MODEL PRODUCTION SHARING CONTRACT …

1 1 MODELPRODUCTION SHARING CONTRACTBETWEENTHE GOVERNMENT OF INDIAANDXYZ COMPANY(IES)WITH RESPECT TO CONTRACT AREAIDENTIFIED ASBLOCK : _____2 TABLE OF CONTENTSARTICLECONTENTSPAGE Interests123 License and Exploration Period13-144 Relinquishment155 Work Programme16-186 Management Committee19-227 Operatorship, Operating Agreement and Operating Committee238 General Rights and Obligations of the Parties24-259 Government Assistance2610 Discovery, Development and Production27-3011 Petroleum Exploration License and Mining Lease31-3212 Unit Development3313 Measurement of Petroleum3414 Protection of the Environment35-3815 Recovery of Cost Petroleum39-4016 PRODUCTION SHARING of Petroleum41-4217 Taxes.

2 Royalties, Rentals, Duties, Supply, Sale, Disposal and Export of Crude Oil and Condensate4619 Valuation of Petroleum47-4820 Currency and Exchange Control Provisions4921 Natural Gas50-5422 Employment, Training and Transfer of Technology5523 Local Goods and Services5624 Insurance and Indemnification5725 Records, Reports, Accounts and Audit58326 Information, Data, Confidentiality, Inspection and Security59-6127 Title to Petroleum, Data and Assets6228 Assignment of Participating Interest63-6529 Guarantees66-6730 Term and Termination of the Contract68-6931 Force Majeure7032 Applicable Law and Language of the Contract7133 Sole Expert, Conciliation and Arbitration72-7334 Change of Status of Companies7435 Entire Agreement.

3 Amendments and Waiver and miscellaneous7536 Certificates7637 Notices77-78 APPENDICESCONTENTSPAGE ADescription of the CONTRACT Area79 Appendix BMap of the CONTRACT Area80 Appendix CAccounting Procedure to the Contract81-104 Appendix DCalculation of the Investment Multiple for PRODUCTION SHARING purposes105-106 Appendix E1 Form of Parent company Financial and Performance Guarantee107-108 Appendix E2 Form of Company Financial and Performance Guarantee109-110 Appendix FProcedure for acquisition of goods and services111-113 Appendix GPerforma of Bank Guarantee to be provided pursuant to Article 29114-115 Appendix HAn itemized break-up of the cost estimates given by the contractor in the bid116documents pursuant to Article PRODUCTION SHARING CONTRACTFOR OFFSHORE AREASThis CONTRACT made this _____ day of _____ President of India, acting through the _____, Ministry of Petroleum and Natural Gas(hereinafter referred to as the Government ) of the FIRST PART.

4 ANDXYZ Company, a Company incorporated under the laws of (hereinafter referred to as XYZ )having its registered office at _____ which expression shall include its successors andsuch assigns as are permitted under Article 28 hereof, of the SECOND PART;WITNESSETH:WHEREAS(1)By virtue of article 297 of the Constitution of India, Petroleum in its natural state in the territorial watersand the continental shelf of India is vested in the Union of India;(2)The Oilfields (Regulation and Development) Act, 1948 (53 of 1948) (hereinafter referred to as the Act )and the Petroleum and Natural Gas Rules, 1959, made thereunder (hereinafter referred to as the Rules )make provisions, inter alia, for the regulation of Petroleum Operations and grant of Licenses and Leasesfor exploration, development and PRODUCTION of Petroleum in India.

5 (3)The Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976(80 of 1976) provides for the grant of a license by the Government to explore and exploit the resources ofthe continental shelf and exclusive economic zone and any Petroleum Operation under this CONTRACT shallbe carried out under a license granted by the Central Government;(4)The above Acts and Rules provide for the grant of License and Lease in respect of any land or mineralunderlying the ocean, within the territorial waters, the continental shelf and exclusive economic zone ofIndia by the Central Government;(5)Rule 5 of the Rules provides for an agreement between the Government and the Licensee or Lesseecontaining additional terms and conditions with respect to the License or Lease.

6 (6)The Government desires that the Petroleum resources which may exist in the territorial waters, thecontinental shelf, and the exclusive economic zone of India be discovered and exploited with the utmostexpedition in the overall interest of India and in accordance with modern oilfield and petroleum industrypractices;2(7)XYZ Company(ies) has / have committed that it has / they have, or will acquire and make available, thenecessary financial and technical resources and the technical and industrial competence and experiencenecessary for proper discharge and / or performance of all obligations required to be performed under thisContract in accordance with modern oilfield and petroleum industry practices and will provide guaranteesas required in Article 29 for the due performance of its obligations hereunder.

7 And(8)As a result of discussions between representatives of the Government and XYZ Company(ies) on theproposal of XYZ Company(ies), the Government has agreed to enter into this CONTRACT with XYZC ompany(ies) with respect to the CONTRACT Area identified as block and detailed in Appendix A andAppendix B, on the terms and conditions herein set , THEREFORE, in consideration of the premises and covenants and conditions herein contained,IT IS HERE BY AGREED between the Parties as follows:3 FOR ONLAND AREASThis CONTRACT made this _____ day of _____ President of India, acting through the _____, Ministry of Petroleum and Natural Gas (hereinafterreferred to as the Government ) of the FIRST PART;ANDXYZ Company, a Company incorporated under the laws of (hereinafter referred to as XYZ ) whichexpression shall include its successors and such assigns as are permitted under Article 28 hereof, of theSECOND PART.

8 WITNESSETH:WHEREAS(1)The Oilfields (Regulation and Development) Act, 1948 (53 of 1948) (hereinafter referred to as the Act )and the Petroleum and Natural Gas Rules, 1959, made thereunder (hereinafter referred to as the Rules )make provision, inter alia, for the regulation of Petroleum Operations and grant of Licenses and Leasesfor exploration, development and PRODUCTION of Petroleum in India;(2)The Rules provide for the grant of Licenses and Leases in respect of land vested in a State Government bythat State Government with the prior approval of the Central Government;(3)Rule 5 of the Rules provides for an agreement between the Central Government and the Licensee orLessee containing additional terms and conditions with respect to the License or Lease.

9 (4)The Government desires that the Petroleum resources which may exist in India be discovered and exploitedwith the utmost expedition in the overall interest of India in accordance with modern oilfield and petroleumindustry practices;(5)XYZ Company(ies) has / have committed that it has / they have, or will acquire and make available, thenecessary financial and technical resources and the technical and industrial competence and experiencenecessary for proper discharge and/or performance of all obligations required to be performed under thisContract in accordance with modern oilfield and petroleum industry practices and will provide guaranteesas required in Article 29 for the due performance of its obligations hereunder.

10 And(6)As a result of discussions between representatives of the Government and XYZ Company (ies) on theproposal of XYZ Company(ies), the Government has agreed to enter into this CONTRACT with XYZC ompany(ies), with respect to the CONTRACT Area identified as block_____ and detailed in Appendix Aand Appendix B, on the terms and conditions herein set , THEREFORE, in consideration of the premises and covenants and conditions herein contained, ITIS HERE BY AGREED between the Parties as follows:4 ARTICLE - 1 DEFINITIONSIn this CONTRACT , unless the context requires otherwise, the following terms shall have the meaning ascribedto them Accounting Procedure means the principles and procedures of accounting set out in Appendix Act means Oilfields (Regulation and Development) Act, 1948 as amended from time to Affiliate means a company or a body;(a)which directly or indirectly controls or is controlled by a Company which is a Party to thisContract.