The term of the development and production period shall be 25 years. This period will be extended if commercial production remains economically feasible. The initial term of the exploration period is to be agreed between the parties as is any extensions to the exploration period. The government may extend the term of the exploration period in respect to the appraisal area of a natural gas discovery for a period to be agreed between the parties.
The contractor shall establish and implement (with Ministry approval), an active, continuing, and self monitoring environmental management program, and shall ensure that all employees, subcontractors and the indigenous community in the contract area are fully aware of the contractor’s environmental policy and shall endeavor to ensure that they assist in the implementation of the policy.
The contractor shall submit to the government an annual report on the implementation of the contractor’s environmental management program, and at other such time as the government may reasonably require.
The contractor shall establish and implement (with government approval), an active, continuing, and self-monitoring environmental management program. The contractor shall ensure that all employees, subcontractors and the indigenous community in the contract area are fully aware of the contractor’s environmental policy and shall work to ensure that they assist in the implementation of the policy.
The contractor shall submit to the government an annual report on the implementation of the contractor’s environmental management program, and at other such time as the government may reasonably require.
The contractor shall conduct petroleum operations in a safe and proper manner in accordance with generally accepted international petroleum industry practice and shall not cause damage to the general environment, including, among other things, the surface, air, lakes, rivers, marine life, animal life, plant life, crops, other natural resources and property. The contractor shall repair any damage caused to the extent reparable, and shall pay reasonable compensation for all damage which is beyond repairs.
The contractor shall comply with the applicable laws, regulations, and directives relating to the environment, to avoid the damages petroleum operations may cause on the human and natural environment. In the absence of applicable laws, the contractor shall apply the most appropriate internationally accepted environment standards.
In conducting its petroleum operations the contractor shall pay strict attention to the prevention of pollution, the treatment of wastes, the safeguarding of the natural environment, and the progressive reclamation and rehabilitation of lands disturbed by operations.
The contractor shall bear all costs for clean‐up, rehabilitation, and reclamation of any and all environmental damage caused by the contractor’s petroleum operations.
In the event of a blowout, accident or other emergency, the contractor shall take immediate steps to bring the emergency situation under control and protect against loss of life and property and prevent harm to natural resources and the general environment.
If the government reasonably determines the contractor’s petroleum operations are threatening to endanger persons or property, or harm the natural environment, or cause pollution, or harm animals, or cause irreparable damage to plant life, the government may order the contractor to discontinue petroleum operations at risk until such time as the contractor has taken remedial measures to eliminate the threat.
The contractor shall have the right, subject to approval of the government, to use water in the contract area for operational purposes, but the contractor shall not deprive any land, domestic settlement or livestock watering place of the water supply to which they are accustomed.
The contractor shall prepare on a calendar year basis an annual balance sheet and profit and loss statement in accordance with the accounting procedures set forth in this contract and the generally applicable laws of Ethiopia. Such accounts and the reports to the government derived therefrom shall be certified by an independent auditor acceptable to the government and shall be submitted, along with the auditorʹs report, to the government and other appropriate authorities within 90 days after the end of the calendar year to which they pertain.
The government shall have the right, at its cost and expense, to carry out additional audits of the contractorʹs books, records and accounts relating to this agreement for each calendar year within 5 years from the end of such year.
The contractor shall appoint an independent auditor, acceptable to the government, to audit annually the accounts and records, including production records, of the petroleum operations and report on them. The cost of such audit shall be borne by the contractor.
The contractor shall pay to the government the following sums when production of crude oil from the contract area attains the following levels for the specified periods of time:
(a) an amount to be agreed between the parties in US dollars after daily production averages of an amount to be agreed between the parties for a period of 30 consecutive days; and
(b) an amount to be agreed between the parties in US dollars after daily production averages of an amount to be agreed between the parties for a period of 30 consecutive days.
Within 30 days following the effective date, the contractor shall pay to the government a signature bonus US$ [X] (to be agreed between the parties).
The contractor may export from Ethiopia, exempt of all export duties and other taxes levied on exports, the petroleum produced from the contract area to which the contractor is entitled in accordance with the provisions of this agreement.
إنتاج حصة - ملامح النفط الربح (مشغلات عن الاختلافات في انقسام - IRR، عامل، إنتاج، ... الخ)
The balance of crude oil remaining in any calendar year after deduction of royalty payments and after recoverable petroleum operations costs have been satisfied, shall be shared, taken and disposed of between the government and the contractor according to the following incremental scale:
Average daily production of crude oil from the contract area
First 20,000 barrels per day (bpd): [X]% government, [X]% contractor;
Next 20,000 bpd: [X]% government, [X]% contractor;
Next 20,000 bpd: [X]% government, [X]% contractor;
Next 20,000 bpd: [X]% government, [X]% contractor;
Next 20,000 bpd: [X]% government, [X]% contractor;
Any volume over the first 100,000 bpd: [X]% government, [X]% contractor.
The balance of natural gas remaining in any calendar year after deduction of royalty payments and after recoverable petroleum operations costs have been satisfied, shall be shared, taken and disposed of between the government and the contractor according to the following incremental scale:
Average daily production of natural gas from the contract area
First 50 million cubic foot per day: [X]% government, [X]% contractor;
Next 50 million cubic foot per day: [X]% government, [X]% contractor;
Next 50 million cubic foot per day: [X]% government, [X]% contractor;
Next 50 million cubic foot per day: [X]% government, [X]% contractor;
Greater than 200 million cubic foot per day: [X]% government, [X]% contractor.
إنتاج حصة - ميزات النفط التكلفة (أساس الحساب، والقيود المفروضة على استرداد التكاليف - على سبيل المثال كنسبة مئوية من الدخل أو الإنتاج، والنفقات الرأسمالية رفع، وما إلى ذلك)
The contractor shall be entitled to recover its petroleum operations costs from crude oil produced within the contract area and that is not used in petroleum operations.
The contractor shall retain and dispose, in each calendar year, of that volume of crude oil the value of which is equal to the recoverable petroleum operations costs for that calendar year, limited to an amount not exceeding [X]% of average daily production from the contract area.
To the extent that the recoverable petroleum operations costs for any calendar year exceed the value of the maximum amount of crude oil, the excess shall be carried forward for recovery in the next succeeding calendar year or calendar years.
القيود المفروضة على المعاملات مع الأطراف التابعة لها
A sale of petroleum is a sale at ʺarmʹs lengthʺ if the following conditions are satisfied:
(i) the price is the sole consideration for the sale;
(ii) the terms of the sale are not affected by any commercial relationship, other than that created by the contract of sale itself, between the seller or an affiliate and the buyer or an affiliate; and
(iii) the seller or an affiliate do not have, directly or indirectly, an interest in the subsequent resale or disposal of the petroleum or any product derived from it.
The contractor shall deal at arm's length whenever possible, and the price in dealings not at arm's length shall be no less favorable than if such dealings were conducted at arm's length.
The contractor shall pay to the government a royalty at a rate depending on the total daily production in a development area of all crude oil and natural gas produced and saved and not used in petroleum operations, and determined according to the following incremental scale:
Average crude oil production from a development area:
First 20,000 barrels per day (bpd): [X]% government, [X]% contractor;
Next 20,000 bpd: [X]% government, [X]% contractor;
Next 20,000 bpd: [X]% government, [X]% contractor;
Next 20,000 bpd: [X]% government, [X]% contractor;
Next 20,000 bpd: [X]% government, [X]% contractor;
Any volume over the first 100,000 bpd: [X]% government, [X]% contractor.
Average natural gas production from a development area:
First 50,000 million cubic foot per day: [X]% government, [X]% contractor;
Next 50,000 million cubic foot per day: [X]% government, [X]% contractor;
Next 50,000 million cubic foot per day: [X]% government, [X]% contractor;
Next 50,000 million cubic foot per day: [X]% government, [X]% contractor;
Any volume over the first 200,000 million cubic foot per day: [X]% government, [X]% contractor.
The government may participate in the petroleum operations in any development area and acquire a participating interest not to exceed [X]% (to be agreed between the parties). The government may acquire such interest either directly or through a specialized government entity.
If the government elects to participate then it shall reimburse the contractor, without interest, for the government pro-rata share of expenditure incurred by the contractor in conducting petroleum operations in the development area from the date of adoption of the development plan to the date of payment.
The government shall have the right to:
(i) vote in proportion to its participating interest on all decisions made under an operating agreement which permit a vote by a party;
(ii) separately take and dispose of its participating interest share of all petroleum produced and saved;
(iii) pay its proportionate part of the expenditure incurred in conducting petroleum operations in accordance with the operating agreement and accounting procedures;
(iv) own a participating interest share in all materials and equipment acquired for use under the operating agreement;
(v) have the right in common with all other parties to carry out sole risk operations in accordance with the provisions of the operating agreement.
The contractor shall prepare a community development program to be carried out in the contract area for the duration of the exploration period. The program shall be mutually agreed by both parties and the contractor shall annually contribute an amount to be agreed between the parties and annually contribute an amount to be agreed between the parties during the development period.
The contractor and the subcontractors shall give preference to the employment of Ethiopian nationals in all petroleum operations to the fullest extent possible, provided they have the required qualifications and experience.
The contractor shall submit a report on a regular basis detailing the employment of Ethiopian nationals and the utilization of Ethiopian materials, products and services in a form to be specified by the government. In addition, the contractor shall, within 30 days of employing, notify the government the name, the terms and the conditions of employment of any Ethiopian national.
The contractor and the subcontractors shall give preference to Ethiopian materials, products and services used in petroleum operations where those materials, products and services are of comparable quality and are readily available at competitive prices.
The contractor shall submit a report on a regular basis detailing the employment of Ethiopian nationals and the utilization of Ethiopian materials, products and services in a form to be specified by the government. In addition, the contractor shall, within 30 days of employing, notify the government the name and the terms and conditions of employment of any Ethiopian national.
In the event the contractor’s petroleum operations require the displacement of peoples occupying land in the contract area, the contractor shall attempt to negotiate a compensation settlement with such occupants. If any such occupants refuse to be displaced, or refuse to agree on a reasonable amount of compensation for being displaced, the government may cause the expropriation of immovable property, if any, and cause the eviction of such occupants for the purpose of the contractor’s petroleum operations, subject to the payment of a reasonable compensation to the displaced occupants to be determined by the government.
The government may require the contractor to submit an adequate re-settlement program for people occupying land required for the contractor’s petroleum operations, instead of paying compensation to such occupants. In such event the contractor shall implement the re-settlement program upon approval by the government.
The contractor shall establish a training and employment program, approved by the government, for Ethiopian nationals.
During the exploration period, the contractor shall annually contribute an amount to be agreed between the parties for the training of Ethiopian government personnel and/or acquisition of training facilities identified by the government. The agreed upon amount will increase during the development and production period.
The contractor shall subject to the approval of the government, which approval shall not be unreasonably withheld, have access over the territory of Ethiopia for the purpose of constructing, laying, operating and maintaining onshore pipelines, cables and any other facilities required for petroleum operations.
The contractor shall, in accordance with generally accepted international petroleum industry practice, take all necessary steps to ensure that all machinery, plant, equipment and installations used in petroleum operations are of proper and accepted construction and are kept in good repair.
Where the government and the contractor agree that a mutual economic benefit can be achieved by constructing and operating common facilities (including, but not limited to, roads, pipelines and other transportation, communication and storage facilities), the contractor shall use its best efforts to reach agreement with other producers on the construction and operation of such common facilities.
Other producers may use the facilities of the contractor where there exists excess capacity and on payment of a reasonable compensation which includes a reasonable return on investment to the contractor and provided such use does not materially interfere with the contractorʹs petroleum operations.
The government may require the contractor to supply crude oil to the government to meet Ethiopia's domestic consumption needs. This crude oil shall be supplied from the crude oil to which the contractor is otherwise entitled.
Associated natural gas, which is not required for use in petroleum operations and the
development, production, processing and utilization or sale of which the contractor
concludes is not economical, shall be returned to the subsurface structure. The contractor
has the right to flare such natural gas in accordance with generally accepted international
petroleum industry practice, provided the contractor demonstrates that the flaring is
required for technical and economic reasons and the government approves the flaring.
The contractor shall carry out the following work obligations and make the following exploration expenditures during the initial term and any extensions regarding same of the exploration period:
(a) geological and geophysical operations, including [X] (to be agreed between the parties) kilometers of seismic surveys, with a minimum expenditure of US$ [X] amount to be agreed between the parties for such seismic operations; and
(b) Drill [X] (to be agreed between the parties) exploratory well(s) to a minimum depth of [X] (to be agreed between the parties) meters per well, the first such well to commence not later than [X] (to be agreed between the parties) months after the effective date, with minimum drilling expenditure of US$ [X] amount to be agreed between the parties for each such well.
At the commencement of the exploration period the contractor shall provide the government with an irrevocable and unconditional bank guarantee for the minimum work obligations in an amount equal to the expenditure obligations.
Any difference or dispute arising out of this contract which cannot be mutually resolved by the parties may be submitted to arbitration to be conducted in accordance with the arbitration rules of the United Nations Commission on International Trade Law. The place of the arbitration shall be [X] and shall be in English. The decision of a majority of the arbitrators shall be final and binding upon the parties.
Any information and data which the contractor may supply to the government under this agreement shall, except with the consent of the contractor, keep such information confidential, and shall not disclose such information other than to a person employed by or on behalf of the government. The government may use any information supplied, for the purpose of preparing and publishing any reports and returns required by law, and for the purpose of preparing and publishing reports and surveys of a general nature.
The government may publish any information which relates to a surrendered area at any time after the surrender, and in any other case, 3 years after the information was received unless the government determines, after representations by the contractor, that a longer period shall apply.
The government may disclose any information obtained pursuant to this agreement as required by lending institutions, consultants and government entities as may be needed.
The contractor shall not trade or disclose to third parties during the term of this agreement and for a period of 10 years afterwards, any information obtained under this agreement without the consent of the government. However, the contractor may disclose information without obtaining such consent:
(a) to such extent as may be required to be disclosed to any authority having jurisdiction on it by law; and
(b) subject to obtaining confidentiality undertakings from the recipients, to its affiliates, consultants, any lending institution or any bona fide potential assignee of an interest in this agreement.
In the event that after the effective date (the date this agreement is signed by the government and the contractor) of this agreement the economic benefits to be derived by a party from the petroleum operations under this agreement are substantially affected by the promulgation of new laws and regulations or of any amendments to the applicable laws and regulations of Ethiopia and if the affected party so requests, the parties shall agree to make the necessary adjustments to the relevant provisions of this agreement, in order to ensure that the affected party is restored to the same economic condition it would have been in if such change in the applicable laws had not taken place.