Exhibit 10.8  RISK SERVICES AGREEMENT  BETWEEN  Sociedade Nacional de Combustíveis de Angola  - Empresa Pública (Sonangol, E.P.)  and  CIE Angola Block 21 Ltd.  and  Sonangol Pesquisa e Produção, S.A.  and  Nazaki Oil and Gáz, S.A.  and  Alper Oil, Lda   in the  Area of Block 21/09


Table of Contents  Article
  
  PageArticle 1(Definitions)
  
  4Article 2(Annexes
  to the Agreement)
  
  12Article 3(Object
  of the Agreement)
  
  13Article 4(Nature
  of the relationship between the Parties)
  
  13Article 5(Duration
  of the Agreement)
  
  13Article 6(Exploration Period)
  
  14Article 7(Production Period)
  
  15Article 8(Operator)
  
  16Article 9(Petroleum Operations Procedures Document)
  
  18Article 10(Payment
  from Sonangol to Contractor and production allowance)
  
  18Article 11(Petroleum Operations costs and expenses)
  
  21Article 12(Lifting
  and disposal of Crude Oil)
  
  21Article 13(Conduct
  of Petroleum Operations)
  
  22Article 14(Work
  obligations during the Exploration Period)
  
  25Article 15(Exploration Work Plans and Budgets)
  
  28Article 16(Commercial Discovery)
  
  29Article 17(General
  Development and Production Plan)
  
  30Article 18(Development and Production Work Programs and Budgets)
  
  30Article 19(Lifting
  Schedule)
  
  31Article 20(Guarantees)
  
  31Article 21(Bonus
  and contributions)
  
  33Article 22(Conservation of Petroleum and prevention of loss)
  
  35Article 23(Records, reports and inspection)
  
  36Article 24(Contractors obligation to purchase Sonangols Petroleum)
  
  38Article 25(Other rights
  and obligations related to Crude Oil disposal)
  
  38Article 26(Unitization and joint Development)
  
  39Article 27(Transfer and abandonment of assets)
  
  39Article 28(Natural
  Gas)
  
  40Article 29(Operations for Sonangols account - sole risk)
  
  41Article 30(Operating Committee)
  
  45Article 31(Ownership of assets)
  
  49Article 32(Property and confidentiality of data)
  
  50Article 33(Responsibility for losses and damages)
  
  51Article 34(Petroleum Operations risk management)
  
  52Article 35(Recruitment,
  integration and training of Angolan personnel)
  
  52Article 36(Double
  taxation and change of circumstances)
  
  54Article 37(Assignment)
  
  54Article 38(Termination of the Agreement)
  
  56Article 39(Confidentiality of the Agreement)
  
  58Article 40(Dispute
  resolution)
  
  59Article 41(Force
  Majeure)
  
  60Article 42(Applicable Law)
  
  60Article 43(Language)
  
  61Article 44(Offices
  and service of notice)
  
  61Article 45(Captions and headings)
  
  61Article 46(Effectiveness)
  
  62  1


Annex A - Description of the Contract Area
  
  64Annex B - Map of the Contract Area
  
  65Annex C - Accounting and Financial Procedures
  
  66Annex D - Corporate Guarantee
  
  83Annex E - Financial Guarantee
  
  85  2


THIS AGREEMENT IS ENTERED INTO BETWEEN:  on the one part:  Sociedade Nacional de Combustíveis de Angola -
Empresa Pública (Sonangol, E.P.), hereinafter referred to as Sonangol, a company with headquarters in Luanda, Republic
of Angola, created in accordance with Decree n°. 52/76, of 9 June 1976;  and, on the other part:  CIE Angola Block 21 Ltd., a company organized and existing under
the laws of Cayman Islands, hereinafter referred to as Cobalt,
with offices and legal representatives in Luanda, Republic of Angola; and  Sonangol Pesquisa e Produção, S.A., hereinafter referred to as Sonangol P&P, a company with headquarters in Luanda,
Republic of Angola, created in accordance with Resolution 4/91, of 6 December 1991,
from the Standing Committee of the Council of Ministers;  Nazaki Oil and Gáz, S.A., a company organized and existing under
the laws of Angola, hereinafter referred to as Nazaki,
with offices and legal representatives in Luanda, Republic of Angola; and  Alper Oil, Lda, a company organized and existing under the
laws of Angola, hereinafter referred to as Alper,
with offices and legal representatives in Luanda, Republic of Angola.  Recitals  WHEREAS, through the Concession Decree-Law No 14/09, of
June 11, the Government of the Republic of Angola, in accordance with the
Petroleum Activities Law (Law Nr. 10/04, of November 12), has granted Sonangol
an exclusive concession for the exercise of the mining rights for Exploration,
Development and Production of liquid and gaseous hydrocarbons in the concession
area of Block. 21/09;  3


WHEREAS, under Concession Decree-Law No 14/09 of June
11, the Government has authorized Sonangol to enter into a Risk Services
Agreement for Block 21/09;  WHEREAS, Sonangol, with a view to carrying out the
Petroleum Operations necessary to duly exercise such rights and in compliance
with the obligations deriving from Concession Decree-Law, wishes to sign a Risk
Services Agreement with Contractor;  WHEREAS, the Government, through the Decree No 4/10 of January
21, pursuant Article 45.1 (a) of the Petroleum Activities Tax Law,
established the production allowance for the Block;  WHEREAS, Sonangol, on the one hand, and Contractor, on
the other hand, have agreed that this Agreement is the Risk Services Agreement
mentioned above and will regulate their mutual rights and obligations in the
execution of said Petroleum Operations.  NOW, therefore, Sonangol, on the one hand, and
Contractor on the other hand, agree as follows:  Article 1 (Definitions)  For the purposes of this Agreement, and unless
otherwise expressly stated in the text, the words and expressions used herein
shall have the following meaning, it being understood that reference to the
singular includes reference to the plural and vice versa:  1.Affiliate means:  (a)a company or any other entity in which
any of the Parties holds, either directly or indirectly. the absolute majority
of the votes in the shareholders meeting or is the holder of more than fifty
percent (50%) of the rights and interests which confer the power of management
of that company or entity, or has the power of management and control over such
company or entity; or  4


(b)a company or any other entity which
directly or indirectly holds the absolute majority of votes at the
shareholders meeting or equivalent corporate body of any of the Parties or
holds the power of management and control over any of the Parties; or  (c)a company or any other entity in which
either the absolute majority of votes in the respective shareholders meeting
or the rights and interests which confer the power of management of said
company or entity are, either directly or indirectly, held by a company or any
other entity which directly or indirectly holds the absolute majority of votes
at the shareholders meeting or equivalent corporate body of any of the Parties
or holds the power of management and control over any of the Parties.  2.Agreement or the Agreement means this
Risk Services Agreement executed between Sonangol and Contractor, including its
Annexes.  3.Angola means the Republic of Angola.  4.Angolan Training Decree means Decree
n°. 17/09, of June 26, regarding the training of Angolan nationals by foreign
corporations.  5.Appraisal means the activity carried
out after the discovery of a Petroleum deposit to better define the parameters
of the deposit and determine its commerciality, including namely:  (a)drilling of Appraisal Wells and running
depth tests;  (b)collecting special geological samples and
reservoirfluids;  (c)running supplementary studies and
acquisition of geophysical and other data, as well as the processing of same
data.  6.Appraisal Well means a Well drilled
following a Commercial Well to delineate the physical extent of the
accumulation penetrated by such Commercial Well, and to estimate the
accumulation reserves and probable Production rates.  5


7.Approved Work Plan and Budget means
either the Exploration Work Plan and Budget or the Development and Production
Work Plan and Budget transmitted to Sonangol under Article 30.12, or
approved by the Operating Committee under Article 30.11, as relevant.  8.Associated Natural Gas means Natural
Gas which exists in a reservoir in solution with Crude Oil and includes what is
commonly known as gas cap gas which overlies and is in contact with Crude Oil  9.Barrel means the unit of measure for
liquids corresponding to forty-two (42) United States gallons of Crude Oil, net
of basic sediment and water and corrected to a temperature of sixty degrees
Fahrenheit (60°F).  10.Commercial Discovery means the
discovery of a Petroleum deposit judged by Contractor to be worth developing in
accordance with the provisions of the Agreement.  11.Commercial Well means the first Well on
any geological structure which after testing in accordance with sound and
accepted industry Production practices, and verified by Sonangol, is found
through analysis of test results to be capable of producing, from a single
reservoir not less than an average rate of five (5) thousand Barrels of
Crude Oil per day.  Contractor
shall have the right to request to Sonangol that a Well which is within the
aforesaid criteria is not to be deemed a Commercial Well. To exercise this
right, Contractor shall timely provide Sonangol information which would
evidence that in the particular circumstances of such Well the same should not
be deemed a Commercial Well.  Among
other factors, consideration shall be given to porosity, permeability,
reservoir pressure, Crude Oil saturation and the reservoir recoverable
reserves.  Contractor
has the option to declare a Well a Commercial Well at a producing rate below
that one set forth above where Contractor is of the  6


opinion
that the accumulation may produce sufficient Crude Oil to recover the costs and
make a reasonable return.  12.Concession Decree-Law means Decree-Law
n° 14/09 of June 11, approved by the Council of Ministers as it was published
in the Diário de República of Angola n° 107, I Series, of June 11, 2009.  13.Contract Area means on the Effective
Date the area described in Annex A and shown on the map in Annex B, and
thereafter the whole or any part of such area in respect of which Contractor
continues to have rights and obligations under this Agreement.  14.Contract Year means the period, and
successive periods, of twelve (12) consecutive Months according to the
Gregorian Calendar beginning on the Effective Date of this Agreement.  15.Contractor means Cobalt, Nazaki,
Sonangol P&P and Alper and their possible assignees under Article 37,
designated collectively except as otherwise provided herein. The participating
interests of the entities constituting Contractor on the Effective Date are:  1.
  
  CIE
  Angola Block 21 Ltd:
  
  40
  %2.
  
  Nazaki:
  
  30
  %3.
  
  Sonangol
  P&P
  
  20
  %4.
  
  Alper
  
  10
  %  16.Crude Oil means a mixture of liquid
hydrocarbons produced from the Contract Area which is in a liquid state at the
wellhead or in the separator under normal conditions of pressure and
temperature, including distillates and condensates, as well as liquids
extracted from the Natural Gas.  17.Customs Duties means all charges,
contributions or fees established in the respective customs tariffs schedules
which are applicable to  7


merchandise
imported or exported through customs, including those levied in accordance with
the Petroleum Activities Customs Law.  18.Development means the activity carried
out in a Development Area after the declaration of a Commercial Discovery. 8aid
activity shall include, but not be limited to:  (a)geophysical, geological and reservoir
studies and surveys;  (b)drilling of producing and injection
Wells;  (c)design, construction, installation,
connection and initial testing of equipment, pipelines, systems, facilities,
plants, and related activities necessary to produce and operate said Wells, to
take, save, treat, handle, store, transport and deliver Petroleum, and to
undertake repressuring, recycling and other secondary or tertiary recovery
projects.  19.Development Area means the extent of
the whole area, within the Contract Area, capable of production from the
deposit or deposits identified in a Commercial Discovery and defined by
agreement between Sonangol and Contractor after said Commercial Discovery.  20.Development Well means a Well drilled
for the purpose of producing or enhancing Production of Petroleum from a
Commercial Discovery, and includes the Appraisal Wells which have been
completed as production or injection Wells.  21.Effective Date means the first day of
the Month following the Month in which this Agreement is signed by Sonangol and
Contractor.  22.Exploration shall include, but not be
limited to, namely, such geological, geochemical and geophysical surveys and
studies, aerial surveys and others as may be included in Approved Work Plans
and Budget, and the drilling of such shot holes, core holes, stratigraphic
tests, Wells for the discovery of Petroleum, and other related holes and Wells
including  8


Appraisal Wells which have not been completed as
production or injection Wells.  23.Exploration Period means the period
defined in Article 6.  24.Exploration Well means a Well drilled
for the purpose of discovering Petroleum, including  Appraisal Wells to the extent permitted by Article 16.  25.Fiscal Year means a period of twelve
(12) consecutive Months according to the Gregorian Calendar which coincides
with the Civil Year and relative to which the presentation of fiscal
declarations is required under the fiscal or commercial laws of Angola.  26.Force Majeure means the concept defined
in Article 41 of this Agreement.  27.General Development and Production Plan
has the meaning attributed to it in Article 17.  28.Government means the Government of the
Republic of Angola.  29.Initial Exploration Phase means the
period of five (5) Contract Years commencing on the Effective Date of the
Agreement, as defined in Article 6.  30.Joint Account means the set of accounts
kept by Operator to record all receipts, expenditures and other operations
which, under the terms of the Agreement, shall be shared between the entities
constituting Contractor in proportion to their participating interests.  31.Law means the legislation in force in
the Republic of Angola.  32.Lifting Schedule means the planned
program of Crude Oil liftings by each Party approved by the Operating
Committee.  33.Market Price means the price determined
for the valuation of the Crude Oil produced from the Contract Area as
established in accordance with Article 6 of the Petroleum Activities Tax
Law.  9


34.Month means a calendar month pursuant
to the Gregorian Calendar.  35.National Concessionaire means Sonangol
as the titleholder of the mining rights of Exploration, Development and
Production of liquid and gaseous hydrocarbons in the Contract Area.  36.Natural Gas means any hydrocarbons
produced from the Contract Area which at a pressure of 14.7 psi and a
temperature of sixty degrees Fahrenheit (60° F) are in a gaseous state at the
wellhead, and includes both Associated and Non-Associated Natural Gas, and all
of its constituent elements produced from any Well in the Contract Area and all
non-hydrocarbon substances therein. Such term shall include residue gas.  37.Non-Associated Natural Gas means that
part of Natural Gas which is not Associated Natural Gas.  38.Operating Committee means the entity
referred to in Article 30.  39.Operator is the entity referred to in Article 8.  40.Optional Exploration Phase means the
additional period of three (3) Contract Years after the Initial Exploration
Phase pursuant to Article 6.  41.Parties means Sonangol and Contractor.  42.Party means either Sonangol or
Contractor as Parties to this Agreement.  43.Petroleum means Crude Oil, Natural Gas
and all other hydrocarbon substances that may be found in and extracted, or
otherwise obtained and saved from the Contract Area.  44.Petroleum Activities Law means Law n°.
10/04, of 12 November 2004.  45.Petroleum Activities Customs Law means
Law n°. 11/04, of 12 November 2004.  46.Petroleum Activities Insurance Decree
means Decree n°. 39/01, of 22 June 2001.  10


47.Petroleum Activities Tax Law means Law
n°. 13/04, of 24 December 2004.  48.Petroleum Operations means the
activities of Exploration, Appraisal, Development and Production which
constitute the object of the Agreement.  49.Petroleum Operations Procedures
Document is the document referred to in Article 9.  50.Phase means the Initial Exploration
Phase or the Optional Exploration Phase, as the case may be.  51.Production means the set of activities
intended to Petroleum extraction, including, but not be limited to, the
running, servicing, maintenance and repair of completed wells and of the
equipment, pipelines, systems, facilities and plants completed during
development, including all activities related to planning, scheduling,
controlling, measuring, testing and carrying out the flow, gathering, treating,
storing and dispatching of Petroleum from the underground Petroleum reservoirs
to the designated exporting or lifting location, as well as operations for
abandonment of facilities and Petroleum deposits and related activities.  52.Production Period means the period
defined in Article 7.  53.Production Plan means the planned
profile of Crude Oil output in Barrels per day approved by the Operating
Committee in conjunction with the Development and Production Work Plan and
Budget for each Development Area, according to Article 18.  54.Quarter means a period of three (3) consecutive
Months starting with the first day of January, April, July or October of
each Civil Year.  55.Serious Fault shall mean inadequate
performance by the Operator that substantially violates the technical rules generally
accepted in the international petroleum industry and/or the obligations under
this Agreement and the Law.  11


56.Sonangol is Sociedade Nacional de
Combustíveis de Angola, Empresa Pública (Sonangol, E.P.), an Angolan State
Company.  57.State means the State of the Republic
of Angola.  58.Well means a hole drilled into the
earth for the purpose of locating, evaluating, producing or enhancing
production of Petroleum.  59.Work Plan and Budget means either an
Exploration Work Plan and Budget or a Development and Production Work Plan and
Budget.  60.Year or Civil Year means a period of
twelve (12) consecutive Months according to the Gregorian Calendar beginning on
January 1 and ending on December 31.  Article 2 (Annexes to the Agreement)  1.The present Agreement is complemented by
the following Annexes which form an integral part of it:  (a)Annex A - Description of the Contract
Area;  (b)Annex B - Map of the Contract Area;  (c)Annex C - Accounting and Financial
Procedures;  (d)Annex D - Corporate Guarantee; and  (e)Annex E - Financial Guarantee.  2.In the event of discrepancy between the
content or the form of Annexes A and B referred to in paragraph 1, Annex A
shall prevail.  3.In the event of discrepancy between the content
or the form of the Annexes referred to in paragraph 1 and the Agreement, the
provisions of the Agreement shall prevail.  12


Article 3 (Object of the Agreement)  1.The object of this Agreement is the
definition, in accordance with Law Nr. 10/04, of November 12, and other
applicable legislation, of the contractual relationship in the form of the Risk
Services Agreement between Sonangol and Contractor for carrying out the
Petroleum Operations.  2.The Parties specifically acknowledge that
the terms of this Agreement represent their sale and express intent, to the
exclusion of any other intent.  Article 4 (Nature of the relationship between the
Parties)  This Agreement shall not be construed as
creating between the Parties any entity with a separate juridical personality,
or a corporation, or a civil society, a joint venture or partnership (conta em
participarção).  Article 5 (Duration of the Agreement)  1.This Agreement shall continue to be in
force until the end of the last Production Period or, in case there is no
Production Period in the Contract Area, until the end of the Exploration
Period, unless prior to that date anything occurs that in the terms of the Law
or the applicable provisions of the Agreement constitutes cause for its
termination or for termination of the concession.  2.The extension of the Exploration or
Production Periods referred to in the preceding paragraph beyond the terms
provided for in Article 6 and Article 7 respectively shall be
submitted by Sonangol to the Government under Article 12 of the Petroleum
Activities Law.  3.At the end of the Exploration Period,
Contractor shall terminate its activities in all areas within the Contract Area
which are not at such time part of a Development Area(s); and, except as
otherwise provided herein,  13


from
that time this Agreement shall no longer have any application to any portion of
the Contract Area not then part of a Development Area.  Article 6 (Exploration Period)  1.Pursuant to the Concession Decree-Law, an
Initial Exploration Phase of five (5) Contract Years shall start from the
Effective Date. One (1) successive extension of three (3) Contract
Years (the Optional Exploration Phase) may follow the Initial Exploration
Phase, provided that Contractor notifies Sonangol in writing of such extension,
at least thirty (30) days before the end of the Initial Exploration Phase, and
if, unless otherwise agreed by Sonangol, Contractor has fulfilled its
obligations in respect of such Phase.  2.The Agreement shall be terminated if no
Commercial Discovery has been made in the Contract Area by the end of the
Initial Exploration Phase or the Optional Exploration Phase, should that be the
case. However, the Exploration Period may be extended for six (6) Months
for the completion of drilling and testing of any Well actually being drilled
or tested at the end of the fourth (4th) and/or seventh (7th) Contract Year, as
the case may be.  3.Should any of the said Wells be a
Commercial Well, Contractor shall be given sufficient time, as mutually agreed,
not exceeding twelve (12) Months, or such longer period as agreed by Sonangol,
following the completion of drilling and testing of the Commercial Well to do Appraisal
work. Should this work result in a Commercial Discovery then a Development Area
shall be granted pursuant to Article 7.  4.In the event Contractor fails to complete
all Exploration Wells foreseen in Article 14 during the Initial
Exploration Phase, Contractor shall elect one of the following options:  (a)Complete the remaining Exploration Well(s) in
a six (6) Month extension of the Initial Exploration Phase and forego the
option to enter into the Optional Exploration Phase;  14


(b)Decide to enter into the Optional
Exploration Phase being, however, required to complete the Wells related to the
Initial Exploration Phase and to drill the Wells related to the Optional
Exploration Phase.  5.Operations for the sole account of
Sonangol conducted under Article 29 hereof shall not extend the
Exploration Period nor affect the term of the Agreement, it being understood
that:  (a)to the extent that such operations do not
conflict with Contractors obligations or obstruct, interfere with or delay any
Petroleum Operations or any existing work plans (including any Approved Work
Plan and Budget), Contractor shall complete any work undertaken at Sonangols
sole risk and expense even though the Exploration Period may have expired;  (b)Contractors completion of the works
referred to in the previous subparagraph shall not extend Contractors
Exploration Period or Agreement term, except as in the case of Contractor
exercising the option right mentioned in Article 29 .3, hereof;  (c)during the period Contractor is
completing the works referred to in subparagraph (a), Contractor shall be given
authorization to continue such sole risk operations and shall be entitled to
all benefits available to Contractor pursuant to the Agreement as if the term
thereof had not terminated.  Article 7 (Production Period)  1.Following each Commercial Discovery, the
extent of the whore area within the Contract Area capable of Production from
the deposit or deposits identified in the Well that originated the Commercial
Discovery and its related Appraisal Wells, if any, shall be agreed upon by
Sonangol and Contractor. Each agreed area shall then be converted automatically
into a Development Area effective from the date of Commercial Discovery.  15


Without
prejudice to paragraph 2 hereof, there shall be a Production Period for each
Development Area which shall be twenty-five (25) Years from the date of
Commercial Discovery in said Development Area. In the event of Commercial
Discoveries in deposits which underlie and overlie each other, such deposits
shall constitute a single Development Area, and such area shall be defined or
redefined as necessary, within the boundaries of the Contract Area, to incorporate
all underlying and overlying deposits.  2.Unless otherwise agreed by Sonangol, any
Development Area is considered automatically terminated and, except as
otherwise provided in the Agreement, the rights and obligations in said Area
are considered terminated if within forty-two (42) Months from the date of
Commercial Discovery in said Development Area the first lifting of Crude Oil
from said Development Area has not been done as part of a regular program of
lifting in accordance with the Lifting Schedule.  No
later than twelve (12) Months before the end of the Production Period,
Contractor may request that Sonangol apply for an extension of the Production
Period under Article 5.2. If Sonangol is not opposed to said request, it
shall discuss the terms and conditions of the extension of the Production
Period with Contractor and submit said terms and conditions to the supervising
Ministry along with the application to be presented under the Petroleum
Activities law.  Article 8 (Operator)  1.Contractor has the exclusive
responsibility for executing the Petroleum Operations, except as provided in Article 29.  2.Under the Concession Decree-law, Cobalt
is the Operator which carries out Petroleum Operations on a no profit, no loss
basis on behalf of Contractor within the Contract Area. Change of operator
shall require the prior approval of the Ministry of Petroleum following a
proposal from Sonangol.  16


3.Any agreement among the Contractor
companies regarding or regulating the Operators conduct in relation to this
Agreement shall be submitted to Sonangol for comment prior to execution
thereof.  4.The Operator will be subject to all of
the specific obligations provided for in this Agreement, the Concession
Decree-law and other applicable legislation and, under the general authority of
the Operating Committee, shall have the exclusive control and administration of
the Petroleum Operations.  5.The Operator shall be the only entity
which, on behalf of Contractor and within the limits defined by the Operating
Committee, may execute contracts, incur expenses, agree to expense commitments
and implement other actions in connection with the conduct of Petroleum
Operations.  6.In the event of the occurrence of any of
the following, Sonangol can require Contractor to immediately propose another
Contractor company as Operator:  (a)if the Operator, by action or omission,
commits a Serious Fault in carrying out its obligations and if this fault is
not remedied to the satisfaction of Sonangol within a period of twenty-eight
(28) days with effect from the date of receipt by the Operator of written
notice issued by Sonangol requesting the Operator to remedy such fault (or
within a greater period of time if so specified in the notice, or as agreed
later by Sonangol);  (b)if sentence has been passed in court
declaring the bankruptcy, liquidation or dissolution of the Operator, or if, in
the court action taken in order to obtain such declaration, any injunction has
been granted or any interim judicial ruling has been made, which prevents
Operator from fulfilling its obligations under the Agreement;  17


(c)if the Operator undertakes the legal
procedures established to prevent bankruptcy or without just cause ceases
payment to creditors;  (d)if the Operator terminates or if there is
strong evidence that it intends to terminate its activities or a significant
portion thereof, and, as a result, fails to fulfil its obligations under the
Agreement. If said strong evidence that the Operator intends to terminate its
activities exists, the Operator shall be given a period of fifteen (15) days
with effect from the date of receipt by the Operator of written notice issued
by Sonangol, or such greater period of time if so specified in the notice, in
which to refute such strong evidence to the satisfaction of Sonangol.  7.If Contractor, in accordance with
paragraph 6, does not comply with the obligation to propose another Operator
from among its members within thirty (30) days from the date when Sonangol gave
notice to Contractor, Sonangol may freely propose one of the other Contractor
entities as Operator or a third party entity selected by Sonangol, if none of
those accept such role.  8.Contractor must accept the Operator
appointed by the Ministry of Petroleum, otherwise it shall be in serious breach
of this Agreement.  Article 9 (Petroleum Operations Procedures
Document)  Sonangol and Contractor may sign a Petroleum
Operations Procedures Document which will regulate and interpret the contents
of this Agreement, which shall be in accordance with the provisions of this
Agreement and the Law.  Article 10 (Payment from Sonangol to Contractor and
production allowance)  1.All quantities of Petroleum produced and
extracted under this Contract are the property of Sonangol and shall revert to
it entirely.  18


2.Sonangol shall allocate to Contractor,
and Contractor has the right to receive, the percentage of gross production of
Petroleum specified in Article 10.3 as payment in kind for the performance
by Contractor for services under this Agreement on behalf of Sonangol.  3.In any Quarter the percentage of
Petroleum from the Contract Area that Sonangol shall allocate in kind to
Contractor, as well as the production allowance applicable pursuant Article 45.1(a) of
the Petroleum Activities Tax Law and established in the Decree 4/09 of January
21, shall be determined by reference to the after tax nominal rate of return
achieved by Contractor at the end of the preceding Quarter in the Contract Area
as follows:  Contractors
  rate of return for 
  the Contract Area
  
  Contractor Payment 
  in kind - %
  
  Production 
  allowance - %Less than 10%
  
  96
  
  90from 10% to less than 20%
  
  85
  
  80from 20% to less than 30%
  
  75
  
  70from 30% to less than 40%
  
  70
  
  65from 40% to less than 50%
  
  65
  
  6050% or more
  
  60
  
  35  4.Contractors rate of return shall be
determined at the end of each Quarter after the date of Commercial Discovery on
the basis of the accumulated compounded net cash flow for the Contract Area,
using the following procedure:  (a)Contractors net cash flow computed in
U.S. dollars for the Contract Area for each Quarter is:  (i)the value received and actually lifted by
Contractor for all Crude Oil from the Contract Area in that Quarter at the
Market Price;  (ii)minus Petroleum Production Tax, Petroleum
Income Tax and Petroleum Transaction Tax;  19


(iii)minus all expenditures incurred in
respect the Contract Area.  (b)Contractors net cash flow for each
Quarter are compounded and accumulated according with the following formula:  ACNCF
(Current Quarter) = (100% + DQ)x
  ACNCF
  (Previous Quarter) + NCF (Current Quarter)100%  where:  ACNCF
= accumulated compounded net cash flow  NCF
= net cash flow  DQ
= quarterly compound rate (in percent).  The formula will be calculated using quarterly
compound rates (in percent) of 2.41%, 3.56%, 4.66%, 6.78%, 8.78% and 10.67%
which correspond to annual compound rates (DA) of 10%, 15%, 20%, 30%, 40% and
50%, respectively, as referred to in previous paragraph.  5.The Contractor rate of return in any
given Quarter shall be deemed to be between the largest DA which yields a
positive or zero ACNCF and the smallest DA which causes the ACNCF to be
negative.  6.The payment to Contractor and the
calculation of the production allowance in a given Quarter shall be in
accordance with the table in paragraph 3 above using the Contractor Groups
rate of return as per this article in the preceding Quarter.  7.It is possible for the Contractor rate of
return to decline as a result of negative cash flow in a Quarter with the
consequence that the payment to Contractor and the calculation of the
production allowance would increase in the subsequent Quarter.  20


8.Pending finalization of accounts, the
payment to Contractor and the calculation of the production allowance shall be
calculated on the basis of provisional estimates, if necessary, of deemed rate
of return as approved by Sonangol. Adjustments shall be subsequently effected
in accordance with the procedure to be established by agreement between
Sonangol and the Contractor.  Article 11 (Petroleum Operations costs and expenses)  Except as otherwise provided for in this
Agreement. the costs and expenses incurred in the Petroleum Operations, as well
as any losses and risks derived therefrom, shall accrue to or be borne by
Contractor, and Sonangol shall not be responsible to bear or repay any of the
aforesaid costs, expenses and risks.  Article 12 (Lifting and disposal of Crude Oil)  1.Each of the Parties (and, as for
Contractor, each entity constituting it) has the right and the obligation to
lift in accordance with the Lifting Schedule and the procedures and regulations
foreseen in the following paragraphs of this Article, its respective Crude Oil
entitlements.  2.Each of the entities constituting
Contractor shall have the right to proceed separately to the commercialization,
lifting and export of the Crude Oil to which it is entitled under this
Agreement.  3.Twelve (12) Months prior to the scheduled
initial export of Crude Oil from each Development Area, Sonangol shall submit
to Contractor proposed procedures and related operating regulations covering
the scheduling and lifting of Crude Oil and any other Petroleum produced from
such Development Area(s). The procedures and regulations shall be consistent
with the terms of this Agreement and shall comprehend the subjects necessary
for efficient and equitable operations including, but not limited to, rights of
the Parties, notification time, maximum and minimum quantities, duration of
storage, scheduling, conservation, spillage, liabilities of the Parties,
throughput fees and penalties, over and  21


underlifting, safety and emergency procedures
and any other matters that may be agreed between the Parties.  4.Contractor shall within thirty (30) days
after Sonangols submission as referred to in the preceding paragraph, submit
its comments on, and recommend any revisions to the proposed procedures and
regulations. Sonangol shall analyze these comments and recommendations and the
Parties shall, within sixty (60) days after Contractors said submission, agree
on such procedures and regulations.  5.In any event, the agreed lifting
procedures and regulations, as provided in the previous paragraph, shall always
comply with the Law.  6.In the case of more than one (1) quality
of Crude Oil in the Contract Area, Sonangol and Contractor shall, unless they
mutually agree that the Crude Oil should be commingled, lift each of the Crude
Oil qualities in proportion to their respective total liftings from the
Contract Area. In determining these proportions any Petroleum belonging to
Sonangol as a result of operations for Sonangols account under Article 29
shall be excluded.  Article 13 (Conduct of Petroleum Operations)  1.With due observance of legal and
contractual provisions and subject to the decisions of the Operating Committee,
Contractor, through the Operator, shall act in the common interest of the
Parties and shall undertake the execution of the work inherent in Petroleum
Operations in accordance with the Law and the professional rules and
standards which are generally accepted in the international petroleum industry.  2.Contractor, through the Operator, shall
carry out the work inherent in Petroleum Operations in an efficient, diligent
and conscientious manner and shall execute the Work Plans and Budgets under the
best economic and technical conditions and in accordance with the Law and the
professional rules and standards which are generally accepted in the
international petroleum industry.  22


3.In performing the Petroleum Operations,
Contractor, through the Operator, shall use the most appropriate technology and
management experience, including its own technology, such as patents, know-how
and other secret technology, insofar as this is permitted by applicable laws
and agreements.  4.Contractor, through the Operator, and its
subcontractors shall:  (a)contract local contractors, as long as
their services are similar in quality and availability to those available on
the international market and the prices of their services, when subject to the
same tax charges, are no more than ten percent (10%) higher compared to the
prices charged by foreign contractors for identical services;  (b)acquire materials, equipment, machinery
and consumable goods of national production, insofar as their quantity, quality
and delivery dates are similar to those of such materials, equipment, machinery
and consumable goods available on the international market. However, such
obligation does not apply in those cases in which the local prices for such
goods are more than ten percent (10%) higher compared to the prices for
imported goods, before charging Customs Duties but after the respective costs
for transportation and insurance have been included.  5.Contractor, through the Operator, shall
seek competitive bids for any work to be performed pursuant to an Approved Work
Plan and Budget if such work is budgeted to exceed two hundred and fifty
thousand U.S. dollars (U.S. $250,000). When reviewing such bids, Contractor
shall select out of the bids which are acceptable to Contractor for technical
and other operational reasons, the bid with the lowest cost. This decision
shall be subject to conformity with the Law, the provisions of paragraph 4
above and, after the first Commercial Discovery, the approval of the Operating
Committee.  6.Operator shall entrust the management of
Petroleum Operations in Angola to a technically competent General Manager and
Assistant  23


General
Manager. The names of such General Manager and Assistant General Manager shall,
upon appointment, be given to Sonangol. The General Manager and, in his
absence, the Assistant General Manager, shall be entrusted with sufficient
powers to carry out immediately and comply with all lawful written directions
given to them by Sonangol or the Government or its or their representatives or
any lawful regulations gazetted or hereafter to be gazetted which are
applicable to the Petroleum Operations.  7.Except as is appropriate for the economic
and efficient processing of data and laboratory studies thereon in specialized
centres outside Angola, geological and geophysical studies as well as any other
studies related to the performance of this Agreement, shall be preferentially
made in Angola.  8.In the case of an emergency in the course
of the Petroleum Operations requiring an immediate action, Contractor, through
the Operator, is authorized to take all actions that it deems necessary for the
protection of human life, the interests of the Parties and the environment, and
shall promptly inform Sonangol of all actions so taken.  9.Subject to Article 20 and Article 32,
any obligations which are to be observed and performed by Contractor shall, if
Contractor comprises more than one entity, be joint and several obligations.  10.Without prejudice to the provisions of Article 35,
the Operator shall have the right to staff the Petroleum Operations with those
whom it believes are necessary for efficient administration and operation
without the imposition of citizenship or residency requirements.  11.Sonangol shall provide reasonable
assistance to Contractor in obtaining visas, permits and other documents
required to enter Angola and residency and work licenses required in connection
with the performance of Petroleum Operations. Contractor shall notify Sonangol
reasonably in advance of the time necessary for receipt of such permits and
licenses and Sonangol shall take steps to arrange for all such permits and
licenses to be issued on a timely basis by the appropriate authorities.  24


Article 14 (Work obligations during the Exploration
Period)  1.During the Initial Exploration Phase
Contractor shall perform a seismic program covering 1,500 Km(2) of 3D long-offset
seismic, with an offset that varies between eight (8) kilometers and ten (10) kilometers.
Sonangol agrees that such obligation has been fulfilled through the acquisition
of existing seismic.  2.During the Initial Exploration Phase
Contractor shall drill, to geological horizons defined in the Approved Work
Plan and Budget, four (4) Exploration Wells in four (4) different
prospects, one of which (subject to paragraph 4) shall have a pre-salt
objective.  3.In the event Contractor elects to extend
the Exploration Period into the Optional Exploration Phase, Contractor shall be
required to drill, to geological horizons defined in the Approved Work Plan and
Budget, two (2) Exploration Wells, one of which (subject to paragraph 4)
shall have a pre-salt objective.  4.In the event Contractor exceeds the
minimum work obligations described in the preceding paragraphs during the
Initial Exploration Phase, then such excess shall be credited against the
minimum work obligations for the Optional Exploration Phase. In the event that,
prior to any Commercial Discovery, Contractor elects to drill more than one
Exploration Well with a pre-salt objective, such additional pre-salt Exploration
Well shall constitute one of the Exploration Wells which Contractor is required
to drill pursuant to paragraph 2 or 3 (as the case may be) and the drilling of
such additional pre-salt Exploration Well shall satisfy the obligation of
Contractor to drill one Exploration Well of any kind.  5.Without prejudice to paragraph 4 of Article 6,
in the event Contractor fails to satisfy the minimum work obligations referred
to in this Article within the deadlines specified in Article 6,
Contractor shall be deemed, unless otherwise agreed by Sonangol, to have
voluntarily terminated activities  25


and withdrawn from all of the Contract Area not
already converted into a Development Area(s).  6.If Contractor withdraws from all of the
Contract Area before drilling the minimum number of Exploration Wells
undertaken by it under this Article, Contractor shall be obligated to pay
Sonangol an amount equal to fifty million U.S. Dollars (U.S. $50,000,000) if
the pre-salt Exploration Well is not so drilled, and an amount equal to thirty
two million five hundred thousand U.S. Dollars (U.S. $32,500,000) for each of
the other three (3) Exploration Wells not so drilled.  7.Contractor shall be required to incur the
following minimum Exploration Expenditures:  (a)Initial Exploration Phase  one hundred
and forty seven million five hundred thousand U.S. Dollars (U.S. $147,500,000);  (b)Optional Exploration Phase  eighty two
million five hundred thousand U.S. Dollars (U.S. $82,500,000).  8.If Contractor fulflls the minimum work
obligations referred to in paragraphs 2 and 3 of this Article relating to
each phase of the Exploration Period, then Contractor shall be considered as
having fulfilled the minimum Exploration Expenditures set forth in the previous
paragraph.  9.Each Exploration Well referred to in this
Article shall test all productive horizons agreed to by Sonangol and
Contractor, unless diligent test efforts consistent with sound and normal oil
industry practices indicate that it is technically impracticable to reach
and/or test any such horizons.  10.During the drilling of Wells under this
Agreement, Contractor shall keep Sonangol informed of the progress of each
Well, its proposals for testing and the results of such tests, and if Sonangol
so requests, shall test any additional prospective zones within the agreed Well
depth provided that such tests shall be consistent with professional rules and
standards which are generally accepted in the international petroleum industry
and not  26


interfere
with the safety and efficiency of the Petroleum Operations planned by
Contractor. Such tests shall be at Contractors expense and shall be credited
towards fulfilling the mandatory work program.  11.If any obligatory Exploration Well is
abandoned due to technical difficulties and, at the time of such abandonment,
the Exploration Expenditures for such Well have equalled or exceeded fifty
million U.S. dollars (U.S.$50,000,000) if such Well is a Well with a pre-salt
objective, or thirty two million five hundred thousand U.S. dollars
(U.S.$32,5000,000) in the case of any other Well, for all purposes of this
Agreement Contractor shall be considered to have fulfilled the work requirement
in respect of one (1) Exploration Well and all costs of the Exploration
Well shall be considered part of the Exploration Expenditures set forth in
paragraphs 6 and 7 of this Article. If any obligatory Exploration Well is
abandoned due to technical difficulties, and if at the time of such abandonment
the Exploration Expenditures for such Well are less than fifty million U.S.
dollars (U.S.$50,000,000) if such Well is a Well with a pre-salt objective, or
thirty two million five hundred thousand U.S. dollars (U.S.$32,500,000) in the
case of any other Well, then Contractor shall have the option either to:  (a)drill a substitute Well at the same or
another location in which case the Exploration Expenditures for both the
original Well and the substitute Well shall be credited against Contractors
minimum Exploration Expenditures set forth in paragraphs 6 and 7 of this
Article; or  (b)pay Sonangol an amount equal to the
difference between (i) fifty million U.S. dollars (U.S.$50,000,000) if
such Well is a Well with a pre-salt objective, or thirty two million five
hundred thousand U.S. dollars (U.S.$32,500,000) in the case of any other Well,
and (ii) the amount of Exploration Expenditures actually spent in
connection with such Well.  27


In
this case, for all purposes of the Agreement, Contractor shall be considered to
have fulfilled the work obligation in respect of one (1) Exploration Well
and the total amount of fifty million U.S. dollars (U.S.$50,000,000) if such Well
is a Well with a pre-salt objective, or thirty two million five hundred
thousand U.S. dollars (U.S.$32,500,000) in the case of any other Well, shall be
considered part of the minimum Exploration Expenditures set forth in paragraphs
6 and 7 of this Article.  Article 15 (Exploration Work Plans and Budgets)  1.Within one (1) Month of the
Effective Date and thereafter at least three (3) Months prior to the
beginning of each Contract Year during the Exploration Period or at such other
times as may mutually be agreed to by Sonangol and Contractor, Contractor shall
prepare in reasonable detail an Exploration Work Plan and Budget for the
Contract Area setting forth the Exploration operations which Contractor
proposes to carry out during the first Contract Year and during the ensuing
Contract Year respectively.  2.During the Exploration Period such Work
Plan and Budget shall cover and be in accordance with the minimum work
obligations of Contractor under Article 14.  3.The Exploration Work Plan and Budget
shall be submitted to the Operating Committee for review, advice or approval as
the case may be, in accordance with Article 30, and carried out by
Contractor after approval by the Ministry of Petroleum under Article 58 of
the Petroleum Activities Law.  4.The Operating Committee shall coordinate,
supervise and control the execution of the Approved Exploration Work Plans and
Budgets, as well as verify if the same is carried out within budget expenditure
limits, or any revisions which have been made thereto.  28


Article 16 (Commercial Discovery)  1.Contractor shall inform Sonangol within
thirty (30) days of the end of the drilling and testing of an Exploration Well,
the results of the final tests of the Well and whether such a Well is
commercial or not. The date of this advice is the date of the declaration of
the Commercial Well, should such well exist.  2.After the declaration of a Commercial
Well, Contractor may undertake the Appraisal of the discovery by drilling one
or more Appraisal Wells to determine whether such discovery can be classified
as a Commercial Discovery.  3.Unless otherwise agreed by Sonangol, not
later than six (6) Months after the completion of the second Appraisal
Well, or twenty-four (24) Months after the declaration of the Commercial Well,
whichever is earlier, Contractor shall give written notice to Sonangol
indicating whether the discovery is considered commercial or not. If Contractor
declares it a Commercial Discovery, Contractor shall proceed to develop it
under the Petroleum Activities Law. The date of Commercial Discovery shall be
the date on which Contractor informs Sonangol in writing of the existence of
said Discovery.  4.If the period allowable for declaration
of a Commercial Discovery extends beyond the Exploration Period, a provisional
Development Area shall be established for such period as necessary to complete
the Appraisal as per paragraphs 2 and 3 above. The provisional Development Area
shall be of the shape and size which encompasses the geological feature or
features which would constitute the potential Commercial Discovery. Such
provisional Development Area shall be agreed by Sonangol in writing.  5.Any Commercial Well shall count towards
fulfilling the work and expenditure obligations provided for in Article 14,
but the Appraisal Well(s)  29


that have been drilled following the discovery
of a Commercial Well shall not count towards such obligations.  6.There shall be no more than one (1) Commercial
Well in each Development Area that counts towards such work obligations; and it
shall be the first Commercial Well in that Development Area.  7.Contractor has the right to declare a
Commercial Discovery without first having drilled a Commercial Well or Wells.  Article 17 (General Development and Production Plan)  Within ninety (90) days of the date of a
Commercial Discovery, Contractor shall prepare and submit to Sonangol a draft
General Development and Production Plan, which shall be analyzed and discussed
by the Parties in order to be agreed and submitted by Sonangol to the Ministry
of Petroleum within three (3) Months of the date of the Commercial
Discovery or within any longer period which may be granted by the Ministry of
Petroleum.  Article 18 (Development and Production Work Programs
and Budgets)  1.From the date of approval of the plan
referred to in Article 17, and thenceforth by the fifteenth (15th) of August of
each Year (or by any other date which may be agreed) thereafter, Contractor
shall prepare in accordance with professional rules and standards
generally accepted in the international petroleum industry a draft annual
Production Plan, a draft Exploration and Production Work Plan and Budget (if
applicable) and a draft Development and Production Work Plan and Budget for the
following Civil Year and may, from time to time, propose to Sonangol that it
submit amendments to the approved Work Plans and Budgets to the consideration
of the Ministry of Petroleum.  2.The draft Development and Production Work
Plan and Budget and the draft Production Plan referred to in the previous
paragraph shall be prepared on the basis of the approved General Development
and Production Plan and any subsequent amendments to the same.  30


3.The draft Production Plan and the draft
Development and Production Work Plan and Budget shall be approved in writing by
the Operating Committee and shall be submitted by Sonangol to the Ministry of
Petroleum for approval under the Petroleum Activities Law.  4.Contractor is authorized and hereby
undertakes to execute, under the supervision and control of the Operating
Committee, and within the limits of the budgeted expenses, the approved
Development and Production Work Plans and Budgets, together with any revised
versions of the same.  Article 19 (Lifting Schedule)  1.The Operating Committee shall approve a
Lifting Schedule, not later than ninety (90) days prior to January 1 and July 1
of each Civil Year following the commencement of Production under the approved
Production Plan, and furnish in writing to Sonangol and Contractor a forecast
setting out the total quantity of Petroleum that the Operating Committee
estimates can be produced, saved, transported and lifted hereunder during each
of the next four (4) Quarters in accordance with sound practices generally
accepted in the international petroleum industry.  2.Contractor shall endeavour to produce in
each Quarter the quantity of Petroleum forecast in the Production Plan.  3.The Crude Oil shall be run to storage
tanks built, maintained and operated by Contractor offshore, and shall be
metered or otherwise measured as required to meet the purposes of this
Agreement and the Law.  Article 20 (Guarantees)  1.The minimum Exploration work obligations shall
be secured by financial guarantees substantially in the form as set out in
Annex E.  2.The financial guarantees referred to in
the previous paragraph shall be given by each member of Contractor (excluding
Sonangol P&P and Alper  31


but
not their assignees), in proportion to the payment obligations assumed by such
member under this Agreement and the financing agreements executed between such
members of Contractor, Sonangol P&P and Alper and may only be reduced and
drawn in such proportions and otherwise in accordance with this Article 20.
Such guarantees shall be provided not later than thirty (30) days after the
execution of this Agreement, in respect of the minimum work obligations of the
Initial Exploration Phase, or thirty (30) days after the start of the Optional
Exploration Phase of the Exploration Period, in respect of the minimum work
obligations of said Phase.  3.The total amount of the financial
guarantees shall in each Phase be equal to fifty million U.S. dollars
(U.S.$50,000,000) for each of the obligatory pre-salt Exploration Wells set
forth in Article 14, and equal to thirty two million five hundred thousand
U.S. dollars (U.S.$32,500,000) for each of the other obligatory Exploration
Wells set forth in Article 14.  4.The financial guarantees shall be reduced
by the amount of fifty million U.S. dollars (U.S.$50,000,000) when the drilling
of each of the obligatory pre-salt Exploration Wells for each Phase of the
Exploration Period is finished, and by the amount of thirty two million five
hundred thousand U.8. dollars (U.S.$32,500,000) when the drilling of each of
the other obligatory Exploration Wells for each Phase of the Exploration Period
is finished.  5.If, during any Year of any of the Phases
of the Exploration Period, Contractor is deemed to have relinquished, as
provided in Article 14.5, all of the Contract Area not converted to a
Development Area(s), Contractor shall forfeit the full amount of the financial
guarantee, reduced as provided for in paragraph 4 of this Article.  6.Each of the entities comprising
Contractor, with the exception of Sonangol P&P and Alper, shall also
provide Sonangol, if so required by the latter, with a corporate guarantee
substantially in the form shown in Annex D hereof or such other form as may be
agreed  32


between
Sonangol and each of such entities, not later than sixty (60) days after the
date of execution of this Agreement.  7.The obligations and liabilities under
this Article 20 of the entities constituting Contractor shall be several
and not joint.  Article 21 (Bonus and contributions)  1.The signature bonus in respect of this
Agreement is ten million US Dollars (US$10,000,000). Cobalt has paid such signature
bonus and Nazaki shall reimburse to Cobalt within thirty (30) days after the
date of signature of this Agreement the amount of three million seven hundred
and fifty thousand US Dollars (US$3,750,000).  2.The contributions for social projects and
academic scholarships referred to below must be paid to Sonangol by Contractor
(excluding Sonangol P&P and Alper but not their assignees), in proportion
to the payment obligations assumed by such member under this Agreement and the
financing agreements executed between such members of Contractor, Sonangol
P&P and Alper:  (a)within thirty (30) days after the date of
signature of this Agreement:  (i)an amount of two million US dollars
(US$2,000,000); and  (ii)such additional amount, not exceeding two
million five hundred thousand US dollars (US$2,500,000), as Sonangol may have
notified to Contractor as being the total cost of ten (10) academic
scholarships (each with a duration of no more than five (5) years) to be
awarded by Sonangol for the overseas education of Angolan nationals;  (b)in respect of each Commercial Discovery
within the Contract Area:  (i)within thirty (30) days after the date of
declaration by Contractor of such Commercial Discovery in accordance  33


with Article 16.3, an amount of two million
US dollars (US$2,000,000);  (ii)within thirty (30) days after the date on
which the Ministry of Petroleum gives final written approval of the General
Development and Production Plan in respect of such Commercial Discovery in
accordance with Article 17, an amount of eight million US dollars
(US$8,000,000);  (c)within thirty (30) days after the date on
which the first lifting by Contractor of Crude Oil from the Contract Area
occurs, and then each subsequent Contract Year, on the anniversary of such
first lifting, until the Contract Year in which production by Contractor of
Crude Oil from the Contract Area ceases, an amount of five million US dollars
(US$5,000,000);  (d)within thirty (30) days after the date on
which the first lifting by Contractor of Crude Oil from the Contract Area
occurs, an amount, not exceeding three million seven hundred fifty thousand US
dollars (US$3,750,000), as Sonangol may have notified to Contractor as being
the total cost of fifteen (15) academic scholarships (each with a duration of
no more than five (5) years) to be awarded by Sonangol for the overseas
education of Angolan nationals.  3.All contributions for social projects
payable by Contractor pursuant to Article 21.2 shall be paid to such bank
account of and in the name of Sonangol as Sonangol may notify to the Operator
not less than fourteen (14) days prior to the date on which such payment is due
to be made.  4.All social projects and scholarship
programs for the purposes of which any amounts paid by Contractor pursuant to Article 21.2
are used shall be administered by Sonangol in compliance with the requirements
of all applicable laws and regulations.  34


Article 22 (Conservation of Petroleum and prevention
of loss)  1.Contractor shall adopt all those measures
which are necessary and appropriate and consistent with the technology
generally in use in the international petroleum industry to prevent loss or
waste of Petroleum above or under the ground in any form during Exploration,
Development, Production, gathering and distributing, storage or Petroleum
transportation operations.  2.Upon completion of the drilling of a
producing Development Well, Contractor shall inform Sonangol of the time when
the Well wilt be tested and shall subsequently inform Sonangol of the resulting
estimated production rate of the Well within fifteen (15) days after the
conclusion of such tests.  3.Petroleum shall not be produced from
multiple independent oil productive zones simultaneously through one string of
tubing, except with the prior approval of Sonangol.  4.Contractor shall record data regarding
the quantities of Crude Oil, Natural Gas and water produced monthly from each
Development Area, which shall be sent to Sonangol within thirty (30) days after
the end of the Month reported on.  5.Daily or weekly statistics and reports
regarding the Production from the Contract Area shall be made available by
Contractor at convenient time for examination by authorized representatives of
Sonangol.  6.Daily drilling records and graphic logs
of Wells shall show the quantity and type of cement and the quantity of any
other materials used in the Well for the purposes of protecting Crude Oil,
Natural Gas or fresh water bearing strata.  7.Any substantial change of mechanical
equipment associated with the Well after its completion shall be subject to the
approval of Sonangol.  35


Article 23 (Records, reports and inspection)  1.Contractor shall prepare and, at all
times while this Agreement is in force, maintain accurate and current records
of its activities and operations in the Contract Area and shall keep all
information of a technical, economic, accounting or any other nature, developed
for the conduct of Petroleum Operations. Such records shall be organized in
such a way as to allow for the prompt and complete ascertainment of costs and
expenditures.  2.The records and information referred to
in the previous paragraph shall be kept at Operators office in Luanda.  3.Sonangol, in exercising its activities
under the terms of this Agreement, shall have the right to free access, upon
prior notice to Contractor, to all data referred to in paragraph 1 above. Contractor
shall deliver to Sonangol, in accordance with applicable regulations or as
Sonangol may reasonably request, information and data concerning activities and
operations under this Agreement. In addition, Contractor shall provide Sonangol
with copies of any and all data related to the Contract Area, including, but
not limited to, geological and geophysical reports, logs and Well surveys,
information and interpretation of such data and other information in Contractors
possession.  4.Contractor shall save and keep in the
best condition possible a representative portion of each sample of cores and
cuttings taken from Wells as well as samples of all fluids taken from
Exploration Wells, and deliver same to Sonangol or its representatives in the
manner directed by Sonangol.  5.All samples acquired by Contractor for
its own purposes shall be considered available for inspection at any convenient
time by Sonangol or its representatives.  6.Contractor shall keep the aforementioned
samples for a period of thirty-six (36) Months or, if before the end of such
period, Contractor withdraws from the Contract Area, then until the date of
withdrawal. Up to three (3)  36


Months
before the end of the aforementioned period, Contractor shall request
instructions from Sonangol as to the destination for such samples. If
Contractor does not receive instructions from Sonangol by the end of such three
(3) Month period then Contractor is relieved of its responsibility to keep
such samples.  7.If it is necessary to export any rock
samples outside Angola, Contractor shall deliver samples equivalent in size and
quality to Sonangol before such exportation. Sonangol, if it so decides, may
relieve Contractor of said obligation.  8.Originals of records and data can be
exported only with the permission of Sonangol. The original magnetic tapes and
any other data which must be processed or analyzed outside Angola may be
exported only if a comparable record and data is maintained in Angola. Such
exports shall be repatriated to Angola on the understanding that they belong to
Sonangol. Copies of the referred records and data may be exported at any time
and under the terms of the Law.  9.Subject to any other provisions of this
Agreement, Contractor shall permit Sonangols duly authorized representatives
and employees to have full and free access to the Contract Area at all
convenient times with the right to observe the Petroleum Operations being
conducted and to inspect all assets, records and data kept by Contractor.
Sonangols representatives and employees, in exercising the aforementioned
rights, shall not interfere with Contractors Petroleum Operations. Contractor
shall grant to said Sonangols representatives and employees the same facilities
in the camp as those afforded to its own employees of similar professional
rank.  10.Without prejudice to Article 33.2,
Sonangol is responsible for any claims of their representatives or employees
resulting from the exercise of the rights granted under this Article. Sonangol
is also responsible and shall indemnify Contractor against all damages and
claims resulting from the gross negligence or willful misconduct of any of
Sonangols representatives or employees while performing their activities in
the  37


Contract Area, in Contractors offices or in
other Contractors facilities directly related to the Petroleum Operations.  Article 24 (Contractors obligation to purchase
Sonangols Petroleum)  1.Sonangol shall have the right to require
Contractor to purchase any part of Sonangols share of production under normal
commercial terms and conditions in the international petroleum industry and at
the Market Price in force at the time the Crude Oil is lifted as established in
the Petroleum Activities Tax Law.  2.The right referred to in the preceding
paragraph shall be exercised in accordance with the following rules:  (a)no later than six (6) Months prior
to the start of a Quarter, Sonangol shall give written notice to Contractor
that it requires Contractor to purchase a specified quantity of Crude Oil to be
lifted progressively over a period of two (2) consecutive Quarters;  (b)Contractors obligation to purchase Crude
Oil from Sonangol will continue mutatis mutandis
from Quarter to Quarter after the initial two (2) consecutive Quarters
until and unless Sonangol gives Contractor written notice of termination which,
subject to the above mentioned minimum period, shall take effect six (6) Months
after the end of the Quarter in which such written notice was given.  Article 25 (Other rights and obligations related to
Crude Oil disposal)  1.Sonangol shall have the right upon six (6) Months
prior written notice to buy from Contractor Crude Oil from the Contract Area
equivalent in value to the Petroleum Income Tax due by Contractor to the
Ministry of Finance. The referred purchase of Crude Oil by Sonangol shall be at
the Market Price applicable to such Crude Oil. Sonangol shall provide
Contractor with not less than three (3) Months advance written notice of
its intention to cease to exercise its right under this paragraph.  38


2.Payment by Sonangol to Contractor for
each purchase of Crude Oil pursuant to the provisions of paragraph 1 above
shall be made not later than two (2) working days before the due date of
payment by Contractor of the relevant amount of Petroleum Income Tax due and
payable by Contractor to the Ministry of Finance. Any unpaid amount, plus
interest as specified in Annex C to this Agreement, shall be paid in kind to
Contractor by Sonangol out of its next Crude Oil entitlement, valued at the
Market Price applicable to such Crude Oil.  Article 26
(Unitization and joint Development)  1.The rules on unitization and joint
development are contained in Article 64 of the Petroleum Activities Law.  2.Any joint Development and Production
carried out under this Article shall not prejudice the provisions of Article 28,
Article 30.2.(e) and Article 30.11.(b).  3.In the event that a unitization process
affects the whole or part of an obligation which Contractor must fulfil within
a certain time period under the Agreement, such time period shall be extended
by the time elapsed between Sonangols written notice under paragraphs 1 and 2
above and the date of mutual agreement on the plan of the related joint
Development. This extension shall not be more than twelve (12) Months, or such
longer period as agreed by Sonangol.  Article 27
(Transfer and abandonment of assets)  1.Within sixty (60) days of termination of
the Agreement or the date of abandonment of any part of the Contract Area,
Contractor must hand over to Sonangol, in a good state of repair and operation,
and in accordance with a plan approved by Sonangol, all of the infrastructures,
equipment and all Wells which, within the area to which the expiry,
cancellation or relinquishment refers, are in production or are capable of
producing, or are being used, or may be used, in injection, together with  39


all
casing, piping, surface or sub-surface equipment and facilities acquired by
Contractor for the conduct of Petroleum Operations, except those as are being
used for Petroleum Operations elsewhere in the Contract Area.  2.If Sonangol so requires, Contractor shall
proceed to correctly abandon the Well or Wells in accordance with Articles 75.4
and 75.5 of the Petroleum Activities Law.  3.The requirement provided for in the
previous paragraph shall be made by Sonangol no later than one hundred and
eighty (180) days before the termination of the Agreement or the estimated date
of abandonment of any part of the Contract Area.  4.If the request referred to in paragraph 2
above is made, Sonangol shall make the required funds available to Contractor
from the amounts paid to Sonangol pursuant to Article 3(e) of Annex
C. In the event the amounts paid by Contractor are insufficient to cover the
abandonment costs, Sonangol and Contractor shall agree on the method of
covering the additional costs.  5.After having carried out the abandonment
of the Wells and related assets, or in the case of Sonangol requesting such
abandonment and not placing at the disposal of Contractor the funds referred to
in paragraph 4, or after Contractor carries out the handing over of the
equipment and Wells to Sonangol under the terms of paragraph 1, Contractor will
have no further liability in relation to the same, except in cases of gross
negligence or willful misconduct and, without prejudice to the provisions of
the Agreement still in force after the termination of the Agreement, Sonangol
shall indemnify and defend Contractor in case of any claims related to such
Wells and assets.  Article 28
(Natural Gas)  1.Contractor shall have the right to use in
the Petroleum Operations, Associated Natural Gas produced from the Development
Areas.  40


2.Associated Natural Gas surplus to the
requirements defined in the preceding paragraph shall be made available free to
Sonangol in Angola wherever Sonangol so determines. If Sonangol so elects and
if possible, Sonangol shall give notice in writing to Contractor prior to the
final approval of the General Development and Production Plan in connection
with such Associated Natural Gas. Pipeline costs and the costs of
transportation of such Associated Natural Gas shall be considered costs of
Petroleum Operations for the purposes of the Petroleum Activities Tax Law.  3.If Non-Associated Natural Gas is
discovered within the Contract Area, Sonangol will have the exclusive right to
appraise, develop and produce such Non-Associated Natural Gas for its own
account and risk under conditions to be mutually agreed with Contractor. If
Sonangol so determines and if agreed to by Contractor within a time period
specified by Sonangol, the discovery of Non-Associated Natural Gas shall be
developed jointly by Sonangol or one of its Affiliates and Contractor.  Article 29
(Operations for Sonangols account - sole risk)  1.Operations which may be the object of a
sale risk notice from Sonangol under this Article shall be those
involving:  (a)penetration and testing geological
horizons deeper than those proposed by Contractor to the Operating Committee in
any Exploration Well being drilled which has not encountered Petroleum,
provided the Operator has not commenced the approved operations to complete or
abandon such Well;  (b)penetration and testing geological
horizons deeper than those proposed by Contractor to the Operating Committee in
any Exploration Well being drilled which has encountered Petroleum, provided
that in respect to such Well the Operating Committee has agreed that Sonangol
may undertake the sole risk operations,  41


and
the Operator has not commenced the approved operations to complete or abandon
such Well;  (c)the drilling of an Exploration Well other
than an Appraisal Well, provided that not more than two (2) such Wells may
be drilled in any Year;  (d)the drilling of an Appraisal Well which
is a direct result from a successful Exploration Well, whether or not such
Exploration Well was drilled as part of a sole risk operation;  (e)the Development of any discovery which is
a direct result from a successful Exploration Well and/or Appraisal Well sole
risk operation which Contractor has not elected to undertake under paragraph 3
of this Article;  (f)the Development of a Petroleum deposit
discovered by a successful Exploration Well and/or Appraisal Well carried out
by Contractor as part of a work plan approved by the Operating Committee, if
thirty-six (36) Months have elapsed since such successful Well was completed
and Contractor has not commenced the Development of such deposit.  2.Except as to those described under
paragraphs 1(a) and 1(b), none of the operations described in paragraph 1
of this Article may be the object of a sole risk notice from Sonangol
until after the operation has been proposed in complete form to the Operating
Committee and has been rejected by the Operating Committee. To be in complete
form as mentioned above, the proposal for conducting any of the above
mentioned operations presented by Sonangol shall contain appropriate
information such as location, depth, target geological objective, timing of
operation, and where appropriate, details concerning any Development plan, as
well as other relevant data.  3.If the conditions referred to in
paragraph 2 have been met, Sonangol may, as to any operation described in
paragraph 1, give a written sole risk  42


notice
to Contractor and the latter shall have the following periods of time, from the
date of receipt of such sole risk notice within which to notify Sonangol
whether or not it elects to undertake such proposed operation by including  it as a part of the Petroleum Operations:  (a)as to any operations described in
paragraphs 1(a) and 1(b), seven (7) days or until commencement of the
deepening operations, whichever occurs last;  (b)as to any operations described in
paragraphs 1(c) and 1(d), three (3) Months;  (c)as to any operations described in
paragraphs 1(e) and 1(f), six (6) Months.  4.If Contractor elects to include as part
of the Petroleum Operations the operation described in the sole risk notice
within the appropriate periods described in paragraph 3 above, such operation
shall be carried out by the Operator within the framework of the Petroleum
Operations under this Agreement, as a part of the current Work Plan and Budget
which shall be considered as revised accordingly.  5.If Contractor elects not to undertake the
operation described in the sole risk notice, subject to the provisions of
paragraph 6 below, the operation for the account of Sonangol shall be carried
out promptly and diligently by Contractor at Sonangols sole risk and expense,
provided that such operation may only be carried out if it does not conflict or
cause hindrance to Contractors obligations or any operation, or delay existing
work plans, including any Approved Work Plan and Budget. With respect to
operations referred to in paragraphs 1(c) and 1(d) such operations
shall begin as soon as a suitable rig is available in Angola. Sonangol and
Contractor shall agree on a method whereby Sonangol shall provide all necessary
funds to Operator to undertake and pay for the operations carried out at
Sonangols sole risk and expense.  43


6.Sonangol shall elect to have the
operations carried out at Sonangols sole risk and expense referred to in
paragraphs 1(e) and 1(f) carried out either by itself, by Contractor
for a mutually agreed fee or by any third party entity contracted to that
effect by Sonangol, provided that such operations may be carried out only if
they will not conflict with or cause hindrance to Contractors obligations or
any Petroleum Operations, or delay existing work plans, including the Approved
Work Plan and Budget. Before entering into any agreement with a third party for
the aforementioned purpose, Sonangol shall notify Contractor in writing of such
proposed agreement. Contractor shall have forty-five (45) days after the
receipt of the aforementioned notification to decide if it exercises its right
of first refusal with respect to the proposed agreement and to perform the sole
risk operations under the same terms and conditions proposed by the third
party.  7.If Sonangol wishes to use in the sole
risk operations assets which are used in the Petroleum Operations, it shall
give written notice to the Operating Committee stating what assets it wishes to
use, provided that the utilization of such assets may not prejudice the
Approved Work Plans and Budgets.  8.If, in accordance with the provisions of
paragraph 4, Contractor decides to undertake any works as foreseen in paragraph
1(d), it shall pay Sonangol in cash and within thirty (30) days of the date in
which it exercises such right, an amount equal to all of the costs incurred by Sonangol
in the relevant sole risk operations conducted in accordance with paragraphs
1(a), 1(b) and 1(c) which directly led to the works foreseen in
paragraph 1(d).  9.In addition to the amount referred to in
the preceding paragraph, Sonangol will also be entitled to receive from
Contractor an additional payment equal to two hundred percent (200%) of the
costs referred to in paragraph 8. 8uch additional payment shall be made in cash
and within ninety (90) days of the date on which Contractor exercises its right
referred to in the preceding paragraph.  44


10.If, in accordance with the provisions of
paragraph 4, Contractor decides to undertake any works foreseen in paragraph
1(e), it shall pay Sonangol in cash, within thirty (30) days of the date in
which it exercises such right, an amount equivalent to the value of total costs
incurred by Sonangol in the sole risk operations which directly led to the
works foreseen in paragraph 1(e), less any payment made in accordance with
paragraph 8 above.  11.If the operations described in paragraphs
1(e) and 1(f) are conducted at Sonangols sole risk and expense,
Sonangol shall receive one hundred percent (100%) of the Petroleum produced
from the deposit developed under such terms.  12.The Petroleum received by Sonangol under
paragraph 11 shall be valued at the Market Price calculated under the Petroleum
Activities Tax Law.  Article 30
(Operating Committee)  1.The Operating Committee is the body
through which the Parties coordinate and supervise the Petroleum Operations and
shall be established within thirty (30) days of the Effective Date.  2.The Operating Committee has, among
others, the following functions:  (a)to establish policies for the Petroleum
Operations and to define, for this purpose, procedures and guidelines as it may
deem necessary;  (b)to review and, except as provided in
paragraph 12, approve all Contractors proposals on Work Plans and Budgets
(including the  45


location
of Wells and facilities), the General Development and Production Plan,
Production Plans and Lifting Schedules;  (c)to verify and supervise the accounting of
costs, expenses and expenditures and the conformity of the operating and
accounting records with the rules established in this Agreement, in Annex
C hereof, in the Petroleum Activities Tax Law, and in other applicable
legislation;  (d)to establish technical and other
committees whenever it deems necessary;  (e)in general, to review and, except as
otherwise provided in this Agreement, to decide upon all matters which are
relevant to the execution of this Agreement, it being understood, however, that
in all events the right to declare a Commercial Discovery is reserved
exclusively to Contractor.  3.The Operating Committee shall obey the
clauses of this Agreement and it cannot decide on matters that by Law or this
Agreement are the exclusive responsibility of the National Concessionaire or
Contractor.  4.The Operating Committee shall be composed
of four (4) members, two (2) of whom shall be appointed by Sonangol.
The other two (2) members shall be appointed by Contractor. The Operating
Committee meetings cannot take place unless at least three (3) of its
members are present.  5.The Operating Committee shall be headed
by a Chairman who shall be appointed by Sonangol from among its representatives
and who shall be responsible for the following functions:  (a)to coordinate and orient all the
Operating Committees activities;  (b)to chair the meetings and to notify the
Parties of the timing and location of such meetings, it being understood that
the Operating Committee shall meet whenever requested by any Party;  46


(c)to establish the agenda of the meetings,
which shall include all matters which the Parties have asked to be discussed;  (d)to convey to each Party all decisions of
the Operating Committee, within five (5) working days after the meetings;  (e)to request from Operator any information
and to make recommendations that have been requested by any member of the
Operating Committee, as well as to request from Contractor any advice and
studies whose execution has been approved by the Operating Committee;  (f)to request from technical and other
committees any information, recommendations and studies that he has been asked
to obtain by any member of the Operating Committee;  (g)to convey to the Parties all information
and data provided to him by the Operator for this effect.  6.In the case of an impediment to the
Chairman of the Operating Committee, the work of any meeting will be chaired by
one of the other members appointed by him for the effect.  7.At the request of any of the Parties, the
Operating Committee shall prepare and approve, according to paragraph 11(c) of
this Article, its internal regulations, which shall comply with the rules established
in this Agreement.  8.At the Operating Committee meetings
decisions shall only be made on matters included on the respective agenda,
unless, with all members of the Operating Committee present, they agree to make
decisions on any matter not so included on the agenda.  9.Each member of the Operating Committee
shall have one (1) vote and the Chairman shall in addition have a tie
breaking vote.  47


10.Except as provided for in paragraph 11,
the decisions of the Operating Committee are taken by simple majority of the
votes present or represented, it being understood that any member may be
represented by written and duly signed proxy held by another member.  11.Unanimous approval of the Operating
Committee shall be required for:  (a)approval of, and any revision to proposed
Exploration Work Plans and Budgets prepared after the first Commercial
Discovery;  (b)approval of, and any revision to the proposed
General Development and Production Plan, the Production Plan, Lifting Schedule
and Development and Production Work Plans and Budgets;  (c)establishment of rules of procedure
for the Operating Committee;  (d)establishment of a management policy for the
carrying out of responsibilities outlined in paragraph 2 of this Article,
namely the procedures and guidelines as per paragraph 2(a) above.  12.Prior to the time of declaration of the
first Commercial Discovery, the Operating Committee shall review and give such
advice as it deems appropriate with respect to the matters referred to in
paragraph 2(e) of this Article and with respect to Contractors
proposals on Exploration Work Plans and Budgets (including the location of
Wells and facilities). Following such review, Contractor shall make such
revision of the Exploration Work Plans and Budgets as Contractor deems
appropriate and shall transmit same Work Plans and Budgets to Sonangol, so that
they may be submitted to approval of the Ministry of Petroleum under the
Petroleum Activities Law.  13.The General Development and Production
Plan, the Development and Production Work Plans and Budget, together with the
Production Plans approved by the Operating Committee, shall be sent by the same
to  48


Sonangol,
for submission to the Ministry of Petroleum for approval under the Petroleum
Activities Law.  14.Minutes shall be made of every meeting of
the Operating Committee and they shall be written in the appropriate record
book and signed by all members.  15.The draft of the minutes shall be
prepared, if possible, within two (2) working days of the meeting being
held and copies of it shall be sent to the Parties within the following five (5) working
days, and their approval shall be deemed granted if no objection is raised
within ten (10) working days of the date of receipt of the draft minutes.  Article 31
(Ownership of assets)  1.Physical assets purchased by Contractor
for the implementation of the Work Plans and Budgets become the property of
Sonangol when purchased in Angola or, if purchased abroad, when landed in
Angola. Such physical assets should be used in Petroleum Operations, provided,
however, Contractor is not obligated to make any payments for the use of such
physical assets during the term of this Agreement. This provision shall not
apply to equipment leased from and belonging to third parties or any entity
comprising Contractor.  2.During the term of this Agreement,
Contractor shall be entitled to full use in the Contract Area, as well as in
any other area approved by Sonangol, of all fixed and movable assets acquired
for use in the Petroleum Operations without charge to Contractor. Any of
Sonangols assets which Contractor agrees have become surplus to Contractors
then current and/or future needs in the Contract Area may be removed and used
by Sonangol outside the Contract Area, without any effect on the tax treatment
available to Contractor. Any of Sonangols assets other than those considered
by Contractor to be superfluous shall not be disposed of by Sonangol except
with agreement of Contractor so long as this Agreement is in force.  49


Article 32
(Property and confidentiality of data)  1.All information of a technical nature
developed through the conduct of the Petroleum Operations shall be the property
of Sonangol. Notwithstanding the above, and without prejudice to the provisions
of the following paragraphs, Contractor shall have the right to use and copy,
free of charge, such information for internal purposes.  2.Unless otherwise agreed by Sonangol and
Contractor, while this Agreement remains in force, all technical, economic,
accounting or any other information, including, without limitation, reports,
maps, logs, records and other data developed through the conduct of Petroleum
Operations, shall be held strictly confidential and shall not be disclosed by
any Party without the prior written consent of the other Party hereto;
provided, however, that either Party may, without such approval, disclose the
aforementioned data:  (a)to any Affiliate or potential assignee of
such Party upon such Affiliate or potential assignee giving a similar
undertaking of confidentiality;  (b)in connection with the arranging of
financing or of a corporate re-organization upon obtaining a similar
undertaking of confidentiality;  (c)to the extent required by any applicable
law, regulation or rule (including, without limitation, any regulation or rule of
any regulatory agency, securities commission or securities exchange on which
the securities of such Party or of any such Partys Affiliates are listed);  (d)to employees, consultants, contractors or
other third parties as necessary in connection with Petroleum Operations upon
obtaining a similar undertaking of confidentiality.  3.The obligation of confidentiality of the
information referred to in paragraph 2 above shall continue for ten (10) Years
after the termination of the  50


Agreement
or such other period as agreed to in writing between the Parties.  4.In the event that any entity constituting
Contractor ceases to hold an interest under this Agreement, such entity will
continue to be bound by the provisions of this Article.  5.To obtain offers for new Petroleum
Exploration and Production agreements. Sonangol may, upon obtaining the prior
written agreement of Contractor, disclose to third parties geophysical and
geological data and information, and other technical data (the age of which is
not less than one (1) Year) or Contractors reports and interpretations
(the age of which is not less than five (5) Years) with respect to that
part or parts of the Contract Area adjacent to the area of such new offers.  6.The confidentiality obligation contained
in this Article shall not apply to any information that has entered the
public domain by any means that is both lawful and does not involve a breach of
this Article.  Article 33
(Responsibility for losses and damages)  1.Contractor, in its capacity as the entity
responsible for the execution of the Petroleum Operations within the Contract
Area, shall be liable to third parties to the extent provided under the Law for
any losses and damage it may cause to them in conducting the Petroleum
Operations and shall indemnify and defend Sonangol with respect thereto,
provided that Sonangol has given timely notice of the claims and opportunity to
defend.  2.Contractor is also liable, under the
terms of the Law, for losses and damage which, in conducting the Petroleum
Operations, it may cause to the State and, in case of Contractors gross
negligence or willful misconduct or Serious Fault, to Sonangol.  3.The provisions of the preceding
paragraphs 1 and 2 do not apply to losses and damage caused during Petroleum
Operations for account and risk of Sonangol, for which Sonangol shall indemnify
and defend  51


Contractor,
and in relation to which Contractor shall only be liable for such losses and
damage caused by its gross negligence or willful misconduct or Serious Fault.  4.Subject to Article 20, if Contractor
comprises more than one (1) entity, the liability of such entities
hereunder is joint and several.  Article 34
(Petroleum Operations risk management)  1.Contractor shall comply with what is
established in Decree Nr. 39/01, of June 22 in the respective regulations
contained therein and the relevant Angolan legislation, in respect of
management of the risks of Petroleum Operations.  2.Management of the risks to which persons,
assets and income from Petroleum Operations are exposed shall include all the
activities referred to in Decree Nr. 39/01, of June 22, and other activities
which Sonangol and Contractor may agree to include to ensure an adequate
financial protection.  3.In relation to the risks relating to
Petroleum Operations, contractor shall take out and maintain insurance
contracts in accordance with the specifications and conditions which may be
approved by Sonangol.  4.Contractor shall carry out, in
cooperation with Sonangol, all the risk management activities provided for in the
mentioned Decree Nr. 39/01, of June 22, in accordance with the instructions, rules and
procedures approved by Sonangol.  Article 35
(Recruitment, integration and training of Angolan personnel)  1.Contractor shall comply with what is
established in Law-Decree Nr. 17/09, of June 26, and the regulations, as well
as applicable legislation regarding the recruitment, integration and training
of Angolan personnel.  52


2.In planned, systematic and various ways
and in accordance with the provisions of this Article, Contractor shall train
all its Angolan personnel directly or indirectly involved in the Petroleum
Operations for the purpose of improving their knowledge and professional
qualification in order that the Angolan personnel gradually reach the level of
knowledge and professional qualification held by Contractors foreign workers.  3.Such training shall also include the
transfer of the knowledge of petroleum technology and the necessary management
experience so as to enable the Angolan personnel to use the most advanced and
appropriate technology in use in the Petroleum Operations, including
proprietary and patented technology, know how and other confidential
technology, to the extent permitted by applicable laws and agreements, subject
to appropriate confidentiality agreements.  4.Besides other duties provided for in the
Law, the recruitment, integration and training of Contractors Angolan
personnel shall be included in three (3) Year plans. In this respect,
Contractor undertakes, notably, to:  (a)prepare a draft of the initial plan and
submit it to Sonangol within four (4) Months of the Effective Date;  (b)prepare a proposal for implementation of
the plan and submit it to Sonangol within one (1) Month of the approval of
such plan by the Ministry of Petroleum;  (c)implement the approved plan in accordance
with the directives of the Ministry of Petroleum and Sonaogol, Contractor being
able, in this regard and with the approval of Sonangol, to contract outside
specialists not associated with Contractor to proceed with the implementation
of specific aspects of the subject plan.  5.Contractor agrees to require in its
contracts with subcontractors who work for Contractor for a period of more than
one (1) Year, compliance with requirements for the training of work crews,
to which requirements such  53


subcontractors
are subject by operation of current law. Contractor further agrees to monitor
compliance with the aforementioned obligations.  6.Contractor shall be responsible for the
training costs of Angolan personnel it employs, such costs being deductible in
calculating the taxable income of Contractor. Costs incurred by Contractor for
training programs for Sonangol personnel will be borne in a manner to be agreed
upon by Sonangol and Contractor.  Article 36
(Double taxation and change of circumstances)  1.In order to avoid the international
double taxation of Contractors income, Sonangol shall favourably consider any
amendments or revisions to this Agreement that Contractor may propose as long
as those amendments or revisions do not impact on Sonangol or Angolas economic
benefits and other benefits resulting from the Agreement.  2.Without prejudice to the other rights and
obligations of the Parties under this Agreement, if any change in the
provisions of any Law, decree or regulation in force in the Republic of Angola
occurs subsequent to the signing of this Agreement which adversely affects the
obligations, rights and benefits hereunder, then the Parties shall agree on
such amendments to this Agreement as are necessary to restore the rights,
obligations and forecasted benefits that would have accrued to the Parties if
such change in Law, decree or regulation had not occurred.  Article 37
(Assignment)  1.In accordance with the Law, each of the
entities constituting Contractor may assign part or all of its rights,
privileges, duties and obligations under this Agreement to an Affiliate or,
upon obtaining prior authorization from the Ministry of Petroleum, to a
non-Affiliate.  2.Any third party assignees shall become
holders of the rights and obligations deriving from this Agreement and the Law.  54


3.In the case of assignment to an Affiliate
of the assignor, the latter and the assignee shall remain jointly and severally
liable for strict compliance with the obligations of Contractor set forth in
this Agreement and relevant legislation.  4.The legal documents required to effect
any assignment in accordance with the provisions of this Article must
indicate the participating interest which the third party assignee will have in
the Agreement and shall be submitted for the prior approval of Sonangol.  5.In any of the cases foreseen in this
Article, the obligations of the assignor which should have been fulfilled under
the terms of this Agreement and the applicable legislation at the date the
request for the assignment is made, must have been fully complied with.  6.Sonangol has the right of first refusal
to acquire the participating interest that any member of Contractor intends to
assign to a non-Affiliate, which right should be exercised pursuant to the
following procedures:  (a)the assigning company shall notify
Sonangol of the price and other essential terms and conditions of the proposed
assignment and the identity of the prospective assignee;  (b)within thirty (30) days after receipt of
the notification referred to in the preceding subparagraph, Sonangor shall
notify the assigning company whether Sonangol elects to exercise the right of
first refusal;  (c)if Sonangol does not exercise the right
of first refusal by failing to give the notification referred to in the
preceding subparagraph, then Sonangol shall be deemed to have waived the right
of first refusal in respect of such assignment;  (d)if Sonangol exercises the right of first
refusal by giving the notification referred to in paragraph 6(b) of this
Article, then Sonangol and the assigning company shall execute the  55


assignment
under the terms and conditions contained in the notification referred to in paragraph
6(a) of this Article.  7.In the event of Sonangol not exercising
the right of first refusal referred to in the preceding paragraph, such right
shall pass to the associates of Sonangol which enjoy the status of national
company as provided for in Article 31.3 of the Petroleum Activities Law,
and shall be exercised, duly adapted, under the terms of the procedures set
forth in the sub-paragraphs of the preceding paragraph.  8.Except as otherwise expressly provided in
this Agreement, upon completion of an assignment made by one of the entities
constituting Contractor to a non-Affiliate, such assignor shall have no further
rights or obligations with respect to the part of the participating interest so
assigned.  Article 38
(Termination of the Agreement)  1.Subject to the provisions of the general
law and of any contractual clause, Sonangol may terminate this Agreement if
Contractor:  (a)interrupts Production for a period of
more than ninety (90) days with no cause or justification acceptable under normal
international petroleum industry practice;  (b)continuously refuses with no
justification to comply with the Law;  (c)intentionally submits false information
to the Government or to Sonangol;  (d)discloses confidential information
related to the Petroleum Operations without having previously obtained the
necessary authorization thereto if such disclosure causes prejudice to Sonangol
or the State;  (e)assigns any part of its interests
hereunder in breach of the rules provided for in Article 37;  56


(f)is declared bankrupt by a court of
competent jurisdiction;  (g)does not comply with any final decision
resulting from an arbitration process conducted under the terms of the
Agreement, after all adequate appeals are exhausted;  (h)does not fulfil a substantial part of its
duties and obligations resulting from the Law, the Concession Decree-Law and
from this Agreement;  (i)intentionally extracts or produces any
mineral which is not covered by the object of this Agreement, unless such
extraction or production is expressly authorized or unavoidable as a result of
operations carried out in accordance with accepted international petroleum
industry practice.  2.Sonangol may also terminate the Agreement
if the majority of the share capital of any entity constituting Contractor is
transferred to a non-Affiliate third party without having obtained prior
authorization from Sonangol.  3.If Sonangol considers that one of the
aforesaid causes exists to terminate this Agreement, it shall notify Contractor
in writing in order for it, within a period of ninety (90) days, to remedy such
cause. The said notification shall be delivered by the official method foreseen
in the Law, and by recorded delivery which shall be signed by the entity to
which it is addressed. If, for any reason, this procedure is impossible, due to
a change of address which has not been notified pursuant to this Agreement,
publication of the notice in one of the most read daily newspapers in Luanda
shall be considered to be as valid as if delivered. If, after the end of the
ninety (90) day notice period such cause has not been remedied or removed, or
if agreement has not been reached on a plan to remedy or remove the cause, this
Agreement may be terminated in accordance with the provisions mentioned above.  4.The termination of the Agreement
envisaged in this Article shall occur without prejudice to any rights
which may have accrued to the Party  57


which
has invoked it in relation to the other Party, in accordance with this
Agreement, the Concession Decree-Law or the Law.  5.If any of the entities constituting
Contractor, but not all of them, gives Sonangol due cause to terminate this
Agreement pursuant to the provisions of paragraph 1 or 2 above, then such
termination shall take place only with respect to such entity or entities and
the rights and obligations that such entity or entities hold under this
Agreement, except as provided in the preceding paragraph, shall revert freely
to Sonangol if the other members of the Contractor do not acquire the
participating interest of the entity to whom Sonangol has terminated this
Agreement pursuant this Article.  Article 39 (Confidentiality
of the Agreement)  1.Sonangol and Contractor agree to maintain
the confidentiality of this Agreement; provided, however, either Party may,
without the approval of the other Party, disclose this Agreement:  (a)to any Affiliate or potential assignee of
such Party upon such Affiliate or potential assignee giving a similar
undertaking of confidentiality;  (b)in connection with the arranging of
financing or of a corporate reorganization upon obtaining a similar undertaking
of confidentiality;  (c)to the extent required by any applicable
Law, Decree or regulation (including, without limitation, any requirement or rule of
any regulatory agency, securities commission or securities exchange on which
the securities of such Party may be listed);  (d)to employees, contractors, consultants
and other third parties as necessary in connection with the execution of
Petroleum Operations upon obtaining a similar undertaking of confidentiality.  58


Article 40 (Dispute
resolution)  1.Any disputes, differences or claims
arising out of this Agreement or relating thereto, or relating to the
interpretation, breach, termination or invalidation of the same, shall be
resolved by agreement of the Parties on the basis of principles of good faith
and equity or fair balance of Parties interests.  2.If the disputes, differences or claims
referred to in the preceding paragraph cannot be resolved amicably, they shall
be finally and exclusively settled by arbitration, in accordance with the
UNCITRAL Rules of Arbitration of 1976 as existing on the Effective Date.
The number of arbitrators shall be three (3). One (1) arbitrator shall be
appointed by Sonangol, one (1) by Contractor (acting jointly) and the
third arbitrator, who shall be Chairman of the Arbitration Tribunal, shall be
jointly appointed by Sonangol and Contractor. If an arbitrator is not appointed
within thirty (30) days of the notice from Sonangol or the Contractor is sent
to the other Party requesting that the appointment be made, then such
arbitrator shall be appointed by the President of the International Chamber of
Commerce of Paris.  3.The arbitration tribunal shall decide
according to Angolan substantive law.  4.The arbitration tribunal shall be seated
in Luanda and shall apply Angolan law and the language of the arbitration shall
be Portuguese. The tribunal will make all best efforts to render a final award
within a year of its appointment, although a failure to do so will not
invalidate any award rendered thereafter.  5.The Parties agree that this arbitration
clause is an explicit waiver of any immunity from or against the validity and
enforcement of any award or of any judgment thereon, and any such award shall
be final and binding and enforceable against any Party in any court having
jurisdiction in accordance with its laws.  59


Article 41 (Force
Majeure)  1.Non-performance or delay in performance
by Sonangol or Contractor, or both of them, of any of the contractual
obligations, except an obligation to pay money, shall be excused if, and to the
extent that, such non-performance or delay is caused by Force Majeure.  2.If the Force Majeure restrains only
temporarily the performance of a contractual obligation or the exercise of a
right subject to a time limit, the time given in this Agreement for the
performance of such obligation or the exercise of such right and for the
performance or exercise of any right or obligation dependent thereon, and, if
relevant, the term of the Agreement, shall be suspended until the restoration
of the status quo prior to the occurrence of
the event(s) constituting Force Majeure, it being understood, however,
that such suspension shall apply only with respect to the parts of the Contract
Area which have been affected.  3.Force Majeure, for the purposes of this
Article, shall be any occurrence which is unforeseeable, unavoidable and beyond
the reasonable control of the Party claiming to be affected by such event, such
as, and without limitation, state of war, either declared or not, rebellions or
mutinies, natural catastrophes, fires, earthquakes, communications cuts and
unavoidable accidents.  4.The Party which understands that it may
claim a situation of Force Majeure shall immediately serve notice to the other
Party, and shall use all reasonable efforts to correct the situation of Force
Majeure as soon as possible.  Article 42 (Applicable
Law)  This Agreement shall be governed by and
construed in accordance with Angolan substantive law.  60


Article 43 (Language)  This Agreement has been prepared and signed in
the Portuguese language which shall be the only official version for the
purpose of establishing the rights and obligations of the Parties.  Article 44 (Offices
and service of notice)  1.Sonangol and Operator shall maintain
offices in Luanda, Republic of Angola, where communications and notices
foreseen in this Agreement must be validly served.  2.Sonangols office for the purpose of
serving notice is:  Rua
Raínha Gioga, 29-32, Nr. 20thFloor Luanda República
de Angola  Fax:
244-222-391915  3.Operators office for the purpose of
serving notice is:  CFRA
Advogados Associados Rua
1° Congresso do MPLA Edificio CIF Luanda One - 15thFloor Luanda República
de Angola  Fax:
244-222-399187  4.Sonangol and Contractor shall communicate
to each other in writing and with reasonable notice any change of their offices
referred to in the preceding paragraphs, if such occurs.  Article 45 (Captions
and headings)  Captions and headings are included in this
Agreement for the sole purpose of systematization and shall have no
interpretative value.  61


Article 46 (Effectiveness)  This Agreement shall come into effect on the
Effective Date.  62


IN WITNESS WHEREOF,
the Parties hereto have signed this Agreement in the Portuguese language in
Luanda, this 24thday
of February 2010.   Sociedade Nacional de
  Combustíveis de Angola - Empresa Pública (Sonaogol, E.P.)Represented
  by:
  /s/
  Manuel D. VicenteManuel D. VicenteCIE
  Angola Block 21 Ltd.Represented
  by:
  /s/
  Samuel H. GillespieSamuel H. GillespieSonangol
  Pesquisa e Produção, S.A.Represented
  by:
  /s/
  Gaspar MartinsGaspar MartinsRepresented
  by:
  /s/
  Domingos Lima ViegasDomingos Lima ViegasNazaki
  Oil and Gáz, S.A.Represented
  by:
  /s/
  Zandre CamposZandre CamposAlper
  Oil, LdaRepresented
  by:
  /s/
  Alberto da Fonseca AbrantesAlberto da Fonseca AbrantesRepresented
  by:
  /s/
  Antonio Do Nasamento PegadoAntonio Do Nasamento Pegado  63


Annex A - Description of the Contract
Area  The present Annex is an integral part of the
Agreement.  The area represented in Annex B is delimited by
the lines defined through points 1 to 4 and is included in the following
perimeter:  Starting at the point of interception of the
Parallel 9° 55 00 S and the Meridian 12° 10 00 E, having the point 1 with
the coordinates of Latitude 9° 55 00 S and Longitude 12° 10 00 E. From this
point moving in to the East, following the Parallel 9° 55 00 S until its
interception with the Meridian 12° 40 00 E, having point 2 with the
coordinates of Latitude 9° 55 00 S and Longitude 12° 40 00 E. From this
point moving South, following the Meridian 12° 40 00 E until interception
with the Parallel 10° 05 00 S, having point 3 with the coordinates of
Latitude 10° 05 00 S and Longitude 12° 40 00 E. From this point moving
East, following the Parallel 10o 05 00 S until interception with the Meridian
12° 55 00 E, having point 4 with the coordinates of Latitude 10° 05 00 S
and Longitude 12° 55 00 E. From this point moving South, following the
Meridian 12° 55 00 until interception with the Parallel 10° 25 00 S, having
point 5 with the coordinates of Latitude 10o 25 00 S and Longitude 12o 55 00E.
From this point moving East, following Parallel 10° 25 00 S until
interception with the Meridian 13o 00 00 E, having point 6 with the
coordinates of Latitude 10o 25 00 S and Longitude 13o 00 00 E. From this
point moving South following the Meridian 13o 00 00 E until interception with
the Parallel 10° 30 00 S, having point 7 with the coordinates of Latitude 10°
30 00 S and Longitude 13° 00 00 E. From this point moving West following
the Parallel 10° 30 00 S until interception with the Meridian 12° 10 00 E,
having point 8 with the coordinates of Latitude 10° 30 00 S and Longitude 12°
10 00 E. Finally, from this point moving North until reaching point 1.  The above coordinates identified are made with
reference to the Datum of Camacupa in the elipsoid of Clark, 1880.  64


Annex B - Map of the Contract Area    65


Annex C - Accounting and Financial
Procedures  The present Annex is an integral part of the
Risk Services Agreement dated February 24, 2010 signed between Sonangol, as one
Party, and Cobalt, Sonangol P&P, Nazaki and Alper, as the other Party, as
referred to in Article 2 of said Agreement.  Article 1
(General provisions)  1.1           Definitions  The
terms used in this Annex shall have the same meaning given to them in the
Agreement.  1.2           Purpose,
cost duplication and accounting records  (a)The purpose of the Accounting and
Financial Procedures is to establish some of the rules and principles
that, under the Petroleum Activities Tax Law, should be contractually agreed
upon, setting forth equitable methods for determining the expenditures and
revenues of the Petroleum Operations in accordance with the Petroleum
Operations Information System (SlOP), approved under the Joint Executive
Decree n°. 7/88, of March 26, 1988 (as amended) and generally accepted
accounting principles.  (b)It is the Parties intention that there
shall not be any duplication of any deductible fiscal cost.  (c)Each of the entities of which Contractor
is made up has the responsibility of keeping its own accounting records for the
purpose of satisfying all legal requirements and justifying tax returns or any
other accounting reports requested by any government authority or Sonangol in
respect of the Petroleum Operations.  66


(d)In
order to permit each entity of which Contractor is comprised to keep such
accounting records, Operator shall prepare the Joint Account in such a manner
as to permit the entities in question to satisfy any legal and contractual
obligations to which they are bound.  1.3Units
and exchange rates  (a)The
measurements required under this Annex will be made in metric units and in
Barrels.  (b)All
the accounting books, results, charts, accounting reports and correspondence
shall be written up in Portuguese language and registered in local currency as
required by Law.  (c)If
necessary for the internal use of Contractor, the referred accounting books,
charts of results, and accounting reports and correspondence may also be
written up in other languages, currencies and units of measurement after
obtaining the prior approval of Sonangol.  (d)Exchange
rate fluctuations shall not constitute any gain or loss either for Sonangol or
Contractor.  (e)Operator
shall supply Sonangol with a description of the procedures adopted for the
calculation of the exchange rate differences, as well as the respective
policies for protection from exchange rate fluctuations.  (f)Gains
and losses, realized or unrealized, as a result of foreign exchange
fluctuations will be registered individually and separately in the Joint
Account, under their own heading.  Operator shall supply
Sonangol with a statement taken from the accounting records in respect of the
foreign exchange rate differences calculated each Quarter no later than twenty-one
(21) days after the end of the Quarter in question.  67


(g)Sonangol,
within thirty (30) days of receipt of the statement referred to in the previous
sub-paragraph, shall notify Operator of its position in respect of the amounts
of foreign exchange rate differences accepted as being recoverable.  (h)The
amounts received and expenses incurred in local currency or in United States
dollars shall be converted from local currency into United States dollars or
United States dollars into local currency at the buying and selling rates
published by the Banco Nacional de Angola on the last working day of the Month
prior to the Month in which the amounts were received or paid, or the buying
and selling rates of any other working day as agreed by the Parties.  (i)The
costs of depreciation and amortization will be translated or converted at the
exchange rate prevailing on the date of purchase of the original asset.  1.4Payments  (a)All
payments between the Parties under the Agreement shall be made in United States
dollars or in other currencies as agreed by the Parties, to a bank account
designated by the Party to which payment is due.  (b)Any
payments required under the Agreement or derived from the same, principally
premiums, rents and penalties for non-compliance with the minimum work program,
as well as any payments due to Contractor arising from Sonangols Crude Oil
purchase rights, shall be made within thirty (30) days of the end of the Month
during which the payment obligation was incurred.  (c)If
one of the Parties has not in due time paid the sums due under the Agreement to
the other Party, payment of interest shall be added to such sums due for each
day such sums are overdue at an annual rate equal to the London Inter Bank
Offered Rate (LIBOR) for six (6) Months, as quoted at 11.00 a.m.
London time  68


on the first working day of each Month
that this sum is overdue by the London office of Bank of America, plus two
(2) percentage points.  1.5Financial
and operational audit and Sonangols rights of inspection  (a)The
accounting records maintained by Contractor shall be audited on an annual basis
by an international independent auditing company selected by Sonangol.  The inspection shall be carried out by
the auditors pursuant to generally accepted auditing principles.  (b)Contractor
shall supply all records, documents and explanations requested by the auditors
and allow them to carry out the checks considered necessary within the scope of
their work.  (c)A
copy of each audit report shall be given to the Ministry of Finance, to
Sonangol and to each entity of which Contractor is comprised within six
(6) Months of the end of the respective Year in which the audit was
carried out.  (d)In
addition to the provisions of sub-paragraph (a) above, Sonangol will have
the permanent right, either on its own or through third parties, and upon
giving reasonable notice to Contractor, to carry out operational inspections or
audits considered to be necessary in respect of facilities, studies, accounts,
records, documents, contracts, goods or assets of any kind in such a manner as
to verify compliance with the contractual provisions and the Law. The costs of
such an audit will be borne by Sonangol.  (e)When
carrying out the audits referred to in this Article, the auditors may inspect
and check, upon reasonable notice having been given by Sonangol to Contractor,
all expenditures and revenues connected with Petroleum Operations, such as
accounting books, accounting entries, inventories, vouchers, payment slips,
invoices,  69


contracts or subcontracts of any kind
related to the Agreement and any other documents, correspondence and records of
Contractor necessary for auditing and checking expenditures and revenues.  (f)In
addition, the auditors have the right, in respect of such inspections and
audits, to visit and examine, provided that they give reasonable notice, au
locations, installations, houses, warehouses and offices of Contractor in
Angola and/or any other location provided that they are used for the Petroleum
Operations, including visits to the personnel working on these operations.  (g)The
costs of the examination and inspection of records located outside Angola
without Sonangols authorization will be borne by Contractor and are not
fiscally recoverable.  (h)All
accounting records, sales statements, books and accounts connected with the
Petroleum Operations will be accepted as true and accurate after a period of
twenty-four (24) Months from the end of the Fiscal Year to which they relate,
unless within this same period, Sonangol or any member of Contractor express
any objection to them in writing.  (i)Sonangol
may extend the twenty-four (24) Month period by an additional twelve (12) Month
period upon providing Contractor with written notice of such extension not
later than sixty (60) days prior to the end of the initial twenty-four (24)
Month period.  (j)Notwithstanding
the possibility of the period of twenty-four (24) Months referred to in the
previous subparagraph having expired, if there is any evidence that Operator is
guilty of gross negligence or willful misconduct or Serious Fault in conducting
the Petroleum Operations during the expired periods, Sonangol will have the
right to carry out additional audits in respect of such periods.  70


(k)All
adjustments required as a result of the audits referred to in this Article,
when agreed and approved by the Operating Committee, shall be promptly made in
the Joint Account.  (I)If
any disputes between Sonangol and Contractor in respect of the audits carried
out still remain, these cases of dispute will be entrusted for the purposes of
resolution to an international and independent audit company agreed between the
Parties.  (m)If
any of the Parties disagree with the resolution put forward by the
aforementioned international and independent audit company, the dissenting Party
shall notify the other Party for the case in dispute to be resolved under
Article 40 of the Agreement.  (n)Notwithstanding
the provisions of this Article, all documents herein referred to shall be
available for inspection by Sonangol for five (5) Years after the date of
their being drawn up.  (o)This
Article will neither take the place of nor lessen the legal obligations of
Contractor arising from Angolan fiscal and commercial legislation.  Article 2
(Expenditures and revenues of Contractor)  2.1The
expenditures incurred in respect of the Petroleum Operations shall be debited
to the Joint Account in accordance with the principles set out in the Petroleum
Activities Tax Law, the Agreement and this Annex.  2.2Each
member of Contractor will comply with the accounting procedure for its share of
Crude Oil exports and the respective revenues shall not be credited to the
Joint Account.  2.3The
expenditures shall be classified in accordance with the Petroleum Operations
Information System (SlOP) and will be deductible under Article 10 of the
Agreement.  71


2.4The
services of and fees for the technical/administrative assistance provided by
the Affiliates of Operator or of Sonangol in respect of the Petroleum Operations
shall meet the following conditions for the purposes of their eligibility as
expenses imputable to the Joint Account:  (a)The
categories of technical/administrative services provided by the Affiliates of
Operator or of Sonangol for the running and carrying out of the Petroleum
Operations, are as follows:  (i)Exploration  ·study
of the soil and setting up of drilling equipment;  ·planning
of seismic acquisition;  ·seismic
processing and interpretation;  ·geophysical
analyses;  ·geological
and geochemical studies;  ·rock
and fluid studies;  ·thermodynamic
analyses;  ·interpretation
of diagraphics;  ·reservoir
analysis and studies;  ·health,
safety and environmental technical audits;  ·ocean
current measurements;  ·environmental
studies.  (ii)Development  ·studies
of the subsurface for the purpose of determining the best manner of recovering
hydrocarbons, 2D and 3D geophysics, production  72


geology, modelling and simulation of
deposits as an integral part of economic reservoir exploitation and
conservation;  ·architectural
and engineering studies for the purpose of preparing the file on the
preliminary project and the file on the basic engineering involved;  ·project
management;  ·water
and gas injection studies;  ·specific
studies for the purpose of enhanced recovery and cost control;  ·improvement
of drilling and completion methods and equipment;  ·safety
procedures program;  ·health,
safety and environmental technical audits;  ·environmental
studies.  (iii)Production  ·analysis
of fluids produced;  ·optimization
studies;  ·improvement
and control of equipment;  ·lifting
schedule studies;  ·corrosion
control program and studies;  ·health,
safety and environmental technical audits;  ·environmental
studies.  73


(iv)Administration
and services  ·provision
of data processing services;  ·maintenance
program and inventory control evaluation and studies.  (b)The
above referred list is exhaustive and may only be altered with the approval of
Sonangol.  (c)In
relation to each Fiscal Year, such services shall be set out under their own
heading as an integral part of the Work Plans and Budgets in the Petroleum
Operations Procedures Document, when signed between Sonangol and Contractor
under Article 9 of the Agreement.  (d)At
the time of the presentation of the Work Plans and Budgets, Operator shall also
submit for the approval of Sonangol the estimate of the applicable tariffs for
the budgeted Year, as well as the number of hours and purpose of each work
order.  (e)Those
services, once budgeted, will be subject to specific work orders which shall be
previously approved by Sonangol at the request of Operator, either by means of
a global Master Order for each field or individually, on a case by case
basis.  (f)These
work orders shall contain an estimate of the number of hours necessary for the
carrying out of the services, a reasonable description of the services desired,
the professional ranking of the workers required to perform them and the agreed
tariffs.  (g)Whenever
the actual costs which have been incurred and invoiced are more than ten
percent (10%) or ten thousand United States dollars (U.S.$ 10,000.00) higher,
whichever is greater, than those budgeted, the deductibility of the difference
will be submitted to Sonangol for approval.  74


(h)For
each approved work order, the reference to the technical reports shall be
attached to the respective invoice and the technical report shall be filed by
Operator in Angola. The tariffs and the Partys or its Affiliates debts
relating to work orders shall be certified annually by an independent auditor,
to confirm whether or not they include any element of profit or loss.  (i)The
approval for individual services whose budgeted worth is equal to or more than
thirty thousand United States dollars (U.S.$30,000.00) is only definitive in
respect of each of these services if Sonangol does not put forward any
objections within a period of forty (40) days from the date of receipt of the
request made by Operator.  (j)The
approval for individual services whose budgeted worth is less than thirty
thousand United States dollars (U.S. $30,000.00) is implicit, with, however,
the Operator proceeding according to the description provided in sub-paragraph
(h) above.  (k)With
respect to unforeseen services which, for such reason, are not set out in the
Approved Work Plans and Budgets, such services can only be ordered by Operator
after approval has been granted by Sonangol, irrespective of their estimated
cost.  (I)In
respect of all the technical and administrative services provided by the
Affiliates of Operator not covered by this Article 2.4, an annual global
price (forfait) of one percent (1%) is hereby
agreed and levied on the direct Exploration expenditures incurred during the
Exploration Period.  (m)The
services which are remunerated by the annual global price fixed in
sub-paragraph (I) above shall include, but are not limited to, purchases
and traffic; human resources management; market consultancy, negotiations;
revisions and supervision of contracts; banks; invoicing; credits; accounts;
general services; communications; methods; internal procedures and controls;  75


technological advances resulting from
scientific research in diverse fields; insurance and legal assistance;
assistance to personalities; assistance to agents undergoing training and safety
of operations.  (n)Expenditures
incurred on personnel and associated costs in respect of the personnel of the
Affiliates of Operator or of Sonangol employed on the Petroleum Operations for
short and long-term periods are not included in the technical and
administrative assistance services set out in this Article 2.4 and may be
deductible as personnel expenditures under the terms set out in the Petroleum
Activities Tax Law.  (o)Other
services provided by the Affiliates of Operator and Affiliates of Sonangol
shall be charged at prices which are not higher than the most favourable prices
charged by third parties for similar services.  2.5Expenditures
incurred on materials for Petroleum Operations shall meet the following
conditions for the purposes of their eligibility as expenses imputable to the
Joint Account:  (a)The
amount of such expenditures shall not be greater than the prices generally in
force on the open market for impartial arms-length transactions for
materials and equipment of the same quality available at the time, with due
consideration of freight and other similar costs.  (b)The
materials and equipment necessary for the Petroleum Operations may also be
acquired from Sonangol and its Affiliates and/or any entity constituting
Contractor and their Affiliates, under the following conditions:  (i)The
new materials and equipment, classified as category A, shall be invoiced at the
vendors lowest price or at the international price in force.  76


This amount shall not be greater than the prices
generally in force in normal arms-length sales transactions on the open
market.  (ii)Used materials and equipment which are in
good condition and which can be reused without the need for repair shall be
considered as category B and charged at seventy-five percent (75%) of the
current price of the material and equipment set out in sub-paragraph b(i).  (iii)Materials and equipment which cannot be
considered as category B but which:  (A)after general repair may be used for its
original purpose as good second hand materials and equipment;  (B)may be used for its original purpose but
for which its repair is not recommendable,  shall be classified as category C and charged at fifty
percent (50%) of the current price of material and equipment set out in
sub-paragraph b(i).  (iv)An amount compatible with their use will
be attributed to materials and equipment which cannot be classified as category
B or C.  (v)When the use of materials and equipment
is temporary and their application on the Petroleum Operations does not justify
the reduction in price under the terms indicated in sub-paragraphs b(i) and
b(ii), they will be debited on the basis of their utilization.  (c)Insofar as it is necessary for the
purposes of the prudent, efficient and economic conduct of the Petroleum
Operations, materials and equipment for use on the Petroleum Operations shall
only be  77


purchased or supplied on the basis of a foreseeable
and reasonable use and any excessive accumulation of stock shall be avoided.  (d)In the case of materials and equipment
supplied by Sonangol and its Affiliates and/or any entity constituting
Contractor and their Affiliates, they will not guarantee such materials and
equipment beyond the guarantee of the supplier or manufacturer of such
materials and equipment and in the case of defective materials and equipment,
any adjustments received by Sonangol and its Affiliates and/or any entity
constituting Contractor and their Affiliates from suppliers or from
manufacturers, shall be credited to the Joint Account pursuant to the
provisions of the Petroleum Activities Tax Law.  Article 3
(Calculation and accounting rules for abandonment costs)  For the purposes of
deductibility under the terms of point III of item (d) of number 2 of Article
23 of the Petroleum Activities Tax Law, the calculation and accounting of the
abandonment costs shall be made according to the terms set forth in the
following sub-paragraphs:  (a)no later than ninety (90) days before the
beginning of the Year for which Operator forecasts that the cumulative
production of the Contract Area will lead to a situation in which the
recoverable reserves at the end of the Year in question represent less than:  (i)fifty percent (50%) of the declared
recoverable reserves under fifty (50) million Barrels;  or  (ii)thirty percent (30%) of the declared
recoverable reserves above fifty (50) million Barrels but not more than one
hundred (100) million Barrels;  or  78


(iii)twenty-five percent (25%) of the declared
recoverable reserves above one hundred (100 million) Barrels,  Operator shall provide Sonangol with a technical study
for the alternative possibilities of abandonment and its best calculations of
the estimated abandonment costs of the Contract Area for approval purposes;  (b)the estimate referred in the previous
sub-paragraph shall be up-to-date and inflated by reference to the estimated
date for the execution of the abandonment operations in the Contract Area;  (c)following the approval of Sonangol and
commencing in the Year referred to in sub-paragraph (a) above, Operator
shall calculate the deductible abandonment costs quarterly using the method of
the production unit, in accordance with the following formula:  Quarterly production
  
  Total approved
  abandonment
  
  Abandonment costs
  quarterly(MMBBLS)
  
  
  
  Declared recoverable reserves (MMBBLS) minus the
  cumulative Production up to beginning of the Quarter (MMBBLS)
  
  X
  costs minus the
  amounts paid pursuant to subparagraph(e) below
  
  =
  recoverable
  (d)the amount calculated under sub-paragraph
(c) above shall be imputed to the expenditures for the Contract Area in
accordance with the Petroleum Activities Tax Law;  79


(e)an amount which is equivalent to the
amount calculated in accordance with sub-paragraph (c) above shall be paid
by Contractor to Sonangol not later than thirty (30) days after the end of the
Quarter in question;  (f)no later than ninety (90) days before the
beginning of each subsequent Year, Contractor may submit to Sonangol a revised
estimate of the abandonment costs and declared recoverable reserves which, once
approved by Sonangol, shall be used in the ensuing Year for the purposes of
calculating the recoverable abandonment costs under sub-paragraphs  (c) and (e) above.  Article 4
(Rules on strategic materials reserves)  The materials
classified by Operator as strategic spare parts, which constitute a security
stock for guaranteeing the satisfactory carrying out of the Petroleum
Operations, will be imputed to the Petroleum Operations in accordance with the
following conditions:  (a)Operator shall submit to Sonangol a list
of the materials classified as strategic spare parts, for the purposes of the
approval of the respective classification;  (b)The materials referred to in the previous
sub-paragraph shall be registered in the accounts at the time of their
acquisition under their own sub-heading of Stock as set out in Article 23.2
(f) of the Petroleum Activities Tax Law;  (c)Their imputation for deductibility
established under the Petroleum Activities Tax Law shall be made on the basis
of their specific use for replacement or after four (4) Years starting
from the Year of acquisition, whichever occurs earlier;  (d)In the case of the imputation referred to
in sub-paragraph (c) above where four (4) Years starting from the
Year of acquisition  80


have elapsed, such imputation in respect of materials
not used on the Petroleum Operations shall only be made with the prior and
timely approval of Sonangol.  Article 5
(Registration and evaluation of assets)  5.1Contractor shall keep detailed records of
assets in use on the Petroleum Operations, in accordance with the standard
practices of Exploration and Production activity in the international petroleum
industry and shall provide Sonangol with a full and detailed annual report on
these assets under the Petroleum Operations Information System (SlOP).  5.2At reasonable intervals and at least once
a Year, a full inventory of assets in use on the Petroleum Operations shall be
made by Contractor under the Agreement.  Contractor shall notify Sonangol thirty (30) days in
advance of its intention to carry out the inventory in order for Sonangol to be
in a position to exercise its right to be represented at the time of the
carrying out of the inventory.  5.3The inventory procedures established by Contractor
shall be notified to Sonangol at the same time as Contractor notifies Sonangol
of its intention to carry out the inventories so that that any recommendations
which Sonangol considers necessary in connection with the carrying out of
inventories on assets belonging to it can be taken into account in these
procedures.  5.4Special inventories may be carried out at
the request of the assignor where an assignment takes place under the
Agreement, provided that the costs of carrying out the inventory are borne by
such assignor.  81


Article 6
(Reports)  Contractor shall
prepare and submit to Sonangol the financial, statistical, technical and
personnel reports in accordance with the procedures set out in the Petroleum
Operations Information System (SlOP).  Article 7
(Revision of accounting and financial procedures)  The provisions set
out in this Annex may be amended by mutual agreement of Sonangol and
Contractor, provided that such amendments do not contravene the provisions of
the Petroleum Operations Information System (SlOP). Amendments shall be made
in writing and shall mention the date upon which they become effective.  Article 8
(Contractual conflicts)  In the case of any
conflict between the provisions set out in this Annex and the provisions set
out in the Agreement, the provisions of the Agreement shall prevail.  82


Annex D - Corporate Guarantee  This Annex is an
integral part of the Risk Services Agreement (the Agreement) dated February
24, 2010, entered into by Sonangol, as one Party, and by Cobalt, Nazaki, Sonangol
P&P and Alper, as the other Party, as provided in Article 2 of the
Agreement.  To
Sociedade Nacional de Combustíveis de Angola 
- Empresa Pública (Sonangol, E.P.) 
Rua Raínha Ginga, 29-32, 20th Floor 
Luanda
Angola  , (Parent Company)
represented
by                              
hereby declares that                               
(Local Company) is an Affiliate
of the Parent Company.  Parent Company is
fully aware of the content of the Risk Services Agreement for Block. 21 (the Agreement) entered into by Sociedade
National de Combustiveis de Angola  Empresa Pública (Sonangol, E.P.) (Sonangol) and the Local Company and
others, and of the Concession Decree-Law of the Council of Ministers which
approved the Agreement, the provisions of which it acknowledges and accepts.  Parent Company
unconditionally guarantees to Sonangol the full and prompt fulfilment of the
obligations assumed under the Agreement by Local Company, and its Affiliated
successors or Affiliated assignees, waiving all benefits or rights which may,
under the Law, in any manner, limit, restrict or annul its obligations under
this Guarantee.  This Guarantee
will not be reduced or in any manner affected by any delay or failure of
Sonangol to enforce its rights, nor by bankruptcy or dissolution of Local
Company.  83


This Guarantee
constitutes an integral part of the Agreement entered into by Sonangol and
Local Company and others, as stated and referred to in Article 20 of the
said Agreement.  If Local Company
should fail in fulfilling any of its obligations under the Agreement, and if
Sonangol shall have communicated in writing to Local Company such failure and
the latter has not remedied or taken the necessary steps to remedy such
failures or deficiencies, within a reasonable period of time, considering the
nature of such failures or deficiencies, then Sonangol may demand of Parent
Company the fulfilment of such obligations in default.  Sonangol s demand
must be made by letter delivered to Parent Company which shall include a
description of Local Companys unfulfilled obligations and a statement of the
amount to be paid or the actions to be taken by Parent Company as a consequence
of such default.  Any disputes
arising under this Guarantee shall be settled in accordance with the
arbitration provisions contained in the Agreement.  Parent CompanyBy:Title:Date:  Agreed:  Sociedade Nacional
de Combustí  veis de Angola  - Empresa Pública
(Sonangol, E.P.)  By:Title:Date:  84


Annex E - Financial Guarantee  This Annex is an
integral part of the Risk Services Agreement February 24, 2010, entered into by
Sociedade Nacional de Combustíveis de Angola - Empresa Pública - (Sonangol,
E.P.), as one Party, and by
                      ,
as the other Party, as provided in Article 2 of the Agreement.  To
Sociedade Nacional de Combustíveis de Angola
- Empresa Pública - (Sonangol, E.P.)
Rua Raínha Ginga, 29-32, 20th Floor
Luanda
Angola  We the undersigned
              (Bank),
whose registered office is located at
                    ,
represented by                     ,
hereby issue our irrevocable standby Letter of Credit Nr.
             as
follows:  We hereby
authorize you to draw on us, for the account of
                      ,
with head office in                                            
(Company) up to an aggregate
amount of [          ]
million U.S. Dollars
(USD            )
in accordance with the conditions herein stipulated.  1.Any drafts issued pursuant to this Letter
of Credit shall be accepted to the extent that Company has failed to comply
with its obligations in respect of the Initial Exploration Phase as provided in
Article 14, paragraphs 1 and/or 6, of the Risk Services Agreement for
Block 21 dated
            2009
between yourselves and Company (the Agreement),
which Initial Exploration Phase expires on
            ,
(unless it is extended) as provided in Article 6, paragraph 1, of the
Agreement.  2.Any withdrawals under this Letter of
Credit shall be made prior to
                      
by signed drafts drawn on                      
branch and shall be accompanied by Sonangol E.P.s written statement certifying
that:  85


(a)Company has failed to perform its
aforementioned obligations for which Sonangol has not previously drawn under this
Letter of Credit;  (b)the amount of the claim represents the
obligation which Contractor has failed to perform as specified in Article 14
of the Agreement;  (c)Company has not paid to Sonangol the
amount claimed.  3.Any withdrawal under this Letter of
Credit must also be accompanied by copy of a letter from Sonangol, E.P. to
Company including:  (a)a description of the unfulfilled
obligations and the amount to be paid by Company as a consequence of such
default;  (b)a statement of Sonangols intention to
draw on the Letter of Credit once thirty (30) days have elapsed from the date
of receipt of the letter;  (c)acknowledgment by Company of receipt of
the notification.  4.This Letter of Credit shall be reduced as
provided in Article 20.4 of the Agreement.  Each of such reductions is to be evidenced by written
statement to be submitted by Company to Bank which statement shall indicate
that Sonangol, E.P. has approved the amount of the reduction being requested.  5.This Letter of Credit shall become effective
on             ,
and expire on
            , or at
such earlier time as the total of the authorized reductions equal the original
amount guaranteed hereunder or when the obligations referred to above have been
fulfilled, whichever first occurs.  6.All documents will be submitted to
                    
- branch which shall make the corresponding payments when and if the terms and
conditions stipulated in this Letter of Credit have been totally satisfied.  86


7.This Letter of Credit is subject to the
Uniform Customs and Practice for Documentary Credits, International Chamber of
Commerce Publication No. 600.  This
Letter of Credit shall be governed and interpreted in accordance with
             law and
is subject to the exclusive jurisdiction of the courts
of              .  We hereby
undertake to Sonangol, E.P that all drafts under and in compliance with the
terms of this Letter of Credit will be duly honored if issued and presented for
payment on or before the expiration date, as provided in paragraph 5 of this
Letter of Credit.  Bank  87