**EXHIBIT 10.23**

** **

**THE SECOND AMENDMENT TO THE GAS SALESAGREEMENT**

** **

** **

**BETWEEN**

** **

**PTT PUBLIC COMPANY LIMITED**

** **

**AND**

** **

**CHEVRON OFFSHORE (THAILAND) LIMITED**

** **

**THAIPO LIMITED**

** **

**PALANG SOPHON LIMITED**

** **

**B8/32 PARTNERS LIMITED**

** **

**DATED**

** **

**EFFECTIVE AS OF OCTOBER 1, 2001**

 

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THE SECOND AMENDMENT TO THE GAS SALES AGREEMENT (the “GSA”) datedNovember 7th, 1995 is hereby made effective as of the 1st day of October, 2001.

 

BETWEEN

 

(1)          PTT PUBLIC COMPANYLIMITED, successor in interest to The PETROLEUM AUTHORITY OF THAILAND, havingits principal office at 555 Vibhavadi Rangsit Road, Bangkok 10900 (hereinaftercalled “PTT”); and

 

(2)          THAIPO LIMITED, acompany duly incorporated and existing under the laws of Thailand and having anoffice at 8th floor, M. Thai Tower, All Seasons Place, 87 WirelessRoad, Khwaeng Lumpini, Khet Patumwan, Bangkok 10330 (hereinafter called“THAIPO”); and

 

(3)          CHEVRON OFFSHORE(THAILAND) LIMITED, formerly known as Thai Romo Limited, a company dulyincorporated and existing under the laws of Thailand and having its registeredoffice at 27th Floor, Suntowers Building B, 123 Vibhavadi-RangsitRoad, Kwaeng Ladyao, Khet Jatujak, Bangkok 10900 (hereinafter called“CHEVRON”); and

 

(4)          PALANG SOPHON LIMITED, acompany duly incorporated and existing under the laws of Thailand and havingits registered office at 5th Floor, Bangkok Insurance/Y.W.C.A.Building, 25 Sathon Tai Road, Khwaeng Thungmahamek, Khet Sathon, Bangkok 10120(hereinafter called “SOPHON”); and

 

(5)          B8/32 PARTNERS LIMITED,a company duly incorporated and existing under the laws of Thailand and havingan office at 8th floor, M. Thai Tower, All Seasons Place, 87Wireless Road, Khwaeng Lumpini, Khet Patumwan, Bangkok 10330 (hereinaftercalled “B8/32 PARTNERS”).

 

THAIPO, CHEVRON, B8/32 PARTNERS and SOPHON hereinafter all collectivelycalled “Concessionaire”)

 

WHEREAS:

 

(A) The Concessionaire and PTT have signed a Memorandum ofUnderstanding dated October 17, 2001 stating their agreement to various mattersrelated to the GSA including the following:

 

(i)                                     theterms for PTT to purchase quantities of Sales Gas in excess of one hundred forty five (145) million Cubic Feetper day;

 

(ii)                                  theadjustment of the Heating Value of the Sales Gas;

 

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(iii)                               NaturalGas to be provided by Concessionaire from fields outside the G.S.A. Area; and

 

(iv)                              othermatters such as temperature, Shortfall and possible long-term sales/purchases.

 

(B) The Concessionaire and PTT later agreed to discuss the definitionof “Fy” — the fuel oil price variable, and “I” — the exchange rate.”

 

(C) The Concessionaire and PTT agreed to sign a mutually acceptableamendment to the GSA to more specifically describe what has been determinedpursuant to such Memorandum of Understanding.

 

NOW IT IS HEREBY AGREED AS FOLLOWS THAT THE GSA SHALL BE AMENDED BYTHIS SECOND AMENDMENT TO REFLECT:

 

1. DEFINITIONS

 

Article 1Definitions shall have the following definitions added;

 

•                  “InterimPeriod” shall mean the period of time commencing as of 6:00 a.m. October 1,2001 and ending 6:00 a.m. March 1, 2004.

•                  “SupplementalGas Quantities” shall mean the volumes of Sales Gas purchased by PTT during theInterim Period pursuant to the terms stated in Article XXXII in addition to theGSA Quantities.

•                  “SupplementalDAQ” shall mean the quantities shown in Column 2 of the Sixth Schedule.

•                  “SupplementalShortfall Gas” shall mean the undelivered difference between the Sales Gas, inexcess of GSA Quantities, actually delivered by the Concessionaire on any day,as the same may be reduced pursuant to this Agreement, and the Sales Gas nominatedby PTT pursuant to, and in accordance with, this Article XXXII, as the same maybe reduced pursuant to this Agreement.

•                  “TotalSupplemental DAQ” shall mean the quantities shown in Column 3 of the SixthSchedule.

•                  “GSAQuantities”, solely for the purpose of Article XXXII, shall mean “the greaterof (i) one hundred and forty five (145) million Cubic Feet per day and (ii) thethen current DCQ plus 15%”.

 

2. QUALITY

 

The Second Schedule (Quality Specification) shall be amended asfollows:

 

(a)          The first sentence shallbe amended to read, “Sales Gas delivered under this Agreement shall at theDelivery Point (unless otherwise specified herein)”.

 

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(b)          Item 8 shall be revisedto read as follows:

 

“Heating Value: have a flow-weighted average Gross Calorific Value forthe combined Delivery Points of not less than nine hundred and fifty (950) BTUper Cubic Foot and not more than one thousand two hundred and twenty five(1,225) BTU per Cubic Foot.  However,Sales Gas at the Tantawan Delivery Point shall not have a Gross Calorific Valueof more than one thousand one hundred and fifty (1,150) BTU per Cubic Foot andSales Gas at the Benchamas Delivery Point shall not have a Gross CalorificValue of more than one thousand two hundred and fifty (1,250) BTU per CubicFoot”.

 

(c)           Item 9 shall be revisedto read as follows:

 

“TEMPERATURE:  have atemperature which is not less than sixty (60) degrees Fahrenheit and not morethan one hundred and thirty (130) degrees Fahrenheit until Concessionaireinstalls equipment modifications designed to cool the Sales Gas below onehundred and twenty (120) degrees Fahrenheit during the Year 2002.  At the earlier of placing such modifiedequipment in service or 6 a.m. January 1st 2003, the maximum allowedtemperature shall be reduced from one hundred thirty (130) degrees Fahrenheitto one hundred twenty (120) degrees Fahrenheit”.

 

(d)          The addition of a newItem 10 to read:

 

“10.  PENTANE PLUS COMPONENTS:****contain no more than two(2.0) mole percent of components consisting of pentane plus (C5+) in thecomposite Sales Gas stream for the combined Delivery Points on a flow-weightedaverage basis.”

 

3. PRICE CALCULATION

 

The definitions of the terms “Fy” and “I”contained in Clause 11.5 of the GSA are amended to read:

 

Fy  =                     the arithmeticaverage of the figures last published, Platts Oilgram Price Report date, foreach month of the six month period ending in March and September respectivelyin which the prices have to be adjusted, in United States Dollars per barrel ofthe Singapore Product Postings for Med FO 180cst from Shell Eastern PetroleumPTE Ltd., ESSO Singapore PTE Ltd., Mobil Sales and Supply Corporation, CaltexPetroleum Corporation, BP Oil International and 

 

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Singapore Petroleum Corporation PTE Ltd., aspublished in “Platt’s Oilgram Price Service”.

 

I  =                               theexchange rate, which shall be the arithmetic average of the daily InterbankExchange Rate of Baht per US Dollar published by The Bank of Thailand for theMonth of March 1995.  This rate isagreed to be 24.75826.

 

4. ADDITIONAL GAS RESERVES  

 

The following new Clause 2.5. shall be added:

 

“2.5.                        In addition to Sales Gasdelivered from the Field Reserves, Concessionaire has the right, but not theobligation, to deliver Sales Gas to PTT pursuant to this Agreement produced fromany areas that are not included within the G.S.A. Area including, but notlimited to, the following two fields within the Concession Area:

 

Maliwan Field (Block 8/32)

 

North Jarmjuree Field (Block 8/32)

 

and the fields delineated within Block 9A of Petroleum Concession No.4/2515/8

 

It is agreed that the Proved Natural Gas Reserves, the Probable NaturalGas Reserves and Natural Gas produced from the above noted fields will not beincluded in the calculation of Field Reserves pursuant to Article X.  In addition, Supplemental Gas Quantitieswill not be included in the calculation for determining the ACQ or in the salesand purchases for determining whether the ACQ has been met under the GSA.”

 

5. SUPPLEMENTAL GAS QUANTITIES FOR THE INTERIM PERIOD

 

The Parties agree to add the following Article XXXII to the GSA:

 

“Article XXXIISUPPLEMENTAL GAS QUANTITIES FOR THE INTERIM PERIOD.

 

32.1                           Notwithstandingany provision in this Agreement to the contrary, the          following provisions shall apply to that portion of SalesGas, which are Supplemental Gas Quantities. Such Supplemental Gas  Quantities shall not be considered“Supplementary Gas” under Article  6.17.  Should there be any conflict between theprovisions of this  Article XXXII andthe provisions contained elsewhere in this Agreement the provisions of thisArticle XXXII shall prevail.

 

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32.2                           During the Interim Period,PTT agrees to purchase additional volumes of Sales Gas amounting to at leastfifty-eight decimal two eight Billion Cubic Feet (58.28 Bcf) in accordance withthe Sixth Schedule attached hereto. Such additional gas shall be nominated andpurchased by PTT after it nominates and purchases the GSA Quantities.

 

32.3                           Agreement between theParties regarding the purchase and sale of Supplemental Gas Quantities pursuantto  this Article XXXII shall be for theInterim Period.  The parties agree thatfrom 6 a.m. October 1st, 2001 to 6 a.m. November 1st, 2001, neither PTT’s obligationsunder the provisions of Article 32.4, nor the Concessionaire’s obligationsunder Article 32.7 shall be effective.

 

32.4                           In addition to events whichallow reduced purchases described elsewhere in this Agreement such as ForceMajeure, Supplemental Shortfall or maintenance,  PTT is entitled to take Supplemental Gas Quantities in an amountless than 75% of the Supplemental DAQ for no more than twenty (20) days duringeach Contract Year.

 

32.5                           If at the end of eachContract Year, PTT has not taken Supplemental Gas Quantities at least equal to32.5(i) below reduced by the quantities associated with 32.5(ii) below:

 

(i)                                     75% of the sum ofthe Supplemental DAQ’s for such Contract Year

 

(ii)                                  the Supplemental GasQuantities not taken due to Force Majeure events, Supplemental Shortfall Gasand Concessionaire’s maintenance

 

then Concessionaire shall render to PTT an invoice on or before thethirty-first (31st) of October of such year for the differencebetween 32.5(i) and the sum of 32.5(ii) above and 32.5(iii) below:

 

(iii)                               the Supplemental GasQuantities actually taken during such Contract Year.

 

The formula for such invoice is illustratedbelow:

 

Invoice Amount = 32.5(i) — [32.5(ii) +32.5(iii)]

 

PTT shall pay the Concessionaire on or before the thirtieth (30th)of November of the same year. The invoice shall be calculated by averaging theprices for each Month of the Contract Year that the Interim Period was ineffect as determined under Clause 32.6 for such Supplemental Gas Quantitiesthat are not taken.  Payment by PTT forSupplemental Gas Quantities not taken will provide PTT an

 

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entitlement to take such Supplemental Gas Quantities at a later date inthe same manner as described in Clause 6.9 above.

 

32.6                           The price to be paid by PTTfor the Supplemental Gas Quantities shall be 88% of the Current Price.

 

32.7                           PTT may nominate up to 105%of the Total Supplemental DAQ, as shown in the Sixth Schedule on any day.  If, at any time, Concessionaire fails todeliver enough Sales Gas during the Interim Period so that SupplementalShortfall Gas occurs, then the Concessionaires shall pay to PTT, by means of acredit against the next payment due by PTT to the Concessionaires pursuant tothis Agreement, for the Supplemental Shortfall Gas an amount equal to 12% ofthe Current Price in effect at the time of the Supplemental Shortfall Gasoccurrence times the Supplemental Shortfall Gas.  If the Sales Gas produced in any month is insufficient to fullysatisfy Concessionaire’s Supplemental Shortfall Gas obligations for thepreceding month, the excess Supplemental Shortfall Gas obligations for suchmonth shall be accrued and carried over to the following month, and from monthto month to the end of the Contract Year, any outstanding SupplementalShortfall Gas obligations remaining shall be applied as a credit against PTT’sannual payment obligations under Articles 6.8 or 32.5.  At such time, the excess amounts owed byConcessionaire for such Supplemental Shortfall Gas will be credited against anyamounts owed by PTT to Concessionaires for natural gas not taken by PTTpursuant to Clause 32.5 above in the same manner as such calculations are madefor GSA Quantities of Sales Gas and any additional amounts still owing to PTTafter such offsets shall be paid in cash at that time.  For the avoidance of doubt, the Shortfallprovisions of Article 15.2 will apply to any shortfall between one hundredforty-three decimal seventy-five (143.75) million Cubic Feet per Day and onehundred forty-five (145) million Cubic Feet per Day.

 

32.8                           Thefollowing principles are agreed:

 

(i)  Supplemental Gas Quantitiesshall not be included in the  calculation of DCQ or ACQ pursuant to Article VI or Field Reservespursuant to Article X.

 

(ii)  the provisions of ArticleXV related to Shortfall and Concessionaire’s failure to deliver Sales Gas willremain in effect but shall be applicable only to GSA Quantities of Sales Gas.

 

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(iii)  Supplemental GasQuantities taken by PTT shall not be included in the calculation ofCarry-Forward Gas pursuant to Clause 6.8, nor shall Carry Forward Gas beapplied against PTT’s obligation to take Supplemental Gas Quantities.

 

32.9                           Without accruing anyobligations to pay for Supplemental Shortfall Gas under Article 32.7 orShortfall Gas under Article 15.2 during 2002, the Concessionaire may conductthe preventative maintenance and facilities upgrade work not more than twotimes during the year 2002 and the aggregate period for such maintenance andupgrade work shall not exceed thirty (30) days. Concessionaire shall update PTTfrom time to time of its anticipated period(s) for such maintenance and upgrades.  Concessionaire shall then designate, atleast one week in advance, the date of commencement of the actual period(s)during which it shall claim the benefits of this Article 32.9.

 

32.10                     The Parties will attempt tonegotiate in good faith a mutually acceptable firm long-term sales/purchaseagreement for additional Natural Gas quantities from the Concession Area tocommence upon the termination of the Interim Period.  If the Parties are unable to reach agreement on a long-term salesarrangement for incremental gas supplies, the following options will apply:

 

(i)                                     BothParties may elect to continue sales/purchases of Supplemental Gas Sales on amonth-to-month basis at the latest Supplemental DAQ in effect unless theParties mutually agree to a different Supplemental DAQ with the otherprovisions of this Article XXXII continuing to apply *mutatis mutandis*.

 

(ii)                                  EitherParty may elect to terminate sales/purchases of Supplemental Gas Quantitieswith ninety (90) days prior written notice and sales at the GSA Quantity willcontinue to be in full force and effect.”

 

6. Sixth Schedule — Supplemental Gas Quantities

 

The attached schedule titled “Sixth Schedule — Supplemental GasQuantities” shall be added to the GSA. Such Schedule includes agreed figuresfor the Supplemental DAQ and the Total Supplemental DAQ for each of the periodsthrough February 2004.

 

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7. Concessionaire’s Reservations Applicable to all Natural GasProduction

 

Revise the first line of Clause 7.2. of the GSA by deleting the words“from the Reservoir”.

 

8. Revision of First Amendment

 

Clause 5. of the First Amendment shall be revised and the word“Concessionaire” shall be replaced with “Concession”.

 

9. Conflict 

 

The provisions of this Second Amendment shall constitute an amendmentand supplement to the GSA and the First Amendment.  To the extent that there is any conflict or inconsistency betweenthe terms of the GSA and the First Amendment with the terms of this SecondAmendment, the terms of this Second Amendment shall prevail.

 

10. GSA Remains in Effect

 

Except as amended hereby the GSA and the First Amendment shall      remain in full force and effect.

 

11. Applicable Law

 

This SecondAmendment shall be governed by and construed in accordance with the laws ofThailand.

 

12. Effective Date

 

This SecondAmendment shall be effective from October 1, 2001.

 

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IN WITNESS WHEREOF each party hereto has caused this Agreement to beexecuted by its duly authorized representatives as of the date first writtenabove.

 

 
| PTT Public Company Limited          |   | Witness:                        |
|-------------------------------------|--------|---------------------------------|
|                                |   |                            |
|                                |   |                            |
| /s/  VISET CHOOPIBAN           |   |                            | /s/  PRASERT BUNSUMPUN |   |
| Mr. Viset Choopiban                 |   | Mr. Prasert Bunsumpun           |
| President                           |   | Senior Executive Vice President |
|                                |   | Gas Business Group              |
|                                |   |                            |
|                                |   |                            |
| Chevron Offshore (Thailand) Limited |   | Witness:                        |
|                                |   |                            |
|                                |   |                            |
| /s/  ISIKELI REUBEN TAUREKA    |   |                            | /s/ ANEK  LAWANPRASERT |   |
| Mr. Isikeli Reuben Taureka          |   | Mr. Anek Lawanprasert           |
| Managing Director                   |   |                            |
|                                |   |                            |
|                                |   |                            |
| /s/  EDWARD STUART JOHNSON     |   |                            |   |
| Mr. Edward Stuart Johnson           |   |                            |
| Director                            |   |                            |
|                                |   |                            |
|                                |   |                            |
| Thaipo Limited                      |   | Witness:                        |
|                                |   |                            |
|                                |   |                            |
| /s/  KEVIN HERRMANN            |   |                            | /s/  EDWARD STUART JOHNSON |   |
| Mr. Kevin Herrmann                  |   | Mr. Edward Stuart Johnson       |
| Resident Manager                    |   |                            |
|                                     |        |                                 |  |  |  |  |  |

 

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| Palang  Sophon Limited            |   | Witness:                    |
|-----------------------------------|--------|-----------------------------|
|                              |   |                        |
|                              |   |                        |
| /s/  PRAPAVADEE SOPHONPANICH |   |                        | /s/  KEVIN HERRMANN |   |
| Ms. Prapavadee Sophonpanich       |   | Mr. Kevin Herrmann          |
| Director                          |   |                        |
|                              |   |                        |
|                              |   |                        |
| /s/  ISIKELI REUBEN TAUREKA  |   |                        |   |
| Mr. Isikeli Reuben Taureka        |   |                        |
| Director                          |   |                        |
|                              |   |                        |
|                              |   |                        |
| B8/32 Partners Limited            |   | Witness:                    |
|                              |   |                        |
|                              |   |                        |
| /s/  KEVIN HERRMANN          |   |                        | /s/  PRAPAVADEE SOPHONPANICH |   |
| Mr. Kevin Herrmann                |   | Ms. Prapavadee Sophonpanich |
| Director                          |   |                        |
|                              |   |                        |
|                              |   |                        |
| /s/  ISIKELI REUBEN TAUREKA  |   |                        |   |
| Mr. Isikeli Reuben Taureka        |   |                        |
| Director                          |   |                        |
|                                   |        |                             |  |  |  |  |  |

 

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**SIXTHSCHEDULE**

**QUANTITIES DURING INTERIM PERIOD**

 
| **1**                             |   | **2**                                 |   | **3**                                                                                   |
|-----------------------------------|--------|---------------------------------------|--------|-----------------------------------------------------------------------------------------|
| **Period**                        |   | **Supplemental  DAQ  (MMcf per day)** |   | **Total Supplemental  DAQ  (GSA Quantities plus  Supplemental DAQ)****(MMcf  per day)** |
| October 2001 – November 2001 |   | 55                                    |   | 200                                                                                     |
| December 2001                     |   | 45                                    |   | 190                                                                                     |
| January 2002                      |   | 35                                    |   | 180                                                                                     |
| February 2002                     |   | 45                                    |   | 190                                                                                     |
| March 2002 – September 2002  |   | 55                                    |   | 200                                                                                     |
| **Contract Year 2001  / 2002**    |   | **18.865 Bcf**                        |   |                                                                                    |
| October 2002 – February 2003 |   | 55                                    |   | 200                                                                                     |
| March 2003 – September 2003  |   | 85                                    |   | 230                                                                                     |
| **Contract Year 2002  / 2003**    |   | **26.495 Bcf**                        |   |                                                                                    |
| October 2003 – February 2004 |   | 85                                    |   | 230                                                                                     |
| **Contract Year 2003  / 2004**    |   | **12.920 Bcf**                        |   |                                                                                    |
| **Total**                         |   | **58.280 Bcf**                        |   |                                                                                    |

 

***Note:**** The volumes specified in the column titled“Total Supplemental DAQ” are for illustrative purposes only.  The calculation of Total Supplemental DAQassumes GSA Quantities of 145 MMcf per day. The actual Total Supplemental DAQ may vary depending on the then currentGSA Quantities for the relevant period.*

 

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