EXHIBIT 10.86
SUPPLEMENTARY CONTRACT (NO.2)
This Supplementary Contract (No. 2) to the Production Sharing Contract for Block
A-18 dated 21 April 1994, as amended and supplemented, (hereinafter referred to
as "the Principal Contract") is made the 29 day of December 1999 by and
between the MALAYSIA-THAILAND JOINT AUTHORITY (hereinafter referred to as
"MTJA") an authority duly established under the Malaysia-Thailand Joint
Authority Act 1990 of Malaysia and Thailand-Malaysia Joint Authority Act B.E.
2533 (1990) of the Kingdom of Thailand and the Agreement between the Government
of Malaysia, and the Government of the Kingdom of Thailand on the Constitution
and Other Matters Relating to the Establishment of the Malaysia-Thailand Joint
Authority, dated 30 May 1990, and having its office at 27th Floor, Empire Tower,
City Square Centre, 182 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia, of the
first part; and PETRONAS CARIGALI (JDA) SDN. BHD., a company duly incorporated
and existing under the laws of Malaysia and having its registered office at
Tower 1, PETRONAS Twin Towers, Persiaran KLCC, 50450 Kuala Lumpur, Malaysia
(hereinafter referred to as "CARIGALI"), TRITON OIL COMPANY OF THAILAND, a
company duly incorporated and existing under the laws of the State of Texas,
United States of America, and having its registered office at 6688 North Central
Expressway, Suite 1400, Dallas, Texas, 75206, United States of America, and
having its local branch office at 33/95-96, 99-100 Wall Street Tower, Surawong
Road, Bangrak, Bangkok 10500 Thailand, (hereinafter referred to as "TRITON"),
and TRITON OIL COMPANY OF THAILAND (JDA) LIMITED, a company duly incorporated
and existing under the laws of the Cayman Islands and having its statutory
office in Dallas, Texas, United States of America, and having its local
registered branch office at Suite 13.01, 13th Floor, Menara Tan & Tan, 207 Jalan
Tun Razak, 50400 Kuala Lumpur, Malaysia (hereinafter referred to as "TRITON
JDA"), of the second part. The parties of the first and second part shall
hereinafter be referred to individually as "Party" and collectively as
"Parties".
WHEREAS Article 8.5(b) of the Principal Contract provides that recovery by
Contractors of allowable costs expended in a Quarter for the Contract Area in
relation to Petroleum Operations in respect of Natural Gas shall be allowed up
to a maximum of fifty per cent (50%) of such costs;
AND WHEREAS CARIGALI, TRITON AND TRITON JDA (hereinafter referred to as the
"Contractors") requested MTJA's agreement to an increase to sixty per cent (60%)
in the maximum allowable cost to be recovered under Article 8.5(b) of the
Principal Contract for certain costs, in relation to past cost for Petroleum
Operations in Block A-18 (sunk cost) and cost for development of the Cakerawala
Gas Field, expended by Contractors for the purpose of assisting the development
of the Cakerawala Gas Project;
AND WHEREAS MTJA agrees to the request of the Contractors to provide for such
increase in the maximum allowable cost to be recovered by Contractors to assist
in the development of the Cakerawala Gas Project and thereby to amend the
Principal Contract to provide for same.
NOW THEREFORE it is hereby stipulated and agreed as follows:
1. The Parties agree that Article 8.5(b) of the Principal Contract shall be
revised as follows :
"Up to a maximum of fifty per cent (50%) shall be applied in the manner herein
provided for the purpose of recovery by Contractors of allowable costs expended
in that Quarter for the Contract Area in relation to Petroleum Operations in
respect of Natural Gas, provided, however, that a maximum of sixty per cent
(60%) shall be applied only for the costs stipulated in (i) and (ii) below :
(i) All allowable costs expended by Contractors in relation to Petroleum
Operations in Block A-18 in respect of Natural Gas from the Effective Date
through 31 December 1997 as reported in the detailed audited accounts as of 31
December 1997, as may be amended, modified or supplemented, until such costs are
fully recovered by Contractors;
(ii) All allowable costs expended by Contractors from and after 1 January
1998 in relation to capital expenditures incurred for the development of the
Cakerawala Field including, without limitation, Cakerawala Booster Compression
and Cakerawala Platform D as detailed in the Cakerawala Field Development Plan
Update 1 approved by MTJA, as may be amended, modified or supplemented and
approved by MTJA until such costs are fully recovered by Contractors;
For the avoidance of doubt, it is agreed and understood that the said facilities
will not be installed simultaneously and such maximum allowable cost recovery of
sixty per cent (60%) shall apply from time to time;
(iii) All detailed accounts that are required to be provided under Article
11 shall identify the allowable costs permitted under (i) and (ii) above, so
that the accounts for which a maximum allowable cost recovery of sixty per cent
(60%) is allowed can be easily identified and distinguished from all other
allowable costs to be recovered by the Contractors for a maximum allowable cost
recovery of fifty per cent (50%) and can be audited in accordance with Article
11; and
(iv) All allowable costs pertaining to expenditures identified under (i) and
(ii) above shall be recovered first and shall be fully recovered prior to the
recovery of all other allowable costs which may be recovered by the Contractors
at a maximum allowable cost recovery of fifty per cent (50%) during any Quarter.
Contractors are entitled to recover all such allowable costs from the proceeds
of Natural Gas sold equal to the amount of all such allowable costs in the
Contract Area (but subject to Article 8.7).
If in any Quarter all such costs expended relating to Petroleum Operations in
respect of Natural Gas (including amounts accumulated or carried forward from
previous Quarters) exceed the maximum permitted value of fifty per cent (50%) or
sixty per cent (60%) as provided above, as the case may be, of such Natural Gas
sold from the Contract Area, the unrecovered excess may be carried forward to
the next succeeding Quarter and added to all such allowable costs expended
relating to Petroleum Operations in respect of Natural Gas for that Quarter, but
provided that such costs can only be recovered for any Quarter up to a maximum
of fifty per cent (50%) or sixty per cent (60%) , as the case may be, of such
Natural Gas sold."
2. Except as expressly provided in this Supplementary Contract (No. 2), the
Principal Contract is not otherwise waived, amended and supplemented hereby and
the terms therein shall remain in full force and effect.
3. Any terms that are defined terms in the Principal Contract shall have the
same meaning when used in this Supplementary Contract (No. 2) unless herein
otherwise expressly provided.
IN WITNESS WHEREOF MTJA, CARIGALI, TRITON and TRITON JDA have by their
respective duly authorised officers executed this Supplementary Contract (No. 2)
on the day and year first herein above written.
Signed by : )
For and on behalf of )_____________________
MALAYSIA-THAILAND JOINT AUTHORITY )
In the presence of )
)
Signed by : )
For and on behalf of )_____________________
PETRONAS CARIGALI (JDA) SDN. BHD. )
In the presence of )
)
Signed by : )
For and on behalf of )_____________________
TRITON OIL COMPANY OF THAILAND )
In the presence of )
)
Signed by : )
For and on behalf of )______________________
TRITON OIL COMPANY OF THAILAND (JDA) )
LIMITED )
In the presence of )
)