Exhibit 10.12
AGREEMENT NO. 001
FOR MARKETING AND CONSULTING SERVICES
KURGAN CITY APRIL 16, 2005
Limited liability company "Zauralneftegaz", hereinafter referred to as the
"Client", in the person of general director Xxxx X. Xxxxxxxxx, acting in
compliance with the by-laws, on one side, and LLC "Consulting firm "Business -
Standard", hereinafter referred to as the "Consultant", in the person of general
director I.S. Ryabokon, acting in compliance with the by-laws, on the other
side, together referred to as the "parties", have entered this contract as
follows:
1. SUBJECT OF AGREEMENT
1.1 By order from the client, the Consultant is obliged to study the
licensed fields market on the territory of Kurgan oblast, available for
geological survey, study and exploration of hydrocarbon resources, with the
purpose of their subsequent extraction.
1.2 The goal of marketing exploration is: to identify the potential of
detecting hydrocarbons on the following licensed fields offered:
- Lebyazhevsky, located in Lebyazhevsky region of Kurgan oblast;
- Yuzhno-Voskresensky, located on the territory of Mokrousovsky,
Makushinsky, and Chastoozersky regions;
- Zapadno-Petuhovsky, located on the territory of Petuhovsk region
of Kurgan oblast (chart attached).
2. RIGHTS AND OBLIGATIONS OF THE PARTIES
2.1 During the period that this agreement remains in effect, the Client is
obliged to inform the Consultant about all known licensed fields, offered or to
be offered at action/tender on the territory of Kurgan oblast, for geological
study, survey and exploration of hydrocarbon resources with their subsequent
extraction.
2.2 The Consultant is obliged to supply marketing and consulting services
for a period of three (3) months from the moment of signing this agreement,
while the Client is obliged to accept and compensate for the services provided.
2.3 For the purposes of performing marketing services, the Consultant must
perform the following tasks during the term of this agreement:
- collect and study geological information pertaining to previous
exploratory activities on the territory of Kurgan oblast;
- conduct interpretation of geological materials and profile
correlation within the boundaries of Vagay-Ishimskaya Basin, as well
as identify prospective horizons for exploring hydrocarbon resources;
- perform the construction of structural-lithologic maps within the
range of licensed fields offered at auction/tender;
- if the Client is required to participate in a tender for a
license or an open auction, the Consultant must provide legal guidance
and consultations throughout the entire process, up until the Client
receives title to the license.
2.4 On the basis of information, received in the process of exploration,
the Consultant provides the following into the Client's ownership:
- all and entire geological information, collected while executing
the terms of this agreement, including but not limited to: reports,
supplementary notes, maps, explanations/descriptions, and memoranda;
- investment program for geological exploration activities;
- project of license agreement terms and conditions for
Yuzhno-Voskresensky, Lebyazhevsky and Zapadno-Petuhovsky fields, with
the "per object" plan of executing geological exploration;
The parties must sign a transfer-receipt act with every transfer and receipt of
report materials.
2.5 The Consultant holds the right to attract/involve third parties for the
execution of this agreement.
3. THE COST OF SERVICES AND COMPENSATION
3.1 The cost of services under this agreement equals a sum, equivalent to
500,000 (five hundred thousand) US dollars. Costs, incurred by the Consultant
that pertain to this agreement, are included in the cost of services and are NOT
separately reimbursed.
3.2 The Consultant's services are subject to payment under the following
time periods and conditions: a sum, equivalent to 250,000 (two hundred and fifty
thousand) US dollars are paid as a down-payment within five (5) after the
signing of this agreement, and the outstanding amount is paid within thirty (30)
days after the receipt and transfer of report materials.
4. TERM OF AGREEMENT AND OTHER CONDITIONS
4.1 This agreement becomes effective as of the day of its signing by the
parties and subjects both parties to its provisions. The terms of this agreement
are applicable to only those relations between the parties, which arise after
the signing of this agreement.
4.2 Termination of this agreement entails the termination of all pertinent
parties' obligations, but does not release the parties from their
responsibilities for the violation of this agreement, if such have occurred
while executing the terms of this agreement.
4.3 The parties express mutual understanding that in case of engaging an
additional license (fourth), this agreement will be augmented with terms of
obtaining this additional license. With this, the cost of services by the
Consultant relating to acquiring this additional license will equal a sum,
equivalent to 170,000 (one hundred and seventy thousand) US dollars, whereas
other terms and conditions will be analogous to this agreement.
4.4. All amendments and additions to this agreement will carry legal affect
only when written and signed by both parties.
4.5 Disputes related to the amendment, termination and execution of this
agreement, are to be resolved in compliance with the laws of the Russian
Federation. All other matters, not stipulated by this agreement, will be
governed by the laws of the Russian Federation.
4.6 This agreement is published in two copies, each having equal legal
rights.
4.7 The terms of this agreement and stipulated obligations are confidential
and cannot be publicized. All information, obtained in relation to this
agreement is the Client's property and cannot be publicized or transferred to
third parties, except "Baltic Petroleum Limited", which is presently a technical
partner of Zauralneftegaz in the project of geological survey, study and
exploration of hydrocarbon resources on the territory of Kurgan oblast. As
technical partner, Baltic Petroleum Limited has access to all information,
obtained from the Consultant in the course of executing this agreement.
5. THE PARTIES' LEGAL ADDRESSES AND SIGNATURES
The Client: The Consultant:
LLC "Zauralneftegaz" LLC "Consulting firm "Business-Standard"
Tax Payer ID: 0000000000 Tax Payer ID: 7709370935
/s/ Xxxx X. Xxxxxxxxx /s/ I.S. Ryabokon
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(signature) (signature)
