Excess Associated Gas. 20.2.1 Associated Gas in excess of amounts used pursuant to Sub-article 20.1 shall be designated as excess Associated Gas. If Contractor considers the excess Associated Gas not to be economic, Staatsolie shall have the right to collect, transport and utilize this excess Associated Gas at its sole cost and risk. In that case, the Parties shall mutually agree on the operational aspects of Staatsolie’s utilization of such Gas. Production of such excess Associated Gas shall not hinder Contractor’s operations in any way.
20.2.2 Contractor is not allowed to flare excess Associated Gas, except in the event it cannot be sold or re-injected in accordance with Sub-articles 20.2.3 or 20.2.4.
20.2.3 If Contractor considers the Development of excess Associated Gas to be economic, then Contractor shall include the Development of such excess Associated Gas in the Development Plan submitted for the Development of Crude Oil.
20.2.4 Contractor shall re-inject into the subsurface any excess Associated Gas, which is not developed under this Sub-article 20.2, subject to international petroleum standards and Staatsolie’s explicit permission; provided that Contractor is not required to re-inject any excess Associated Gas if such re-injection would, in Contractor’s opinion, cause damage to the reservoir or negatively effect the efficiency of production of Crude Oil or the ultimate recovery of Crude Oil.
Excess Associated Gas. 13.2.1 If the proposed Development Plan submitted to the Management Committee provides for the commercialization of Excess Associated Gas, then upon approval of such Development Plan:
(a) The Parties (as sellers) shall endeavour to conclude with buyers a long-term gas sales agreement(s) incorporating the principles set forth in Article 13.4.
(b) When such gas sales agreement(s) is concluded, Operator shall commence implementation of the Development Plan and construct the necessary facilities, such as, but not limited to, the gathering, treating, compressing, transporting and processing facilities required for the production and delivery to the delivery point of Excess Associated Gas as specified in the Development Plan or as may be otherwise agreed to in the gas sales agreement(s).
13.2.2 If the Management Committee does not declare a Commercial Discovery for a Discovery of Crude Oil containing Excess Associated Gas due to lack of a gas utilization scheme, then First Party shall have the option to take the Excess Associated Gas, free of charge, at the delivery point which is immediately after the gas oil separation plant(s). If the Management Committee then declares a Commercial Discovery: a) Operator shall operate the separation facilities which will permit the delivery as aforesaid; b) Costs of such operation shall be considered Exploitation Operations Expenditures; and c) First Party shall be responsible for the gathering at the delivery point specified in this Article 13.2.2, compressing and transporting of said Excess Associated Gas and shall bear all costs related thereto. Any receipt and disposition of such Excess Associated Gas by First Party shall be carried out in accordance with Good Oilfield Practices in a manner which will not unreasonably interfere with the Petroleum Operations regarding the said Commercial Discovery. If First Party does not exercise the aforesaid option, the Parties shall meet to discuss an appropriate alternative.
