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PRODUCTION SHARING CONTRACT
BETWEEN
THE GOVERNMENT OF
REPUBLIC OF TAJIKISTAN,
represented by the
STATE AUTHORIZED BODY MINISTRY OF ENERGY AND
INDUSTRY OF THE REPUBLIC OF TAJIKISTAN,
and
KULOB PETROLEUM LIMITED
DATED
«
13
» June 2008
TABLE OF CONTENTS
* [Omitted]
PRODUCTION SHARING CONTRACT AND LICENSES
This Production Sharing Contract (“PSC” or “Contract”) is made and entered into as
of the 13 day of June 2008 by and between:
(1) Ministry of Energy and Industry of the Republic of Tajikistan as the duly
authorised representative of the State (as it is defined in article 1.67), pursuant to
the authority set out in Annex B, (hereinafter referred to as the “State” or the
“Ministry”) as the party of the first part; and
(2) Kulob Petroleum Limited, a company organised and existing under the laws of
the Bailiwick of Jersey, British Isles (registered number 97435), with registered
address at Pirouet House, Union Street, St Helier, Jersey JE4 8ZQ, British Isles ,
and its successors and assignees, if any, will individually be referred to as
“Contractor Party” and collectively referred to as “Contractor” or “Contractor
Parties”) as the party of the second part; and
The State, the Ministry, and the Contractor may sometimes be referred to as “Party”
and collectively as the “Parties”.
WITNESSETH:
WHEREAS, all Petroleum resources within the territory and under the internal waters
of Republic of Tajikistan are owned by the State;
WHEREAS, the State enters into this Contract wishing to promote the development
of the Contract Area and the Ministry and Contractor desire to join and assist in the
exploration, development and production of the potential resources within the
Contract Area;
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NOW, THEREFORE, in consideration of the promises and the mutual covenants and
conditions herein contained, it is hereby agreed as follows:
ARTICLE 1
DEFINITIONS
The following words and terms used in this Contract shall unless otherwise expressly
specified in this Contract have the following respective meanings:
1.1
“Accounting Procedure” means the accounting procedure set out in Annex
“C” hereto.
1.2
An “Affiliated Company” or “Affiliate” means:
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 2 of 27
a) with respect to a Contractor Party: a company, corporation, partnership or
other legal entity:
i)
in which a Contractor Party owns directly or indirectly more than fifty
percent (50%) of the shares, voting rights or otherwise has the right to
establish management policy; or
ii)
in which at least fifty percent (50%) of the shares or voting rights are
owned directly or indirectly by a company or other legal entity, which
owns directly or indirectly more than fifty percent (50%) of the shares,
voting rights or otherwise has the right to establish management policy
of a Contractor Party;
b) with respect to the State: any legal entity directly or indirectly controlled by
the State, respectively, or operating under their collective management. For
the purposes of this part of the definition, the term to “control” (including the
related terms “controlled” or “operates under collective management”) shall
mean with respect to any entity, having the right to carry out direct or indirect
supervision of such entity or to define a general scope of its activity based on
holding the shares entitled to vote, other form of ownership, or on any other
grounds.
1.3
“Annex” or “Annexes” means each or all of the Annexes “A”, “B”, “C”, “D”
attached to this Contract and made a part hereof. In the event of a conflict
between the provisions of an Annex and a term in the main body of this
Contract, the provisions of the latter shall prevail.
1.4
“Appraisal” means all works carried out by Contractor to evaluate and
delineate the commercial character of a Discovery of Petroleum in the
Contract Area.
1.5
“Appraisal Programme” means a work programme submitted by Contractor
under which Contractor plans to evaluate and delineate a Discovery of
Petroleum in the Contract Area.
1.6
“Associated Natural Gas” means all gaseous hydrocarbons produced in
association with Crude Oil, which Crude Oil itself can be commercially
produced and separated therefrom.
1.7
“Available Crude Oil” means Crude Oil produced and saved from the Contract
Area and not used in Petroleum Operations in accordance with Article 11.3.
1.8
“Available Natural Gas” means Natural Gas produced and saved from the
Contract Area and not used in Petroleum Operations in accordance with
Article 11.3.
1.9
“Barrel” means a quantity consisting of forty-two (42) United States gallons
liquid measure, corrected to a temperature of sixty degrees (60º) Fahrenheit
with pressure at sea level.
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 3 of 27
1.10
“Budget” means the estimate of the expenditures, listed category by category,
relating to Petroleum Operations and contained in any Work Programme
proposed by Contractor.
1.11
“Calendar Quarter” or “Quarter” is a period of three consecutive months
beginning on January 1st, April 1st, July 1st and October 1st of each Calendar
Year.
1.12
“Calendar Year” means a period of twelve (12) consecutive months beginning
on January 1st and ending on December 31st in the same year, according to the
Gregorian Calendar.
1.13
“Capital Expenditure” means Development Expenditure and Exploration
Expenditure.
1.14
*[definition of commercial terms omitted]
1.15
*[definition of commercial terms omitted]
1.16 “Contract” or “PSC” means this Production Sharing Contract together with all
attached Annexes and any variation, extension or modification hereto which may be
agreed in writing by all the Parties.
1.17
“Contract Area” means the area specified in Article 3 hereof and delineated in
Annex A, as reduced or enlarged from time to time in accordance with the
provisions of this Contract.
1.18
“Contract Year” means a period of twelve (12) consecutive months within the
term of the Contract.
1.19
“Contractor” means the Contractor Parties, their assignees and successors, as
provided herein.
1.20
*[definition of commercial terms omitted]
1.21
*[definition relating to financial terms omitted]
1.22
*[definition relating to financial terms omitted]
1.23
*[definition relating to financial terms omitted]
1.24
*[definition relating to financial terms omitted]
1.25
“Crude Oil” means crude mineral oil, asphalten, ozopherite and all kinds of
hydrocarbons whether in a solid, liquid or mixed state at the wellhead or
separator or which is obtained from Natural Gas through condensation or
extraction, including Condensate (“Condensate” means hydrocarbon liquid
separated from natural gas that condenses due to changes in the temperature,
pressure, or both, and remains liquid at standard conditions).
1.26
“Customs Duties” means all import (or export) tariffs and duties and other
mandatory payments as stipulated by applicable laws, regulations or other
legal measures of Republic of Tajikistan with respect to the import or export
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 4 of 27
of materials, equipment, goods and any other similar items used for the
purposes provided by the Agreement.
1.27
*[definition of financial terms omitted]
1.28
*[definition of financial terms omitted]
1.29
*[definition of financial terms omitted]
1.30
*[definition of financial terms omitted]
1.31
*[definition of financial terms omitted]
1.32
“Dollar” or “US$” means the lawful currency of the United States of America.
1.33
“Double Tax Treaty” means any international treaty or convention for the
avoidance of double taxation of income and/or capital which is applicable in
Republic of Tajikistan.
1.34
“Drilling Costs” shall mean all expenditures whether directly or indirectly
incurred during Exploration and Development for well drilling, completing
and reworking operations including, but not limited to, labour, geological
design, engineering and other Subcontractors (including all fees, tariffs and
charges payable to any such Subcontractors), material and equipment
consumed or lost, perforation, formation testing, cementing, well-logging and
transportation.
1.35
“Effective Date” means the date on which this Contract has been duly signed
and executed by all Parties.
1.36 “Excess Associated Natural Gas” is defined as set forth in Article 16.1.b.
1.37 “Excess Crude” is defined as set forth in Article 11.15.
1.38 “Exploration” or “Exploration Operations” means operations conducted under
this Contract in connection with the exploration for previously undiscovered
Petroleum, or the evaluation of discovered reserves which shall include
geological, geophysical, aerial and (other survey) activities and any
interpretation of data relating thereto as may be contained in Exploration
Work Programmes and Budgets, and the drilling of such shot holes, core
holes, stratigraphic tests, Exploratory Wells for the discovery of Petroleum,
Appraisal wells and other related operations.
1.39
*[definition of financial terms omitted]
1.40
“Exploratory Well” means any well drilled with the objective of confirming a
structure or geologic trap in which Petroleum capable of Commercial
Production in significant quantities has not been previously discovered.
1.41
“Field” means a Petroleum reservoir or group of reservoirs within a common
geological structure or feature. “Field” may be an “Oil Field” or a “Natural
Gas Field”.
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 5 of 27
1.42
*[definition of financial terms omitted]
1.43
“Force Majeure” is defined as set forth in Article 25.2.
1.44
“Foreign Employee” is defined as set forth in Article 17.11
1.45
“Foreign Subcontractors” means Subcontractors which are organised outside
of Tajikistan.
1.46
“Gas Sales Contract” is any contract to be entered into for the sale of Nonassociated Natural Gas in accordance with the provisions of Article 16.2.
1.47
Operator (Operating company) means the company defined in Article 2.8 or as
subsequently amended in accordance with Article 2.8.
1.48
“Contractor Licence” is the “Licence” issued to the Contractor by the
appropriate authority of the Republic of Tajikistan, giving the exclusive rights
to the exploration for and production of Petroleum in the Contract Area,
according to Republic of Tajikistan Law.
1.49
“LIBOR” means the three (3) months U.S. Dollars London Interbank fixing
offer rate quoted daily in the London Financial Times.
1.50
“Marketing Team” is defined as set forth in Article 16.2.a.ii.
1.51
“Measurement Point” means the location specified in an approved
Development Plan where the Petroleum is metered and delivered to the
Parties.
1.52
“Month” or “Calendar Month” means a calendar month.
1.53
“Natural Gas” means Non-associated Natural Gas and Associated Natural Gas
in their natural state.
1.54
“Natural Gas Field” means a field from which more than fifty (50) percent of
the estimated reserves on an energy equivalency basis are Natural Gas at
surface conditions.
1.55
“Non-associated Natural Gas” means all gaseous hydrocarbons produced from
gas wells, and includes wet gas, dry gas and residue gas remaining after the
extraction of liquid hydrocarbons from wet gas.
1.56
“Oil Field” means a field from which more than fifty (50) percent of the
estimated reserves on an energy equivalency comprise Crude Oil.
1.57
*[definition of financial terms omitted]
1.58
“Party” or “Parties” means the parties whose authorised representatives have
affixed their signatures hereto.
1.59
“Payment Date” has the meaning as defined in 11.10.
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 6 of 27
1.60
“Petroleum” means Crude Oil and Natural Gas.
1.61
“Petroleum Operations” means the Exploration Operations, the Development
Operations, Production Operations, and transportation, export and other
activities related thereto carried out pursuant to this Contract, and “Petroleum
Operations Expenditures” means all costs incurred by the Contractor Parties in
connection with the Exploration Operations, the Development Operations,
Production Operations, Finance Costs, transportation, export and other
activities related thereto carried out pursuant to this Contract.
1.62
*[definition of financial terms omitted]
1.63
“Production” or “Production Operations” means operations and all related
activities carried out for Petroleum production after the approval of any
Development Plan, including without limitation extraction, injection,
stimulation, treatment, transportation, storage, lifting, and associated
operations, but does not include any storage or transportation beyond the
Measurement Point.
1.64
*[definition of financial terms omitted]
1.65
*[definition of financial terms omitted]
1.66
*[definition of financial terms omitted]
1.67
“State” or “Government” means the Government of Republic of Tajikistan and
all political or other agencies or instrumentalities or subdivisions thereof
including but not limited to any local government bodies or other
representative, agency or authority, which has the authority to govern,
legislate, regulate, levy and collect taxes or duties, grant licences, permits,
approve or otherwise impact (whether financially or otherwise) directly or
indirectly upon any of the Parties’ rights, obligations or activities under the
Contract; the word “Governmental” shall be construed accordingly.
1.68
*[definition of financial terms omitted]
1.69
*[definition of financial terms omitted]
1.70
“Subcontractor” means any natural person or juridical entity contracted
directly or indirectly by or on behalf of Contractor to supply goods, works or
services related to this Contract.
1.71
“Tax Inspectorate” is defined as set forth in Article 17.10.
1.72
“Third Party” or “Third Parties” means one or more of a natural person or
juridical entity other than a Party hereto and any Affiliate of a Party.
1.73
“Taxes” means all levies, duties, payments, fees, taxes or contributions
payable to or imposed by State agencies, State subdivisions or republican,
local authorities and self-governing authorities of Republic of Tajikistan.
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 7 of 27
1.74
“VAT” means Tajikistan value added tax or any sales taxes.
1.75
“Work Programme” and “Work Programme and Budget” shall mean any work
programme and work programme and Budget to be submitted to the
Coordination Committee by the Contractor in accordance with the provisions
of Article 10 and which shall set out the proposed Petroleum Operations to be
carried out in the Contract Area together with the associated Budget as the
case may be.
ARTICLE 2
SCOPE OF CONTRACT AND GENERAL PROVISIONS
2.1
By its approval of this Contract the State authorised body hereby ratifies that
all required to Contractor Licences will be issued according to the current
Laws of Republic of Tajikistan.
2.2
Subject to the terms and conditions of the Contract, the State hereby grants to
the Contractor Parties the exclusive rights to conduct Petroleum Operations in
the Contract Area during the term of this Contract.
2.3
The Contractor shall be responsible to the State for the execution of such
Petroleum Operations with Operator acting as operator all in accordance with
the provisions of the Contract.
2.4
In performing Petroleum Operations, Contractor shall provide all financial and
technical requirements, unless otherwise provided in this Contract, or agreed
with the State, and conduct all operations in accordance with the standards
generally accepted in the international Petroleum industry.
2.5
Contractor shall be compensated for its services, not by way of reimbursement
in cash of its expenditures under the Contract, but by receipt of its share of
Petroleum from the Contract Area to which it may become entitled by way of
recovery of Costs and Expenses from Cost Recovery Petroleum under Article
11.
If share due to the Contractor in accordance with this Agreement
Petroleum produced from Development Areas within the Contract Area
developed by Contractor is insufficient to reimburse Contractor for Costs and
Expenses incurred by Contractor, Contractor shall bear its own losses in
respect of any shortfall.
2.6
This Contract defines the Parties’ rights and obligations, governs their mutual
relations and establishes the rules and methods for the Exploration,
Development, Production, and sharing of Petroleum between them. The entire
interests, rights and obligations of each of the Parties under this Contract shall
be solely governed by the provisions of this Contract. The Contractor and the
Ministry may as between themselves, agree in writing to amend any provision
of this Contract where to do so would, in the opinion of both the Contractor
and the Ministry improve the day to day operations contemplated hereunder,
but not so as to vary any fundamental provision of this Contract.
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 8 of 27
2.7
During the period in which this Contract is in force, all Available Crude Oil
and Available Natural Gas resulting from Petroleum Operations, will be
shared between the Ministry (or its designated representative) and the
Contractor in accordance with the provisions of Article 11 of this Contract.
2.8
The Operator (Operating company) for Petroleum Operations shall be a
Petroleum Operating Company established by the Contractor in accordance
with the legislation of Republic of Tajikistan and may be changed by the
Contractor with the consent of the Ministry. Such consent can not be
unreasonably withheld. In case if no decision (consent) of the Ministry is
given in the course of forty-five (45) days after the Ministry is informed by the
Contractor the appointment of operator shall be deemed as effected. It is
hereby agreed that the first Operator shall be Tethys Services Tajikistan
Limited, a company organised and existing under the laws of the Republic of
Tajikistan (registration number 001- 4472) and with current offices at 37/1,
Bokhtar Street, Dushanbe, Tajikistan.
ARTICLE 3
CONTRACT AREA
3.1
The Contract Area is as set out by the geographic location and coordinates
described in Annex “A” attached hereto and delineated in the map which
forms part thereof. The total area of the Contract Area may hereafter be
reduced only in accordance with the provisions of this Contract upon consent
of the Parties.
3.2
Except as for all rights and authorisations necessary for the implementation of
the provisions of this Contract, no right is granted in favour of the Contractor
or the Ministry to the use or disposal of any other natural or man-made
resources or aquatic resources with the exception of aquatic resources used
directly in Petroleum Operations”.
3.3
*[description of commercial terms omitted]
ARTICLE 4
CONTRACT TERM
4.1
The term of this Contract shall commence on the date of signing and on that
date the Contract becomes fully effective (the “Effective Date”) and exclusive
Petroleum Operations by the Contractor on the Contract Area may commence
and shall continue for a total of twenty-five (25) consecutive Contract Years,
unless the Contract is sooner terminated in accordance with Article 29 of this
Contract. If not already issued the State undertakes to ensure that any further
governmental consents, licences, approvals and permissions required by the
Contractor or the Operator are issued within thirty (30) days of the Contract
Effective Date.
4.2
If in respect of any Development Area, Commercial Production remains
possible beyond the initial period of 25 consecutive Contract Years specified
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 9 of 27
in Article 4.1 or any extension provided under this Article, the Contractor,
after giving notice to the State at least one (1) year prior to the end of any such
term shall automatically be entitled to have an extension of the term of this
Contract with respect to such Development Area for an additional term of not
less then 5 years or the producing life of the Development Area.
ARTICLE 5
*[description of commercial terms omitted]
ARTICLE 6
*[description of commercial terms omitted]
ARTICLE 7
OPERATOR RESPONSIBILITY
7.1
The Parties agree that the Operator shall act as the Operator for Petroleum
Operations within the Contract Area in accordance with approved Work
Programmes and Budgets unless otherwise stipulated in this Article 7.
7.2
The Operator shall have the following obligations:
7.3
a)
to perform the Petroleum Operations reasonably, economically and
efficiently
b)
to conduct (implement) the Work Programmes and Budgets approved ;
c)
to be responsible for purchasing facilities, equipment and
miscellaneous material and enter 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 Programmes and Budgets and instructions from
Contractor;
d)
describes commercial obligations ;
e)
to establish and maintain complete and accurate accounting records
regarding its costs and expenditures for the Petroleum Operations in
accordance with the Accounting Procedure and this Contract;
f)
describes commercial obligations;
g)
as above .
Operator and Contractor, and their direct and indirect shareholders, shall not
be responsible for any activities (including Petroleum activities) affecting the
Contract Area prior to the date of the Operator’s Licence and the results of
such activities.
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 10 of 27
7.4
The Operator shall provide all Parties with copies of all relevant data and
reports pertaining to Petroleum Operations (including but not be limited to
geophysical, geological, technological, operational, accounting or other
material) required by such Parties.
ARTICLE 8
OPERATOR OBLIGATIONS AND REQUIREMENTS
8.1
The Contractor will ensure that the Operator acts in accordance with
International oil and gas field standards and good oilfield practices.
8.2
*[description of commercial obligations omitted]
ARTICLE 9
9.1
*[description of commercial activities omitted]
ARTICLE 10
ANNUAL WORK PROGRAMMES AND BUDGETS
10.1
Contractor shall be responsible for the procurement of installations, equipment
and supplies and entering into contracts for the purchase of goods and services
with Foreign Subcontractors and others arising out of Petroleum Operations,
all in accordance with approved Work Programmes and Budgets. Operator
shall assist the Contractor when requested in respect of the matters set out in
the previous sentence, and shall implement domestic procurement operations
as provided in Clause 7.2(c) in accordance with approved Work Programmes
and Budgets.
10.2
*[description of commercial obligations omitted]
10.3
*[description of commercial obligations omitted]
10.4
*[description of commercial obligations omitted]
10.5
*[description of commercial obligations omitted]
10.6
*[description of commercial obligations omitted]
10.7
*[description of commercial obligations omitted]
ARTICLE 11
11.1
In accordance with requirements of part 1 Article 10 of the Law of
Republic of Tajikistan “On Production Sharing contracts” Contractor shall
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 11 of 27
provide or procure the provision of all funds required to conduct Petroleum
Operations under this Contract, and Contractor shall be entitled to recover its
Costs and Expenses (Petroleum Operations Expenditures) from Petroleum
produced from the Contract Area as provided below.
11.2
*[description of commercial terms omitted]
11.3
Contractor and Operator 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 which Contractor
and Operator shall be entitled to use for Petroleum Operations shall not exceed
the amount which would be expected to be used in accordance with
international Petroleum industry practice. For the avoidance of doubt, the use
of such Petroleum shall only be for the benefit of Petroleum Operations and
not the personal gain of any Party. An appropriate paper shall also be executed
for the use of such Petroleum.
11.4
Available Crude Oil and Available Natural Gas shall be measured at the
applicable Measurement Point and allocated as set forth hereinafter.
*[description of financial terms omitted]
11.6
*[description of financial terms omitted]
11.7
*[description of financial terms omitted]
11.8
*[description of financial terms omitted]
11.9
*[description of financial terms omitted]
11.10 *[description of financial terms omitted]
11.11 *[description of financial terms omitted]
11.12 *[description of financial terms omitted]
11.13 For the avoidance of any doubt, title to their relevant shares of Petroleum shall
pass from the State to the Ministry and each Contractor Party as appropriate at
the Measurement Point. The Operator has no title to any Petroleum.
11.14 The Ministry and Contractor shall agree on procedures for taking volumes of
Crude Oil corresponding to their respective entitlements on a regular basis and
in a manner that is appropriate having regard to the respective destinations and
uses of the Crude Oil, all in accordance with the provisions of this Contract. If
necessary the Ministry and Contractor will enter into a lifting agreement
consistent with this Contract setting out the agreed procedures for taking
volumes of Crude Oil, and such agreement shall comply with the principles of
accepted international Petroleum Industry practice.
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 12 of 27
11.15 The Contractor Parties shall have the free right to export, without hindrance,
its share of Crude Oil and Natural Gas from Republic of Tajikistan without the
imposition of any export duties, taxes, rents, customs fees or similar, and shall
be able to freely sell its share of Petroleum to any organisation, corporation or
individual whether resident in Republic of Tajikistan or not, and to receive
payment for this Petroleum wheresoever and in what form and currency it
wishes. No VAT or sales taxes shall be chargeable on sales of the Contractor
Parties share of Petroleum whether such sales are to the domestic market or
for export.
ARTICLE 12
12.1
*[description of financial terms omitted]
12.2
*[description of financial terms omitted]
12.3
*[description of financial terms omitted]
ARTICLE 13
ANCILLARY RIGHTS OF THE CONTRACTOR AND OPERATOR
13.1
In addition to the rights to carry out Petroleum Operations within the Contract
Area the State and the Ministry shall provide or otherwise procure in
accordance with existing legislation of Republic of Tajikistan access to
Contractor and Operator to all existing facilities and infrastructure in the
Contract Area and within Republic of Tajikistan owned by the State or the
Ministry for the purpose of carrying out its Petroleum Operations during the
term of the Contract. Such facilities and infrastructure would include, but not
be limited to, oil, gas and product pipelines, oil and gas processing facilities,
oil and gas storage facilities, rail loading facilities, and similar. Such access
shall be on terms as regards access and tariffs no less favourable than those
offered to other persons or entities, either State or otherwise, both within
Republic of Tajikistan and with regard to interstate contracts.
13.2
The Contractor and Operator shall have the right to use, produce, reprocess
and export all existing geoscience, engineering, environmental and geodetic
data (including magnetic tapes and films) maps, surveys, reports, and studies it
deems necessary to carry out Petroleum Operations in accordance with
existing legislation of Republic of Tajikistan hereunder including, but not
limited to: magnetic surveys, seismic surveys, well logs and analysis, core
analysis, well files, geologic and geophysical maps and reports, reservoir
studies, reserve calculations, accurate geodetic coordinates for the location of
all wells and seismic lines and all other pertinent data relative to the Contract
Area. The State will give all assistance to the Contractor to retrieve and gain
access to such data.
In accordance with existing legislation of Republic of Tajikistan The
Contractor shall have the right to conduct all geoscience, engineering,
13.3
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 13 of 27
environmental and geodetic studies it deems necessary to carry out Petroleum
Operations under the Work Programme. Said studies may include, but are not
limited to: seismic surveys, magnetic surveys, global positioning surveys,
aerial photography (obtaining relevant permits), collection of
soil/water/oil/rock samples for scientific and environmental studies and
geological field studies. Contractor shall be granted access to and/or
permission to fly subject to obtaining appropriate consents (which will not be
unreasonably withheld or delayed) over the Contract Area to conduct said
studies. Contractor shall have the right to import equipment and supplies
necessary to conduct said studies as well as the right to export data, film and
all samples to laboratories outside Republic of Tajikistan to conduct such
studies.
13.4
describes commercial obligations
the Contractor and/or Operator 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, underwater piers and other installations, means of
transportation, roads, bridges, and other means of transportation, garages,
hangers, workshops, maintenance and repair shops and all the auxiliary
services which are necessary or useful to Petroleum Operations or related to
them and, more generally, everything that is or could become necessary or
accessory to carry out the Petroleum Operations but for the avoidance of any
doubt in accordance with the relevant law of Republic of Tajikistan.
13.5
The agents, employees and personnel of both Contractor and Operator, or
Subcontractors, may enter or leave the Contract Area and have free access,
within the scope of their functions, to all installations put in place by the
Contractor or Operator or otherwise utilised in Petroleum Operations.
13.6
Subject to prior consent of any appropriate local State bodies and the relevant
landowners the Contractor shall have the right to utilise the upper soil, mature
timber, clay, sand, lime, salt, gypsum and stones with exclusion of precious
and semiprecious stones, gems, ore materials and other mineral deposits for
the production and exploration of which a separate licence (permission) is
required, and any other similar substances, necessary for the performance of
Petroleum Operations in accordance with the current legislation of the
Republic of Tajikistan. The Contractor may utilise the water necessary for
Petroleum Operations, on condition that reasonable efforts are taken to
minimise potentially adverse effects on irrigation and navigation, and that
land, houses and the watering places are not adversely affected.
13.7
The Contractor shall have the right to use existing pipeline and terminal
facilities belonging to or under the control of the State or the Ministry. The
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 14 of 27
State and the Ministry shall assist in making these facilities available to the
Contractor on terms with regard to access and tariffs that are no less
favourable than those available to others including the Ministry and any other
State enterprise. Priority shall be given in the use of such pipelines and
facilities to Petroleum produced within Republic of Tajikistan.
ARTICLE 14
*[description of the State’s obligations omitted]
ARTICLE 15
15.1
*[description of commercial terms omitted]
ARTICLE 16
*[description of commercial terms omitted]
ARTICLE 17
TAX/FISCAL REGIME
17.1
This Article shall apply to each Contractor Party individually.
17.2
Each Contractor Party, Foreign Subcontractor, Foreign Employee and
Operator shall be entitled to full and complete exemption from Taxes
according to the Tax Code of the Republic of Tajikistan prior to or after the
Effective Date of this Agreement except as otherwise provided for in this
Contract.
17.3
It is acknowledged that Double Tax Treaties will have effect to give relief
from Taxes to, but not limited to, Contractor, Contractor Parties, Foreign
Subcontractors and Foreign Employees if such Treaties exist.
17.4
It is acknowledged that, if this Contract was not in force, each Contractor
Party may be normally subject to taxes related to the mineral extraction
industry in accordance with the taxation code of Republic of Tajikistan.
17.5
Given that this Contract is in force, then taxes, levies, duties, rents and other
similar payments and liabilities to the State and local authorities to which the
Contractor Parties may be liable will be paid, assumed and discharged by the
Ministry, its assignees, divisions or other entities receiving the State share of
Petroleum in accordance with Article 17.6 herein. For the avoidance of doubt,
the Contractor Parties shall be entitled to full and complete exemption from
taxes, levies, duties, rents, fees and other similar payments to the State and
local authorities according to the Tax Code of Republic of Tajikistan valid on
the effective date of this Agreement, and that the State’s share of Petroleum is
full compensation for this exemption.
17.6
The Ministry, its successors or assignees, will assume, pay and discharge, in
the name and on behalf of each Contractor Party (and if necessary the
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 15 of 27
Operator), any road tax liability, mineral usage tax liability, production tax
liability or any other Tajik tax liability, according to the Tax Code of Republic
of Tajikistan, out of the Ministry’s share of Profit Oil and Profit Natural Gas.
The Ministry Profit Oil and Profit Natural Gas share as determined by Article
11 of this Contract is therefore implied to include an amount equal in value to
all of the Contractor Parties’ (and Operator’s) potential tax liabilities.
17.7
The Ministry, on behalf of the State, will cause to be issued to the Contractor
Parties (and Operator) by the appropriate State tax bodies, before 1st April of
each year, an annual statement of all taxes imputed to have been paid by the
Ministry on behalf of the Contractor Parties, in such a form that the statement
would reasonably be accepted by foreign authorities operating a Double Tax
Treaty with the Republic of Tajikistan.
17.8
The Ministry shall not credit, directly or indirectly, Contractor Parties’ tax
payments against the Ministry’s tax or any other payments to the Government
or the treasury of the Republic of Tajikistan required from the Ministry.
17.9
The Ministry shall assume, pay and discharge any penalties, interest, fines or
similar levies for late payment of a Contractor Party’s (and Operator’s) Road
Tax and/or Mineral Usage or other tax liabilities in respect of any Calendar
Year.
17.10 The State will notify each Contractor Party within one (1) month of the
Effective Date of this Contract on the tax inspectorate office (“ for the Major
Tax payers”) which is to be located in Dushanbe, where the Contractor Party
and Operator should be registered as a tax payer in accordance with the Tax
Code of Republic of Tajikistan and be responsible for and administer the
implementation of the provisions of this Contract as they relate to taxation and
issuance of statements and of appropriate documentation to allow the tax and
related exemptions contained in this Contract to be implemented by the
Contractor Parties and/or the Operator.
17.11 Employees of the Contractor, Contractor Parties, their Affiliates and
Subcontractors, and those employees assigned by Contractor to Operator who
are not citizens of the Republic of Tajikistan (“Foreign Employees”) shall not
be liable to personal income tax in accordance with Article 141 paragraph 2)
of Tax Code of Republic of Tajikistan.
17.12 Foreign Employees who perform work in the Republic of Tajikistan and their
employers that would otherwise be covered by and subject to social insurance,
pension fund contributions and similar payments under the social security
system of the Republic of Tajikistan will be exempt from those payments.
17.13 VAT or sales tax shall be treated as follows:
a)
Goods, works and services supplied directly or indirectly to or by a
Contractor Party or its Affiliates, Operator or a Foreign Subcontractor
for the purpose of Petroleum Operations shall be exempt from VAT in
accordance with the Tax Code of Republic of Tajikistan.
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 16 of 27
b)
All imports including but not limited to goods, equipment, works,
loans and other forms of financing acquired by a Contractor Party or its
Affiliates, Operator, their Subcontractors or their agents for the
purpose of Petroleum Operations shall be exempt from VAT in
accordance with the Tax Code of Republic of Tajikistan.
c)
Exports of Petroleum by each Contractor Party or its agents shall be
imposed with VAT with credit zero per cent rate in accordance with
the Tax Code of Republic of Tajikistan.
d)
All re-exports by a Contractor Party or its Affiliates, Subcontractors or
their agents of goods and works supplied for the purposes of Petroleum
Operations including but not limited to re-export of goods temporarily
imported into Tajikistan for the purposes of Petroleum Operations shall
be exempt from VAT or the amounts paid in respect with VAT earlier
shall be reimbursed in accordance with the legislation of Republic of
Tajikistan.
ARTICLE 18
ACCOUNTING, FINANCIAL REPORTING AND AUDIT
18.1
Contractor shall maintain books and accounts of Petroleum Operations in
accordance with the Accounting Procedure attached hereto as Annex C. These
shall be maintained in local currency of the Republic of Tajikistan and in US$
in accordance with the legislation of Republic of Tajikistan and generally
accepted international Petroleum industry accounting principles. All books
and accounts which are made available to the Ministry in accordance with the
provisions of the Accounting Procedure shall be prepared both in the Tajik and
English languages.
18.2
The Accounting Procedure specifies the procedure to be used to verify and
establish promptly and finally Contractor’s Costs and Expenses under Article
11 of this Contract.
18.3
Sales revenues, expenditures, financial results, tax liabilities, and loss carryforwards of each Contractor Party shall be determined in accordance with the
rules, rights, and obligations set forth in this Contract in so far as such sales
revenues, expenditures, financial results, tax liabilities, and loss carryforwards are related to Petroleum Operations under this Contract.
18.4
To the extent that the Ministry incurs Costs and Expenses which are
recoverable from Cost Recovery Petroleum in accordance with Article 11, the
Ministry shall maintain separate books and accounts. These books and
accounts shall be maintained in local currency of the Republic of Tajikistan
and in US$, in the Tajik language and the English language and shall be in
accordance with generally accepted international Petroleum industry
accounting principles. Prior to the Ministry commencing to incur Costs and
Expenses an accounting procedure which establishes the method for
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accounting for the Ministry’s participation in the funding of Petroleum
Operations shall be agreed and approved by Co-ordination Committee. The
Contractor shall have the right to audit the books and accounts maintained by
the Ministry.
ARTICLE 19
CURRENCY, PAYMENTS AND EXCHANGE CONTROL
19.1
Contractor and each Contractor Party, and their Affiliates, Subcontractors and
Operator shall have the right to open, maintain, and operate Foreign Exchange
bank accounts both in and outside of Tajikistan and local currency bank
accounts inside the Republic of Tajikistan. Such operations performed in the
Republic of Tajikistan will comply with the Republic of Tajikistan Law.
19.2
Contractor and each Contractor Party, and their Affiliates and Foreign
Subcontractors shall have the right to transfer all funds received in and
converted to Foreign Exchange in the Republic of Tajikistan to bank accounts
outside the Republic of Tajikistan in accordance with the Republic of
Tajikistan Law.
19.3
Contractor and each Contractor Party, and their Affiliates and Foreign
Subcontractors shall have the right to hold, receive and retain outside the
Republic of Tajikistan and freely use all funds received and derived from
Petroleum Operations by them outside the Republic of Tajikistan without any
obligation to repatriate or return the funds to the Republic of Tajikistan,
including but not limited to all payments received from export sales of
Contractor Parties’ share of Petroleum and any sales proceeds from an
assignment of their interest in this Contract.
19.4
Contractor and each Contractor Party, and their Affiliates, Foreign
Subcontractors and Operator have the right to import into the Republic of
Tajikistan funds required for Petroleum Operations under this Contract in
Foreign Exchange in accordance with the legislation of Republic of Tajikistan.
19.5
Contractor and each Contractor Party, and their Affiliates and Foreign
Subcontractors shall have the right to pay outside of the Republic of Tajikistan
for goods, works and services of whatever nature in connection with the
conduct of Petroleum Operations under this Contract without having first to
transfer to the Republic of Tajikistan the funds for such payments.
19.6
Whenever such a need arises Contractor and each Contractor Party and their
Affiliates, Foreign Subcontractors and Operator shall be entitled to purchase
local currency with Foreign Exchange and covert local currency into Foreign
Exchange in accordance with provisions stipulated in legislation.
19.7
Contractor and each Contractor Party, and their Affiliates and Foreign
Subcontractors shall have the right to pay outside the Republic of Tajikistan
principal and interest on loans used for funding Petroleum Operations without
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 18 of 27
having to first transfer to the Republic of Tajikistan the funds for such
payment.
19.8
Contractor and each Contractor Party and their Affiliates, Foreign
Subcontractors and Operator shall have the right to pay, wages, salaries,
allowances and benefits of their foreign personnel working in the Republic of
Tajikistan in Foreign Exchange partly or wholly outside the Republic of
Tajikistan.
19.9
Conversions of currency shall be recorded at the rate actually experienced in
that conversion. Expenditures and sales revenues in currency other than the
US$ shall be translated to US$ at the rates officially published by National
Bank of the Republic of Tajikistan at the close of business on the first business
day of the current month.
ARTICLE 20
IMPORT AND EXPORT
20.1
Contractor, each Contractor Party and Affiliates and their agents and
Subcontractors and Operator shall have the right to import into, export and reexport from the Republic of Tajikistan in Accordance with the Republic of
Tajikistan Law all equipment with no customs fees, levys, duties, import taxes
or similar being payable.
20.2
Contractor, each Contractor Party and Affiliates, their agents and
Subcontractors shall have the right to sell any materials or equipment or goods
which were used in Petroleum Operations provided that such items are no
longer needed for Petroleum Operations and the costs of such items have not
been and are not intended to be included as Costs and Expenses recoverable
from Cost Recovery Petroleum including payments of the relevant taxes from
those such operations (sales) in accordance with the Tax Code of Republic of
Tajikistan.
20.3
Contractor, each Contractor Party, their customers and their carriers shall have
the right to export the share of Petroleum on behalf of Contractor or each
Contractor Party in accordance with the Republic of Tajikistan Law.
20.4
Foreign Employees and family members of Contractor and its Affiliates, its
agents and Foreign Subcontractors, shall have the right to import into and reexport of personal and household purpose items from the Republic of
Tajikistan at any time in accordance with the Republic of Tajikistan Customs
Code.
ARTICLE 21
EXPORT OF HYDROCARBONS, TRANSFER OF
OWNERSHIP, AND REGULATIONS FOR DISPOSAL
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21.1
The Contractor, Contractor Parties, any purchaser from such parties and their
respective carriers shall, for the duration of this Contract, have the right to
export without any export duties, levys, rents, taxes or similar, from any
export point selected by the Contractor for such purpose, the share of
Petroleum to which the Contractor is entitled under this Contract. Access to
export points shall be given to the above parties on a non discriminatory basis
and at rates no less favourable than those available to the Ministry, or granted
to others by the State or the Ministry.
21.2
*[description of commercial terms omitted]
21.3
The Contractor and the Ministry shall each be entitled to designate (at their
own cost) an employee, independent company or consultant who shall check
the liftings of Petroleum from the Measurement Point or at such other point as
may be designated in accordance with Article 21.
21.4
If one of the Parties is unable to lift its share of Petroleum in due time, with
the result that Petroleum Operations may be interfered with or in any way
disrupted, then after giving such notice as is practical in the circumstances any
other Party may dispose of it, and subsequently give back to such Party an
equivalent amount of Petroleum (taking into account any costs incurred).
ARTICLE 22
OWNERSHIP OF ASSETS
22.1
Ownership of any asset, whether fixed or moveable, acquired by or on behalf
of Contractor in connection with Petroleum Operations hereunder shall vest in
the State without consideration if (1) both the costs of such asset have been
recovered by Contractor under this Contract, and (2) either the Contract has
come to an end or, if earlier, when the asset is no longer required for
Petroleum Operations by the Contractor. The Contractor shall enjoy
continued free, exclusive and unrestricted use of all assets at no cost or loss of
benefit to the Contractor until the termination of this Contract or if earlier until
they are no longer required for Petroleum Operations. The Contractor shall
bear the custody and maintenance of such assets and all risks of accidental loss
or damage thereto while they are required for Petroleum Operations, provided
however that all costs necessary to operate, maintain and repair such assets
and to replace or repair any damage or loss shall be recoverable as Operation
Expenses from Cost Recovery Petroleum in accordance with the provisions of
Article 11.
22.2
Whenever Contractor relinquishes any part of the Contract Area, all moveable
property located within the portion of the Contract Area so relinquished may
be removed to any part of the Contract Area that has been retained for use in
Petroleum Operations.
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22.3
The provisions of Article 22.1 and 22.2 shall not apply to materials or other
property that are rented or leased to Contractor, its Affiliates or Operator or
which belongs to employees of Contractor, its Affiliates or Operator.
ARTICLE 23
INSURANCE
23.1
Contractor shall obtain and maintain such types and amounts of insurance for
the Petroleum Operations as are reasonable and such that they comply with
Republic of Tajikistan Law and accepted international Petroleum industry
practice and standards.
23.2
*[description of commercial terms omitted]
ARTICLE 24
PERSONNEL
24.1
Contractor shall be entitled to bring foreign personnel into the Republic of
Tajikistan in connection with the performance of Petroleum Operations. The
entry into the Republic of Tajikistan of such personnel is hereby authorised,
and the State authorised body shall issue at the Contractor’s request the
required documents, such as entry and exit visas, work permits and residence
cards. At Contractor’s request, the State shall facilitate all immigration
formalities at the points of exit and entry into the Republic of Tajikistan for
the employees and family members of the Contractor, its Affiliates,
Subcontractors, Operator, agents and brokers. The Contractor (or Operator on
its behalf) shall contact the appropriate offices of the State to secure the
necessary documents, and to satisfy the required formalities.
24.2
The employees working within the scope of Petroleum Operations shall be
placed under the authority of the Contractor, its Affiliates, its Subcontractors,
agents or brokers or the Operator each of which shall act individually in their
capacity as employers. The works, hours, wages, and all other conditions
relating to their employment shall be determined by the relevant employer of
such employees. In relation to employees who are citizens of the Republic of
Tajikistan their employment shall be in accordance with the Republic of
Tajikistan law. To the extent that any expatriate personnel are engaged under
a contract subject to the Republic of Tajikistan law, that contract shall comply
with the provisions of the Republic of Tajikistan law. The Contractor, its
Affiliates, its Subcontractors, agents or brokers however, shall enjoy full
freedom in the selection and assignment of their employees.
24.3
Contractor takes into account the Law of Republic of Tajikistan “On Product
Sharing Contracts” and agrees to:
a)
Where employees have the appropriate experience and skills, to engage
employees who are citizens of the Republic of Tajikistan with the aim of these
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 21 of 27
employees ultimately making up at least seventy per cent (70%) of the total
employees engaged in the implementation of the works under this Contract;
b)
Employ foreign employees and specialists where necessary for the
effective operation of works under this Contract or due to the unavailability of
suitably trained and qualified local staff.
c)
To implement appropriate training programmes for Tajik staff with the
intention of replacing foreign staff with suitably trained and experienced local
specialists.
ARTICLE 25
FORCE MAJEURE
25.1
If as a result of Force Majeure, Contractor is rendered unable, wholly or in
part, to carry out its obligations under this Contract, other than the obligation
to pay any amounts due, then the obligations of Contractor, so far as and to the
extent that the obligations are affected by such Force Majeure, shall be
suspended during the continuance of any inability so caused, but for no longer
period. Contractor shall notify the Parties of the Force Majeure situation
within seven (7) days of becoming aware of the circumstances relied upon and
shall keep the Ministry informed of all significant developments. Such notice
shall give reasonably full particulars of the said Force Majeure, and also
estimate the period of time which Contractor will probably require to remedy
the Force Majeure. Contractor shall use all reasonable diligence to remove or
overcome the Force Majeure situation as quickly as possible in an economic
manner. The period of any such non performance or delay, together with such
period as may be necessary for the restoration of any damage done during
such delay, shall be added to the time given in this Contract for the
performance of any obligation dependent thereon (and the continuation of any
right granted) and to the term of this Contract.
25.2
For the purposes of this Contract, “Force Majeure” shall mean a circumstance
which is irresistible or beyond the reasonable control of Contractor, any act of
the State, or the Ministry or any other hindrance of Contractor’s performance
not due to its fault or negligence.
ARTICLE 26
*[description of commercial terms omitted]
ARTICLE 27
CONTRACT ENFORCEMENT AND STABILISATION, AND
REPRESENTATIONS AND WARRANTIES
Production Sharing Contract between The Republic of Tajikistan and Kulob Petroleum Limited - Page 22 of 27
27.1
In the course of performing the Petroleum Operations, the Operator and the
Parties shall be subject to all applicable laws, decrees, rules and regulations.
27.2
The State agrees and commits to Contractor, for the duration of this Contract,
to maintain the stability conditions of this Contract.
27.3
The Parties agree to cooperate in every possible way in order to achieve the
objectives of this Contract. The State and its subdivisions shall facilitate the
exercise of Contractor’s activities by granting it all decrees, permits,
resolutions, licenses and access rights and making available to it all
appropriate existing facilities and services under the control of the State or the
Ministry so that the Parties may derive the greatest benefit from Petroleum
Operations for their own benefit and for the benefit of the Republic of
Tajikistan.
27.4
If at any time after this Contract has been signed there is a change in the
applicable laws, regulations or other provisions effective within the Republic
of Tajikistan which to a material degree adversely affect the economic
position of the Contractor or any Contractor Party hereunder, the terms and
conditions of this Contract shall be altered so as to restore the Contractor to no
worse an overall economic position as that which the Contractor would have
been in had this Contract been given full force and effect without amendment
as it is stipulated in Article 27.5.
27.5
To the extent that the Contractor’s overall economic position is not restored
through mutually agreed changes to the terms and conditions of this Contract
the State shall fully indemnify the Contractor against such economic effects.
In case if the Contract is terminated under Articles 29.2 and 30 hereunder,
then Contractor shall indemnify the State against losses such as lost profit and
lost capital.
27.6
If the Contractor believes that its economic position has been adversely
affected, due to the circumstances provided in Articles 27.4, 27.5 under which
articles it may give notice to the State and to the Ministry describing how its
position has been so affected and the Parties shall thereafter 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 in accordance with the provisions of Article 30.
27.7
The State and the Ministry warrants to the Contractor as follows:
a)
The State has taken the appropriate steps necessary to authorise the
Ministry to execute this Contract on behalf of the State;
b)
The signatories to this Contract on behalf of the State (in each of their
capacities hereunder) is duly authorised to bind the Ministry;
c)
The Ministry has been legally vested by the State with the necessary
power to authorise Petroleum Operations in the Contract Area and to
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compensate the Contractor by allocating to it a share of the Petroleum
produced in accordance with the terms of this Contract.
d)
The conduct of Petroleum Operations in accordance with the laws of
the Republic of Tajikistan.
e)
Upon completion of the matters and procedures set out in Article 32
there is no other entity or authority whose approval or authorisation is
required to permit the Contractor to enjoy and enforce its rights
hereunder.
ARTICLE 28
NOTICES AND CONFIDENTIALITY
28.1
Notices shall be considered duly drafted if written in Tajik and English and
delivered in person or by registered mail or by courier service or by any
electronic means of transmitting written communications which provides
confirmation of complete transmission, and addressed to such Parties as
designated below. The originating notice given under any provision of this
Contract shall be deemed delivered only when received by the Party to whom
such notice is directed. Time for such Party to deliver any notice in response
to such originating notice shall run from the date the originating notice is
received. The second or any responsive notice shall be deemed delivered
when received. “Received” for purposes of this Article with respect to written
notice delivered pursuant to this Contract shall be actual delivery of the notice
to the address of the Party to be notified specified in accordance with this
Article. Each Party shall have the right to change its address at any time
and/or designate that copies of all such notices be directed to another person at
another address, by giving written notice thereof to all other Parties. The
addresses for service of notices on each of the Parties is as follows:-
Kulob Petroleum Limited
P.O. Box 524
St. Peter Port
Guernsey, GY1 5EL
Channel Islands
Attention:
Fax :
e-mail:
CEO
+44 1481 725 922
info@tethys.gg
The State and the Ministry
Ministry of Energy and Industry
Rudaki Avenue 22
Dushanbe
Tajikistan, 734012
Attention:
Fax:
Minister
+ 992 48 221 8889
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e-mail:
28.2
28.3
____________________
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 as
provided herein;
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 that any data or information which, through no fault of a
Party, becomes a part of the public domain;
h)
To the extent required by any recognised stock exchange, regulatory
body or auditor.
Disclosure as pursuant to Article 28.2 (d), (e), and (f) 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 three (3) years and not to use or disclose the data and information
except for the express purpose for which disclosure is to be made.
ARTICLE 29
TERMINATION AND BREACH
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29.1
At any time, if in the opinion of Contractor, circumstances do not warrant
continuation of the Petroleum Operations, Contractor may, by giving written
notice to that effect to the Ministry, relinquish its rights and be relieved of its
obligations pursuant to this Contract, except such rights and obligations as
related to the period prior to such relinquishment. Neither this Contract nor
any of the rights granted hereunder nor the Operator Licence may be
terminated as a result of any act or omission of Operator save in the case
where Operator has carried out an act or omitted to do something at the
specific request of the Contractor and Operator has previously advised the
Contractor prior to carrying out the act or omitting to do something that to
carry out that act or to omit to do the relevant thing may result in this Contract
being terminated.
29.2
Without prejudice to the provisions stipulated in Article 29.1 above, this
Contract may only be terminated by the State in its entirety by giving one
hundred and eighty (180) days advance written notice thereof to all Parties,
when and only if a material breach of Contract is alleged to have been
committed by Contractor and, provided that conclusive evidence thereof has
been found by prior arbitration as stipulated in Article 30. For the purposes of
this Article, a material breach means a fundamental breach which, if not cured,
is tantamount to the frustration of the entire Contract either as a result of the
unequivocal refusal to perform contractual obligations or as a result of conduct
which has destroyed the commercial purpose of this Contract.
ARTICLE 30
DISPUTE RESOLUTION
30.1
All disputes arising out of or in connection with this Agreement shall be
finally settled under the Rules of Arbitration of the International Chamber of
Commerce by three arbitrators appointed in accordance with the said Rules.
30.2
A Party need not exhaust administrative or judicial remedies prior to
commencement of arbitrage proceedings.
30.3
Any arbitrage tribunal constituted pursuant to this Agreement shall be held in
Stockholm, Sweden, in the English language and apply the provisions of this
Agreement as supplemented and interpreted by general principles of the laws
of Sweden as are in force on the Effective Date.
ARTICLE 31
TEXT
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31.1
This Contract shall be executed in three (3) originals in the Tajik language,
three (3) originals in the English language and in three (3) originals in the
Russian language each of which shall have equal legal force and effect;
provided however that in the case of dispute, conflict or arbitration the English
version shall 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.
ARTICLE 32
*[description of State’s obligations omitted]
This Contract is executed this 13 day of June 2008 _____ in three (3) versions in
Tajik, Russian and English.
STATE AUTHORIZED
REPRESENTATIVE
For the Ministry
Minister of Energy and Industry
CONTRACTOR
Signature: “signed”
Signature: “signed”
Name: Gul Sherali
Name: Dr David Robson
For Kulob Petroleum Limited
Director and President
ANNEXES
*[description of commercial and fiscal terms omitted]
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