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"An Act Ratifying



The Production Sharing Contracts With Addendum For



Blocks LB 11 and 12 Signed Between



The National Oil Company of Liberia (NOCAL)



On Behalf Of



The Republic Of Liberia And



Oranto Petroleum Limited"



Approved: April 16 2007



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Published by Authority

Ministry of Foreign Affairs

Monrovia, Liberia



Printed: May 22, 2007AN ACT RATIFYING THE PRODUCTION SHARING CONTRACTS WITH ADDENDA FOR BLOCKS LB 11 AND 12 SIGNED BETWEEN THE NATIONAL OIL COMPANY OF LIBERIA (NOCAL) ON BEHALF OF THE REPUBLIC OF LIBERIA AND ORANTO PETROLEUM LIMITED.



It is enacted by the Senate and House of Representatives of the Republic of Liberia in Legislature Assembled:



Section I: That from and immediately after the passage of this Act, PRODUCTION SHARING CONTRACTS WITH ADDENDA FOR BLOCKS LB 11 AND 12 SIGNED BETWEEN THE NATIONAL OIL COMPANY OF LIBERIA (NOCAL) ON BEHALF OF THE REPUBLIC OF LIBERIA AND ORANTO PETROLEUM LIMITED as herding recited below word for word in the equally authentic English Version be, and the same is hereby ratified.



SECTION II: SHORT TITLE: This Act Ratifying the Production Sharing Contracts with Addenda for Blocks LB 11 and 12 signed between the National Oil Company of Liberia (NOCAL) on behalf of the Republic of Liberia and Oranto Petroleum Limited, may also be officially cited as the PRODUCTION SHARING CONTRACTS ACT OF NOCAL AND ORANTO PETROLEUM LIMITED.



SECTION III: That any and all obligations, covenants, terms and conditions as contained in the above mentioned Production Sharing Contracts shall be carried to full completion.



SECTION IV: This Act shall take effect immediately upon the publication into hand-bill.



ANY LAW TO THE CONTRARY NOTWITHSTANDING.2007



Attestation to:

House's endorsement to Senate's engrossed Bill Bo. 2,

Entitled:



"An Act Ratifying the Production Sharing Contracts with Addenda for Blocks LB 11 and 12 Signed Between the National Oil Company of Liberia (NOCAL) on Behalf of the Republic of Liberia and Oranto Petroleum Limited"





______________________________

Vice President of Liberia/President of the Senate, R.L.



______________________________

Secretary of the Senate, R.L.



_____________________________

Speaker of the House of Representatives, R.L.



_____________________________

Chief Clerk of the House of Representatives, R.L.REPUBLIC



OF



LIBERIA



Production Sharing Contract



Between



National Oil Company of Liberia



And



Oranto Petroleum Limited



Block LB-12



June 2005TABLE OF CONTENTS



ARTICLE | | PAGE

1. | DEFINITIONS | 3

2. | SCOPE OF THE CONTRACT | 6

3. | DURATION OF EXPLORATION PERIODS AND SURRENDERS | 7

4. | EXPLORATION WORK COMMITMENTS | 9

5. | ESTABLISHMENT AND APPROVAL OF ANNUAL WORK PROGRAMS AND BUDGETS | 11

6. | CONTRACTOR'S OBLIGATIONS IN RESPECT OF THE EXPLORATION PERIODS | 12

7. | CONTRACTOR'S RIGHTS IN RESPECT OF THE EXPLORATION PERIODS | 14

8. | ACTIVITY REPORTS DURING THE EXPLORATION PERIODS AND SUPERVISION OF PETROLEUM OPERATIONS | 16

9. | OCCUPATION OF LAND | 18

10. | USE OF FACILITIES | 19

11. | APPRAISAL OF A PETROLEUM DISCOVERY | 20

12. | GRANT OF AN EXCLUSIVE EXPLOITATION AUTHORIZATION IN RESPECT OF A COMMERCIAL DISCOVERY | 23

13. | DURATION OF THE EXPLORATION PERIOD | 24

14. | EXPLOITATION OBLIGATION | 25

15. | CONTRACTOR'S OBLIGATIONS AND RIGHTS IN RESPECT OF EXCLUSIVE EXPLOITATION AUTHORIZATIONS | 26

16. | RECOVERY OF PETROLEUM COSTS AND PRODUCTION SHARING | 28

17. | TAXATION | 30

18. | VALUATION OF PETROLEUM | 34

19. | BONUSES | 37

20. | OWNERSHIP AND ABANDONMENT OF ASSETS | 38

21. | NATURAL GAS | 39

22. | FOREIGN EXCHANGE CONTROL | 44

23. | APPLICABLE LAW | 45

24. | MONETARY UNIT | 46

25. | ACCOUNTING METHODS AND AUDITS | 47

26. | IMPORT AND EXPORT | 48

27. | DISPOSAL OF PRODUCTION | 50

28. | PROTECTION OF RIGHTS | 51

29. | PERSONNEL AND TRAINING | 52

30. | ACTIVITY REPORTS IN RESPECT OF EXCLUSIVE EXPLOITATION AUTHORIZATIONS | 53

31. | ARBITRATION | 54

32. | FORCE MEJEURE | 55

33. | JOINT AND SEVERAL OBLIGATIONS AND GUARANTEES | 56

34. | RIGHTS OF ASSIGNMENT | 57

35. | STABILITY OF CONDITIONS | 58

36. | IMPLEMENTATION OF THE CONTRACT | 59

37. | EFFECTIVE DATE | 61



[signature]APPENDIX



1 DELIMITED AREA 62

2 ACCOUNTING PROCEDURE 64PRODUCTION SHARING CONTRACT



BETWEEN



The Republic of Liberia, (STATE) represented for the purposes of this Contract by the National Oil Company of Liberia (NOCAL), a company incorporated under the laws of Liberia;



AND



Oranto Petroleum Limited, a company incorporated under the laws of Nigeria, hereinafter referred to as (Contractor).



WHEREAS



• the discovery and exploitation of Petroleum are important for the interest and the economic of development of the country and its people;



• NOCAL wishes to undertake operations for exploration for exploitation, transportation, storage, processing and marketing of Petroleum;



• NOCAL has the mining rights in respect of Petroleum exploration and exploitation over the entirety of available areas in Liberia including the Delimited Area defined hereinafter;



• NOCAL wishes to promote the development of the Delimited Area, and the Contractor wishes to cooperate with NOCAL by assisting it in the exploration for and production of the potential resources within the Delimited Area, and hereby encouraging the economic growth of the country;



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Page 1 of 75Empty pageEmpty pagethe company which is a Party to this Contract shall be the Contrator; and



the Contrator represents that it has the financial resources, the technical competence and the organization capacity necessary to carry out in the Delimited Area the Petroleum Operations specified hereinafter.



NOW,THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:



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Page 2 of 75The following terms used in this Contract shall have the following meaning:



1.1. CALENDAR YEAR means a period of twelve (12) consecutive months beginning on January first (1st) and ending on the following December thirty-first (31st), according to the Gregorian calendar.



1.2. CONTRACT YEAR means a period of twelve (12) consecutive months beginning on the Effective Date or on the anniversary thereof.



1.3. FISCAL YEAR means a period of twelve (12) consecutive months beginning on January first (1st) and ending on the following December thirty-first (31st).



1.4. BARREL means U.S. barrel, i.e., 42 U.S. gallons measured at a temperature of 60°F and under an atmospheric pressure.



1.5. BUDGET means the itemized cost estimates of the Petroleum Operations described in an Annual Work Program.



1.6. EFFECTIVE DATE means the date on which this Contract comes into force and effect, as defined in Article 37.



1.7. CONTRACTOR means the company that shall be the operator and shall conduct Petroleum Operations.



1.8. CONTRACT means this Production Sharing Contract and its appendices forming an integral part hereof, together with any extension, renewal, replacement or modification hereto, which may be mutually agreed between the Parties.



1.9. PETROLEUM COSTS means all expenditures actually incurred and paid by the Contractor for the purposes of the Petroleum Operations under this Contract, and determined in accordance with the Accounting Procedure attached hereto as Appendix 2.



1.10. DOLLAR means dollar of the United States of America.



1.11. NATURAL GAS means methane, ethane, propane, butane and dry or wet gaseous hydrocarbons, whether or not associated with Crude Oil, as well as all gaseous products extracted in association with Petroleum, such as, without limitation, nitrogen, hydrogen sulfide, carbon dioxide, helium and water vapor.

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Page 3 of 751.12. ASSOCIATED NATURAL GAS means Natural Gas which exists in a reservoir in solution with Crude Oil which is or could be produced in association with Crude Oil.



1.13. NON-ASSOCIATED NATURAL GAS means Natural Gas other than Associated Natural Gas.



1.14. FIELD means a commercial accumulation of Petroleum in one or several overlaying horizons, which has been appraised in accordance with the provisions of Article 11.



1.15. PETROLEUM means Crude Oil and Natural Gas.





1.16. PETROLEUM OPERATIONS means all the Petroleum exploration, appraisal, development, production, transportation and marketing operations, and more generally any other operations directly associated therewith, carried out under this Contract.



1.17. PARTIES means NOCAL and the Contractor, and PARTY means either NOCAL or the Contractor.



1.18. APPRAISAL PERIMETER means any part of the Delimited Area where one or more Petroleum discoveries have been made, and in respect of which NOCAL has granted to the Contractor an exclusive appraisal authorization for the purpose of appraising the extent of said discoveries.



1.19. EXPLOITATION PERIMETER means any part of the Delimited Area in respect of which NOCAL has granted to the Contractor an exclusive exploitation authorization.



1.20. CRUDE OIL means crude mineral oil, asphalt, ozokerite, and all kinds of Petroleum and bitumen, either solid or liquid in their natural condition or obtained from Natural Gas by condensation or extraction, including coodensates and Natural Gas liquids.





1.21. DELIVERY POINT means the F.O.B. point connecting the loading facilities to the vessel then loading Crude Oil in the Republic of Liberia or any other transfer point mutually agreed between the Parties.





1.22. TOTAL PRODUCTION means the total production of Crude Oil or the total production of Natural Gas obtained from the whole Delimited Area less the quantities used for the requirements of the Petroleum Operations and any unavoidable losses.





1.23. ANNUAL WORK PROGRAM means the document describing, item by item, the Petroleum Operations to be carried out during a Calendar Year within the Delimited Area and in each Exploitation Perimeter, if any, established in accordance with the Contract.





1.24. DELIMITED AREA means the area in respect of which NOCAL under this Contract, grants to the Contractor an exclusive exploration right





































































































The areas surrendered by the Contractor in accordance with the provisions of Articles 3.5 and 3.6 shall be deemed as excluded from the Delimited Area, which shall be reduced accordingly. Conversely, the Exploitation Perimeter(s) shall be an integral part of the Delimited Area during the term of the relevant exclusive exploitation authorization.



1.25. AFFILIATED COMPANY means:



• a company or any other entity which directly or indirectly controls or is controlled by any entity constituting the Contractor; or



• a company or any other entity which directly or indirectly controls or is controlled by a company or entity which itself directly or indirectly controls any entity constituting the Contractor.



Such "control" means direct or indirect ownership by a company or any other entity of more than fifty percent (50%) of the shares, conferring voting rights, forming the stock of another company.



1.26. THIRD PARTY means a company or any other entity, other than the Contractor, which does not come within the foregoing definition.



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Page 5 of 75ARTICLE 2



SCOPE OF THE CONTRACT





2.1. This Contract is a Production Sharing Contract and included all the provisions of the agreement between NOCAL and the Contractor.



2.2. NOCAL authorizes the Contractor to be the Operator pursuant to the terms set forth herein and to carry out the useful and necessary Petroleum Operations in the Delimited Area, on an exclusive basis.



2.3. The Contractor undertakes, for all the work necessary for carrying out the Petroleum Operations provided for hereunder, to comply with good international petroleum industry practice and to be subject to the laws and regulations in force in Liberia unless otherwise provided under this Contract.



2.4. The Contractor shall supply all financial and technical means necessary for the proper performance of the Petroleum Operations.



2.5. The Contractor shall bear alone the financial risk associated with the performance of the Petroleum Operations. The Petroleum Costs related thereto shall be recoverable by the Contractor in accordance with the provisions of Article 16.2.



2.6. During the term hereof, in the event of production, the Total Production arising from the Petroleum Operations shall be shared between the Parties according to the terms set forth in Articles 16.2 and 16.3.



2.7. On the Effective Date, the Delimited Area shall be in the area as defined in Appendix 1.



2.8. The Contractor shall furnish NOCAL with all reports, information and data referred to hereunder, including without limitation any agreement binding on the entities constitution the Contractor.



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Page 6 of 75

ARTICLE 3



DURATION OF EXPLORATION PERIODS AND SURRENDERS



3.1. The exclusive exploration authorization is hereby granted to the Contractor for a first period of Four (4) Contractual Years in respect of the entire Delimited Area.



3.2. If during the first exploration period set forth above the Contractor has fulfilled the exploration work commitments defined in Article 4, as ascertained by the Government, the exclusive exploration authorization shall, at the Contractor’s request, be renewed for a second exploration period of Two (2) Contractual Years.



3.3. If, at the end of such second exploration period and provided that it has fulfilled its work commitments as set forth above, the Contractor so requests, a third exploration period shall be authorized for Two (2) Contractual Years.



3.4. The applications referred to in Articles 3.2 and 3.3 shall be made at least sixty (60) days prior to the expiration of the current exploration period.



3.5. The Contractor shall surrender at least the following surfaces:



(a) Twenty percent (20%) of the initial surface of the Delimited Area at the expiration of the second exploration period.



(b) Twenty percent (20%) of the initial surface of the Delimited Area at the expiration of the second exploration period.



Such surrenders shall be constituted of one block of a simple geometrical shape delimited by north-south, east-west lines or by natural boundaries of the area concerned.



For the purpose of computing the surface to be surrendered, the surface in respect of any Exploitation Perimeter shall be deducted from the initial surface of the Delimited Area.



The surfaces previously surrendered pursuant to the provisions of Article 3.6 shall be deducted from the surfaces to be surrendered.



Subject to its compliance with the above-mentioned requirements, the Contractor shall have the right to determine the area to be surrendered.

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Page 7 of 75The Contractor undertakes to furnish NOCAL with a precise description and a map showing the details of the surrendered areas and those retained, together with a report specifying the work carried out in the surrendered areas from the Effective Date and the results obtained.



3.6. During any exploration period, the Contractor may, at any time, notify NOCAL that it surrenders on the whole or any part of the Delimited Area the rights granted to it by giving sixty (60) days' notice to that effect.



No surrender during or at the expiration of any exploration period shall reduce the work commitments and the investment obligations set forth in Article 4 for the current exploration period.



In the event of surrender, the Contractor shall have the exclusive right to retain, for their respective term, the surfaces in respect of Appraisal Perimeters and Exploitation Perimeters which would have been granted and to carry out the Petroleum Operations therein.



3.7. At the expiration of the third exploration period set forth in Article 3.3, the Contractor shall surrender the whole remaining surface of the Delimited Area except as to any Appraisal Perimeters and Exploitation Perimeters which would have then been granted.



3.8. If at the expiration of all the exploration periods the Contractor has not obtained an exclusive appraisal authorization or an exclusive exploitation authorization, this Contract shall terminate.



3.9. The termination of this Contract, whatever the reason thereof, shall relieve the Contractor of any obligations under this Contract incurred prior to, or arising from, said termination and which shall be fulfilled.



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Page 8 of 75ARTICLE 4



EXPLORATION WORK COMMITMENTS



4.1. The Contractor shall commence the geological and seismic work within three months from the Effective Date.



4.2. The Contractor, during the first exploration period defined in Article 3.1, shall carry out the following minimum work:

·1500 square kilometers of 3D seismic survey and



4.3. The Contractor, during the second exploration period defined in Article 3.2, shall carry out the following minimum work provided a commercially viable prospect is defined from seismic and geological work:

·One (1) exploratory well.



4.4.1 The Contractor, during the third exploration period defined in Article 3.3, shall carry out the following minimum work:

·One (1) exploratory or appraisal well if hydrocarbons have been found in commercially viable quantities.



4.4. Each of the exploratory wells referred to above shall be drilled to a minimum depth of 1000 meters, after deductions of the water depth, or to a lesser depth if the continuation of drilling performed in accordance with good international petroleum industry practice is prevented for any of the following reasons:



(a) the basement is encountered at a lesser depth than the minimum contractual depth;



(b) continuation of drilling presents an obvious danger due to the existence of abnormal formation pressure;



(c) rock formations are encountered the hardness of which prevents, in practice, the continuation of drilling by the use of appropriate equipment;



(d) petroleum formations are encountered the crossing of which requires, for their protection, the laying of casings preventing the minimum contractual depth from being reached.



In the event that any of the above reasons occurs, the exploratory well shall be deemed to have been drilled to the minimum contractual depth.

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Page 9 of 75Notwithstanding any provision in this Article to the contrary, NOCAL and the Contractor may, at any time, agree to abandon the drilling of a well at a lesser depth than the minimum contractual depth.



4.5. In order to carry out the exploration/appraisal work defined in Articles 4.2 to 4.4 in the best technical conditions in accordance with good international petroleum industry practice, the Contractor undertakes to spend the following minimum amounts:



(e) Four point five (4.5) million Dollars during the first exploration period defined in Article 3.1;



(f) Six (6) million Dollars during the second exploration period defined in Article 3.2;



(g) Six (6) million Dollars during the third exploration/appraisal period defined in Article 3.3.



If during the exploration period the Contractor has performed its work commitments for an amount lesser than the amount specified above, it shall be deemed to have fulfilled its investment obligations relating to that period. Conversely, the Contractor shall perform the entirety of its work commitments set forth in respect of an exploration period even if it results in exceeding the amount specified above for that period.



4.6. If at the expiration of any of the three (3) periods defined in Articles 3.1, 3.2 and 3.3 or upon the date of surrender of the whole Delimited Area, or upon the date of termination of this Contract, the Contractor has not fulfilled its work commitments set forth in this Article, it shall pay as compensation to NCOAL, within thirty (30) days after that date of expiration, surrender or termination, the unspent balance of exploration work commitments above-defined for the current exploration period.

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Page 10 of 75 ARTICLE 5



ESTABLISHMENT AND APPROVAL OF



ANNUAL WORKKPROGRAMS AND BUDGETS





5.1. At least three (3) months before the beginning of

each Calendar Year, or for the first year, within

one (1) month from the Effective Date, the

Contractor shall prepare and submit For approval

to NOCAL an Annual Work Program together with the

related Budget for the entire Delimited Area,

specifying the Petroleum Operations that the

Contractor proposes to perform during that Calendar

Year and their cost.



5.2. It NOCAL wishes to propose any revisions or

modifications to the Pelroleum Operations specified

in said Annual Work Program, it shall, within

thirty (30) days after receipt of that Program, so

notify the Contractor presenting all iustifications

deemed useful. In that event NOCAL and the

Contractor shall meet as soon as possible to

consider the proposed revisions or modifications

and to mutually establish the Annual Work Program

and the related Budget in its final form, in

accordance with good international petroleum

industry practice. However, during the Exploration

Period, the Annual Work Program and the related

Budget established by the Contractor after the

above mentioned meeting shall be deemed to be

approved provided that they comply with the

obligations set forth in Article 4.



Each part of the Annual Work Program and Budget

in respect of which NOCAL has not proposed any

revision or modification within the period of

thirty (30) days above-mentioned, shall be carried

out by the Contractor within the stated time.



Should NOCAL fail to notify the Contractor of its

wish for revision or modification within the period

of thirty (30) days above-mentioned, such Annual

Work Program and the related Budget submitted by

the Contractor shall be deemed to be approved

by NOCAL.



5.3. It is agreed by NOCAL and the Contractor that the

Contractor may acquire knowledge as and when the

the work is implemented, or certain events may

justify changes to the details of the Annual Work

Program. In that event, after notification to NOCAL,

the Contractor may make such changes provided that

the basic objectives of said Annual Work Program

are not modified.







Page 11 of 75 ARTICLE 6



CONTRACTOR'S OBLIGATIONS IH RESPECT OF

THE EXPLORATION PERIODS





6.1. The Contractor shall provide all the necessary funds end purchase or hire all the equipment, facilities and materials required te carry out the Petroleum Operations.



6.2. The Contractor shall provide all technical assistance, including the personnel required to carry out the Petroleum Operations.



6.3 The Contractor shall be responsible for the preparation and performance of the Annual Work Programs which shall be carried out in the most appropriate manner in observande of good international petroleum industry-practice.



6.4. The Contractor undertakes to take all the reasonable and practical steps to:



(a) ensure the prpotection of water-bearing strata encountered during its work;



(b) carry out the tests necessary of for determining the value of any show encountered during drilling and the exploitability of any possible Petroleum iscoveries.



(c) avoid losses and discharges of Petroleum preduced as well as losses and discharges of mud or any other preduct used in the Petroleum Operations.



6.5. All works and facilities erected by the Contractor hereunder shall according to their nature and to the circumtances, be built, placed, signaled, marked, fitted and preserved so asto allow at any time and in

safety free passage to naviagtion within the Delimited Area, and without preduice to the foregoing, the Contractor shall, in order to faciliate navigation install the sound and optical devises approved or

required by the competent authorities and maintain them in e manner satisfactory to said authorities.





































6.6. In the exercise of its rights to build, carry out work and maintain all facilities necessary for the purposes hereof, the Contractor shall not disturb any existing graveyard or building used for religious purposes, nor cause a nuisance to any government or public buildinq, except with the prior consent of NOCAL, and shall make good the damage caused by it in that event,



6.7. In its conduct of Petroleum Operations, the Contractor undeetakes take all necessary precautions to prevent marine pollution.



In order to prevent pollution, NOCAL and Contractor agree that the Contractor shall observe all existing international environmental protocols, regulations and rules as may he applicable to prevent

pollution and preserve the environment. NOCAL and the Contractor shall meet and consider any measure which may be necessary to preserve the environment.



8.8. The Contractor and its subcontractors shall be obligated to give preference to enterprises and goods from Liberia, it conditions of price quality, delivery time and terms of payment are similar.

ARTICLE 7





CONTRACTOR'S RIGHTS IN RESPECT OF

THE EXPLORATION PERIODS



7.1. Without prejudice to the provisions hereof, the Contractor shall have the right to carry out the Petroleum Operations within the Delimited area. Such right includes, inter alia;



(a) full responsibility for, management of and control over all the Petroleum Operations;



(b) authority to exercise any of the rights conferred hereby through agents end independent contrators, and to pay accordingly any of their expenses and costs in the place and in the currency chosen by the Contractor.



7.2. The Contractor shall have the right to clear the ground, dig, perforate, drill, build, erect, place, supply, operate, manage and maintain ditches,

pools, wells, trenches, excavations, dams, canals, water conduits, plants, tanks, basins, maritime and other storage facilities, primary distillation units, first-extraction gasoline separator units, sulfur plants,

and other facilities for Petroleum production, together with the pipelines, pumping stations, generator units, power plants, high voltage lines, telephone, telegraph, radio and other communication facilities, factories, warehouses, offices, employees’ housing, hospitals,

premises, ports, clocks, harbors, dikes, jetties, dredges, sea walls, under water piers and other facilities, ships, vehicles, railways, warehouses, workshops, foundries, repair shops and all the auxiliary

services which are necessary for or useful to the Petroleum Operations or in connection therewith; and all additional facilities which are or may become necessary for or reasonably subsidiary to the carrying out of

the Petroleum Operations.



7.3. The agents, employees and representatives of the Contractor or its subcontractors shall have the right, for the purposes of the Petroleum Operations to enter into or leave the Delimited Area and shall have free

access to all the facilities set up by the Contractor.



7.4. The Contractor shall have the right subject to the payment of fees applicable in Liberia, to remove and use the surface soil, mature timber, clay, sand, limestone, gypsum, stones and other similar materials which may be necessary tor the perfomance of the Petroleum Operations.



With the consent of the competent administrative services, the







Page 14 of 75Contractor may make reasonable use of such materials for the performance of the Petroleum Operations, subject to payment of fees applicable in Liberia, when they are located on land owned by the STATE and placed in the vicinity of the land where said Operations are taking place.



The Contractor may take or use the water necessary for the Petroleum Operations, provided that existing irrigation or navigation are not impaired and that land, houses or watering places for livestock are not deprived of a reasonable quantity of water.

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Page 15 of 75ARTICLE 8



ACTIVITY REPORTS DURING THE EXPLORATION PERIODS AND SUPERVISION OF PETROLEUM OPERATIONS



8.1. NOCAL shall own and may freely use all the original data and documents relating to the Petroleum Operations such as, but without limitation, records, samples, geological, geophysical, petrophysical, drilling and operating reports.



8.2. The Contractor undertakes to furnish NOCAL with the following periodic reports:



(a) daily reports on drilling operations;



(b) weekly reports on seismic operations;



(c) within thirty (30) days after each Calendar quarter, a report on the Petroleum Operations carried out together with a detailed statement on Petroleum Costs in respect of the precedinf quarter;



(d) prior to the end of February of each Calendar Year, an annual report on the Petroleum Operations carried out together with a detailed statement on Petroleum Costs in respect of the preceding Calendar Year.



8.3. In addition, the following reports or documents shall be furnished to NOCAL as soon as they are prepared or obtained:



(a) a copy of all geological surveys and syntheses together with the related maps;



(b) a copy of all geophysical surveys, measurement and interpretation reports, map profiles, sections or other documents related thereto, as well as, at NOCAL’s request, the originals of all recorded seismic magnetic tapes;



(c) a copy of the drilling location and completion report for each well together with a complete set of recorded logs;



(d) a copy of all drill tests or production tests together with any study relating to the flow or production of a well;

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Page 16 of 75(e) a copy of all reports relating to core analyses.



All maps, sections, profiles, logs and all other geological or geophysical documents shall be supplied on an appropriate transparent support in view of subsequent reproduction.



A representative portion of the cores and cuttings removed from each well, as well as samples of fluids produced during drill tests or production tests shall also be supplied to NOCAL within a reasonable period.



Upon expiration or in the event of surrender or termination of this Contract, the original documents and samples relating to the Petroleum Operations shall be provided to NOCAL.



8.4. The Contractor shall keep NOCAL informed of its activities through the duly designated representative of the latter. In particular, the Contractor shall notify NOCAL as soon as possible and in any event at least fifteen (15) days in advance of all projected Petroleum Operations, such as any geological surveys, seismic surveys, commencement of drilling and installation of a platform.



In the event the Contractor decides to abandon a drilling it shall notify NOCAL thereof within at least seventy-two (72) hours prior to such abandonment.



8.5. The contractor shall be entitled however to trade any data, geological and or geophysical and any other data howsoever obtained through the Operations with other operators (contractors) working within the political boundaries of Liberia in order to promote dissemination and sharing of knowledge that would benefit the contractors and/or NOCAL and as is the normal accepted practice in the petroleum industry.

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Page 17 of 75ARTICLE 9



OCCUPATION OF LAND



9.1. The STATE shall make available to the Contractor, and only for the purposes of the Petroleum Operations, any land which it owns and which is necessary for said operations. The Contractor shall have the right to build and the obligation to maintain, above and below the ground, the facilities necessary for the Petroleum Operations.



The Contractor shall indemnify the STATE for any damage caused to the land by the construction, use and maintenance of its facilities on such land.



The STATE shall authorize the Contractor to build, use and maintain telephone, telegraph and piping systems above and below the ground and along the land not belonging to the STATE, provided that the Contractor pays to the land-owners, a reasonable compensation mutually agreed upon.



9.2. The rights on land owned by private persons, which would be necessary for the carrying out of the Petroleum Operations, shall be acquired by direct agreement between the Contractor and the private person concerned.



In the event of disagreement, the Contractor shall notify the STATE thereof, and the latter shall proceed to expropriation for a public purpose, at Contractor’s expenses. When determining the value of those property rights, no consideration shall be given to the Contractor’s purpose for acquiring them and the STATE agrees that no law or procedure for said acquisition shall have the effect of giving them an excessive value or a confiscation value. Those rights acquired by the STATE shall be registered in its name, but the Contractor shall be entitled to benefit therefrom for the purposes of the Petroleum Operations. During the entire term of this Contract, the STATE guarantees that the Contractor shall be protected in the use and occupation of such land just as if it owns the property rights thereto.

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Page 18 of 75USE OF FACILITIES



10.1. For the purposes of the Petroleum Operations, the Contractor shall have the right to use, in accordance with the applicable laws, any railroad, tramway, road, airport, landing strip, canal, river, bridge, waterway and any telephone or telegraph network in Liberia whether owned by the STATE or by any private enterprise, subject to the payment of fees then in effect or mutually agreed upon which will not be in excess of the prices and tariffs charged to Third Parties for similar services.



The Contractor shall also have the right to use for the purposes of the Petroleum Operations any land, sea or air transportation means for the transportation of its employees or equipment, subject to compliance with the laws and regulations which generally govern the use of such means of transportation.



10.2. The STATE shall have the right to use for exceptional matters any transportation and communication facility installed by the Contractor, subject to a fair compensation mutually agreed upon which will not be in excess of the prices and tariffs charged to Third Parties for similar services.



10.3. Nothing in this Contract shall limit the STATE’s right to build, operate and maintain on, under and along the land made available to the Contractor for the purposes of the Petroleum Operations, roads, railroads, airports, landing strips, canals, bridges, pipelines, useful telephone and telegraph lines, provided that such right is not exercised in a manner which restricts or hinders the Contractor’s rights hereunder, or the Petroleum Operations.

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Page 19 of 75 ARTICLE 11



APPRAISAL OF A PETROLEUM DISCOVERY





11.1. In the event the Contractor discovers Petroleum, it shall, as promptly as possible, notify NOCAL thereof and submit to it, within thirty (30) days after the date of the temporary plugging or abandonment of the

discovery well, a report including all information relating to said discovery.



11.2. If the Contractor wishes to undertake appraisal work relating to the above mentioned Petroleum discovery, it shall submit for approval to NOCAL, within six (6) months after the date of notification of said

discovery, the appraisal work program and the estimate of the related Budget.



The provisions of Article 5 shall be applicable, mutatis mutandis, to said program as regards its approval and performance, it being understood

that the submitted program shall comply with good international petroleum industry practice.



11.3. If the Contractor meets the conditions referred to in Article 11.2 and on request to NOCAL, the letter shell grant to it an exclusive appraisal authorization for a duration of two (2) years from the date of approval of the appraisal work program and the related Budget, in respect of the Appraisal Perimeter specified in said program. Except otherwise provided by this Article, the Contractor shall, during the term of said

exclusive appraisal authorization, be subject to the same regime as that applicable to the exclusive exploration authorization.



11.3.1. The Contractor shall then diligently carry out the apprasial work program for the discovery in question, in particular it shall drill the appraisal wells and carry out the production tets specified in said program.



At the Contractors request, notified at least thirty (30) days prior to the expiration of the appraisal period above-defined, the duration of said period may be extended by a maximum of six (6) months, provided that such extension is justified by the continuation of the drilling and production tests specified in the appraisal program.



11.3.2. Within three (3) months after the completion of appraisal work, and no later than thirty (30) days prior to the expiration of the appraisal period, the Contractor shall provide NOCAL with a detailed report giving all the













Page 20 of 75































Information relating to the discovery and the appraisal thereof.



11.3.3. If, after having carried out the appraisal work, the Contractor considers that the Field corresponding to the Petroleum discovery is commercial, it shall submit to NOCAL, together with the previous report, an application for an exclusive exploitation authorization accompanied by a detailed development and production plan for said Field, specifying inter alia;



(a) the planned delimitation of the Exploitation Perimeter applied for by the Contractor, so that it covers the area defined by the seismic closure of the Field concerned, together with all the technical justifications with respect to the extent of said Field;



(b) an estimate of the reserves in place; the proven and probable recoverable reserves and the corresponding annual productions, together with a study on the methods of recovery and the possible valorization of the products associated with Crude Oil, such as any Associated Natural Gas;



(c) item by item, the description of equipment and work necessary for production, such as the number of development wells, the number of platforms, pipelines, production, processing, storage and loading facilities together with their specifications;



(d) the estimated schedule for its implementation and the projected date of production start-up;



(e) the estimates of investments and exploitation costs together with an economic evaluation demonstrating the commercial nature of the discovery in question.



11.3.4. The commercial nature of one or more Petroleum Fields shall be determined by the Contractor, provided that it shall, at the end of appraisal work, submit to NOCAL the economic study referred to in Article 11.3.3.(e) demonstrating the commercial nature of said Field or Fields.



A Field may be declared commercial by the Contractor if, after taking into account the provisions of this Contract and the submitted development and production plan, the projected incomes and expenses determined in

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Page 21 of 75 accordance with good international petroleum

industry practice confirm the commercial

nature of said Field.



11.3.5. For the puposes of evaluatig the commercial nature of said Field oer Fieldse. NOCAL and the Contractor shall meet within thirty (30) days after the submission of the development and production plan accompanied by the economic evaluation.



11.3.5. The development and production plan submitted by the Contractor shall be subject to the approval of NOCAL. Within ninety (90) days after the submission of said plan. NOCAL may propose revision of modifications hereto by notifying the Contractor thereof with all the useful justifications. In that event, the Parties shall meet as soon or possible in order to consider the proposed revisions or modifications and estblish by mutual agreement the plan in its final form; the plan shall be deemed to be approved_ by NOCAL upon the date of such agreement.



Should NOCAL fail to notify the Contractor of

its wish for reviision ofr modification within

the above-mentioned ninety(90) day period, the

plan submitted by the Contractor shall be

deemed to be approved by NOCAL at the

expiration of said period.



11.4. If for reason not technically justified, the Contractor, within twelve (12) months after notification to NOCAL of a Petrolium discovery, has not applied for an exclusive appraisal authorization of if, after its granting it has not commenced the appraisal work in respect of said discovery or if the Contractor, within eighteen (18) months after completion of the

appraisal work declare the discovery as commercial. NOCAL may require that the Contractor surrenders all its rights in respects of the area deemed to encompass said discovery without any compensation for the Contractor. If within sixty (60) days after NOCAL's request, the

Contractor has not notified its decision, it shall surrender said area end will forfeit all its rights on Petroleum which could be produced from said

discovery, and any area so surrendered shall be deducted from the surfaces to be surrendered under Article 3.5. ARTICLE 12



GRANT OF AN EXCLUSIVE



EXPLOITATION AUTHORIZATION





12.1. A commercial Petroleum discovery shall entitle the Contractor to an exclusive right, if it so requests pursuant to the conditions set forth in Article 11.3.3. to obtain, in respect of the Field concerned, an exclusive exploitation authorization covering the related Exploitation Perimeter. Said authorization shall be granted by NOCAL as soon as possible.



12.2. If the Contractor makes several commercial discoveries in the Delimited Area, each such discovery shall, in accordance with the provision of Article 12.1 give rise to an exclusive exploitation authorization each corresponding to an Exploitation Perimeter. The

number of exotusive exploitation authorizations and related Exploitation Perimeters within the Delimited Area shall not be limited.



12.3. If it in the course of work carried out after the grant of an exclusive exploitation authorization, it appears that the area defined by the seismic closure of the Field concerned is larger than originally

estimated pursuant to Article 11.3.3. NOCAL shell grant to the Contractor, as part of the exclusive exploitation authorization already granted, an additional area so that the entirely of said Fielid is include in the Exploitation Perimeter, provided, however, that the Contractor supplies NOCAL, together with its application with the technical evidence of the extension so required and provided, further, that the above mentioned extension is an integral part of the Delimited Area as

defined at the time of said application.



12.4. Where a Field extends beyond the boundaries of the Delimited Area, NOCAL may require the Contractor to exploit said Field in association with the right holder of the adjacent area under the provisions of a

unitization agreement.



Within six (6) months after NOCAL has notified its request, the Contractor shall submit to its approval the development and production plan or the Field concerned which shall be prepared in agreement with the right holder of the adjacent area.



































ARTICLE 13

DURATION OF THE EXPLOITATION PERIOD





13.1. The duration of an exclusive exploitation authorization during which the Contractor is authorized to carry out the exploitation of a Field declared

commercial is set at twenty-tlfive (25) years from its date of issue.



If upon expiration of the exploitation period of twenty-five (25) years above-defined, a commercial exploitation of a Field remains possible NOCAL may authorize the Contractor, at the latter's request submitted at least twelve (12) months prior to said expiration, to continue under this Contract the exploitation of said Field during an additional period of no more than ten (10) years, provided that the Contractor has fulfilled all its obligations during the current exploitation period.



If, upon expiration of that additional exploitation period, a commercial exploitation of said Field remains possible, the Contractor may request NOCAL, at least twelve (12) months prior to said expiration that it be

authorized to continue the exploitation of said Field under this Contract, during an additional period to be agreed upon.



13.2. The Contractor may, at any time, fully or partially surrender any exclusive exploitation authorization by giving at least twelve (12)

months prior notices which may be reduced with NOCAL’s consent. That notice shall be accompanied by the list of steps which the surrendering Contractor undertakes to take, in accordance with good international petroleum industry practices arising out of its surrender.



13.3. Interruption of development work or production of a Field declared commercial, for a consecutive period of at least six (6) months, decided by the Contractor without NOCAL's consent. or abandonment of the

exploitation of a Field, may give rise to the withdrawal of the exclusive exploitation authorization concerned together with the termination of this Contract.



13.4. Upon expiration surrender or withdrawal of the last exclusive exploitation authorization granted to the Contractor, this Contract shall terminate.



13.5. The termination of this Contract, whatever the reason thereof, shall not relieve the Contractor of any obligations incurred prior to, or arising from, said expiration or temtination and which shall be fulfilled.





















ARTICLE 14



EXPLOITATION OBLIGATION





14.1. FOr Any Field in respectet of which en exclusive exploitation authorization has been granted, the Contractor undertakes to perform, at its sole cost

and its own financial risk, all the Petroleum Operations useful and necessary for the exploitation of said Field.



14.2. However if the Contractor can provide accounting evidence, during either the development period, that the exploitation of a Field cannot be commecially profitable, notwithstanding that an exclusive exploitation authorization has been granted in accordanse with the provisions of Article 12.1. NOCAL agrees not to force the Contractor to continue the exploitation of such Field.



In that event, NOCAL, in its discretion, may withdraw the exclusive exploitation authorization concerned from the Contractor without any compensation for the latter, by giving a sixty (60) days prior notice.. ARTICLE 15

CONTRACTORS OBLIGATIONS AND RIGHTS

IN RESPECT OF EXCLUSIVE EXPLOITATION

AUTHORIZATIONS







15.1. The Contractor shall commence development work not later than six (6) months efier approval of the development and production plan referred to in Article 11.3.6 and shall continue it with the maximum diligence.



15.2. The provisions of Articles 5, 6, 7, 8, 9 and 10 are also applicable, mutatis mutandis, in repect of any exclusive exploitation authorization.



The Contractor shall have the right to build, use, operate and maintain all the Petroleum storage and transportation facilities which are necessary for the production transportation and sale of Petroleum

produced, pursuant to the conditions specified in this Contract.



The Contractor may determine the route and location of any pipeline inside Liber1a which is necessary for the Petroleum Operations, provided that it shall submit plans to NOCAL for approval prior to the

commencement ofi work; any pipeline crossing or running alongside roads or passageways (other than those used exclusively by the Contractor) shall be built so as not to hinder the passage on those roads or passageways.



15.4. The Contractor may, to the extent and for the duration of the excess capacity of a pipeline or processing, transportation or storage facility built for the purposes of the Petrolem Operations be obligated to

accept the flow of Petroleum coming from exploltations other than that of the Contractor, provided that such flow shall not cause prejudice to the Petroleum Operations, and provided, further. that a reasonable

tariff covering a normal remuneration for capital invested in respect of the pipeline or facility concerned shall be paid by the user.



15.5. Following the grant of an exclusive explatation authorization, the Contractor undertakes to proceed diligently with the carrying out of development wells, spacing them in a manner so as to ensure, in

accordance with good Intemational petroleum industry practice, the maximum economic recovery of the Petroleum contained in the Field in question.



15.6. The Contractor shall, in the conduct of development and production operations, comply with all good international petroleum industry.











































practice which in particular entsures the good conservation of Fields and maximum economic recovery Petroleum.



Tha Contractor shall, inter alla, carry out enhanced recovery studies and use such recovery process if they may lead to an increasa in Petroleum recovery rate under economic concditions.



15.7. The Contractor shall provide NOCAL with all the raports, studies, measurement results, tests end documents enabling tha monitoring of the proer exploitation of each Field.



Tha Contractor shall, in particular, carry out tha following measures on eash producing well:



(a) monthly testing of production ant gas/oil ratio;



(b) half-yaarly measurement of the Field resevoirs pressure.



15.8. The Contractor undertakes to produce evert year each Field quantities of Petroleum in accordance with the provisions of article 15.6.



The annual procduction rates of each Field shall be submitted by the Contractor together with tha Annual Work Programs for the approval of NOCAL which shall not BE withheld provided that the Contractor gives proper technical and economic grounds.



15.9.The Contractor shall meassure, in a point mutually agreed between the Partias, all Petroleum produced and not used for the requirement of the Petroleum Operations, and exculiding unavoidable losses, after

extraction of water and sediments, by using the measurement appliances and procedures customarily used in the international petroleum industry.



The aautorised NOCAL'S repsenentatives shal have the right to examine those measurements and inspect or cause

to be inspected the appliances and procedures used.



If the Contractor wishses to change said measurement nd procedures, it shall obtain prior approral from NOCAL.



Where the appliances and procedures used therefore have caused an overstatement or understatement of measured quantities, the error shall be deemed to have existed since the date of the last calibration of the appliances, unless the contrary can be justified, and the proper adjustment shall be made for the period of extintence of such error.



ARTICLE 16



RECOVERY OF PETROLEUM COSTS AND PRODUCTION SHARING



16.1. From the commencement of regular production of Crude Oil, the Contractor shall market all the production of Crude Oil obtained from the Delimited Area, in accordance with the provisions hereinafter defined.



16.2. For the purposes of recovery of the Petroleum Costs, the Contractor may freely take each Calendar YEar a portion of the production in no event greater than seventy percent (70%) of the Total Disposable Production of Crude Oil from the Delimited Area, or only any lesser percentage which would be necessary and sufficient.



The value of such portion of Total Production allocated to the recovery of the Petroleum Costs by the Contractor, as defined in the preceding paragraph, shall be calculated in accordance with the provisions of Article 18 and will be referred to as "Cost Oil".



If during any Calendar Year the Petroleum Operation Costs not yet recovered by Contractor under the provisions of this Article 16.2 exceed the equivalent in value of seventy percent (70%) of the Total disposable Production of Crude Oil remaining from the Delimited Area, as calculated above, the balance of the Petroleum Costs which cannot be recovered in that Calendar Year shall be carried forward in the following Calendar Year or Years until full recovery of the Petroleum Costs or until the expiration of this Contract.





16.3. The quantity of Crude Oil from the Delimited Area remaining during each Calendar Year after the Contractor has taken from the Total Production the portion necessary for the recovery of the Petroleum Costs, hereinafter referred to as "Remaining Production or (Profit Oil)", shall be shared between NOCAL and the Contractor as follows:



The Remaining Production shall be shared according to the daily Total Production from the Delimited Area:















































Increments of daily NOCAL's Share Contractor's share

Total Production

(In Barrels per day)





from 0 to 30,000 20% 80%



from 30,000 to 75,000 30% 70%



from 75,000 to 200,000 35% 65%



over 200,000 40% 60%





For the purpose of this Article, the daily Total Production shall be the average rate of Total Production during the calendar quarter in question.



For the purposes of the tax legislation of the Republic of Liberia, the quantity of Crude Oil that NOCAL will receive during each Calendar Year pursuant to this Article 16.3 shall include the portion necessary to pay any tax(es) of the Contractor in Liberia which will be assessed on its incomes. NOCAL agrees to pay from this portion any income tax on behalf and in the name of the Contractor and to deliver to the latter official receipts of such payments.



16.4. NOCAL may receive its share of production defined in Article 16.3 either in kind or in cash.





16.5. If NOCAL wishes to receive in kind all or part of its share of production defined in Article 16.3 it shall so notify in writing the Contractor at least niney (90) days prior to the beginning of the calendar quarter concerned specifying the precise quantity that it wishes to receive in kind during said quarter.



16.6. If NOCAL wishes to receive in cash all or part of its share of production defined in Article 16.9 or if NOCAL has not notified the Contractor it its decision to receive its share of production in kind pursuant to Article 16.5, the Contractor shall market NOCAL's share, of production to be taken in cash for the quarter concerned, lift said share during such quarter and pay to NOCAL within thirty (30) days following the date of each lifting, an amount equal to the quantity corresponding to NOCAL's share of production multiplied by the sale price defined in Article 18.



NOCAL may require payment, for sales of its share of production sold by the Contractor, in Dollars or in the foreign currency in which the sale has been made.



























































ARTICLE 17



TAXATION



17.1. Unless otherwise provided for in this Contract the Contractor shall, in respect of its Petroleum Operations, be subject to the laws generally applicable and the regulations in force in Liberia concerning taxes which are or may be levied on incomes, or determined thereto.



It is specifically acknowledged that the provisions of this Article shall apply individually to any entity comprising the Contractor under this Contract.



The Contractor shall keep separate accounts for each Fiscal Year in respect of the Petroleum Operations, in accordance with the regulations in force in Liberia, enabling in particular the establishment of a profit and loss account as well as a balance sheet showing both the results of said Petroleum Operations and the asset and liability items allocated or related thereto.



17.2. For the purposes of Article 17.1 the Contractor shall in respect of its net profit arising from Petroleum Operations, be liable to an income tax under the laws and regulations in force in Liberia.



In accordance with the provisions of Article 16.3 under which NOCAL shall pay Contractor's Income tax from NOCAL's share of crude oil, the Contractor shall not be liable for any payment to the STATE with respect to said tax. As regards the tax authorities of Liberia, the share of Crude Oil of Total Production, which the Contractor is entitled to receive under the provisions of Article 16.3 is considered as representing the net profit obtained by the Contractor.





17.3. For the purposes of assessing the Contractor's taxable net income in respect of a Fiscal Year, the profit and loss account shall, inter alia, be credited by the following:



(a) the Contractor's annual gross income recorded in its accounting books, arising from the marketing of the quantity of Crude Oil to which it is entitled under Articles 16.2 and 16.3 all other incomes or proceeds related to the Petroleum Operations, including inter alia those arising from:





* the sale of related substances;









































processing, transportation or storage of products for Third Parties in the facilities dedicated to the Petroleum Operations.



Such profit and loss account shall be debited with all charges necessary for the purposes of the Petroleum Operations in respect of the Fiscal Year concerned, which may be deducted under the applicable laws of Liberia and the provisions of this Contract.



In particular the following items may be debited from the income of the Fiscal Year:



(a) In addition to the charges specifically set forth below in this Article 17.4, all other Petroleum costs, including the costs of supplies, personnel and manpower expenses, costs of services provided to the Contractor in respect of the Petroleum operations, provided, however, that costs of supplies, personnel and services rendered by Affiliated Companies shall be deductible provided that they do not exceed those which would be normally charged in arm's length transactions between independent buyer and seller for identical or similar supplies or services.



(b) Overhead costs relating to the Petroleum Operations performed under this Contract, including without limitation:



* Rentals for movable and immovable properties as well as insurance premiums;



* A reasonable portion, in light of the services rendered to the Petroleum Operations performed in Liberia, of wages and salaries paid to managers and employees residing abroad, and the general and administrative overhead costs of the central services of the Contractor and its Affiliated Companies working for its account, located abroad, and indirect costs incurred by said central services abroad for their account. Overhead costs paid abroad shall in no event be greater than the limits specified in the Accounting Procedure.





(c) Interest paid to creditors of the Contractor, for their actual amount, subject to the limits specified in the Accounting Procedure.



(d) Losses of materials or assets resulting from destruction or damage, assets which are renounced or abandoned during the year, bad debts, indemnities paid to Third Parties as compensation for damage.





(e) Reasonable and justified reserves made for clearly identified future losses or liabilities which current events render probable.





























































































(f) Any other losses or charges directly related to the Petroleum Operations, including exchange losses realized in connection with the Petroleum Operations as well as bonuses and amounts paid during the Fiscal Year.



17.5. The Contractor’s taxable net profit shall be equal to the difference, if positive, between all the amounts credited and all the amounts debited in the profit and loss account. If this amount is negative, it shall constitute a loss.



17.6. Within three (3) months after the end of a Fiscal Year, each entity constituting the Contractor shall submit to the competent tax authorities its annual tax return altogether with financial statements, as required by applicable regulations.



NOCAL, shall, after submission of said annual tax return and acknowledgment of tax payment, furnish to the Contractor within a reasonable period the tax receipts evidencing, the payment of Contractions Liberian income tax and all other documents certifying that the Contractor has, for the Fiscal Year in question, complied with all its tax obligations with respect to the income tax as defined in this Article.



17.7. Except for the income tax defined in the Article and the bonuses provided for in Article 19, the Contractor shall be exempt from all other levies, duties, taxes or contributions of any nature whatsoever arising from the Petroleum Operations and any revenues related thereto or, more generally, on Contractor’s property, activities or actions, including its establishment and its operation hereunder.



In particular, the Contractor, its suppliers, subcontractors and Affiliated Companies shall be exempt from the taxes or turnover (value added taxes and taxes on services) which would be payable in connection with sales made by, work performed for and services rendered to the Contractor under this Contract.



17.8. Assignments of any kind between the companies signing this Contract and their Affiliated Companies as well as any assignment made in accordance with this Agreement shall be exempt from any duties or taxes payable in such respect.

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Page 32 of 7517.9. Surface rentals shall be payale to NOCAL per square kilometer of the area remaining at the beginning of each Calendar Year as part of the Delimited Area, in the amounts as set out below:



Phase of Operation Surface Rentals Per Annum

First Exploration Period $ 15 per sq. km.

Second Exploration Period $ 25 per sq. km.

Third Exploration/appraisal Period $ 40 per sq. km

Development & Exploitation Area $ 60 per sq. km.



17.10 Contractors' employees shall be exempt from payment of local taxes during the exploration phase of the license.ARTICLE 18



VALUATION OF PETROLEUM



18.1. For the purposes of this Contract, the Crude Oil price shall be the F.O.B. "Market Price" at the Delivery Point, expresses in Dollars per Barrel and payable within thirty (30) days after the date of the bill of lading, as determined hereinafter for each quarter.



A market Price shall be determined for each type of Crude Oil of Crude Oil mix, Contractor shall not be obliged to sell to any specific market.



18.2. The Market Price applicable to liftings of Crude Oil made during a calendar quarter shall be calculated at the end of said quarter and shall be equal to the weighted average of the price obtained for Crude Oil from the Delimited Area during said quarter by the Contractor and by NOCAL from independent purchasers, as adjusted to take into account the differences in quality and gravity as well as in F.O.B. delivery terms and payment conditions.



18.3. In the event such sales are not made, the Market Price shall be determined on the basis of the prices obtained on the international market during said quarter between independent buyers and sellers for sales of crude oils of quality similar to the Crude Oil from the Delimited Area in the same markets such as those in which the Liberian Crude Oil would normally be sold, as adjusted to take into account the differences in quality, gravity, transportation as well as in sales and payment conditions.



18.4. The following transactions shall, inter alia be executed from the calculation of the Market Price of Crude Oil:





(a) sales in which the buyer is an Affiliated Company of the seller as well as sales between entities constituting the Contractor;



(b) sales in the Liberian domestic market;



(C) sales in exchange for other than payment in freely convertible currencies and sales fully or partially made for reasons other than the usual economic incentives involved in Crude Oil sales on the international market (such as exchange contracts, sales from government to government or to government agencies).



18.5. Within ten (10) days following the end of each quarter, the Parties shall advise each other of the prices obtained for their share of production of Crude Oil from the Delimited Area sold to independent purchasers during the quarter in question, indicating for each sale the identity of







































the purchaser, the quantities sold, the delivery

and payment terms.



Within twenty (20) days following the end of each

quarter, the Contractor shall determine In

accordance with the provisions of Article 18.2 or

Article 18.3, as the case may be, the Market Price

applicable for the quarter concerned, and shall

notify NOCAL of that Market Price, indicating the

method of calculation and all data used in the

calculation of that market Price.



Within thirty (30) days following receipt of the

notice referred to in the preceding paragraph,

NOCAL shall verify that the calculation of Market

Price complies with the provisions hereof and

shall notify the Contractor of its acceptance or

objections. Failing notification from NOCAL within

that thirty (30) day period the Market Price

provided for in the Contractor's notice referred

to in the preceding paragraph shall be deemed to

have been accepted by NOCAL.



In the event that NOCAL has notified objections to

the Market Price, the Parties shall meet within

fifteen (15) days following NOCAL's notification

to mutually agree on the Market Price. If the

Parties fail to agree on the Market Price

applicable to a given quarter within seventy five

(75) days after the end of that quarter. NOCAL or

the Contractor may immediately submit to an

expert, appointed in accordance with the following

paragraph, the determination of the Market Price

(including the determination of reference crude

oils if the Parties have not determined them). The

expert shall determine the price within thirty

(30) days after his appointment and his

conclusions shall be final and binding on the

Parties. The expert shall decide in accordance

with the provisions of this Article.



The expert shall be selected by agreement between

the Parties or, if no agreement Is reached, by the

International Center of Expertise of the

International Chamber of Commerce in accordance

with its rules on Technical Expertise, at the

request of the most diligent.Party. The expertise

costs shall be charged to the Contractor and

included in the Petroleum Costs.



18.6. In the event it would be necessary to calculate on

a provisional basis during a quarter the Crude Oil

price applicable to the liftings made during said

quarter, that price shall be established as

follows:



(a) For any sale to independent buyers, the price

applicable to that sale shall be the price

obtained for the Crude Oil for said sale, as

adjusted to take Into account the F.O.B.

delivery terms and thirty (30) days payment

terms.



(b) For any lifting other than those which are

the subject of a sale to Independent buyers,

the price applicable to that lifting shall be

the Market Price determined for the preceding

quarter or, if that Market Price has not been

determined, a price set up by





Page 35 of 75agreement between the Parties or, falling agreement, the last known Market Price.



Once the Market Price for a quarter has been determined on a final basis, adjustments, if required, shall be made within thirty (30) days. [signature]



Page 36 of 75 ARTICLE 19 See the



BONUSES



19.1. The Contractor shall pay to NOCAL the following bonuses:



(a) One and a half (1.5) million Dollars when the Total Production of Crude Oil from the Delimited Area first reaches the average rate of thirty thousand (30,000) Barrels per day during a period of thirty (30) consecutive days.



(b) Two and a half (2.5) million Dollars when the Total Production of Crude Oil from the Delimited Area first reaches the average rate of fifty thousand (50,000) Barrels per day during a period of thirty (30) consecutive days.



(c) Three and a half (3.5) million Dollars when the Total Production of Crude Oil from the Delimited Area first reaches average rate of one hundred thousand (100,000) Barrels per day during a period of thirty (30) consecutive days.



Each of the amounts referred to in (a), (b) and (c) above shall be paid within thirty (30) days following the expiration of the reference period of thirty (30) consecutive days.



19.2. The payments referred to in Article 19.1 be recoverable and, thereafter shall be considered as Petroleum Costs.

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Page 37 of 75ARTICLE 20



OWNERSHIP AND ABANDONMENT OF ASSETS



20.1. Upon expiration, surrender or termination of this Contract, whatever the reason thereof, in respect of all or part of the Delimited Area, or at the end of exploitation of a Field, the Contractor shall transfer at no cost to NOCAL the ownership of assets, movables and immovables, used for the requirements of the Petroleum Operations carried out in the area so surrendered, located whether inside or outside the Delimited Area, such as wells and their equipment, buildings, warehouses, docks, lands, offices, plants, machinery and equipment, bases, harbors, wharfs, jetties,buoys,platforms,pipelines,roads,bridges, railroads and other facilities,



Such transfer of ownership shall cause the automatic cancellation of any security or surely concerning those assets, or which those assets constitute.



However, the Contractor may continue to use those assets beyond the date referred to in the first paragraph, for the requirements of its Petroleum Operations in Liberia governed by other contracts.





20.2. If NOCAL decides not to accept, for all or part of the assets, the transfer of ownership provided for in Article 20.1, it may, not later than ninety (90) days following the date specified in said Article, require the Contractor, in accordance with good International petroleum industry practice, to perform abandonment operations and to remove, at the cost of the Contractor, the facilities relating to the surrendered area.

ARTICLE 21



NATURAL GAS



21.1. Non-Associated Natural Gas



21.1.1. In the event of a Non-Associated Natural Gas discovery, the Contractor shall engage in discussions with NOCAL with a view to determining whether the appraisal and exploitation of said discovery have a potentially commercial nature.





21.1.2. If the Contractor, after the above-mentioned discussions, considers that the appraisal of such Non-Associated Natural Gas discovery is justified, it shall undertake the appraisal work program for said discovery.



The Contractor shall have the right, for the purposes of evaluating the commerciality of the Non-Associated Natural Gas discovery, if it so requests at least thirty (30) days prior to the expiration of the third exploration period set forth in Article 3.3 to be granted an exclusive appraisal authorization concerning the Appraisal Perimeter of the above-mentioned discovery, for a term of two (2) years.



In addition, the Parties shall jointly evaluate the possible outlets for the Natural Gas, both on the local market and for export, together with the necessary means for its marketing, and they shall consider the possibility of a joint marketing of their shares of production in the event the Natural Gas discovery would not otherwise be commercially exploitable. For that purpose, a Consultative Committee for Natural Gas shall be established by the Parties to ensure the coordination of the upstream and downstream components of the Natural Gas project and facilitate its evaluation and implementation.



22.1.3 Following completion of appraisal work, in the event the Parties should jointly decide that the exploitation of that discovery is justified to supply the local market, or in the event the Contractor should undertake to develop and produce that Natural Gas for export, the Contractor shall submit prior to the expiration of the appraisal period an application for an exclusive exploitation authorization which NOCAL will grant under the terms provided by Article 12.1.



The Contractor shall then have the right and obligation to proceed with the development and production of that Natural Gas in accordance with the approved development plan referred to in Article 11.3 and the provisions of this Contract applicable to Crude Oil shall apply, mutatis



































































mutandis, to Natural Gas, unless otherwise specifically provided under Article 21.3.



21.1.4. If the Contractor considers that the appraisal of the Non-Associated Natural Gas discovery concerned is not justified, NOCAL may, by giving twelve (12) months prior notice which may be reduced either with NOCAL's consent or automatically in the event the exclusive exploration authorization expires earlier, require the Contractor to surrender its rights in respect of the area encompassing said discovery.



In the same manner, if the Contractor, after completion of appraisal works, considers that the Non-Associated Natural Gas discovery is not commercial, NOCAL may, by giving three (3) months prior notice, unless the exclusive exploration authorization expires earlier, require the Contractor to surrender its rights on the area encompassing said discovery.



In both cases, the Contractor shall forfeit its rights to all Non-Associated Natural Gas which could be produced from said discovery, and NOCAL may then carry out, or cause to be carried out, all the appraisal, development, production, processing, transportation and marketing work relating to that discovery, without any compensation for the Contractor.



Page 40 of 7521.2 ASSOCIATED NATURAL GAS



21.2.1. In the event of a commercial discovery of Crude Oil, the Contractor shall state if it considers that the production of Associated Natural Gas is likely to exceed the quantities necessary for the requirements of the Petroleum Operations related to the production of Crude Oil (including reinjection operations), and if it considers that such excess is capable of being produced in commercial quantities. In the event the Contractor shall have informed NOCAL of such an excess, the Parties shall jointly evaluate the possible outlets for that excess of Natural Gas,both on the local market and for export (including the possibility of joint marketing of their shares of production of that excess of Natural Gas in the event such excess would not otherwise be commercially exploitable), together with the means necessary for its marketing.





In the event the Parties should decide that the development of the excess of Natural Gas is justified, or in the event the Contractor would wish to develop and produce that excess for export, the Contractor shall indicate in the development and production program referred to in Article 11.3.3 the additional facilities necessary for the development and exploitation of that excess and its estimate of the costs related thereto.



The Contractor shall then have the right to proceed with the development and exploitation of that excess in accordance with the development and production program approved by NOCAL under the terms provided by Article 11.3.6, and the provisions of the Contract applicable to Crude Oil shall apply, mutatis mutandis, to the excess of Natural Gas, unless otherwise specifically provided by Article 21.3.



A similar procedure shall be applicable if the sale of marketing of Associated Natural Gas is decided during the exploitation of a Field.



21.2.2. In the event the Contractor should not consider the exploitation of the excess of Natural Gas as justified and if NOCAL, at any time, would wish to utilize it, NOCAL shall notify the Contractor thereof, in which event:



(a) the Contractor shall make available to NOCAL free of charge at the Crude Oil and Natural Gas separation facilities all or part of the excess that NOCAL wishes to lift;





(b) NOCAL shall be responsible for the gathering, processing, compressing and transporting of that excess from the above mentioned separation facilities, and shall bear any additional costs related thereto;

































































(c) * the construction of the facilities necessary for the operations referred to in paragraph (b) above, together with the lifting of that excess by NOCAL, shall be carried out in accordance with good international petroleum industry practice and in such a manner as not to hinder the production, lifting and transportation of Crude Oil by the Contractor.



21.2.3. Any excess of Associated natural Gas which would not be utilized under Articles 21.2.1 and 21.2.2., shall be reinjected by the Contractor. However, the Contractor shall have the right to flare said gas in accordance with good international petroleum industry practice, provided that the Contractor furnishes NOCAL with a report demonstrating that said gas cannot be economically utilized to improve the rates of recovery of Crude Oil by means of reinjection pursuant to the provisions of Article 15.5., and provided, further, that NOCAL approves said flaring, which approval shall not be unreasonably withheld.



21.3 Provisions common to Associated and Non-Associated Gas



21.3.1. In order to encourage the exploitation of Natural Gas, NOCAL may grant to the Contractor specific benefits when they are duly justified concerning, inter alia, the recovery of the Petroleum Costs relating to Natural Gas.



21.3.2. The Contractor shall have the right to dispose of its share of production of Natural Gas, in accordance with the provisions of this Contract. It shall also have the right to proceed with the separation of liquids from all Natural Gas produced, and to transport, store as well as sell on the local market or for export its share of liquid Petroleum so separated which will be considered as Crude Oil for the purposes of their sharing between the Parties under Article 16.



21.3.3. For the purposes of this Contract, the Natural Gas price, expressed in Dollars par million BTU, shall be equal to:



(a) with respect to Natural Gas export sales to Third Parties, the price obtained from purchasers:



(b) with respect to sales on the local market of Natural Gas as a fuel, the equivalent of One Hundred percent (100%) of the price of high sulfur heavy fuel oil (expressed in Dollars per million BTU) exported from or imported into Liberia, or such other price as NOCAL (or the national entity that the STATE would set up for the distribution of Natural Gas on the local market) and the Contractor would mutually agree upon.



The above-mentioned equivalent price for the utilization of Natural Gas as a fuel shall be determined on the basis of the same calorific value with respect to the commercial gas delivered at the entry point of the main gas transportation network, if any, or otherwise where delivered to



Page 42 of 75



large consumers. In the event of transfer of the gas at a delivery point located upstream, the selling price shall be adjusted accordingly. [signature]



Page 43 of 75ARTICLE 22



FOREIGN EXCHANGE CONTROL



22.1. The Contractor shall comply with the foreign exchange control regulations, subject to the provisions of this Article.



22.2. The Contractor shall have the right to retain abroad all the foreign currencies arising from export sales of all Petroleum to which it is entitled under this Contract, or from assignments, as well as equity, incomes from loan and more generally, all assets acquired abroad by it, and to freely dispose of such foreign currencies or assets to the extent that they may exceed its requirements for its operations in Liberia.



22.3. No restriction shall be exercised on importation by the Contractor of funds intended for the performance of the Petroleum Operations.





22.4. The Contractor shall have the right to purchase currencies of Liberia with foreign currencies, and freely exchange into foreign currencies of its election any funds held by it in Liberia in excess of its local requirements at exchange rates which shall not be less favorable than those generally applicable to any other buyer or seller of foreign currencies.ARTICLE 23



APPLICABLE LAW



The laws and regulations in force in the Republic of Liberia and the provisions of international law as may be applicable to international oil and gas activities shall apply to the Contractor, to this Contract and to the Operations which are the purpose thereof, unless otherwise provided by the Contract. [signature]



Page 45 of 75ARTICLE 24



MONETARY UNIT



24.1. The registers and accounting books relating to this Contract shall be maintained and recorded in US Dollars. Sald registers and accounting books shall be used to determine the Petroleum Costs, gross income, exploitation costs and net profits for the purpose of the preparation of the Contractor's tax return; they shall contain, inter alia, Contractor's account showing the sales of Petroleum under this Contract.





24.2. Whenever it is necessary to convert into US Dollars expenses and incomes expressed in another currency, the exchange rates to be used shall be equal to the arithmetic average of the daily closing rates for the purchase and sale of said currency during the month when the expenses were paid and the income received.



24.3. The originals of the registers and accounting books referred to in Article 24.1 shall be kept in Liberia.



The registers and accounting books shall be supported bu detailed documents with respect to receipts and Petroleum Costs.ARTICLE 25



ACCOUNTING METHOD AND AUDITS



25.1 The Contractor shall maintain its accounts in accordance with the regulations in force and with the provisions of the Accounting Procedure set out in Appendix 2 attached hereto forming an integral part of this Contract.



25.2 After giving the Contractor notice thereof in writing, the STATE shall have the right to cause the registers and accounting books relating to the Petroleum Operations to be inspected and audited by its own agents or by experts of its election, and shall have a period of four (4) years following the end of each Calendar Year to carry out those inspections or audits relating to said Year and may submit its objections to the Contractor for contradictions or errors found during such inspection or audits.



Should the STATE fail to make any claim within the above-mentioned period of four (4) years, no further objection or claim shall be made by the Liberian administration for the Calendar Year concerned.



[signature]



Page 47 of 75ARTICLE 26



IMPORT AND EXPORT



26.1. (a) The Contractor shall have the right to import into Liberia, in its own name or on behalf of its contractors and subcontractors, all the technical equipment,materials,machinery and tools, goods and supplies necessary in the Contractor's opinion for the proper conduct and achievements of the Petroleum Operations; such imports include but are not limited to, drilling, exploration, development, production, transportation, sales and marketing, equipment,pipelines, tanks, geological and geophysical tools, boats, ships, launches, drilling barges, ships and platforms, production platforms, civil engineering and telecommunication equipment, power plants and all related equipment, aircraft, automotive equipment and other vehicles, Instruments, tools, space parts, alloys and additives, camping equipment, protective clothing and equipment, medical, surgical and sanitary equipment, supplies and instruments necessary for the Installation and operation of hospitals and dispensaries, documentation equipment, construction materials of all types, lumber, office furniture and equipment, automobiles, explosives, chemicals, fuels, ship supplies, pharmaceutical products, medicines.



(b) The Contractor shall have the right to import into Liberia, in its own name or on behalf of its contractors or subcontractors, the furniture, clothing, household appliances and all personal effects for all the foreign employees and their families assigned to work in Liberia for the Contractor or its contractors or subcontractors.





(c) However, the Contractor, its agents, contractors and subcontractors undertake not to proceed with the imports mentioned in Article 26.1.(a) Insofar as such items are available in Liberia under equivalent conditions of quantity, quality, price, delivery and terms of payment, unless specific requirements or technical emergencies are presented by the Contractor.





(d) The Contractor, its agents, contractors and subcontractors shall have the right to re-export from Liberia, free of all duties and taxes and at any time, all the items imported under Article 26.1.(a) and (b) which are no longer necessary for the Petroleum Operations except the items which have become the property of the State under the provisions of Article 20.





26.2. All the technical materials, machinery and tools, goods and supplies specified in Article 26.1 which the Contractor, its agents, contractors and subcontractors, their foreign employees and their families will have the right to import in one or more shipments to Liberia, shall be fully exempt of all duties and taxes payable as a result of the























































imrportation ("entry duties and taxes*).







As the case may be. tho applicable administrative formalities will be

those of the following regimes:







(a) Exceptional temporary admission regime in full suspension of

entry duties and taxes for equipment. materials, machinery

and tools, goods and supplies necessary for the proper

progress Of the Petroleum Operations, for the entire duration

Of their use In Liberia including the continental shelf. it being

understood that for the equipment, materials, machinery and

tools. and goods and supplies consumed during the

operations or left In place, the exceptional ternpora

admission discharge will be automatic by simple quarterly

declaration and without payment Of duties and taxes.



In the event of a duly Justified emergency, the equipment, materials, tools and machinery, goods and supplies will be placed at the disposal Of the users as soon as they arrive in Liberia and the administrative regularization relating to their

admission will be made later and as soon as possible.



(b) Supply regime for consumable goods and foodstuffs, fuels and lubricants used at sea, in particular on all ships, aircraft and machinery used for petroleum exploration and exploitation.



(c) Exempt admission regime according to the regulations in force, for furniture, clothing, household appliances and personal effects.



26.3. The Contractor, its agents, contractors and subcontractors shall, provided that they inform the STATE In advance of their intent to sell and subject to the provisions of Article 20, have tho right to in Liberia, all equipment, materlals, mechinery and tools. goods and supplies which they have imported when they are considered as surplus and no longer necessary for the Petroleum Operations. In that event, the seller shall be responsible for paying all duties and taxes applicable on the date of the transaction and for filing all the formalities prescribed by the regulations In force.



26.4. During the term of this Contract, the Contractor. its customers and their carriers shall have the right to export freely at the export point

selected for that purpose, free of all duties and taxes and at any time. the portion of Petroleum to which the Contractor is entitled in accordance with the provisions Contract, ded n of all deliveries made to the STATE.ARTICLE 27



DISPOSAL OF PRODUCTION





27.1 Each Calendar Year, up to a total of ten percent (10%) of the share of Crude Oil Production to which the Contractor is entitled, shall be sold to NOCAL by the Contractor for the purpose of satisfying the needs of the domestic market of Liberia. Such contribution of the Contractor shall be in proportion to its share of production, in the total Crude Oil Production in Liberia.



The quantity of Crude Oil the Contractor shall be obligated to sell to NOCAL shall be notified to it by NOCAL at least three (3) months prior to the beginning of each calendar quarter.



27.2. The price of the Crude Oil sold to NOCAL under Article 28.1 for the needs of the domestic market shall be the Market Price defined in Article 18.



That Crude Oil price shall be payable to the Contractor in Dollars two (2) months after receipt of the invoice unless otherwise agreed between the Parties.



27.3. The transfer of title to, and the risk of, the share of Petroleum production to which each party is entitled shall be made at the Delivery Point, or at any other transfer point agreed between the Parties.



27.4. Each of the Parties shall have the right and obligation, to dispose of and lift the share of Petroleum to which it is entitles under the Contract.



Such share shall be lifted on as regular a basis as possible, it being understood that each of the Parties, within reasonable limits, will be authorized to lift more (overlift) or less (underlift) than its share of Petroleum produced and unlifted by the lifting day to the extent that such overlift or underlift does not infringe on the rights of the other Party and its compatible with the production rate and the storage capacity. In the establishment of the sequence of liftings, priority will be given to the Party with the largest share of produced and unlifted quantity of Petroleum at a given time. The Parties shall periodically meet to establish a provisional lifting program on the basis of the principles above-described and taking into account the wishes of the Parties as regards the dates and quantities of their liftings, provided that those wishes are compatible with said principles.



[signature]



Page 50 of 75

ARTICLE 28





PROTECTION OF RIGHTS



28.1. The Contractor shall take all necessary steps to achieve the objectives of this Contract in its conduct of Petroleum operations.



28.2. NOCAL shall take all necessary steps to facilitate the implementation by the Contractor of the objectives of this Contract, and the STATE shall protect the property and operations of the Contractor, its employees and agents in the territory of Liberia.



28.3. At the request of the Contractor, the STATE shall prohibit the construction of dwelling or business buildings in the vicinity of Installations which the Contractor may declare dangerous as a result of its operations. It shall take all necessary precautions to prohibit anchoring in the vicinity of submerged pipeline at river passages,and to prohibit any hindrance to the use of any other installation necessary for the Petroleum Operations whether on land or offshore.





28.4. The Contractor shall take out and cause to be taken out by its contractors and subcontractors, in respect of the Petroleum Operations, all insurances of the type and for such amount customarily used in the International petroleum Industry, including without limitation, third party liability insurance and insurances to cover damage to property, facilities, equipment and materials, without prejudice to such insurances which would be required under Liberian legislation. ARTICLE 29



PERSONNEL AND TRAINING



29.1. The Contractor hall, for the purposes of the Petroleum Operations, employ Liberian personnel whenever qualified on equal basis for requirements of the employment.



Managers, technicians, engineers, accountants, geologists, geophysicists, scientists, chemists, drillers, foreman, mechanics, skilled workers, secretaries and executive employees may be hired outside Liberia If similarly qualified Specialists cannot be hired in Liberia.



29.2. Upon commencement of the Petroleum Operations, the Contractor shall organize a training program for Liberian nationals. For that purpose the Contractor shall devote a minimum annual training Budget of:



(a) $100,000 Dollars during each year of the exploration periods:



(b) $150,000 Dollars during each year of the exploitation periods.



(c) And $150,000 Dollars per year in the exploration phase and $200,000 per year in the exploitation phase for Social and Welfare.



The training, Social and Welfare expenses borne by the Contractor shall be included in the recoverable Petroleum Costs.



29.3. The entry into Liberia of all foreign personnel shall be authorized and the STATE shall issue the documents necessary for that entry to all members of the foreign personnel, such as entry visas, working permits and exit visas, in compliance with the immigration regulations in force in Liberia.



At the request of the Contractor, the STATE shall facilitate any immigration formalities with the Immigration Bureau, at the points of entry into and exit from Liberia, In respect of the Contractor's employees, contractors, subcontractors and agents, and their families, all without undue delays.



29.4. All the employees required for the conduct of the Petroleum Operations shall be under the Contractors authority or that of its contractors, subcontractors and agents, in their capacity as employers. Their work, number of working hours, salaries and any other matters relating to their employment conditions shall be determined by the Contractor or its contractors, subcontractors and agents.



[signature]

Page 52 of 75

ARTICLE 30



ACTIVITY REPORTS IN RESPECT OF EXCLUSIVE EXPLOITATION AUTHORIZATIONS



30.1. The provisions of Article 12 shall apply, mutatis mutandis, to any exclusive exploitation authorizations. In addition, the following periodic activity reports shall, inter alia, be furnished in respect of each Field:



(a) daily production reports;



(b) monthly reports stating the quantities of Petroleum produced and those sold during the previous month together with information on such sales.



Unless the Contractor gives its written consent, the information relating to a Field under exploitation, except statistical data about activity, shall be considered as confidential by the Parties during the term of this Contract.



30.2. The Contractor shall forthwith notify the STATE of any material damage whatsoever caused to the petroleum fields or facilities, and shall take all necessary steps to terminate it and carry out the necessary repairs.



30.3. From the year of granting an exclusive exploitation authorization, the annual report referred to in Article 8.2 shall also include the following:



(a) information on all development and production operations carried out during the previous Calendar YEar, including the quantities of Petroleum produced and those sold, if any;



(b) information on all transportation and sales operations together with the location of the main facilities built by the Contractor, if any;



(c) a statement specifying the number of employees and workers, their qualification and their nationality, together with a report on the medical care and training provided to them.ARTICLE 31



ARBITRATION



31.1. In the event of any dispute between the STATE of NOCAL and the Contractor relating to, or arising out of, the interpretation or execution of the provisions of this Contract, the Parties shall make their best efforts to settle such dispute amicably.



If within three (3) months from the date of notice of such dispute by either Party to the other, the Parties have not reached settlement, the dispute shall, at the request of the most diligent Party, be referred for arbitration to the International Chamber of Commerce in accordance with its rules and regulations.



31.2. The arbitration shall be held in London, England. The language used during the procedure shall be the English language. The arbitration shall be determined by three (3) arbitrators. The arbitrators shall not have the same nationality as the Parties.



The arbitration tribunal's award shall be final; It shall be binding on the Parties and shall be enforceable in any court of appropriate jurisdiction.



31.3. The expenses of any arbitration shall be borne equally by the Parties, that is to say, each Party shall pay the expenses of its own arbitrator and the expenses of the third arbitrator in equal shares, and any expenses imposed by the International Chamber of commerce shall be shared equally by the Parties.



The performance by the Parties of their obligations under this Contract shall not be suspended during the course of the arbitration.ARTICLE 32



FORCE MAJEURE



32.1. No delay or default of a Party in performing any of the obligations resulting from this Contract shall be considered as a breach of this Contract if such delay or default is caused by a case of Force Majeure.



If in the event of Force Majeure the performance of any of the obligations under this Contract is delayed, that delay extended by the period of time required to repair the damage caused during such delay and to resume the Petroleum Operations, shall be added to the period provided by this Contract for the performance of said obligation, and the exclusive exploration or exploitation authorizations shall be extended by that period as regards the area concerned by Force Majeure.



32.2. Force Majeure means any event unforeseeable and beyond the control of a Party, such as: earthquake, flood, accident, strike, lockout, riot, delay in obtaining the rights-of-way, insurrection, civil disturbances, sabotages, acts of war or conditions attributable to war, or any other cause beyond its control, similar to or different from those already mentioned.



32.3. Where a Party considers it is prevented from performing any of its obligations by the occurrence of Force Majeure, it shall forthwith notify the other Party thereof by specifying the grounds for establishing Force Majeure, and take all necessary and useful steps to ensure the normal resumption of the performance of the concerned obligations upon termination of the event constituting the Force Majeure.



Obligations other than those affected by Force Majeure shall continue to be performed in accordance with the provisions of this Contract.



Page 55 of 75ARTICLE 33



JOINT AND SEVERAL OBLIGATIONS

AND GUARANTEES



33.1. All the clauses, conditions and provisions of the Contract shall be binding on the Parties and their respective successors and assignees. This Contract constitutes the only agreement between the Parties and no previous communication, promise or agreement, whether oral or written, between the Parties, related to the purpose of this Contract may be asserted to amend the clauses hereof.



The STATE certifies and guarantees that there is no other applicable agreement with respect to the petroleum rights within the Delimited Area, that it will perform its obligation in fairness and good faith and that this Contract will not be cancelled, amended or modified except by agreement between the Parties.



33.2 Where the Contractor is constituted by several entities, the obligations and liabilities of those entities under this Contract shall be joint and several. [signature]



Page 56 of 75ARTICLE 34

RIGHTS OF ASSIGNMENT



34.1. All or part of the rights and obligations arising from this Contract may be assigned by any of the entities constituting the Contractor to Third Parties whose technical and financial reputation is well established; the assignees with the other entities constituting the Contractor shall thereafter be jointly and severally liable for the obligations arising from this Contract.



The terms of any assignment shall be subject to the prior approval of NOCAL, which approval shall not be unreasonably withheld.



If within thirty (30) days following notification to NOCAL of a projected assignment accompanied by all the related information and the draft assignment deed, NOCAL has not given its decision, that assignment shall be deemed to be approved by NOCAL.



From the date of approval of an assignment, the assignee shall comply with the terms and conditions of this Contract.



34.2. All or part of the joint and several rights and obligations arising from this Contract may be freely assigned at any time by any of the entities constituting the Contractor to one or more Affiliated Companies or other entities constituting the Contractor.



[signature]



Page 57 of 75ARTICLE 35



STABILITY OF CONDITIONS



35.1. This Contract is executed between the Parties in accordance with the laws and regulations in force at the date of its signing and on the basis of the provisions of said laws and regulations, as regards, inter alia, the economic fiscal and financial provisions of this Contract.



35.2. Consequently, should new laws or regulations modify the provisions of the laws and regulations in force at the date of signing this Contract and should those modifications bring about a material change in the respective economic situation of the Parties resulting from the original provisions of said Contract, the Parties shall in good faith enter into an agreement with a view to modifying those provisions in order to restore the economic balance of the Contract as intended at the signing thereof.ARTICLE 36



IMPLEMENTATION OF THE CONTRACT



36.1. The Parties agree to cooperate in every possible manner to achieve the objectives of this Contract.



NOCAL shall facilitate the Contractor's performance of its activities by granting it any permits, licenses, access rights necessary for the performance of the Petroleum Operations and by making available to it any appropriate services and facilities, so that the Parties can obtain the best benefit from a sincere cooperation. However, the Contractor shall observe the applicable procedures and formalities, and shall apply to the competent Ministries and/or Agencies of the Administration.



36.2. Any notices or other communication under this Contract shall be deemed to have been made when they are delivered to an authorized representative of the Party concerned at the location of said Party's principal office in Liberia, or sent by telegram, cable or facsimile with all expenses paid, or deposited as registered letters with the Postal administration of Liberia with postage prepaid.



Notifications shall be deemed to have been made on the date when the addressee shall receive them.



36.3. If NOCAL considers that the Contractor has committed a breach in the performance of any of its obligations, it shall so notify the Contractor in writing and the Contractor shall have sixty (60) days to remedy the breach or refer the matter to arbitration in accordance with this Contract.



36.4. The terms and conditions of this Contract may be modified only in writing and by mutual agreement between the Parties.



36.5. Unless otherwise specified in writing, the Ministry and NOCAL shall represent the STATE under this Contract and is empowered to grant, in the name and on behalf of the STATE, any consent necessary or useful for the implementation of this Contract.



36.6. Headings in this Contract are inserted for purposes of convenience and reference and in no event shall define, restrict or describe the scope of object of the Contract or of any of its clauses.



36.7. Appendices 1 and 2 attached hereto shall form an Integral part of this Contract.



Page 59 of 7536.8. Any waiver of the STATE or NOCAL concerning the performance of any obligation of the Contractor shall be in writing and signed by the representative of the STATE or NOCAL, and no waiver shall be implied if the STATE or NOCAL does not exercise any of its rights to which it is entitled under this Contract.



Page 60 of 75IN WITNESS WHEREOF, the Parties have signed this Contract on the date as set forth below.



Dr.Fodee Kromach

PRESIDENT/CEO Date

NATIONAL OIL COMPANY OF LIBERIA





Mr.Clemenceau B.Urey

CHAIRMAN,BOARD OF DIRECTORS Date

NATIONAL OIL COMPANY OF LIBERIA



Dr.Eugene Shannon

MINISTER OF LANDS, MINES & ENERGY Date

REPUBLIC OF LIBERIA





Dr.Antolnette Sayeh

MINISTER OF FINANCE Date

REPUBLIC OF LIBERIA





Dr.Richard Tolbert

CHAIRMAN,NATIONAL INVESTMENT COM Date

REPUBLIC OF LIBERIA





Attested:

Hon. Frances Johnson-Morris Date

MINISTER OF JUSTICE

REPUBLIC OF LIBERIA





Approved: Date

Her Excellency

Ellen Johnson-Sirleaf

PRESIDENT

REPUBLIC OF LIBERIA

















Ratified: Date

National Legislature of the Republic of Liberia ARTICLE 37



EFFECTIVE DATE



Upon execution by the Parties this Contract shall become effective, the date of execution beig referred to as the Effective Date, and said Contract shall become bind on the Parties.



IN WITNESS WHEREOF, the Parties have signed this Contract on the date as set forth below.



For the National Oil Company WITNESS:

of Liberia - NOCAL



By: [SIGNATURE] By: [SIGNATURE]



F. Musah Dean Jr.



President & Chief Executive Officer



For Oran o Petroleum Limited WITNESS:



By: [SIGNATURE] By: [SIGNATURE]



Prince Arthur Eze



Chairman



For the Republic of Liberia



By: [SIGNATURE] Date: -----------



His Excellency, C. Gyude Bryant



Chairman National Transitional



Government of Liberia





Page 61 of 75

APPENDIX 1



Attached to and made part of this Contract between the Republic of Liberia and the Contractor.



DELIMITED AREA



On the Effective Date, the Delimited Area, designed as Block LB-12, is formed by the area included inside the perimeter constituated by the points indicated on the map attached thereto. Point A is the southern most point, further points follow alphabetically in a clockwise direction around the block.



The geographical coordinates of those points are the following, with reference to the Greenwish meridian:



Point | Latitude | Longitude



LB-12 A | 5.0265881N | 10.603417W



LB-12 B | 5.2087863N | 10.808280W



LB-12 C | 5.9747965N | 10.199498W



LB-12 D | 5.7891339N | 9.9970695W



Those coordinates are only given for purposes of illustration and shall not be considered as the boundaries of the national jurisdiction of Liberia.



The surface of the Delimited Area above-defined is deemed to be equal to about 3295.119 sq. kms. [signature]



Page 62 of 75MAP OF THE DELIMITED AREA



[Map]



Block LB-12 [signature]



Page 63 of 75 APPENDIX 2



Attached to and made part of this Contract between the Republic of Liberia and the Contractor.



ACCOUNTING PROCEDURE



Article I - General Provisions 1.1. Object





1.1 Object



This Accounting Procedure shall be followed and

observed in the performance of the obligations under

the Contract to which this Appendix is attached.



1.2 Accounts and statements



The registers and accounting books of the Contractor

shall be in conformity with accounting rules and

regulations for business applicable In Liberia.

However, the Contractor may apply the accounting

rules and procedures customarily used in the

petroleum industry, insofar as none of these are

contrary to the rules an regulations referred to

above.



In accordance with the provisions of Article 25 of

the Contract, accounts, books and registers shall be

maintained and recorded in Dollars. These accounts

shall be used, inter alia, to determine amount of

Petroleum Costs, the recovery of said Costs, the

production sharing, as well as for the purposes of

Contractor's tax return.



The Contractor shall record all operations connected

with the Petroleum Operations in accounts separate

from those relating to any other activities which it

may carry out in the Republic of Liberia.



All accounts, books, records and statements,

together with documents supporting expenses

incurred, such as Invoices and service contracts,

shall be kept In the Republic of Liberia in order to

be provided at the request of the competent

authorities of Liberia.



1.3. Interpretation



The definitions of the terms used in this Appendix

2 shall be same as those of the same terms set

forth in the Contract.



In the event of any conflict between the provisions

of this Accounting Procedure and the Contract, the

provisions of the Contract shall prevail.







Page 64 of 751.4. Modifications



The provisions of this Accounting Procedure may be modified by mutual agreement between the Parties.



The Parties agree that if any provision of the Accounting Provision proves inequitable to either Party, such provision shall be modified in good faith by the Parties.



Page 65 of 75Article II-Petroleum Costs



II.1. Petroleum Costs Account



The Contractor shall maintain a "Petroleum Costs Account: which will record in detail expenses incurred by the Contractor directly relating to the Petroleum Operations carried out under this Contract, and which will be recoverable in accordance with the provisions of Article 16 of the Contract.



This Petroleum Costs Account shall, inter alia, record separately, by Appraisal Perimeter or Exploitation Perimeter if any, the following expenses:



(a) exploration expenditures;



(b) appraisal expenditures;



(c) development expenditures;



(d) exploitation expenses;



(e) financial costs;



(f) overhead costs in Liberia;



(g) overhead costs abroad



The Petroleum Costs Account shall enable, inter alia, to identify at any time:



(a) the total amount of Petroleum Costs since the Effective Date;



(b) the total amount of Petroleum Costs recovered;



(c) the total amount credited to the Petroleum Costs Account pursuent to Article II.4(b) below;



(d) the total amount of Petroleum Costs which remain to be recovered.



For the purposes of Article 16 of the Contract, Petroleum Costs shall be recovered in the following sequences:



(a) exploitation expenses in respect of a Field incurred and paid from the date of commencement of regular production;



(b) financial costs;



(c) other Petroleum Costs.



Page 66 of 75In addition, within each of the foregoing categories, the costs shall be recovered in the sequence in which they are incurred.



Unless otherwise provided for in this Accounting Procedure the intent of the Parties is not to duplicate any item of the credit or debit of the accounts maintained under the Contract.



II.2. Items debited to the Petroleum Costs Account



The following expenses and costs shall be debited to the Petroleum Costs Account:



II.2.1. Personnel expenses



All payments in respect of the salaries and wages of the Contractor's employees directly assigned to the Petroleum Operations carried out under this Contract, in the Republic of Liberia, whether temporarily or permanently, including amounts imposed by the applicable laws and costs of employees' benefits and all additional charges or expenses in accordance with the individual or collective employment contracts or pursuant to the Contractor's personnel policies.



II.2.2 Overhead costs in Liberia



Wages and salaries of the Contractor's personnel directly engaged in the Petroleum Operations in the Republic of Liberia, whose work time is not directly allocated to the programs, as well as costs of maintaining and operating in Liberia a main and administrative office and sub-offices necessary for the Petroleum Operations.



II.2.3. Overhead costs abroad



The Contractor shall add a reasonable amount as overhead paid abroad, connected to the carrying out of the Petroleum Operations by the Contractor or its Affiliated Companies, such amounts representing the estimated cost of services directly rendered for the benefit of the said Petroleum Operations.



The amounts charge shall be provisional amounts established on the basis of the experience of the Contractor, and shall be annually adjusted according to the actual costs borne by the Contractor.



However, overhead costs paid abroad shall be charged only within the following limits:



(a) prior to the grant of an exclusive exploitation authorization One Hundred percent (100%) of the expenses charged to the Petroleum Costs Account excluding overhead costs for the year in question;





[Signature]





Page 67 of 75(b) from the grant of the first exclusive exploitation authorization One Hundred percent (100%) of expenses charged to the Petroleum Costs Account excluding overhead costs for the year in question.



11.2.4. Buildings



Construction, maintenance expenses, as well as rents paid for all offices, houses, warehouses and buildings of other types, including housing for employees, and cost of equipment, furniture, and fittings necessary for the operation of those buildings directly required for the performance of the Petroleum Operations.



11.2.5. Materials, equipment and rentals



Costs of equipment, materials, machinery, and facilities purchased or provided for use in the Petroleum Operations, as well as rentals or compensations paid or incurred for the use of any equipment or facilities required directly for the performance of the Petroleum Operations.



11.2.6. Services



Costa of services directly related to Petroleum Operations rendered by subcontractors and consultants, as well as any costs directly related to services rendered by the STATE or NOCAL or any other authorities of the Republic of Liberia.



Costs of services directly related to Petroleum Operations rendered by Affiliated Companies, provided that such costs shall not exceed those normally charged by independent companies for an identical or similar service.



11.2.7. Insurance Premiums



Premiums paid for insurances customarily taken out for the Petroleum Operations to be carried out by the Contractor.



11.2.8. Legal Expenses



All expenses of handling, investigation and settlement of litigation or claims directly arising from the Petroleum Operations.



11.2.9. Financial Costs



All interests paid by the Contractor in respect of the loans from Third Parties and advances obtained from Affiliated Companies, provided that those loans and advances shall be for the purpose of the financing of Petroleum Costs related only to the development of Petroleum



Page 68 of 75Operations in respect of a Field. In the event such financing is provided by Affiliated Companies, the allowable interest rates shall not exceed the rates customarily used in the international financial markets for loans of a similar nature.



11.2.10. Other Expenses



Any other expenses incurred and paid by the Contractor for the purposes of the necessary and proper conduct of the Petroleum Operations under the approved Annual Work Programs and Budgets, other than the expenses covered and dealt with by the foregoing provisions of this Article and other than the expenses excluded from the Petroleum Costs.



11.3. Expenses not chargeable to the Petroleum Costs Account



The expenses which are not directly necessary for the performance of the Petroleum Operations, and the expenses excluded by the provisions of the Contract or this Accounting Procedure as well as by the regulations in force in Liberia, are not chargeable to the Petroleum Costs Account and shall therefore not be recoverable.



Such expenses shall include, without limitation:



(a) expenses relating to the period before the Effective Date;



(b) any expenses relating to the operations carried out beyond the Delivery Point, such as transportation and marketing costs;



(c) financial costs relating to the financing of exploration Petroleum Operations, and those relating to the share of financing of development Petroleum Operations;



(d) bonuses defined in Article 19 of the Contract;



(e) exchange losses.



11.4. Items credited to the Petroleum Costs Account



The following incomes and proceeds shall, inter alia, be credited to the Petroleum Costs Account:



(a) income arising from the marketing of the quantity of Crude Oil to which the Contractor is entitled under Article 16 of the Contract for the purpose of recovery of the Petroleum Costs;



(b) any other incomes or proceeds related to the Petroleum Operations, specifically those arising from;



• sales of related substances;



Page 69 of 75any services rendered to Third Parties using the facilities dedicated to the Petroleum Operations, including, but not limited to, processing, transportation and storage of products for Third Parties in those facilities. [signature]



Page 70 of 75Article III Cost Evaluation Basis For Services, Materials and Equipment Used in the Petroleum Operations



III.1. Technical services



A reasonable rate shall be charged for the technical services rendered by the Contractor or its Affiliated Companies for the direct benefit of the Petroleum Operations carried out under the Contract, such as gas, water, core analyses and any other analyses and tests, provided that such charges shall not exceed those normally charged by independent technical service companies and laboratories for similar services.





III.2. Purchase of materials and equipment



Materials and equipment purchased from Third Parties and directly necessary for the performance of the Petroleum Operations carried out under the Contract shall be charged to the Petroleum Costs Account at "Net Cost" Incurred by the Contractor.



"Net Cost" shall include such items as taxes, shipping agent fees, transportation, loading and unloading costs, license fees, related to the supply of materials and equipment, as well as transit losses not recovered through insurance.



III.3. Use of equipment and facilities owned exclusively by the Contractor



Equipment and facilities owned by the Contractor and used directly for the Petroleum Operations shall be charged to the Petroleum Costs Account at a rental rate which shall be sufficient to cover maintenance, repairs, depreciation and services required for the performance of the Petroleum Operations.



III.4. Valuation of materials



All materials transferred to Liberia from the Contractor's warehouses, or from those of any entity constituting the Contractor or their Affiliated Companies shall be valued as follows:



(a) New Material



New material (condition "A") means new material which has never been used; one hundred percent (100%) of the current market price, which corresponds to the price normally charged for similar supplies in arm's length transactions between buyer and seller.



Material in good condition (condition "B") means material in good condition which is still usable for its original purpose without



Page 71 of 75repair, at a maximum of seventy-five percent (75%) of the price of new material.



b)Other used material



Other used material (condition "C") means material still usable for its original purpose, but only after repairs and reconditioning: at a maximum of fifty percent (50%) of the price of new material.



c) Material in poor condition



Material in poor condition (condition "D") means material no longer usable for its original purpose but still usable for other purposes; at a maximum of twenty-five percent (25%) of the price of new material.



(d) Scrap material



Scrap material (condition "E") means material beyond usage and repair: prevailing price of scrap material.



111.5. Materials and equipment disposed by the Contractor



Materials and equipment purchased by all the entities constituting the Contractor shall be valued in accordance with the principles defined in Article 111.4 above.



Materials and equipment purchased by any entity constituting the Contractor by Third Parties shall be valued at the received sale price, which shall in no event be less than the price determined in accordance with the principles defined in Article 111.4 above.



The corresponding amounts shall be credited to the Petroleum Costs Account.



[signature]



Page 72 of 75Article IV-Inventories



IV.1. Period



The Contractor shall keep a permanent inventory both in quantity and value of all normally controllable materials used for the Petroleum Operations and shall proceed at reasonable intervals with the physical inventories as required by the Parties.



IV.2. Notice



A written notice of intention to take an inventory shall be sent by the Contractor at least ninety (90) days prior to the commencement of said inventory so that the STATE and the entities constituting the Contractor may be represented at their own expenses during the inventory operations.



IV.3. Information



In the event the STATE or any entity constituting the Contractor shall not be represented at an inventory, such Party or Parties shall be bound to accept the inventory taken by the Contractor which shall furnish to such Party or Parties a copy of said inventory.



[signature]



Page 73 of 75Article V-Financial and Accounting Statements



The Contractor shall furnish the STATE and NOCAL with the reports, records and statements provided by the provisions of the Contract and the applicable regulations and, inter alia, the the following financial and accounting statements:



V.1. Statement of exploration work obligations



Such annual statement shall be submitted not later than one (1) month after the end of each Contractual Year in respect of the exploration periods.



It shall present with details the exploration work and expenditures carried out by the Contractor to fulfill its obligations set forth in Article 4 of the Contract, excluding specifically appraisal wells and related appraisal expenditures as well as development expenditures, exploitation expenses, overhead costs and bonuses.



V.2. Statement of recovery of Petroleum Costs



A quarterly statement shall be submitted not later than one (1) month after the end of each Calendar Quarter. IT shall present the following items of the Petroleum Costs Account:



(a) the amount of Petroleum Costs which remain to be recovered at the beginning of the quarter;



(b) the amount of Petroleum Costs in respect of that quarter and recoverable under the provisions of the Contract;



(c) the quantity and the value of the production of Petroleum taken by the Contractor during the quarter for the purpose of recovery of the Petroleum Costs;



(d) the amount of incomes or proceeds credited for the purpose of Article 11.5(b) above during the quarter;



(e) the amount of Petroleum Costs which remain to be recovered at the end of the quarter.



In addition, an annual statement of the recovery of Petroleum Costs shall be submitted prior to the end of February of each Calendar Year.



V.3. Statement of production



After commencement of production, such monthly statement shall be submitted not later than fifteen (15) days after the end of each month.



It shall present for each month the detailed production of each Exploitation Perimeter and, inter alia, the quantities of Petroleum:



Page 74 of 75(a) stored at the beginning of the month;



(b) lifted during the month;



(c) loss and used for the requirements of the Petroleum Operations;



(d) stored at the end of the month.



[signature]Empty pageADDENDUM TO PRODUCTION SHARING CONTRACT BETWEEN NATIONAL OIL COMPANY OF LIBERIA AND ORANTO PETROLEUM LIMITED, BLOCK LB-12, JUNE 2005



BETWEEN



The Republic of Liberia represented for the purposes of this Contract by the National Oil Company of Liberia (NOCAL), a company incorporated under the laws of Liberia; REPRESENTED by its Chairman of the BOARD and President/CEO



AND



Oranto Petroleum Limited a company incorporated under the Laws of the Federal Republic of Nigeria, hereinafter referred to as "the Contractor".



This addendum represents decisions reached between the two parties at a meeting held on Wednesday July 12th, 2006 at The Royal Air Force Club in London, UK.



1 ARTICLE 3



DURATION OF EXPLORATION PERIODS AND SURRENDERS



3.1 The exclusive exploration authorization is hereby

granted to the Contracto for a period of eight (8)

consecutive years defined by threes consecutive

periods



A first (Exploration Period of four (4) Contract

Years, a second Exploration Period of two (2)

Contract Years and a third Exploration Period of

two (2) Contract Years in respect of the entire

Delimited Area.



3.2 If during the first exploration period set forth

above the Contractor has fulfilled the exploration

work commitments defined in Article 4, as

ascertained by the Government, the exclusive

exploration authorization shall, at toe

Contractor’s request, be renewed for a second

exploration period of two (2) Contract Years.



ARTICLE 4



EXPLORATION WORK COMMITMENT





1.2 The Contractor, during the first exploration period

defined in Article 3.1, shall carry out a minimum

work progamme at a cost of no less than eight (8)

million Dollars which includes a 3D Seismic

Survey of 1500 square Km and the d ng of one (1)

exploration well.



4.3 Tho Contractor, during the second exploration

period defined in Article 3.1, shall carry out a

minimum work programme at a cost of no less than

ten (10) million Dollars includes a commitment

to drill one (1) exploration well.







24.4 The Contractor, during the third exploration period defined in Article 3.1, shall carry out a minimum work program at a cost of no less than ten (10) million Dollars including a commitment to drill one (1) exploration well.



4.5 Each of the exploratory wells shall be drilled to a minimum depth of two thousand (2000) meters, after deduction of the water depth, or to a lesser depth if the continuation of drilling performed in accordance with good international petroleum industry practice is prevented for any of the following reasons:



(a) The basement is encountered at a lesser depth than the minimum contractual depth;



(b) Continuation of drilling presents an obvious danger due to the existence of abnormal formation pressure;



(c) Rock formations are encountered the hardness of which prevents, in practice, the continuation of drilling by the use of appropriate equipment;



(d) Petroleum formations are encountered the crossing of which requires, for their protection, the laying of casings preventing the minimum contractual depth from being reached.



In the event that any of the above reasons occurs, the exploratory well shall be deemed to have been drilled to the minimum contractual depth.



Notwithstanding any provision in this Article to the contrary, NOCAL and the Contractor may, at any time, agree to abandon the drilling of a well at a lesser depth than the minimum contractual depth.



In order to carry out the exploratory drilling defined in Articles 4.3 and 4.4 in the best technical conditions in accordance with good international petroleum industry practice, the Contractor undertakes to make the expenditure required to meed the objectives of the well work program which will include drilling and as appropriate, testing. ARTICLE 6



CONTRACTOR’S OBLIGATIONS IN RESPECT OF THE

EXPLORATION PERIODS AND ENVIRONMENTAL

MANAGEMENT





6.5 The Contractor further undertakes to carry out all

petroleum operations in accordance with the

Environmental Protection and Management Laws of

Liberia and all international environmental

protocols. In this respect, the Contractor shall:



(a) Submit to the Government an Environmental

Impact Statement (EIS) prior to the

commencement of exploration and production.



(b) Take reasonable preventative, corrective and

restorative measures to protect from pollution,

contamination or damage resulting Petroleum

Operations water bodies, land surfaces and the

atmosphere, and that any pollution,

contamination and damage of such water bodies,

land surface and atmosphere hereunder be

rectified.



Subject to the foregoing, and at the conclusion of

Petroleum Opera'ions in the Delimited Area, the

Contracto will undertake reasonable efforts to

restore the terrain to a state in which it is use

able.



6.11 The Contractor and its subcontractors shall be

obligated to give preference to enterprises and

goods from Liberia if conditions of price, quality,

delivery time and terms of payment are similar to

those from other countries or from non-Liberian

sources. Specifically, the Contractor commits

itself to award to only Liberians, supply,

construction or service contracts, the estimated

value of which is under Two Hundred Thousand United

States Dollars (US$200,000.00). If the Contract is

above Two Hundred Thousand United States Dollars

(US$200,000.00) and is awarded to a Non-Liberian

contractor;









4the contractor must seek a partnership with a Liberian company(ies).



ARTICLE 16



RECOVERY OF PETROLEUM COSTS AND PRODUCTION SHARING



16.1 For the purposes of recovery of the Petroleum Costs, the Contractor may freely take each Calendar Year a portion of the production in no event greater than seventy percent (70%) of the Total Production of Crude Oil or Gas from the Delimited Area, or only any lesser percentage which would be necessary and sufficient to recover remaining cost.



This value of such portion of Total Production allocated to the recovery of the Petroleum Costs by the Contractor, as defined in the preceding paragraph, shall be calculated in accordance with the provisions of Article 18.



If during a Calendar Year the Petroleum Costs not yet recovered by the Contractor under the provisions of this Article 16.2 exceeded the equivalent in value of seventy percentage (70%) of the Total Productions of Crude Oil or Total Production of Gas from the Delimited Area, as calculated above, the balance of the Petroleum Costs which cannot be recovered in that Calendar Year shall be carried forward in the following Calendar Year or Years until full recovery of the Petroleum Costs or until the expiration of this Contract.



16.2 For the purposes of recovery of the Petroleum Costs, the Contractor may freely take each Calendar Year a portion of the production in no event greater than seventy percent (70%) of the Total Production of Crude Oil or Gas from the Delimited Area, or only any lesser percentage which would be necessary and sufficient to recover remaining cost.



The value of such portion of Total Production allocated to the recovery of the Petroleum Costs by the Contractor, as defined in the preceding paragraph, shall be calculated in accordance with the provisions of Article 18.



5If during a Calendar Year the Petroleum Costs not yet recovered by the Contractor under the provisions of this Article 16.2 exceed the equivalent in value of seventy percent (70%) of the Total Production of Crude Oil or Total Production of Gas from the Delimited Area, as calculated above, the balance of the Petroleum Costs which cannot be recovered in that Calendar Year shall be carried forward in the following Calendar Year or Years until full recovery of the Petroleum Costs or until the expiration of this Contract.



16.3 The quantity of Crude Oil from the Delimited Area remaining during each Calendar Year after the Contractor has taken from the Total Production the portion necessary for the recovery of the Petroleum Costs, hereinafter referred to as "Remaining Oil Production," shall be shared between NOCAL and the Contractor as follows:



Increments of daily oil NOCAL's Share Contractors Share

Total Production (in Barrels per day)

from 0 to 30,000 20% 80%

from 30,001 to 75,000 40% 60%

from 75,001 to 200,000 50% 50%

over 200,000 60% 40%



The Remaining Oil Production shall be shared according to the daily Total Production from the Delimited Area.



The terms and conditions of the above schedule may change subject to the commercial discovery of oil.



16.4 In case of natural gas, the following production sharing shall apply:



Increments of daily Gas NOCAL's Share Contractors Share



Total Production 30% 70%



6For the purpose of this Article, the daily Total Production shall be the average rate of Total Production during the calendar quarter in question.



ARTICLE 17



TAXATION



7.1 Unless otherwise provided for in this Contract the

Contractor shall, in respect of its Petroleum

Operations, be subject to the laws generally

applicable and the regulations in force in Liberia

concerning taxes which are or may be levied on

incomes, or determined thereto.



It is specifically acknowledged that the provisions

of this Article shall apply individually to any

entity comprising the Contractor under this

Contract.



The Contractor or shall keep separate accounts for

each Fiscal Year in respect of the Petroleum

Operations, in accordance with the regulations in

force in Liberia, enabling in particular the

establishment of a profit and loss account as well

as a balance sheet showing both the results of said

Petroleum Operations and the asset and liability

items allocated or related thereto.



7.2.1 For the purposes of Article 17.1 the Contractor

shall in respect of its net profit arising

from Petroleum Operations, be liable to

corporate income tax under the laws and

regulations in force in Liberia. Income tax

applicable to Petroleum Operations carried out

under this Contract shall be thirty five (35)%,

which shall be paid on this behalf by NOCAL

directly to the Government of Liberia. The

portion of profit oil necessary to pay the tax of

the Contractor shall be added to NOCAL’s share of

the profit oil this share which constitutes the

Contractors taxes will be mutually determined by

the Parties.











7ARTICLE 19



BONUSES AND HYDROCARBON

DEVELOPMENT FUND



19.119.3.2. The contribution to the Hydrocarbon Development Fund referred to in Article 19.3.1 will be recoverable and therefore, shall be considered as Petroleum Costs.



ARTICLE 29



PERSONNEL AND TRAINING



29.2. Upon commencement of the Petroleum Operations, the Contractor shall provide funding for Training Programmes and for that purpose the Contractor shall devote an annual Training Budget of:



(a) $100,000 Dollars during each year of the exploration period;



(b)$200,000 Dollars during each year of the exploitation period.



Additionally, the Contractor shall make an annual contribution of Seventy-five (75) Thousand Dollars to the University of Liberia for the enhancement of programmes in Geology, Mining Engineering and Environmental Studies.



29.3. Upon commencement of the Petroleum Operations, the Contractor shall provide funding for Social and Welfare programmes in Liberia and for that purpose the Contractor shall devote an annual Social and Welfare Budget of:



(a)$150,000 Dollars during each year of the exploration period;



(b)$250,000 Dollars during each year of the exploitation period.



An escrow account shall be established by both Parties for the purposes of receiving money and paying for the programmes



9 detailed in Articles 29.2.1 and 29.2.2 and they

shall both be signatories to such account, except

for the contribution to the University of Liberia

which shall be paid directly to the institution.



The Training requirements shall be developed by

both Parties with the understanding that NOCAL

shall provide 70% of the training candidates and

the Contractor shall provide 30% of the candidates.



The Training and Social and Welfare Programmes

shall be mutually agreed by the Parties.



The Training and Social and Welfare expenses borne

by the Contractor shall be included in recoverable

Petroleum Costs. Funding for the Training and

Social and Welfare Programmes shall be paid within

30 days of the Effective Date. Thereafter,

payments shall be made within thirty days of each

subsequent anniversary of the agreement.



29.4 The entry into Liberia of all foreign personnel

stall be authorized and the STATE shall issue the

documents necessary for that entry to all members

of the foreign personnel, such as entry visas,

working permits and exit visas, in compliance

with the immigration regulations in force in

Liberia.



At the request of the Contractor, the STATE shall

facilitate any immigration formalities with the

Immigration Bureau at the points of entry into and

exit from Liberia, in respect of the Contractor’s

employees, contractors, subcontract and agents, and

their families, all without undue delays.



29.5 All the employees required for the conduct of the

Petroleum Operations shall be under the

Contractor’s authority or that of its contractors,

subcontractors and agents, in their capacity as

employers. Their work, number of working hours,

salaries and any other matters relating to their

employment condition's shall be determined by the

Contractor or its com actors, subcontractors and

agents.









1032.1 Termination by the Contractor. During the Exploration and Exploitation Periods, the Contractor may surrender, by not less than sixty day notice to NOCAL, all of its rights and obligations hereunder in respect of all or any part of the Delimited Area, and the operator shall be relieved of all obligations to NOCAL in respect of the area so surrendered except those obligations rising out of or related to the surrender.



32.2 Termination by NOCAL. Subject to the provisions of Article 31, NOCAL shall have the right to terminate this Agreement if any of the following events (hereinafter called "Events of Default") shall occur and be continuing:



(a) Where the Contractor shall fail to make any of the payments described in this Agreement on the due payment date, and such default is not cured within thirty (30) days after notice by NOCAL or within such longer periods as may be specified in said notice;



(b) Where the Contractor shall materially fail to comply with its work commitments and other conditions in this Agreement and such failure is not cured within ninety (90) days after notice by NOCAL or within such longer period as may be specified in the notice



(c) Where the Contractor shall (i) voluntarily dissolve, liquidate or wind up its affairs, or make an assignment of all or substantially all of its assets for the benefit of creditors other than an assignment made to secure indebtedness incurred in the ordinary course of business; (ii) file a petition or application to any tribunal for the appointment of a trustee or receiver for all or any substantial part of the Contractor's assets; (iii) commence any proceedings for its bankruptcy, reorganization,



11 arrangement, insolvency or readjustment of debt

under the laws of any jurisdiction, whether now

or hereafter in effect or if any such petition or

application is filed, or any such proceedings are

commenced against it shall indicate its approval

thereof, consent thereto or acquiescence therein,

or (iv) if any order is entered appointing any

such trustee or receiver, or adjudicating the

Contractor bankrupt or insolvent, or approving

the petitior in any such proceedings, and

provided that the Contractor shall fail to take

corrective measure(s) to have such order removed

or lifted within sixty (60) days;



(i) Where the Contractor shall fail to carry out Exp

Exploration as required by Article 4, or cease

Exploration for a period of twelve (12)

consecutive months or cease Production with

respect to all Production Areas for a period of

twenty four (24) consecutive months, unless such

failure or cessation is consented to by NOCAL or

is caused by a state of force majeure.



32.3 Opportunity to Cure. In the case of an allege

Event of Default described above NOCAL before

taking any further action shall provide Notice to

the Contractor of the alleged occurrence of such

Event of Default and of NOCAL's views in that

regard and shall offer the Operator a fair

opportunity to consult with NOCAL to resolve the

matter. If, after a reasonable period of time of

consultation, NOCAL is of the reasonable opinion

that the matter cannot be resolved by further

consultation, NOCAL may then send to the

Contractor Notice of NOCAL's intention to

terminate this Agreement. If Event of Default is

not cured within sixty (60) days after said

Notice, or within such longer period as may be

necessary to allow a reasonable period of time

to effect such cl then Agreement shall be

terminated, subject to Article 31.



32.4 Disputes Regarding Events of Default. Notwith

standing the provision of Article 32.2, if the

Contractor disputes whether











12



There has been an Event pf Default described above and, within sixty (60) cays after receipt by the Contractor of NOCAL's Notice of its intention to terminate this agreement, refers such dispute to arbitration in accordance with Article 31, then termination of this Agreement shall not take effect until the finality of and in accordance with, an arbitration award upholding

NOCAL's right to terminate the agreement.





ARTICLE 36



STABILITY OF CONDITIONS



36.3

Periodic Review: In the event of changes in circumstances from those existing at the Effective Date, that have a material effect on the terms of this Agreement , either NOCAL or the Contractor shall at the request of the other consult together. If it is established that such Profound Changes in Circumstances nave occurred, then the Parties shall effect such changes in or clarifications to this Agreement that they agree are necessary. The Parties shall meet in good faith to make the necessary revisions and adjustments to the Agreement in order to maintain such expected economic benefits to each of the Parties, provided that the economic benefits to the Parties shall not be reduced as a result of exercising the terms of this article. For the purposes of this Agreement the term “Profound Changes in Circumstances" shall mean such changes in the economic conditions of the petroleum industry world wide or in Liberia or such changes that result in such a material and fundamental alteration of the conditions and assumptions relied upon by the Parties at the Effective Date of this Agreement (or the time after any subsequent review under this Article) to the effect that the overall balance of equities and benefits reasonably anticipated by the Parties will no longer be achievable. Additionally, the Parties also agree to review the agreement every five years to consider the concerns of any of the Parties.

[signature]







13

IN WITNESS WHEREOF, the Parties have signed this Contract o the dates as so forth below/



On Behalf of NOCAL

[signature] [date]

Dr. Fodee Krornah

President/CEO of NOCAL



[signature] [date]

Mr. Clemenceau B. Urey

Chairman of the Board, NOCAL



Attested by:

[signature] [date]

Mrs. Marie E. Leigh-Parker

VP Administration/Finance



On behalf of The Contractor:



[signature] [date]

Prince Arthur Eze

Chairman of Oranto Petroleum Ltd



Attested by: [signature] [date]IN WITNESS WHEREOF, the Parties have signed this Contract on the date as set forth below.





[SIGNATURE] 7/8/06

___________________ ________________

Dr. Fodre Kromah Date

PRESIDENT/CEO

NATIONAL OIL COMPANY OF LIBERIA





[SIGNATURE] 08-07-06

___________________ ________________

Mr. Clemenceau B. Urey Date

CHAIRMAN, BOARD OF DIRECTORS

NATIONAL OIL COMPANY OF LIBERIA







[SIGNATURE] 08-15-06

___________________ ________________

Dr. Bugene Shannon Date

MINISTER OF LANDS, MINES & ENERGY

REPUBLIC OF LIBERIA







[SIGNATURE] August 16,2006

___________________ ________________

Dr. Antonette Sayeh Date

MINISTER OF FINANCE

REPUBLIC OF LIBERIA







[SIGNATURE] 8-16-06

___________________ ________________

Dr. Richard Tolber Date

CHAIRMAN NATIONAL INVESTMENT COM.

REPUBLIC OF LIBERIA







[SIGNATURE] August 16,2006

___________________ ________________

At tester: Date

Hon. Finances Johnson-Morris

MINISTER OF JUSTICE

REPUBLIC OF LIBERIA







[SIGNATURE] 17-08-2006

___________________ ________________

Approved: Date

Her Excellency

Ellen Johnson-Sirleaf

PRESIDENT

REPUBLIC OF LIBERIA







___________________ ________________

Ratifier: Date

Nation: Legislature of the

Republic of Liberia



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