The coordinates of the contract area are the following: Point 1 (552056,00 4 59’ 39.9” N, 8 42’ 0.2” E); Point 2 (508700,00 4 36’8.1” N, 9 9’ 28.0” E); Point 3 (487175,99 4 24’27.1390” N, 9 6’ 36.9502”); Point 4 (468356,00 4 14’ 14.2” N, 8 56’ 57.9” E); Point 5 (454185,00 4 6’32.7” N, 8 58’ 48.7” E); Point 6 (454500,00 4 6’ 42.9” N, 8 54’ 35.6” E); Point 7 (470000,00 4 15’7.8” N, 8 54’ 35.6” E); Point 8 (470000,00 4 15’7.7” N, 8 52’ 58.3” E); Point 9 (474662,00 4 17’39.6” N, 8 52’ 58.2” E); Point 10 (474662,00 4 17’39.6” N, 8 51’ 56.0” E); Point 11 (485746,00 4 23’ 40.5” N, 8 50’ 41.9” E); Point 12 (499500,00 4 31’ 8.5” N, 8 50’ 41.8” E); Point 13 (505487,45 4 34’ 23.5” N, 8 50’ 48.3” E); Point 14 (532360,84 4 48’ 58.3634” N, 8 36’ 49.2644).
Renouvellement ou prolongation de la durée de la concession
The initial period of the exploration phase shall be renewed, at the request of KOSMOS ENERGY CAMEROON, for two additional periods, with each period lasting for 2 years. The renewal is granted according to Petroleum Code and Regulation. Such renewal cannot be refused if the conditions under the law have been fully satisfied. The initial period of the Development and Exploitation Phase may be renewed one time for an additional period of 10 years, pursuant to the Petroleum Legislation. The renewal shall be granted if KOSMOS ENERGY CAMEROON has fulfilled its obligations during the initial period and can demonstrate that it can continue commercial production beyond the initial period. In the event of discovery and exploitation of non-associated natural gas, this period can be renewed one time for an additional term of 10 years.
Charles Sale, the Minister of Industry, Mines and Technological Development; Adolphe Moudiki, the Executive General Manager of the National Hydrocarbons Corporation
The initial contract area is 2510 km². By the end of the initial exploration phase, the first extension, and second (final) extension phase, the contract area would be reduced to 70%, 50%, and 0% respectively (except when an exploitation authorization has been granted or applied for).
The initial period of the exploration phase shall be 3 years starting from the effective date (exploration phase means the phase covered by an exploration authorization). The initial period of the development and exploitation phase is 20 years for crude petroleum, starting from the date when the exploitation authorization is granted. In the event of discovery and exploitation of non-associated natural gas, the term of the initial period of the development and exploitation phase shall be 25 years (the period of the development and exploitation phase begins on the date of granting of an exploitation authorization and ending on the date of production of the first tonne of commercial hydrocarbons).
Etude sur l'impact environnemental et plan de gestion
KOSMOS ENERGY CAMEROON shall provide the government an environmental protection plan containing especially a waste management plan, and shall commit to submitting in due course the environmental impact study. Furthermore, KOSMOS ENERGY CAMEROON shall establish an abandonment plan for each exploitation authorization in the contract area. Such abandonment plan shall be annually reviewed by KOSMOS ENERGY CAMEROON to take into account especially the evolution of technical and financial parameters.
KOSMOS ENERGY CAMEROON shall use reasonable efforts to ensure that its personnel and its sub-contractors take the environmental protection and Abandonment measures required under the provisions of the petroleum legislation. KOSMOS ENERGY CAMEROON shall take the environmental and safety capability of a company into account in the hiring of its sub-contractors. KOSMOS ENERGY CAMEROON shall provide the government an environmental protection plan containing especially a waste management plan, and shall commit to submitting in due course the environmental impact study. Kosmos Energy Cameroon shall establish an abandonment plan for each exploitation authorization (exclusive exploitation authorisation for hydrocarbons granted or renewed for the benefit of the contractor in accordance with the provisions of Part III, Chapter III of the Petroleum Code) in the area governed by the contract, but shall not be obligated to proceed with all or part of the abandonment work if the government requests it to leave the installations and facilities on site for the government's use.
Within 30 days following the contract signing date, KOSMOS ENERGY CAMEROON shall pay to the government a signature bonus of US$ 500,000. Within 30 days following the start of the first renewal period of the exploration phase, KOSMOS ENERGY CAMEROON shall pay to the government a further signature bonus of US$ 250,000. When production of crude petroleum and natural gas reaches certain thresholds, KOSMOS ENERGY CAMEROON shall pay to the government additional production bonuses (see Art. 15.3).
KOSMOS ENERGY CAMEROON shall be liable for the duties and taxes levied by the Customs Administration under the Petroleum Code, which is the Law No. 99/013 of the Republic of Cameroon.
KOSMOS ENERGY CAMEROON shall be liable for Company Tax calculated as 40% of KOSMOS ENERGY CAMEROON’s net profits. KOSMOS ENERGY CAMEROON shall pay the company tax in 4 installments in a fiscal year.
Partage de production - Eléments de "Profit Oil" (critères pour la modification du partage, - TRI, facteur "r", niveau de production, etc.)
The government’s share of profit oil varies according to the ratio R: "yearly gross revenue minus exploitation costs and company tax" divided by "yearly exploration costs and development costs". If R is less than 0.25, government’s share is 15%. If R is from 0.25 to 0.50, government’s share is 20%. If R is from 0.50 to 1.00, government’s share is 25%. If R is from 1.00 to 1.50, government’s share is 40%. If R is from 1.50 to 2.00, government’s share is 45%. If R is from 2.00 to 2.50, government’s share is 50%. If R is more than 2.50, government’s share is 65%. In case of natural gas, there is a similar progression of government’s shares corresponding to R.
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.)
Each year, KOSMOS ENERGY CAMEROON may lift its reimbursement oil (reimbursement oil, or cost oil, means the portion of the available oil production applied to reimbursement of costs pursuant to this contract). The maximum of such reimbursement oil cannot exceed 60% of the available production of crude oil. The recovery of petroleum costs by the contractor shall be guaranteed in the following order: (1) exploitation costs of the current calendar year; (2) development costs; (3) exploration costs on a first in, first out basis. If during a calendar year the petroleum costs not yet recovered by KOSMOS ENERGY CAMEROON due to the 60% cap, the uncovered petroleum costs shall be carried forward to the following calendar year(s) until total recovery of the petroleum costs or until this contract terminates. For the purpose of recovering petroleum costs pertaining to natural gas, KOSMOS ENERGY CAMEROON may lift, for each calendar year, reimbursement gas equal to 80% of the available production of natural gas.
The government may take a participating interest share (“participating interest”) in petroleum operations related to exploitation under this contract. The government’s participating interest may not be less than 5% nor greater than 15%. The government shall reimburse its participating interest share of the development and exploitation costs incurred by the KOSMOS ENERGY CAMEROON in the performance of petroleum operations in relation to the exploitation area. The government shall assume the responsibility for paying its participating interest share of all costs and expenses incurred for the exploitation.
KOSMOS ENERGY CAMEROON and its Sub-Contractors shall comply with the provisions of Sections 76 and 77 of the Petroleum Code (Law No. 99/013 of the Republic of Cameroon), which states that KOSMOS ENERGY CAMEROON shall grant preference to Cameroonian enterprises and personnel when purchasing goods or services, for the purposes of Petroleum Operations and for construction, supply, and service contracts.
KOSMOS ENERGY CAMEROON HC and its Sub-Contractors shall comply with the provisions of Sections 76 and 77 of the Petroleum Code, which states that KOSMOS ENERGY CAMEROON HC shall grant preference to Cameroonian enterprises and personnel when purchasing goods or services, for the purposes of Petroleum Operations and for construction, supply, and service contracts.
During the exploration phase, KOSMOS ENERGY CAMEROON undertakes the performance of the minimum work program, which includes aeromagnetic & gravity survey, geological fieldwork to recover samples of oil seeps, purchase or reprocessing of existing 2D seismic data. KOSMOS ENERGY CAMEROON shall also provide the Operating Committee a bank guarantee (the Operating Committee shall be responsible for the supervision of the Petroleum Operations), for an initial amount equal to the estimated cost of the minimum work program to be completed during such period. The estimated cost for the initial period of the exploration phase is $5.9 million; the estimated cost for the first and second renewal periods are $6 million each. While the estimated amount is not binding, the minimum work program is binding on KOSMOS ENERGY CAMEROON.
The parties shall make reasonable efforts to amicably settle any dispute arising between them under this contract. Failing amicable settlement, the government and KOSMOS ENERGY CAMEROON hereby consent to submit to the International Centre for Settlement of Investment Disputes any dispute arising out of or relating to this Contract. The arbitration shall take place in Paris. The language of the arbitral proceedings shall be French or English. The introduction of the arbitration procedure shall suspend the performance of the contested matter for the entire duration of such arbitration. The decisions and awards of the arbitrators shall be final and irrevocable in nature. Any disputes of a technical nature shall be submitted for expert resolution pursuant to the provisions of Title XX of the Petroleum Regulation. The decision of the expert shall be final and binding on the Parties.
KOSMOS ENERGY CAMEROON may assign all or part of its rights and obligations under this contract, and it is obligated to inform the government and submit to it the information as required by the Petroleum Regulation (Petroleum Regulation means Decree No. 2000/465, which sets forth the terms of application for Law No. 99/013 constituting the Petroleum Code). The government already grants its prior consent to assignments among KOSMOS ENERGY CAMEROON and its affiliated entities, if the purpose of the assignments is about repartition of participation percentages among these entities. The government may also assign all or part of its rights and obligations arising under this Contract to a government body or unit or to KOSMOS ENERGY CAMEROON.
The government shall have the right to terminate this contract, provided that it notifies KOSMOS ENERGY CAMEROON 90 days in advance, if KOSMOS ENERGY CAMEROON: a) fails to meet a payment obligation for more than 30 days after the due date; b) has seriously violated the provisions of this contract; c) has materially breached the legislation and regulations in force in respect of petroleum operations; d) has declared bankruptcy or become subject to winding up. If KOSMOS ENERGY CAMEROON remedies the above conditions within 90 days following the notice, such termination shall not become effective. If KOSMOS ENERGY CAMEROON intends to challenge the defaults or breaches asserted by the government, it should justify its position in writing addressed to the government within 30 days from the receipt of the notification. KOSMOS ENERGY CAMEROON may relinquish all of its rights and obligations for any exploitation area if it considers that it is no longer in its commercial interest to continue with exploitation operations, provided that: (1) KOSMOS ENERGY CAMEROON gives the government written notice 12 months in advance; (2) KOSMOS ENERGY CAMEROON properly concludes the work or pays an amount equivalent to the monetary value of the work which was specified in the work program and budget; and (3) KOSMOS ENERGY CAMEROON carries out all operations necessary for the transfer of exploitation activity to the government.
The government and Kosmos Energy Cameroon shall comply with the provisions of the Petroleum Legislation (Petroleum Legislation means the Petroleum Code and the Petroleum Regulation, as well as other legislative and regulatory texts in force that govern Petroleum Operations in Cameroon) on the confidentiality obligation related to documents, reports, surveys, plans, data, samples and other information connected to the performance of this contract (hereafter referred to as “Contractual Data”). The parties commit not to communicate it to third parties other than affiliates, except for routine statistical data. This obligation shall survive until end of the contract. KOSMOS ENERGY CAMEROON and its affiliated parties may, communicate Contractual Data to third parties, including (1) to any potential assignee in good faith or any company that provides assistance in connection with the Petroleum Operations; (2) to any external professional consultants involved in Petroleum Operations; (3) to any bank or financial entity from which the contractor seeks to obtain financing, if the third parties have provided confidential commitment on their part.
Any arbitral tribunal that is constituted to resolve a dispute under the contract shall apply the law of Cameroon as the governing law, as supplemented by principles of international law.
An event shall be considered to be an event of Force Majeure if: (1) it has the effect of temporarily or permanently preventing either of the government or KOSMOS ENERGY CAMEROON ("the Parties") from performing the obligations; and (2) it is unforeseeable or unpreventable or beyond the control of either force of the Parties. Examples of events of Force Majeure include strikes, work stoppages, fires, earthquakes, landslides, disruption of the means of transportation, floods, hurricanes, volcanic eruptions, explosions, wars, guerrilla warfare, terrorist acts, and blockades. A party shall not be liable for the non-performance or the partial or late performance of any of its obligations if the responsible Party is so prevented by reason of an event of Force Majeure. However, the impeded Party shall do its best to meet its obligations pursuant to this Contract and to make every reasonable effort to minimize its consequences. The impeded party shall also renew its compliance with the provisions of this contract within a reasonable period of time after the event of Force Majeure has ceased to exist. The terms granted to a Party shall be extended for a time period equal to that of the event of Force Majeure.
In the event of changes of the Petroleum Legislation, the annual finance law, or other relevant laws and regulations, which take place after the effective date and which would affect in a significant manner to the detriment of KOSMOS ENERGY CAMEROON, KOSMOS ENERGY CAMEROON may, within two months send to the Minister in charge of hydrocarbons written notification and justifications stating that the legislative or regulatory change in question would have a significant detrimental effect on contractor’s economic interest as guaranteed under this contract. Within a two month period upon receipt of KOSMOS ENERGY CAMEROON’s notice, the Minister in charge of hydrocarbons may either: (1) accept in writing the reasons of KOSMOS ENERGY CAMEROON and waive KOSMOS ENERGY CAMEROON from the application of the new legislative or regulatory provision; or (2) reject in writing KOSMOS ENERGY CAMEROON’s justifications. If the Minister in charge of hydrocarbons cannot prevent the application of such new law and regulation on KOSMOS ENERGY CAMEROON, the parties shall make such readjustments to the contract as to reestablish the economic or fiscal equilibrium of the contract as it had been agreed previously.