Technical Service Contract for the Rumaila Oil Field
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BP/CNPC Comments 27 July 2009 Without Prejudice TECHNICAL SERVICE CONTRACT FOR THE RUMAILA OIL FIELD BETWEEN SOUTH OIL COMPANY OF THE REPUBLIC OF IRAQ AND BP IRAQ LIMITED AND CNPC INTERNATIONAL (IRAQ) LIMITED AND SOMO BP/CNPC Comments 27 July 2009 Without Prejudice TECHNICAL SERVICE CONTRACT FOR THE RUMAILA OIL FIELD TABLE OF CONTENTS ARTICLE 1 – DEFINITIONS..........................................................................................................3 ARTICLE 2 – SCOPE OF CONTRACT.......................................................................................10 ARTICLE 3 – TERM OF CONTRACT .........................................................................................12 ARTICLE 4 – SIGNATURE BONUS ...........................................................................................12 ARTICLE 5 – RELINQUISHMENT ..............................................................................................12 ARTICLE 6 – MINIMUM WORK OBLIGATION ..........................................................................12 ARTICLE 7 – SOC’S ASSISTANCE ...........................................................................................13 ARTICLE 8 – TERMINATION......................................................................................................15 ARTICLE 9 – CONDUCT OF PETROLEUM OPERATIONS ......................................................16 ARTICLE 10 – ASSOCIATED GAS ............................................................................................21 ARTICLE 11 – DEVELOPMENT PLANS AND WORK PROGRAMS.........................................22 ARTICLE 12 – APPROVAL OF DEVELOPMENT PLANS AND WORK PROGRAMS..............23 ARTICLE 13 – JOINT MANAGEMENT OF PETROLEUM OPERATIONS.................................25 ARTICLE 14 – DATA AND SAMPLES .......................................................................................26 ARTICLE 15 – REPORTS AND RECORDS ...............................................................................27 ARTICLE 16 – ACCESS AND INSPECTION..............................................................................28 ARTICLE 17 – MEASUREMENT, TRANSFER, AND DELIVERY OF CRUDE OIL/ EXPORT OIL ...............................................................................................................................................28 ARTICLE 18 - VALUATION OF EXPORT OIL ARTICLE 19 – SUPPLEMENTARY FEES AND SERVICE FEES ..............................................30 ARTICLE 20 – BOOKS OF ACCOUNT, ACCOUNTING AND AUDIT .......................................34 ARTICLE 21 – EXCHANGE AND CURRENCY CONTROL .......................................................35 ARTICLE 22 – TITLE TO ASSETS .............................................................................................36 ARTICLE 23 – TAXES ................................................................................................................36 ARTICLE 24 – PARTNERSHIP, INDEMNITY AND INSURANCE..............................................36 ARTICLE 25 – IMPORTS AND EXPORTS .................................................................................38 ARTICLE 26 – EMPLOYMENT, TRAINING, AND TECHNOLOGY TRANSFER .......................38 ARTICLE 27 – PARTICIPATION.................................................................................................39 BP/CNPC Comments 27 July 2009 Without Prejudice ARTICLE 28 – ASSIGNMENT.....................................................................................................39 ARTICLE 29 – LAWS AND REGULATIONS ..............................................................................41 ARTICLE 30 – LOCAL GOODS AND SERVICES......................................................................41 ARTICLE 31 – FORCE MAJEURE .............................................................................................42 ARTICLE 32 – ENTIRE AGREEMENT AND AMENDMENTS....................................................42 ARTICLE 33 – CONFIDENTIALITY AND TECHNOLOGY OWNERSHIP..................................43 ARTICLE 34 – HEADINGS OF ARTICLES.................................................................................44 ARTICLE 35 – LANGUAGE........................................................................................................44 ARTICLE 36 – CONTRACTOR'S OFFICE IN THE REPUBLIC OF IRAQ .................................44 ARTICLE 37 – GOVERNING LAW, CONCILIATION AND ARBITRATION...............................45 ARTICLE 38 – NOTICES ............................................................................................................46 ARTICLE 39 – SIGNATURE, RATIFICATION AND EFFECTIVE DATE....................................47 ARTICLE 40 – WAIVER ..............................................................................................................47 ARTICLE 41 – PROTECTION OF THE ENVIRONMENT ...........................................................47 ARTICLE 42 – SITE RESTORATION AND DECOMMISSIONING.............................................51 ARTICLE 43 – GENERAL BUSINESS ETHICS .........................................................................51 ANNEX A – DESCRIPTION OF CONTRACT AREA ..................................................................53 ANNEX B – MAP OF CONTRACT AREA..................................................................................55 ANNEX C – ACCOUNTING PROCEDURE.................................................................................56 ANNEX D – DEFINITION OF RESERVOIRS ..............................................................................68 ANNEX E – MINIMUM WORK OBLIGATION ............................................................................69 ANNEX F – FORMS OF GUARANTEE......................................................................................69 ANNEX G- THE VOLUNTARY PRINCIPLES ON SECURITY AND HUMAN RIGHTS ………… ADDENDUM ONE – HEADS OF JOINT OPERATING AGREEMENT ......................................81 ADDENDUM TWO – HEADS OF CRUDE OIL TRANSFER AGREEMENT ...............................86 ADDENDUM THREE – HEADS OF CHARTER OF FIELD OPERATING DIVISION ................90 ADDENDUM FOUR – HEADS OF EXPORT OIL SALES AGREEMENT...................................95 Draft Model Producing Oil Field "Technical Service Contract (“PFTSC”), April 23, 2009 TECHNICAL SERVICE CONTRACT FOR RUMAILA OIL FIELD This Technical Service Contract ("Contract") is made and entered into this day of _____ 2009, by and between: South Oil Company, an Iraqi State oil company, the Republic of Iraq, having its registered office at ________ (“ State Oil Company or SOC”) of the First Part, and BP Iraq Limited, a company established and existing under the laws of England and Wales, having its registered office at Chertsey Road, Sunbury on Thames, Middlesex, UK TW18 7BP ("BP”); and CNPC International (Iraq) Limited, a company established and existing under the laws of the Virgin Islands, having its registered office at Trident Chambers, P.O. Box 146, Road Town, Tortola, British Virgin Islands ("CNPC”); and (individually a “Company” and collectively the “Companies”); together with SOMO, an Iraqi State entity established and existing under the laws of the Republic of Iraq, having its registered office at _____________, the Republic of Iraq (“State Partner”), Companies and State Partner are collectively referred to as “Contractor”, of the Second Part; SOC and Contractor are referred to, individually, as “Party”, or, collectively, as “Parties”. WITNESSETH WHEREAS, all oil and gas resources within the territory and offshore areas of the Republic of Iraq are owned by all the people of the Republic of Iraq; and the State of Iraq, being the sole representative of the whole people, acting through the Iraqi Government, has sole right to explore, develop, extract, exploit and utilize such natural resources, therefrom; and WHEREAS, SOC, in its role as an Iraqi State oil and gas company, is exclusively entrusted with and authorized for development and production of the Rumaila Oil Field, in accordance with the Law; and WHEREAS, Contractor has sound financial standing, technical competency, and professional skills to provide any and all of the technical services warranted for rehabilitation, improved production, enhanced recovery, and generally all and any Petroleum Operations as defined herein; and WHEREAS, the Parties mutually represent that they have the power, authority and desire to enter into this Technical Service Contract for the Rumaila Oil Field as defined herein; NOW THEREFORE, and in consideration of the promises and the mutual covenants hereinafter set out, it is agreed as follows: 2 BP/CNPC Comments 27 July 2009 Without Prejudice ARTICLE 1 – DEFINITIONS Except as specifically provided otherwise herein, any reference to an Article, Annex or Addendum shall be construed as reference to an Article, Annex or Addendum of this Contract. In this Contract, including its Annexes and Addenda, 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 C. 1.2 “Additional Appraisal Program” means as defined in Article 11.1(b). 1.3 "Affiliate" in relation to any Contractor's entity, means: (a) a company which controls such entity, or (b) a company which is controlled by such entity, or (c) a company which is controlled by a company which controls such