exhb102.htm


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    Exhibit
      10.2

    


    OPTION
      AGREEMENT FOR PARTICIPATION

    IN
      EXPLORATION BLOCKS IN ARAB REPUBLIC OF EGYPT

    


    THIS
      OPTION AGREEMENT FOR PARTICIPATION IN EXPLORATION BLOCKS IN ARAB REPUBLIC OF
      EGYPT (hereinafter referred to as this “Option Agreement”) made this
8th
      day of January, 2008 with an
      effective date of December 31,
      2007 (the “Effective
      Date”)

    


    BETWEEN:

    


    Gujarat
      State Petroleum Corporation
      Limited, a company organized and existing under the laws of India having
      its registered office at GSPC Bhavan, behind Udyog Bhavan, Sector-11,
      Gandhinagar, Gujarat 382011, India (hereinafter referred to as “GSPC”)

    


    OF
      THE
      FIRST PART;

    


    AND

    


    GeoGlobal
      Resources (Barbados)
      Inc., a company whose registered office is at Chamberlain Place, Broad
      Street, Bridgetown, Barbados, West Indies with its corporate head office at
      310,
      605 – 1st
      Street
      SW, Calgary, Alberta, T2P 3S9, Canada, (hereinafter referred to as “GGRB”)

    


    OF
      THE
      SECOND PART

    


    (GSPC
      and
      GGRB shall hereinafter collectively be referred to as “Parties” and individually as
      a
“Party”)

    


    WHEREAS:

    


    
      	
              (a)  

            	
              The
                Parties and Alkor Petroo Limited (“Alkor”) entered
                into a
                Joint Study & Bid Agreement dated July 13, 2006 (hereinafter referred
                to as “JSBA”) for
                participation in blocks offered under bid round by Arab Republic
                of
                Egypt.

            


    

    


    
      	
              (b)  

            	
              The
                consortium comprising of GSPC, GGRB and Alkor was successful in their
                bids
                for two exploration blocks namely the E-GAS Block 6 offshore (also
                referred to as “N.
                Hap’y”) and the GANOPE Block 8 onshore (also referred to as “South Diyur”)
                (N. Hap’y
                and South Diyur are hereinafter collectively referred to as the “Exploration
                Blocks”).

            


    

    


    
      	
              (c)  

            	
              The
                Parties entered into an Assignment Agreement for Exploration Blocks
                in
                Arab Republic of Egypt dated 8th
                January, 2008 (the “Assignment Agreement”)
                (attached herewith as Schedule “A”) by which GGRB assigned its entire 30%
                (thirty percent) participating interest the Exploration
                Blocks.

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    
      	
              (d)  

            	
              GGRB
                has furnished to GSPC the following bank guarantees (equivalent to
                2% of
                financial commitment for the first Exploration Phase in Exploration
                Blocks) with respect to a 30% participating interest in the Exploration
                Blocks:

            


    

    


    
      	
              (i)  

            	
              The
                bank guarantee dated July 26, 2007 provided by GGRB in the amount
                of
                US$270,000 (United States dollars two hundred and seventy thousand)
                in
                favour of GSPC; and

            


    

    
      	
              (ii)  

            	
              The
                bank guarantee dated July 26, 2007 provided by GGRB in the amount
                of
                US$900,000 (United States dollars nine hundred thousand) in favour
                of
                GSPC.

            


    

    


    (The
      bank
      guarantees referred to above shall collectively be referred to as the “July 26,
      2007 Bank Guarantees”.  GSPC has called upon the July 26, 2007 Bank
      Guarantees and received the amounts provided for by them).

    


    
      	
              (e)

            	
              Upon
                execution of the Assignment Agreement, GSPC will repay the amounts
                it
                received by invocation of the July 26, 2007 Bank Guarantees and direct
                that the State Bank of India allocate these funds to two new bank
                guarantees to be provided by GGRB in the same amounts as the July
                26, 2007
                Bank Guarantees, and expiring July 15, 2008 in favour of GSPC (referred
                to
                as the “January 2008 Bank Guarantees”).  GGRB will also give
                similar instructions to the State Bank of India.
                

            


    

    


    NOW
      THEREFORE THIS OPTION AGREEMENT
      WITNESSETH that in consideration of the Parties entering into the
      Assignment Agreement and of the mutual covenants and agreements herein
      contained, GSPC and GGRB hereto agree as follows:

    


    1.           
      Terms and Conditions of Option to Participate:

    


    
      	
              (a)

            	
              GGRB
                shall have the irrecoverable and exclusive right, commencing on the
                Effective Date of this Option Agreement and ending on April 30, 2008,
                or
                such other date as may be agreed to in writing between the Parties,
                to
                elect by notice in writing to GSPC, to participate up to a 30% (thirty
                percent) participating interest (“Elected Participating
                Interest”) in both the Exploration Blocks, and a corresponding
                participating interest in the Concession Agreement(s) to the Exploration
                Blocks and agreeing to pay their pro rata share (equal to their Elected
                Participating Interest) of all costs and expenses incurred from and
                after
                the Effective Date of this Option Agreement in the Exploration Blocks.
                For
                avoidance of dout, it is clarified that, in the event of exercise
                of
                option, GSPC shall have no further obligation under this Option Agreement
                and under the Assignment Agreement for the payment of any costs and
                expenses with respect to the Elected Participaging Interest from
                and after
                the date of exercise of the option by
                GGRB. 

            


    

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    
      	
              (b)

            	
              GGRB
                shall, immediately upon exercise of option by GGRB as envisaged under
                Clause 1(a) of this Agreement, reimburse GSPC, all costs and expenses
                incurred by GSPC with respect to the Elected Participating Interest
                after
                the Effective Date from the Option Bank Guarantees referred to in
                paragraph 1(d) below.  In the event, the Option Bank Guarantees are
                not sufficent to make this reimbursement, GGRB will pay GSPC directly
                the
                additional amounts so as to fully reimburse GSPC. 

            


    

    


    
      	
              (c)

            	
              GGRB
                shall not be charged or liable to pay for any matters with respect
                to
                Exploration Blocks prior to the Effective Date of this Option Agreement.
                

            


    

    


    
      	
              (d)

            	
              The
                Parties agree that if GGRB elects to participate in the Exploration
                Blocks
                within the time frame agreed to in paragraph 1(a) above, GGRB shall
                further provide GSPC bank guarantees (representing 100% of the financial
                commitment for the first Exploration Phase in Exploration Blocks)
                with
                respect to their Elected Participating Interest. For further clarity,
                GGRB
                shall have the obligation to provide, in relation to the initial
                Exploration Period of the Exploration Blocks, bank guarantees in
                proportion to the Elected Participating Interest of (i) US$150,000,000
                (United States dollars one hundred and fifty million) for N. Hap’y; and
                (ii) US$45,000,000 (United States dollars forty-five million) for
                South
                Diyur (as may be applicable).  These bank guarantees are
                referred to as the “Option Bank Guarantees”.


            


    

    


    
      	
              (e)

            	
              Upon
                delivery of the Option Bank Guarantees, GSPC shall release the January
                2008 Bank Guarantees to GGRB. 

            


    

    


    
      	
              (f)

            	
              If
                GGRB fails to provide the Option Bank Guarantees within ten (10)
                days of
                the receipt by GSPC of GGRB’s notice of election to participate as
                stipulated in Clause 1(a), such failure shall be deemed to be a
                termination of GGRB’s right to earn or retain any interest in the
                Exploration Blocks. 

            


    

    


    
      	
              (g)

            	
              If
                GGRB fails to elect to participate as stipulated in Clause 1(a),
                or fails
                to provide the Option Bank Guarantees, then the January 2008 Bank
                Guarantees shall be forfeited and GGRB shall waive any and all rights
                whatsoever in respect of them. 

            


    

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    2.           
      Further Assurance:

    


    
      	
              (a)

            	
              GSPC
                has received the amount provided for in the July 26, 2007 Bank Guarantees.
                It is agreed between the Parties that the amount received by GSPC
                will be
                repaid and directed by GSPC to fund the January 2008 Bank Guarantees
                by
                GGRB in favour of GSPC. GGRB will give similar direction to the State
                Bank
                of India. 

            


    

    


    
      	
              (b)

            	
              In
                the event of exercise of its option under Clause 1(a) to acquire
                Elected
                Participating Interest and upon the delivery of the Option Bank Guarantees
                referred to in Clause 1(d), GSPC hereby agrees to provide GGRB the
                necessary documentary support such as a Power of Attorney, authorization,
                affidavit, undertaking and such other document(s) and full co-operation,
                as may be required, to execute and/or amend the Concession Agreements
                for
                the Exploration Blocks, the Assignment Agreement and any other
                documentation as may be required to reflect that GGRB has been transferred
                from GSPC, the GGRB Elected Participating Interest.
                

            


    

    


    
      	
              (c)

            	
              In
                the event of exercise of its option under Clause 1(a) to acquire
                Elected
                Participating Interest and upon the delivery of the Option Bank
                Guarantees, GGRB and GSPC shall co-operate and undertake all necessary
                action (including liasioning with the Government of the Arab Republic
                of
                Egypt, GANOPE, E-GAS, contractors, etc) as may be required to give
                effect
                to the assignment of the GGRB Elected Participating Interest, in
                favour of
                GGRB. 

            


    

    


    
      	
               

            	
              (d)
                GGRB and GSPC agree to act in good faith and not to undertake any
                action
                which is prejudicial to interest of GGRB, GSPC or Alkor under the
                Concession Agreement the JSBA, or any related agreements.
                

            


    

    


    
      	
               

            	
              (e)
                Each of the Parties represent that they have the necessary powers
                and
                authority to enter into this Option Agreement and perform the obligations
                envisaged herein. 

            


    

    


    
      	
              3.

            	
              Amendment:
                

            


    

    


    No
      amendment to this Option Agreement shall be valid and binding unless set forth
      in writing and duly executed by the Parties.

    


    
      	
              4.

            	
              Governing
                Law and Arbitration: 

            


    

    


    
      	
              (a)

            	
              This
                Option Agreement shall be governed by laws of India.
                

            


    

    


    
      	
              (b)

            	
              Any
                dispute arising in connection with or with respect to validity of
                this
                Option Agreement shall be finally resolved through arbitration in
                accordance with the provisions of the Arbitration and Conciliation
                Act,
                1996. Proceedings of arbitration shall be held in Ahmedabad and shall
                be
                conducted in English. Each Party shall appoint one arbitrator and
                the two
                arbitrators so appointed shall appoint the third arbitrator.
                

            


    

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    5.           
      Counterpart Execution:

    


    This
      Option Agreement may be executed in any number of counterparts, all of which
      taken together shall constitute one and the same understanding, and any Party
      may enter into this Option Agreement by executing a counterpart.

    


    


    


    EXECUTED
      in Gandhinagar,
      Gujarat

    


    


    


    


    by:
      /s/ M.Y. Farooqui

    GM
      (P&D)

    Signed
      for and on behalf
      of                                                                                                


    
      	
               

            	
              GUJARAT
                STATE PETROLEUM CORPORATION LIMITED


            


    

    


    


    by:
      /s/ Allan J. Kent,

    Executive
      Vice President and Chief Financial Officer

    
      	
               

            	
              Signed
                for and on behalf of 

            


    

    
      	
               

            	
              GEOGLOBAL
                RESOURCES (BARBADOS)
                INC.