Qatar

Any and all documents required under or resulting from or necessary to implement this contract or with regard to the petroleum operations shall be prepared, interpreted, executed and delivered in the English language.

The contract location shall be an area in the North Field, within ABCD

Hydrocarbons

Qatar Petroleum

The term and effectiveness of this contract shall commence on the signature date and expire on the 25th anniversary of the production commencement date (with the opportunity to extend the term of this agreement for up to 5 years).

Model development and production sharing agreement

Company shall, as a part of the front-end engineering and design, prepare an environmental impact assessment which includes the following elements: - air dispersion modeling; - meteorological data; - background air quality data; - identifying and assessing all potential gaseous, liquid and solid releases to the atmosphere; - identifying and assessing proposed environmental impact mitigation measures; and - identifying and assessing any other environmental activities. Within 180 days after the effective date, the company shall undertake and complete a safety and environmental baseline assessment of the anticipated contract location and the onshore sites consistent with internationally accepted industry practices, the laws of Qatar and the project implementation schedule, and incorporate the findings of the environmental baseline assessment (EBA) in a report addressed to the management committee. Within one year from the effective date, the company shall prepare and submit to the management committee for its approval, a plan for handling spent catalyst and hazardous wastes. Such plan shall include: - the required equipment and procedures for handling and removing spent catalyst and hazardous wastes from the facilities; - the potential for recovering valuable metals from the spent catalyst; - the potential disposal sites for temporary and permanent disposal of the spent catalyst and hazardous wastes; and - any particular characteristics of the spent catalyst and hazardous wastes which require special handling to protect the environment and/or the personnel handling the spent catalyst or hazardous wastes.

Company shall participate, on a non-discriminatory basis, in any existing or future environmental monitoring programs over the contract location or in or around the facilities site in Ras Laffan Industrial City including those for ambient air quality and ground based ecosystems. Costs of such participation shall be a part of operating costs. The company acknowledges that there shall be no unauthorized disposal or dumping of untreated produced water, effluents, chemicals, other petroleum products or by-products or other waste, and that suitable waste management techniques acceptable to the government shall be implemented to avoid pollution in and around all petroleum operations. The government shall have the right at any time and at any location to spot check samples of such effluents to ensure that the standards set out above are met.

The company shall take all reasonable actions to minimize any adverse impact to the general environment, including without limitation the surface, subsurface, sea, air, animal life, plant life, other natural resources and property. The order of priority for actions shall be (i) the protection of life; (ii) environment; and (iii) property. All petroleum operations, including the disposal of produced water, effluents, chemicals, spent catalyst and any hazardous or toxic wastes that may be generated shall be handled in a safe and environmentally friendly and sound manner and in accordance with the environmental law and internationally accepted petroleum industry practices. In the event of a conflict of standards between the environmental law and internationally accepted petroleum industry practices, the higher or more stringent standard shall be applied unless a specific exemption to such higher or more stringent standard is granted by the government. The company acknowledges that there shall be no unauthorized disposal or dumping of untreated produced water, effluents, chemicals, other petroleum products or by-products or other waste, and that suitable waste management techniques acceptable to the government shall be implemented to avoid pollution in and around all petroleum operations. The government shall have the right at any time and at any location to spot check samples of such effluents to ensure that the standards set out above are met. The company shall have the obligation to comply with the requirements of the Environmental Law. The company shall be liable for the costs and expenses of abandoning the facilities and restoring the site locations.

Government provided utilities include desalinated water supply. Any agricultural grade water produced as a by product of petroleum operations onshore, and not used in petroleum operations on a first priority basis, shall be delivered free of charge to the government. Costs associated with any necessary treatment and the delivery of such water shall be petroleum costs. The company shall only be required to make available and deliver such water on an as-available basis and shall not be subject to any claims or liability as a result of failure to make available or to deliver any quantities or quality of surplus water.

The company shall keep in Qatar clear and accurate original and duplicate United States dollar based accounts and records of all petroleum operations and petroleum costs, and upon reasonable prior notice the company shall, within 30 days of receiving such notice, provide such accounts and records in a meaningful form to the government and/or its representatives for inspection. The company shall prepare such accounts and records in accordance with the accounting procedure. The parties shall use best endeavors to agree within 12 months of the effective date, or within such longer period as the parties may agree, on a mutually acceptable accounting procedure in accordance with internationally accepted accounting standards, government standards (including those of its affiliates) and generally accepted international accounting procedures. The government shall have the right at all times to inspect and audit the statements of petroleum costs and all other records, books and accounts regarding the petroleum operations prepared by or in the possession of the company and, to the extent any of its affiliates provides services for the petroleum operations, its affiliates and their respective contractors at the place where such records, books and accounts are normally kept. Upon receipt of at least 30 days notice of an audit, the company shall make available, or procure that its affiliates make available, to the government and its representatives all such records, books and accounts relevant to the audit that are in its possession or control. The government shall endeavor to minimize the duplication of audits. The company shall arrange for an annual audit of its books and records including financial statements, pertaining to petroleum operations by external, independent auditors registered in Qatar, the costs of which shall be submitted as petroleum costs. To the extent the government or any of its affiliates provides services for the petroleum operations, the company shall have the right at all times lo inspect and audit the records, books and accounts regarding the provision of such services prepared by or in the possession of the government or its affiliates at the place where such records, books and accounts are normally kept. Upon receipt of at least 30 days notice of an audit, the government shall make available or procure that its affiliates make available to the company and its representatives all such records, books and accounts relevant to the audit. The company shall endeavor to minimize the duplication of audits.

The company shall pay the government the following separate bonuses promptly when due: - upon the signing of this contract, an amount of US$ [X]; - at production commencement date, an amount of US$ [X]; - 1 calendar month after R is > 1 for a period of 6 consecutive months a bonus in the amount of US$ [X]; - for a combined total of bonuses in the amount of US$ [X].

The company shall be subject to and comply with, the requirements of the Qatar Income Tax Law with respect to the computation of tax, filing of returns, assessments of tax and keeping of records for review by authorized persons. The government shall assume, pay and discharge or cause to be discharged on behalf of the company all Qatar income tax of the company.

The tax rate applicable to the company with regard to all taxable income generated by the petroleum operations for the term of this company shall be 35%, regardless of whether the rate which would otherwise be applicable from time to time pursuant to the Qatar Income Tax Law is higher or lower.

During the term of this contract, the natural gas liquid products and the gas to liquids products resulting from petroleum operations shall be allocated between the government and the company in accordance with the provisions of this contract. The R factor to be used in determining the parties’ respective entitlements to a share of any profit petroleum in each calendar quarter shall mean and be calculated on an accrual basis as the ratio of the company's cumulative revenues with regard to the project from the effective date until the end of the preceding calendar quarter divided by the company's cumulative petroleum costs incurred until the end of the preceding calendar quarter. The company's cumulative revenues shall be the sum of (i) the aggregate value of net petroleum production up to such date, based on the actual price received for petroleum, and (ii) all other revenues received by the company (other than insurance proceeds) associated with the conduct of the petroleum operations and not otherwise taken into account in reducing petroleum costs. For each calendar quarter commencing with the calendar quarter in which the production commencement date occurs, the company's percentage share of profit petroleum shall be equal to the relevant percentage specified in the following table applying the relevant “R” factor during the same calendar quarter. R FACTOR: R≤1.25: company share: 18.9%; government share: 81.1% 1.25 < R ≤ 1.50: company share: 15.6%; government share: 84.4% R> 1.50: company share: 11.8%; government share: 88.2% Company shall be entitled to receive, on a quarterly basis, cost recovery petroleum plus its share of profit petroleum. Prior to the calendar quarter in which the production commencement date occurs, the government shall be entitled to 100% of the net petroleum production.

The company’s recovery of petroleum costs from time to time shall be limited to the quantity of cost recovery petroleum actually available to the company at the delivery points each calendar quarter. Commencing with the calendar quarter in which the production commencement date occurs and for each calendar quarter thereafter, the company shall recover all the petroleum costs recoverable in that calendar quarter from the lesser of (i) 40% of the net petroleum production for that calendar quarter or (ii) the amount of the petroleum costs recoverable in that calendar quarter. In the event such reconciliation would result in company receiving more than 40% of the net petroleum production from such quarter, the excess reconciliation amount shall be carried forward.

The company acknowledges that the placement of nationals of Qatar at all levels of staffing in the oil and gas industry is an important objective of the government. Accordingly the company shall, in selecting its personnel to work on petroleum operations, give priority to the nationals of Qatar, and in giving such priority, the company shall recruit, employ and utilize such qualified nationals when they are available for work at competitive rates, to fill its required staffing at all levels. The company and the government shall meet from time to time to establish and define such staff positions, reasonable numbers, and job descriptions of such Qatari nationals. As soon as reasonably practical, the positions of deputy general manager, administration, internal audit, legal and finance managers shall be filled with qualified Qatari nationals.

In selecting contractors for the provision of any services for the petroleum operations to be performed in Qatar, the company shall select, when possible, individuals who are nationals of Qatar or companies which are majority owned by individuals who are nationals of Qatar, to the extent such individuals and companies are invited to participate in the tender for the provision of such services, provided that: - the company, in its judgment acting reasonably, is satisfied (on the basis of demonstrated ability, experience, quality, timely performance, workmanship and other relevant criteria) with their ability to properly perform the work entrusted to them; - the cost of such services does not exceed 110% of the lowest acceptable cost for equivalent or comparable services offered by or otherwise available from non-Qatari nationals or companies which are majority owned by non-Qatari nationals; and - the other terms and conditions (including quality, deliverability and reliability) applicable to such services are otherwise competitive with those available from non-Qatari nationals or companies which are majority owned by non-Qatari nationals. In purchasing goods for the petroleum operations, the company shall give preference, when possible, to goods which are manufactured in part or whole within Qatar or which are offered by individuals who are nationals of Qatar, or by companies which are majority owned by individuals who are nationals of Qatar, to the extent such individuals and companies are invited to participate in the tender for the purchase of such goods, provided that: - the company, in its judgment acting reasonably, is satisfied (on the basis of demonstrated quality, experience, workmanship, availability in the quantity and at the times when needed, and, as may be appropriate, availability of service and support, and other relevant criteria) with the fitness of such goods; - the price of the goods does not exceed 105% of the lowest acceptable all inclusive cost offered by or otherwise available for equivalent or comparable goods not manufactured in Qatar or supplied by non-Qatari nationals or companies which are majority owned by non-Qatari nationals; and - the other terms and conditions (including quality, deliverability and reliability) on which such goods are offered or otherwise available are competitive with those available for goods not manufactured in Qatar or available from non-Qatari nationals or companies which are majority owned by non-Qatari nationals.

The company shall prepare plans and programs for the identification, training and education of both male and female nationals of Qatar at all levels of staffing to improve their technical and professional competence and their management ability. Such plans and programs shall have as their objective the meaningful training and placement of Qatari nationals in time to have such individuals assume meaningful and productive roles in permanent positions in petroleum operations as soon as the facilities become operational and increasingly so as petroleum operations continue through the term of this contract. Training programs shall include performance based, and not solely time based, training and development objectives. Costs incurred or accrued by the company in developing and implementing training and education programs shall be submitted as petroleum costs. The government may request the company to accept reasonable numbers of the personnel of the government and its Affiliates as secondees in the Operator’s organization to participate in the conduct of petroleum operations with the goal of imparting technical, administrative and management skills to such personnel. The total number of personnel to be so seconded for the conduct of petroleum operations, the criteria for recruitment and dismissal, the selection of those personnel and their duties and hours of work shall be determined by the Management Committee. Such secondment program shall be integrated with and supplemental to the Qatarization objectives and programs of Article 15.5. All such personnel seconded to company shall not be employees of the company and their salaries and benefits shall continue to be paid or cause to be paid by the government. The company shall reimburse the government for all the incurred or accrued costs associated with the secondment of the government’s personnel to the company, without an element of profit, and all such costs shall be submitted as petroleum costs.

Infrastructure of the government necessary for petroleum operations (such as onshore sites, cooling seawater supply and outflow, export products jetty construction and land sites), shall be provided to the company by the government for use in the conduct of petroleum operations on non-discriminatory terms. Such government infrastructure shall not be funded, designed, constructed, operated, or maintained by the company as part of the project or the facilities. If government infrastructure for the natural gas liquids products and/or the gas to liquids products storage tanks and/or the export products jetty at Ras Laffan Industrial City are not available, or in the reasonable opinion of the company, will not be available on a timely basis then the company may develop and implement the same at its own cost, such cost to be included as a part of the petroleum costs. The company shall endeavor in conducting petroleum operations to utilize, to the greatest extent reasonably possible from time to time, the existing and available facilities in Qatar on terms and conditions to be agreed by the government and the company, provided that the utilization of such facilities and services would be economically beneficial to the project. Telegraph, wireless and telephone communications equipment shall be installed and maintained by the company in strict accordance with the laws of Qatar and all applicable government rules, regulations and standards. The company shall endeavor to ensure that such equipment is used exclusively for the petroleum operations.

The parties acknowledge that the objective of optimum effectiveness and minimizing cost in the petroleum operations for the project may also be best achieved by cooperative efforts and joint utilization of facilities, infrastructure and operations among other projects in the vicinity of the contract location and/or the onshore project facilities. Accordingly, the company shall advise the government of those instances in which co-operative efforts and joint utilization of facilities, infrastructure and operations are reasonable and justified. Likewise, the government shall advise the company of those instances in which co-operative efforts and joint utilizations of facilities, infrastructure and operations should be considered. In such event the parties shall meet to discuss and consider all reasonable opportunities for such cooperative efforts and joint utilization of facilities, infrastructure and operations. Upon request of the government, the company shall cooperate reasonably with the operator for any other project and participate in any reasonable studies or discussions to further share facilities or infrastructure, combine or unitize operations between the projects. Any decision by the company to further share facilities or infrastructure or combine or unitize the operations between the projects shall be approved by the government acting in its sole discretion and on a fair and equitable basis in conformity with the principles of joint utilization of facilities, infrastructure and operations and unitization generally recognized in the international petroleum industry. Any steam generated in petroleum operations may be used in such petroleum operations on a first priority basis, including associated utilities. Any steam not needed for petroleum operations, including associated utilities, shall be made available free of charge to the government. Costs associated with the delivery and any necessary treatment of such surplus steam shall be petroleum costs. The company shall only be required to make available and deliver such surplus steam on an as-available basis and shall not be subject to any claims or liability as a result of failure to make available or to deliver any quantities or quality of surlus steam.

If the company at any time has the capacity to deliver free gas it shall notify the government of its ability to do so and the quantities and duration of such potential delivery off free gas. The concept of providing free gas to the government from any excess offshore upstream production capacity runs counter to the concept of choosing the smallest possible contract location. However, in the event the natural gas liquids (NGL) plant or the gas to liquids (GTL) plant does not perform as projected, then the government may wish to take advantage of any excess gas production capacity the company has constructed in the facilities. The company shall design the NGL facilities and the GTL facilities to have the ability to recover ethane from gas. At the government’s request, company shall install ethane recovery facilities, provide that the costs of such additional facilities are commercially justifiable. The company, acting as a reasonable and prudent operator, shall have the right to flare gas for the following purposes: - testing of appraisal, development and production wells; - short term operational reasons; and - emergencies or circumstances other imperative and/or compelling operational. Excluding emergencies or unforeseen operational circumstances all flaring of gas must have the prior written approval of the government. Gas flared under these articles and with the written approval of the government shall be free while gas flared for any other reasons shall be paid for at the rate of US$ 0.[XX] per MMSCF escalated from the effective date at the rate of [X]% per annum.

The company shall drill 1 or more appraisal wells. Until completion of those petroleum operations required under the development plan, each annual work program and budget shall be in accordance with and reflect the work commitments and expenditures under the development plan. After completion of such petroleum operations required by the development plan, each annual work program and budget and second year WP&B shall reflect the ongoing petroleum operations that the company proposes to carry out during the relevant year and any subsequent development plan approved by the management committee.

The parties shall in good faith and with a spirit of cooperation use all reasonable efforts to settle amicably any dispute that arises out of or relates to this contract or the breach, termination or validity of same through constructive discussions and negotiations. Where despite such good faith efforts, the parties are unable to resolve a dispute within 30 days after any party’s notice of a dispute, either party may after meeting with and securing consent from the other party refer any such dispute to one or more experts for non-binding resolution. The parties shall use best endeavors to agree within 12 months of the effective date, or within such longer period as the parties may agree, on mutually acceptable procedures for the selection of an expert. If a party considers that a dispute cannot be settled amicably and/or by reference to experts, it may give notice to the other party to commence arbitration proceedings in accordance with this contract. Upon such notice the dispute shall be finally settled by arbitration in accordance with the United Nations Commission on International Table Law (“UNCITRAL”) Arbitration Rules then in effect. The arbitrators shall allocate costs of arbitration. The number of arbitrators shall be 3. The London Court of International Arbitration shall be the appointing authority. The decision of the arbitrators shall be rendered in writing and delivered to, and shall be final and binding upon, each of the parties. The arbitration shall take place in London, England, unless the parties agree upon another location, and the laws of Qatar shall apply to the arbitration and the enforcement of any award. All arbitrators shall be fluent in the English language and the arbitration shall be conducted in the English language. The arbitration tribunal shall decide all questions and settle all disputes strictly in accordance with the provisions of this contract and, in particular, the governing law of this contract. The mandate of the arbitrators shall continue until registration of the decision and any award of the arbitration tribunal. The decision and any award of the arbitration tribunal shall be final and binding upon the parties, and each party shall comply with and give full effect to any such award in a timely manner. The parties shall not have the right to appeal the decision and any award of the arbitration tribunal to any court that would otherwise have jurisdiction in any matter arising in the course of the arbitration or out of the decision and any award. However, any party may make an application to any court having jurisdiction for registration of the decision and any award, for judgment on the decision and any award to be entered and/or for enforcement of any award, including enforcement of any award granting interlocutory relief against any party and for the obtaining of any evidence (whether by discovery of documents, interrogatories, affidavits or testimony of witnesses) which the arbitration tribunal may direct be obtained as part of the arbitration proceedings. Any dispute may be referred for settlement to an alternative forum such as an independent mediator or the courts of Qatar if the parties can agree within 30 days after the notice of arbitration that such alternative forum is more appropriate to the circumstances of the particular dispute. Subject to all legal requirements which may be imposed on either party, the parties undertake to keep confidential the contents of the arbitration proceedings and the decision and any award of the arbitration tribunal, except to the extent necessary for enforcement of any such award.

All aspects of the project as well as all data acquired, developed, received or otherwise obtained pursuant to this contract and the nature and extent of the petroleum operations, is deemed strictly confidential, and accordingly shall not be disclosed by the company without the prior consent of the government (such consent not to be unreasonably withheld or delayed); provided that such consent shall not be required to the extent: - such disclosure is required by law or stock exchange rules applicable to a party (or for greater certainty any of the companies); - such disclosure is made in the course of the conduct of the petroleum operations to a party’s (including for greater certainty any of the companies) affiliates, contractors, consultants, agents, and their respective personnel provided that in the case of contractors, consultants or agents the party first receives a written undertaking of confidentiality from each entity prior to disclosure consistent with the terms of this contract; - such disclosure is made to prospective bona fide assignees or financial institutions or agencies or their advisors of a party (including for greater certainty any of the companies) and their respective personnel, provided that the party first receives a written undertaking of confidentiality from each entity other than the personnel prior to disclosure consistent with the terms of this contract; - such disclosure is retired in any arbitration, legal or other dispute resolution proceedings. Any disclosure in an arbitration, legal or other dispute resolution proceeding shall remain fully confidential and shall not result in such confidential information losing its confidential status. Information shall not be considered confidential and may be freely disclosed if and to the extent a party can demonstrate specific information was at the time in question: - already legally in the party’s possession independent of disclosure by the other party and without any obligation of confidentiality; or - already known to the public through no fault of the party. Each party shall be responsible for any wrongful disclosure of confidential information by its personnel and the personnel of its affiliates and contractors. Each party shall ensure that confidential information is released only to its personnel who need to know for the purposes of the project or petroleum operations, and that such personnel are fully aware of the confidentiality obligations in this contract. Company shall not make any public announcement or issue any news or press release relating to the project, this contract or the conduct of the petroleum operations without the prior consent of the government, except in the event of an emergency or as required by an applicable stock exchange. Should an emergency occur, company may release immediate releases but shall coordinate with the government to the extent practicable. If company intends to make a public announcement or issue a news or press release, it shall give the government at least 7 days notice and within such 7 days the government may require changes to the announcement or release which the company shall incorporate into such announcement or release. If the company proposes to disclose confidential information and/or make a public announcement required by an applicable stock exchange, it shall first provide a copy of such proposed disclosure to the government for its review. The obligations of confidentially set out above shall survive the termination or expiry of this contract and continue thereafter for a period of 24 months. Notwithstanding the foregoing, in the event this contract is terminated prior to the completion of the full term of same, then the period, for which the obligations of confidentiality as they relate to proprietary GTL processes, shall be the time period set forth in this article, plus 24 months. Following the management committee’s approval of the disposal plan presented, if disposal at a land site in Qatar is chosen, then the company shall have a reasonable period of time, not to exceed 6 months, to determine if a secrecy and/or confidentiality agreement is required between the operator of the disposal site and company. Subject to all legal requirements which may be imposed on either party, the parties undertake to keep confidential the contents of the arbitration proceedings and the decision and any award of the arbitration tribunal, except to the extent necessary for enforcement of any such award.

This contract shall be governed by and interpreted in accordance with the laws of Qatar. In the event that the substantive laws of Qatar do not address a particular issue or point that is in dispute between the parties, or they expressly refer to the laws of jurisdictions other than Qatar, the laws of England and Wales shall be used to resolve the issue. In all cases of conflict between the laws of Qatar and the laws of England and Wales, however, the laws of Qatar shall prevail. All petroleum operations, including the disposal of produced water, effluents, chemicals, spent catalyst and any hazardous or toxic wastes that may be generated shall be handled in a safe and environmentally friendly and sound manner and in accordance with the environmental law and internationally accepted petroleum industry practices. In the event of a conflict of standards between the environmental law and internationally accepted petroleum industry practices, the higher or more stringent standard shall be applied unless a specific exemption to such higher or more stringent standard is granted by the government.

Following the management committee’s approval of the disposal plan presented, if disposal at a land site in Qatar is chosen, then the company shall have a reasonable period of time, not to exceed 6 months, to determine if a secrecy and/or confidentiality agreement is required between the operator of the disposal site and company. The parties agree and undertake, on behalf of themselves, their affiliates, contractors, and their respective personnel to act at all times in a manner which is consistent with the highest ethical standards. Each company warrants that it has not made or offered and will not make or offer with respect to the matters which are the subject of this contract, any payment, gift, promise or other advantage, whether directly or through intermediaries, to or for the use of any public official (i.e. any person holding a legislative, administrative or judicial office, including any person exercising a public function for a public agency, a public enterprise or a public international organization, where such payment, gift, promise or advantage would violate the applicable laws of Qatar or the laws of the country of incorporation of such company, and the principle described in the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed in Paris on 17 December 1997).

In the event company is subjected by the government, to any additional liabilities, fees, taxes, imposts or costs of any sort or kind, other than deminimus ones, during the term of this contract, then company shall have the right to request from the government a modification to the terms and condition of this contract that will restore company to the economic position it was in prior to the imposition of such liabilities, fees, taxes, imposts, or costs.