Common use of Conversion to a Development Lease Clause in Contracts

Conversion to a Development Lease. (i) Following a Commercial Oil Discovery or a Commercial Gas Discovery and after submitting a Development Plan, the extent of the whole area capable of production to be covered by a Development Lease shall be mutually agreed upon by EGPC and CONTRACTOR and be subject to the approval of the Minister of Petroleum. Such area shall be converted automatically into a Development Lease without the issue of any additional legal instrument or permission. In case CONTRACTOR did not fulfill its commitment to submit the Oil / Gas Development Lease documentations to EGPC, in order to issue the Development Lease related to that discovery, within one (1) year from the date EGPC and CONTRACTOR agree in writing that a Commercial Discovery exists, CONTRACTOR shall be considered assignor without charge for the area dedicated for issuing such Development Lease. EGPC shall have the right to develop, produce and dispose all the Petroleum produced from such assigned area in the manner it deems appropriate without any further legal procedures , the CONTRACTOR shall have no right related to the production and has no right to have recourse against EGPC for compensation or expenditures or costs. (ii) Following the conversion of an area to a Development Lease based on a Commercial Gas Discovery (or upon the discovery of Gas in a Development Lease granted following a Commercial Oil Discovery), EGPC and CONTRACTOR shall endeavor with diligence to find adequate markets capable of absorbing the production of Gas and with respect to the local markets, EGPC shall advise CONTRACTOR of the potential outlets for such Gas and the expected annual schedule of demand. Thereafter, EGPC and CONTRACTOR shall meet with a view to assessing whether the outlets for such Gas and other relevant factors warrant the Development and production of the Gas and in case of agreement, the Gas thus made available shall be disposed of to EGPC or EGAS under a long-term Gas Sales Agreement in accordance with and subject to the conditions set forth in Article VII. (iii) The Development period of each Development Lease shall be as follows:

Conversion to a Development Lease. (i) Following a Commercial Oil Discovery or a Commercial Gas Discovery and after submitting a Development Plan, the extent of the whole area capable of production to be covered by a Development Lease shall be mutually agreed upon by EGPC and CONTRACTOR and be subject to the approval of the Minister of Petroleum. Such area shall be converted automatically into a Development Lease without the issue of any additional legal instrument or permission. In case CONTRACTOR did not fulfill its commitment to submit the Oil / Gas Development Lease documentations to EGPC, in order to issue the Development Lease related to that discovery, within one (1) year from the date EGPC and CONTRACTOR agree in writing that a Commercial Discovery exists, CONTRACTOR shall be considered assignor without charge for the area dedicated for issuing such Development Lease. EGPC shall have the right to develop, produce and dispose all the Petroleum produced from such assigned area in the manner it deems appropriate without any further legal procedures , the CONTRACTOR shall have no right related to the production and has no right to have recourse against EGPC for compensation or expenditures or costs. (ii) Following the conversion of an area to a Development Lease based on a Commercial Gas Discovery (or upon the discovery of Gas in a Development Lease granted following a Commercial Oil Discovery), EGPC and CONTRACTOR shall endeavor with diligence to find adequate local markets capable of absorbing the production of Gas and with respect to the local markets, EGPC shall advise CONTRACTOR of the potential outlets for such Gas Gas, and the expected annual schedule of demand. Thereafter, EGPC and CONTRACTOR shall meet with a view to assessing whether the outlets for such Gas and other relevant factors warrant the Development development and production of the Gas and in case of agreement, agreement the Gas thus made available shall be disposed of to EGPC or EGAS under a long-term Gas Sales Agreement in accordance with and subject to the conditions set forth in Article VIIVII . (iii) The Development period of each Development Lease shall be as follows: (aa) In respect of a Commercial Oil Discovery, twenty (20) years from the date of such Commercial Discovery plus the Optional Extension Period (as defined below) provided that, in the event that, subsequent to the conversion of a Commercial Oil Discovery into a Development Lease, Gas is discovered in the same Development Lease and is used or is capable of being used locally or for export hereunder, the period of the Development Lease shall be extended only with respect to such Gas, LPG extracted from such Gas and Crude Oil in the form of condensate produced with such Gas for twenty (20) years from the date of first deliveries of Gas locally or for export plus the Optional Extension Period (as defined below) provided that the duration of such Development Lease based on a Commercial Oil Discovery may not be extended beyond thirty-five (35) years from the date of such Commercial Oil Discovery, unless otherwise agreed upon between EGPC and CONTRACTOR and subject to the approval of the Minister of Petroleum. CONTRACTOR shall immediately notify EGPC of any Gas Discovery but shall not be required to apply for a new Development Lease in respect of such Gas. (bb) In respect of a Commercial Gas Discovery, twenty (20) years from the date of first deliveries of Gas locally or for export plus the Optional Extension Period (as defined below) provided that, if subsequent to the conversion of a Commercial Gas Discovery into a Development Lease, Crude Oil is discovered in the same Development Lease, CONTRACTOR's share of such Crude Oil from the Development Lease (except LPG extracted from Gas or Crude Oil in the form of condensate produced with Gas) and Gas associated with such Crude Oil shall revert entirely to EGPC upon the lapse of twenty (20) years from the date of such Crude Oil Discovery plus the Optional Extension Period (as defined below). Notwithstanding, anything to the contrary under this Agreement, the duration of a Development Lease based on a Commercial Gas Discovery shall in no case exceed thirty-five (35) years from the date of such Commercial Gas Discovery, unless otherwise agreed upon between EGPC and CONTRACTOR and subject to the approval of the Minister of Petroleum. CONTRACTOR shall immediately notify EGPC of any Oil Discovery but shall not be required to apply for a new Development Lease in respect of such Crude Oil.

Conversion to a Development Lease. (i) Following a Commercial Oil Discovery or a Commercial Gas Discovery and after submitting a Development PlanPlan and a Decommissioning Plan according to the definition referred to in Article I of this Agreement, the extent of the whole area capable of production to be covered by a Development Lease shall be mutually agreed upon by EGPC and CONTRACTOR and be subject to the approval of the Minister of Petroleum. Such area shall be converted automatically into a Development Lease without the issue of any additional legal instrument or permission. In case CONTRACTOR did not fulfill its commitment to submit the Oil / Gas Development Lease documentations to EGPC, in order to issue the Development Lease related to that discovery, within one (1) year from the date EGPC and CONTRACTOR agree in writing that a Commercial Discovery exists, CONTRACTOR shall be considered assignor without charge for the area dedicated for issuing such Development Lease. EGPC shall have the right to develop, produce and dispose all the Petroleum produced from such assigned area in the manner it deems appropriate without any further legal procedures procedures, the CONTRACTOR shall have no right related to the production and has no right to have recourse against EGPC for compensation or expenditures or costs. (ii) Following the conversion of an area to a Development Lease based on a Commercial Gas Discovery (or upon the discovery of Gas in a Development Lease granted following a Commercial Oil Discovery), EGPC and CONTRACTOR shall endeavor with diligence to find adequate markets capable of absorbing the production of Gas and with respect to the local markets, EGPC shall advise CONTRACTOR of the potential outlets for such Gas and the expected annual schedule of demand. Thereafter, EGPC and CONTRACTOR shall meet with a view to assessing whether the outlets for such Gas and other relevant factors warrant the Development and production of the Gas and in case of agreement, the Gas thus made available shall be disposed of to EGPC or EGAS under a long-term Gas Sales Agreement in accordance with and subject to the conditions set forth in Article VII. (iii) The Development period of each Development Lease shall be as follows:

Conversion to a Development Lease. (i) Following a Commercial Discovery of Oil Discovery or a Commercial Gas Discovery and after submitting a Development Plan, the extent of the whole area capable of production to be covered by a Development Lease shall be mutually agreed upon by EGPC and CONTRACTOR and be subject pursuant to the approval last paragraph of the Minister of Petroleum. Such area shall be converted automatically into a Development Lease without the issue of any additional legal instrument or permission. In case CONTRACTOR did not fulfill its commitment to submit the Oil / Gas Development Lease documentations to EGPC, in order to issue the Development Lease related to that discovery, within one Article III (1c) year from the date EGPC and CONTRACTOR agree in writing that a Commercial Discovery exists, CONTRACTOR shall be considered assignor without charge for the area dedicated for issuing such Development Lease. EGPC shall have the right to develop, produce and dispose all the Petroleum produced from such assigned area in the manner it deems appropriate without any further legal procedures , the CONTRACTOR shall have no right related to the production and has no right to have recourse against EGPC for compensation or expenditures or costs. (ii) Following the conversion of an area to a Development Lease based on a Commercial Gas Discovery (or upon the discovery of Gas in a Development Lease granted following a Commercial Oil Discoveryiii), EGPC EGAS and CONTRACTOR shall endeavor with diligence to find adequate markets capable of absorbing the production of Gas Oil. Thereafter, EGAS and CONTRACTOR shall meet with respect a view to assessing whether the local markets, EGPC shall advise CONTRACTOR of the potential outlets for such Oil and other relevant factors warrant the Development and production of the Oil in accordance with and subject to the conditions set forth in Article VII. (ii) Following a Commercial Discovery of Gas pursuant to the last paragraph of Article III (c) (iii), EGAS and CONTRACTOR shall endeavor with diligence to find adequate markets capable of absorbing the production of the Gas. EGAS shall notify CONTRACTOR within a Year from the Date of Notice of Commercial Discovery of Gas if EGAS requires such Gas for the local market, and the expected annual schedule of demanddemand for such Gas. Thereafter, EGPC EGAS and CONTRACTOR shall meet with a view to assessing whether the outlets for such Gas and other relevant factors such as Gas Price warrant the Development and production of the Gas and and, in case of agreement, the Gas thus made available shall be disposed of to EGPC or EGAS under a long-term Gas Sales Agreement in accordance with and subject to the conditions set forth in Article VII. In case of unavailability of local market capable of absorbing such Gas; EGAS and/or CONTRACTOR shall endeavor with diligence to find adequate markets abroad capable of absorbing the production of such Gas subject to the Minister of Petroleum’s approval . Based on the scheme of disposition of Oil or Gas in (i) and (ii) above, the CONTRACTOR should submit to EGAS the Development Plan including abandonment plan of the Development area which shall be contained for example but not limited to abandonment procedures and estimated cost. The mechanism for recovering such costs shall be according to Annex “F”. The Development Lease abandonment cost recovery mechanism shall be annexed to the Development Lease application. CONTRACTOR should also submit the Development Lease Application which should comprise the extent of the whole area capable of production to be covered by the Development Lease, the Petroleum reserves and the Commercial Production Commencement date, in accordance with what was agreed upon by EGAS and CONTRACTOR. In case of requesting a Gas Development Lease, the application should include in addition to what stated above, the Gas price which was agreed upon by EGAS and CONTRACTOR pursuant to Article VII (c) (2). Then the Development Lease should be subject to the Minister of Petroleum’s approval and such area shall then be converted automatically into a Development Lease without the issue of any additional legal instrument or permission. The date on which the Minister of Petroleum approves the Development Lease Application will be the “Development Lease Approval Date”. In case CONTRACTOR failed to submit the Development Lease Application within (one) (1) year / three (3) Years)from the Date of Notice of Commercial Discovery of Oil or Gas made by CONTRACTOR to EGAS (unless otherwise agreed upon by EGAS), the CONTRACTOR is committed to surrender such Oil or Gas reserves to EGAS. EGAS can freely elect to develop such specific area covering said geological structure containing the said Petroleum reserves that the CONTRACTOR failed to submit the Development Lease application by any other mean deems to be appropriate by EGAS. The CONTRACTOR has no right to have recourse against EGAS for compensation or expenditures or costs or any share in production. (iii) The Development period of each Development Lease shall be as follows:

Conversion to a Development Lease. (i1) Following a Commercial Oil Discovery or a Commercial Gas Discovery and after submitting a Development Plan, the extent of the whole area capable of production to be covered by a Development Lease shall be mutually agreed upon by EGPC GANOPE and CONTRACTOR and be subject to the approval of the Minister of Petroleum. Such area shall be converted automatically into a Development Lease without the issue of any additional legal instrument or permission. In case CONTRACTOR did not fulfill its commitment to submit the Oil / Gas Development Lease documentations to EGPCGANOPE, in order to issue the Development Lease related to that discovery, within one two (12) year years from the date EGPC and CONTRACTOR agree in writing that a Date of Contractor’s notification to GANOPE of Commercial Discovery existsexists ( unless otherwise approved by GANOPE ), CONTRACTOR shall be considered assignor without charge for the area dedicated for issuing such Development Lease. EGPC GANOPE shall have the right to develop, produce and dispose all the Petroleum produced from such assigned area in the manner it deems appropriate without any further legal procedures , the CONTRACTOR shall have no right related to the production and has no right to have recourse against EGPC GANOPE for compensation or expenditures or costs. (ii2) Following the conversion of an area to a Development Lease based on a Commercial Gas Discovery (or upon the discovery of Gas in a Development Lease granted following a Commercial Oil Discovery), EGPC GANOPE and CONTRACTOR shall endeavor with diligence to find adequate markets capable of absorbing the production of Gas and with respect to the local markets, EGPC GANOPE shall advise CONTRACTOR of the potential outlets for such Gas and the expected annual schedule of demand. Thereafter, EGPC GANOPE and CONTRACTOR shall meet with a view to assessing whether the outlets for such Gas and other relevant factors warrant the Development development and production of the Gas and in case of agreement, the Gas thus made agreement such available gas shall be disposed of to GANOPE or EGPC or EGAS under a long-term Gas Sales Agreement AGREEMENT in accordance with and subject to the conditions set forth in Article VII. (iii3) The Development period of each Development Lease shall be as follows:

Conversion to a Development Lease. (i) Following a Commercial Oil Discovery or a Commercial Gas Discovery and after submitting a Development PlanDiscovery, the extent of the whole area capable of production to be covered by a Development Lease shall be mutually agreed upon by EGPC and CONTRACTOR and be subject to the approval of the Minister of Petroleum. Such area shall be converted automatically into a Development Lease without the issue of any additional legal instrument or permission. In case CONTRACTOR did not fulfill its commitment to submit the Oil / Gas Development Lease documentations to EGPC, in order to issue the Development Lease related to that discovery, within one (1) year from the date EGPC and CONTRACTOR agree in writing that a Commercial Discovery exists, CONTRACTOR shall be considered assignor without charge for the area dedicated for issuing such Development Lease. EGPC shall have the right to develop, produce and dispose all the Petroleum produced from such assigned area in the manner it deems appropriate without any further legal procedures , the CONTRACTOR shall have no right related to the production and has no right to have recourse against EGPC for compensation or expenditures or costs. (ii) Following the conversion of an area to a Development Lease based on a Commercial Gas Discovery (or upon the discovery of Gas in a Development Lease granted following a Commercial Oil Discovery), EGPC and CONTRACTOR shall endeavor endeavour with diligence to find adequate local markets capable of absorbing the production of Gas and with respect to the local markets, EGPC shall advise CONTRACTOR of the potential outlets for such Gas Gas, and the expected annual schedule of demand. Thereafter, EGPC and CONTRACTOR shall meet with a view to assessing whether the outlets for such Gas and other relevant factors warrant the Development development and production of the Gas and in case of agreement, agreement the Gas thus made available shall be disposed of to EGPC or EGAS under a long-term Gas Sales Agreement in accordance with and subject to the conditions set forth in Article VIIVII . (iii) The Development period of each Development Lease shall be as follows:: (aa) In respect of a Commercial Oil Discovery, twenty (20) years from the date of such Commercial Discovery plus the Optional Extension Period (as defined below) provided that, in the event that, subsequent to the conversion of a Commercial Oil Discovery into a Development Lease, Gas is discovered in the same in Development Lease and is used or is capable of being used locally or for export hereunder, the period of the Development Lease shall be extended only with respect to such Gas, LPG extracted from such Gas and Crude Oil in the form of condensate produced with such Gas for twenty (20) years from the date of first deliveries of Gas locally or for export plus the Optional Extension Period (as defined below) provided that, the duration of such Development Lease based on a Commercial Oil Discovery c may not be extended beyond thirty-five (35) years from the date of such Commercial Oil Discovery unless otherwise agreed upon between EGPC and CONTRACTOR and subject to the approval of the Minister of Petroleum 10 Central Sinai Concession 20-F <PAGE> CONTRACTOR shall immediately notify EGPC of any Gas Discovery but shall not be required to apply for a new Development Lease in respect of such Gas. (bb) In respect of a Commercial Gas Discovery, twenty (20) years from the date of first deliveries of Gas locally or for export plus the Optional Extension Period (as defined below) provided that, if subsequent to the conversion of a Commercial Gas Discovery into a Development Lease, Crude Oil is discovered in the same Development Lease, CONTRACTOR's share of such Crude Oil from the Development Lease (except LPG extracted from Gas or Crude Oil in the form of condensate produced with Gas) and Gas associated with such Crude Oil shall revert entirely to EGPC upon the lapse of twenty (20) years from the date of such Crude Oil Discovery plus the Optional Extension Period (as defined below). Notwithstanding, anything to the contrary under this Agreement, the duration of a Development Lease based on a Commercial Gas Discovery shall in no case exceed thirty-five (35) years from the date of such Commercial Discovery, unless otherwise agreed upon between EGPC and CONTRACTOR and subject to the approval of the Minister of Petroleum. CONTRACTOR shall immediately notify EGPC of any Oil Discovery but shall not be required to apply for a new Development Lease in respect of such Crude Oil. The "Optional Extension Period" shall mean a period of five (5) years which may be elected by CONTRACTOR upon six (6) months written notice to EGPC prior to the expiry of the "' relevant twenty (20) year period.

Conversion to a Development Lease. (i) Following a Commercial Discovery of Oil Discovery or pursuant to the last paragraph of Article III(c)(iii), EGAS and CONTRACTOR shall endeavor with diligence to find adequate markets capable of absorbing the production of Oil. Thereafter, EGAS and CONTRACTOR shall meet with a view of assessing whether the outlets for such Oil and other relevant factors warrant the Development and production of the Oil in accordance with and subject to the conditions set forth in Article VII. (ii) Following a Commercial Discovery of Gas pursuant to the last paragraph of Article III(c)(iii), EGAS and CONTRACTOR shall endeavor with diligence to find adequate markets capable of absorbing the production of the Gas. EGAS shall notify CONTRACTOR within one (1) Year from the Date of Notice of Commercial Discovery of Gas if EGAS requires such Gas for the local market, and after submitting the expected annual schedule of demand for such Gas. Thereafter, EGAS and CONTRACTOR shall meet with a view of assessing whether the outlets for such Gas and other relevant factors such as Gas price warrant the Development Planand production of the Gas and, in case of agreement, the Gas thus made available shall be disposed of to EGAS under a Gas Sales Agreement in accordance with and subject to the conditions set forth in Article VII. In case of unavailability of local market capable of absorbing such Gas; EGAS and/or CONTRACTOR shall endeavor with diligence to find adequate markets abroad capable of absorbing the production of such Gas subject to the Minister of Petroleum’s approval. Based on the scheme of disposition of Oil or Gas in (i) and (ii) above, the CONTRACTOR should submit to EGAS the Development Plan including abandonment plan of the Development area which shall be contained, for example, but not limited to, abandonment procedures and estimated cost. The mechanism for recovering such costs shall be according to Annex “F”. The Development Lease abandonment cost recovery mechanism shall be annexed to the Development Lease application. CONTRACTOR should also submit the Development Lease application, which should comprise the extent of the whole area capable of production to be covered by a the Development Lease shall be mutually Lease, the Petroleum reserves and the Commercial Production Commencement date, in accordance with what was agreed upon by EGPC EGAS and CONTRACTOR. In case of requesting a Gas Development Lease, the application should include in addition to what stated above, the Gas price which was agreed upon by EGAS and CONTRACTOR and pursuant to Article VII(c)(2). Then the Development Lease should be subject to the approval of the Minister of Petroleum. Such ’s approval and such area shall then be converted automatically into a Development Lease without the issue of any additional legal instrument or permission. The date on which the Minister of Petroleum approves the Development Lease Application will be the “Development Lease Approval Date”. In case CONTRACTOR did not fulfill its commitment failed to submit the Oil / Gas Development Lease documentations application within three (3) Years from the Date of Notice of Commercial Discovery of Oil or Gas made by CONTRACTOR to EGPCEGAS (unless otherwise agreed upon by EGAS), in order the CONTRACTOR is committed to issue surrender such Oil or Gas reserves to EGAS. EGAS can freely elect to develop such specific area covering said geological structure containing the said Petroleum reserves that the CONTRACTOR failed to submit the Development Lease related application by any other mean deems to that discovery, within one (1) year from the date EGPC and be appropriate by EGAS. The CONTRACTOR agree in writing that a Commercial Discovery exists, CONTRACTOR shall be considered assignor without charge for the area dedicated for issuing such Development Lease. EGPC shall have the right to develop, produce and dispose all the Petroleum produced from such assigned area in the manner it deems appropriate without any further legal procedures , the CONTRACTOR shall have no right related to the production and has no right to have recourse against EGPC EGAS for compensation or expenditures or costs. (ii) Following the conversion of an area to a Development Lease based on a Commercial Gas Discovery (costs or upon the discovery of Gas any share in a Development Lease granted following a Commercial Oil Discovery), EGPC and CONTRACTOR shall endeavor with diligence to find adequate markets capable of absorbing the production of Gas and with respect to the local markets, EGPC shall advise CONTRACTOR of the potential outlets for such Gas and the expected annual schedule of demand. Thereafter, EGPC and CONTRACTOR shall meet with a view to assessing whether the outlets for such Gas and other relevant factors warrant the Development and production of the Gas and in case of agreement, the Gas thus made available shall be disposed of to EGPC or EGAS under a long-term Gas Sales Agreement in accordance with and subject to the conditions set forth in Article VIIproduction. (iii) The “Development period Period” of each Development Lease shall be as follows: