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GAS SALES AGREEMENT
between
PETROLEUM AUTHORITY OF THAILAND
and
THAIPO LIMITED
THAI ROMO LIMITED
THE SOPHONPANICH CO., LTD.
NOVEMBER 7th, 1995
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TABLE OF CONTENTS
ARTICLE PAGE
I DEFINITIONS.................................................... 4
II SALE, PURCHASE AND RELATED MATTERS............................. 8
III INITIAL FIELD RESERVES......................................... 9
IV QUALITY........................................................ 10
V DELIVERY PRESSURE.............................................. 12
VI QUANTITIES..................................................... 14
VII CONCESSIONAIRE'S RESERVATIONS.................................. 20
VIII PTT FACILITIES................................................. 21
IX EXCHANGE OF INFORMATION........................................ 22
X DETERMINATION OF RESERVES...................................... 23
XI PRICE AND PRICE ADJUSTMENT..................................... 24
XII BILLING AND PAYMENT............................................ 28
XIII MEASUREMENTS................................................... 31
XIV POINT OF DELIVERY, PROPERTY AND RISK........................... 34
XV DEFAULT........................................................ 35
XVI FORCE MAJEURE.................................................. 37
XVII PERIOD OF CONTRACT............................................. 39
XVIII TERMINATION.................................................... 40
XIX ASSIGNMENT..................................................... 42
XX EXPERTS........................................................ 43
XXI ARBITRATION.................................................... 46
XXII APPLICABLE LAW................................................. 48
XXIII SUCCESSORS AND ASSIGNS......................................... 49
XXIV CONCESSIONAIRE'S REPRESENTATIVE................................ 50
XXV NOTICES........................................................ 51
XXVI WAIVER......................................................... 53
XXVII MARGINAL HEADINGS.............................................. 54
XXVIII ROYALTY IN KIND................................................ 55
XXIX ATTACHMENTS.................................................... 56
XXX RELATIONSHIP................................................... 57
XXXI ENTIRE CONTRACT................................................ 58
FIRST SCHEDULE PART I THE CONCESSION AREA..................... 60
PART II G.S.A. AREA............................. 61
PART III MAP OF CONCESSION AREA.................. 62
SECOND SCHEDULE QUALITY SPECIFICATIONS............................. 63
THIRD SCHEDULE MEASUREMENT OF SALES GAS DELIVERED................. 64
FOURTH SCHEDULE DELIVERY POINT..................................... 66
FIFTH SCHEDULE PARENTAL GUARANTEES................................ 67
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AN AGREEMENT made in Bangkok Metropolis in the Kingdom of Thailand this seventh
day of November, B.E. 2538 (1995) between the PETROLEUM AUTHORITY OF THAILAND
having its principal office at 555, Vibhavadi Rangsit Road, Bangkok 10900
(hereinafter called "PTT") represented by Mr. Pala Sookawesh of the first part,
and Thaipo Limited, (hereinafter called THAIPO), a company duly incorporated
and existing under the laws of Thailand and having its registered office at
19th Floor, B.B. Building, 54 Asoke Road, Sukhumvit 21, Bangkok 10110,
represented by Mr. Radford Phillip Laney and Thai Romo Limited, (hereafter
called THAI ROMO), a company duly incorporated and existing under the laws of
Thailand and having its registered office at 19th Floor, B.B. Building, 54
Asoke Road, Sukhumvit 21, Bangkok 10110, represented by Mr. Patrick R.
Rutherford, and The Sophonpanich Co., Ltd., (hereafter called SOPHONPANICH) a
company duly incorporated and existing under the laws of Thailand and having
its registered office at 61 Soi Watana, Nineteen, Sukhumvit Road, Bangkok
10110, represented by Mr. Chote Sophonpanich, (hereinafter all collectively
called "Concessionaire") of the second part.
WHEREAS
(A) On the first (1st) day of August, 1991, the Minister of Industry awarded
Petroleum Concession No. 1/2534/36, and on the sixth (6th) day of March,
1992 the Supplementary Petroleum Concession No. 1 to Petroleum Concession
No. 1/2534/36;
(B) There has been established the Petroleum Authority of Thailand, a
Government Authority, to operate petroleum business;
(C) At the date of this Agreement thirteen (13) wells have been drilled within
the G.S.A. Area described in the First Schedule Part II and Natural Gas
has been discovered as a result of such drilling activities; and
(D) The Concessionaire is willing to sell and PTT is willing to buy the said
Natural Gas from the G.S.A. Area and subject to the terms and conditions
hereinafter appearing;
NOW IT IS HEREBY AGREED as follows:
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ARTICLE I DEFINITIONS
In this Agreement, reference to Articles and Clauses shall be reference to
Articles and Clauses of this Agreement and words indicating the singular may
also include the plural and vice versa as the context requires and unless
otherwise indicated the following words and expressions in this Agreement,
including the foregoing recitals, shall have the meanings set forth below:
1.1 "Annual Contract Quantity" (ACQ) shall have the meaning set forth
in Article VI.
1.2 "BTU" means one (1) British Thermal Unit which is further defined
as the amount of heat required to raise the temperature of one
(1) avoirdupois pound of pure water from fifty-eight and one-half
(58.5) degrees Fahrenheit to fifty-nine and one-half (59.5)
degrees Fahrenheit at a standard pressure of fourteen decimal
seven three (14.73) pounds per square inch absolute.
1.3 "Bank of Thailand Average Loan Rate" means, on any day, the rate
per annum of interest at which the Bank of Thailand on that day
lends (or is prepared to lend) Baht to the commercial banks in
Thailand (announced by the Bank of Thailand as the Loan Window
Rate) or, if a second tier rate is also announced, the unweighted
arithmetic average interest rate calculated by adding together
the first and second tier rates and then dividing the sum of the
rates by two.
1.4 "Carry-Forward Gas" shall have the meaning set forth in
Article VI.
1.5 "Concession Agreement" means, collectively, the Petroleum
Concession Agreement No. 1/2534/36, dated August 1, 1991,
covering block B8/32 offshore Thailand, awarded by the Ministry
of Industry to Maersk Oil (Thailand) Ltd., Thaipo, Limited and
Thai Romo, Limited, and Supplementary Petroleum Concession No. 1
to Petroleum Concession No. 1/2534/36, dated March 6, 1992,
whereby The Sophonpanich Co., Ltd. entered into Petroleum
Concession No. 1/2534/36.
1.6 "Concession Area" means the area which is described by its
co-ordinates in the First Schedule, Part I and which, for
illustrative purposes, is shown by a map in the First Schedule,
Part III, as may exist from time to time after required
relinquishments.
1.7 "Concessionaire" shall have the meaning set forth in the
recitals.
1.8 "Concessionaire's Equipment" shall have the meaning set forth in
Article XIII.
1.9 "Contract Delivery Pressure" shall have the meaning set forth in
Article V.
1.10 "Contract Period" means the period from the Contractual Delivery
Date to the date on which this Agreement shall be terminated by
any of the means herein provided
1.11 "Contract Year" means a period beginning at six (6) o'clock a.m.
on the first day of October in any year after the First Contract
Year during the continuance of this Agreement and
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ending at six (6) o'clock a.m. on the first day of October in the
following year or at termination according to Article XVIII.
1.12 "Contractual Delivery Capacity" shall have the meaning set forth
in Article VI.
1.13 "Contractual Delivery Date" (CDD) and "Date of Commencement of
Delivery" (DCD) shall have the meanings set forth in Article VI.
1.14 "Cubic Foot" when applied to Sales Gas means the volume of Sales
Gas being saturated with water vapour which occupies one (1)
cubic foot of space measured at fourteen decimal seven three
(14.73) pounds per square inch absolute pressure at a temperature
of sixty (60) degrees Fahrenheit.
1.15 "Current Price" shall have the meaning set forth in Article XI.
1.16 "Daily Contract Quantity" (DCQ) shall have the meaning set forth
in Article VI.
1.17 "Day" means a period of twenty four (24) hours beginning at six
(6) o'clock a.m. on each day and ending at six (6) o'clock a.m.
on the following day.
1.18 "Debit Year" shall have the meaning set forth in Article VI.
1.19 "Delivery Point" shall have the meaning set forth in Article XIV.
1.20 "Effective Date" shall be the date of execution of this Agreement
by the parties.
1.21 "Facilities" shall mean only those facilities installed by PTT
necessary to receive Sales Gas at the Delivery Point and to
transport such gas to PTT's second main pipeline connecting
Erawan to Rayong, together with any communication equipment
installed by PTT on Concessionaire's Floating Petroleum Storage
and Offloading System (FPSO). PTT shall inform Concessionaire
of the cost of such Facilities at the CDD.
1.22 "Field Reserves" means at any time the estimated total quantity
of Proved and Probable Natural Gas in the Reservoir on the date
of the last determination of reserves made in accordance with
Article III or Article X which may be economically and reasonably
recovered by prudent oil and gas industry practices plus the
total quantity of Natural Gas therefore taken from the Reservoir.
1.23 "First Contract Year" means the period immediately following the
end of the Run In Period and ending at six (6) o'clock a.m. on
the following first day of October.
1.24 "Foot" means zero decimal three zero four eight (0.3048) metres
as defined by the eleventh Conference Generale des Poids et
Mesures at Paris, France in 1960.
1.25 "G.S.A. Area" means that part of the Concession Area described by
its co-ordinates in the First Schedule, Part II and dedicated to
the service of this Gas Sales Agreement.
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1.26 "Gross Calorific Value" means that number of BTUs produced by the
complete combustion at a constant pressure of thirty (30) inches
of mercury at thirty two (32) degrees Fahrenheit and under
standard gravitational force (acceleration thirty two decimal one
seven four (32.174) feet per second per second) of one (1) cubic
foot of the Sales Gas at sixty (60) degrees Fahrenheit with
excess air at the same temperature and pressure as the Sales
Gas when the products of combustion are cooled to sixty (60)
degrees Fahrenheit and when the water formed by combustion is
condensed to the liquid state and the products of combustion
contain the same total mass of water vapour as the Sales Gas and
air before combustion.
1.27 "Inch Water Gauge" means that differential pressure equal to zero
decimal zero three six one two seven three (0.0361273) pounds
force per square inch.
1.28 "Minister" means the Minister of Industry who takes charge and
control for the execution of the Petroleum Act or any Minister as
may be designed from time to time under the law of Thailand.
1.29 "Month" means a period beginning at six (6) o'clock a.m. on the
first day of any calendar month and ending at six (6) o'clock
a.m. on the first day of the following calendar month.
1.30 "Natural Gas" shall have the meaning as defined at the Effective
Date in the Petroleum Act B.E. 2514 but shall also include
"By-products" as defined at the Effective Date in the said Act.
1.31 "Net Annual Contract Quantity" (Net ACQ) shall have the meaning
set forth in Article VI.
1.32 "Operator" shall have the meaning set forth in Article XXIV.
1.33 "PSIA" means pounds per square inch absolute.
1.34 "PSIG" means pounds per square inch gauge.
1.35 "Probable Natural Gas reserves" means the estimated additional
quantities of Natural Gas in the Reservoir, beyond those defined
as Proved Natural Gas reserves, which from time to time
geological and engineering data indicate to have a fair to good
probability of being recovered in future years from already
discovered deposits with price movements consistent with Article
XI and forecast investment and operating costs. For the purpose
of this definition there is a fifty (50) per cent chance that the
actual quantity will be more than the amount estimated as Proved
Natural Gas plus Probable Natural Gas reserves and a fifty (50)
per cent chance that it will be less.
1.36 "Proved Natural Gas reserves" means the estimated quantities of
Natural Gas which from time to time geological and engineering
data demonstrate with reasonable certainty to be recoverable in
future years from the Reservoir under existing economic and
operating conditions, that is prices and costs as of the date the
estimate is made. Prices include consideration of changes in
existing prices provided only by this Agreement. For the purpose
of this definition there is a ninety (90) per cent chance that
the actual quantity will
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be more than the amount estimated as Proved reserves and a ten
(10) per cent chance that it will be less.
1.37 "Reasonable and Prudent Operator" when used to describe the
standard of care to be exercised by a party in performing its
obligations hereunder means the degree of diligence and prudence
and foresight reasonably and ordinarily exercised by experienced
operators engaged in the same line of business under the same or
similar circumstances and conditions and when used to determine
the action that would be required of a party to this Agreement
means the action an experienced commercial operator engaged in
the same line of business under the same or similar circumstances
and conditions would take in the exercise of such due diligence,
prudence and foresight.
1.38 "Reservoir" means the stratigraphic interval or intervals
underlying the areas described in the First Schedule Part 11
hereto in which Natural Gas was encountered or which forecasts
predict Natural Gas to be contained herein, including all other
parts of the same stratigraphic interval associated with the
geological feature, be it stratigraphic or structural and located
within the G.S.A. Area, in which there is estimated to be Natural
Gas, whether or not in communication with the Natural Gas
encountered in a test well or wells on that geological feature.
1.39 "Run-In Period" shall have the meaning set forth in Article VI.
1.40 "Sales Gas" means Natural Gas delivered to PTT in accordance with
the provisions of this Agreement.
1.41 "Shortfall" shall have the meaning set forth in Article XV.
1.42 "Specific Gravity" means the weight of a volume of dry Sales Gas
divided by the weight expressed in the same units of an equal
volume of dry carbon dioxide free air both gases being at sixty
(60) degrees Fahrenheit and an absolute pressure of thirty (30)
inches of mercury at thirty-two (32) degrees Fahrenheit and under
standard gravitational force (acceleration thirty-two decimal one
seven four (32.174) feet per second per second).
1.43 "Time and "Calendar": any reference to time shall be construed as
whatever time shall be in force in Bangkok, Thailand and any
reference to calendar shall be construed as the Gregorian
Calendar.
1.44 "Week" means a period of seven (7) days beginning at six (6)
o'clock a.m. on Sunday and ending at six (6) o'clock a.m. on the
following Sunday.
1.45 "Year" means a period of twelve (1 2) months beginning at six (6)
o'clock a.m. on any day of any calendar year and ending at six
(6) o'clock a.m. on the same day in the following calendar year.
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ARTICLE 11 SALE, PURCHASE AND RELATED MATTERS
2.1 Subject to the provisions of Clauses 7.2 and 7.3 and unless
excused under other provisions of this Agreement the
Concessionaire shall deliver and sell and PTT shall accept and
purchase all of the Sales Gas within the Field Reserves in the
manner and on the terms and conditions hereinafter set out in
this Agreement.
2.2 The Concessionaire agrees to indemnify PTT and save it harmless
from all suits, actions, debts, accounts, damages, costs, losses,
liabilities and expenses arising from or out of claims of any or
all persons to Sales Gas delivered to PTT hereunder or to
royalties, taxes or other charges thereon, which attach before
the title passes to PTT or which adverse claim of any character
whatsoever being asserted in respect of any Sales Gas, including
a material defect in the Concessionaire's title, PTT may retain,
as security for the performance of the Concessionaire's
obligations with respect to such claim under this Clause, the
purchase price thereof up to the amount of such claim until such
claim has been finally determined or until the Concessionaire
shall have furnished a bond or other form of security acceptable
to PTT, conditioned for the protection of PTT with respect to
such claim. PTT shall invest, as trustees, any monies withheld
as security at the best terms available to PTT at a commercial
bank in Bangkok, and interest earned thereon shall follow the
determination of who is entitled to the monies withheld less any
costs and expenses incurred by PTT in connection therewith.
2.3 Except as otherwise provided in this Agreement the parties shall,
so long as this Agreement remains in force, maintain any permit,
agreement or other authorization, or cause to be maintained any
permit or other authorization, which is or are necessary to
enable each to fulfil all of its obligations under this
Agreement.
2.4 The Concessionaire shall be jointly and severally liable under the
Agreement.
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ARTICLE III INITIAL FIELD RESERVES
The Field Reserves are initially agreed to be three hundred (300) billion
Cubic Feet of Natural Gas.
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ARTICLE IV QUALITY
4.1 Sales Gas delivered under this Agreement shall, at the Delivery
Point, be in accordance with the specifications set out in the
Second Schedule to this Agreement.
4.2 If at any time or from time to time during the Contract Period,
the Sales Gas offered for delivery hereunder shall fail to
conform to the relevant specification set out in the Second
Schedule:
(i) PTT may accept delivery of the Sales Gas in whole or in
part (notwithstanding the failure to conform to the
specifications set out in the Second Schedule) and, in
the event that PTT accepts delivery, the Concessionaire
shall compensate PTT for all reasonable and justifiable
expenses of a temporary nature which PTT has incurred
incidental to the acceptance of such Sales Gas and all
reasonable and justifiable costs incurred by PTT in the
course of any temporary measures which PTT may take to
restore the Sales Gas to the specifications set out in
the Second Schedule or such lesser standard as PTT may
determine. The Concessionaire's liability under this
Clause 4.2 (i) in any Month shall not exceed the value
of a volume of Sales Gas equal to ten (10) times the DCO
then in force at the Current Price, payable for the
Month in which the deficiency occurs. Sales Gas taken
under this Clause 4.2 (i) shall be paid for at the
Current Price, or
(ii) PTT may refuse to accept delivery of the Sales Gas in
whole or in part until the deficiency has been remedied
and to the extent of such refusal, PTT's rights and
remedies in respect of such quality deficient gas
so refused shall be as set forth in Article XV.
4.3 The Concessionaire shall, as soon as possible after any such
failure in quality, inform PTT of the cause of the failure and
give an estimate of the probable duration of the failure.
4.4 Within thirty (30) days after any failure in quality pursuant to
Clause 4.2 the Concessionaire may propose to carry out the
operations necessary to remedy the deficiency in quality within a
period of not more than one hundred and eighty (180) days, or
such longer period as may be required for a Reasonable and
Prudent Operator, and, in such event, during the period mentioned
in such notice for as long as the Concessionaire is actively and
diligently carrying out the said operations during such period,
PTT shall not itself be entitled to carry out any remedial
operations of a permanent nature but may either refuse or accept
delivery of Sales Gas as a provided in Clause 4.2.
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4.5 If the Concessionaire shall not have served a notice within the
period stated in Clause 4.4 or (having served a notice) shall
have ceased to carry out the operations actively and diligently,
then PTT may itself carry out such operations as may reasonably
be required to remedy the deficiency in quality. After
completion of the operations PTT may recover from the
Concessionaire the reasonable cost of such operations, with
interest thereon at the rate set forth in Clause 12.7, by
reducing the price to be paid for Sales Gas to be delivered
thereafter by twenty five (25) per cent until the reduction has
permitted recovery of such cost and interest but such recovery
(net of interest) shall not exceed the value of an amount of
Sales Gas equal to thirty (30) times the DCO in force at the
Current Price, for the Month in which PTT commenced such
operations.
4.6 During any period in which PTT is carrying out any remedial
operations in accordance with Clause 4.5, it may either refuse or
accept delivery of Sales Gas as provided in Clause 4.2.
4.7 Should the parties fail to reach an agreement within a period of
thirty (30) days, any difference between the parties which may
arise in respect of the quality of the Sales Gas or the cost
incurred to remedy any deficiency therein or in connection with
the execution of any remedial operations or otherwise under this
Article shall (at the request of either party) be referred to an
expert to be appointed pursuant to Article XX.
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ARTICLE V DELIVERY PRESSURE
5.1 Sales Gas to be delivered under this Agreement shall be delivered
at the Delivery Point at such pressure (hereinafter called the
"Contract Delivery Pressure") necessary to meet PTT`s
notification pursuant to this Agreement, taking into account the
PTT back pressure at the Delivery Point at the time of delivery.
The Contract Delivery Pressure shall be not greater than 1,750
PSIG unless the total throughput in the PTT's parallel pipeline
including the Sales Gas exceed 900 million Cubic Feet per Day,
then the Contract Delivery Pressure shall be increased
accordingly at the sole risk and expense of the Concessionaire,
but shall not exceed 1,870 PSIG, except as otherwise agreed by
both parties.
5.2 If at any time or from time to time the Sales Gas offered for
delivery hereunder is not at the Contract Delivery Pressure:
(i) PTT may accept delivery of the Sales Gas in whole or in
part (notwithstanding it was not at Contract Delivery
Pressure) and, in the event that PTT in its sole
judgement accepts delivery, the Concessionaire shall
compensate PTT for all reasonable and justifiable costs
incurred incidental to the acceptance of such Sales Gas
and all reasonable and justifiable costs incurred by PTT
in the course of any temporary measures which PTT may
take to restore the Sales Gas to the required pressure.
The Concessionaire's liability under this Clause 5.2 in
any Month shall not exceed the value of a volume of
Sales Gas equal to ten (10) times the DCQ in force at
the Current Price. Sales Gas taken under this Clause
5.2 shall be paid for at the Current Price, or
(ii) PTT may refuse to accept delivery of the Sales Gas in
whole or in part and to the extent of such refusal,
PTT's rights and remedie in respect of such pressure
deficient gas shall be as set forth in Article XV.
5.3 The Concessionaire shall as soon as possible after any such
failure in Contract Delivery Pressure inform PTT of the cause of
the failure and give an estimate of the time needed to remedy the
failure.
5.4 Within thirty (30) Days after any failure in Contract Delivery
Pressure, the Concessionaire may give notice to PTT that the
Concessionaire proposes to carry out the operations necessary to
remedy such failure within a period of not more than one hundred
and eighty (180) Days, or such longer period as may be essential
for a Reasonable and Prudent Operator, and in such event, during
the period mentioned in such notice, or for so long as the
Concessionaire is actively and diligently carrying out the
said operations, PTT shall not itself be entitled to carry out
any remedial operations of a permanent nature but may either
refuse or accept delivery of Sales Gas in the manner set out in
Clause 5.2.
5.5 If the Concessionaire shall not have served a notice within the
period stated in Clause 5.4 or (having served a notice) shall
have ceased to carry out the operations actively and diligently,
PTT may itself carry out such operations as may reasonably be
required to remedy the deficiency in 'Contract Delivery Pressure.
After completion of the operations PTT may
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recover from the Concessionaire the reasonable cost of such
operations, with interest thereon at the rate set forth in Clause
12.7, by reducing the price to be paid for Sales Gas to be
delivered thereafter by twenty five (25) per cent until the
reduction has permitted recovery of such cost and interest but
such recovery (net of interest) shall not exceed the value of an
amount of Sales Gas equal to twenty five (25) times the DCQ in
force at the Current Price when PTT commenced such operations.
5.6 During any period in which PTT is carrying out any remedial
operations in accordance with Clause 5.5, it may either refuse or
accept delivery of Sales Gas in the manner set out in Clause 5.2.
5.7 Should the parties fail to reach agreement within a period of
thirty (30) Days, any difference between the parties which may
arise in respect of the Contract Delivery Pressure of the Sales
Gas or the cost incurred to remedy any deficiency therein or in
connection with the execution of any remedial operations or
otherwise under this Article shall (at the request of either
party) be referred to an expert to be appointed pursuant to
Article XX
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ARTICLE VI QUANTITIES
6.1 The Concessionaire shall after the Effective Date, at its own
expense, diligently proceed to provide and maintain facilities to
enable it, on and after the Contractual Delivery Date, to produce
and deliver a peak capacity (hereinafter called "the Contractual
Delivery Capacity") at the rate or rates calculated as
hereinafter provided.
6.2 Subject always to Article XVI the Date of Commencement of
Delivery (DCD) shall be on January 1, 1997. The Parties will
however inform, at regular intervals, each other of the progress
and status of the construction of their respective facilities.
If it is agreed that the DCD can take place before the above
referred date the parties shall undertake to bring forward the
DCD to a date which is mutually acceptable and in that case the
other provisions of the Agreement will apply mutatis mutandis.
Any deferment of the DCD due to an event constituting Force
Majeure in accordance with Article XVI shall be limited to
the number of Days and part Days actually lost in consequence of
the occurrence of such event.
6.3 A Run-in Period shall follow the Date of Commencement of Delivery
(DCD) and such Run-In Period shall terminate at the earlier of the
completion of the seventy two (72) hour test or three (3) Months.
The first Day following the Run-In Period shall be referred to as
the Contractual Delivery Date (CDD). The Run-In Period shall be
for the purpose of proving the facilities required for the
performance of the initial obligations of both the Concessionaire
and PTT and during such Run-in Period both the Concessionaire and
PTT shall use reasonable endeavours respectively to deliver and
take Sales Gas.
(i) The Concessionaire shall, during the Run-In Period,
complete a test of seventy-two (72) consecutive
hours during which PTT shall nominate the rate of
delivery in accordance with Clause 6.12 and the
Concessionaire shall offer continuously to PTT
Sales Gas of a quality and at a pressure consistent with
the PTT nomination. If the Concessionaire is unable,
for whatever reason other than PTT's inability to take,
to complete the continuous seventy-two (72) hour period,
the test shall be restarted.
If within the seventy-two (72) hour test period PTT, for
whatever reason, is unable to take Sales Gas, the test
shall be re-started at the end of the interruption,
but only for the number of hours necessary to make up
the total period of seventy-two (72) hours.
During the Run-In Period, Sales Gas shall be paid for at
a price of seventy five (75) per cent of Current
Price as calculated.
(ii) If by the Day preceding the end of the Run-in Period
the seventy two (72) hour test has not been completed,
for any reason other than Force Majeure, then:
a) if such non-completion is due to the
Concessionaire's inability to deliver, PTT shall
have the right to notify the Concessionaire
that the test is deemed completed for all
purposes of this Agreement, and that from the
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Day following the receipt of such notice, the
provisions of this Agreement following the
Contractual Delivery Date shall apply; or
b) if such non-completion is due to PTT's inability
to take, the Concessionaire shall have the right
to notify PTT that the test is deemed completed
for all purposes of this Agreement, and that
from the Day following the receipt of such
notice the provisions of this Agreement
following the Contractual Delivery Date shall
apply.
6.4 For the First Contract Year and for each Contract Year, there
shall be determined, in the manner herein provided, a daily rate
for delivery of Sales Gas in that Year, which shall be expressed
as a quantity of Sales Gas in Cubic Feet and shall hereinafter be
called the "Daily Contract Quantity" (DCQ).
6.5 That amount of Sales Gas equivalent to the sum of the DCOs in
effect on each Day for the First Contract Year and for each
Contract Year shall hereinafter be called the "Annual Contract
Quantity" (ACQ).
6.6 (i) The DCQ for the First Contract Year shall be seventy five
(75) million Cubic Feet, and for the Second Contract
Year following the Contractual Delivery Date the DCQ
shall be eighty five (85) million Cubic Feet.
(ii) The DCO for the third Contract Year and subsequent
Contract Years shall be determined by dividing the Field
Reserves as determined or last redetermined by six
thousand (6000).
(iii) If under Clause 6.6 (ii) above, the resulting DCO should
increase to a level greater than one hundred twenty five
(125) million Cubic Feet, the parties shall meet together
in an effort to reach agreement on an increase in the DCQ.
(iv) In the event the DCQ as determined under Clause 6.6 (ii)
or Clause 6.6 (iii) above result in an increase in the
DCQ, such increase shall become effective on the date of
commencement of the following Contract Year, provided
that, if an investment on the part of the Concessionaire
is required in order to meet the increased DCQ, the
increase DCQ shall become effect upon the date of
commencement of the following Contract Year, or upon the
date of the completion of the work enabling the
Concessionaire to meet the increased DCQ, whichever is
later.
(v) In the event new fields or areas in the Concession Area
are determined to contain additional Natural Gas reserves
the Parties shall review the information and seek to
agree on the inclusion of such Natural Gas reserves
under this Agreement.
6.7 During the First Contract Year and in each Contract Year, PTT
shall purchase not less than the net Annual Contract Quantity
(Net ACQ), which quantity shall be the ACO reduced by:
(i) Any Sales Gas properly notified for delivery on any Day
which the Concessionaire has for any reason, other than
the failure of PTT to accept, not delivered; and
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(ii) Any Sales Gas properly notified for delivery on any Day
which PTT has been prevented by Force Majeure from
accepting.
6.8 If in each Contract Year PTT has not taken at least the Net ACO,
PTT shall pay (in the manner set forth in Article X11) the
arithmetic average of the Current Price applicable in the
relevant Contract Year for a quantity equal to the difference
between the Net ACO and the quantity actually taken, provided
that:
(i) If in the First Contract Year or in any Contract Year
PTT has taken and paid for Sales Gas (other than Sales
Gas taken in accordance with Clause 6.14) in excess of
the Net ACO for that Contract Year (such excess gas
hereinafter being called "Carry-Forward Gas"), then such
Carry-Forward Gas shall be offset against the obligation
of PTT in any subsequent Contract Year, under this Clause
6.8, to pay for Sales Gas not taken; and
(ii) The application of such offset by Carry-Forward Gas
shall in any Contract Year be limited to twenty (20) per
cent of the Net ACQ for that Contract Year; and
(iii) The balance (if any) of Carry-Forward Gas not so used
shall be carried forward for offset in subsequent
Contract Years, provided, however, that Carry-Forward Gas
shall only be used to offset PTT's obligations in the
five (5) Contract years following the First Contract Year
or the Contract Year in which the offset was earned.
6.9 When in accordance with Clause 6.8 PTT has paid for a quantity of
Sales Gas not taken in the First Contract Year or in any Contract
Year (hereinafter called "the Debit Year"), PTT shall, after PTT
has taken the Net ACQ for that Contract Year, in any or all of
the subsequent Contract Years take free of charge, a quantity of
Sales Gas equal to that paid for but not taken in respect of the
Debit Year of Years adjusted to reflect any differences in the
BTU content of the Sales Gas paid for in the Debit Year (based on
the average Gross Calorific Value for the said Debit Year) and
the Sales Gas actually taken.
Provided that this Clause shall not oblige the Concessionaire to
deliver Sale Gas on any Day in excess of the Contractual
Delivery Capacity.
6.10 Throughout the Contract Period the Concessionaire shall maintain
a Contractual Delivery Capacity of one hundred and fifteen (115)
per cent of the DCQ, and PTT may require delivery up to that
maximum rate at any time, notwithstanding that the aggregate of
such daily requirements in the First Contract Year or any one
Contract year may exceed the ACQ.
6.11 If at any time, or from time to time, during the Contract Period,
but not before sixty five (65) per cent of the Field Reserves as
last determined or redetermined has been produced (but excluding
gas, if any, which has been reinjected into the Reservoir) under
this Agreement, the Concessionaire expects that in order to
maintain the DCO (with the associated Contractual Delivery
Capacity) last established in accordance with Clause 6.6 it would
be necessary for the Concessionaire to incur additional
expenditure for facilities required to maintain such DCQ and
associated Contractual Delivery Capacity in excess of that which
a
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Reasonable and Prudent Operator would make, then the
Concessionaire may serve upon PTT notice of a decrease in DCQ, to
be effective after the expiration of twelve (12) months from
the date of the service of the said notice.
The Concessionaire's notice shall specify the decreased DCQ which
shall not be less than that which a Reasonable and Prudent
Operator could maintain without making such additional
expenditure, and shall be supported by adequate information and
raw data (if any) not previously given to PTT.
If within sixty (60) days following the receipt of a notice under
this Clause 6.11 PTT has informed the Concessionaire that it
considers the DCO which a Reasonable and Prudent Operator could
maintain without making such additional expenditure as aforesaid
is greater than the DCO specified in the notice, or that a
Reasonable and Prudent Operator would make such additional
expenditure, then PTT and the Concessionaire shall meet to
discuss the matter and shall endeavour, in good faith, to reach a
solution within sixty (60) Days. If, at the end of such sixty
(60) Days, the parties have not agreed on the issue, then either
party may require the matter to be submitted for determination to
an expert to be appointed in accordance with Article XX. The
expert shall be given access to all material data including raw
data available to the Concessionaire. In determining such issue,
the expert shall use the Field Reserves decided upon in
accordance with Article X. The award of the expert shall be
effective twelve (12) Months from the date of the
Concessionaire's notice, provided that, if the award of the
expert requires the Concessionaire to make a substantial
investment in additional platforms and/or facilities, the award
shall be effective on the completion of the work necessary to
meet the award or twelve (12) Months from the date of the
Concessionaire's notice, whichever is the later.
6.12 Not later than ten (10) a.m. each Friday, PTT shall notify the
Concessionaire of the rate of delivery required at the Delivery
Point for each Day of the following Week, being a rate which, if
sustained throughout the Day, will provide no more than the
applicable Contractual Delivery Capacity and no less than fifty
(50) per cent of the applicable DCQ and, so far as is reasonably
practicable, the Concessionaire shall deliver and PTT shall
receive at a rate as consistent as possible throughout the Day,
with due consideration for the normal fluctuations caused by
demand variations and operational control of facilities. PTT may
at any time before or during any Day call for the rate of
delivery previously notified to be varied to any extent within
the limits set out in Clause 6.10 and this Clause 6.12, and the
Concessionaire shall use reasonable endeavours to comply with
such request, provided that:
(i) Any request for a change of less than ten (10) per cent
shall be complied with within two (2) hours.
(ii) Any request for a change of ten (10) per cent or greater,
but less than twenty-five (25) per cent, shall be
complied with within six (6) hours.
(iii) Any request for a change of twenty-five (25) per cent or
greater shall be complied with within twelve (12) hours.
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6.13 If for any reason other than PTT's failure to accept, the
Concessionaire curtails deliveries below the quantities properly
notified for delivery by PTT within the prevailing Contractual
Delivery Capacity, PTT shall be deemed, until such curtailment
ceases, to have nominated as hereinafter provided:
(a) According to the weekly programme in force, from the
start of the curtailment until the end of the programme
for the Week in which the said curtailment started, and
(b) At the level of the prevailing DCO in respect of the
period of curtailment, if any, which extends beyond the
weekly programme referenced in Clause 6.12,
Provided that, if at the end of the referenced weekly programme
the total volume of Sales Gas taken by PTT during that Contract
Year is less than that which PTT should on average have taken at
that date, then PTT may continue, until such deficiency has been
made good to notify up to the maximum level permitted in
accordance with Clause 6.12 and, once made good, at a level of
the current DCO until the end of the period of curtailment.
6.14 At the request of PTT, the Concessionaire shall deliver Sales Gas
at a rate exceeding the limits in Clause 6.10 if it is
reasonably able so to do, provided that the Concessionaire in no
event shall be required to install additional facilities nor to
upgrade existing facilities to enable it to deliver Sales Gas at
such a rate.
6.15 For the purpose of this Agreement the quantity properly notified
for delivery on any Day shall be that quantity which would be
tendered for delivery if the delivery rate or rates required by
PTT had been sustained throughout the number of hours for which
it was or they were required to be effective.
Provided that if PTT, in accordance with Clause 6.14, has in fact
called for a rate exceeding the applicable Contractual Delivery
Capacity the quantity properly notified shall be calculated
as if the rate called for had been that of the applicable
Contractual Delivery Capacity.
6.16 After any event which causes a cessation of deliveries of Sales
Gas, then for a period of twelve (12) hours following the
start-up of deliveries, the Concessionaire, while using
reasonable endeavours to meet nominations, shall be relieved
solely from the consequences of shortfall for any failure to
deliver the nominated amounts in full.
6.17 If at any time or from time to time after the fifth anniversary
of the Contractual Delivery Date the Concessionaire establishes
in accordance with Article X the Field Reserves are inadequate to
meet a DCQ of eighty five (85) million Cubic Feet at a depletion
rate of one to six thousand (1:6000), or that he may be in
default due to lack of Contractual Delivery Capacity then the
Concessionaire may supply at the Delivery Point (or some other
agreed point of delivery) Sales Gas available from the Concession
Area ("Supplementary Gas") to the extent of any such deficiency
Provided that the Sales Gas so supplied
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(i) is delivered in accordance with the terms and
conditions of this Agreement; and
(ii) Concessionaire's interest in such Natural Gas is not
already committed under a separate agreement for the
sale of Natural Gas.
In the event that the Concessionaire invokes this right to supply
Supplementary Gas it shall serve upon PTT a notice to be
effective after the expiration of six (6) Months from the receipt
by PTT of the notice. The notice shall give details of an
area to be dedicated to this Agreement, which shall be so
determined that when added to the area described in the First
Schedule, Part II, the depletion rate of the Field Reserves in
the combined area is not greater than one to six thousand
(1:6000). The said area shall be added to the First Schedule,
Part II, to become part of the G.S.A. Area.
6.18 For the purpose of managed maintenance, the Concessionaire shall
be entitled to give notice to PTT and PTT shall be entitled to
give notice to the Concessionaire to reduce, for limited periods,
the DCQ to less than the DCQ prevailing prior to the maintenance
period, subject to the following conditions:
(i) This entitlement is solely in respect of preventative
maintenance.
(ii) The frequency shall be not more than three times in any
calendar year and the aggregate period shall not exceed
ten (10) Days.
(iii) The notification period shall be twelve (12) Months, or
such lesser period as may be agreed between the
Concessionaire and PTT, on each occasion.
(iv) Each notice shall give the proposed period of
maintenance and the level of DCQ which is to prevail
during the period of maintenance. Such level of DCO
shall be not less than fifty percent (50%) of the DCQ
prevailing prior to the maintenance period for that
period of that Contract Year.
(v) Up to not later than six (6) Months prior to the
notified date of commencement of such maintenance, either
party may require the other to make such timing
adjustments to the maintenance period as may be
reasonably requested but such right shall not be
used to the detriment of preventative maintenance which
is in accordance with good oil and gas industry practice.
(vi) The reduced DCQ modified under this Clause 6.18 shall
apply for all purposes of this Contract for each Day or
part Day during which maintenance is taking place.
The Concessionaire and PTT shall exercise their best
efforts in order to have their respective maintenance
periods coincide.
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ARTICLE VII CONCESSIONAIRE'S RESERVATIONS
The following rights are reserved to the Concessionaire:
7.1 Without prejudice to the nature and extent of the obligations of
the Concessionaire under this Agreement the right to decide the
manner in which it shall conduct its physical operations. The
Concessionaire shall give preference to domestic goods, works and
services, always provided that the goods, works and services are
of appropriate specifications from a technical and safety point
of view and equivalent in price, quantity and availability.
7.2 The right to use Natural Gas produced by the Concessionaire from
the Reservoir for any of the following purposes:
(i) For the operation of the Concessionaire's field
facilities, process facilities and other miscellaneous
uses relating to production from the Reservoir and the
delivery of Sales Gas;
(ii) For gas lift operation, repressuring, pressure
maintenance or cycling operations within the Reservoir;
(iii) For the use in satisfying any of the Concessionaire's
obligations under the terms and conditions of the
Concession Agreement and this Agreement.
7.3 The right to process the Natural Gas recovered before delivery to
PTT for the removal of any constituents other than methane,
ethane, propane and butane (except such minimum amounts as would
necessarily be removed in the recovery of such constituents).
Such removed constituents shall not be a part of this Agreement.
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ARTICLE VIll PTT FACILITIES
PTT shall, within the timed programme for the sale and delivery of Sales
Gas in accordance with this Agreement, diligently proceed to provide,
install and maintain at its own expense such facilities as may be
necessary to enable PTT to transmit and dispose of the Sales Gas from the
commencement of the Run-In Period provided in Clause 6.3 and on and after
the Contractual Delivery Date at the rate or rates determined, and
continuing until such time as this Agreement is terminated under the
provisions of Article XVIII.
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ARTICLE IX EXCHANGE OF INFORMATION
9.1 The Concessionaire and PTT shall at all times make available to
each other all such information as may reasonably be required to
enable each party to carry out its obligations under this
Agreement and in particular (but without prejudice to the
generality of the foregoing) will meet together approximately
three (3) months before each new Contract Year to exchange and
discuss written forecasts which indicate future programmes of
operations and expectations for succeeding Years.
9.2 The Concessionaire shall make available to PTT all basic data
which assists in determining the Field Reserves whether or not
notice of a redetermination of Field Reserves has been given in
accordance with Clause 10.2. This basic data shall be supplied to
PTT within thirty (30) days after the end of each quarter of the
First Contract Year and each Contract Year.
9.3 Recognizing that Sales Gas from more than one Natural Gas
reservoir may, during the Contract Period, be delivered to PTT
pursuant to this Agreement and also that the quality of the
resultant Sales Gas so delivered, while supplied within the
specifications of the Second Schedule, may vary depending on the
reservoir from which it is produced, the Concessionaire agrees to
attempt to give PTT not less than twelve (12) months notice of
such variations in quality.
9.4 All information made available under this Article shall be
supplied at the expense of the party providing the same and shall
not be disclosed to any person not in the service or employment
or professionally retained by the party receiving the same or in
the service or employment of the Government of Thailand and
entitled to receive the same or required by law or in any
arbitration or legal proceedings and any information disclosed
hereunder shall be so disclosed only on condition that the
recipient shall make no further disclosure thereof.
Each recipient shall treat as confidential all data and
information properly designated as confidential as long as the
same does not become public knowledge and shall take or cause to
be taken such precautions as are necessary to prevent
disclosure thereof to others.
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ARTICLE X DETERMINATION OF RESERVES
10.1 Until such time as a new quantity is agreed, or determined as
provided in this Article X, the Field Reserves shall be the
quantity set forth in Article III.
10.2 At any time or from time to time but not more frequently than
every second year, unless mutually agreed, PTT or the
Concessionaire may require a determination or redetermination of
the Field Reserves.
10.3 If the parties agree upon the result of such redetermination, the
Field Reserves as so redetermined shall become effective for all
purposes of this Agreement, as of October 1 for the Contract Year
the request for redetermination is made, but if the parties do
not so agree within ninety (90) Days of the notice requiring
redetermination, either PTT or the Concessionaire may require
that the redetermination be carried out by an expert appointed
pursuant to Article XX, who shall be given access to all basic
geological, geophysical, engineering and pertinent economic and
price forecast data available to both the Concessionaire and PTT.
The Field Reserves so determined by the expert shall become
effective as of the first Day of the Month following completion
date of such determination for all purposes of this Agreement.
Provided that, if the Field Reserves are increased to the extent
that additional platforms and facilities are essential to deliver
the higher DCQ (and provide the associated Contractual Delivery
Capacity) then the revised DCO shall become effective immediately
after such platforms and facilities are commissioned or two (2)
Years after the Field Reserves determination completion date,
whichever is the earlier.
10.4 In any redetermination the calculation of Field Reserves shall
limit the allowable element of Probable Natural Gas to twenty
(20) per cent of the total.
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ARTICLE XI PRICE AND PRICE ADJUSTMENT
11.1 Sales Gas delivered under this Agreement and in each Contract
Year (or to be paid for whether delivered or not) shall be paid
for in the manner and at the prices following.
11.2 The Current Price shall be the Initial Base Price (P) as adjusted
in accordance with this Article XI. The Initial Base Price shall
be US$ 1.90 times 1 for each one million (1,000,000) BTU Gross
Calorific Value.
11.3 There shall be one (1) pricing period which shall be from the
commencement of deliveries for the term of the Agreement.
11.4 In the month of March or September which ever is immediately
preceding the Run-In Period established under Clause 6.3 and in
the months of March and September every year thereafter for the
duration of this Agreement the Initial Base Price shall be
adjusted in the following manner and the Current Price so
obtained shall become effective on the first Day of April and
first Day of October respectively immediately following and
remain effective until the thirtieth Day of September and
thirty-first Day of March respectively next following.
11.5 There shall be a Normal Price and absolute Ceiling and Floor
Prices and a Special Floor Price, each of which shall be
calculated according to the following formulae:
(i) Ceiling Price (BAHT/MMBTU)
Ay = 0.82*((Fy*ly)/6.15)
(ii) Normal Price (BAHT/MMBTU)
By = P*((0.30*Wy/W)+ly/l((0.25*OMy/OM)+(0.3*Fy/F))+0.15)
(iii) Floor Price (BAHT/MMBTU)
Cy = 1.65*l*((0.25*Wy/W)+ly/l((0.20*OMy/OM)+(0.25*Fy/F))+0.30)
(iv) Special Floor Price (BAHT/MMBTU)
Dy = (Ay+Cy)/2
Where,
F = the arithmetic average of the figures published for each month of
the six month period from October 1994 to March 1995 inclusive
for the medium fuel oil 3.5% Sulfur. The agreed value is
15.65972.
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Fy = the arithmetic average of the figures last published for each
month of the six month period ending in March and September
respectively in which the prices have to be adjusted, in United
States Dollars per barrel of medium fuel oil ex Singapore
(3.5% Sulfur) from Shell Eastern Petroleum PTE Ltd., Esso
Singapore PTE Ltd., Mobil Sales and Supply Corporation, Caltex
Petroleum Corporation, BP Oil International and Singapore
Petroleum Corporation PTE Ltd. as published in "Platts Oilgrarn
Price Service".
W = the arithmetic average of the figures published for each month of
the six month period from October 1994 to March 1995 inclusive
for the index of Wholesale Prices in Thailand based on 100 for
the calendar year 1990 as published by the International Monetary
Fund in "International Financial Statistics". The agreed value
is 114.02160.
Wy = the arithmetic average of the figures published as for W above in
respect of the six month period ending in the March and September
respectively in which the prices have to be adjusted.
l = the exchange rate, which shall be the arithmetic average for the
month of March 1995 of the daily Exchange Equalization Fund (EEF)
Baht/US Dollar buying and EEF selling rates to commercial banks
published by the Bank of Thailand and shall be calculated by
first averaging the two daily rates and then the resultant
averages for each day within the month. This rate is agreed to
be 24.75826.
ly = the exchange rate calculated as for l above for the calendar
month in which the price adjustment is calculated.
OM = the arithmetic average of the figures published for each month of
the six month period from October 1994 to March 1995 inclusive
for the Producer Price Index for Oil Field Machinery and Tools,
Commodity Code No. 1191, based on 100 for the calendar year 1982
as published by the United States Department of Labor, Bureau
of Labor Statistics. The agreed value is 112.13333.
OMy = the arithmetic average of the figures published as for OM above in
respect of the six month period ending in the March and September
respectively in which the prices have to be adjusted.
11.6 The Current Prices shall be
(I) "By" if "Ay" is greater than "By" and "By" is greater than
"Cy"
(II) "Ay" if "By" is greater than "Ay" and "Ay" is greater than
"Cy"
(III) "Cy" if "Ay" is greater than "Cy" and "Cy" is greater than
"By"
(IV) "Dy" if "Cy" is greater than "Ay"
11.7 The value of ly shall be calculated each Month. If the value so
calculated differs by more than five (5) per cent from the value
of ly last used in calculating the Current Price, then a new
Current Price shall be calculated using this latest ly value and
become effective the first value and become effective the first
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Day of the following Month, all other figures remaining
unchanged except as provided in Clause 11.9.
11.8 If in the opinion of either party any of the indices or set of
statistics used in this Article at any time or from time to time
are discontinued or are so changed in nature or become so out of
date that it ceases to serve the original purpose for which it
was intended by the parties, as evidenced by the context in which
it was used in this Agreement, then the party may so notify the
other and request that a replacement be found. The parties shall
endeavour to agree to such replacement as is considered
necessary.
If within sixty (60) days of the notification the parties have
failed to agree, then at the request of either party the matter
shall be referred for resolution to an expert appointed in
accordance with Article XX. The award of the expert shall be
effective from the date of said notification.
11.9 If for any reason, when it becomes necessary to calculate the
Current Price, any of the components of the necessary data are
not published or made available as required by this Article XI,
then such calculation shall be provisionally made using the
latest six (6) months published data and the final adjustment
shall be made within thirty (30) days of all of the components of
the necessary data being first published. Such final adjustments
shall have retroactive effect.
Provided that if, when calculating the value of "Fy" at least
three (3) of the six (6) Company values are published, then the
calculation made shall be binding and subsequent publication of
the missing values shall not be taken into account.
11.10 All figures in calculations performed under this Article shall at
each stage in the calculation be rounded to five (5) decimal
places by rounding off the sixth decimal place, a five (5) in
the sixth decimal place being rounded upwards.
The final figures used for the prices payable in accordance with
this Article XI shall be rounded to four (4) decimal places by
rounding off the fifth decimal place, a five (5) in the fifth
decimal place being rounded upwards. All monies shall be to the
nearest Thai Satang.
11.11 PTT shall pay the Concessionaire (in the manner set forth in
Article XII) for an amount of Sales Gas delivered in accordance
with Article VI and in the following priority:
(i) Firstly, for such volumes of gas to which the reduced
prices under Article IV, V and XV apply at such reduced
prices.
(ii) Secondly, for the remaining balance of the Net ACO, at the
Current Price.
Any Sales Gas additional to the Net ACO taken, where
applicable, in the First Contract Year and in each
Contract Year shall be paid for as follows:
(iii) Firstly, such volumes of Sales Gas as PTT has paid for
but not taken in Debit Years, and taken in accordance
with Article VI shall be free of charge.
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(iv) Secondly, for the remaining balance, if any, of the
volumes of gas to which a reduced price applies under
either Article IV, V or XV at such reduced price.
(v) Thirdly, for the remaining balance at the Current Price.
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ARTICLE XII BILLING AND PAYMENT
12.1 On or before the tenth day of each month following the date of
the first physical deliveries of Sales Gas hereunder, the
Concessionaire shall render to PTT a statement showing for the
preceding Month:
(i) the quantity of Sales Gas properly notified by PTT for
delivery on each Day and the amount of Sales Gas offered
for delivery by the Concessionaire hereunder on each Day
expressed in Cubic Feet and millions of BTU;
(ii) the DCQ in force on each Day;
(iii) the quantity of Sales Gas actually taken by PTT each Day
expressed in Cubic Feet and millions of BTU;
(iv) the reduction (if any) in the ACQ to be made in respect
of that Month pursuant to the provisions of Clause 6.7;
(v) the Gross Calorific Value of the Sales Gas delivered in
each Day expressed in BTU per Cubic Foot;
(vi) the sum due and owing to the Concessionaire under
Article XI for Sales Gas delivered during the Month and
any prior Month showing the quantities at the different
prices if applicable;
(vii) any sum due and owing to PTT; and
(viii) the net sum payable to the Concessionaire.
12.2 On or before the thirty-first day of each October following the
First Contract Year and each Contract Year, the Concessionaire
shall render or cause to be rendered to PTT a statement showing:
(i) the total quantity of Sales Gas delivered hereunder in
the First Contract Year or the preceding Contract Year,
as the case may be, expressed in Cubic Feet and BTUs and
the price or prices applicable;
(ii) the Net ACO for such period;
(iii) the quantity (if any) of undelivered Sales Gas
(expressed in Cubic Feet and BTUs computed from the
Average Gross Calorific Value of the Sales Gas delivered
during that period) for which PTT must pay in
accordance with Clause 6.8. In the event no Sales Gas was
delivered in that period, the last Average Gross
Calorific value determined for the last effective period
shall be used;
(iv) the quantity, (if any) of Sales Gas delivered which is
free of charge to PTT in accordance with Clause 6.9;
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(v) the quantity (if any) of Carry Forward Gas earned during
the period, the quantity (if any) of Carry Forward Gas
taken during the period and the balance of Carry Forward
Gas remaining at the end of the period;
(vi) the sum (if any) due to PTT in accordance with Clause
15.2; and
(vii) the net sum or sums (if any) payable by one party to
another in respect of such transactions.
12.3 On or before the thirtieth day after each Month or the twentieth
day following receipt of the statement for that Month, whichever
is the later, PTT shall pay each of the companies defined as
Concessionaire, that part of the net sum set forth in an invoice
submitted by the Operator in accordance with Clause 12.1 (viii).
12.4 On or before the thirtieth day of each November or the thirtieth
day following the receipt of the statement in accordance with
Clause 12.2 (whichever is the later) PTT or the Concessionaire
(as the case may be) shall pay the net sum or sums (if any)
referred to in Clause 12.2 (vii).
Provided that, if by the thirtieth day of any November the
Concessionaire shall not have rendered such statement, then
PTT may itself prepare the same and render it to the
Concessionaire.
12.5 Where any sum is in dispute the undisputed portion shall promptly
be paid and after settlement of the dispute any amount agreed or
otherwise determined to be due shall be paid within fourteen (14)
days after such agreement or determination with interest thereon
in accordance with Clause 12.7.
12.6 Payment under this Article shall be made in Thai Baht to the
credit of each of the companies defined as Concessionaire or PTT
(as the case may be) at such place in Bangkok as such company or
PTT may request or at such other place as may be agreed.
12.7 Should any party fail to make payment to another of any sum due
hereunder, interest thereon shall accrue, at the London Inter
Bank offered rate (LIBOR) for US dollars for one Month as
published in the Financial Times of London, England, each day
such payment is due plus one (1) per cent, except to the extent
that the failure to make payment arose from an error on the part
of the party to whom payment was due to be made.
12.8 PTT and the Concessionaire shall have the right at reasonable
hours to examine the books and other records of the other party
relative to this Agreement to the extent necessary to verify the
accuracy of any statement or computation made pursuant to any of
the provisions of this Agreement,
Provided that, for the purposes of this Agreement,
(i) such books and other records need not be preserved longer
than a period of four (4) years; and
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(ii) if any such examination reveals any inaccuracy in any
billing therefore made, the necessary adjustment shall be
made promptly.
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ARTICLE XIII MEASUREMENTS
13.1 Sales Gas delivered under this Agreement shall be measured in
Cubic Feet and BTUs according to the procedure set out in the
Third Schedule hereto.
In the event that Sales Gas is delivered to more than one (1)
Delivery Point concurrently, the BTU content and other
characteristics of the total Sales Gas shall be computed by
weighting the gas composition and throughput values at each
Delivery Point and aggregating such data for total measurement.
13.2 All measuring and testing equipment, housings, devices and
materials shall, with all related equipment, appliances and
buildings (herein called the "Concessionaire's Equipment") be
procured, installed, maintained and operated by the
Concessionaire at the Concessionaire's expense except as provided
hereafter.
PTT may, at its own expense, have procured and installed by the
Concessionaire, and supervise operation of, check measuring and
testing equipment which shall not interfere with the use of
the Concessionaire's facilities including its measuring and
testing equipment. The parties shall enter into an agreement to
cover such procurement, installation and operation.
13.3 The Concessionaire shall ensure that withdrawal for maintenance
or adjustment of any individual component part of the
Concessionaire's Equipment does not affect the delivery of Sales
Gas.
13.4 PTT shall have the right from time to time and at all times upon
giving reasonable notice to the Concessionaire to inspect or
cause to be inspected the Concessionaire's Equipment and other
measurements or test data of the Concessionaire but the reading
calibration and adjustment of the Concessionaire who shall
preserve all original test data and other similar records for a
period of four (4) years and shall make a copy thereof available
to PTT at any time upon request,
Provided that, PTT or its employees, agents or representatives
may, with reasonable notice, enter upon any facilities owned or
installed by the Concessionaire pursuant to this Article at the
sole risk and cost of PTT,
Provided further that, PTT shall afford to the Concessionaire the
same rights of inspection and verification at the sole risk of
the Concessionaire in respect of all check measuring and
testing equipment installed at the Delivery Point by PTT in
respect of the Sales Gas delivered hereunder.
13.5 Each component of the measuring and testing equipment shall be
adjusted to operate accurately within a limit prescribed by the
manufacturer but which shall not in any case exceed a limit of
two (2) per cent.
The accuracy of the Concessionaire's Equipment shall be verified
by the Concessionaire once in every month during the Contract
Period or at such other frequency as may be
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agreed (and at other times if so required by either party) and
the Concessionaire shall give to PTT sufficient previous notice
of the date, time and nature of every verification to enable a
representative of PTT to be present therat. The results of any
verification shall be binding on both parties unless PTT shall
within seven (7) days after such verification give notice to the
Concessionaire that it disputes the accuracy of such
verification.
Verification shall be made at the expense of the Concessionaire
but PTT shall bear the cost of the attendance of its
representatives at any verification and shall bear the whole
expense of any verification made at its request if the accuracy
of the equipment concerned is found to be within the limits
mentioned in this Clause 13.5.
13.6 If at any time or from time to time during the continuance of
this Agreement any component of the Concessionaire's Equipment
is found to be out of service or registered outside the limits of
accuracy agreed under Clause 13.5 the Concessionaire shall
forthwith adjust it to read accurately within the limits
mentioned in Clause 13.5 or (if that is not possible) replace it
with a servicable component and (unless the Concessionaire and
PTT shall otherwise agree) the following provisions shall apply
with regard to earlier readings affected by the defective
component.
(i) no correction shall be made in respect to readings made
during the period before the immediately preceding
verification of the defective component;
(ii) if the time at which the component became defective can
be established the readings affected thereby shall be
corrected with effect from that time in a manner provided
by paragraphs (a)(b) and (c) of Clause (iii) of this
Clause 13.6;
(iii) if the time at which the component became defective cannot
be established, then the time has elapsed since the
immediately preceding verification shall be divided into
two (2) equal parts and estimated readings shall be
established in respect to the first such part by
assuming that the defective component has operated
accurately throughout such part and in respect of the
second such part;
a) by using the readings recorded by any check
measuring or testing equipment, if such equipment
is registered accurately within the limits
mentioned in Clause 13.5;
or if such equipment is not registered accurately
or if no such equipment has been installed; or
b) by correcting the error, if the percentage of
error is ascertainable to the satisfaction of
both parties, by calibration test or mathematical
calculation;
or it the percentage of error is not so
ascertainable, then
c) by estimating the quantity and/or quality of Sales
Gas delivered by reference to deliveries under
similar conditions when the defective component
was registering accurately;
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13.7 The parties shall meet to discuss and to endeavour to settle any
dispute which may arise with regard to the application of the
provisions of this Article or the measurement of the quantity of
Sales Gas delivered and if within thirty (30) days after the
commencement of such meeting, or, if no such meeting takes place,
within forty (40) days of one party notifying the other that a
point of dispute exists, they shall have been unable to agree,
the matter may be referred to an expert to be appointed in
accordance with the provisions of Article XX.
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ARTICLE XIV POINT OF DELIVERY, PROPERTY AND RISK
14.1 Sales Gas to be delivered under the terms of this Agreement shall
be delivered by the Concessionaire to PTT at the Delivery Point
specified in the Fourth Schedule hereto.
14.2 The property and risk in the Sales Gas tendered for delivery by
the Concessionaire shall pass to PTT at the Delivery Point,
Provided that, if any Sales Gas so tendered is deficient in
quality but is, at the moment of its passage through the Delivery
Point, not known by PTT to be so deficient, such Sales Gas shall
for the purposes of this Agreement be deemed to have been
delivered and the Concessionaire shall compensate PTT for any
damages suffered by PTT and which PTT can properly claim in
consequence of such deficiency up to an amount equal to the value
of a quantity of Sales Gas ten (10) times the DCQ then in force
at the Current Price.
14.3 Immediately upon notification by PTT of the occurrence of a
failure of pipeline facilities installed by PTT pursuant to
Article VIII causing an escape of Sales Gas, the Concessionaire
shall stop delivering Sales Gas and PTT shall not be required to
pay for any Sales Gas passing the Delivery Point after such
failure has been notified and prior to the failure being
remedied, but PTT shall remain obligated in accordance with
Clause 6.8.
14.4 In the event of the Government of Thailand taking Royalty in kind
under the Concession Agreement from the Development Area and
directing that such Royalty Sales Gas be delivered to PTT, PTT
shall, if the Government so requests, take delivery of such Sales
Gas at the Delivery Point and the liability and risk of the
Concessionaire shall cease at that point.
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ARTICLE XV DEFAULT
15.1 Except as otherwise provided in this Article XV and Clauses 4.2
and 5.2, each party shall be liable to the other in the event of
such party's default or breach of an obligation hereunder only
for actual costs, expenses and damages incurred by such other
party as the direct result of such default or breach.
15.2 Except as otherwise provided in this Article XV, PTT's sole
remedy for the Concessionaire's failure to deliver Sales Gas,
during any day, in quantities required by the provisions of this
Agreement (such deficient quantity being referred to as
"Shortfall") shall be the right to take an amount of Sales Gas
equal to the Shortfall as part of the Net ACO at a price
twenty-five (25) per cent below the Current Price at the time
of the occurrence of the Shortfall. The Shortfall shall be
cumulated at the end of the Month of its occurrence and Sales Gas
to compensate for Shortfall ("Shortfall Gas") shall be taken from
the first day of the next month.
If for a period of not less than thirty (30) Days, in
circumstances in which this Clause 15.2 applies, the
Concessionaire does not make available Sales Gas and, as a result
by the end of the First Contract Year or the Contract Year, as
the case may be, PTT has not been able to exercise all or part of
its right to require delivery of Shortfall Gas in respect of
that period, then the Concessionaire shall pay to PTT, in
accordance with Article XII, a sum in cash equal to the Shortfall
not so delivered times twenty-five (25) per cent of the Current
Price prevailing during the occurrence of the Shortfall.
If any period of not less than thirty (30 ) Days, which the
Concessionaire does not make available Sales Gas as mentioned
above, occurs over two accounting years then the sum to be paid
shall not become due before the end of the second of such years.
15.3 The Concessionaire, as a Reasonable and Prudent Operator, shall
incur no liability to PTT for failure to deliver Sales Gas in
quantities required by this Agreement if such failure was in any
way caused, in whole or in part, by an event where:
(i) the Concessionaire has been prevented by Force Majeure
as defined in Article XVI, or
(ii) subject to PTT's rights under Clause 4.2 and 5.2, PTT
failed to take Sales Gas properly tendered in accordance
with this Agreement.
15.4 Subject to the provisions of this Agreement and in particular
Clauses 6.9 and 18.4, PTT's liability to the Concessionaire, for
failure in its obligation to accept delivery of Sales Gas
hereunder, shall be limited to the payment to the Concessionaire
for Sales Gas not taken, at the price provided in this Agreement.
15.5 In no event shall either the Concessionaire or PTT be liable to
the other for indirect or special damages of any kind nor shall
either be liable to the other for damages asserted or claimed to
have suffered by any third party not a party to this Agreement.
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15.6 For the avoidance of doubt, the parties agree that if the
Concessionaire's default under the provisions of this Agreement
is limited to Shortfall, then PTT's remedy is pursuant to Clause
15.2 and not 15.1.
15.7 If the ACQ as the result of any determination or redetermination
of the Field Reserves drops below thirty one billion Cubic Feet,
the Concessionaire shall pay PTT a sum of money equivalent to the
capital cost of the Facilities installed by PTT for the service
of this agreement times zero decimal one nine nine two (0.1992)
multiplied by the amount the ACQ is less than thirty one (31)
billion Cubic Feet divided by thirty one (31) billion Cubic Feet.
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ARTICLE XVI FORCE MAJEURE
16.1 In this Agreement "Force Majeure" shall denote any event the
happening which could not be prevented even though a person
against whom it happened or threatened to happen were to take
such appropriate care as might be expected of a Reasonable and
Prudent Operator. Force Majeure shall not include a failure to
give a notice or to pay money due under the Agreement.
16.2 Events which may, subject to Clause 16.1, be considered Force
Majeure events shall include but not be limited to acts of
government, strikes, lock-outs, acts of public enemy, wars
whether declared or undeclared, blockades, insurrection, riots,
epidemics, landslides, lightning, earthquakes, fires, storms,
floods, washouts, civil disturbances, explosions, breakage or
accident to machinery or lines of pipe, freezing of wells or
lines of pipe, partial or entire failure of wells, inability to
obtain necessary materials or supplies due to changes in laws and
regulations, material changes in the obligations of the
Concessionaire under the Concession Agreement imposed
unilaterally by the Government of Thailand, inability of PTT to
accept delivery of Sales Gas by reason of inability of any power
generation or industrial customer of PTT to take Sales Gas which
it or they would have taken if such inability is caused by a
happening which would have constituted Force Majeure in
accordance with Clause 16.1 as if the customer concerned had been
a party to this Agreement;
Provided that PTT shall have no right to Force Majeure relief
hereunder by reason of the inability of any power generation or
industrial customer to take Sales Gas unless PTT shall
pro-rate the amount from which it requires relief among all of
its relevant suppliers. The deemed amount of Sales Gas which
would have been delivered to the customer concerned shall be
calculated by reference to the average delivery to that customer
over the immediately preceding thirty (30) Days and PTT supply
pattern by the average take of Sales Gas over the same thirty
(30) Days.
16.3 A party claiming relief on account of Force Majeure shall:
(i) as soon as practicable give notice to the other party
of the happening said to constitute Force Majeure,
such notice to include full information about the
circumstances and a statement of the steps and time
believed necessary to remedy the failure but neither
party shall be obliged to settle or prevent any strike
or other industrial action except on terms which, in
its sole judgement, are acceptable to it.
(ii) proceed as a Reasonable and Prudent Operator at its own
expense to remedy the failure as rapidly as possible.
16.4 A party failing to fulfil its obligations (other than the
obligations to give notice or to pay money excepted under Clause
16.1) by reason of Force Majeure and fulfilling the requirements
of Clause 16.3 shall be relieved of liability as follows:
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(i) in case of the Concessionaire, to the extent that Force
Majeure has prevented it from fulfilling its
obligations under this Agreement and in particular
delivering Sales Gas that it should have delivered.
(ii) in the case of PTT to the extent that Force Majeure has
prevented it from fulfilling its obligations under this
Agreement and in particular accepting Sales Gas which
it should have accepted or from disposing of the same.
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ARTICLE XVII PERIOD OF CONTRACT
This Agreement shall come into force on the Effective Date and shall so
continue in force until terminated as provided in Article XVIII. Right and
obligations accrued to and incurred by each party prior to termination of
this Agreement shall survive such termination.
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ARTICLE XVIII TERMINATION
18.1 This Agreement shall terminate
(i) upon termination of the petroleum production periods as
provided in the Concession Agreement and Petroleum Act
BE 2514 (1971), as amended, and Ministerial Regulations
promulgated pursuant thereto, or
(ii) when there are no Field Reserves remaining in the
Reservoir, or
(iii) after a period of thirty (30) years from the
Contractual Delivery Date, such period to be extended
by each event of Force Majeure which is of not less
than thirty (30) Days duration,
whichever shall first occur.
18.2 The Concessionaire shall in good faith endeavour to give to PTT
not less than two (2) years notice of the date upon which an
event set forth in Clause 18.1 (ii) is expected to occur, but
this Agreement shall terminate when such event occurs whether
before or after the date notified by the Concessionaire.
18.3 If this Agreement terminates then the Concessionaire shall
reimburse PTT the net amount which PTT has paid for Sales Gas
pursuant to Clause 6.8 but not taken pursuant to Clause 6.9.
Reimbursement shall be made within thirty (30) days of
termination and all other amounts due from one party to the other
shall be settled within sixty (60) days after termination, after
which interest shall be paid in accordance with Clause 12.7 until
payment is made.
The Concessionaire shall have the right to substitute for such
payment, quantities of natural gas delivered from outside the
G.S.A. area and delivered at the Delivery Point or some other
point of delivery acceptable to PTT. The natural gas substituted
shall be supplied in accordance with the terms and conditions of
this Agreement, the duration of which shall be extended as
necessary for this purpose.
Detailed arrangements for the substitution shall be submitted by
the Concessionaire together with the notice given in accordance
with Clause 18.2. If within ninety (90) days the parties have
failed to agree the detailed arrangements, either party may refer
the matter for arbitration in accordance with Article XXI.
18.4 If at any time after the Concessionaire has served a notice of a
decrease in DCQ in accordance with Clause 6.11 the pipeline
connecting the Delivery Point with the market, or any other part
of PTT's facilities necessary for the transmission, compression
treatment, or distribution of the Sales Gas which is the subject
of this Agreement, is damaged by a happening beyond the
control PTT acting in accordance with the standards of a
Reasonable and Prudent Operator and it would be necessary for PTT
to incur additional expenditure to repair the damage in excess of
that which a Reasonable and Prudent Operator would make, then PTT
may, by written notice given to the Concessionaire, reduce the
DCQ or terminate this Agreement, as appropriate to the extent of
the damage, with
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immediate effect and if this Agreement is so terminated then PTT
and the Concessionaire shall be excused from all obligations
thereafter.
If within sixty (60) days following the receipt of a notice given
by PTT in accordance with this Clause 18.4, the Concessionaire
informs PTT that the Concessionaire considers that a Reasonable
and Prudent Operator would make such additional expenditure and
the parties are unable to agree, then either party may require
the matter to be submitted to an expert to be appointed in
accordance with the provisions of Article XX and the expert shall
be given access to all material data.
18.5 In the event the Concessionaire should cease to deliver Sales Gas
from the GSA Area, then in the event the Concessionaire has not
delivered at least five hundred (500) billion Cubic Feet of Sales
Gas pursuant to this Agreement, the Concessionaire shall pay PTT
a sum of money equivalent to the "undelivered quantity" in
billion Cubic Feet, divided by five hundred (500) billion Cubic
Feet times the capital cost of the Facilities installed by PTT
for the service of this agreement times one decimal one to the
"n"th power (1.10 x n) where n is the number of Calendar years
which the Concessionaire has delivered Sales Gas to PTT. The
"undelivered quantity" being five hundred (500) billion Cubic Feet
less actual deliveries.
18.6 Notwithstanding any other provision of this Agreement, this
Agreement shall terminate if the Concession Agreement is
terminated in a manner beyond the control of the Concessionaire.
In the event of such termination and subject to the provisions of
Clause 18.6, each party shall be relieved of all liability
hereunder.
18.7 Termination in any circumstances shall not relieve any party of
an obligation to pay amounts due and payable to another at the
time of termination.
18.8 If any provision of part of this Agreement is void, then this
Agreement as a whole shall not be affected thereby and if
practicable the remainder of the provisions hereof shall remain
valid and enforceable, provided, however, that if such void
provision is considered as essential by any Party, the Parties
shall meet and endeavour in good faith to set out a legal
replacement provision.
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ARTICLE XIX ASSIGNMENT
19.1 No party shall be entitled without the consent in writing of the
other (which consent shall not be unreasonably withheld) to
assign any of its rights or obligations created by this
Agreement, except assignment of the rights and/or obligations
hereunder as security for obtaining financial facilities needed
to put the Concession Area into operation and production.
production.
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ARTICLE XX EXPERTS
20.1 Whenever in this Agreement it is provided that any person is to
be appointed an expert or any matter is to be referred to an
expert or the parties agree that a point of difference between
them shall be resolved by an expert the provisions of this
Article XX shall apply.
20.2 Other than in the appointment of an expert to redetermine Field
Reserves pursuant to Article X, the procedure for the appointment
of an expert shall be the following:
(i) The party wishing the appointment of an expert to be made
shall give notice in writing to that effect to the other
and in such notice shall give details of the matter which
it is proposed shall be resolved by the expert.
(ii) The parties shall meet in an endeavour to agree upon a
single expert to whom the matter in dispute shall be
referred for determination.
(iii) If within twenty-one (21) days from the service of the said
notice the parties have failed to agree upon an expert
then the matter shall forthwith be referred by the party
wishing the appointment to be made to the President of
the International Gas Union who shall be requested to
make the appointment of the said expert within thirty
(30) days and may in so doing take such independent
advice as he thinks fit.
(iv) Upon an expert being agreed or selected under the foregoing
provisions of this Article the parties shall forthwith
notify such expert of his selection and shall request him
to state within fourteen(l4) days whether or not he is
willing and able to accept the appointment.
(v) If such expert shall be either unwilling or unable to
accept such appointment or shall not have accepted such
appointment within the said fourteen (14) days then
unless the parties are able to agree on the appointmet
of another expert who is willing and able to act,
the matter shall again be referred to the President of
the International Gas Union who shall be requested to
make a further appointment and the procedures shall be
repeated until an expert is found who accepts the
appointment.
20.3 For the appointment of an expert to redetermine Field Reserves
pursuant to Article X, the procedure for the appointment of an
expert shall be the following.
(i) The party wishing the appointment of an expert to be made
shall give notice in writing to that effect to the other
party and in such notice shall give details of the matter
which it is proposed shall be resolved by the expert.
(ii) The Concessionaire shall within fifteen (15) days of the
giving by it or the receipt by it of such notice, submit
to PTT the names of five (5) companies, (at least two (2)
of which must be registered outside of the United States or
Thailand and must not be a subsidiary of an US or Thai
company), each of which in the opinion of the
Concessionaire has the capacity and integrity to act as
an independent expert.
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(iii) The parties jointly shall within fifteen (15) days request
written confirmation within thirty (30) days from each such
expert that the expert is willing to accept the
determination assignment.
(iv) If less than three (3) of the experts furnish their written
confirmation as provided above, the Concessionaire,
maintaining the requirements of Clause 20.3 (ii), shall
add within a further fifteen (15) days a number of
experts to the remaining list to increase the number of
three (3) or more experts on the list who are willing to
accept the assignment.
(v) From the list determined as above by the Concessionaire,
PTT will select one (1) within seven (7) Days. This
expert shall be given the determination assignment.
20.4 Once the expert has accepted his appointment pursuant to Clause
20.2 (v) or has been selected pursuant to Clause 20.3 (v) a
notice shall be sent within five (5) days of such date to appoint
an expert by either party (with copy of such appointment to the
other party) or both parties and shall instruct the expert that
the appointment is made on behalf of both parties and will set
forth the points of difference to be resolved and will fairly
represent the position of each.
20.5 Not later than thirty (30) days after the acceptance by an expert
of his appointment each partly shall submit to the expert and to
the other party all data, information and other submissions which
each party considers relevant to the matter for which the expert
has been appointed. Within fifteen (1 5) days after the said
thirty (30) day period each party may rebut the data, information
and submission of the other party. The expert shall make his
decision on such data, information and submissions and shall
ignore data, information and submissions made after such
forty-five (45) days unless the same are furnished in response to
a specific request from him. The expert may examine physical
evidence onsite provided both parties are accorded the
opportunity to attend and participate in such examination.
20.6 Within a reasonable period, which shall not in the case of a
determination under Article X exceed one hundred and eighty (180)
days after his appointment, or in any other case ninety (90) days
after his appointment, the expert shall render a decision. If
the expert does not so decide the matter within such time or
within such extensions of time agreed upon by the parties hereto,
the matter shall, at the request of either party, be referred to
a new expert who shall be appointed under the provisions of this
Article XX and upon the acceptance of appointment by such new
expert the appointment of the previous expert shall cease,
Provided that if the previous expert shall have rendered a
decision prior to the date upon which the new expert accepts his
appointment then such decision shall be binding upon the parties
and the instructions to the new expert shall be withdrawn.
20.7 The report of the expert shall be in writing and shall set forth
his decision and reasons therefore.
20.8 No person shall be appointed to act as the expert under this
Article XX:
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(i) unless he shall be qualified by education, experience and
training to determine the matter in dispute.
(ii) who at the time of appointment is an employee of or
engaged by either party.
20.9 The decision of the expert shall be final and binding upon the
parties on the matter under determination and may be entered
thereon by any court of competent jurisdiction (provided that if
a court in Thailand is selected by either party, it shall be the
Civil Court of Bangkok) save in the event of:
(i) fraud;
(ii) an evident material miscalculation of figures or an
evident material mistake in the description of any
person, thing or property referred to in the award;
(iii) failure of expert to disclose any relevant interest
likely to give rise to justifiable doubts as to his
impartiality or independence;
(iv) where an expert has awarded upon a matter not submitted
to him, unless it is a matter not affecting the merits
of the decision upon the matter submitted.
Each party shall continue fully to perform all of its
obligations under this Agreement during the pendency of the
determination.
20.10 Each party shall bear the costs and expenses of all counsel,
witnesses and employees retained by it but the cost and expenses
of the expert shall be apportioned equally between the
Concessionaire and PTT.
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ARTICLE XXI ARBITRATION
21.1 Any and all disputes, controversies or claims between the parties
arising out of or relating to this Agreement or the performance,
breach, termination or invalidity thereof which are not by this
Agreement referred for determination to an expert appointed in
accordance with the provisions of Article XX shall be finally
settled under the Arbitration Rules of the Arbitration Institute
of the Thai Ministry of Justice.
21.2 Within sixty (60) Days of a party having given notice of a
dispute, controversy or claim to the other party, the parties
shall appoint an arbitrator, and thereafter the arbitrators so
appointed shall within sixty (60) days appoint a third arbitrator
who shall act as chairman of the arbitrators.
21.3 If any party including the arbitrators appointed in accordance
with Clause 21.2 fails to nominate an arbitrator within the time
specified in Clause 21.2, the Chief Justice of the Supreme Court
of Thailand shall be requested to appoint such arbitrator.
21.4 The language of any arbitration shall be English.
21.5 The parties agree that the arbitration proceedings and any
findings by and awards rendered by the arbitrators appointed
shall be kept confidential for the term of the Agreement.
21.6 The place of arbitration shall ordinarily be Bangkok but, if any
one of the parties so requests, shall take place at such other
place as may be agreed by the parties.
21.7 In rendering an award, the arbitrators shall take account of the
law of the Kingdom of Thailand and of practice and usage in the
international oil and gas industry.
21.8 The arbitral award shall be final and binding on both parties on
the matter under arbitration, and judgement thereon may be
entered in any court of competent jurisdiction (provided that if
a court in Thailand is selected by either party, it shall be the
Civil Court of Bangkok) save in the event of:
(i) Fraud;
(ii) An evident material miscalculation of figures or an
evident material mistake in the description of any
person, thing or property referred to in the award;
(iii) Failure of any arbitrator to disclose any relevant
interest likely to give rise to justifiable doubts as
to his impartiality or independence;
(iv) Where the arbitrators have awarded upon a matter not
submitted to them, unless it is a matter not affecting
the merits of the decision upon the matter submitted.
In which case the matter shall be resolved using the Arbitration
Rules noted above.
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Each party shall continue fully to perform all of its
obligations under this Agreement during the pendency of the
determination.
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ARTICLE XXII APPLICABLE LAW
This Agreement shall be construed and interpreted in accordance with and
governed by the law of Thailand.
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ARTICLE XXIII SUCCESSORS AND ASSIGNS
This Agreement shall bind and enure to the benefit of the companies
defined as the Concessionaire and PTT and their respective successors and
permitted assigns.
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ARTICLE XXIV CONCESSIONAIRE'S REPRESENTATIVE
24.1 The Operator appointed from time to time by the Concessionaire
shall be the authorized representative of the Concessionaire for
the provision of information and data, for the giving and
receiving of all notices and invoices to and from PTT and for all
other purposes of this Agreement other than the receiving from
PTT payments in accordance with Article XII, and PTT shall be
fully protected in acting in reliance upon anything done or
performed or agreement made by the Operator as though the
Concessionaire had done or performed the same.
24.2 The original Operator appointed by the Concessionaire under this
agreement is Thaipo Limited.
In the case of appointment of a new Operator, the Concessionaire
shall so notify PTT at least fifteen (15) days before such
appointment becomes effective.
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ARTICLE XXV NOTICES
25.1 Whether or not so stipulated herein, all notices, communications
and statements (hereinafter called "notices") required or
permitted hereunder shall be in writing. Notices may be served.
(i) by hand delivering them to, and receiving a receipt
from, the party on whom they are to be served at that
party's address hereinafter given and received, provided
that such delivery shall be during normal business hours.
Such notices shall be deemed received by the addresses
when actually delivered as aforesaid; or
(ii) by telex when given (or by any other like method by which
a written and recorded message may be sent) directed to
the party on whom they are to be served at that party's
address hereinafter given. Notices so served shall be
deemed received by the addresses thereof;
(a) when actually received by them within the
normal working hours of a business day; or, if
not so received
(b) at the commencement of the next ensuing
business day following transmission thereof
provided, however, that an answer back has been
received; or
(iii) by mailing them first class registered post, to the
party on whom they are to be served. Notices so served
shall be deemed received by the addressees when a signed
receipt has been given.
25.2 The initial address for service of notice hereunder of each of
the respective parties shall be as follows:
In the case of PTT:
555 Vibhavadi-Rangsit Road
Bangkok 10900 Thailand
Telex: 72054 PTT TH
In the case of the Concessionaire:
Thaipo Limited
19th Floor, B.B. Building
54 Asoke Road, Sukhumvit 21
Bangkok 10110, Thailand
Fax No.: (66-2) 260-7150
Tel No.: (66-2) 260-7151
25.3 Each party will promptly inform the other in writing of any
change.
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25.4 For information purposes only, and without limiting in any way
the scope of Article XXIV, the initial nominated addresses of
each of the companies defined as Concessionaire shall be:
The Sophonpanich Co., Ltd.
61 Soi Watana, Nineteen,
Sukhumvit Road, Bangkok 10110
Thailand
Fax No.: (66-2) 236-8988
Tel No.: (66-2) 230-1881
Thai Romo Limited
19th Floor, B.B. Building
54 Asoke Road, Sukhumvit 21
Bangkok 10110, Thailand
Fax No.: (66-2) 260-7274
Tel No.: (66-2) 260-7242
Each such company shall promptly inform the other and Thaipo
Limited, and PTT in writing, of any change.
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ARTICLE XXVI WAIVER
No waiver by either party of any default or defaults by the other in the
performance of any of the provisions of this Agreement shall operate or be
construed as a waiver of any other or further default whether of a like or
different character.
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ARTICLE XXVII MARGINAL HEADINGS
The marginal headings in this Agreement are inserted for convenience only
and shall not affect the construction of this Agreement.
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ARTICLE XXVIII ROYALTY IN KIND
The Concessionaire shall pay royalty for any Sales Gas sold under this
Agreement as set out in Clauses 10 (2) (a) and (b) of the Concession
Agreement. If the Government of Thailand elects to take royalty gas in
kind, the Concessionaire's obligation to deliver Sales Gas shall be
reduced accordingly and in particular the DCQ shall be reduced by that
percentage of Sales Gas produced from the Concession Area which is so
taken by the Government.
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ARTICLE XXIX ATTACHMENTS
There are attached to this Agreement five (5) Schedules numbered from the
First to the Fifth and such Schedules are hereby made part of this
Agreement for all the purposes thereof.
In the event that any provision set forth in any of the five (5) Schedules
attached hereto conflict with the provisions set forth in this Agreement,
the provisions of this Agreement shall prevail.
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ARTICLE XXX RELATIONSHIP
It is expressly agreed that it is not the purpose or intention of this
Agreement to create, nor is the same to be construed as creating, any form
of legal partnership between companies defined as the Concessionaire.
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ARTICLE XXXI ENTIRE CONTRACT
This Agreement and the terms hereof shall constitute the entire agreement
between the parties hereto with respect to all matters herein and its
execution has not been induced by nor do either of the parties rely upon
or regard as material any representations or writings whatsoever not
incorporated herein. This Agreement may be modified or supplemented
only by amendment in writing executed on behalf of the parties hereto.
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IN WITNESS WHEREOF each party hereto has caused this Agreement to be executed
by its duly authorised representative as of the date first written above.
THAIPO LIMITED PETROLEUM AUTHORITY OF THAILAND
Radford Phillip Laney Pala Sookawesh
- ------------------------------------ ---------------------------------------
Mr. Radford Phillip Laney Mr. Pala Sookawesh
President and Managing Director Governor
- ------------------------------------ ---------------------------------------
Steven R. Samuel, Witness [Illegible], Witness
THAI ROMO LIMITED
Patrick R. Rutherord
- ------------------------------------
Mr. Patrick R. Rutherford
Chairman of the Board
Rutherford/Moran Oil Corporation
- ------------------------------------
Ronald B. Manning, Witness
THE SOPHONPANICH CO., LTD.
Mr. Chote Sophonpanich
- ------------------------------------
Chote Sophonpanich
Director
- ------------------------------------
[Illegible], Witness
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FIRST SCHEDULE PART I
THE CONCESSION AREA
North Latitude East Longitude
------------------------ ------------------------
(Degree/ Minute/ Second) (Degree/ Minute/ Second)
Point No.
1 11 0 0 100 45 0
2 11 0 0 101 13 15
3 10 59 0 101 13 0
4 10 16 50 101 29 0
5 10 9 0 101 30 0
6 10 9 0 101 27 0
7 10 0 0 101 28 20
8 10 0 0 101 19 0
9 9 50 0 101 19 0
10 9 50 0 101 16 0
11 9 42 0 101 16 0
12 9 42 0 101 10 0
13 9 48 0 101 10 0
14 9 48 0 101 8 0
15 9 52 0 101 8 0
16 9 52 0 101 6 0
17 9 40 0 101 6 0
18 9 40 0 101 16 0
19 9 33 0 101 16 0
20 9 33 0 101 15 0
21 9 31 0 101 15 0
22 9 31 0 101 10 0
23 9 32 0 101 10 0
24 9 32 0 101 9 0
25 9 34 0 101 9 0
26 9 34 0 101 7 0
27 9 30 0 101 7 0
28 9 30 0 100 45 0
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FIRST SCHEDULE PART II
G.S.A AREA
POINT LATITUDE LONGTITUDE
CODE DEG MINS SEC DEG MINS SEC
- ---- --- ---- --- --- ---- ---
A 10 18 00.00"N 101 24 00.0"E
B 10 18 00.00"N Intersecting with the Declared Cambodian
Continental Shelf (1972)
C 10 16 50.00"N 101 29 30.0"E
D 10 09 00.00"N 101 30 00.0"E
E 10 09 00.00"N 101 27 00.0"E
F 10 00 00.00"N 101 28 20.0"E
G 10 00 00.00"N 101 24 00.0"E
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FIRST SCHEDULE PART III
MAP OF CONCESSION AREA
[GRAPH]
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.
SECOND SCHEDULE
QUALITY SPECIFICATIONS
Sales Gas delivered under this Agreement shall at the Delivery Point.
1. GENERAL : be commercially free from materials and dusts or other
solid matter, liquid matter, waxes, gums and gumforming
constituents which might cause injury to or interference with
proper operations of the lines, meters, regulators or other
appliances through which Sales Gas flows. The Sellers shall
furnish, install, maintain and operate such filters, separators and
other devices as are necessary to comply with this specification.
2. WATER CONTENT : contain not more than seven (7) pounds of water
vapor per one million (1,000,000) Cubic Feet of Sales Gas.
3. SULPHUR : contain not more than seventy five(75) parts per
million (ppm) by weight of total sulphur in the Sales Gas.
4. HYDROGEN SULPHIDE : contain not more than fifty (50) parts per
million (ppm) by weight of hydrogen sulphide in the Sales Gas.
5. CARBON DIOXIDE : contain not more than seventeen (17) mole per
cent of carbon dioxide.
6. OXYGEN : contain not more than zero decimal one (0.1) mole
percent of oxygen.
7. MERCURY: NIL
8. HEATING VALUE : have a Gross Calorific Value not less than nine
hundred and fifty (950) BTU per Cubic Foot and not more than one
thousand one hundred and fifty (1,150) BTU per Cubic Foot.
9. TEMPERATURE : have a temperature which is not less than sixty
(60) degrees Fahrenheit and not more than one hundred and twenty
(120) degrees Fahrenheit.
Suitable standard test methods and measuring instruments of standard
manufacture acceptable to both parties, together with procedures for
checking and/or verification of the instruments, shall be agreed between
the parties or be determined by an expert.
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THIRD SCHEDULE
MEASUREMENT OF SALES GAS DELIVERED
1. METERING
The Sales Gas delivered under this Agreement shall be measured
with meters constructed and installed, and whose computations of
volume are made, in accordance with the provisions of Gas
Measurement Committee Report No. 3 of the American Gas
Association (AGA) as reprinted and revised September, 1985, with
any subsequent amendments or revisions which may be mutually
acceptable to both parties.
2. ADJUSTMENT FOR SUPERCOMPRESSIBILITY
Adjustment for the effect of supercompressibility shall be made
according to the provisions of AGA Report No. 3 for the average
conditions of pressure, flowing temperature and specific gravity
at which the Sales Gas was measured during the period under
consideration and with the proportionate values of all components
including carbon dioxide and nitrogen, in the gas delivered
included in the computation of the applicable
supercompressibility factors. The Concessionaire agrees to
exercise due diligence in measuring the initial fraction values
of carbon dioxide, nitrogen, and all other components and to
measure subsequent values of all components as may be required
and agreed by the parties. Unless another method is agreed by
the parties, supercompressibility factors shall be calculated in
accordance with Clause 5.6.1 in the Transmission Measurement
Committee Report No. 8, "Compressibility and Supercompressibility
of Natural Gas and Other Hydrocarbon Gases", December 1985 of the
AGA.
3. TEMPERATURE
The temperature of the Sales Gas shall be determined by a
recording thermometer so installed that it will record the
temperature of such gas flowing through the meters. The
recording thermometer shall be installed and maintained by the
Concessionaire in accordance with the specifications set forth in
said AGA Gas Measurement Committee Report No. 3. The arithmetical
average of readings each day shall be deemed the Sales Gas
temperature and used in computing the volume of gas metered
during such day.
4. SPECIFIC GRAVITY
The Specific Gravity of the Sales Gas being metered shall be
calculated in accordance with the provisions of the said AGA
Measurement Committee Report No. 3.
Tests to determine the Specific Gravity of the Sales Gas being
metered shall be made in accordance with American Society for
Testing and Materials (ASTM) Standard D 1070-73 "Standard Methods
for Specific Gravity of Gaseous Fuels", or any subsequent
revision thereof acceptable to both parties.
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the Specific Gravity of the Sales Gas shall be determined from
samples taken with a continuous gas sampler. Samples will be
taken at reasonable intervals by the Concessionaire who also
agrees to take additional samples if requested to do so by
PTT.
In lieu of continuous sampling the parties may agree to spot
sampling which shall be representative of the Sales Gas
delivered at the time such samples are taken.
The Specific Gravity so determined by any calculation shall apply
to the Sales Gas metered from the commencement date of the sample
used for compositional analysis until the next sample is taken
for analysis.
5. HEATING VALUE DETERMINATION
The Gross Calorific Value of the Sales Gas in BTUs per Cubic Foot
shall be determined from samples taken with a continuous sampler.
Tests to determine the calorific value of Sales Gas delivered may
be made utilizing a recording calorimeter operated and maintained
in accordance with ASTM Standard D-182677 "Calorific Value
of Gases in Natural Gas Range by Continuous Recording
Calorimeter", or any subsequent revision thereof acceptable to
the parties.
If gas chromatograph measurements are taken, calculations of
Gross Calorific Value shall be made utilizing the method set
forth in AGA Measurement Committee Report No. 3.
The Gross Calorific Value determined by any test shall apply to
the Sales Gas metered from the commencement date of the sample
until the next sample is taken for test.
In lieu of continuous sampling, the parties may agree to spot
sampling which shall be representative of the Sales Gas delivered
at the time such samples are taken.
6. Notwithstanding anything contained herein the measurement of
Sales Gas delivered may be carried out by alternative methods if
the parties hereto agree.
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FOURTH SCHEDULE
DELIVERY POINT
The Delivery Point shall be the flange located on the pipeline end
manifold (PLEM), or other agreed point, connecting the Concessionaire's
Floating Petroleum Storage and Offloading System (FPSO) to PTT's Facilities
for the reception and transmission of the Sales Gas which is the subject
of this Agreement. Delivery Point is to be agreed in detail but in
principle is based on a single Delivery Point.
Concessionaire shall advise PTT of the location of the Delivery Point as
soon as possible but not later than 120 days after the effective date of
this Agreement.
If an additional period is required beyond the 120 day period to conform
an acceptable location and if the completion of PTT's pipeline and related
facilities will be delayed as a result then, the First Contractual
Delivery Date may, by notice from PTT to Concessionaire given within
fifteen days after notification of the location, be extended by a period
of time to be expressed in PTT's notice but not exceeding such additional
period beyond the aforesaid 120 day period.
Concessionaire shall consult with PTT regarding any such change.
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FIFTH SCHEDULE
PARENTAL GUARANTEE
October 25, 1995
TO PETROLEUM AUTHORITY OF THAILAND
Dear Sirs:
In consideration of your entering into an Agreement with Thaipo Limited and
others for the purchase from them of natural gas on the terms and conditions
therein mentioned, we, Pogo Producing Company, guarantee the due performance by
Thaipo Limited of all its obligations under the said Agreement.
Yours faithfully,
Pogo Producing Company
By: /s/ RADFORD PHILLIP LANEY
-----------------------------
Radford Phillip Laney
Vice President
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PARENTAL GUARANTEE
October 25, 1995
TO PETROLEUM AUTHORITY OF THAILAND
Dear Sirs:
In consideration of your entering into an Agreement with Thai Romo Limited and
others for the purchase from them of natural gas on the terms and conditions
therein mentioned, we, Rutherford/Moran Oil Corporation guarantee the due
performance by Thai Romo Limited of all its obligations under the said
Agreement.
Yours faithfully,
Rutherford/Moran Oil Corporation
/s/ MICHAEL D. McCOY
------------------------------
by: Michael D. McCoy [SEAL]
Vice President
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