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 An Act Ratifying





The Production Sharing Contracts With Addendum For


Blocks LB 11 And 12 Signed Between


The National Oil Company Of Liberia (NOCAL)


On behalf Of


The Republic Of Liberia And


Oranto Petroleum Limited"


Approved: April 16,2007


(dWftWTO

















Published By authority


Ministry of Foreign Affairs


Monrovia, Liberia


Printed: May 22,2007


I


































































































































































































.


AN ACT RATIFYING THE PRODIK I ION SHARING CONTRACTS NVIIII


ADDENDA FOR BLOCKS LB 11 AND 12 SIGNED BETWEEN I UK NA IIONAL


OIL COMPANY OF LIBERIA (NOCAL) ON BEHALF' OF THE REPO III U Of


LIBERIA ANDORANTO PETROLEUM LIMITED.


It li enacted by the Senate and House of Representatives of the Republic of Liberia in


I egisUlurc Assembled:


Section I: That from and immediately after the passage of this Act. PKODt X T ION


SHARING CONTRACTS WITH ADDENDA FOR BLOCKS LB 11 AM) 12 SIGNI l)


BETWEEN TUB NATIONAL OIL COMPANY OF LIBERIA (NOCAL) ON BEHALF


«)l THE REPUBLIC OF LIBERIA AND OR A NTO PETROLEUM LIMITED


iih herein recited .below word for won! in ihe ct|imlly milhciUic English Vertltm kio. nlTd


U]c tmme is hereby ratified.








NECTION II: SHORT TITLE: This Act Ratifying the Production Sharing Contracts


with Addenda for Blocks LB 11 ami 12 signed between the National Oil Company of


Ubena (NOCAL) on behalf of the RepuU •' Liberia and Oranto Petxolcu u I united,


my abflTbe officially cited as the PROD! XTION SHARING CON IRAC IS ACT OF


NOCAI, AND ORAVTO PETROLEUM LIMITED


MECTION III: That any and aH obligation*, covenants, terms and condition* as


OOntained in Cite above mentioned Production Sharing Contracts shall be carried to full











RUCTION IV: This Act shall takceficct immediately upon the publication into hand-


m -








ANY LAW TO THE CONTRARY NO I \\ ITIISTANDING


 20$7





ATTESTATION TOi


HOUSE'S ENDORSEMENT TO SENATE'S ENGROSSED BILL BO. 2.





ENTITLE D ;





“AN ACT RATIFYING TIIE PRODUCTION SHAKING CONTTKACTS WITH


ADDENDA FOR BLOCKS 1.11 II AND 12 SIGNED BETWEEN TIIE NATIONAL


OIL COMPANY OF LIBERIA (NOCAL) ON IIEIIALF OF THE REPUBLIC OF


LIBERIA ANDORANTOPETROLEUM LIMITED-














VICE PHIC5I OF LIBKill A/PRE*»lDKNT OF THE SENATkTkX!











/ //I n/idiu, i HL > jMM ■_





SECRETART OFTIIE SENATE. HJ.


I





REPUBLIC


OF


LIBERIA











Production Sharing Contract


Between


National Oil Company of Liberia


And


Oranto Petroleum Limited








Block LB-11





June 2005























deMMi PSCUbcnatUcckLMIl


 TABLE OF CONTENTS








ARTICLE PAGE


1. DEFINITIONS 5


2. SCOPE OF THE CONTRACT 8


3. DURATION OF EXPLORATION PERIODS AND SURRENDERS 9


4. EXPLORATION WORK COMMITMENTS 11


5. ESTABLISHMENT AND APPROVAL OF ANNUAL WORK 13


PROGRAMS AND BUDGETS


6. CONTRACTOR S OBLIGATIONS IN RESPECT OF THE 15


EXPLORATION PERIODS


7. CONTRACTOR'S RIGHTS IN RESPECT OF THE 17


EXPLORATION PERIODS


8. ACTIVITY REPORTS DURING THE EXPLORATION PERIOOS 19


AND SUPERVISION OF PETROLEUM OPERATIONS


9. OCCUPATION OF LAND 22


10. USE OF FACILITIES 23


11. APPRAISAL OF A PETROLEUM DISCOVERY 24


12. GRANT OF AN EXCLUSIVE EXPLOITATION AUTHORIZATION 27


IN RESPECT Of A COMMERCIAL DISCOVERY


13. DURATION OF THE EXPLOITATION PERIOD 28


14. EXPLOITATION OBLIGATION 29


15. CONTRACTOR’S OBLIGATIONS AND RIGHTS IN RESPECT 30


OF EXCLUSIVE EXPLOITATION AUTHORIZATIONS


16. RECOVERY OF PETROLEUM COSTS AND PRODUCTION 32


SHARING


17. TAXATION 34


18. VALUATION OF PETROLEUM 38


19. BONUSES 41


20. OWNERSHIP AND ABANDONMENT OF ASSETS 42


21. NATURAL GAS 43


22. FOREIGN EXCHANGE CONTROL 48


23. APPLICABLE LAW 49


24. MONETARY UNIT 50


25. ACCOUNTING METHODS AND AUDITS 51


26. IMPORT AND EXPORT 52


27. DISPOSAL OF PRODUCTION 55


28. PROTECTION OF RIGHTS 56


29. PERSONNEL AND TRAINING 57


30. ACTIVITY REPORTS IN RESPECT OF EXCLUSIVE 59


EXPLOITATION AUTHORIZATIONS


31. ARBITRATION 60


32. FORCE MAJEURE . 61


33. JOINT AND SEVERAL OBLIGATIONS AND GUARANTEES 62


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r 34. RIGHTS OF ASSIGNMENT 63


35. STABILITY OF CONDITIONS 64


r; 36. IMPLEMENTATION OF THE CONTRACT 65


37. EFFECTIVE DATE 67





r APPENDIX 1


DELIMITED AREA


n


APPENDIX 2


r ACCOUNTING PROCEEDURE








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r C nnlid-'niiiil Or&iun C'cWokMin l*V Liberia If Page


!. 04/2003 1





 PRODUCTION SHARING CONTRACT





BETWEEN





The Republic of Liberia. (STATE) represented for the purposes of this Contract


by the National Oil Company of Liberia (NOCAL), a company Incorporated under


the laws of Liberia;





AND





Oranto Petroleum Limited a company incorporated under the laws of Nigeria


hereinafter referred to as Oranto. and represented for the purposes of


this Contract by “Contractor"


WHEREAS


• The discovery and exploitation of Petroleum are important for tho Interest and


the economic development of the country and Its people;


• NOCAL wishes to undertake operations for exploration for exploitation,


transportation, storage, processing and marketing of Petroleum;


• NOCAL has the mining rights In respect of Petroleum exploration and


exploitation over the entirety of available areas In Libena including the


Delimited Area defined hereinafter;


• NOCAL wishes to promote the development of the Delimited Area, and the


Contractor wishes to cooperate with NOCAL by assisting it m the exploration


for and production of the potential resources within the Delimited Area, and


thereby encouraging the economic growth of the country;


• The company which is a Party to this Contract shall be the Contractor, and


• The Contractor represents that It has the financial resources, the technical


competence and the organization capacity necessary to carry out in the


Delimited Area the Petroleum Operations specified hereinafter


NOW THEREFORE. THE PARTIES HEREBY AGREE AS FOLLOWS:














'>«o Ponwvm I nikKd PM 1 Pagr«


 ARTICLE 1








DEFINITIONS





The following terms used in this Contract shall have the following meaning


1.1 CALENDAR YEAR means a period of twelve (12) consecutive months


beginning on January frrst (1") and ending on the following December


thirty-first (31*), according to the Gregorian Calendar.


1.2 CONTRACT YEAR means a period of twelve (12) consecutive months


beginning on the Effective Date or on the anniversary thereof.


1.3 FISCAL YEAR means a period of twelve (12) consecutive months


beginning on January first (1*‘) and ending on the following December


thirty-first (31*).


1.4 BARREL means U.S. barrel. 42 U.S. gallons measured at a temperature


of 60°F and under an atmospheric pressure.


1.5 BUDGET means the itemized cost estimates of the Petroleum Operations


described In an Annual Work Program.


1.6 EFFECTIVE DATE means the date on which this Contract cornea into


force and effect, as described In Article 37.


1.7 CONTRACTOR means (name of comply) and any of its successors and


permitted assignees; and (company) shall act as Operator and shall


conduct Petroleum Operations


1.8 CONTRACT means this Production Sharing Contract and its appendices


forming an integral part hereof, together with any extensK>n. renewal,


replacement or modification hereto, which may be mutually agreed


between the Parties.


1.9 PETROLEUM COSTS means all expenditures actually incurred and paid


by the Contractor for the purposes of the Petroleum Operations under this


Contract, and determined in accordance with the Accounting Procedure


attached hereto as Appendix 2.


1.10 DOLLAR means dollar of the United State# of America.














( rtnfidntliul f«J ►N4" .'•'J ^ • 7HTS


I ( Oft ?


 1.11 NATURAL OAS means methane, ethane, propane, butane and dry or wet


gaseous hydrocarbons, whether or not associated with Crude Oil In


gaseous status under standard temperature and pressure conditions, as


well as all gaseous products extracted In association with Petroleum, such


as, without limitation, nitrogen, hydrogen sulphide, carbon dioxide, helium


and water vapour.


hs 1.12 ASSOCIATED NATURAL GAS means Natural Gas, which exists In a


ter reservoir In solution with Crude Oil, which Is or could bo produced In


association with Crude Oil.


hs 1.13 NON-ASSOCIATED NATURAL GAS means Natural Gas other than


Associated Natural Gas.


FIELD means an accumulation of Petroleum In one or several overlaying


ihs 1.14


w horizons.


1.16 PETROLEUM means Crude Oil and Natural Gas.


ire 1.10 PETROLEUM OPERATIONS means all the Petroleum exploration,


appraisal, development, production, transportation and marketing


ns operations, abandonment and decommissioning, and more generally, any


other operations directly associated therewith, carried out under this


Contract.


MO 1.17 PARTIES means NOCAL and the Contractor; and PARTY means either


NOCAL or the Contractor.


nd


1.18 APPRAISAL PERIMETER means any part of the Delimited Area where


tad


one or more Petroleum discoveries have been made, end m respect of


*s which NOCAL has granted to the Contractor an exclusive appraisal


authorization for the purpose of appraising the extent of said discoveries


0. EXPLOITATION PERIMETER means any part of the Delimited Area In


ted 1.19 respect of which NOCAL has granted to the Contractor an exclusive


exploitation authorization.


•d i 1.20 CRUDE OIL means crude mineral oil. asphalt, ozokente. and all kinds of


Ns Petroleum and bitumen, either solid or liquid In their natural condition or


pa obtained from Natural Gas by condensation or extraction, including


condensates and Natural Gas liquids.





1.21 DELIVERY POINT means the FOB point connecting the loading


facilities to the vessel then loading Crude Oil in the Republic of Liberia or


any other transfer point mutually agreed between the Parties. /








r.M'wVrou. PST Lihrm 1‘i.n-k Page 6


1.22 TOTAL PRODUCTION meant the total production of Crude Oil or the


total production of Natural Oat obtained from tt>e\vt»ole Delimited Area


lest the quantities used for the requirements of the Petroleum Operations


and any unavoidable losses.


1.23 ANNUAL WORK PROGRAM means the document describing. Item by


Item, the Petroleum Operations to be earned out during a Calendar Year


within the Delimited Area and m each Exploitation perimeter. If any.


established In accordance with the Contract.


1.24 DELIMITED AREA means the area In respect of which NOCAL under this


Contract, grants to the 9ontractor an exclusive exploration right.


The areas surrendered by the Contractor In accordance with the


provisions of Articles 3.5 and 3.6 shall be deemed as excluded from the


Delimited Area, which shall be reduced accordingly. Conversely, the


Exploitation Perlmeter(s) shall be an Integral part of the Delimited Area


during the term of the relevant exclusive exploitation authorization.


1.25 AFFILIATED COMPANY means:


• a company or any other entity which directly or Jndirectly controls or Is


controlled by any entity constituting the Contractor, or


• a company or any other entity which directly or indirectly controls or is


controlled by a company or entity which Itself directly or indirectly


controls any entity constituting the Contractor


Such ’control* meant direct or indirect ownership by e company or any


other entity of more than fifty percent (50%) of the shares, conferring


voting rights, forming the stock of another company


1.26 THIRD PARTY means a company or any other entity, other than the


Contractor, which does not come within the foregoing definition.


1.27 ARMS LENGHTH SALES: For the purpose of


determining arrm length salos, the price of Crude Oil will gonorally bo


based on per banel basis of one or more Crude OU blends which at the tlmo


of calculation aro being fieely and actively tradod in tho International Oil


market and have similar characteristics and Quality to the Crude Oil being


marketed. The price of such Crude Oil will e ascertained from Platt's Crude


OH Market Wire deity publications or the spot market for the seme Crude Oil


ascertained In a similar manner.














,.-0 \>SC Lifaenu lUoct I r.*e 7


lt.-06.-200>'


 ARTICLE 2


tfl


»a


is


SCOPE OF THE CONTRACT








ay


•r 2.1 This Contract is a Production Sharing Contract and Includes all the


>y. provisions of the agreement between NOCAL and the Contractor.


2.2 NOCAL authorizes the Contractor to be the Operator pursuant to the


terms set forth herein and to carry out Petroleum Operations in the


Delimited Area, on an exclusive basis.


2.3 The Contractor undertakes, for all the work necessary for carrying out the


Petroleum Operations provided for hereunder, to comply with good


international petroleum industry practice and to be subject to the laws and


■te regulations in force in Liberia unless otherwise provided under this


ne


ie Contract.


•a 2.4 The Contractor shall supply all financial and technical means necessary





for the proper performance of the Petroleum Operations.


2.5 The Contractor shall bear alone the financial risk associated with the


performance of the Petroleum Operations. The Petroleum Costs related


thereto shall be recoverable by the Contractor in accordance with the





Is provisions of Article 16.2.


2.6 During the term hereof, in the event of production, the Total Production


arising from the Petroleum Operations shall be shared between the


Parties according to the terms set forth in Articles 16.2 and 16.3.


Is 2.7 On the Effective Date, the Delimited Area shall be the area as defined in


diy


Appendix 1.


2.8 The Contractor shall furnish, NOCAL with all reports, information and data





referred to hereunder, including without limitation any for the provision of


ny goods and services In respect of Petroleum in excess of US$100,000


ng binding on the entities constituting the contraction binding on the entities/ n


constituting the Contractor. yfv*


he















































CWbtmml PSC Iibw.il HIocr • B I


I 06:000


 ARTICLE 3





DURATION OF EXPLORATION PERIODS AND SURRENDERS








3.1 The exclusive exploration authorization is hereby granted to the


Contractor for a period of 9 consecutive years defined by three


consecutive periods.


A first Exploration period of 4 Contract years, a second Exploration Period


of 2 Contract years and a third Exploration Period of 3 Contract years in


respect of the entire Delimited Area.


3.2 If during the first Exploration period set forth above the Contractor has


fulfilled the exploration work commitments defined in Article 4, the


exclusive exploration authorization shall, at the Contractor's request, be


renewed for a second Exploration period of two (2) Contract Years.


3.3 If, at the end of such second Exploration period and provided that It has


fulfilled its work commitments as set forth at>ove. the Contractor so


requests, a third Exploration period shall be authorized for three (3)


Contract Years.


3.4 The applications referred to in Articles 3.2 and 3.3’ shall be made at least


sixty (60) days prior to the expiration of the current exploration period.


3.5 The Contractor shall surrender at least the following surfaces:


(a) Twenty-five percent (25%) of the initial surface of the Delimited


Area at the expiration of the first exploration period.


(b) Twenty-five percent (25%) of the initial surface of the Delimited


Area at the expiration of the second exploration period.


Such surrenders shall be constituted by a limited number if perimeter of a


simple geometrical shape delimited by north-south, east-west lines or by


natural boundaries of the area concerned.


For the purpose of computing the surface to be surrendered, the surface


in respect of any Exploitation Perimeter shall be deducted from the initial


surface of the Delimited Area.


The surfaces previously surrendered pursuant to the provisions of Article


3.6 shall be deducted from the surfaces to be surrendered.














( ml'idmuI - rST LtDct.* Bloc* Page9


•i 06t?00Sv


 Subjoct to Its compliance with the above-mentioned requirements, the


Contractor shall have the nght to determine the size, shape, and location


of the area to be surrendered. - --------





The Contractor undertakes to furnish NOCAL with a precise description


and a map showing the details of the surrendered areas and those


retained, together with a report specifying the work carried out in the


surrendered areas from the Effective Date and the results oblained.


3.® During any exploration period, the Contractor may. at any time, notify


a


n NOCAL that it surrenders on the whole or any part of the Delimited Area


the rights granted to it by giving sixty (60) days’ notice to that effect.


No surrender during or at the expiration of any exploration period shall





reduce the work commitments and the investment obligations set forth in


Article 4 for the current exploration period.





In the event of surrender, the Contractor shall have the exclusive right to


0 retain, for their respective term, the Appraisal Perimeters and Exportation


Perimeters which have been granted and to carry out the Petroleum


I) Operations therein.


3.7 At the expiration of the third Exploration period set forth in Article 3.3, the


Contractor shall surrender the whole remalrflng Delimited Area except as


to any Appraisal Perimeters and Exploitation Perimeters which have then


been granted and In respect for which an application has been made


0 3.8 It at the expiration of all the exploration periods the Contractor has not


0 obtained or is not applying for an exclusive appraisal authorization or an


exclusive exploitation authorization, this Contract shad terminate.


If an exploratory we




penod. then NOCAL snail grant Contractor an extension of the exclusive


exploration authorization of 60 days (after the exploratory well is


terminated and the rig released) In order to evaluate results of the well.


3.9 The term nation of this Contract, whatever the reason thereof, shall not





relieve the Contractor of any obligations under this Contract Incurred prior


to. or arising from, said termination and which shall be fulfilled.























rtd r>C Ubrru tttack I 10


II06JWSM


i














ARTICLE 4


EXPLORATION WORK COMMITMENTS


4.1 The Contractor shall commence the Petroleum Operations within three





months from the Effective Date.


4.2 Tha Contractor, during the first exploration period defined In Article 3.1,


shall carry out the following minimum work:


1500squore kilometres of 3-D Seismic Acquisition





4.3 The Contractor, during the second exploration period defined In Article


3.2. shall carry out the following minimum work:


One (1) exploratory well.


4.4 The Contractor, during the third exploration period defined In Artlclo 3.3,





shall carry out the following minimum work:


One (1) exploratory well.





4.5 Each of the exploratory wells referred to above shall be drilled to a


minimum dopth of (1000) one thousand meters, after deduction of the


water depth, or to a lesser depth if the continuation of drilling performed In


accordance with good International petroleum industry practice Is


prevented for any or the following reasons:


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





contractual depth;


(b) Continuation of drilling presents an obvious danger due to the


existence of abnormal formation pressure;


(c) Rock formations are encountered the hardness of which prevents,


in practice, the continuation of drilling by the use of appropriate


r equipment;


(d) Petroleum formations are encountered the crossing of which


Ir requires, for their protection, the laying of casings preventing the


mining contractual depth from being reached.





In the event that any of the above occurs, the exploratory


shall be deemed to have been drilled lo the contractual depth





Notwithstanding any provision in this Article to the contrary. NOCAL and the


Contractor may. at any time, agree to abandon the drilling of a well at a lesser


depth than the minimum contractual depth. -











Pe«r.ic_.n mirsJ PSi L.bna 1 *• II


IMMOSS9II


'





4.6 In order to carry out the exploration work defined in Articles 42 to 4.4 in


the best technical conditions in accordance with good international


petroleum industry practice, the Contractor undertakes to spend the


fotowfng minimum amounts dotemsned with minimum expendiure of


(a) 4.5 million Dollars during the first Exploration period defined in Article


3.1


(b) 6 million Dollars during the second Exploration period defined in Arbdo


3 2


(c) 6 million Dollars during the second exploration pcnod defined in Article


3.3


If during the exploration period the Contractor has performed 4s work


commitments for an amount lesser than the amount specified above, it


shall be deemed to have fulfilled its investment obligations relating to that


period. Conversely, the Contractor shal perform the entirety of its work


commitments set forth in respect of an exploration period even if it results


in exceeding the amount spedfied above for that period.


4.7 If at the expiration of any of the three (3) exploration periods defined in


Articles 3.1, 22 and 3.3 or upon the date of surrender of the whole


Delimited Area, or upon the date of termination of this Contract, tho


Contractor has not fulfilled its work commitments sot forth in this Article, it


shall pay as compensation to NOCAL, within thirty (30) days after that


date of expiration, surrender or termination, the unspent balance of


investment obligation above-defined for the current exploration period.





















































Page 12


 ARTICLE 5





ESTABLISHMENT AND APPROVAL OP


ANNUAL WORK PROGRAMS AND' BUDOET8


5.1 At least three (3) months before the beginning of each Calendar Year, or


for the first year, within three (3) months from the Effective Date, the


Contractor shall prepare and submit for approval to NOCAL an Annual


Work Program together with the related Budget for the entire Delimited


Area, specifying the Petroleum Operations that the Contractor proposes to


perform during that Calendar Year and their cost.


5.2 If NOCAL wishes to propose any revisions or modifications to the


Petroleum Operations specified In said Annual Work Program, It shall,


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


Contractor, presenting all justifications deemed useful. In that-event.


NOCAL and the Contractor shall meet as soon as possible to consider the


proposed revisions or modifications and to mutually establish the Annual


Work Program and the related Budget In Its final form, In accordance with


good International petroleum Industry practice. However, during the


Exploration Periods, the Annual Work Program and the related Budget


established by the Contractor after the above mentioned meeting shall be


deemed to be approved provided that they comply with the obligations set


forth in Article 4.


The Contractor shall make al effort to ensure that the each part of the


Annual work program and Budget wfl be carried out within the stated time


Should NOCAL fail to notify the Contractor of Its wish for revision or


modification within the period of thirty (30) days above-mentioned, such


Annual Work Program and the related Budget submitted by the Contractor


shall be deemed to be approved by NOCAL.


5.3 It is agreed by NOCAL and the Contractor that the Contractor may acquire


knowledge as and when the work Is implemented, or certain events may


justify changes to the details of the Annual Work Program. In that event,


after notification to NOCAL. the Contractor may make such changes


provided that the basic objectives of said Annual Work Program are not


modified.


5.4 Whenever NOCAL is required to exercise Its discretion or its approval is


required, under this Agreement. It shall exercise Its discretion or grant its


approval on the basis of the efficient and economic conduct of Petroleum


Operations In respect of the Delimited Area and In accordance with good


international oil industry practice.








Confidential Orunto Petroleum Limited PSC Liberia Block I U-11 Page 13


11/06/200513


5.5 At the Commencement of the first Exploration Period, NOCAL and the


Contractor shall form a Joint Operations Committee (JOC) comprising not


more than three (3) members appointed by NOCAL and not more than


three (3) members appointed by the Contractor. The purpose of this JOC


will be to review present and future Petroleum Operations and report


jointly to NOCAL and the Contractor.


The Joint Operations Committee shall meet once every ca lendar year or


otherwise as the members shall agree. No meeting of the Joint


Operations Committee shall be held unless two (2) members each


appointed by the Contractor and NOCAL are present.


The Contractor shall appoint the first Chairman of the Committee who


shall hold office until the second anniversary of the Effective Date.


Thereafter, NOCAL and the operator shall have alternating right to appoint


the Chairman of the Committee, who shall hold office for (2) two years


All costs of the meeting of the Committee if held outside Liberia shall be


borne by the Contractor. Members of the Committee shall be entitled to


sitting fees (payable by the Contractor) In an amount to be approved by


NOCAL and the Contractor for attendance In person at meetings of the


committee.










































































Confidenaal Otwko PeuoWum limlitd PSC Libena Block LB-11 Page 14


IIW200SI4


 ARTICLE 6





CONTRACTOR S OBLIGATIONS IN RESPECT OF


THE EXPLORATION PERIODS


6.1 The Contractor shad provide all the necessary funds end purchase or hire


al1 the equipment, facilities and materials required to carry out the


Petroleum Operations.


6.2 The Contractor shall provide aH technical assistance, including the


personnel required to carry out the Petroleum Operations.


6.3 The Contractor shall be responsible for the preparation and performance


of the Annual Work Programs, which shall be carried out in the most


appropriate manner In observance of good International petroleum


industry practice.


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


to:


(a) Ensure the protection of water-bearing strata encountered during its


work:


(b) Carry out the tests necessary for determining the value of any show


enoountered during drilling and the exploftability of any possible


Petroleum discoveries;


(c) Avoid losses and discharges of Petroleum In the Petroleum


Opera toons.


(d) Submit to NOCAL an Environmental Impact Statement (EIS) prior


to commencement of exploration and production.


(e) Take reasonable preventive, corrective and restorative measures to


protect from pollution, contamination or damage resulting from


Petroleum Operations, and that any pollution, contamination and


damage of such water bodies, land surfaces and atmosphere


hereunder be rectified.


Subject to the foregoing, and at the conclusion of Petroleum


operations in the Delimited area the contractor win undertake all


reasonable efforts to restore the terrain to a state in which it Is


usable.


6.5 All works and facilities erected by the Contractor hereunder shall,


according to their nature and to the circumstances, be built placed,


signalled, marked, fitted and preserved so as to allow at any time and m


safety free passage to navigation within the Delimited .Area, and without


prejudice to the foregoing, the Contractor shall. In order to facilitate


navigation, install the sound and optical devices approved or required by





Con fidmiul Otar id Petroleum Limned PSC l.ibrna Bkxk l B-lT IS


11 OS 200515


 the competent authorities and maintain them in a mariner satisfactory to


said authorities.


6 6 In the exercise of its rights to build, carry out work and maintain all





facilities necessary for the purposes hereof.' the'Contractor shall not


disturb any exlsbng graveyard or building used for religious purposes, nor


cause a nuisance to any government or public building, except with the


prior consent of NOCAL. and shall make good the damage caused by it in


that event.


6.7 In Its conduct of Petroleum Operations, the Contractor undertakes to take





an necessary precautions to prevent marine position.


6.8 In order to prevent pollution. NOCAL and Contractor agree that the


Contractor shall observe all existing international environmental protocols,


regulations and rules as may be applicable to prevent pollution and


preserve the environment NOCAL and the Contractor shall meet and


consider any measure, which may be necessary to preserve the


environment.


6.9 Environmental Audit





NOCAL and contractor shall commission periodic environmental audit


when necessary to ensure compliance with the EIS


6.10 The Contractor and Its subcontractors shall be obligated to give


preference to enterprises and goods from Liberia, if conditions of price,


quality, delivery time and terms of payment are similar.





















































ConrtdniMJ Or into PrtmJcuir Li PSC l.ibru It lock L B-i I PVI6


11/0*200516


 CONTRACTOR'S RIGHTS IN RESPECT OF


THE EXPLORATION PERIOOS


7.1 Without prejudice to the provisions hereof, the Contractor shall have the


right to carry out the Petroleum Operations within the Delimited area. Such


right includes, inter alia.


(a) Full responsibility for, management of and control over all the


Petroleum Operations;


(b) Authority to exercise any of the rights conferred hereby through


agents and independent contractors, and to pay accordingly any of


their expenses and costs In the piece and In the currency chosen


by the Contractor.


72 The Contractor shall have the right to dear the ground, dig. perforate, drill.


buW. erect, place, supply, operate, manage and maintain ditches, pools,


wells, trenches, excavations, dams, canals, water conduits, plants, tanks,


basins, maritime and other storage facilities, primary distillation -nits, first


extraction gasoline separator units, sulphur plants, and other facilities for


Petroleum production, together with the pipelines, pumping stations,


generator units, power plants, high voltage lines, telephone, telegraph,


radio and other communication facilities, factories, warehouses, offices,


employees' housing, hospitals, premises, ports, docks, harbours, dikes,


Jetties, dredges, sea walls, under water piers and other fadlities. ships,


vahldea, railways, warehouses, workshops, foundries, repair shops and


all the auxiliary services which are necessary for or useful to the


Petroleum Operations or in connedion therewith; and all additional


facilities which are or may become necessary for or reasonably subsidiary


to the carrying out of the Petroleum Operations.


7.3 The agents. emp\oyees and representatives ol the. Contractor or its


subcontractors shall have the right, for the purposes of the Petroleum


Operations to enter into or leave the Delimited Area and shall have free


access to all the fadlities set up by the Contrador.


7.4 The Contractor shall have the right, subject to the payment of fees


applicable In Liberia, to remove and use the surface soil, mature timber,


clay, sand, limestone, gypsum, stones and other similar materials, which


may be necessary for the performance of the Petroleum Operations.


With the consent of the competent administrative services, the Contractor


may maka reasonabio un of such materials for the performance of the





0 mUemd Own Vtmotemn IjwiaeS FSC 1 ibma Black LB-11 Ptg* 17


ll«6200SI7


 Petroleum Operations, subject to payment of fees applicable in Liberia,


when they are located on land owned by the STATE and placed in the


vicinity of the land where said Operations are taking place.





The Contractor may take or use the water necessary for the Petroleum


Operations, provided that existing irrigation or navigation are not impaired


and that land, houses or watering places for livestock are not deprived of


reasonable quantity of water.




















































































































■ Milldcntial Oranro Petroleum Limited PSC Liberia Block LB-11 Page 18


1506/2005


.


 ARTICLE 8





ITY REPORTS DURING THE EXPLORATION PER OI)S AND


SUPERVISION OF PETROLEUM OPERATIONS





shall own and may freely use all the original data a id docum* nts


flitting to the Petroleum Operations such as. but wthjut limit* on.


rtcords. samples, geological, geophysical, petrophysk-.al drilling ind


operating reports.


The Contractor undertakes to furnish NOCAL with the folk wing peri-die





reports


(a) dally reports on drilling operations; weekly report! on seismic


operations;


(b) within thirty (30) days after each Calendar quarter a report on the





Petroleum Operations carried out together vitf a deta led


statement on Petroleum Costs in respect of the prece

(c) prior to the end of February of each Calendar ''ear, an am ual


report on the Petroleum Operations carried out together wit i a


detailed statement on Petroleum Costs in respect )f he precet ing


Calendar Year.





In addition, the following reports or documents shall >e fumishec to


NOCAL as soon as they are prepared or obtained:





(a) a copy of all geological surveys and syntheses tog< ther with he


related maps.





(b) a copy of all geophysical surveys, measurement a kJ interprets on


reports, map profiles, sections or other documents related ther to.


as well as, at NOCAL’s request, the originals of ail r x»rded seis nic


magnetic tapes;


(c) a copy of the drilling location and completion rep< rt for each i 'ell


together with a complete set of recorded logs;


(d) a copy of a.1 dril tests or production tests tcgethei with any st dy





relating to the flow or production of a well;


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














onikkfliial Ormilo Pcrolcum Limited l‘SC Liborin Hindi LB*I I I'age 19


■ 3/06/2005


All maps, tactions, profiles, logs and all other geological or geophysical


documents shall be supplied on an appropriate transparent support in


view of subsequent reproduction.


A representative portion of the cores and cuttings removed from each wed.


, as well as samples of fluids produced during drill tests or production tests


shall also be supplied to NOCAL within a reasonable period.


Upon expiration or in the event of surrender or termination of this Contract,


the original documents and samples relating to the Petroleum Operations


shall be provided to NOCAL.


8.4 All data, Information, documents, reports and statistics Including


Interpretation and analysis supplied by the contractor pursuant to this


Contract shall be treated as confidential and shall not be disclosed by any


Party to any pther person without the express written consent of the other


Parties within the life of the Exploration, Appraisal or Exploitation


authorization period.


8.5 The provisions of this Article 8.4 shall not prevent disclosure:


(a) By NOCAL or the STATE:


(1) To any agency of the STATE or to any advisor or consultant


to NOCAL;


(li) For the purpose of complying with the STATE'S international


obligations for the submission of statistics and related data.


f


(b) By Contractor:


(I) To Its Affiliates, advisers ort consultants;


00 To a bona fide potential assignee of all or part of


Contractor’s interest bona hereunder.


(ill) To banks or other lending institutions for the purpose of


seeking external financing of costs of the Petroleum


Operations;


(Iv) To Non-Affiliates who shall provide services for the


Petroleum operations, including subcontrsctors, vendors and


other service contractors, where this Is essential for their


provision of such services;


(v) To government agencies for obtaining necessary rulings,


permits licenses and approvals, or as may be required by


applicable law or financial stock exchange, accounting or


reporting practices.

















I oflfUmcu! Orjnro Petm*um PV Dbrm ■oeSLB.ll


11 1*200$;


Any Party disclosing information or providing data to any third party under


this Article shall require such persons to undertake the confidentiality of


such data.


The Contractor shall keep NOCAL Informed of Its activities through the


duly designated representative of the latter. In particular, the Contractor


shall notify NOCAL as soon as possible and In any event at least fifteen


(15) days In advance of all projected Petroleum Operations, including


geological and geophysical surveys, seismic surveys, commencement of


drilling and installation of production platform.


In the event the Contractor decides to abandon a drilling It shall notify


NOCAL thereof within at loast seventy-two (72) hours prior to such


abandonment unless operational safety demands more urgent response.




























































































21


 ARTICLE 9





OCCUPATION OF LAND





0.1 The STATE shall make available to the Contractor, and only for the


purposes of the Petroleum Operations, any land which it owns and which


Is necessary for said operations. The Contractor shall have the right to


build and the obligation to maintain, above and below the ground, the


facilities necessary for the Petroleum Operations.


The Contractor shall Indemnify the STATE for any damage caused to the


land by the construction, use and maintenance of its facilities on such


land.


The STATE shall authorize the Contractor to build, use and maintain


telephone, telegraph and piping systems above and below the ground and


along the land not belonging to the STATE, provided that the Contractor


pays to the land-owners, a reasonable compensation mutually agreed


upon.


9.2 The rights on land owned by private persons, which woukf be necessary


for the carrying out of the Petroleum Operations, shall be acquired by


direct agreement between the Contractor and the private person


concerned.


In the event of disagreement, the Contractor shall notify the STATE


thereof, and the latter shall proceed to expropriation for a public purpose,


at Contractor's expenses. When determining the value of those property


rights, no consideration shall be given to the Contractor's purpose for


acquiring them and the STATE agrees that no law or procedure for said


acquisition shall have the effect of giving them an excessive value or a


confiscation value. Those rights acquired by the STATE shall be


registered In Its name, but the Contractor shall be entitled to benefit


therefrom for the purposes of the Petroleum Operations During the' entire


term of this Contract, the STATE guarantees that the Contractor shafl be


protected In the use and occupation of such land Just as If it owns the


property rights thereto.





























« onfidnuia) Oroniu Petroleum Limited PSC Liberia Block Lll*l I Page 22


11 OA. 200522


 ARTICLE 10


USE OF FACILITIES


10.1 For the purposes of the Petroleum Operations, the Contractor shall have


the right to use. in accordance with the applicable laws, any railroad,


tramway, road, airport, landing strip, canal, river, bridge, waterway and


any telephone or telegraph network in Liberia whether owned by the


STATE or by any private enterprise, subject to the payment of fees then in


effect or mutually agreed upon which will not be in excess of the prices


and tariffs charged to Third Parties for similar services.


The Contractor shall also have the right to use for the purposes of the


Petroleum Operations any land, sea or air transportation means for the


transportation of its employees or equipment, subject to compliance with


the laws and regulations which generally govern the use of such means of


transportation.


10.2 The STATE shall have the right to use for exceptional matters any


transportation and communication facility installed by the Contractor,


subject to a fair compensation mutually agreed upon which will not be in


excess of the prices and tariffs charged to Third Parties for similar


services.


10.3 Nothing in this Contract shall limit the STATE’S right to build, operate and


maintain on. under and along the land made available to the Contractor for


the purposes of the Petroleum Operations, roads, railroads, airports,


landing strips, canals, bridges, pipelines, useful telephone and telegraph


lines, provided that such right is not exercised In a manner which restricts


or hinders the Contractor's rights hereunder, or the Petroleum Operations.















































Co*rWfcf\!ial Oraciu Petroleum Limited PSO Liberia Block I II-11 Page 23


11«6/20052?


 APPRAISAL OF A PETROLEUM DISCOVERY








11.1 In the event the Contractor discovers Petroleum. It shall, as promptly as


possible, notify NOCAL thereof and submit to It. within thirty (30) days


after the date of the temporary plugging or abandonment of the discovery


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


11.2 If the Contractor wishes to undertake appraisal work relating to the above-





mentioned Petroleum discovery. It shall submit for approval to NOCAL,


within six (6) months after the date of notification of said discovery, the


appraisal work program and the estimate of the related Budget.





The provisions of Article 5 shall be applicable, mutatls mutandis, to said


program as regards its approval and performance, it being understood that


the submitted program shall comply with good International petroleum


Industry practice.


11.3 If the Contractor meets the conditions referred to In Article 11.2 and on


request to NOCAL. the latter shall grant to it an exclusive appraisal


authorization for a duration of two (2) years from the date of approval of


the appraisal work program and the related Budget, In respect of the


Appraisal Perimeter specified in said program. Except otherwise provided


by this Article, the Contractor shall, during the term of said exclusive


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


to the exclusive exploration authorization


11.3.1 The Contractor shall then diligently carry out the appraisal work


program for the discovery In question; In particular it shall drill


the appraisal wells and carry out the production tests specified


in said program.





At the Contractor's request notified at least thirty (30) days prior


to the expiration of the appraisal period above-defined, the


duration of said period may be extended by a maximum of six


(6) months, provided that such extension is justified by the


continuation of the drilling and production tests specified In the


appraisal program.





Further extensions of the appraisal period may be requested by


Contractor and granted by NOCAL, In the event that further


geological, geophysical, subsurface, facilities or commercial


work is considered justified by the Contractor. In order to








ConfUmMl <>fa.uo P^mlcum Limited PSC Librm Block III- k 24


11 06/200524


 establish whether the Field corresponding to the Petroleum


discovery is commercial.





11.32 Within three (3) months after the completion of appraisal work,


and no later than thirty (30) days prior to the expiration of the


appraisal period, the Contractor shall provide NOCAL with a


detailed report giving all the information relating to the discovery


and the appraisal thereof.


11.3.3 If. after having carried out the appraisal woric, the Contractor





considers that the Field corresponding to the Petroleum


discovery is commercial, it shall submit to NOCAL. together with


the previous report, an application for an exclusive exploitation


authorization accompanied by a detailed development and


production plan for said Field, specifying Inter alia:


(a) the planned delimitatJon of the Exploitation Perimeter applied for


by the Contractor, so that it covers the area defined by the


seismic closure of the Field concerned, together with aH the


technical justifications with respect to the extent of said Field.


(b) an estimate of the reserves In place: the proven and probable





recoverable reserves and the corresponding annual productions,


together with a study on the methods of recovery and the possible


valorisation of the products associated with Crude Oil, such as any


Associated Natural Gas;


(c) item by item, the description of equipment and work necessary


for production, such as the number of development wells, the


number of platforms, pipelines, production, processing, storage


and loading facilities together with their specifications;


(d) the estimated schedule for its implementation and the projected





date of production start-up;


(e) the estimates of investments and exploitation costs together


with an economic evaluation demonstrating the commercial


nature of the discovery in question.


11.3.4 The commercial nature of one or more Petroleum Fields shall


be determined by the Contractor, provided that it shall, at the


end of appraisal work, submit to NOCAL the economic study


referred to In Article 11.3.3.(e) demonstrating the commercial


nature of said Field or Fields.














('emridetioiii Unuxtt Petroleum limned PSC F fieri* Block I.II■ 11 Page 25


I I/O*700525


 A Field may be declared commercial by the Contractor If, after


taking into account the provisions of this Contract and the


submitted development and production plan, the projected


Incomes and expenses determined in accordance with good


International petroleum Industry practice confirm the commercial


nature of said Field,


11.3.5 For the purposes of evaluating the commercial nature of said





Field or Fields, NOCAL and the Contractor shall meet within


thirty (30) days after the submission of the development and


production plan accompanied by the ’economic evaluation.


11.3.6 The development and production plan submitted by the


Contractor shall be subject to the approval of NOCAL. Within


ninety (90) days after the submission of said plan, NOCAL may


propose revisions or modifications hereto by notifying the


Contractor thereof with all the useful Justifications. In that event,


the Parties shall meet as soon as possible In order to consider


the proposed revisions or modifications and establish by mutual


agreement the plan In Its final form; the plan shall be deemed to


be approved by NOCAL upon the date of such agreement.


Should NOCAL fail to notify the Contractor of its wish for





revision or modification within the above-mentioned ninety (90)


day period, the plan submitted .by the Contractor shall be


deemed to be approved by NOCAL at the expiration of said


period.





11.4 If for reasons not technically Justified, the Contractor, within twelve (12)


months after notification to NOCAL of a Petroleum discovery, has not


applied for an exclusive appraisal authorization or if, after its granting, it


has not commenced the appraisal work In respect ’of said discovery, or if


the Contractor, within eighteen (18) months after completion of the


appraisal work, does not declare the discovery as commercial. NOCAL


may require that the Contractor surrenders all its rights In respect of the


area deemed to encompass said discovery without any compensation for


the Contractor. If. within sixty (60) days after the above period and on


receipt of NOCAL’s written request, the Contractor has not notified its


decision, It shall surrender said area and will forfeit all its rights on


Petroleum which could be produced from said discovery, and any area so


surrendered shall be deducted from the "surfaces to be surrendered under


Article 3.5.

















( onrtrtennnl Ownio Pci ml™ in Limned PSC l.ibcnn Block l II-11 |*uge 26


II 06,200526


 ARTICLE 12


GRANT OF AN EXCLUSIVE


EXPLOITATION AUTHORIZATION








12.1 A commercial Petroleum discovery shall entitle the Contractor to an


exclusive right, If It so requests pursuant to the conditions set forth In


Article 11.3.3.. to obtain, in respect of the Field concerned, an exclusive


exploitation authorization covering the related Exploitation Perimeter. Said


authorization shall be granted by NOCAL as soon as possible.


12.2 If the Contractor makes several commercial discoveries in the Delimited


Area, each such discovery shall. In accordance with the provisions of


Article 12.1 give rise to an exclusive exploitation authorization each


corresponding to an Exploitation Perimeter. The number of exclusive


exploitation authorizations and related Exploitation Perimeters within the


Delimited Area shall not be limited. Contractor shall retained the right to


carryout explorations within the Exploitation Perimeter.


12.3 If In the course of work carried out after the grant of an exclusive


exploitation authorization, It appears that the area defined by the seismic


closure of the Field concerned is larger than originally estimated pursuant


to Article 11.3.3., NOCAL shall grant to the Contractor, as part of the


exclusive exploitation authorization already granted, an additional area so


that the entirety of said Field Is Included ih the Exploitation Perimeter,


provided, however, that the Contractor supplies NOCAL. together *4th Its


application with the technical evidence of the extension so required and


provided, further, that the above mentioned extension is an integral part of


the Delimited Area as defined at the time of said application.


12.4 Where a Field extends beyond the boundaries of the Delimited Area,


NOCAL may require the Contractor to exploit said Field in association with


the right holder of the adjacent area under the provisions of a unltlsatlon


agreement.


Within six (fl) months after NOCAL has notified its request, the Contractor


shall submit to Its approval the development and production plan of the


Field concerned which shall be prepared In agreement with the right


holder of the adjacent area.























ConfitVniial OWQ Petroleum limited PS( librna Bloch I II-11 P*je 27


novwosr


 DURATION OF THE EXPLOITATION PERIOD





13-1 The duration of an exclusive exportation authorization during ***** the


Contractor It authorized to carry out the exploitation of a Flak! declared


commercial It set at twenty-five (25) years from its date of issue.


If upon expiration of the exploitation period of twenty-five (25) years


above-defined, a commercial exploitation of a Field remains possible


NOCAL shall authorize the Contractor, at the latter's request submitted at


least twelve (12) months prior to sa!d expiration, to continue under this


Contract the exploitation of said Field during an additional period of no


more than ten (10) years, provided that the Contractor has fulfilled all its


obligations during the current exploitation period.


If. upon expiration of that additional exploitation period, a commercial


exploitation of said Field remains possible, the Contractor may request


NOCAL, at least twelve (12) months prior to said expiration that It be


authorized to continue the exploitation of said Field under this Contract,


during an additional period to be agreed upon.


13.2 The Contractor may, at any time, fully or partially surrender any exclusive


exploitation authorization by fllvlng at least twelve (12) months’ prior


notices which may be reduced with NOCAL’s consent. That notice shall be


accompanied by the list of steps which the surrendering Contractor


undertakes to take. In accordance with good International petroleum


Industry practices arising out of Its surrender..


13.3 Interruption of development* work or production of a Field declared


commercial, for a consecutive period of at least six (6) months (unless


extended by periods of Force Majeure). decided by the Contractor without


NOCAL’s consent, or abandonment of the exploitation of a Field, may give


rise to the withdrawal of the exclusive exploitation authorization concerned


together with the termination of this Contract. In the event of any


disagreement


between NOCAL and the Contractor regarding circumstances of the


Interruption


then the JOC shall meet to resolve the disagreement.


13.4 Upon expiration surrender or withdrawal of the last exclusive exploitation


authorization granted to the Contractor, this Contract shall terminate.


13.5 The termination of this Contract, whatever the reason thereof, shafl not


relieve the Contractor of any obligations Incurred prior to, or arising from,


said expiration or termination and which shall be fulfilled.








Confidential Orwio Petroleum Limned PSC libena Block LB-II Page 21


11 ■06/200528


 ARTICLE 14


EXPLOITATION OBLIGATION





14.1 For any Field In respect of wtilch an exclusive exploitation authorization


has been granted, the Contractor undertakes to perform, at Its sole cost


and Its own financial risk, all the Petroleum Operations In accordance with


good International oil field practice for the exploitation of said Field.





14.2 However, If the Contractor can provide accounting evidence, during either


the development period or the production period, that the exploitation of a


Field cannot be commercially profitable, notwithstanding that an exclusive


exploitation authorization has been granted in accordance with the


provisions of Article 12.1, NOCAL agrees not to force the Contractor to


continue the exploitation of such Field.


In that event. NOCAL, In its discretion, may withdraw the exclusive


exploitation authorization concerned with respect to such field from the


Contractor without any compensation for the latter, by giving a sixty (80)


days’ prior notice.










































































CoifidmHiU OriiiK> Petroleum I imuwl PSC* Liberia Block 1.0-11 Page 29


I K06/200529


 A-3HSIE.15





CONTRACTOR’S OBLIGATIONS AND RIGHTS


IN RESPECT OF EXCLUSIVE EXPLOITATION AUTHORIZATIONS








15.1 The Contractor shall commence development work not later than six (6)


months after approval of the development and production plan referred to


in Article 11.3.0 and shall continue it with the maximum diligence.


15.2 The provisions of Articles 5, 0. 7. 0, 9 and 10 are also applicable, mutatis


mutandis. In respect of any exclusive exploitation authorization.


15.3 The Contractor shall have the right to build, use, operate and maintain all


the Petroleum storage and transportation facilities which are necessary for


the production transportation and sale of Petroleum produced, pursuant to


the conditions specified in this Contract.


The Contractor may determine the route and location of any pipeline


Inside Liberia which is necessary for the Petroleum Operations, provided


that It shall submit plans to NOCAL for approval prior to the


commencement of work; any pipeline crossing or running alongside roads


or passageways (other than those used exclusively by the Contractor)


shall be built so as not to hinder the passage on those roads or


passageways.


15.4 The Contractor may. to the extent and for the duration of the excess


capacity of a pipeline or processing, transportation or storage facility built


for the purposes of the Petroleum Operations, be obligated to accept the


flow of Petroleum coming from exploitations other than that of the


Contractor, provided that such flow she! not cause prejudice to the


Petroleum Operations, and provided, further, that a reasonable tariff


covering a normal remuneration for capital Invested In respect of the


pipeline or facility concerned shall be paid by the user.


15.5 Following the grant of an exclusive exploitation authorization, the


Contractor undertakes to proceed diligently with the Carrying out of


development, and production plan to ensure. In accordance with good


international petroleum Industry practice, the maximum economic recovery


of the Petroleum contained In the Field in question.


15.0 The Contractor shall, in the conduct of development and production


operations, comply with all good international potroleum industry practice


which in particular ensures the good conservation of Fields and maximum


economic recovery of Petroleum.











< 'onfldmlMl Orano Petroleum linked PSCUbem Blort III-11 Pt*eJ0


II1I67005.W)


The Contractor shall, if deemed appropriate by Contractor and NOCAL,


carry out enhanced recovery studies and use such recovery processes if


they may lead to an increase in Petroleum recovery rate under economic


conditions.


15.7 The Contractor shall provide NOCAL with all the reports, studies,


measurement results, tests and documents enabling the monitoring of the


proper exploitation of each Field.


The Contractor shall. In particular, carry out the following measures on


each producing well:


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


(b) half-yearly measurement of the Field reservoirs pressure or other


methods to monitor reservoir performance as agreed by the


- Parties.


15.8 The Contractor undertakes to produce every year from each Reid


quantities of Petroleum In accordance with the provisions of Article 15.6.


The annual production rates of each Reid shall be submitted by the


Contractor together with the Annual Work Programs for the approval of


NOCAL which shall not be withheld provided that the Contractor gives


proper technical and economic grounds.


15.9 The Contractor shall measure all petroleum produced after extraction of


the water and associated substances using, with the agreement of the


NOCAL, Instruments and procedures In keeping with the International


petroleum Industry methods. NOCAL shall have the right to examine


these measurements and to Inspect the Instruments and procedures used.


If during exploitation, the Contractor wishes to change said Instruments


and procedures. It shall obtain the prior consent of NOCAL, which will not


be unreasonably withheld.



































Confidential Ortmio Petroleum Limited PSC l.ibcriu (Dock MM I P«g« 31


I I/M2005.M


ARTICWE.1^


RECOVERY OF PETROLEUM COSTS AND PRODUCTION SHARING


16.1 From the commencement of regular production of Crude Oil. the


Contractor shall market all the production of Crude Oil obtained from the


Delimited Area, In accordance with the provisions hereinafter defined.


16.2 For the purposes of recovery of the Petroleum Costs, the Contractor may


freely take each Calendar Year a portion of the production In no event


greater than eighty percent (80%) of the Total Production of Crude Oil


from the Delimited Area, or only any lesser percentage which would be


necessary and sufficient.


The value of such portion of Total Production allocated to the recovery of


the Petroleum Costs by the Contractor, as defined In the preceding


paragraph, shall be calculated In accordance with the provisions of Article


18.


If during a Calendar Year the Petroleum Costs not yet recovered by the


Contractor under the provisions of this Article 16.2 exceed the equivalent


In value of seventy percent (70%) of the Total Production of Crude Oil


from the Delimited Area, as calculated above, the balance of the


Petroleum Costs which cannot be recovered In that Calendar Year shall


be earned forward In the following Calendar Year or Years until full


recovery of the Petroleum Costs or until the expiration of this Contract


16.3 The quantity of Crude OH from the Delimited Area remaining during each


Calendar Year after the Contractor has taken from the Total Production


the portion necessary for the recovery of the Petroleum Costs, hereinafter


referred to as 'Remaining Production, and shall be shared between


NOCAL and the Contractor as follows:


The Remaining Production shaH be shared according to the daiy Total


Production from the Deimited Area. Remaining Production shall be


shared Incrementally on the basis of the following production traunches:





[Increments of dally total NOCAL's Contractor's


Production (In Barrels per day) Share share


From 0 to 100,000 40% 60%


From 100,000 to 150,000 50% ] 50%


Over 150,000 60% 40%





In the case of natural gas the production shall be split:


NOCAL 30% Contractor 70%





Confidential Onmo Petroleum l irmwd PSC Liberia Block LB-11 P««e 32





11/06/200532


For the purpose of this Article, the daily Total Production shall be the


average rate of Total Production during the calendar quarter in question.


For the purposes of the tax legislation of the Republic of Liberia, the


quantity of Crude Oil that NOCAL will receive during each Calendar Year


pursuant to this Article 16 3 shall include the portion necessary to pay any


tax(es) of the Contractor in Liberia which will be assessed on its incomes,


see Article 17 below. NOCAL agrees to pay from its portion of the


production split any income tax on behalf of and in the name of the


Contractor as and when due, and to deliver to the latter copies of all


official receipts of such payments.


16.4 NOCAL may receive Its share of production defined in Article 16.3 either in


kind or in cash


16.5. If NOCAL wishes to receive in kind all or part of its share of production


defined in Article 16.3 it shall so notify in writing to the Contractor at least


ninety (90) days prior to the beginning of the calendar quarter concerned


specifying the precise quantity that it wishes to receive In kind dunng said


quarter.


16.6 If NOCAL wishes to receive in cash all or part of its share of production


defined in Article 16.3 or if NOCAL has not notified the Contractor if its


decision to receive its share of production in kind pursuant to Article 16.5,


the Contractor shall market NOCAL's share, of production to be taken In


cash for the quarter concerned, lift said share during such quarter and pay


to NOCAL within thirty (30) days following the date of each Irfbng. an


amount equal to the quantity corresponding to NOCAL’s share of


production multiplied by the sale price defined In Article 18.


NOCAL may require payment, for sales of its share of production sold by


the Contractor. In Dollars or in the foreign currency in which the sale has


been made


 ARTICLE 17





TAXATION





17.1 Unless otherwise provided for In this Contract the Contractor shall. In


respect of Its Petroleum Operations, be subject to the laws generally


applicable and the regulations In force In Liberia oonceming taxee which


are or may be levied on incomes, or determined thereto.


It Is specifically acknowledged that the provisions of this Article shall apply


individually to each entity comprising the Contractor under this Contract.


The Contractor shall keep separate accounts for each Fiscal Year In


respect of the Petroleum Operations, in accordance with the regulations In


force In Liberia, enabling In particular the establishment of a profit and loss


aocount as well as a balance sheet showing both the results of said


Petroleum Operations and the asset and liability Items allocated or related


thereto.


17.2.1 For the purposes of Article 17.1 the Contractor shall In respect of Its net


profit arising from Petroleum Operations, be liable to an Income tax under


the laws and regulations In force In Liberia.


Income Tax rate applicable to Petroleum Operations carried out under this


Contract shall be (35%) thirty-five per cent.


In accordance with the provisions of Artide 16.3 under which NOCAL shall


pay Contractor's income tax from NOCAL’s share of crude oil, the


Contractor shall not be Habie for any payment to the STATE with respect


to sard tax. As rega-ds the tax authorities of Liberia, the share of Crude Oil


of Total Production, which the Contractor is entitled to receive under the


provisions of Artide 16.3 is considered as representing the net profit


obtained by the Contractor.


17.3 For the purposes of assessing the Contractor's total taxable income In


respect of a Fiscal Year, the profit and loss account shall. Inter alia, be


credited by the following:


(a) the Contractor's annual gross income recorded in Its accounting


books, arising from the marketing of the quantity of Crude Oil to


which it is entitled under Artdes 16.2 and 16.3 all other incomes or


proceeds related to the Petroleum Operations, including inter alia


those arising from:


• the sale of related substances;


• processing, transportation or storage of products for Third


Parlies in the fadlities dedicated to the Petroleum Operations.





( onMnul Orao Penoirarr 1 iimud PSC Liberia Block I B-11 Page 34


11 0#V2005U


 *7.4 Such profit and loss account shall be debited with all charQea necessary


for the purposes of the Petroleum Operations In respect of the Fiscal Year


ooncemed. which may be deducted under the applicable laws of Liberia


and the provisions of this Contract.





In particular the following Items shall be debited from the Income of the


Fiscal Year:


(a) In addition to the charges specifically set forth below In this Article


17.4, all other Petroleum costs, including the costs of supplies,


personnel and manpower expenses, costs of services provided to the


Contractor in respect of the Petroleum Operations, provided, however,


that costs of supplies, personnel and services rendered by Affiliated


Companies shall be deductible provided that they do not exceed those


which would be normally charged In arm's length transactions between


Independent buyer and seller for identical or similar supplies or


services.


(b) Overhead costs relating to the Petroleum Operations performed under


this Contract, Including without limitation:


• Rentals for movable and immovable properties as well as insurance


premiums;





• As set out In the Accounting procedure. In Sght of the services


rendered to the Petroleum Operations performed in Libert*, of


wages and salaries paid to manager* and employees residing


abroad, and the general and administrative overhead costs of the


central services of the Contractor and Its Affiliated Companies


worlcing for its account located abroad, and indirect costs ipcurrad


by said central services abroad for their account. Overhead coats


paid abroad shall in no event be greater than the limits specified in


the Accounting Procedure.


(c) Interest paid to creditors of the Contractor, for their actual amount,


subject to the limits specified In the Accounting Procedure.


(d) Losses of materials or assets resulting from destruction or damage,


assets which are renounced or abandoned during the year, bad debts.


indemnities paid to Third Parties as compensation for damage.





(e) Reasonable and justified reserves made ter dearly identified future


losses or liabilities which currant avants render probable.











CmlUkntisI tJrunto Perolcum I .imiiert PNC I therm I Hock I »• 11 P«ge 33


IHKWJ00535


(0 Any other losses or charges directly related to the Petroleum


Operations, including exchange losses realized in connection with the


Petroleum Operations as well as bonuses and amounts paid during the


Fiscal Year.


(g) Surface rentals as defined In article 17.10


(h) Any other Contractor expense recorded according to Accounting


procedure


17.5 The Contractor's total taxable profit shall be equal to the difference,


between all the amounts credited and all the amounts debited In the profit


and loss account. If this amount Is negative, it shall constitute a loss.


17.6 Within three (3) months after the end of a Fiscal Year, each entity


constituting the Contractor shall submit to the competent tax authorities its


annual tax return together with financial statements, as required by


applicable regulations.


Contractor shall provide NOCAL with a copy of the Tax return duly


submitted to the Tax Authorities.


NOCAL, shall, after receiving the copy of said annual tax return furnish to


the Contractor within a reasonable period (no more than sixty days) the


tax receipts evidencing, the payment of Contractors Liberian Income tax


and all other documents certifying that the Contractor has. for the Fiscal


Year In question, complied with all Its tax obligations with respect to the


Income tax as defined in this Article. Such receipts shall be Issued by the


relevant taxing authorities and shall state the amount and other particular


circumstances, according to Appendix 2 of this Contract.


17.7 Except for the income tax defined In this Article and the bonuses provided


for in Article 19, the Contractor shall be exempt from all other levies,


duties, taxes or contributions of any nature whatsoever arising from the


Petroleum Operations and any revenues related thereto or, more


generally, on Contractor's property, activities or actions, including its


establishment and its operation hereunder.


In particular, the Contractor, its suppliers, subcontractors and Affiliated


Companies shall be exempt from the taxes or turnover (value added taxes


and taxes on services) which would be payable in connection with sales


made by, work performed for and services rendered to the Contractor


under this Contract.


17.8 Assignments of any kind between the companies signing this Contract and


their Affiliated Companies as well as any assignment made in accordance








( onfetmtiol Onnio Petroleum Limited PSC Liberia Block LB-11 Page 36


11.0*20053*


with this Agreement to a third party shall be exempt from any duties or


taxes payable in such respect.


17.0 Surface rentals shall be payable to NOCAL per square kilometer of the


area remaining at the beginning of each Calendar Year as part of the


Delimited Area, in the amounts as set out below:


Phase of Operation


Surface Rentals Per Annum


First Exploration Period $30 per sq. km


Second Exploration Period $50 per sq. km.


Third Exploration Period $75 per sq. km.


Development & Exploitation Area $100 per sq. km.








































































































ConAdentinl Oranto Petroleum limited PSC Ubctiii Block MM I Page 37


11/06/200537


 ARTICLE 18





VALUATION OF PETROLEUM


18.1 For the purposes of this Contract, the Crude Oil price shall be the F. O. B.


Market Price" at the Delivery Point, expressed in Dollars per Barrel and


payable within thirty (30) days after the date of the bill of lading, as


determined hereinafter for each quarter.


A Market Price shall be determined for each type of Crude Oil or Crude Oil


mix.


18.2 The Market Price applicable to liftings of Crude Oil made during a


calendar quarter shall be calculated at the end of said quarter and shall be


equal to the weighted average of the prices obtained for Crude Oil from


the Delimited Area during said quarter by the Contractor and by NOCAL


from independent purchasers, as adjusted to take into account the


differences in quality and gravity as well as In F.O.B. delivery terms and


payment conditions.


18.3 In the event such sales are not made, the Market Price shall be


determined on the basis of the prices obtained on the international market


during said quarter between independent buyers and sellers for sales of


crude oils of contract term, quantity and quality equivalent to the Crude Oil


from the Delimited Area in the same markets as those in which the


Liberian Crude Oil would normally be sold, as adjusted to take into


account the differences In quality, gravity, transportation as well as in


sales and payment conditions.


18.4.1 The following transactions shall, inter alia, be excluded from the


calculation of the Market Price of Crude Oil:


(a) sales In which the buyer is an Affiliated Company of the seller as


well as sales between entities constituting the Contractor.


(b) sales in the Liberian domestic market;


(c) sales in exchange for other than payment in freely convertible


currencies and sales fully or partially made for reasons other then


the usual economic incentives involved In Crude Oil sales on the


international market (such as exchange contracts, sales from


government to government or to government agencies).


18.5 Within ten (10) days foiiowing the end of each quarter, the Parties shall


advise each other of the prices obtained for their share of production of


Crude Oil from the Delimited Area eokJ to independent purchasers during








CorMmtuI Orario Petroleum l irmted PSC Liberia Block LB-11 Page 38


1106/200338


 the quarter In question, indicating for each sale the Identity of ttv


purchaser, the quantities sold, the delivery and payment terms.


Within twenty (20) days following the end of each quarter, the Contract)





shall determine In accordance with the provisions of Article 18.2 or Artk*


18.3, as the case may be. the Market Price applicable for the quarte


concerned, and shall notify NOCAL of that Market Price, indicating tt*


method of calculation and afl data used In the calculation of that marke


Price.





Within thirty (30) days following receipt of the notice referred to In the


preceding paragraph. NOCAL shall verify that the calculation of Market


Price complies with the provisions hereof and shall notify the Contractor of


Its acceptance or objections. Falling notification from NOCAL within that


thirty (30) day period the Market Price provided for in the Contractor's


notice referred to in the preceding paragraph shall be deemed to have


been accepted by NOCAL.





In the event that NOCAL has notified objections to the Market Price, the


Parties shall meet within fifteen (15) days following NOCAL's notification to


mutually agree on the Market Price. If the Parties fail to agree on the


Market Price applicable to a given quarter within seventy-five (75) days


after the .end of that quarter, NOCAL or the Contractor may Immediately


submit to an expert, appointed in accordance with the following paragraph,


the determination of the Market Price (Including the determination of


reference crude oils if the Parties have not determined them). The expert


shall determine the price within thirty (30) days after his appointment and


his conclusions shell be flnel end binding on the Parties. The expert shall


decide in accordance with the provisions of this Article.


The expert shall be selected by agreement between the Parties or. if no


agreement Is reached, by the International Centar of Expertise of the


international Chamber of Commerce in accordance with Its ndes on


Technical Expertise, af the request of the most dWgent Party. The


expertise costs shall be charged to the Contractor and Included In the


Petroleum Costs.





18.6 m the event ir would be neceasery to calculate on e provisional basis


during a quarter the Crude Oil price applicable to the liftings made during


said quarter, that price shall be established as follows:


(a) For any sale to Independent buyers, the price applicable to





that sale shall be the price obtained for the Crude Oil for said


sale, as adjusted to take Into account the F O B. delivery


terms and thirty (30) days payment terms.








ConfidntMl Onmo Prtrolrum Umied PSC l ibrri. illoc* l B-1! Page 39


IMJA/ttUSM


 (b) For any lifting other than those which are the subject of a


sale to independent buyers, the price applicable to that lifting


shall be the Market Price determined for the preceding


quarter or. if that Market Price has not been determined, a


price set up by agreement between the Parties or. failing


agreement, the last known Market Price.


Once the Market Price for a quarter has been determined on a final basis,


adjustments. If required, shall be made within thirty (30) days.

















































































































Confidential Oranio Petroleum Limited PSC Liberia Block LB I 40


11/06/200540


 ARTICLE 19


BONUSES








19.1 The Contractor shall pay to NOCAL the following bonuses:





(a) 3 5 Mribon Dollars when the Total Production of Crude 04 from the


Delimited Area first reaches the average rate of thirty thousand


(30,000) Barrels per day during a period of thirty (30) consecutive


days.


(b) 4 5 Million Dollars when the Total Production of Crude Oil from the


Delimited Area first reaches the average rate of fifty thousand


(50,000) Barrels per day during a period of thirty (30) consecutive


days


(c) 5.5 Million Dollars when the Total Production of Crude Oil from the


Delimited Area first reaches the average rate of one hundred


thousand (100.000) Barrels per day during a period of thirty (30)


consecutive days


Each of the amounts referred to in (a), (b) end (c) above shall be paid


within thirty (30) days following the expiration of the reference period of


thirty (30) consecutive days







































































Confidential Ortmo Petroleum Limited PSC Liberia Block LB-11 Page 41


I5W2005


 ABHCLE-3P





OWNERSHIP AND ABANDONMENT OF ASSETS


20.1 Upon expiration, surrender or termination of this Contract, whatever the


reason thereof, in respect of all or part of the Delimited Area, or at the end


of exploitation of a Field, the Contractor shall transfer at no cost to NOCAL


the ownership of assets, movables and Immovables owned by a


Contractor, used for the requirements of the Petroleum Operations carried


out in the area so surrendered, located whether inside or outside the


Delimited Area, such as wells and their equipment, buildings, warehouses,


docks, lands, offices, plants, machinery and equipment, bases, harbours,


wharfs, Jetties, buoys, platforms, pipelines, roads, bridges, railroads and


other facilities.


Such transfer of ownership shall cause the automatic cancellation of any


security or surety concerning those assets, or which those assets


constitute.


However, the Contractor may continue to use those assets beyond the


date referred to In the first paragraph, for the requirements of Its


Petroleum Operations in Liberia governed by other contracts.


20.2 If NOCAL decides not to accept, for all or part of the assets, the transfer of


ownership provided for in Article 20.1, it may. not later than ninety (90)


days following the date specified in said Article, require the Contractor, in


accordance with good international petroleum industry practice, to perform


abandonment operations and to remove, at the cost of the Contractor, the


facilities relating to the surrendered area.


















































CoMAOmdal Oanio Petroleum Umiied PSC I .bm« Block LB-11 P^e 42


I I t*.200*2


 MTKtf 21





NATURAL GAS








21.1 Non-Assodated Natural Gas


21.1.1 In the event of a Non-Associated Natural Gas discovery, the


Contractor shall engage in discussions with NOCAL with a view to


determining whether the appraisal and exploitation of said


discovery have a potentially commercial nature.


21.1.2 If the Contractor, after the above-mentioned discussions, considers


that the appraisal of such Non-Associated Natural Gas discovery is


Justified; It shall undertake the appraisal work program for said


discovery.





The Contractor shall have the right, for the purposes of evaluating


the commerriality of the Non-Assodated Natural Gas discovery. If it


so requests at least thirty (30) days prior to the expiration of the


third exploration period set forth in Artide 3.3 to be granted an


exduslve appraisal authorization concerning the Appraisal


Perimeter of the above-mentioned discovery, for a term of two (2)


years.


In addition, the Parties shall jointly evaluate the possible outlets for


the Natural Gas, both on the local market and for export, together


with the necessary means for Its marketing, and they shall consider


the possibility of a joint marketing of their shares of production In


the event the Natural Gas discovery would not otherwise be


commercially exploitable. For that purpose, a Consultative


Committee for Natural Gas shall be established by the Parties to


ensure the coordination of the upstream and downstream


components of the Natural Gas project and facilitate Its evaluation


and implementation.


21.1.3 Following completion of appraisal work, in the event the Partes


should jointly decide that the exploitation of that discovery is


justified to supply the local market, or in the event the Contractor


should undertake to develop and produce that Natural Gas for


export, the Contractor shall submit prior to the expiration of the


appraisal period an application for an exclusive exploitation


authorization which NOCAL will grant under the terms provided by


Article 12.1.














(onfckncu! Or«o Pcvolcw* l PNC l itana Block l B-U Pi*«43


11 06 tnou?


 The Contractor shad then have the right and obligation to proceed


with the development and production of that Natural Oat In


accordance with the approved development plan referred to In


Article 11.3 and the provisions of this Contract applicable to Crude


OH shai apply, mutatis mutandis, to Natural Gas, unless otherwise


specifically provided under Article 21.3.


the If the Contractor considers that the appraisal of the Non-Assodated


w to 21.1.4


MM Natural Gas discovery concerned is not Justified. NOCAL may, by


giving twelve (12) months prior notice which may be reduced either


with NOCAL.'s consent or automatically In the event the exclusive


ders exploration authorization expires earlier, require the Contractor to


ryis surrender its rights in respect of the area encompassing said


•aid discovery.


In the same manner, if the Contractor, after completion of appraisal


?§;issff? §!sf*l works, considers that the Non-Assodated Natural Gas discovery Is


not commerdal, NOCAL may. by giving three (3) months prior


notice, unless the exdusive exploration authorization expires


earlier, require the Contractor to surrender its rights on the area


encompassing said discovery.





In both cases, the Contractor shall forfeit Its rights to all Non-


Assodated Natural Gas which could be produced from said


discovery, and NOCAL may then carry out. or cause to be carried


out, all the appraisal, development, production, processing,


transportation and marketing work relating to that discovery, without


any compensation for the Contractor.





21.1.5 Notwithstanding tha larms of Artlda 21.1.4. If the Operator is of tha


view that non-Assodeted Gas development In question is non¬


economic. as a stand alone development but can demonstrate that


there Is sufRdent prospectivity In the region to support a continued


development of current discovered reserves and future prospects


as a combined economnlc development, then NOCAL will provide


the Contractor a period of (30) Wrty-elx months before exercising


its rights pursuant to Artide 21.1.4

















 21.2 Associated Natural Gas





212.11n the event of a commercial discovery of Crude OH. the Contractor


shal state if. it considers that the production of Associated Natural


Gas is likely to exceed the quantities necessary for the


requirements of the Petroleum Operations related to the production


of Crude OS (including reinjection operations), end if it considers


that such excess is capable of being produced In commercial


quantities. In the event the Contractor shall have Informed NOCAL


of such an excess, the Parties shall jointly evaluate the possible


outlets for that excess of Natural Gas, both on the local market and


for export (including the possibility of joint marketing of their shares


of production of that excess of Natural Gas in the event such


excess would not otherwise be commercially exploitable), together


with the means necessary for Its marketing


In the event the Parties should decide that the development of the





excess of Natural Gas is justified, or in the event the Contractor


would wish to develop end produce that excess for export, the


Contractor shall indicate In the development and production


program referred to in Article 11.3.3 the additional facilities


necessary for the development and exploitation of that excess and


Its estimate of the costs related thereto.


The Contractor shall then have the right to proceed with the





development and exploitation of that excess In accordance with the


development and production program approved by NOCAL unoer


the terms provided by Article 11.3.6 and the provisions of the


Contract applicable to Crude Oil shall apply, mutatls mutandis, to


the excess of Natural Gas. unless otherwise specifically provided


by Article 21.3.





A similar procedure shall be applicable If the sale or marketing of


Associated Natural Gas is decided during the exploitation of a


Field.


21.2.2. In the event the Contractor should not consider the exploitation of


the excess of Natural Gas as justified and if NOCAL, at any time,


would wish to utilize It. NOCAL shall notify the Contractor thereof, In


which event:





(a) the Contractor shall make available to NOCAL free of charge at


the Crude Oil and Natural Gas separation facilities all or port of


the excess that NOCAL wishes to lift;











( onfldential Oranco Petroleum l.imitctl PSC Liberia Block I II-11 P«se 45


111)6/200545


 (b)NOCAL shall be responsible tor the gathering, processing,


compressing and transporting of that excess from the above-


mentioned separation facilities and shall bear any additional


.a acs??7 petroleum costs related thereto;





(c) the construction of the facilities necessary for the operations


referred to In paragraph (b) above, together with the lifting of


that excess by NOCAL. shall be carded out In accordance with


good international petroleum industry practice end in such a


manner as not to hinder the production, lifting and transportation


of Crude Oil by the Contractor.





21.2.3 Any excess of Associated Natural Gas which would not be utilized


under Articles 21.2.1. and 21.2.2., shall be reinjected by the


Contractor. However, the Contractor shall have the right to flare


said gas in accordance with good international petroleum industry


practice, provided that the Contractor furnishes NOCAL with a


report demonstrating that said gas cannot be economica By utilized


to improve the rate of recovery of Crude Oil by means of reinjection


pursuant to the provisions of Article 15.6., and provided, further,


that NOCAL approves said flaring, which approval shall not be


unreasonably withheld.





Provisions common to Associated and Non-Associated Gas


21.3.1 In order to encourage the exploitation of Natural Gas. NOCAL may





grant to the Contractor specific benefits when they are duly Justified


concerning, inter alia, the recovery of the Petroleum Costa relating


to Natural Gas.


21.3.2 The Contractor shall have the right to dispose of Its share of


production of Natural Gas, in accordance with the provisions of this


Contract. It shall also have the right to proceed with the separation


of liquids from all Natural Gas produced, and to transport, store as


well as sell on the local market or for export its share of liquid


Petroleum so separated Which will be considered as Crude Oil for


the purposes of their sharing between the Parties under Article 16.


r


».


in


 21.3.3 For the purposes of this Contract, the Natural Oat price expressed


In Dollars per minion BTU. shall be equal to:





(a) with respect to Natural Oas export sales to Third Pardee,


3» ?


price obtained from purchasers;


(b) vdth respect to sales on the local martial of Natural Oas


price Shan be as NOCAL (or the national entity that


STATE would set up for the distribution of Natural Oas


the local market) and the Contractor mutually agree upon.














































































































Confident**! Oramo Petroleum limited P8C Libena Block LB-II rap 47


11/06/200547


 ARTICLE 22


FOREIGN EXCHANGE CONTROL








22.1 The Contractor shall comply with the foreign exchange control regulations,


subject to the provisions of this Article.


22.2 The Contractor shall have the right to retain abroad all the foreign


currencies arising from export sales of all Petroleum to which it is entitled


under this Contract, or from assignments, as well as equity, incomes from


loan and more generally, all assets acquired abroad by it, and to freely


dispose of such foreign currencies or assets to the extent that they may


exceed its requirements for its operations In Liberia.





22.3 No restriction shall be exercised on Importation by the Contractor of funds


Intended for the performance of the Petroleum Operations.


22.4 The Contractor shall have the right to purchase currencies of Liberia with


foreign currencies, and freely exchange into foreign currencies of Its


election any funds held by it in Liberia in excess of its local requirements


at exchange rates which shall not be less favourable than those generally


applicable to any other buyer or seller of foreign currencies.






























































CoaAdmtal Oranto Pd-otcun limned PSC Liberia Bloch IBM Page 48


11 TX.70054*


 ARTICLE 23


APPLICABLE LAW











The laws and regulations In force In the Republic of Liberia and the provisions of


international law as may be applicable to International oil and gas activities shall


apply to the Contractor, to this Contract and to the Operations which are the


purpose thereof, unless otherwise provided by the Contract.


























































































































ConlWcntial Ormuo Petroleum Limited PSC IJbena Block LB-11 Page 49


11,06/200549


*




















MONETARY UNIT


24.1 The regulars end accounting books relating to this Contract she* be


maintained and recorded in Dollars. Said registers and accounting books


shall be used to determine the Petroleum Costs, gross Income,


exploitation costs and net profits for the purpose of the preparation of the


Contractor's tax return; they shall contain, inter alia, Contractor's accounts


showing the sales of Petroleum under this Contract.


24.2 Whenever it is necessary to convert into Dollars expenses and incomes


expressed in another currency, the exchange rates to be used shall be


equal to the arithmetic average of the dally dosing rates for the purchase


and sale of said currency during the month when the expenses were paid


and the income recerved


24.3 The originals o< the registers and accounting books referred to In Artide





24.1 shall be kept in Liberia.


The registers and accounting books shall be supported by detailed


documents with respect to receipts and Petroleum Coats.




































































( onUdmlul Oramo Pcuokum Limned PSC l ihm« Hluc* LB-11 Pace 50


110*100550


 ARTICLE 25


ACCOUNTING METHOD AND AUDITS


25.1 The Contractor shall maintain Ha § accounts In accordance with the


regulations In force and with the prc&istons of the Accounting Procedure


set out in Appendix 2 attached hereto forming an Integral part of this


Contract.


25.2 After giving the Contractor notice thereof in writing, the STATE shall have


the right to cause the registers and accounting books relating to the


Petroleum Operations to be inspected and audited by Its own agents or by


experts of its election, and shall have a period of four (4) years following


the end of each Calendar Year to carry out those Inspections or audits


relating to said Year and may submit Its objections to the Contractor for


any contradictions or errors found during such Inspection or audits


Should the STATE fail to make any claim within the above-mentioned


period of four (4) years, no further objection or dalm shall be made by the


Liberian administration for the Calendar Year concerned.







































































f nnildoiiiot i >r»mi. ivimlciiin i iii'iicd I ibrtiu Hliwh Ml. 11 Page Si


11 HKW5I


 IMPORT AND EXPORT





26.1 (a) The Contractor shall have the right to Import Into Liberia, In Its own


name or on behalf of Its contractors and subcontractors, all the technical


equipment, materials, machinery and tools, goods and supplies necessary


In the Contractor's opinion for the proper conduct and achievements of the


Petroleum Operations, such imports include but are not limited to. dnlllng.


exploration, development, production, transportation, sales and marketing,


equipment, pipelines, tanks, geological and geophysical tools, boats,


ships, launches, drilling barges, ships and platforms, production platforms,


civil engineering and telecommunication equipment, power plants and all


related equipment, aircraft, automotive equipment and other vehtdes.


instruments, tools, spare parts, alloys and additives, camping equipment,


protective clothing and equipment, medical, surgical and sanitary


equipment, supplies and instruments necessary for the Installation and


operation of hospitals and dispensaries, documentation equipment,


construction materials of all types, lumber, office furniture and equipment,


automobiles, explosives, chemicals, fuels, ship supplies, pharmaceutical


products, medicines.


(b) The Contractor shall have the right to import Into Liberia, in its own





name or on behalf of its contractors or subcontractors, the furniture,


clothing, household appliances and aft personal effects for aft the


foreign employees and their fam Ikes assigned to work m Liberia for


the Contractor or its contractors or subcontractors.





(c) However, the Contractor, its agents, contractors and subcontractors


undertake not to proceed with the imports mentioned In Article


26.1.(a) insofar as such items are available in Liberia under


equivalent conditions of quantity, quality, price, delivery and terms


of payment, unless specific requirements or technical emergencies


are presented by the Contractor.


(d) The Contractor, Its agents, contractors and subcontractors shall have





the right to re-export from Liberia, free of all duties and taxes and at any


time, all the Items imported under Article 26.1.(a) and (t>) which are no


longer necessary for the Petroleum Operations except the items which


have become the property of the State under the provisions of Article 20.























I Otimo Pornkura I inurti PSC Liberia Biota i Page 52


11 •06. MW55?


26.2 All the technical materials, machinery and tools, goods and supplies


specified In Article 26.1 which the Contractor, its agents, contractors and


subcontractors, their foreign employees and their families will have the


right to import In one or more shipments to Liberia, shall be fully exempt of


all duties and taxes payable as a result of the importation ("entry duties


and taxes').


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


of the following regimes:


(a) Exceptional temporary admission regime in fuH suspension of entry


duties and taxes for equipment, materials, machinery and tools,


goods and supplies necessary for the proper progress of the


Petroleum Operations, for the entire duration of their use In Liberia


Including the continental shelf, It being understood that for the


equipment, materials, machinery and tools, and goods and supplies


oonsumed during the operations or left in place, the exceptional


temporary admission discharge will be automatic by simple


quarterly declaration and without payment of duties and taxes.


In the event of a duly justified emergency, the equipment, materials,


tools and machinery, goods and supplies will be placed at the


disposal of the users as soon as they arrive in Liberia and the


administrative regularization relating to their admission win be made


later and as soon as possible.


(b) Supply regime for consumable goods and foodstuffs, fuels and


lubricants used at sea, In particular on all ships, aircraft and


machinery used for petroleum exploration and exploitation.


(c) Exempt admission regime according to the regulations In force, for


furniture, clothing, household appliances and personal effects.


26.3 The Contractor, its agents, contractors and subcontractors shall, provided


that they Inform the STATE in advance of their intent to sell and subject to


the provisions of Article 20, have the right to sell in Liberia, all equipment,


materials, machinery and tools, goods-and supplies which they have


imported when they are considered as surplus and no longer necessary


for the Petroleum Operations. In that event, the seller shall be responsible


for paying all duties and taxes applicable on the date of the transaction


and for filing all the formalities prescribed by the regulations in force.

















Con ii dm w I i Wiiiiio l’cw»leum Limited PS* Mhenn HUvi t •-1 Puge S3


in*. ?ous;»


26.4 During the term of this Contract, the Contractor, its customers and their


carriers shall have the right to export freely at the export point selected for


that purpose, free of all duties and taxes and at any time, the portion of


Petroleum to which the Contractor is entitled In accordance with the


provisions of this Contract, after deduction of all deliveries made to the


STATE.


26.5 The Contractor shall be exempt from any pre-inspection regulations that


may exist In Liberia. NOCAL and the STATE shall ensure that such


exemptions are upheld and provide relevant documentation and approvals


as may be required by Liberia Customs authority.











































































































iHi.Jrmiu! Omnin IVHnloum Umnr

i I ill. 2005?-


 ARTICLE 27


DISPOSAL OF PRODUCTION


27.1 Each Calendar Year, up to a total of ten percent (10%) of the share of





Crude Oil Production to which the Contractor is entitled, shall be sold to


NOCAL by the Contractor for the purpose of satisfying the needs of the


domestic market of Liberia. Such contribution of the Contractor shall be in


proportion to its share of production, in the total Crude Oil Production in


Liberia.


The quantity of Crude Oil the Contractor shall be obligated to sell to


NOCAL shall be notified to it by NOCAL at least three (3) months prior to


the beginning of each calendar quarter.


27.2 The price of the Crude Oil sold to NOCAL under Article 28.1 for the needs


of the domestic market shall be the Market Price defined in Article 18.





That Crude Oil price shall be payable to the Contractor In Dollars one (1)


month after receipt of the invoice unless otherwise agreed between the


Parties,


27.3 The transfer of title to, and risk of, the share of Petroleum production to


which each party Is entitled shall be made at the Delivery Point, or at any


their transfer point agreed between the Parties.


27.4 Each of the Parties shall have the right and obligation, to dispose of and


lift the share of Petroleum to which it is entitled under this Contract.


Such share shall be lifted on as regular a basis as possible, it being





understood that each of the Parties, within reasonable limits, will be


authorized to lift more (overlift) or less (underlift) than its share of


Petroleum produced and unlifted by the lifting day to the extent that such


overlift or underlift does not infringe on the rights of the other Party and is


compatible with the production rate and the storage capacity. In the


establishment of the sequence of liftings, priority will be given to the Party


with the largest share of produced and unlifted quantity of Petroleum at a


given time. The Parties shall periodically meet to establish a provisional


lifting program on the basis of the principles above-described and taking


into account the wishes of the Parties as regards the dates and quantities


of their liftings, provided that those wishes are compatible with said


principles.

















l mifidenlia; (>T4'i;u Linwd P5C* Llbmi HI-* • P^.55


I |<«6'200S55


 ARTICLE 28


PROTECTION OF RIGHTS





"5 a p s s a a 28.1 The Contractor shall take all necessary steps to achieve the objectives of


this Contract m Its conduct of Petroleum Operations.





28.2.1 NOCAL shall take all necessary steps to facilitate the implementation by


the Contractor of the objectives of this Contract, and the STATE shall


protect the property and operations of the Contractor, its employees and


agents In the territory of Liberia.


28.3 At the request of the Contractor, the STATE shall prohibit the construction


of dwelling or business buildings In the vicinity of installations which the


Contractor may dedare dangerous as a result of its operations It shall


take all necessary precautions to prohibit anchoring In the vicinity of


submerged pipelines at river passages, and to prohibit any hindrance to


the use of any other Installation necessary for the Petroleum Operations


D whether on land or offshore.





28.4 The Contractor shall take out and cause to be taken out by its contractors


and subcontractors, in respect of the Petroleum Operations, all insurances


0 of the type and for such amounts customarily used in the international


y petroleum industry. Including without Hmrtabon. third party liability


insurance and insurances to cover damage to property, facilities,


equipment and materials, without prejudice to such Insurances which


would be required under Liberian legislabon
























































( mASraml Or**,, p0mtn>* l B*irO PSC l .bc^* Page 56


11*02001**


ARTICLE 2?


PERSONNEL, TRAINING, SOCIAL AND WELFARE


29.1 The Contractor shall, for the purposes of the Petroleum Operations,


employ nationals of Liberia whenever qualified for requirements of the


employment.


Managers, technicians, engineers, accountants, geologists, geophysicists,


scientists, chemists, drillers, foremen, mechanics, skilled workers,


/ secretaries and executive employees may be hired outside Liberia If


similarly qualified specialists cannot be hired in Liberia.


The requirements for the Training, Social and Welfare programmes shall


bo mutually agreed by both Parties. Funding for the Training and Social


Welfare Programmes shall be paid to the fund 30 days after Effective


Date. The training, social and welfare expenses set out in Article 29 borne


by the Contractor shall be Included In the recoverable Petroleum Costs.


29.2a Upon commencement of the Petroleum Operations, the Contractor shall


organize a Training Programme for Liberian nationals. For that purpose


the Contractor shall devote a minimum annual training Budget of:


125.000Dollars during each year of the exploration periods;


200,000Dollars during each year of the exploitation periods.


An escrow fund shall be established by both parties for the purpose of


receiving the funds and payment of the programmes referred to in Article


29.2a&b below. Both parties shall be signatories to the account and wil


require two signatures, one by an approved NOCAL official and one by an


approved Contractor official.


The training requirements shall be developed by both parties with the


understanding that NOCAL shall provide 70% of the training candidates


and the Contractor shad provide 30% of the candidates. Ail candidates


shall be Liberian Citizens.


29.2b Upon commencement of the Petroleum Operations, the Contractor shall


finance a Social and Welfare Programme set out by NOCAL for the benefit


of Liberian nationals. For that purpose the Contractor shall work with


NOCAL and shall de-rote a minimum annual social and welfare Budget of:


150,000Dollars during each year of the exploration periods;


250.000Dollars during each year of the exploitation periods.








< I.I Own PfunlrxMi L "«ud PNC librro Hloct IBM S7


111* MnS5?


I k
























































)


29.3 The entry Into Liberia of all foreign personnel shall be authorized and the


STATE shall Issue the documents necessary for that entry to all members


of the foreign personnel, such as entry visas, working permits and exit


visas, In compliance with the immigration regulations in force in Liberia.


At the-request of the Contractor, the STATE shall facilitate any


immigration formalities with the Immigration Bureau, at the points of entry


into and exit from Liberia, in respect of the Contractor's employees,


contractors, subcontractors and agents, and their families, all without


undue delays.


29.4 All the employees required for the conduct of the Petroleum Operations


shall be under the Contractor’s authority or that of Its’ contractors,


subcontractors and agents, in their capacity as employers. Their work,


number of working hours, salaries and any other matters relating to their


employment conditions shall be determined by the Contractor or its


contractors, subcontractors and agents.



















































































< nafulm^l Oranto PMpbw I irr-.tc** l*S* 1 ibrru Ukx « t >• Page 58


11 flMft IV'*


 ARTICLE 39


ACTIVITY REPORTS IN RESPECT OF





EXCLUSIVE EXPLOITATION AUTHORIZATIONS








30.1 The provisions of Article 12 shall apply, mutatis mutandis, to any exclusive


exploitation authorizations. In addition, the following periodic activity


reports shall. Inter alia, be fumisned in respect of each Field:


(a) daily production reports;


(b) monthly reports stating the quantities of Petroleum produced and


those sold during the previous month together with Information on


such sales.


Unless the Contractor gives its written consent, the information relating to


a Field under exploitation, except statistical data about activity, shall be


considered as confidential by the Parties during the term of this Contract.





30.2 The Contractor shall forthwith notify the STATE of any material damage


whatsoever caused to the petroleum fields or facilities, and shall take all


necessary steps to terminate it and carry out the necessary repairs.





30.3 From the year of granting an exclusive exploitation authorization, the


annual report referred to in Article 8.2 shall also indude the following:


(a) information on all development and production operations carried


out during the previous Calendar Year, induding the quantities of


Petroleum produced and those sold, If any;


(b) information on all transportation and sales operations together with


the location, of the main facilities built by the Contractor. If any;


(c) a statement specifying the number of employees and workers, their


qualification and their nationality, together with a report on the


medical care and training provided to them.





























i on (Idem ia! Grant'' Peu-olcum I mined CSC Liberia Block l IS P*ge 59


11 W20ft>59


 ARTICLE U


ARBITRATION





31.1 In Ihe event of any dispute between the STATE or NOCAL and


Contractor relating to. or arising out of. the interpretation or execution


the provisions of this Contract, the Parties shall make their best efforts


settle such dispute amicably.





If within three (3) months from the date of notice of such dispute by eit


Party to the other, the Parties have not reached settlement, the dlsf


shall, at the request of the most diligent Party, be referred for arbitration I


the International Chamber of Commerce in accordance with its rules ar


regulations.





31.2 The arbitration shall be held In London. England. The language u«


during the procedure shall be the English language. The arbitration shad


be determined by three (3) arbitrators. The arbitrators shall not have Ihe


same nationality as the Parties.


The arbitration tribunal's award shall be final; it shall be binding on the


Parties and shall be enforceable in any court of appropriate jurisdiction.


31.3 The expenses of any arbitration shall be borne equally by the Part;.'* «


is to say I each Party shall pay the expenses of its own arbitrator jo. a


expenses of the third arbitrator In equal shares, and any expenses


imposed by the International Chamber of Commerce shall be shared


equally by the Parties.


The performance by the Parties of their obligations under this Contract


shal not be suspended during the course of the arbitration.









































CnnlWVrinad Orumn PfmkT.-n I iimirt PM I ibma Hlocfc Page 60


II4S100M


 Agl!PLE32


FORCE MAJEURE





32.1 No delay or default of a Party in performing any of the obligations resulting


from this Contract shall be considered as a breach of this Contract If such


delay or default Is caused by a case of Force Majeure.


If In the event of Force Majeure the performance of any of the obligations


under this Contract Is delayed, that delay extended by the period of time


required to repair the damage caused during such delay and to resume


the Petroleum Operations, shall be added to the period provided by this


Contract for the performance of said obligation, and the exclusive


exploration or exploitation authorizations shall be extended by that period


as regards the area concerned by Force Majeure.


32.2 Force Majeure means any event unforeseeable and beyond the control of


a Party, such as: earthquake, flood, accident, strike, lockout, riot, delay In


obtaining the rights-of-way, insurrection, civil disturbances, sabotages,


acts of war or conditions attributable to war, or any other cause beyond Its


control, similar to or different from those already mentioned.


32.3 Where a Party considers it is prevented from performing any of.lts


obligations by the occurrence of Force Majeure. it shall forthwith notify the


other Party thereof by specifying the grounds for establishing Force


Majeure, and take all necessary and useful steps to ensure the normal


resumption of the performance of the concerned obligations upon


termination of the event constituting the Force Majeure.


Obligations other than those affected by Force Majeure shall continue to


be performed In accordance with the provisions of this Contract.















































Imlml Omniu Pomlvum l.imlnsJ I's P>Cr61


ll'OMfcUsi


 AftTi




JOINT AND SEVERAL OBLIGATIONS


AND GUARANTEES








33.1 All the clauses, conditions and provisions of this Contract shall be binding


on the Parties and their respective successors and assignees. This


Contract constitutes the only agreement between the Parties and no


previous communication, promise or agreement, whether oral or written,


between the Parties, related to the purpose of this Contract may be


asserted to amend the clauses hereof.





The STATE certifies and guarantees that there Is no other applicable


agreement with respect to the petroleum rights wtthin the Delimited Area,


that It will perform its obligation In fairness and good faith and that this


Contract will not be cancelled, amended or modified except by agreement


between the Parties.


33.2 Where the Contractor Is constituted by several entltiea. the obligations and





liabilities of those entities under this Contract shall be joint and several.













































































rMfldnltol Ornmo Petroleum Limited PSC Liberia Hkck lit I Page 62


11 <*'20056?











k i


i t





 ART1CLE34


RIGHTS OF ASSIGNMENT








34.1 All or part of the rights and obligations arising from this Contract may be


assigned by any of the entities constituting the Contractor to Third Parties


whose technical and financial reputation Is well established; the assignees


with the other entitles constituting the Contractor shall thereafter be Jointly


and severally liable for the obligations arising from this Contract.


The terms of any assignment shall be subject to the prior approval of


NOCAL. which approval shall not be unreasonably withheld.


If within thirty (30) days following notification to NOCAL of a projected


assignment accompanied by all the related Information and the draft


assignment.deed, NOCAL has not given Its decision, that assignment


shall be doomed to bo approved by NOCAL.


From the date of approval of an assignment, the assignee shall comply





with the terms and conditions of this Contract.


34.2 All or part of the Joint and several rights and obligations arising from this


Contract may be freely assigned at any time by any of the entities


constituting the Contractor to one or more Affiliated Companies or other


entities constituting the Contractor.
























































’ • Confidential Osnto Petroleum Limned CSC Libert* liloch lil-. I P*SC 63


11 iKv?0O.V>’


 ARTICLE??





STABILITY OF CONDITIONS





35.1. This Contract is executed between the Parties in accordance with the laws


and regulations in force at the date of its signing and on the basis of the


provisions of said laws and regulations, as regards. Inter alia, the


economic, fiscal and financial provisions of this Contract.


35.2 Consequently, should new laws or regulations modify the provisions of the


laws and regulations in force at the date of signing of this Contract and


should those modifications bring about a material change in the respective


economic situation of the Parties resulting from the original provisions of


said Contract, the Parties shall in good faith enter into an agreement with


a view to modifying those provisions in order to restore the economic


balance of the Contract as intended at the signing thereof.


This Agreement may not be amended or modified by virtue of the adoption


or amendment of Law or regulation by the State of Liberia after effective


date of this Agreement This Agreement may only be amended or modified by


written agreement of all parties.


35.3 In the even! of other changes in circumstances from those existing at


the Effective Date, that have a material effect on the terms of this


Agreement, either NOCAL or the Contractor shall request of the other to


consult together. If it is established that such Profound Changes in


Circumstances have occurred, then the Parties shall effect such changes in.


or clarifications to this Agreement that they agree are necessary. The


Parties shall meet in good faith to make the necessary revisions and


adjustments to the Agreement In order to maintain such expected economic


benefits to each of the Parties, provided that the economic benefits to the


Parties shall not be reduced as a result of exercising the terms of this


Article. For the purposes of this Agreement, the term ’Profound Changes In


Circumstances' shall mean such changes in the economic conditions of the


Petroleum Industry world-wide or in Liberia or such changes that result in


such a material and fundamental alteration of the conditions and assumptions


relied upon by the Parties at the Effective Date of this Agreement (or the


time after any subsequent review under this article) to the effect that the


ovorall balance of equities and benefits reasonably anticipated by the


Parties will no longer be achievable.


It is understood that this clause subjects the parties to a simple


obligation to consider in good faith the proposed modification of the


Agreement. This Agreement shall remain unaltered and In force during any


such period of consideration.

















Confidential Oranto Petroleum Limned PSC Li ben u Block I II-11 Page 64


I l/06'200S64


 ABIlgLE.?6


IMPLEMENTATION OF THE CONTRACT


36.1 The Parties agree to cooperate in every possible manner to achieve the


objectives of this Contract.


NOCAL shall facilitate the Contractor's performance of its activities by


granting it any permits, licenses, access rights necessary for the


performance of the Petroleum Operations and by making available to it


any appropriate services and facilities, so that the Parties can obtain the


best benefit from a sincere cooperation. However, the Contractor shall


observe the applicable procedures and formalities, and shall apply to the


competent Ministries and/or Agencies of the Administration.


36.2 Any notices or other communication under this Contract shall be deemed


to have been made when they are delivered to an authorized


representative of the Party concerned at the location of said Party's


principal office in Liberia, or sent by telegram, cable or facsimile with all


expenses paid, or deposited as registered letters with the Postal


administration of Liberia with postage prepaid.


Notifications shall be deemed to have been made on the date when the


addressee shall receive them.


36.3 If NOCAL considers that the Contractor has committed a breach in the


performance of any of its obligations, It shall so notify the Contractor in


writing and the Contractor shall have sixty (60) days to remedy the breach


or refer the matter to arbitration in accordance with this Contract.


36.4 The terms and conditions of this Contract may be modified only In writing


and by mutual agreement between the Parties.


36.5 Unless otherwise specified In writing, the Ministry and NOCAL shall


represent the STATE under this Contract and is empowered to grant, In


the name and on behalf of the STATE, any consent necessary or useful


for the implementation of this Contract.


36.6 Headings in this Contract are inserted for purposes of convenience and


reference and in no event shall define, restrict or describe the scope of


object of the Contract or of any of its clauses.


36.7 Appendices 1 and 2 attached hereto shall form an integral part of this


Contract.











< iiolidcnii.il OiixKio Petroleum I muied f*SC I iberui Bloc-. IS Page 65


I |.W2Q»M5


36.8 Any waiver of the STATE or NOCAL concerning the performance of any


obligation of the Contractor shall be in writing and signed by the


representative of the STATE or NOCAL. and no waiver shall be implied if


the STATE or NOCAL does not exercise any of its rights to which it is


entitled under this Contract.















































































































































* onfidnuntl Oramo Pceokwn U PSC l .Iwrru lltOC* • -» ' Page 66


I i l|(. 20CISW.


 ARTICLE, 37





EFFECTIVE DATE





Upon execution by the Parties and when promulgated as the law of the Republic


of Liberia, this Contract shall become effective, the date of execution being


referred to as the Effective Date, and said Contract shall become binding on the


Parties.
































































































































Onfidemial Oramo Peirokum Limned PSC Liberia Block I.U Page 67


Ili*» >

 IN WITNESS WHEREOF, the Parties have signed this Contract on the date as


set forth below.





3


16 6 J


President. Date











Date








irman


Board of Directors. NOCAL








>_(





Date “























Contractor Date

















Attested by:.


Minister of Justice Date














Approved:.


Chairman Date


National Transitional Government











Ratified:


National Transitional Legislative Assembly Date



































Confnlrnn.il Orsnto Pcimlrtiin I uniied PSCI ibcr... ni«vk I H i Page 68


I I Wi'KM'V).'








* a!.■• 1


.


APPENDIX 1


Attached to and made part of this Contract between the Republic of Llboria and


the Contractor.


DELIMITED AREA








On the Effective Date, the Delimited Area, designated as LB-11 Block, is formed


by the area Included Inside the perimeter constituted by the points Indicated A-G


on the map attached thereto.


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


the Greenwich meridian:





Point Latitude Longitude





LB-11 A 4.05O1O49N 10.405189W


LB-11 B 5.0285881 N 10.603417W


LB-11 C 5.7891339N 9.9970695W


LB-11 D 5.7568089N 9.9602223W


LB-11 E 5.7258922N 9.9236217W


LB-11 F 5.6752893N 9.8673159W


LB-11 G 5.6359125N 9.8335242W


LB-11 H 5 6084965N 9.8018547W





These coordinates are only given for purposes of illustration and shall not be


considered as the boundaries of the national junsdiction of Liberia.


The surface of the Delimited Area above defined Is deemed to be equal to about


3183.5 sq. km.


















































Onftrirntlnl Ottinui Petroleum Limited PSC l.ibcriu Ulock Lll-I I Page 69


I l/W20U.Vi<>


 Liberia Block LB-11 Location




































































Confidential Oramo Petroleum Limited PSC I .,bcm Block LB-11


11'06/200570 Page 70


Attach od to and mado part of this Contract between the Republic of Liberia and











Article I - General Provisions


1.1 Object


This Accounting Procedure shall bo followed and observed In the


performance of the obligations undor the Contract to which this Appendix


Is attached.


1.2 Accounts and statements


The registers and accounting books of the Contractor shall be in


conformity with accounting rules and regulations for business applicable In


Liberia. However, the Contractor may apply the accounting rules and


procedures customarily used In the petroleum industry, insofar as none of


these are contrary to the rules and regulations referred to above.


In accordance with the provisions of Article 25 of the Contract, accounts,


books and registers shall be maintained and recorded in Dollars. These


accounts shall be used, inter aka. to determine the amount of Petroleum


Costs, foe recovery of said Costs, foe producfcon sharing, as well as for


foe purposes of Contractor's tax return


The Contractor shall record afl operations connected with foe Petroleum


Operations m accounts separate from those relating to any other activities


which It may carry out in foe Republic of Liberia.


All accounts, books, records and statements, together with documents


supporting expenses Incurred, such as invoices and service contracts,


shall be kept In the Republic of Liberia in order to be provided at the


request of the competent authorities of Liberia


1.3 Interpretation


The definitions of the terms used in this Appendix 2 shall be the same as


those of the same terms set forth in the Contract


In the event of any conflict between the provisions of this Accounting


Procedure and the Contract, the provisions of foe Contract shall prevail.








( onftikwtiiil Ofoniii PSC l.ibcritt Bbvt. I B-M P«ge 71


11 lit. >00571


 I





.4 Modifications S


* \ '**"I? '


The provisions of this Accounting Procedure may be modified by mutual


agreement between the Parties.


The Parties agree that if any provision of the Accounting Procedure


proves inequitable to either Party, such provision shall be modified In good


faith by the Parties.











Article II - Petroleum Costs


11.1 Petroleum Costs Account


The Contractor shall maintain a "Petroleum Costs Account" which will


record In detail the expenses Incurred by the Contractor directly rolating to


the Petroleum Operations carried out under this Contract, and which will


be recoverable in accordance with the provisions of Article 10 of the


Contract.


This Petroleum Costs Account shall; inter alia, record separately, by


Appraisal Perimeter or Exploitation Perimeter if any, tho following


expenses:


(a) exploration expenditures.


(b) appraisal expenditures;


(c) development expenditures;


(d) exploitation expenses;


(e) financial costs;


(f) overhead costs in Liberia;


(g) overhead costs abroad


The Petroleum Costs Account shal enable, inter alia, to identify at any


time:


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


(b) the total amount of Petroleum Costs recovered;


(c) the total amount credited to the Petroleum Costs Account pursuant


to Article 11.4 (b) below;


(d) the total amount of Petroleum Costs wt*ch remain to be recovered





For the purposes of Article 16 of the Contract. Petroleum Costs shall be


recovered In the following sequence:.








CtmMmemi Oryvn (, -rvd PSC I -ben* Block LB-1 72


11 <*.70057?


 (a) exploitation expenses in respect of a Field Incurred and paid frmiil


date of commencement of regular production;


(b) financial costs;


(c) other Petroleum Costs


In addition, within each of the foregoing categories, the costs sMI


recovered in the sequence in which they are incurred.


Unless otherwise provided for in this Accounting Procedure tho mt-nti


the Parlies is not to duplicate any item of the credit or debit of


accounts maintained under the Contract


11.2 Items debited to the Petroleum Costs Account








The following expenses and costs shall be debited to the Petroleum Co


Account


11.2.1 Personnel expenses





All payments In respect of the salaries and wages ol


Contractor's employees directly assigned to the Petroimi


Operations carried out under this Contract, In the Republic


Liberia, whether temporarily or permanently, including amou


Imposed by the applicable laws and costs of employees'


and all additional charges or expenses in accordance with


individual or collective employment contracts or pursuant to


Contractor's personnel policies


11.2.2 Overhead costs In Liberia








Wages and salaries of the Contractor's personnel directly


in the Petroleum Operations m the Republic of Liberia, whose


time it not directly allocated to the programs, as well as costs


maintaining and operating in Liberia a mam and adrnMi


office and sub-offices necessary for the Petroleum Operations


11.2.3 Overhead costs abroad





The Contractor shall add a reasonable amount as overhead paid


abroad, connected to the carrying out of the Petroleum Operations


by the Contractor or its AffiUated Companies, such amounts


representing the estimated cost of services directly rendered for tho


benefit of the said Petroleum Operations


The amounts charged shall oe provisional amounts established on


the basis of the experience of the Contractor, and shall be- annuaBy


adjusted according to the actual costs borne by the Contractor





71


Yom However, overhead cotta paid abroad shal be charged only within


the following limits:





(a) prior to the grant of an exclusive exploitation authorization one


lhall hundred percent (100%) of the expenses charged to the


Petroleum Costs Account excluding overhead costs for the year


in question;





(b) from the grant of the first exclusive exploitation authorization


one hundred percent (100%) of expenses charged to the


Petroleum Costs Account excluding overhead costs for the year


in question.





These costs, including a detailed breakdown of the costs wfB be provided


i Costal to the JOC for review and agreement





11.2.4 Buildings





Construction, maintenance expenses, as well as rents paid for si


offices, houses, warehouses and buildings of other types. Including


housing for employees, and cost of equipment furniture, and


fittings necessary for the operation of those buildings directly


required for the performance of the Petroleum Operations.





11.2.5 Materials, equipment and rentals


Costs of equipment, materials, machinery, and facilities purchased


or provided for use In the Petroleum Operations, as well as rentals


or compensations paid or Incurred for the use of any equipment or


facilities required directly for the performance of the Petroleum


gaged Operations.


• work


sis of 11.2.5 Services


rativo Costs of services directly related to Petroleum Operations rendered





by subcontractors and consultants, as well as any costs directly


related to services rendered by the STATE or NOCAL or any other


authorities of the Republic of Liberia.


paid


itions Costs of services directly related to Petroleum Operations rendered


Dunls by Affiliated Companies provided that such oosts shall not exceed


)r the those normally charged by Independent companies for an identical


id on or similar service.





ually








Confidenoai Oranto Petroleum Limited PSCLiberia Block LB-II Page 74


1106/200574








iV


 11.2.7 Insurance Premium*





Premiums paid for insurances customarily taken out for





Petroleum Operations to be canted out by the Contractor.


11.2.8 Legal Expenses





of handing, investigation and settlement of


or daims directly ansing from the Petroleum Operations.


11.2.9 Financial Costs








All Interests paid by the Contractor In respect of the loans


Third Parties end advances obtained from Affiliated


* provided that those loans and advances shall be for the purpose |


the financing of Petroleum Costs related only to the dovelopmer


Petroleum Operation* In respect of a Field. In the event


financing is provided by Affiliated Companies, the allowable Int


rates shall not exceed the rates customarily used In


international financial markets for loans of a similar nature.


11.2.10 Other Expenses








Any other expenses Incurred and paid by the Contractor for


purposes of the necessary and proper conduct of the Petrol


Operations under the approved Annual Work Program*


Budgets, other than the expenses covered and dealt with by


foregoing provision* of this Article and other than the


excluded from the Petroleum Costs





11.3 Expenses not to the Petroleum Coat* Account





The expenses which are not directly necessary for the performance of


Petroleum Operations, and the expenses excluded by the provisioni


the Contract or this Accounting Procedure as well as by the regulation


force In Liberia, are not chargeable to the Petroleum Costs Account i


shall therefore not be recoverable.





Such expenses shall Indude without limitation:





expenses relating to the period before the Effective Date;


any expenses relating to the operations carried out beyond


Delivery Point such -a transportation and marketing costs;


financial costs relating to the financing of exploration Petrol*


Operations and those relating to the share of financing


development Petroleum Operations;








CrmfuVnm] »>**o Limed KC' l ibm* Block LH-I ’


II •■.200S'5


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


(e) exchange losses.


11.4 Items credited to the Petroleum Costs Account


it for


The following incomes and proceeds shall. Inter alia, be credited to the


Petroleum Costs Account





f fitig.i (a) income arising from the marketing of the quantity of Crude Oil to which


the Contractor is entitled under Article 16 of the Contract for the


purpose of recovery of the Petroleum Costs;


(b) any other Incomes or proceeds related to the Petroleum Operations,


specifically those arising from:


•ans fn • sales of related substances;


■mpai


urpose| • any services rendered to Third Parties using the facilities dedicated


>pmon|( to the Petroleum Operations. Including, but not limited to,


enl si processing, transportation and storage of products for Third Parties


e mtnr In those facilities.


I in Article 111 - Cost Evaluation Basis For Services, Materials and Equipment





Used In the Petroleum Operations





111.1 Technical services


>r foi A reasonable rate shall be charged for the technical services rendered by


elrolm


ims the Contractor or Its Affiliated Companies for the direct benefit of the


h by Petroleum Operations carried out under the Contract, such as gas. water,


ixpen* core analyses and any other analyses and tests, provided that such


charges shall not exceed those normally charged by independent


technical service companies and laboratories for similar services.


111.2 Purchase of material* and equipment


ceof Materials and equipment purchased from Third Parties and directly





ations necessary for the performance of the Petroleum Operations carried out


>unl under the Contract shall be charged to the Petroleum Costs Account at


’Net Cost" incurred by the Contractor.





"Net Cost" shall include such items as taxes, shipping agent fees,


transportation, loading and unloading costs, license fees, related to the


supply of materials and equipment, as well as transit losses not recovered


ond tf* through insurance.


itrolcum


emtj ol





Onfidemiul Omnia Pctinleum Limned P.Sv' Liberi.i UloiK i II Page 76


>>x 7> I P06/20057A


111.3 Use of equipment and facilities owned exclusively by the Contractor


Equipment and facilities owned by the Contractor and used directly for the


Petroleum Operations shall be charged to the Petroleum Costs Account at


a rental rate which shall be sufficient to cover maintenance, repairs,


depreciation and services required for the performance of the Petroleum


Operations.


111.4 Valuation of materials


All materials transferred to Liberia from the Contractor's warehouses, or


from those of any entity constituting the Contractor or their Affiliated


Companies, shall be valued as follows:


(a) New Material


New material (condition 'A‘) means new material which has never


been used; one hundred percent (100%) of the current market


price, which corresponds to the price normally charged for similar


supplies in arm’s length transactions between buyer and seller.


Material in good condition (condition ’B’) means material in good


condition which is still usable for its original purpose without repair,


at a maximum of seventy-five percent (75%) of the price of new


material.


(b) Other used material


Other used material (condition "C”) means material still usable for


Its original purpose, but only after repairs and reconditioning: at a


maximum of fifty percent (50%) of the price of new material.


(c) Material in poor condition


Material in poor condition (condition "D") means material no longer


usable for its original purpose but still usable for other purposes: at


a maximum of twenty-five percent (25%) of the price of new


material.


(d) Scrap material


Scrap material (condition "E") means material beyond usage and


repair, prevailing price of scrap material.











Conli

II <*> HHI5-7


 111.5








Contractor shad be vetoed In accordance mtn eta


Article 1114 above.





J&tmtr art egupnent purchased by an/ entity constituting the


Contractor or by Third Parties shall be valued at the received sale price,





which shall in no event be less than the price determined In accordance


with the principles defined in Artde 111 above.





The corresponding amounts Shan be credited to the Petroleum Costs








iv -





M





The inventory both m


value of all materials used lor the Petroleum


Operations and intervals with the physical


by the





IV.2 Notice





A written notice of intention to take an Inventory shall be sent by the


Contractor at least ninety (80) days prior to the commencement of said


Inventory so that the STATE and the entities constituting the Contractor


may be represented at their own expenses during the inventory


operations.





IV.J Information


In the event the STATE or any entity constituting the Contractor shall not





be represented at an Inventory, such Party or Parties shall be bound to


accept the inventory taken by the Contractor which shall furnish to such


Party or Parties a copy of said Inventory


Article V • Financial and Accounting Statementa





The Contractor shall furnish the STATE and NOCAl with all the reports, records


and statements provided by the provisions of the Contract and the applicable


regulations and, inter alia, the following financial and accounting statements:











'S; * •'•illd'ttliel Own Peimlfuin Ltmiwd P l.ibrviw ill" • »' Par 71


II IK.


I





V.1 Statement of exploration work obligations


Such annual statement shall be submitted not later than one (1) month


after the end of each Contractual Year in respect of the exploration


periods.


It shall present with details the exploration work and expenditures carried


out by the Contractor to fulfill its obligations set forth In Article 4 of the


Contract, excluding specifically appraisal wells and related appraisal


expenditures as well as development expenditures, exploitation expenses,


overhead costs and bonuses.


V.2 Statement of recovery of Petroleum Costs


A quarterly statement shall be submitted not later than one (1) month after


the end of each Calendar Quarter. It shall present the following items of


the Petroleum Costs Account


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


beginning of the quarter


(b) the amount of Petroleum Costs in respect of that quarter and


recoverable under the provisions of the Contract;


(c) the quantity and the value of the production of Petroleum taken by


the Contractor during the quarter for the purpose of recovery of the


Petroleum Costs;


(d) the amount of incomes or proceeds credited for the purpose of


Article ll.5.(b) above during the quarter;


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


end of the quarter.


In addition, an annual statement of the recovery of Petroleum Costs shall


be submitted prior to the end of February of each Calendar Year.


V.3 Statement of production


After commencement of production, such monthly statement shall be


submitted not later than fifteen (15) days after the end of each month.


It shall present for each month the detailed production of each Exploitation


Perimeter and. Inter alia, the quantities of Petroleum:


(a) stored at the beginning of the month;.


(b) Ilftod during the month;


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


stored at the ond of the month.


Confidential Orumo Petroleum 1 imued PSC Liberia Block LU-11 Page 79


11 /06/7005'9


 ADDENDUM TO PRODUCTION SHARING CONTRACT


BETWEEN THE NATIONAL OIL COMPANY OF LIBERIA


AND ORANTO PETROLEUM LIMITED, BLOCK LB-11,


JUNE 2005


BETWEEN


The Republic of Liberia represented for the purposes of this Contract


by the National Oil Company of Liberia (NOCAL), a company


incorporated under the laws of Liberia; REPRESENTED by its


Chairman of the BOARD and President/CEO








AND


Oranto Petroleum Limited a company incorporated under the Laws of


the Federal Republic of Nigeria, hereinafter referred to as ‘the


Contractor*.


This addendum represents decisions reached between the two


parties at a meeting held on Wednesday July 12*. 2006 at The Royal


Air Force Club in London, UK.












































i


 ARTICLE 3





DURATION OF EXPLORATION PERIODS AND SURRENDERS








3.1 The exclusive exploration authorization is hereby granted to the


Contractor for a period of eight (8) consecutive years defined


by three consecutive periods


A first Exploration Period of four (4) Contract Years, a second


Exploration Period of two (2) Contract Years and a third


Exploration. Period of two (2) Contract Years in respect of the


entire Delimited Area.


3.2 If during the first exploration period set forth above the





Contractor has fulfilled the exploration work commitments


defined in Article 4, as ascertained by the Government, the


exclusive exploration authorization shall, at the Contractor’s


request, be renewed for a second exploration period of two (2)


Contract Years.


ARTICLE 4








EXPLORATION WORK COMMITMENTS








4.2 The Contractor, dunng the first exploration period defined in


Article 3.1, shall carry out a minimum work programme at a cost


of no less than eight (8) million Dollars which includes a 3D


Seismic Survey of 1500 square Km and the drilling of one (1)


exploration well.


4.3 The Contractor, during the second exploration penod defined in


Article 3.1. shall carry out a minimum work programme at a cost


of no less than ten (10) million Dollars including a commitment


to drill one (1) exploration well.











2 /


i p


4.4 The Contractor, during the third exploration period defined in


A'tide 3.1, shaB carry out a minimum work programme at a cost of no


k is than ten (10) million Dollars including a commitment to drill one


(1] exploration wen.


4.5 Each of the exploratory wells shall be drilled to a minimum depth


of two thousana (2000) meters, after deduction of the water depth, or


to a lesser depth if the continuation of driBing performed in


accordance with good international petroleum industry practice is


prevented for any of the following reasons:


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


minimum contractual depth;


(b) Continuation of drilling presents an obvious danger due


to the existence of abnormal formation pressure;


(c) Rock formations are encountered the hardness of which


prevents, in practice, the continuation of drilling by the


use of appropriate equipment;


(d) Petroleum formations are encountered the crossing of


which requires, for their protection, the laying of casings


preventing the minimum contractual depth from being


reached.


In the event that any of the above reasons occurs, the


exploratory well shall be deemed to have been drilled to the


minimum contractual depth.


Notwithstanding any provision In this Article to the contrary,


NOCAL and the Contractor may. at any time, agree to abandon


the drilling of a well at a lesser depth than the minimum


contractual depth.


In order to carry out the exploration drilling defined in Articles


4.3 and 4.4 in the best technical conditions in accordance with


good international petroleum industry practice, the Contractor


undertakes to make the expenditure required to meet the


objectives of the well work programme which will include drilling


and as appropriate, testing.











3


 ARTICLE 6





CONTRACTOR’S OBLIGATIONS IN RESPECT OF THE


EXPLORATION PERIODS AND ENVIRONMENTAL


MANAGEMENT


5 The Contractor further undertakes to carry out all petroleum


operations in accordance with the Environmental Protection


and Management Laws of Liberia and all international


environmental protocols In this respect, the Contractor shall:


(a) Submit to the Government an Environmental Impact


Statement (EIS) prior to the commencement of


exploration and production.


(b) take reasonable preventative, corrective and restorative


measures to protect from pollution, contamination or


damage resulting Petroleum Operations water bodies,


land surfaces and the atmosphere, and that any


pollution, contamination and damage of such water


bodies, land surface and atmosphere hereunder be


rectified.


Subject to the foregoing, and at the conclusion of Petroleum


Operations in the Delimited Area, the Contractor will undertake


reasonable efforts to restore the terrain to a state in which it is


useable.


6.11 The Contractor and its subcontractors shall be obligated to give


preference to enterprises and goods from Liberia, if conditions


of price, quality, delivery time and terms of payment are similar


to those from other countries or from non-Liberian sources.


Specifically, the Contracior commits itself to award to only


Liberians, supply, construction or service contracts, the


estimated value of which is under Two Hundred Thousand


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


Two Hundred Thousand United States Dollars


(US$200,000 00) and is awarded to a Non-Liberian contractor;


\


4


the contractor must seek a partnership with a Liberian


company(ies).


ARTICLE 16


RECOVERY OF PETROLEUM COSTS AND PRODUCTION


SHARING


16.1 For the purposes of recovery of the Petroleum Costs, the


Contractor may freely take each Calendar Year a portion of the


production In no event greater than seventy percent (70%) of


the Total Production of Crude Oil or Gas from the Delimited


Area, or only any lesser percentage which would be necessary


and sufficient to recover remaining cost.


The value of such portion of Total Production allocated to the


recovery of the Petroleum Costs by the Contractor, as defined


in the preceding paragraph, shall be calculated In accordance


with the provisions of Article 18.


If during a Calendar Year the Petroleum Costs not yet


recovered by the Contractor under the provisions of this Article


16.2 exceed the equivalent in value of seventy percent (70%) of


the Total Production of Crude Oil or Total Production of Gas


from the Delimited Area, as calculated above, the balance of


the Petroleum Costs which cannot be recovered in that


Calendar Year shall be carried forward In the following


Calendar Year or Years until full recovery of the Petroleum


Costs or until the expiration of this Contract


16 2 The quantity of Crude Oil from the Delimited Area remaining


during each Calendar Year after the Contractor has taken from


the Total Production the portion necessary for the recovery of


the Petroleum Costs, hereinafter referred to as ’Remaining OB


Production,’ shall be shared between NOCAL and the


Contractor as follows:


Increments of daily oil NOCAL’s Share Contractor's


share


Total Production








5


 (in Barrels per day)


from 0 to 100,000 40% 60%





from 100.001 to 150.000 50% 50%


over 150.000 60% 40%


The Remaining Oil Production shall be shared according to the


daily Total Production from the Delimited Area


The terms and conditions of the above schedule may change


subject to the commercial discovery of oil.


16.3 In case of natural gas. the following production sharing shaM


apply:


Increments of dally Gas NOCAL’a Share S2I±


share


Total Production 30% 70%





For the purpose of this Article, the daily Total Production shall


be the average rate of Total Production during the calendar


quarter in question





ARTICLE 17


TAXATION





17.1 Unless otherwise provided for in this Contract the Contractor


shall, in respect of its Petroleum Operations, be subject to the


laws generally applicable and the regulations in force in Liberia


concerning taxes which are or may be levied on incomes, or


determined thereto.





It is specifically acknowledged that the provisions of this Article


shall apply individually to any entity comprising the Contractor


under this Contract.





The Contractor shall keep separate accounts for each Fiscal


Year in respect of the Petroleum Operations, in accordance


with the regulations in force in Liberia, enabling in particular the


establishment of a profit and loss account as well as a balance


sheet showing both the results of said Petroleum Operations


and the asset and liability items allocated or related thereto.








6


17.2.1 For the purposes of Artide 17.1 the Contractor shall in respect


of its net profit arising from Petroleum Operations, be iabie to


corporate Income tax under the laws and regulations in force in


Liberia. Income tax applicable to Petroleum Operations carried


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


paid on its* behalf by NOCAL directly to the Government of


Liberia. The portion of profit oil necessary to pay the tax of the


Contractor shall be added to NOCAL's share of the profit oil


(this share which constitutes the Contractors taxes will be


mutually determined by The Parties





































































































7


 ARTICLE 19





DEVELOPMENT FUND








19.1 The Contractor shall pay to NOCAL the following bonuses


(a) Two (2) million Dollars when the Total Production of


Crude Oil from the Delimited Area first reaches the


average rate of thirty thousand (30.000) Barrels per day


during a period of thirty (30) consecutive days


(b) . Three (3) million Dollars when the Total Production of


Crude Oil from the Delimited Area first reaches the


average rate of fifty thousand (50.000) Barrels per day


during a period of thirty (30) consecutive days.


(C) Five (5) million Dollars when the Total Production of


Crude Oil from the Delimited Area first reaches the


average rate of one hundred thousand (100,000) Barrels


per day dunng a penod of thirty (30) consecutive days


Each of the amounts referred to in (a), (b) and (c) above shall


be paid within thirty (30) days following the expiration of the


reference period of thirty (30) consecutive days.


19.2 These bonuses shall not be recoverable and shall therefore not


be treated as Petroleum Costs


19 3 HYDROCARBON DEVELOPMENT FUND





19 3 1 To stimulate research in the field of hydrocarbon,


most especially In continental areas, and to assist the


Government in its overall goal of achieving energy


sustainability, a Hydrocarbon Development Fund, to be


managed by NOCAL. has been established Within thirty


days of the Effective Date of this Agreement the Contract


shall make a one-time contribution of Five (5) Hur.arec


Thousand Dollars to this Fund.


 19 3.2 The contribution to the Hydrocarbon Development


Fund referred to in Article 19 3 1 will be recoverable and


r therefore shall be considered as Petroleum Costs








ARTICLE 29








PERSONNEL AND TRAINING











29.2. Upon commencement of the Petroleum Operations, the


Contractor shall provide funding for Training Programmes and


for that purpose the Contractor shall devote an annual Training


Budget of:


(a) $100.000 Dollars during each year of the exploration period;


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


Additionally the Contractor shall make an annual contribution


of Seventy-five (75) Thousand Dollars to the University of


Liberia for the enhancement of programmes m Geology. Mining


Engineering and Environmental Studies


29.3. Upon commencement of the Petroleum Operations, the


Contractor shall provide funding for Social and Welfare


programmes in Liberia and for that purpose the Contractor shall


devote an annual Social and Welfare Budget of:


(a) S150.000 Dollars during each year of the exploration period;


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


An escrow account shall be established by both Parties for the


purposes of receiving money and paying for the programmes


detailed in Aricles 29.2.1 and 29.2.2 and they shall both bo


signatories to such account except for the contribution to the








9





K


V.


University of Liberia which shad be paid directly to the


institution


The Training requirements shall be developed by both Parties


with the understanding that NOCAL shall provide 70% of the


training candidates and the Contractor shall provide 30% of the


candidates.


The Training and Social and Welfare Programmes shall be


mutually agreed by the Parties.


The Training and Social and Welfare expenses borne by the


Contractor shall be included in recoverable Petroleum Costa.


Funding for the Training and Social and Welfare Programmes


shall be paid within 30 days of the Effective Date. Thereafter,


payments shall be made within thirty days of each subsequent


anniversary of the agreement.


29.4 The entry Into Liberia of all foreign personnel shall be


authorized and the STATE shall Issue the documents


necessary for that entry to all members of the foreign


personnel, such as entry visas, working permits and exit visas,


in compliance with the immigration regulations in force in


Liberia


At the request of the Contractor, the STATE shall facilitate any


immigration formalities with the Immigration Bureau, at the


points of entry into and exit from Liberia, in respect of the


Contractor’s employees, contractors, subcontractors and


agents, and their families, all without undue delays.


29.5 All the employees required for the conduct of the Petroleum


Operations shall be under the Contractor’s authority or that of


its contractors, subcontractors and agents, in their capacity as


employers. Their work, number of working hours, salaries and


any other matters relating to their employment conditions shall


be determined by the Contractor or its contractors,


subcontractors and agents








ARTICLE 32a








10


 TERMINATION





32.1 Termination by the Contractor. During the Exploration and


Exploitation Periods, the Contractor may surrender, by not less


than sixty day notice to NOCAL, all of its rights and obligations


hereunder in respect of all or any part of the Delimited Area,


and the operator shall be relieved of all obligations to NOCAL in


respect of the area so surrendered except those obligations


rising out of or related to the surrender.


32.2 Termination by NOCAL Subject to the provisions of Article


31. NOCAL shall have the right to terminate this Agreement if


any of the following events (hereinafter called “Events of


Default") shall occur and be continuing:


(a) Where the Contractor shall fail to make any of the


payments described in this Agreement on the due


payment date, and such default is not cured within thirty


(30) days after notice by NOCAL or within such longer


periods as may be specified in said notice;


(b) Where the Contractor shall matenally fail to comply with


its work commitments and other conditions in this


Agreement and such failure is not cured within ninety (90)


days after notice by NOCAL or within such longer period


as may be specified in the notice


(c) Where the Contractor shall (i) voluntarily dissolve,


liquidate or wind up its affairs, or make an assignment of


all or substantially all of its assets for the benefit of


creditors other than an assignment made to secure


indebtedness incurred in the ordinary course of business,


(ii) file a petition or application to any tribunal for the


appointment of a trustee or receiver for all or any


substantial part of the Contractor's assets; (iii) commence


any proceedings for its bankruptcy, reorganization,


arrangement insolvency or readjustment of debt under


the laws of any jurisdiction, whether now or hereafter in


effect or if any such petition or application is filed, or any





II


 such proceedings are commenced against it shall


indicate its approval thereof, consent thereto or


acquiescence therein, or (iv) if any order is entered


appointing any such trustee or receiver, or adjudicating


the Contractor bankrupt or insolvent, or approving the


petition in any such proceedings, and provided that the


Contractor shall fail to take corrective measure(s) to have


such order removed or lifted within sixty (60) days;


(d) Where the Contractor shall fail to carry out Exploration as


required by Article 4. or cease Exploration for a penod of-


twelve (12) consecutive months or cease Production with


respect to all Production Areas for a period of twenty four


(24) consecutive months, unless such failure or cessation


is consented to by NOCAL or is caused by a state of force


majeure.





32.3 Opportunity to Cure. In the case of an alleged Event of


Default described above, NOCAL, before taking any further


action, shall provide Notice to the Contractor of the alleged


occurrence of such Event of Default and of NOCAL's views in


that regard and shall offer the Operator a fair opportunity to





consult with NOCAL to resolve the matter If, after a


reasonable penod of time of consultation, NOCAL is of the


reasonable opinion that the matter cannot be resolved by


further consultation. NOCAL may then send to the Contractor


Notice of NOCAL’s intention to terminate this Agreement. If the


Event of Default is not cured within sixty (60) days after said


Notice, or within such longer period as may be necessary to


allow a reasonable period of time to effect such cure, then this


Agreement shall be terminated, subject to Article 31.


32.4 Disputes Regarding Events of Default Notwithstanding the


provision of Article 32.2, if the Contractor disputes whether


there has been an Event of Default described above and. within


sixty (60) days after receipt by the Contractor of NOCAL’s


Notice of its intention to terminate this agreement, refers such


dispute to arbitration in accordance with Article 31,' then


termination of this Agreement snail not take effect until the


finality of, and in accordance with, an arbitratiojia^ard^


upholding NOCAL s ngnt tc terminate the agreement








12


 ARTICLE 36








STABILITY OF CONDITIONS








36.3 Periodic Review: In the event of changes In circumstances


from those existing at the Effective Date, that have a material


effect on the terms of this Agreement , either NOCAL or the


Contractor shall at the request of the other consult together. If It


is established that such Profound Changes in Circumstances


have occurred, then the Parties shall effect such changes in or


clarifications to this Agreement that they agree are necessary.


The Parties shall meet In good faith to make the necessary


revisions and adjustments to the Agreement in order to


maintain such expected economic benefits to each of the


Parties, provided that the economic benefits to the Parties shall


not be reduced as a result of exercising the terms of this article.


For the purposes of this Agreement the term 'Profound


Changes In Circumstances' shall mean such changes in the


economic conditions of the petroleum industry world wide or in


Liberia or such changes that result in such a material and


fundamental alteration of the conditions and assumptions relied


upon by the Parties at the Effective Date of this Agreement (or


the time after any subsequent review under this Article) to the


effect that the overall balance of equities and benefits


reasonably anticipated by the Parties will no longer be


achievable. Additionally , the Parties also agree to review the


agreement every five years to consider the concerns of any of


the Parties.


IN WITNESS WHEREOF, the Parties have signed this Contract on


the date as set forth below.


On Behalf of NOCAL:


Dr.fcodee Kromah








13


PresJdent/CEO of NOCAL Date





Mr. Clemenceaii B. Urey Date


Chairman of the Board, NOCAL





Attested by:


MU


OL


Mrs.-Marie E. Leigh-Parker


VP Administration/Finance Date





On behalf of The Contractor





Prince Arthi


Chalrmarvdf Oranto Petroleum Ltd Bate

















Date















































14


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








M L





iFodceKromah


IENT/CEO


NATIONAL OIL COMPANY OF LIBERIA





oy-^7-


‘Mr. Clemenccau B. Ur* Date


CHAIRMAN, BOj


NATIONAL OIL C<


3-| !T^oL





ff MASTER OF LANDS, MI Date


ENERGY





AC OF LIBE 4


ItI -n>°c





Dr. Antoinette Sayeh i> Date


MINISTER OF FINANCE


REPUBLIC OF LIBERIA


V-U»





Dr. Richard Tolbert Date


CHAIRMAN, NATIONAL INVESTMENT COM.


REPUBLIC OF LIBERIA





Attested: p


Idnh.








Hon. Frances Johnson-Morris


MINISTER OF JUSTICE


REPUBLIC OF LIBEl





/7~ o?-


/c3: Date


Her Excellency


Ellen Johnson-Sirleaf


PRESIDENT


REPUBLIC OF LIBERIA











Ratified: . Date


National Legislature of the Republic of Liberia