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 ATTACHMENTS





Attachment 1 - a letter dated the 23 May 2002, from FGN awarding OPL 245 to SNUD





Attachment 2 - a production sharing contract (“PSC”) with Nigerian National Petroleum


Corporation (NNPC), on 22 December 2003





Attachment 3 - Settlement Agreement dated 30th November, 2006, the Court of Appeal


Abuja,





Attachment 4 - Escrow Agreement dated 22nd December 2003, between FGN and SNUD


Attachment 5 - Block 245 Resolution Agreement dated 29th April, between FGN, NNPC,


SNUD, SNEPCO and NAE


Attachment 6 - Block 245 SNUD Resolution Agreement signed 29th April 2011, between


FGN, SNUD and SNEPCO.


Attachment 7 - Terms of Settlement signed 2901 April 2011, between SNUD, SNEPCO


and Malabu.


Attachments- Escrow Agreement 2 signed 4th May 2011, between FGN, NAE and


SNEPCO.


Attachment 9 - Letter dated 3rd May, 2011 from FGN to NAE and SNUD notifying


SNUD, SNEPCO and NAOC of the release of claims in accordance with


the escrow agreement.


Attachment 10- Letter dated 11th May, 2011 from FGN to SNEPCO awarding OPL


245 to SNEPCO AND NAE jointly.


Attachment 11 - Notice of discontinuance dated 29th April 2011 between FGN and SNUD.


Attachment 12 - Escrow Termination Notice signed 3rd May 2011 between FGN and


SNUD


Attachment 13 - Escrow Completion Notice of Escrow Agreement 2 between FGN, NAE


and SNEPCO





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6


 ATTACHMENT 2





A Production Sharing Contract ( PSC )


with Nigerian National Petroleum


Corporation (NNPC), on 22nd December


2003.


 C-4





Production Sharing Contract


BY AND BETWEEN





NIGERIAN NATIONAL PETROLEUM CORPORATION


(THE “CORPORATION”)


and


SHELL NIGERIA ULTRA DEEP LIMITED


(THE “CONTRACTOR”)


COVERING: BLOCK 245 OFFSHORE NIGERIA











Dated: 2003


 CONTENTS





CLAUSE 1 - DEFINITIONS .........................................................


CLAUSE 2 - BONUS ...........................................................


CLAUSE 3 - SCOPE ...........................................


CLAUSE 4-TERM .............................................


CLAUSE 5 - RELINQUISHMENT OF AREAS


CLAUSE 6 - WORK PROGRAMME AND EXPENDITURE


CLAUSE 7 - MANAGEMENT COMMITTEE ...................................


CLAUSE 8 - RIGHTS AND OBLIGATIONS OF THE PARTIES


CLAUSE 9 - RECOVERY OF OPERATING COSTS AND CRUDE


OIL ALLOCATION


CLAUSE 10-VALUATION OF AVAILABLE CRUDE OIL


CLAUSE 11-PAYMENT ...................................................................


CLAUSE 12 - TITLE TO EQUIPMENT/ABANDONMENT.;


CLAUSE 13 - EMPLOYMENT AND TRAINING OF PERSONNEL


CLAUSE 14 - BOOKS AND ACCOUNTS, AUDIT AND


OVERHEAD CHARGES


CLAUSE 15 - ROYALTY AND TAXES .........


CLAUSE 16-INSURANCE ...................................................


CLAUSE 17 - CONFIDENTIALITY AND PUBLIC


ANNOUNCEMENTS


CLAUSE 18 - ASSIGNMENT .............................................


CLAUSE 19 - TERMINATION ...........................................


CLAUSE 20 - FORGE MAJEURE .............................................


CLAUSE 21 - LAWS AND LANGUAGE ..........................


CLAUSE 22 - NATURAL GAS ..................................


CLAUSE 23 - REPRESENTATIONS AND WARRANTIES.................’


CLAUSE 24 - CONCILIATION AND ARBITRATION,.; ........


CLAUSE 25 - EFFECTIVE DATE


CLAUSE 26 - CHANGE IN LEGISLATION ...................


CLAUSE 27 - OPERATOR ...............................


CLAUSE 28 - CONFLICT OF INTERESTS


CLAUSE 29 - NOTICES ......................


CLAUSE 9 - RECOVERY OF OPERATING COSTS AND CRUDE


OIL ALLOCATION


CLAUSE 10-VALUATION OF AVAILABLE CRUDE OIL


CLAUSE 11 - PAYMENT


CLAUSE 12 - TITLE TO EQUIPMENT/ABANDONMENT





ANNEXES


Annex A -OPL245 Co-ordinates Niger Delta (Offshore) B1


Annex.B- Accounting Procedure B2 B16


Annex C - Allocation Procedure C1 - C9


Annex D - Uniform Nomination, Ship Scheduling and Lifting


Procedure D1-D14


Annex E - Procurement and Project Implementation Procedures


E1-E11


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A Bl) J A


Signature. A...


Date........





























3


THIS CONTRACT is made this^&hl^ay ofh&^003 BETWEEN


the NIGERIAN NATIONAL PETROLEUM CORPORATION, a


corporation established under the laws of the Federal Republic of


Nigeria, with its head office at NNPC Towers, Herbert Macaulay


Way, Central Business District, Abuja (hereinafter referred to as


"the CORPORATION” which expression shall, where the context


so admits, Include Its successors-ln-tltle and assigns) of the one


part.and SHELL NIGERIA ULTRA DEEP LIMITED, company


Incorporated under the laws of Federal Republic of Nigeria, having


its registered office at Freeman House, 21/22 Marina, Lagos,


(hereinafter called “CONTRACTOR" which expression shall, where


the context so admits, Include Its respective successors-ln-title and


assigns) of the other part.


WHEREAS, by virtue of Section 1 of the Petroleum Act Cap 350


Laws of Nigeria 1990 as amended, the Federal Government of the


Federal Republic of Nigeria is vested with the entire ownership and


control of all petroleum in, under or upon any land which is in


Nigeria or under the territorial waters of Nigeria or within the


Exclusive Economic Zone of Nigeria; and


WHEREAS, the CORPORATION is the holder of the oil


prospecting license (OPL) No. 245 described in Annex A hereto


and any subsequent OH Mining Lease (OML) derived therefrom;


and





OM|ER^S' the Said area Of the 0PL 245 and


any subsequent


OML shall constitute the Contract Area; and


WHEREAS, by virtue of the Nigerian National Petroleum


Corporation Act Cap 320 laws of the Federation of Nigeria 1990,


the CORPORATION has the right, power and authority to enter into


this Contract: and


WHEREAS, the CONTRACTOR represents that it together with its


Affiliates has the technical competence and professional skills


necessary to conduct Petroleum Operations and has the funds


both local and foreign for carrying on the said operations and has


agreed to conduct the said operations; and


NOW THEREFORE, in consideration of the premises and the


mutual covenants herein reserved and contained, It is hereby


agreed as follows:


CLAUSE 1 - DEFINITIONS








As used in this Contract, unless otherwise specified, the following


terms shall have the respective meaning herein ascribed to them:





(a) “Accounting Procedure” means, the Rules and


Procedures as set forth in Annex B and attached to and


forming part of this Contract.





(b) “Affiliate" means, a company or other entity that controls


or is controlled by a Party to this Contract, or which is


controlled by a company or other entity which controls a


Party to this Contract, It being understood that control


cERTiHE^RUE^cor


federal 1 i hI'.GH courJ 5


; A B' ■ J A


shall mean ownership by one company or entity of at


least fifty (50%) percent of:


(I) the voting stock, If the company is a corporation


Issuing stock; or





(il) the controlling rights or Interests, if the entity is


not a corporation.





In relation to Shell Nigeria Ultra Deep Limited,


(a) N.V. Koninklijke Nederlandsche • Petroleum


Maatschapplj,


(b) Jhe “Shell0 Transport and Trading Company PLC:


Any company (other than Shell) which is for the time


being directly or indirectly controlled by N.V.


Koninklijke Nederlandsche Petroleum Maatschappij


and the “Shdll" Transport and Trading Company, PLC


or either of them. For the purposes of this definition, a


company Is directly controlled by another company or


companies If such other company or companies hold


shares carrying In the aggregate at least fifty percent


(50%) of votes exercisable at a general meeting of the


first mentioned company or companies; and a


particular company is indirectly controlled by a


company or companies (hereinafter called the "parent


company or companies") if a series of companies can


be specified, beginning with the parent company of


companies and ending with particular company so


related that each company of the series, except the


parent company or companies, is directly controlled by


one or more of the companies earlier In the series.


(c) “Available Crude Oil" means, the Crude Oil won and


saved from the Contract Area.


(d) ' “Barrel” means, a quantity or unit of Crude Oil, equal to


forty-two (42) United States gallons at the temperature


>•--- of sixty degrees (60‘) Fahrenheit at normal


atmospheric pressure.


(e) “Budget” means, the cost estimate of items included in


a Work Programme.


(f) “Calendar Year* means, a period of twelve (12) months


commencing from January 1 and ending the following


December 31, according to the Gregorian Calendar.


(S) “Capital Cost" means, those expenditures incurred and


obligations made In accordance with Article II.2 of the


Accounting Procedures.


(h) “Commercial Quantity” shall have the same meaning as


defined In the Petroleum Act CAP 350 Laws of the


Federation of Nigeria 1990 as amended.


(I) “Concession Rentals” means, the rents payable on the


OPL and OML under the Petroleum Act CAP 350 Laws


of the Federation of Nigeria, as amended.





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A B ll ll A


Signature


Date


0) “Contract Area" means, the area of the OPL 245 and


any OML derived therefrom.








(k) “Contract Year” means, a period of twelve (12)


consecutive months according to the Gregorian


Calendar, from the Effective Date of this Contract or


from the anniversary of the Effective Date.


(l) “Cost Oil” means, the quantum of Available Crude Oil


allocated to the CONTRACTOR for recovery of


Operating Costs after the allocation of Royalty Oil to


the CORPORATION.





(m) “Crude OH" means, the liquid petroleum which has


been treated but not refined and Includes condensates


but excludes basic sediments and water.








tn) “Deep Offshore" means, any water depth beyond 200


metres.








(o) "Effective Date" means the date on which the sums


specified In Clause 2.1 (a) and Clause 2.1 (b) are paid


by the Contractor


(p) ’ “Foreign Currency” means, currency other than that of


Nigeria agreed upon by the Parties and acceptable to


the Federal Government of Nigeria.








(q) "Government" means, the Government of the Federal


Republic of Nigeria.
































i


4


(r) "Gross Negligence" means, any act or failure to act of


any Senior Supervisory Personnel (whether sole, joint


or concurrent) which was intended to cause, or which


was In reckless disregard of or wanton Indifference to,


the harmful consequences such act or failure to act


would have on (a) the safety of personnel or property or


(b) Petroleum Operations,


(s) “Lifting Procedure" means, the Rules and Procedures


set forth in Annex D and attached to and forming part of


this Contract.





(t) “Minister” means, the Minister charged with the


responsibility for Petroleum Resources in Nigeria.





(u) “Ministry" means, the Ministry charged with the


responsibility for Petroleum Resources In Nigeria.





(v) “Natural Gas" means, all gaseous hydrocarbons


produced in association with the Crude Oil or from


reservoirs which produce mainly gaseous


hydrocarbons.





(w) “Oil Mining Lease” (“OML”) means, a lease granted by


the Minister under the Petroleum Act CAP 350, Laws of


•the Federation of Nigeria as amended, to a lessee to


search for, win, work, carry away and dispose of


petroleum.


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Signature •.


Date ..J..


(x) “Oil Prospecting License’ (“OPL") means, a license


granted by the Minister under the Petroleum Act CAP


350, Laws of the Federation of Nigeria as amended, to


a licensee to prospect for petroleum.


(y) “Operating Costs" means, expenditures incurred and


obligations made as determined in accordance with


Article 11 of the Accounting Procedure.


(z) “Party" means, either the CORPORATION or the


CONTRACTOR and "Parties" means, the


CORPORATION and the CONTRACTOR.


(aa) "Petroleum Operations" means, the winning or


obtaining and transportation of petroleum or chargeable


oil in Nigeria by or on behalf of a company for its own


account by any drilling, mining, extracting or other like


operations or process, not including refining at a


refinery, in the course of business carried on by the


company engaged In such operations, and all


operations Incidental thereto and any sale of or any


disposal of chargeable oil by or on behalf of the


company;


/


(ab) Petroleum Profit Tax" or “PPT" means, the tax pursuant


to the Petroleum Profits Tax Act CAP 354 Laws of the


Federation of Nigeria 1990 as amended.











io


(ac) "Proceeds" means, the amount in U.S. Dollars


determined by multiplying the Realizable Price by the


number of Barrels of Available Crude Oil lifted by either


Party.





(ad) “Profit Oil" means, the balance of Available Crude Oil


• after the allocation of Royalty Oil, Tax Oil, and Cost Oil.


(ae) “Realizable Price" means, the price in U.S. Dollars per


Barrel determined pursuant to Clause 10.


(af) "Royalty" means, the amount payable pursuant to the


Petroleum Act CAP 350 Laws of the Federation of


Nigeria and Petroleum (Drilling and Production)


Regulations Cap 350, Laws of the Federation of Nigeria


1990, as amended.





(ag) "Royalty Oil" means, the quantum of Available Crude


Oil that will generate an amount of Proceeds equal to


the actual payment of Royalty and Concession Rentals.





(ah) "Senior Supervisory Personnel" means, with respect to


a CONTRACTOR, or any of its Affiliates providing


services, any senior supervisory employee who


functions in Petroleum Operations and who is In charge


of on-site drilling, construction, production, installations





or facilities and related operations, or any other field


operations, or employee who functions at a


management level equivalent to or superior to the


pate - -











3iT(





 described positions, any person to whom such person


reports (such as an officer or director of such











CONTRACTOR or of any such Affiliate of the


CONTRACTOR).


(al) "Tax Oil’ means, the quantum of Available Crude Oil


allocated to the CORPORATION which will generate an


amount of Proceeds equal to the actual payment of


PPT.


(aj) “Work Programme" means, the statement Itemizing the


Petroleum Operations to be carried out In the Contract


Area for the applicable period as defined in Clause 6.


(ak) “Year* means, a period of twelve (12) consecutive


months according to the Gregorian Calendar.


Reference to the singular includes a reference to the plural


and vice versa.


The headings used in this Contract are for convenience only


and shall not be used to construe or interpret the Contract.





CLAUSE 2


BONUS


2.1 Slgnature/Prospectlvlty Bonus








CERTIFIED


FEDERAL/HIGH COu^ 12











t.


XA


CONTRACTOR shall make payment of the Signature Bonus


of two hundred and ten million dollars (US$ 210 million) as


follows:


(a) the sum of one million United States of America dollars


(USS 1 million) to the Federal Government of Nigeria


PTDF Account within thirty (30) days of the execution of


this Contract;


(b) the balance of two hundred and nine million dollars (USS


209 million) shall be paid into a nominated escrow


account, five days after execution of the Escrow


Agreement in accordance with the terms agreed between


the Parties.


2.2 Production Bonus


CONTRACTOR shall pay to the CORPORATION a


Production Bonus as follows: One hundred thousand Barrels


(100,000 bbls) or cash equivalent at the attainment of each of


the following cumulative production levels:


(a) Fifty Million Barrels (50 MMB)


(b) One Hundred Million Barrels (100 MMB)





2.3 The Production Bonus provided for in Clause 2.2 hereof shall


be paid within thirty (30) days of such production level being


first attained,








2.4 The CORPORATION may serve the CONTRACTOR a thirty-


(30) days notice of revocation, if the CONTRACTOR.fails to


pay the Bonuses specified in this Clause. At the expiration of


the revocation notice, this contract shall terminate forthwith.





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2.5 The Bonuses provided for in this Clause 2 shall not be


recoverable as Cost Oil.











CLAUSE 3


SCOPE








3.1 This Contract is a Production Sharing Contract, governed in


accordance with the terms and provisions hereof. Petroleum


Operations and provision of financial and technical


requirements by the CONTRACTOR under this Contract


shall be with the prior approval of the CORPORATION as


required in Clauses 7.2(e) and (f), 12.1, 18, 19.2 and Annex


E, Article 1.3 (a) and (b) and Articles 3.3, 3.6, and 5.6, and


any other clause requiring approval of CORPORATION


under this Contract. The CORPORATION, as holder of all


rights In and to the Contract Area, hereby appoints and


conveys to the CONTRACTOR, the exclusive right to


conduct Petroleum Operations in the Contract Area.





3.2 During the term of this Contract the total Available Crude Oil


shall be allocated to the Parties in accordance with the


provisions of Clause 9, the Accounting Procedure (Annex B)


and the Allocation Procedure (Annex C).








3,3 The CONTRACTOR together with its Affiliates shall provide


funds and bear interest on funds, in addition to bearing the





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COURT 14


fedbr* A A








Signature


<>-


risk of Operating Costs and the risk required to carry out


Petroleum Operations and shall therefore have an economic


interest in the development of Crude Oil and Natural Gas.


3.4 The CONTRACTOR is engaged in Petroleum Operations


pursuant to Petroleum Profits Tax Act Cap 354 Laws of the


Federation of Nigeria 1990 (UPPT Act") as amended and


accordingly, the Companies Income Tax Act 1979 Cap 60


Laws of the Federation of Nigeria 1990, as amended, shall


have no application.








CLAUSE 4


TERM


4.1 (a) The term of this Contract, subject to Clauses 4.1 (c) 19


and 21 herein, shall be for thirty (30) years from the


Effective Date, Inclusive of ten (10) years exploration


period under the OPL and twenty (20) years OML


period.


(b) At the end of the twenty (20) year OML period, the


CORPORATION shall seek the maximum allowed


renewal period of the OML subject to the performance


of all the CONTRACTOR'S obligations, to the


satisfaction of the CORPORATION during the expiring


period of the OML. If such renewal Is granted, this


Contract shall be extended for the duration of such


renewal at the option of either Party.


(c) If pursuant to the provisions of Clause 6.5 herein,


CORPORATION obtains a new OPL over the Contract


Area or an extension.thereof, the Contract shall be


extended for the term of such extension or new OPL;


and the terms of the Contract shall continue to apply


mutatls mutandis for the period of such extension.


CLAUSE 5


EXCLUSION OF AREAS


5.1 Subject to Clauses 6.5,19, and 21, the duration of the OPL


relating to this Contract shall be for a period of ten (10) years


from the Effective Date. At the end of the OPL period,


CONTRACTOR shall relinquish fifty per cent (50%) of the


Contract Area In accordance with the Regulations








CLAUSE 6


CLAUSE 6 - WORK PROGRAMME AND EXPENDITURE


6.1 Within two (2) months after the Effective Date and thereafter


at least three (3) months prior to the beginning of each year


the CONTRACTOR shall prepare and submit for review and


approval by the Management Committee, pursuant to Clause








A


 7, a Work Programme and Budget for the Contract Area


setting forth the Petroleum Operations which CONTRACTOR





proposes to carry out during the ensuing year, or in case of


first Work Programme and Budget, during the remainder of


the current year. The Management Committee shall review


and approve such Work Programme and Budget in


accordance with Clause 7.4(e) prior to submission of the


Work Programme and Budget to the Ministry.





6.2 The minimum Work Programme to be executed by the


CONTRACTOR during the exploration period of this Contract


shall be as follows:





(a) First (1st) Phase - Contract Years 1 to 5:


CONTRACTOR shall acquire from PGS and


process a minimum of 2,500 square kilometer of


3D seismic and drill two (2) wells.








(b) Second (2nd) Phase- Contract Years 6 to 10:


CONTRACTOR shall drill one (1) well and if on


the assessment of the Management Committee, it


has made a potentially commercial discovery,


then It shall drill one (1) additional well which shall


be an appraisal well.


Subject to Clause 6.5, If at the end of any of the phases the


CONTRACTOR should perform less than the minimum Work


Programme required, the amount of money left outstanding


under the performance bond required pursuant to Clause 6.4


shall be forfeited and paid to the CORPORATION.





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A B TO A//


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6.3 If CONTRACTOR completes the minimum Work Programme


stipulated in any of the above phases as described in Clause


6.2 (a), or (b) respectively, CONTRACTOR shall have the


right to terminate the Contract at the end of each of the above


phases, as provided In Clause 19.6. Subject to Clause 6.5, if


CONTRACTOR falls to fully execute the minimum Work


Programme In any phase, then CORPORATION shall have


the right to terminate this Contract, as provided in Clause


19.1(b).





6.4 (a) Within forty five (45) days after the Effective Date of


this Contract, CONTRACTOR shall submit to the


CORPORATION a performance bond (in the form


attached and marked Annex F) for the first phase of the


exploration period as security for the performance by


CONTRACTOR of the minimum Work Programme


stipulated for the first phase. The performance bond


shall be In an agreed format from a reputable


international bank acceptable to the CORPORATION.


(b) The above obligation of CONTRACTOR to submit a


performance bond as a security shall be separately


fulfilled by the CONTRACTOR In respect of the second


phase of the exploration period, following its entry Into


the said phase.


(c) For the first phase, the performance bond shall be in


the amount of Sixty million U.S. Dollars ($60,000,000)


and for, the second phase in the -amount of Thirty


million U.S. Dollars ($30,000,000).











A





(d) The amount of the performance bond submitted by the


CONTRACTOR for each phase shall be reduced


annually based on the monetary expenditures


CONTRACTOR has Incurred in the previous year of such


phase and shall terminate at the end of each phase, if the


minimum work therefore has been performed.


6.5 In the event CONTRACTOR is unable to carry out its


obligations under this Clause 6 or any other provision of the


Contract as a result of an Order of Court or other


proceedings before any other constituted authority affecting


OPL 245 and/or the Contract Area, then upon notification to


the CORPORATION, the time for the performance of such


CONTRACTOR's obligations shall be extended for a period


equal to the period during which CONTRACTOR was unable


to carry out such obligations, and the CONTRACTOR shall


not be in default of such obligations under this Contract. If


such extension falls outside the statutory OPL period,


CORPORATION shall seek an extension of the OPL or


obtain a new OPL over the Contract Area to commence


Immediately upon the expiration of the original statutory OPL


term.


CLAUSE 7 ■ MANAGEMENT COMMITTEE


7.1 A Management Committee shall be established within thirty


(30) days from the date of execution of this Contract for the


purpose of providing orderly direction of all matters pertaining


to the Petroleum Operations and Work Programme.





19


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Signature


Date...,!..


7.2 The powers and duties of the Management Committee shall


include but not limited to the following:





(a) the revision, and approval of all proposed Work


Programmes and Budgets in accordance with Clauses











6.1 and 7.4(e);


(b) the revisions, and approval of any proposed


recommendations made by either Party or by any sub-


committee, pursuant to Clause 7.7 with respect to


Petroleum Operations;


(c) ensuring that the CONTRACTOR carries out the


decisions of the Management Committee and conducts


Petroleum Operations pursuant to this Contract;


(d) the consideration and decision on matters relating to


.... the relinquishment of areas in the Contract Area


pursuant to Clause 5; and in accordance with the


petroleum laws;


(e) settlement of claims and litigation in excess of five


hundred thousand Naira (N500.000) or the equivalent


thereof in Foreign Currency, or such other amount as


may be approved by the Management Committee in so


far as such claims are not covered by policies of


Insurance maintained under thisContract provided,


however, that such' settlements which exceed ten





20


million Naira (N10,000,000) shall be with the approval


of the CORPORATION;


(f) consideration and approval of the sale or disposal of


any items or movable property relating to Petroleum


Operations in accordance with the provisions of this


Contract, except for items of historic costs of less than


One hundred thousand (N100.000) Naira (or such other


amount as may be approved by the Management


Committee) provided that any intention to sell or


dispose of fixed assets shall be referred to the


CORPORATION;


(g) settlement of unresolved audit exceptions arising from


audits as provided for in Clause 14.3 of this Contract;


(h) ensuring that the CONTRACTOR implements the


provisions of the Accounting Procedure (Annex B), the


Lifting Procedure (Annex D), and the Procurement and


Project Implementation Procedures (Annex E) and all


amendments and revisions thereto as agreed by the


Parties;


(I)- any other matters relating to Petroleum Operations


except:


(i) those matters, reserved to the Parties in their


respective rights pursuant to Clause 8; or





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A/B UJ A


Signature. L ...KRC


Date.......- L-AtD''


(ii) those matters elsewhere provided for In this


Contract;


(j) consideration and approval of the sale, disposal or


exchange of Information to third parties other than


routine exchange of seismic data and other such data


commonly exchanged within the industry; and


(k) consideration and determination of any other matter


relating to the Petroleum Operations which may be


referred to it by any Party (other than any proposal to


amend this Contract) or which is otherwise designated


under this Contract for reference to it.


7.3 (a) Ths Management Committee shall consist often (10)


persons appointed by the Parties as follows:





CORPORATION - 5


CONTRACTOR - 5





(b) Each Party shall designate by notice In writing to the


other Party, the names of Its representatives to serve


as members of the Management Committee as


provided in Clause 7.3(a) hereof and their respective


alternates, which members or alternates shall be


authorised to represent that Party with respect to the


decisions of the Management Committee. Such notice


shall give the names, titles and addresses of the


designated members and alternates.





COPY 22


(c) At least fourteen (14) working days prior to each


scheduled Management Committee meeting, the


secretary shall provide an agenda of matters, with


briefs, to be considered during such meeting. Any Party


desiring to have other matters placed on the agenda


shall give notice to the other Party not less than seven


(7) working days prior to the scheduled meeting. No


other matter may be introduced into the agenda


thereafter for deliberation at the meeting unless


mutually agreed by the Parties. No agenda shall be


required In the event of an emergency meeting called


pursuant to Clause 7.4(b),


(d) Either Party may change any of its respective members


or alternates as described in Clause 7.3(b) from time to


• ;.;time by notifying the other Party in writing not less than


ten (10) days in advance of the effective date of such


change.


(e) The CORPORATION shall appoint one of its five (5)


members as the chairman of the Management


Committee and the CONTRACTOR shall appoint the


secretary. The secretary shall not be a member of the


Management Committee but shall keep minutes of all


meetings and records of all decisions of the


Management Committee. The minutes of each meeting


shall be approved by the Management Committee at


the next meeting and copies thereof shall be supplied


to the Parties, In addition, the secretary shall at each


meeting, prepare a written summary of any decision


made by the Management Committee for approval and


signature by the Parties.


7.4 (a) Not later than the twenty-eighth (28th) day of February


of each Year, the chairman shall prepare and forward to


the Parties, a calendar of meetings as agreed by the


Management Committee for that Year.


(b) The Management Committee shall meet at least once


every four (4) calendar months, or at such other


Intervals or venue as may be agreed by the


Management Committee and, In addition, whenever


requested by either Party by giving at least twenty-one


(21) days notice in writing to the other Party which


notice shall specify the matter or matters to be


considered at the meeting; or, when summoned by the


chalrman or by the CONTRACTOR as an emergency


meeting for which no specified notice period shall be


required.





(c) The quorum for any meeting of the Management


Committee shall consist of a minimum of three (3)


representatives of the CORPORATION and three (3)


representatives of the CONTRACTOR. The chairman or


his alternate and the CONTRACTOR'S designated lead


representative or his alternate must be present at every


Management Committee meetings fob a quorum to be





24








Signature.


Dote


 formed. If no such quorum is present, the chairman shall


call another meeting of the Management Committee


giving at least fourteen (14) days written notice of such


meeting.





(d) The secretary shall In consultation with the chairman


convene all meetings of the Management Committee


other than emergency meetings.


(e) Within eight (8) weeks after the submission of a Work


Programme and Budget by the CONTRACTOR, the


Management Committee shall meet to consider and


approve such submissions. Should the


CORPORATION wish to propose a revision as to


certain specific features of the said Work Programme


and Budget, it shall within eight (8) weeks after receipt


of such Work Programme and budget so notify the


CONTRACTOR in writing specifying In reasonable


detail the changes requested and its reasons thereof.


The Management Committee shall resolve the request


for revisions proposed by the CORPORATION. If the


CORPORATION has not proposed any revisions In


writing within eight (8) weeks, then the said Work


Programme and Budget as submitted shall be


approved by resolution of the Management Committee.


Any portion of a Work Programme about which the


CORPORATION has not proposed a revision shall in


so far as possible be carried out as prescribed therein.








CERT!FIBO/T^U£ COPY 25





FEDERAL hi a 4 COURT





B IM A


Signature


Date -...i


7.5 (a) Except as may be expressly provided for in this


Contract, the Management Committee shall determine


and adopt rules to govern Its procedures.


(b) Members attending a meeting of the Management


Committee may - be accompanied by advisers and


experts to the extent reasonably necessary to assist


' with the conduct of such meeting. Such advisers and


experts shall not vote or In any way participate In


decisions, but may contribute in a non-binding way to


discussions or debates of the Management Committee.


(c) Except as otherwise expressly provided In this Contract


all decisions of the Management Committee shall be


made by the unanimous vote of the Parties. If


unanimity is not obtained on any matter (including any


matter pertaining to a Work Programme or Budget


proposed by the CONTRACTOR) submitted to the


Management Committee, then the Management


Committee shall meet again to attempt to resolve such


matter not later than fourteen (14) days after the


meeting In which the proposed matter failed to be


resolved. Any portion of such proposal that.isresolved


shall In so far as possible be carried out At least seven


(7) days prior to such second meeting, the Party


casting the dissenting vote shall provide to the other


Party In writing in reasonable detail the reasons for


such dissenting vote. If such reasons are not provided


at least seven (7) days prior to such second meeting,





26


certified





Slgnature'





then the proposal shall be deemed approved. In such


second meeting the agenda shall comprise of such


written reasons as provided by the dissenting Party. If


unanimity Is not obtained in the second meeting, then


the Management Committee shall meet- a third time


within fourteen (14) days after the second meeting. If


unanimity is not obtained In the third meeting then the


CORPORATION and the CONTRACTOR may agree to


appoint an independent qualified expert to advise on


the matter, which advice shall be binding on the


Parties. In the event of failure of the Parties to agree to


the appointment of the said expert, the provisions of


Clause 24 shall apply.


(d) The Parties shall be bound by, and abide by, each


decision of the Management Committee duly made In


accordance with the provisions of this Contract.


7.6 Any matter which Is within the powers and duties of the


Management Committee may be determined by the


Management Committee without a Management Committee


meeting If such matter Is submitted In writing by either Party


to the other Party with due notice and wjth sufficient


Information regarding the matter to be determined so as to


enable the Parties to make an Informed decision with respect


to such matter, The other Party to whom the Information is


submitted shall agree in writing with the proposed request for


the said decision to be carried out subject further to the


provision of Clause 7.6(d) herein








federal high


Signature


(a) Except for urgent matters referred to in Clause 8.1(p),


each Party shall cast its vote with respect to such matter


within twenty-one (21) days of receipt of such notice and


such manner of determination shall be followed unless a


Party objects, within fourteen (14) days of receipt of


such notice, to having the matter determined in such


manner. If any Party fails to vote by the expiry of the


twenty-one (21) days period for voting, It shall be


deemed to have voted In the affirmative. The secretary


shall promptly advise the Parties of the results of such


vote and the secretary shall draft a resolution to be


signed as soon as possible by the Parties.


(b) Each Party shall nominate one of Its officers as its


representative from whom the other Party may seek


binding decisions on urgent matters, including, but not


limited to ongoing drilling operations, by e-mail, by


telephone, registered or hand delivered, letter, facsimile


transmission, or In person and advise each other In


writing of the persons so nominated and any changes


thereof.





(c) The decisions made pursuant to this Clause 7.6 shall


be recorded in the minutes of the next scheduled


meeting of the Management Committee, and shall be


binding upon the Parties to the same extent as if the


matter had been determined at a meeting of the


Management Committed V


 7.7 The Management Committee shall establish exploration and


technical sub-committees and any other advisory sub-





committees, as it considers necessary from time to time such


as finance and budget, and legal services sub-committees:


(a) Each sub-committee established pursuant to Clause


7.7 shall be given terms of reference and shall be


subject to such direction and procedures as the


Management Committee may give or determine.


(b) The Management Committee shall appoint the


members of the sub-committee, which shall be


comprised of equal representation from the Parties.


uh su. The chairman and the secretaries of the sub-


committees shall be appointed by the Management


Committee.


(c) The deliberations and recommendations of any sub-


committee shall be advisory only and shall become


binding and effective upon acceptance by the


Management Committee.





CLAUSE 8 ■ RIGHTS AND OBLIGATIONS OF THE PARTIES


8.1 In accordance with this Contract, the CONTRACTOR shall:





(a) provide all necessary funds for payment of Operating


Costs Including, but not limited to, funds required to








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FEDERAL HIGH/COUf^T- A CM


A R IJ fi/A


Signature -


Date


 provide all materials, equipment, supplies, and


technical requirements (including personnel)


purchased, paid for or leased in Foreign Currency;





(b) provide such other funds for the performance of Work


_ Programmes Including payments to third parties who


perform services In accordance with terms contained


therein as sub-contractors;


r, (c) prepare Work Programmes and Budgets and carry out


approved Work Programmes in accordance with


;.u. :.;<7 . - p Internationally acceptable petroleum industry practices


z, and standards with the objective of avoiding waste and


obtaining maximum ultimate recovery of Crude Oil at


minimum costs;


u-.. (d) ensure that all leased equipment paid for In Foreign


Currency and brought into Nigeria for Petroleum


T-.r Operations are treated in accordance with the terms of


the applicable leases;


(e) have the right of Ingress to and egress from the


Contract Area and to and from facilities therein located


at all times during the term of this Contract;


(f) submit to the CORPORATION for permanent custody


copies of all geological, geophysical, drilling, well


production, operating and other data and reports as It


may compile during the term hereof and at the end of





30


 the Contract surrender all original data and reports to


the CORPORATION;





(g) prepare estimated and final PPT returns and submit


same to the CORPORATION on a timely basis in


accordance with the PPT Act;


(h) have the right to lift in accordance with Annex D and


'freely export and to retain abroad the receipts from the


sale of Available Crude Oil allocated to it here under;


(i) prepare and carry out plans and programmes for


industry training and education of Nigerians for ali Job


classifications with respect to Petroleum Operations in


accordance with the Petroleum Act Cap 350 Laws of the


Federation of Nigeria 1990, as amended;


(j) - employ only such personnel as required to conduct the


Petroleum Operations in a prudent and cost effective


manner giving preference to Nigerian citizens;


(k) give preference to such goods which are available in


Nigeria or services that can be rendered by Nigerian


nationals, provided they meet the specifications and the


standards of the goods and services;





(I) the CONTRACTOR and its sub-contractors shall, as the


case may be, pay all customs duties and like charges as


are imposed by law In Nigeria, subject to the provisions


CERTIFIED 1P>- COPT


FEDERAL HIGIjj COUPJ.


A


□f this Contract, CONTRACTOR and its sub-contractors


shall not be treated differently from any other companies


and their sub-contractors engaged in similar Petroleum


Operations in Nigeria;


(m) indemnify and hold the CORPORATION harmless


against all losses, damages, injuries, expenses, actions


of whatever kind and nature Including but not limited to


legal fees and expenses suffered by any third party


where such loss, damage, Injury is as the result of


Gross Negligence of the CONTRACTOR or its sub-


contractors except where such losses are shown to


result from any action or failure to act on the part of the


CORPORATION.


(n) Indemnify and hold the CORPORATION harmless


against all losses, damages, injuries, expenses, actions


of whatever kind and nature suffered by the


CORPORATION where such loss, damage or injury is


as the result of Gross Negligence of the CONTRACTOR


or its sub-contractors except where such losses are


shown to result from any action or failure to act on the


part of the CORPORATION, provided however, that for


Gross Negligence, the CONTRACTOR shall not be


liable to the CORPORATION for any consequential


losses or consequential damages, Including lost


production or lost profits.


(o) determine with the CORPORATION the technical and


cost aspects of any field development under this


Contract and thereafter agree with the CORPORATION


on the development decision prior to the development of


a field in the Contract Area;








(p) not exercise all or any rights or authority over the


'■r>: Contract Area in derogation of the rights of the


CORPORATION;








(q) in the event of any emergency requiring Immediate


operational action, take all actions it deems proper or


advisable to protect the Interests of the Parties and any


costs so incurred shall be Included In the Operating


■- Costs. Prompt notification of any such action taken by


the CONTRACTOR and the estimated cost shall be


given to the CORPORATION within forty-eight (48)


thfc hours of the event. The notice shall be given to the


CORPORATION within forty eight (48) hours of when


the CONTRACTOR became aware of the event, if


CONTRACTOR can demonstrate to the satisfaction of


the CORPORATION that it was not aware of the event


at the time the event occurred. If the CORPORATION


• is not notified within the period of forty eight (48) hours,


then the CONTRACTOR shall be solely responsible for


the costs Incurred for such operational action between


the end of the forty eight (48) hour notice pejriod and the


actual time of receipt of the notice by the


CORPORATION; such costs shall not be recoverable as





CERTIFIED'fRVE COPY


FEDERAL HIGH COUR?


' A B 11 11 A_


Signature......1’0*1 ...


Date - - ! . ■/ . An ny <


 Operating Costs. If the CORPORATION is not provided


with a cost estimate within seven (7) days from the








event or from the date CONTRACTOR became aware


of the event, then the costs of such operational action


shall not be recoverable as Operating Cost;


(r) provide CORPORATION with a copy of the duly


executed Joint operating agreement between the


Contractor Parties within 30 days of its execution. If


CONTRACTOR executes a heads of agreement prior to


executing such joint operating agreement, a copy of it


will be provided to CORPORATION within thirty (30)


days of its execution;


(s) submit to the CORPORATION technical and economic


i?.r data, or other relevant information generated by the


Operator and furnished to CONTRACTOR relating to


the Contract Area, as and when required by the


:Cr CORPORATION, provided, however,CONTRACTOR


shall not be required to submit its Internal proprietary or


confidential information which are not directly related to


this PSC.








8.2 In accordance with this Contract, the CORPORATION shall:





(a) pay to the Government in a timely manner, all bonuses,


Royalties, Concession Rentals and PPT accruing out of


Petroleum Operations and indemnify and hold the


CONTRACTOR harmless against all losses, damages,








Signature- 34








pots-804”’








 expenses, actions of whatever kind and nature


including but not limited to legal fees and expenses





suffered by the CONTRACTOR as a result of any


failure to so timely pay;








(b) with its professional staff assigned pursuant to Clause


13 jointly work with the CONTRACTOR’S professional


staff in the Exploration, Petroleum Engineering,


Facilities/Material, Legal, Finance and Environmental


and Safety Departments and other areas in the


Petroleum Operations;





(c) assist and expedite the CONTRACTOR'S execution of


Petroleum Operations and Work Programmes


.cc c.. -•jr.piyinc m Including, but not limited to, assistance in supplying or


otherwise making available all necessary visas, work


..v .... • permits, rights of way and easements as may be


- : ? .C 7. *' • -zc.'.cv: requested by the CONTRACTOR (expenses incurred


:.O-, ai c- CObnRACTSr by the CORPORATION at the CONTRACTOR’S


request In providing such assistance shall be


reimbursed to the CORPORATION by the


CONTRACTOR In accordance with Clause 11.1


herein). The CONTRACTOR shall Include such


.... . reimbursements In the Operating Costs; which


reimbursement will be made against the


CORPORATION’S invoice and shall be in U.S. Dollars


computed at the rate of exchange published by the


Central Bank of Nigeria or the Federal Ministry of


Finance on the date the expense was Incurred);





CEPJ1FIE i’ COPY


H-'Gb/ COURT





Signet ur


(d) have the right to recover from CONTRACTOR all costs


approved by the Management Committee which are


reasonably incurred for purposes of Petroleum


Operations in the Contract Area;


(e) have title to all original data resulting from the


Petroleum Operations Including but not limited to


geological, geophysical, engineering, well logs,


completion, production, operations, status reports and


any other data as the CONTRACTOR may compile


during the term hereof, provided however, that the


CONTRACTOR shall keep and use such original data


during the term of this Contract and the


CORPORATION shall have access to such original


data during the term of this Contract;


(f) not exercise all or any of Its rights or authority over the


Contract Area In derogation of the rights of the


CONTRACTOR: and


(g) the CORPORATION shall apply for conversion of the


OPL to OML and shall exercise all the rights and


.-••• comply with all the obligations of the Licensee or


Lessee under the Petroleum Act Cap 350 Laws of the


Federation of Nigeria, 1990.














36


 CLAUSE 9 - RECOVERY OF OPERATING COSTS AND CRUDE


OIL ALLOCATION





9.1 The allocation of Available Crude Oil shall be In accordance


with the Accounting Procedure (Annex B), the Allocation


Procedure (Annex C) and this Clause 9 as follows:





(a) Royalty Oil shall be allocated to the CORPORATION in


, such quantum as will generate an amount of Proceeds








equal to the actual Royalty payable during each month


and the Concession Rental payable annually;


(b) Cost Oil shall be allocated to the CONTRACTOR in


such quantum as will generate an amount of Proceeds


sufficient for recovery of Operating Costs in OPL245


and any OML(s) derived therefrom after allocation of


Royalty Oil to the CORPORATION. All costs will be


recovered in U.S. Dollars through CostOil allocation;


(c) Tax Oil shall be allocated to the CORPORATION in


such quantum as will generate an amount of Proceeds


equal to the PPT liability payable during each month;


(d) If the quality of the seismic is approved by the


Management Committee, reasonable seismic


acquisition and processing costs confirmed by


Department of Petroleum Resources of the Ministry


and, committed to or incurred on the relevant OPL prior


to the Effective Date of this Contract shall be














■A


 recoverable and count toward satisfying the minimum


Work Programme.





(e) Profit Oil, being the balance of Available Crude Oil after


deducting Royalty Oil, Tax Oil, and Cost Oil, shall be





allocated to each Party pursuant to Schedule B-2


Section D of the Accounting Procedure (Annex B) as


follows:








Cumulative PROFIT OIL PERCENTAGES


Production (MMB) CONTRACTOR CORPORATIO





from Contract Area N


6-350 70 30


351-750 65 35


---. .... 751 -1000 52.5 47.5


1001 -1500 45 55


1501 - 2000 35 65


Greater than 2000 Negotiable








in the event of a discovery of a field which cannot be


economically developed at the above Profit Oil splits,





the Parties shall meet to agree on the appropriate


terms and conditions and Profit Oil splits which would


provide for the development pf such discovery to the


economic benefit of the Parties.





9.2 Each Party shall take In kind, lift and dispose of Its allocation


of Available Crude Oil in accordance with the Lifting








FED& 1 38








s,«nature





Date-


 Procedure (Annex D). In the event of any reconciliation, the


records of the Ministry of Petroleum Resources shall be the


official records.





9.3 Allocation of Royalty Oil and Tax Oil to the CORPORATION


shall be applied towards the liabilities of the CONTRACTOR








and the CORPORATION for Royalty, Concession Rentals,


and PPT and the Proceeds therefrom shall be paid to the


Government by the CORPORATION on behalf of both


Parties.


9.4 Either Party may at the request of the other, lift the other


Party's Available Crude Oil pursuant to Clause 9.2 and the


lifting Party within sixty (60) days shall transfer to the account


of the non-lifting Party the Proceeds of the sale to which the


non-lifting Party is entitled. Overdue payments shall bear


interest at the rate of one (1) month LIBOR plus two (2%)


percent


9.5 The CONTRACTOR may purchase any portion of the


CORPORATION'S allocation of Available Crude Oil from the


Contract Area under the CORPORATION'S terms and


conditions Including valuation and pricing of the Crude Oil as


applicable to third party buyers of the CORPORATION’S


Crude Oil.








9.6 The Parties shall meet on a monthly or quarterly basis to


reconcile all Crude Oil produced, allocated and lifted during


the period In accordance with Article III (7) of Annex D.


























i


 CLAUSE 10 - VALUATION OF AVAILABLE CRUDE OIL





10.1 Available Crude Oil allocated to each Party shall be valued In


accordance with the following procedures:


(a) On the attainment of commercial production, each


Party shall engage the services of an Independent


laboratory of good repute to determine the assay of the


new Crude Oil.





(b) When a new Crude Oil stream is produced, a trial


marketing period shall be designated which shall





extend for the first six (6) months period during which


such new stream is lifted or for the period of time


required for the first ten (10) liftings, whichever is


longer. During the trial marketing period the Parties


shall:





(I) collect samples of the new Crude Oil upon which


the assays shall be performed as provided in


Clause 10.1 (a) above;








(II) determine the approximate quality of the new


Crude Oil by estimating the yield values from


refinery modelling;





(lii) share in the marketing such that each Party


markets approximately an equal amount of the








40


 new Crude Oil and to the extent that one Party lifts


the other Party’s allocation of Available Crude Oil,


payments thereof, shall be made in accordance


with Clause 9.4;





(iv) provide. Information to a third party who shall


compile the information and maintain all individual





Party information confidential with regards to the


marketing of the new Crude Oil including


documents which verify the sales price and terms


of each lifting;








(v) apply the actual F.O.B. sales price to determine


the value for each lifting which F.O.B. sales pricing


for each lifting shall continue after the trial


marketing period until the Parties agree to a


valuation of the new Crude Oil but In no event


longer than ninety (90) days after conclusion of


the trial marketing period.








(c) As soon as practicable but In any event not later than


sixty (60) days after the end of the trial marketing


period, the Parties shall meet to review the assay, yield,


and actual sales data. Each Party may present a


proposal for the valuation of the new Crude Oil. A


valuation formula for the Realizable Price shall be


agreed to by the Parties not later than nine (9) months


after the first lifting. Such valuation formula shall be in


accordance with the Realizable Price provisions








CERTIFIED ZRUE COPY


FEDERAL FilGHI COURT





Signature.


Date.o*...


established by the Management Committee. It is the


intent of the Parties that such prices shall reflect the true


market value based on arm's length transactions for the


sale of the new Crude Oil. The valuation formula as


determined hereinbefore (including the product yield


values) shall be mutually agreed within thirty (30) days


of the aforementioned meeting failing which,


determination of such valuation shall be as provided in


Clause 10.2.


(d) Upon the conclusion of the trial marketing period, the


Parties shall be entitled to lift their allocation of Available


Crude OH pursuant to Clauss 9 and the Lifting


Procedure.


(e) When a new Crude Oil stream Is produced from the


Contract Area and is commingled with an existing Crude


Oil produced in Nigeria, which has an established


Realizable Price basis, then such basis shall be applied


to the extent practicable for determining the Realizable


. Price of the new Crude OH, The Parties shall meet and


mutually agree on any appropriate modifications to such


established valuation basis, which may be required to


reflect any change in the market value of the Crude Oils


as a result of commingling.


10.2 If in the opinion of either Party an agreed price valuation


method fails to reflect the market value of a Crude Oil


produced in the Contract Area, then such Party may propose














Signature





to the other Party modifications to such valuation method


once in every six (6) months but in no event more than twice





in any Year. The Parties shall then meet within thirty (30)


days of such proposal and mutually agree on any


modifications to such valuation within thirty (30) days from


such meeting, failing which, determination of such valuation


shall be referred to a mutually agreed independent expert for


his opinion.


10.3 Segregation of Crude Oils of different quality andfor grade


-shall be by agreement of the Parties taking into


consideration, among other things, the operational


practicality of segregation and the cost benefit analysis


. thereof. If the Parties agree on such segregation the


following provisions shall apply:





(a) Any and all provisions of the Contract concerning


valuation of Crude Oil shall separately apply to each





segregated Crude Oil produced;


(b) Each grade or quality of Crude Oil produced and


segregated in a given Year shall contribute Its


proportionate share to the total quantity designated In


such Year as Royalty Oil, Tax OH, Cost Oil and Profit


Oil.





CLAUSE 11 PAYMENT

















Signature i A Ml


Date


11.1 The method of payment of any sum due from the


CONTRACTOR to the CORPORATION and vice versa shall


be in accordance with the prevailing guidelines of the Federal


Ministry of Finance and of the Central Bank of Nigeria and in


accordance with the Accounting Procedure, Annex B.


11.2 Unless so otherwise provided herein, any payment which the


CORPORATION is required to make to the CONTRACTOR


or which the CONTRACTOR is required to make to the


CORPORATION pursuant to this Contract shall be made


within thirty (30) days following the end of the month In which


the obligation to make such payments occurs. Overdue


payments shall bear interest at the annual rate of one (1)


month LIBOR plus two (2%) percent.





11.3 Each Party shall have the right of set off against the other


Party for sums due and payable th the other Party under this


Contract agreed sums past due under this Clause, provided


that no set-off shall be made without prior notice of thirty (30)


days and written consent of the other Party.





CLAUSE 12 -TITLE TO EQUIPMENT/ABANDONMENT


12,1 The CONTRACTOR shall finance the cost of purchasing all


equipment to be used in Petroleum Operations in the


Contract Area pursuant to the Work Programme and such


equipment shall become the property of the CORPORATION


on arrival in Nigeria. The CONTRACTOR and the


CORPORATION shall have the right to use such equipment








CERCIFIE _


F£d£RaL/HIGH COU


• * i VfJ A /


 exclusively for Petroleum Operations in the Contract Area


during the term of this Contract Should the CORPORATION








desire to use such equipment outside the Contract Area,


such use shall be subject to terms and conditions agreed by


the Parties, provided that it Is understood that Petroleum


Operations hereunder shall take precedence over such use


by the CORPORATION. The CONTRACTOR shall only lease


equipment with the approval of the CORPORATION, such


approval not to be unreasonably withheld If such lease is in


the best interest of the Petroleum Operations.


12.2 The CONTRACTOR’S right to use such purchased


equipment shall cease with the termination or expiration


(whichever is earlier) of this Contract.


12.3 The provisions of Clause 12.1 with respect to the title of


■ property passing to the CORPORATION shall not apply to


' leased equipment belonging to local or foreign third parties,


and such equipment may be freely exported from Nigeria in


accordance with the terms of the applicable lease.


12.4 Title to all lands purchased or otherwise acquired by the


CONTRACTOR for the purposes of Petroleum Operations


and all movable property utilized in the Contract Area and


incorporated permanently In any premises, location and


structures for the purpose of Petroleum Operations


hereunder shall be In the name of the CONTRACTOR AND


CORPORATION. Upon cost recovery of the costs of such


property, the CORPORATION shall take full title of such








HIGH CCHJR.T


A B U/ ’ A











i


lands and property relating to Petroleum Operations under


the Contract on a “where is as is” basis. CONTRACTOR


shall hand over such lands and property within thirty (30)


days.


12.5 Subject to Clause 12.2 hereof, all fixed assets purchased or


otherwise acquired by the CONTRACTOR for the purposes


of Petroleum Operations hereunder shall become the


property of the CORPORATION. Upon termination of this


Contract pursuant to Clause 19 the CONTRACTOR shall


hand over possession of such fixed assets to the


CORPORATION.


12.6 During the term of this Contract, any agreed sales of


equipment, land, fixed assets, materials and machinery


acquired for the purpose of the Petroleum Operations


hereunder shall be conducted by the CONTRACTOR on the


basis of the highest price obtainable and the proceeds of


such sale shall be credited to the Petroleum Operations.


12.7 Abandonment








Abandonment costs will be estimated on a field basis and on


the basis bf technical studies by the CONTRACTOR to be


agreed by the Management Committee. The


CONTRACTOR shall either (I) provide security, with prior


approval of the CORPORATION which shall not be


unreasonably withheld, in the form of a standby letter of


credit or corporate or bank guarantee, or (II) set aside an





45


 abandonment fund in U.S. Dollars to be held in an interest-


bearing escrow account jointly established by the Parties at a


first class commercial bank. The bank so designated shall


have a long term rating of not less than “AA* by Standard and


Poor's Corporation or “Aa2" by Moody's Investor Service or a


comparable rating by another mutually agreed rating service.


Preference shall be given to banks in Nigeria possessing the


required rating,





The abandonment fund shall be set aside commencing at a


time and at a rate to be agreed by the Management








Committee. Such rate shall take into account the relationship


between the estimated total abandonment cost and the


anticipated production revenues, and shall be reviewed on an


annual basis as part of the budgeting process.


The abandonment fund shall be used solely for the purposes


of paying for decommissioning and abandonment operations.


No Party shall mortgage, pledge, encumber or otherwise use


such abandonment fund for any purpose whatsoever except


as expressly provided herein. The abandonment fund may be


invested only in investments approved by both Parties.


Any balance remaining in the abandonment fund after total


abandonment and cost recovery for al! fields in the Contract


Area shall revert to the CORPORATION.








CLAUSE 13 ■ EMPLOYMENT AND TRAINING OF PERSONNEL








cert/f/ed^rue. COPY


federal/h.’gh COURT ”





s/gnfltu/e.....





I


13.1 Each Calendar Year, the Operator shall submit a detailed


programme for recruitment and training for the following


Calendar Year in respect of the Nigerian personnel of


Operator in accordance with the Petroleum Act CAP 350


Laws of the Federation 1990 and a detailed account of the


attainment of the percentages of Nigerian employees


specified in Clause 13.3 (b)


13.2 Qualified Nigerians shall be employed in all non-specialized


positions.





13.3 (a) Qualified Nigerians shall also be employed in specialized


positions such as those in exploration, drilling,





engineering, production, environmental, safety, finance


etc. The OPERATOR shall have the right, subject to


applicable laws, rules and regulations, to employ non-


Nigerians in such specialized positions where qualified


Nigerians are not available provided that the OPERATOR


shall recruit and train Nigerians for such specialized


positions, such that the number of non-Nigerian staff shall


be kept to a minimum.








(b) The Operator shall ensure that:





(I) ten (10) Years from the Effective Date of this


Contract the number of citizens of Nigeria


employed by the Operator in connection with the


Petroleum Operations in managerial, professional


and supervisory positions shall reach at least


seventy five (75%) percent of the total number of


persons employed by Operator in those positions.











The Operator shal: further ensure that at the 15th


and 20th Year after the Effective Date of this


Contract, the minimum level of the total number


of Nigerian citizens engaged in Petroleum


Operations in managerial, supervisory and other


professional positions shall reach eighty (80%)


percent and eighty five (85%) percent


respectively; and


(ii) all skilled, semi-skilled and unskilled workers


employed by the Operator are citizens of Nigeria.


13.4 Pursuant to Clause 8.3(b) competent professionals of the


CORPORATION shall be assigned to work with the Operator


and such personnel and the Operator's personnel shall not be


treated differently with regards to salaries and other benefits.


Operator and CORPORATION shall mutually agree on the


numbers of CORPORATION'S staff to be assigned to the


Petroleum Operations. The costs and expenses of such


CORPORATION personnel shall be included in' Operating


Costs.


13.5 The Management Committee shall agree on the organization


chart of the Operator which shall include Nigerian and non-


Nigerian staff in key positions.








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13.6 No Nigerian employed under this Contract shall be


disengaged without the prior written approval by the Ministry





of Petroleum Resources or other designate:., government


agency; as may be required by applicable laws and


regulations. Request for such approval shall be made through


the CORPORATION.








CLAUSE 14 - BOOKS AND ACCOUNTS. AU C Ar

OVERHEAD CHARGES





14.1 Books and Accounts








The CONTRACTOR shall be responsible for keeping


complete books of accounts consistent with modern





petroleum industry and accounting practices and procedures.


The statutory books and accounts of this Contract shall be


kept in Naira and U.S. Dollars. All other books of accounts as


the CONTRACTOR may consider necessary shall be kept in


columnar form in both Naira and U.S. Dollars. Officials of the


CORPORATION and the CONTRACTOR shall have access


to such books and accounts. The accountants of


CORPORATION assigned pursuant to Clause 13 shall


participate in the preparation of same.





14.2 All statutory books of account shall be kept at the registered


address of the CONTRACTOR in Nigeria.





14.3 Audits




















A CM


(1) Books of Accounts


The CORPORATION shall have the right to Inspect and


audit the accounting records relating to this Contract for


any Calendar Year by giving thirty (30) days written


notice to the CONTRACTOR and the CONTRACTOR


shall facilitate the work of such inspection and auditing;


provided however that such inspection and auditing


shall be carried out within two (2) Calendar Years


following the end of the Calendar Year In question, and


If not, the books and accounts relating to such


Calendar Year shall be deemed to be accepted by the


Parties as satisfactory. Any exception must be made in


writing within ninety (90) days following the end of such


audit and failure to give such written notice within such


time shall establish the correctness of the books and


accounts.





(ii) The CORPORATION may undertake the inspection


and audit in Clause 14.3 (i) above either through Its


own personnel or through a qualified firm of chartered


accountants registered in Nigeria appointed for the


purpose by the CORPORATION; provided, however,


that the transportation and per diem costs of the


CORPORATION'S own personnel shall be borne by the


CONTRACTOR as general administrative costs and


shall be cost recoverable. For the qualified firm of


chartered accountants, the costs shall be borne by the


CORPORATION.


 (iil) Notwithstanding that the said period of two (2)


Calendar Years may have expired, If the





CONTRACTOR has been found guilty of Gross


Negligence, the CORPORATION shall have the right to


conductfurther audit to the extent required to


investigate such Gross Negligence in respect of any


earlier periods; provided, however, that the costs of


such investigations shall be borne by the


CORPORATION.








(iv) Materials





The CONTRACTOR shall maintain, physical and


accounting controls of materials in stock in accordance





with general practice In the International petroleum


industry. The CONTRACTOR shall make a total


Inventory at least once In a Calendar Year and shall


give the CORPORATION a four (4) week written notice


prior to such Inventory. The CORPORATION and or its


external auditors shall be entitled to observe such


Inventory. The CORPORATION may however carry out


partial or total check of such Inventories at its own


expense, whenever it considers necessary, provided


such exercise does not unreasonably disrupt Petroleum


Operations.





14.4 Home Office Overhead Charges


 The CONTRACTOR shall include the following percentages


on total annual capital expenditure as overhead charges in


calculating total Operating Costs:


First - $200 million 1 % of Capex


Next • $200 million 0.75% Capex


Next - $100 million 0.5% ofCapex


Above - $500 million 0%








CLAUSE 15 ■ ROYALTY AND TAXES


15.1 Royalty


Royalty .rates shall be as provided in the Petroleum Act, Cap


350, Laws of the Federation of Nigeria, 1990, as amended,


and the prevailing fiscal laws and regulations,





15.2 Petroleum Profits Tax (PPT)





(a) The PPT shall be In accordance with the Laws of the


Federation of Nigeria, 1990 as amended.


(b) The PPT rate applicable to the Contract Area shall be


fifty (50%) percent flat rate of the chargeable profits for


the duration of the Contract.


15.3 The CORPORATION shall pay all Royalty, Concession


Rentals and PPT on behalf of itself and the CONTRACTOR


out of Available Crude Oil allocated to it under Clause 9.1 of


this Contract.








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15.4 The Realizable Price established in accordance with Clause


10 of this Contract shall be used in determining the amount











payable on Royalty' and PPT in respect of Crude Oil


produced and lifted pursuant to this Contract. The


parameters for new Crude Oil streams produced from the


Contract Area shall also be determined in accordance with


the provisions of Clause 10 of this Contract.


15.5 The CORPORATION shall make available to the


CONTRACTOR copies of receipts Issued by the Federal


Inland Revenue Service bearing the name of the Party for the


payment made for PPT in accordance with each Party's Tax


Oil allocation as provided in Annex B Schedule B.1


CORPORATION shall provide to CONTRACTOR a copy of


the payment advice within thirty (30) days of issuance.


15.6 Investment Tax Allowance (ITA)


(a) The ITA shall be in accordance with the PPT Act Cap


354 Laws of the Federation of Nigeria, 1990 as


amended.








(b) The ITA rate applicable to the Contract Area shall be


fifty (50%) percent flat rate for the duration of this


Contract.





CLAUSE 16 ■ INSURANCE





BU





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Signature.!- XZ.....


Date-











I


fl


16.1 All property acquired under the provisions of this Contract


shall be adequately insured with an insurance company of


good repute by the CONTRACTOR in consultation with the


CORPORATION, in the names of the Parties, the premium


for such policies shall be included in Operating Costs. All


policies shall name the CORPORATION as a co-insured with


a waiver of subrogation rights in favour of the


CORPORATION.


16.2 In case of loss or damage to property, indemnifications paid


by the insurance companies shall be entirely received by the


CONTRACTOR for Petroleum Operations. The


CONTRACTOR shall determine whether the lost or damaged


property should be repaired, replaced or abandoned. If the


decision is to repair or replace, the CONTRACTOR shall


immediately replace or repair such lost or damaged property.


Any excess cost of repair or replacement above the amount


reimbursed by the insurance companies shall be regarded as


Operating Costs. If the decision Is to neither repair nor


replace then the proceeds of any coverage shall be credited


to Operating Costs. In the event that the loss or damage is


attributable to the CONTRACTOR'S Gross Negligence the


excess cost of replacement or repair shall not be reimbursed


as Operating Costs.


16.3 The CONTRACTOR shall take out and maintain an


insurance policy covering any and all damages caused to


third parties as a direct or Indirect result of the


CONTRACTOR'S Petroleum Operations.





53


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Signature .j


 16.4 All Insurance policies under this Clause 16 shall be based on


good international petroleum industry practice, and shall be





taken out in the Nigerian Insurance market except for those


concerning risks for which the CONTRACTOR cannot obtain


coverage in Nigeria which shall be taken out abroad, to the


extent requiredby law.








16.5 In entering into contracts with any sub-contractor for the


performance of Petroleum Operations, the CONTRACTOR





shall require such sub-contractor to take out adequate


insurance In accordance with Clauses 16.1 and 16.3 above


and to properly Indemnify the CORPORATION and the


CONTRACTOR for any damage done and to properly


Indemnify and hold the CORPORATION and the


CONTRACTOR harmless against claims from third parties.





16.6 The CONTRACTOR shall maintain other Insurance policies


required under Nigerian law.








CLAUSE 17 ■ CONFIDENTIALITY AND PUBLIC


ANNOUNCEMENTS





17.1 The CONTRACTOR and the CORPORATION shall keep


information furnished to eaoh other ln' Mnnect|on with





Petroleum Operations and all plans. maps, drawlngs,


designs, data, scientific, technical and financial reports and


other data and Information of anv UnH


„ , , ar|y kind or nature relating to


Petroleum Operations includinH


ud,n9 any discovery of petroleum






































r


as strictly confidential, and shall ensure that their entire or


partial contents shall under no circumstances be disclosed in


any announcement to the public or to any third party without


the prior written consent of the other Party.





The provisions of this Clause 17 shall not apply to disclosure


to:


(a) Subcontractors, Affiliates, assignees, auditors, financial


consultants or legal advisers, provided that such


disclosures are required for the effective performances


of the aforementioned recipients' duties related to


Petroleum Operations;


(b) Comply with statutory obligation or the requirements of


any governmental agency or the rules of a stock


exchange on which a Party’s stock is publicly traded In


■r which case the disclosing Party will notify the other


Party of any information so disclosed prior to such


disclosure.





(c) Financial institutions Involved In the provision of finance


for the Petroleum Operations hereunder provided, in all


such cases, that the recipients of such data and


i


information agree in writing to keep such data and


Information strictly confidential.


(d) A third party for the purpose of negotiating an


assignment of Interest hereunder provided such third


party executes an undertaking to keep the information


disclosed confidential.


17.2 The Parties shall take necessary measures In order to make


their employees, agents, representatives, proxies and sub-


contractors comply with the same obligation of confidentiality


provided for in this Clause I7.


17.3 The provisions of this Clause 17 shall terminate five (5)


Years after the expiration of this Contract.


17.4 The Parties shall use best endeavours to ensure that their


respective servants, employees, agents and sub-contractors


shall not make any reference in public or publish any notes in


newspapers, periodicals or books nor divulge, by any other


means whatsoever, any Information on the activities under


the Petroleum Operations, or any reports, data or any facts


and documents that may come to their knowledge by virtue


of this Contract, without the prior written consent of the other


Party.





17,5 The CONTRACTOR shall submit to the CORPORATION all


statutory reports and information for submission to


Government and other statutory bodies.





CLAUSE 18 - ASSIGNMENT





18.1 CONTRACTOR shall not sell, assign, transfer, convey or


rwise dispose of part or all of Its rights and Interest under


this Contract to other parties, including Affiliates, without a


prior written notice to and without prior written consent of the


CORPORATION which consent shall not be unreasonably


withheld.


18.2 If the written consent by the CORPORATION is given, the


assigning CONTRACTOR shall be relieved of its liability to


the extent of the assignment of its rights and obligations


under this Contract.


18.3 Any request for consent to assign or dispose as aforesaid,


made by the CONTRACTOR to the CORPORATION shall


include the deed of assignment and other relevant


information relating to financial and corporate standing of the


assignee, and Its capability to contribute to the Petroleum


Operations under this Contract.


CLAUSE 19-TERMINATION


19.1 The CORPORATION shall be entitled to terminate this


Contract If any of the following events occur:


(a) CONTRACTOR defaults in the performance of any of


its obligations set forth in Clause 8 herein;


(b) CONTRACTOR has failed to pay the Bonuses set out


In Clause 2 and/or fully execute the minimum Work


Programmes described In Clause 6.2;








CERi


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Signatu


 (c) CONTRACTOR assigns its rights and Interests under


this Contract without a prior written notice and prior











written consent of the CORPORATION;


(d) CONTRACTOR is adjudged insolvent or bankrupt by a


court of competent jurisdiction in Nigeria;


(e) CONTRACTOR liquidates or terminates its corporate


existence; or


(f) Warranties made by CONTRACTOR under Clause 23


herein are found to be untrue when made.


(g) If upon Completion under the terms of the Escrow


Agreement as agreed between the Parties and made


pursuant to clause 2.1. (b) hereof, the Escrow Cash or


any part thereof then outstanding is not paid into the


FGN Receiving Account as stipulated therein;


PROVIDED that such non payment is attributed solely


to any act or omission of the CONTRACTOR.





19.2 Termination for any of the events specified in Clause 19.1 (d)


and (e) above, shall be with Immediate effect and the


CORPORATION may by written notice to the


CONTRACTOR declare the Contract terminated as to the


CONTRACTOR.





19.3 If the cause for termination is an event specified in Clause


19.1(a) the CORPORATION shall give written notice thereof


 to CONTRACTOR to remedy such default within a period not


more than thirty (30) days of receipt of CORPORATION'S





notice or such additional days as the CORPORATION


deems appropriate in the circumstances. If upon the


expiration of the said period such default has not been


remedied or removed, the CORPORATION may by written


notice to the CONTRACTOR declare the Contract


terminated.








19.4 With the exception of such rights of the CONTRACTOR that


may have accrued prior to the date of termination,


CONTRACTOR’S rights shall cease upon the termination of


this Contract. Such termination shall take place without


prejudice to any other rights or remedies, which may be


available to either Party.








19.5 Without prejudice to all other rights of the CORPORATION


herein contained, CONTRACTOR shall upon the termination


of this Contract permit inspection, copying and auditing of Its


accounts and records for the Petroleum Operations.





19.6 Upon ninety (90) days notice, CONTRACTOR shall have the


right, at Its sole discretion, to relinquish Its rights and to


terminate this Contract without further obligations or


liabilities, provided It has satisfied the minimum Work


Programme provided in either Clause 6.2 (a) or Clause 6.2


. (b) or if a delay referred to in Clause 6.5 has continued for


more than a cumulative period of 12 months.





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 19.7 However, subject to Clause 6.5 herein this Contract shall


terminate if no petroleum is found in the Coriirc.wt Area aftei


ten (10) Years from the Effective Date and no OML Is issued.





CLAUSE 20 - FORCE MAJEURE


20.1 Any failure or delay on the part of either Party in the


performance of its obligations or duties under this Contract


shall be excused to the extent attributable to force majeure. A


force majeure situation Includes delays, defaults or Inability to


perforpi under this Contract due to any event beyond the


-reasonable contemplation or control of either Party. Such


event may be, but Is not limited to, any act, event, happening,


or occurrence due to natural causes; and acts or perils of


navigation, fire, hostilities, war (declared or undeclared),


blockage, labour disturbances, strikes, riots, Insurrection, civil


commotion, quarantine restrictions, epidemics, storms,


floods, earthquakes, accidents, blowouts, lightning, and, acts


of or orders of Government.


20.2 If Petroleum Operations are delayed, curtailed or prevented


by force majeure, then the time for carrying out the obligation


and duties thereby affected, and rights and obligations


hereunder, shell be extended for a period equal to the period


of such delay.


20.3 The Party who Is unable to perform its obligations as a result


of the force majeure shall promptly notify the other Party


thereof not later than forty-eight (48) hours after the


 establishment of the commencement of the force majeure,


stating the cause, and both Parties shall do all that is


reasonably within their powers to remove such cause.





20.4 The CONTRACTOR’S failure or inability to find Crude Oil in


commercial quantity for reasons other than as specified in


Clause 20.1 hereof shall not be deemed force majeure,








CLAUSE 21 ■ LAWS AND LANGUAGE


21.1 This Contract shall be governed by and construed in





accordance with the Laws of the Federation of Nigeria.


21.2 All affairs related to this Contract shall be conducted In the


language in which this Contract was drawn up.








CLAUSE 22 ■ NATURAL GAS


22.1 If the CONTRACTOR discovers a commercially viable


quantity of Natural Gas, the CONTRACTOR shall Investigate


and submit proposals for the commercial development of the


Natural Gas for the CORPORATION'S consideration. Any


cost in respect of such proposals or investigation shall be


Included in Operating Costs. For the commercial


development of Natural Gas, the CORPORATION and


CONTRACTOR shall enter Into a supplemental agreement.


Such agreement shall recognize that the CONTRACTOR has








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Signatur





 the right to participate in such development project, with the


right to recover the costs and share in the profits.








22.2 Notwithstanding the provisions of Clause 22 hereof, the


CONTRACTOR may utilize, at no cost any proportion of the


produced Natural Gas required as fuel for production


operations; gas recycling, gas Injection, gas lift, or any other


Crude Oil enhancing recovery schemes, stimulation of wells


necessary for maximum Crude Oil recovery In the field


discovered and developed by the CONTRACTOR and such


usage shall be with prior written consent of the


CORPORATION, which consent shall not be unreasonably


withheld.





22.3 The attainment of recovery of Crude Oil through an efficient,


economic and technically acceptable method shall always be


paramount In all decisions regarding associated Natural Gas.


However, prior to the commencement of production of Crude


Oil from the Contract Area, the CONTRACTOR shall submit


to the Minister, a programme for the utilization of any Natural


Gas associated with Crude Oil, which has been discovered


from the Contract Area.


CLAUSE 23 - REPRESENTATIONS AND WARRANTIES


23.1 In consideration of the CORPORATION entering Into this


Contract, the CONTRACTOR warrants as follows:


(a) The CONTRACTOR has the power to enter into and


perform this Contract and has taken ell necessary





action to execute, deliver and perform the Contract in


accordance with the terms herein contained and has


been granted all concessions, licenses, permits and


authorization on Petroleum Operations.


(b) The execution, delivery and performance of this


Contract by the CONTRACTOR will not contravene in


any respect, any of the provisions of:





(i) any law or regulations or order of any


governmental authority, agency or court


applicable to or by which the CONTRACTOR


may be bound;





(il) any mortgage, contract or other undertaking or


instrument to which the CONTRACTOR is a party


or which Is binding upon It or any of its respective


revenues or assets.





(c) Full disclosure has been made to the CORPORATION


prior to the Effective Date of all facts In relation to the


CONTRACTOR and its financial condition and affairs


as are material and should be made known to the


CORPORATION.








FEDEfiAA C0U





Signature.


Date. . 63





A^





 (d) That the CONTRACTOR together with its Affiliates has


the funds both in foreign and local currencies to carry


out Petroleum Operations under this Contract.


(e) The representations and warranties set out above shall


remain for the duration of this Contract.





CLAUSE 24 - CONCILIATION AND ARBITRATION ’


24.1 Where an independent expert is used, CORPORATION and


CONTRACTOR shall furnish the expert with all written


information, which he may reasonably require for his opinion.


The cost of the services of the expert, if appointed, shall be


shared equally between CORPORATION and


CONTRACTOR.


24.2 If a difference or dispute arises between the CORPORATION


and the CONTRACTOR, concerning the interpretation or


performance of this Contract, and If the Parties fail to settle


such difference or dispute by amicable agreement, then


either Party may serve on the other a demand for arbitration.


24.3 WHhln thirty (30) days of such demand being served, each


Party shall appoint an arbitrator and the two arbitrators thus


appointed shall within a further thirty (30) days appoint a third


arbitrator.lf the arbitrators do not agree on the appointment of


such third arbitrator, or if either Party falls to appoint the


arbitrator to be appointed by it, such arbitrator or third


arbitrator shall be appointed by the President of the Court of





66


CERTIFIEuSEC°‘-“'














 Arbitration of the International Chamber of Commerce (ICC)


in Paris on the application of the other Party (notice of the


Intention to apply having been duly given in writing by the


applicant Party to the other Party). The third arbitrator when


appointed shall convene meetings of the arbitration panel


and act as chairman. If an arbitrator refuses or neglects to


act or is incapable of acting or dies, a new arbitrator shall be


appointed in his place and the above provisions of appointing


arbitrators shall govern the appointment of any such new


arbitrator or arbitrators.





24.4 The arbitration award shall be binding upon the Parties. The


Nigerian Arbitration and Conciliation Act Cap 19, laws of the


Federation of Nigeria, 1990 shall apply to this Contract and


the Judgment upon the award rendered by the arbitrators may


be entered in a court having jurisdiction thereof. Each Party


shall pay Its own attorney’s fees and costs.


24.5 The venue of the arbitration shall be any where In Nigeria as


may be agreed by the Parties.


CLAUSE 25-EFFECTIVE DATE


25.1 This Contract shall come Into force and effect on the


Effective Date.


25.2 This Contract shall not be amended or modified in any


respect except by mutual consent, in writing, of the Parties .


hereto.


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 CLAUSE 26 ■ CHANGE in legislation


26.1 The Parties agree that the commercial terms and conditions


of this Contract are based on the existing fiscal terms in


accordance with the provisions of the Deep Offshore and


Inland Basin Production Sharing Contracts Act, 1999. If such


fiscal terms are changed, the Parties agree, subject to


Clause 26.3, to review the terms and conditions of this


Contract affected by such changes to align such terms and


conditions with the fiscal terms.


26.2 The terms of this Contract have been negotiated and agreed


having due regard to the terms of the Petroleum Profits Tax


Act, as amended by the Deep Offshore and Inland Basin


Production Sharing Contracts Act, 1999and any duties and/or


surcharges applicable to export of Crude Oil on the Effective


Date.


26.3 If at any time or from time to time there should be a change


In legislation or regulations which materially affects the


commercial benefits afforded the CONTRACTOR under this


Contract, the Parties will consult each other and shall agree


to such amendments to this Contract as are necessary to


restore as near as practicable such commercial benefits


which existed under the Contract as of the Effective Date.


 CLAUSE 27 ■ OPERATOR





Shell Nigeria Ultra Deep Limited is designated the Operator


under the Contract to execute the Petroleum Operations In


the Contract Area.


CLAUSE 28 - CONFLICT OF INTERESTS


28.1 Each Party represents and warrants that It did not engage


any person, firm or company as a commission agent for


purposes of this Contract and that It has not given or offered


to give (directly or indirectly) to any person any bribe, gift,


gratuity, commission or other thing of significant value, as an


inducement or reward for doing or forbearing to do any action


or take any decision in relation to the Contract, or for showing


or forbearing to show favour or disfavour to any person in


relation thereto.


28.2 Each Party further represents that it shall not either directly or


indirectly give to any parson, director, employee,


representative or agent of the other Party or any government


official any commission, fee rebate, gift or any entertainment


of significant cost or value, and shall not procure the services


of any commission agent or other third party to give any such


gift, fee, reward, concession, bribe, entertainment of


significant cost or value or anything of a similar nature, for


the purposes of Influencing or inducing positively or





CERTIFIED COPY


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Signature. 69





Date..,.


 adversely the award of the Contract or doing any act In


connection with the Contract.








CLAUSE 29 ■ NOTICES


29.1 Any notice required to be given by each Party to the other


shall be in writing and shall be deemed to have been duly


given and received If sent by fax, or registered post to, or


hand delivered at the following registered offices:








THE CORPORATION:


THE GROUP MANAGING DIRECTOR





NIGERIAN NATIONAL PETROLEUM CORPORATION


NNPC TOWERS


CENTRAL AREA, HERBERT MACAULAY WAY,


ABUJA.


Fax: 234-(09(-413-4760.


CONTRACTOR;


THE EXECUTIVE DIRECTOR


SHELL NIGERIA ULTRA DEEP LIMITED


21/22 MARINA


L^GOS


Fax: 234 1 264 5433





29.2 Each Party shall notify the other promptly of any change in


the above address.


IN WITNESS WHEREOF THE PARTIES herein have caused this


agreement to be executed the day and year first above written.








SIGNED AND DELIVERED for and on behalf of


NIGERIAN NATIONAL PETROLEUM CORPORATION





Name:











Designation: GROUP MANAGING DIRECTOR








In the presence of:





Name:


Signature:


Designation: '


Address: ................








SIGNED AND DELIVERED for and on behalf of


Shell Nigeria Ultra Deep Limited

















Designation: EXECUTIVE DIRECTOR





In the presence of:








Name:


 Signature:


Designation:


Address:











APPROVED BY THE HONOURABLE MINISTER





This .J22(^Oay


2002








Sign’at ure: ;o»>«yZ-••---' -------


Name:














Designation: PRESIDENTIAL ADVISER ON


PETROLEUM AND ENERGY, FOR AND





ON BEHALF OF MINISTER OF


PETROLEUM RESOURCES











In the presence of:





Name:


oXnation: ,
































73