CLAUSE FIVE - EXPLOITATION Sample Clauses

CLAUSE FIVE - EXPLOITATION. 5.1 The exploitation phase shall commence the Day after the end of the exploration phase, provided that a declaration of Commercial Discovery has been made during the exploration phase. However, the Contractor has the option of commencing the exploitation phase and ending the exploration phase earlier, on the Date of Commencement of Commercial Production. If a retention period applies, the exploitation phase shall commence once is made the declaration of Commercial Discovery. 5.2 The Contractor is obliged that the Date of Commencement of Commercial Production must take place within the period established in sections 4.8 and 4.9. 5.3 The Contractor shall submit to PERUPETRO, no less than sixty (60) Days before the end of each calendar Year after a declaration of Commercial Discovery, the following: a) An annual work program and detailed budget showing income, costs, expenditure and investment for the following calendar Year. b) An annual work program and detailed budget showing income, costs, expenditure and investment for Exploration aimed at discovering additional reserves, if applicable. c) A work program and projected income, costs, expenditure and investment covering Development and/or Production for the next five (5) calendar Years. The Contractor may adjust or change such programs in the Supervision Committee. 5.4 In carrying out each work programs, the Contractor shall use the equipment and/or methods necessary and appropriate to allow operations evaluation and monitoring. 5.5 The Contractor is obliged to produce and recover the Hydrocarbon reserves in the Contract Area economically, in accordance with the programs referred to in this Clause Five and shall carry out this work in accordance with technical and economic principles generally accepted and employed in the international hydrocarbons industry. 5.6 The Contractor has the right to use the Hydrocarbons produced in the Contract Area in its Operations at no cost whatever, which are not considered in the royalty determination. At the same time, such hydrocarbons could be processed in primary distillation plants of the Contractor to be exclusively used in the Operations. 5.7 The Contractor shall have the right to recover Liquid Hydrocarbons from any Natural Gas which may be produced in the Contract Area and extract them at any stage of handling the said Natural Gas. Liquids thus separated shall be considered as Condensates for the purposes of determining the royalty, except when, for economic or o...