ARTICLE 1. DEFINITIONS
Except as specifically provided otherwise herein, any reference to an Article, Sub-Article, Annex or Addendum shall be construed as reference to an Article, Sub-Article, Annex or Addendum of this Contract.
In this Contract words in the singular include the plural and vice versa, and except where the context otherwise requires, the following terms shall have the meanings set out as follows:
1.1 "Accounting Procedure" means the accounting procedures and requirements set out in Annex X.
1.2 "Affiliate" means, with respect to any Company, any legal entity which:
Controls that Company;
is controlled by that Company;
or is controlled by a legal entity which in its turn controls or is controlled by that Company.
To "control" means to determine and pursue the policy of an organization, enterprise or legal entity by way of direct or indirect control over 50% (fifty per cent) or more of the shares or votes in such organization.
1.3 "Appraisal" or "Appraisal Operations" shall include (but not be limited to) such geological, geophysical, aerial and any other surveys and any interpretation of data relating thereto and the drilling of such shot-holes, core holes, stratigraphic rests, holes for the appraisal of Petroleum and other related holes and wells, the production testing and the purchase or acquisition of such supplies, materials and equipment therefore.
1.4 "Approval" or "Approved" means the approval of the State Body in written form.
1.5 "Average Daily Production" means the total cumulative production of Crude Oil for a certain period of time divided by the number of calendar days in that period of time.
1.6 "Barrel" means a quantity consisting of forty-two (42) United States Gallons under one (1) atmosphere of pressure and temperature of sixty (60) degrees Fahrenheit.
1.7 "Budget" means itemized expenditures and costs of Petroleum Operations related to an Annual Work Program.
1.8 "Calendar Year" means a period of twelve (12) consecutive months commencing with the first day of January and ending the last day of December, according to the Gregorian calendar.
1.9 "Contract Area" means the development and production area covered by this Contract, as described in Annex X and outlined in the map which constitutes Annex Y. In case of difference between Annex X and Annex Y the coordinate description in Annex X shall prevail.
1.10 "Contractor" means, at the Effective Date, (PART 1) and (PART 2), and at any time thereafter shall include their legal successors and permitted assigns.
1.11 "Crude Oil" means all hydrocarbons regardless of gravity which are produced and
saved from the Field in liquid state at atmospheric pressure, including asphalt, tar and the liquid hydrocarbons known as distillates and condenses obtained from Natural Gas.
1.12. "Commercial Oil" means part of the Net Production transported, commingled with other crudes, measured at the Delivery Measurement Point (DMP) and delivered to the Contractor at the Delivery Point in accordance with the provisions of Articles 18 and 19 and Addendum Two.
|
|
1.13. "Commercial Oil Price" means the price of one Barrel of Commercial Oil Free on Board (FOB, Incoterms-2000) at the Delivery Point, computed in accordance with the provisions of Article 19.
1.14. "Delivery Point" or "DP" means the point(s) at the loading flanges of the (X) loading terminal(s) in the Arabian Gulf where Contractor's entitlement of Commercial Oil under this Contract shall be delivered.
1.15 "Development Operations" means any and all operations, including primary and subsequent (secondary, tertiary or other) recovery projects and pressure maintenance, conducted with a view to developing the Field including, but without limitation: the drilling of evaluation, appraisal, production and injection wells; the engineering, building and erecting or laying of production plants and construction of the facilities (such as without limitation: separators;
Compressors; generators; pumps and tankage; gathering lines; pipelines; and all facilities required to be installed for production, pressure maintenance, and treatment, storing and transporting of Petroleum, and loading the same into seagoing tankers); the obtaining of such materials, equipment, machinery, articles and supplies as may be required or expedient for the above activities; and all auxiliary operations, activities; and services required or expedient for the better conduct or result of the above activities, all in accordance with sound oil field and economic practices.
1.16. "Development Plan" means scheduled programmer and cost estimate specifying the Development Operations required to develop and/or increase the production capacity of the Field, which includes Initial Field Development Plan, General Field Development Plan and subsequent revisions thereof.
1.17. "Local Currency" means the currency of (State X).
1.18. "Dollar" or "USD" means dollar of the United States of America.
1. 19. "Effective Date" means the date when this Contract comes into force according to Article 41
1. 20. "Excluded Risks": mean such events as war, foreign invasion, military actions (may be not connected with declaration of war), civil war, insurrection, revolution, rebellion, strikes, disturbances, confiscation, requisition, destruction - in case if such events:
take place on the territory of (State X);
are not a result of the Contractor's and/or the Operator's activities;
are not covered by insurance.
1.21. "Field" means the part of (X oilfield) limited to the reservoirs defined in Section X of Annex X, the area limits of which shall be defined as and when the Appraisal work is carried out, all within the Contract Area and subject to the provision of Article 5 hereof.
|
|
1.22. "Government" means the Government of (State X).
1.23. "Libor" - means the fixed interbank rate proposed for a three months deposits in US Dollars published by the London newspaper "Financial Times" on the date when the interests start accumulating.
In case such rate was not published by the "Financial Times" on the date when the interests start accumulating, the latest rate published within the seven working days prior to the required date shall be used.
In case Libor rate cannot be detected by the above method the London interbank rate proposed for a three months deposits in US Dollars indicated in article "The Monetary Market Rates" of the "Wall-Street Journal" (New-York) shall be applied.
1.24. "Measurement Point" means the place (s) at which volumes and qualities of Crude Oil produced, received, transmitted or delivered shall be measured.
1.25. "Minimum Work Obligations" means the minimum commitments undertaken by Contractor under Article 6 and Annex X.
1.26. "Natural Gas" or "Gas" means hydrocarbons that are in a gaseous phase at atmospheric conditions of temperature and pressure.
1.27. "Net Production" means Crude Oil, measured'at the PMP and transferred to the Transporter at the Transfer Point less transportation. losses, linefill and terminal dead stock computed in accordance with Addendum Two and the subsequent Transportation Agreement.
1.28. "Operator" means the entity designated pursuant to Article 9 hereof to conduct Petroleum Operations.
1.29. "Participating Interest" - means, with respect to (PART 1) and (PART 2) comprising Contractor, its percentage interest as defined in Article 27 and Addendum X in rights, privileges, obligations and liabilities under the Contract.
1.30. "Petroleum" means all hydrocarbons including liquid and gaseous hydrocarbons produced and saved from the Field under this Contract.
1.31. "Petroleum Costs" means all expenditures incurred and payments made by Contractor and/or Operator in connection with or in relation to Petroleum Operations preparing and their realization including but not limited to expenses (damage, loss, deterioration) caused by Excluded Risks, social expenses for the personnel, food and medicine purchases except as otherwise stipulated herein determined in accordance with the provisions of this Contract and Annex X.
1.32. "Petroleum Operations" means all operations in connection with Appraisal, Development, and Production Operations and other activities related thereto including technical documentation preparing, under this Contract.
|
|
1.33. "Production Operations" means any and all operations related to production of Petroleum including (but not limited to) workovers, stimulation's, operating, staffing, supervising, servicing, repairing and maintaining of any and all wells, plants, equipment, pipelines, tank farms, terminals. and all other installations and facilities.
1.34. "Quarter" means a period of three (3) consecutive months commencing with the ' first day of January, April, July or October, according to the Gregorian calendar.
1.35. "Sub-contractors" means the suppliers, contractors and sub-contractors of the Operator at whatever level.
1.36. "Transfer Pointer "TP" means the inlet flange(s), immediately after the Measurement Point at the Field, of the pipeline (s) through which Crude Oil is to be transported by the Transporter to the Delivery Point.
1.37. "Transporter means the entity designated by State Body for transportation and storage of Crude/Commercial Oil beyond the Transfer Point pursuant to Article 17, Addendum X and the subsequent Transportation Agreement.
1.38. "Work Programmer" means an itemization and time schedule of the Petroleum Operations to be carried out under this Contract.
1.39. "Year" means the period of twelve (12) consecutive months according to the Gregorian Calendar.
1.40. Joint Operating Company (JOC) - means the organization designated, according to Article 9 of the Contract, to conduct Petroleum Operations as Operator's successor personate to Addendum X.
ARTICLE 2. SCOPE OF CONTRACT
2.1 This Contract is a Contract for the Development and Production from the Field in accordance with the provisions herein contained. It includes Annexes X - Y and Addenda X - Y attached hereto and made part thereof.
In the event of conflict of the texts between the Contract and the Annexes or the Addenda, the provisions of the Contract shall prevail.
The Contractor, subject to the provisions herein contained, shall:
2.1.1 Carry out Petroleum Operations to develop and produce the relevant reservoirs of the Field with a view to achieving a sustained production level of (000) thousand Barrels per day by the end of (X) Years period from the Effective Date;
2.1.2 Provide all capital, machinery, equipment, and technology, personnel and services necessary for the carrying out of Petroleum Operations.
2.1.3 Incur all Petroleum Costs required for carrying out Petroleum Operations, in order to achieve the plateau set out in item 2.1.1 above.
2.1.4 Fulfill all-financial and other obligations of the Contractor and enjoy all rights and benefits, in accordance with the provisions of this Contract.
2.2 Notwithstanding the above, scope of this Contract does not include developed reservoirs defined in Section X of Annex X.
2.3 The Companies comprising the Contractor shall be jointly and severally responsible towards the State Body for the Contractor's obligations fulfillment within the limits of their joint Participating Interest.