PRODUCTION SHARING CONTRACT BETWEEN THE GOVERNMENT OF INDIA AND
PRODUCTION
SHARING CONTRACT
BETWEEN
THE
GOVERNMENT OF INDIA
AND
GEOGLOBAL
RESOURCES (BARBADOS) INC.
WITH
RESPECT TO CONTRACT AREA
IDENTIFIED
AS
BLOCK
: DS-ONN-2004/1
(Frontier
Area Block)
Β
TABLE
OF CONTENTS
Β Β Β
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Β
ARTICLE
|
Β
CONTENTS
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Β
PAGE
NO.
|
| Β |
Preamble
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1-2
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1
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Definitions
|
3-12
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2
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Participating
InterestsΒ
|
13
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3
|
License
and Exploration Period
|
14-16
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4
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Relinquishment
|
17
|
|
5
|
Work
Programme
|
18-20
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|
6
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Management
Committee
|
21-25
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|
7
|
Operatorship,
Operating Agreement and Operating Committee
|
26
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|
8
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General
Rights and Obligations of the Parties
|
27-29
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|
9
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Government
Assistance
|
30
|
|
10
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Discovery,
Development and Β Production
|
31-35
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|
11
|
Petroleum
Exploration License and Mining Lease
|
36-37
|
|
12
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Unit
Development
|
38-41
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|
13
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Measurement
of Petroleum
|
40
|
|
14
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Protection
of the Environment
|
41-45
|
|
15
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Recovery
of Cost Petroleum
|
46-48
|
|
16
|
Production
Sharing of Petroleum
|
49-51
|
|
17
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Taxes,
Royalties, Rentals, Duties etc.Β
|
52-55
|
|
18
|
Domestic
Supply, Sale, Disposal and Export of Crude Oil and
Condensate
|
56-57
|
|
19
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Valuation
of Petroleum
|
58-60
|
|
20
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Currency
and Exchange Control Provisions
|
61
|
|
21
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Natural
Gas
|
62-67
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|
22
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Employment,
Training and Transfer of Technology
|
68
|
|
23
|
Local
Goods and Services
|
69
|
|
24
|
Insurance
and Indemnification
|
70
|
|
25
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Records,
Reports, Accounts and Audit
|
71
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|
Β
ARTICLE
|
Β
CONTENTS
|
Β
PAGE
NO.
|
|
26
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Information,
Data, Confidentiality, Inspection and Security
|
72-74
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|
27
|
Title
to Petroleum, Data and Assets
|
75
|
|
28
|
Assignment
of Participating Interest
|
76-78
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|
29
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Guarantees
|
79-81
|
|
30
|
Term
and Termination of the Contract
|
82-84
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|
31
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Force
Majeure
|
85-86
|
|
32
|
Applicable
Law and Language of the Contract
|
87
|
|
33
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Sole
Expert, Conciliation and Arbitration
|
88-89
|
|
34
|
Change
of Status of Companies
|
90
|
|
35
|
Entire
Agreement, Amendments and Waiver and miscellaneous
|
91
|
|
36
|
Certificates
|
92
|
|
37
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Notices
|
93-94
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|
Β
APPENDICES
|
Β
CONTENTS
|
Β
PAGE
NO.
|
|
Appendix
A
|
Description
of the Xxxxxxxx Xxxx
|
00
|
|
Xxxxxxxx
X
|
Map
of the Contract Area
|
96
|
|
Appendix
C
|
Accounting
Procedure to the Contract
|
97-127
|
|
Appendix
D
|
Calculation
of the Investment Multiple for Production Sharing purposes
|
128-129
|
|
Xxxxxxxx
X0Β
|
Form
of Parent company Financial and Performance Guarantee
|
130-131
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|
Appendix
E2
|
Form
of Company Financial and Performance Guarantee
|
132-133
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|
Appendix-F
|
Procedure
for acquisition of goods and services
|
134-137
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|
Appendix-G
|
Performa
of Bank Guarantee to be provided pursuant to Article 00
|
000-000
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|
Appendix-H
|
Cost
estimates for Minimum Work Programme
|
141-
|
Β
PRODUCTION
SHARING CONTRACT
| Β | Β |
This
Contract made this 2nd day of March, 2007,
between:
|
|
1.
|
Β |
The
President of India, acting through the Joint Secretary, Ministry
of
Petroleum and Natural Gas (hereinafter referred to as βthe Governmentβ) of
the FIRST PART;
|
AND
| Β | Β |
M/s
GeoGlobal Resources (Barbados) Inc., a Company incorporated under
the laws
of Barbados, West Indies, (hereinafter referred to as βGGRBβ) having its
registered office at 000, 000 - 0xx
Xxxxxx XX, Xxxxxxx, Xxxxxxx, Xxxxxx, X0X 0X0 which expression shall
include its successors and such assigns as are permitted under Article
28
hereof, of the SECOND PART;
|
WITNESSETH:
WHEREAS
(1)Β The
Oilfields (Regulation and Development) Act, 1948 (53 of 1948) (hereinafter
referred to as "the Act") and the Petroleum and Natural Gas Rules, 1959, made
thereunder (hereinafter referred to as "the Rules") make provisions, inter
alia,
for the regulation of Petroleum Operations and grant of Licenses and Leases
for
exploration, development and production of Petroleum in India;
|
(2)
|
Β |
The
rules provide for the grant of Licenses and Leases in respect of
land
vested in a State Government by that State Government with the prior
approval of the Central Government;
|
|
(3)
|
Β |
Rule
5 of the Rules provides for an agreement between the Government and
the
Licensee or Lessee containing additional terms and conditions with
respect
to the License or Lease;
|
|
(4)
|
Β |
The
Government desires that the Petroleum resources which may exist in
India
be discovered and exploited with the utmost expedition in the overall
interest of India and in accordance with modern oilfield and petroleum
industry practices;
|
|
(5)
|
Β |
GGRB
have committed that it has/they have, or will acquire and make available,
the necessary financial and technical resources and the technical
and
industrial competence and experience necessary for proper discharge
and/or
performance of all obligations required to be performed under this
Contract in accordance
|
| Β |
Β
|
with
modern oilfield and petroleum industry practices and will provide
guarantees as required in Article 29 for the due performance of its
obligations hereunder; and
|
|
(6)
|
Β |
As
a result of discussions between representatives of the Government
and GGRB
on the proposal of GGRB, the Government has agreed to enter into
this
Contract with GGRB, with respect to the Contract Area identified
as
Frontier Area Block as specified in Notice Inviting Offer (NIO) block
DS-ONN-2004/1 and detailed in Appendix A and Appendix B, on the terms
and
conditions herein set forth.
|
NOW,
THEREFORE, in consideration of the premises and covenants and conditions herein
contained, IT IS HEREBY AGREED between the Parties as follows:Β Β
Β
ARTICLE
1
DEFINITIONS
In
this
Contract, unless the context requires otherwise, the following terms shall
have
the meaning ascribed to them hereunder:
1.1Β "Accounting
Procedure" means the principles and procedures of accounting set out in Appendix
C.
1.2Β βActβ
means Oilfields (Regulation and Development) Act, 1948 as amended from time
to
time.
1.3Β "Affiliate"
means a company or a body;
a)Β which
directly or indirectly controls or is controlled by a Company which is a Party
to this Contract; or
b)Β which
directly or indirectly controls or is controlled by a company which directly
or
indirectly controls or is controlled by a Company which is a Party to this
Contract.
For
the
purpose of this definition it is understood that βcontrolβ means:
i)Β ownership
by one company of more than fifty percent(50%) of the voting securities of
the
other company; or
ii)Β the
power
to direct, administer and dictate policies of the other company even where
the
voting securities held by such company exercising such effective control in
that
other company is less than fifty percent(50%) and the term βcontrolledβ shall
have a corresponding meaning.
1.4Β "Appendix"
means an Appendix attached to this Contract and made a part
thereof.
1.5
Β "Appraisal
Programme" means a programme, carried out following a Discovery in the Contract
Area for the purpose of appraising Discovery and delineating the Petroleum
Reservoirs to which the Discovery relates in terms of thickness and lateral
extent and determining the characteristics thereof and the quantity of
recoverable Petroleum therein.
1.6
Β "Appraisal
Well" means a Well drilled pursuant to an Appraisal Programme.
1.7
Β βApproved
Work Programmeβ and βApproved Budgetβ means a Work Programme or a Budget that
has been approved by the Management Committee pursuant to the provisions of
this
Contract.
1.8
Β "Arms
Length Sales" means sales made freely in the open market, in freely convertible
currencies, between willing and unrelated sellers and buyers and in which such
buyers and sellers have no contractual or other relationship, directly or
indirectly, or any common or joint interest as is reasonably likely to influence
selling prices and shall, inter alia, exclude sales (whether direct or indirect,
through brokers or otherwise) involving Affiliates, sales between Companies
which are Parties to this Contract, sales between governments and
government-owned entities, counter trades, restricted or distress sales, sales
involving barter arrangements and generally any transactions motivated in whole
or in part by considerations other than normal commercial
practices.
1.9
Β "Article"
means an article of this Contract and the term "Articles" means more than one
Article.
1.10
Β βAssociated
Natural Gasβ or βANGβ means Natural Gas producedΒ in
association with Crude Oil either as free gas or in solution, if such Crude
Oil
can by itself be commercially produced.
1.11
Β "Barrel"
means a quantity or unit equal to 158.9074 litres (forty two (42) United States
gallons) liquid measure, at a temperature of sixty (60) degrees Fahrenheit
(15.56 degrees Celsius) and under one atmosphere pressure (14.70 psia).
1.12
Β "Basement"
means any igneous or metamorphic rock, or rocks or any stratum of such nature,
in and below which the geological structure or physical characteristics of
the
rock sequence do not have the properties necessary for the accumulation of
Petroleum in commercial quantities and which reflects the maximum depth at
which
any such accumulation can be reasonably expected in accordance with the
knowledge generally accepted in the international petroleum
industry.
| 1.13Β Β |
βBudgetβ
means a budget formulated in relation to a Work
Programme.
|
1.14Β βBusiness
Dayβ means any of the Calendar Day excluding holidays.
1.15Β βCalendar
Dayβ means any of the seven (7) days of a week.
Β
1.16Β "Calendar
Month" means any of the twelve (12) months of the Calendar Year.
1.17Β "Calendar
Quarter" or βQuarterβ means a period of three (3) consecutive Calendar Months
commencing on the first day of January, April, July and October of each Calendar
Year.
1.18Β "Calendar
Year" means a period of twelve (12) consecutive Months according to the
Gregorian calendar, commencing with the first (1st)
day of
January and ending with the thirty-first (31st)
day of
December.
1.19Β "Commercial
Discovery" means a Discovery of Petroleum reserves which has been declared
as a
Commercial Discovery in accordance with the provisions of Article 10 and/or
Article 21.
Β
1.20Β "Commercial
Production" means production of Crude Oil or Condensate or Natural Gas or any
combination of these from the Contract Area (excluding production for testing
purposes) and delivery of the same at the relevant Delivery Point under a
programme of regular production and sale.
1.21
Β "Company"
for the purpose of this Contract means a company which is a Party to this
Contract and, where more than one Company is Party to the Contract, the term
"Companies" shall mean all such Companies collectively, including their
respective successors and permitted assigns under Article 28.
1.22
Β "Condensate"
means those low vapour pressure hydrocarbons obtained from Natural Gas through
condensation or extraction and refers solely to those hydrocarbons that are
liquid at normal surface temperature and pressure conditions provided that
in
the event Condensate is produced from a Development Area and is segregated
and
transported separately to the Delivery Point, then the provisions of this
Contract shall apply to such Condensate as if it were Crude Oil.
1.23
Β "Contract"
means this agreement and the Appendices mentioned herein and attached hereto
and
made an integral part hereof and any amendments made thereto pursuant to the
terms hereof.
1.24
Β "Contract
Area" means, on the Effective Date, the area described in Appendix-A and
delineated on the map attached as Appendix B or any portion of the said area
remaining after relinquishment or surrender from time to time pursuant to the
terms of this Contract (including any additional area as provided under Article
11.3).
1.25
Β "Contract
Costs" means Exploration Costs, Development Costs and Production Costs as
provided in Section 2 of the Accounting Procedure and allowed to be cost
recoverable in terms of Section 3 of the Accounting Procedure.
1.26Β "Contract
Year" means a period of twelve (12) consecutive months counted from the
Effective Date or from the anniversary of the Effective Date.
1.27Β "Contractor"
means the Company(ies).
1.28
Β "Cost
Petroleum" means, the portion of the total value of Petroleum Produced and
Saved
from the Contract Area which the Contractor is entitled to take in a particular
period, for the recovery of Contract Costs as provided in Article
15.
1.29
Β "Crude
Oil" or βOilβ or βCrudeβ means all kinds of hydrocarbons and bitumen,
both
in
solid
and in liquid form, in their natural state or obtained from Natural Gas by
condensation or extraction, including distillate and Condensate when commingled
with the heavier hydrocarbons and delivered as a blend at the Delivery Point
but
excluding Natural Gas.
1.30Β βDeepwater
Areaβ (for deepwater blocks/areas) means area falling beyond four hundred (400)
metre isobath.
1.31
Β "Delivery
Point" means, except as otherwise herein provided or as may be otherwise agreed
between the Parties having regard to international practice, the point at which
Petroleum reaches the outlet flange of the delivery facility, either offshore
or
onshore and different Delivery Point(s) may be established for purposes of
sales. Delivery Point(s) shall be approved by the Management Committee.
1.32Β "Development
Area" means part of the Contract Area which encompasses one or more Commercial
Discovery(ies) and any additional area that may be required for proper
development of such Commercial Discovery(ies) and established as such in
accordance with the provisions of the Contract.
1.33Β "Development
Costs" means those costs and expenditures incurred in carrying out Development
Operations, as classified and defined in Section 2 of the Accounting Procedure
and allowed to be recovered in terms of Section 3 thereof.
1.34Β "Development
Operations" means operations conducted in accordance with the Development Plan
and shall include, but not be limited to the purchase, shipment or storage
of
equipment and materials used in developing Petroleum accumulations, the
drilling, completion and testing of Development Xxxxx, the drilling and
completion of Xxxxx for Gas or water injection, the laying of gathering lines,
the installation of offshore platforms and installations, the installation
of
separators, tankages, pumps, artificial lift and other producing and injection
facilities required to produce, process and transport Petroleum into main Oil
storage or Gas processing facilities, either onshore or offshore, including
the
laying of pipelines within or outside the Contract Area, storage at Delivery
Point(s), the installation of said storage or Gas processing facilities, the
installation of export and loading facilities and other facilities required
for
the development and production of the said Petroleum accumulations and for
the
delivery of Crude Oil and/or Gas at the Delivery Point and also including
incidental operations not specifically referred to herein but required for
the
most efficient and economic development and production of the said Petroleum
accumulations
in accordance with modern oilfield and petroleum industry
practices.
1.35Β "Development
Plan" means a plan submitted by the Contractor for the development of a
Commercial Discovery, which has been approved by the Management Committee or
the
Government pursuant to Article 10 or Article 21.
1.36Β "Development
Well" means a Well drilled, deepened or completed after the date of approval
of
the Development Plan pursuant to Development Operations or Production Operations
for the purposes of producing Petroleum, increasing production, sustaining
production or accelerating extraction of Petroleum including production Xxxxx,
injection Xxxxx and dry Xxxxx.
1.37Β βDirectorate
General of Hydrocarbons or DGHβ means an organisation, including its successors
under the Ministry of Petroleum and Natural Gas.
1.38
Β "Discovery"
means the finding, during Petroleum Operations, of a deposit of Petroleum not
previously known to have existed, which can be recovered at the surface in
a
flow measurable by conventional petroleum industry testing methods.
1.39
Β "Discovery
Area" means that part of the Contract Area about which, based upon Discovery
and
the results obtained from a Well or Xxxxx drilled in such part, the Contractor
is of the opinion that Petroleum exists and is likely to be produced in
commercial quantities.
1.40
Β "Effective
Date" means the later of the date on which this Contract is executed by the
Parties or the date of issue ofΒ License
or date from which License has been made effectiveΒ by
the
Central Government or State Government(s) as the case may be.
1.41Β "Environmental
Damage" means soil erosion, removal of vegetation, destruction of wildlife,
pollution of groundwater or surface water, land contamination, air pollution,
noise pollution, xxxx fire, disruption to water supplies to natural drainage
or
natural flow of rivers or streams, damage to archaeological, palaeontological
and cultural sites and shall include any damage or injury to, or destruction
of,
soil or water in their physical aspects together with vegetation associated
therewith, aquatic or terrestrial mammals, fish, avi-fauna or any plant or
animal life whether in the sea or in any other water or on, in or under
land.
Β
1.42Β "Exploration
Costs" means those costs and expenditures incurred in carrying out Exploration
Operations, as classified and defined in Section 2 of the Accounting Procedure
and allowed to be recovered in terms of Section 3 thereof.
1.43Β "Exploration
Operations" means operations conducted in the Contract Area pursuant to this
Contract in searching for Petroleum and in the course of an
Appraisal
Programme and shall include but not be limited to aerial, geological,
geophysical, geochemical, palaeontological, palynological, topographical and
seismic surveys, analysis, studies and their interpretation, investigations
relating to the subsurface geology including structural test drilling,
stratigraphic test drilling, drilling of Exploration Xxxxx and Appraisal Xxxxx
and other related activities such as surveying, drill site preparation and
all
work necessarily connected therewith that is conducted in connection with
Petroleum exploration.
1.44
Β "Exploration
Period" means the period mentioned in Article 3 during which Exploration
Operations may be carried out by the Contractor as provided in Article 3
hereof.
1.45Β βExploration
Phaseβ or βPhaseβ means any of the periods specified in Article 3 in which the
Contractor is required to complete the Minimum Work Programme specified
therein.
1.46Β "Exploration
Well" means a Well drilled for the purpose of searching for undiscovered
Petroleum accumulations on any geological entity (be it of structural,
stratigraphic, facies or pressure nature) to at least a depth or stratigraphic
level specified in the Work Programme.
1.47Β βFieldβ
means an Oil Field or a Gas Field or combination of both as the case may
be.
1.48Β "Financial
Year" means the period from the first (1st)
day of
April to the thirty-first (31st)
day of
March of the following Calendar Year.
1.49Β "Foreign
Company" means a Company within the meaning of Section 591 of the Companies
Act,
1956.
1.50Β βFrontier
Areaβ means any area identified, demarcated and so notified by the Government or
its authorised agency(ies) for the purpose of exploration and exploitation
of
Oil and Gas, which is logistically and technically difficult and lacks
infrastructural and/or marketing facilities, etc.
1.51
Β "Gas"
means Natural Gas.
1.52Β βGas
Fieldβ means, within the Contract Area, a Natural Gas Reservoir or a group of
Natural Gas Reservoirs within a common geological structure or
feature.
Β
1.53Β βGovernmentβ
or βCentral Governmentβ means Government of India unless otherwise stated.
1.54Β βInvestment"
shall have the meaning ascribed to that expression in paragraph 3 of Appendix
D.
1.55Β "Investment
Multiple" means, the ratio of accumulated Net Cash Income to accumulated
Investment by the Contractor,
as
determined in accordance with Appendix D.
1.56Β βLeaseβ
means a petroleum mining lease referred to in the Rules and shall, unless
otherwise stated therein, exclude right for exploration and exploitation of
coal/ lignite bed methane (CBM).
1.57Β βLesseeβ
means the Contractor to whom a Lease is issued under the Rules for the
purpose
of carrying out Petroleum Operations in a Development Area or Contract
Area.
1.58Β "LIBOR"
means the London Inter-Bank Offer Rate for six-month maturates of United States
Dollars as quoted by the International Swaps and Derivative Association or such
other bank being a BBA LIBOR contributor panel bank as the Parties may agree.
1.59Β βLicenseβ
means a petroleum exploration license referred to in the Rules.
1.60Β "Licensee"
means the Contractor to whom a License is issued under the Rules for the purpose
of carrying out Petroleum Operations in the Contract Area.
1.61Β βMinimum
Work Programmeβ means with respect to each Exploration Phase, the Work Programme
specified in Article 5 with respect to such Phase.
1.62Β "Management
Committee" means the committee constituted pursuant to Article 6
hereof.
1.63Β "Month"
means Calendar Month.
1.64Β "Natural
Gas" means wet gas, dry gas, all other gaseous hydrocarbons, and all substances
contained therein, including sulphur, carbondioxide and nitrogen but excluding
extraction of helium, which are produced from Oil or Gas Xxxxx, excluding those
condensed or extracted liquid hydrocarbons that are liquid at normal temperature
and pressure conditions, and including the residue gas remaining after the
condensation or extraction of liquid hydrocarbons from gas.
1.65Β "Net
Cash
Incomeβ shall have the meaning assigned in paragraph 2 of Appendix-
D.
1.66Β "Non
Associated Natural Gas" or "NANG" means Natural Gas which is produced either
without association of Crude Oil or in association with such quantities of
Crude
Oil which by itself cannot be commercially produced.
1.67Β βOil
Fieldβ means, within the Contract Area, an Oil Reservoir or a group of Oil
Reservoirs within a common geological structure or feature.
1.68Β βOperatorβ
means one of the Parties comprising the Contractor, appointed as the Operator
pursuant to Article 7.
1.69Β βOperating
Agreementβ means the joint operating agreement entered by the constituents of
the Contractor in accordance with Article 7, with respect to conduct of
Petroleum Operations.
1.70Β βOperating
Committeeβ means the Committee established by that name in the Operating
Agreement pursuant to Article 7.
1.71Β "Participating
Interest" means, in respect of each Party constituting the Contractor, the
undivided share expressed as a percentage of such Partyβs participation in the
rights and obligations under this Contract.
1.72Β "Parties"
means the parties signatory to this Contract including their successors and
permitted assigns under this Contract and the term "Party" means any of the
Parties.
1.73Β "Petroleum"
means Crude Oil and/or Natural Gas existing in their natural condition but
excluding helium occurring in association with Petroleum or shale.
1.74Β "Petroleum
Operations" means, as the context may require, Exploration Operations,
Development Operations or Production Operations or any combination of two or
more of such operations, including construction, operation and maintenance
of
all necessary facilities, plugging and abandonment of Xxxxx, safety,
environmental protection, transportation, storage, sale or disposition of
Petroleum to the Delivery Point, Site Restoration and any or all other
incidental operations or activities as may be necessary.
1.75Β βPetroleum
Produced and Savedβ means gross Petroleum produced minus impurities such as
water or solids produced along with Petroleum, Petroleum recycled to the
reservoir, Petroleum used in Petroleum Operations or flared or otherwise
unavoidably lost under the provisions of the Contract.
1.76Β "Production
Costs" means those costs and expenditures incurred in carrying out Production
Operations as classified and defined in Section 2 of the Accounting Procedure
and allowed to be recovered in terms of Section 3 thereof.
1.77Β "Production
Operations" means all operations conducted for the purpose of producing
Petroleum from the Development Area after the commencement of
production
from the Development Area including the operation and maintenance of all
necessary facilities therefor.
1.78Β "Profit
Petroleumβ means, the total value of PetroleumΒ Produced
and Saved from the Contract Area in a particular period, as reduced by Cost
Petroleum and calculated as provided in Article 16.
1.79Β βRecompletionβ
means an operation whereby a completion in one zone is abandoned in order to
attempt a completion in a different zone within an existing Well bore.
1.80Β "Reservoir"
means a naturally occurring discrete accumulation of Petroleum.
1.81Β βRulesβ
means the Petroleum and Natural Gas Rules, 1959 and any amendments made thereto
from time to time.
1.82Β "Section"
means a section of the Accounting Procedure.
1.83Β "Self-sufficiency"
means, in relation to any Year, that the volume of Crude Oil and Crude Oil
equivalent of Petroleum products exported from India during that Year either
equals or exceeds the volume of Crude Oil and Crude Oil equivalent of Petroleum
products imported into India during the same Year, as determined by
Government.
1.84Β "Site
Restoration" shall mean all activities required to return a site to its state
as
of the Effective Date pursuant to the Contractorβs environmental impact study
and approved by the Government or to render a site compatible with its intended
after-use (to the extent reasonable) after cessation of Petroleum Operations
in
relation thereto and shall include, where appropriate, proper abandonment of
Xxxxx or other facilities, removal of equipment, structures and debris,
establishment of compatible contours and drainage, replacement of top soil,
re-vegetation, slope stabilisation, in-filling of excavations or any other
appropriate actions in the circumstances.
1.85Β "Statement"
or "Statements" refers to the statements required to be furnished in accordance
with Appendix-C of this Contract.
1.86Β βState
Governmentβ means any government of a state of the Union of India, which has
control over the Contract Area for the purpose of grant of Licenses/ Leases.
In
case the Contract Area covers more than one state, the State Government shall
include all such governments of those states.
1.87Β "Subcontractor"
means any company or person contracted by the Contractor or Operator to provide
goods or services with respect to Petroleum Operations.
1.88Β βUS
$β or
βUSDβ or βUS Dollarβ or βUnited States Dollarβ means the currency of the United
States of America.
1.89Β "Well"
means a borehole, made by drilling in the course of Petroleum Operations, but
does not include a seismic shot hole.
1.90Β "Work
Programme" means a work programme formulated for the purpose of carrying out
Petroleum Operations.
1.91Β "Year"
means a Financial Year.
Β
ARTICLE
2
PARTICIPATING
INTERESTS
| 2.1Β Β |
The
initial Participating Interest of the Parties comprising the Contractor
shall be as follows:
|
GGRΒ Β :Β 100%
(hundred per cent)Β
2.2
Β Except
as
provided in this Article or elsewhere in this Contract, the rights and
obligations of the Parties comprising the Contractor shall include but not
be
limited to:
| Β |
(a)
|
the
right to take Cost Petroleum in accordance with the provisions of
Article
15;
|
| Β |
(b)
|
the
right to take its Participating Interest share of Profit Petroleum
in
accordance with the provisions of Article
16;
|
| Β |
(c)
|
the
right to receive its Participating Interest share of any incidental
income
and receipts arising from Petroleum Operations;
and
|
(d)Β the
obligation to contribute its Participating Interest share of costs and expenses
including Contract Costs.Β
ARTICLE
3
LICENSE
AND EXPLORATION PERIOD
| 3.1Β Β |
The
Exploration Period shall begin on the Effective Date and shall consist
of
two (2) Exploration Phases, first exploration Phase shall be for
a period
not exceeding five (5) consecutive Contract Years and second Exploration
Phase shall be for a period not exceeding three (3) consecutive Contract
Years, for a total period not exceeding eight (8) consecutive Contract
Years unless extended pursuant to the terms of this
Contract.
|
| 3.2Β Β |
Except
as otherwise provided in this Contract, the term of the first Exploration
Phase shall not exceed four (4) consecutive Contract Years (hereinafter
referred to as the first Exploration
Phase).
|
3.3
Β Except
as
otherwise provided in this Contract, the term of the second Exploration Phase
shall not exceed three (3) consecutive Contract Years from the end of the first
Exploration Phase (hereinafter referred to as the second Exploration
Phase).
3.4
Β At
the
expiry of any Exploration Phase of the Exploration Period, provided that the
Contractor has completed the Minimum Work Programme for that Exploration Phase,
the Contractor shall have the option, exercisable by giving a written notice
to
the Government at least thirty (30) days prior to the expiry of the relevant
Phase, either:
| Β |
(a)
|
to
proceed to the next Exploration Phase on presentation of the
requisiteΒ guarantees
as provided for in Article 29; or
|
| (b)Β Β |
to
relinquish the entire Contract Area except for any Discovery Area
and any
Development Area and to conduct Development Operations and Production
Operations in relation to any Commercial Discovery in accordance
with the
terms of this Contract, and the Contractor shall have no further
obligation in respect of the Minimum Work Programme under Article
5 for
any subsequent Exploration Phases of the Exploration
Period.
|
If
neither of the options provided for in paragraphs (a) and (b) hereof is
exercised by the Contractor, this Contract shall terminate at the end of the
then current Exploration Phase and the License shall be automatically
cancelled.
|
3.5
|
If
at the end of an Exploration Phase the Minimum Work Programme for
that
phase is not completed, the time for completion of the said Minimum
Work
Programme shall be extended for a period necessary to enable completion
thereof but not exceeding six (6) months, provided that the Contractor
submits his request by giving a written notice to the Government
at least
thirty (30) days prior to the expiry of the relevant Phase and can
show
technical or other good reasons for non-completion of the Minimum
Work
Programme and the Management Committee gives its consent to the said
extension and provided further that the period of such extension
shall be
subtracted from the next succeeding Exploration Phase, if any. In
case the
Minimum Work Programme of any particular Exploration Phase is completed
before stipulated time as provided in the Article 3.2, the time so
saved
will be added to the next Exploration Phase, if so requested by the
Contractor giving a notice in writing to the Government thirty (30)
days
prior to such early completion of the Phase and in that event the
provision of the Article 3.4 (a) shall apply immediately after such
early
completion of the Phase.
|
|
3.6
|
Β |
If,
at the end of an Exploration Phase, execution of any Work Programme
is in
progress and which is in addition to the Minimum Work Programme,
such
Exploration Phase shall be extended for a period not exceeding six
(6)
months to enable completion thereof provided that the Minimum Work
Programme for such Phase has been completed andΒ the
Management Committee gives its consent to the said extension as provided
in the Article 3.5. In the event of an extension as provided for
herein,
the notice referred to in Article 3.4 shall be given at least thirty
(30)
days prior to the expiry of the relevant
extension.
|
|
3.7
|
Β |
Where
sufficient time is not available prior to the expiry of the Exploration
Period to complete an Appraisal Programme, at the request of the
Contractor, the Government shall extend the Exploration Period for
such
period, not exceeding eighteen (18) months, as may be mutually agreed
between the Parties for the Appraisal Programme to be carried out
and for
the Contractor and the Management Committee, to comply with the provisions
of Article 10 and Article 21.
|
|
3.8
|
Β |
If
no Commercial Discovery has been made in the Contract Area by the
end of
the Exploration Period, the Contract shall
terminate.
|
3.9
Β If
this
Contract is terminated in accordance with its terms, the License shall be
automatically cancelled.
|
3.10
|
Β |
If
at the expiry of the Exploration Period a development plan for development
of a Commercial Discovery and an application for Lease is under
consideration by the Management Committee or Government, as the case
may
be, pursuant to Articles 10, 11 and 21 respectively, the License
shall
continue in force with respect to that part of the Contract Area
to which
the application for the Lease relates, pending a decision on the
proposed
development plan and the application for the Lease, but
|
shall
cease to be in force and effect with respect to the remainder of the Contract
Area.
ARTICLE
4
RELINQUISHMENT
|
4.1
|
If
at the end of the first Exploration Phase, the Contractor elects,
pursuant
to Article 3.4 to continue Exploration Operations in the Contract
Area in
the second Exploration Phase, the Contractor shall have the option
to
relinquish a part of Contract Area in simple geometrical shape. In
case,
the Contractor exercises its option to relinquish a part of the Contract
Area in simple geometrical shape. In case, the Contractor excercises
its
option to relinquish a part of the Contract area at the end of first
Exploration Phase, then such area to be relinquished shall not be
less
than twenty five percent (25%) of the original Contract Area and
the
Contractor shall be entitled to retain the balances area including
any
Development Area and Discovery Area in not more than three (3) areas
of
simple geometrical shapes. Notwithstanding the provision of this
Article
4.1, the Contractor shall be permitted to retain the Development
Areas and
Discovery Areas in accordance with Article
3.4.
|
|
4.2
|
At
the end of the second Exploration Phase, the Contractor shall retain
only
Development Areas and Discovery
Areas.
|
|
4.3
|
If
the Contractor exercises the option provided for in paragraph (b)
of
Article 3.4, the Contractor shall, after any Discovery Areas or
Development Areas have been designated, relinquish all of the Contract
Area not included within the said Discovery Areas or Development
Areas.
|
|
4.4
|
As
and when the Contract is terminated under the provisions of Article
3 or
in accordance with any other provisions of this Contract, the entire
Contract Area remaining with the Contractor shall be deemed to have
been
relinquished by the Contractor as on the date on which the Contract
is
terminated.
|
|
4.5
|
Relinquishment
of all or part of the Contract Area or termination of the Contract
shall
not be construed as absolving the Contractor of any liability undertaken
or incurred by the Contractor in respect of the Contract Area during
the
period between the Effective Date and the date of such relinquishment
or
termination.
|
Β
|
4.7
|
Subject
to Article 14.9, the liability of the Contractor shall be limited
to any
liability undertaken or incurred in respect of, relating to or connected
with the Contract, and/or any claim arising out of or in relation
to the
act of negligence, misconduct, commission or omission in carrying
out
Petroleum Operations during the period between the Effective Date
and the
date of relinquishment of the Contract Area or termination or expiry
of
the Contract, as the case may
be.
|
ARTICLE
5
WORK
PROGRAMME
|
5.1
|
The
Contractor shall commence Petroleum Operations not later than six
(6)
months from the Effective Date.
|
|
5.2
|
In
addition to the Bid Work Programme Commitment in first Exploration
Phase
specified below in Article 5.2.1 and 5.3, the Contractor shall be
required
to undertake and completed the 2D seismic - API, in grid size for
32
(thirty two) KM x 32 (thirty two) KM
covering the entire Contract Area (herein after referred to as βMandatory
Work Programmeβ) during first Exploration Phase. In case due to any reason
intrinsic to the Contract Area reason(s), the Contractor is not able
to
cover any part of the Contract Area by 2D seismic survey of grid
size
specified in this Article, the Contractor shall submit a proposal
for
substitution of the short fall in the Mandatory work Programme to
the
Management Committee for approval. The Management Committee shall
consider
and take a reasoned unanimously decision on the proposal of the Contractor
in a timely manner. The Management Committee may ask the Contractor
by
giving a reasonable time, any relevant information / details / data
to
enable it to take a decision on the proposal. The Management Committee
shall ensure that the substituted work programme shall be at least
to the
shortfall in the Mandatory Work Programme when evaluated in terms
of
efforts and expenditure. In case Management Committee is not able
to
decide unanimously, the matter may be referred for approval of the
Government. In case not proposal is received from the Contractor
for the
substitution and fails to complete Mandatory Work Programme the provision
of Article 5.6 shall apply.
|
|
5.2.1
|
During
the currency of the first Exploration Phase, as per Article 3.2,
the
Contractor shall complete the following Work
Programme:
|
| Β |
(a)
|
(i)
|
A
seismic programme consisting of the acquisition, processing and
interpretation of 325
(three hundred twenty five)
line kilometres Of 2D[inclusive of mandatory work programme, 2D API
32
(thirty two)KM x 32 (thirty two)KM] seismic data in relation to the
exploration objectives;
|
| (ii)Β Β |
Gravity
magnetic survey (API) of 2500
(two thousand five hundred) stations;
|
| (iii)Β Β |
Geochemical
survey of 500
(five hundred)
stations;
|
| (iv)Β Β |
Core
holes to 500m. - 10(ten)
xxxxx
|
| 5.3Β Β |
During
the currency of the second Exploration Phase, as per Article 3.3,
the
Contractor shall complete the following Work
Programme:
|
| (a)Β Β |
(i)
A
seismic programme consisting of the acquisition, processing and
interpretation of 500
(five hundred) line
kilometers of 2D and 200
(two hundred) sq.
kms. of 3D seismic data in relation to the exploration
objectives;
|
| (b)Β Β |
(i)One
(1)
Exploration Well shall be drilled at least 2000
(two thousand) metres
of depth.
|
| (ii)Β Β |
to
Basement; and
|
| (iii)Β Β |
that
point below which further drilling becomes impracticable due to geological
conditions encountered and drilling would be abandoned by a reasonable
prudent operator in the same or similar circumstances. Abandonment
of
drilling under this provision by the Contractor, would require unanimous
approval of the Management Committee. Β
|
|
5.4
|
The
actual depth objective for each of the Xxxxx shall be determined
by the
Contractor in the light of the advice of the Management Committee
before
the commencement of the drilling. Each Well which reaches the geological
objective for which the depth objective was determined shall be deemed
to
have been drilled to the depth objective or to actual total depth,
whichever is greater. The Contractor shall ensure that all relevant
subsurface, geological, geochemical and geophysical information necessary
for the attainment of the exploration objectives in accordance with
modern
oilfield and petroleum industry practices is obtained during exploratory
drilling.
|
|
5.5
|
If
the depth/geological objective of the Well is not achieved for any
reason,
a substitute Well shall be drilled of the same specifications as
stipulated in and subject to Articles 5.2, & 5.3, as the case may
be.
|
|
5.6
|
Subject
to Article 31, the Contractor undertakes to complete the Mandatory
Work
Programme and Minimum Work Programme in accordance with Articles
5.2,
5.2.1, 5.3 and 5.5, as the case may be. In the event that the Contractor
fails to fulfill the said Mandatory Work Programme or Minimum Work
Programme or both by the end of the relevant Exploration Phase or
early
termination of the Contract by the Government for any reason whatsoever,
each Company constituting the Contractor shall pay to the Government,
within sixty (60) days following the end of the relevant Exploration
Phase
or early termination of the Contract, as may be the case, its
Participating Interest shall for an amount which, when evaluated
in terms
of the Mandatory Work Programme or Minimum Work Programme specified
for
the relevant Phase, is equal to the amount which would be required
to
completed the said Mandatory Work Programme or Minimum Work Programme
or
both. For determination of this amount, available relevant information
including the Budget and modern oilfield and petroleum industry practices
may be taken into account.
|
|
5.7
|
If
the Minimum Work Programme for the second Exploration Phase has been
completed earlier than eighteen months from the end of the Phase,
the
Contractor shall meet with the Government to discuss the possibility
of
early relinquishment, unless the Contractor undertakes further work
with
the approval of the Management
Committee.
|
|
5.8
|
In
the event that the Contractor has carried out work in excess of the
Minimum Work Programme in any Exploration Phase, the excess
explorationΒ work
done shall be set off against the Minimum Work Programme for the
following
Exploration Phase.
|
|
5.9
|
As
soon as possible after the Effective Date and thereafter within ninety
(90) days before commencement of each following Year, the Contractor
shall
submit to the Management Committee the Work Programmes and the Budgets
relating to Petroleum Operations to be carried out during the relevant
Year. Work Programme and Budgets for the Exploration Period shall
include
work sufficient to meet the relevant Minimum Work Programme with
respect
to each Exploration Phase specified in this Article
5.
|
|
5.10
|
The
Contractor may propose modifications or revisions to the details
of a
reviewed or an approved Work Programme and Budget, as the case may
be, in
the light of the then existing circumstances and shall submit to
the
Management Committee modifications or revisions to the Work Programme
and
Budget referred to in Article 5.9.
|
|
5.11
|
Work
Programmes and Budgets and any modifications or revisions thereto
relating
to Exploration Operations shall be submitted to the Management Committee
for review and advice as provided in Article 6.5. Work Programmes
and
Budgets related to Development Operations and Production Operations
and
any modifications or revisions thereto shall be submitted to the
Management Committee for approval as provided in Article 10 and Article
21.
|
ARTICLE
6
MANAGEMENT
COMMITTEE
|
6.1
|
There
shall be constituted a committee to be called the Management Committee
with functions as stated herein below.
|
|
6.2
|
Government
shall nominate two (2) members representing Government in the Management
Committee, whereas each Company constituting the Contractor shall
nominate
one (1) member each to represent Company in the Management Committee
provided that in case the Contractor constitutes only one Company,
that
Company shall have two (2) members. The Parties shall nominate the
members
to the Management Committee within thirty (30) days of the Effective
Date.
|
|
6.3
|
Each
Party may nominate alternate members with full authority to act in
the
absence and on behalf of the members nominated under Article 6.2
and may,
at any time, nominate another member or alternate member to replace
any
member nominated earlier by notice to other members of the Management
Committee.
|
|
6.4
|
One
representative of the Government shall be designated as the Chairman
of
the Management Committee and the second representative of the Government
shall be designated as the Deputy Chairman. The member of the Operator,
or
the member designated by the Operator where Operator has two (2)
members
in the Management Committee shall be designated as the Secretary
of the
Committee.
|
|
6.5
|
Operator
on behalf of the Contractor with the approval of Operating
Committee,
if
constituted under the Article 7.4, or in case of a single Party
constituting the Contractor, then that Party shall submit following
matters to the Management Committee for review and it shall have
advisory
functions:
|
| (a)Β Β |
the
annual Work Programmes and Budgets in respect of Exploration Operations
and any revisions or modifications
thereto;
|
| (b)Β Β |
annual
work progress and costs incurred
thereon;
|
| (c)Β Β |
proposals
for surrender or relinquishment of any part of the Contract Area
by the
Contractor;
|
| (d)Β Β |
proposals
for an Appraisal Programme or revisions or additions thereto and
the
declaration of a Discovery as a Commercial
Discovery;
|
| (e)Β Β |
any
other matter required by the terms of this Contract to be submitted
to it
for review or advice; and
|
| (f)Β Β |
any
other matter which the Contractor decides to submit for review or
advice
including matters concerning inter-Party
relationships.
|
|
6.6
|
The
following matters shall be submitted by Operator on behalf of the
Contractor with the approval of Operating Committee, if constituted
under
the Article 7.4, or in case of single Party constituting the Contractor,
then by that Party to the Management Committee for
approval:
|
| (a)Β Β |
Annual
Work Programmes and Budgets in respect of Development Operations
and
Production Operations and any modifications or revisions
thereto;
|
(b)
proposals
for the approval of development plans as may be required under this Contract,
or
modifications or revisions to a Development Plan;
(c)
determination
of a Development Area;
(d)
appointment
of auditors along with scope of audit, approval and adoption of audited report
submitted under Article 25.4.3;
(e)
collaboration
with licensees or contractors of other areas;
(f)
claims
or
settlement of claims for or on behalf of or against the Contractor in excess
of
limits fixed by the Management Committee from time to time;
(g)proposal
about abandonment plan/Site Restoration as required to be submitted under
Article 14.10;
(h)
any
other
matter required by the terms of this Contract to be submitted for the approval
of the Management Committee;
(i)
any
other
matter which the Contractor decides to submit to it; and
(j)
any
matter, which Government refers to the Management Committee for its
consideration and reasoned opinion.
|
6.7
|
Unless
agreed otherwise by all the members of the Management Committee,
the
Management Committee shall meet at least once every six (6) months
during
the Exploration Period and thereafter at least once every three (3)
months
or more frequently at the request of any member. The Secretary, with
the
approval of the Chairman, shall convene each meeting by notifying
the
members twenty eight (28) days prior to such a meeting (or a shorter
period of notice if the members unanimously so agree) of the time
and
place of such meeting and the purpose thereof and shall include in
such
notice a provisional agenda for such meeting. The Chairman shall
be
responsible for processing the final agenda for such meeting and
the
agenda shall include all items of business requested by the members
to be
included, provided such requests are received by the Secretary at
least
ten (10) days prior to the date fixed for the meeting. The Secretary
shall
forward the agenda to the members at least seven (7) Business Days
prior
to the date fixed for the meeting. Matters not included in the agenda
may
be taken up at the meeting by any member with the unanimous consent
of all
the members whether present or not present at the
meeting.
|
|
6.8
|
The
Chairman or the Deputy Chairman, as may be the case, shall preside
over
the meetings of the Management Committee and, in their absence, any
other
member representing Government and present shall preside over the
meetings.
|
|
6.9
|
Secretary
to the Management Committee shall be responsible, inter alia, for
preparation of the minutes of every meeting in the English language
and
provision to every member of the Management Committee with two (2)
copies
of the minutes approved by the Chairman within three (3) Business
Days of
the meeting. Unless agreed otherwise by all the members of the Management
Committee, the minutes of a meeting shall be finalised by the Management
Committee within three (3) Business Days thereafter. Members shall
notify
the Chairman and the other members of their approval of the minutes
by
putting their signatures on one copy of the minutes and returning
the same
to the Chairman. Members may suggest any modification to the minutes
while
returning the signed copy. Members may also communicate with the
Chairman
through telex, cable, or facsimile or any other effective mode of
communication agreed by all the members of the Management Committee.
If
the Chairman or any other member does not agree with the modification
to
the minutes suggested by any member, the matter shall be brought
to the
attention of the other members and resubmitted to the Management
Committee
at the next meeting and the minutes shall stand approved as to all
other
matters. If a member fails to respond within the aforesaid three
(3)
Business Day period, unless agreed otherwise by the Management Committee
as herein provided, the minutes shall be deemed to be approved by
such
member.
|
|
6.10
|
Any
member shall be entitled, if either he/she or his/her alternate is
unable
to attend a meeting, to cast his vote by telex, cable, facsimile
transmission or any other effective mode of communication agreed
by all
the members of the Management Committee and received by the Chairman
prior
to the date on which the vote is taken in the course of the meeting
or by
giving a prior written notice to all other members, appoint a member,
with
his/her prior consent, representing another Party in the Management
Committee as its proxy to attend a meeting and to exercise the appointing
memberβs right to vote at the meeting whether as directed by the
appointing member or otherwise. A member appointed as a proxy and
attending a meeting shall be present in two separate capacities and
vote
accordingly. All such votes shall have the same effect as if that
member
had been present and so voted at the
meeting.
|
|
6.11
|
In
case of urgency, where Operating Committee has made a recommendation
together with reasons to the Chairman requiring consideration of
a matter
by the Management Committee without delay, Chairman, after being
satisfied
may waive the requirements of notice period for the meeting and
circulation of agenda to such extent as would be consistent with
the
urgency and consideration of the matter by the Management Committee.
Alternatively, Chairman may approve submission of notice and agenda
to
members by telex or facsimile transmission or any other effective
mode of
communication agreed by all the members of the Management Committee,
receipt of which shall be confirmed by telephone by the Chairman
requiring
the members to confirm their decision by these modes of communication
not
later than three (3) Business Days from confirmation
of
|
receipt
of notice and agenda by the member. Any member failing to convey the decision
within the time limits of three (3) Business Days shall be deemed to have voted
in favour of the proposal. The result of any such vote shall be notified by
the
Chairman to all the members.
|
6.12
|
The
meetings of the Management Committee shall be held in India, unless
otherwise mutually agreed by the members of the Management Committee.
All
expenses of the members of the Management Committee attending meetings
shall be borne by the respective Party and shall in no event be cost
recoverable.
|
|
6.13
|
All
matters requiring the approval of the Management Committee shall
be
generally approved by a unanimous vote of the members of the Management
Committee present as well as the views of the members received by
some
other mode of communication. In case, unanimity is not achieved in
decision making process within a reasonable period as may be required
under the circumstances, the decision of the Management Committee
shall be
approved by the majority Participating Interest of seventy percent
(70%)
or more with Government representative having a positive vote in
favour of
the decision.
|
|
6.14
|
There
shall be a quorum of the Management Committee for holding a meeting
and
making decisions with each Party to the Contract represented by at
least
one of its nominated members in the Management Committee either present
in
person or represented as per Article 6.10. If there is no quorum
in a
meeting, the meeting shall stand postponed to the same day and time
in the
next week and if quorum is not present or represented even in the
next
meeting and subject to a Government member being present, the members
present and represented will constitute the quorum and take decisions
and
decisions taken by such quorum shall be final and binding to all
the
absenting Parties or Parties not represented, notwithstanding the
provisions of Article 6.13.
|
|
6.15
|
The
Management Committee, if it considers necessary, may appoint legal,
financial or technical subcommittees comprised of such representatives
as
may be agreed by the Management Committee to consider any matter
requiring
approval or decision of the Management Committee. Such sub-committee
expenses shall form part of Contract Cost with relevant cost
classification as decided by the Management Committee pursuant to
the
Section 2 of the Accounting Procedure and will be cost
recoverable.
|
|
6.16
|
In
the event a Party to the Contract is not entitled to vote in the
Operating
Committee meetings being in default under the Operating Agreement,
and
Operator notifies Chairman of the default by the Party, then the
issue of
exercising voting right by such defaulting Party in the Management
Committee meetings shall be discussed by the Management Committee.
The
Management Committee excluding the defaulting Party, after duly hearing
the views of the defaulting Party on the matter of their default
under
Operating Agreement, shall
|
take
unanimous decision on exclusion or otherwise of the defaulting Party from voting
in the Management Committee meetings. For avoidance of any doubt, it is clearly
understood that unanimous decision by the Management Committee referred to
in
this Article 6.16 excludes defaulting Party from such decision. Accordingly,
if
the Management Committee decides to exclude the defaulting Party from voting
in
the Management Committee, then the said Party shall not be entitled to vote
in
the meetings of the Management Committee under Contract. In that event,
notwithstanding the provisions of Article 6.13, decisions of the Management
Committee shall be made by vote of the members of the Management Committee
excluding the member appointed by the said Party in default and any vote or
purported vote by such member in the Management Committee shall be ignored.
The
said Party in default shall be bound by all decisions of the Management
Committee. The non-defaulting Parties under the Operating Agreement shall
indemnify Government against any claims of whatsoever nature which may arise
due
to exclusion of defaulting Party from voting in the Management
Committee.
ARTICLE
7
OPERATORSHIP,
OPERATING AGREEMENTAND OPERATING COMMITTEE
|
7.1
|
GGRB
shall be the Operator for the purpose of carrying out Petroleum Operations
pursuant to this Contract during the term of the
Contract.
|
|
7.2
|
No
change in the operatorship shall be effected without the consent
of the
Government and such consent shall not be unreasonably
withheld.
|
|
7.3
|
The
functions required of the Contractor under this Contract shall be
performed by the Operator on behalf of all constituent(s) of the
Contractor subject to, and in accordance with, the terms and provisions
of
this Contract and generally accepted modern oilfield and petroleum
industry practices, provided, however, that this provision shall
not be
construed as relieving the constituent(s) of the Contractor from
any of
its obligations or liability under the
Contract.
|
7.4Β Within
forty five (45) days of the Effective Date or such longer period as may be
agreed to by Government, the Companies constituting the Contractor shall execute
an Operating Agreement. The said agreement shall be consistent with the
provisions of this Contract and shall provide for, among other
things:
Β
(a)Β the
appointment, resignation, removal and responsibilities of the
Operator;Β
(b)Β the
establishment of an Operating Committee comprising of an agreed number of
representatives of the Companies chaired by a representative of the
Operator;Β Β
| Β |
(c)
|
functions
of the said Operating Committee taking into account the provisions
of the
Contract, procedures for decision making, frequency and place of
meetings;
and
|
| Β |
(d)
|
contribution
to costs, default, sole risk, disposal of Petroleum and assignment
as
between the Parties to the Operating
Agreement.
|
|
7.4.1
|
Operator
shall provide to the Government a copy of the duly executed Joint
Operating Agreement within thirty (30) days of the Execution Date
or such
longer period as may be agreed to by the
Government.
|
|
7.4.2
|
In
case a single Company constitutes the Contractor, the provisions
of
Article 7.4 and 7.4.1 shall not be applicable. However, in case of
increase in the number of constituents of the Contractor, the provisions
of Article 7.4 and 7.4.1 shall apply from the date of such increase
in the
number of the constituents.
|
ARTICLE
8
GENERAL
RIGHTS AND OBLIGATIONS OF THE PARTIES
|
8.1
|
Subject
to the provisions of this Contract, the Contractor shall have the
following rights:
|
| Β |
(a)
|
subject
to the provisions of Article 12, the exclusive right to carry out
Petroleum Operations to recover costs and expenses as provided in
this
Contract. The right shall exclude exploitation of coal/lignite bed
methane
(CBM) by the Contractor in the Contract
Area;
|
| Β |
(b)
|
the
right to use, free of charge, such quantities of Petroleum produced
as are
reasonably required for conducting Petroleum Operations in the Contract
Area in accordance with generally accepted modern oilfield and petroleum
industry practices;
|
| Β |
(c)
|
the
right to lay pipelines, build roads, construct bridges, ferries,
aerodromes, landing fields, radio telephones and related communication
and
infrastructure facilities and exercise other ancillary rights as
may be
reasonably necessary for the conduct of Petroleum Operations subject
to
such approvals as may be required and the applicable laws in force
from
time to time for the regulation and control
thereof;
|
| Β |
(d)
|
the
right to use all available technical data, seismic and well information,
maps, samples etc. of the Contract Area as on the Effective Date,
free of
charge, subject to nominal copying/reproduction costs for further
Petroleum Operations. The Contractor shall submit the list of all
data
required by them to Directorate General of Hydrocarbons (DGH) based
on the
list of data provided in the information docket for the block pertaining
to the Contract Area as soon as possible but not later than one hundred
and eighty (180) days from the execution of the Contract and the
same, if
available and reproducible, shall be made available to the Contractor
in
the office of DGH within ninety (90) days from the submission of
such
request for data by the Contractor, provided the Effective Date of
the
Contract has commenced and the Contractor has furnished relevant
guarantees under Article 29 of the
Contract.
|
| Β |
(e)
|
such
other rights as are specified in this
Contract.
|
|
8.2
|
The
Government reserves the right to itself, or to grant to others the
right,
to prospect for and mine minerals or substances other than Petroleum
within the Contract Area; provided, however, that if after the Effective
Date, others are issued rights, or the Government proceeds directly
to
prospect for and mine in the Contract Area any minerals or substances
other than Petroleum, the Contractor shall use its best efforts to
avoid
obstruction to or interference with such operations within the Contract
Area and the third parties and/or the
Government,
|
as
the
case may be, shall use best efforts to ensure that operations carried out do
not
obstruct or unduly interfere with Petroleum Operations in the Contract
Area.
|
8.3
|
The
Contractor shall having due regard to modern oilfield and petroleum
industry practices :
|
| Β |
(a)
|
except
as otherwise expressly provided in this Contract, conduct all Petroleum
Operations at its sole risk, cost and expense and provide all funds
necessary for the conduct of Petroleum Operations including 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 Subcontractors;
|
| Β |
(b)
|
conduct
all Petroleum Operations within the Contract Area diligently,
expeditiously, efficiently and in a safe and workmanlike manner pursuant
to the Work Programme formulated in accordance with
Contract;
|
| Β |
(c)
|
ensure
provision of all information, data, samples etc. which may be required
to
be furnished under the applicable laws or under this
Contract;
|
| Β |
(d)
|
ensure
that all equipment, materials, supplies, plant and installations
used by
the Contractor, the Operator, and Subcontractors comply with generally
accepted standards and are of proper construction and kept in safe
and
good working order;
|
| Β |
(e)
|
in
the preparation and implementation of Work Programmes and in the
conduct
of Petroleum Operations, follow modern oilfield and petroleum industry
practices with such degree of diligence and prudence reasonably and
ordinarily exercised by experienced parties engaged in a similar
activity
under similar circumstances and
conditions;
|
| Β |
(f)
|
the
procedure for acquisition of goods and services, as of the Effective
Date,
shall be as per the Appendix-F of this Contract. Based on economic
considerations and generally accepted practices in the international
petroleum industry with the objective of ensuring cost and operational
efficiency in the conduct of Petroleum Operations, the Appendix-F
to this
Contract may be modified or changed with the prior approval of the
Management Committee when circumstances so
justify;
|
| Β |
(g)
|
after
the designation of a Development Area, pursuant to this Contract,
forthwith proceed to take all necessary action for prompt and orderly
development of the Development Area and for the production of Petroleum
in
accordance with the terms of this
Contract;
|
| Β |
(h)
|
appoint
a technically competent and sufficiently experienced representative,
and,
in his absence, a suitably qualified replacement therefor, who shall
be
resident in India and who shall have full authority to take such
steps as
may be necessary to implement this Contract and whose name(s) shall,
on
appointment within ninety (90) days after commencement of the first
Contract Year, be made known to the
Government;
|
| Β |
(i)
|
provide
acceptable working conditions, living accommodation and access to
medical
attention and nursing care for all personnel employed in Petroleum
Operations;
|
| Β |
(j)
|
carry
out such other obligations as are specified in this Contract, in
particular those specified in Article 14; and
|
| Β |
(k)
|
be
always mindful of the rights and interests of India in the conduct
of
Petroleum Operations.
|
ARTICLE
9
GOVERNMENT
ASSISTANCE
|
9.1
|
Upon
application in the prescribed manner, and subject to compliance with
applicable laws and relevant procedures, the Government or its nominee
will:
|
| Β |
(a)
|
use
their good offices to provide the right of ingress and egress from
the
Contract Area and any facilities used in Petroleum Operations, wherever
located, and which may be within their
control;
|
| Β |
(b)
|
use
their good offices, when necessary, to assist the Contractor in
procurement or commissioning of facilities required for execution
of Work
Programmes including necessary approvals, permits, consents,
authorisations, visas, work permits, Licenses including Licenses
and
Leases, rights of way, easement, surface rights and security protection
at
the Contractorβs cost, required pursuant to this Contract and which may be
available from resources within its control;
and
|
| Β |
(c)
|
in
the event that onshore facilities are required outside the Contract
Area
for Petroleum Operations including, but not limited to, storage,
loading
and processing facilities, pipelines and offices, use their good
offices
in assisting the Contractor to obtain from the authorities of the
state in
which such facilities are required, such licenses, permits,
authorizations, consents, security protection at the Contractorβs cost,
surface rights and easements as are required for the construction
and
operation of the said facilities by the
Contractor.
|
ARTICLE
10
DISCOVERY,
DEVELOPMENT AND PRODUCTION
|
10.1
|
If
and when a Discovery is made within the Contract Area, the Contractor
shall:
|
| Β |
(a)
|
forthwith
inform the Management Committee and Government of the
Discovery;
|
| Β |
(b)
|
promptly
thereafter, but in no event later than a period of thirty (30) days
from
the date of the Discovery, furnish to the Management Committee and
Government particulars, in writing, of the Discovery;
and
|
| Β |
(c)
|
promptly
run tests to determine whether the Discovery is of potential commercial
interest and, within a period of sixty (60) days after completion
of such
tests, submit a report to the Management Committee containing data
obtained from such tests and its analysis and interpretation thereof,
together with a written notification of whether, in the Contractor's
opinion, such Discovery is of potential commercial interest and merits
appraisal.
|
|
10.2
|
If
the Contractor determines to conduct a drill stem or production test,
in
open hole or through perforated casing, with regard to any Exploration
Well, it shall notify the Government of the time of such test at
least
forty eight (48) hours prior to the proposed test, and the Government
shall have the right to have a representative present during such
test.
|
|
10.3
|
If,
pursuant to Article 10.1 (c), the Contractor notifies the Management
Committee that the Discovery is of potential commercial interest,
the
Contractor shall prepare and submit to the Management Committee within
one
hundred and twenty (120) days of such notification, a proposed Appraisal
Programme with a Work Programme and Budget to carry out an adequate
and
effective appraisal of such Discovery designed to achieve both the
following objectives: (i) determine without delay, and, in any event,
within the period specified in Article 10.5, whether such Discovery
is a
Commercial Discovery and (ii) determine, with reasonable precision,
the
boundaries of the area to be delineated as the Development
Area.
|
|
10.4
|
The
proposed Appraisal Programme shall be reviewed by the Management
Committee
within thirty (30) days after submission thereof pursuant to Article
10.3.
The said Appraisal Programme, together with the Work Programme and
Budget
submitted by the Contractor, which may be revised or modified or
amended
by the Contractor in light of the Management Committee review, shall
be
adopted as the Appraisal Programme and the Contractor shall promptly
commence implementation thereof; and the annual Budget for the Exploration
Period, adopted pursuant to Article 5, shall be revised
accordingly.
|
10.5
Β The
Contractor shall in respect of a Discovery of Crude Oil advise the Management
Committee by notice in writing within a period of eighteen (18) months from
the
date on which the notice provided for in Articale 10.1(c) was delivered, whether
such Discovery should be declared a Commercial Discovery or not. Such notice
shall be accompanied by a report on the Discovery setting forth all relevant
technical and economic data including estimated recoverable reserves,
sustainable production levels, estimated development and production
expenditures, prevailing and forecasted prices, and other pertinent technical
and economic factors according to modern oilfield and petroleum industry
practices as well as all evaluations, interpretations and analyses of such
data
and feasibility studies relating to the Discovery prepared by or for the
Contractor, with respect to the Discovery and any other relevant information.
If
the Contractor is of the opinion that Crude Oil has been discovered in
commercial quantities, it shall submit the proposal to the Management Committee
for review that the Discovery be declared a Commercial Discovery. In the case
of
a Discovery of Gas, the provisions of Article 21 shall apply.
|
10.6
|
The
Management Committee shall, within forty (40) days of the date of
the
notice referred to in Article 10.5, review the proposal of the Contractor
and request any other additional information it may reasonably require so
as to complete the review of the proposal made by the Contractor.
The
Contractor shall furnish the additional information within thirty
(30)
days from the date of the request. The review by the Management Committee
shall be made and conveyed to the Contractor within the later of
(a)
ninety (90) days from the date of notice referred to in Article 10.5
or
(b) forty (40) days of receipt of such other information as may be
required under this Article.
|
|
10.7
|
If
the Contractor declares the Discovery a Commercial Discovery after
taking
into account the advice of the Management Committee as referred in
the
Article 10.6, within two hundred (200) days of the declaration of
the
Discovery as a Commercial Discovery, the Contractor shall submit
to the
Management Committee a comprehensive development plan of the Commercial
Discovery which shall:
|
| Β |
(a)
|
relate
to the Discovery Area and contain a Reservoir or part thereof and
the
boundaries of the proposed Development
Area;
|
| Β |
(b)
|
be
designed to ensure the most efficient, beneficial and timely use
of the
Petroleum resources discovered; and
|
| Β |
(c)
|
be
preparedΒ in
accordance with sound engineering, economic, safety and environmental
principles recognised in the generally accepted modern oilfield and
petroleum industry practices.
|
Such
plan
shall contain detailed proposals by the Contractor for the construction,
establishment and operation of all facilities and services for and incidental
to
the recovery, storage and transportation of the Petroleum from the
proposed
Development
Area to the Delivery Point together with all data and supporting information
including but not limited to:
| Β |
(i)
|
description
of the nature and characteristic of the Reservoir, data, statistics,
interpretations and conclusions on all aspects of the geology, Reservoir
evaluation, Petroleum engineering factors, Reservoir models, estimates
of
reserve in place, possible production magnitude, nature and ratio
of
Petroleum fluids and analysis of producible
Petroleum;
|
| Β |
(ii)
|
outlines
of the development project and/or alternative development projects,
if
any, describing the production facilities to be installed and the
number
of Xxxxx to be drilled under such development project and/or alternative
development projects, if any;
|
| Β |
(iii)
|
estimate
of the rate of production to be established and projection of the
possible
sustained rate of production in accordance with modern oilfield and
petroleum industry practices under such development project and/or
alternative development projects, if any, which will ensure that
the area
does not suffer an excessive rate of decline of production or an
excessive
loss of Reservoir pressure;
|
| Β |
(iv)
|
estimates
of Development Costs and Production Costs under such development
project
and/or alternative development projects, if
any;
|
| Β |
(v)
|
Contractor's
recommendations as to the particular project that it would prefer;
|
| Β |
(vi)
|
Work
Programme and Budget for development proposals relating to the proposed
Development Area;
|
| Β |
(vii)
|
anticipated
adverse impact on the environment and measures to be taken for prevention
or minimisation thereof and for general protection of the environment
in
conduct of operations;
|
| Β |
(viii)
|
measures
to be taken for the health and safety of persons employed in Petroleum
Operations;
|
| (ix)Β Β |
the
information required in Article 21.
|
|
10.8
|
A
proposed development plan submitted by the Contractor pursuant to
Article
10.7 may be approved by the Management Committee within one hundred
and
ten (110) days of submission thereof or eighty (80) days of receipt
of any
additional information requested by the Management Committee. In
case the
Management Committee requires any reasonable additional information,
the
same shall be requested by it within eighty (80) days from the submission
of the development plan. The Contractor shall provide such additional
information within thirty (30) days from the request by the Management
Committee. If, within a period of one hundred and ten (110) days
after
submission of a proposed development plan or eighty (80) days from
the
receipt of any additional information, where asked by the Management
Committee, the Management Committee fails to convey a decision to
the
Contractor, the Contractor shall have option to submit the proposal
to the
Government. Also, where, the Management Committee rejects the development
plan of the Contractor, the Contractor can submit the
development
|
plan
for
the approval of the Government. The Government shall respond on the proposed
development plan submitted by the Contractor within one hundred and ten (110)
days. In case Government refuses to approve the proposed development plan,
it
shall convey the reasons for such refusal and the Contractor shall be given
opportunity to make appropriate modifications to meet concerns of Government
and
the provisions of the foregoing Article and re-submit the plan within ninety
(90) days from the date of receipt of refusal from the Government.
|
10.9
|
A
Development Plan approved by the Management Committee or Government,
as
may be the case, from time to time shall commit the Contractor to
the
obligations stipulated in Articles 10.10 to
10.12.
|
|
10.10
|
Work
Programmes and Budgets for Development and Production Operations
shall be
submitted to the Management Committee as soon as possible after the
approval of a Development Plan under Article 10.8 and thereafter
not later
than 31st December each Year in respect of the Year immediately
following.
|
|
10.11
|
The
Management Committee, when considering any Work Programme and Budget,
may
require the Contractor to prepare an estimate of potential production
to
be achieved through the implementation of the said Work Programme
and
Budget for each of the three (3) Years following the Year to which
the
Work Programme and Budget relate. If major changes in yearly estimates
of
potential production are required, these shall be based on evidence
necessitating such changes.
|
|
10.12
|
Not
later than the fifteenth (15th)
of January each Year, in respect of the Year immediately following
commencement of Commercial Production, the Contractor shall determine
the
"Programme Quantity" with the approval of the Management Committee.
The
Programme Quantity for any Year shall be the maximum quantity of
Petroleum
based on Contractor's estimates, as approved by the Management Committee,
which can be produced from a Development Area consistent with modern
oilfield and petroleum industry practices and minimising unit production
cost, taking into account the capacity of the producing Xxxxx, gathering
lines, separators, storage capacity and other production facilities
available for use during the relevant Year, as well as the transportation
facilities up to the Delivery
Point.
|
|
10.13
|
Proposed
revisions to the details of a Development Plan or an annual Work
Programme
or Budget in respect of Development and Production Operations shall,
for
good cause and if the circumstances so justify, be submitted for
approval
to the Management Committee.
|
|
10.14
|
In
the event the area encompassing the Commercial Discovery extends
beyond
the Development Area designated in the Development Plan, either within
the
original Contract Area but subsequently relinquished or, outside
the
original Contract Area, the Management Committee may make recommendations
to the Government
|
concerning
enlargement of the Development Area, provided the same was not awarded to any
other company by the Government or is not held by any other party or not on
offer by the Government and no application for a License or Lease is pending
with the Government. However, in case the area is held by any other party or
on
offer by the Government or application for License or Lease is pending with
the
Government, the Management Committee shall notify the same to the Government
for
further action on the matter. Government
may consider such request for extension at its sole discretion and on terms
and
conditions, which it may consider fit.
ARTICLE
11
PETROLEUM
EXPLORATION LICENSE AND MINING LEASE
|
11.1
|
The
Contractor shall submit an application for grant of License in respect
of
the Contract Area, as early as possible, but not later than fifteen
(15)
Business Days from the date of execution of this
Contract.
|
|
11.2
|
On
submission of a development plan of a Commercial Discovery pursuant
to
Article 10.7, the Contractor shall submit an application for a Lease
in
respect of the proposed Development Area to the relevant State
Government(s).
|
|
11.3
|
Where
a part of a Reservoir in respect of which a Commercial Discovery
has been
declared extends beyond the Contract Area, subject to Article 10.14
such
area may be included in the proposed Development Area, in relation
to
which application for a Lease is made, on terms and conditions as
decided
by the Central Government; provided that such area
is:
|
| Β |
(a)
|
not
subject to a license or lease granted to any other
person;
|
| Β |
(b)
|
not
the subject of negotiations/bidding or contract awarded for a license
or
lease; and
|
| Β |
(c)
|
available
for licensing (i.e. is not an area over which Petroleum Operations
are
excluded).
|
|
11.4
|
Where
a Development Plan has been approved pursuant to Article 10 and the
Contractor has complied with the terms and conditions of the License
and
this Contract and is not in breach of any of the terms thereof, or
the
provisions of any law and subject to normal Government
clearances/approvals being obtained by the Contractor as applicable
before
grant/issue of the Lease, the Central Government will assist the
Contractor in obtaining the Lease from the relevant State Government(s)
over the Development Area as agreed, subject to Article 11.5 to enable
the
Contractor to carry out Petroleum Operations in the Development Area
in
accordance with the Development
Plan.
|
|
11.5
|
The
Lease shall be granted for an initial period of twenty (20) years
from the
date of grant thereof subject to:
|
| Β |
(a)
|
cancellation
in accordance with its terms or for termination of this Contract
in
accordance with its terms;
|
| Β |
(b)
|
extension
by mutual agreement between the Parties for five (5) years or such
period
as may be agreed after taking into account the balance recoverable
reserve
and balance economic life of the
Field/Development
|
Area
from
the expiry of the initial period provided that in the event of a Commercial
production of Non Associated Natural Gas the extension may be for a period
of
ten (10) years or such period as may be mutually agreed between the Parties
after taking into account the balance recoverable reserves and balance economic
life of the Field/Development Area from the date of expiry of the initial term;
and
| Β |
(c)
|
the
terms of this Contract and other terms and conditions as set forth
in such
Lease be consistent with this Contract and the relevant
legislation.
|
ARTICLE
12
UNIT
DEVELOPMENT
|
12.1
|
If
a Reservoir in a Discovery Area is situated partly within the Contract
Area and partly in an area in India over which other parties have
a
contract to conduct petroleum operations and both parts of the Reservoir
can be more efficiently developed together on a commercial basis,
on
receiving information in writing from any party to these contracts
or any
information on this from any bonafide source, the Government may,
for
securing the more effective recovery of Petroleum from such Reservoir,
by
notice in writing to the Contractor, require that the
Contractor:
|
| Β |
(a)
|
collaborate
and agree with such other parties on the joint development of the
Reservoir ;
|
| Β |
(b)
|
submit
such agreement between the Contractor and such other parties to the
Government for approval within one hundred and eighty (180) days;
and
|
(c)
Β prepare
a
plan for such joint development of the said Reservoir, within one hundred and
eighty (180) days of the approval of the agreement referred to in (b)
above.
|
12.2
|
If
no plan is submitted within the period specified in Article 12.1
(c) or
such longer period as the Government and the Contractor and the other
parties referred to in Article 12.1 may agree, or, if such plan as
submitted is not acceptable to the Government and the Parties cannot
agree
on amendments to the proposed joint development plan, the Government
may
cause to be prepared, at the expense of the Contractor and such other
parties a plan for such joint development consistent with generally
accepted modern oilfield and petroleum industry practices which shall
take
into consideration any plans and presentations made by the Contractor
and
the aforementioned other parties.
|
|
12.3
|
If
the parties are unable to agree on the proposed plan for joint
development, the Government may call for a joint development plan
from an
independent agency, which agency, may make such a proposal after
taking
into account the position of the parties in this regard. Such a
development plan, if approved by Government, shall be binding on
the
parties, notwithstanding their disagreement with the plan. However,
the
Contractor may in case of any disagreement on the issue of joint
development or the proposed joint development plan, prepared in accordance
with Article 12.2 or within forty five (45) Business Days of the
plan
approval as aforesaid in this Article, notify the Government that
it
elects to surrender its rights in the Reservoir/Discovery in lieu
of
participation in a joint
development.
|
|
12.4
|
If
a proposed joint development plan is agreed and adopted by the parties,
or
adopted following determination by the Government, the plan as finally
adopted shall be the approved joint development plan and the Contractor
shall comply with the terms of the said development plan as if the
Commercial Discovery is
established.
|
|
12.5
|
The
provisions of Articles 12.1, 12.2 and Article 12.3 shall apply mutatis
mutandisΒ to
a Discovery of a Reservoir located partly within the Contract Area,
which,
although not equivalent to a Commercial Discovery if developed alone,
would be a Commercial Discovery if developed together with that part
of
the Reservoir which extends outside the Contract Area to the areas
subject
to contract for petroleum operations by other
parties.
|
ARTICLE
13
MEASUREMENT
OF PETROLEUM
| 13.1Β Β |
Petroleum
used for internal consumption for Petroleum Operations, flared, saved
and
sold from the Contract Area shall be measured by methods and appliances
generally accepted and customarily used in modern oilfield and petroleum
industry practices and approved by the Management Committee and the
Government.
|
|
13.2
|
The
Government may, at all reasonable times, inspect and test the appliances
used for measuring the volume and determining the quality of Petroleum,
provided that any such inspection or testing shall be carried out
in such
a manner so as not to unduly interfere with Petroleum
Operations.
|
|
13.3
|
Before
commencement of production from the Contract Area, the Parties shall
mutually agree on:
|
| Β |
(a)
|
methods
to be employed for measurement of volumes of Petroleum
production;
|
| Β |
(b)
|
the
point or points at which Petroleum shall be measured and the respective
shares allocated to the Parties in accordance with the terms of this
Contract;
|
| Β |
(c)
|
the
frequency of inspections and testing of measurement appliances and
relevant procedures relating thereto;
and
|
| Β |
(d)
|
the
consequences of a determination of an error in
measurement.
|
|
13.4
|
The
Contractor shall undertake to measure the volume and quality of the
Petroleum Produced and Saved from the Contract Area at the agreed
measurement point consistent with generally accepted modern oilfield
and
petroleum industry practices with the frequency and according to
procedures agreed pursuant to Article 13.3. The Contractor shall
not make
any alteration in the agreed method or procedures for measurement
or to
any of the approved appliances used for that purpose without the
written
consent of the Management Committee and the
Government.
|
|
13.5
|
The
Contractor shall give the Government timely notice of its intention
to
conduct measuring operations or any agreed alteration for such operations
and the Government shall have the right to be present at and supervise,
either directly or through authorised representatives, such
operations.
|
|
13.6
|
The
Contractor shall keep all the records of analysis and measurement
of
hydrocarbons calibrations and proving of measurement system and make
available to Government or its authorized agency such records on
request.
|
ARTICLE
14
PROTECTION
OF THE ENVIRONMENT
|
14.1
|
The
Government and the Contractor recognise that Petroleum Operations
will
cause some impact on the environment in the Contract Area. Accordingly,
in
performance of the Contract, the Contractor shall conduct its Petroleum
Operations with due regard to concerns with respect to protection
of the
environment and conservation of natural resources and shall in
particular;
|
| Β |
(a)
|
employ
modern oilfield and petroleum industry practices and standards including
advanced techniques, practices and methods of operation for the prevention
of Environmental Damage in conducting its Petroleum
Operations;
|
| Β |
(b)
|
take
necessary and adequate steps to:
|
| Β |
(i)
|
prevent
Environmental Damage and, where some adverse impact on the environment
is
unavoidable, to minimise such damage and the consequential effects
thereof
on property and people;
|
| Β |
(ii)
|
ensure
adequate compensation for injury to persons or damage to property
caused
by the effect of Petroleum Operations;
and
|
Β
| Β |
(c)
|
comply
with the requirements of applicable laws and the reasonable requirements
of the Government from time to
time.
|
|
14.2
|
If
the Contractor fails to comply with the provisions of paragraph (b)(i)
of
Article 14.1 or contravenes any relevant law, and such failure or
contravention results in any Environmental Damage, the Contractor
shall
forthwith take all necessary and reasonable measures to remedy the
failure
and the effects thereof.
|
|
14.3
|
If
the Government in accordance with the laws has good reason to believe
that
any works or installations erected by the Contractor or any operations
conducted by the Contractor are endangering or may endanger persons
or any
property of any person, or are causing or may cause pollution, or
are
harming or may harm fauna or flora or the environment to a degree
which
the Government deems unacceptable, the Government may require the
Contractor to take remedial measures within such reasonable period
as may
be determined by the Government and to repair any suchΒ damage.
If the Government deems it necessary, it may also require the Contractor
to discontinue Petroleum Operations in whole or in part until the
Contractor has taken such remedial measures or has repaired any damage
caused.
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|
14.4
|
The
measures and methods to be used by the Contractor for the purpose
of
complying with the terms of paragraph (b)(i) of Article 14.1 shall
be
determined in timely consultation with the Government upon the
commencement of Petroleum Operations or whenever there is a significant
change in the scope or method of conducting Petroleum Operations
and shall
take into account the international standards applicable in similar
circumstances and the relevant environmental impact study carried
out in
accordance with Article 14.5 below. The Contractor shall notify the
Government, in writing, of the measures and methods finally determined
by
the Contractor and shall cause such measures and methods to be reviewed
from time to time in the light of prevailing
circumstances.
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|
14.5
|
The
Contractor shall cause a person or persons with special knowledge
on
environmental matters, to carry out two environmental impact studies
in
order:
|
| Β |
(a)
|
to
determine at the time of the studies the prevailing situation relating
to
the environment, human beings and local communities, the flora and
fauna
in the Contract Area and in the adjoining or neighbouring areas;
and
|
| Β |
(b)
|
to
establish the likely effect on the environment, human beings and
local
communities, the flora and fauna in the Contract Area and in the
adjoining
or neighbouring areas in consequence of the relevant phase of Petroleum
Operations to be conducted under this Contract, and to submit, for
consideration by the Parties, methods and measures contemplated in
Article
14.4 for minimising Environmental Damage and carrying out Site Restoration
activities.
|
|
14.5.1
|
The
first of the aforementioned studies shall be carried out in two parts,
namely, a preliminary part which must be concluded before commencement
of
any field work relating to a seismographic or other survey, and a
final
part relating to drilling in the Exploration Period. The part of
the study
relating to drilling operations in the Exploration Period shall be
approved by Government before the commencement of such drilling
operations, it being understood that such approval shall not be
unreasonably withheld.
|
|
14.5.2
|
The
second of the aforementioned studies shall be completed before
commencement of Development Operations and shall be submitted by
the
Contractor as part of the Development Plan, with specific approval
of
Government being obtained before commencement of Development Operations,
it being understood that such approval shall not be unreasonably
withheld.
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|
14.5.3
|
The
studies mentioned in Article 14.5 above shall contain proposed
environmental guidelines to be followed in order to minimize Environmental
Damage and shall include, but not be limited to, the following, to
the
extent appropriate to the respective study taking into account the
phase
of operations to which the study relates
:
|
| Β |
(a)
|
proposed
access cutting;
|
| Β |
(b)
|
clearing
and timber salvage;
|
| Β |
(c)
|
wildlife
and habitat protection;
|
| Β |
(d)
|
fuel
storage and handling;
|
| Β |
(e)
|
use
of explosives;
|
| Β |
(f)
|
camps
and staging;
|
| Β |
(g)
|
liquid
and solid waste disposal;
|
| Β |
(h)
|
cultural
and archaeological sites;
|
| Β |
(i)
|
selection
of drilling sites;
|
| Β |
(j)
|
terrain
stabilization;
|
| Β |
(k)
|
protection
of freshwater horizons;
|
| Β |
(l)
|
blowout
prevention plan;
|
| Β |
(m)
|
flaring
during completion and testing of Gas and Oil
Xxxxx;
|
| Β |
(n)
|
abandonment
of Xxxxx;
|
| Β |
(o)
|
rig
dismantling and site completion;
|
| Β |
(p)
|
reclamation
for abandonment;
|
| Β |
(q)
|
noise
control;
|
| Β |
(r)
|
debris
disposal; and
|
| Β |
(s)
|
protection
of natural drainage and water flow.
|
|
14.5.4
|
Subject
to the provision of all applicable laws and notifications on protection
of
environment, any new project or expansion or modernization projects
for
petroleum operations for which a proposal is submitted by the Contractor,
the Government shall compete the assessment of the project within
a period
of ninety (90) days from the receipt of the requisite documents and
data
from the project authorities and completion of public hearing. The
decision of the Government on the proposal of the Contractor for
environmental clearance shall be conveyed within thirty (30) days
thereafter. However, wherever forest land is involved; the Contractor
/
user State Government concerned, under the Forest (Conservation)
Act,
1980. The decision of the Central Government on such proposal of
the
Contractor / user agency shall be taken within sixty (60) days from
the
date of receipt of proposal of the Contractor / user agency from
the State
Government. The state Government is required to convey its recommendations
on the proposal complete in all respect to the Central Government
or
otherwise within ninety (90) days from the date of receipt of the
same
from the applicant.
|
|
14.6
|
The
Contractor shall ensure that:
|
| Β |
(a)
|
Petroleum
Operations are conducted in an environmentally acceptable and safe
manner
consistent with modern oilfield and petroleum industry practices
and that
such Petroleum Operations are properly
monitored;
|
| Β |
(b)
|
the
pertinent completed environmental impact studies are made available
to its
employees and to its contractors and Subcontractors to develop adequate
and proper awareness of the measures and methods of
|
environmental
protection to be used in carrying out the Petroleum Operations; and
| Β |
(c)
|
the
contracts entered into between the Contractor and its contractors
and
Subcontractors relating to its Petroleum Operations shall include
the
provisions stipulated herein and any established measures and methods
for
the implementation of the Contractor's obligations in relation to
the
environment under this Contract.
|
|
14.7
|
The
Contractor shall, prior to conducting any drilling activities, prepare
and
submit for review by the Government contingency plans for dealing
with Oil
spills, fires, accidents and emergencies, designed to achieve rapid
and
effective emergency response. The plans referred to above shall be
discussed with the Government and concerns expressed shall be taken
into
account.
|
|
14.7.1
|
In
the event of an emergency, accident, Oil spill or fire arising from
Petroleum Operations affecting the environment, the Contractor shall
forthwith notify the Government and shall promptly implement the
relevant
contingency plan and perform such Site Restoration as may be necessary
in
accordance with modern oilfield and petroleum industry
practices.
|
|
14.7.2
|
In
the event of any other emergency or accident arising from the Petroleum
Operations affecting the environment, the Contractor shall take such
action as may be prudent and necessary in accordance with modern
oilfield
and petroleum industry practices in such
circumstances.
|
|
14.8
|
In
the event that the Contractor fails to comply with any of the terms
contained in Article 14.7 within a period specified by the Government,
the
Government, after giving the Contractor reasonable notice in the
circumstances, may take any action which may be necessary to ensure
compliance with such terms and to recover from the Contractor, immediately
after having taken such action, all costs and expenditures incurred
in
connection with such action together with such interest as may be
determined in accordance with Section 1.7 of Appendix C of this
Contract.
|
|
14.9
|
On
expiry or termination of this Contract or relinquishment of part
of the
Contract Area, the Contractor
shall:
|
| Β |
(a)
|
subject
to Article 27, remove all equipment and installations from the
relinquished area or former Contract Area in a manner agreed with
the
Government pursuant to an abandonment plan;
and
|
| Β |
(b)
|
perform
all necessary Site Restoration in accordance with modern oilfield
and
petroleum industry practices and take all other action necessary
to
prevent hazards to human life or to the property of others or the
environment.
|
Β
|
14.10
|
The
Contractor shall prepare a proposal for the restoration of site including
abandonment plan and requirement of funds for this and the annual
contribution. This will be submitted along with the annual Budget
for the
consideration and approval of the Management Committee. The annual
contribution shall be deposited by the Contractor in the Site Restoration
fund which will be established, in accordance with the scheme notified
by
the Government.
|
|
14.11
|
Subject
to Section 3.2 of Accounting Procedure, any Site Restoration fund
scheme
formulated by Government and subject to provisions of this Contract,
any
and all costs incurred by the Contractor pursuant to this Article
shall be
cost recoverable including but not limited to sinking funds established
for abandonment and restoration of the Contract
Area.
|
|
14.12
|
In
this Article, a reference to Government includes the State
Government.
|
|
14.13
|
Where
the Contract Area is partly located in areas forming part of certain
national parks, sanctuaries, mangroves, wetlands of national importance,
biosphere reserves and other biologically sensitive areas passage
through
these areas shall generally not be permitted. However, if there is
no
passage, other than through these areas to reach a particular point
beyond
these areas, permission of the appropriate authorities shall be
obtained.
|
|
14.14
|
The
obligations and liability of the Contractor for the environment hereunder
shall be limited to damage to the environment
which:
|
| Β |
(a)
|
occurs
after the Effective Date; and
|
| Β |
(b)
|
results
from an act or omission of the
Contractor.
|
ARTICLE
15
RECOVERY
OF COST PETROLEUM
|
15.1
|
The
Contractor shall be entitled to recover Contract Costs out of a percentage
of the total value of Petroleum Produced and Saved from the Contract
Area
in the Year in accordance with the provisions of this
Article.
|
|
15.2
|
Exploration
Costs incurred by the Contractor in the Contract Area upto the date
of
first Commercial Production shall be aggregated, and the Contractor
shall
be entitled to recover the aggregate of such Exploration Costs out
of the
Cost Petroleum at the rate of one hundred percent (100%) per annum
of such
Exploration Costs beginning from the date of such Commercial
Production.
|
|
15.3
|
The
Contractor shall be entitled to recover out of the Cost Petroleum
from the
Contract Area the Exploration Costs which it has incurred in any
Year
after the date of Commercial Production at the rate of one
hundred
percent (100%)
per annum of such Exploration Costs beginning from the date such
Exploration Costs are incurred.
|
|
15.4
|
Development
Costs incurred by the Contractor in the Contract Area upto the date
of
first Commercial Production shall be aggregated, and the Contractor
shall
be entitled to recover out of the Cost Petroleum the aggregate of
such
Development Costs at the rate of one hundred percent (100%) per annum
of
such Development Costs beginning from the date of such Commercial
Production.
|
15.5Β The
Contractor shall be entitled to recover out of the Cost Petroleum from the
Contract Area the Development Costs which it has incurred after the date of
first Commercial Production at the rate of one hundred percent (100%) per annum
of such Development Costs beginning from the date such Development Costs are
incurred.
15.6Β The
Contractor shall be entitled to recover in full during any Year the Production
Costs incurred in that Year out of the Cost Petroleum.
15.7Β The
Contractor shall be entitled to recover in full during any Year the royalty
payments to the Government/State Government(s) in that Year out of the Cost
Petroleum.
15.8Β If
during
any Year the Cost Petroleum is not sufficient to enable the Contractor to
recover in full the Contract Costs due for recovery in that Year in accordance
with the provisions of Articles 15.1 to 15.7 then, subject to the provisions
of
Article 15.12:
(a)
recovery shall first be made of royalty payments; and
(b)
recovery shall next be made of the Production Costs; and
(c)
recovery shall next be made of the Exploration Costs; and
(d)
recovery shall then be made of the Development Costs.
| Β |
The
unrecovered portions of Contract Costs shall be carried forward to
the
following Year and the Contractor shall be entitled to recover such
Contract Costs in such Year or the subsequent Years as if such Contract
Costs were due for recovery in that Year, or the succeeding Years,
until
the unrecovered Contract Costs have been fully recovered out of Cost
Petroleum from the Contract Area.
|
15.9Β The
maximum amount of Cost Petroleum to which the Contractor shall be entitled,
in
accordance with the provisions of this Article, shall be sixty
percent (60%) of
the
total value of the Petroleum Produced and Saved from the Contract
Area.
15.10Β For
the
purposes of this Article, as well as Article 16, costs, receipts and income
shall be converted into production unit equivalents, and vice versa viz both
in
physical and monitory terms, using the relevant prices established pursuant
to
Article 19 for Crude Oil and Article 21 for Natural Gas.
Β
|
15.11
|
Pending
completion of the calculations required to establish definitively
the
Contractor's entitlement to Cost Petroleum from the Contract Area
in any
Year, the Contractor shall take delivery, provisionally, of volumes
of
Crude Oil or Natural Gas representing its estimated Cost Petroleum
entitlement calculated with reference to estimated production quantities,
costs and prices as established by the Contractor and approved by
the
Management Committee. Such provisional determination of Cost Petroleum
shall be made every Quarter on an accumulative basis. Within ninety
(90)Β days
of the end of each Year, a final calculation of the Contractor's
entitlement to Cost Petroleum, based on actual production quantities,
costs and prices for the entire Year as reflected in audited accounts
under Article 25.4.3, shall be undertaken and any necessary adjustments
to
the Cost Petroleum entitlement shall be agreed upon between the Government
and the Contractor within thirty (30) days and made within thirty
(30)
days thereafter.
|
|
15.12
|
Where
more than one Party constitutes the Contractor, the percentage of
the
total Cost Petroleum from the Contract Area which shall be available
to
each such Party in any Year for recovery of its share of Contract
Costs
shall be determined on the basis of the respective Participating
Interest
of each such Party.
|
|
15.13
|
The
Contractor acknowledges that the cost estimates for Minimum Work
Programme
are the realistic estimate of expenditure. For the purposes of allowing
cost recovery under Article 15 herein read with Section 3 of the
Accounting Procedure, the cost estimates given by the Contractor
in the
bid documents towards the Minimum Work Programme in all three Exploration
Phases shall be
|
taken
as
Bench Xxxx. Any material increase over the Bench Xxxx shall not be allowed
for
cost recovery unless the Government on the recommendation of the Management
Committee agrees that the cost increase is due to change in circumstances after
the Contract comes into effect. For the above purpose, an itemized break-up
provided by the Contractor of cost estimates given in the bid documents is
placed at Appendix - H to this Contract.
ARTICLE
16
PRODUCTION
SHARING OF PETROLEUM
|
16.1
|
The
Parties to this Contract shall share in the Profit Petroleum in each
Year
in accordance with the provisions of this Article. A Party's share
of
Profit Petroleum in any Year, shall be calculated on the basis of
the
Investment Multiple actually achieved by the Contractor at the end
of the
preceding Year for the Contract Area as provided in Appendix-D.
|
16.2.1
When the Investment Multiple of the Contractor at the end of any Year is less
than one and one half (1.5), the Government shall be entitled to take and
receive eighty
five percent (85%)
and the
Contractor shall be entitled to take and receive fifteen
percent (15%)
of the
total Profit Petroleum from the Contract Area with effect from the start of
the
succeeding Year.
16.2.2
When the Investment Multiple of the Contractor at the end of any Year is equal
to or more than one and one half (1.5) but is less than two (2.0) the Government
shall be entitled to take and receive seventy
percent (70%) and
the
Contractor shall be entitled to take and receive thirty
percent (30%)
of the
total Profit Petroleum from the Contract Area with effect from the start of
the
succeeding Year.
16.2.3
When the Investment Multiple of the Contractor at the end of any Year is equal
to or more than two (2.0) but is less than two and one half (2.5), the
Government shall be entitled to take and receive ten
percent (10%)
and the
Contractor shall be entitled to take and receive ninety
percent (90%)
of the
total Profit Petroleum from the Contract Area with effect from the start of
the
succeeding Year.
|
16.2.4
|
When
the Investment Multiple of the Contractor at the end of any Year
is equal
to or more than two and one half (2.5) but is less than three (3.0),
the
Government shall be entitled to take and receive zero
percent (0%) and
the Contractor shall be entitled to take and receive one
hundred percent (100%) of
the total Profit Petroleum from the Contract Area with effect from
the
start of the succeeding Year.
|
16.2.5
When the Investment Multiple of the Contractor at the end of any Year is equal
to or more than three (3.0) but is less than three and one half (3.5), the
Government shall be entitled to take and receive zero
percent (0%) and
the
Contractor shall be entitled to take and receive one
hundred percent (100%)
of the
total Profit Petroleum from the Contract Area with effect from the start of
the
succeeding Year.
|
16.2.6
|
When
the Investment Multiple of the Contractor at the end of any Year
is equal
to or more than three and one half (3.5), the Government shall be
entitled
to take and receive zero
percent (0%) and
the Contractor shall be entitled to take and receive one
hundred percent (100%)
of
the total Profit Petroleum from the Contract Area with effect from
the
start of the succeeding Year.
|
|
16.3
|
Any
balance left to the credit of the Parties in any Site Restoration
account,
opened pursuant to the provision of Article 14.10, after Site Restoration
has been done by the Contractor in accordance with the provisions
of this
Contract and the laws in this regard, shall be shared between the
Government and the Contractor as per the Investment Multiple reached
at
the time of ceasing of production from the Contract
Area.
|
|
16.4.1
|
The
Government shall have the option to take its entitlement to Profit
PetroleumΒ Other
than "ANG" or "NANG"
either
in cash or in kind in any Year. In case of "ANG" or "NANG", as the
case
may be, the Government shall have the option to take its entitlement
to
Profit Petroleum in cash or in kind and such option shall be exercised
at
interval of every five (5) Years from the commencement of first Commercial
Production from the Contract Area.
|
|
16.4.2
|
In
accordance with the Article 16.4.1, The Government shall exercise
such
option by giving a written notice to the Contractor not later than
thirtieth (30th)
June in the preceding Year in which the entitlement is due. Once
the
Government has exercised its option, the same shall continue unless
the
Government informs the Contractor otherwise.
|
|
16.4.3
|
Where
the Government has informed the Contractor of its intention to take
its
share in kind, the Parties shall mutually agree on a procedure for
delivery of the Governmentβs share of Profit Petroleum and, where
relevant, the composition of the Petroleum which is to be
delivered.
|
16.5The
value
of the Contractorβs Investment Multiple at the end of any Year in respect of the
Contract Area shall be calculated in the manner provided for, and on the basis
of the net cash flows specified in Appendix-D to this Contract. However, the
amount of Profit Petroleum to be shared between the Government and the
Contractor shall be determined for each Quarter on an accumulative basis.
Pending finalisation of accounts, Profit Petroleum shall be shared between
the
Government and the Contractor on the basis of provisional estimated figures
of
Contract Costs, production, prices, receipts, income and any other income or
allowable deductions and on the basis of the value of the Investment Multiple
achieved at the end of the preceding Year. All such provisional estimates shall
be approved by the Management Committee. When it is necessary to convert
monetary units into physical units of production equivalents or vice versa,
the
price or prices determined pursuant to Articles 19 and 21 for Crude Oil,
Condensate and Natural Gas respectively shall be used. Within ninety
(90)Β days
of
the end of each Year, a final calculation of Profit Petroleum based on
actual
costs,
quantities, prices and income for the entire Year shall be completed and any
necessary adjustments to the sharing of Petroleum shall be agreed upon between
the Government and the Contractor within thirty (30) days and made within thirty
(30) days thereafter.
(Explanation:
The Profit Petroleum due to the Government shall be deposited with βPay &
Accounts officer or its successor, Ministry of Petroleum & Natural Gas,
Government of India, Shastri Bhavan, New Delhi by 10th of the Month following
each Quarter)
16.6Β The
Profit Petroleum due to the Contractor in any Year from the Contract Area shall
be divided amongst the Parties constituting the Contractor, in proportion to
their respective Participating Interest.
ARTICLE
17
TAXES,
ROYALTIES, RENTALS, DUTIES ETC.
|
17.1
|
Companies,
their employees, persons providing any materials, supplies, services
or
facilities or supplying any ship, aircraft, machinery, equipment
or plant
(whether by way of sale or hire) to the Companies for Petroleum Operations
or for any other purpose and the employees of such persons shall
be
subject to all fiscal legislation in India except where, pursuant
to any
authority granted under any applicable law, they are exempted wholly
or
partly from the application of the provisions of a particular law
or as
otherwise provided herein.
|
|
17.2
|
Pursuant
to the provisions of section 42 of the Income-tax Act, 1961, the
allowances specified herein shall apply in computing income tax payable
by
a Company on its profits and gains from the business of Petroleum
Operations in lieu of (and not in addition to) corresponding allowances
provided for under the heading "Profits and Gains of Business or
Profession" in the Income-tax Act, 1961. Any other allowance, which
are
not specified herein, shall be treated in accordance with the provisions
of Income-tax Act, 1961.
|
|
17.2.1
|
Subject
to the provisions herein below, deductions at the rate of one hundred
percent (100%) per annum shall be allowed for all expenditures, both
capital and revenue expenditures, incurred in respect of Exploration
Operations and drilling operations. The expenditure incurred in respect
of
Development Operations, other than drilling operations, and Production
Operations will be allowable as per the provisions of the Income-tax
Act,
1961. The expenses so incurred are subject to the
following:
|
| Β |
(a)
|
where
any expenditure is not solely incurred on Petroleum Operations or
is
incurred as part of or in conjunction with any other business, only
that
proportion of the total expenditure which can be proved to the assessing
officer to represent a fair proportionate part thereof, having regard
to
all relevant facts and circumstances, shall be
allowed;
|
| Β |
(b)
|
sections
40A and 44C of the Income-tax Act, 1961, shall
apply.
|
17.2.2
A
Company shall be entitled, for income tax purposes only, to deduct all its
unsuccessful Exploration Costs in contract areas covered by other contracts
from
the aggregate value of Petroleum allocable to the Company from any Field(s)
in
the Contract Area in the manner as follows:
| Β |
(a)
|
unsuccessful
Exploration Costs incurred in contract areas other than the Contract
Area
where a Commercial Discovery has been made up to the date of commencement
of Commercial Production shall be aggregated
and
|
the
Company shall be entitled to deduct such costs at the rate of one hundred per
cent (100%) per annum;
| Β |
(b)
|
unsuccessful
Exploration Costs incurred in contract areas other than the Contract
Area
where a Commercial Discovery has been made, after the commencement
of
Commercial Production, shall be deductible at the rate of one hundred
per
cent (100%) per annum of such costs beginning from the Year such
costs are
incurred.
|
17.2.3
All allowable expenditure incurred prior to the Year in which Commercial
Production commences shall be aggregated and the assessed loss for that Year
as
well as the assessed loss, if any, incurred in the assessment year relevant
to
the Year in which Commercial Production commences, or in any subsequent
assessment year, shall be carried forward to succeeding assessment years and
set
off as provided in the Income-tax Act, 1961.
|
17.2.4
|
For
any or all accumulated expenditures incurred in respect of Exploration
Operations and drilling operations prior to the date of commercial
production, Company(ies) shall have option to amortize such expenditures
over a period of ten (10) years from the date of first commercial
production.
|
17.2.5
The profits and gains of the business of the Parties comprising the Contractor
consisting of Petroleum Operations shall, for the purpose of levy of income
tax
under the Income-tax Act, 1961, be computed on the basis of the value,
determined in accordance with Article 19, of its Participating Interest share
of
Crude Oil produced and saved and sold, or otherwise disposed of, from the
Contract Area and from any revenue realised on the sale of Associated or Non
Associated Natural Gas referred to in Article 21 as well as any other gains
or
receipts from Petroleum Operations as reduced by the deductions as specified
herein, and, except as herein provided, all the provisions of the Income-tax
Act, 1961, shall apply.
|
17.2.6
|
Company(ies)
shall be eligible for benefits available under section 80 IB of the
Income-tax Act, 1961 as applicable from time to
time.
|
|
17.3
|
For
the purposes of Article 17.2 and section 42 of the Income-tax Act,
1961:
|
17.3.1
The following terms used in section 42 of the Income-tax Act, 1961, shall have
the meanings corresponding to the terms used in this Contract and defined in
Article 1 as follows:
| Β |
(a)
|
"agreement"
means this Contract as defined in Article
1;
|
| Β |
(b)
|
"commercial
production" shall have the meaning assigned in Article
1.
|
|
17.3.2
|
The
terms "assessing officer", "assessed loss", and "assessment year"
shall
have the meaning as defined in the Income-tax Act,
1961.
|
|
17.3.3
|
The
other terms used herein and defined in Article 1 shall have the meaning
therein ascribed.
|
|
17.4
|
Companies
(Lessee) shall be required to pay royalty to the Government (Lessor)
for
offshore areas at the rate of ten percent (10%) of the well-head
value of
Crude Oil and Natural Gas. In case of an onshore area, Companies
shall be
required to pay to the State Government(s) (Lessor) at the rate of
twelve
point five zero percent (12.5%) of the well-head value of Crude Oil
and
ten percent (10%) of the well-head value of Natural Gas. In case
of an
offshore area falling beyond four hundred (400) metre isobath, the
rate of
royalty payable by Companies (Lessee) to the Government (Lessor)
shall be
at the rate of five percent (5%) of the well-head value of Crude
Oil and
Natural Gas for the first seven years from the date of commencement
of
Commercial Production in the Field. The valuation of Crude Oil and
Natural
Gas shall be as per the Article 19 and Article 21 respectively. The
royalty amount due to Government/State Government(s) shall be payable
latest by the end of the succeeding
Month.
|
|
17.5
|
Machinery,
plant, equipment, materials and supplies imported by the Contractor
and
its Subcontractors solely and exclusively for use in Petroleum Operations
under this Contract or similar contracts with the Government where
customs
duty has been exempted by the Government shall be exempt from customs
duties and export duties or other charges on re-exportation of the
said
items in accordance with applicable
legislation.
|
|
17.6
|
The
Government shall have the right to inspect the records and documents
of
the physical item or items for which an exemption has been provided
pursuant to Article 17.5 to determine that such item or items are
being or
have been imported solely and exclusively for the purpose for which
the
exemption was granted. The Government shall also be entitled to inspect
such physical items wherever located to ensure that such items are
being
used for the purpose herein specified and any item not being so used
shall
immediately become liable to payment of the applicable customs
duties.
|
|
17.7
|
Subject
to Article 27, the Contractor and its Subcontractors may sell or
otherwise
transfer in India all imported items which are no longer required
for
Petroleum Operations, subject to applicable laws including rules,
regulations, procedures, notifications etc. governing customs duties
and
sale or disposal of such items.
|
|
17.8
|
Any
sales tax or tax of similar nature payable on the sale(s) of Petroleum
under this Contract shall be borne/reimbursed by the
buyer(s).
|
|
17.9
|
Subject
to the provisions herein above provided, the Contractor shall be
liable
for payment of:
|
| Β |
(a)
|
annual
license charges and rental fees and other charges under the
Rules;
|
| Β |
(b)
|
charges
payable by specified industries or in connection with Petroleum Operations
under applicable legislation;
|
| Β |
(c)
|
payments
for purchase, lease or rental of land or land rights in connection
with
Petroleum Operations;
|
| Β |
(d)
|
taxes,
fees or charges for specific services rendered on request or to the
public
generally;
|
| Β |
(e)
|
customs
duties, except for those items subject to exemption as provided in
Article
17, applicable at the rates specified from time to time;
and
|
| Β |
(f)
|
stamp
duties, registration fees, license fees, taxes such as taxes on property
or assets (not calculated by reference to income or otherwise exempted)
or
other levies, fees or charges of a non-discriminatory nature and
generally
applicable in India or in the State where Petroleum Operations are
being
conducted.
|
|
17.10
|
If
any change in or to any Indian law, rule or regulation dealing with
income
tax or other corporate tax, export/import tax, excise, customs duty
or any
other levies, duties or taxes imposed on Petroleum or dependent upon
the
value of Petroleum results in a material change to the expected economic
benefits accruing to any of the Parties after the date of execution
of the
Contract, the Parties shall consult promptly in good faith to make
necessary revisions and adjustments to the Contract in order to maintain
such expected economic benefits to each of the Parties, provided,
however,
that the expected economic benefits to the Parties shall not be reduced
as
a result of the operation of this
Article.
|
ARTICLE_18
DOMESTIC
SUPPLY, SALE, DISPOSAL AND
EXPORT
OF CRUDE OIL AND CONDENSATE
|
18.1
|
Until
such time as the total availability to the Government of Crude Oil
and
Condensate from all Petroleum production activities in India meets
the
total national demand, each Company comprising the Contractor, shall
be
required to sell in the domestic market in India all of the Company's
entitlement to Crude Oil and Condensate from the Contract Area in
order to
assist in satisfying the national
demand.
|
|
18.2
|
If,
during any Year, India attains Self-sufficiency, the Government shall
promptly thereafter, but in no event later than the end of the first
Quarter of the following Year, so advise the Company(ies) by written
notice. In such event, as from the end of the second Quarter of the
following Year, or such earlier date as the Parties may mutually
agree,
domestic sale obligation shall be suspended and the Company shall
have the
right to lift and export its Participating Interest share of Crude
Oil and
Condensate until such time, if any, as Self-sufficiency shall have
ceased
to exist. If Self-sufficiency ceases to exist during a Year, the
Government shall recover its position to ask Company(ies) under Article
18.1 in respect of the following Year by giving ninety (90) days
notice
thereof to the Company(ies) to sell Crude Oil and Condensate in the
Indian
domestic market.
|
|
18.3
|
Upon
India achieving Self-sufficiency, the Company(ies) shall be entitled
to
freely lift and export any Crude Oil and Condensate pursuant to this
Article 18, subject to Government's generally applicable destination
restrictions to countries with which the Government, for policy reasons,
has severed or restricted trade.
|
|
18.4
|
No
later than sixty (60) days prior to the commencement of production
in a
Field, and thereafter no less than sixty (60) days before the commencement
of each Year, the Contractor shall cause to be prepared and submitted
to
the Parties a production forecast setting out the total quantity
of Crude
Oil that it estimates can be produced from a Field during the succeeding
Year, based on a maximum efficient rate of recovery of Crude Oil
from that
Field in accordance with modern oilfield and petroleum industry practices.
No later than thirty (30) days prior to the commencement of each
Quarter,
the Contractor shall inform its estimate of production for the succeeding
Quarter and shall endeavour to produce the forecast quantity for
each
Quarter.
|
|
18.5
|
Each
Company comprising the Contractor shall, throughout the term of this
Contract, have the right to separately take in kind and dispose of
all its
share of Cost Petroleum and Profit Petroleum and shall have the obligation
to lift the said
|
Petroleum
on a current basis and in such quantities so as not to cause a restriction
of
production or inconvenience to the other Company(ies).
|
18.6
|
The
Government shall, throughout the term of this Contract, have the
right to
separately take in kind and dispose of its share of Crude Oil and
shall
have the obligation to lift the said Oil on a current basis and in
such
quantities so as not to cause a restriction of production or inconvenience
to the Contractor.
|
|
18.7
|
For
the purpose of implementing the provisions of this Article, a Crude
lifting procedure and Crude sales agreement based on generally acceptable
international terms shall be agreed upon by the Contractor with buyer(s)
no later than six (6) months or such shorter period as may be mutually
agreed between the Contractor and buyer(s) with the consent of Government
prior to the commencement of production in a Field. Such lifting
procedure
shall be made available to all the Parties to this
Contract.
|
ARTICLE
19
VALUATION
OF PETROLEUM
|
19.1
|
For
the purpose of this Contract, the value of Crude Oil, Condensate
and
Natural Gas (refer Article 21) shall be based on the price determined
as
provided herein.
|
|
19.2
|
A
price for Crude Oil shall be determined for each Month or such
other
period as the Parties may agree (hereinafter referred to as "the
Delivery
Period") in terms of United States Dollars per Barrel, on import
parity
basis (with marine freight being determined on the basis of nearest
port
to the Contract Area) for Crude Oil produced and sold or otherwise
disposed of from Contract Area, for each Delivery Period, in accordance
with the appropriate basis for that type of sale or disposal specified
below. Subject to the provisions of this Article 19, it is clearly
understood that the actual prices received by the Company(ies) from
the
sales will form the basis for the purposes of cost recovery, Profit
Petroleum sharing and payment of royalty as provided in the Articles
15,
16 and 17 respectively. The basis of valuation given in this Article
for
the purpose of Article 15,16 and 17 shall apply only where Government
is
of the view that sale prices realised by the Company(ies) are not
consistent with the price realisable at Arms Length
Sales.
|
|
19.3
|
In
the event that some or all of a Company's or Contractorβs total sales of
Crude Oil during a Delivery Period are made to third parties at Arms
Length Sales, all sales so made shall be valued at the weighted average
of
the prices actually received by a Company, calculated by dividing
the
total receipts from all such sales at the Delivery Point by the total
number of Barrels of the Crude Oil sold in such sales.
|
|
19.3.1
|
Each
Company constituting the Contractor shall separately submit to the
designated nominee of the Government, within fifteen (15) days of
the end
of each Delivery Period, a report containing the actual prices obtained
in
their respective Arms Length Sales for any Crude Oil. Such reports
shall
distinguish between term sales and spot sales and itemize volumes,
customers, prices received and credit terms, and a Company shall
allow the
designated nominee(s) of the Government to examine the relevant sales
contracts.
|
|
19.4
|
For
the purpose of determining price at Arms Length Sales, the price
of the
Crude Oil at which sale takes place will generally be based on per
Barrel
of one or more crude oils which, at the time of calculation, are
being
freely and actively traded in the international market and are similar
in
characteristics and quality to the Crude Oil in respect of which
the price
is being determined, selling price to be ascertained from Xxxxx'x
Crude
Oil Market Wire daily publication ("Xxxxx'x"), or the spot market
for the
same crude oils ascertained in the same manner,
whichever
|
price
more truly reflects the current value of such crude oils. For any Delivery
Period in which sales take place, the price shall be the arithmetic average
price per Barrel determined by calculating the average for such Delivery Period
of the mean of the high and low FOB prices for each day of the crude oils
selected for comparison adjusted for differences in the Crude Oil and the crude
oils being compared for quality, transportation costs, delivery time, quantity,
payment terms and other contract terms to the extent known and other relevant
factors. In the event that Xxxxx'x ceases to be published or is not published
for a period of thirty (30) consecutive days, the Parties shall agree on an
alternative daily publication. The Contractor shall make available all the
data
pertaining to pricing of Crude to enable Government to decide that the proposed
sale price by the Contractor/each constituents of the Contractor reflects a
fair
market price for the Crude.
|
19.4.1
|
In
the event that, at the relevant time, no crude oils of similar quality
to
the Crude Oil to be sold are being actively traded in the international
markets where prices can be ascertained by international publication,
or
the official FOB selling prices and the international spot market
price
vary widely between producers, the Parties shall meet in good faith
to
determine an appropriate pricing basis.
|
|
19.5
|
The
Contractor shall determine the relevant prices in accordance with
this
Article and the calculation, basis of calculation and the price determined
shall be supplied to the Government and shall be subject to agreement
by
the Government.
|
|
19.6
|
In
the event that the Parties fail to reach agreement on any matter
concerning selection of the crude oils for comparison, the calculation,
the basis of, or mechanism for the calculation of the prices, the
prices
arrived at, the adjustment of any price or generally about the manner
in
which the prices are determined according to the provisions of this
Article within thirty (30) days, or such longer period as may be
mutually
agreed between the Parties, from the date of commencement of Commercial
Production or the end of each Delivery Period thereafter, any Party
may
refer the matter or matters in issue for final determination by a
sole
expert or arbitrator appointed as provided in Article
33.
|
19.6.1
If
the matter is referred to the sole expert, within ten (10) days of the said
appointment, the Parties shall provide the expert with all information they
deem
necessary or as the expert may reasonably require.
19.6.2
Within fifteen (15) days from the date of his appointment, the expert shall
report to the Parties on the issue(s) referred to him for determination,
applying the criteria or mechanism set forth herein and indicate his decision
thereon to be applicable for the relevant Delivery Period for Crude Oil and
such
decision shall be accepted as final and binding by the Parties.
|
19.6.3
|
Any
price or pricing mechanism agreed by the Parties pursuant to the
provisions of this Article shall not be changed
retroactively.
|
|
19.7
|
In
the event that all sales of Crude Oil in a Delivery Period by a Company
constituting the Contractor are to be made to an Affiliate, the Parties
may agree on an alternative method of valuing the Crude Oil for the
purposes of this Contract, provided that such alternative method
results
in an internationally competitive fair market valuation for that
Delivery
Period. In case of disagreement, the decision of the Government on
determining a Crude price in case of sales to an Affiliate shall
be final
and binding.
|
|
19.8
|
In
the event that in any Delivery Period there is more than one type
of sales
referred to in Articles 19.3 and 19.7, then, for the purpose of
calculating Cost Petroleum and Profit Petroleum entitlement and royalty
payments pursuant to Articles 15, 16 and 17 respectively, a single
price
per Barrel of Crude Oil for all the sales for the relevant Delivery
Period
shall be used. Such single price shall be the weighted average of
the
prices determined for each type of sale, weighted by the respective
volumes of Crude Oil sold in each type of sale in the relevant Delivery
Period.
|
|
19.9
|
The
provisions specified above for the determination of the price of
sales of
Crude Oil shall apply mutatis mutandis to
Condensates.
|
|
19.10
|
The
price of Natural Gas shall be determined as provided in Article 21.
|
ARTICLE
20
CURRENCY
AND EXCHANGE CONTROL PROVISIONS
|
20.1
|
Subject
to the provisions herein, and to compliance with the relevant provisions
of the laws of general application in India governing currency and
foreign
exchange and related administrative instructions and procedures issued
thereunder on a non-discriminatory basis, each Foreign Company comprising
the Contractor shall, during the term of this Contract, have the
right
to:
|
(a)Β repatriate
abroad, in United States Dollars or any other freely convertible currency
acceptable to the Government and the Foreign Company, the net proceeds of sales
of Petroleum in India;
(b)Β receive,
retain and use abroad the proceeds of any export sales of Petroleum under the
Contract;
(c)Β open,
maintain and operate bank accounts with reputable banks, both inside and outside
India, for the purpose of this Contract;
(d)Β freely
import, through normal banking channels, funds necessary for carrying out the
Petroleum Operations;
(e)Β convert
into foreign exchange and repatriate sums imported pursuant to (d) above in
excess (if any) of its requirements; and
(f)Β make
payments outside of India for purchases, services and loans obtained abroad
without the requirement that funds used in making such payments must come from
or originate in India.
Provided,
however, that repatriation pursuant to subparagraphs (a) and (e) and payments
pursuant to subparagraph (f) shall be subject to the provisions of any treaties
and bilateral arrangements between the Government and any country with respect
to payments to or from that country.
|
20.2
|
The
rates of exchange for the purchase and sale of currency by the Companies
shall be the prevailing rates of general application determined by
the
Reserve Bank of India or such other financial body as may be mutually
agreed by the Parties and, for accounting purposes under this Contract,
these rates shall apply as provided in Section 1.6 of
Appendix-C.
|
|
20.3.
|
A
Party other than a Foreign Company comprising the Contractor shall
be
governed by the relevant currency and foreign exchange laws and related
administrative instructions and procedures issued
thereunder.
|
|
20.4
|
Indian
Companies shall have right to remit their portion of expenditure
in
foreign currency(ies) in accordance with the exchange control
provisions.
|
ARTICLE
21
NATURAL
GAS
|
21.1
|
Subject
to Article 21.2, the Indian domestic market shall have the first
call on
the utilisation of Natural Gas discovered and produced from the Contract
Area. Accordingly, any proposal by the Contractor relating to Discovery
and production of Natural Gas from the Contract Area shall be made
in the
context of the Government's policy for the utilisation of Natural
Gas and
shall take into account the objectives of the Government to develop
its
resources in the most efficient manner and to promote conservation
measures.
|
|
21.2
|
The
Contractor shall have the right to use Natural Gas produced from
the
Contract Area for the purpose of Petroleum Operations including
reinjection for pressure maintenance in Oil Fields, gas lifting and
captive power generation required for Petroleum
Operations.
|
|
21.3
|
For
the purpose of sales in the domestic market pursuant to this Article
21,
the Contractor shall have freedom to market the Gas and sell its
entitlement.
|
|
21.4
|
Associated
Natural Gas (ANG)
|
|
21.4.1
|
In
the event that a Discovery of Crude Oil contains ANG, the Contractor
shall
declare in the proposal for the declaration of the said Discovery
as a
Commercial Discovery as specified in Article 10, whether (and by
what
amount) the estimated production of ANG is anticipated to exceed
the
quantities of ANG which will be used in accordance with Article 21.2
(such
excess being hereinafter referred to as "the Excess ANG"). In such
an
event the Contractor shall indicate whether, on the basis of the
available
data and information, it has reasonable grounds for believing that
the
Excess ANG could be commercially exploited in accordance with the
terms of
this Contract along with the Commercial Production of the Crude Oil
from
the Contract Area, and whether the Contractor intends to so exploit
the
Excess ANG.
|
|
21.4.2
|
Based
on the principle of full utilisation and minimum flaring of ANG,
a
proposed development plan for an Oil Discovery shall, to the extent
practicable, include a plan for utilisation of the ANG including
estimated
quantities to be flared, reinjected, and to be used for Petroleum
Operations; and, if the Contractor proposes to commercially exploit
the
Excess ANG for sale in the domestic market in accordance with Government's
policy, or elsewhere, the proposed plans for such
exploitation.
|
|
21.4.3
|
If
the Contractor wishes to exploit the Excess ANG, subject to Article
21.1,
the Contractor shall be free to explore markets for the commercial
exploitation of the said Excess ANG and submit its proposals for
such
exploitation to the Government in accordance with Article
21.4.2.
|
|
21.4.4
|
Where
the Contractor is of the view that the Excess ANG cannot be commercially
exploited and chooses not to exploit the said Excess ANG, or is unable
to
find a market for the Excess ANG pursuant to Article 21.4.3, the
Government shall be entitled to take and utilise such Excess ANG
free of
any cost/charge.
|
|
21.4.5
|
If
the Government elects to take the Excess ANG as provided in Article
21.4.4:
|
| Β |
(a)
|
the
Contractor shall deliver such Excess ANG to the Government (or its
nominee) free of any cost/charge, at the downstream flange of the
Gas/Oil
separation facilities;
|
| Β |
(b)
|
the
Contractor shall, based on sound petroleum engineering practices,
install
such facilities as would facilitate, insofar as practicable, uninterrupted
delivery of such Excess ANG to the Government or its
nominee;
|
| Β |
(c)
|
the
cost of all facilities installed pursuant to paragraph (b) above
shall be
borne by the Government (or its
nominee);
|
| Β |
(d)
|
the
Government or its nominee shall bear all costs including gathering,
treating, processing and transporting costs beyond the downstream
flange
of the Gas/Oil separation facilities;
and
|
| Β |
(e)
|
the
delivery of such Excess ANG shall be subject to procedures to be
agreed
between the Government or its nominee and the Contractor prior to
such
delivery, such procedures to include matters relating to timing of
off-take of such Excess ANG. Parties shall endeavour that such procedures
do not restrict Oil production.
|
|
21.4.6
|
The
Excess ANG which is not commercially exploited by the Contractor,
or taken
by the Government or its nominee pursuant to this Article 21, shall
be
returned to the subsurface structure or flared or otherwise disposed
off
as approved by the Government in the context of the Development Plan,
provided that flaring will be resorted to only for small quantities
and as
a last resort.
|
|
21.4.7
|
As
soon as practicable after the submission of the proposed development
plan,
the Contractor and the Government or its nominee shall meet to discuss
the
sale and/or disposal of any ANG discovered with a view to giving
effect to
the provisions of this Article 21 in a timely
manner.
|
|
21.5
|
Non
Associated Natural Gas (NANG)
|
|
21.5.1
|
In
the event of a Discovery of NANG in the Contract Area, the Contractor
shall promptly report such Discovery to the Management Committee
and
the
|
Government
and the provisions of Articles 10.1 and 10.2 shall apply. The remaining
provisions of Article 10 would apply to the Discovery and development of NANG
only insofar as they are not inconsistent with the provisions of this Article.
Notwithstanding the provisions of Article 3, the Contractor shall be entitled
to
retain the Discovery Area subject to the provisions of this Article
21.
|
21.5.2
|
If,
pursuant to Article 10.1, the Contractor gives notification that
the
Discovery is of potential commercial interest, the Contractor shall
submit
to the Management Committee, within one (1) year from the date of
notification of the above said Discovery, the proposed Appraisal
Programme, including a Work Programme and Budget to carry out an
adequate
and effective appraisal of such Discovery, to determine (i) without
delay,
whether such Discovery is a Commercial Discovery and (ii) with reasonable
precision, the boundaries of the area to be delineated as the Development
Area. Such proposed Appraisal Programme shall be supported by all
relevant
data such as Well data, Contractor's best estimate of reserve range
and
production potential, and shall indicate the date of commencement
of the
proposed Appraisal Programme.
|
|
21.5.3
|
The
proposed Appraisal Programme together with the Work Programme and
Budget
referred to in Article 21.5.2 shall be reviewed by the Management
Committee within sixty (60) days of its submission by the Contractor.
The
Management Committee shall offer its comments within the said period.
The
said Appraisal Programme together with the Work Programme and Budget
submitted by the Contractor as revised or modified or amended in
light of
the Management Committee review and advice, shall be adopted as the
Appraisal Programme and the Contractor shall promptly proceed with
implementation of the said
Programme.
|
21.5.4
Β If
on the
basis of the results of the Appraisal Programme, the Contractor is of the
opinion that NANG has been discovered in commercial quantities, it shall submit
to the Management Committee as soon as practicable but not later than three
(3)
years from the date of notification of the aforementioned Discovery, a proposal
for the declaration of the Discovery as a Commercial Discovery. Such proposal
shall take into account the Governmentβs policies on Gas utilization and propose
alternative options, if any for use or consumption of the NANG and be
accompanied by a report on the Discovery supported by, inter alia, technical
and
economic data, evaluations, interpretations and analyses of such data and
feasibility studies relating to the Discovery prepared by or on behalf of the
Contractor, and other relevant information. If no proposal is submitted to
the
Management Committee by the Contractor within three (3) years from the said
Discovery, the Contractor shall relinquish its rights to develop such Discovery
and the area relating to such Discovery shall be excluded from the Contract
Area.
21.5.5Β Where
the
Contractor has submitted a proposal for the declaration of a Discovery as a
Commercial Discovery, the Management Committee shall consider the proposal
of
the Contractor with reference to commercial utilization or commercial
development of the NANG in the domestic market or elsewhere and in the context
of Governmentβs policy on Gas utilization and the chain of activities required
to bring the NANG from the Delivery Point to potential consumers in the domestic
market or elsewhere. The Management Committee may, within eighty five (85)
days
of the submission of the said proposal, request the Contractor to submit any
additional information on the Discovery, the anticipated markets or any other
related matter, that may reasonably be required to facilitate a review. The
Contractor shall submit the required information within thirty (30) days of
the
request by the Management Committee. The Management Committee will advise the
Contractor of its review within one hundred and thirty five (135) days from
the
submission of proposal or within fifty five (55) days from the receipt of
additional information, as the case may be, on the proposal made by the
Contractor to declare the Discovery as a Commercial Discovery.
|
21.5.6
|
If
the Contractor declares the Discovery a Commercial Discovery after
taking
into account the advice of the Management Committee as referred to
in the
Article 21.5.5, the Contractor shall, within one (1) year of the
declaration of the Discovery as a Commercial Discovery, submit a
development plan for the development of the Discovery to the Management
Committee for approval. Such plan shall be supported by all relevant
information including, inter alia, the information required in Article
10.7.
|
21.5.7
Unless otherwise agreed by the Management Committee, it shall consider the
proposed development plan and give their approval within one hundred and sixty
five (165) days of submission thereof or eighty five (85) days from the receipt
of the clarifications/additional information from the Contractor. Any
clarification/additional information required by the Management Committee shall
be asked for within eighty five (85) days of receipt of the proposal from the
Contractor. The Contractor shall provide such additional information within
thirty (30) days from the receipt of request by the Management Committee. If
the
Management Committee fails to convey its decision within one hundred and sixty
five (165) days from the submission of the development plan or eighty five
(85)
days from the receipt of the clarifications/additional information, whichever
is
later, the Contractor may submit the development plan for the approval of the
Government. Also, where, the Management Committee rejects the development plan
of the Contractor, the Contractor can submit the development plan for the
approval of the Government.
21.5.8
Where the development plan is submitted to the Government for approval pursuant
to Article 21.5.7, the Government shall convey its decision within one hundred
and fifteen (115) days from the date of receipt of the proposal from the
Contractor. Government, where it considers necessary, may ask
clarifications/additional
information from the Contractor within eighty five (85) days and shall convey
its decision within fifty five (55) days from the date of receipt of such
clarifications/additional information.
|
21.5.9
|
If
the Government has failed to approve or disapproves the Contractorβs
proposed development plan, within one hundred and fifteen (115) days
from
receipt or within fifty five (55) days from the receipt of clarifications/
information from the Contractor as mentioned in the Article 21.5.8,
the
Government shall advise the Contractor, in writing, of the reasons
for
such failure or disapproval and the Government and the Contractor
shall
meet to discuss the said development plan and the reasons for the said
failure to approve or disapproval, and use their best efforts to
agree on
appropriate modifications thereto to meet the Governmentβs concerns or
objections. Thereafter, the Contractor shall have the right to resubmit,
within eighty five (85) days of communication from the Government,
the
proposed development plan duly amended to meet the Governmentβs concerns.
Such right of resubmission of the proposed development plan shall
be
exercisable by the Contractor only once. The Government will respond
to
the re-submitted plan within one hundred and fifteen (115)
days.Β If
no such plan is submitted to the Government within the above specified
period, the Contractor shall relinquish its right to develop such
Gas
Discovery and such Discovery shall be excluded from the Contract
Area.
|
21.5.10
In the event that the Management Committee or Government, as may be the case,
approves the Contractorβs development plan for the development of such
Commercial Discovery, with such modifications and amendments as the Management
Committee or Government, as may be the case, may approve, the said Gas Discovery
shall be promptly developed by the Contractor in accordance with the approved
plan which shall be the Development Plan.
21.5.11
The Contractor will have a two (2) years period, from the date of approval
of
the Development Plan by the Management Committee or Government, to tie-up the
market(s) for sale of Non-associated Natural Gas.
21.5.12In
the event the Contractor does not commence development of such Discovery within
ten (10) years from the date of the first Discovery Well, the Contractor shall
relinquish its right to develop such Discovery and the area relating to such
Discovery shall be excluded from the Contract Area.
|
21.6
|
Valuation
of Natural Gas
|
|
21.6.1
|
The
Contractor shall endeavour to sell all Natural Gas produced and saved
from
the Contract Area at arms-length prices to the benefits of Parties
to the
Contract.
|
|
21.6.2
|
Notwithstanding
the provision of Article 21.6.1, Natural Gas produced from the Contract
Area shall be valued for the purposes of this Contract as follows
:
|
| Β |
(a)
|
Gas
which is used as per Article 21.2 or flared with the approval of
the
Government or re-injected or sold to the Government pursuant to Article
21.4.5 shall be ascribed a zero
value;
|
| Β |
(b)
|
Gas
which is sold to the Government or any other Government nominee shall
be
valued on the terms and conditions actually obtained including pricing
formula and delivery; and
|
| Β | Β |
(Explanation
: However, it is clarified that this provision would apply only when
the
sale is made to the Government or Government nominee under the provisions
of the Contract)
|
| Β |
(c)
|
Gas
which is sold or disposed of otherwise than in accordance with paragraph
(a) or (b) shall be valued on the basis of competitive arms length
sales
in the region for similar sales under similar
conditions.
|
|
21.7
|
The
formula or basis on which the prices shall be determined pursuant
to
Article 21.6Β shall
be approved by the Government prior to the sale of Natural Gas to
the
consumers/buyers,Β within
sixty (60) Business Days from the receipt of proposal or from the
date of
receipt of clarification/additional information, where asked for
by the
Government. For granting this approval, Government shall take into
account
the prevailing policy, if any, on pricing of Natural Gas including
any
linkages with traded liquid fuels, and it may delegate or assign
this
function to a regulatory authority as and when such an authority
is in
existence and in place.
|
ARTICLE
22
EMPLOYMENT,
TRAINING AND TRANSFER OF TECHNOLOGY
|
22.1
|
Without
prejudice to the right of the Contractor to select and employ such
number
of personnel as, in the opinion of the Contractor, are required for
carrying out Petroleum Operations in a safe, cost effective and efficient
manner, the Contractor shall, to the maximum extent possible, employ,
and
require the Operator and Subcontractors to employ, citizens of India
having appropriate qualifications and experience, taking into account
experience required in the level and nature of the Petroleum
Operations.
|
|
22.2
|
The
Operator shall offer a mutually agreed number of Indian nationals
the
opportunity for on-the-job training and practical experience in Petroleum
Operations during the Exploration Period. Not later than six (6)
months
after approval of the Development Plan, the Operator shall, in
consultation with the Government, establish and implement training
programmes for staff positions in each phase and level of Petroleum
Operations including skilled, technical, executive and management
positions, with a view to ensuring employment of nationals of India
and
gradual and progressive reduction of foreign
personnel.
|
|
22.3
|
At
the request of the Government, the Foreign Companies shall separately
endeavour to negotiate, in good faith, technical assistance agreements
with the Government or a company nominated by Government for this
purpose
setting forth the terms by which each Foreign Company constituting
the
Contractor may render technical assistance and make available commercially
proven technical information of a proprietary nature for use in India
by
the Government or the company nominated by Government. The issues
to be
addressed in negotiating such technical assistance agreements shall
include, but not be limited to, licensing issues, royalty conditions,
confidentiality restrictions, liabilities, costs and method of
payment.
|
ARTICLE
23
LOCAL
GOODS AND SERVICES
|
23.1
|
In
the conduct of Petroleum Operations, the Contractor
shall:
|
| Β |
(a)
|
give
preference to the purchase and use of goods manufactured, produced
or
supplied in India provided that such goods are available on terms
equal to
or better than imported goods with respect to timing of delivery,
quality
and quantity required, price and other
terms;
|
| Β |
(b)
|
employ
Indian Subcontractors having the required skills or expertise, to
the
maximum extent possible, insofar as their services are available
on
comparable standards with those obtained elsewhere and at competitive
prices and on competitive terms; provided that where no such
Subcontractors are available, preference shall be given to non-Indian
Subcontractors who utilise Indian goods to the maximum extent possible,
subject, however, to the proviso in paragraph (a) above;
and
|
| Β |
(c)
|
ensure
that provisions in terms of paragraphs (a) to (b) above are contained
in
contracts between the Operator and its
Subcontractors.
|
|
23.2
|
Subject
to Article 8.3(f), the Contractor shall establish appropriate procedures,
including tender procedures, for the acquisition of goods and services
which shall ensure that suppliers and Subcontractors in India are
given
adequate opportunity to compete for the supply of goods and services.
The
tender procedures shall include, inter alia, the financial amounts
or
value of contracts which will be awarded on the basis of selective
bidding
or open competitive bidding, the procedures for such bidding, and
the
exceptions to bidding in cases of emergency, and shall be subject
to the
approval of the Management
Committee.
|
|
23.3
|
Within
sixty (60) days after the end of each Year, the Contractor shall
provide
the Government with a report outlining its achievements in utilising
Indian resources during that Year in accordance with Section 10 of
Appendix C to this Contract.
|
|
23.4
|
In
this Article "goods" means equipment, materials and
supplies.
|
ARTICLE
24
INSURANCE
AND INDEMNIFICATION
|
24.1
|
Insurance
|
|
24.1.1
|
The
Contractor shall, during the term of this Contract, maintain and
obtain
insurance coverage for and in relation to Petroleum Operations for
such
amounts and against such risks as are customarily or prudently insured in
the international petroleum industry in accordance with modern oilfield
and petroleum industry practices, and shall furnish to the Government,
certificates evidencing that such coverage is in effect. Such insurance
policies shall include the Government as additional insured and shall
waive subrogation against the Government. The said insurance shall,
without prejudice to the generality of the foregoing,
cover:
|
| Β |
(a)
|
loss
or damage to all installations, equipment and other assets for so
long as
they are used in or in connection with Petroleum Operations; provided,
however, that if for any reason the Contractor fails to insure any
such
installation, equipment or assets, it shall replace any loss thereof
or
repair any damage caused thereto;
|
| Β |
(b)
|
loss,
damage or injury caused by pollution in the course of or as a result
of
Petroleum Operations;
|
| Β |
(c)
|
loss
of property or damage or bodily injury suffered by any third party
in the
course of or as a result of Petroleum Operations for which the Contractor
may be liable;
|
| Β |
(d)
|
any
claim for which the Government may be liable relating to the loss
of
property or damage or bodily injury suffered by any third party in
the
course of or as a result of Petroleum Operations for which the Contractor
is liable to indemnify the Government, or the State
Government;
|
| Β |
(e)
|
with
respect to Petroleum Operations offshore, the cost of removing wrecks
and
cleaning up operations following any accident in the course of or
as a
result of Petroleum Operations; and
|
| Β |
(f)
|
the
Contractor's and/or the Operator's liability to its employees engaged
in
Petroleum Operations.
|
24.1.2
The Contractor shall require its Subcontractors to obtain and maintain insurance
against the risks referred to in Article 24.1.1 relating mutatis
mutandisΒ to
such
Subcontractors.
|
24.2
|
Indemnity
|
| Β |
Subject
to Article 4.7, the Contractor shall indemnify, defend and hold the
Government and the State Government harmless against all claims,
losses
and damages of any nature whatsoever, including, without limitation,
claims for loss or damage to property or injury or death to persons
caused
by or resulting from any Petroleum Operations conducted by or on
behalf of
the Contractor.
|
ARTICLE
25
RECORDS,
REPORTS, ACCOUNTS AND AUDIT
|
25.1
|
The
Contractor shall prepare and maintain in original at an office in
India
accurate and current books, records, reports and accounts of its
activities for and in connection with Petroleum Operations so as
to
present a fair, clear and accurate record of all its activities,
expenditures and receipts.
|
|
25.2
|
Based
on generally accepted and recognised accounting principles and modern
petroleum industry practices, record, books, accounts and accounting
procedures in respect of Petroleum Operations shall be maintained
on
behalf of the Contractor by the Operator, at its business office
in India,
in accordance with the Accounting Procedure to this
Contract.
|
|
25.3
|
The
Contractor shall submit to the Government regular Statements and
reports
relating to Petroleum Operations as provided in
Appendix-C.
|
25.4.1
Β The
annual audit of accounts shall be carried out on behalf of the Contractor by
a
qualified, independent firm of recognised chartered accountants, registered
in
India.
25.4.2
Β The
appointment of auditor and the scope of audit should have prior approval of
the
Management Committee.
25.4.3
Β The
Contractor shall submit the audited accounts to the Management Committee for
approval within sixty (60) days from the end of the Year. The Management
Committee shall consider and approve the auditor's report within thirty (30)
days after the submission of such report.
25.4.4
Β Copy
of
the auditors report shall be submitted to the Government within thirty (30)
days
after the approval of the Management Committee.
|
25.5
|
The
Government shall have the right to audit the accounting records of
the
Contractor in respect of Petroleum Operations as provided in the
Accounting Procedure.
|
|
25.6
|
The
accounting and auditing provisions and procedures specified in this
Contract are without prejudice to any other requirements imposed
by any
statute in India, including, without limitation, any specific requirements
of the statutes relating to taxation of
Companies.
|
|
25.7
|
For
the purpose of any audit referred to in Articles 25.5, the Contractor
shall make available in original to the auditor all such books, records,
accounts and other documents and information as may be reasonably
required
by the auditor during normal business hours.
|
ARTICLE
26
INFORMATION,
DATA, CONFIDENTIALITY,
INSPECTION
AND SECURITY
|
26.1
|
The
Contractor shall, promptly after they become available in India,
provide
the Government, free of cost, with all data obtained as a result
of
Petroleum Operations under the Contract including, but not limited
to,
geological, geophysical, geochemical, petrophysical, engineering,
Well
logs, maps, magnetic tapes, cores, cuttings and production data as
well as
all interpretative and derivative data, including reports, analyses,
interpretations and evaluation prepared in respect of Petroleum Operations
(hereinafter referred to as "Data"). Data shall be the property of
the
Government, provided, however, that the Contractor shall have the
right to
make use of such Data, free of cost, for the purpose of Petroleum
Operations under this Contract as provided
herein.
|
|
26.2
|
The
Contractor may, for use in Petroleum Operations, retain copies or
samples
of material or information constituting the Data and, with the approval
of
the Government, original material, except that where such material
is
capable of reproduction and copies have been supplied to the Government,
the Contractor may, subject to the right of inspection by the Government,
export, subject to any applicable regulations, samples or other original
Data for processing or laboratory examination or analysis, provided
that
representative samples equivalent in quality, size and quantity,
or, where
such material is capable of reproduction, copies of equivalent quality,
have first been delivered to the
Government.
|
|
26.3
|
The
Contractor shall keep the Government currently advised of all developments
taking place during the course of Petroleum Operations and shall
furnish
the Government with full and accurate information and progress reports
relating to Petroleum Operations (on a daily, Monthly, Yearly or
other
periodic basis) as Government may reasonably require, provided that
this
obligation shall not extend to proprietary technology. The Contractor
shall meet with the Government at a mutually convenient location
in India
to present the results of all geological and geophysical work carried
out
as well as the results of all engineering and drilling operations
as soon
as such Data becomes available to the
Contractor.
|
|
26.4
|
All
Data, information and reports obtained or prepared by, for or on
behalf
of, the Contractor pursuant to this Contract shall be treated as
confidential and, subject to the provisions herein below, the Parties
shall not disclose the contents thereof to any third party without
the
consent in writing of the other
Parties.
|
|
26.5
|
The
obligation specified in Article 26.4 shall not operate so as to prevent
disclosure:
|
| Β |
(a)
|
to
Affiliates, contractors, or Subcontractors for the purpose of Petroleum
Operations;
|
| Β |
(b)
|
to
employees, professional consultants, advisers, data processing centres
and
laboratories, where required, for the performance of functions in
connection with Petroleum Operations for any Party comprising the
Contractor;
|
| Β |
(c)
|
to
banks or other financial institutions, in connection with Petroleum
Operations;
|
| Β |
(d)
|
to
bonafide intending assignees or transferees of a Participating Interest
of
a Party comprising the Contractor or in connection with a sale of
the
stock or shares of a Party comprising the
Contractor;
|
| Β |
(e)
|
to
the extent required by any applicable law or in connection with any
legal
proceedings or by the regulations of any stock exchange upon which
the
shares of a Party comprising the Contractor are
quoted;
|
| Β |
(f)
|
to
Government departments for, or in connection with, the preparation
by or
on behalf of the Government of statistical reports with respect to
Petroleum Operations, or in connection with the administration of
this
Contract or any relevant law or for any purpose connected with Petroleum
Operations; and
|
| Β |
(g)
|
by
a Party with respect to any Data or information which, without disclosure
by such Party, is generally known to the
public.
|
|
26.6
|
Any
Data, information or reports disclosed by the Parties comprising
the
Contractor to any other person pursuant to Article 26.5 (a) to (d)
shall
be disclosed on the terms that such Data, information or reports
shall be
treated as confidential by the recipient. Prompt notice of disclosures
made by Companies pursuant to Article 26.5 shall be given to the
Government.
|
|
26.7
|
Any
Data, information and reports relating to the Contract Area which,
in the
opinion of the Government, might have significance in connection
with
offers by the Government of acreages, may be disclosed by the Government
for such purpose. Government may also disclose such Data or information
for any exploration programme to be conducted by a third party in
adjoining areas with the consent of the Contractor, for better
understanding of regional geological set-up and such consent by the
Contractor shall not be unreasonably withheld.
|
Β
|
26.8
|
Where
an area ceases to be part of the Contract Area, the Contractor shall
hand
over all the originals and copies of the Data and information with
respect
to that part to the Government within a period of one (1) year from
the
date of relinquishment or surrender. The Contractor shall, however,
be
allowed to retain one copy of the Data in its possession for its
own use,
where required, and shall not use the Data for sale or any other
purposes.
Subject to the provisions of this Article, the Contractor shall keep
all
Data/information confidential.
|
Β
| Β |
Explanatory
Note: Pursuant
to this Article 26, and not withstanding any provisions in the contract
to
the contrary, the Government shall have the right to disclose and
freely
use all data and information at itβs sole discretion except for date of
proprietary nature such as interpretation report to any party on
or after
three (3) Years from acquisition of such data in order to promote
exploration and production activities in the country. For any relinquished
areas, the government shall have the right to disclose and freely
use all
the data immediately after such
relinquishment.
|
|
26.9
|
The
Government shall, at all reasonable times, through duly authorised
representatives, be entitled to observe Petroleum Operations and
to
inspect all assets, books, records, reports, accounts, contracts,
samples
and Data kept by the Contractor or the Operator in respect of Petroleum
Operations in the Contract Area, provided, however, that the Contractor
shall not be required to disclose any proprietary technology. The
duly
authorised representatives shall be given reasonable assistance by
the
Contractor for such functions and the Contractor shall afford such
representatives reasonable use of all facilities and privileges afforded
to its own personnel in the field including the use of office space
and
housing for a period not exceeding 30 mandays in a Year and thereafter
at
the cost of Government. The said representatives shall be entitled
to make
a reasonable number of surveys, measurements, drawings, tests and
copies
of documents, take samples, and make reasonable use of the equipment
and
instruments of the Contractor provided that such functions shall
not
unduly interfere with the Contractor's Petroleum
Operations.
|
|
26.10
|
The
Contractor shall give reasonable advance notice to the Government,
or to
any other authority designated by the Government for such purpose,
of its
programme of conducting surveys by aircraft or by ships, indicating,
inter
alia, the name of the survey to be conducted, approximate extent
of the
area to be covered, the duration of the survey, the commencement
date, and
the name of the airport or port from which the survey aircraft or
ship
will commence its voyage.
|
|
26.11
|
The
Government, or the authority designated by the Government for such
purpose, shall have the right to inspect any aircraft or ship used
by the
Contractor or a Subcontractor carrying out any survey or other operations
in the Contract Area and shall have the right to put on board such
aircraft or ship, Government officers in such number as may reasonably
be
necessary to ensure compliance by the Contractor or the Subcontractor
with
the security requirements of India.
|
ARTICLE
27
TITLE
TO PETROLEUM, DATA AND ASSETS
|
27.1
|
The
Government is the sole owner of Petroleum underlying the Contract
Area and
shall remain the sole owner of Petroleum produced pursuant to the
provisions of this Contract except as regards that part of Crude
Oil,
Condensate or Gas the title whereof has passed to the Contractor
or any
other person in accordance with the provisions of this
Contract.
|
|
27.2
|
Title
to Petroleum to which the Contractor is entitled under this Contract,
and
title to Petroleum sold by the Companies shall pass to the relevant
buyer
party at the Delivery Point. The Contractor shall be responsible
for all
costs and risks prior to and including at the Delivery Point and
each
buyer party shall be responsible for all costs and risks associated
with
such buyer party's share after the Delivery
Point.
|
|
27.3
|
Title
to all Data specified in Article 26 shall be vested in the Government
and
the Contractor shall have the right to use thereof as therein
provided.
|
|
27.4
|
Assets
purchased by the Contractor for use in Petroleum Operations shall
be owned
by the Parties comprising the Contractor in proportion to their
Participating Interest provided that the Government shall have the
right
to require vesting of full title and ownership in it, free of charge
and
encumbrances, of any or all assets, whether fixed or movable, acquired
and
owned by the Contractor for use in Petroleum Operations inside or
outside
the Contract Area, such right to be exercisable at the Governmentβs option
upon expiry or earlier termination of the
Contract.
|
|
27.5
|
The
Contractor shall be responsible for proper maintenance, insurance
and
safety of all assets acquired for Petroleum Operations and for keeping
them in good repair, order and working condition at all times, and
the
costs thereof shall be recoverable as Contract Costs in accordance
with
Appendix-C.
|
|
27.6
|
So
long as this Contract remains in force, subject to Article 27.5,
the
Contractor shall, free of any charge for the purpose of carrying
out
Petroleum Operations hereunder, have the exclusive use of assets
which
have become the property of
Government.
|
|
27.7
|
Equipment
and assets no longer required for Petroleum Operations during the
term of
the Contract shall be sold, exchanged or otherwise disposed of by
the
Contractor, provided however that the proceeds of sale shall be credited
to Petroleum Operations as provided in Appendix C, provided that
prior
written consent of the Management Committee shall be obtained for
each
transaction in excess of US$ 50,000 (Fifty thousand United States
Dollars)
or such other value as may be agreed from time to time by the Management
Committee. The consent of the Management Committee shall not be
unreasonably withheld.
|
ARTICLE
28
ASSIGNMENT
OF PARTICIPATING INTEREST
|
28.1
|
Subject
to the terms of this Article and other terms of this Contract, any
Party
comprising the Contractor may assign, or transfer, a part or all
of its
Participating Interest, with the prior written consent of the Government,
which consent shall not be unreasonably withheld, provided that the
Government is satisfied that:
|
| Β |
(a)
|
the
prospective assignee or transferee is of good standing, has the capacity
and ability to meet its obligations hereunder, and is willing to
provide
an unconditional undertaking to the Government to assume its Participating
Interest share of obligations and to provide guarantees in respect
thereof
as provided in the Contract;
|
| Β |
(b)
|
the
prospective assignee or transferee is not a company incorporated
in a
country with which the Government, for policy reasons, has restricted
trade or business;
|
| Β |
(c)
|
the
prospective assignor or transferor and assignee or transferee respectively
are willing to comply with any reasonable conditions of the Government
as
may be necessary in the circumstances with a view to ensuring performance
under the Contract; and
|
| Β |
(d)
|
the
assignment or transfer will not adversely affect the performance
or
obligations under this Contract or be contrary to the interests of
India.
|
|
28.1.1
|
Subject
to Article 28.7, nothing in this Article 28 shall prevent a Party
comprising the Contractor from assigning or transferring a part or
all of
its Participating Interest to an Affiliate, with the approval of
the
Management Committee, provided
that;
|
| Β |
a)
|
the
assignee provides an irrevocable, unconditional bank guarantee from
a
reputed bank of good standing in India, acceptable to the Government,
in
favour of the Government, for the amount specified in Article 29.2,
in a
form provided at Appendix-G;
|
| Β |
b)
|
the
assignee provides a parent financial and performance guarantee issued
by
the guarantor which furnished the guarantee pursuant to Article 29
in
respect of the assignor Partyβs obligations under this Contract in favour
of the Government, of the performance of such Affiliate assignee
of its
obligations under this Contract;
|
| Β |
c)
|
the
prospective Affiliate is not a company incorporated in a country
with
which the Government, for policy reason, has restricted trade or
business;
and
|
| Β |
d)
|
the
assignment will not adversely affect the performance or obligations
under
this Contract or be contrary to the interest of
India.
|
|
28.2
|
In
case of any change in the status of a Company or its shareholding
resulting in a change in:
|
| Β |
a)
|
the
control of the Company; or
|
| Β |
b)
|
its
relationship with the company(ies) providing the guarantee under
Article
29.1 (a) and 29.1 (b);
|
the
Company shall seek the consent of the Government for assigning the Participating
Interest under the changed circumstances and the provisions of this Article
28
shall apply, mutatis mutandis, to be obtaining of such consent. For the purpose
of this Article 28.2, control has the same meaning as in Article 1.3.
|
28.3
|
An
application for consent to assign or transfer shall be accompanied
by all
relevant information concerning the proposed assignment or transfer
including detailed information on the proposed assignee or transferee
and
its shareholding and corporate structure, as was earlier required
from the
Companies constituting the Contractor, the terms of the proposed
assignment or transfer and the unconditional undertaking referred
to in
Article.
|
|
28.4
|
The
applicant shall also submit such information relating to the prospective
assignee or transferee of the assignment or transfer as the Government
may
reasonably require to enable proper consideration and disposal of
the
application.
|
|
28.5
|
No
assignment or transfer shall be effective until the approval of the
Government is received or deemed to have been received. Approval
may be
given by the Government on such terms and conditions as it may deem
fit.
Provided that such terms and conditions may not increase the obligations
of the Parties comprising the Contractor. Upon assignment or transfer
of
its interest in this Contract, the assignor or transferor shall be
released and discharged from its obligations hereunder only to the
extent
that such obligations are assumed by the assignee or transferee with
the
approval of the Government.
|
|
28.6
|
In
the event that the Government does not give its consent or does not
respond to a request for assignment or transfer by a Party comprising
the
Contractor within one hundred and twenty (120) days of such request
and
receipt of all information referred to in Article 28.3 above, consent
shall be deemed to have been given by the
Government.
|
|
28.7
|
An
assignment or transfer shall not be made where the Participating
Interest
to be retained by the proposed assignor or the percentage interest
of
assignee shall be less than ten per cent (10%) of the total Participating
Interest of all the constituents of the Contractor, except where
the
Government, on the recommendations of the Management Committee may,
in
special circumstances, so permit.
|
28.8Β Nothing
contained in this Article 28, shall prevent a Party comprising the Contractor
from mortgaging, pledging, charging or otherwise encumbering at its own risk
and
cost all or part of its Participating Interest for the purposes of security
relating to finance to the extent required for performing its obligation under
the Contract, provided that:Β
| Β |
i)
|
such
Party shall remain solely liable for all its obligations relating
to its
Participating Interest to the exclusion of the other participants
thereto;
|
| Β |
ii)
|
the
encumbrance shall be expressly subordinated to the rights of the
other
Parties under this Contract. The obligations occurring from the said
encumbrance shall be the sole responsibility of the original Party
and
shall in no manner compromise the rights of other Parties to the
Contract;
|
| Β |
iii)
|
such
Party has given reasonable notice of such encumbrance and furnishes
to all
other Parties (including, for the avoidance of doubt, the Government)
a
certified copy of the executed instrument(s) evidencing the encumbrances;
|
| Β |
iv)
|
keeping
in view the national interest of India, prior consent of the Government
shall be required (which consent shall not be unreasonably withheld)
of
the list of potential lenders with whom such Party can consider
hypothecation;
|
| Β |
v)
|
the
Party creating the charge shall ensure that such charge shall not
in any
way affect the interest of other Parties or result in interference
with
joint operations. In the event of any claims or liabilities imposed
on
other Parties because of the creation of such charges, the Party
having
created charge on its Participating Interest shall indemnify the
other
Parties; and
|
| Β |
vi)
|
in
case of foreclosure or default by a borrowing Party, the mortgagee
shall
not be deemed to have acquired a right to carry on either by itself
or
through an agent, the Petroleum Operation, without the written consent
of
the Government of India.
|
|
28.8.1
|
The
Parties acknowledge that to obtain financing a Party (βBorrowerβ) will be
required to secure for a permitted chargee the right to receive a
copy of
any notice served on the Borrower and the Parties agree that they
shall
serve a copy of any such notice on any such permitted chargee in
accordance with the provisions of Article 37 at the same time as
such
notice is served on the Borrower. For the purposes of Article 37
the
address for service of notices of the permitted chargee shall be
that
specified in the instrument or instruments referred to in Article
28.8(iii).
|
|
28.8.2
|
In
case lender elects to participate directly or through a company other
than
the Borrower under the financing arrangement referred to above, the
same
shall be subject to the rights of Government as contained in Article
28.1
of Contract and the pre-emptive rights of the Parties as may be contained
in Operating Agreement. Any Party which wishes to exercise the said
pre-emptive rights will explicitly assume the obligation on the same
terms
and conditions as the Borrower.
|
ARTICLE
29
GUARANTEES
|
29.1
|
Ease
of the Companies constituting the Contractor shall procure and deliver
to
the Government within thirty (30) days fromΒ theΒ Effective
Date of this Contract:
|
| Β |
(a)
|
an
irrevocable, unconditional bank guarantee from a reputed bank of
good
standing in India, acceptable to the Government, in favour of the
Government, for the amount specified in Article 29.2, in a form provided
at Appendix-G;
|
| Β |
(b)
|
financial
and performance guarantee in favour of the Government from a parent
company acceptable to the Government, in the form and substance set
out in
Appendix-E1, or, where there is no such parent company, the financial
and
performance guarantee from the Company itself in the form and substance
setout in Appendix-E2;
|
| Β |
(c)
|
a
legal opinion from its legal advisors, in a form satisfactory to
the
Government, to the effect that the aforesaid guarantees have been
duly
signed and delivered on behalf of the guarantors with due authority
and is
legally valid and enforceable and binding upon
them;
|
29.2
Β The
amount of the guarantee referred to in Article 29.1 (a) Β above
shall be an amount equal to thirty five percent (35%) of the Company's
Participating Interest share of the total estimated annual expenditure in
respect of the Minimum Work Programme to be undertaken by the Contractor in
the
Contract Area during the relevant Year of a Phase, subject to Article 29.3.
the
total estimated expenditure for the relevant Year for the purpose of furnishing
bank guarantee by the Contractor shall be higher of the cost estimates made
by
the Directorate General of Hydrocarbons (DGH) or budget estimates of the
Contractor as presented by it to the Management Committee.
|
29.3
|
The
guarantee referred to in Article 29.2 shall provide
that;
|
| Β |
(a)
|
at
the end of each Year it shall be automatically renewed for an amount
equal
to a Companyβs Participating Interest share of thirty five percent (35%)
of the total estimated expenditure in respect of the Minimum Work
Programme to be undertaken for the following Year of an Exploration
Phase,
unless the Contractor has terminated the Contract in accordance with
the
terms thereof. The guarantee shall be renewed at the end of each
Year
positively thirty (30) days before the expiry of the guarantee
period.
|
| Β |
(b)
|
after
the completion and due performance of the Minimum Work Programme
of a
particular Exploration Phase, the guarantee will be released in favour
of
the Company on presentation to the bank of a certificate from the
Government that the obligation of the Contractor has been fulfilled
and
the guarantee may be released, subject to Article 29.4. Such certificate
shall be provided within thirty (30) days from the completion of
the
Minimum Work Programme and fulfillment of obligations under the Contract
to the satisfaction of the
Government.
|
|
29.4
|
If
the Contractor elects to proceed to the second Exploration Phase
of the
Exploration Period, a bank guarantee for the Phase in terms of Articles
29.1 (a), 29.2 and 29.3 shall be delivered to the Government with
the
notice of such election and if such guarantee is not so delivered,
the
provisions of Article 29.5 shall
apply.
|
|
29.5
|
If
any of the documents referred to in Article 29.1 is not delivered
within
the period specified herein, this Contract may be terminated by the
Government upon ninety (90) days written notice of its intention
to do
so.
|
|
29.6
|
Subject
to Article 29.7, notwithstanding any change in the composition or
shareholding of the parent company furnishing a performance guarantee
as
provided herein, it shall, not under any circumstances, be absolved
of its
obligations contained in the guarantees provided pursuant to Article
29.1(b).
|
|
29.7
|
If
:
|
Β
| Β |
(a)
|
a
Party (βAssignorβ) assigns all or a part of its Participating Interest to
a third party (βAssigneeβ) in accordance with Article 28;
|
| Β |
(b)
|
the
Assignee provides an irrevocable, unconditional bank guarantee from
a
reputed bank of good standing in India, acceptable to the Government,
in
favour of the Government, for an amount equal to the assigneeβs
Participating Interest share of the estimated expenditure of the
Minimum
Work Programme of the Exploration Phase current at the Effective
Date of
the assignment;
|
| Β |
(c)
|
the
Assignee provides performance guarantee and legal opinion in terms
of this
Article; and
|
| Β |
(d)
|
the
addendum to the Contract giving effect to the assignment of Participating
Interest is executed by all
Parties;
|
then
the
Government shall release the guarantee given by the assignor under Article
29.1
(a) to the extent of the amount of the guarantee provided by the assignee and
where relevant the guarantee under Article 29.1 (b).
ARTICLE
30
TERM
AND TERMINATION OF THE CONTRACT
|
30.1
|
The
term of this Contract shall be for the period of the License and
any Lease
granted thereunder, unless the Contract is terminated earlier in
accordance with its terms, and shall be deemed to have been terminated,
if
for any reason, the Contractor ceases to hold such License or
Lease.
|
|
30.2
|
Subject
to the provision of Articles 5, 14 and 30.6 and without prejudice
to the
provisions of Article 30.7 or any other provisions of this Contract,
the
Contractor shall have the right to terminate this
Contract:
|
| Β |
(a)
|
with
respect to any part of the Contract Area other than a Development
Area
then producing, or that prior thereto had produced Petroleum, upon
giving
ninety (90) days written notice of its intention to do so;
and
|
| Β |
(b)
|
with
respect to any Development Area in which Petroleum is being produced,
or
that prior thereto had produced Petroleum, upon giving at least one
hundred and eighty (180) days written notice of its intention to
do
so.
|
|
30.3
|
This
Contract may, subject to the provisions herein below and Article
31, be
terminated by the Government upon giving ninety (90) days written
notice
with reasons to the other Parties of its intention to do so in the
following circumstances, namely, that the Contractor or a Party comprising
the Contractor (βthe Defaulting
Partyβ)
|
| Β |
(a)
|
has
knowingly submitted any false statement to the Government in any
manner
which was a material consideration in the execution of this Contract;
or
|
| Β |
(b)
|
has
intentionally and knowingly extracted or authorised the extraction
of
hydrocarbon not authorized to be extracted by the Contract or without
the
authority of the Government except such extractions as may be unavoidable
as a result of operations conducted hereunder in accordance with
generally
accepted modern oilfield and petroleum industry practices which,
when so
extracted, were immediately notified to the Government
or
|
| Β |
(c)
|
is
adjudged bankrupt by a competent court or enters into or scheme of
composition with its creditors or takes advantage of any law for
the
benefit of debtors; or
|
| Β |
(d)
|
has
passed a resolution to apply to a competent court for liquidation
of the
Company unless the liquidation is for the purpose of amalgamation
or
reconstruction of which the Government has been given notice and
the
|
Government
is satisfied that the Company's performance under this Contract would not be
adversely affected thereby and has given its approval thereto; or
| Β |
(e)
|
has
assigned any interest in the Contract without the prior consent of
the
Government as provided in Article 28;
or
|
| Β |
(f)
|
has
failed to make any monetary payment required by law or under this
Contract
by the due date or within such further period after the due date
as may
thereafter be specified by the Government; or
|
| Β |
(g)
|
has
failed to comply with or has contravened the provisions of this Contract
in a material particular; or
|
| Β |
(h)
|
has
failed to comply with any final determination or award made by a
sole
expert or arbitrators subject to Article 33; or
|
| Β |
(i)
|
has
failed to carry out or observe any of the terms and conditions of
the
License or Lease or the provisions of the Acts or Rules in force
thereunder, subject however, to Article
31.
|
| Β |
(j)
|
on
notice of termination as provided in Article
29.5.
|
| Β |
PROVIDED
THAT
|
| Β |
where
the Contractor comprises two or more Parties, the Government shall
not
exercise its rights of termination pursuant to Article 30.3, on the
occurrence, in relation to one or more, but not all, of the Parties
comprising the Contractor, of an event entitling the Government to
terminate the Contract,
|
| Β |
(a)
|
if
any other Party or Parties constituting the Contractor (the non-Defaulting
Party or Parties) satisfies the Government that it, or they, is/are
willing and would be able to carry out the obligations of the
Contractor.
|
| Β |
(b)
|
where
the non Defaulting Party or Parties with the consent of the Government
has/have acquired the Participating Interest of the Defaulting Party
pursuant to the provisions of the Operating Agreement and has/have
procured and delivered to the Government a guarantee or guarantees
as
referred to in Article 29.1 in respect of the Participating Interest
of
the Defaulting Party acquired by the non Defaulting Party or
Parties.
|
|
30.4
|
This
Contract may also be terminated by the Government on giving the requisite
notice specified above if the events specified in Article 30.3 (c)
and (d)
occur with respect to a company which has given a performance guarantee
pursuant to Article 29 subject however to Article
30.5.
|
|
30.5
|
If
the circumstance or circumstances that give rise to the right of
termination under Article 30.3(f) or (g) or (i) or Article 30.4 are
remedied (whether by the Defaulting Company or by another Party or
Parties
in its behalf) within the ninety (90) day period, or such extended
period
as may be granted by the Government,
|
following
the notice of the Government's intention to terminate the Contract as aforesaid,
such termination shall not become effective.
|
30.6
|
On
termination of this Contract, for any reason whatsoever, the rights
and
obligations of the Contractor shall cease but such termination shall
not
affect any rights of any Party which may have accrued or any obligations
undertaken or incurred including obligations under Article 5.6, by
the
Contractor or any Party comprising the Contractor and not discharged
prior
to the date of termination.
|
|
30.7
|
In
the event of termination pursuant to Articles 30.2, 30.3 or
30.4:
|
| Β |
(a)
|
the
Government may require the Contractor, for a period not exceeding
one
eighty (180) days from the date of termination, to continue, for
the
account and at the cost of the Government, Crude Oil or Natural Gas
production activities until the right to continue such production
has been
transferred to another entity;
|
| Β |
(b)
|
a
Foreign Company, which is a constituent of the Contractor, shall
have to
remove and export all its property subject to Article 27 and the
provisions hereof provided that in the event that ownership of any
property is in doubt, or disputed, such property shall not be exported
unless and until the doubt or dispute has been settled in favour
of the
Foreign Company.
|
|
30.8
|
Within
ninety (90) days after the termination of this Contract, pursuant
to
Article 30.2, 30.3, or 30.4, or such longer period as the Government
may
agree, the Contractor shall comply with Article 14.9 and any reasonably
necessary action as directed by the Government to avoid Environmental
Damage or hazards to human life or to the property of
others.
|
ARTICLE
31
FORCE
MAJEURE
|
31.1
|
Any
non-performance or delay in performance by any Party hereto of any
of its
obligations under this Contract, or in fulfilling any condition of
any
License or Lease granted to such Party, or in meeting any requirement
of
the Act, the Rules or any License or Lease, shall, except for the
payment
of monies due under this Contract or under the Act and the Rules
or any
law, be excused if, and to the extent that, such non-performance
or delay
in performance under this Contract is caused by Force Majeure as
defined
in this Article.
|
|
31.2
|
For
the purpose of this Contract, the term Force Majeure means any cause
or
event, other than the unavailability of funds, whether similar to
or
different from those enumerated herein, lying beyond the reasonable
control of, and unanticipated or unforeseeable by, and not brought
about
at the instance of, the Party claiming to be affected by such event,
or
which, if anticipated or foreseeable, could not be avoided or provided
for, and which has caused the non-performance or delay in performance.
Without limitation to the generality of the foregoing, the term Force
Majeure shall include natural phenomena or calamities, earthquakes,
typhoons, fires, wars declared or undeclared, hostilities, invasions,
blockades, riots, strikes, insurrection and civil disturbances but
shall
not include the unavailability of
funds.
|
|
31.3
|
Where
a Party is claiming suspension of its obligations on account of Force
Majeure, it shall promptly, but in no case later than seven (7) days
after
the occurrence of the event of Force Majeure, notify the Management
Committee in writing giving full particulars of the Force Majeure,
the
estimated duration thereof, the obligations affected and the reasons
for
its suspension.
|
|
31.4
|
A
Party claiming Force Majeure shall exercise reasonable diligence
to seek
to overcome the Force Majeure event and to mitigate the effects thereof
on
the performance of its obligations under this Contract. The Party
affected
shall promptly notify the Management Committee as soon as the Force
Majeure event has been removed and no longer prevents it from complying
with the obligations which have been suspended and shall thereafter
resume
compliance with such obligations as soon as
possible.
|
|
31.5
|
The
Party asserting the claim of Force Majeure shall have the burden
of
proving that the circumstances constitute valid grounds of Force
Majeure
under this Article and that such Party has exercised reasonable diligence
and efforts to remedy the cause of any alleged Force
Majeure.
|
|
31.6
|
Where
a Party is prevented from exercising any rights or performing any
obligations under this Contract due to Force Majeure, the time for
the
performance of the obligations affected thereby and for performance
of any
obligation or the exercise of any right dependent thereon, and the
term of
any Exploration Phase of the Exploration Period or this Contract,
may be
extended to the extent of Force Majeure period or by such period
as may be
agreed by the Management Committee.
|
|
31.7
|
Notwithstanding
anything contained herein above, if an event of Force Majeure occurs
and
is likely to continue for a period in excess of thirty (30) days,
the
Parties shall meet to discuss the consequences of the Force Majeure
and
the course of action to be taken to mitigate the effects thereof
or to be
adopted in the circumstances.
|
ARTICLE
32
APPLICABLE
LAW AND LANGUAGE OF THE CONTRACT
|
32.1
|
This
Contract shall be governed and interpreted in accordance with the
laws of
India.
|
|
32.2
|
Nothing
in this Contract shall entitle the Contractor to exercise the rights,
privileges and powers conferred upon it by this Contract in a manner
which
will contravene the laws of India.
|
|
32.3
|
The
English language shall be the language of this Contract and shall
be used
in arbitral proceedings. All communications, hearing or visual materials
or documents relating to this Contract shall be written or prepared
in
English.
|
|
32.4
|
The
laws will also include amendments, revisions, modifications
etc.
|
ARTICLE
33
SOLE
EXPERT, CONCILIATION AND ARBITRATION
|
33.1
|
The
Parties shall use their best efforts to settle amicably all disputes,
differences or claims arising out of or in connection with any of
the
terms and conditions of this Contract or concerning the interpretation
or
performance thereof.
|
|
33.2
|
Matters
which, by the terms of this Contract, the Parties have agreed to
refer to
a sole expert and any other matter which the Parties may agree to
so
refer, may be referred to a sole expert who shall be an independent
and
impartial person of international standing with relevant qualifications
and experience, appointed by written agreement between the Parties
and who
shall not, by virtue of nationality, personal connection or commercial
interest, have a conflict between his/her own interest and his/her
duty as
a sole expert. In the event that the Parties fail or are unable to
agree
on a sole expert within thirty (30) days or such longer period as
may be
mutually agreed by Parties, the sole expert shall be appointed by
a body
or an institution or an agency or a person, mutually agreed by Parties.
In
case, there is no agreement on the body or an institution or an agency
or
a person for appointing sole expert or such institution or agency
or body
fails to appoint a sole expert within thirty (30) days or such longer
period as may be mutually agreed by Parties, the matter shall be
referred
to arbitration.Β Any
sole expert appointed shall be acting as an expert and not as an
arbitrator and the decision of the sole expert on matters referred
to
him/her shall be final and binding on the Parties and shall not be
subject
to arbitration.
|
|
33.3
|
Subject
to the provisions of this Contract, the Parties hereby agree that
any
controversy, difference, disagreement or claim for damages, compensation
or otherwise (hereinafter in this Clause referred to as a βdisputeβ)
arising between the Parties, which cannot be settled amicably within
ninety (90) days after the dispute arises, may (except for those
referred
to in Article 33.2, which may be referred to a sole expert) be submitted
to conciliation or an arbitral tribunal for final decision as hereinafter
provided.
|
|
33.4
|
The
arbitral tribunal shall consist of three arbitrators. Each Party
to the
dispute shall appoint one arbitrator and the Party or Parties shall
so
advise the other Parties. The two arbitrators appointed by the Parties
shall appoint the third arbitrator.
|
|
33.5
|
Any
Party may, after appointing an arbitrator, request the other Party(ies)
in
writing to appoint the second arbitrator. If such other Party fails
to
appoint an arbitrator within thirty (30) days of receipt of the written
request to do so, such arbitrator may, at the request of the first
Party,
be appointed in accordance with Arbitration and Conciliation Act,
1996.Β
|
|
33.6
|
If
the two arbitrators appointed by or on behalf of the Parties fail
to agree
on the appointment of the third arbitrator within thirty (30) days
of the
appointment of the second arbitrator and if the Parties do not otherwise
agree, at the request of either Party, the third arbitrator shall
be
appointed in accordance with Arbitration and Conciliation Act,
1996.
|
|
33.7
|
If
any of the arbitrators fails or is unable to act, his successor shall
be
appointed by the Party or person who originally appointed such in
the
manner set out in this Article as if he was the first
appointment.
|
|
33.8
|
The
decision of the arbitral tribunal shall be pronounced within four
(4)
months unless otherwise extended by the Parties, and, in case of
difference among the arbitrators the decision of the majority shall
be
final and binding on the Parties.
|
|
33.9
|
The
arbitration agreement contained in this Article 33 shall be governed
by
the Arbitration and Conciliation Act, 1996 (Arbitration Act). Arbitration
proceedings shall be conducted in accordance with the rules for
arbitration provided in Arbitration
Act.
|
|
33.10
|
The
right to arbitrate disputes under this Contract shall survive expiry
or
the termination of this Contract.
|
|
33.11
|
Prior
to submitting a dispute to arbitration, the Parties may by mutual
agreement submit the matter for conciliation in accordance with Part
III
of the Arbitration and Conciliation Act, 1996. No arbitration proceedings
shall be instituted while conciliation proceedings are pending provided
that a Party may initiate arbitration proceedings in the event that
dispute has not been resolved by conciliation within sixty (60) days
of
the date of agreement by the Parties to submit such dispute to
conciliation.
|
|
33.12
|
The
venue of the sole expert, conciliation or arbitration proceedings
pursuant
to this Article, unless the Parties agree otherwise, shall be New
Delhi,
India and shall be conducted in the English language. Insofar as
practicable, the Parties shall continue to implement the terms of
this
Contract notwithstanding the initiation of proceedings before a sole
expert, conciliator or arbitral tribunal and any pending claim or
dispute.
|
|
33.13
|
The
fees and expenses of a sole expert or conciliator appointed by the
Parties
shall be borne equally by the Parties. The cost and expenses of arbitrator
appointed by a Party in accordance with the provision of this Article
shall be borne by the respective Party and the cost and expenses
of third
arbitrator and other incidental expenditure in relation to arbitration
and
liability thereof shall be at the discretion of the
arbitrators.
|
|
33.14
|
Notwithstanding
anything contrary contained herein above, in the event of dispute
among
Government Company(ies) and with the Government, such disputes shall
be
settled in accordance with guidelines issued on the subject by Government
from time to time.
|
ARTICLE
34
CHANGE
OF STATUS OF COMPANIES
|
34.1
|
The
Parties comprising the Contractor shall notify the Government of
any
change in the management or control of a Company(ies) or the relationship
with any guarantor of the
Company(ies).
|
ARTICLE
35
ENTIRE
AGREEMENT, AMENDMENTS, WAIVER AND MISCELLANEOUS
|
35.1
|
This
Contract supersedes and replaces any previous agreement or understanding
between the Parties, whether oral or written, on the subject matter
hereof, prior to the execution date of this
Contract.
|
|
35.2
|
This
Contract shall not be amended, modified, varied or supplemented in
any
respect except by an instrument in writing signed by all the Parties,
which shall state the date upon which the amendment or modification
shall
become effective.
|
|
35.3
|
No
waiver by any Party of any one or more obligations or defaults by
any
other Party in the performance of this Contract shall operate or
be
construed as a waiver of any other obligations or defaults whether
of a
like or of a different character.
|
|
35.4
|
The
provisions of this Contract shall inure to the benefit of and be
binding
upon the Parties and their permitted assigns and successors in interest.
|
|
35.5
|
In
the event of any conflict between any provisions in the main body
of this
Contract and any provision in the Appendices, the provision in the
main
body shall prevail.
|
|
35.6
|
The
headings of this Contract are for convenience of reference only and
shall
not be taken into account in interpreting the terms of this
Contract.
|
|
35.7
|
Reference
to any law or regulation having the force of law includes a reference
to
that law or regulation as from time to time may be amended, extended
or
re-enacted.
|
|
35.8
|
A
reference in this Contract to the word βincludingβ shall also mean
βincluding but not limited toβ.
|
ARTICLE
36
CERTIFICATES
|
36.1
|
A
Company shall furnish, prior to execution of this Contract, a duly
authorised copy of a resolution properly and legally passed by the
Board
of Directors of the Company authorising its President or any
Vice-President or any other representative to execute this Contract
along
with a certificate duly signed by the Secretary or an Assistant Secretary
of the Company under its seal in this regard and to the effect that
the
Company has the power and authority to enter into this Contract and
to
perform its obligations thereunder and has taken all necessary action
to
authorise the execution, delivery and performance of the
Contract.
|
ARTICLE
37
NOTICES
|
37.1
|
All
notices, statements, and other communications to be given, submitted
or
made hereunder by any Party to another shall be sufficiently given
if
given in writing in English language and sent by registered post,
postage
paid, or by telegram, telex, facsimile, radio or cable, to the address
or
addresses of the other Party or Parties as
follows:
|
| Β |
(a)
|
If
to the Government:
|
| Β | Β |
Secretary
to the Government of India
|
| Β | Β |
Ministry
of Petroleum and Natural Gas
|
| Β | Β |
Shastri
Bhavan
|
| Β | Β |
Xx.
Xxxxxxxx Xxxxxx Xxxx,
|
| Β | Β |
Xxx
Xxxxx- 000000, XXXXX
|
| Β | Β |
Facsimile
No.: 91 11 3383585
|
Β
| Β |
(b)
|
Xx.
Xxxx Xxxx Xxx
|
GeoGlobal
Resources (Barbados) Inc.
|
Β
|
Β |
c/o310,
000- 0xx
Xxxxxx XX
|
| Β | Β |
Xxxxxxx,
Xxxxxxx,
|
| Β | Β |
Xxxxxx
X0X 0X0
|
Facsimile
No.:Β Β Β x0
000
000-0000
Telephone
No.: Β x0
000
000-0000
|
37.2
|
Notices
when given in terms of Article 37.1 shall be effective when delivered
if
offered at the address of the other Parties as under Article 37.1
during
business hours on working days and, if received outside business
hours, on
the next following working day.
|
|
37.3
|
Any
Party may, by reasonable notice as provided hereunder to the other
Parties, change its address and other particulars for notice
purpose.
|
IN
WITNESS WHEREOF, the representatives of the Parties to this Contract being
duly
authorised have hereunto set their hands and have executed these presents this
22nd day of May, 2007.
| Β |
Signed
for and on
|
| Β |
behalf
of the
|
President
of IndiaΒ
Signature
:Β
/s/______________Β Β Β Β Β Β Β Β Β Β
Name
:Β Β <blank>
Β
In
presence of Β Β
/s/______________
Β
Β
Β
Β
Signed
for and on behalf
of
GGRBΒ Β Β Β Β Β Β Β Β Β Β Β Β Β Β Signature
:Β /s/Β Β Β Β Β Β Β Β Β Β Β Β
Name
:Β Β
Xxxx
Xxxx Xxx
Β
In
presence of:Β Β
/s/
X.Xxxxxxxxx
Name
:Β Β X.
Xxxxxxxx
Β
APPENDIX
A
DESCRIPTION
OF THE CONTRACT AREA
Β
| Β |
The
area comprising approximately 2649 Sq. Km., Onshore India identified
as
Block
DS-ONN-2004/1
herein and shown on the map attached as Appendix
B.
|
Longitude
and Latitude measurements commencing at points A to D are given below
:
|
Coordinates
|
||||||||||
|
Longitude
|
Latitude
|
|||||||||
|
Pt.
|
Deg.
|
Min.
|
Sec.
|
Deg.
|
Min.
|
Sec.
|
||||
| Β | Β | Β | Β | Β | Β | Β | ||||
|
A
|
74
|
45
|
0.00
|
21
|
36
|
56.73
|
||||
|
B
|
74
|
45
|
0.00
|
21
|
5
|
0.00
|
||||
|
C
|
75
|
15
|
0.00
|
21
|
5
|
0.00
|
||||
|
D
|
75
|
15
|
0.00
|
21
|
24
|
20.34
|
||||
|
(Pt.
D to A follows Inter-State boundary between Maharashtra and Madhya
Pradesh)
|
||||||||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | Β | Β | |||||
| Β | Β | Β | Β | Β | Β | Β | ||||
| Β | Β | Β | Β | |||||||
| Β | Β | Β | Β | |||||||
Appendix B
Map of Contract Area
Β
APPENDIX
C
ACCOUNTING
PROCEDURE TO
THE
CONTRACT
BETWEEN
THE
GOVERNMENT OF INDIA
AND
GEOGLOBAL
RESOURCES (BARBADOS) INC.
WITH
RESPECT TO CONTRACT AREA
IDENTIFIED
AS
BLOCK
: DS-ONN-2004/1
TABLE
OF CONTENTS
SectionsΒ ContentΒ Β Β Β Β Β Β Β
Section
1: Β General
Provisions
| Β | Β |
1.1
Purpose
|
| Β | Β |
1.2
Definitions
|
| Β | Β |
1.3
Inconsistency
|
| Β | Β |
1.4
Documentation and Statements to be
|
| Β | Β |
submitted
by the Contractor
|
| Β | Β |
1.5
Language and units of account
|
| Β | Β |
1.6
Currency exchange rates
|
| Β | Β |
1.7
Payments
|
| Β | Β |
1.8
Arms length transactions
|
| Β | Β |
1.9
Audit and inspection rights of the
|
| Β | Β |
Government
|
| Β | Β |
1.10
Revision of Accounting Procedure
|
Section
2:Β Classification,
Definition and Allocation of Costs and Expenditures
| Β | Β |
2.1
Segregation of Costs
|
| Β | Β |
2.2
Exploration Costs
|
| Β | Β |
2.3
Development Costs
|
| Β | Β |
2.4
Production Costs
|
| Β | Β |
2.5
Service Costs
|
| Β | Β |
2.6
General and Administrative Costs
|
Section
3:Β Costs,
Expenses, Expenditures and Incidental Income of the
Contractor
3.1Β Costs
recoverable and allowable without
further
approval of the Government:
3.1.1Β Surface
Rights
3.1.2
Β Labour
and Associated Labour Costs
3.1.3Β Transportation
Costs
3.1.4
Β Charges
for Services -
(i)
Third
Parties
(ii)
Affiliates of Contractor
3.1.5Β Communications
3.1.6Β Office,
Shore Bases and
Β Β Miscellaneous
facilities
3.1.7Β Environmental
Studies and Protection
3.1.8
Β Materials
and Equipments
(i)Β
General
Β Β Β (ii)Β
Warranty
(iii)
Β Value
of
Materials charged to the accounts under the Contract
3.1.9Β Duties,
fees and other charges
3.1.10Β Insurance
and Losses
3.1.11Β Legal
expenses
3.1.12Β Training
costs
3.1.13Β General
and Administrative
Costs
3.1.14Β Royalty,
License fee, surface rentals etc.
3.2
Β Costs
not
recoverable and not allowable
under
the
Contract
3.3Β Other
Costs recoverable and allowable
only
with
Management Committee approval
3.4
Β Incidental
income and credits
Β Β 3.5Β Non-duplication
of charges and credits
Section
4: Β Records
and Inventories of Assets
4.1
Β Records
Β Β 4.2
Β Inventories
Section
5: Β Production
Statement
Section
6: Β Value
of Production and Pricing Statement
Section
7:Β Statement
of Costs, Expenditures and Receipts
Section
8:Β Cost
Recovery Statement
Section
9:Β Profit
Sharing Statement
Section
10:Β Local
Procurement Statement
Section
11:Β End
of Year Statement
Section
12:Β Budget
Statement
ACCOUNTING
PROCEDURE
SECTION
1
GENERAL
PROVISIONS
|
1.1
|
Purpose
|
| Β |
Generally,
the purpose of this Accounting Procedure is to set out principles
and
procedures of accounting which will enable the Government of India
to
monitor effectively the Contractor's costs, expenditures, production
and
income so that the Government's entitlement to Profit Petroleum can
be
accurately determined pursuant to the terms of the Contract. More
specifically, the purpose of the Accounting Procedure is
to:
|
| Β |
-
|
classify
costs and expenditures and to define which costs and expenditures
shall be
allowable for cost recovery and profit sharing and participation
purposes;
|
| Β |
-
|
specify
the manner in which the Contractor's accounts shall be prepared and
approved; and
|
| Β |
-
|
address
numerous other accounting related matters.
|
| Β |
This
Accounting Procedure is intended to apply to the provisions of the
Contract and is without prejudice to the computation of income tax
under
applicable provisions of the Income-Tax Xxx, 0000, as
amended.
|
1.2Β Definitions
| Β |
For
purposes of this Accounting Procedure, the terms used herein which
are
defined in the Contract shall have the same meaning when used in
this
Accounting Procedure.
|
|
1.3
|
Inconsistency
|
| Β |
In
the event of any inconsistency or conflict between the provisions
of this
Accounting Procedure and the other provisions of the Contract, the
other
provisions of the Contract shall
prevail.
|
|
1.4
|
Documentation
and Statements to be submitted by theΒ Contractor
|
|
1.4.1
|
Within
ninety (90) days of the Effective Date of the Contract, the Contractor
shall submit to and discuss with the Government a proposed outline
of
charts of accounts, operating records and reports, which outline
shall
reflect each of the categories and sub-categories of costs and income
specified in Sections 2 and 3
|
and
shall
be in accordance with generally accepted standards and recognized accounting
systems and consistent with normal petroleum industry practice and procedures
for joint venture operations.
Β Β
| Β |
Within
ninety (90) days of receiving the above submission, the Government
shall
either provide written notification of its approval of the proposal
or
request, in writing, revisions to the
proposal.
|
|
Β
|
Within
one hundred and eighty (180) days from the Effective Date of the
Contract,
the Contractor and the Government shall agree on the outline of charts
of
accounts, records and reports which shall also describe the basis
of the
accounting system and procedures to be developed and used under this
Contract. Following such agreement, the Contractor shall expeditiously
prepare and provide the Government with formal copies of the comprehensive
charts of accounts, records and reports and allow the Government
to
examine the manuals and to review procedures which are, and shall
be,
observed under the Contract.
|
|
1.4.2
|
Notwithstanding
the generality of the foregoing, the Contractor shall make regular
Statements relating to the Petroleum Operations as
follows:
|
| Β |
(i)
|
Production
Statement (see Section 5 of this Accounting
Procedure).
|
| Β |
(ii)
|
Value
of Production and Pricing Statement (see Section 6 of this Accounting
Procedure).
|
| Β |
(iii)
|
Statement
of Costs, Expenditures and Receipts (see Section 7 of this Accounting
Procedure).
|
| Β |
(iv)
|
Cost
Recovery Statement (see Section 8 of this Accounting
Procedure).
|
| Β |
(v)
|
Profit
Sharing Statement (see Section 9 of this Accounting
Procedure)
|
| Β |
(vi)
|
Local
Procurement Statement (see Section 10 of this Accounting
Procedure)
|
| Β |
(vii)
|
End
of Year Statement (see Section 11 of this Accounting Procedure).
|
| Β |
(viii)
|
Budget
Statement (see Section 12 of this Accounting
Procedure).
|
|
1.4.3
|
All
reports and Statements shall be prepared in accordance with the Contract
and the laws of India and, where there are no relevant provisions
in
either of these, in accordance with generally accepted practices
in the
international petroleum industry.
|
|
1.4.4
|
Each
of the entities constituting the Contractor shall be responsible
for
maintaining its own accounting records in order to comply with all
legal
requirements and to support all returns or any other accounting reports
required by any Government authority in relation to the Petroleum
Operations. However, for the purposes of giving effect to this Accounting
Procedure, the Party constituting the Contractor who is the Operator
shall
be responsible for maintaining, at its business office in India,
on behalf
of the Contractor, all the
|
accounts
of the Petroleum Operations in accordance with the provisions of the Accounting
Procedure and the Contract.
|
1.5
|
Language
and Units of Account
|
| Β |
All
accounts, records, books, reports and Statements shall be maintained
and
prepared in the English language using mercantile basis of accounting.
The
accounts shall be maintained in United States Dollars, which shall
be the
controlling currency of account for cost recovery, and profit sharing
purposes. Metric units and Barrels shall be employed for measurements
required under the Contract. Where necessary for clarification, the
Contractor may also maintain accounts and records in other languages,
currencies and units.
|
|
1.6
|
Currency
Exchange Rates
|
|
1.6.1
|
For
conversion purposes between United States Dollars and Indian Rupees
or any
other currency, the monthly average of the daily mean of the buying
and
selling rates of exchange as quoted by the State Bank of India (or
any
other financial body as may be mutually agreed by the Parties) for
the
Month in which the revenues, costs, expenditures, receipts or income
are
recorded, shall be used. However, in the case of any single non-US
Dollar
transaction in excess of the equivalent of fifty thousand (50,000)
US
Dollars, the conversion into US Dollars shall be performed on the
basis of
the average of the applicable exchange rates for the day on which
the
transaction occurred.
|
|
1.6.2
|
Any
realized or unrealized gains or losses from the exchange of currency
in
respect of Petroleum Operations shall be credited or charged to the
accounts. A record of the exchange rates used in converting Indian
Rupees
or any other currencies into United States Dollars as specified in
Section
1.6.1 shall be maintained by the Contractor and shall be identified
in the
relevant Statements required to be submitted by the Contractor in
accordance with Section 1.4.2.
|
|
1.7
|
PaymentsΒ
|
|
1.7.1
|
Subject
to Article 20.3 of the Contract and the foreign exchange laws and
regulations prevailing from time to time, all payments between the
Parties
shall, unless otherwise agreed, be in United States Dollars and shall
be
made through a bank designated by each receiving
Party.
|
|
1.7.2
|
Unless
otherwise specified, all sums due under the Contract shall be paid
within
forty five (45) days from the date on which the obligation to pay
was
incurred.
|
|
1.7.3
|
All
sums due by one Party to the other under the Contract during any
Month
shall, for each day such sums are overdue during such Month, bear
interest
compounded daily at the applicable LIBOR plus two (2) percentage
points.
|
|
1.8
|
Arms
Length Transactions
|
Β
| Β |
Unless
otherwise specifically provided for in the Contract, all transactions
giving rise to revenues, costs or expenditures which will be credited
or
charged to the accounts prepared, maintained or submitted hereunder
shall
be conducted at arms length or on such a basis as will assure that
all
such revenues, costs or expenditures will not be lower or higher,
as the
case may be, than would result from a transaction conducted at arms
length
on a competitive basis with third
parties.
|
|
1.9
|
Audit
and Inspection Rights of the
Government
|
|
1.9.1
|
Without
prejudice to statutory rights, the Government, upon at least twenty
(20)
Business Days advance written notice to the Contractor, shall have
the
right to inspect and audit, during normal business hours, all records
and
documents supporting costs, expenditures, expenses, receipts and
income,
such as the Contractor's accounts, books, records, invoices, cash
vouchers, debit notes, price lists or similar documentation with
respect
to the Petroleum Operations conducted hereunder in each Year, within
two
(2) years (or such longer period as may be required in exceptional
circumstances) from the end of such
Year.
|
|
1.9.2
|
The
Government may undertake the conduct of the audit either through
its own
representatives or through a qualified firm of recognised chartered
accountants, registered in India or a reputed consulting firm, appointed
for the purpose by the Government and the costs of audit in case
of
Government auditor(s) shall be borne by the Government, where as
for
outside auditor(s), this shall be borne by the Contractor as a General
and
Administrative Cost.
|
|
1.9.3
|
In
conducting the audit, the Government or its auditors shall be entitled
to
examine and verify, at reasonable times, all charges and credits
relating
to the Contractor's activities under the Contract and all books of
account, accounting entries, material records and inventories, vouchers,
payrolls, invoices and any other documents, correspondence and records
considered necessary by the Government to audit and verify the charges
and
credits. The auditors shall also have the right, in connection with
such
audit, to visit and inspect, at reasonable times, all sites, plants,
facilities, warehouses and offices of the Contractor directly or
indirectly serving the Petroleum Operations, and to physically examine
other property, facilities and stocks used in Petroleum Operations,
wherever located and to question personnel associated with those
operations. Where the Government requires verification of charges
made by
an Affiliate, the Government shall have the right to obtain an audit
certificate from an internationally recognized firm of public accountants
acceptable to both the Government and the Contractor, which may be
the
Contractor's statutory auditor. Submission of the audit certificate,
shall
in no way relieve or diminish
the
|
responsibility
of the Contractor for the compliance with the obligations under the Contract.
|
1.9.4
|
Any
audit exceptions shall be made by the Government in writing and notified
to the Contractor within one hundred and twenty (120) days following
completion of the audit in
question.
|
|
1.9.5
|
The
Contractor shall answer any notice of exception under Section 1.9.4
within
one hundred and twenty (120) days of the receipt of such notice.
Where the
Contractor has, after the said one hundred and twenty (120) days,
failed
to answer a notice of exception, the exception shall prevail and
deemed to
have been agreed to by the
Contractor.
|
|
1.9.6
|
All
agreed adjustments resulting from an audit and all adjustments required
by
prevailing exceptions under Section 1.9.5 shall be promptly made
in the
Contractor's accounts and any consequential adjustments to the
Government's entitlement to Petroleum shall be made within thirty
(30)
days therefrom.
|
|
1.9.7
|
Notwithstanding
any reference to a Sole Expert or Arbitration in accordance with
the
provisions of the Contract, in case any amount is claimed as due
to the
Government resulting from the audit exception but not accepted or
settled
by the Contractor, then the Contractor shall deposit such claimed
amount
in a escrow account to be opened with a financial institution, failing
mutually agreed agreement with State Bank of India within thirty
(30) days
from the date when the amount is disputed by the Contractor. The
amount in
escrow account along with any interest accumulated thereon shall
be
appropriated or adjusted in accordance with the decision or award
of the
Sole Expert or Arbitral Tribunal as may be or otherwise as mutually
agreed
to between the Parties.
|
|
1.9.8
|
If
the Contractor and the Government are unable to reach final agreement
on
proposed audit adjustments, either Party may refer any dispute thereon
to
a sole expert as provided for in the Contract. So long as any issues
are
outstanding with respect to an audit, the Contractor shall maintain
the
relevant documents and permit inspection thereof until the issue
is
resolved.
|
|
1.10
|
Revision
of the Accounting Procedure
|
| Β |
By
mutual agreement between the Government and the Contractor, this
Accounting Procedure may be revised from time to time, in writing,
signed
by the Parties, stating the date upon which the amendments shall
become
effective.
|
SECTION
2
CLASSIFICATION,
DEFINITION AND ALLOCATION OF COSTS
AND
EXPENDITURES
|
2.1
|
Segregation
of Costs
|
| Β |
Costs
shall be segregated in accordance with the purposes for which such
expenditures are made. All costs and expenditures allowable under
Section
3, relating to Petroleum Operations, shall be classified, defined
and
allocated as set out below in this
Section.
|
|
2.2
|
Exploration
Costs
|
| Β |
Exploration
Costs are all direct and allocated indirect expenditures incurred
in the
search for Petroleum in an area which is, or was at the time when
such
costs were incurred, part of the Contract Area, including expenditures
incurred in respect of:
|
|
2.2.1
|
Aerial,
geophysical, geochemical, palaeontological, geological, topographical
and
seismic surveys, analysis and studies and their
interpretation.
|
|
2.2.2
|
Core
hole drilling and water Well
drilling.
|
|
2.2.3
|
Labour,
materials, supplies and services used in drilling Xxxxx with the
object of
finding Petroleum or in drilling Appraisal Xxxxx provided that if
such
Xxxxx are completed as producing Xxxxx or injection Well for enhancing
Oil
recovery, the costs of completion thereof shall be classified as
Development Costs.
|
|
2.2.4
|
Facilities
used solely in support of the purposes described in Sections 2.2.1,
2.2.2
and 2.2.3 above, including access roads, all separately identified.
|
|
2.2.5
|
Any
Service Costs and General and Administrative Costs directly incurred
on
exploration activities and identifiable as such and a portion of
the
remaining Service Costs and General and Administrative Costs allocated
to
Exploration Operations determined by the proportionate share of total
Contract Costs (excluding General and Administrative Costs and Service
Costs) represented by all other Exploration
Costs.
|
|
2.2.6
|
Geological
and geophysical information purchased or acquired in connection with
Exploration Operations.
|
|
2.2.7
|
Any
other expenditures incurred in the search for Petroleum not covered
under
Sections 2.3 or 2.4.
|
|
2.3
|
Development
Costs
|
|
Β
|
Development
Costs are all direct and allocated indirect expenditures incurred
with
respect to the development of discoveries within the Contract Area
including expenditures incurred on account
of:
|
|
2.3.1
|
Geological
and Geophysical information acquired in connection with Development
Operations.
|
|
2.3.2
|
Drilling
Development Xxxxx, whether these Xxxxx are dry or producing and drilling
Xxxxx for the injection of water or Gas to enhance recovery of
Petroleum.
|
|
2.3.3
|
Completing
of Exploration Xxxxx by way of installation of casing or equipment
or
otherwise or for the purpose of bringing a Well into use as a producing
Well or as a Well for the injection of water or Gas to enhance recovery
of
Petroleum.
|
|
2.3.4
|
Purchase,
installation or construction of production, transport and storage
facilities for production of Petroleum, such as pipelines, flow lines,
production and treatment units, wellhead equipment, subsurface equipment,
enhanced recovery systems, offshore and onshore platforms, export
terminals and piers, harbours and related facilities and access roads
for
production activities.
|
|
2.3.5
|
Engineering
and design studies for facilities referred to in Section
2.3.3.
|
|
2.3.6
|
Any
Service Costs and General and Administrative Costs directly incurred
in
Development Operations and identifiable as such and a portion of
the
remaining Service Costs and General and Administrative Costs allocated
to
development activities, determined by the proportionate share of
total
Contract Costs (excluding General and Administrative Costs and Service
Costs) represented by all other Development
Costs.
|
|
2.4
|
Production
Costs
|
Β Β Β
| Β |
Production
Costs are expenditures incurred on Production Operations after the
start
of production from the Field (which are other than Exploration and
Development Costs). The balance of General and Administrative Costs
and
Service Costs not allocated to Exploration Costs or Development Costs
shall be allocated to Production
Costs.
|
|
2.5
|
Service
Costs
|
| Β |
Service
Costs are direct and indirect expenditures incurred in support of
Petroleum Operations in the Contract Area, including expenditures
on
warehouses, piers, marine vessels, vehicles, motorized rolling equipment,
aircraft, fire and security stations, workshops, water and sewerage
plants, power plants, housing, community and recreational facilities
and
furniture and tools and
|
equipment
used in these activities. Service Costs in any Year shall include the costs
incurred in such Year to purchase and/or construct the said facilities as well
as the annual costs of maintaining and operating the same, each to be identified
separately. All Service Costs shall be regularly allocated as specified in
Sections 2.2.5, 2.3.5 and 2.4 to Exploration Costs, Development Costs and
Production Costs and shall be separately shown under each of these categories.
Where Service Costs are made in respect of shared facilities, the basis of
allocation of costs to Petroleum Operations hereunder shall be
specified.
|
2.6
|
General
and Administrative Costs
|
| Β |
General
and Administrative Costs are expenditures incurred on general
administration and management primarily and principally related to
Petroleum Operations in or in connection with the Contract Area,
and shall
include:
|
|
2.6.1
|
main
office, field office and general administrative expenditures in India
including supervisory, accounting and employee relations
services;
|
|
2.6.2
|
an
annual overhead charge for services rendered by the parent company
or an
Affiliate to support and manage Petroleum Operations under the Contract,
and for staff advice and assistance including financial, legal, accounting
and employee relations services, but excluding any remuneration for
services charged separately under this Accounting Procedure, provided
that:-
|
Β
| Β |
(i)
|
for
the period from the Effective Date until the date on which the first
Development Plan under the Contract is approved by the Government,
this
annual charge shall be the Contractor's verifiable expenditure but
shall
in no event be greater than the following percentages of the total
Contract Costs incurred during the Contract Year in or in connection
with
the Contract Area and qualifying for recovery pursuant to Section
3:
|
Β
Contract
costs in anyΒ Β Annual
overhead charge
| Β | Β |
Contract
year (in million US$)
|
0-23%
Over
2-5Β US
$
60,000 + 2% of Contract Costs in excess of US $ 2 million.
| Β |
Over
5
|
Β | Β |
US
$ 120,000 + 1% of Contract
|
| Β | Β | Β | Β |
Costs
in excess of US $ 5 million
|
Β
| Β |
(ii)
|
from
the date on which the first Development Plan is approved, the charge
shall
be at an amount or rate to be agreed on between the Parties and stated
in
the Development Plan.
|
|
2.6.3
|
All
General and Administrative Costs shall be regularly allocated as
specified
in Sections 2.2.5, 2.3.5 and 2.4 to Exploration Costs, Development
Costs
and Production Costs respectively, and shall be separately shown
under
each of these cost categories.
|
SECTION
3
COSTS,
EXPENSES, EXPENDITURES AND INCIDENTAL INCOME
OF
THE CONTRACTOR
|
3.1
|
Costs
Recoverable and Allowable Without Further Approval of the
Government
|
| Β |
Costs
incurred by the Contractor on Petroleum Operations as per reviewed
or
approved Work Programme and Budget by the Management Committee as
the case
may be, pursuant to the Contract as classified under the headings
referred
to in Section 2 shall be allowable for the purposes of the Contract
except
to the extent provided in Section 3.2 or elsewhere in this Accounting
Procedure, and subject to audit, as referred to in Articles 25.4.1
to
25.4.4 and Article 25.5,Β as
provided for herein. Further in case of variation in costs over the
reviewed/approved Work Programme and Budget, as the case may be,
or
re-appropriation of costs, shall be submitted to the Management Committee
for review/approval, as the case may be, within thirty (30) days
from end
of the relevant Financial Year and subject to the audit and other
provisions of the Contract, such costs shall be allowable for the
purposes
of the Contract.
|
|
3.1.1
|
Surface
Rights
|
| Β |
All
direct costs necessary for the acquisition, renewal or relinquishment
of
surface rights acquired and maintained in force for the purposes
of the
Contract except as provided in Section
3.1.9.
|
3.1.2Labour
and Associated Labour Costs
(a)Β Contractor's
locally recruited employees based in India
Costs
of
all the Contractor's locally recruited employees who are directly engaged in
the
conduct of Petroleum Operations under the Contract in India. Such costs shall
include the costs of employee benefits and Government benefits for employees
and
levies imposed on the Contractor as an employer, transportation and relocation
costs within India of the employee and such members of the employee's family
as
per the personnel policy of the employer as required by law or customary
practice in India. If such employees are engaged in other activities in India,
in addition to Petroleum Operations, the cost of such employees shall be
apportioned on a time sheet basis according to sound and acceptable accounting
principles.
(b)Β Assigned
Personnel
Β
Costs
of
salaries and wages, including bonuses, of the Contractor's employees directly
and necessarily engaged in the conduct of the Petroleum Operations under the
Contract, whether temporarily or permanently assigned, irrespective of the
location of such employees, it being understood that in the case of those
personnel only a portion of whose time is wholly dedicated to Petroleum
Operations under the Contract, only that pro rata portion of applicable
salaries, wages, and other costs, as specified in Sections 3.1.2(c), (d), (e),
(f) and (g), shall be charged and the basis of such pro rata allocation shall
be
specified.
| Β |
(c)
|
The
Contractor's costs regarding holiday, vacation, sickness and disability
benefits and living and housing and other customary allowances applicable
to the salaries and wages chargeable under Section 3.1.2(b)
above.
|
| Β |
(d)
|
Expenses
or contributions made pursuant to assessments or obligations imposed
under
the laws of India which are applicable to the Contractor's cost of
salaries and wages chargeable under Section 3.1.2(b)
above.
|
| Β |
(e)
|
The
Contractor's cost of established plans for employees' group life
insurance, hospitalization, pension, retirement and other benefit
plans of
a like nature customarily granted to the Contractor's employees provided,
however, that such costs are in accordance with generally accepted
standards in the international petroleum industry, applicable to
salaries
and wages chargeable to Petroleum Operations under Section 3.1.2(b)
above.
|
| Β |
(f)
|
Personal
income taxes where and when they are paid by the Contractor to the
Government of India for the employee, in accordance with the Contractor's
standard personnel policies.
|
| Β |
(g)
|
Reasonable
transportation and travel expenses of employees of the Contractor,
including those made for travel and relocation of the expatriate
employees, including their dependent family and personal effects,
assigned
to India whose salaries and wages are chargeable to Petroleum Operations
under Section 3.1.2(b) above.
|
| Β |
Transportation
cost as used in this Section shall mean the cost of freight and passenger
service and any accountable incidental expenditures related to transfer
travel and authorized under the Contractor's standard personnel policies.
The Contractor shall ensure that all expenditures related to
transportation costs are equitably allocated to the activities which
have
benefited from the personnel
concerned.
|
|
3.1.3
|
Transportation
Costs
|
| Β |
The
reasonable cost of transportation of equipment, materials and supplies
within India and from outside India to India necessary for the conduct
of
Petroleum Operations under the Contract, including directly related
costs
such as unloading charges, dock fees and inland and ocean freight
charges.
|
|
3.1.4
|
Charges
for Services
|
Β Β (i)Β Third
Parties
The
actual costs of contract services, services of professional consultants,
utilities and other services necessary for the conduct of Petroleum Operations
under the Contract performed by third parties other than an Affiliate of the
Contractor, provided that the transactions resulting in such costs are
undertaken pursuant to Section 1.8 of this Accounting Procedure.
Β Β (ii)Β Affiliates
of Contractor
(a)Β Professional
and AdministrativeΒ Services
and ExpensesΒ
Cost
of
professional and administrative services provided by any Affiliate for the
direct benefit of Petroleum Operations, including, but not limited to, services
provided by the production, exploration, legal, financial, insurance, accounting
and computer services divisions other than those covered by Section 3.1.4
(ii)(b) which the Contractor may use in lieu of having its own employees.
Charges shall be equal to the actual cost of providing their services, shall
not
include any element of profit and shall not be any higher than the most
favourable prices charged by the Affiliate to third parties for comparable
services under similar terms and conditions elsewhere and will be fair and
reasonable in the light of prevailing modern oilfield and petroleum industry
practices.
(b)Β Scientific
or Technical Personnel
Β
Cost
of
scientific or technical personnel services provided by any Affiliate of the
Contractor for the direct benefit of Petroleum Operations, which cost shall
be
charged on a cost of service basis. Charges therefor shall not exceed charges
for comparable services currently provided by outside technical service
organizations of comparable qualifications. Unless the work to be done by such
personnel is covered by an Approved Budget and Work Programme, the Contractor
shall not authorize work by such personnel without approval of the Management
Committee.
| Β |
(c)
|
Equipment,
facilities and property owned and furnished by the Contractor's
Affiliates, at rates commensurate with the cost of ownership and
operation
provided, however, that such rates shall not exceed those currently
prevailing for the supply of like equipment, facilities and property
on
comparable terms in the area where the Petroleum Operations are being
conducted. The equipment and facilities referred to herein shall
exclude
major investment items such as (but not limited to) drilling rigs,
producing platforms, oil treating facilities, oil and gas loading
and
transportation systems, storage and terminal facilities and other
major
|
facilities,
rates for which shall be subject to separate agreement with the
Government.
|
3.1.5
|
Communications
|
| Β |
Cost
of acquiring, leasing, installing, operating, repairing and maintaining
communication systems including radio, satellite link and microwave
facilities between the Contract Area and the Contractor's nearest
base
facility.
|
|
3.1.6
|
Office,
Shore Bases and Miscellaneous
Facilities
|
| Β |
Net
cost to the Contractor of establishing, maintaining and operating
any
office, sub-office, shore base facility, warehouse, housing or other
facility directly serving the Petroleum Operations. If any such facility
services contract areas other than the Contract Area, or any business
other than Petroleum Operations, the net costs thereof shall be allocated
on an equitable and consistent
basis.
|
|
3.1.7
|
Environmental
Studies and Protection
|
| Β |
Costs
incurred in conducting the environmental impact assessment studies
for the
Contract Area, and in taking environmental protection measures including
abandonment cost or contribution to abandonment funds as may be created
for abandonment and Site Restoration pursuant to the terms of the
Contract.
|
|
3.1.8
|
Materials
and equipment
|
Β Β (i)Β General
So
far as
is practicable and consistent with efficient and economical operation, only
such
material shall be purchased or furnished by the Contractor for use in the
Petroleum Operations as may be required for use in the reasonably foreseeable
future and the accumulation of surplus stocks shall be avoided. Material and
equipment held in inventory shall only be charged to the accounts when such
material is removed from inventory and used in Petroleum Operations. Costs
shall
be charged to the accounting records and books based on the βFirst-in, First-out
methodβ.
(ii)Β Warranty
In
the
case of defective material or equipment, any adjustment received by the
Contractor from the suppliers or manufacturers or their agents in respect of
any
warranty on material or equipment shall be credited to the accounts under the
Contract.
Β Β (iii)Β Value
of materials charged to the accountsΒ under
the Contract
Β
| Β |
(a)
|
Except
as otherwise provided in subparagraph (b) below, materials purchased
by
the Contractor for use in the Petroleum Operations shall be valued
to
include invoice price less trade and cash discounts, if any, purchase
and
procurement fees plus freight and forwarding charges between point
of
supply and point of shipment, freight to port of destination, insurance,
taxes, custom duties, consular fees, other items chargeable against
imported material and, where applicable, handling and transportation
costs
from point of importation to warehouse or operating site, and these
costs
shall not exceed those currently prevailing in normal arms length
transactions on the open market.
|
| Β |
(b)
|
Material
purchased from or sold to Affiliates or transferred to or from activities
of the Contractor other than Petroleum Operations under the
Contract:
|
| Β |
(aa)
|
new
material (hereinafter referred to as condition A) shall be valued
at the
current international price which shall not exceed the price prevailing
in
normal arms length transactions on the open
market;
|
| Β |
(bb)
|
used
material which is in sound and serviceable condition and is suitable
for
reuse without reconditioning (hereinafter referred to as condition
B)
shall be priced at not more than seventy five per cent (75%) of the
current price of the above mentioned new
materials;
|
| Β |
(cc)
|
used
material which cannot be classified as condition B, but which, after
reconditioning, will be further serviceable for original function
as good
second-hand condition B material or is serviceable for original function,
but substantially not suitable for reconditioning (hereinafter referred
to
as condition C) shall be priced at not more than fifty per cent (50%)
of
the current price of the new material referred to above as condition
A.
|
| Β |
The
cost of reconditioning shall be charged to the reconditioned material,
provided that the condition C material value plus the cost of
reconditioning does not exceed the value of condition B
material.
|
| Β |
Material
which cannot be classified as condition B or condition C shall be
priced
at a value commensurate with its
use.
|
| Β |
Material
involving erection expenditure shall be charged at the applicable
condition percentage (referred to above) of the current knocked-down
price
of new material referred to above as condition
A.
|
| Β |
When
the use of material is temporary and its service to the Petroleum
Operations does not justify the reduction in price in relation to
materials referred to above as conditions B and C, such material
shall be
priced on a basis that will result in a net charge to the accounts
under
the Contract consistent with the value of the service rendered.
|
|
3.1.9
|
Duties,
Fees and Other Charges
|
| Β |
Any
duties, levies, fees, charges and any other assessments levied by
any
governmental or taxing authority in connection with the Contractor's
activities under the Contract and paid directly by the Contractor
except
corporate income tax payable by the constituents of the
Contractor.
|
|
3.1.10
|
Insurance
and Losses
|
| Β |
Insurance
premia and costs incurred for insurance pursuant to Article 24 of
the
Contract, provided that such insurance is customary, affords prudent
protection against risk and is at a premium no higher than that charged
on
a competitive basis by insurance companies which are not Affiliates.
Except as provided in Sections 3.2 (ix), Section 3.2(x) and Section
3.2(xi), actual costs and losses incurred shall be allowable to the
extent
not made good by insurance. Such costs may include, but are not limited
to, repair and replacement of property in the Contract Area resulting
from
damages or losses incurred by fire, flood, storm, theft, accident
or such
other cause.
|
|
3.1.11
|
Legal
Expenses
|
| Β |
All
reasonable costs and expenses, except Section 3.2 (xi) resulting
from the
handling, investigating, asserting, defending, or settling of any
claim or
legal action necessary or expedient for the procuring, perfecting,
retention and protection of the Contract Area and in defending or
prosecuting lawsuits involving the Contract Area or any third party
claim
arising out of Petroleum Operations under the Contract, or sums paid
in
respect of legal services necessary for the protection of the joint
interest of Government and the Contractor, shall be allowable. Such
expenditures shall include attorney's fees, court costs, costs of
investigation and procurement of evidence and amounts paid in settlement
or satisfaction of any such litigation and claims provided such costs
are
not covered elsewhere in the Accounting Procedure. Where legal services
are rendered in such matters by salaried or regularly retained lawyers
of
the Contractor or an Affiliate, such compensation shall be included
instead under Section 3.1.2 or 3.1.4 (ii) above as
applicable.
|
|
3.1.12
|
Training
Costs
|
| Β |
All
costs and expenses incurred by the Contractor in training as is required
under Article 22 of the
Contract.
|
|
3.1.13
|
General
and Administrative Costs
|
| Β |
The
costs described in Section 2.6.1 and the charge described in Section
2.6.2
of this Accounting Procedure.
|
|
3.1.14
|
Royalty,
License fee, surface rentals
etc.
|
| Β |
Royalty,
License fee, surface rentals, dead rents and other levies and taxes
paid
to the Government of India or State Government or local Government
bodies
or authority or agency except income tax paid to the Government.
|
|
3.2
|
Costs
not recoverable and not allowable under the
Contract
|
| Β |
The
following costs and expenses shall not be recoverable or allowable
(whether directly as such or indirectly as part of any other charges
or
expense) for cost recovery and profit sharing purposes under the
Contract
:
|
| Β |
(i)
|
costs
and charges incurred before the Effective Date including costs in
respect
of preparation, signature or ratification of this
Contract;
|
| Β | Β |
Explanatory
Note:
It
is clarified that costs and expenditures, incurred prior to the Effective
Date but after the execution of the Contract, for making statutory
payments in connection with the Petroleum Operations such as Petroleum
Exploration License (PEL) fee and application fee shall be allowed
as
Contract Cost and shall be cost
recoverable.
|
| Β |
(ii)
|
expenditures
in respect of any financial transaction to negotiate, float or otherwise
obtain or secure funds for Petroleum Operations including, but not
limited
to, interest, commission, brokerage and fees related to such transactions,
as well as exchange losses on loans or other financing, whether between
Affiliates or otherwise;
|
| Β |
(iii)
|
costs
of marketing or transportation of Petroleum beyond the Delivery
Point;
|
| Β |
(iv)
|
expenditures
incurred in obtaining, furnishing and maintaining the guarantees
required
under the Contract and any other amounts spent on indemnities with
regard
to non-fulfillment of contractual
obligations;
|
| Β |
(v)
|
attorney's
fees and other costs and charges in connection with arbitration
proceedings and sole expert determination pursuant to the
Contract;
|
| Β |
(vi)
|
fines,
interest and penalties imposed by Courts of law of the Republic of
India;
|
| Β |
(vii)
|
donations
and contributions;
|
| Β |
(viii)
|
expenditures
on creation of any partnership or joint venture
arrangement;
|
| Β |
(ix)
|
amounts
paid with respect to non-fulfillment of contractual
obligations;
|
| Β |
(x)
|
costs
incurred as a result of failure to insure where insurance is required
pursuant to the Contract, or of failure to follow procedures laid
down by
|
an
insurance policy or where the Contractor has elected to self insure, or has
under-insured;
| Β |
(xi)
|
costs
and expenditures incurred as a result of misconduct or negligence
of the
Contractor; and
|
| Β |
(xii)
|
expenses
of the members of the Management Committee as per Article
6.12.
|
|
3.3
|
Other
costs recoverable and allowable only with Management Committee
approval
|
| Β |
Any
other costs and expenditures not included in Section 3.1 or 3.2 of
this
Accounting Procedure but which have been incurred by the Contractor
for
the necessary and proper conduct of Petroleum Operations shall be
allowed
to be recovered only with the express prior approval in writing of
the
Management Committee.
|
|
3.4
|
Incidental
Income and Credits
|
| Β |
All
incidental income and proceeds received from Petroleum Operations
under
the Contract, including but not limited to the items listed below,
shall
be credited to the accounts under the Contract and shall be taken
into
account for cost recovery, and Profit Petroleum sharing purposes
in the
manner described in Articles 15 and 16 of the
Contract:-
|
| Β |
(i)
|
The
proceeds of any insurance or claim or judicial awards in connection
with
Petroleum Operations under the Contract or any assets charged to
the
accounts under the Contract where such operations or assets have
been
insured and the premia charged to the accounts under the
Contract;
|
| Β |
(ii)
|
Revenue
received from third parties for the use of property or assets, the
cost of
which has been charged to the accounts under the
Contract;
|
| Β |
(iii)
|
Any
adjustment received by the Contractor from the suppliers/manufacturers
or
their agents in connection with defective material, the cost of which
was
previously charged by the Contractor to the accounts under the
Contract;
|
| Β |
(iv)
|
Rentals,
refunds or other credits received by the Contractor which apply to
any
charge which has been made to the accounts under the
Contract;
|
| Β |
(v)
|
Prices
originally charged to the accounts under the Contract for materials
subsequently exported from the Republic of India without being used
in
Petroleum Operations under the
Contract;
|
| Β |
(vi)
|
Proceeds
from the sale or exchange by the Contractor of assets, plant or
facilities, the acquisition costs of which have been charged to the
accounts under the Contract;
|
| Β |
(vii)
|
Legal
costs charged to the accounts under Section 3.1.11 of this Accounting
Procedure and subsequently recovered by the
Contractor.
|
|
3.5
|
Non-Duplication
of Charges and Credits
|
| Β |
Notwithstanding
any provision to the contrary in this Accounting Procedure, it is
the
objective of the Parties that there shall be no duplication of charges
or
credits to the accounts under the
Contract.
|
SECTION
4
RECORDS
AND INVENTORIES OF ASSETS
|
4.1
|
Records
|
|
4.1.1
|
The
Contractor shall keep and maintain detailed records of property and
assets
in use for or in connection with Petroleum Operations under the Contract
in accordance with normal practices in exploration and production
activities of the international petroleum industry. Such records
shall
include information on quantities, location and condition of such
property
and assets, and whether such property or assets are leased or
owned.
|
|
4.2
|
Inventories
|
|
4.2.1
|
The
Contractor shall:
|
| Β |
(a)
|
not
less than once every twelve (12) Months with respect to movable assets;
and
|
| Β |
(b)
|
not
less than once every three (3) Years with respect to immovable assets,
|
Β
take
an
inventory of the assets used for or in connection with Petroleum Operations
in
terms of the Contract and address and deliver such inventory to the Government
together with a written statement of the principles upon which valuation of
the
assets mentioned in such inventory has been based.
|
4.2.2
|
The
Contractor shall give the Government at least thirty (30) days notice
in
writing in the manner provided for in the Contract of its intention
to
take the inventory referred to in Section 4.2.1 and the Government
shall
have the right to be represented when such inventory is
taken.
|
|
4.2.3
|
When
an assignment of rights under the Contract takes place, a special
inventory shall be taken by the Contractor at the request of the
assignee
provided that the cost of such inventory is borne by the assignee
and paid
to the Contractor.
|
|
4.2.4
|
In
order to give effect to Article 27 of the Contract, the Contractor
shall
provide the Government with a comprehensive list of all relevant
assets
when requested by the Government to do
so.
|
SECTION
5
PRODUCTION
STATEMENT
|
5.1
|
From
the date of first production of Petroleum from the Contract Area
the
Contractor shall submit a monthly Production Statement to Government
showing the following information separately of each producing Field
and
in aggregate for the Contract Area:
|
|
5.1.1
|
The
quantity of Crude Oil and Condensate produced and
saved.
|
|
5.1.2
|
The
quality and characteristics of such Crude Oil and Condensate produced
and
saved.
|
|
5.1.3
|
The
quantity of Associated Natural Gas and Non Associated Natural Gas
produced
and saved.
|
|
5.1.4
|
The
quality, characteristics and composition of such Natural Gas produced
and
saved separately.
|
|
5.1.5
|
The
quantities of Crude Oil, Condensate and Natural Gas used for the
purposes
of carrying on drilling and production operations and pumping to
field
storage, as well as quantities
re-injected.
|
|
5.1.6
|
The
quantities of Crude Oil, Condensate and Natural Gas unavoidably
lost.
|
|
5.1.7
|
The
quantities of Natural Gas flared and
vented.
|
|
5.1.8
|
The
size of Petroleum stocks held on the first day of the Month in
question.
|
|
5.1.9
|
The
size of Petroleum stocks held on the last day of the Month in
question.
|
|
5.1.10
|
The
quantities of Natural Gas reinjected into the Petroleum
Reservoir.
|
|
5.1.11
|
The
number of days in the Month during which Petroleum was produced from
each
Field.
|
|
5.1.12
|
The
Gas-Oil ratio for each Reservoir and Field for the relevant
Month.
|
|
5.1.13
|
Water
production, water injection and Reservoir pressure data for each
Reservoir
and Field.
|
|
5.2
|
All
quantities shown in this Statement shall be expressed in both volumetric
terms (barrels of Oil and cubic metres of Gas) and in the case of
Oil in
weight (metric tonnes).
|
|
5.3
|
For
the purpose of reporting Field production quantities pursuant to
this
Section, the Contractor shall agree with the Management Committee
on the
exact area to be designated as Development
Area.
|
|
5.4
|
The
Government may direct in writing that the Contractor include other
reasonable particulars relating to the production of Petroleum in
its
monthly Production Statement, and the Contractor shall comply with
such
direction.
|
|
5.5
|
The
Production Statement for each Month shall be submitted to Government
no
later than fifteen (15) days after the end of such
Month.
|
SECTION
6
VALUE
OF PRODUCTION AND PRICING STATEMENT
|
6.1
|
The
Contractor shall, for the purposes of Article 19 of the Contract,
prepare
a Statement providing calculations of the value of Crude Oil and
Condensate produced and saved during each Month. This Statement shall
contain the following information:
|
|
6.1.1
|
The
quantities, prices and receipts realised therefor by the Contractor
as a
result of sales of Crude Oil and Condensate to third parties made
during
the Month in question.
|
|
6.1.2
|
The
quantities, prices and receipts realised therefor by the Contractor
as a
result of sales of Crude Oil and Condensate made during the Month
in
question, other than to third parties, if
any.
|
|
6.1.3
|
The
quantities of Crude Oil and Condensate appropriated by the Contractor
to
refining or other processing without otherwise being disposed of
in the
form of Crude Oil or Condensate.
|
|
6.1.4
|
The
value of stocks of Crude Oil and Condensate on the first day of the
Month
in question.
|
|
6.1.5
|
The
value of stocks of Crude Oil and Condensate on the last day of the
Month
in question.
|
|
6.1.6
|
The
percentage volume of total sales of Crude Oil and Condensate made
by the
Contractor during the Month that are Arms Length Sales to third
parties.
|
|
6.1.7
|
Information
available to the Contractor, insofar as required for the purposes
of
Article 19 of the Contract, concerning the prices of competitive
crude
oils produced by the main petroleum producing and exporting countries
including contract prices, discounts and premia, and prices obtained
on
the spot markets.
|
|
6.2
|
The
Contractor shall, for the purpose of Article 21 of the Contract,
prepare a
Statement providing calculations of the value of Associated Natural
Gas
and Non Associated Natural Gas produced, flared internally used,
saved and
sold during each Month. This Statement shall contain all information
of
the type specified in Section 6.1 for Crude Oil as is applicable
to Gas
and such other relevant information as may be required by
Government.
|
|
6.3
|
The
Statements required pursuant to Sections 6.1 and 6.2 shall include
a
detailed breakdown of the calculation of the prices of Crude Oil,
Condensate, Associated Natural Gas and Non Associated Natural Gas
pursuant
to the provisions of Articles 19 and
21.
|
|
6.4
|
The
Value of Production and Pricing Statement for each Month shall be
submitted to Government not later than thirty (30) days after the
end of
such Month.
|
SECTION
7
STATEMENT
OF COSTS, EXPENDITURES AND RECEIPTS
|
7.1
|
The
Contractor shall prepare with respect to each Quarter a Statement
of
Costs, Expenditures and Receipts under the Contract using mercantile
basis
of accounting. The Statement shall distinguish between Exploration
Costs,
Development Costs and Production Costs and shall separately identify
all
significant items of costs and expenditure as itemised in Section
3 of
this Accounting Procedure within these categories. The Statement
of
receipts shall distinguish between income from the sale of Petroleum
and
incidental income of the sort itemised in Section 3.4 of this Accounting
Procedure. If the Government is not satisfied with the degree of
disaggregation within the categories, it shall be entitled to request
a
more detailed breakdown. The Statement shall show the
following:
|
|
7.1.1
|
Actual
costs, expenditures and receipts for the Quarter in
question.
|
|
7.1.2
|
Cumulative
costs, expenditures and receipts for the Year in
question.
|
|
7.1.3
|
Latest
forecast of cumulative costs, expenditures and receipts at the Year
end.
|
|
7.1.4
|
Variations
between budget forecast and latest forecast and explanations
thereof.
|
|
7.2
|
The
Statement of Costs, Expenditures and Receipts of each Quarter shall
be
submitted to Government not later than thirty (30) days after the
end of
such Quarter.
|
SECTION
8
COST
RECOVERY STATEMENT
|
8.1
|
The
Contractor shall prepare with respect to each Calendar Quarter a
Cost
Recovery Statement containing the following
information:
|
|
8.1.1
|
Unrecovered
Contract Costs carried forward from the previous Quarter, if
any.
|
|
8.1.2
|
Contract
Costs for the Quarter in question.
|
|
8.1.3
|
Total
Contract Costs for the Quarter in question (Section 8.1.1 plus Section
8.1.2).
|
|
8.1.4
|
Quantity
and value of Cost Petroleum taken and disposed of by the Contractor
for
the Quarter in question.
|
|
8.1.5
|
Contract
Costs recovered during the Quarter in question as per Article
15.
|
|
8.1.6
|
Total
cumulative amount of Contract Costs recovered up to the end of the
Quarter
in question.
|
|
8.1.7
|
Amount
of Contract Costs to be carried forward into the next
Quarter.
|
|
8.2
|
The
Cost Recovery Statement for each Quarter shall be submitted to Government
not later than thirty (30) days after the end of such
Quarter.
|
SECTION
9
PROFIT
SHARING STATEMENT
|
9.1
|
The
Contractor shall prepare with respect to each Quarter a Profit Sharing
Statement containing the following
information:
|
|
9.1.1
|
The
calculation of the applicable net cash flows as defined in Appendix
D for
the Quarter in question.
|
|
9.1.2
|
The
value of the Investment Multiple applicable in the Quarter in
question.
|
|
9.1.3
|
Based
on Section 9.1.2 and Article 16, the appropriate percentages of Profit
Petroleum for the Government and the Contractor in the Quarter in
question.
|
|
9.1.4
|
The
total amount of Profit Petroleum to be shared between the Government
and
the Contractor in the Quarter in
question.
|
|
9.1.5
|
Based
on Sections 9.1.3 and 9.1.4, the amount of Profit Petroleum due to
the
Government and the Contractor as well as to each constituent of the
Contractor in the Quarter in
question.
|
|
9.1.6
|
The
actual amounts of Petroleum taken or payment received by Government
and
the Contractor as well as by each constituent of the Contractor during
the
Quarter in question to satisfy their entitlements pursuant to Section
9.1.5.
|
|
9.1.7
|
Adjustments
to be made, if any, in future Quarters in the respective amounts
of Profit
Petroleum due to the Government and the Contractor as well as to
each
constituent of the Contractor on account of any differences between
the
amounts specified in Sections 9.1.5 and 9.1.6, as well as any cumulative
adjustments outstanding from previous
Quarters.
|
|
9.2
|
The
Profit Sharing Statement shall be submitted to Government not later
than
thirty (30) days after the end of such Quarter. Any amount due or
adjustment required in profit sharing among the Parties shall be
made
within thirty (30) days from the submission of the Statement to the
Government.
|
SECTION
10
LOCAL
PROCUREMENT STATEMENTΒ
|
10.1
|
In
furtherance of the obligation in Article 23 of the Contract for the
Contractor to give preference to the procurement of Indian goods
and
services, the Contractor shall prepare in respect of each Year a
local
procurement statement, containing the following
information:
|
| Β |
(a)
|
The
amount of expenditure incurred by the Contractor directly, or indirectly
through its Subcontractors, on goods supplied, produced or manufactured
in
India;
|
| Β |
(b)
|
the
amount of expenditure incurred by the Contractor directly, or indirectly
through its Subcontractors, on services provided by Indian
entities;
|
| Β |
(c)
|
the
respective percentages that the expenditures recorded under items
(a) and
(b) above represent of the Contractorβs total
expenditures;
|
| Β |
(d)
|
a
detailed description of the procedures adopted during the Year to
identify
and purchase goods and services from Indian suppliers;
and
|
| Β |
(e)
|
a
detailed exposition of how the local purchases for the Year as recorded
under items (a) and (b) above compared with the projected purchases
included in the budget statement for that Year (pursuant to Section
12.1.3), with explanations for any significant
variations;
|
|
10.2
|
The
local procurement statement shall be submitted to the Government
within
sixty (60) days after the end of each
Year.
|
SECTION
11
END
OF YEAR STATEMENT
|
11.1
|
The
Contractor shall prepare a definitive End of Year Statement. The
Statement
shall contain aggregated information in the same format as required
in the
Production Statement, Value of Production and Pricing Statement,
Statement
of Costs, Expenditures and Receipts, Cost Recovery Statement and
Profit
Sharing Statement, but shall be based on actual quantities of Petroleum
produced, income received and costs and expenditures incurred. Based
upon
this Statement, any adjustments that are necessary shall be made
to the
transactions concerned under the
Contract.
|
| Β |
[Explanation
: End of year Statement shall further contain the item wise justification
for the variation between the actual costs and expenditure incurred
and
included in the statement of costs, expenditure and receipts vis-Γ -vis the
Budgets for corresponding line
items.]
|
|
11.2
|
The
End of Year Statement for each Year shall be submitted to Government
within ninety (90)Β days
of the end of such Year.
|
SECTION
12
BUDGET
STATEMENT
|
12.1
|
The
Contractor shall prepare a Budget Statement for each Year. This Statement
shall distinguish between budgeted Exploration Costs, Development
Costs
and Production Costs and shall show the
following:
|
|
12.1.1
|
Forecast
costs, expenditures and receipts for the Year in question.
|
|
12.1.2
|
A
schedule showing the most important individual items of total costs,
expenditures and receipts for the said
Year.
|
|
12.1.3
|
Estimated
amounts to be spent in the Year on procuring goods and services in
India.
|
|
12.2
|
The
Budget Statement shall be submitted to Government with respect to
each
Year not less than ninety (90) days before the start of the said
Year
provided that in the case of the Year in which the Effective Date
falls,
the Budget Statement shall be submitted within ninety (90) days of
the
Effective Date.
|
APPENDIX-D
CALCULATION
OF THE INVESTMENT MULTIPLE
FOR
PRODUCTION SHARING PURPOSES
|
1.
|
In
accordance with the provisions of Article 16, the share of the Government
and the Contractor respectively of Profit Petroleum from the Contract
Area
in any Year shall be determined by the Investment Multiple earned
by the
Contractor from the then Petroleum Operations at the end of the preceding
Year. These measures of profitability shall be calculated on the
basis of
the appropriate net cash flows as specified in this Appendix
D.
|
|
2.
|
The
"Net Cash Income" of the Contractor from their Petroleum Operations
in any
particular Year is the aggregate value for the Year of the
following:
|
Β Β Β
| Β |
(i)
|
Cost
Petroleum entitlement of the Contractor as provided in Article 15;
|
| Β | Β |
plus
|
| Β |
(ii)
|
Profit
Petroleum entitlement of the Contractor as provided in Article 16;
|
| Β | Β |
plus
|
| Β |
(iii)
|
the
Contractorβs all incidental income (of the type specified in section 3.4
of the Accounting Procedure) arising from Petroleum
Operations;
|
| Β | Β |
less
|
| Β |
(iv)
|
the
Contractorβs Production Costs and royalty payments (Article 17) incurred
on or in the Contract Area;
|
|
3.
|
The
"Investment" made by the Contractor in the Contract Area in any particular
Year is the aggregate value for the Year
of:
|
| Β |
(i)
|
the
Contractorβs Exploration Costs incurred on or in the Contract Area
pursuant to Article 15
|
| Β | Β | Β |
| Β | Β |
plus
|
Β
| Β |
(ii)
|
the
Contractorβs Development Costs incurred on or in the Contract
Area.
|
|
4.
|
For
the purposes of the calculation of the Investment Multiple, costs
or
expenditures which are not allowable as provided in the Accounting
Procedure shall be excluded from Contract Costs and be
disregarded.
|
|
5.
|
The
Investment Multiple ratio earned by the Contractor as at the end
of any
Year shall be calculated by dividing the aggregate value of the addition
of each of the annual Net Cash Incomes (accumulated, without interest,
up
to and including that Year starting from the Year in which Production
Costs were first incurred or Production first arose) by the aggregate
value of the addition of each of the annual Investments (accumulated,
without interest, up to and including that Year starting from the
Year in
which Exploration and Development Costs were first
incurred).
|
|
6.
|
Profit
Petroleum from the Contract Area in any Year shall be shared between
the
Government and the Contractor in accordance with the value of the
Investment Multiple earned by the Contractor as at the end of the
previous
Year pursuant to Articles 16.2 to
16.5.
|
APPENDIX-E1
FORM
OF PARENT COMPANY FINANCIAL AND PERFORMANCE GUARANTEE
(to
be
furnished pursuant to Article 29.1 (b) of the Contract)
Β Β Β WHEREAS_____________________________________
a company duly organised and existing under the laws of___________________
having its registered office at____________________ (hereinafter referred to
as
'the Guarantor' which expression shall include its successors and assigns)
is
[the indirect owner of one hundred percent (100%) of the capital stock of XYZ
Company and direct owner of its parent company;] and
WHEREAS
XYZ Company is signatory to a Production Sharing Contract in respect of an
(offshore) (onshore) area identified as Block ________________________________
(hereinafter referred to as 'the Contract') made between the Government of
India
(hereinafter referred to as 'the Government'), and XYZ Company (hereinafter
referred to as XYZ which expression shall include its successors and permitted
assigns); and
WHEREAS
the Guarantor wishes to guarantee the performance of XYZ Company or its
Affiliate Assignee under the Contract as required by the terms of the
Contract;
NOW,
THEREFORE this Deed hereby provides as follows:
1.
Β Β The
Guarantor hereby unconditionally and irrevocably guarantees to the Government
that it will make available, or cause to be made available, to XYZ Company
or
any other directly or indirectly owned Affiliate of XYZ Company to which any
part or all of XYZ Company's rights or interest under the Contract may
subsequently be assigned ('Affiliate Assignee'), financial, technical and other
resources required to ensure that XYZ Company or any Affiliate Assignee can
carry out its obligations as set forth in the Contract.
2.Β Β The
Guarantor further unconditionally and irrevocably guarantees to the Government
the due and punctual compliance by XYZ Company or any Affiliate Assignee, of
any
obligations of XYZ Company or any Affiliate Assignee under the
Contract.
3.Β Β The
Guarantor hereby undertakes to the Government that if XYZ Company, or any
Affiliate Assignee, shall, in any respect, fail to perform its obligations
under
the Contract or commit any breach of such obligations, then the Guarantor shall
fulfil or cause to be fulfilled the said obligations in place of XYZ Company
or
any Affiliate Assignee, and will indemnify the Government against all
losses,
damages,
costs, expenses or otherwise which may result directly from such failure to
perform or breach on the part of XYZ Company.
4.Β Β This
guarantee shall take effect from the Effective Date and shall remain in full
force and effect for the duration of the said Contract and thereafter until
no
sum remains payable by XYZ Company, or its Affiliate Assignee, under the
Contract or as a result of any decision or award made by any expert or arbitral
tribunal thereunder.
5.Β Β This
guarantee shall not be affected by any change in the articles of association
and
bye-laws of XYZ Company or the Guarantor or in any instrument establishing
the
Company or Guarantor.
6.Β Β The
liabilities of the Guarantor shall not be discharged or affected by (a) any
time
indulgence, waiver or consent given to XYZ Company; (b) any amendment to the
Contract or to any security or other guarantee or indemnity to which XYZ Company
has agreed; (c) the enforcement or waiver of any terms of the Contract or of
any
security, other guarantee or indemnity; or (d) the dissolution, amalgamation,
reconstruction or reorganisation of XYZ Company.
7.Β Β This
guarantee shall be governed by and construed in accordance with the laws of
India.
IN
WITNESS WHEREOF the Guarantor, through its duly authorised representatives,
has
caused its seal to be duly affixed hereto and this guarantee to be duly executed
the _____________ day of _________________ 200_.
APPENDIX-E2
FORM
OF COMPANY FINANCIAL AND PERFORMANCE GUARANTEE
(to
be
furnished pursuant to Article 29.1 (b) of the Contract)
|
Β
|
WHEREAS___XYZ
Company _____________________________________ duly organised and
existing
under the laws of__________________ having its registered office
at_______________________ (hereinafter referred to as 'the Guarantor'
which expression shall include its successors and assigns) is signatory
to
a Production Sharing Contract in respect of an (offshore) (onshore)
area
identified as Block ___________________________________ (hereinafter
referred to as 'the Contract') made between the Government of India
(hereinafter referred to as 'the Government'), and XYZ Company
(hereinafter referred to as XYZ which expression shall include its
successors and permitted assigns); and
|
| Β |
WHEREAS
the Guarantor wishes to guarantee its performance under the Contract
as
required by the terms of the
Contract;
|
| Β |
NOW,
THEREFORE this Deed hereby provides as follows:
|
|
1.
|
The
Guarantor hereby unconditionally and irrevocably guarantees to the
Government that it will make available, or cause to be made available,
financial, technical and other resources required to ensure that
XYZ
Company can carry out its obligations as set forth in the
Contract.
|
|
2.
|
The
Guarantor further unconditionally and irrevocably guarantees to the
Government the due and punctual compliance by it of any obligations
under
the Contract.
|
|
3.
|
The
Guarantor hereby undertakes to the Government that it shall fulfill
or
cause to be fulfilled all its obligations under the Contract, and if it
fails to perform its obligations under the Contract or commits any
breach
of such obligations, then it shall indemnify the Government against
all
losses, damages, costs, expenses or otherwise which may result directly
from such failure to perform or breach on its
part.
|
|
4.
|
This
guarantee shall take effect from the Effective Date and shall remain
in
full force and effect for the duration of the said Contract and thereafter
until no sum remains payable by XYZ Company, under the Contract or
as a
result of any decision or award made by any expert or arbitral tribunal
thereunder.
|
5.Β This
guarantee shall not be affected by any change in the articles of association
and
bye-laws of XYZ Company or in any instrument establishing the Company.
6.Β The
liabilities of the Guarantor shall not be discharged or affected by (a) any
time
indulgence, waiver or consent given to XYZ Company; (b) any amendment to the
Contract or to any security or other guarantee or indemnity to which XYZ Company
has agreed; (c) the enforcement or waiver of any terms of the Contract or of
any
security, other guarantee or indemnity.
7.Β This
guarantee shall be governed by and construed in accordance with the laws of
India.
IN
WITNESS WHEREOF the Guarantor, through its duly authorised representatives,
has
caused its seal to be duly affixed hereto and this guarantee to be duly executed
the _____________ day of _________________ 200__.
APPENDIX-F
PROCEDURE
FOR ACQUISITION OF GOODS AND SERVICES
IΒ OBJECTIVES
The
objectives of these procedures are to:
| (a) Β Β |
ensure
that the goods and services acquired by the Operator for carrying
out the
Petroleum Operations are acquired at the optimum cost taking into
consideration all relevant factors including price, quality, delivery
time
and the reliability of potential
suppliers.
|
| (b) Β Β |
ensure
that goods and services are delivered in a timely manner taking into
consideration the consequences of delays in the acquisition of these
goods
and services on the project as a
whole.
|
| (c) Β Β |
ensure
that the provisions of Article 23 of the Contract are
implemented.
|
IIΒ PRINCIPLES
The
principles upon which these procedures are based are:
| (a) Β Β |
The
Parties must be satisfied that the Operator is working to an agreed
procedure for acquiring goods and services which is auditable and
in
accordance with the provisions of the
Contract.
|
| (b) Β Β |
The
Operator must have the ability to acquire goods and services expeditiously
so that the project schedules in respect of Approved Work Programmes
are
maintained.
|
IIIΒ PROCEDURES
The
procedures to be adopted by the Operator for the acquisition of goods and
services shall be as follows:
| Β |
Procedure
A
|
Procedure
B
|
Procedure
C
|
|
Applicable
to Exploration, Appraisal,
Development
and Production operations
|
$
50,000 to less than $ 200,000
|
$
200,000 to less than $ 500,000
|
Equal
to or more than $ 500,000
|
For
contracts valued at less than US$ 5000
The
Operator will be at liberty to determine the procurement procedures and methods
to procure goods and services valued at less than US Dollars five thousand
(US$5000).
For
Contracts valued at US$ 5000 and above but less than US$
50,000
The
Operator will be at liberty to determine the preferred method of acquiring
goods
and services valued at US Dollars five thousand (US$ 5000) and above but less
than US Dollars fifty thousand (US$ 50,000) provided that at least three (3)
quotations from selected suppliers (including at least one (1) Indian supplier)
will be obtained. For items valued at greater than US Dollars twenty thousand
(US$ 20,000), Operator is required to report to the Operating Committee if
the
quote accepted exceed the lowest quote by more than twenty (20) percent.
Operator will promptly report to the Operating Committee the Operatorβs reasons
for not selecting the lowest quote.
Procedure
A:
Operator
shall:
| (1) Β Β |
provide
the constituents of the Contractor with a list of all the entities
approved by the Operating Committee as per Appendix-F (V) for the
applicable category of the contract along with other entities, if
any,
from whom the Operator proposes to invite
tender;
|
| (2) Β Β |
add
to such list the entities whom other Party requests for adding within
five
(5) Business Days on receipt of such
lists;
|
| (3) Β Β |
if
and when any Party so requests, Operator shall evaluate any entity
listed
in (1) and (2) above to assure that entity is qualified as based
on the
qualification criteria agreed in accordance with Appendix-F(IV) to
perform
under the contract;
|
| (4) Β Β |
complete
the tendering process within a reasonable period of
time;
|
| (5) Β Β |
circulate
to all constituents of the Contractor a comparative bid analysis
stating
Operatorβs choice of the entity for award of contract. Provide also
reasons for such choice in case entity chosen is not the lowest
bidder;
|
| (6) Β Β |
inform
all the constituents of the Contractor of the entities to whom the
contract has been awarded; and
|
| (7) Β Β |
upon
the request of a Party, provide such Party with a copy of the final
version of the contract awarded.
|
Procedure
B:
Operator
shall:
| (1) Β Β |
provide
the Parties with a list of all the entities approved by the Operating
Committee as per Appendix-F (V) for the applicable category of the
contract,
|
along
with other entities, if any, from whom the Operator proposes to invite
tender;
| (2) Β Β |
add
to such list the entities whom a Party requests for adding within
five (5)
Business Days on receipt of such
list;
|
| (3) Β Β |
if
and when any Party so requests, Operator shall evaluate any entity
listed
in (1) and (2) above to assure that entity is qualified as based
on the
qualification criteria agreed in accordance with Appendix-F (IV),
to
perform under the contract;
|
| (4) Β Β |
complete
the tendering procedure within a reasonable period of
time;
|
| (5) Β Β |
circulate
to all constituents of the Contractor a comparative bid analysis
stating
Operatorβs choice of the entity for award of contract. Provide also
reasons for such choice in case the entity chosen is not the lowest
bidder. If the bid selected is not the lowest bid, obtain prior approval
of the Operating Committee for award of
contract;
|
| (6) Β Β |
award
the contract accordingly and inform all the members of the Management
Committee of the entities to whom the contract has been awarded;
and
|
| (7) Β Β |
upon
the request of a Party, provide such Party with a copy of the final
version of the contract awarded.
|
Procedure
C:
Operator
shall:
| (1) Β Β |
publish
invitations for parties to pre-qualify for the proposed contract
in at
least three (3) daily national Indian newspaper. Provide to Non-Operating
Companies, a list of responding parties and an analysis of their
qualifications for the contract being contemplated to be awarded.
Include
those who qualify, as per the prequalification criteria approved
as per
Appendix-F (IV) in the list of entities from whom Operator proposes
to
invite tender for the said
contract;
|
| (2) Β Β |
provide
the members of the Management Committee with a total list of all
the
entities selected as (1) above and all the entities approved by the
Operating Committee as per Appendix-F(V) for the applicable category
of
the contract, along with other entities, if any, from whom the Operator
proposes to invite tender;
|
| (3) Β Β |
add
to such entities whom a Party requests for adding within five (5)
Business
Days on receipt of such list;
|
| (4) Β Β |
if
and when any Party so requests, Operator shall evaluate any entity
listed
in (2) and (3) above to assure that entity is qualified as based
on the
qualification criteria agreed in accordance with Appendix-F(IV),
to
perform under the contract;
|
| (5) Β Β |
prepare
and dispatch the tender documents to the entities as finally listed
and to
Parties;
|
| (6) Β Β |
after
the expiration of the period allowed for tendering, consider and
analyse
the details of all bids received;
|
| (7) Β Β |
prepare
and circulate to the constituents of the Contractor a comparative
bid
analysis stating Operatorβs recommendation as to the entity to whom the
contract
|
should
be
awarded, the reasons therefor, and the technical, commercial and contractual
terms to be agreed upon;
| (8) Β Β |
obtain
the approval of the Operating Committee to the recommended bid. However,
failing Operating Committee approval any Company may refer the issue
to
the Management Committee for decision;
and
|
| (9) Β Β |
award
the contract accordingly and upon the request of a Party, provide
such
Party with a copy of the final version of the
contract;
|
| IV. Β Β |
A
set of vendor qualifications criteria for each major category
contract/supply shall be proposed by the Operator and approved by
the
Operating Committee within thirty (30) days of its submission. In
the
event the Operating Committee fails to approve vendor qualification
criteria within thirty (30) days of the date the same is first submitted
by the Operator, the matter shall be referred to the Management Committee
for decision. The Operating Committee may revise the qualification
criteria.
|
| V. Β Β |
It
is anticipated that, in order to expedite joint operations, contracts
will
be awarded to qualified vendors/contractors who are identified as
approved
vendors for the specified activities. A list of such approved vendors
shall first be established as
follows:
|
Operator
shall:
| (1) Β Β |
provide
the constituents of the Contractor with a list of the entities from
whom
Operator proposes to invite tender for contracts;
and
|
| (2) Β Β |
add
to such list entities whom a Company requests for adding within fourteen
(14) days on receipt of such list; and
|
| (3) Β Β |
obtain
approval of the Operating Committee. Such list shall thereafter be
maintained by the Operator. The Operating Committee may add to or
delete
vendors from such list.
|
APPENDIX-G
PERFORMA
OF BANK GUARANTEE TO BE PROVIDED
PURSUANT
TO ARTICLE 29
|
1.
|
In
consideration of Government of India (hereinafter referred to as
βGovernmentβ) having entered into a Production Sharing Contract for the
block ________dated _________ (hereinafter referred to as βContractβ,
which expression shall include all the amendments agreed to between
the
Government and the Contractor, thereto), with M/s __________________
having its registered office at _____________ (hereinafter referred
to as
___________, which expression unless repugnant to the context or
meaning
thereof include all its successors, administrators, executors and
assigns), which is a constituent of the Contractor, and the Government
have agreed that the ____________ Company shall furnish to Government
a
bank guarantee (hereinafter referred to as βGuaranteeβ) towards its
obligations as provided in the Contract for US$(for Foreign Companies)/US$
equivalent in Indian Rupees (for Indian Companies) for the performance
of
its obligations under the Contract.
|
| 2. Β Β |
We
__________(name of the Bank) registered under the Law of __________
and
having its registered office at _____________ (hereinafter referred
to as
βthe Bankβ, which expression shall unless repugnant to the context or
meaning thereof includes all its successors, administrators, executors
and
assigns) do hereby guarantee and undertake to pay immediately on
the fist
demand in writing and any/all money(s) to the extent of Indian Rupees/US$
_______(in figures) and (Indian Rupees/US$ ______ in words) without
any
demur, reservation, contest or protest and/or without any reference
to the
Company. Any such demand made by Government on the Bank by serving
a
written notice shall be conclusive and binding, without any proof,
on the
Bank as regards the amount due and payable, notwithstanding any dispute(s)
pending before any court, tribunal, arbitrator, sole expert, conciliator
or any other authority and/or any other matter or thing whatsoever,
as
liability under these presents being absolute and unequivocal. We
agree
that the Guarantee herein contained shall be irrevocable and shall
continue to be enforceable until it is discharged by Government in
writing. This Guarantee shall not be determined, discharged or affected
by
the liquidation, winding up, dissolution or insolvency of the Contractor
and shall remain valid, binding and operative against the
Bank.
|
|
3.
|
The
Bank also agree that Government at its option shall be entitled to
enforce
this Guarantee against the Bank as a principal debtor, in the first
instance, without proceeding against the ___________ Company and
notwithstanding any security or other guarantee that Government may
have
in relation to the ____________ Companyβs
liabilities.
|
|
4.
|
The
Bank further agree that Government shall have fullest liberty without
our
consent and without affecting in any manner our obligations hereunder
to
vary any of the terms and conditions of the said Contract or to extend
time of performance by the said __________ Company from time to time
or to
postpone for any time or from time to time exercise of any of the
powers
vested in Government against the said ___________ Company and to
forebear
or enforce any of the terms and conditions relating to the said Contract
and we shall not be relieved from our liability by reason of any
such
variation, or extension being granted to the said __________ Company
or
for any forbearance, act or omission on the part of Government or
any
indulgence by Government to the said ___________ Company or any such
matter or thing whatsoever which under the law relating to sureties
would,
but for this provision, have effect of so relieving
us.
|
|
5.
|
The
Bank further agree that the Guarantee herein contained shall remain
in
full force during the period that is taken for the performance of
the
Contract and all dues of Government under or by virtue of this Contract
have been fully paid and its claim satisfied or discharged or till
Government discharges this Guarantee in writing, whichever is
earlier.
|
|
6.
|
This
Guarantee shall not be discharged by any change in our constitution,
in
the constitution of _________ Company or that of the
Contractor.
|
|
7.
|
The
Bank confirm that this Guarantee has been issued with observance
of
appropriate laws of the country of
issue.
|
|
8.
|
The
Bank also agree that this Guarantee shall be governed and construed
in
accordance with Indian Laws and subject to the exclusive jurisdiction
of
Indian courts at _________, India.
|
|
9.
|
Notwithstanding
any thing contained herein above, our liabilities under this Guarantee
is
limited to Indian Rupees/US$ ____________(in figures) Indian Rupees/US$
_______________ (in words) and our Guarantee shall remain in force
upto
and including sixty (60) days after the expiry date/extended date.
Any
claim under this Guarantee must be received before the expiry of
sixty
(60) days or before the expiry of sixty (60) days from the extended
date
if any. If no such claim has been received by us within sixty (60)
days
after the said date/extended date the Governmentβs right under this will
cease. However, if such a claim has been received by us within and
upto
sixty (60) days after the said date/extended date, all the Governmentβs
rights under this Guarantee shall be valid and shall not cease until
we
have satisfied that claim.
|
| Β |
In
witness whereof, the Bank through its authorised officers has set
its hand
and stamp on this _______ day of __________ 200_ at
______________.
|
| Β |
The
seal of___________________ was hereto duly affixed by______________
this__________ day of ____________200_ in accordance with its bye-laws
and
this Guarantee was duly signed by_________________ and ________________
as
required by the said bye-laws.
|
| Β |
________________________
________________________
|
Β Β Β
SecretaryΒ Β Β Β
President & Director
| Β |
Witness:
|
Β
Appendix
H
Cost
Estimates
Page
1
Β
Appendix
H
Cost
Estimates
Page
2
Β
Appendix H
Cost Estimates
Page 3
Β
Appendix
H
Cost
Estimates
Page
4
Β
Appendix H
Cost Estimates
Page 5
Β
Β
