Etude sur l'impact environnemental et plan de gestion
The working interest owners shall cause a person or persons with special expertise and knowledge on environmental matters, approved by the government, to carry out 2 environmental impact studies in order:
(a) to determine at the time of the studies the prevailing situation relating to the environment, human beings and local communities, the wildlife and marine life in the area and in the adjoining or neighboring areas; and
(b) to establish the likely effect on the environment, human beings and local communities, the wildlife and marine life in the area and in adjoining or neighboring areas in consequence of the relevant petroleum operations to be conducted under this agreement, and to submit, for consideration of the parties, methods and measures for minimizing environmental damage and carrying out site restoration activities.
The working interest owners shall ensure that petroleum operations are conducted in an environmentally acceptable and safe manner consistent with good international petroleum industry practices and are properly monitored.
Working interest owners shall conduct petroleum operations with due regard to concerns with respect to protection of the environment and conservation of natural resources.
Working interest owners shall:
(a) employ advanced techniques, practices and methods of operation for the prevention of environmental damage in conducting petroleum operations; and
(b) take necessary and adequate steps to prevent environmental damage and, where some adverse impact on the environment is unavoidable, to minimize such damage and the consequential effects of same to persons, property or otherwise.
The measures and methods to be used by the working interest owners shall be determined in consultation with the government upon the commencement of petroleum operations and whenever there is a significant change in the scope or method of conducting petroleum operations and shall take into account the good international petroleum industry practices as applicable in similar circumstances and the relevant environmental impact study carried out in accordance with the relevant laws.
Within 90 days after the termination of this agreement, unless the government has granted an extension of this period, the working interest owner shall complete all reasonable and necessary action as directed by the government to avoid environmental damage or hazard to human life or third party property.
The government may require from time to time, working interest owners to, amongst other things, take necessary and adequate steps to prevent environmental damage and, where some adverse impact on the environment is unavoidable, to minimize such damage and the consequential effects of same to persons, property or otherwise.
The operator shall maintain correct and accurate records and accounts of all expenditures made for joint operations, of all production obtained from the area and of all property acquired for the joint account or disposed of in accordance with normal industry practices and the accounting procedure.
The accounts shall be audited for the period from the effective date to the end of the calendar year, and thereafter annually by an independent firm of chartered accountants.
Copies of the audit reports shall be delivered to the government and to each of the working interest owners within six months of the end of each calendar year. If neither of them take exception to the audited accounts within 6 months after their receipt, the same shall be final and binding.
The government and/or a non-operator working interest owner(s) shall have the right, at its sole expense, to audit the joint account and related records for any calendar year at any time on 30 days notice.
The working interest owners, other than the Government Holdings (Private) Limited (if applicable), shall pay the government on an area basis, the following production bonuses based on cumulative production of million barrels of oil equivalent (MMBOE):
At the start of Commercial Production: US$ 600,000
30 MMBOE: US$ 1,200,000
60 MMBOE: US$ 2,000,000
80 MMBOE: US$ 5,000,000
100 MMBOE: US$ 7,000,000
Government Holdings (Private) Limited will not pay the production bonuses as long as the government is the majority shareholder of this company.
A windfall levy on crude oil/condensate will be calculated using the following formula:
WLO = 0.5 x (M-R) x (P-B)
Where
WLO – windfall levy on crude oil and condensate;
M - net production (produced and saved);
R – royalty;
P - market price of crude oil and condensate as stated;
B - base price of crude oil and condensate.
The base price for crude oil and condensate will be US$ 30 per barrel. This base price will escalate each calendar year by US$ 0.25 per barrel. In the event market price of crude oil/condensate exceeds US$ 100 per barrel, the 100% benefit of Windfall Levy over and above US$ 100 per barrel will pass on to the government. The ceiling would be reviewed when pricing dynamics significantly change in the international market.
For sale of natural gas to parties other than government, a windfall levy will be applicable on the difference between the applicable zone price and the third party sale price using the following formula:
WLG = 0.5 x (PG-BR) x V
Where
WLG - windfall levy on share of natural gas;
PG – third party sale price of natural gas;
BR - base price;
V – volume of gas sold to third party excluding royalty.
The base price will be the applicable zone price. Where the third party sale price of gas is less or equal to the base price, the windfall price share shall be zero. The windfall price shall not apply on sales of natural gas made to the government.
Income tax on profits or gains shall be at the rate of 40% of profit and gains as determined and assessed in accordance with the provisions of the Income-Tax Ordinance, 2001 (No. XLIX of 2001).
Under this contract local companies or, if applicable, the Government Holdings (Private) Limited (GHPL) will have a working interest of:
15% in Zone-I
20% in Zone-II
25% in Zone-III
85% in Zone-I
80% in Zone-II
75% in Zone-III.
A local company means a company existing under the laws of Pakistan with more than 50% shares held by nationals of Pakistan.
At all times a local company will maintain this working interest, provided however, in the event any local E&P company, other than GHPL, subsequently intends to reduce its working interest in a joint venture which would lower the collective working interest(s) of local E&P companies (including that of GHPL) below those thresholds, GHPL shall have the first right to make up the balance of the required minimum local working interest.
The working interest owners, other than Government Holdings (Private) Limited, shall be required, in consultation with local civil administration/provincial governments, to undertake social welfare programs such as fight against narcotics, promotion of sports, rehabilitation of the mentally retarded and handicapped children, improvement of educational facilities, drinking water, health, roads, and grant of scholarships for local students. Working interest holders shall spend no less than US$ 30,000 annually during the exploration phase until the commencement of commercial production. The government will issue necessary guidelines for social welfare programs as deemed appropriate from time to time. After the commencement of commercial production in the area, the following minimum amounts based on rate of production will be spent during each year:
Less than 2000 barrels of energy per day (BOE/D): US$ 50,000 – Zone I; US$ 37,500 – Zone II;
2000 – 5000 BOE/D: US$ 100,000 – Zone I; US$ 75,000 – Zone II;
5000 - 10,000 BOE/D: US$ 200,000 – Zone I; US$ 150,000 – Zone II;
10,000 - 50,000 BOE/D: US$ 400,000 – Zone I; US$ 300,000 – Zone II;
More than 50,000 BOE/D: US$ 700,000 – Zone I; US$ 525,000 – Zone II;
These amounts will be increased from time to time by mutual agreement of the working interest owners and the government. Any amounts so spent shall be treated for income tax purposes as wholly and exclusively incurred for the purpose of the business of the working interest owners.
The operator agrees to employ qualified nationals of Pakistan in its joint operations. Preference will be given to employment of nationals and unskilled workers from the area.
The operator including its contractor(s) shall ensure the employment of unskilled workers of the area, at local/district level, to the extent of at-least 50% of their unskilled workers category. The operator undertakes to gradually replace its expatriate staff with qualified nationals as they become available. Within 30 days of the end of each calendar year, the working interest holder shall submit a written report to director general, petroleum concessions describing the number of personnel employed, their nationality and positions and the status of training program for nationals of Pakistan.
Each development plan should include a plan for utilization of local goods and services.
Contracts for at least 10% of the computer software requested shall be awarded by the operator to local companies (i.e. those existing under the law in Pakistan) to use the local software capabilities, subject to such software capabilities being available at competitive prices.
Etude d'impact sur les incidences sociales/sur les droits de l'homme et plan de gestion
The report on each commercial discovery shall cover all the relevant factors as required under the rules (relating to Regulation of Mines and Oilfield and Mineral Development (Government Control) Act, 1948 (XXIV of 1948)) including anticipated adverse impact on the environment and measures proposed to be taken for preventing adverse impacts and for general protection of the environment.
The working interest owner agrees to undertake schooling and training of nationals of Pakistan for staff positions, including administrative and executive management positions.
An annual program for employment and training of nationals of Pakistan shall be established by the working interest owner and submitted for approval to the director general, petroleum concessions at least 90 days in advance. Such program shall be included in the annual work program and budget of the companies.
The working interest owner shall also be required to establish a program, satisfactory to the government to train personnel of the directorate general of petroleum concessions and the government. Such training program shall cover both technical and management disciplines (e.g., geology, geophysics, engineering, project management, accounting, legal) and shall include on-the-job training and participation in in-house seminars. The scope of training will cover internship/scholarships and training of the local inhabitants in different institutions.
From the effective date and up to the date of commercial discovery the working interest owners, other than Government Holdings (Private) Limited shall, spend a minimum of US$ 25,000 per year during the exploration phase and during the development and production phase a minimum of US$ 50,000 per year on training. This expenditure will be subject to upward review from time to time. The unspent training amount during a year, unless agreed otherwise, shall be deposited into a special account maintained for the purpose by the directorate general of petroleum concessions.
This agreement contemplates the construction and operation of temporary or permanent exploration and production facilities (including pipelines) both within and outside the area. The government, subject to relevant rules, laws and policies, agrees to assist the working interest owners in carrying out all joint operations including the construction and operation of such facilities.
The working interest owners shall have the sole and exclusive right to establish, install and operate LPG or natural gas processing plants in the area in accordance with the relevant law, rules or regulations, provided that if they fail to commence the installation of an LPG or natural gas processing plant in the area within 4 years of the grant of the lease unless otherwise agreed between the government and the working interest owners, their exclusive right to establish such plant(s) within the area will cease.
The working interest owners shall construct, operate and maintain the gas pipeline connecting the field to the field gate and connecting gas pipeline.
The government will have the option to establish, install and operate LPG and natural gas processing plant(s) in the area, provided that the working interest owners are given an opportunity to participate in such plant(s).
If in any year there is projected domestic demand, as determined by an entity designated by the government, in excess of production from indigenous source, the government may require working interest owners to sell crude oil in Pakistan on a pro-rata basis with other producers in Pakistan, according to the crude oil production of each producer in a year.
Each working interest owner, excluding Government Holdings (Private) Limited shall procure and deliver to the government on effective date of this agreement:
-either an irrevocable, unconditional bank guarantee from a reputable bank of good standing in Pakistan acceptable to the government for such working interest owner’s share of non-performance compensation; or
-a guarantee in favor of the government, from its parent guarantor, acceptable to the government; or
-the government may also consider accepting a proposal of a local working interest owners for the provision of guarantee in the form of first & preferred lien on petroleum production and or assets etc. in Pakistan;
-the government may also consider accepting a proposal of opening “joint escrow account” against minimum financial obligation of minimum work program.
The operator shall not flare natural gas but shall use it commercially or for recycling. If natural gas is not so used, the working interest owners shall negotiate an arrangement making it available to the government. If the government is unable or unwilling to take delivery, the operator will be allowed to flare the natural gas.
The minimum work program and minimum expenditure to discharge the obligations, during the initial term provided for in the rules (relating to Regulation of Mines and Oilfield and Mineral Development (Government Control) Act, 1948 (XXIV of 1948)) shall be as follows:
Phase 1 is contract years 1, 2 and 3: 100 work units (or as otherwise agreed) plus [X] work units per grid area (to be agreed between the parties) in the original area for each of contract years.
Phase 2 is contract years 4 and 5: at least 1 exploration well to be agreed by the government before entering into phase 2 along with corresponding work units.
Any question or dispute arising out of or in connection with the terms of this agreement or the license or any lease shall be settled amicably through mutual negotiations between the parties in good faith within thirty days after the date the disputing parties delivers return notice of the dispute to the other parties. Failing an amicable settlement within a reasonable period, such dispute shall be submitted to the International Centre for Settlement of Investment Disputes (ICSID) established by the "Convention on the Settlement of Investment Disputes Between States and Nationals of Other States" of 1965. Arbitration proceedings shall be in Pakistan or anywhere else as mutually agreed by the parties. The award rendered shall be final and conclusive. The judgment may be entered in any court having jurisdiction or application may be made in that court for enforcement of the award. The official language of arbitration will be English.
The government shall allow the operator access to all geological, geophysical, well and other technical data which is in public domain on the effective date pertaining to the area and any free adjoining areas. If and when requested by the operator, the government shall provide or supply to the operator copies of such data on payment of actual reproduction and other costs of the data and on such terms and conditions as it may determine. Such data shall not be disclosed to any third party except to operator's employees and consultants
including banks and financial institutions for the purpose of financing who shall be
similarly bound to treat it as strictly confidential.
All information acquired by any working interest owner in respect of the joint operations including all seismic and well data and related information that pertains to or results from the joint operations, or any data or information contributed by any working interest owner to
such joint operations, shall be considered confidential and shall not be disclosed to any other person which is not a working interest owner, except:
(a) to an affiliate of a working interest owner, provided such affiliate executes a strict undertaking to treat and maintain all such information as confidential; or
(b) as required by the government or any applicable laws or regulations of a stock exchange having jurisdiction over a working interest owner; or its affiliate; or
(c) to contractors (including consultants) employed by a working interest owner, the government or the operator, where disclosure of such data or information is essential to such contractor's work, provided such contractor executes an agreement to treat and to maintain all such information as strictly confidential; or
(d) to a bonafide prospective assignee of a working interest owner, provided such prospective assignee first executes an agreement to treat and maintain all such information as strictly confidential; or
(e) to a bank or lending agency to the extent required by a working interest owner for arranging the funds for its obligations under this joint operating agreement provided that such bank or lending agency first executes an agreement to treat and maintain all such information as strictly confidential.
This agreement sets forth the entire agreement reached between the working interest owners and the government and it shall remain and continue in force and shall be binding upon each of them throughout its duration without any amendment, revision or alteration except as may be mutually agreed by the working interest owners with the approval of the government.
The rules, Income Tax Ordinance 2001, Regulations of Mines and Oilfields and Mineral Development (Government Control) Act, 1948 and other laws that are in force on the effective date shall remain applicable, whether or not they are subsequently amended or revised. Provided that where any matter is not specifically dealt with in this agreement or where there is any conflict between the provisions of this agreement and the laws, such matter shall be governed in accordance with the applicable provision of the rules, Income Tax Ordinance 2001, Regulations of Mines and Oilfields and Mineral Development (Government Control) Act, 1948 and other laws as are in force on the effective date of this agreement.