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Exhibit 4.65    
    


ORIGINAL  


[****] CONFIDENTIAL TREATMENT REQUESTED  


Lufeng 22 – 1

Field Development  


Amendment No. 5

to

Contract ANS022731  


Between

Statoil (Orient) Inc.

and

Lufeng Development Company  


1







 

Statoil (Orient) Inc. (Company) and Lufeng Development Company (Contractor) have agreed to suspend the Contract ANS 022731 for the Lease Suspension Period described
below. During this Lease Suspension Period Phase II of the Work will be suspended. 


This
Amendment No. 5, will become effective as from the Date of start of Lease Suspension. This Amendment No. 5 will supersede Amendment No. 4 from the same date. 


1      General  


Except
as herein expressly amended, the Contract, together with any previous executed Amendments, shall continue in full force and effect. 



In
the event of any conflict between the provisions in this Amendment and the Contract including previous Amendments, this Amendment shall be given priority. 


Word
and expressions in this Amendment shall have the same meaning as in the Contract. 



2      Amendment to the Contract  


Conditions of Contract  


1.     Definitions  


Daily
Hire Rate shall read now: 


"Daily
Hire Rate means the rate that Contractor shall be paid in accordance with items 5 or 8 in Exhibit B—Compensation." 


"Date
of start of Lease Suspension" means the date the Vessel is leaving the Location for Lease Suspension Period. 


"Lease
Suspension Period" means the period from the Date of start of Lease Suspension up to and including the Date of Lease Resumption during which period the Vessel is disconnected from the mooring
system and has left the Location for repair and lifetime extension and in order to operate on the Xijiang oil field under a separate contract between Contractor and ConocoPhillips China Inc. 


"Date
of Lease Resumption" means the date when the Vessel arrives at the Location and tenders readiness for the start of hook up. 


"Vessel"
means the FPSO excluding the disconnectable mooring system. 


4.     Obligations of Contractor—Main Rules  



Article 4.4
first sentence shall read: 


"Contractor
shall give the highest priority to the Work and Contractor warrants that, except for the Lease Suspension Period, the FPSO is not and will not be assigned to any other work throughout the
Contract Period (including optional extension periods which are exercised) according to Exhibit C." 


16.   Cancellation


Article 16.1
first two sentences of first paragraph shall read: 


"Both
Parties to this Contract may at any time by written notice to the other Party cancel the Contract with subsequent Amendments, provided that the cancellation criteria and periods set forth in
item 9.1 in Exhibit A—Scope of Work shall prevail for the Lease Suspension Period and the extended duration of Phase 11 of the Work, and the day-rates as calculated in
Exhibit A, item 9.1 and Exhibit B 8 shall apply." 


2







 



19.   Payment of the Contract Prices—invoicing and audit



Article 19.2
first sentence shall read: 


"Unless
otherwise prescribed in Exhibit B—Compensation or item 9.1 in Exhibit A—Scope of Work, the following provisions shall apply to invoicing:" 


Article 19.3
first sentence shall read: 


"Unless
otherwise prescribed in Exhibit B—Compensation, Company shall at the last day of the month subsequent to the month of production (M + 1) pay the amount
due to Contractor according to the invoice relating to month of production (M), which satisfies the requirements in Article 19.2 above or item 9.1 in Exhibit A—Scope of
Work." 


26.   Loss of or damage to the FPSO or the SPS


Article 26.1.3,
following sentence shall be added at the end: 


"If
any damage to the Vessel occurs during the Lease Suspension Period, it is Contractor's sole responsibility to carry out necessary measures at its own cost to ensure that the Vessel is ready to
perform the Work as from the Date of Lease Resumption. Contractor is released from this responsibility in case of Force Majeure or if the Vessel should suffer a total loss during the Suspension
Period." 


"If
any damage to the disconnectable mooring system occurs during the Lease Suspension Period, it is Company's sole responsibility to carry out necessary measures at its own cost to ensure that the
disconnectable mooring system is ready to perform the Work as from the Date of Lease Resumption." 


Article 26.1.5,
following sentence shall be added at the end: 


"This
Article 26.1.5 shall not be applied to any measures taken or costs incurred related to any damage to the FPSO occurred during the Lease Suspension Period." 



Add
as a separate clause 26.1.6: 


"Parties
agree that during the Lease Suspension Period the disconnectable mooring system remains at the Location within the care and custody of Company." 


Exhibit A—Scope of Work  


9      Options  


Item
9.1 shall be amended to read as follows: 



"Item
9.1 Extension of time for Phase TI of the Work: 


The
Contract Schedule milestone 2.9, Completion of Phase 11 of the Work is extended by 36 months, effective from and including the day FPSO "Munin" arrives on Location and tenders readiness for
start of hook-up (Date of Lease Resumption and start of DHR). FPSO "Munin" is due to arrive on Location not earlier than March 10th, 2005, but not later than April 15th,
2005." 


(A)  Cancellation  


If
Company elects to cancel the Contract prior to the Date of Lease Resumption, Contractor shall be entitled to reimbursement of all reasonable and documented costs incurred that are specifically
related to repair and lifetime extension work for continued work on Lufeng, as described in Contractor's budget proposal provided to Company June 16th, 2004. 


3







 

The
below wording applies from the Date of Lease Resumption: 


Company
has the right to terminate Phase II of the Work extended pursuant to this Amendment No. 5 as follows: 



	•
	During
year 1 from Date of Lease Resumption, the Contract can be terminated with a 6 month prior notice.



	•
	During
year 2 from Date of Lease Resumption, the Contract can be terminated with a 4 to 5 month prior notice.



	•
	During
year 3 from Date of Lease Resumption, the Contract can be terminated with a 3 month prior notice. 




Following
a notification of termination, either Party has the right to request consultation with the other Party to mutually review opportunities to continue operations, to suspend operations or to
resume operations at a later date. Such consultations shall not effect the notification period, nor the period reserved for the preparation of field abandonment, unless otherwise agreed. 



Any
notification of termination shall be given in writing. Following such notification of termination (on day "d"), Company has the right to continue to operate and produce throughout the
applicable period of notification of termination. The Lufeng 22–1 production will be terminated not later than the last day of the applicable period of notification of termination. During
the applicable period of notification the Daily Hire Rate and the agreed operating cost shall remain payable, irrespective whether Company has instructed Contractor to stop production. 


Following
the termination of production, Company is granted up to 15 days for preparation of field abandonment and sail away. For said period, Contractor shall be paid the Daily Hire Rate of
[****]/day for actual number of days or pro rata thereof plus reasonable and documented operating costs. Any days exceeding that period of 15 days, except in the
case of default on the part of Contractor as defined in the Contract, shall be paid at the Daily Hire Rate of [****]/day or pro rata thereof plus reasonable and documented
operating costs. 


The
Phase TI of the Work shall be terminated at sail away. 


Any
extension of Phase II of the Work exceeding 36 months from Date of Lease Resumption shall be mutually agreed. 


(B)  Daily Hire Rate  



Contractor
shall be paid the rates stated in item 8.1 Exhibit B—Compensation, for providing the FPSO for the duration of the extended period of Phase II of the Work from Date of
Lease Resumption. 


(C)  Invoicing and Payment  


(a)   Invoicing  


Upon
expiry of each production month (in calendar days) Company will produce a Daily Hire Rate calculation statement for subject production month, computed according to Exhibit B
—Compensation, Item 8.1. Company shall submit to Contractor such Daily Hire Rate calculation statement, including supporting documents, not later than the 10th calendar day of the calendar
month subsequent to the production month. Contractor shall, if not disputed, base its commercial invoices on the Daily Hire Rate calculation statement. 


4







 

(b)   Payment  



The
monthly average Daily Hire Rate payable from Company to Contractor shall not exceed [****] per day. 


Any
amount or part thereof, due to Contractor in excess of [****] per day, (monthly average), shall be paid by Company in the first following month where the monthly average of
[****] per day is not exceeded, and provided that the payment for any month shall not exceed an average of [****] per day. The balance
of such delayed payment in excess of [****] per day (monthly average) earned under this extended Phase II of the Work shall be paid in the following month(s) subject to the
above. 


(D)  Reconciliation  


Final
invoice shall be made in accordance with the provisions set forth in Article 19.4 in the "Conditions of Contract." 


Exhibit B—Compensation  


4      Contract Price  



Item
4.4 Daily Hire Rate, add at the end: 


"Notwithstanding
the above, the extended Phase II period from Date of Lease Resumption shall be compensated to Contractor and invoiced according to the provisions set forth in item 9.1 in
Exhibit A—Scope of Work." 


Item
4.5 Standby Rates, add at the end: 


"Notwithstanding
the above, in the extended Phase II period from Date of Lease Resumption the Standby Rate is deleted and replaced with Daily Hire Rate" (as defined in item 8.1 A) in
Exhibit B—Compensation, applicable for Phase II of the Work up to and including termination of production pursuant to Exhibit A—Scope of Work, (item 9.1
A) Cancellation. 


Standby
time during the period granted for preparation of field abandonment and sail away pursuant to Exhibit A—Scope of Work, (item 9.1 A) Cancellation, shall be compensated
per day or part thereof at the daily rate applicable for subject period." 


Item
4.6 Cancellation Fee, add at the end: 


"Notwithstanding
the above, in the extended Phase II period from Date of Lease Resumption, the cancellation provisions set forth in item 9.1 in Exhibit A—Scope of Work shall apply." 


Item
4.8.3 Options, add at the end: 



"Notwithstanding
the above, the option in item 9.1 in Exhibit A—Scope of Work is declared by signature of this Amendment. The basis for payment shall be in accordance with the
provisions in item 9.1 in Exhibit A—Scope of Work and item 8.1 in Exhibit B—Compensation." 


8      OPTIONS  


Item
8.1 shall be amended to read as follows: 



	 
	 	 

	"Item 8.1	 	Extension of time for Phase II of the Work in accordance with item 9.1 in Exhibit A—Scope of Work




5







 

The
following rates shall apply: 



(A)  Daily Hire Rate


The
Daily Hire Rate (DHR) shall be calculated as follows: (see Attachment l.) 


Calculated
Daily Hire Rate (DHR) = A + B 


where: 



	 
	 
	 

	A	=	[****] day or part thereof
	

B	

=	

T × N
	

 	

 	

If B = (equal to) 0, DHR = A.





(B)  Monthly Hire Rate  


The
Monthly Hire Rate (MHR) shall be calculated as follows: 



	 
	 
	 

	MHR	=	DHR(m)
	

where:	

 	

 
	

DHR(m)	

=	

Sum of each DHR over the whole calendar month.





Definitions:  



	 
	 
	 

	D	=	Applicable monthly calendar days.
	

N	

=	

Net quantity of oil produced measured in standard barrels (STB) according to the official Lufeng 22–1 monthly Production report.
	

T	

=	

Is a tariff of [****] per barrel of oil produced. When during this 36 month extension of Phase II of the Work pursuant to this Amendment No. 5, cumulative production exceeds 12 million barrels, the tariff "T" is reduced to [****] per barrel
of oil produced over and above this leve.




6







 
Signed
on the 16-06-2004 



	 
	 	 

	For Company	 	For Contractor
	

Statoil (Orient) Inc.

on behalf of the Participating Parties

in the Lufeng 22 – 1 Field Development	
 	

Lufeng Development Company
	



/s/  INGE A KJøDE      
 Inge A Kjøde
 Managing Director

CNOOC/Statoil Joint Operating Group	

 	



/s/  A. P. VAN DE KORPUT      
 A. P. van de Korput
 Managing Director

Lufeng Development Company
	



/s/  ROALD RIISE      
 Roald Riise
 Chairman of the Board of Directors

Statoil (Orient) Inc	

 	



 




7







 
Amendment No. 5

to

Contract ANS022731

Attachment 1

Daily Hire Rate calculation statement

(Example only)  


8







 

 Daily Hire Rate Calculation Statement  


Production
Month:            Apr-05            Calendar Days            30



Calculated
Daily Hire Rate (DHR) = A + B 



	 
	 
	 

	A	=	[****] day                B = T × N                if B
< = 0, DHR = A
	 	T–	Tariff of [****] per barrel of oil produced
	 	N–	Net quantity of oil produced





Calculation:




	 
	 	 
	 	 

	Sum of each DHR Fixed element (A)	 	[****]	 	[****]
	Sum of each DHR Variable element: (B):	 	 	 	[****]
	DHR (m)	 	 	 	[****]
	

MHR Payable [****]	
 	

 	
 	

[****]
	 	 	 	 	






	Calculation of Balance Brought Forward
 
	 	Balance

	Current Month Balance	 	[****]
	Balance Brought Forward from last month	 	[****]
	Closing Balance Brought Forward	 	[****]
	 	 	





9







 

Calculation
of Daily Hire Rate (DHR) 



	Day
 
	 	Production in Net STB
	 	A

Fixed Element

[****]
	 	B

Viable Element

[****]
	 	A+B

Calculated DHR Total

	1	 	[****]	 	[****]	 	[****]	 	[****]
	2	 	[****]	 	[****]	 	[****]	 	[****]
	3	 	[****]	 	[****]	 	[****]	 	[****]
	4	 	[****]	 	[****]	 	[****]	 	[****]
	5	 	[****]	 	[****]	 	[****]	 	[****]
	6	 	[****]	 	[****]	 	[****]	 	[****]
	7	 	[****]	 	[****]	 	[****]	 	[****]
	8	 	[****]	 	[****]	 	[****]	 	[****]
	9	 	[****]	 	[****]	 	[****]	 	[****]
	10	 	[****]	 	[****]	 	[****]	 	[****]
	11	 	[****]	 	[****]	 	[****]	 	[****]
	12	 	[****]	 	[****]	 	[****]	 	[****]
	13	 	[****]	 	[****]	 	[****]	 	[****]
	14	 	[****]	 	[****]	 	[****]	 	[****]
	15	 	[****]	 	[****]	 	[****]	 	[****]
	16	 	[****]	 	[****]	 	[****]	 	[****]
	17	 	[****]	 	[****]	 	[****]	 	[****]
	18	 	[****]	 	[****]	 	[****]	 	[****]
	19	 	[****]	 	[****]	 	[****]	 	[****]
	20	 	[****]	 	[****]	 	[****]	 	[****]
	21	 	[****]	 	[****]	 	[****]	 	[****]
	22	 	[****]	 	[****]	 	[****]	 	[****]
	23	 	[****]	 	[****]	 	[****]	 	[****]
	24	 	[****]	 	[****]	 	[****]	 	[****]
	25	 	[****]	 	[****]	 	[****]	 	[****]
	26	 	[****]	 	[****]	 	[****]	 	[****]
	27	 	[****]	 	[****]	 	[****]	 	[****]
	28	 	[****]	 	[****]	 	[****]	 	[****]
	29	 	[****]	 	[****]	 	[****]	 	[****]
	30	 	[****]	 	[****]	 	[****]	 	[****]
	31	 	0	 	 	 	 	 	 
	 	 	
	 	
	 	
	 	

	Total	 	[****]	 	[****]	 	[****]	 	[****]
	 	 	
	 	
	 	
	 	






Prepared
by:                        Approved by: 


10







 
Amendment No. 5

to

Contract ANS022731

Attachment 2

Extract from Lufeng 22–1 monthly Production report

(Example only)


11







 
 
 

LF22–1 DAILY OIL PRODUCTION IN MAY 2004    
    



	 
	 	 
	 	 
	 	 
	 	 
	 	Total field downtime

	 
	 	Gross oil (M3/D)
	 	Net oil (STB)

	Date
 

	 	Daily
	 	Monthly
	 	Daily
	 	Monthly
	 	(hours)

	1	 	943	 	943	 	5156	 	5156	 	0.0
	2	 	926	 	1869	 	5063	 	10218	 	0.0
	3	 	948	 	2817	 	5183	 	15401	 	0.0
	4	 	936	 	3753	 	5117	 	20518	 	0.0
	5	 	939	 	4692	 	5134	 	25652	 	0.0
	6	 	943	 	5635	 	5156	 	30808	 	0.0
	7	 	930	 	6565	 	5085	 	35892	 	0.0
	8	 	945	 	7510	 	5167	 	41059	 	0.0
	9	 	934	 	8444	 	5108	 	46165	 	0.0
	10	 	935	 	9379	 	5112	 	51277	 	0.0
	11	 	932	 	10311	 	5095	 	56372	 	0.0
	12	 	931	 	11242	 	5090	 	61642	 	0.0
	13	 	924	 	12168	 	5052	 	66514	 	0.0
	14	 	923	 	13089	 	5046	 	71560	 	0.0
	15	 	934	 	14023	 	5106	 	76667	 	0.0
	16	 	920	 	14943	 	5030	 	81697	 	0.0
	17	 	916	 	15859	 	5008	 	86705	 	0.0
	18	 	928	 	16787	 	5074	 	91778	 	0.0
	19	 	917	 	17704	 	5013	 	96792	 	0.0
	20	 	929	 	18633	 	5079	 	101871	 	0.0
	21	 	917	 	19550	 	5013	 	106884	 	0.0
	22	 	920	 	20470	 	5030	 	111914	 	0.0
	23	 	917	 	21387	 	5013	 	116927	 	0.6
	24	 	995	 	22382	 	5440	 	122367	 	0.0
	25	 	917	 	23299	 	5013	 	127381	 	0.0
	26	 	904	 	24203	 	4942	 	132323	 	0.0
	27	 	902	 	25105	 	4931	 	137255	 	0.0
	28	 	903	 	26008	 	4937	 	142191	 	0.0
	29	 	933	 	26941	 	5101	 	147292	 	0.0
	30	 	873	 	27814	 	4773	 	152065	 	0.0
	31	 	878	 	28692	 	4800	 	156865	 	0.0
	 	 	
	 	 	 	
	 	 	 	

	Total	 	28692	 	 	 	156865	 	 	 	0.6
	 	 	
	 	 	 	
	 	 	 	






Monthly
net crude oil for burning (STB) = 5540 



	 
	 	Gross cum. lifting
	 	Net cum. lifting
	 	Gross stock
	 	Net stock

	04–04	 	32100064	 	32062326	 	345985	 	344953
	05–04	 	32400585	 	32362666	 	196471	 	195939





Note: 


	1.
	Daily
gross oil is the "oil to storage" plus "crude oil for burning" from the Daily Report.



	2.
	Monthly
gross oil is the sum of Daily gross oil.



	3.
	Net
volume in stock is the oil in storage, which is STB at 60F degree and excluded BS&W.



	4.
	Net
cumulative volume lifted is total volume lifted by end of month, which is STB at 60F degree and excluded BS&W.



	5.
	Monthly
net volume lifted is monthly volume lifted in the month, which is STB at 60F degree and excluded BS&W. 


12







 
	Monthly
	net
 volume lifted this month = Net cumulative volume lifted by end of this month—Net cumulative volume lifted by end of last month.



	6.
	Monthly
net production this month =Monthly net volume lifted this month—Net volume in stock at end of last month + Net volume in stock at end of this
month + net crude oil for burning this month.



	7.
	Daily
net oil is allocated daily production, which is STB at 60F degree and excluded BS&W.



	Daily
	net
 oil = Monthly net production X (Daily gross oil/Monthly gross oil).



	8.
	Total
field downtime is the hour during no any production from the total field. 


13











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Exhibit 4.65


LF22–1 DAILY OIL PRODUCTION IN MAY 2004