrator or


mediator, and shall endeavor to resolve the Dispute within thirty (30) days of his


appointment, but no later than sixty (60) days after his appointment. The sole expert shall


decide the manner in which any determination is made, hut in any event shall accept oral


and/or written submissions and arguments from the Parties. All correspondence,


documentation and information provided by a Party to the sole expert shall be copied to the


other Party, and any ora! submissions to the sole expert shall be made in the presence of all


Parties and each Party shall have a right of response. The decision of the sole expert on


matters referred to him shall be final and binding on the Parties. The Parties shall refer any


Dispute arising out of or relating to such expert decision, including enforcement thereof, to


arbitration pursuant to Article 26.4 or Article 26.6, whichever applies.











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Petroleum Agreement


Government of Guyana - Anadarko


26.4 Subject to the provisions herein, the Parties hereby consent to submit lo the International


Centre for the Settlement of Investment Disputes (ICSID) any Dispute relating to or arising





out of this Agreement to arbitration pursuant to the rules of the Convention on the Settlement


of Investment Disputes between States and Nationals of Other States (hereinafter referred to


as the “Convention”). It is hereby stipulated that the transaction to which this Agreement





relates is an investment within the meaning of the Convention. The Government hereby


irrevocably waives any claim to immunity for itself, its agencies, its enterprises, and any of


its assets with regard to any sole expert determination or arbitration pursuant to this Article


26 and to any proceedings to recognise or to enforce this Article 26 or any proceeding to


recognise or enforce a sole expert determination, or an arbitral award rendered in an


arbitration thereunder. Without prejudice to the generality of the foregoing, the waiver of





immunity shall include immunity from service of process and immunity from jurisdiction of


any competent court or any arbitration tribunal, and immunity of any of the Government's, its


agencies’, or its enterprises' property from execution of any sole ex nation or


arbitration award or judgment entered thereon,


// *V


26.5 f *


If the Secretary-General of ICSID refuses to register a request for


of arbitrators constituted pursuant to Article 26.4 above determines


of ICSID's jurisdiction, either Party may request arbitration of.


arbitrators pursuant to the Arbitration Rules of the Untied


International Trade Law (UNCITRAL). The American





administer the arbitration under the UNCITRAL Arbitration


appointing authority when the UNCITRAL Arbitration Rules call for an appointing authority.





26.6 The seat of the arbitration proceedings pursuant to this Article 26 shall be Washington DC,


United States of America, however, hearings may be held at such other place as the Parties


may agree to in writing. The arbitration proceedings shall be conducted in the English


language.


26.7 The fees and expenses of a sole expert (as well as the charges for the use of ICSID or other


facilities) shall be borne equally by the Contractor and the Government. Each Party shall


bear any other expenses it incurs in connection with expert or conciliation proceedings. In


the case of arbitration proceedings, the arbitrators shall assess the expenses incurred by the


Parties, the fees and expenses of the arbitrators, the charges for the use of the facilities and


any other costs related to the arbitration and shall decide by whom such costs shall be paid in


their award. The arbitral award shall be made and payable in dollars of the United States of


America, free of any tax or other deduction. The award shall include interest, unless the


arbitration tribunal determines that it is not appropriate. Interest shall run from the date of


any breach or violation of this Agreement. Interest shall continue to run from the date of


award until the award is paid in full. Interest shall be calculated at the Agreed Interest Rate.


The arbitrator(s) shall render a decision within six (6) months after having been confirmed,


or such other time as the Parties may agree.











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Petroleum Agreement


Government of Guyana - Anadarko


 26.8 The decision of a majority of the arbitrators shall be final and binding on all the Parties and


judgment on the award may be entered by any court of competent jurisdiction.
























































































































































Page 59





Petroleum Agreement *5>


Government of Guyana - Anadarko








 Article 27 - Applicable Law


27.1 This Agreement shall be governed by, interpreted and construed in accordance with the laws





of the Republic of Guyana, and, consistent with such rules of international law as may be


applicable or appropriate, including the generally accepted customs and usages of the


international petroleum industry.

























































































Page 60





Petroleum Agreement


Government of Guyana - Anadarko 9


Article 28 - Protection of the Environment








28.1 In accordance with the Environmental Protection Act, 1996, the Contractor shall obtain an


environmental authorization as required from the Environmental Protection Agency and


comply with the provisions of that Environmental Protection Act in relation to any activity of


this Agreement that is governed by that Environmental Protection Act.


28.2 The Contractor is precluded from initiating any exploration or development activity on those


areas outside of the Contract Area which the Environmental Protection Agency may


determine to be sensitiv e or protected.


28.3 In furtherance ofregulation 6 of the Regulations in the conduct of Petroleum Operations the


Contractor shall take necessary and adequate precautions, in accordance with good


international petroleum industry practice, against pollution and for the protection of the


environment and the living resources of the rivers and sea.





28.4 If the Contractor's failure to comply with the provisions of Attfell lollutionor


damage to the environment, riverain or marine life or otheryh^e/i take all


rcasonable measures in accordance with good internationAl nfeti i practice to


remedy the failure and the effects thereof and shall where nolluty jr disperse it


in an environmental 1y acceptable manner. The Contractor $hyl\nbt b fo remedy or


clean up pollution or environmental damage of any typeVfca in/r to the


commencement of Petroleum Operations by the Contractor or\qs^. fence of pre-


existing environmental conditions.


28.5 The Contractor shall notify the Minister forthwith in the event of any emergency or accident


arising from Petroleum Operations affecting the environment and shall take such action as


may be prudent and necessary in accordance with good international petroleum industry


practice in such circumstances.


28.6 If the Contractor does not act promptly pursuant to Article 28.4 so as to control or clean up


any pollution within a reasonable period specified by the Minister, the Minister may, after


giving the Contractor reasonable notice in the circumstances, take any actions which are


necessary in accordance with good international petroleum industry practice and the


reasonable costs and expenses of such actions shall be borne by the Contractor.























Page 61





Petroleum Agreement


Government of Guyana - Anadarko


 Article 29 - Termination and Cancellation





29.1 This Agreement shall be deemed to have been terminated if the Petroleum Prospecting


Licence granted to the Contractor pursuant to Article 3 and every Petroleum Production


Licence granted to the Contractor under Article 8 has either expired or, under and in


accordance with the Act and any relevant provision of this Agreement, been surrendered by


the Contractor or lawfully cancelled by the Minister pursuant to section 42 of the Act but


save as aforesaid, shall continue in full force and effect so long as the Contractor continues to


hold any of the said Licences.


29.2 Should any issue arise between the Parties as to whether the Contractor is in default and such


issue cannot be amicably settled by consultation between the Parties and a dispute thereon is


referred for resolution pursuant to Article 26, this Agreement and the said Licences shall


continue in force pending resolution of such dispute.


29.3 Pursuant to section 42 of the Act, the Minister shall not cancel a Licence on the basis of





default unless the Minister has, by notice served on the licensee, given not less than thirty


(30) days notice of such intention and the basis of default. In the notice the Minister shall


specify a reasonable date, not less than sixty (60) Business Days, before w'hich the licensee


may submit a written response or remedy the default.





29.4 On termination of this Agreement, or cancellation of any Licence as aforesaid, the rights and


obligations of the Parties shall cease by the termination or cancellation, but such


termination, or cancellation shall not affect any right of action existing or liabilities incurred


by a Party before the date of termination or cancellation, and any legal proceedings that


might have been commenced or continued against a Party may be commenced or continued


against it.















































Page 62





Petroleum Agreement


Government of Guyana - Anadarko


 Article 30 - Effective Date


30.1 The Effective Date shall be the date on which this Agreement is duly signed.
















































































Page 63


Petroleum Agreement


Government of Guyana - Anadarko


PA-V


Article 31 > Miscellaneous





31.1 The Government assures the Contractor that the Contract Area lies entirely within the


territorial limits of Guyana and that Guyana has sovereignty over such area. The


Government shall continue to assert its right to the entire Contract Area and seek to resolve


current or future claims, if any, by other States that impugn any portion of the Contract Area.


The Government shall also use its best efforts to permit due observance of the terms and


conditions of this Agreement by both Parties. Both Parties undertake not to take any action


inconsistent with the terms and conditions of the Agreement


31.2 This Agreement shall not be amended or modified in any respect except by written


agreement entered into by all the Parties which shall state the date upon which the


amendment or modification shall become effective.





31.3 In the event of any conflict between any provisions in the n


any provisions in the Annexes, the provision in the main b





31.4 The headings of this Agreement are for convenience of referonceion^aihi^g^Bl


into account in interpreting the terms of this Agreement, f f ^ /





31.5 A reference to the singular in this Agreement includes a r<


versa.





31.6 The provisions of this Agreement shall inure to the benefit of and be bincfflTg upon the Parties


and their permitted assignees and successors in interest.


31.7 No waiver by any Party of any one or more obligations or defaults by any other Party shall be


construed as a waiver of any other obligations or defaults whether of a like or of a different


character.


31.8 This Agreement supersedes and replaces any previous Agreement or understanding between


the Parties whether oral or written on the subject matter hereof, prior to the date of this


Agreement.
































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Petroleum Agreement


Government of Guyana - Anadarko


Article 32 - Stability of Agreement








32.1 Except as may be expressly provided herein, the Government shall not amend, modify,


rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel


replacement or substitution, or otherwise seek to avoid, alter, or limit this Agreement without


the prior written consent of Contractor.


32.2 After the signing of this Agreement and in conformance with Article 15, the Government


shall not increase the economic burdens of Contractor under this Agreement by applying to


this Agreement or the operations conducted thereunder any increase of or any new petroleum


related fiscal obligation, including, but not limited to, any new taxes whatsoever, any new


royalty, duties, fees, charges, value-added tax (VAT) or other imposts.


32.3 If at any time after the signing of this Agreement there is a change in the laws of Guyana


whether through the amendment of existing laws (including the hydrocarbons law, the


customs code or tax code) or the enactment of new law s or a change having the force of law


in the interpretation, implementation or application thereof (whether the change is specific to


the Agreement, the Contractor or of general application) and such change has a materially


adverse effect on the economic benefits, including those resulting Injtn ihe.jjscal regime


provided by this Agreement, accruing to the Contractor hereundp<^S^.^i6^&m of this


Agreement, the Government shall promptly take any and all aflithe


lost or impaired economic benefits to Contractor, so that Gcmyactt^P^^bs tjjfeAame


economic benefit under the Agreement that it would have received iiilaw


or its interpretation, application, or implementation. The fore*c^m>^i^^Fti9x{^lyinyude


the obligation to resolve promptly by whatever means may Ve or


anomaly between this Agreement and any such new or amended fagisihiion, inclijfefinSoy way


of exemption, legislation, decree and/or other authoritative acts. Ss'${VrANA^/


32.4 In the event that Contractor’s overall economic benefits have been materially and adversely


affected by actions or changes as set forth above in Section 32.3, whether directly or


indirectly, Contractor may notify the Government in writing. The Parties shall then meet


within thirty (30) days after such notification with the objective of reaching agreement on a


remedial action to be taken by the Government, whether by exemption, legislation, decree


and/or other authoritative acts or by amendment to the terms of the Agreement. If the Parties


are unable to resolve their differences within one hundred twenty (120) days after Contractor


has issued the aforementioned notification, then the Contractor may refer the matter to


arbitration in accordance with Article 26. In such case, the arbitral tribunal is authorized to


modify the Agreement to re-establish the economic benefits under the Agreement to


Contractor described in Article 32.3, or in the event this is not possible, including for


example where such dispute W'ould not qualify or constitute a legal dispute under Article 25


of the ICSID Convention, to award damages to Contractor that fully compensate it for the


loss of economic benefits under the Agreement, both historical and future losses.





Page 65





Petroleum Agreement 3


Government of Guyana - Anadarko


Article 33 - Notices





33.1 All notices and other communications to be given under this Agreement shall be deemed to


have been made properly if delivered in person in writing, mailed with charges prepaid or


sent by facsimile, by one Party to the other at their respective addresses in Guyana as set


forth below and copied to their overseas addresses. Any such notice or communication given


as aforesaid shall be deemed to have been given and received at the time of delivery (if


delivered by hand or by courier) or at the time of receipt (if transmitted by facsimile):





The Minister Responsible for Petroleum


c/o Guyana Geology And Mines Commission


Upper Brickdam, Stabroek,





P.O. BOX 1028, Georgetown, GUYANA.


Attention: Commissioner, GGMC


Telephone 592-225-3047


Facsimile: 592-223-5223





The Company Secretary/Director


ANADARKO GUYANA COMPANY


c/o 62 Hadfield and Cross Streets, Werk-en-Rust,


Georgetown, GUYANA


Attention: Anadarko Guyana Company representative


Teiphone: 592-227-7814


Facsimile: 592-225-7996





33.2 Any Party may, by notice as provided hereunder to the other Parties and GGMC change its


address and other particulars for notice purposes.





IN WITNESS whereof the Parties have caused their duly authorised representatives to set their hands


at the City of Georgetown, in the Republic of Guyana in the presence of one another the day and year


first above written.





Signed by The Minister Responsible For Petroleum





Representing the Government of the Republic ofiGuyana.








His Excellency Donald Ramotar


President of the Republic of Guyana 3UC





Signed by The President of ANADARKO GUYANA COMPANY


ttkba:-to.....4.'..,





Company President








Page 66





Petroleum Agreement


Government of Guyana - Anadarko


A TRUE COPY of the original which


was registered in the Deeds Registry at


Georgetown, Oemerara, Guyana on the


^ Y 0f ?aSi=


Assistant Sworn Clerk Ss^L


C~eKtr ^'xSv'%\


ANNEX A


DESCRIPTION OF PROSPECTING AREA








Description of area to be granted under Petroleum Prospecting Licence pursuant to Article 3 of the Petroleum





Agreement


The area compnses approximately 19,828 sq. km described herein consisting of graticular blocks identified herein


shown on Block Reference Map at Annex B


Latitude and Longitude Measurements are North and West respectively.








POINT NO. LATITUDE LONGITUDE POINT NO. LATITUDE LONGITUDE





1 10° 05.00' N 59° 25.00' W 22 10° 50.00' N 57° 40.00' W


2 10° 10.00' N 59° 25.00' W 23 / 57° 35.00’ W





3 10° 10.00' N 58° 50.00' W 24 / / ,0-45 0,n, \ 57° 35.00' W





4 10° 20.00’ N 58“ 50.00' W 25 ( ( ]57° 25.00’ W


5 10° 20.00'N 58° 35.00' W 26 \* > *5330*4/* / 57° 25.00 W 1





6 10° 25.00' N 58° 35.00'W 27 > 57° 30.00’ W





7 10° 25.00'N 58° 20.00' W 28 9° 20.00' N 57° 30.00’ W


8 10° 30.00’ N 58° 20.00' W 29 9° 20.00’ N 58° 15 00'W





9 10° 30.00'N 58° 10.00'W 30 9° 25.00' N 58° 15.00’W





io 10° 35.00’ N 58° 10.00'W 31 9° 25.00' N 58° 20.00’ W


11 10° 35.00' N 58° 05.00’ W 32 F 9° 30.00' N 58° 20.00' W


12 10° 45 00' N 58° 05.00' W 33 9° 30.00' N 58° 25.00' W





13 10° 45 00' N 58° 00.00' W 34 9° 50.00' N 58° 25.00’ W





14 10° 50.00'N 58° 00.00' W 35" 9° 50.00' N 58° 30.00' W


15 10° 50.00* N 57° 55.00’ W 36 9° 55.00' N 58° 30.00’ W





16 10° 55.00’N 57° 55.00' W 37 9° 55.00' N 58° 45.00' W


17 10° 55.00' N 57° 50.00 W 38 10° 00.00’ N 58° 45.00 W


18 11° 00.00'N 57Q 50.00’ W 39 10° 00.00' N 58° 55.00' W





19 11° 00.00'N 57° 45.00’ W 40 10° 05.00' N 58° 55.00’ W


20 10° 55.00' N 57° 45.00’ W





21 10° 55.00' N 57° 40 00’ W


 DESCRIPTION OF CONTRACT AREA (CONT'D)





The following five (5) minute by five (5) minute square graticular blocks describe the area. These blocks are shown


on the Map attached


Block Ee 128-132


Block Ff 48, 60, 71,72, 81-84. 90-96, 99-108.111-132, 134-144


Block Gg 3,14-16, 25-29, 37-43, 49-55, 61-67, 73-79, 85-91,97-103,109-115,121-127,133-139


Block B 4-12,19-24, 32-36,44-48, 56-60,68-72, 81-84, 94-96


Block C 1-7,13-19. 25-31. 3743,49-55, 61-67, 73-79, 85-91, 103
















































































ii


 57°


60' 59' 58'























































































































POP FURTHER INFORMATION:





J7 Karen Llvan Commissioner Ag.


Guyana Geology A Mines Commission


41 Upper Bnckda-n Georgetown*, Guyana, South America


TBLJ (»2)





Si S-'Bo.'O (IS2) 225 2862 . Rtf*


PAX: |S9Z) 1274014 ‘ C t


73 email: commissioner@ggmcgov.ty i





website: www.ggmc.gov.gy








Universal Transverse Mercator Projection


, Projection International UFA


Spheroid Meter


' Unit o* Measurement 63* West of Greenwich





iM»ndian ofOrtgm Equator


latitude of Origin 39996


Scale Facer Q Ongin 500.000 Meters Eastin , 31A


1 False Coordinates of Ongin


i Datum PSAD 1956 N*' Meters Northing





cn T




















CM.








 ANNEX C - ACCOUNTING PROCEDURE





This Annex is part of this Petroleum Agreement (hereinafter referred to as "the Agreement")


SECTION 1 - GENERAL PROVISIONS





1.1 Definitions





For the purpose of this Accounting Procedure the terms used herein which are defined in the


Agreement or in the Act shall have the same meaning when used in this Accounting


Procedure.





1.2 Documentation Required to be Submitted by the Contractor





(a) The Contractor shall keep the accounts, operating recori statements


relating to the Petroleum Operations:





(i) in accordance with the terms of the Agi nting


Procedure; and





(ii) in such form as may be agreed from time to ti which


shall identify the categories of costs, expense! credits


classified in Sections 2 and 3 of this Annex





(b) Pursuant to (a) above, the Contractor shall make quarterly Statements relating to the


Petroleum Operations including:


(i) Production Statement (see Section 5 of this Annex).





(ii) Value of Production and Pricing Statement (see Section 6 of this Annex).


(iii) Statement of Expenditures and Receipts (see Section 7 of this Annex).





(iv) Cost Recovery Statement (see Section 8 of this Annex).


(v) End-of-Year Statement (see Section 9 of this Annex).





(vi) Budget Statement (see Section 10 of this Annex).





3.3 Language. Units of Account and Exchange Rates





(a) Accounts shall be maintained in Guyanese dollars and United States dollars;


however, the United States dollars accounts will prevail in case of conflict. Barrels





Annex C Page I





Petroleum Agreement


Government of Guyana - Anadarko


 shall be employed for measurements of production of Crude Oil required under the


Agreement and this Annex. Standard cubic feet (scf) shall be employed for


measurements of production of Natural Gas required under the Agreement and this


Annex. The language employed shall be English.


(b) Should there be any gain or loss from exchange of currency, it will be credited or





charged to the accounts under the Agreement.


(c)


(i) Amounts received and costs, expenses and expenditures made in currencies


other than United States dollars or Guyanese dollars shall be converted into


United States dollars by using the relevant foreign exchange rate published in


the Wall Street Journal on the first business day following the Month in


which the relevant transaction occurred.





(ii) Amounts received and costs, expenses and expenditures made in Guyanese


dollars or in United States dollars shall be converted from Guyanese dollars


into United States dollars or from United States doll


on the basis of the average of the buying and sellj


the currencies in question as determined an<


Guyana, prevailing on the last Business Day ofj


the Calendar Month that the relevant transact;








(iii) The actual exchange rates applied in accordam c) (ii)


above and, where relevant, sub-section 1.3 (c) (ij ified in


the relevant Statements required under sub-Section Annex.





1.4 Payments





(a) All payments between the Parties under the Agreement shall, unless otherwise


agreed, be made in United States dollars and through a bank designated by the


receiving Party.





(b) All sums due under the Agreement during any Calendar Month shall, for each day


such sums are overdue bear interest at the Agreed Interest Rate.


1.5 Audit and Inspection Rights of Government





(a) The Minister shall have the right to audit upon ninety (90) days written notice, at his


sole cost and expense, accounts and records of the Contractor, maintained hereunder


with respect to each Calendar Year within two (2) years from the end of each such


Year. For purposes of auditing, the Minister may audit, examine and verify, at


reasonable times during normal business hours but not more than once per Calendar


Annex C Page 2








Petroleum Agreement


Government of Guyana - Anadarko


 Year, all charges and credits relating to the Contractor's activities under the


Agreement and all books of accounts, accounting entries, material records and


inventories, vouchers, payrolls, invoices and any other documents, correspondence


and records necessary to audit and verify the charges and credits. During such annual


audit, examination and verification in respect of each Calendar Year the Minister


may review items previously subjected to audit in earlier Years but such review shall:





(i) only be carried out in conjunction with the annual audit for any given Year;


and





(ii) subject to Section 1.5 (b), no sooner than twelve (12) months following the


previous audit thereof; and





(iii) only be for the purposes of verifying a matter arising in a later period, which


relates to the earlier Year(s) in question or as specified in Section 1.5 (b).








In conducting such audits, the auditors may physically ex at the sole cost and


expense of the Minister, property, facilities and stocks u rations


wherever located. Such examinations shall take pla> i^S during


normal business hours upon fifteen (15) days prior rjoti< "^4





(b) At the conclusion of each audit, the Parties shall standing


matters and a written report will be issued to the Conttoc Jyiays of


the conclusion of such audit. The report shall includ^sill g pfom such


audit.





'file Contractor shall reply to the report in writing as soon as possible and in any


event not later than sixty (60) days following receipt of the report indicating


acceptance or rejection of the audit claim and in the case of a rejection showing


explanations thereof.





Should the Minister consider that the report or reply requires further investigation on


any item therein, the Minister shall have the right to conduct further investigation in


relation to such matter within sixty (60) days of its receipt of Contractor’s reply. If


within sixty (60) days of the Minister's further investigation, the Parties are unable to


agree to the disposition of the Minister's audit claim, the claim shall be submitted to


arbitration in accordance with Article 26 of the Agreement.





All adjustments resulting from an audit agreed to by the Contractor and the Minister


conducting the audit shall be reflected promptly in the accounts by the Contractor and


any consequential adjustments in Crude Oil entitlements shall also be made


promptly.











Annex C Page 3





Petroleum Agreement


Government of Guyana - Anadarko


 In the event that an audit claim by the Minister is not settled to the satisfaction by the


Contractor's reply as provided for above, the Contractor shall be entitled to recover


any disputed amounts pending final resolution of the claim. However, any


subsequent adjustments in the Minister's share of Profit Oil following resolution of


the claim shall be repaid with interest, at the Agreed Interest Rate as a first claim


from Contractor's share of future Profit Oil. In the event that the Contractor's share


of Profit Oil is insufficient to provide for the Minister's extra entitlement including


interest, the Contractor shall promptly make an equivalent payment in United States


dollars to the Minister.





(c) Without prejudice to the finality of matters as described in sub-sections 1.5 (a) and


1.5 (b) all documents referred to in those sub-sections shall be maintained and made


available for inspection by the Minister for two (2) years following their date of issue


providing, however, that where issues are outstanding with respect to an audit, the


Contractor shall maintain documents for a longer period until the issues are resolved.





(d) The Contractor may require that audits hereunder of accounts and records maintained


by Affiliated Companies of the Operator, other than any Affiliated Company of the


Operator which is conducting a substantial part of the Petroleum Operations on


behalf of the Contractor be conducted either by the Operator's statutory auditors


working under the instruction of the Minister (provided s; is accepted


by the statutory auditors), failing which, by an itors of


international standing to be approved by the Ministi


Nothing herein above provided shall entitle the


(e) have


access to data and records which:








(i) are subject to statutory restrictions on disclosure


(ii) do not relate to Petroleum Operations; or








(iii) arc not customarily disclosed in auditing practice in the international


petroleum industry; provided however, that where the Minister or his auditors


seek confirmation that charges subject to restricted access under (a), (b) and


(c) above have been properly charged imder this Agreement and Accounting


Procedure, they shall be entitled to seek (at their sole cost) from the statutory


auditors of the Contractor or its Affiliated Companies, as the case may be,


certification that such charges have been levied on a fair and reasonable basis.




















Annex C Page 4





Petroleum Agreement


Government of Guyana - Anadarko


 SECTION 2 - CLASSIFICATION, DEFINITION AND ALLOCATION OF COSTS.


EXPENSES AND EXPENDITURES





All costs, expenses and expenditures relating to the Petroleum Operations referred to in Section 3


shall be classified, defined and allocated as follows:





2. \ Exploration Costs are all direct and allocated indirect expenditures incurred in the search for


Petroleum in an area which is or wras, at the time when such costs were incurred, in the


Contract Area, including:





(a) Aerial, geophysical, geochemical, paleontological, geological, topographical and


seismic surveys and studies and their interpretation provided the data relates to the


Contract Area.





(b) Core hole drilling and water well drilling.


(c)


Labour, materials or equipment, and services xploration and


Appraisal Wells with the object of finding purposes of


appraising the extent of producible reservoirs d such wells


are not completed as producing wells.





(d) Facilities or allocated portions thereof usee he purposes


described in (a) (b) and (c) above.


(e) GUymb


All General and Administrative Costs, Annual OverheatTCTIarges and all Service


Costs allocated to Exploration Costs.


(0


Any other Contract Costs incurred in the search for and appraisal of Petroleum after


the Effective Date.





(g) Annual amounts set forth and paid to GGMC pursuant to Article 19.3 of the


Agreement.


(h) Rentals.


(i) Licenses and other fees.


2.2 Development Costs shall consist of all expenditures incurred in:





(a) Drilling wells, which are completed as producing wells and drilling wells for


purposes of producing from a producible reservoir whether these w-ells are dry or


producing, and drilling wells for the injection of w'ater or gas to enhance recovery of


Petroleum.





Annex C Page 5





Petroleum Agreement


Government of Guyana - Anadarko


 (b) Completing wells by way of installation of casing or equipment or otherwise after a


well has been drilled for the purpose of bringing the well into use as a producer or as


a well for the injection of water or gas to enhance recovery of petroleum.


(c) Intangible drilling costs such as labour, consumable material and services having no


salvage value which are incurred in drilling and deepening of wells for production


purposes.


(d) The costs of field facilities such as pipelines, flow lines, production and treatment


units, wellhead equipment subsurface equipment, enhanced recovery systems,


offshore platforms, petroleum storage facilities, export terminals and piers, harbours


and related facilities and access roads for production activities.


(e) Engineering and design studies for field facilities.





(f) All General and Administrative Costs, Annual Overh Service


Costs allocated to Development Costs.





2.3 Operating Costs arc all expenditures incurred in the Petrol other


than Exploration Costs, Development Costs, General and nnual


Overhead Charge and Service Costs. The balance of Gener ts and


Service Costs not allocated to Exploration Costs or Develop: 'bated to


Operating Costs.


2.4 Service Costs





(a) These are direct and indirect expenditures in support of the Petroleum Operations


including but not limited to warehouses, piers, marine vessels, vehicles, motorised


rolling equipment, aircraft, fire and security stations, workshops, water and sewage


plants, power plants, housing, community and recreational facilities and furniture,


tools and equipment used in these activities and safety and security services. Service


Costs in any Calendar Year shall include the total costs incurred in such Year to


purchase and/or construct said facilities as well as the annual costs to maintain and


operate the same.


(b) All Service Costs will be allocated to Exploration Costs, Development Costs and


Operating Costs in accordance with standard industry accounting practice or on an


equitable basis otherwise agreed between the Minister and the Contractor.


2.5 General and Administrative Costs and Annual Overhead Charge


(a) General and Administrative Costs arc all general and administrative costs in respect


of the local office or offices including but not limited to supervisory, accounting and


employee relations services, but which are not otherwise recovered.





Annex C Page 6





Petroleum Agreement


Government of Guyana - Anadarko


 (b) An Annual Overhead Charge for services rendered outside Guyana and not otherwise


charged under this Accounting Procedure, for managing the Contractor's activities


under the Agreement and for staff advice and assistance including but not limited to


financial, legal, accounting and employee relations services. For the period from the


Effective Date until the date on which the first Petroleum Production Licence under


the Agreement is granted by the Minister this annual charge shall be three percent


(3%) of the Contract Costs including those covered in sub-sections 2.1 through


2.5(a), incurred during the Calendar Year. From the date of grant of the Petroleum


Production Licence the Annual Overhead Charge will be:





First $15,000,000.00 of Contract Costs: 3%





Next $15,000,000 of Contract Costs: 2%





In excess of $30,000,000 of Contract Costs 1%








(c) All General and Administrative Costs and Annual Overhead Charge will be allocated


to Exploration Costs, Development Costs and Operating Costs in accordance with


standard industry accounting practice or on an equitable basis otherwise agreed


between the Minister and the Contractor.



























































Annex C Page 7





Petroleum Agreement


Government of Guyana - Anadarko


 SECTION 3 - COSTS. EXPENSES. EXPENDITURES AND CREDITS OF THE


CONTRACTOR





3.1 Costs Recoverable Without Further Approval of the Minister








Subject to the provisions of the Agreement, the Contractor shall bear and pay the following


costs and expenses in respect of the Petroleum Operations. These costs and expenses will be


classified under the headings referred to in Section 2. They are all recoverable as Contract


Costs by the Contractor under the Agreement.


(a) Surface Rights





This covers all costs attributable to


surface rights acquired and maintained


amounts payable pursuant to Article


(b) Labour and Associated Labour Costs








(i) Gross salaries and wages including bonuses of the employees of the Parties


comprising the Contractor directly engaged in the Petroleum Operations,


irrespective of the location of such employees, it being understood that in the


case of those personnel only a portion of whose time is wholly dedicated to


Petroleum Operations, only that pro-rata portion of applicable wages and


salaries will be charged.


(ii) Costs regarding holiday, vacation, sickness and disability payments





applicable to the salaries and wages chargeable under (i) above.


(iii) Expenses or contributions made pursuant to assessments or obligations


imposed under the laws of the Republic of Guyana which are applicable to


cost of salaries and wages chargeable under (i) above.


(iv) Cost of established plans for employees' life insurance, hospitalisation,


pensions, and other benefits of a similar nature customarily granted to the


employees of the Parties comprising the Contractor.


(v) Reasonable travel and personal expenses of such employees including those


made for travel and relocation of the Expatriate Employees assigned to the


Republic of Guyana all of which shall be in accordance with the normal


practice of the Parties comprising the Contractor.





(vi) Any personal income taxes owing to the Republic of Guyana by employees of


the Parties comprising Contractor and paid or reimbursed by a Party


comprising the Contractor.





Annex C Page 8 2-





Petroleum Agreement


Government of Guyana - Anadarko





 (c) Transportation





st of transportation of employees, equipment, materials and supplies necessary


conduct of the Petroleum Operations.





s for Sendees





0) Third Party Contracts


The actual costs of contracts for technical and other services entered into by





the Contractor for the Petroleum Operations, made with third parties other


than Affiliated Companies of the Contractor are recoverable; provided that


the prices paid by the Contractor are co 1


by other international or domestic I


services.





Affiliated Companies





Without prejudice to the charges to be mau^nj accordant


2.5, in the case of services rendered to me Petroleum


Affiliated Company, the charges will be baseo>4QaBt4>i^^


The charges will be no higher than the usual pricesttrargi


Company to third parties for comparable services under similar terms and


conditions elsewhere and will be fair and reasonable in the light of prevailing


international oil industry practice and conditions.


The salaries, wages and related costs of employees of an Affiliated Company





that arc temporarily or permanently assigned in Guyana and are directly


engaged in Petroleum Operations shall be chargeable to the project at their


actual documented cost. The salaries, wages and related costs of employees


of an Affiliated Company that are temporarily or permanently outside of


Guyana and are directly engaged in Petroleum Operations shall be chargeable


to the project at their actual documented cost. Costs for salaries, wages and


related costs shall be charged to the project on an actual basis or at a rate


based upon the average cost in accordance with the Affiliated Company’s


usual practice. The methodology of determining rates based on average cost


shall be provided to the Government upon their request. Such rates may be


reviewed at least annually with the Minister. Reasonable actual documented


expenses (including travel costs) of those employees whose salaries and


wages arc chargeable to the project and are reimbursed by the Contractor


under their usual practice shall also be charged to the project.











Annex C Page 9





Petroleum Agreement


Government of Guyana - Anadarko


 (e) Material





(i) So far as is practicable and consistent with efficient and economical





operation, only such material or equipment shall be purchased or furnished by


the Contractor for use in the Petroleum Operations as may be required for use


in the reasonably foreseeable future and the accumulation of surplus stocks


shall be minimized.


(ii) The Contractor does not warrant material beyond the supplier’s or





manufacturer’s guarantee express or implied, and in case of defective


material or equipment, any adjustment received by the Contractor from the


suppliers/manufacturers or their agents will be credited to the accounts under


the Agreement.





(iii)


(a) Except as provided in (b) below, material purchased by the


Contractor for use in the Petroleum Operations shall be valued to


include invoice price less trade and cash discounts (if any), purchase


and procurement fees plus freight and forwarding charges between


of supply and point of shipment, freight to port of destination,





taxes, custom duties, consular fees, other items chargeable


linH^imnorted material and, where applicable, handling and


iSporVMmi expenses from point of importation to warehouse or





fatjha site, and cost of the material in question should not exceed


llur■ I


Srivaling in normal arms length transactions on the open


/qf material of similar quality and supplied on similar terms at


ie yi procurement.


) ---Material purchased from Affiliated Companies of the Parties


comprising Contractor shall be charged at the prices specified at (1)


and (2) hereof.





(1) New Material (Condition "A")





Shall be valued and invoiced at a price, which should not


exceed the price prevailing in normal arms length transactions


on the open market at the time of procurement.





(2) Used Material (Conditions "B" and "C")





(i) Material which is in sound and serviceable condition


and is suitable for reuse without reconditioning shall


be classified as Condition "B" and priced at not more


than seventy-five percent (75%) of the price of new


material defined in (1) above.





Annex C Page 10





Petroleum Agreement


Government of Guyana - Anadarko


 (ii) Material, which cannot be classified as Condition "B"


but which:


(a) after reconditioning will be further serv iceable





for original function as good second-hand


material (Condition "B"), or


(b) is serviceable for original function but not


suitable for reconditioning; shall be classified





as Condition "C" and priced at not more than


fifty percent (50%) of the current price of new


material (Condition "A") as defined in (1)


above. The cost of reconditioning shall be


charged to the reconditioned material provided


that the Condition "C" material value plus the


cost of reconditioning does not exceed the


value of Condition "B" material.





(iii)











(iv)











consistent with the value of the service rendered.








(f) Rentals, Duties and Other Assessments





All rentals, taxes, levies, charges, fees, contributions and any other assessments and


charges levied by the Government in connection with the Petroleum Operations and


paid directly by the Contractor.





(g) Insurance and Losses





insurance premium and cost incurred for insurance pursuant to Article 20 provided


that if such insurance is wholly or partly placed with an Affiliated Company of the


Parties comprising the Contractor, such premium and costs shall be recoverable only


to the extent generally charged by competitive insurance companies other than an


Affiliated Company of a Parly comprising the Contractor. Costs, losses and damages


incurred to the extent not made good by insurance, are recoverable, including costs,





Annex C Page 11





Petroleum Agreement


Government of Guyana - Anadarko


 losses or damages resulting from the indemnities in Article 2 of the Agreement,


unless such costs, losses or damages have resulted solely from an act of willful


misconduct or gross negligence of the Contractor.


(h) Legal Expenses








All costs and expenses of litigation and legal or related services necessary or


expedient for the procuring, perfecting, retention and protection of the Contract Area


and in defending or prosecuting lawsuits involving the Contract Area or any third


party claim arising out of activities under the Agreement or sums paid in respect of


legal services necessary or expedient for the protection of the interest of the Parties


are recoverable. Where legal services are rendered in such matters by salaried or


regularly retained lawyers of the Contractor or an Affiliated Company of the Parties


comprising Contractor, such compensation will be included instead under sub-section


3.1 (b) or 3.1 (d) above as applicable.





(i) Training Costs





All costs and expenses incurred by the Contract personnel


and such other amounts as may be expended 19 of the


Agreement.





(j) General and Administrative Costs and Annual _





The costs described in sub-section 2.5(a) and the charge'described in sub-section


2.5(b).





(k) Pre-Contract Costs





The sum of Six Million One Hundred Seventy Thousand Four Hundred Ninety-Three


United States dollars (US$6,170.493.00) in respect ofall costs incurred by Contractor


prior to the Effective Date.


(1) Interest and Financing Costs








Interest, expenses and related fees incurred on loans raised by the Parties comprising


the Contractor for Petroleum Operations and other financing costs provided that such


expenses, fees and costs are consistent with market rates.


(m) Abandonment Costs





Amortized abandonment costs calculated pursuant to Article 20.1 (d)(iii).











Annex C Page 12





Petroleum Agreement


Government of Guyana - Anadarko


3.2 Costs Recoverable only with Approval of the Minister





(a) Commission paid to intermediaries by the Contractor.





(b) Donations and contributions to organisations in Guyana.


(c) Expenditure on research into and development of new equipment, material and


techniques for use in searching for developing and producing petroleum which will


be of benefit to Petroleum Operations.





3.3 Costs not Recoverable under the Agreement





(a) With the exception of the sum specified in sub-section 3.1 (k), costs incurred before


the Effective Date.





(b) Petroleum marketing or transportation costs of Pe Delivery Point.


(c) Amounts paid under Article 3.2 of the Agree ounts paid


with regard to non-fulfillment of contractual ion 3.1(g).


(d)


Costs of arbitration and the sole expert in^ : under the


Agreement.


(e)


Fines and penalties imposed by Courts of Laws of the Co-operative Republic of


Guyana.





(f) Payments made in accordance with Article 15.4 of the Agreement.


(g) Costs incurred as a result of willful misconduct or gross negligence of the Contractor


or failure to insure where insurance is required pursuant to Article 20.2(a) of the


Agreement.





3.4 Other Costs and Expenses


Other costs and expenses not covered or dealt with in the provisions of this Section 3 and





w'hich are incurred by the Contractor in the conduct of the Petroleum Operations are


recoverable subject to the approval of the Minister.





3.5 Credits under the Agreement


The net proceeds of the following transactions will be credited to the Accounts under the


Agreement and shall reduce the amount of Contract Costs, which the Contractor is entitled to


recover from Cost Oil, by a corresponding amount:








Annex C Page 13





Petroleum Agreement


Government of Guyana - Anadarko


 (a) The net proceeds of any insurance or claim in connection with the Petroleum


Operations or any assets charged to the accounts under the Agreement when such


operation or assets were insured and the premium charged to the accounts under the


Agreement.


(b) Revenue received from third parties for the use of property or assets the cost of which





has been charged to the accounts under the Agreement.


(c) Any adjustment received by the Contractor from the .suppliers/manufacturers or their





agents in connection with defective material the cost of which was previously


charged to the accounts under the Agreement.





(d) Rentals, refunds or other credits received by the Contractor which apply to any


charge which has been made to the accounts under the Agreement, including any


costs and expenses previously charged to the accounts pursuant to sub-section 3.1(h)


and which have been successfully recouped from legal proceedings but excluding any


award granted to the Contractor under arbitration or sole expert proceedings referred


to in sub-section 3.3(d) above.





(e) The value at the time of export of inventory materials subsequently exported from the


Co-operative Republic of Guyana without being used Operations,


the acquisition costs of which have been char] under the


Agreement.





(f) The proceeds from the sale or exchange by the Ci ipment,


plant or facilities, the acquisition costs of which htrfe'hcen i ccounts


under the Agreement, including such items sold to the GovemriSr?





(g) The proceeds from the sale of Petroleum Data which relates tolfTe Contract Area


provided that the acquisition costs of such rights and information have been charged


to the accounts under the Agreement;





(h) The proceeds derived from the sale or licence of any intellectual property the


development costs of which have been charged to the accounts under the Agreement.





3.6 Duplication of Charues and Credits





Notwithstanding any provision to the contrary in this Accounting Procedure, it is the


intention that there shall be no duplication of charges or credits to the accounts under the


Agreement.














Annex C Page 14





Petroleum Agreement


Government of Guyana - Anadarko


 SECTION 4 - RECORDS AND VALUATION OF ASSETS








The Contractor shall maintain detailed records of property in use for the Petroleum Operations in


accordance with normal practice in exploration and production activities of the international


petroleum industry. The Contractor shall notify the Minister annually in writing of all assets


acquired and all assets disposed of during the preceding twelve (12) months. At reasonable intervals


but at least once a year with respect to moveable assets and once every three (3) years with respect to


immovable assets, inventories of the property under the Agreement shall be taken by the Contractor.


The Contractor shall give the Minister at least thirty (30) days written notice of its intention to take


such inventory and the Minister shall have the right to be represented when such inventory is taken.


The Contractor will state clearly the principles upon which valuation of the inventory has been


based. When an assignment of rights under the Agreement takes place a special inventory may be


taken by the Contractor at the request of the assignee provided that the costs of such inventory are


borne by the assignee.


































































































Annex C Page 15





Petroleum Agreement


Government of Guyana - Anadarko


SECTION 5 - PRODUCTION STATEMENT





5.1 Upon commencement of production of Petroleum from the Contract Area, the Contractor


shall submit a monthly Production Statement to the Minister showing the following


information separately for each Field and in aggregate for the Contract Area.


(a) The gross quantity of Crude Oil and Natural Gas produced.


(b) The quantities of Crude Oil and Natural Gas used for the purpose of carrying on


Petroleum Operations including drilling and Production Operations and pumping to


Field storage.


(c) Quantities of Crude Oil and Natural Gas lost.





(d) The quantities of Natural Gas flared.


(e) The quantity of Crude Oil produced and saved.





(0 The quantity of Natural Gas produced and saved.


(g) T he quantity of stocks of Crude Oil held at the beginning of the Calendar Month in


question.


(h) The quantity of stocks of Crude Oil held at the end of the Calendar Month in


question.


(i) The number of days in the Month during which Petroleum was produced from each


Field.


(j) The average daily production rate for each Field, calculated in accordance with


Article 11.6 of the Agreement.


5.2 The Production Statement for each Calendar Month shall be submitted to the Minister not


later than sixty (60) days after the end of such Calendar Month.























Annex C Page 16 If





Petroleum Agreement


Government of Guyana - Anadarko


 SECTION 6- VALUE OF PRODUCTION AND PRICING STATEMENT





6.1 The Contractor shall, for the purposes of Article 13 of the Agreement prepare a statement


providing calculations of the value of Crude Oil and the value of the Natural Gas produced


and saved during each Calendar Month for each Field. This statement, which shall be


prepared for each quality of Crude Oil and the Natural Gas produced from the Contract Area,


shall contain the following information:


(a) The quantities, prices and receipts realised therefur by the Contractor as a result of





Third Party Sales of Crude Oil and the Natural Gas made during the Calendar Month


in question.


(fa) The quantities, prices and receipts realised therefor by the Contractor as a result of





sales of Crude Oil and the Natural Gas made during the Calendar Month in question,


other than Third Party Sales.


(c) The percentage of total volume of Crude Oil sales which were Third Party Sales.





(d) The percentage of total volume of Natural Gas sales which were Third Party Sales.


(e) Information supplied to the Minister by Contractor for the purposes of Article 13.2 of





the Agreement.


6.2 The Value of Production and Pricing Statement for each Calendar Month shall be submitted


to the Minister not later than thirty (30) days after the end of such Calendar Month.












































Annex C Page 17


Petroleum Agreement


Government of Guyana - Anadarko


SECTION 7 - STATEMENT OF EXPENDITURE AM) RECEIPTS





7.1 The Contractor shall prepare with respect to each Calendar Quarter, or on a monthly basis if


requested by the Minister in writing, a Statement of Expenditure and Receipts under the


Agreement. The Statement will distinguish between Exploration Costs, Development Costs


and Operating Costs consistent with the individual categories specified in Sections 2 and 3


herein and will separately identify major items of expenditures within these categories. The


statement will show the following:


(a) Actual expenditures and receipts on a monthly basis for the period in question.


(b) Cumulative expenditure and receipts for the budget year in question.


(c) Cumulative expenditures and receipts since the Effective Date.


(d) Latest forecast of cumulative expenditures to year end.


(e) Variations between budget forecast and latest forecast, w'ith explanations thereof.


7.2 Subject to 7.1, the Statement of Expenditure and Receipts shall be submitted to the Minister


no later than thirty (30) days after the end of such Calendar Quarter or Month as the case may


be.


















































Annex C Page 18





Petroleum Agreement


Government of Guyana - Anadarko


SECTION 8- COST RECOVERY STATEMENT





8.1 The Contractor shall prepare with respect to each Calendar Month a Cost Recovery


Statement containing the following information:





(a) Recoverable Contract Costs carried forward from the previous Month, if any.


(b) Recoverable Contract Costs for the Month in question.





(c) Total Recoverable Contract Costs, which is that cost at sub-section 8.1 (a) plus that


cost at sub-section 8.1 (b).


(d)


Quantity and value of Cost Oil taken and disposed of by thi he Month


in question.


(e) Contract Costs recovered for the Month in question.





0) Total cumulative amount of Contract Costs to be next


Month.





8.2 The information to be submitted under Section 8.1 (d) and (e) given in


separate statements for each Field, so as to indicate together, the Contractor’s total allocation


of Cost Oil as required under Article 11 of the Agreement.


The Cost Recovery Statement to be submitted under sub-section 8.1 shall identify the


8.3


unrecovered cost of assets for the purpose of .Article 20.1 (b)(iii) of the Agreement.


8.4 The Cost Recovery Statement for each Month shall be submitted to the Minister no later than


thirty (30) days after the end of such Month.






































Annex C Page 19





Petroleum Agreement


Government of Guyana - Anadarko


SECTION 9 - END-OF-YEAR STATEMENT





9.1 The Contractor shall prepare an End-of-Year Statement. The Statement will contain


aggregated information for the Year in the same format as required in the Value of


Production and Pricing Statement, Cost Recover)' Statement and Statement of Expenditures


and Receipts but will be based on actual quantities of Petroleum produced and expenses


incurred. The End-of-Year Statement for each Calendar Year shall be submitted to the


Minister within one hundred and twenty (120) days of the end of such Calendar Year.


(a) Crude Oil


(i) In the event the domestic supply obligations under Article 17 are effected by


the Government as to Crude Oil, not later than one hundred and twenty (120)


days after the end of each Calendar Year, the Minister, acting on behalf of the


Government, shall make available to Contractor an annual summary' (the


“Domestic Supply Report”) describing (a) the Government’s total entitlement


from all Crude Oil production in Guyana during the prior Calendar Year, (b)


the quantity of Crude Oil actually provided to the Government by Contractor


and all third parties which produce Crude Oil in Guyana during the prior


Calendar Year, and (c) a description of the quantities and use of all Crude Oil


provided to the Government by Contractor and all third parties which produce


Crude Oil in Guyana, including without limitation, dmjieslic power supply


from power plant facilities, refined products for dmrC^fcfeft&vutfpUon from


refineries, etc., and any quantities of Cru^K'^lfTjr^ifeH^wvducts,


petrochemicals or fuel for power generation lljat on^Ojavana.


(b) Natural Gas \ / /


(i) In the event the domestic supply obligations ^defrs^rtide^Eir been


effected by the Government as to Natural Gas, noth^^^)neJ>*mdred and


twenty (120) days after the end of each Calendar Year. tfie'WImster, acting on


behalf of the Government, shall make available to Contractor an annual


summary (the “Domestic Supply Report”) describing (a) the Government’s


total entitlement from all Natural Gas production in Guyana during the prior


Calendar Year, (b) the quantity of Natural Gas actually provided to the


Government by Contractor and all third parties which produce Natural Gas in


Guyana during the prior Calendar Year, and (c) a description of the quantities


and use of all Natural Gas provided to the Government by Contractor and all


third parties which produce Natural Gas in Guyana, including without


limitation, domestic residential, commercial and industrial consumption, fuel


used for domestic power generation, etc., or, and any quantities of Natural


Gas liquefied or compressed in Guyana for export or used as feedstock for


petrochemical exports, such as methanol and fertilizer.


Annex C Page 20





Petroleum Agreement


Government of Guyana - Anadarko


SECTION 10 - BUDGET STATEMENT


10.1 The Contractor shall prepare an annual budget pursuant to Article 7 of the Agreement (the


“Budget Statement”). The Budget Statement will distinguish between Exploration Costs,


Development Costs and Operating Costs consistent with the individual categories specified


in Sections 2 and 3 and will show the following:


(a) Forecast expenditures and receipts under the Agreement for the Calendar Year.


(b) Cumulative expenditures and receipts to the end of the said Year.













































































Annex C Page 21





Petroleum Agreement


Government of Guyana - Anadarko


ANNEX D - Pre-Approved and Certified Petroleum Operations Items








A


Acids (stimulation) - chemicals used downhole or injected in oil/gas formations


Acoustical survey equipment - including sonar, side scanning sonar, full wave form sonic loggers


Aeromagnetic recording survey systems


Air slips also known as tubing slips


All terrain vehicles (ATVs)


Automated equipment at the well head, processing plant or refinery used to monitor and control production


B


Bags (cloth) with printed tags - used in well testing


Bails (links)


Barrel - chemical mixing when used at the well head


Batteries - for production machinery and equipment


Batteries - geophysical when used exclusively for seismic prospecting in blasting and recording systems


Bits - drill includes PDCs, tricones


Blasting systems - used for seismic prospecting





Blowout ignition system


Blowout preventers (BOPs)


Boxes - shipping (used in well testing), core





Building - portable


Building - support - when used as weather-related protective covering


generators or instrumentation


Buildings - that provide office or dwelling space; geologist lab trailers;


Bulldozers - earth moving equipment


C


Cable - electrical


Cable - wire rope





Cables - electrical (integrated into machinery)


Cables used for seismic prospecting


Calibration gas - for H2S monitors and H2S analyzers





Casing


Casing accessories





Catwalks - see Scaffolding


Cement -oilwell


Cementing equipment





Centralizers - casing attachment


Centrifuge - used to remove fine drill solids from mud systems


Chemical mixing barrel - when used at the well head


Chemical storage drums - when used at the manufacturing or processing site


Chemicals used in drilling and production operations


Chemicals used in refining operations


Choke manifold and valves


Circulating system - includes discharge and return lines


Circulating systems - includes mud tanks, mud mixers, discharge and return lines and separators


Cleaners/degreasers - includes oilfield equipment


Cloth bags with printed tags - used in well testing


Coil tubing


Coil tubing reel


Collars - drilling


Communication equipment - includes satellite communications equipment








Annex D Page I





Petroleum Agreement


Government of Guyana - Anadarko


Compressors - for compression of air or natural gas


Computers - to monitor production/drilling machinery and equipment


Consumables - consumable equipment used in drilling and production operations


Control panels - used to run generators at a well head


Core boxes


Corrosion inhibitors - added to upstream installations for preventative maintenance


Couplings


Custom software - designed for and integrated into drilling and production machinery or equipment





D


Data processing units used for seismic prospecting


DC electric motors (integrated) used to drive the drawworks mud pumps, or top drives, also commonly





called traction motors


Deflocculants - used in fresh water mud systems


Dehydration chemicals


Dehydrators - including mole sieve used at the well head; used during the production testing phase


Demulsifiers - used in production operations to remove water from crude oil


Density counters - spectral gamma-gamma


Detectors - flame, when used during the production testing phase as an alternative to a flare stack


Diesel power generating systems


Discharge and return lines


Dispersants - production chemicals


Distribution panel - electrical that controls the electrical distribution for the entire rig package


Dope - pipe


Drifts - for casing, tubing, and line pipe


Drill bits, includes tricone, PDCs (Polycrystalline Diamond Compact)


Drill collar handling equipment


Drill collars - used in exploration and development drilling


Drill line spool - wire rope


Drill pipe - used in exploration and development drilling


Drill pipe handling equipment


Drill stem testing equipment - includes instrumentation


Drilling - detergent; muds; surfactants


Drilling Rigs and associated equipment - Onshore and Offshore


Drilling fluid - chemicals used to create drilling fluid (see mud)


Drills - all drills used exclusively for seismic prospecting includes heli, enviro, LIS, track, truck, buggy


Drives - top, rotary and pump


Drums - for chemical storage when used at the manufacturing or processing site


E


EDR system (only an EDR and the embedded dedicated computer equipment that is integrated into the


unit) used at the drilling site


Electric generators and alternators


Electric logging equipment


Electrical cable - distribution panel, electrical generating systems


Electrical distribution panel


Electrical generating systems (integrated)


Electrical submersible pumps - ESP - for artificial lift of petroleum


Electrical surveying equipment


Electrical thermostats


Electromagnetic surveying equipment - includes time and frequency domain induced polarization


equipment


Emergency gas shut off devices








Annex D Page 2





Petroleum Agreement


Government of Guyana - Anadarko


Engine oils


Engines - used for oilfield service


Equipment - hoisting


Explosives - includes those used in seismic, coring, construction


F


Field potentiometers


Filter bags - for the production machinery and equipment


Fishing tools for retrieving tools lost downhole


Fittings - includes those used in the transportation and distribution system, for example, on gathering lines


Flame detectors - when used during the production testing phase as an alternative to a flare stack


Flare stacks - includes mobile flare stacks used during the production testing phase


Flare tank systems, located at the wellsite, that are directly connected to the drilling rig and are used to


control polluting emissions


Flare tanks and lines


Float equipment


Fluids - fracturing, stimulating, well servicing


Foamers- used downhole to enhance production


Forklifts


Fracturing chemicals


Fracturing equipment


Fuel gas lines - for oil and gas production machinery


Fuel storage tanks - see Tanks


Full wave form sonic loggers





G


Gamma-ray spectrometers


Gas-welding, acetylene, argon - when used as an inert welding gas or in repair jobs; calibration gas for





H2S monitors and H2S analyzers


Gas dehydration equipment used in processing plants or refineries up to the point where the petroleum or





natural gas is a marketable product


Gas detection monitors that detect hazardous gas and provide a warning


Gas flow equipment - when used downhole to monitor gas flow


Gas lift lines - located at a production wellsite to encourage the flow or transport of gas from the reservoir


to the surface


Gas shut off devices (emergency) - that are attached to a gas line and automatically shut off gas supply





Gauges - engine


Generating systems - diesel power, electrical


Gensets/generators - portable, mobile or standby alternators generators/gensets)


Geophones


Geophysical batteries - when used exclusively for seismic prospecting in blasting and recording systems


Geronimo and escape lines


Global positioning systems used for seismic prospecting; used for creating stakeless surveys


Graders


Gradiometers - includes potassium gradiometers for radioactive methods of geophysical prospecting





Gravel - for well pads, processing plant on-site roads


Gravitational recording survey systems


Gravity meters


Grease


Ground penetrating radar equipment





Gunny sacks


Guns - perforating that are used during the production testing phase














Annex D Page 3





Petroleum Agreement


Government of Guyana - Anadarko


H


Hammer wrenches


Hand held tools


Heat exchangers


Heaters - line, located at the well head to preheat gas but not line heaters on pipeline, used during the


production testing phase


Heli-dnlls for seismic prospecting


Hoisting equipment


Hooks and swivels - drill pipe handling equipment


Hydraulic tank


Hydraulic winches


Hydrogen sulfide - used for gas scrubbing


Hyperspectral spectrometers used for remote sensing


I





Imaging equipment - seismic


Incinerator - when used during the production testing phase in place of a flare stack to burn off excess


natural gas


Indicator - weight


Inductive conductivity probes used for electrical or electromagnetic


infrared and hyperspectral spectrometers


Infrared spectrometers used for remote sensing


Inhibitors - corrosion added to upstream installations for preventative


Injector head that runs or retrieves the coil tubing


Instruments -


instruments or equipment for seismic prospecting


Integrated diesel power generating systems


Integrated electrical operating systems


Integrated fuel tanks - see Tanks


Integrated navigation systems used for seismic prospecting


Integrated pump units


Integrated steam heaters





L


Lab testing equipment - used for testing drilling fluids


Lab testing equipment - used for testing production fluids


Labels - for vials used in well testing


Laptop computers (see entry under Computers)


LIDAR (Light Detection and Ranging) mapping equipment used for remote sensing


Light towers or light plants


Lighting - industrial explosion proof


Lights


Lignite - drilling mud or fluid


Line heaters - located at the well head to preheat gas, but not line heaters on the pipeline


Line heaters - used on pipelines, but not line heaters located at the well head for preheating gas Industry)


Line pipe


Liners used on the ground


Lines - catline, drill, flare, loadline, geronimo and escape, sandline, spool, tong


Lines - discharge, return, flare


Links (bales)


Liquefaction equipment - used in a processing plant or refinery to liquefy C02 so that it can be


transported and marketed


Liquid viscosifiers








Annex D Page 4





Petroleum Agreement


Government of Guyana - Anadarko


Loaders - includes loaders used to move drill pipe to and from the drilling rig


Logging equipment - electric wireline


Lubricants - specialty





M


Machinery and equipment used to inject substances into a reservoir


Magnetic susceptibility meters


Magnetometers


Main - drum (also known as a drill drum)


Main drum also known as drill drum - part of the drawworks


Maintenance tools - includes cheater bars


Manifold - choke, valve that is an integral piece of the high press


Manifold - choke; mud /a?


Manufactured proppant


Measurement while drilling equipment (MWD) - used to monitor tl sition


Meter skids - used in the transportation of natural gas or petrcfieu they are part of


the distribution system \ ^


Mobile radios


Molecular sieve (Mole sieve pellets) - when used as a part of ex


Monitoring equipment - that monitors or controls the operation of


Monitors - hazardous gas detection monitors that provide a warning


Mooring systems - for storage vessels


Motors - includes mud motors


Motors - traction, mud


Motors - used in the production testing phase; mud motors used downhole in the drilling process


Mud - chemicals used in the creation of drilling fluid


Mud - mixers, tank, manifold, motors


Mud logging equipment and supplies


MWD (Measurement While Drilling) equipment and supplies





N


Navigation systems used for seismic prospecting, used for creating stakeless surveys


Nitrogen - used to stimulate production


Non-polarizing electrodes used for making measurements in drill holes





O


Optical sensors





P


Packers


Paint supplies


Perforating guns - used during the production testing phase


Pipe dope


Pipeline installation equipment


Pipeline coatings - cement or otherwise


Piping systems - used downhole in the production and testing phase


Pit volume totalizer (PVT) - used for monitoring the bore hole


Polarization equipment - time and frequency domain induced


Portable building


Potentiometers - field


Power - tongs and jaws (also see Tongs)


Power plants - includes diesel, electrical


Power tongs








Annex D Page 5





Petroleum Agreement


Government of Guyana - Anadarko 'IF








Power washers


Pressure piping systems and its components - used during the production testing phase


Preventers - blowout (BOP)


Probes - inductive conductivity used for electrical or electromagnetic surveying


Production processing equipment - includes separators, compressors, tanks, flow lines, pumps and valves


Prospecting, seismic - see seismic prospecting


Protectors - thread


Pump lines and valves that run from the mud pump to well


Pump units - includes submersible trash or sump


Pumpjacks





Pumps - explosion proof


Pumps and motors - used in the production testing phase





R


Racks - pipe used in the drilling process





Radar equipment - ground penetrating, side looking aperture


Radio - phone, mobile, VHF, two-way


Radio antenna - MDS


Radioactive prospecting - scintillometers, spectral gamma-gamma


counters, gamma-ray spectrometers, potassium gradiometers


Radioactive sources - used in wireline logging


Ram thread protectors - telescoping


Reactive welding gases - when used in a repair service


Recorder box used for seismic prospecting


Recording system used for seismic prospecting


Reel for coil tubing


Reflectance equipment used for remote sensing


Regulators - includes when used in the transportation and distribution system, for example, gathering


lines


Remote sensing equipment - includes ultraviolet lamps and reflectance, infrared and hyperspectral


spectrometers


Resistivity survey equipment used for electrical or electromagnetic surveying


Return and discharge lines of a circulating system


Rod basket


Rotary and pump drives


Rotary and pump drives


Rotary table


S





Safety valves - used for well control that are a part of the equipment on the service rig


Sand - includes sand used to stimulate well production


Satellite communications equipment


SCADA equipment - (Supervisory Control and Data Acquisition) used at the well head, processing plant


or refinery


Scintillometers


Seismic - instrumentation, drilling equipment, imaging equipment


Seismic explosives


Seismic prospecting - recording system, seismic instrumentation, geophones, cables, data processing


units


Seismic vessels and associated equipment


Self-potential meters used for electrical or electromagnetic surveying


Sensors - optical


Separator vessels - used during the production testing phase








Annex D Page 6





Petroleum Agreement


Government of Guyana - Anadarko


Snubbing unit - composed of a blowout preventor stack, a hydraulic jack and a power unit to run the


hydraulics


Solids control equipment


Sonar - includes side scanning


Sonic loggers - full wave form


Spectral gamma-gamma density counters


Spectrometers - infrared or hyperspectral used for remote sensing, gamma ray


Spools - includes drill line spool


Spools (specialized pieces that adapt tubing to BOPs or for spacing requirements between BOP and


wellhead)


Stabbing guides - used in the drilling process


Stimulating fluids


Stimulation acids - chemicals used downhole or injected in oil/gas formations


Storage tanks - (see Tanks)


Submersible trash pump unit - used to pump drilling fluids, mud/water





Sulphur recovery equipment - used in processing plants and refineries


Survey equipment (see Global positioning systems and Navigation systems)





T


Tank battery





Tanks - flare, integrated fuel, mud or water, stand alone fuel tank fully/


serves as the direct fuel supply for the rig


Tanks - storage - used at a refinery or processing plant


Tanks - water storage


Telecommunication equipment


Thermostats - electrical designed for use with any of the machinery or <


Thread protectors - used in the drilling process


Time and frequency domain induced polarization equipment used for electrical or electromagnetic


surveying


Tongs - backup and integral tongs, power tongs and jaws


Tongs - power also called rotary or casing tongs, power tongs and jaws, backup and integral tongs


Tools - fishing tools for retrieving tools tost downhole


Tools - hand


Top drives - Drill Rig


Torque gauges - used in the drilling process


Towers - light


Traction motors


Travelling blocks


Tricones - drill bits


Tubing - includes coil


Tubing slips also known as air slips


Two-way radios





U


Ultraviolet lamps used for remote sensing





V


Vacuum and wash pump used to clean up around rig and wash equipment


Vacuum tanks or systems - truck- or trailer-mounted


Vacuum units


Valve - outlet, manifold (integral part of the high pressure pumping system)


Valve manifold (integral part of the high pressure pumping system)


Valves - includes those used in the transportation and distribution system, for example, gathering lines








Annex D Page 7





Petroleum Agreement


Government of Guyana - Anadarko


 Valves - safety - used for well logging, drill stem testing or the production testing phase





Vehicles


Vessels - separator - used during the production testing phase


Vessels - supply and anchor handling for offshore petroleum operations





Vessels - for storage of crude oil (FPSO)


Vessels - Mobile Offshore Drilling Units


Vibrators used for seismic prospecting


Viscosifiers - liquid; dry polymer; concentrated


W





Walkways - see Scaffolding


Waste gas transmission - see Pipes


Waste management bins


Waste water treatment units - mobile


Water clarifiers - used to remove residual oil in produced water prior to disposal or re-use


Water disposal lines - includes associated machinery and equipment that are located within the


processing plant


Water storage tanks


Welding equipment and supplies


Well flow lines transporting raw product from a well to a satellite, battery, line pipe or processing plant


Well logging equipment - includes surface and downhole tools


Well testing equipment - includes surface and downhole tools


Wellhead equipment


Winches


Wireline (or slickline) unit - skid- or truck-mounted































































































Annex D Page 8





Petroleum Agreement


Government of Guyana - Anadarko