18/7/2006 - date of signature by the National Oil Company of Liberia (NOCAL) and Oranto Petroleum,
7/8/2006 - Date signed by president and chairman of the board of directors of NOCAL
15/8/2006 - Signed by Minister of Lands, Mines and Energy
16/8/2006 - Signed by Minister of Finance; Chairman, National Investment Committee; Minister of Justice
17/8/2006 - Date of approval by the President of Liberia
Etude sur l'impact environnemental et plan de gestion
Oranto Petroleum Limited (Oranto) shall submit to the government an Environmental Impact Statement (EIS) prior to the commencement of exploration and production.
The National Oil Company of Liberia and Oranto Petroleum Limited shall commission periodic environment audit, when necessary to ensure compliance with the environmental impact statement.
Oranto Petroleum Limited (Oranto) shall be responsible for the preparation and performance of the annual work programs, which shall be carried out in the most appropriate manner in observance of good international petroleum industry practice. Oranto shall take all the reasonable and practical steps to:
(1) ensure the protection of water-bearing strata encountered during its work;
(2) avoid losses and discharges of petroleum in the petroleum operations;
(3) submit to the National Oil Company of Liberia (NOCAL) an environmental impact statement (EIS) prior to commencement of exploration and production;
(4) take reasonable preventive, 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 surfaces and atmosphere hereunder be rectified.
At the conclusion of petroleum operations in the delimited area Oranto will take all reasonable efforts to restore the terrain to a state in which it is usable.
In the conduct of petroleum operations, Oranto shall take all necessary precautions to prevent marine pollution. In order to prevent pollution, NOCAL and Oranto agree that Oranto shall observe all existing international environmental protocols, regulations and rules to prevent pollution and preserve the environment.
Oranto Petroleum Limited 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.
After giving Oranto Petroleum Limited (Oranto) notice, the government 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 4 months following the end of each calendar year to carry out those inspections or audits. The government may submit its objections to Oranto for any contradictions or errors found during such inspection or audits.
Oranto Petroleum Limited shall pay to the National Oil Company of Liberia the following bonuses:
(a) US$ 2 million when the total production of crude oil from the delimited area first reaches the average rate of 30,000 barrels per day during a period of 30 consecutive days;
(b) US$ 3 million when the total production of crude oil from the delimited area first reaches the average rate of 50,000 barrels per day during a period of 30 consecutive days;
(c) US$ 5 million when the total production of crude oil from the delimited area first reaches the average rate of 100,000 barrels per day during a period of 30 consecutive days.
These bonuses shall not be recoverable and are not treated as petroleum costs.
The National Oil Company of Liberia (NOCAL) shall pay Oranto's income tax from NOCAL’s share of crude oil. Oranto shall not be liable for any payment to the government with respect to the tax. As regards the tax authorities of Liberia, the share of crude oil of total production, which Oranto is entitled to receive is considered as representing the net profit obtained by Oranto.
Partage de production - Eléments de "Profit Oil" (critères pour la modification du partage, - TRI, facteur "r", niveau de production, etc.)
The quantity of crude oil from the delimited area remaining during each calendar year after Oranto Petroleum Limited (Oranto) has taken from the total production the portion necessary for the recovery of the petroleum costs shall be shared between the National Oil Company of Liberia (NOCAL) and Oranto, on a field by field basis, as follows:
From 0 to 100,000 barrels per day: 40% NOCAL, 60% Oranto
From 100,000 to 150,000: 50% NOCAL, 50% Oranto
Over 150,000: 60% NOCAL, 40% Oranto
In the case of natural gas: 30% of daily gas total production to NOCAL, 70% to Oranto.
Partage de production - Eléments de "Cost Oil" (base de calcul, limites sur le recouvrement des coûts, e.g. comme % des revenues ou de la production, crédit d'investissement, etc.)
To recover petroleum costs, Oranto Petroleum Limited (Oranto) each calendar year may take a portion of the production in no event greater than 70% of the total production of crude oil or gas from the delimited area, or only any lesser percentage which would be necessary, to recover remaining cost. If during a calendar year the petroleum costs exceed 70% of the total production of crude oil or total production of gas from the delimited area the balance of the petroleum costs which cannot be recovered in that year shall be carried forward in the following calendar year(s) until full recovery of the petroleum costs or until the expiration of the contract.
Restrictions sur les transactions avec les parties liées
Sales in which the buyer is an affiliated company of the seller as we well as sales between entities constituting Oranto Petroleum Limited shall be excluded from the calculation of the market price of crude oil.
Oranto Petroleum Limited (Oranto) shall, for the purposes of the petroleum operations, employ nationals of Liberia whenever the requirements of the employment.
Managers, technicians, engineers, accountants, geologists, geophysicists, scientists, chemists, drillers, foremen, mechanics, skilled workers, secretaries and executive employees may be hired outside Liberia if similarly qualified specialists cannot be hired in Liberia.
Oranto Petroleum Limited (Oranto) 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. Oranto commits itself to award to only Liberians, supply, construction or service contracts, the estimated value of which is under US$ 200,000. If the contract is above US$ 200,000 and is awarded to a non-Liberian contractor, the contractor must seek a partnership with a Liberian company(ies).
Etude d'impact sur les incidences sociales/sur les droits de l'homme et plan de gestion
Upon commencement of the petroleum operations, Oranto Petroleum Limited (Oranto) shall finance a social and welfare program set out by the National Oil Company of Liberia (NOCAL) for the benefit of Liberian nationals. For that purpose Oranto shall work with NOCAL and shall devote a minimum annual social and welfare budget of US$ 150,000 during each year of the exploration periods and US$ 250,000 during each year of the exploitation periods.
The requirements for the training, social and welfare programs shall be mutually agreed by both parties. The training, social and welfare expenses borne by Oranto shall be included in the recoverable petroleum costs.
Oranto shall organize a training program for Liberian nationals. For that purpose Oranto shall devote a minimum annual training budget of US$ 100,000 during each year of the exploration periods and US$ 200,000 during each year of the exploitation periods. Additionally, Oranto shall make an annual contribution of US$ 75,000 to the University of Liberia for the enhancement of programs in geology, mining, engineering and environmental studies. The training requirements shall be developed by both parties with the understanding that the National Oil Company of Liberia (NOCAL) shall provide 70% of the training candidates and Oranto shall provide 30% of the candidates. All candidates shall be Liberian citizens.
All works and facilities erected by Oranto Petroleum Limited (Oranto) shall be built, placed, signaled, marked, fitted and preserved to allow at any time and in safety free passage to navigation within the delimited area. Oranto shall, in order to facilitate navigation, install the sound and optical devices approved or required by the competent authorities and maintain them in a manner satisfactory to
the authorities.
During the exploitation period, Oranto shall have the right to clear the ground, dig, drill, build, erect, place, supply, operate, manage and maintain the infrastructure detailed in this article which are necessary for or useful to the petroleum operations.
Oranto 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. Oranto 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 the National Oil Company of Liberia for approval prior to the commencement of work.
Oranto is also authorized to build, use and maintain telephone and piping systems on land not belonging to the government, provided that Oranto pays reasonable, mutually agreed upon compensation to the landowners.
If Oranto Petroleum Limited (Oranto) has excess capacity in a pipeline or processing, transportation or storage facility built for the purposes of the petroleum operations, it may be obligated to accept the flow of petroleum coming from third party exploitations, provided that such flow shall not cause prejudice to Oranto’s operations, and provided that a reasonable tariff covering a normal remuneration shall be paid by the user.
To stimulate research in the field of hydrocarbon, most especially in continental areas, and to assist the government in its goal of achieving energy sustainability, a hydrocarbon development fund, to be managed by the National Oil Company of Liberia, has been established. Oranto Petroleum Limited shall make a total contribution of US$ 500,000.
The contribution to the hydrocarbon development fund will be recoverable and considered as petroleum costs.
Oranto Petroleum Limited (Oranto), during the first exploration period shall carry out the following minimum work: 1500 square kilometers of 3D seismic acquisition and the drilling of 1 exploration well. During the second exploration period Oranto shall drill 1 exploratory well, and during the third exploration period Oranto shall also drill 1 exploratory well.
In order to carry out the exploration work in the best technical conditions in accordance with good international petroleum industry practice, Oranto will spend the following minimum amounts: US$ 8 million during the first exploration period; US$ 10 million during the second exploration period; and US$ 10 million during the third exploration period.
For any field in respect of which an exclusive exploitation authorization has been granted, Oranto shall perform, at its sole cost and its own financial risk, all the petroleum operations useful and necessary for the exploitation of the field.
In the event of any dispute between the government or the National Oil Company of Liberia (NOCAL) and Oranto Petroleum Limited (Oranto) relating this contract, the parties shall make their best effort to settle such dispute amicably. If within 3 months from the date of notice of such dispute the parties have not reached settlement, the dispute shall be referred for arbitration to the International Chamber of Commerce in accordance with its rules and regulations. The arbitration shall be held in London in the English language.
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. Any party that now or hereafter has a right to claim sovereign immunity for itself waives any such immunity to the fullest extent permitted by the laws of any applicable jurisdiction.
All data, information, documents, reports and statistics including interpretation and analysis supplied by Oranto Petroleum Limited (Oranto) shall be treated as confidential and shall not be disclosed by any party without the express written consent of the other parties within the life of the exploration, appraisal or exploitation authorization period.
This shall not prevent disclosure by the National Oil Company of Liberia (NOCAL) or the government to any government agency or to any advisor or consultant to NOCAL or for the purpose of complying with the government’s international obligations for the submission of statistic and related data.
Oranto may disclose information:
(a) to its affiliates, advisors or consultants;
(b) to a bona fide potential assignee or all or part of Oranto’s interest;
(c) to banks or other lending institutions for the purpose of seeking external financing of costs of the petroleum operations;
(d) to non-affiliates who shall provide services for the petroleum operations, including sub-contractors, vendors, and other service contractors, where this is essential for their provision of services.
(e) to government agencies for obtaining necessary rulings, permits, licenses' and approvals, or as may be required by applicable law or financial stock exchange, accounting or reporting practices
Any party disclosing information or providing data to a third party under these terms shall require those persons to undertake the confidentiality of such data.
This contract is executed and binding between the parties in accordance with the laws and regulations in force as of the effective date and on the basis of the provisions of all laws and regulations regarding the economic, fiscal and financial provisions of this contract. Should new laws or regulations modify the provisions of the laws and regulations in force at the date of the signing of this contract that have a significant material effect on the terms of this 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 as intended at the contract’s signing.
This contract may not be amended, cancelled or modified by virtue of the adoption or amendment of any law, rule, order, decree or regulation by the government after the effective date of this contract. It may only be amended or modified by written agreement of all parties to this contract.
In the event of changes in circumstances from those existing at the effective date, that have a significant material effect on the terms of this contract, the parties can consult together. If it mutually established that such profound changes in circumstances have occurred, then the parties shall make such changes to this contract that they mutually agree are necessary. The parties shall meet in good faith to make the necessary revisions and adjustments to the contract 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. The term “profound changes in circumstances" shall mean such changes in the economic conditions of the petroleum industry worldwide 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 contract to the effect that the overall balance of benefits reasonably anticipated by the parties will no longer be achievable.