NOTICE: The text below was created automatically and may contain errors and differences from the contract's original PDF file. Learn more here 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
Published By authority
Ministry of Foreign Affairs
Printed: May 22,2007
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-
ANY LAW TO THE CONTRARY NO I \\ ITIISTANDING
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.
Production Sharing Contract
National Oil Company of Liberia
Oranto Petroleum Limited
TABLE OF CONTENTS
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
7. CONTRACTOR'S RIGHTS IN RESPECT OF THE 17
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
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
31. ARBITRATION 60
32. FORCE MAJEURE . 61
33. JOINT AND SEVERAL OBLIGATIONS AND GUARANTEES 62
< nnridvnuul Onm.o PcwnVuin Litni.nl PSCl ihm* ; P4*e2
11 .'Oh ?oo>:
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
r ACCOUNTING PROCEEDURE
r C nnlid-'niiiil Or&iun C'cWokMin l*V Liberia If Page
!. 04/2003 1
PRODUCTION SHARING CONTRACT
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;
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"
• 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«
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
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
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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
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
MO 1.17 PARTIES means NOCAL and the Contractor; and PARTY means either
NOCAL or the Contractor.
1.18 APPRAISAL PERIMETER means any part of the Delimited Area where
one or more Petroleum discoveries have been made, 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
•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
SCOPE OF THE CONTRACT
•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
•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
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*
CWbtmml PSC Iibw.il HIocr • B I
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
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)
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
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
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
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
(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
(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
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
(b) 6 million Dollars during the second Exploration period defined in Arbdo
(c) 6 million Dollars during the second exploration pcnod defined in Article
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.
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
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
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
Confidenaal Otwko PeuoWum limlitd PSC Libena Block LB-11 Page 14
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
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
6.4 The Contractor undertakes to take all the reasonable and practical steps
(a) Ensure the protection of water-bearing strata encountered during its
(b) Carry out the tests necessary for determining the value of any show
enoountered during drilling and the exploftability of any possible
(c) Avoid losses and discharges of Petroleum In the Petroleum
(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
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
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
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
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
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
(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
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
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
The Contractor undertakes to furnish NOCAL with the folk wing peri-die
(a) dally reports on drilling operations; weekly report! on seismic
(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
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
(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
(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
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
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
(li) For the purpose of complying with the STATE'S international
obligations for the submission of statistics and related data.
(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
(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
I oflfUmcu! Orjnro Petm*um PV Dbrm ■oeSLB.ll
Any Party disclosing information or providing data to any third party under
this Article shall require such persons to undertake the confidentiality of
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.
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
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
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
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
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
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
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
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
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
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
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
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
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
( onrtrtennnl Ownio Pci ml™ in Limned PSC l.ibcnn Block l II-11 |*uge 26
GRANT OF AN EXCLUSIVE
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
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
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
between NOCAL and the Contractor regarding circumstances of the
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
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
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
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
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
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
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
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
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
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
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
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
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
*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
(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
(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
• 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
(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
(g) Surface rentals as defined In article 17.10
(h) Any other Contractor expense recorded according to Accounting
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
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
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
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
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
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
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
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
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
(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
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
(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
(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)
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
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
Such transfer of ownership shall cause the automatic cancellation of any
security or surety concerning those assets, or which those assets
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
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
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)
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
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
(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
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
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
(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
(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
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.
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,
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
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
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
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
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
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
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
(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
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
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
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?-
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
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
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
l mifidenlia; (>T4'i;u Linwd P5C* Llbmi HI-* • P^.55
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
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
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
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
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'*
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
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
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
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
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
JOINT AND SEVERAL OBLIGATIONS
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
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
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
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
< iiolidcnii.il OiixKio Petroleum I muied f*SC I iberui Bloc-. IS Page 65
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.
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
Onfidemial Oramo Peirokum Limned PSC Liberia Block I.U Page 67
IN WITNESS WHEREOF, the Parties have signed this Contract on the date as
set forth below.
16 6 J
Board of Directors. NOCAL
Minister of Justice Date
National Transitional Government
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
Attached to and made part of this Contract between the Republic of Llboria and
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
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
This Accounting Procedure shall bo followed and observed In the
performance of the obligations undor the Contract to which this Appendix
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
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
.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
This Petroleum Costs Account shall; inter alia, record separately, by
Appraisal Perimeter or Exploitation Perimeter if any, tho following
(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
(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
(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
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
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
(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
These costs, including a detailed breakdown of the costs wfB be provided
i Costal to the JOC for review and agreement
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
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.
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.
Confidenoai Oranto Petroleum Limited PSCLiberia Block LB-II Page 74
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 ’
(d) bonuses defined in Article 19 of the Contract;
(e) exchange losses.
11.4 Items credited to the Petroleum Costs Account
The following incomes and proceeds shall. Inter alia, be credited to the
Petroleum Costs Account
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;
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
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.
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
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
(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
(d) Scrap material
Scrap material (condition "E") means material beyond usage and
repair, prevailing price of scrap material.
II <*> HHI5-7
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
The inventory both m
value of all materials used lor the Petroleum
Operations and intervals with the physical
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
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
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
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
(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
ADDENDUM TO PRODUCTION SHARING CONTRACT
BETWEEN THE NATIONAL OIL COMPANY OF LIBERIA
AND ORANTO PETROLEUM LIMITED, BLOCK LB-11,
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
Oranto Petroleum Limited a company incorporated under the Laws of
the Federal Republic of Nigeria, hereinafter referred to as ‘the
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.
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)
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)
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.
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
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
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.
CONTRACTOR’S OBLIGATIONS IN RESPECT OF THE
EXPLORATION PERIODS AND ENVIRONMENTAL
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
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
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;
the contractor must seek a partnership with a Liberian
RECOVERY OF PETROLEUM COSTS AND PRODUCTION
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
(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
Increments of dally Gas NOCAL’a Share S2I±
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
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
It is specifically acknowledged that the provisions of this Article
shall apply individually to any entity comprising the Contractor
under this Contract.
The Contractor shall keep separate accounts for each Fiscal
Year in respect of the Petroleum Operations, in accordance
with the regulations in force in Liberia, enabling in particular the
establishment of a profit and loss account as well as a balance
sheet showing both the results of said Petroleum Operations
and the asset and liability items allocated or related thereto.
17.2.1 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
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
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
(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
University of Liberia which shad be paid directly to the
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
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
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
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
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
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
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
IN WITNESS WHEREOF, the Parties have signed this Contract on
the date as set forth below.
On Behalf of NOCAL:
PresJdent/CEO of NOCAL Date
Mr. Clemenceaii B. Urey Date
Chairman of the Board, NOCAL
Mrs.-Marie E. Leigh-Parker
VP Administration/Finance Date
On behalf of The Contractor
Chalrmarvdf Oranto Petroleum Ltd Bate
IN WITNESS WHEREOF, the Parties have signed this Contract on the date as set forth
NATIONAL OIL COMPANY OF LIBERIA
‘Mr. Clemenccau B. Ur* Date
NATIONAL OIL C<
ff MASTER OF LANDS, MI Date
AC OF LIBE 4
Dr. Antoinette Sayeh i> Date
MINISTER OF FINANCE
REPUBLIC OF LIBERIA
Dr. Richard Tolbert Date
CHAIRMAN, NATIONAL INVESTMENT COM.
REPUBLIC OF LIBERIA
Hon. Frances Johnson-Morris
MINISTER OF JUSTICE
REPUBLIC OF LIBEl
REPUBLIC OF LIBERIA
Ratified: . Date
National Legislature of the Republic of Liberia