Common use of Effectiveness and Efficacy Clause in Contracts

Effectiveness and Efficacy. This Agreement shall be effective for thirty-five (35) years, being valid and in effect as of the date of its execution. Division into phases This Agreement shall be divided into two phases: Exploration Phase, for the whole Contract Area, expected duration of which is set forth in Annex II; and Production Phase, duration of which is defined in paragraph Error: Reference source not found. PRODUCTION SHARING SYSTEM SECTION FIVE – RECOVERY AS COST OIL Right to Recovery as Cost Oil Exclusively in case of a Commercial Discovery, the Contracted Party shall be entitled to receive, as Cost Oil, a share of the Oil and Gas Production, according to the terms, criteria, and conditions established in Annex VII. Calculation and Recovery as Cost Oil T he expenditures below shall be recovered as Cost Oil, according to the methodology and procedures provided for in Annex VII: expenditures previously approved by the Operating Committee or those which approval is waived by this Agreement; and expenditures recognized by the Manager. The expenditures below incurred by the Contracted Parties during the period prior to the execution of the Agreement and until creation of the Operating Committee may be recovered as Cost Oil and as long as , cumulatively: related to the collection of data and information, acquisition of governmental licenses, authorizations, and permits; subject to recovery, pursuant to the criteria provided for in Annex VII; and ratified by the Operating Committee, prior to their actual recovery as Cost Oil. Recovery as Cost Oil Expenditures to be recovered as Cost Oil shall be registered in proper account, referred to as Cost Oil account. During the Production Phase, the Contracted Party shall, every month, receive the Production share corresponding to the Cost Oil, observing the limit of the Gross Production Value, defined in Annex XII. Costs that exceed the limits defined and are not recovered as Cost Oil at a certain calendar year shall be accrued for appropriation in the subsequent years. Expenditures recognized as Cost Oil shall be annually adjusted preferably according to the Extended National Consumer Price Index (IPCA) of the Brazilian Institute of Geography and Statistics – IBGE, or according to another index that better reflects the industry expenditures, at the Manager’s discretion, and return on equity is prohibited. The Manager shall be exclusively responsible for managing the calculation, recognition, and recovery of Cost Oil and managing the Cost Oil account. Any positive balance in the Cost Oil account at the end of the contract term shall not entitle the Contracted Party to indemnifications or refunds. S ECTION SIX – ROYALTIES The amount of Royalties payable every month per Development Area or Field shall be determined by multiplying the equivalent to fifteen percent (15%) of the Total Production Volume of Oil and Gas in the Development Area or Field during such month by its respective reference prices, under Annex VII. Royalties are payable due to the Production of Oil and Gas arising from Long Duration Tests. The Contracted Party shall be entitled to the Production volume corresponding to the Royalties payable, and reimbursement in cash is prohibited in any event.

Effectiveness and Efficacy. This Agreement shall be effective for thirty-five (35) years, being valid and in effect as of the date of its execution. Division into phases This Agreement shall be divided into two phases: Exploration Phase, for the whole Contract Area, expected duration of which is set forth in Annex II; and Production Phase, duration of which is defined in paragraph Error: Reference source not found14.1. PRODUCTION SHARING SYSTEM SECTION FIVE – RECOVERY AS COST OIL Right to Recovery as Cost Oil Exclusively in case of a Commercial Discovery, the Contracted Party shall be entitled to receive, as Cost Oil, a share of the Oil and Gas Production, according to the terms, criteria, and conditions established in Annex VII. Calculation and Recovery as Cost Oil T he expenditures below shall be recovered as Cost Oil, according to the methodology and procedures provided for in Annex VII: expenditures previously approved by the Operating Committee or those which approval is waived by this Agreement; and expenditures recognized by the Manager. The expenditures below incurred by the Contracted Parties during the period prior to the execution of the Agreement and until creation of the Operating Committee may be recovered as Cost Oil and as long as , cumulatively: related to the collection of data and information, acquisition of governmental licenses, authorizations, and permits; subject to recovery, pursuant to the criteria provided for in Annex VII; and ratified by the Operating Committee, prior to their actual recovery as Cost Oil. Recovery as Cost Oil Expenditures to be recovered as Cost Oil shall be registered in proper account, referred to as Cost Oil account. During the Production Phase, the Contracted Party shall, every month, receive the Production share corresponding to the Cost Oil, observing the limit of the Gross Production Value, defined in Annex XII. Costs that exceed the limits defined and are not recovered as Cost Oil at a certain calendar year shall be accrued for appropriation in the subsequent years. Expenditures recognized as Cost Oil shall be annually adjusted preferably according to the Extended National Consumer Price Index (IPCA) of the Brazilian Institute of Geography and Statistics – IBGE, or according to another index that better reflects the industry expenditures, at the Manager’s discretion, and return on equity is prohibited. The Manager shall be exclusively responsible for managing the calculation, recognition, and recovery of Cost Oil and managing the Cost Oil account. Any positive balance in the Cost Oil account at the end of the contract term shall not entitle the Contracted Party to indemnifications or refunds. S ECTION SIX – ROYALTIES The amount of Royalties payable every month per Development Area or Field shall be determined by multiplying the equivalent to fifteen percent (15%) of the Total Production Volume of Oil and Gas in the Development Area or Field during such month by its respective reference prices, under Annex VII. Royalties are payable due to the Production of Oil and Gas arising from Long Duration Tests. The Contracted Party shall be entitled to the Production volume corresponding to the Royalties payable, and reimbursement in cash is prohibited in any event.

Effectiveness and Efficacy. This Agreement shall be effective for thirty-five (35) years, being valid and in effect as of the date of its execution. Division into phases This Agreement shall be divided into two phases: Exploration Phase, for the whole Contract Area, expected duration of which is set forth in Annex II; and Production Phase, duration of which is defined in paragraph Error: Reference source not found14.1. PRODUCTION SHARING SYSTEM SECTION FIVE – RECOVERY AS COST OIL Right to Recovery as Cost Oil Exclusively in case of a Commercial Discovery, the Contracted Party shall be entitled to receive, as Cost Oil, a share of the Oil and Gas Production, according to the terms, criteria, and conditions established in Annex VII. Calculation and Recovery as Cost Oil T he expenditures below shall be recovered as Cost Oil, according to the methodology and procedures provided for in Annex VII: expenditures previously approved by the Operating Committee or those which approval is waived by this Agreement; and expenditures recognized by the Manager. The expenditures below incurred by the Contracted Parties during the period prior to the execution of the Agreement and until creation of the Operating Committee may be recovered as Cost Oil and as long as , cumulatively: related to the collection of data and information, acquisition of governmental licenses, authorizations, and permits; subject to recovery, pursuant to the criteria provided for in Annex VII; and ratified by the Operating Committee, prior to their actual recovery as Cost Oil. Recovery as Cost Oil Expenditures to be recovered as Cost Oil shall be registered in proper account, referred to as Cost Oil account. During the Production Phase, the Contracted Party shall, every month, receive the Production share corresponding to the Cost Oil, observing the limit of the Gross Production Value, defined in Annex XII. Costs that exceed the limits defined and are not recovered as Cost Oil at a certain calendar year shall be accrued for appropriation in the subsequent years. Expenditures recognized as Cost Oil shall be annually adjusted preferably according to the Extended National Consumer Price Index (IPCA) of the Brazilian Institute of Geography and Statistics – IBGE, or according to another index that better reflects the industry expenditures, at the Manager’s discretion, and return on equity is prohibited. The Manager shall be exclusively responsible for managing the calculation, recognition, and recovery of Cost Oil and managing the Cost Oil account. Any positive balance in the Cost Oil account at the end of the contract term shall not entitle the Contracted Party to indemnifications or refunds. S ECTION SIX – ROYALTIES The amount of Royalties payable every month per Development Area or Field shall be determined by multiplying the equivalent to fifteen percent (15%) of the Total Production Volume of Oil and Gas in the Development Area or Field during such month by its respective reference prices, under Annex VIIXxxxx XXX. Royalties are payable due to the Production of Oil and Gas arising from Long Duration Tests. The Contracted Party shall be entitled to the Production volume corresponding to the Royalties payable, and reimbursement in cash is prohibited in any event.

Effectiveness and Efficacy. This Agreement shall be effective for thirty-five (35) years, being valid and in effect as of the date of its execution. Division into phases This Agreement shall be divided into two phases: Exploration Phase, for the whole Contract Area, expected duration of which is set forth in Annex II; and Production Phase, duration of which is defined in paragraph Error: Reference source not found. PRODUCTION SHARING SYSTEM SECTION FIVE – RECOVERY AS COST OIL Right to Recovery as Cost Oil Exclusively in case of a Commercial Discovery, the Contracted Party shall be entitled to receive, as Cost Oil, a share of the Oil and Gas Production, according to the terms, criteria, and conditions established in Annex VII. Calculation and Recovery as Cost Oil T he expenditures below shall be recovered as Cost Oil, according to the methodology and procedures provided for in Annex VII: expenditures previously approved by the Operating Committee or those which approval is waived by this Agreement; and expenditures recognized by the Manager. The expenditures below incurred by the Contracted Parties during the period prior to the execution of the Agreement and until creation of the Operating Committee may be recovered as Cost Oil and as long as , cumulatively: related to the collection of data and information, acquisition of governmental licenses, authorizations, and permits; subject to recovery, pursuant to the criteria provided for in Annex VII; and ratified by the Operating Committee, prior to their actual recovery as Cost Oil. Recovery as Cost Oil Expenditures to be recovered as Cost Oil shall be registered in proper account, referred to as Cost Oil account. During the Production Phase, the Contracted Party shall, every month, receive the Production share corresponding to the Cost Oil, observing the limit of the Gross Production Value, defined in Annex XII. Costs that exceed the limits defined and are not recovered as Cost Oil at a certain calendar year shall be accrued for appropriation in the subsequent years. Expenditures recognized as Cost Oil shall be annually adjusted preferably according to the Extended National Consumer Price Index (IPCA) of the Brazilian Institute of Geography and Statistics – IBGE, or according to another index that better reflects the industry expenditures, at the Manager’s discretion, and return on equity is prohibited. The Manager shall be exclusively responsible for managing the calculation, recognition, and recovery of Cost Oil and managing the Cost Oil account. Any positive balance in the Cost Oil account at the end of the contract term shall not entitle the Contracted Party to indemnifications or refunds. S ECTION SIX – ROYALTIES The amount of Royalties payable every month per Development Area or Field shall be determined by multiplying the equivalent to fifteen percent (15%) of the Total Production Volume of Oil and Gas in the Development Area or Field during such month by its respective reference prices, under Annex VIIXxxxx XXX. Royalties are payable due to the Production of Oil and Gas arising from Long Duration Tests. The Contracted Party shall be entitled to the Production volume corresponding to the Royalties payable, and reimbursement in cash is prohibited in any event.