THIRD AMENDED AND RESTATED
IMPLEMENTATION PROCEDURES FOR
CRUDE OIL LIFTINGS
THIRD AMENDED AND RESTATED
IMPLEMENTATION PROCEDURES FOR
CRUDE OIL LIFTINGS
TABLE OF CONTENTS
ARTICLE PAGE
I. DEFINITIONS 2
II. EFFECTIVE DATE 8
III. GENERAL PROVISIONS 8
IV. ANNUAL NOMINATION 10
V. NOTIFICATION OF ESTIMATED ENTITLEMENT 12
VI. VESSEL NOMINATION AND SCHEDULING 14
VII. LAYTIME AND DEMURRAGE 22
VIII. EMERGENCY DISPOSAL 23
IX. YEAR END SETTLEMENTS 25
X. TAX RULING AND INTERIM PROCEDURES 30
XI. CONFLICTS AND ORDER OF PRECEDENCE 30
XII. NOTICES 31
XIII.SUCCESSORS AND ASSIGNS 33
XIV. GOVERNING LAW 33
XV. CAPTIONS 33
XVI. ENTIRE AGREEMENT 33
XVII.AMENDMENTS 34
XVIII.WAIVER 34
THIRD AMENDED AND RESTATED
IMPLEMENTATION PROCEDURES FOR
CRUDE OIL LIFTINGS
THESE THIRD AMENDED AND RESTATED IMPLEMENTATION PROCEDURES
are entered into by and among VIRGINIA INDONESIA COMPANY, LASMO
SANGA SANGA LIMITED, OPICOIL HOUSTON, INC., UNION TEXAS EAST
KALIMANTAN LIMITED, UNIVERSE GAS & OIL COMPANY, INC. AND VIRGINIA
INTERNATIONAL COMPANY.
W I T N E S S E T H :
WHEREAS, pursuant to the Second Amended and Restated
Implementation Procedures, Contractors (or their predecessors in
interest) established procedures pursuant to which each
Contractor lifts its crude oil entitlement under the Production
Sharing Contract dated August 8, 1968 (as heretofore and
hereafter amended, amended and restated or extended); and
WHEREAS, Contractors wish to amend and restate the Second
Amended and Restated Implementation Procedures to provide for
certain revisions thereto.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, Contractors hereby agree as follows:
ARTICLE I - DEFINITIONS
In this Agreement, the following terms shall have the meanings
set forth below:
"Agreement" shall mean the Third Amended and Restated
Implementation Procedures for Crude Oil Liftings.
"Annual Crude Oil Gross Receipts" attributable to a Party
shall mean the sum of the gross receipts determined for
each Month of a Year by multiplying the number of Barrels
a Party Lifted in a Month by the applicable Crude Oil
Price for such Month, plus or minus any payments made to
or by such Party pursuant to Section 9.2 hereof.
"Available Production" shall mean all Crude Oil produced
and saved from the Contract Area in accordance with good
oil field practice and available for delivery as of any
given time at the Point of Lifting.
"Barrel", "Crude Oil", "Operating Costs", "Petroleum",
"Petroleum Operations", "Contract Area", "Year" and such
other words not specifically defined herein shall have the
meanings set forth in the PSC.
"Contractors" shall mean VICO, LASMO Sanga Sanga Limited,
OPICOIL Houston, Inc., Union Texas East Kalimantan
Limited, Universe Gas and Oil Company, Inc. and Virginia
International Company, collectively. "Contractor" shall
refer to any one of the Contractors.
"Contractors' Share of Available Production" shall mean
all Available Production, less any portion thereof
attributable to the interests of Total/Inpex (whose Crude
Oil is transported by VICO via its Badak Field facilities
to the Santan Terminal) and any portion thereof nominated
to be Lifted during the period under consideration as
Pertamina Share Oil, Cost Oil or Domestic Market
Obligation, as adjusted from time to time pursuant to
Section 5.2 hereof.
"Contractors' Share Oil" shall mean the quantity of Crude
Oil to which Contractors are entitled under Section 6.1.3
of the PSC.
"Cost Oil" shall mean the quantity of oil which is for
recovery of Operating Costs under Section 6.1.2 of the PSC
and the quantity of oil to which Contractors are entitled
under Section 6.1.7 of the PSC.
"Crude Oil Offtake Coordinator" shall have the meaning
attributed to it in Section 3.4 hereof.
"Crude Oil Price" shall mean the net realized price of
Crude Oil in effect for a particular period as provided in
Section 7.1.1(a) of the PSC used to determine the weighted
average price of Crude Oil for a Year for purposes of
calculating cost recovery pursuant to Section 6.1 of the
PSC.
"Domestic Market Obligation" shall mean the quantity of
Available Production which Contractors are obligated to
furnish to fulfill the obligation towards the supply of
the domestic market in Indonesia under Section 5.1.2 (p)
of the PSC.
"Effective Date" shall mean the date specified in Article
II hereof.
"Emergency Lifting Quantity" shall have the meaning
attributed to it in Section 8.2 hereof.
"Final Settlement" shall have the meaning attributed to it
in Section 9.2 hereof.
"4th Quarter Report" shall have the meaning attributed to
it in Section 9.2 hereof.
"Lift", "Lifted" and "Lifting" all refer to the act of
taking Crude Oil at the Point of Lifting.
"LNG" shall mean liquefied Natural Gas.
"Month" shall mean a calendar month.
"Offtake Procedure" shall mean the Crude Oil Offtake
Procedure, Santan Terminal dated October 23, 1974, by and
among VICO, on behalf of the Parties (or their respective
predecessors in interest), Unocal Indonesia, Ltd.,
Indonesia Petroleum, Ltd. and Pertamina, as hereafter
amended.
"Operating Agreement" shall mean the Operating Agreement
for the Contract Area by and among the Contractors (or
their respective predecessors in interest) effective
August 8, 1968, as heretofore and hereafter amended.
"Overlift(s)" shall mean, as of any given date, the
cumulative amount, expressed in Barrels and measured from
the Effective Date (or calculated for some other specified
period), by which the quantity of Crude Oil a Party has
Lifted exceeds that Party's Working Interest Share of
Contractors' Share of Available Production theretofore
actually Lifted.
"Parties" shall mean the Contractors collectively.
"Party" shall mean any one of the Parties.
"Party's Availability" shall mean a Party's Working
Interest Share of Contractors' Share of Available
Production, as adjusted upward or downward, respectively,
by such Party's then current Underlift or Overlift.
"Pertamina" shall mean PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA, the Indonesian State Enterprise
established on the basis of Law No. 8/1971.
"Pertamina Share Oil" shall mean the quantity of Crude Oil
to which Pertamina is entitled under Section 6.1.3 of the
PSC.
"Point of Lifting" shall mean the flange between the
Santan Terminal's delivery hose and cargo intake of a
vessel at Santan Terminal.
"PSC" shall mean the Amended and Restated Production
Sharing Contract dated April 23, 1990, but effective
August 8, 1968, and the Production Sharing Contract dated
April 23, 1990, but effective August 8, 1998, both between
Pertamina and the Contractors (or their predecessors in
interest), as such contracts may be subsequently amended,
amended and restated or extended.
"Quarter" shall mean a quarter of a Year beginning on the
first day of January, April, July or October.
"Santan Operating Agreement" shall mean the Santan
Terminal Facilities Joint Operating Agreement dated
October 22, 1974, by and among Unocal Indonesia, Ltd., as
Terminal Operator, Indonesia Petroleum, Ltd. and VICO, as
hereafter amended.
"Santan Terminal" shall mean those facilities described in
Section 1.1 of the Santan Operating Agreement.
"Second Amended and Restated Implementation Procedures"
shall mean the Second Amended and Restated Implementation
Procedures for Crude Oil Liftings, effective as of January
1, 1991, among the Contractors (or their predecessors in
interest).
"Settlement Year" shall mean each Year for which a
settlement is made pursuant to Article IX hereof.
"Terminal Operator" shall mean the party designated under
the provisions of Section 3 of the Santan Operating
Agreement to act as Operator thereunder.
"Total/Inpex" shall mean Total Indonesie and Indonesia
Petroleum, Ltd.
"Underlift(s)" shall mean, as of any given date, the
cumulative amount, expressed in Barrels and measured from
the Effective Date (or calculated for some other specified
period), by which a Party's Working Interest Share of
Contractors' Share of Available Production theretofore
actually Lifted exceeds the quantity of Crude Oil which
such Party has Lifted.
"VICO" shall mean Virginia Indonesia Company.
"Working Interest Share" of a Party shall mean the
Percentage of Interest of such Party as defined in the
Operating Agreement.
ARTICLE II - EFFECTIVE DATE
Effective July 1, 1993 (the "Effective Date"), this Agreement
shall supersede and replace, in their entirety, the Second
Amended and Restated Implementation Procedures. This Agreement
shall be deemed valid and binding on the Parties from the date of
its execution and delivery, although its terms regarding the
nomination of Crude Oil to be Lifted, the actual Lifting of Crude
Oil, and Year-end settlements shall not be implemented prior to
the Effective Date. Nonetheless, the Parties shall take all
appropriate action, including in particular the giving of certain
of the notices specified in Articles IV, V and VI, which may be
reasonably required to implement this Agreement as of the
Effective Date.
ARTICLE III - GENERAL PROVISIONS
3.1 Each Party shall have the right and obligation to take in
kind and separately dispose of its Working Interest Share
of Contractors' Share of Available Production.
3.2 Any Party shall have the right to nominate and Lift in any
Month any portion of Contractors' Share of Available
Production not nominated for Lifting by any other Party as
of the tenth (10th) day of the preceding Month .
3.3 VICO is hereby appointed and authorized by the Parties to
schedule and control all Crude Oil Liftings in conjunction
with the Terminal Operator and to act on behalf of the
Parties when dealing with Pertamina pursuant to the terms
and conditions of the Offtake Procedure.
3.4 VICO shall appoint a representative to be designated as
the Crude Oil Offtake Coordinator who shall coordinate the
Liftings of Available Production between the Parties and
at the same time endeavor to ensure that all Liftings are
scheduled such that (i) the production of Natural Gas from
the Contract Area and subsequent transformation thereof
into LNG is not interrupted or otherwise adversely
affected and (ii) planned Crude Oil production can at all
times be contained within the limits of available storage.
3.5 Each Party shall consult with and seek advice and
assistance from the Crude Oil Offtake Coordinator on
matters relating to scheduling of Crude Oil Liftings and
shipments.
3.6 Title to and risk of loss of all Crude Oil shall pass to
the Lifting Party at the Point of Lifting.
3.7 All deliveries of Available Production shall be made at
the Santan Terminal to a vessel nominated pursuant to the
terms of this Agreement.
3.8 All Lifting Contractors shall comply with the applicable
Santan Port Rules which have been properly adopted
pursuant to Sections 4.4 and 4.5 of the Santan Operating
Agreement and attached thereto as Exhibit "E" in order to
ensure the safe operation of the Santan Terminal and its
harbor. VICO shall provide copies of the Santan Port
Rules to the Parties upon request and shall advise of any
proposed and actual changes with respect thereto.
3.9 All consular, agency, towage, pilotage, customs,
quarantine, tonnage and port fees, taxes, charges and
expenses assessed against or with respect to a vessel
shall be paid by the owner of the vessel or by the party
chartering the vessel.
3.10 Except as otherwise provided in this Agreement, each Party
shall be responsible for all taxes and other payments
arising with respect to all Crude Oil Lifted by such
Party.
ARTICLE IV - ANNUAL NOMINATION
4.1 On or before October 15th of each Year (Y), VICO shall
notify all Parties of the quantity of estimated Available
Production which can be produced and made available for
disposal during each Month of the next ensuing Year (Y+1).
Such notice shall also include VICO's estimate of Crude
Oil Price, Cost Oil, Pertamina Share Oil and Domestic
Market Obligation for the next ensuing Year (Y+1).
4.2 On or before November 1st of each Year (Y), VICO shall
notify the Parties of the estimated volume of Available
Production allocated to each Party for Lifting during each
Quarter of the following Year (Y+1).
4.3 Upon notification, if any, by Terminal Operator of the
receipt from Pertamina of the notice issued pursuant to
Section 4(c) of the Offtake Procedure, VICO shall send to
each Party a notice detailing the following:
a. VICO's estimate of the volumes of Available
Production for each Month of the following Year
(Y+1);
b. Pertamina's estimate, if available, of the volumes of
the Domestic Market Obligation and Pertamina Share
Oil which Pertamina requires during each Quarter of
the following Year (Y+1); and
c. VICO's estimate of Contractors' Share of Available
Production for each Quarter of the Year (Y+1).
4.4 VICO shall immediately notify the Parties of the receipt
from Pertamina of any notice of its decision to market the
Parties' Cost Oil Entitlement under Section 7.1.1(d) of
the PSC. Within twenty (20) days of receipt of VICO's
notice of Pertamina's decision, each Party shall notify
VICO if it elects to match the sales price designated by
Pertamina for such Cost Oil and the volume of Cost Oil it
plans to Lift. All annual nominations of the Parties
shall be subject to revision in the event Pertamina should
exercise its right to and does, in fact, market the
Parties' Cost Oil Entitlement pursuant to Section 7.1.1(d)
of the PSC.
4.5 VICO shall issue each Month a revised estimate of
Contractors' Share of Available Production for the current
Year (Y) by Quarters reflecting changes, if any, in the
estimated Available Production, the applicable Crude Oil
Price or in any other factor used by a Contractor to
calculate the volume of Cost Oil.
ARTICLE V - NOTIFICATION OF ESTIMATED ENTITLEMENT
5.1 On or before the first (1st) day of each Month (M), VICO
shall send to each Party a notice setting out the
following:
a. Estimated Overlift or Underlift position of each
Party and estimated overlift or underlift position of
Pertamina at the end of the preceding Month (M-1);
b. Available Production estimated to be in inventory at
the Santan Terminal attributable to the Parties,
Pertamina and Total/Inpex at the end of the preceding
Month (M-1);
c. The estimated quantity of additions to Available
Production during the Month (M), the following Month
(M+1) and a provisional forecast for the succeeding
two (2) Months (M+2 and M+3);
d. Pertamina's and each Party's Liftings for the Year to
date and cargo nominations for the Month (M); and
e. Each Party's Availability for the following Month
(M+1) and the quantity of Available Production which
is available for Lifting by Pertamina and Total/Inpex
during such Month (M+1). For purposes of
calculating a Party's Availability for the following
Month (M+1) under this subsection, a Party shall be
deemed to have Lifted the quantity of Available
Production equal to its accepted nomination, if any,
for the Month (M).
5.2 In the event VICO determines that there is a significant
increase or decrease in the Cost Oil being attributed to
the Contractors, VICO may choose to allocate such
increased or decreased volumes to the Contractors in
varying increments over any given period of Months
(thereby increasing or reducing Contractors' Share of
Available Production for such Months) in order to avoid
any problems associated with a significant one-time
alteration in the amount of Crude Oil available for
Lifting by the Contractors or Pertamina.
ARTICLE VI - VESSEL NOMINATION AND SCHEDULING
6.1 Subject to the following qualification, the principle
governing Crude Oil Liftings shall be that, to the extent
practicable, all Crude Oil Lifted by the Parties shall be
taken evenly throughout each Year, and that a reasonable
balance shall be maintained between each Party's Working
Interest Share of Contractors' Share of Available
Production and the quantity of Crude Oil Lifted by such
Party throughout each Year. The Parties recognize that of
primary importance in the operation of the Contract Area
as well as the Santan Terminal is the uninterrupted
production of Natural Gas and its subsequent
transformation into LNG at the Bontang liquefaction
facilities in order to meet contractual obligations and
market demands therefor.
6.2 The Lifting of Crude Oil by the Parties shall be scheduled
by VICO in conjunction with the Terminal Operator which is
the party ultimately responsible pursuant to the terms of
the Santan Operating Agreement for coordinating the
shipping program at the Santan Terminal. The actual
Lifting of Crude Oil at the Santan Terminal shall be
governed by the provisions of the Santan Operating
Agreement (including the Offtake Procedure) and, as
between the Parties , the terms and conditions set forth
herein, to the extent they do not conflict with the Santan
Operating Agreement.
6.3 Not later than the fifth (5th) day of each Month (M), each
Party shall advise VICO of its requested nomination(s) for
the forthcoming Month (M+1) and its provisional
nominations for the following two (2) Months (M+2 and
M+3). With respect to Month (M+1), such nomination(s)
shall include the following:
a. The name of each vessel nominated to be loaded at
Santan Terminal (the designation "TBN" being
acceptable);
b. The quantity to be delivered to each vessel, such
quantity not to exceed or be lower than,
respectively, the applicable maximum or minimum
established for an individual Lifting by Terminal
Operator; and
c. The date range for each vessel, which range shall be
two (2) days before and two (2) days after the
expected arrival date.
6.4 If, in the opinion of VICO, cargo nominations received
from the Parties exceed the estimated Contractors' Share
of Available Production for any Month (M+1), then VICO
shall endeavor to bring such amounts into balance by
consultation between the Parties. Should such endeavor be
unsuccessful, then each nominating Party shall be
allocated an amount equal to such Party's Availability or
the amount of its nomination, whichever is less. For
purposes of this Section 6.4, a Party's Availability shall
be deemed to be zero (0) if it is otherwise determined to
be a negative number. If the aggregate of the amounts so
allocated exceeds the estimated Contractors' Share of
Available Production for Month (M+1), then such available
amount shall be allocated based on the lesser of the
following:
a. A Party's nomination; or
b. An amount determined for each nominating Party by
multiplying the Contractors' Share of Available
Production for Month (M+1) by a fraction having a
numerator equal to such Party's Availability for
Month (M+1) and a denominator equal to the sum of all
nominating Parties' Availabilities for such Month.
6.5 Any balance of Crude Oil available for Lifting following
the procedure set out in Section 6.4 hereof shall be
allocated to the nominating Parties in the following order
of priority:
a. First, to a Party with a positive Party's
Availability for Month (M+1) in an amount not
exceeding such Party's nomination (or the balance
thereof, as the case may be), and if there is more
than one such Party, priority shall be established in
sequence commencing first with the nomination
submitted by the Party with the greatest Party's
Availability for such Month; and
b. Second, to a Party with a negative Party's
Availability for Month (M+1) in an amount not
exceeding such Party's nomination (or the balance
thereof, as the case may be), and if there is more
than one such Party, first priority shall be
established in sequence commencing with the
nomination submitted by the Party with the smallest
negative Party's Availability for such Month.
Should two or more Parties have Availabilities of
identical size, whether positive or negative, the highest
ranking shall be given to the Party whose last Lifting
(including, for this purpose, scheduled Liftings for the
remainder of the Month) prior to the end of the Month (M)
was earliest in time.
6.6 A Party whose Lifting has been reduced in accordance with
Sections 6.4 and 6.5 hereof shall have the right to
withdraw its nomination by notice given promptly to VICO.
In the event of such withdrawal, VICO shall reapply the
priorities according to Sections 6.4 and 6.5 hereof to
all other nominations. With respect to any Month (M+1),
all the adjustments, if any, which are to be made pursuant
to Sections 6.4 and 6.5 hereof and to this Section 6.6 to
the Parties' nominations shall be taken into account
before it is determined whether any conflict exists as
described in Section 6.7 hereof.
6.7 If VICO receives two or more nominations, as adjusted
pursuant to Sections 6.4, 6.5 and 6.6, which in terms of
loading date conflict (which shall include being
insufficiently separated in time to allow for the
accumulation at Santan Terminal of Available Production
necessary to supply in full the accepted nominations of
the Parties during the period under consideration), VICO
shall endeavor to resolve such conflict (by means of one
or more loading date alterations or loading quantity
reductions, or both) by consultation between the Parties.
Should such endeavor be unsuccessful, then the nomination
having the highest ranking (as determined in accordance
with Section 6.5 hereof) shall be accepted and the
nomination(s) conflicting with it rejected. Any Party
whose nomination is so rejected shall promptly be notified
accordingly by VICO and shall have the right to submit,
within two (2) working days of such notice, a further
nomination for a date range in Month (M+1) other than (but
which may overlap with) the date range for which it
originally nominated and for a quantity of Crude Oil not
greater than the quantity accepted by VICO in respect of
the original nomination. The foregoing provisions of this
Section 6.7 shall be applied to any conflict between such
further nomination and any other nomination with respect
to Month (M+1). Notwithstanding the above, should the
terms and provisions of the Offtake Procedure, including
Exhibit 1 attached thereto, conflict with the scheduling
priorities as determined above, the provisions of the
Offtake Procedure shall control.
6.8 With respect to Month (M+1), if insufficient nominations
are received from the Parties to enable, in VICO's
reasonable opinion, a shipping program for that Month to
be compiled which will keep available Crude Oil stocks
within available storage capacity of the Santan Terminal,
then VICO shall endeavor through consultation with the
Parties to achieve a sufficient increase in such
nominations. If such endeavor is unsuccessful, VICO shall
determine the minimum acceptable level of production and,
should the aforesaid nominations be insufficient to permit
that level of production to be maintained, one or more of
the Parties with a positive Party's Availability shall be
deemed to have nominated a quantity (or an additional
quantity) of Crude Oil, beginning with the Party with the
largest positive Party's Availability and followed
successively, as necessary, by the Party(ies) with the
next largest positive Party's Availability, equal to the
lesser of (i) the difference between the Party's
Availability of such Party and its nomination submitted
for the Month (M+1), or (ii) the remaining Barrels
required to be Lifted to maintain the acceptable level of
production. No Party shall be required to nominate a
volume of Crude Oil pursuant to this provision which, when
combined with any existing nomination of such Party, would
be less than any minimum lift requirement imposed by
Terminal Operator.
6.9 Parties may nominate for less than full cargoes of Crude
Oil, and the nominations of more than one Party may be
Lifted and loaded onto the same vessel.
6.10 Within one (1) day of receipt by VICO of the shipping
program from Terminal Operator pursuant to Section 1.4 of
Exhibit 1 to the Offtake Procedure [but no later than the
18th day of each Month (or, in the case of February, the
16th day of such Month), assuming the proper and timely
notice is given by Terminal Operator], VICO shall notify
each Party of the accepted shipping program for the Month
(M+1) and provisional programs for the following two (2)
Months (M+2 and M+3) together with an expected loading
date for the Month (M+1) within the five (5) day date
range notified under Section 6.3 hereof (or applicable
under Section 6.7 or 6.8 hereof).
6.11 At least twelve (12) days prior to the expected loading
date(s) referred to in Section 6.10, each Contractor
Lifting in Month (M+1) shall:
a. Establish with VICO a firmly scheduled three (3) day
date range(s) of arrival at the Santan Terminal
(within the date range(s) specified in Section 6.3.c
hereof) for the Lifting(s) during Month (M+1) of
nominations which are acceptable to the Lifting
Contractor and VICO; and
b. Submit to VICO the following information for each
such Lifting in order that such information can be
conveyed to Terminal Operator:
i. Designation of the tanker, including both its
name and size (the designation "TBN" being
acceptable only if it is acceptable to Terminal
Operator);
ii. Date range of the Lifting(s) (as established
pursuant to a. above);
iii. Quantity of Crude Oil to be loaded on each
tanker;
iv. Designation of the Consignor and Consignee
along with the required number of documentation
copies needed for each (the standard
documentation passing from Jakarta to the
Santan Terminal to include a Bill of Lading
reading "Freight Payable as Arranged",
Certificate of Quantity, Certificate of
Quality, Certificate of Origin, Cargo Manifest,
Ullage Report, Tanker Time and Loading Report,
the Master's Receipt for Sample, the Master's
Receipt for Shipping Documents, the Dry
Certificate and the Notice of Readiness);
v. Destination of the tanker(s); and
vi. Name of the Lifting Party or Parties.
The failure of a Lifting Party to provide the above-
referenced information (with the exception of the name of
the designated tanker) shall result in VICO having the
right to invoke the emergency sale provisions of Article
VIII hereof for the exclusive account of such Party,
notwithstanding any provisions thereof to the
contrary. Except as otherwise provided below, such
accepted program for the forthcoming Month (M+1) shall be
considered final and binding.
6.12 If as a result of circumstances arising after the
establishment of a firm shipping program for a Month (M+1)
such program becomes infeasible, VICO may, in consultation
with Terminal Operator and the Parties, make such
equitable revisions to the scheduled Lifting(s) of one or
more Parties as are necessary to restore the feasibility
of the program, always subject to the consent of each
Party whose Lifting is to be revised (which consent shall
not be unreasonably withheld).
6.13 In order to ensure continuous production, VICO shall be
further empowered to request alterations to the programs
notified pursuant to Section 6.10 hereof.
6.14 Any Party may at any time request changes to its scheduled
Lifting and VICO shall endeavor to implement such changes
to the extent practicable under the terms of the Offtake
Procedure, provided such changes do not jeopardize the
scheduled Lifting of any other Party or cause a reduction
of production.
6.15 All other matters concerning the actual Lifting of Crude
Oil at Santan Terminal, whether or not specifically
addressed in this Agreement, including, but not limited
to, substitution of vessels, changes in Lifting date
ranges, notification requirements and other harbor
procedures, applicable safety regulations and Santan
Terminal documentation requirements, shall be governed by
the Santan Operating Agreement and the Offtake Procedure
attached thereto (including the Tanker Nomination
Procedure which is attached as Exhibit 1 thereto), all of
which are incorporated herein by reference as though fully
set forth herein. The actual Liftings shall be ultimately
scheduled and implemented by Terminal Operator; therefore,
any notices required to be given to Terminal Operator by a
Lifting Party shall be first submitted to VICO within a
reasonable time prior to the date such notice is due under
the applicable terminal procedures to allow VICO to relay
such notice to Terminal Operator as required. VICO shall
use its best efforts to relay by the appropriate time any
notice to Terminal Operator on behalf of a Party but shall
in no way be held responsible for a failure to do so.
ARTICLE VII - LAYTIME AND DEMURRAGE
The provisions of Part II of Exhibit 1, Tanker Nomination
Procedure, to the Offtake Procedure concerning laytime and
demurrage shall be specifically incorporated herein for all
purposes, including, but not limited to, the calculation of
laytime and amounts due for demurrage, if any.
ARTICLE VIII - EMERGENCY DISPOSAL
8.1 If the production of Crude Oil or Natural Gas from the
Contract Area is in jeopardy because insufficient Crude
Oil has been Lifted or scheduled for Lifting and if, in
the opinion of VICO, an emergency has thereby arisen, then
VICO may take such action as may be reasonably necessary,
including arranging for the disposition of sufficient
Crude Oil so as to maintain the production of Crude Oil
and Natural Gas at an acceptable rate. Such Crude Oil
shall be sold by VICO through an independent broker
selected by VICO on an F.O.B. Santan Terminal basis. VICO
shall use its best efforts to receive the current market
price for such Crude Oil sold, but in no way warrants its
ability or the ability of the broker to do so. The
quantities allocated to the Parties as set forth below
shall be sold by VICO for the separate accounts of the
respective Parties concerned.
8.2 Except as otherwise provided in Section 6.11 and in this
Section 8.2, the quantity of Crude Oil in each Lifting
under this Article VIII (the "Emergency Lifting Quantity")
shall be allocated to those Parties (if any) which are
underlifted as of a time immediately prior to the Lifting
in question. However, if a Party has been scheduled to
make a Lift pursuant to an accepted shipping program
during a Month in which VICO deems an emergency to exist
hereunder but such Lift has not occurred or been
completed, or if a Party's nomination for the Month in
which an emergency Lift occurs had been rejected pursuant
to Section 6.7 hereof and was not rescheduled for such
Month despite the best efforts of such Party to do so, the
Barrels such Party is scheduled to Lift, or the Barrels
attributable to such Party's rejected nomination, shall be
subtracted from the Underlift attributable to such Party,
if any, when determining the existence or size of a
Party's Underlift for purposes of this Section 8.2. In
addition, notwithstanding the foregoing, if a Party is
underlifted at the time of an emergency Lift but has a
positive Party's Availability at the beginning of the
month in which such Lift occurs which is less than the
minimum Lift requirement imposed by Terminal Operator, the
Barrels comprising such Party's Underlift shall not be
considered for purposes of allocating to such Party an
Emergency Lifting Quantity hereunder. The Emergency
Lifting Quantity (or a portion thereof) shall first be
allocated to the Party having the largest Underlift. The
number of Barrels allocated to such Party shall equal the
number of Barrels that, when subtracted from such Party's
Underlift, reduces such Underlift to the extent that it
equals the Underlift of the second most underlifted Party.
Thereafter, any remaining Emergency Lifting Quantity shall
be allocated to both such underlifted Parties equally, on
a Barrel per Barrel basis, until their respective
Underlifts, when reduced by the number of Barrels
allocated hereunder, equal the size of the Underlift of
the third most underlifted Party. This process shall
continue in similar fashion until the entire Emergency
Lifting Quantity has been allocated or until all
Underlifts attributable to the Parties have been
eliminated. If the combined Underlifts of the Parties
pursuant to this Section 8.2 is less than the Emergency
Lifting Quantity, the volume in excess of such combined
Underlifts shall be allocated to each respective Party
based on such Party's Working Interest Share. Those
Barrels allocated to a Party hereunder comprising a
portion of the Emergency Lifting Quantity shall be
considered as having been Lifted by such Party under the
terms of this Agreement.
8.3 The proceeds from the sale of the Emergency Lifting
Quantity (after deduction of all related costs, including
the fee charged by the above-mentioned broker) shall be
distributed to the Parties in the proportion in which the
Emergency Lifting Quantity was allocated to the Parties in
Section 8.2 hereof.
8.4 VICO shall immediately advise each Party by means of
facsimile transmission or telex whenever VICO decides to
make a Lifting in accordance with this Article VIII. Upon
confirmation of an emergency sale, VICO shall immediately
advise each Party by means of facsimile transmission or
telex of the terms of the sale, including the price,
credit terms and the volume sold.
ARTICLE IX - YEAR END SETTLEMENTS
9.1 If a payment is required by the Parties or Pertamina under
Section 13 of the Offtake Procedure, each Party shall
contribute to or share in such payment based on its actual
Liftings during the Year (Y) as set forth in Section 9.2
hereof.
9.2 Within sixty (60) days after the end of each Year (Y),
VICO shall send each Party a notice setting forth the
respective underlift or overlift position of the Parties
and Pertamina, as documented in that certain report filed
by VICO each year with Pertamina/BPPKA, entitled "Fourth
Quarter Financial Status Report for East Kalimantan Area"
(the "4th Quarter Report"). For purposes of this Article
IX, any payment owed by either the Parties or Pertamina
for a Year (Y) based on the applicable underlift or
overlift position described in the 4th Quarter Report
shall be referred to as the "Final Settlement" for such
Year (Y). If, according to that notice, either Pertamina
or the Parties are deemed to be a Net Overlifter or Net
Underlifter (as such terms are defined under the Offtake
Procedure) and, therefore, a payment from one to the other
is required, VICO shall at the same time notify the
Parties of the following additional information:
a. The actual quantities of Available Production Lifted
by each Party during the Year (Y) plus its final
Overlift or minus its final Underlift from the prior
Year (Y-1) as shown pursuant to Section 9.2.d hereof
in the notice which was issued with respect to Year
(Y-1);
b. Each Party's Working Interest Share of Contractors'
Share of Available Production Lifted during the Year
(Y);
c. Overlift or Underlift position of each Party as at
the end of Year (Y), as adjusted for each Party's
Working Interest Share of Final Settlement converted
to Barrels at the price per Barrel utilized in the
4th Quarter Report; and
d. Final Overlift or Underlift position of each Party as
at the end of Year (Y) after making adjustments in
accordance with Section 9.3 hereof for payments due
to or from Pertamina.
Any Final Settlement payment received from Pertamina shall
be distributed by VICO within a reasonable time after
receipt thereof to those Parties who Lifted less than
their Working Interest Share of Contractors' Share Oil and
Cost Oil in the proportion that their respective
Underlifts bear to the total of all Underlifts as
calculated above. Any Final Settlement due to Pertamina
by the Parties shall be borne by such Parties who Lifted
more than their Working Interest Share of Contractors'
Share Oil and Cost Oil in the proportion that their
respective Overlifts bear to the total of all Overlifts as
calculated above. Upon VICO's request, each Party shall
advance to VICO its respective share of any payment due
Pertamina pursuant to this Section 9.2.
9.3 If the Parties make a payment to Pertamina or Pertamina
makes a payment to the Parties pursuant to this Article IX
with respect to the Year (Y), the amount of Available
Production Lifted by each Party during the Year (Y) and
the Overlift or Underlift position of each Party at the
end of the Year (Y) as notified under Section 9.2.c
hereof shall be adjusted, provided that the corresponding
unadjusted positions shall be considered valid for the
purposes of applying the provisions of this Agreement
until the Parties are notified of the adjusted positions.
If the Parties make a payment to Pertamina, the amount of
Available Production Lifted by each Party during the Year
(Y) shall be reduced by the number of Barrels determined
by dividing the amount (expressed in United States
Dollars) a Party contributed to the payment to Pertamina
by the price per Barrel utilized in the 4th Quarter
Report, being the weighted average of each Crude Oil Price
in effect during such Year. If Pertamina makes a payment
to the Parties, the amount of Available Production Lifted
by each Party during the Year (Y) shall be increased by
the number of Barrels determined by dividing the amount
(expressed in United States Dollars) a Party received by
the price per Barrel utilized in the 4th Quarter Report.
9.4 Any Year-end imbalances among the Parties shall be carried
forward to the following Year.
9.5 When the Final Settlement position between the Parties and
Pertamina is determined, a settlement between Parties
shall be made to ensure that the amount of Indonesian
income taxes paid by each Party corresponds as nearly as
possible to the tax liability on Crude Oil Lifted by such
Party. The amount of Indonesian income taxes incurred on
Crude Oil Lifted by a Party shall be computed as if such
Party's Indonesian tax return were prepared taking into
consideration such Party's Annual Crude Oil Gross Receipts
but excluding therefrom such Party's Working Interest
Share of cost recovery and investment credit. For
purposes of the above computation, the Domestic Market
Obligation adjustment shall be allocated to the Parties
based on their respective Working Interest Shares.
Each Party's income tax liability as determined above
shall be compared to actual Indonesian income taxes paid
on Crude Oil Lifted, including each Party's share of taxes
paid on Domestic Market Obligation receipts. As soon as
practicable after the end of a Year, VICO shall notify the
Parties of the amount of taxes owed and paid by each Party
with respect to such Year, and if during the course of
such Year a Party has paid an amount in taxes which is
below or in excess of its income tax liability, an
appropriate adjustment shall be made with respect to such
Party in the following month's tax cash call.
9.6 Once production of Crude Oil ceases or the Contract Area
is returned to Pertamina, or at such earlier time as shall
be agreed by the Parties, the Parties shall, within sixty
(60) days of such date, make an interim settlement pending
Final Settlement with Pertamina. The interim settlement
shall be based upon VICO's calculated Overlift and
Underlift positions for the Parties adjusted for each
Party's share of Pertamina's overlifted or underlifted
position. Final settlement among the Parties will be made
thirty (30) days after a Final Settlement has been reached
with Pertamina. The settlement price among the Parties
shall be the weighted average of each Crude Oil Price for
Crude Oil produced from the Contract Area, excluding
Domestic Market Obligation, which was Lifted by the
Parties within the calendar Year prior to the date
production of Crude Oil ceased, the date the Contract Area
was returned to Pertamina or the settlement date agreed
upon by the Parties, as the case may be.
ARTICLE X - TAX RULING AND INTERIM PROCEDURES
10.1 VICO, on behalf of the Parties, shall prepare and submit
to the appropriate Indonesian government tax authority a
request for a ruling to the effect that each Party may
legally calculate Indonesian taxes due and file Indonesian
tax returns based on the number of Barrels of Crude Oil
actually Lifted by a Party during a particular Year. Such
request shall be acceptable in form and content to all
Parties.
10.2 Pending receipt of the tax ruling referred to in Section
10.1, the Interim Procedures which are attached hereto as
Addendum "A" and made a part hereof shall apply and be
effective during the periods described therein,
notwithstanding any other provision of this Agreement to
the contrary.
ARTICLE XI - CONFLICTS AND ORDER OF PRECEDENCE
11.1 The Operating Agreement notwithstanding, the provisions of
this Agreement shall be controlling as among the Parties
with regard to the matters referred to herein.
11.2 Should the provisions of this Agreement be inconsistent
with the provisions of the Santan Operating Agreement, the
Santan Operating Agreement shall be controlling.
ARTICLE XII - NOTICES
12.1 All notices related to this Agreement shall be in writing
and delivered by certified mail, return receipt requested,
or transmitted by telex or facsimile communication to the
designated addresses listed below:
LASMO SANGA SANGA LIMITED
c/o Lasmo Trading Limited
100, Liverpool Street
London EC2M 2BB
United Kingdom
Attention: David Barter
Fax No.: (011-44) 71-606-2893
Telex No.: 8812970
w/c.c. LASMO SANGA SANGA LIMITED
c/o The LASMO Companies in Indonesia
10th Floor, Landmark Centre, Tower A
Jalan Jenderal Sudirman No. 1
P. O. Box 3415/Jkt.
Jakarta 12910, Indonesia
Attention: Graeme A. Jamieson
Fax No.: (011-62) 21-571-1004
Telex No.: 45218 LOMSL 1A
OPICOIL HOUSTON, INC.
2801 Post Oak Blvd., Suite 300
Houston, Texas 77056
Attention: Charles C.J. Chu
Fax No.: 713-297-8108
UNION TEXAS EAST KALIMANTAN LIMITED
c/o Union Texas Petroleum Corporation
1330 Post Oak Boulevard
P. O. Box 2120
Houston, Texas 77252
Attention: Crude Oil Marketing Department
Fax No.: 713-968-3606
Telex No.: 203109
UNIVERSE GAS & OIL COMPANY, INC.
Akasaka Twin Tower, East Wing
17-22, Akasaka 2-chome
Minato-ku, Tokyo 107
Japan
Attention: Hitoshi Yamatoya
Fax No.: Tokyo 03 (3585) 1486
Telex No.: UGOTOK J2422211
w/c.c. Houston Liaison Office
c/o Japex (U.S.) Corporation
Geosource Plaza
2700 Post Oak Blvd.
Suite 1200
Houston, Texas 77056
Attention: Masao Toyosaki
Fax No.: 713-871-9619
VIRGINIA INDONESIA COMPANY
P. O. Box 1551
Houston, Texas 77251-1551
Attention: Crude Oil Offtake Coordinator
Fax No.: 713-754-6998
Telex No.: 166100
VIRGINIA INTERNATIONAL COMPANY
c/o The LASMO Companies
One Houston Center
1221 McKinney, Suite 600
Houston, Texas 77010-2015
Attention: Ian D. Brown
Fax No.: 713-654-8527
w/c.c. Virginia International Company
c/o Union Texas Petroleum Corporation
1330 Post Oak Boulevard
P. O. Box 2120
Houston, Texas 77252
Attention: Crude Oil Marketing Department
Fax No.: 713-968-3606
Telex No.: 203109
12.2 A Party may change its address or designated addressee(s)
by written notice to the other Parties.
ARTICLE XIII - SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon each of the Parties hereto
and their respective successors and assigns.
ARTICLE XIV - GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Texas. Any dispute relating to the
interpretation of or performance under this Agreement shall be
finally settled by arbitration in accordance with Section 9 of
the Joint Venture Agreement, dated August 8, 1968, as amended,
among the Parties (or their predecessors in interest).
ARTICLE XV - CAPTIONS
All captions, headings or titles appearing within the body of
this Agreement are used solely for the purpose of identification
and are not to be used in interpreting the rights, duties and
obligations of the Parties.
ARTICLE XVI - ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the
Parties and supersedes all previous negotiations, commitments and
writings with respect to the subject matter hereof.
ARTICLE XVII - AMENDMENTS
This Agreement may not be changed or modified in any manner,
except by an instrument executed by the Parties, in writing, and
signed by each Party's duly authorized officer or representative.
ARTICLE XVIII - WAIVER
No waiver of any breach of this Agreement shall be held to be a
waiver of any other or subsequent breach.
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed by its duly authorized officer this 1st
day of July, 1993.
VIRGINIA INDONESIA COMPANY LASMO SANGA SANGA LIMITED
By _______/s/__________________ By _______/s/_______________
OPICOIL HOUSTON, INC. UNION TEXAS EAST KALIMANTAN
LIMITED
By ________/s/__________________ By _______ /s/_______________
UNIVERSE GAS & OIL COMPANY, INC. VIRGINIA INTERNATIONAL
COMPANY
By ________/s/__________________ By __________/s/____________
ADDENDUM "A"
INTERIM PROCEDURES
Attached to and made a part of the Third Amended and Restated
Implementation Procedures for Crude Oil Liftings effective July
1, 1993 among Virginia Indonesia Company, LASMO Sanga Sanga
Limited, OPICOIL Houston, Inc., Union Texas East Kalimantan
Limited, Universe Gas & Oil Company, Inc. and Virginia
International Company.
The Parties hereby agree that the following terms and
provisions of this Addendum "A" shall apply and be effective
during the periods hereafter specified:
1. All defined terms used herein shall have the meanings
attributed to them in the Third Amended and Restated
Implementation Procedures for Crude Oil Liftings to which this
Addendum "A" is attached.
2. Information otherwise to be provided pursuant to
Article IV covering an entire Year or periods of time within such
Year shall, with respect to 1993, be provided for the period of
July 1, 1993 through December 31, 1993 only.
3. For purposes of Subsection 5.1(a), none of the Parties
shall be in an Overlift or Underlift position as of July 1, 1993.
4. These Interim Procedures shall be applicable for any
Year (or, with respect to 1993, the period from July 1 through
December 31) during which an acceptable tax ruling as described
in Section 10.1 (the "Tax Ruling") is not received. In the event
the Tax Ruling is obtained, these Interim Procedures shall become
void and inapplicable effective as of the first day of the Year
in which it is received (or July 1 in the event such ruling is
received on or before December 31, 1993). For purposes of this
Addendum "A", the period of time from July 1, 1993 through
December 31, 1993 and any Year thereafter during which an
acceptable Tax Ruling is not received shall be referred to as a
"Settlement Period", with the first six month period being
referred to as the "First Settlement Period" and the yearly
periods following thereafter being referred to as "Subsequent
Settlement Periods".
5. The following settlement shall be effected among the
Parties as of the last day of any Settlement Period:
a. For the First Settlement Period, the Parties having an
Overlift position as of the end of such time shall pay to
each Party with an Underlift an amount determined by
multiplying the number of Barrels comprising such Party's
Underlift which accrued during the applicable period by an
amount in United States dollars equalling the arithmetic
average of the Crude Oil Price in effect for each Month of
the First Settlement Period, adjusted as needed to reflect
any penalties incurred pursuant to paragraph 6 below. This
payment to each Party with an Underlift shall be made by
each Party with an Overlift in the proportion that such
Party's Overlift bears to the total Overlifts of all Parties
as of the last day of the Settlement Period. The amounts to
be paid hereunder shall be calculated by the Operator and
all Parties shall be provided with such information by
January 15th following the end of the Settlement Period.
Actual payments required shall be made on or before January
31st following the end of such period.
b. For any Subsequent Settlement Period for which these
Interim Procedures are applicable, the procedure set forth
below shall be followed:
(i) a record shall be maintained by the Operator of
each Party's Overlift or Underlift which accrued
during each four-month period beginning on the first
day of January, May and September of each Year;
(ii) a monetary liability in U.S. dollars shall be
calculated for each four-month period for each Party
with an Overlift to each Party with an Underlift in
the manner described in a. above (including any
penalties incurred pursuant to paragraph 6 below),
with the exception that the price attributed to each
Underlifted Barrel shall be determined by computing
the arithmetic average of the applicable Crude Oil
Price in effect for each Month of the four-month
periods in question;
(iii) as of the end of each Subsequent Settlement
Period, the Operator shall determine the net liability
of each Party to the other, if any, by totaling the
monetary results of each four month period's
calculation as set forth in b.(ii) above; and
(iv) the Parties shall be notified of the results of
the calculation described in b.(iii) above as of
January 15th following the end of a Subsequent
Settlement Period, and the required payments shall be
made by the appropriate Parties on or before the
following January 31st.
c. Settlements made pursuant to 5.a and 5.b above shall
increase or decrease the number of Barrels deemed Lifted and
sold or purchased by each Party over the applicable
Settlement Period to the extent of the number of Barrels
comprising such Party's Underlift or Overlift as well as
increase or decrease each Party's Annual Crude Oil Gross
Receipts for such period. Such a settlement shall
constitute a sale and purchase of Crude Oil among the
Parties with Overlifts and Underlifts during the Settlement
Period.
6. Notwithstanding any language of paragraph 5 to the
contrary, for any six-month or four-month period addressed
therein during which a Party's Underlift is greater than fifteen
percent (15%) of such Party's Working Interest Share of
Contractors' Share of Available Production for such period, any
settlement payment to be made by a Party having an Overlift
position attributable to such period to a Party having an
Underlift shall be calculated based on the following:
a. With respect to the Barrels comprising the Party's
Underlift up to and including fifteen percent (15%) of such
Party's Working Interest Share of Contractors' Share of
Available Production for such period, a price equal to the
arithmetic average of the Crude Oil Price in effect for each
Month during such period; and
b. With respect to the Barrels comprising such Party's
Underlift in excess of fifteen percent (15%) of its Working
Interest Share of Contractors' Share of Available Production
for such period, a price equal to ninety percent (90%) of
the average Crude Oil Price calculated in 6.a above.
However, in the event a Party is excused for reasons of Force
Majeure (as defined in the PSC) from Lifting a certain number of
Barrels during such period, those Barrels shall not be considered
when determining the size of a Party's Underlift for purposes of
applying this penalty position. By way of example and not by
limitation, the inability of a Party to schedule a Lifting after
a good faith attempt to do so because of the operation of the
terms of this Agreement or the Offtake Procedure shall be
considered a Force Majeure event.
7. For any Year during which an acceptable Tax Ruling is
not received, the Indonesian tax liability of each Party shall be
based on such Party's Annual Crude Oil Gross Receipts. Each
Party's share of any Final Settlement with Pertamina owing to or
received by the Parties shall be calculated based on its Working
Interest Share. In addition, there shall be no Year-end
imbalances among the Parties, and each Party shall begin each
Subsequent Settlement Period in balance with neither an Overlift
nor Underlift position.
July 1, 1993
Mr. Ian D. Brown Mr. Chris J. Biggs
LASMO Sanga Sanga Limited Union Texas East Kalimantan
Ltd.
Virginia International Company c/o Union Texas Petroleum
Corp.
One Houston Center 1330 Post Oak Blvd.
1221 McKinney, Suite 600 P. O. Box 2120
Houston, Texas 77010 Houston, Texas 77252
Mr. Charles C. J. Chu Mr. H. Yamatoya
OPICOIL Houston, Inc. Universe Gas & Oil Company,
Inc.
2801 Post Oak Blvd., Suite 300 Akasaka Twin Tower, East Wing
Houston, Texas 77056 17-22, Akasaka 2-chome
Minato-ku, Tokyo 107
Japan
Re: Establishment of Lifting Groups;
Side Letter to Third Amended and
Restated Implementation Procedures
for Crude Oil Liftings
Gentlemen:
For purposes hereof, please refer to the Third Amended and
Restated Implementation Procedures for Crude Oil Liftings (the
"Agreement") dated effective July 1, 1993, by and among the
undersigned. All references to article and section numbers
herein are to the corresponding provisions in the Agreement, and
all the terms used herein shall have the meanings attributed to
them in the Agreement.
The Parties hereby agree that, for the period herein stated,
the right and obligation to Lift the Working Interest Share of
Contractors' Share of Available Production attributable to
Virginia International Company ("Virginia International") and
Virginia Indonesia Company ("VICO") under the terms and
provisions of the Agreement shall be allocated and transferred in
equal portions to LASMO Sanga Sanga Limited ("LASMO") and Union
Texas East Kalimantan Limited ("UTP"). These two combinations of
interests shall be referred to respectively as the "LASMO Lifting
Group" and "UTP Lifting Group".
The interests of those Parties comprising each of the LASMO
Lifting Group and UTP Lifting Group shall be combined, and each
group shall be considered as a Party under the Agreement, for
purposes of determining or allocating, as the case may be,
Working Interest Share, Party's Availability, Overlifts,
Underlifts, annual and monthly nominations and entitlements,
Emergency Lifting Quantity, Final Settlement and Domestic Market
Obligation, subject to the further provisions hereof.
Notwithstanding the foregoing, each of the Parties shall continue
to prepare its individual tax returns based on its specific
interest and shall be entitled to receive all notices as
specified in Article XII.
As among the members of the two lifting groups created
hereby, the nominations and Liftings of such groups shall be
allocated based on a Party's prorata share of the combined
interests of the lifting group participants. These percentages
are as follows:
LASMO or UTP. . . . . . . . . . . 69.42148%
Virginia International. . . . . . 20.66116%
VICO. . . . . . . . . . . . . . . 9.91736%
The agreement set forth herein shall remain in effect for so
long as (i) each of LASMO plc and Union Texas Petroleum Holdings,
Inc., directly or indirectly through their respective
subsidiaries, continues to own fifty percent (50%) of the Unimar
Company, which in turn indirectly owns Virginia International and
VICO or (ii) the Agreement is terminated, whichever first occurs.
If the foregoing fully and accurately sets forth our
agreement, please indicate your acceptance of this letter in the
appropriate space below.
Sincerely,
VIRGINIA INDONESIA COMPANY
By: /s/
Richard P. Bergsieker
Vice President, Technical
and Commercial Planning
RPB/sfw
File 246-2
ACCEPTED and AGREED to
this ________ day of _______________, 1993
LASMO SANGA SANGA LIMITED
By:_______/s/_____________________________
ACCEPTED and AGREED to
this ________ day of _______________, 1993
OPICOIL HOUSTON, INC.
By:_______/s/_____________________________
ACCEPTED and AGREED to
this ________ day of _______________, 1993
UNION TEXAS EAST KALIMANTAN LIMITED
By:_______/s/_____________________________
ACCEPTED and AGREED to
this ________ day of _______________, 1993
UNIVERSE GAS & OIL COMPANY, INC.
By:_______/s/_____________________________
ACCEPTED and AGREED to
this ________ day of _______________, 1993
VIRGINIA INTERNATIONAL COMPANY
By:_______/s/_____________________________
ACCEPTED and AGREED to
this ________ day of _______________, 1993
VIRGINIA INDONESIA COMPANY
By:_______/s/_____________________________