Common use of RIGHTS AND OBLIGATIONS OF THE CONTRACTOR Clause in Contracts

RIGHTS AND OBLIGATIONS OF THE CONTRACTOR. 8.1 The CONTRACTOR is responsible for the conduct and performance of the Petroleum Operations in the Contract Area during the term of the Contract, pursuant to the Work Programmes and corresponding Budgets approved by the Operating Committee, the provisions of this Contract and of the Petroleum Legislation, as well as the generally accepted practices of the international petroleum industry. 8.2 The rights and obligations of the CONTRACTOR include the following, without limitation: 8.2.1 The preparation and submission of the Work Programme and corresponding Budgets, for the purpose of enabling the Operating Committee to make its decisions, including any revisions or amendments which may be made to same. 8.2.2 The obligation to supply the STATE, as soon as possible, with information, documentation and data pertaining to the Petroleum Operations. Concerning cores and other data acquired within the framework of the Petroleum Operations and which cannot be duplicated, said data which is the property of the STATE, shall be temporary conserved by the CONTRACTOR on behalf of the STATE for exploitation and made available and transferred to the STATE upon request. 8.2.3 The right, during the term of this Contract, to dispose of and to freely export, without having to post bond or a guarantee, its share of Hydrocarbons as provided for in Articles 13 and 22 of this Contract. The CONTRACTOR shall be required to fulfil all administrative formalities required by the current Petroleum Legislation for the purposes of such disposal and export. 8.2.4 Application for and obtaining, within the framework of the current legislation, all rights governing the utilisation of radio frequencies and other means of communication, all movements of aircraft, land vehicles or small craft, landing fields, routes, housing for personnel, warehouses, equipment for reception of freight, loading platforms and any other equipment which the CONTRACTOR may need in order to carry out the Petroleum Operations. 8.2.5 The right to freely utilise, for the conduct and performance of the Petroleum Operations, its personnel and the products and services of its Affiliates, regardless of location. The utilisation of such personnel and the products and services of its Affiliates should be at rates that conform to general rates charged by Petroleum Operators of international reputation working for petroleum operations in conditions similar to those in the Gulf of Guinea region and of West Africa. 8.3 The CONTRACTOR is required to: 8.3.1 Complete the minimum Work Programme in accordance with the terms of Article 6 of this Contract; 8.3.2 Comply with the decisions of the Operating Committee; 8.3.3 Pay all invoices related to Petroleum Operations on a timely basis; 8.3.4 Acquire all permits, permissions, approvals, and easements for access or occupancy that may be necessary in order to carry out the Petroleum Operations under the provisions of the Petroleum Legislation; 8.3.5 Be responsible for the safekeeping of all Joint Property; and 8.3.6 Pay to whom owed any taxes, fees and other miscellaneous payments provided for in this Contract and by current Petroleum Legislation. 8.4 Without prejudice to the provisions of the Petroleum Legislation, particularly those of Title XIX of the Petroleum Regulation pertaining to insurance, the CONTRACTOR shall address any claim or litigation arising from the Petroleum Operations, other than claims and litigation which may arise between the Parties (including between those entities constituting the CONTRACTOR), and may settle or resolve any well founded claim or dispute which involves an amount not exceeding fifty thousand U.S. Dollars (US$50,000), lawyers’ fees not included, without referring the matter to the Operating Committee. The CONTRACTOR shall obtain the prior consent of the Operating Committee for the settlement of any dispute which involves an amount greater than fifty thousand U.S. Dollars (US$50,000). If a dispute should arise between the STATE and a third party in relation to the Petroleum Operations, or which impact upon same, the STATE shall promptly notify the CONTRACTOR in writing. The CONTRACTOR shall either defend against the claims of the third person or settle same, pursuant to the instructions which it will have received from the Operating Committee, it being understood that during the Development and Exploitation Phase, the amount of the damages and legal expenses connected thereto shall be chargeable to the Joint Account. 8.5 In the event services or goods are provided to the Petroleum Operations by a third party other than the Operator or its Affiliates, the forecast cost or estimate of which exceeds two hundred thousand U.S. Dollars (US$200,000) during the Exploration Phase or three hundred thousand U.S. Dollars (US$300,000) during the Development and Exploitation Phase, or if the cost exceeds any amount set by the Operating Committee, the Operator shall, except for valid reasons, proceed with a call for bids. 8.6 The Contractor shall bear all the direct or indirect consequences of civil liability it incurs due to any damages caused to third parties by it in the conduct of Petroleum Operations. As such it shall indemnify, defend and hold the STATE harmless against all third party claims. The CONTRACTOR shall bear the consequences of any damage caused to the STATE arising directly from the partial or total non-performance of its contractual obligations pursuant to this Contract, except for any damages not arising directly from such non- performance. The CONTRACTOR shall not be liable towards the STATE for damage to the environment that may have existed in the Contract Area prior to the Effective Date.

RIGHTS AND OBLIGATIONS OF THE CONTRACTOR. 8.1 The CONTRACTOR is responsible for the conduct and performance of the Petroleum Operations in the Contract Area during the term of the Contract, pursuant to the Work Programmes Programme and corresponding Budgets approved by the Operating Committee, the provisions of this Contract and of the Petroleum Legislation, as well as the generally accepted practices of the international petroleum industry. 8.2 The rights and obligations of the CONTRACTOR include the following, without limitation: 8.2.1 The preparation and submission of the Work Programme and corresponding Budgets, for the purpose of enabling the Operating Committee to make its decisions, including any revisions or amendments which may be made to same. 8.2.2 The obligation to supply the STATE, as soon as possible, with information, documentation and data pertaining to the Petroleum Operations. Concerning cores and other data acquired within the framework of the Petroleum Operations and which cannot be duplicated, said data which is the property of the STATE, STATE shall be temporary conserved by the CONTRACTOR on behalf of the STATE for exploitation and made available and transferred to the STATE upon request. 8.2.3 The right, during the term of this Contract, to dispose of and to freely export, without having to post bond or a guarantee, its share of Hydrocarbons as provided for in Articles 13 and 22 of this Contract. The CONTRACTOR shall be required to fulfil fulfill all administrative formalities required by the current Petroleum Legislation for the purposes of such disposal and export. 8.2.4 Application for and obtaining, within the framework of the current legislation, all rights governing the utilisation of radio frequencies and other means of communication, all movements of aircraft, land vehicles or small craft, landing fields, routes, housing for personnel, warehouses, equipment for reception of freight, loading platforms and any other equipment which the CONTRACTOR may need in order to carry out the Petroleum Operations. 8.2.5 The right to freely utilise, for the conduct and performance of the Petroleum Operations, its personnel and the products and services of its Affiliates, regardless of location. The utilisation of such personnel and the products and services of its Affiliates should be at rates that conform to general rates charged by Petroleum Operators of international reputation working for petroleum operations in conditions similar to those in the Gulf of Guinea region and of West Africa. 8.3 The CONTRACTOR is required to: 8.3.1 Complete the minimum Work Programme in accordance with the terms of Article 6 of this Contract; 8.3.2 Comply with the decisions of the Operating Committee; 8.3.3 Pay all invoices related to Petroleum Operations on a timely basis; 8.3.4 Acquire all permits, permissions, approvals, and easements for access or occupancy that may be necessary in order to carry out the Petroleum Operations under the provisions of the Petroleum Legislation; 8.3.5 Be responsible for the safekeeping of all Joint Property; and 8.3.6 Pay to whom owed any taxes, fees and other miscellaneous payments provided for in this Contract and by current Petroleum Legislation. 8.4 Without prejudice to the provisions of the Petroleum Legislation, particularly those of Title XIX of the Petroleum Regulation pertaining to insurance, the CONTRACTOR shall address any claim or litigation arising from the Petroleum Operations, other than claims and litigation which may arise between the Parties (including between those entities constituting the CONTRACTOR), and may settle or resolve any well founded claim or dispute which involves an amount not exceeding fifty thousand U.S. Dollars (US$50,000), lawyers’ fees not included, without referring the matter to the Operating Committee. The CONTRACTOR shall obtain the prior consent of the Operating Committee for the settlement of any dispute which involves an amount greater than fifty thousand U.S. Dollars (US$50,000). If a dispute should arise between the STATE and a third party in relation to the Petroleum Operations, or which impact upon same, the STATE shall promptly notify the CONTRACTOR in writing. The CONTRACTOR shall either defend against the claims of the third person or settle same, pursuant to the instructions which it will have received from the Operating Committee, it being understood that during the Development and Exploitation Phase, the amount of the damages and legal expenses connected thereto shall be chargeable to the Joint Account. 8.5 In the event services or goods are provided to the Petroleum Operations by a third party other than the Operator or its Affiliates, the forecast cost or estimate of which exceeds two hundred thousand U.S. Dollars (US$200,000) during the Exploration Phase or three hundred thousand U.S. Dollars (US$300,000) during the Development and Exploitation Phase, or if the cost exceeds any amount set by the Operating Committee, the Operator shall, except for valid reasons, proceed with a call for bids. 8.6 The Contractor shall bear all the direct or indirect consequences of civil liability it incurs due to any damages caused to third parties by it in the conduct of Petroleum Operations. As such it shall indemnify, defend and hold the STATE harmless against all third party claims. The CONTRACTOR shall bear the consequences of any damage caused to the STATE arising directly from the partial or total non-performance of its contractual obligations pursuant to this Contract, except for any damages not arising directly from such non- non-performance. The CONTRACTOR shall not be liable towards the STATE for damage to the environment that may have existed in the Contract Area prior to the Effective Date.

RIGHTS AND OBLIGATIONS OF THE CONTRACTOR. 8.1 The CONTRACTOR is responsible 3.1 Subject to the provisions of this Agreement, the Contractor shall have the following rights: a) the exclusive right to carry out Petroleum Operations to recover costs and expenses as provided in this Agreement; b) the right to use, free of charge, such quantities of Petroleum produced as are reasonably required for the conduct and performance of the conducting Petroleum Operations in the Contract Agreement Area during in accordance with generally accepted modern oilfield/gasfield and petroleum industry practices; and c) the term right to lay pipelines and build communication and infrastructure facilities and exercise other ancillary rights as may be reasonably necessary for the conduct of Petroleum Operations subject to obtaining the Contractrequired approvals and compliance with the relevant laws relating to the regulation and control thereof. d) the right to take Cost Petroleum in accordance with the provisions of Article 22; e) the right to take its Participating Interest share of Profit Petroleum in accordance with the provisions of Article 21; f) the right to receive its Participating Interest share of any incidental income and receipts arising from Petroleum Operations; and g) the obligation to contribute its Participating Interest share of costs and expenses including Agreement Costs. 3.2 The Contractor shall, having due regard to modern global oilfield/gasfield and petroleum industry practices and laws, statutes and regulations:- a) except as otherwise expressly provided in this Agreement, conduct all Petroleum Operations at its sole risk, cost and expense and provide all funds necessary for the conduct of Petroleum Operations including, but not limited to, funds for the purchase or lease of equipment, materials or supplies required for Petroleum Operations as well as for making payments to employees, agents and Sub Contractor(s); b) conduct all Petroleum Operations within or related to the Agreement Area diligently, expeditiously, efficiently and in an environmentally friendly, safe and workmanlike manner pursuant to the Work Programmes Programme formulated in accordance with this Agreement; c) ensure provision of all information, data and corresponding Budgets approved by the Operating Committee, the provisions of this Contract and of the Petroleum Legislation, as well as the generally accepted practices of the international petroleum industry. 8.2 The rights and obligations of the CONTRACTOR include the following, without limitation: 8.2.1 The preparation and submission of the Work Programme and corresponding Budgets, for the purpose of enabling the Operating Committee to make its decisions, including any revisions or amendments samples which may be made required to samebe furnished under the relevant laws or under this Agreement; d) adhere to the procedure for the procurement of goods and services set out in Article 39. 8.2.2 The obligation to supply the STATEe) appoint a technically competent and experienced representative, as soon as possibleand, with informationin his/her absence, documentation and data pertaining to the Petroleum Operations. Concerning cores and other data acquired within the framework of the Petroleum Operations and which cannot be duplicated, said data which is the property of the STATE, a suitably qualified replacement who shall be temporary conserved by the CONTRACTOR on behalf of the STATE for exploitation resident in Sri Lanka and made available and transferred who shall have full authority to the STATE upon request. 8.2.3 The right, during the term of this Contract, to dispose of and to freely export, without having to post bond or a guarantee, its share of Hydrocarbons take such steps as provided for in Articles 13 and 22 of this Contract. The CONTRACTOR shall be required to fulfil all administrative formalities required by the current Petroleum Legislation for the purposes of such disposal and export. 8.2.4 Application for and obtaining, within the framework of the current legislation, all rights governing the utilisation of radio frequencies and other means of communication, all movements of aircraft, land vehicles or small craft, landing fields, routes, housing for personnel, warehouses, equipment for reception of freight, loading platforms and any other equipment which the CONTRACTOR may need in order to carry out the Petroleum Operations. 8.2.5 The right to freely utilise, for the conduct and performance of the Petroleum Operations, its personnel and the products and services of its Affiliates, regardless of location. The utilisation of such personnel and the products and services of its Affiliates should be at rates that conform to general rates charged by Petroleum Operators of international reputation working for petroleum operations in conditions similar to those in the Gulf of Guinea region and of West Africa. 8.3 The CONTRACTOR is required to: 8.3.1 Complete the minimum Work Programme in accordance with the terms of Article 6 of this Contract; 8.3.2 Comply with the decisions of the Operating Committee; 8.3.3 Pay all invoices related to Petroleum Operations on a timely basis; 8.3.4 Acquire all permits, permissions, approvals, and easements for access or occupancy that may be necessary to implement this Agreement and whose name shall, on appointment within ninety (90) days after commencement of the first Agreement Year, be made known to the Government; f) provide acceptable working conditions, living accommodation and access to medical attention and nursing care for all personnel employed in order to Petroleum Operations; g) carry out the Petroleum Operations under the provisions such other obligations as are specified in this Agreement or any other applicable legislation of the Petroleum Legislation; 8.3.5 Be responsible for the safekeeping of all Joint PropertySri Lanka; and 8.3.6 Pay to whom owed any taxes, fees and other miscellaneous payments provided for in this Contract and by current Petroleum Legislation. 8.4 Without prejudice to h) the provisions of the Petroleum Legislation, particularly those of Title XIX of the Petroleum Regulation pertaining to insurance, the CONTRACTOR shall address any claim or litigation arising from the Petroleum Operations, other than claims and litigation which may arise between the Parties (including between those entities constituting the CONTRACTOR), and may settle or resolve any well founded claim or dispute which involves an amount not exceeding fifty thousand U.S. Dollars (US$50,000), lawyers’ fees not included, without referring the matter to the Operating Committee. The CONTRACTOR shall obtain the prior consent of the Operating Committee for the settlement of any dispute which involves an amount greater than fifty thousand U.S. Dollars (US$50,000). If a dispute should arise between the STATE and a third party in relation to the Petroleum Operations, or which impact upon same, the STATE shall promptly notify the CONTRACTOR in writing. The CONTRACTOR shall either defend against the claims of the third person or settle same, pursuant to the instructions which it will have received from the Operating Committee, it being understood that during the Development and Exploitation Phase, the amount of the damages and legal expenses connected thereto shall be chargeable to the Joint Account. 8.5 In the event services or goods are provided to the Petroleum Operations by a third party other than the Operator or its Affiliates, the forecast cost or estimate of which exceeds two hundred thousand U.S. Dollars (US$200,000) during the Exploration Phase or three hundred thousand U.S. Dollars (US$300,000) during the Development and Exploitation Phase, or if the cost exceeds any amount set by the Operating Committee, the Operator shall, except for valid reasons, proceed with a call for bids. 8.6 The Contractor shall bear all consider the direct or indirect consequences rights and interests of civil liability it incurs due to any damages caused to third parties by it Sri Lanka in the conduct of Petroleum Operations. As such it shall indemnify, defend and hold the STATE harmless against all third party claims. The CONTRACTOR shall bear the consequences of any damage caused to the STATE arising directly from the partial or total non-performance of its contractual obligations pursuant to this Contract, except for any damages not arising directly from such non- performance. The CONTRACTOR shall not be liable towards the STATE for damage to the environment that may have existed in the Contract Area prior to the Effective Date.

RIGHTS AND OBLIGATIONS OF THE CONTRACTOR. 8.1 The CONTRACTOR is responsible for the conduct and performance of the Petroleum Operations in the Contract Area during the term of the Contract, pursuant to the Work Programmes and corresponding Budgets approved by the Operating Committee, the provisions of this Contract and of the Petroleum Legislation, as well as the generally accepted practices of the international petroleum industry. 8.2 The rights and obligations of the CONTRACTOR include the following, without limitation: 8.2.1 The preparation and submission of the Work Programme Programmes and corresponding Budgets, for the purpose of enabling the Operating Committee to make its decisions, including any revisions or amendments which may be made to same. 8.2.2 The obligation to supply the STATE, as soon as possible, with information, documentation and data pertaining to the Petroleum Operations, except for technical usage deriving from the CONTRACTOR’S proprietary know-how. Concerning cores and other data acquired within the framework of the Petroleum Operations and which cannot be duplicated, said data which is the property of the STATE, shall be temporary conserved by the CONTRACTOR on behalf of CONTRACTOR, available to be consulted by the STATE for exploitation and made available and transferred furnished to the STATE upon requestwhen it is no longer useful for the conduct of the Petroleum Operations and at the latest before the expiry date of the Contract. 8.2.3 The right, during the term of this Contract, to dispose of and to freely export, without having to post bond or a guarantee, its share of Hydrocarbons as provided for in Articles 13 and 22 of this Contract. The CONTRACTOR shall be required to fulfil fulfill all administrative formalities required by the current Petroleum Legislation for the purposes of such disposal and export. 8.2.4 Application for and obtaining, within the framework of the current legislation, all rights governing the utilisation of radio frequencies and other means of communication, all movements of aircraft, land vehicles or small craft, landing fields, routes, housing for personnel, warehouses, equipment for reception of freight, loading platforms and any other equipment which the CONTRACTOR may need in order to carry out the Petroleum Operations. 8.2.5 The right to freely utilise, for the conduct and performance of the Petroleum Operations, its personnel and the products and services of its Affiliates, regardless of location. The utilisation of such personnel and the products and services of its Affiliates should be at rates that conform to general rates charged by Petroleum Operators of international reputation working for petroleum operations in conditions similar to those in the Gulf of Guinea region and of West Africa. 8.3 The CONTRACTOR is required to: 8.3.1 Complete the minimum Work Programme in accordance with the terms of Article 6 of this Contract; 8.3.2 Comply with the decisions of the Operating Committee; 8.3.3 Pay all invoices related to Petroleum Operations on a timely basis; 8.3.4 Acquire all permits, permissions, approvals, and easements for access or occupancy that may be necessary in order to carry out the Petroleum Operations under the provisions of the Petroleum Legislation; 8.3.5 Be responsible for the safekeeping of all Joint Property; and 8.3.6 Pay to whom owed any taxes, fees and other miscellaneous payments provided for in this Contract and by current Petroleum Legislation. 8.4 Without prejudice to the provisions of the Petroleum Legislation, particularly those of Title XIX of the Petroleum Petroleum. Regulation pertaining to insurance, the CONTRACTOR shall address any claim or litigation arising from the Petroleum Operations, other than claims and litigation which may arise between the Parties (including between those entities constituting the CONTRACTOR), and may settle or resolve any well founded claim or dispute which involves an amount not exceeding fifty one hundred thousand U.S. Dollars (US$50,000100,000), lawyers’ fees not included, without referring the matter to the Operating Committee. The CONTRACTOR shall obtain the prior consent of the Operating Committee for the settlement of any dispute which involves an amount greater than fifty one hundred thousand U.S. Dollars (US$50,000100,000). If a dispute should arise between the STATE and a third party in relation to the Petroleum Operations, or which impact upon same, the STATE shall promptly notify the CONTRACTOR in writing. The CONTRACTOR shall either defend against the claims of the third person or settle same, pursuant to the instructions which it will have received from the Operating Committee, it being understood that during the Development and Exploitation Phase, the amount of the damages and legal expenses connected thereto shall be chargeable to the Joint Account. 8.5 In the event services or goods are provided to the Petroleum Operations by a third party other than the Operator or its Affiliates, the forecast cost or estimate of which exceeds two four hundred thousand U.S. Dollars (US$200,000400,000) during the Exploration Phase or three five hundred thousand U.S. Dollars (US$300,000500,000) during the Development and Exploitation Phase, or if the cost exceeds any amount set by the Operating Committee, the Operator shall, except for valid reasons, proceed with a call for bids. 8.6 The Contractor shall bear all the direct or indirect consequences of civil liability it incurs due to any damages caused to third parties by it in the conduct of Petroleum Operations. As such it shall indemnify, defend and hold the STATE harmless against all third party claims. The CONTRACTOR shall bear the consequences of any damage caused to the STATE arising directly from the partial or total non-performance of its contractual obligations pursuant to this Contract, except for any damages not arising directly from such non- non-performance. The CONTRACTOR shall not be liable towards the STATE for damage to the environment that may have existed in the Contract Area prior to the Effective Date, or any indirect losses or for any losses caused wholly or partly by any act or omission of the STATE, regional or local government entities.

RIGHTS AND OBLIGATIONS OF THE CONTRACTOR. 8.1 The CONTRACTOR is responsible for the conduct and performance of the Petroleum Operations in the Contract Area during the term of the Contract, pursuant to the Work Programmes and corresponding Budgets approved by the Operating Committee, the provisions of this Contract and of the Petroleum Legislation, as well as the generally accepted practices of the international petroleum industry. 8.2 The rights and obligations of the CONTRACTOR include the following, without limitation: 8.2.1 The preparation and submission of the Work Programme Programmes and corresponding Budgets, for the purpose of enabling the Operating Committee to make its decisions, including any revisions or amendments which may be made to same. 8.2.2 The obligation to supply the STATE, as soon as possible, with information, documentation and data pertaining to the Petroleum Operations, except for technical usage deriving from the CONTRACTOR’S proprietary know­how. Concerning cores and other data acquired within the framework of the Petroleum Operations and which cannot be duplicated, said data which is the property of the STATE, shall be temporary conserved by the CONTRACTOR on behalf of CONTRACTOR, available to be consulted by the STATE for exploitation and made available and transferred furnished to the STATE upon requestwhen it is no longer useful for the conduct of the Petroleum Operations and at the latest before the expiry date of the Contract. 8.2.3 The right, during the term of this Contract, to dispose of and to freely export, without having to post bond or a guarantee, its share of Hydrocarbons as provided for in Articles 13 and 22 of this Contract. The CONTRACTOR shall be required to fulfil fulfill all administrative formalities required by the current Petroleum Legislation for the purposes of such disposal and export. 8.2.4 Application for and obtaining, within the framework of the current legislation, all rights governing the utilisation of radio frequencies and other means of communication, all movements of aircraft, land vehicles or small craft, landing fields, routes, housing for personnel, warehouses, equipment for reception of freight, loading platforms and any other equipment which the CONTRACTOR may need in order to carry out the Petroleum Operations. 8.2.5 The right to freely utilise, for the conduct and performance of the Petroleum Operations, its personnel and the products and services of its Affiliates, regardless of location. The utilisation of such personnel and the products and services of its Affiliates should be at rates that conform to general rates charged by Petroleum Operators of international reputation working for petroleum operations in conditions similar to those in the Gulf of Guinea region and of West Africa. 8.3 The CONTRACTOR is required to: 8.3.1 Complete the minimum Work Programme in accordance with the terms of Article 6 of this Contract;Contract; 8.3.2 Comply with the decisions of the Operating Committee;Committee; 8.3.3 Pay all invoices related to Petroleum Operations on a timely basis;basis; 8.3.4 Acquire all permits, permissions, approvals, and easements for access or occupancy that may be necessary in order to carry out the Petroleum Operations under the provisions of the Petroleum Legislation;Legislation; 8.3.5 Be responsible for the safekeeping of all Joint Property; Property; and 8.3.6 Pay to whom owed any taxes, fees and other miscellaneous payments provided for in this Contract and by current Petroleum Legislation. 8.4 Without prejudice to the provisions of the Petroleum Legislation, particularly those of Title XIX of the Petroleum Petroleum. Regulation pertaining to insurance, the CONTRACTOR shall address any claim or litigation arising from the Petroleum Operations, other than claims and litigation which may arise between the Parties (including between those entities constituting the CONTRACTOR), and may settle or resolve any well founded claim or dispute which involves an amount not exceeding fifty one hundred thousand U.S. Dollars (US$50,000100,000), lawyers’ fees not included, without referring the matter to the Operating Committee. The CONTRACTOR shall obtain the prior consent of the Operating Committee for the settlement of any dispute which involves an amount greater than fifty one hundred thousand U.S. Dollars (US$50,000100,000). If a dispute should arise between the STATE and a third party in relation to the Petroleum Operations, or which impact upon same, the STATE shall promptly notify the CONTRACTOR in writing. The CONTRACTOR shall either defend against the claims of the third person or settle same, pursuant to the instructions which it will have received from the Operating Committee, it being understood that during the Development and Exploitation Phase, the amount of the damages and legal expenses connected thereto shall be chargeable to the Joint Account. 8.5 In the event services or goods are provided to the Petroleum Operations by a third party other than the Operator or its Affiliates, the forecast cost or estimate of which exceeds two four hundred thousand U.S. Dollars (US$200,000400,000) during the Exploration Phase or three five hundred thousand U.S. Dollars (US$300,000500,000) during the Development and Exploitation Phase, or if the cost exceeds any amount set by the Operating Committee, the Operator shall, except for valid reasons, proceed with a call for bids. 8.6 The Contractor shall bear all the direct or indirect consequences of civil liability it incurs due to any damages caused to third parties by it in the conduct of Petroleum Operations. As such it shall indemnify, defend and hold the STATE harmless against all third party claims. The CONTRACTOR shall bear the consequences of any damage caused to the STATE arising directly from the partial or total non-performance non­performance of its contractual obligations pursuant to this Contract, except for any damages not arising directly from such non- performancenon­performance. The CONTRACTOR shall not be liable towards the STATE for damage to the environment that may have existed in the Contract Area prior to the Effective Date, or any indirect losses or for any losses caused wholly or partly by any act or omission of the STATE, regional or local government entities.