Common use of Decommissioning Fund Clause in Contracts

Decommissioning Fund. (a) Unless otherwise instructed by ANPM, in the first Calendar Year upon commencement of Commercial Production, Contractor shall establish a Decommissioning Fund in accordance with the Applicable Law in Timor-Leste and this Contract, which shall be in the form of an interest bearing escrow account, which is a bank account that, when possible, must yield a maximum of one (1) percentage point margin above the annual yield on long-term United States Treasury Bonds (thirty-year (30) bonds), in ANPM’s name at a first class financial institution previously approved by ANPM. The interest accumulated in the Decommissioning Fund is neither Recoverable Costs nor tax deductible. (b) Annual Decommissioning costs provisions shall be calculated based on the total estimated abandonment costs and charged as Recoverable Costs in beginning in the Calendar Year immediately following the Calendar Year in which Commercial Production first occurs. The amount of annual Decommissioning costs provision in each Calendar Year shall be calculated as follows: (i) the total Decommissioning costs at the expected date of Decommissioning must be first calculated; (ii) the calculated annual Decommissioning costs shall be deducted from such total Decommissioning costs of which the additions made to the Decommissioning Costs Reserve, eligible as Recoverable Costs, in all previous Calendar Years together with interest on such Recoverable Costs (calculated to the approved date of Decommissioning at the actual or forecast rate of Uplift) (whichever is applicable); (iii) the residual Decommissioning costs, resulting from the calculations under Articles 6.5(b)(i) and 6.5(b)(ii) above, shall then be discounted to the relevant Calendar Year at the forecast rate of Uplift applicable in each Calendar Year remaining until the Calendar Year of Decommissioning; (iv) the discounted total amount of residual Decommissioning costs shall then be divided by the total number of Calendar Years remaining prior to the Calendar Year in which Decommissioning must occur, including the relevant Calendar Year; (v) the resultant amount shall be the addition to the Decommissioning Costs Reserve for the relevant Calendar Year; (vi) it is the intention of the provisions of this Article 6.5 that the total accumulated provision allowed, including interest calculated to the Calendar Year of Decommissioning at the rate of Uplift, shall equal the total Decommissioning costs; and (vii) if the amount in Article 6.5(b)(v) is negative, then such amount shall be treated as a reduction of Recoverable Costs for the relevant Calendar Year. (c) If the Decommissioning Fund is underfunded, Contractor shall be required to transfer to such Decommissioning Fund any additional amounts that may be required to ensure that sufficient funding exists to carry out Decommissioning in compliance with Good Oil Field Practice and other international standards deemed acceptable by ANPM and consistent with the Applicable Law in Timor-Leste. (d) If the actual Decommissioning costs are lower than the accumulated amounts in the Decommissioning Fund when Decommissioning is completed, such surplus shall be treated as Profit Crude Oil and transferred to ANPM in accordance with the Applicable Law in Timor- Leste. (e) In the event ANPM elects to continue the Petroleum Operations and take over the relevant Facilities, the accumulated amount in the Decommissioning Fund and such additional amounts as may be estimated for Decommissioning at the time of the transfer, shall be deposited in a nominated bank account domiciled in Timor-Leste having ANPM as beneficiary. (f) In the case mentioned in Article 6.5(e), ANPM assumes all responsibility for the relevant Facilities and Decommissioning, and Contractor shall be released from any liability arising out of the subsequent use of the funds.

Decommissioning Fund. (a) Unless otherwise instructed The sale, conveyance, assignment, transfer and delivery to Purchaser of the Assets is subject to the simultaneous assignment to one or more trusts created by ANPMthe Purchaser for this purpose of the assets comprising the Decommissioning Fund, free and clear of any security interests, pledges, and adverse claims of creditors, or customers of Seller, or of the CPUC, and including all income, interest and other earnings accrued thereon, net of expenses accrued in the first Calendar Year upon commencement ordinary course of Commercial Productionbusiness, Contractor shall establish a together with copies of such Decommissioning Fund in accordance Fund's material internal accounting, Tax and other records related to such Decommissioning Fund, including but not limited to Tax Returns of the Decommissioning Fund, previously issued private letter rulings with the Applicable Law in Timor-Leste and this Contractrelated rulings requests, which shall be in the form Tax Return work papers of an interest bearing escrow account, which is a bank account that, when possible, must yield a maximum of one (1) percentage point margin above the annual yield on long-term United States Treasury Bonds (thirty-year (30) bonds), in ANPM’s name at a first class financial institution previously approved by ANPM. The interest accumulated in the Decommissioning Fund is neither Recoverable Costs nor tax deductible. (b) Annual Decommissioning costs provisions shall be calculated based on insofar as the total estimated abandonment costs same are made available by pertinent Tax preparers, material correspondence with state and charged as Recoverable Costs in beginning in the Calendar Year immediately following the Calendar Year in which Commercial Production first occurs. The amount of annual Decommissioning costs provision in each Calendar Year shall be calculated as follows: (i) the total Decommissioning costs at the expected date of Decommissioning must be first calculated; (ii) the calculated annual Decommissioning costs shall be deducted from such total Decommissioning costs of which the additions made Federal taxing authorities, elections and other attachments and disclosures pertaining to the Decommissioning Costs ReserveFund filed as part of the Seller's Tax Returns for all years, eligible private letter ruling requests pending as Recoverable Costsof the date hereof, in all previous Calendar Years together with interest on such Recoverable Costs (calculated and trustee and investment manager reports relating to the approved Decommissioning Fund. Since the investments of the Decommissioning Fund are commingled for investment purposes with the investments of other trusts relating to the San Oxxxxx Nuclear Generating Station and the Decommissioning Fund's investments must be separated or allocated to accomplish the assignment contemplated hereby, the Seller will transfer to Purchaser the Decommissioning Fund's proportionate holding of each such investment, subject to such good faith actions and equitable allocations of authorized persons of the Decommissioning Fund to avoid transferring fractional shares or fractions of other instruments, odd lots or denominations in each case that are not traditionally traded or that cannot customarily be transferred without added cost, it being understood that in such cases the Decommissioning Fund may substitute cash or cash equivalents in lieu of such securities or instruments. Between the date hereof and the date of Decommissioning at the actual or forecast rate of Uplift) (whichever is applicable); (iii) the residual Decommissioning costsClosing, resulting from the calculations under Articles 6.5(b)(i) and 6.5(b)(ii) above, shall then be discounted subject to the relevant Calendar Year at terms and conditions hereof, Seller and Purchaser shall work cooperatively and exercise their respective Commercially Reasonable Efforts to accomplish such assignment from such Persons empowered to execute the forecast rate of Uplift applicable in each Calendar Year remaining until the Calendar Year of Decommissioning; (iv) the discounted total amount of residual Decommissioning costs shall then be divided by the total number of Calendar Years remaining prior to the Calendar Year in which Decommissioning must occursame, including the relevant Calendar Year; (v) adoption of any and all amendments to the resultant amount shall be governing instruments of the addition Decommissioning Fund necessary to achieve such result. There are no claims or causes of actions against any third parties relating to the Decommissioning Costs Reserve for Trust Fund and/or the relevant Calendar Year; (vi) it is the intention of the provisions of this Article 6.5 that the total accumulated provision allowed, including interest calculated to the Calendar Year of Decommissioning at the rate of Uplift, shall equal the total Decommissioning costs; and (vii) if the amount in Article 6.5(b)(v) is negative, then such amount shall be treated as a reduction of Recoverable Costs for the relevant Calendar Yearassets therein. (c) If the Decommissioning Fund is underfunded, Contractor shall be required to transfer to such Decommissioning Fund any additional amounts that may be required to ensure that sufficient funding exists to carry out Decommissioning in compliance with Good Oil Field Practice and other international standards deemed acceptable by ANPM and consistent with the Applicable Law in Timor-Leste. (d) If the actual Decommissioning costs are lower than the accumulated amounts in the Decommissioning Fund when Decommissioning is completed, such surplus shall be treated as Profit Crude Oil and transferred to ANPM in accordance with the Applicable Law in Timor- Leste. (e) In the event ANPM elects to continue the Petroleum Operations and take over the relevant Facilities, the accumulated amount in the Decommissioning Fund and such additional amounts as may be estimated for Decommissioning at the time of the transfer, shall be deposited in a nominated bank account domiciled in Timor-Leste having ANPM as beneficiary. (f) In the case mentioned in Article 6.5(e), ANPM assumes all responsibility for the relevant Facilities and Decommissioning, and Contractor shall be released from any liability arising out of the subsequent use of the funds.

Decommissioning Fund. (a) Unless otherwise instructed by ANPM, in the first Calendar Year upon commencement of Commercial Production, Production Contractor shall establish a Decommissioning Fund in accordance with the Applicable Law in Timor-Leste and this Contract, which shall be in the form of an interest bearing escrow account, which is a bank account that, when possible, must yield a maximum of one (1) percentage point margin above the annual yield on long-term United States Treasury Bonds (thirty-year (30) bonds), in ANPM’s name name, at a first class financial institution previously approved by ANPM. The interest accumulated in the Decommissioning Fund is neither Recoverable Costs nor tax deductible. (b) Annual Decommissioning costs provisions shall be calculated based on the total estimated abandonment costs and charged as Recoverable Costs in beginning in the Calendar Year immediately following the Calendar Year in which Commercial Production first occurs. The amount of annual Decommissioning costs provision in each Calendar Year shall be calculated as follows: (i) the total Decommissioning costs at the expected date of Decommissioning must be first be calculated; (ii) the calculated annual Decommissioning costs shall be deducted from such total Decommissioning costs of which the additions made to the Decommissioning Costs Reserve, eligible as Recoverable Costs, in all previous Calendar Years together with interest on such Recoverable Costs (calculated to the approved date of Decommissioning at the actual or forecast rate of Uplift) (whichever is applicable); (iii) the residual Decommissioning costs, resulting from the calculations under Articles 6.5(b)(i6.5(b) (i) and 6.5(b)(ii) above, shall then be discounted to the relevant Calendar Year at the forecast rate of Uplift applicable in each Calendar Year remaining until the Calendar Year of Decommissioning; (iv) the discounted total amount of residual Decommissioning costs shall then be divided by the total number of Calendar Years remaining prior to the Calendar Year in which Decommissioning must occur, including the relevant Calendar Year; (v) the resultant amount shall be the addition to the Decommissioning Costs Reserve for the relevant Calendar Year; (vi) it is the intention of the provisions of this Article 6.5 that the total accumulated provision allowed, including interest calculated to the Calendar Year of Decommissioning at the rate of Uplift, shall equal the total Decommissioning costs; and (vii) if the amount in Article 6.5(b)(v) is negative, then such amount shall be treated as a reduction of Recoverable Costs for the relevant Calendar Year. (c) If the Decommissioning Fund is underfunded, Contractor shall be required to transfer to such Decommissioning Fund any additional amounts that may be required to ensure that sufficient funding exists to carry out Decommissioning in compliance with Good Oil Field Practice and other international standards deemed acceptable by ANPM and consistent with the Applicable Law in Timor-Leste. (d) If the actual Decommissioning costs are lower than the accumulated amounts in the Decommissioning Fund when Decommissioning is completed, such surplus shall be treated as Profit Crude Oil and transferred to ANPM in accordance with the Applicable Law in Timor- Leste. (e) In the event ANPM elects to continue the Petroleum Operations and take over the relevant Facilities, the accumulated amount in the Decommissioning Fund and such additional amounts as may be estimated for Decommissioning at the time of the transfer, shall be deposited in a nominated bank account domiciled in Timor-Leste having ANPM as beneficiary. (f) In the case mentioned in Article 6.5(e), ANPM assumes all responsibility for the relevant Facilities and Decommissioning, and Contractor shall be released from any liability arising out of the subsequent use of the funds.

Decommissioning Fund. (a) Unless otherwise instructed by ANPM, in Upon the first Calendar Year upon commencement of Commercial Production, the Contractor shall establish a Decommissioning Fund in accordance with the Applicable Law in Timor-Leste and this Contract, which shall be in the form of an interest bearing escrow account, which is a bank conservative account that, when possible, must yield yielding a maximum of one (1) percentage point margin above the annual yield on long-term United States Treasury Bonds (thirty-year (30) bonds), in ANPM’s the name of ANP at a first class financial institution previously approved by ANPMthe ANP. The interest accumulated This account shall be used to accumulate cash reserves for use as a contingency fund against possible pollution and eventual Decommissioning related to Petroleum Operations in the Contract Area (the “Decommissioning Fund is neither Recoverable Costs nor tax deductibleFund”). (b) Annual On a yearly basis, Contractor shall pay fifty (50) cents in USD per barrel of oil equivalent produced into said Decommissioning costs provisions Fund. The monies contributed to the Decommissioning Fund as described in this Section 4.16 shall be calculated based on the total estimated abandonment costs and charged as Recoverable Costs in beginning in the Calendar Year immediately following the Calendar Year in which Commercial Production first occurs. The amount of annual interests accumulated in the Decommissioning costs provision in each Calendar Year Fund are neither Recoverable Costs nor tax deductible and shall be calculated considered a Miscellaneous Receipt for the purposes of Clause 2.7 of Annex C. All amounts paid into such Decommissioning Fund shall be certified by an auditor and conform to the IAS 37 as follows: (i) the total Decommissioning costs at the expected date of Decommissioning must be first calculated; (ii) the calculated annual Decommissioning costs shall be deducted from such total Decommissioning costs of which the additions made to the Decommissioning Costs Reserve, eligible as Recoverable Costs, in all previous Calendar Years together with interest on such Recoverable Costs (calculated to the approved date of Decommissioning at the actual or forecast rate of Uplift) (whichever is applicable); (iii) the residual Decommissioning costs, resulting from the calculations under Articles 6.5(b)(i) and 6.5(b)(ii) above, shall then be discounted to the relevant Calendar Year at the forecast rate of Uplift applicable in each Calendar Year remaining until the Calendar Year of Decommissioning; (iv) the discounted total amount of residual Decommissioning costs shall then be divided by the total number of Calendar Years remaining prior to the Calendar Year in which Decommissioning must occur, including the relevant Calendar Year; (v) the resultant amount shall be the addition to the Decommissioning Costs Reserve for the relevant Calendar Year; (vi) it is the intention of the provisions signing of this Article 6.5 that Agreement. If IAS 37 is updated or amended during the total accumulated provision allowed, including interest calculated term of this Agreement the Parties will negotiate in good faith as to whether the Calendar Year of Decommissioning at new standard will replace the rate of Uplift, shall equal the total Decommissioning costs; and (vii) if the amount in Article 6.5(b)(v) is negative, then such amount shall be treated as a reduction of Recoverable Costs for the relevant Calendar Yearadopted one. (c) The ANP may at its sole discretion access funds from the Decommissioning Fund in the event that the Contractor fails to effect environmental clean-up during the term of this Agreement, or Decommission to the satisfaction of the ANP following termination of this Agreement. The ANP shall notify the Contractor of its withdrawals from the Decommissioning Fund and the Contractor shall be required to pay into the account the sum used for said purposes within sixty (60) days of notification. (d) Upon termination of this Agreement, where the Contractor fulfils all obligations in respect of environmental remediation and Decommissioning to the satisfaction of the ANP, all existing funds in the Decommissioning Fund shall remain with the ANP. If the Decommissioning Fund is underfundedinsufficient to complete the Decommissioning Plan, the Contractor shall be pay all such additional required costs prior to transfer to such Decommissioning Fund any additional amounts that may be required to ensure that sufficient funding exists to carry out Decommissioning in compliance with Good Oil Field Practice and other international standards deemed acceptable by ANPM and consistent with the Applicable Law in Timor-Leste. (d) If the actual Decommissioning costs are lower than the accumulated amounts in the Decommissioning Fund when Decommissioning is completed, such surplus shall be treated as Profit Crude Oil and transferred to ANPM in accordance with the Applicable Law in Timor- Leste. (e) termination of this Agreement. In the event ANPM the ANP elects to continue have the Petroleum Operations Operations, including all equipment, pipelines or lines, installations, production units and take over the relevant Facilitiesall other systems relating to such xxxxx as may be necessary, the accumulated amount in delivered up to it, the Decommissioning Fund and such additional amounts as may be are estimated for Decommissioning at the time point of the transfer, transfer shall be deposited in a nominated bank account domiciled in Timor-Leste having ANPM as beneficiary. (f) In transferred to the case mentioned in Article 6.5(e)ANP, ANPM assumes who shall assume all responsibility for the relevant Facilities facility and Decommissioning, its Decommissioning and hold the Contractor shall be released from harmless against any liability arising out with respect thereto accruing after the date of such transfer to the subsequent use ANP unless due to the negligence or wilful misconduct of the fundsContractor.