This contract shall be executed in 3 originals in the Georgian language and 3 originals in the English language each of which shall have equal legal force and effect. In the case of dispute, conflict or arbitration the English version shall (after the Georgian version has been reviewed and its provisions discussed in good faith) be used as the authentic version to determine the rights and obligations of the parties which shall be determined by reference solely to the English version of this contract.
Any development plan shall also include an abandonment and site restoration program together with a funding procedure for such program. Each abandonment plan shall describe the measures necessary to return used areas to a condition that reasonably permits the use of such areas for purposes similar to those uses existing prior to the commencement of petroleum operations. All expenditures incurred in site restoration shall be recoverable from cost petroleum.
A baseline survey will be conducted on all fields that the joint venture Georgia MAKOIL will operate on before operations commence. The purpose of these surveys is to determine and record the current status of pollution, contamination and environmental awareness. A photographic library is a component of the survey.
An important part of any of Georgia MAKOIL operational planning is an environmental impact assessment (EIA). EIA includes the analysis of possible activity and determination of sensitive areas of the environment. The amount of risk is then quantified for each hazard that
has been identified.
The joint venture Georgia MAKOIL plans an integral program of environmental protection activities, including:
- Materials management to prevent adverse interreaction with the environment;
- Waste avoidance or recycling where possible;
- International standards training for the company personnel;
- Emergency response facilities to limit environmental damage authorization permits for any activities that may cause pollution.
JKX (Ninotsminda) Limited may utilize the water necessary for petroleum operations, on condition that reasonable efforts are taken to minimize potentially adverse effects on irrigation and navigation, and that land, houses and the watering places are not adversely affected. All such operations shall be carried out in accordance with international petroleum practices.
JKX (Ninotsminda) Limited shall be subject to the Law of Georgia on Taxation of Enterprises as enacted and in effect on the date of execution of the contract.
Georgian Oil (or its successors or assignees) shall assume, pay and discharge, in the name of each contractor party, that contractor party's profit tax liability for a calendar year out of Georgian Oil's 70% share of profit oil and profit natural gas for that calendar year. The Georgian oil profit oil and profit natural gas share will include an amount equal in value to all of the contractor parties' profit tax liabilities.
The obligation to assume, pay and discharge each contractor party's payment of profit tax (and only this tax) by Georgian Oil shall fulfill the entire tax liability of each contractor party.
إنتاج حصة - ملامح النفط الربح (مشغلات عن الاختلافات في انقسام - IRR، عامل، إنتاج، ... الخ)
Following recovery of costs and expenses from cost recovery petroleum, the remaining petroleum including any portion of cost recovery petroleum not required for recovery of costs and expenses shall be allocated between Georgian Oil and JKX (Ninotsminda) Limited in the following proportions, over each calendar year:
a) Profit Oil: Georgian Oil - 70%, JKX (Ninotsminda) Limited - 30%;
b) Profit Natural Gas: Georgian Oil - 70%, JKX (Ninotsminda) Limited - 30% after converting the natural gas to barrels of crude oil on an energy equivalency basis.
إنتاج حصة - ميزات النفط التكلفة (أساس الحساب، والقيود المفروضة على استرداد التكاليف - على سبيل المثال كنسبة مئوية من الدخل أو الإنتاج، والنفقات الرأسمالية رفع، وما إلى ذلك)
JKX (Ninotsminda) Limited and Georgian Oil shall be entitled to recover all costs and expenses incurred in respect of petroleum operations from a maximum of 50% per calendar year of all available crude oil and available natural gas from the contract area. Costs and expenses shall be recoverable from cost recovery petroleum on a first in, first out basis (i.e. costs and expenses incurred will be recovered according to the date they were incurred, earliest first). To the extent that in a calendar year outstanding recoverable costs and expenses related to the contract area exceed the value of all cost recovery crude oil or cost recovery natural gas, the excess shall be carried forward for recovery in the succeeding calendar years until fully recovered, but in no case after termination of the contract.
JKX (Ninotsminda) Limited shall be entitled to bring foreign personnel into Georgia in connection with the performance of petroleum operations. JKX (Ninotsminda) Limited, its affiliates, its subcontractors, agents or brokers however, shall enjoy full freedom in the selection and assignment of their employees.
JKX (Ninotsminda) Limited and/or Georgian British Oil Company shall have the right to clear the land, to dig, pierce, drill, construct, erect, locate, supply, operate, manage and maintain pits, tanks, wells, trenches, excavations, dams, canals, water pipes, factories, reservoirs, basins, maritime storage facilities and such, primary distillation units, separating units for first oil extraction, sulphur factories and other petroleum producing installations, as well as pipelines, pumping stations, generator units, power plants, high voltage lines, telephone, telegraph, radio and other means of communication (including satellite communication systems), plants, warehouses, offices, shelters, personnel housing, hospitals, schools, premises, ports, docks, harbors, dikes, jetties, dredges, breakwaters, underwater piers and other installations, ships, vehicles, railroads, road, bridges, ferry-boats, airlines, airports and other means of transportation, garages, hangers, workshops, foundries, maintenance and repair shops and all the auxiliary services which are necessary or useful to petroleum operations.
The government and Georgian Oil agree to secure access for JKX (Ninotsminda) Limited to any new or modernized pipelines or other infrastructure passing through Georgia which may be constructed or upgraded during the term of the contract on terms no less favorable than those available to others including Georgia Oil and any other government body. These provisions shall apply to any new or upgraded pipeline through Georgia which may be constructed or modernized by or on behalf of the consortium responsible for the development of the Azerbaijan Sector of the Caspian Sea ("AIOC") whether or not in conjunction with government and/or Georgian Oil, and in any agreement with AIOC or any entity connected therewith the government and/or Georgian Oil shall secure these benefits for JKX (Ninotsminda) Limited and Georgian Oil.
JKX (Ninotsminda) Limited may participate in the installation and operation of the pipeline(s) required to transport natural gas produced from the contract area to the market for such natural gas and share in any revenues generated from the use of said pipeline(s) by others.
Ownership of any asset, whether fixed or moveable, acquired by or on behalf of JKX (Ninotsminda) Limited in connection with petroleum operations shall vest in Georgian Oil without consideration when both the costs of such asset have been recovered by JKX (Ninotsminda) Limited under this contract and either the contract has come to an end or, if earlier, when the asset is no longer required for petroleum operations by JKX (Ninotsminda) Limited. JKX (Ninotsminda) Limited shall enjoy continued free, exclusive and unrestricted use of all assets at no cost or loss of benefit to JKX (Ninotsminda) Limited until the termination of this contract or if earlier until they are no longer required for petroleum operations.
JKX (Ninotsminda) Limited may participate in the installation and operation of the pipeline(s) required to transport natural gas produced from the contract area to the market for such natural gas and share in any revenues generated from the use of said pipeline(s) by others.
Georgian Oil and JKX (Ninotsminda) Limited agree that the operator shall be Georgian British Oil Company (GBOC). GBOC shall act as the designated non-profit agent of Georgian Oil and JKX (Ninotsminda) Limited for the conduct of petroleum operations.
JKX (Ninotsminda) Limited and Georgian British Oil Company (GBOC) shall have the right to use free of charge petroleum produced from the contract area to the extent required for petroleum operations under the contract. The amount of petroleum shall not exceed the amount which would be expected to be used in accordance with international petroleum industry practice.
The purpose of the first 3 year stage is to research the producing capacity of deposits on the license territory and to drill 2 horizontal and 1 vertical wells.
For the purpose of providing the overall supervision and direction of and ensuring the performance of the petroleum operations, Georgian Oil and JKX (Ninotsminda) Limited shall establish a coordination committee.
Georgian British Oil Company shall have the following obligations:
a) To perform the petroleum operations reasonably, economically and efficiently in accordance with directions received from the coordination committee.
b) To assist JKX (Ninotsminda) Limited as requested in implementation of the work programs and budgets approved by the coordination committee;
c) To be responsible for domestic procurement of installations, equipment and supplies and entering into subcontracts and service contracts on behalf of Contractor with domestic service providers and vendors related to the petroleum operations, in accordance with approved work programs and budgets and instructions from JKX (Ninotsminda)
The parties consent to submit to the International Centre for Settlement of Investment Disputes any dispute in relation to or arising out of this contract for settlement by arbitration pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.
It is agreed that, although JKX (Ninotsminda) Limited is a national of Cyprus, it is controlled by a national of the United Kingdom and shall be treated as a national of that state for the purposes of the Convention. A party need not exhaust administrative or judicial remedies prior to commencement of arbitrage proceedings. Any arbitrage tribunal constituted pursuant to this contract shall apply the provisions of this contract as supplemented and interpreted by general principles of the laws of Georgia and England as in force on the effective date.
Subject to the provisions of the contract, the parties agree that all information and data acquired or obtained by any party in respect of petroleum operations shall be considered confidential and shall be kept confidential and not be disclosed during the term of the contract to any person or entity not a party to this contract, except:
a) To an affiliate, provided such affiliate maintains confidentiality;
b) To a governmental agency or other entity when required by the contract;
c) To the extent such data and information is required to be furnished in compliance with any applicable laws or regulations, or pursuant to any legal proceedings or because of any order of any court binding upon a party;
d) To prospective or actual contractors, consultants and attorneys employed by any party where disclosure of such data or information is essential to such contractor's, consultant's or attorney's work;
e) To a bona fide prospective transferee of a party's participating interest (including an entity with whom a party or its affiliates are conducting bona fide negotiations directed toward a merger,
consolidation or the sale of a majority of its or an affiliate's shares);
f) To a bank or other financial institution to the extent appropriate to a party arranging for funding;
g) To the extent such data and information must be disclosed pursuant to any rules or requirements of any government or stock exchange having jurisdiction over such party, or its affiliates;
h) To its respective employees for the purposes of petroleum operations, subject to each party taking customary precautions to ensure such data and information is kept confidential; or
i) To the extent that any data or information which, through no fault of a party, becomes a part of the public domain.
Disclosure shall not be made unless prior to such disclosure the disclosing party has obtained a written undertaking from the recipient party to keep the data and information strictly confidential for at least 3 years and not to use or disclose the data and information except for the express purpose for which disclosure is to be made.
Any arbitrage tribunal constituted pursuant to this contract shall apply the provisions of this contract as supplemented and interpreted by general principles of the laws of Georgia and England as are in force on the effective date.
The government agrees and commits to JKX (Ninotsminda) Limited, for the duration of this contract, to maintain the stability of the legal, tax, financial, mining, customs and economic conditions of this contract.
If at any time after this contract has been signed there is a change in the applicable laws, regulations or other provisions effective within Georgia which to a material degree adversely affect the economic position of JKX (Ninotsminda) Limited, the terms and conditions of this contract shall be altered so as to restore JKX (Ninotsminda) Limited to the same overall economic position as that which it would have been in had this contract been given full force and effect without amendment.
To the extent that JKX (Ninotsminda) Limited's overall economic position is not restored through mutually agreed changes to the terms and conditions of this contract the government shall fully indemnify JKX (Ninotsminda) Limited against such economic effects through payment of financial compensation or other means acceptable to the contractor.
If JKX (Ninotsminda) Limited believes that its economic position has been adversely affected it may give notice to the government and to Georgian Oil describing how its position has been so affected. The parties shall then promptly meet with a view to reaching agreement on the remedial action to be taken. If matters have not been resolved within 90 days the matter may be referred to arbitration by any party.
Following adoption of any Georgian law on production sharing, this contract will be amended to comply with the provisions of that law provided that the economic and fiscal position of JKX (Ninotsminda) Limited under this contract shall not be adversely affected.