Common use of Annual Royalty Clause in Contracts

Annual Royalty. 11.1 Annual royalty rate Each of the Parties shall pay to the State an annual royalty on the value of its Participating Interest in the Net Share of Hydrocarbons Production according to the following basis: CRUDE OIL · For Crude Oil from an Exploitation Concession with a water depth less than or equal to 200 metres: the production of the first 300,000 tons originating from each Exploitation Concession is exempted from the annual royalty payment; all production exceeding 300,000 tons originating from each Exploitation Concession is subject to an annual royalty charge of 10%. · For Crude Oil from an Exploitation Concession with a water depth greater than 200 meters: the production of the first 500,000 tons originating from each Exploitation Concession is exempted from the royalty payment; all production exceeding 500,000 tons originating from each Exploitation Concession is subject to an annual royalty charge of 7%. NATURAL GAS · For Natural Gas from an Exploitation Concession with a water depth less than or equal to 200 metres: the production of the first 300 million m3 originating from each Exploitation Concession is exempted from the annual royalty payment; all production exceeding 300 millions m3 originating from each Exploitation Concession is subject to an annual royalty charge of 5%. · For Natural Gas from an Exploitation Concession with a water depth greater than 200 metres: the production of the first 500 million m3 originating from each Exploitation Concession is exempted from the royalty payment; all production exceeding 500 million m3 originating from each Exploitation Concession is subject to an annual royalty charge of 3.5%. 11.2 Methods of payment of the annual royalty The STATE reserves the right to be paid in kind or in cash. Any decision by the STATE to modify its choice of payment method must be communicated to each of the Parties in writing at least six (6) calendar months prior to the effective date of such a change. 11.2.1 The Crude Oil and/or Natural Gas prices which shall be used to determine the amount of the advances of the annual royalty as specified in Article 11.2.2 below, if payable in cash, shall be based on the Market Price applicable during the calendar month to which such advances relate as defined in Article 6 herein. 11.2.2 If the STATE elects to be paid in cash, then on or before 31 July and 31 January of each calendar year, each of the Parties shall pay the STATE advances on the annual royalty for that amount of Net Hydrocarbon Production produced during the immediately preceding semesters ending 30 June and 31 December of the calendar year in question, provided that Hydrocarbons were produced in the Exploitation Concession during the applicable semester. The amount of the semestrial advance shall be estimated by each of the Parties on the basis of the production and by using the Market Price referred to in Article 11.2.1 of this Agreement. 11.2.3 Within 90 days following the end of each calendar year, each of the Parties shall submit to the STATE the final annual royalty declaration and shall then settle the difference between the actual amounts due and the sum of the estimated semestrial payments made for the calendar year in question. If the sum of the estimated semestrial payments is greater than the final amount due, the difference shall be deferred as a credit against the annual royalty for the next calendar year.

Annual Royalty. 11.1 Annual royalty rate Each of the Parties shall pay to the State an annual royalty on the value of its Participating Interest in the Net Share of Hydrocarbons Production according to the following basis: CRUDE OIL · For Crude Oil from an Exploitation Concession with a water depth less than or equal to 200 metres: the production of the first 300,000 tons originating from each Exploitation Concession is exempted from the annual royalty payment; all payment; production exceeding above the first 300,000 tons originating from each Exploitation Concession is subject to an annual royalty charge of 10%. · For Crude Oil from an Exploitation Concession with a water depth greater than 200 meters: the production of the first 500,000 tons originating from each Exploitation Concession is exempted from the royalty payment; all payment; production exceeding above the first 500,000 tons originating from each Exploitation Concession is subject to an annual royalty charge of 7%. NATURAL GAS · For Natural Gas from an Exploitation Concession with a water depth less than or equal to 200 metres: the production of the first 300 million m3 m(3) originating from each Exploitation Concession is exempted from the annual royalty payment; all payment; production exceeding above the first 300 millions m3 originating from each Exploitation Concession is subject to an annual royalty charge of 5%. · For Natural Gas from an Exploitation Concession with a water depth greater than 200 metres: the production of the first 500 million m3 originating from each Exploitation Concession is exempted from the royalty payment; all payment; production exceeding above the first 500 million m3 originating from each Exploitation Concession the rate is subject to an annual royalty charge of 3.5%. 11.2 Methods of payment of the annual royalty The STATE reserves the right to be paid in kind or in cash. Any decision by the STATE to modify its choice of payment method must be communicated to each of the Parties in writing at least six (6) calendar months prior to the effective date of such a change. 11.2.1 The Crude Oil and/or Natural Gas prices which shall be used to determine the amount of the advances of the annual royalty as specified in Article 11.2.2 below, if payable in cash, shall be based on the Market Price applicable during the calendar month to which such advances relate as defined in Article 6 herein. 11.2.2 If the STATE elects to be paid in cash, then on or before 31 July and 31 January of each calendar year, each of the Parties shall pay the STATE advances on the annual royalty for that amount of Net Hydrocarbon Production produced during the immediately preceding semesters ending 30 June and 31 December of the calendar year in question, provided that Hydrocarbons were produced in the Exploitation Concession during the applicable semester. The amount of the semestrial advance shall be estimated by each of the Parties on the basis of the production and by using the Market Price referred to in Article 11.2.1 of this Agreement. 11.2.3 Within 90 days following the end of each calendar year, each of the Parties shall submit to the STATE the final annual royalty declaration and shall then settle the difference between the actual amounts due and the sum of the estimated semestrial payments made for the calendar year in question. If the sum of the estimated semestrial payments is greater than the final amount due, the difference shall be deferred as a credit against the annual royalty for the next calendar year.

Annual Royalty. 11.1 Annual royalty rate Each of the Parties Party shall pay to the State an annual royalty on the value of its Participating Interest in the Net Share of Hydrocarbons Production according to the following basis: CRUDE OIL ·  For Crude Oil from an any Exploitation Concession with a water depth less than or equal to 200 metresmeters: the production of the The first 300,000 tons originating from produced in each Exploitation Concession is are exempted from the annual royalty payment; all All production exceeding 300,000 tons originating from in each Exploitation Concession is subject to an annual royalty charge of 10%. ·  For Crude Oil from an any Exploitation Concession with a water depth greater than 200 meters: the production of the The first 500,000 tons originating from produced in each Exploitation Concession is are exempted from the annual royalty payment; all All production exceeding 500,000 tons originating from in each Exploitation Concession is subject to an the annual royalty charge of 7%. NATURAL GAS ·  For Natural Gas from an any Exploitation Concession with a water depth less than or equal to 200 metresmeters: the production of the The first 300 million m3 originating from produced in each Exploitation Concession is are exempted from the annual royalty payment; all All production exceeding 300 millions million m3 originating from in each Exploitation Concession is subject to an annual royalty charge of 5%. ·  For Natural Gas from an any Exploitation Concession with a water depth greater than 200 metresmeters: the production of the The first 500 million m3 originating from each produced in an Exploitation Concession is are exempted from the annual royalty payment; all All production exceeding 500 million m3 originating from in each Exploitation Concession is subject to an the annual royalty charge of 3.5%. 11.2 Methods of payment of the annual royalty The STATE reserves the right to be paid in kind or in cash. Any decision by the STATE to modify its choice of payment method must be communicated to each of the Parties in writing at least six (6) calendar months prior to the effective date of such a change. 11.2.1 The Crude Oil and/or Natural Gas prices which shall be used to determine the amount of the advances of the annual royalty as specified in Article 11.2.2 below, if payable in cash, shall be based on the Market Price applicable during the calendar month to which such advances relate as defined in Article 6 herein. 11.2.2 If the STATE elects to be paid in cash, then on or before 31 July and 31 January of each calendar year, each of the Parties shall pay the STATE advances on the annual royalty for that amount of Net Hydrocarbon Production produced during the immediately preceding semesters semesters, ending 30 June and 31 December of the calendar year in question, provided that Hydrocarbons were produced in the Exploitation Concession during the applicable semester. The amount of the semestrial advance shall be estimated by each of the Parties on the basis of the production and by using the Market Price referred to in Article 11.2.1 of this Agreement. 11.2.3 Within 90 ninety (90) days following the end of each calendar year, each of the Parties Party shall submit to the STATE the final annual royalty declaration and shall then settle the difference between the actual amounts due and the sum of the estimated semestrial payments made for the calendar year in question. If the sum of the estimated semestrial payments is are greater than the final amount due, the difference shall be deferred as a credit against the annual royalty for the next calendar year.

Annual Royalty. 11.1 Annual royalty rate Each of the Parties shall pay to the State an annual royalty on the value of its Participating Interest in the Net Share of Hydrocarbons Production according to the following basis: CRUDE OIL · For Crude Oil from an Exploitation Concession with a water depth less than or equal to 200 metres: the production of the first 300,000 tons originating from each Exploitation Concession is exempted from the annual royalty payment; all production exceeding above the first 300,000 tons originating from each Exploitation Concession is subject to an annual royalty charge of 10%. · For Crude Oil from an Exploitation Concession with a water depth greater than 200 meters: the production of the first 500,000 tons originating from each Exploitation Concession is exempted from the royalty payment; all production exceeding above the first 500,000 tons originating from each Exploitation Concession is subject to an annual royalty charge of 7%. NATURAL GAS · For Natural Gas from an Exploitation Concession with a water depth less than or equal to 200 metres: the production of the first 300 million m3 m(3) originating from each Exploitation Concession is exempted from the annual royalty payment; all production exceeding above the first 300 millions m3 originating from each Exploitation Concession is subject to an annual royalty charge of 5%. · For Natural Gas from an Exploitation Concession with a water depth greater than 200 metres: the production of the first 500 million m3 originating from each Exploitation Concession is exempted from the royalty payment; all production exceeding above the first 500 million m3 originating from each Exploitation Concession the rate is subject to an annual royalty charge of 3.5%. 11.2 Methods of payment of the annual royalty The STATE reserves the right to be paid in kind or in cash. Any decision by the STATE to modify its choice of payment method must be communicated to each of the Parties in writing at least six (6) calendar months prior to the effective date of such a change. 11.2.1 The Crude Oil and/or Natural Gas prices which shall be used to determine the amount of the advances of the annual royalty as specified in Article 11.2.2 below, if payable in cash, shall be based on the Market Price applicable during the calendar month to which such advances relate as defined in Article 6 herein. 11.2.2 If the STATE elects to be paid in cash, then on or before 31 July and 31 January of each calendar year, each of the Parties shall pay the STATE advances on the annual royalty for that amount of Net Hydrocarbon Production produced during the immediately preceding semesters ending 30 June and 31 December of the calendar year in question, provided that Hydrocarbons were produced in the Exploitation Concession during the applicable semester. The amount of the semestrial advance shall be estimated by each of the Parties on the basis of the production and by using the Market Price referred to in Article 11.2.1 of this Agreement. 11.2.3 Within 90 days following the end of each calendar year, each of the Parties shall submit to the STATE the final annual royalty declaration and shall then settle the difference between the actual amounts due and the sum of the estimated semestrial payments made for the calendar year in question. If the sum of the estimated semestrial payments is greater than the final amount due, the difference shall be deferred as a credit against the annual royalty for the next calendar year.