ASSIGNMENT AGREEMENT FOR EXPLORATION BLOCKS IN ARAB REPUBLIC OF EGYPT
Exhibit
10.1
ASSIGNMENT
AGREEMENT FOR EXPLORATION BLOCKS
IN
ARAB REPUBLIC OF EGYPT
THIS
ASSIGNMENT AGREEMENT FOR EXPLORATION BLOCKS IN ARAB REPUBLIC OF EGYPT
(hereinafter referred to as this “AssignmentAgreement”)
made this 8th
day of January, 2008 with an
effective date of December 31,
2007 (the “Effective
Date”).
BETWEEN:
Gujarat
State Petroleum Corporation
Limited, a company organized and existing under the laws of India having
its registered office at GSPC Bhavan, behind Udyog Bhavan, Xxxxxx-00,
Xxxxxxxxxxx, Xxxxxxx 000000, Xxxxx (hereinafter referred to as “GSPC”)
OF
THE
FIRST PART;
AND
GeoGlobal
Resources (Barbados)
Inc., a company whose registered office is at Xxxxxxxxxxx Place, Broad
Street, Bridgetown, Barbados, West Indies with its corporate head office at
310,
605 – 1st
Street
SW, Calgary, Alberta, T2P 3S9, Canada, (hereinafter referred to as “GGRB”)
OF
THE
SECOND PART
(GSPC
and
GGRB shall hereinafter collectively be referred to as “Parties” and individually as
a
“Party”)
WHEREAS:
|
(a)
|
The
Parties and Alkor Petroo Limited (“Alkor”) entered
into a
Joint Study & Bid Agreement dated July 13, 2006 (hereinafter referred
to as “JSBA”) for
participation in blocks offered under bid round by Arab Republic
of
Egypt.
|
|
(b)
|
The
consortium comprising of GSPC, GGRB and Alkor was successful in their
bids
for two exploration blocks namely the E-GAS Block 6 offshore (also
referred to as “N.
Hap’y”) and the GANOPE Block 8 onshore (also referred to as “South Diyur”)
(N. Hap’y
and South Diyur are hereinafter collectively referred to as the “Exploration
Blocks”).
|
|
(c)
|
GGRB
irrevocably agrees to assign its 30% (thirty percent) participating
interest in the Exploration Blocks (“GGRB Participating
Interest”) in favour of GSPC, subject to the terms and conditions
set out herein.
|
NOW
THEREFORE THIS ASSIGNMENT
AGREEMENT WITNESSETH that in consideration of the mutual covenants and
agreements herein contained, GSPC and GGRB hereto agree as follows:
|
1.
|
Terms
and Conditions of Assignment:
|
|
(a)
|
GGRB
hereby assigns all of the GGRB Participating Interest in the Exploration
Blocks to GSPC effective as of the Effective
Date.
|
|
(b)
|
GGRB
hereby waives any right to claim any amounts paid by it and/or any
other
benefits whatsoever in respect of any work done and/or expenditure
incurred for the Exploration Blocks prior to the Effective Date of
this
Assignment Agreement. For greater clarity those amounts
are:
|
|
|
(i)
the amount of the retainer fees paid to Alkor for the account of
Seaharvest FZ Environmental & Oil Services, Egypt (“Seaharvest”) being
US$45,000 (United States dollars forty-five thousand) representing
30%
(thirty percent) of the retainer fee of US$150,000 (United States
dollars
one hundred and fifty thousand) to Seaharvest, for the support of
the
ongoing bids in the Exploration Blocks and to cover all of its costs
during the tender evaluation and awarding process; and
|
|
|
(ii)
|
the
amount of the success fees paid to Alkor for the account of Seaharvest
being US$375,000 (United States dollars three hundred and seventy-five
thousand) which represents 30% (thirty percent) of the success fee
of
US$1,000,000 (United States dollars one million) for the contract
in E-GAS
Block 6 and 30% (thirty percent) of the success fee of US$250,000
(United
States dollars two hundred and fifty thousand) for the contract in
GANOPE
Block 8; and
|
|
|
(iii)
|
the
amount of the administrative fees and signature bonus paid to GSPC
for the
account of E-GAS Block 6 being US$1,518,000 (United States dollars
one
million five hundred and eighteen thousand) which represents 30%
(thirty
percent) of the administrative fee of US$60,000 (United States dollars
sixty thousand) and 30% (thirty percent) of the signature bonus of
US$5,000,000 (United States dollars five million) for the contract
in
E-GAS Block 6; and
|
|
|
(iv)
|
the
amount of the administrative fees and signature bonus paid to GSPC
for the
account of GANOPE Block 8 being US$468,000 (United States dollars
four
hundred and sixty-eight thousand) which represents 30% (thirty percent)
of
the administrative fee of US$60,000 (United States dollars sixty
thousand)
and 30% (thirty percent) of the signature bonus of US$1,500,000 (United
States dollars one million five hundred thousand) for the contract
in
GANOPE Block 8; and
|
|
|
(v)
|
GGRB
invoice dated August 1, 2006 in the amount of US$304,628.45 (United
States
dollars three hundred and four thousand six hundred and twenty-eight
and
forty-five cents) for costs and services provided by GGRB in connection
with the study prepared for the joint bid.
|
|
(c)
|
GSPC
will release and direct that the funds it obtained by calling on
GGRB’s
bank guarantees dated July, 26, 2007 in the amount of US$ 270,000
and US$
900,000 be applied to new bank guarantees in the same amounts to
be
provided by GGRB in favour of GSPC. GGRB will give similar direction
to
the Bank. These new bank guarantees will remain in place in accordance
with the Option Agreement. Should GGRB exercise the option defined
under
the Option Agreement, these new bank guarantees will be released
to GGRB.
Should GGRB however, fail to exercise the option by April 30, 2008
or by
such other date agreed to by GGRB and GSPC then these new bank guarantees
will be forfeited and amount thereof will be credited in favour of
GSPC.
Further, GGRB shall waive any and all rights whatsoever in respect
of
them.
|
|
(d)
|
GGRB
shall have no obligation to GSPC concerning the GGRB Participating
Interest for the period prior to Effective Date except for those
set out
in Clause 1(b) and (c).
|
|
(e)
|
GSPC
confirms that as of the Effective Date it has not incurred any exploration
expenses concerning the Exploration
Blocks.
|
|
(f)
|
GSPC
confirms that it has not and will not enter into any contractual
or other
obligations in reliance of the Powers of Attorney’s to be provided in
accordance with Clause 2(a) save and except for signing the Concession
Agreements for the Exploration Blocks for which GSPC is providing
indemnification in accordance with Clause 1(j) and for recording
the
assignment of the GGRB Participating Interest in favour of
GSPC.
|
|
(g)
|
Subject
to the provisions of Clause 1(i), GSPC agrees that it shall be liable
for
all of the obligations arising out of and / or in connection with
the GGRB
Participating Interest with effect from and after the Effective Date.
|
|
(h)
|
Further,
the Parties agree that GSPC shall be entitled to all the benefits
and
shall be entitled to exercise all the rights arising out of and in
relation to the GGRB Participating Interest from the Effective Date.
|
|
(i)
|
GSPC
shall be responsible for the payment of all of GGRB Participating
Interest
share of all costs and all liabilities with respect to the applicable
Concession Agreements, executed or to be executed, with respect to
the
Exploration Blocks, provided in the event GGRB exercises its option
to
participate up to a 30% (thirty percent) participating interest
("Elected Participating Interest) in both the Exploration Blocks,
and a
corresponding participating interest in the Concession Agreements
to the
Exploration Blocks by paying their pro rata share (equal to their
Elected Participating Interest) of all costs and expenses incurred
from
and after the "Effective Date" of the Option Agreement dated 8th
January,
2008 ("Option Agreement") with respect to the Exploration Blocks.
For avoidance of doubt, it is clarified that in the event GGRB exercises
the option to participate in the Exploration Blocks in the manner
provided
in this Clause 1(i) and in accordance with the terms of the Option
Agreement, GSPC shall have no further obligation under this Assignment
Agreement and under the Option Agreement for the payment for any
costs and
expenses with respect to the Elected Participating Interest from
and after
the Effective Date of the Option
Agreement.
|
|
(j)
|
Parties
acknowledge that GSPC will be required to execute the Concession
Agreement
on behalf of GGRB despite this Assignment Agreement. Subject to the
provisions of Clause 1(i), GSPC shall indemnify and hold harmless
GGRB
against all suits, proceedings, liabilities, obligations, expenses,
responsibilities, losses, damages, claims, demands, actions, costs
and
expenses that GGRB may be subjected to, arising out of or in connection
with GGRB Participating Interest with respect to the Concession Agreement
up to the date of exercise of option or the end of the last date
for the
exercise of the option (as the case may be), by GGRB, under the Option
Agreement. In the event, GGRB fails to exercise the option, this
indemnity
will continue up to the date on which assignment by GGRB in favour
of GSPC
(or any other person designated by GSPC) is approved by the Egyptian
Government.
|
|
|
Further
Assurance:
|
|
(a)
|
GGRB
hereby agrees to provide GSPC the necessary documentary support such
as a
Power of Attorney (“POA”), authorization,
affidavit, undertaking and such other document(s) and full co-operation,
as may be required, to execute and/or amend the Concession Agreement
and
any other documentation as may be required to reflect that GSPC (or
any
other person designated by GSPC) has been transferred, and is entitled
to,
the GGRB Participating Interest in the Exploration Blocks.
|
|
|
(b)
GGRB and GSPC shall co-operate and undertake all necessary action
(including liasioning with the Government of the Arab Republic of
Egypt,
GANOPE, E-GAS, contractors, etc) as may be required to give effect
to the
assignment of GGRB Participating Interest, in favour of GSPC (or
any other
person designated by GSPC).
|
|
|
(c)
GGRB and GSPC agree to act in good faith and not to undertake any
action
which is prejudicial to interest of GGRB, GSPC or Alkor under the
Concession Agreement, the JSBA, or any related agreements.
|
|
|
(d)
GGRB agrees to undertake all such actions as may be required to ensure
that POA or the equivalent authorisation is duly notarised and legalised
by the competent authorities including Egyptian Consulate in the
country
where GGRB is located. GGRB covenants and agrees to submit in trust
such
documentation to facilitate the signing of the Concession Agreement.
|
|
(e)
|
Upon
execution of the Concession Agreement, the Parties hereby agree that
GGRB
or GSPC (acting as its valid Power of Attorney holder in terms of
Clause
2(a) above) shall take all further steps to record the assignment
of the
GGRB Participating Interest in favour of GSPC. Nothing herein shall
preclude the Parties from any actions required to assign GGRB
Participating Interest in favour of GSPC.
|
|
(f)
|
Each
of the Parties represent that they have the necessary powers and
authority
to enter into this Assignment Agreement and perform the obligations
envisaged herein.
|
3.
Amendment:
No
amendment to this Assignment Agreement shall be valid and binding unless set
forth in writing and duly executed by the Parties.
4.
Governing Law and Arbitration:
|
(a)
|
This
Assignment Agreement shall be governed by laws of India.
|
|
(b)
|
Any
dispute arising in connection with or with respect to validity of
this
Assignment Agreement shall be finally resolved through arbitration
in
accordance with the provisions of the Arbitration and Conciliation
Act,
1996. Proceedings of arbitration shall be held in Ahmedabad and shall
be
conducted in English. Each Party shall appoint one arbitrator and
the two
arbitrators so appointed shall appoint the third arbitrator.
|
|
5.
|
Counterpart
Execution:
|
This
Assignment Agreement may be executed in any number of counterparts, all of
which
taken together shall constitute one and the same understanding, and any Party
may enter into this Assignment Agreement by executing a counterpart.
EXECUTED
in Gandhinagar,
Gujarat
by:
/s/ M.Y. Xxxxxxxx
XX
(P&D)
Signed
for and on behalf
of
|
|
GUJARAT
STATE PETROLEUM CORPORATION LIMITED
|
by:
/s/ Xxxxx X. Xxxx,
Executive
Vice President and Chief Financial Officer
|
|
Signed
for and on behalf of
|
|
|
GEOGLOBAL
RESOURCES (BARBADOS)
INC.
|
