The language which governs the interpretation of the contract is English.
The language to be used in negotiation, mediation or arbitration shall be English.
Any notices must be given in English. If a notice is given in any other language, in order to be valid the notice must be acknowledged and accepted by the recipient.
The term of the contract comprises the exploration period and a development period.
The exploration period is for a base term of 5 contract years from the effective date, extendable on a yearly basis up to a maximum of 7 contract years. The exploration period is subject to further extension beyond the extended exploration term as provided in Arts. 6.6-6.7.
Subject to extension as provided in Art. 6.14, the development period for all commercial discoveries of crude oil is 20 years from the date of the first declaration of a commercial discovery of crude oil by Repsol YPF Oriente Medio (Repsol YPF), and the development period for all gas fields is 20 years from the last day of the gas field holding period.
If commercial production from a production area (whether an oil field or a gas field) is still possible at the end of the development period, Repsol YPF will be entitled to an automatic extension of the development period of 5 years in respect of such production area.
Etude sur l'impact environnemental et plan de gestion
Within 180 days of the effective date Repsol YPF Oriente Medio (Repsol YPF) must deliver a comprehensive and detailed environmental impact report prepared in accordance with best practices. The government may require that such environmental impact report be reviewed and validated by a recognized independent environmental consultant selected by the government (at the cost of Repsol YPF), and may post the report to the government's website to invite public comments.
Repsol YPF must provide an environmental impact assessment report together with its development plan and final environmental impact assessment not less than 180 days before the scheduled start of decommissioning operations or the scheduled expiration of the contract, whichever is earlier. If Repsol YPF does not deliver the final environmental impact assessment, then the government will be entitled to produced it and Repsol YPF shall pay all costs in respect of the report.
Repsol YPF Oriente Medio (Repsol YPF) shall take all necessary steps to respond to, and shall promptly notify the government of all emergency and other events occurring in relation to the petroleum operations which are causing or likely to cause material environmental damage.
Repsol YPF shall implement a health, safety and environment program and appoint EHS monitors to conduct periodic monitoring of the petroleum operations as it relates to the health, safety and environment program.
Repsol YPF must provide an environmental management and monitoring plan satisfactory in all respects to the government, before the government will authorize the start of petroleum operations. The plan must establish such procedures as may be reasonably necessary to continuously determine and assure that:
(a) all petroleum operations are in compliance with and do not violate the requirements of applicable law or the contract;
(b) no hazardous substances or solid wastes are disposed of or otherwise released on or to any property except in compliance with the EHS standards;
(c) no hazardous substance will be released on or to any property in a quantity equal to or exceeding that quantity which would require reporting under applicable law or the EHS standards; and
(d) no waste or hazardous substance is released so as to pose an imminent and substantial endangerment to public health or welfare of the environment.
Repsol YPF shall provide self monitoring reports to the government following Repsol's standard practice as set forth in the following Repsol documents:
(a) DGU HSE due diligence, dated 1 November 2009;
(b) DGU Hazard identification study, dated 1 January 2010;
(c) DGU HSE bridging document, dated 1 January 2010; and
(d) DGU environmental. social, and health impact assessment, dated 1 July 2009.
Flaring of natural gas is prohibited except in accordance with an approved work program and applicable permits or in an emergency.
Repsol YPF Oriente Medio (Repsol YPF) shall pay the government US$ 150,000 in advance each contract year during the exploration period; and US$ 300,000 in advance each contract year during the development period to be credited by the government to the environment fund to be established by the government for the benefit of the natural environment of the Kurdistan region.
Repsol YPF shall carry out petroleum operations, and procure that they are carried out in such a manner as to:
(a) protect the natural environment and ensure that petroleum operations result in minimum ecological damage or destruction;
(b) upon termination of the contract or when no longer required for the petroleum operations (whichever is earliest), clean up the contract area and make it good and safe, and protect and restore the natural environment;
(c) control the flow and prevent the waste or escape of petroleum, water or any product used in or derived by processing petroleum;
(d) prevent the escape of any mixture of water or drilling fluid with petroleum;
(e) prevent damage to petroleum-bearing strata in or outside the contract area; and
(f) remedy in a timely fashion any damage caused to the natural environment.
Repsol YPF take measures for the purpose of taking control of any blow out or fire which could damage the environment or petroleum field in accordance with best practices.
Prior to the relinquishment of any area, Repsol YPF shall, in accordance with best practices and applicable law, perform all necessary clean-up activities and take all actions to prevent hazards to the natural environment, human life, or property.
Prior to relinquishing a portion of the contract area, Repsol YPF shall take reasonable measures to abandon the area to be relinquished in accordance with best practices and the EHS standards in similar physical and ecological environments. Such measures shall include removal or closure in place of facilities and assets and materials together with reasonable measures necessary for the preservation of fauna, flora and ecosystems, all In accordance with best practices in similar physical and ecological environments. Repsol YPF shall only be responsible for site restoration or environmental damage to the extent it pertains solely and directly to petroleum operations conducted pursuant to the contract.
Repsol YPF shall take reasonable measures in accordance with applicable law, best practices, and the EHS standards in similar physical and ecological environments to minimize any adverse material impact on national parks and nature reserves which may arise directly at a result of the petroleum operations.
The government may, on not less than 24 hours' notice, order Repsol YPF to suspend all or any part of its operations pending conclusion of a government investigation into the circumstances of any incident, including possible violations of EHS standards, involving:
(a) an emission of hazardous substances or other release of hazardous substances causing damage, injury, claims, or a threat of any of the foregoing constituting a potential violation of EHS Standards;
(b) the presence in, on, under, or migrating from any part of the contract area (or surface water on or groundwater under the contract area) of any substance at a concentration above the concentration at which the substance is normally present in, on, or under land in the same locality; or (c) the disposal of hazardous wastes in violation of the EHS standards.
On not less than 30 days' prior notice to Repsol YPF, the government may order Repsol YPF to suspend all or any part of its petroleum operations when the government has determined that Repsol YPF has either significantly or persistently failed to satisfy the EHS standards or is conducting project operations in a grossly negligent manner that could endanger the environment.
On not less than 30 days' prior notice to Repsol YPF, the government may order Repsol YPF to suspend all or any part of petroleum operations until Repsol YPF has fully paid all outstanding liabilities arising from or related to significant environmental damage caused by petroleum operations in breach of Repsol YPF's obligations in the contract or applicable law.
Repsol YPF Oriente Medio (Repsol YPF) is entitled to use in petroleum operations water belonging to the public domain by prior arrangement with the relevant authorities and on payment of the generally prevailing charges.
Subject to applicable law and compliance with EHS standards, Repsol YPF shall have the right in the Kurdistan region to take or use any water necessary for the petroleum operations provided it does not damage any existing irrigation or navigation systems and that land, houses, or watering points belonging to third parties are not deprived of their use.
The government is entitled to inspect and audit the accounts with respect to each calendar year at any time within a period of five calendar years following the end of such calendar year. The government is also entitled to appoint an auditor of international standing familiar with international petroleum industry accounting practice to undertake or assist the government with respect to any audit.
Within 30 days of the effective date Repsol YPF Oriente Medio (Repsol YPF) shall pay US$ 10 million to the government, being the first tranche of the capacity building bonus, for deposit in the capacity building account.
On or before the earliest of: 15 August 2013; the commencement of drilling of the first exploration well; and the first day of the development period, Repsol YPF shall pay US$ 40 million to the government, being the second tranche of the capacity building bonus, for deposit in the capacity building account. If Repsol YPF does not pay the second tranche of the capacity building bonus, the contract will terminate automatically in accordance with Arts. 6.9 and 45.
Each contract entity shall pay to the government the amounts set out below, separately for, and in respect of, each production area.
In respect of production crude oil and natural gas from the contract area Repsol YPF shall pay the following production bonus within 30 days of the following relevant occurrence:
(a) US$ 2.5 million on first production;
(b) US$ 5 million when production reaches a cumulative amount of 10 million barrels of crude oil and natural gas barrel of oil equivalent (BOE);
(c) US$ 10 million when production reaches a cumulative amount of 25 million barrels of crude oil and natural gas BOE; and
(d) US$ 20 million when production reaches a cumulative amount of 50 million barrels of crude oil and natural gas BOE.
Except as expressly provided in Art. 31, and without prejudice to the exemptions expressly provided for in Art. 30, each contractor entity, its affiliates and any subcontractor shall, for the entire duration of the contract, be exempt from all taxes as a result of its income, assets, and activities under the contract.
Each contractor entity will be subject to income tax on its income from petroleum operations. The government shall pay all income tax directly to the applicable Kurdistan region authorities for the account of each contractor entity in accordance with the contractor entity's tax return. The government shall pay such income taxes from the government's share of profit petroleum.
Repsol YPF Oriente Medio (Repsol YPF) shall promptly provide to the government such technological and logistical assistance to the Kurdistan region petroleum sector as the Minister of Natural Resources may request, up to the value of US$ 1 million including geological computing hardware and software and such other equipment. Repsol YPF and the government shall agree the form of such assistance.
In the event of the establishment of a fund for revenue sharing between the federal government of Iraq and other regions, and upon receipt of instructions from the government the Repsol YPF shall pay into such fund:
(a) any royalty payable In cash due to the government;
(b) proceeds from the sale of any crude oil undertaken by a contractor entity on behalf of the government pursuant to the contract; and
(c) all production bonuses.
Partage de production - Eléments de "Profit Oil" (critères pour la modification du partage, - TRI, facteur "r", niveau de production, etc.)
The total amount of profit petroleum which will be attributed and allocated to the Repsol YPF Oriente Medio (Repsol YPF) and the government interest holders from first production in accordance with their respective participating interests is as set out below.
R = (X / Y)
Where R = the R factor
Where X = cumulative revenues
Where Y = cumulative costs
For profit oil, an amount equal to the quantities of petroleum resulting from the application of the relevant percentage as indicated below to the daily volume of production of profit oil within the contract area at the corresponding delivery point.
Where R < or = 1 the total amount is 32%
Where 1 < R < or = 2.25 the total amount is 32 - [(32 - 16) x (R - 1) / (2.25 - 1))%
Where R > 2.25 the total amount is 16%
And for profit gas, equal to the quantities of gas resulting from the application of the relevant percentage as indicated below to the daily volume of production of profit gas within the contract area at the corresponding delivery point:
Where R < or = 1 the total amount is 38%
Where 1 < R < or = 2.75 the total amount is [38 - [(38 -19) x (R - 1) / (2.75 - 1)]%
Where R > 2.75 the total amount is 19%
From first production until the end of the calendar year in which first production occurs, the R factor shall be deemed to be less than 1.
Profit petroleum which is attributed and allocated neither to Repsol YPF or the government interest holder in accordance with Art. 26.7 is to be attributed and allocated to the government.
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.)
Subject to the accounting procedure, Repsol YPF Oriente Medio (and each contractor entitiy) shall be entitled to recover from the first production from any production area in the contract area and thereafter from all production areas all petroleum costs from up to 40% of available crude oil within any calendar year and from up to 50% of available gas produced within any calendar year.
Restrictions sur les transactions avec les parties liées
In order to be considered recoverable petroleum costs without need for further approval from government, charges for administrative, scientific, or technical services performed by affiliates of Repsol YPF Oriente Medio (Repsol YPF) shall not exceed those prevailing if performed by non-affiliated third parties, taking into account the quality and availability of such services.
In order to be considered recoverable petroleum costs without need for further approval from government rates for the use of equipment and facilities owned and furnished by Repsol YPF affiliates must not exceed those currently prevailing for the supply of like equipment and facilities on comparable terms in the area where the petroleum operations are being conducted and shall be on an arm's length basis.
Repsol YPF Oriente Medio shall calculate the royalty daily by applying the following rate to the royalty petroleum produced and saved on that day: 10% for royalty crude oil and 10% for royalty gas.
No royalty is payable in respect of associated gas from an oil field.
The government has a participating interest of 20% in the petroleum operations and all other rights, duties, and obligations of Repsol YPF Oriente Medio (Repsol YPF) (except as provided in Art. 4).
No holder of the government interest has any obligation or liability to Repsol YPF or any contractor entity whatsoever, including any obligation or liability to contribute any share of petroleum costs and any other obligation or liability arising out of or related to petroleum operations, all of which are carried out by Repsol YPF.
For the petroleum operations, Repsol YPF Oriente Medio (Repsol YPF) shall give, and shall require its subcontractors to give, preference to citizens of the Kurdistan region and other parts of Iraq to the extent such citizens have the technical capability, qualifications, competence, and experience required to perform the work, are available at competitive compensation rates, and their employment would not cause Repsol YPF, any contractor entity, any of its affiliates, or any of its subcontractors to violate any law applicable to it.
For the first 5 contract years, Repsol YPF shall pay to the government US$ 250,000 in advance each contract year for the recruitment of personnel, whether from the Kurdistan region other parts of Iraq or abroad, to the Ministry of Natural Resources.
Repsol YPF Oriente Medio (Repsol YPF) shall give priority to subcontractors from the Kurdistan region and other parts of Iraq to the extent their competence, rates, experience, reputation, qualifications, specialities, financial capacity, availability, delivery and other commercial terms are, in Repsol YPF's sole opinion, comparable in all material respects with those provided by foreign companies operating in the international petroleum industry, and will not cause any contractor entity or its affiliates to violate any law applicable to it, including corrupt practices laws.
A subcontractor will not qualify as being from the Kurdistan region and other parts of Iraq unless it is organized under applicable law or the laws of Iraq, domiciled In Iraq, and majority-owned and controlled by citizens of the Kurdistan region or Iraq.
Repsol YPF Oriente Medio (Repsol YPF) shall give priority to assets and materials that are readily available in the Kurdistan region and other parts of Iraq to the extent their price, grade, quality, quantity, specifications, purchase, delivery and other commercial and technical terms are comparable in all material respects with those otherwise available to Repsol YPF.
Repsol YPF Oriente Medio (Repsol YPF) shall give reasonable consideration to the secondment of government personnel to Repsol YPF and of Repsol YPF's personnel to the government during the various phases of the petroleum operations. The government and Repsol YPF shall agree on terms and conditions for such secondment, and any associated costs will be cost recoverable.
Repsol YPF shall train all its personnel from the Kurdistan region and other parts of Iraq directly or indirectly involved in the petroleum operations for the purpose of improving their knowledge and professional qualifications in order that such personnel gradually reach the level of knowledge and professional qualification held by the contractor entities' expatriate workers with an equivalent resume. Such training shall also include the transfer of knowledge of petroleum technology and the necessary management experience so as to enable the personnel from the Kurdistan region and other parts of Iraq to apply advanced and appropriate technology in the petroleum operations, to the extent appropriate confidentiality agreements.
Repsol YPF shall allocate for training the amount of:
(a) US$ 150,000 for each contract year during the exploration period; and
(b) US$ 300,000 for each contract year during the development period.
To the extent any amount allocated for a contract year is not utilized in a contract year, Repsol YPF shall pay the unutilized allocation to the government within 60 days after the end of the applicable contract year.
Reasonable training costs will be cost recoverable.
Repsol YPF Oriente Medio (Repsol YPF) is entitled to freely use access roads located within the contract area and outside the contract area for the construction, installation, maintenance, operation and removal of pipelines and other facilities required for the petroleum operations.
For its petroleum operations, Repsol YPF shall have the right to use in the Kurdistan region, subject to applicable law, any railway, tramway, road, airport, landing field, canal, river, bridge, or waterway, any telecommunications network and any existing pipelines or transportation infrastructure, on terms no less favorable than those offered to other persons and, unless generally in force, to be agreed.
The government shall have the right to build, operate and maintain roads, railways, airports, landing strips, canals, bridges, protection dams, police stations, military Installations, pipelines (subject to Arts. 14 and 38) and telecommunications networks in the contract area, provided this does not increase the costs, or compromise or have a material adverse effect on the performance of the petroleum operations. If the construction, operation and maintenance of such facilities by the government results in increased cost or expense for Repsol YPF then such expense will be cost recoverable.
Under national emergencies due to environmental catastrophe or disaster, or internal or external war, the government shall have the right to request to use any transportation and communication facilities installed by Repsol YPF. Any associated costs, expenses or liabilities incurred by Repsol YPF will be cost recoverable.
In the conduct of petroleum operations, Repsol YPF shall have the right in the Kurdistan region, subject to compliance with applicable Kurdistan region law and EHS standards, to clear land, excavate, drill, bore, construct, erect, place, procure, operate, emit and discharge, manage and maintain ditches, tanks, wells, trenches, access roads, excavations, dams, canals, water mains, plants, reservoirs, bairns, storage and disposal facilities, primary distillation units, extraction and processing units, separation units, sulphur plants and any other facilities or installations for the petroleum operations, in addition to pipelines, pumping stations, generators, power plants, high voltage lines, telephone, radio and any other telecommunications systems, as well as warehouses, offices, sheds, houses for personnel, hospitals, schools, premises, dikes, vehicles, railways, roads, bridges, airlines, airports and any other transportation facilities, garages, hangars, workshops, foundries, repair shops and any other auxiliary facilities for the petroleum operations and generally everything which is required for its performance of the petroleum operations. Repsol YPF has the right to select the location for these facilities.
The government shall have the same rights as Repsol YPF for use, free of charge, of any pipeline and related facilities constructed by Repsol YPF under Art. 33 for the transportation of the share of the petroleum to which the government is entitled under this contract.
Subject to available capacity, tie-in agreements, and pipeline crude oil minimum quality specifications, Repsol YPF Oriente Medio (Repsol YPF) shall permit third parties to transport their petroleum through any crude oil pipeline constructed by Repsol YPF on reasonable commercial terms to be agreed between the Repsol YPF and such third party that must not discriminate among potential third party users. Repsol YPF and the government shall always have priority of access to such pipelines.
On not less than 30 days' prior notice to Repsol YPF Oriente Medio (Repsol YPF), the government may terminate the contract if a competent authority has reasonably determined (in a proceeding applying due process):
(a) that the contract has been obtained by Repsol YPF, or any person acting on behalf of Repsol YPF in violation of corrupt practices laws; or
(b) that a permit, approval, consent, or waiver in connection with the contract or petroleum operations has been obtained by Repsol YPF, or any person acting on behalf of Repsol YPF, in violation of corrupt practices laws.
The contractor entities shall sell and deliver to the government, upon written request of the government, any amounts of crude oil that the government shall request to meet Kurdistan region internal consumption requirements. The government shall pay the international market price for such crude oil and the contractor entities and the government shall enter into a sales agreement containing normal commercial terms prevailing in the international petroleum industry.
It is the policy of the government to ensure that natural gas is first made available to satisfy the consumption requirements and needs of the people of Iraq.
Repsol YPF Oriente Medio (Repsol YPF) shall start exploration operations within 30 days of the management committee's approval of the exploration work program and budget.
During the first sub period Repsol YPF shall:
(a) carry out geological and geophysical studies, comprising:
(i) the compilation of a technical database;
(ii) the performance of a remote sensing study; and
(iii) a field visit to verify initial geological and geophysical work and remote sensing results and plan for 2 dimensional seismic acquisition; and
(b) perform field work compiling structural, stratigraphic and lithologic mapping and sampling;
(c) acquire, process and Interpret 150 line kilometers of 2 dimensional seismic data, or a 3 dimensional seismic data program by agreement between the parties, committing for this purpose a minimum financial amount of US$ 4 million; and
(d) except only if the contract terminates because Repsol YPF does not pay the capacity building bonus-second tranche in accordance with Art. 32.1, drill one exploration well including testing and coring as appropriate, and commit for this purpose a minimum financial amount of US$ 15 million.
During the second sub-period Repsol YPF shall:
(a) acquire, process and interpret further seismic data (being either 2 dimensional or 3 dimensional), if Repsol YPF considers that the results from the first exploration well justify the acquisition of further seismic data; and
(b) drill one exploration well, including testing and coring as appropriate, and commit a minimum financial amount of US$ 15 million, unless the data from the first exploration well demonstrates that there is no reasonable technical case for drilling the second exploration well in the contract area.
Each party fully and irrevocably waives any claim to immunity for itself or any of its assets. This waiver includes any claim to immunity from:
(a) any expert determination, mediation, or arbitration proceedings commenced pursuant to the provisions in the contract;
(b) any judicial, administrative or other proceedings to aid expert determination, mediation, or arbitration proceedings commenced pursuant to provisions in the contract; and
(c) any effort to confirm, enforce or execute any decision, settlement, award, judgment, service of process, execution order, or attachment (but not any pre judgment attachment) that results from an expert determination, mediation, arbitration or any judicial, administrative, or other proceedings commenced pursuant to the contract.
The waiver does not apply to the government in respect of any dispute related to the exercise of some rights by the government as set out in the contract to the extent the dispute is between the government and any holder of a government interest. The government expressly reserves all sovereign immunities in respect of the foregoing disputes.
Art. 42 does not apply to any dispute arising out of or relating to the exercise of some rights by the government as set out in the contract. Such disputes, and disputes arising out provisions in the contract between the government and any government interest holder, shall be subject to the exclusive jurisdiction of the courts of the Kurdistan region located in Erbil.
Subject to the above, the parties to the dispute shall first seek to settle the dispute by negotiation between senior representatives with authority to negotiate the settlement of the dispute.
If the dispute is not resolved by negotiation within 60 days after the date of the receipt by each party to the dispute of the notice of dispute or such further period as the parties to the dispute may agree in writing, any party to the dispute may seek settlement of the dispute by mediation in accordance with the London Court of International Arbitration (LCIA) mediation procedure and the parties to such dispute shall submit to such mediation procedure.
If the dispute is not settled within the earlier of:
(a) 60 days of the appointment of the mediator, or such further period as the parties to the dispute may otherwise agree under the mediation procedure; and
(b) 120 days alter the delivery of the notice of dispute, any party to the dispute may refer the dispute to and seek final resolution by arbitration under the LCIA rules.
An election by a party to refer a dispute to arbitration shall be construed as meaning such dispute shall be resolved by binding arbitration under the LCIA rules.
Any arbitration shall he conducted by three arbitrators in London, England.
The parties agree that the arbitral award will be final and not subject to any appeal, including to the Courts of England on issues of law.
Except as specifically provided otherwise, no dispute is subject to decision by any court, and the government specifically does not submit to the jurisdiction of any court outside of the Kurdistan region.
Except as provided under clause 36.8, each party shall keep all data and information relating to the contract and the petroleum operations confidential during the entire term of the contract and not divulge or disclose such data or information to third parties without specific consent of the other parties, such consent not to be unreasonable withheld or delayed. The confidentiality obligations do not apply to information which:
(a) is, or through no fault of the disclosing party, becomes part of the public domain (information known to other contractors in the Kurdistan region or elsewhere is not presumptively in the public domain);
(b) is known to the recipient at the date of disclosure;
(c) is required to be furnished in compliance with any law applicable to it, by a competent governmental authority with jurisdiction over such party or its affiliates, by a court order or any other legal proceeding with jurisdiction over such party or an affiliate; or
(d) is required to be disclosed pursuant to the rules or regulations of any government or recognized stock exchange having jurisdiction over a contractor entity or an affiliate.
Notwithstanding the above as contained in Art. 36.7 and in accordance with best practices and subject to Art. 36.8.1 such information may be disclosed to:
(a) affiliates of each contractor entity;
(b) employees, officers and directors of each contractor entity and their respective
affiliated companies for the purpose of the petroleum operations, subject to each such entity taking customary precautions to ensure such information is kept confidential;
(c) consultants or agents retained by any contractor entity or its affiliates for the purpose of analyzing or evaluating information or data;
(d) banks or financial institutions retained by any contractor entity or its affiliates with a view to financing petroleum operations, including any professional consultants retained by such bank or financial institution;
(e) bono fide prospective assignees of a participating interest under the contract
(including any person with whom a contractor entity or an affiliate of such contractor entity are conducting bona fide negotiations directed towards a merger, consolidation or the sale of a material portion of its or such affiliate's equity ownership interests);
(f) prospective or actual subcontractors and suppliers engaged by a party where disclosure of such information is essential to such subcontractor's or supplier's agreement to work for such party; and
(g) any other person or entity with the prior consent of the non-disclosing party.
No contractor entity may make a disclosure pursuant to clauses 36.8(c)-(f) unless the recipient has entered into a confidentiality undertaking fully encompassing the provisions in this article.
The contract, including any dispute arising from or in relation to it is governed by English law. The agreement to arbitrate contained in Art. 42 is governed by English law.
The government shall maintain the stability of the fiscal conditions of the contract as they result from applicable law in force as of the effective date, for the entire duration of the contract in accordance with Art. 43. The provisions of Art. 43 do not apply to government interest holders.
If at any time after the effective date there is any change to regional tax laws in force on the effective date and the fiscal position of the contractor entities under this contract is materially either beneficially or detrimentally affected by such change of tax law then Respol YPF Oriente Medio (Repsol YPF) and the government shall negotiate to alter the terms of the contract so as to place the contractor entities in the same overall economic position (taking into account home country taxes) as that which the Repsol YPF, as the original contractor entity, would have been without any change of tax law. The government will under no circumstances be liable to any party or person for any consequential or indirect losses because of any change of tax law.
If a party believes that a change of tax law has beneficially or detrimentally affected the contractor entity as provided in Art. 43.4. and upon that contractor entity's request, the government shall meet with the contractor entities to decide on any necessary measures or making any appropriate amendments to the terms of the contract to place the contractor entitles in the position (taking into account home country taxes) Repsol YPF, as original contractor entity, was in prior to the occurrence of the change of tax law.
Should the government not agree with the Repsol YPF in respect of the effect of the change of tax law, within 90 days of the request of the party referred to in Art. 43.6 (or such other period as may be agreed by the parties), a party may refer the dispute to arbitration as provided in Art. 42 without first referring the matter to negotiation and mediation.
Repsol YPF acknowledges that the government has advised It may propose laws which could have a beneficial or detrimental effect upon the fiscal position of Repsol YPF. The introduction of such laws will not entitle Repsol YPF or any contractor entity to any rights to any alteration to the terms of this contract.