Common use of Materials Furnished by Operator Clause in Contracts

Materials Furnished by Operator. Materials required for operations shall be purchased for direct charge to the Project Account whenever practicable, except the Operator may furnish such Equipment and/or other Materials from its stock under the following conditions: 3.2.1 New Materials (Condition “1”). New Materials transferred from the warehouse or other properties of Operator shall be priced at net cost determined in accordance with Section 3.1 above. 3.2.2 Used Materials (Conditions “2” and “3”). 3.2.2.1 Material which is in sound and serviceable condition and suitable for use without repair or reconditioning. shall be classed as Condition “2” and priced at seventy percent (70%) of actual historical cost. 3.2.2.2 Materials not meeting the requirements of Section 3.2.2.1 above, but which can be made suitable for use, after being repaired or reconditioned, shall be classed as Condition “3” and priced at fifty percent (50%) of actual historical cost after repairs and reconditioning. 3.2.2.3 Material which cannot be classified as Condition “2” or Condition “3” shall be priced at a value commensurate with its use. 3.2.2.4 Fuel storge tanks, buildings and other items of Material involving erection costs, if transferred in decommissioned condition, shall be graded as to condition as provided in this Section 3.2.2 of Section III and priced based on actual historical or estimated and pre-approved cost. 3.2.2.5 Materials, which is no longer useable for its original purpose but is useable for some other purpose, shall be graced as to condition as provided in this Section 3.2.2 of Section III. Such Material shall be priced based on the current price of items normally used for such other purpose if sold to third parties.

Materials Furnished by Operator. Materials required for operations shall be purchased for direct charge to the Project Joint Account whenever practicable, except the Operator may furnish such Equipment and/or other Materials from its stock under the following conditions: 3.2.1 New Materials (Condition “«1”»). New Materials transferred from the warehouse or other properties of Operator shall be priced at net cost determined in accordance with Section 3.1 above. 3.2.2 Used Materials (Conditions “«2” » and “«3”»). 3.2.2.1 Material which is in sound and serviceable condition and suitable for use without repair or reconditioning. reconditioning shall be classed as Condition “«2” » and priced at seventy seventy-five percent (7075%) of actual historical cost. 3.2.2.2 Materials not meeting the requirements of Section 3.2.2.1 above, but which can be made suitable for use, use after being repaired or reconditioned, shall be classed as Condition “«3” » and priced at fifty percent (50%) of actual historical cost after repairs and reconditioning. 3.2.2.3 Material which cannot be classified as Condition “«2” » or Condition “«3” » shall be priced at a value commensurate with its use. 3.2.2.4 Fuel storge tanksTanks, derricks, buildings and other items of Material involving erection costs, if transferred in decommissioned knocked-down condition, shall be graded as to condition as provided in this Section 3.2.2 of Section III and priced based on the basis of actual historical or estimated and pre-approved cost. 3.2.2.5 MaterialsMaterial including drill pipe, casing and tubing, which is no longer useable for its original purpose but is useable for some other purpose, shall be graced as to condition as provided in this Section 3.2.2 of Section III. Such Material shall be priced based on the basis of the current price of items normally used for such other purpose if sold to third parties.