Unassociated Document


     

    CONTRACT
NUMBER:

     

    AGR/C105/10

     

    Between

     

    SCS
CORPORATION

     

    and

     

    AGR
PEAK WELL MANAGEMENT LIMITED

    


    for

    


    THE
PROVISION OF WELL CONSTRUCTION PROJECT MANAGEMENT SERVICES

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      
        
          
            	
                    

                  	 
      	
                       

                  
	 
      	 
      	 
      
	
                    CONTRACT
      NUMBER: AGR/C*/10

                    between

                    SCS
      CORPORATION

                    and

                    AGR
      PEAK WELL MANAGEMENT LIMITED

                    for

                    PROVISION
      OF WELL CONSTRUCTION

                    PROJECT
      MANAGEMENT SERVICES

                  	 
      	
                    Date:
      November 24, 2010

                  
	 
      	 
      	 
      


          

        

      

    

     

    CONTENTS

     

    
      
        
          
            	
                    SECTION
      I

                  	 	
                    FORM
      OF AGREEMENT

                  
	 
      	 	 
      
	
                    SECTION
      II

                  	 	
                    GENERAL
      AND SPECIAL CONDITIONS OF CONTRACT

                  
	 
      	 	 
      
	
                    SECTION
      III

                  	 	
                    REMUNERATION

                  
	 
      	 	 
      
	
                    SECTION
      IV

                  	 	
                    SCOPE
      OF WORK

                  
	 
      	 	 
      
	
                    SECTION
      V

                  	 	
                    HEALTH
      SAFETY AND ENVIRONMENT

                  
	 
      	 	 
      
	
                    SECTION
      VI

                  	 	
                    ADMINISTRATION
      INSTRUCTIONS

                  
	 
      	 	 
      
	
                    APPENDIX
      A

                  	 	
                    STANDARD
      GENERAL CONDITIONS OF CONTRACT FOR WELL SERVICES

                  
	 	 	 
	
                    APPENDIX
      B

                  	 	
                    HYDROCARBON
      PRODUCTION SHARING CONTRACT, WITH AMENDMENT NO. 1

                  
	 	 	 
	
                    APPENDIX
      C

                  	 	
                    OPERATING
      AGREEMENT DATED JANUARY 28,
2010

                  


          

        

      

    

     

    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

     

    SECTION I - FORM OF AGREEMENT

    


    This
CONTRACT is made between the following parties:-

    


    SCS Corporation of 12012
Wickchester Lane, Suite 475, Houston TX 77079, a wholly owned
subsidiary of Hyperdynamics Corporation of 12012 Wickchester Lane, Suite
475,hereinafter called the COMPANY

    


    and

    


    AGR PEAK WELL MANAGEMENT LIMITED, a company registered in
Scotland (Company No. SC189858) having its registered office at Union Plaza, 1
Union Wynd, Aberdeen AB10 1SL, hereinafter called the CONTRACTOR

    


    WHEREAS:

    


    
      
        	
                1)

              	
                the
      COMPANY wishes that certain WORK shall be carried out, all as described in
      the CONTRACT; and

              


      

    

    


    
      
        	
                2)

              	
                the
      CONTRACTOR wishes to carry out the WORK in accordance with the terms of
      this CONTRACT.

              


      

    

    


    NOW:

    


    The
parties hereby agree as follows:

    


    
      
        	
                1)

              	
                In
      this CONTRACT all capitalized words and expressions shall have the
      meanings assigned to them in this FORM OF AGREEMENT or elsewhere in the
      CONTRACT.

              


      

    

    


    
      
        	
                2)

              	
                The
      following Sections shall be deemed to form and be read and construed as
      part of the CONTRACT:

              


      

    

    


    1.           Section
I                  Form
of Agreement

      
Including Appendix 1 to Section I - Form of
Agreement

    


    2.           Section
II                 a)           LOGIC  (formerly CRINE) General
Conditions of Contract for
Well Services Edition 2 - March 2001

    


      
b)           Special
Conditions of Contract

    


    3.           Section
III                Remuneration

     

    
      
        Section
I

         


      

      
        3

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

    


    4.           Section
IV               Scope
of Work

     

    5.           Section
V                
Health, Safety and Environment

     

    6.           Section
VI               Administration
Instructions

     

    
      7.          
APPENDIX
A         STANDARD
GENERAL CONDITIONS OF CONTRACT FOR WELL SERVICES (i.e. LOGIC (formerly CRINE)
General Conditions
of Contract for Well Services Edition 2 - March
2001

    

     

    
      8.          
APPENDIX
B         HYDROCARBON
PRODUCTION SHARING CONTRACT, WITH AMENDMENT NO. 1

    

     

    
      9.          
APPENDIX
C         OPERATING
AGREEMENT DATED JANUARY 28, 2010

    

     

    The
Sections, including all appendices, shall be read as one (1) document, the
contents of which, in the event of ambiguity or contradiction between Sections,
shall be given precedence in the order listed with the exception that the
Special Conditions of Contract shall take precedence over the General Conditions
of Contract

    


    
      
        	
                3)

              	
                In
      accordance with the terms and conditions of the CONTRACT, the CONTRACTOR
      shall perform and complete the WORK and the COMPANY shall pay the CONTRACT
      PRICE.

              


      

    

    


    
      
        	
                4)

              	
                The
      terms and conditions of the CONTRACT shall apply from the date specified
      in Appendix 1 to this Section I – Form of Agreement which date shall be
      the EFFECTIVE DATE OF COMMENCEMENT OF THE
  CONTRACT.

              


      

    

    


    
      
        	
                5)

              	
                The
      duration of the CONTRACT shall be set out in Appendix 1 to this Section I
      – Form of Agreement.

              


      

    

    


    
      
        	
                6)

              	
                With
      regard to the sub-contracted elements of this CONTRACT, the parties hereby
      agree that the philosophy and/or intent of this CONTRACT is one of pass
      through, whereby the obligations and responsibilities of CONTRACTOR within
      its SUB- CONTRACTS shall pass through to COMPANY in accordance with the
      terms of the SUB-CONTRACTS and this
CONTRACT.

              


      

    

     

    
      
        Section
I

         


      

      
        4

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

    


    The
authorised representatives of the parties have executed the CONTRACT in
duplicate upon the dates indicated below:

    


    
      
        	
                For
      and on Behalf of:

              	
                For
      and on Behalf of:

              
	 
      	 
      
	
                AGR
      PEAK WELL MANAGEMENT LIMITED

              	
                SCS
      CORPORATION

              
	 
      	 
      
	
                Signature:

              	
                Signature:

              
	 
      	 
      
	
                /s/
      I. Burdis

              	
                /s/
      Ray Leonard

              
	 
      	 
      
	
                Name:
      Mr I. Burdis

              	
                Name:
      Ray Leonard

              
	 
      	 
      
	
                Title:
      VP Well Mangement

              	
                Title:
      Chief Executive Officer

              
	 
      	 
      
	
                Date:
      November 30, 2010

              	
                Date:
      November 29, 2010

              


      

    

     

    
      
        Section
I

         


      

      
        5

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

     

    APPENDIX
1 TO SECTION I – FORM OF AGREEMENT

     

    Section
I - Form of Agreement

    


    
      
        
          	
                  Clause
      4

                	
                  The
      EFFECTIVE DATE OF COMMENCEMENT OF THE CONTRACT is 24 NOVEMBER
      2010.

                
	 
      	 
      
	
                  Clause
      5

                	
                  The
      duration of the CONTRACT shall, subject to Clause 23 of the General
      Conditions, be from the EFFECTIVE DATE OF COMMENCEMENT OF THE CONTRACT
      thereafter.  Rates contained herein shall be subject to review
      and agreement between the parties on the 14th
      October 2011 and shall be reviewed and amended as necessary by agreement
      between the parties, to cover any additional WORK and rate movements as
      may be required.

                


        

      

    

    


    Section
II -CRINE General Conditions of Contract

    


    
      
        
          	
                  Clause
      3.1(a)

                	
                  The
      COMPANY REPRESENTATIVE is:

                
	 
      	 
      
	 
      	
                  Michael
      Palmer

                
	 
      	 
      
	 
      	
                  The
      CONTRACTOR REPRESENTATIVE is:

                
	 
      	 
      
	 
      	
                  Mr
      I. Burdis – VP Well Management

                
	 
      	 
      
	
                  Clause
      4.5(b)

                	
                  Materials
      and Equipment with no implied warranties etc. - TBA

                
	 
      	 
      
	
                  Clause
      5.1

                	
                  The
      COMPANY designated heliport is: TBA as agreed between the COMPANY and the
      CONTRACTOR

                
	 
      	 
      
	 
      	
                  The
      COMPANY designated supply base is: TBA as agreed between the COMPANY and
      the CONTRACTOR

                
	 
      	 
      
	
                  Clause
      10.1

                	
                  The
      defects notification periods are:

                
	 
      	
                  Seven
      (7) days from completion of the element of the WORK defectively performed
      but in any event at least twenty four (24) hours prior to rig departure
      from the WELLSITE.

                
	 
      	 
      
	
                  Clause
      10.2

                	
                  Limit
      of liability for defective WORK is: One million pounds sterling
      (£1,000,000)

                


        

      

    

     

    
      
        Section
I

         


      

      
        6

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

     

    
      
        
          
            	
                    Clause
      10.4

                  	
                    Limit
      of liability for additional costs:

                  
	 
      	 
      
	 
      	
                    CONTRACTOR
      shall not be liable for additional costs.

                  
	 
      	 
      
	
                    Clause
      13.5

                  	
                    Limit
      of liability for additional costs for suspension:

                  
	 
      	 
      
	 
      	
                    CONTRACTOR
      shall not be liable for additional costs.

                  
	 
      	 
      
	
                    Clause
      13.8

                  	
                    The
      period of suspension is:

                  
	 
      	 
      
	 
      	
                    Except
      for the RIG CONTRACT (where suspension is deemed to be deleted since it is
      not applicable) fourteen (14) days.

                  
	 
      	 
      
	
                    Clause
      14.3

                  	
                    Latest
      time for receipt of invoices is:

                  
	 
      	 
      
	 
      	
                    One
      hundred and eighty (180) days from the date of completion of the
      services.

                  
	 
      	 
      
	
                    Clause
      14.5

                  	
                    The
      address for invoicing is:

                  
	 
      	 
      
	 
      	
                    SCS
      Corporation

                  
	 
      	
                    12012
      Wickchester Lane, Suite 475

                  
	 
      	
                    Houston
      Texas, 77079

                  
	 
      	 
      
	 
      	
                    For
      the attention
      of: Accounts Payable

                  
	 
      	 
      
	
                    Clause
      14.9

                  	
                    Interest
      rate per annum is:

                  
	 
      	 
      
	 
      	
                    Base
      Rate, as set out in Clause 14.9 in General Conditions, Appendix A, plus
      three (3) percent.

                  
	 
      	 
      
	
                    Clause
      17.4

                  	
                    Rights
      shall vest in COMPANY and CONTRACTOR.

                  
	 
      	 
      
	
                    Clause
      19.2(d)

                  	
                    This
      indemnity is given in respect of the following property and is subject to
      any exclusions or limitations specified below:

                  
	 
      	 
      	 
      
	 
      	
                    (i)

                  	
                    Property
      directly affected by the WORK: third party facilities within the 500 metre
      zone

                  


          

        

      

    

     

    
      
        Section
I

         


      

      
        7

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

     

    
      
        
          	 
      	
                  (ii)

                	
                  Other
      property: any and all such Other property: third party facilities within
      the 500 metre zone

                
	 
      	 
      	 
      
	 
      	
                  (iii)

                	
                  For
      the purposes of Clause 19.2(d) only, consequential loss shall have the
      same meaning as ascribed thereto in Clause 21.

                
	 
      	 
      	 
      
	
                  Clause
      19.4

                	
                  Limit
      of liability for pollution in respect of Clause 19.4 (c): “Mirrored” to
      reflect CONTRACTOR’s sub-contractor arrangements.

                
	 
      	 
      
	
                  Clause
      19.7

                	
                  Depreciation
      rate per month of:

                
	 
      	 
      
	 
      	
                  “Mirrored”
      to reflect CONTRACTOR’s sub-contractor arrangements.

                
	 
      	 
      
	
                  Clause
      19.10

                	
                  Limit
      of liability for costs:

                
	 
      	 
      
	 
      	
                  “Mirrored”
      to reflect CONTRACTOR’s sub-contractor arrangements.

                
	 
      	 
      
	
                  Clause
      20.2

                	
                  Insurance
      by CONTRACTOR, the amounts are: Employer’s Liability  £
      10,000,000 (Ten Million sterling) General Third Party  £
      5,000,000 (Five Million sterling)

                
	 
      	 
      
	
                  Clause 23.5

                	
                  Limit of liability for additional
      costs of termination:

                
	 
      	 
      
	 
      	
                  CONTRACTOR
      shall not be liable for additional costs.

                
	 
      	 
      
	
                  Clause
      23.6(c)

                	
                  Limit
      of liability for additional costs of suspension and
      termination:

                
	 
      	 
      
	 
      	
                  CONTRACTOR
      shall not be liable for additional costs.

                
	 
      	 
      
	
                  Clause
      23.7(a) (iii)

                	
                  Additional
      Clauses and Special Conditions remaining in full force and effect shall
      be:

                
	 
      	 
      
	 
      	
                  Section
      II Part B paragraphs 1.0 to 15.0.

                
	 
      	 
      
	
                  Clause
      23.8

                	
                  Cumulative
      limit of liability for additional costs of suspension and
      termination:

                
	 
      	 
      
	 
      	
                  CONTRACTOR
      shall not be liable for additional
costs.

                


        

      

    

     

    
      
        Section
I

         


      

      
        8

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

     

    
      
        
          	
                  Clause
      27.6

                	
                  The
      addresses for the service of notices are:

                
	 
      	 
      	 
      
	 
      	
                  (i)

                	
                  COMPANY:

                
	 
      	 
      	 
      
	 
      	 
      	
                  SCS
      Corporation

                
	 
      	 
      	
                  12012
      Wickchester Lane, Suite 475

                
	 
      	 
      	
                  Houston,
      Texas 77079

                
	 
      	 
      	 
      
	 
      	
                  (ii)

                	
                  CONTRACTOR:

                
	 
      	 
      	 
      
	 
      	 
      	
                  AGR
      PEAK WELL MANAGEMENT LIMITED Union Plaza

                
	 
      	 
      	
                  1
      Union Wynd

                
	 
      	 
      	
                  ABERDEEN

                
	 
      	 
      	
                  AB10
      1SL

                
	 
      	 
      	 
      
	
                  Clause
      28.1(b)

                	
                  Resolution
      of Disputes: The nominees for Executive are

                
	 
      	 
      	 
      
	 
      	
                  (i)

                	
                  Company:

                
	 
      	 
      	 
      
	 
      	 
      	
                  Michael
      Palmer – VP Operations

                
	 
      	 
      	 
      
	 
      	
                  (ii)

                	
                  Contractor:

                
	 
      	 
      	 
      
	 
      	 
      	
                  I.
      Burdis – VP Well
Management

                


        

      

    

     

    
      
        Section
I

         


      

      
        9

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

     

    SECTION
II – GENERAL AND SPECIAL CONDITIONS OF CONTRACT

     

    A.    GENERAL
CONDITIONS OF CONTRACT

     

    Subject
to the provisions of this CONTRACT and in particular Part B below, LOGIC
(formerly CRINE) General Conditions of Contract for Well Services - Edition 2 –
March 2001, as
attached hereto as Appendix A, shall apply and govern except as specifically
modified by the following.

    


    B.    SPECIAL
CONDITIONS OF CONTRACT

    


    
      	
              1.

            	
              The
      following definitions shall be added to the Clause
  1:

            


    

     

    
      
        	
                 
      

              	
                1.15

              	
                “GOVERNMENT”
      means the government of the Republic of Guinea and any political
      subdivision, agency or instrumentality thereof, including the Ministry,
      Minister and Government Oil & Gas
Company.

              


      

    

     

    
      	
               
      

            	
              1.16

            	
              “GOVERNMENT
      OIL & GAS COMPANY” means the oil and gas company formed by the
      Republic of Guinea for the purposes of the Contract under whatever name is
      eventually given to the company.

            


    

     

    
      	
               
      

            	
              1.17

            	
              “JOINT
      OPERATING AGREEMENT” or “JOA” means the Operating Agreement dated January
      28, 2010, between SCS and Dana Petroleum (E&P) Limited covering the
      PSC, attached as Appendix C, as subsequently
  amended.

            


    

     

    
      	
               
      

            	
              1.18

            	
              “MINISTRY’
      means the Ministry of Mines, Energy and Hydraulics of the Republic of
      Guinea.  “MINISTER” means the Minister of the
      Ministry.

            


    

     

    
      	
               
      

            	
              1.19

            	
              “PRODUCTION
      SHARING CONTRACT” or “PSC” means the Hydrocarbon Production Sharing
      Contract dated September 22, 2006 and amended May 10, 2010 and as
      subsequently amended between SCS and the
  Government.

            


    


    
      
        Section
II

         


      

      
        10

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

     

    
      	
               
      

            	
              1.20

            	
              “WILFUL
      MISCONDUCT” means an intentional, conscious or reckless disregard of good
      and prudent oil and gas field practice or of any of the terms of this
      CONTRACT in disregard of avoidable and harmful consequences but shall not
      include any act, omission, error of judgement or mistake made in good
      faith in the exercise of any function, authority or discretion vested in
      or exercisable by CONTRACTOR and which in the exercise of such good faith
      is justifiable by special circumstances including safeguarding of life,
      property or the environment and other
  emergencies.

            


    

     

    
      	
              2.

            	
              At
      the start of Clause 4.1 add the
following:

            


    

     

    “COMPANY
shall remain as Operator of the PSC pursuant to the Joint Operating Agreement,
and CONTRACTOR’s sub-contracted services and sub-contracted work hereunder shall
be solely as agent for COMPANY as Operator.  Subject to the
foregoing,”

     

    
      	
              3.

            	
              At
      the start of the second sentence of Clause 8.2 (a) add the following:
      -

            


    

     

    “Where possible and/or appropriate,”.

     

    
      
        	
                4.

              	
                After
      the word “shall” in line two of Clause 8.2 (b) add the
      following:

              


      

      
         

         “where
possible and/or appropriate,”.

         

      

    

    
      
        
          	
                  5.

                	
                  Delete
      paragraph one of Clause 14.3 and
substitute:

                


        

      

    

    


    “The
CONTRACTOR shall be entitled to invoice COMPANY twice per month.”

    


    
      	
              6.

            	
              In
      the event of “Neutral Funding”:

            


    

    


    Clause
14.6 - Delete paragraph one in its entirety and replace with the
following:

    


    “(i)        With
respect to WORK performed directly by CONTRACTOR, within thirty (30) days from
receipt of a correctly prepared and adequately supported invoice by the COMPANY
at the address specified in the CONTRACT; and

    


    (ii)         With
respect to WORK performed by SUBCONTRACTORS, within fourteen (14) days from
receipt of a correctly prepared and adequately supported invoice by the COMPANY
at the address specified in the CONTRACT;

    


    the
COMPANY shall make payment in respect of such invoices as follows:”

     

    
      
        Section
II

         


      

      
        11

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

     

    
      	
              7.

            	
              Add
      new sub-clause 10.7 as follows:

            


    

     

    “For the
purposes of this Clause 10 the CONTRACTOR shall not be liable to the COMPANY for
the costs associated with helicopter transport of personnel between the
shore-based heliport and offshore or for the costs of offshore accommodation and
messing.”

    


    
      	
              8.

            	
              Add
      new Clause 31 – NON SOLICITATION OF CONTRACTOR EMPLOYEES AND
      CONSULTANTS

            


    

    


    “During
the term of this CONTRACT and for a period of six (6) months thereafter, the
COMPANY agrees that it shall not make any offers of employment, seek to employ,
nor employ any of the employees of CONTRACTOR or its holding company and the
subsidiaries of its holding company or consultants or agents of the CONTRACTOR,
who have been placed or seconded to work on the COMPANY’s account, without the
prior written consent of CONTRACTOR. COMPANY shall pay CONTRACTOR a recruitment
fee of fifty percent (50%) of the gross first year’s annual salary of such a
successful recruit, regardless of whether or not CONTRACTOR has consented to the
same.”

     

    
      	
              9.

            	
              COMPANY
      hereby agrees to indemnify, defend and hold harmless CONTRACTOR from and
      against any and all claims arising out of the performance of any of the
      third party supplier and contractor agreements entered into by CONTRACTOR
      for and on behalf of COMPANY except to the extent that such claim arises
      as a result of the WILFUL MISCONDUCT of
  CONTRACTOR.

            


    

     

    
      	
              10.

            	
              Early
      Termination Compensation:

            


    

    


    
      	
               
      

            	
              8.1

            	
              Notwithstanding
      the provisions of Clause 23, Termination of the General Conditions of
      Contract, in the event that COMPANY elects to terminate CONTRACT Number:
      AGR/C105/10 for whatsoever reason, COMPANY shall be responsible for and
      shall save, indemnify, defend and hold harmless CONTRACTOR from and
      against all claims, losses, damages, costs (including legal costs),
      expenses and liabilities arising out of such termination. Also in the
      event of termination, COMPANY agrees to enter into agreements whereby
      CONTRACTOR’S rights and obligations, under the various contracts
      CONTRACTOR has entered into for and on behalf of COMPANY to perform the
      services hereunder, are assigned to
COMPANY.

            


    

    


    
      	
               
      

            	
              8.2

            	
              In
      the event the Contract is terminated by COMPANY, CONTRACTOR will invoice
      for services carried out to that date and for any commitments made on
      behalf of COMPANY, including termination fees.  Should a lump
      sum charge be applicable for the services being undertaken at CONTRACT
      cancellation, CONTRACTOR will invoice the full lump
  sum.

            


    


    
      
        Section
II

         


      

      
        12

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

     

    
      	
               
      

            	
              8.3

            	
              In
      the event of termination for convenience by COMPANY (i.e. termination
      without cause) and COMPANY enters into direct contracts for the Drilling
      Rig, Vessels and Third Party Services previously held by CONTRACTOR, then
      COMPANY shall reimburse CONTRACTOR a cancellation fee in the
      amount  of  USD$  500,000  (five  hundred  thousand  United  States  Dollars)
      based  upon  CONTRACTOR’s  exposure  in  terms  of  personnel  standby
      costs, unearned income/profit, administration and management charges. For
      the sake of good order, the aforementioned cancellation fee shall not be
      payable by COMPANY to CONTRACTOR in the event of termination of the
      CONTRACT prior to a commitment having been made to a drilling
      rig.

            


    

    


    
      	
               
      

            	
              8.4

            	
              In
      the event that the full scope of work, as contemplated under this
      CONTRACT, is not subsequently required to be carried out by CONTRACTOR,
      then COMPANY and CONTRACTOR shall meet and agree fair and reasonable
      compensation in respect of CONTRACTOR’s time and effort expended during
      front end activities, that would normally have been recovered under the
      later operational recovery
mechanism.

            


    

    


    
      	
              11.

            	
              The
      CONTRACT between the drilling rig contractor and CONTRACTOR will reflect
      that COMPANY are deemed to be part of the company group i.e. part of the
      CONTRACTOR Group

            


    

     

    
      	
              12.

            	
              CONTRACTOR
      shall be named as an additional assured on COMPANY’s insurance policies or
      COMPANY’s guarantor’s insurance policy, in respect of the obligations
      entered into with third party suppliers and contractors for and on behalf
      of COMPANY, wherein COMPANY’s insurers and underwriters or COMPANY’s
      guarantor’s and underwriters, waive all rights of subrogation against
      CONTRACTOR.

            


    

     

    
      	
              13.

            	
              In
      the event that CONTRACTOR is required, as a result of its tendering and/or
      negotiating  exercise  to  place  sub-contracted  services  for  COMPANY,  to  raise
      Letters of Credit in favour of certain sub-contractors in order to secure
      the provision of such services for and on behalf of COMPANY, then COMPANY
      shall reimburse CONTRACTOR any additional costs so incurred. Reimbursement
      of any additional costs shall be against fully documented CONTRACTOR
      sub-contractor requirements and subsequent CONTRACTOR Bank
      Charges.

            


    

     

    
      	
              14.

            	
              COMPANY
      hereby agrees that as an integral part of the contract between the
      Parties, COMPANY shall arrange, from a bank satisfactory to CONTRACTOR and
      COMPANY, for an Irrevocable Standby Letter of Credit (ISLOC) in favour of
      CONTRACTOR in the amount of the total estimated value of the CONTRACT.
      Such Letter of Credit shall facilitate partial draw down and be in place
      for the duration of the CONTRACT including subsequent finalisation of
      invoice payment. The ISLOC will require to be put in place by COMPANY in
      favour of CONTRACTOR, in a timely manner in order to satisfy payment dates
      identified in a CONTRACTOR generated commitment schedule that will reflect
      the total forecasted phased value of this CONTRACT. It is envisaged that
      a one or more ISLOC(s) will be put in place and topped up
      accordingly, so as to meet the milestone deadlines that will facilitate
      timely payments in accordance with the commitment
  schedule.

            


    

     

    
      
        Section
II

         


      

      
        13

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

    


    
      	
              15.

            	
              For
      the sake of good order, CONTRACTOR confirms that in respect of the
      commitments made to third party suppliers and contractors on COMPANY’s
      behalf, that result in a differential between CONTRACTOR and its
      SUBCONTRACTORS, and the terms of the CONTACT between CONTRACTOR and
      COMPANY e.g. where lost-in-hole depreciation, limits of liability, late
      payment interest rate percentage charges, latest time for receipt of
      invoices, equipment loss or damage during transportation, etc. etc. are
      not replicated in CONTRACTOR’s SUB-CONTRACTS, then COMPANY shall be
      responsible for and shall save, indemnify, defend and hold harmless
      CONTRACTOR from and against all claims, losses, damages, costs (including
      legal costs), expenses and liabilities arising out of any such
      disparity.

            


    

    


    
      	
              16.

            	
              COMPANY
      shall be responsible for and undertakes that, all regulatory &
      statutory requirements/approvals for the WORK will be (or have been)
      implemented prior to the rig’s arrival and that COMPANY will be liable for
      and will indemnify, defend and hold CONTRACTOR harmless from and against
      any and all claims arising due to delays in the execution of the WORK
      and/or the offshore rig program, as a result of any regulatory/statutory
      omission/non-compliance.

            


    

    


    
      	
              17.

            	
              After
      the word "COMPANY" in line 10 of Clause 20.1 insert the word
      "GROUP".

            


    

     

    
      	
              18.

            	
              All
      rates and charges quoted in this CONTRACT, unless otherwise stated, are
      exclusive of the following Guinean
Taxes:-

            


    

     

    
      	
               
      

            	
              
                Ø

              

            	
              Value
      Added Tax;

            


    

     

    
      	
               
      

            	
              
                Ø

              

            	
              Any
      withholding tax;

            


    

     

    
      	
               
      

            	
              
                Ø

              

            	
              Any
      tax, including local taxes, applicable in the jurisdiction of
      operation;

            


    

     

    
      	
               
      

            	
              
                Ø

              

            	
              Any
      import/export charges, fees or
dues;

            


    

     

    
      	
              19.

            	
              Clause
      15 is hereby supplemented by adding a new Clause 15.8 which reads as
      follows:

            


    

     

    
      	
               
      

            	
              15.8

            	
              Notwithstanding
      anything in this CONTRACT to the contrary, COMPANY shall not be obligated
      to pay for the CONTRACTOR’s or any SUBCONTRACTOR’s income taxes or
      franchise taxes levied by any applicable governmental authority on income
      derived from this or related to this CONTRACT or
  otherwise.

            


    

     

    
      
        Section
II

         


      

      
        14

        
          

        

      

      
         


      

    

     

    
      
        	
                

              	 
      	
                   

              
	 
      	 
      	 
      
	
                CONTRACT
      NUMBER: AGR/C*/10

                between

                SCS
      CORPORATION

                and

                AGR
      PEAK WELL MANAGEMENT LIMITED

                for

                PROVISION
      OF WELL CONSTRUCTION

                PROJECT
      MANAGEMENT SERVICES

              	 
      	
                Date:
      November 24, 2010

              
	 
      	 
      	 
      


      

    

     

    
      	
              20.

            	
              CONTRACTOR
      shall comply with the requirements of any government having jurisdiction
      over the WORK, and of the government having jurisdiction over the PSC, in
      relation to the contracting or supply of goods or services and the COMPANY
      shall reimburse the CONTRACTOR for any additional costs incurred related
      thereto.

            


    

     

    
      	
              21.

            	
              Throughout
      this agreement, unless made necessary by the particular usage or purpose
      in any provision, the term “United Kingdom” shall be replaced by the
      “Republic of Guinea.

            


    

     

    
      	
              22.

            	
              At
      the start of Clause 17.1 add the
following:

            


    

     

    “This
Clause 17 and all its subparts shall be subject at all times to the provisions
of Article 15 of the JOA and Article 19 of the PSC.  Subject to
Article 15 of the JOA and Article 19 of the PSC

     

    
      	
              23.

            	
              Add
      a new Clause 4.14 that states:

            


    

     

    CONTRACTOR
shall treat all venture information, confidential information and proprietary
information subject to and consistent with the COMPANY’s obligations under
Article 15 of the JOA and Article 19 of the PSC.

     

    
      
        Section
II

         


      

      
        15

        
          

        

      

      
         


      

    

     

    
      
        
          
            
              	
                      

                    	 
      	
                         

                    
	 
      	 
      	 
      
	
                      CONTRACT
      NUMBER: AGR/C*/10

                      between

                      SCS
      CORPORATION

                      and

                      AGR
      PEAK WELL MANAGEMENT LIMITED

                      for

                      PROVISION
      OF WELL CONSTRUCTION

                      PROJECT
      MANAGEMENT SERVICES

                    	 
      	
                      Date:
      November 24, 2010

                    
	 
      	 
      	 
      


            

          

        

      

      
         

      

      SECTION
III – REMUNERATION

       

      The
following is subject to the provisions set forth in Section IV, Scope of Work,
for the definition of services to be provided by Contractor hereunder, which
shall control in the case of any inconsistency with the following Section III.
All CONTRACTOR charges will be based in US Dollars. CONTRACTOR has converted GBP
based costs at a US Dollar exchange rate of 1.60. Both COMPANY and CONTRACTOR
reserve the right to adjust the prices should the exchange rate move by +/- 3%
to an agreed rate based on a quarterly average exchange rate from a reputable
source.

       

      
        	
                1. 

              	
                Project
      Management

              


      

       

      The
project management rate covers the following:

      


      
        	
                 
      

              	
                ·

              	
                Time,
      as required, for the Project prior to operations covering the scope of
      work described herein.

              


      

      
        	
                 
      

              	
                ·

              	
                Additional
      tasks required to be delivered by the Project Manager as requested by
      Hyperdynamics will be charged on a day rate
  basis.

              


      

      
        	
                 
      

              	
                ·

              	
                Use
      of all AGR;s corporate engineering and project management software
      (P1TM, Eikos, Casing
      Seat, Stress Check, Well Plan Hydraulics, Well Plan Torque and Drag, Well
      Plan Drill Ahead, West, Navision, Cost
  Management).

              


      

      
        	
                 
      

              	
                ·

              	
                Development
      of the Contract Management Plan.

              


      

      
        	
                 
      

              	
                ·

              	
                In
      addition, a number of Contactor’s personnel shall be kept fully informed
      with regard to the project, in order that they can provide additional
      support and cover for personnel within the project team if
      required.

              


      

      


      
        
          
            
              
                
                  	
                          DESCRIPTION

                        	 
      	
                          RATE USD

                        	 
      	
                          INVOICED

                        
	
                          Project
      Management

                        	 
      	
                          14,400/month

                        	 
      	
                          Monthly

                        
	
                          Use of Proprietary
      software See Note 4

                        	 
      	
                          1,600/month

                        	 
      	
                          Monthly

                        


                

              

            

          

        

      

       

      
        	  	
                1) 

              	
                Exclusive
      of travel and subsistence where
required.

              


      

       

      
        	
                 
      

              	
                2)

              	
                Monthly
      Project Management fee shall apply at the commencement of the project
      planning phase until two (2) months following completion of operation to
      allow for close out of the project.

              


      

      


      
        
          
            Section
III

             


          

          
            16

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      
        	
                 
      

              	
                3)

              	
                Monthly
      Project Management fee will only be invoiced and payable when work is
      actively being undertaken on behalf of
COMPANY.

              


      

       

      
        	
              	
                4)

              	
                As
      an option, CONTRACTOR is able to offer use by COMPANY, for the duration of
      this well project, the proprietary P1TM probabilistic well time and cost
      estimation and risk management software plus training for two COMPANY
      personnel. CONTRACTOR’s engineers will construct the base model from the
      well design and hold the controlled copy of the model and the associated
      cost estimates and AFEs. This will allow COMPANY to use the base model to
      carry out scenario planning and sensitivity analysis by changing the
      variables in the model without having to resort to CONTRACTOR engineering
      resources

              


      

       

      
        	
                2. 

              	
                Fisheries
      and Marine Mammal Protection

              


      

       

      COMPANY
shall reimburse CONTRACTOR for all costs related to fisheries and marine mammal
protection as set forth in the Well Planning Lump Sums Table under Specialist
Third Party Studies. Any CONTRACTOR disciplines required in connection with the
foregoing shall be reimbursed in accordance with Item 10 of Section III –
Remuneration.

       

      
        	
                3. 

              	
                Well
      Planning

              


      

       

      All well
planning activities are undertaken on the basis of agreed lump sums for those
phases of the well planning, execution and close out that are completely within
CONTRACTOR’s control.  The overall work scope has been split into a
number of key areas, as described in the Scope of Work, with each item having a
lump sum associated with it.  The synergies available due to
implementing a continuous programme are taken into consideration in the
charges.

      


      
        
          
            Section
III

             


          

          
            17

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      Well Planning Lump Sums

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          DESCRIPTION

                                        	 
      	
                                          COST US$

                                        	 
      	
                                          COMMENTS

                                        
	 	 	 	 	 
	
                                          Assistance
      with the Regulatory Permitting

                                        	 
      	
                                          40,000/well

                                        	 
      	
                                          As
      per Clause 1 of Section IV

                                        
	 	 	 	 	 
	
                                          Environmental
      Impact Assessment and Oil Pollution Emergency
      Plan

                                        	 
      	
                                          Third
      Party Outsourced

                                        	 
      	
                                          As
      per Note 6) below

                                        
	 	 	 	 	 
	
                                          HSEQ
      Management System and Emergency Response
    System

                                        	 
      	
                                          52,800

                                        	 
      	
                                          One
      off charge per program - see notes below

                                        
	 	 	 	 	 
	
                                          Logistics
      and Procurement Strategy Development

                                        	 
      	
                                          16,000

                                        	 
      	 
      
	 	 	 	 	 
	
                                          Site
      Survey Co-Ordination

                                        	 
      	
                                          16,240

                                        	 
      	
                                          Per
      well if required

                                        
	 	 	 	 	 
	
                                          Geo
      Technical Survey Management

                                        	 
      	
                                          16,240

                                        	 
      	
                                          Per
      well if required

                                        
	 	 	 	 	 
	
                                          Rig
      contracting

                                        	 
      	
                                          See
      Item 10 of

                                          Section
      III

                                        	 
      	 
      
	 	 	 	 	 
	
                                          Services
      contracting

                                        	 
      	
                                          See
      Item 10 of

                                          Section
      III

                                        	 
      	 
      
	 	 	 	 	 
	
                                          Logistics
      Base Study

                                        	
                                            

                                        	
                                          Day
      Rate Based (See Item 10 of Section III)

                                        	
                                            

                                        	
                                          In-country
      fact finding trip and discussions with local legislators, vendors,
      suppliers and ER
support

                                        


                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      


      
        
          
            Section
III

             


          

          
            18

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    DESCRIPTION

                                  	 
      	
                                    COST
      US$

                                  	 
      	
                                    COMMENTS

                                  
	 	 	 	 	 
	
                                    Setting
      Up Logistics Base

                                  	 
      	
                                    736,000

                                  	 
      	
                                    Includes
      set up of all necessary local infrastructure and shipping and receipt of
      materials. This fee covers CONTRACTOR manpower costs. It does not cover
      any third party services, hardware or materials required to put a base in
      place. USD$400,000 has been budgeted for contracting and implementing
      local services.

                                  
	 	 	 	 	 
	
                                    Project
      Scoping

                                  	 
      	
                                    11,300

                                  	 
      	
                                    Initial
      Scoping and option screening phase for the project. Well objectives and
      functionality are defined. Per Well

                                  
	 	 	 	 	 
	
                                    Initial
      Well planning phase for the first well. This will be reduced by 55% for
      subsequent, analogous wells.

                                  	 
      	
                                    112,000

                                  	 
      	
                                    Per
      vertical, up to 30 degree inclination normally pressured and temperature
      (Non HPHT) WELL.

                                    See
      note 2 below.

                                  
	 	 	 	 	 
	
                                    Initial
      Well Test Planning Phase (Standard)

                                  	 
      	
                                    72,000

                                  	 
      	
                                    Per
      generic single zone tested. See notes
  below

                                  
	 	 	 	 	 
	
                                    Additional
      Test Zone

                                  	 
      	
                                    25%
      Uplift shall be applied to the Initial
      and Detailed Well and Well Test Lump Sum.

                                  	 
      	 
      


                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
            Section
III

             


          

          
            19

            
              

            

          

          
             


          

        

      

       

      
        
          
            	
                    

                  	 
      	
                       

                  
	 
      	 
      	 
      
	
                    CONTRACT
      NUMBER: AGR/C*/10

                    between

                    SCS
      CORPORATION

                    and

                    AGR
      PEAK WELL MANAGEMENT LIMITED

                    for

                    PROVISION
      OF WELL CONSTRUCTION

                    PROJECT
      MANAGEMENT SERVICES

                  	 
      	
                    Date:
      November 24, 2010

                  
	 
      	 
      	 
      


          

        

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Detailed
      Well Design Phase (Drilling) for the first well. This will be reduced by
      30% for subsequent, analogous wells.

                                  	 
      	
                                    120,000

                                  	 
      	
                                    Per
      vertical, up to 30 degree inclination normally pressured and temperature
      (Non HPHT) WELL. See notes below.

                                  
	 	 	 	 	 
	
                                    Detailed
      Well Test Design
      Phase for the first well

                                  	 
      	
                                    Standard
      104,000

                                  	 
      	
                                    Per
      generic single zone tested. See notes
  below

                                  
	 	 	 	 	 
	
                                    Detailed
      Well Test Design Phase for subsequent analogous
      wells

                                  	 
      	
                                    48,000

                                  	 
      	 
      
	 	 	 	 	 
	
                                    Additional
      Test Zone

                                  	 
      	
                                    25%
      Uplift shall be applied to the Initial and Detailed Well and Well Test
      Lump Sum.

                                  	 
      	 
      
	 	 	 	 	 
	
                                    Sidetracks

                                  	 
      	
                                    30%
      Uplift shall be applied to the Initial
      Well, Detailed Well and Well Test Lump
      Sum.

                                  	 
      	 
      
	 	 	 	 	 
	
                                    Operations
      Preparation

                                  	 
      	
                                    104,000

                                  	 
      	
                                    Rig
      move preparation, logistics plan, pre-spud. One off
      charge.

                                    See
      notes below.

                                  
	 	 	 	 	 
	
                                    Operations
      close out at the end of the multi well program. One off
      charge.

                                  	 
      	
                                    See
      Item 5 of Section III

                                  	 
      	
                                    Rig
      move demobilization preparation, logistics plan for rental
      equipment return (assumes base is moth-balled & not fully
      decommissioned).

                                  
	 	 	 	 	 
	
                                    Specialist
      Third Party Studies

                                  	 
      	
                                    See
      Note 6) below.

                                  	 
      	
                                    Examples
      of such studies are as follows, but not limited
      to,

                                    1)     Riser
      analysis

                                    2)     Current
      Study

                                    3)     Casing
      Design

                                    4)     Well
      head Study

                                  
	 	 	 	 	 
	
                                    Security

                                  	
                                      

                                  	
                                    Third
      party Security Advisor will be utilized. See Item 4 of Section
      III

                                  	
                                      

                                  	
                                    Any
      additional work required by
      CONTRACTOR personnel will be charged on a day rate
      basis

                                  


                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          Section
III

          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

      


      
        	
                 
      

              	
                1)

              	
                Exclusive
      of travel and subsistence where
  required.

              


      

      
        	
                 
      

              	
                2)

              	
                Initial
      well planning fee to be adjusted dependent upon the level of detail
      already carried out by
COMPANY.

              


      

      
        	
                 
      

              	
                3)

              	
                Standard
      test type - single zone test, Wellhead Pressure < 5000psi, Gas clean
      up   completion wells and sweet
      wells.

              


      

      
        	
                 
      

              	
                4)

              	
                Difficult
      test type - High flow rate (Gas rate > 30 MMscf/d or Oil rate >7,000
      bbls/d), 5000 psi <Wellhead Pressure <8000psi, High H2S,
      Stimulation, Multi Zone DST, Underbalanced annulus well
      tests.

              


      

      
        	
                 
      

              	
                5)

              	
                Complex
      test type - High pressure / High temperature, Heavy Oil, Gravel Pack, Deep
      Water.

              


      

      
        	
                 
      

              	
                6)

              	
                Any
      specialist third party services for studies, analysis, products or
      specialist consultation shall be charged at a cost plus
      10%.

              


      

      
        	
                 
      

              	
                7)

              	
                All
      rates quoted in this CONTRACT are exclusive of local value added tax,
      local taxes and/or withholding taxes unless where
      stated.

              


      

      
        	
                 
      

              	
                8)

              	
                Any
      approved cost for travel and subsistence on COMPANY approved business
      shall be recharged at cost, including any travel to and from the heliport
      supporting the rig
operations.

              


      

      


      
        	
                4. 

              	
                Rig
      and Service Contracting

              


      

       

      CONTRACTOR
will manage the contracting of all third party services required for COMPANY’s
operations. Also pursuant to Section IV, Item 6 and Clause 8 of the General
Conditions, whether or not held in the COMPANY’s name, CONTRACTOR will
administer every service contract and invoice COMPANY twice monthly on a cost
plus basis as per this Item 4. A fully competitive tendering exercise will be
carried out, in line with applicable law. For the sake of good order any
tendering activities, as a result of compliance with the foregoing statement,
shall be reimbursed by COMPANY to CONTRACTOR at the day rates contained in
Section III, Item 10. The Parties hereby confirm that COMPANY shall have the
option to enter into contracts for the provision of the following
services:

      


      
        	
                 
      

              	
                ·

              	
                Mobile
      Drilling Rig;

              


      

      
        	
                 
      

              	
                ·

              	
                In
      country (Guinea) contracts e.g.
shorebase;

              


      

      and
CONTRACTOR shall hold the remaining third party service contracts in its name
for and on behalf of COMPANY.

      


      
        
          
            Section
III

             


          

          
            21

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

      


      These
charges are detailed below and are based upon CONTRACTOR being paid within
fourteen (14) days of receipt of invoice by COMPANY in order to achieve a
neutrally funded position with its SUB-CONTRACTORS. The third party charges will
be invoiced on by CONTRACTOR in the same currency that the
SUB-CONTRACTOR provides in order to remain in a currency exchange neutral
position.

       

      
        
          
            
              	
                      EXPENDITURE

                      VALUE

                    	 	
                      UP TO

                      $1MILLION

                    	 	 	
                      $1 MILLION -

                      $3 MILLION

                    	 	 	
                      ABOVE $3

                      MILLION

                    	 
	
                      Administration
      Charge – Neutral Funding

                    	 	 	2.5	%	 	 	2.0	%	 	 	1.25	%


            

          

        

      

       

      
        	
                5. 

              	
                Operations
      Wrap-up

              


      

      


      CONTRACTOR will carry out all
activities necessary to close-out the operation, including return of all rental
items, suitable storage of residual consumables and full financial/material
reconciliations. A full set of well reports, inclusive of a lessons learnt
database, will be generated for future reference. It is anticipated that these
activities should conclude approximately three weeks after cessation of
operations.

       

      
        
          
            	
                    DESCRIPTION

                  	 
      	
                    RATE USD

                  	 
      	
                    INVOICED

                  
	
                    Wrap-up
      dry hole

                  	 
      	
                    $130,133
      per well

                  	 
      	
                    Wrap-up
      activities include logistics base shut-down, processing of final services
      invoices and final drilling/testing related well operations reporting,
      cost and equipment reconciliation. This includes the rig move
      demobilization preparation and a logistics plan for rental equipment
      return.

                  
	
                    Wrap-up
      tested

                  	 
      	
                    $143,147
      per well

                  	 
      
	
                    Wrap-up
      completed

                  	
                      

                  	
                    $157,461
      per well

                  	
                      

                  


          

        

      

      
        
          	
                  1)

                	
                  All
      rates exclusive of travel and subsistence where
      required.

                


        

      

      
        
          	
                  2)

                	
                  Above
      wrap up lump sums are based upon execution of a 3 well programme. In the
      event there are only 2 wells then CONTRACTOR reserves the right to invoice
      an additional lump sum of USD
  $34,000.

                


        

      

      


      
        
          
            Section
III

             


          

          
            22

            
              

            

          

          
             


          

        

      

      


      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

      


      
        	
                6. 

              	
                Performance
      Based Incentives

              


      

       

      CONTRACTOR
shall receive as an incentive 10% of the Gross Savings to COMPANY on the
following costs:

      


      
        	
                 
      

              	
                -

              	
                A
      day rate for a semi submersible drilling rig below $450,000 per
      day.

              


      

      
        	
                 
      

              	
                -

              	
                Total
      mobilization/demobilization fees below $10 million per drilling
      rig

              


      

      
        	
                 
      

              	
                -

              	
                Helicopter
      fees below $25,000 per day exclusive of actual flying
  time.

              


      

      
        	
                 
      

              	
                -

              	
                Total
      helicopter mobilization/demobilization fees below
  $100,000.

              


      

      
        	
                 
      

              	
                -

              	
                Work
      boat fees per boat under $50,000 per day.
 

              


      

      
        	
                 
      

              	
                -

              	
                Total
      work boat  mobilization/demobilization fees
      below  $400,000 for each work
boat

              


      

       

      Gross
Savings shall be calculated according to the following example:

       

      
        
          	
                   
      

                	
                  -

                	
                  COMPANY
      incentive day
      rate:              
         $450,000

                


        

        
          	
                   
      

                	
                  -

                	
                  CONTRACTOR
      negotiated day rate:     
         $400,000

                


        

        
          	
                   
      

                	
                  -

                	
                  Gross
      Savings to
      COMPANY:                  
       $  50,000

                


        

        
          	
                   
      

                	
                  -

                	
                  CONTRACTOR
      Incentive
      (10%)               $    5,000
      per day

                


        

         

      

      
        	
                7. 

              	
                Travel
      Expenses

              


      

       

      The cost
of any COMPANY approved travel will be recharged at documented cost. Any
inter-continental flights will be Business Class.

      


      
        	
                8. 

              	
                Timesheets

              


      

       

      Where
applicable, CONTRACTOR is to submit monthly timesheets for COMPANY’s
approval.

       

      The
timesheets are to be signed by the appropriate employee and approved by the
CONTRACTOR Representative prior to submission to COMPANY.

       

      Fully
approved timesheets will be attached to and submitted with all personnel
invoices.

       

      
        	
                9. 

              	
                Taxes

              


      

       

      The rates
and charges quoted are exclusive of Guinean VAT, unless specifically stated
otherwise. COMPANY shall be responsible for the payment of any and all of
CONTRACTOR’s VAT, withholding tax, local taxes, should it be applicable in
connection with the execution of the scope of WORK, including any penalties,
levies, fines or such charges.

      


      
        
          
            Section
III

             


          

          
            23

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      
        	
                10. 

              	
                Day
      Rates

              


      

       

      The day
rates applicable for CONTRACTOR personnel in support of the project are set out
below.  These rates have been used to calculate the monetary value of
each CTR.  Onshore day rates are based on a minimum of eight (8) hours
per day however CONTRACTOR's personnel may be required to support operations
requirement which shall necessitate, at times, hours in excess of eight (8)
hours per day.  No overtime shall apply for hours in excess of eight
(8) hours per day.

       

      
        
          
            
              
                	
                        DAY RATE (USD)

                      	 
	
                        Discipline

                      	 	
                        Onshore

                        (UK)

                      	 	 	
                        Offshore

                        (Guinea)

                      	 	 	
                        Onshore

                        (Guinea)

                      	 
	
                        Operations
      Manager

                      	 	$	2,080	 	 	$	2,240	 	 	$	2,240	 
	
                        Well
      Test Engineer

                      	 	$	1,600	 	 	$	1,680	 	 	$	1,680	 
	
                        Completions
      Engineer

                      	 	$	1,440	 	 	$	1,600	 	 	$	1,600	 
	
                        Offshore
      Materials Manager

                      	 	 	n/a	 	 	$	1,040	 	 	$	1,040	 
	
                        Well
      Site Geologist

                      	 	 	n/a	 	 	$	1,440	 	 	$	1,440	 
	
                        Project
      Manager

                      	 	$	2,080	 	 	$	2,240	 	 	$	2,240	 
	
                        Drilling
      Superintendent

                      	 	$	1,920	 	 	$	2,463	 	 	$	2,463	 
	
                        Logistics
      Superintendent

                      	 	$	1,040	 	 	$	1,312	 	 	$	1,312	 
	
                        Well
      Team Leader

                      	 	$	1,920	 	 	$	2,463	 	 	$	2,463	 
	
                        Senior
      Drilling Engineer

                      	 	$	1,600	 	 	$	1,848	 	 	$	1,848	 
	
                        Operations
      Drilling Engineer

                      	 	$	1,200	 	 	$	1,440	 	 	$	1,440	 
	
                        Senior
      Test Engineer (PE)

                      	 	$	1,760	 	 	$	1,920	 	 	$	1,920	 
	
                        Day
      Drilling Supervisor

                      	 	 	n/a	 	 	$	2,560	 	 	$	2,560	 
	
                        Night
      Drilling Supervisor

                      	 	 	n/a	 	 	$	2,080	 	 	$	2,080	 
	
                        Operations
      Accountant

                      	 	$	720	 	 	$	800	 	 	$	800	 
	
                        Technical
      Assistant

                      	 	$	480	 	 	$	538	 	 	$	538	 
	
                        HSEQ
      Engineer

                      	 	$	1,120	 	 	$	1,280	 	 	$	1,280	 
	
                        Contracts
      Manager

                      	 	$	1,392	 	 	 	n/a	 	 	 	n/a	 
	
                        Completions
      Engineer

                      	 	$	1,600	 	 	$	1,760	 	 	$	1,760	 
	
                        Subsea
      Engineer

                      	 	$	1,600	 	 	$	1,760	 	 	$	1,760	 
	
                        Supply
      Base Supervisor / Manager

                      	 	$	1,176	 	 	$	1,200	 	 	$	1,200	 
	
                        Production
      Technologist

                      	 	$	1,760	 	 	$	2,000	 	 	$	2,000	 
	
                        Information
      & Computer Technology (ICT) Engineer

                      	 	$	1,120	 	 	$	1,280	 	 	$	1,280	 


              

            

          

        

      

       

      
        
          
            Section
III

             


          

          
            24

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

      


      
        	
                1)

              	
                Commences
      on the day that the rig is taken on contract for and on behalf of COMPANY
      from the previous Operator or stack location for COMPANY and ends on the
      day that the rig is released from contract for and on behalf of COMPANY to
      the next Operator or stack
  location.

              


      

      
        	
                2)

              	
                Invoiced
      according to timesheets approved by CONTRACTOR Project Manager, or
      delegate i.e. Team Leader, including mobilisation and de-mobilisation time
      (1+1
      days).

              


      

      
        	
                3)

              	
                All
      rates exclusive of travel and subsistence where
      required

              


      

      
        	
                4)

              	
                Retainer
      Rate: If at any time during this project for reasons outwith the control
      of CONTRACTOR, CONTRACTOR personnel are not being utilised under this
      CONTRACT, and COMPANY requires to retain such personnel, a mutually agreed
      Retainer Rate per man per day ($/day) will be applied e.g. if there is a
      gap after all the scheduled planning work has been completed and there is
      a delay in the rig arrival.  CONTRACTOR shall use all reasonable
      endeavours to redeploy such
  personnel.

              


      

      
        	
                5)

              	
                Dayrate
      for ICT Engineer excludes any associated equipment and shipping costs
      re-chargeable at cost plus
10%.

              


      

      


      
        
          
            Section
III

             


          

          
            25

            
              

            

          

          
             


          

        

      

      


      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      SECTION
IV – SCOPE OF WORK

      


      CONTRACTOR
will provide a full well project management service in support of COMPANY’s
exploration/appraisal/development drilling programme for the drilling of two (2)
wells and a contingent third (3rd) well
with an estimated duration of sixty (60) days each. The workscope is summarised
below and has been split into phases. All work will be carried out according to
CONTRACTOR's established Business and Technical Procedures, accredited to ISO
9001:2000 in the United Kingdom.

       

      Subject
to Item 6 below and Clause 8 of the General Conditions in Appendix A, the
COMPANY shall have and maintain at all times the right to receive notice of and
give approval to the use or selection of any subcontractor or third parties
providing services of any type or manner to COMPANY. Such option to receive
notice and grant approval shall be in accordance with Section IV scope of work
Item 6B.

       

      Subject
to Clause 4 of the General Conditions in Appendix A as modified by Clause 2 of
the Special Conditions in Section II, the COMPANY shall remain as Operator of
the PSC pursuant to the Joint Operating Agreement, and CONTRACTOR’s services and
work hereunder shall be solely as agent for COMPANY .

       

      The
Parties hereby confirm that COMPANY shall have the option to enter into
contracts for the provision of the following services:

      


      
        	
                 
      

              	
                ·

              	
                Mobile
      Drilling Rig;

              


      

      
        	
                 
      

              	
                ·

              	
                In
      country (Guinea) contracts e.g.
shorebase;

              


      

      


      and
CONTRACTOR shall hold the remaining third party service contracts in its name
for and on behalf of COMPANY.

       

      
        	
                1.

              	
                Republic
      of Guinea Representation & Regulatory
  Permitting

              


      

      CONTRACTOR
will work with COMPANY and if required represent COMPANY in the Republic of
Guinea with regard to all relationships with industry authorities and partners.
This will include all permit applications, consents, formal reporting, partner
representation and well examination (if required). All such work will be
undertaken at CONTRACTOR’s offices in Aberdeen.

       

      
        	
                2.
      

              	
                Project
      Management

              


      

       

      Subject
to Clause 8 of the General Conditions in Appendix A, the COMPANY retains the
right at all time to be notified of and approve the CONTRACTOR’s services in
regard to: (1) all subcontractors and third-party suppliers of goods and
services; (2) the preparation of plans; and (3) the terms of any agreements with
all subcontracts and third-party suppliers. Such option to receive notice and
grant approval shall be in accordance with Section IV scope of work Item
6B.

       

      
        
          
            Section
IV

             


          

          
            26

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

      


      A Project
Manager will be assigned who will co-ordinate all activities associated with the
COMPANY’s programme, particularly in regard to management of CONTRACTOR’s
personnel and interfaces with COMPANY (management, asset team
etc).  The Project Manager will prepare a contract management plan
(CMP), which will be approved by COMPANY’s management.  This CMP will
govern how the project shall be undertaken and will be a key document in regard
to project management and progress reporting. The Project Manager will also have
the responsibility of ensuring all work is carried out as per the
CMP.  The Project Manager will report directly to COMPANY’s
Representative.

      The
Parties hereby confirm that COMPANY shall have the option to enter into
contracts for the provision of the following services:

      


      
        	
                 
      

              	
                ·

              	
                Mobile
      Drilling Rig;

              


      

      
        	
                 
      

              	
                ·

              	
                In
      country (Guinea) contracts e.g.
shorebase;

              


      

      


      and
CONTRACTOR shall hold the remaining third party service contracts in its name
for and on behalf of COMPANY.

       

      
        	
                3. 

              	
                HSEQ
      Management System and Emergency Response
  Procedures

              


      

       

      CONTRACTOR
will review the relevant management systems of COMPANY and the chosen drilling
contractor prior to preparing bridging documentation to cover the
project.

       

      A set of
project specific Emergency Response Procedures will be formulated on behalf of
COMPANY, together with all necessary bridging documentation. The emergency
response procedures will be utilized throughout all operations. An Emergency
Response desktop exercise will also be arranged to test arrangements prior to
operations. The Emergency Response Procedures shall incorporate and utilize to
the extent possible OHSAS 18001:2007 – Health & Safety
Management.

      


      
        	
                4. 

              	
                Site
      and Geo Technical Survey Management and
  Co-Ordination

              


      

       

      A site
and Geo Technical survey will be required at all proposed drilling
locations.  The exact requirements will be dependent upon existing
site survey data available for the blocks and the specific requirements of the
chosen drilling contractor and their insurance
underwriter.  CONTRACTOR will manage all aspects involved including
workscope definition, site survey vessel contracting and onsite
supervision/QA/QC.

      


      
        
          
            Section
IV

             


          

          
            27

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      
        
          	
                  5.

                	
                  Fisheries and Marine Mammal
      Protection  If
      COMPANY supplies an experienced fisheries and marine mammal representative
      for services in regards to wildlife protection (the “Wildlife
      Representative”), CONTRACTOR shall take all actions necessary to
      accommodate the Wildlife Representative and to cooperate in the
      representative’s performance of such services as may be directed by
      COMPANY. COMPANY shall reimburse CONTRACTOR for any additional costs so
      incurred.

                


        

      

       

      
        	
                6. 

              	
                Rig
      and Service Contracting

              


      

       

      
        	
                 
      

              	
                A.

              	
                COMPANY’s
      right to review and approve all contracts and hold in its own name;
      CONTRACTOR duty to administer
contracts.

              


      

       

      Whether
or not held in the COMPANY’s name, CONTRACTOR
will administer every Third Party Contract and invoice COMPANY twice monthly on
a cost plus basis as per Section III-Item 4. The Parties hereby confirm that
COMPANY shall have the option to enter into contracts for the provision of the
following services:

      


      
        	
                 
      

              	
                ·

              	
                Mobile
      Drilling Rig;

              


      

      
        	
                 
      

              	
                ·

              	
                In
      country (Guinea) contracts e.g. shorebase support
  services;

              


      

      


      and
CONTRACTOR shall hold the remaining third party service contracts in its name
for and on behalf of COMPANY.

       

      
        	
                 
      

              	
                B.

              	
                Contracting
      and Contract Management.

              


      

      


      It is
CONTRACTOR’s intention, as far as possible, to utilise its existing contracts
with well service contractors which were put in place in 2005 as a result of a
competitive tendering exercise (the “Existing Contracts”).  These
contracts are currently being renegotiated and re-validated against current
market conditions and, through a benchmarking process, the legitimacy of the
proposed rates are being assured.  To the extent that CONTRACTOR
desires for any third-party supplier or subcontractor to provide supplies or
render services based on one or more of the Existing Contracts, CONTRACTOR
hereby agrees and acknowledges that any such Existing Contract must be approved
by the COMPANY in accordance with the terms of this CONTRACT.

      


      
        
          
            Section
IV

             


          

          
            28

            
              

            

          

          
             


          

        

      

      


      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

      


      However,
where COMPANY requires or where CONTRACTOR do not have a suitable Existing
Contract, CONTRACTOR will carry out a tender exercise to select a suitable
contractor.  Such tendering activities may take in the region of six
(6) weeks to complete from contracting strategy through to contract
award.  Where necessary, it may be possible to reduce this timeline.
(Reference Item 4, Rig and Service Contracting Section III.)

      


      The
decision as to whether CONTRACTOR can utilise its existing contracts or carry
out a tender exercise will form part of the contracting strategy and will be
subject to COMPANYs’ approval.  This may, in some cases, result in a
sole source negotiation.

      


      With
respect to the drilling rig contract, a tender exercise will be carried out to
identify the most suitable commercially and technically acceptable drilling rig
available; It is anticipated that this exercise could be completed within a six
(6) to eight (8) week period from preparation of the contract strategy,
dependent upon the market response and the availability of appropriate drilling
rigs; provided however that CONTRACTOR shall use all reasonable efforts to
complete tendering activities in any specific time period as instructed by
COMPANY from time to time.

       

      With
respect to the fixed wing, helicopter, vessels and warehouse services, where
required, a tender exercise will be carried out to identify the most suitable
commercially and technically acceptable contractor; It is anticipated that this
exercise could be completed within a six (6) week period from preparation of the
contract strategy through to contract award; provided however that CONTRACTOR
shall use all reasonable efforts to complete tendering activities in any
specific time period as instructed by COMPANY from time to time.

      


      If timing
and individual company drivers allow, CONTRACTOR will include COMPANY’s
programme in a continuous multi-operator programme.  The majority of
third party contracts to support this work are already in place having been
competitively bid in early 2005 against a significant planned workscope and
awarded on a two (2) year primary term; provided however, to the extent that
CONTRACTOR desires for any third-party supplier or Subcontractor to provide
supplies or render services based on one or more of the Existing Contracts,
CONTRACTOR hereby agrees and acknowledges that any such Existing Contract must
be approved by the COMPANY such approval shall be deemed to have been granted by
the COMPANY upon signature of the contracting strategy delivered in accordance
with Section IV scope of work Item 6B, in accordance with the terms of this
CONTRACT. The following work was undertaken to place these contracts in the
first instance and will be undertaken in regard to placing and managing any
contracts not already placed:

      


      
        
          
            Section
IV

             


          

          
            29

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      
        
          	  	
                  Ø

                	
                  Preparation
      of contracting strategy

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Full
      compliance with European Union procurement directives

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Utilisation of First Point Assessment
      Limited
      (FPAL)(1)

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Pre-Qualification
      exercises where necessary

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Preparation
      of ITT’s

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Evaluation
      of all submissions

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Preparation
      and execution of contracts

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Technical
      and HSEQ audits of contractors

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Operational
      management of contracts

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Implementation
      of invoice tracking system

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Implementation
      of project specific cost control system

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Processing
      of invoices

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Payment
      of invoices

                
	 	 	 


        

      

      
        	  	
                Ø

              	
                Resolution
      of disputes

              


      

       

      
        	
                7. 

              	
                Contract
      Preparation

              


      

       

      This is
the initial phase of the contract wherein the parties will agree the well
objectives, establish the final scope of work and agree the mechanisms to be
used to govern the execution of the project. The primary deliverable will be the
Contract Management Plan which will include:

      


      
        
          	  	
                  Ø

                	
                  Defined
      and prioritised project objectives

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Resource
      plan

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Contracting
      requirements and supporting contracts

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Review
      of client management system

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Preparation
      of project specific organigrams

                
	 	 	 


        

      

      
        	  	
                Ø

              	
                Preparation
      of CMP

              


      

      


      
        
          
            Section
IV

             


          

          
            30

            
              

            

          

          
             


          

        

      

      


      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

      


      
        	
                8. 

              	
                Project
      Scoping

              


      

       

      It is envisaged that a certain amount of
work shall be required to develop the well design
to a state where robust and formal planning can commence. In
conjunction with CONTRACTOR, COMPANY is responsible for
generating a comprehensive and approve pre-drilling data
package.  This document shall demonstrate that CONTRACTOR planned
designs meet COMPANY objectives.

       

      
        	
                9. 

              	
                Initial
      Well Planning

              


      

       

      
        The key
deliverable from the Initial well planning phase is the Design Rationale
Document (DRD). This document presents the recommended well design by CONTRACTOR
and is approved by COMPANY. An initial well cost estimate will be generated
which will allow approvals to be sought for financial commitments. There will be
considerable interaction between CONTRACTOR and COMPANY during this phase to
ensure that objectives are fully understood. Deliverables from the Initial Well
Planning Phase, that will be captured in the Design Rationale Document (DRD) and
additional stand alone documents are:

         

      

      
        
          	
                   
      

                	
                  Ø

                	
                  Well
      Objectives derived from COMPANYs’ Basis for Well Design

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  Ø

                	
                  Offset
      data review

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  Ø

                	
                  Pore
      Pressure Fracture Gradient Prognosis (COMPANY provided)

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  Ø

                	
                  Preliminary
      well design

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  Ø

                	
                  Preliminary
      casing design.  Third Party Specialists will be used for complex
      casing design if required.

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  Ø

                	
                  Preliminary
      drilling fluids programme

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  Ø

                	
                  Preliminary
      directional and surveying programme

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  Ø

                	
                  Preliminary
      formation evaluation programme

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  Ø

                	
                  Initial
      probabilistic well model generated from P1TM(10 P1 Model iterations are
      included in this phase of planning lump sum)

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  Ø

                	
                  Well
      cost estimate output in AFE format

                
	 	 	 


        

      

      
        	
                 
      

              	
                Ø

              	
                Process
      flow maps for all phases of the
operation

              


      

       

      Ø

      


      
        
          
            Section
IV

             


          

          
            31

            
              

            

          

          
             


          

        

      

      


      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

      


      
        	
                10. 

              	
                Initial
      Well Test Planning (if
required)

              


      

       

      COMPANY
may request CONTRACTOR to generate an initial well test basis of design document
for approval by COMPANY. This document will demonstrate that CONTRACTOR’s
planned well test design and programme will meet COMPANY’s Basis for Well Test
Design. The document will contain the following information:

       

      
        
          	  	
                  Ø

                	
                  Well
      Test Objectives derived from COMPANY’s Basis for Well Test
      Design

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Preliminary well
      test design

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Initial
      probabilistic well model generated from P1TM

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Well
      test cost estimate output in AFE format

                
	 	 	 


        

      

      
        	  	
                Ø

              	
                Process
      flow maps for all phases of the
operation

              


      

       

      
        	
                14. 

              	
                Detailed
      Well Design

              


      

       

      This
phase of the work will build on the preliminary well design work and complete
all detailed engineering work. This detailed engineering will comprise not only
the standard work such as hydraulics design, drill string design etc. but also a
review of all opportunities to enhance performance on the well. CONTRACTOR
places great importance on this opportunity evaluation phase and in P1TM has the
most powerful process in the industry for facilitating such option selection
decisions. Also a full risk assessment will be carried out for each well, again
utilising P1TM, in order to fully understand exposure and be in a position to
focus engineering effort in regard to risk mitigation.

       

      On
completion of detailed engineering work a detailed drilling programme will be
generated for approval by COMPANY, which will consist of the
following:

       

      
        
          	
                   
      

                	
                  ·

                	
                  Well
      Summary

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Well
      Objectives

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Basic
      Well Data

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Drilling
      Time Curve

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Geological
      background (provided by COMPANY)

                
	 	 	 


        

      

      
        	
                 
      

              	
                ·

              	
                Formation
      Evaluation Program (provided by
COMPANY)

              


      

       

      
        
          
            Section
IV

             


          

          
            32

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      
        
          	
                   
      

                	
                  ·

                	
                  Detailed
      casing design (Third Party contractor may be used depending on well
      complexity)

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Drilling
      Procedures (by hole section)

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Directional
      Surveying Summary

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Mud
      Summary program

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Cement
      Summary

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Bit
      and Hydraulics Program

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Casing
      Specification Sheet

                
	 	 	 


        

      

      
        
          	
                   
      

                	
                  ·

                	
                  Offset
      Well References

                
	 	 	 


        

      

      
        	
                 
      

              	
                ·

              	
                Contact
      names and addresses

              


      

       

      Additionally,
the final AFE level cost estimate will be generated following the completion of
the P1TM modelling work. Five (5) P1
generated AFE revisions are included in the lump sum. A full DWOP (drill well on
paper) exercise will be held for the programme.

      


      
        	
                15.

              	
                Detailed
      Well Test Design

              


      

       

      A full
well test design will be carried out and a detailed operational programme
generated. CONTRACTOR will undertake a full test HAZID and will utilise P1TM to
facilitate management of risks and opportunities. Specific deliverables shall
be:

       

      
        
          	  	
                  Ø

                	
                  Equipment
    Specification

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Artificial
      Lift Design

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Well Specific
    Procedures

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Offset Well
    References

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Equipment Selection

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Detailed Equipment Layouts

                
	 	 	 


        

      

      
        	  	
                Ø

              	
                Data Gathering and sampling
      requirements

              


      

      


      
        
          
            Section
IV

             


          

          
            33

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      
        	
                18.

              	
                REPUBLIC
      OF GUINEA Representation/Permitting with regard to Environmental
      Impact Assessment

              


      

       

      Subject
to Clause 1, above, CONTRACTOR will undertake the preparation of all statutory
permits, applications, notifications and reports to the Ministry, including any
that are needed for or involved with an Environmental Impact Assessment that
shall be required.

       

      
        	
                19.

              	
                HSE
      Management System

              


      

       

      Subject
to Clause 3, above, CONTRACTOR will prepare the following documentation and
carry out the following activities ahead of the commencement of
well operations:

      


      
        	
                 
      

              	
                Ø

              	
                Prepare
      the Management System Interface Document (MSID - bridging document) which
      will cover, inter alia:-

              


      

      
        	
                 
      

              	
                o

              	
                HSE
      Management during the various stages of the execution of the WORK;
      and

              


      

      
        	
                 
      

              	
                o

              	
                Well
      Control Contingency Planning;

              


      

       

      
        
          	  	
                  Ø

                	
                  Prepare
      the Emergency Response & Security Plan (ERP)

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Rig
      audit

                
	 	 	 


        

      

      
        	  	
                Ø

              	
                Carry
      out an emergency
response exercise.

              


      

      


      
        	
                20. 

              	
                Reporting Systems

              


      

       

      CONTRACTOR
 will  set  up  a  full  reporting  system
 for  the  project.  Specific deliverables will
be:

      


      
        
          	  	
                  Ø

                	
                  Prepare
      and publish key performance indicators

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Prepare
      the well site reporting system

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Prepare
      the Partners reporting system

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Prepare
      loss reporting

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Prepare
      cost tracking and reporting

                
	 	 	 


        

      

      
        	  	
                Ø

              	
                Arrange
      computer facilities

              


      

       

      
        
          
            Section
IV

             


          

          
            34

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

      


      
        	
                21. 

              	
                Operations
      Preparation

              


      

       

      CONTRACTOR
will undertake all activities necessary prior to commencing operations including
rig move preparation, setting up the logistics base, preparing reporting systems
and holding the pre-operations meetings.

       

      
        	
                22. 

              	
                Operations
      Management

              


      

       

      CONTRACTOR will supply a full well management operations team to supervise all
drilling, well testing and completions operations. This team will
comprise of:

       

      
        	
                 
      

              	
                ·

              	
                Project
      Manager

              


      

       

      
        	
                 
      

              	
                ·

              	
                Well
      team Leader/Drilling Superintendent

              


      

       

      
        	
                 
      

              	
                ·

              	
                Senior
      Drilling Engineer

              


      

       

      
        	
                 
      

              	
                ·

              	
                Operations
      Drilling Engineer

              


      

       

      
        	
                 
      

              	
                ·

              	
                Materials
      and Logistics Superintendent

              


      

       

      
        	
                 
      

              	
                ·

              	
                Operations
      Accountant

              


      

       

      
        	
                 
      

              	
                ·

              	
                Logistics
      Base Supervisor

              


      

       

      
        	
                 
      

              	
                ·

              	
                Senior
      Drilling Supervisor

              


      

       

      
        	
                 
      

              	
                ·

              	
                Night
      Drilling Supervisor

              


      

       

      
        	
                 
      

              	
                ·

              	
                Offshore
      Materials Manager

              


      

       

      
        	
                 
      

              	
                ·

              	
                HSEQ
      Supervisor

              


      

       

      
        	
                 
      

              	
                ·

              	
                Wellsite
      Geologist

              


      

       

      
        	
                 
      

              	
                ·

              	
                Senior
      Well Test Engineer(PE)

              


      

       

      CONTRACTOR
shall provide the COMPANY with a list of all CONTRACTOR’s personnel who will be
assigned to providing services hereunder, including a description of their
relevant professional and work experiences.

      


      
        	
                23. 

              	
                Operations
      Wrap-up

              


      

       

      CONTRACTOR
will carry out all activities necessary to close-out the operation, including
return of all rental items, suitable storage of residual consumables and full
financial/material reconciliations. A full set of well reports, inclusive of a
lessons learned database, will be generated for future reference. It is
anticipated that these activities should conclude approximately eight (8) weeks
after cessation of operations.

      


      
        
          
            Section
IV

             


          

          
            35

            
              

            

          

          
             


          

        

      

      


      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      SECTION V
– HEALTH, SAFETY AND ENVIRONMENT

       

      
        	
                1. 

              	
                MANAGEMENT
      OF HEALTH, SAFETY AND ENVIRONMENTAL
    PROTECTION

              


      

       

      
        	  	
                1.1 

              	
                Health, Safety and
      Environmental Policies

              


      

       

      The
CONTRACTOR shall have and/or implement a Health, Safety and Environmental Policy
(“HSE Policy”) which is compatible with COMPANY “Statement of Policy on Health,
Safety and the Environment” as amended from time to time, and shall where
relevant ensure that sub-contractor’s HS&E policies are also compatible with
the above mentioned policies. This HSE Policy shall be implemented in full
cooperation with the HSE consultant of COMPANY’s choosing, which shall report
directly to COMPANY throughout the period of Work. The HSE Policy shall
incorporate and utilize to the maximum extent possible OHSAS 18001:2007 – Health
& Safety Management.

       

      
        	  	
                1.2

              	
                Compliance

              


      

       

      The
CONTRACTOR shall have arrangements to manage compliance with all relevant
statutory provisions and additional Health, Safety and Environmental obligations
imposed by this CONTRACT.

       

      
        	  	
                1.3 

              	
                Health,
      Safety and Environmental
      Procedures

              


      

       

      The
CONTRACTOR’S Health, Safety and Environmental Management System shall include a
comprehensive set of working procedures for the control and implementation of
Health, Safety and Environmental aspects such as, but not limited
to:

       

      
        
          	  	
                  Ø

                	
                  Supply
      and use of Personal Protective Equipment

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Risk
      Assessment

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Medical
      / First Aid Facilities

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Incident Reporting, Investigation and
      Analysis

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Emergency
      Response

                
	 	 	 


        

      

      
        
          	  	
                  Ø

                	
                  Safety
      Training

                
	 	 	 


        

      

      
        	  	
                Ø

              	
                Waste
      Management

              


      

      


      
        
          
            Section
V

             


          

          
            36

            
              

            

          

          
             


          

        

      

       

      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

      


      
        	  	
                Ø

              	
                Drug
      and Alcohol Policy

              


      

       

      
        	  	
                1.4

              	
                Environmental
      Protection

              


      

       

      The
CONTRACTOR’S Environmental Policies shall where applicable be compatible with
COMPANY’S “Statement of Policy on Health, Safety and the Environment” as amended
from time to time.

       

      
        	  	
                1.5

              	
                Waste
      Disposal

              


      

       

      The
CONTRACTOR shall act to minimise the total quantity of waste resulting from
execution of the works.The CONTRACTOR shall be committed to handling and
disposing of wastes from their operations in a safe and environmentally sound
manner.

      


      
        
          
            Section
V

             


          

          
            37

            
              

            

          

          
             


          

        

      

      


      
        
          	
                  

                	 
      	
                     

                
	 
      	 
      	 
      
	
                  CONTRACT
      NUMBER: AGR/C*/10

                  between

                  SCS
      CORPORATION

                  and

                  AGR
      PEAK WELL MANAGEMENT LIMITED

                  for

                  PROVISION
      OF WELL CONSTRUCTION

                  PROJECT
      MANAGEMENT SERVICES

                	 
      	
                  Date:
      November 24, 2010

                
	 
      	 
      	 
      


        

      

       

      SECTION VI
– ADMINISTRATION INSTRUCTIONS

       

      MONTHLY INVOICING

       

      
        	
                1. 

              	
                CONTRACTOR
      will be entitled to invoice COMPANY twice per
  month.

              


      

       

      
        	
                2. 

              	
                CONTRACTOR
      must provide appropriate supporting documentation to
      invoices.

              


      

       

      
        	
                3. 

              	
                Failure
       to  follow  these  instructions  will
       result  in  invoices  being  returned  to
      CONTRACTOR.

              


      

      
        


        
          
            
              Section
VI

               


            

            
              38

              
                

              

            

            
               


            

          

        

      

    


    Contracts
for the

    


    Offshore
Oil and Gas Industry

     

    General
Conditions of Contract (including Guidance Notes) for Well Services

    


    
      	
               ̈

            	
              Now
      published under the auspices of

              
                LOGIC

              

            
	 
      	
              Leading
      Oil & Gas industry Competitiveness

               

              www.logic-oil.com

            
	 
      	 
      
	
               ̈

            	 
      


    

    


    Edition 2
- March 2001 Scanned - Nov 2002


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    
 

    Downloaded
version of contract - see printed edition for original ©
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    Background

     

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Offshore Oil and Gas Industry1The first
editions of these model contracts were published in 1997, as "CRINE"
contracts.

     

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founded in 1992 as a cost reduction initiative initially to reduce the capital
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              Sustain
      UKCS activity : to enable discoveries
      to become economic and thus developed prospects to become economic and
      thus drilled field lives to be extended the
      maximisation of economic recovery of
  reserves

            


    

    
      
        	
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    Contracts
for the Offshore Oil and Gas Industry

     

    General
Conditions of Contract (including Guidance Notes)

    for
Well Services

     

    Edition
2 - March 2001

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ©
LOGIC

     

    All
rights reserved. No part of this document may be reproduced by any means, or
transmitted, or translated into a machine language without the written
permission of LOGIC.

     

    ISBN 0
85293 311 8

     

    General
Conditions of Contract for Well Services

     

    Published
on behalf of LOGIC by the Institute of Petroleum, London.

     

    Leading
Oil & Gas Industry Competitiveness (LOGIC) is a company registered under the
Companies Act limited by guarantee and registered in Scotland No.
199292.

     

    The
information given in this publication is given in good faith and belief in its
accuracy. However, the individual members of the Standard Contracts Committee
and their respective companies, organisations and industry bodies including
LOGIC do not accept any legal liability or responsibility whatsoever for the
consequences of its use or misuse in any particular
circumstances.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    WELL
SERVICES

     

    General
Conditions of Contract for Well Services 

     

    Part 1 - General Conditions of
Contract

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WELL
SERVICES

     

    
      
        
          
            	
                    CONTENTS

                  	 
      
	
                    Contracts for
      the

                  	
                    1

                  
	
                    Offshore Oil and Gas
      Industry

                  	
                    1

                  
	
                    LOGIC

                  	
                    1

                  
	
                    General Conditions of Contract for
      Well Services

                  	
                    46

                  
	
                    Part 2 - Guidance
      Notes

                  	
                    46

                  
	
                    1.

                  	 
      


          

        

      

    

     

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    WELL
SERVICES

     

    
      1.
DEFINITIONS

    

     

    
      The
following definitions shall be used for the purpose of interpreting the
CONTRACT.

    

    
      Further
definitions not contained in this Clause shall apply to the Section in which
they are stated
and subsequent Sections.

    

     

    
      	
               
      

            	
              1.1

            	
              "AFFILIATE"
      shall mean any subsidiary or parent or holding company of any company or
      any other subsidiary of such parent or holding company. For the purpose of
      this definition, "subsidiary" and "holding company11
      shall have the meaning assigned to it under Section 736, Companies Act,
      1985, as amended by Section 144, Companies Act
  1989.

            


    

     

    
      	
               
      

            	
              1.2

            	
              "COMPANY
      GROUP" shall mean the COMPANY, its CO-VENTURERS, its and their respective
      AFFILIATES and its and their respective directors, officers and employees
      (including agency personnel), but shall not include any member of the
      CONTRACTOR GROUP.

            


    

     

    
      	
               
      

            	
              1.3

            	
              "COMPANY
      REPRESENTATIVE" shall mean that person referred to in Clause
      3.

            


    

     

    
      	
               
      

            	
              1.4

            	
              "CONTRACT"
      shall have the meaning described in Section I - Form of
      Agreement,

            


    

     

    
      	
               
      

            	
              1.5

            	
              "CONTRACT
      PRICE" shall mean the price for the WORK calculated in accordance with
      Section III - Remuneration, exclusive of Value Added
  Tax.

            


    

     

    
      	
               
      

            	
              1.6

            	
              "CONTRACTOR
      GROUP" shall mean the CONTRACTOR, its SUBCONTRACTORS, its and their
      AFFILIATES, its and their respective directors, officers and employees
      (including agency personnel), but shall not include any member of the
      COMPANY GROUP. "CONTRACTOR GROUP" shall also mean subcontractors (of any
      tier) of the SUBCONTRACTOR who are performing WORK offshore or at any
      wellsites, their AFFILIATES, their directors, officers and employees
      (including agency personnel).

            


    

     

    
      	
               
      

            	
              1.7

            	
              "CONTRACTOR
      REPRESENTATIVE" shall mean that person referred to in Clause
      3.

            


    

     

    
      	
               
      

            	
              1.8

            	
              "CO-VENTURER"
      shall mean any other entity with whom the COMPANY is or may be from time
      to time a party to a joint operating agreement or unitisation agreement or
      similar agreement relating to the operations for which the WORK is being
      performed and the successors in interest of such CO-VENTURER or the
      assignees of any interest of such
CO-VENTURER.

            


    

     

    
      	
               
      

            	
              1.9

            	
              "SUBCONTRACT"
      shall mean any contract between the CONTRACTOR and any party (other than
      the COMPANY or any employees of the CONTRACTOR) for the performance of any
      part of the WORK.

            


    

     

    
      	
               
      

            	
              1.10

            	
              "SUBCONTRACTOR"
      shall mean any party (other than the CONTRACTOR) to a
      SUBCONTRACT.

            


    

     

    
      	
               
      

            	
              1.11

            	
              "TECHNICAL
      INFORMATION" shall mean all such information provided by or caused to be
      provided by the COMPANY pursuant to the
  CONTRACT.

            


    

     

    
      	
               
      

            	
              1.12

            	
              "VARIATION"
      shall mean such instructions or adjustments as set out in Clause
      11.

            


    

     

    
      	
               
      

            	
              1.13

            	
              "WORK"
      shall mean all work that the CONTRACTOR is required to carry out in
      accordance with the provisions of the CONTRACT, including the provision of
      all materials, services and equipment to be rendered in accordance with
      the CONTRACT.

            


    

     

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    WELL
SERVICES

     

    
      
        	
                1.14

              	
                "WORKSITE"
      shall mean the lands, waters and other places on, under, in or through
      which the WORK is to be performed including offshore installations,
      floating construction equipment, vessels (including the area covered by
      approved anchor patterns) and places where equipment, materials or
      supplies are being obtained, stored or used for the purposes of the
      CONTRACT.

              


      

    

     

    
      
        	
                2.

              	
                INTERPRETATION

              


      

    

     

    
      
        	
                2.1

              	
                All
      instructions, notices, agreements, authorisations, approvals and
      acknowledgements shall be in writing. All such documentation together with
      all correspondence and other documents shall be in the English
      language.

              


      

    

     

    Nevertheless,
if for any reason it is considered necessary by the COMPANY to give an
instruction to the CONTRACTOR orally in the first instance, the CONTRACTOR shall
comply with such instruction. Any such oral instruction shall be confirmed in
writing as soon as is possible under the circumstances, provided that, if the
CONTRACTOR confirms in writing any such oral instruction which is not
contradicted in writing by the COMPANY without undue delay, it shall be deemed
to be an instruction in writing by the COMPANY.

     

    
      
        	
                2.2

              	
                Any
      reference to statute, statutory provision or statutory instrument shall
      include any re-enactment or amendment thereof for the time being in
      force.

              


      

    

     

    
      3*
COMPANY AND CONTRACTOR REPRESENTATIVES

    

     

    
      
        	
                3.1

              	
                General

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              The
      COMPANY REPRESENTATIVE and CONTRACTOR REPRESENTATIVE are the persons named
      as such in Appendix 1 to Section I - Form of
  Agreement.

            


    

     

    
      	
               
      

            	
              (b)

            	
              Such
      representatives, or delegates appointed in accordance with the provisions
      of this Clause 3, shall be readily available to enable both the COMPANY
      and the CONTRACTOR to discharge their obligations under the
      CONTRACT.

            


    

     

    
      	
               
      

            	
              (c)

            	
              The
      COMPANY REPRESENTATIVE and any person authorised by him shall have access
      at all reasonable times to the WORKSITE and the CONTRACTOR shall afford
      every facility for and every assistance in obtaining the right of
      access.

            


    

     

    
      
        	
                3.2

              	
                COMPANY
      REPRESENTATIVE

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              The
      COMPANY REPRESENTATIVE has the authority to commit the COMPANY in all
      matters under the CONTRACT and, subject to any delegation of such
      authority which shall be notified to the CONTRACTOR in writing, shall be
      responsible for issuing to and receiving from the CONTRACTOR all notices,
      information, instructions and
decisions.

            


    

     

    
      	
               
      

            	
              (b)

            	
              By
      notice to the CONTRACTOR, the COMPANY REPRESENTATIVE may at any time
      delegate any of his authority to any nominated deputy. Such notice shall
      specify the precise authority of any such deputy and shall be sent to the
      CONTRACTOR REPRESENTATIVE.

            


    

     

    
      	
               
      

            	
              (c)

            	
              The
      COMPANY may change the COMPANY REPRESENTATIVE at any time and shall notify
      the CONTRACTOR of any change.

            


    

     

    
      	
               
      

            	
              (d)

            	
              Except
      as expressly stated in the CONTRACT, the COMPANY REPRESENTATIVE has no
      powers to amend the CONTRACT or to relieve the CONTRACTOR from any of
      its
      obligations under the
CONTRACT.

            


    

     

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    WELL
SERVICES

     

    
      
        	
                3.3

              	
                CONTRACTOR
      REPRESENTATIVE

              


      

    

     

    
      	
            	
              (a)

            	
              The
      CONTRACTOR REPRESENTATIVE has the authority to commit the CONTRACTOR to
      any course of action within the rights and obligations of the CONTRACTOR
      under the CONTRACT and, subject to any delegation of such authority which
      shall be notified to the COMPANY in writing, shall be responsible for
      issuing to and receiving from the COMPANY all notices, information,
      instructions and decisions.

            


    

     

    
      	
               
      

            	
              (b)

            	
              The
      CONTRACTOR REPRESENTATIVE may delegate any of his authority to any
      nominated deputy, the terms of such delegation being subject to the prior
      approval of the COMPANY which shall not be unreasonably withheld or
      delayed.

            


    

     

    
      	
               
      

            	
              (c)

            	
              The
      CONTRACTOR shall not change the CONTRACTOR REPRESENTATIVE or any nominated
      deputy without cause without the prior approval of the COMPANY which shall
      not unreasonably be withheld or
delayed.

            


    

     

    
      	
               
      

            	
              (d)

            	
              The
      CONTRACTOR REPRESENTATIVE has no powers to amend the
    CONTRACT.

            


    

     

    
      	
              4.

            	
              CONTRACTOR’S
      GENERAL OBLIGATIONS

            


    

     

    
      
        	
                4.1

              	
                The
      CONTRACTOR shall provide all management, supervision, personnel, materials
      and equipment, (except materials and equipment specified to be provided by
      the COMPANY), plant, consumables, facilities and all other things whether
      of a temporary or permanent nature, so far as the necessity for providing
      the same is specified in or reasonably to be inferred from the
      CONTRACT.

              


      

    

     

    
      
        	
                4.2

              	
                The
      CONTRACTOR shall cariy out all of its obligations under the CONTRACT and
      shall execute the WORK with all due care and diligence and with the skill
      to be expected of a reputable contractor experienced in the types of work
      to be carried out under the
CONTRACT.

              


      

    

     

    
      
        	
                4.3

              	
                The
      CONTRACTOR shall take full responsibility for the adequacy, stability and
      safety of all its operations and methods necessary for the performance of
      the WORK and shall keep strictly to the provisions of Section V - Health,
      Safety and Environment.

              


      

    

     

    
      
        	
                4.4

              	
                Except
      to the extent that it may be legally or physically impossible or create a
      hazard to safety the CONTRACTOR shall comply with the COMPANY’s
      instructions and directions on all matters relating to the
      WORK.

              


      

    

     

    
      
        	
                4.5

              	
                Materials
      and Equipment

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              Materials
      and equipment or parts thereof provided by the CONTRACTOR for which there
      is no detailed specification included in the CONTRACT shall be new or as
      new, of good quality and workmanship and fit for the intended purpose
      where a purpose is defined in the CONTRACT or, where no such purpose is
      defined, fit for its ordinary
purpose.

            


    

     

    
      	
               
      

            	
              (b)

            	
              Notwithstanding
      the provisions of Clause 4.5(a) in respect of materials and equipment
      specified in Appendix 1 to Section I - Form of Agreement which shall
      ultimately become the property of the COMPANY, the CONTRACTOR shall ensure
      that such materials and equipment meet the COMPANY’s
      specific requirements with regard to any quality, quantity or
      specifications which are set out in the CONTRACT and in accordance with
      good oilfield and engineering practice. However, in respect of such items
      there are no irhplied warranties of merchantability, satisfactory quality
      or fitness for a particular
purpose.

            


    

     

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    WELL
SERVICES

     

    
      
        	
                4.6

              	
                In
      order to ensure that performance and completion of the WORK are not
      delayed or impeded the CONTRACTOR shall be responsible for the timely
      provision of all matters referred to in Clause 4.1 and, where
      provided for
      elsewhere in
      the CONTRACT, for the timely request of COMPANY provided materials,
      services and facilities.

              


      

    

     

    
      
        	
                4.7

              	
                The
      COMPANY reserves the right to let other contracts associated with the
      WORK. The CONTRACTOR shall afford the COMPANY and other contractors of the
      COMPANY reasonable access and opportunity for the performance of their
      work or contracts and shall co-operate fully with such
      parties.

              


      

    

     

    
      
        	
                4.8

              	
                The
      CONTRACTOR shall be responsible for the programming of the
      WORK.

              


      

    

     

    
      	
              4.9

            	
              On
      completion of the WORK or any portion thereof, the CONTRACTOR shall
      without delay clear and remove all equipment and materials provided by the
      CONTRACTOR including debris, thereby leaving the WORKSITE in a clean, tidy
      and safe condition.

            


    

     

    
      	
              4.10

            	
              Surplus
      COMPANY material in the possession of the CONTRACTOR on completion of the
      WORK shall be disposed of by the CONTRACTOR in accordance with the
      instructions of the COMPANY REPRESENTATIVE which shall be the subject of a
      VARIATION in accordance with Clause
11.

            


    

     

    
      
        	
                5.

              	
                OFFSHORE
      TRANSPORTATION AND
ACCOMMODATION

              


      

    

     

    
      
        	
                5.1

              	
                The
      CONTRACTOR shall be provided with, at no cost to the CONTRACTOR, all
      offshore accommodation and messing and all routine and medi-vac
      transportation for personnel provided by CONTRACTOR GROUP and for
      equipment and materials provided by CONTRACTOR GROUP which are capable of
      transportation by helicopter or supply boat between the COMPANY designated
      heliport and supply base as specified in Appendix 1 to Section I - Form of
      Agreement and the offshore part of the
WORKSITE.

              


      

    

     

    
      
        
          	
                  5.2

                	
                  The
      costs of non-routine transportation requested by the CONTRACTOR may, at
      the sole option of the COMPANY, be recovered from the
      CONTRACTOR.

                


        

      

    

     

    
      
        	
                6.

              	
                CONTRACTOR
      TO INFORM ITSELF

              


      

    

     

    
      
        	
                6.1

              	
                The
      CONTRACTOR shall be deemed to have satisfied itself, before entering into
      the CONTRACT, as to the extent and nature of the WORK including but not
      limited to the services, personnel, materials and equipment, plant,
      consumables and facilities required for the WORK, the correctness and
      sufficiency of the rates and prices entered in Section III - Remuneration,
      general and local conditions, and all other matters which could affect
      progress or performance of the
WORK.

              


      

    

     

    
      
        	
                6.2

              	
                Any
      failure by the CONTRACTOR to take account of matters which affect the WORK
      will not relieve the CONTRACTOR from its obligations under the
      CONTRACT.

              


      

    

     

    
      
        	
                6.3

              	
                The
      CONTRACTOR shall check all TECHNICAL INFORMATION in accordance with good
      oilfield practice and advise the COMPANY of any errors or inconsistencies
      it finds. The COMPANY shall resolve those errors or inconsistencies and
      the CONTRACTOR shall thereafter be entitled to rely on all TECHNICAL
      INFORMATION furnished to the CONTRACTOR by the COMPANY (as corrected by
      the COMPANY if applicable).

              


      

    

     

    
      
        	
                7.

              	
                CONTRACTOR
      TO INFORM COMPANY/COMPANY TO INFORM
CONTRACTOR

              


      

    

     

    
      
        	
                7.1

              	
                The
      CONTRACTOR shall notify the COMPANY without undue delay of all things
      which in the opinion of the CONTRACTOR appear to be deficiencies,
      omissions, contradictions or ambiguities in the CONTRACT or conflicts with
      applicable law.

              


      

    

     

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    WELL
SERVICES

     

    The
COMPANY shall review these items and issue the necessary instructions before the
CONTRACTOR proceeds with any part of the WORK affected. Subject to the
provisions of Clause 11, the COMPANY shall issue a VARIATION if the CONTRACTOR
can show that it has suffered delay and/or incurred additional cost as a result
of any such instruction.

     

    
      
        	
                7.2

              	
                In
      addition to the requirements of Section V - Health, Safety and
      Environment, the CONTRACTOR shall notify the COMPANY without delay of any
      accidents which occur in connection with the carrying out of the WORK. The
      CONTRACTOR shall also notify the COMPANY of any other incidents which
      occur which might affect the carrying out of the WORK or the
      CONTRACT.

              


      

    

     

    
      
        	
                7.3

              	
                The
      CONTRACTOR shall notify the COMPANY immediately of any proposed or actual
      stoppages of work, industrial disputes or other matters affecting or
      likely to affect the carrying out or completion of the
    WORK.

              


      

    

     

    When
requested by the COMPANY the CONTRACTOR shall also supply to the COMPANY other
information in connection with the WORK relating to industrial relations
including but not limited to minimum rates of pay, allowances, amenities,
working hours, periods of unpaid leave and overtime.

     

    
      
        	
                7.4

              	
                The
      COMPANY shall without delay provide to the CONTRACTOR all information
      affecting the WORK which the CONTRACTOR reasonably requires from the
      COMPANY in order to properly perform the WORK in accordance with the
      CONTRACT.

              


      

    

     

    
      
        8*ASSIGNMENT
AND SUBCONTRACTING

      

    

     

    
      
        	
                8.1

              	
                Assignment

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              The
      COMPANY is entitled to assign the CONTRACT or any part of it or any
      benefit or interest in or under it to any CO-VENTURER or AFFILIATE of the
      COMPANY. In addition the COMPANY may make any such assignment to any other
      third party but only with the prior agreement of the CONTRACTOR which
      shall not unreasonably be withheld or
delayed.

            


    

     

    
      	
               
      

            	
              (b)

            	
              The
      CONTRACTOR undertakes that, in the event of any assignment described
      above, it will execute without delay a formal assignment of interest in
      the CONTRACT to the relevant party, to be effective upon the written
      assumption by the assignee of all obligations of the COMPANY under the
      CONTRACT.

            


    

     

    
      	
               
      

            	
              (c)

            	
              The
      CONTRACTOR shall assign neither the CONTRACT nor any part of it nor any
      benefit nor interest in or under it without the prior approval of the
      COMPANY which shall not unreasonably be withheld or
    delayed.

            


    

     

    
      
        	
                8.2

              	
                Subcontracting

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              The
      CONTRACTOR shall not subcontract the whole of the WORK. The CONTRACTOR
      shall not subcontract any part of the WORK without the prior approval of
      the COMPANY which approval shall not unreasonably be withheld or
      delayed.

            


    

     

    
      	
               
      

            	
              (b)

            	
              Before
      entering into any SUBCONTRACT, whether provided for in the CONTRACT or
      not, the COMPANY shall be given an adequate opportunity to review the form
      of SUBCONTRACT, the choice of SUBCONTRACTOR, the part of the WORK included
      in the SUBCONTRACT and any other relevant details requested by the
      COMPANY.

            


    

     

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    WELL
SERVICES

     

    Where the
COMPANY will be required to reimburse to the CONTRACTOR the sum paid to the
SUBCONTRACTOR, any procedure for award of such SUBCONTRACTS included in the
CONTRACT shall be followed and the COMPANY shall be entitled to review all
relevant aspects of the SUBCONTRACT.

     

    No
SUBCONTRACT shall bind or purport to bind the COMPANY or the CO- VENTURERS.
Nevertheless the CONTRACTOR shall ensure that any SUBCONTRACTOR shall be bound
by and observe the provisions of the CONTRACT in so far as they apply to the
SUBCONTRACT.

     

    
      	
            	
              (c)

            	
              Each
      SUBCONTRACT shall expressly provide for the CONTRACTOR’s
      unconditional right of assignment of the SUBCONTRACT to the COMPANY
      in the event that the COMPANY terminates the CONTRACT or the
      WORK.

            


    

    


    
      	  	
              (d)

            	
              The
      CONTRACTOR shall be responsible for all work, acts, omissions and defaults
      of any SUBCONTRACTOR as fully as if they were work, acts, omissions or
      defaults of the CONTRACTOR.

            


    

     

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Page No.
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      9.
CONTRACTOR PERSONNEL

    

     

    
      
        	
                9.1

              	
                The
      CONTRACTOR undertakes to provide sufficient personnel at all times to
      ensure performance and completion of the WORK in accordance with the
      provisions of the CONTRACT.

              


      

    

     

    
      
        	
                9.2

              	
                All
      personnel employed on the WORK shall, for the work which they are required
      to perform, be competent, properly qualified, skilled and experienced in
      accordance with good industry practice. The CONTRACTOR shall verify all
      relevant qualifications of such
personnel.

              


      

    

     

    
      
        	
                9.3

              	
                Where
      key personnel of the CONTRACTOR are specified in the CONTRACT they shall
      not be replaced without the prior approval of the COMPANY. Any replacement
      shall work with the person to be replaced for a reasonable handover
      period.

              


      

    

     

    
      
        	
                9.4

              	
                The
      CONTRACTOR shall ensure that such key personnel and supervisory personnel
      of the CONTRACTOR and SUBCONTRACTORS shall read, write and speak fluent
      English.

              


      

    

     

    
      
        	
                9.5

              	
                The
      CONTRACTOR shall make its own arrangements for the engagement of
      personnel, local or otherwise, and, save in so far as the CONTRACT
      otherwise provides, for their payment and onshore transport, housing,
      maintenance and board and
lodging.

              


      

    

     

    
      
        	
                9.6

              	
                The
      CONTRACTOR shall be as responsible for any WORK performed by any agency
      personnel and by any other person provided by the CONTRACTOR in connection
      with the WORK as if the WORK was performed by the employees of the
      CONTRACTOR.

              


      

    

     

    
      
        	
                9.7

              	
                The
      CONTRACTOR shall ensure that all employees of the CONTRACTOR and any
      SUBCONTRACTOR engaged in the performance of the WORK comply with
      applicable laws including immigration laws and where required are in
      possession of a valid work permit for the duration of the CONTRACT. When
      requested details of such work permits shall be submitted to the COMPANY
      prior to the employee being engaged in the
WORK.

              


      

    

     

    
      	
               
      

            	
              9.8

            	
              The
      COMPANY may instruct the CONTRACTOR to remove from the WORKSITE any person
      engaged in any part of the WORK who in the reasonable opinion of the
      COMPANY is either:

            


    

     

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    WELL
SERVICES

     

    
      	
               
      

            	
              (a)

            	
              incompetent
      or negligent in the performance of his or her duties;
  or

            


    

     

    
      	
               
      

            	
              (b)

            	
              engaged
      in activities which are contrary or detrimental to the interests of the
      COMPANY; or

            


    

     

    
      	
               
      

            	
              (c)

            	
              not
      conforming to relevant safety procedures described in Section V - Health,
      Safety and Environment or persists in any conduct likely to be prejudicial
      to safety, health or the
environment.

            


    

     

    Any such
person shall be removed forthwith from the WORKSITE. Any person removed for any
of the above reasons shall not be engaged again in the WORK or on any other
works of the COMPANY without the prior approval of the COMPANY.

     

    The
CONTRACTOR shall provide a suitable replacement for any such person within 24
hours or such longer time as may be agreed by the COMPANY.

     

    
      10.
DEFECTIVE PERFORMANCE

    

     

    
      
        	
                10.1

              	
                Where
      the COMPANY has found the WORK or part thereof or any rework performed by
      the CONTRACTOR not to have been performed in accordance with the CONTRACT,
      the COMPANY shall detail in writing within the relevant period specified
      in Appendix 1 to Section I - Form of Agreement the specific nature of the
      defect and the Clause and Section of the CONTRACT that contains the
      obligation that the CONTRACTOR has failed to
  meet.

              


      

    

     

    
      
        	
                10.2

              	
                Commencing
      immediately upon the notice issued under Clause 10.1 becoming effective,
      the CONTRACTOR shall at its own expense and risk, reperform that part of
      the WORK which has not been performed in accordance with the CONTRACT. The
      CONTRACTOR’s
      liability in respect of such reperformance shall be limited to the sum(s)
      specified in Appendix 1 to Section I - Form of
  Agreement.

              


      

    

     

    
      
        	
                10.3

              	
                Notwithstanding
      the CONTRACTOR’s
      obligation pursuant to Clause 10.2 above the COMPANY may, at its sole
      option, engage a third party to perform any part of the WORK which has not
      been performed or reperformed pursuant to Clause 10.2 by the CONTRACTOR in
      accordance with the CONTRACT and in respect of which the COMPANY has so
      notified the CONTRACTOR in accordance with Clause 10.1 above. The COMPANY
      shall give notice to the CONTRACTOR of its intention to exercise this
      option in which case Clause 10.2 shall not apply, and the CONTRACTOR shall
      cease immediately any work being carried out under Clause
      10.2.

              


      

    

     

    
      
        	
                10.4

              	
                Where
      the COMPANY, under Clause 10.3 above, engages a third party, the
      CONTRACTOR shall be liable for any additional costs (including, without
      limitation, the total costs of the reperformance of the relevant part of
      the WORK by the third party) reasonably incurred by the COMPANY as a
      direct result of the defective performance or reperformance of the
      relevant part of the WORK by the CONTRACTOR, providing however that the
      maximum amount of such additional costs for which the CONTRACTOR shall be
      liable in respect of each defectively performed or reperformed part of the
      WORK shall be limited to the sum(s) specified in Appendix 1 to Section I -
      Form of Agreement.

              


      

    

     

    
      
        	
                10.5

              	
                Notwithstanding
      the other provisions of this Clause 10, the COMPANY shall provide at its
      own cost any services and/or materials as listed in Section VI - Company’s
      General Obligations which the COMPANY considers the CONTRACTOR requires to
      undertake properly such performance or
  reperformance.

              


      

    

     

    
      
        	
                10.6

              	
                The
      CONTRACTOR shall be responsible for correcting any defect in material and
      workmanship in any supplied materials or equipment, within the relevant
      period referred to in Clause 10.1. However, the CONTRACTOR shall not be
      liable for :

              


      

    

     

    
      	
               
      

            	
              (a)
      the costs of routine maintenance for such materials and equipment;
      or

            


    

     

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              (b)
      the costs of correcting any such defects which result from the following
      :

            


    

     

    
      	
               
      

            	
              (i)

            	
              incorrect
      operation by the COMPANY; or

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      reasonable actions of the CONTRACTOR in relying on TECHNICAL INFORMATION;
      or

            


    

     

    
      	
               
      

            	
              (iii)

            	
              actual
      operating conditions being different from those specified in the CONTRACT
      or in any VARIATIONS; or

            


    

     

    
      	
               
      

            	
              (iv)

            	
              defects
      in materials and equipment supplied by the COMPANY which could not
      reasonably have been discovered by the
  CONTRACTOR.

            


    

     

    
      
        	
                11.

              	
                VARIATIONS

              


      

    

     

    
      
        	
                11.1

              	
                The
      COMPANY has the right to issue instructions to the CONTRACTOR at any time
      to make any variations to the WORK which are within the capability and
      resources of the CONTRACTOR. The CONTRACTOR shall proceed immediately as
      instructed.

              


      

    

     

    
      
        	
                11.2

              	
                Any
      adjustment to the CONTRACT PRICE resulting from any variation shall be
      valued at the appropriate rates and prices included in the CONTRACT or, in
      the absence of any appropriate rates and prices, a fair valuation shall be
      made.

              


      

    

     

    
      
        	
                12.

              	
                FORCE
      MAJEURE

              


      

    

     

    
      
        	
                12.1

              	
                Neither
      the COMPANY nor the CONTRACTOR shall be responsible for any failure to
      fulfil any term or condition of the CONTRACT if and to the extent that
      fulfilment has been delayed or temporarily prevented by a force majeure
      occurrence, as hereunder defined, which has been notified in accordance
      with this Clause 12 and which is beyond the control and without the fault
      or negligence of the party affected and which, by the exercise of
      reasonable diligence, the said party is unable to provide
      against.

              


      

    

     

    
      
        	
                12.2

              	
                For
      the purposes of this CONTRACT only the following occurrences shall be
      force majeure:

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              Riot,
      war, invasion, act of foreign enemies, hostilities (whether war be
      declared or not), acts of terrorism, civil war, rebellion, revolution,
      insurrection of military or usurped
power;

            


    

     

    
      	
               
      

            	
              (b)

            	
              Ionising
      radiations or contamination by radio-activity from any nuclear fuel or
      from any nuclear waste from the combustion of nuclear fuel or
      radio-active, toxic, explosive or other hazardous properties of any
      explosive nuclear assembly or nuclear component
  thereof;

            


    

     

    
      	
               
      

            	
              (c)

            	
              Pressure
      waves caused by aircraft or other aerial devices travelling at sonic or
      supersonic speeds;

            


    

     

    
      	
               
      

            	
              (d)

            	
              Earthquake,
      flood, fire, explosion and/or other natural physical disaster, but
      excluding weather conditions as such, regardless of
    severity;

            


    

     

    
      	
            	
              (e)

            	
              Strikes
      at a national or regional level or industrial disputes at a national or
      regional level, or strikes or industrial disputes by labour not employed
      by the affected party its subcontractors or its suppliers and which affect
      a substantial or essential portion of the
WORK;

            


    

     

    
      	
               
      

            	
              (f)

            	
              Maritime
      or aviation disasters;

            


    

     

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                (g)

              	
                Changes
      to any general or local Statute, Ordinance, Decree, or other Law or any
      regulation or bye-law of any local or other duly constituted authority or
      the introduction of any such Statute, Ordinance, Decree, Law, regulation
      or bye-law.

              


      

    

     

    
      
        	
                12.3

              	
                In
      the event of a force majeure occurrence, the party that is or may be
      delayed in performing the CONTRACT shall notify the other party without
      delay giving the full particulars thereof and shall use all reasonable
      endeavours to remedy the situation without
  delay.

              


      

    

     

    
      
        	
                12.4

              	
                Save
      as otherwise expressly provided in the CONTRACT, no payments of whatever
      nature shall be made in respect of a force majeure
    occurrence.

              


      

    

     

    
      
        	
                12.5

              	
                Following
      notification of a force majeure occurrence in accordance with Clause 12.3,
      the COMPANY and the CONTRACTOR shall meet without delay with a view to
      agreeing a mutually acceptable course of action to minimise any effects of
      such occurrence.

              


      

    

     

    
      13.
SUSPENSION

    

     

    
      
        	
                13.1

              	
                The
      COMPANY shall have the right, by notice to the CONTRACTOR, to suspend the
      WORK or any part thereof to the extent detailed in the notice, for any of
      the following reasons;

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              subject
      only to Clause 13.3, in the event of some default on the part of the
      CONTRACTOR; or

            


    

     

    
      	
               
      

            	
              (b)

            	
              in
      the event that suspension is necessary for the proper execution or safety
      of the WORK, or persons; or

            


    

     

    
      	
               
      

            	
              (c)

            	
              to
      suit the convenience of the
COMPANY.

            


    

     

    
      
        	
                13.2

              	
                Upon
      receipt of any such notice, the CONTRACTOR shall, unless instructed
      otherwise:

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              discontinue
      the WORK or the part of the WORK detailed in the notice, on the date and
      to the extent specified; and

            


    

     

    
      	
               
      

            	
              (b)

            	
              properly
      protect and secure the WORK as required by the
  COMPANY.

            


    

     

    
      
        	
                13.3

              	
                Jn
      the event of default on the part of the CONTRACTOR and before the issue by
      the COMPANY of a notice to suspend the WORK or any part thereof the
      COMPANY shall give notice of default to the CONTRACTOR giving details of
      such default. If the CONTRACTOR, upon receipt of such notice, does not
      commence and thereafter continuously proceed with action satisfactory to
      the COMPANY to remedy such default the COMPANY may issue a notice of
      suspension in accordance with the provisions of Clause
    13.1.

              


      

    

     

    
      
        	
                13.4

              	
                Unless
      the suspension arises as a result of default on the part of the
      CONTRACTOR, the CONTRACTOR shall be reimbursed in accordance with the
      provisions of Section III - Remuneration or, in the absence of such
      provisions, in accordance with Clause
11.

              


      

    

     

    
      
        	
                13.5

              	
                If
      suspension results from default on the part of the CONTRACTOR any
      additional costs reasonably incurred by the COMPANY as a direct result
      shall be recoverable by the COMPANY from the CONTRACTOR. The
      CONTRACTOR’s
      liability in respect of such additional costs shall be limited to the sum
      specified in Appendix 1 to Section I - Form of
  Agreement.

              


      

    

     

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                13.6

              	
                The
      COMPANY may, by further notice, instruct the CONTRACTOR to resume the WORK
      to the extent specified.

              


      

    

     

    
      
        	
                13.7

              	
                In
      the event of any suspension, the COMPANY and the CONTRACTOR shall meet at
      not more than seven (7) day intervals with a view to agreeing a mutually
      acceptable course of action during the
  suspension.

              


      

    

     

    
      
        	
                13.8

              	
                If
      the period of any suspension not arising as a result of default on the
      part of the CONTRACTOR exceeds the period stated in Appendix 1 to Section
      I - Form of Agreement, the CONTRACTOR may serve a notice on the COMPANY
      requiring permission within fourteen (14) days from the receipt of such
      notice to proceed with the WORK or that part thereof subject to
      suspension. If within the said fourteen (14) days the COMPANY does not
      grant such permission the CONTRACTOR, by a further notice, may (but is not
      bound to) elect to treat the suspension as
  either:

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              where
      it affects part only of the WORK, an omission of such part under Clause
      11; or

            


    

     

    
      	
               
      

            	
              (b)

            	
              where
      it affects the whole of the WORK, termination in accordance with Clause
      23.1 (a).

            


    

     

    
      14.
TERMS OF PAYMENT

    

     

    
      	
              14.1

            	
              For
      the performance and completion of the WORK, the COMPANY shall pay or cause
      to be paid to the CONTRACTOR the amounts provided in Section III -
      Remuneration at the times and in the manner specified in Section III and
      in this Clause.

            


    

     

    
      
        	
                14.2

              	
                Except
      where it is expressly provided that the COMPANY shall carry out an
      obligation under the CONTRACT at its own cost, all things to be supplied
      or performed by the CONTRACTOR under the CONTRACT shall be deemed to be
      included in the rates and prices included in Section III - Remuneration.
      Without limitation all obligations of the CONTRACTOR pursuant to the
      provision of Clause 10 shall be performed by the CONTRACTOR at its sole
      cost and expense.

              


      

    

     

    
      
        	
                14.3

              	
                The
      CONTRACTOR shall submit to the COMPANY an invoice within thirty (30) days
      of the end of each calendar
month.

              


      

    

     

    Following
completion of the whole of the WORK, the CONTRACTOR shall not be entitled to
receive any payment on any invoice received by the COMPANY after the time
specified in Appendix 1 to Section I - Form of Agreement, as the latest time for
receipt of invoices. Nevertheless the COMPANY may, at its sole discretion, make
payment against any such invoice.

     

    
      
        	
                14.4

              	
                To
      the extent that payments to be made under the CONTRACT attract Value Added
      Tax, the proper amount of such tax shall be shown as a separate item on
      the invoice; Value Added Tax shall be added to the CONTRACT PRICE as
      appropriate.

              


      

    

     

    
      	
              14.5

            	
              Each
      invoice shall show separately the individual amounts under each of the
      headings in Section III - Remuneration, and shall quote the COMPANY
      Contract Reference Number, Title and such other details as may be
      specified in the CONTRACT.

            


    

     

    Each
invoice shall be forwarded to the address specified in Appendix 1 to Section I -
Form of Agreement.

     

    
      
        	
                14.6

              	
                Within
      thirty (30) days from receipt of a correctly prepared and adequately
      supported invoice by the COMPANY at the address specified in the CONTRACT,
      the COMPANY shall make payment in respect of such invoices as
      follows:

              


      

    

     

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              (a)

            	
              for
      payments in Sterling the COMPANY shall make payment of the due amount into
      the bank account of the CONTRACTOR specified in the CONTRACT or otherwise
      notified by the CONTRACTOR, using the Banker’s Automated Clearing System;
      or

            


    

     

    
      	
               
      

            	
              (b)

            	
              for payments in
      foreign currencies the COMPANY shall make payment of the due amount
      in the appropriate currency into the bank account of the CONTRACTOR
      specified in the CONTRACT or otherwise notified by the
      CONTRACTOR.

            


    

     

    
      
        	
                14.7

              	
                If
      the COMPANY disputes any items on any invoice in whole or in part or if
      the invoice is prepared or submitted incorrectly in any respect, the
      COMPANY shall notify the CONTRACTOR of the reasons and request the
      CONTRACTOR to issue a credit note for the unaccepted part or whole of the
      invoice as applicable. Upon receipt of such credit note the COMPANY shall
      be obliged to pay the undisputed part of a disputed
    invoice.

              


      

    

     

    If any
other dispute connected with the CONTRACT exists between the parties the COMPANY
may withhold from any money which becomes payable under the CONTRACT the amount
which is the subject of the dispute. The COMPANY shall not be entitled to
withhold monies due to the CONTRACTOR under any other contracts with the COMPANY
as set off against disputes under the CONTRACT, nor shall it be entitled to
withhold monies due under the CONTRACT as set off against disputes under any
other contract.

     

    On
settlement of any dispute the CONTRACTOR shall submit an invoice for sums due
and the COMPANY shall make the appropriate payment in accordance with the
provisions of Clause 14.6 and Clause 14.9 where applicable.

     

    
      
        	
                14.8

              	
                Neither
      the presentation nor payment nor non-payment of an individual invoice
      shall constitute a settlement of a dispute, an accord and satisfaction, a
      remedy of account stated, or otherwise waive or affect the rights of the
      parties hereunder.

              


      

    

     

    In
particular the COMPANY may correct or modify any sum previously paid in any or
all of the following circumstances:

     

    
      	
            	
              (a) 

            	
              any
      such sum was incorrect; or

            


    

     

    
      	
            	
              (b) 

            	
              any
      such sum was not properly payable to the CONTRACTOR;
  or

            


    

     

    
      	
               
      

            	
              (c)

            	
              any
      work in respect of which payment has been made and which does not comply
      with the terms of the CONTRACT.

            


    

     

    
      
        	
                14.9

              	
                Interest
      shall be payable for late payment of correctly prepared and supported
      invoices. The amount of interest payable shall be the current Bank of
      England "Base Rate* plus the percentage specified in Appendix 1 to Section
      I - Form of Agreement calculated on a daily basis or in the absence of
      such percentage, Bank of England "Base Rate' plus three percent (3%) from
      the due date for payment until actual
payment.

              


      

    

     

    
      
        	
                14.10

              	
                If
      the COMPANY at any time incurs costs which, under the provisions of the
      CONTRACT, the COMPANY is entitled to recover from the CONTRACTOR, the
      COMPANY may invoice the CONTRACTOR for such costs, provided always that
      the COMPANY may deduct the amount of such costs from any amount due, or
      that may become due to the CONTRACTOR under the
  CONTRACT.

              


      

    

     

    The
CONTRACTOR shall pay the COMPANY within thirty (30) days of receipt of invoice
any sums outstanding after such deduction.

     

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                14.11

              	
                For
      the purposes of Clause 14.10, and elsewhere in the CONTRACT, wherever a
      party to the CONTRACT is entitled to recover from another party any costs
      incurred, then the amount of such costs shall be the amount of all claims,
      losses, damages, charges, disbursements, costs (including amounts paid to
      third parties), overheads and expenses directly resulting from the matter
      in question, but no element of
profit.

              


      

    

     

    
      15.
TAXES AND TAX EXEMPTION CERTIFICATES

    

     

    
      
        	
                15.1

              	
                The
      CONTRACTOR shall in accordance with the provisions of Clause 18, except as
      may otherwise be provided in Section III - Remuneration, be responsible
      for:

              


      

    

     

    
      	
               
      

            	
              (a)

            	
              the
      payment of all taxes, duties, levies, charges and contributions (and any
      interest or penalties thereon) for which the CONTRACTOR is liable as
      imposed by any appropriate government authority whether of the United
      Kingdom or elsewhere, whether or not they are calculated by reference to
      the wages, salaries, benefits or expenses and other remuneration paid
      directly or indirectly to persons engaged or employed by the CONTRACTOR;
      and

            


    

     

    
      	
               
      

            	
              (b)

            	
              the
      payment of all taxes, duties, levies, charges and contributions (and any
      interest or penalties thereon) including but not limited to
      income, profits, corporation taxes and taxes on capital gains,
      turnover and added value taxes for which the CONTRACTOR is liable, whether
      arising in the United Kingdom, its territorial waters, its continental
      shelf or elsewhere, now or hereafter levied or imposed by any appropriate
      government authority whether of the United Kingdom or elsewhere, arising
      from this CONTRACT; and

            


    

     

    
      	
               
      

            	
              (c)

            	
              compliance
      with all statutoiy obligations to make deductions on account of and remit
      the required amounts to any appropriate government authority whether of
      the United Kingdom or elsewhere, including, but not limited to income tax,
      PAYE, national insurance, employee taxes, charges, social security costs,
      levies and contributions whether or not they are measured by the wages,
      salaries or other remuneration or benefits paid to persons employed by the
      CONTRACTOR, or persons providing services in connection with the CONTRACT
      to the CONTRACTOR, and the imposition of a similar obligation upon any
      SUBCONTRACTOR or any other person employed by them or providing services
      to them in connection with the CONTRACT;
and

            


    

     

    
      	
               
      

            	
              (d)

            	
              ensuring
      that any SUBCONTRACTOR or any other person employed, or providing services
      on or in connection with the CONTRACT shall comply with this Clause
      15.

            


    

     

    
      
        	
                15.2

              	
                The
      CONTRACTOR shall supply to the COMPANY all such information, in connection
      with activities under the CONTRACT, as is necessary to enable the COMPANY
      to comply with the lawful demands for such information by any appropriate
      government authority whether of the United Kingdom or
      elsewhere.

              


      

    

     

    
      
        	
                15.3

              	
                Where
      the CONTRACTOR, any SUBCONTRACTOR or any other person employed by them, or
      providing services to them on or in connection with the CONTRACT, is or
      may become liable for tax as a result of the operation of Section 38
      Finance Act 1973 and/or Section 830 Income and Corporation Taxes Act 1988
      and/or Section 276 Taxation of Chargeable Gains Act 1992, and if such a
      person, within forty five (45) days of the EFFECTIVE DATE OF COMMENCEMENT
      OF THE CONTRACT, is not able to exhibit to the reasonable satisfaction of
      the COMPANY that the person is "resident" for tax purposes within the
      United Kingdom, the CONTRACTOR shall, where the WORK or any part thereof
      is to be performed within the United Kingdom and/or within a "designated
      area", obtain for itself and procure that any such SUBCONTRACTOR or other
      person employed by them, or providing services to them on or in connection
      with the CONTRACT obtains a United Kingdom Inland Revenue Certificate of
      Exemption in favour of the COMPANY in accordance with the provisions
      of paragraph 7 of Schedule 15 Finance Act 1973 and any statutory amendment
      thereto. The CONTRACTOR shall immediately upon receipt thereof, forward
      such certificate to the COMPANY or where such certificate is refused, the
      CONTRACTOR shall upon being so informed, immediately notify the COMPANY of
      such refusal.

              


      

    

     

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    If such
Certificate of Exemption is not obtained within forty five (45) days of the
EFFECTIVE DATE OF COMMENCEMENT OF THE CONTRACT, or having been obtained is
subsequently withdrawn, the COMPANY shall have the right to make deductions from
any amounts due to the CONTRACTOR up to the maximum estimated potential tax
liability arising to the person or persons whose certificate of exemption has
not been obtained or has been withdrawn, as reasonably computed by the COMPANY,
arising out of the CONTRACT.

     

    In the
event that any such deductions are made by the COMPANY, these shall be paid to
the CONTRACTOR on the receipt by the COMPANY of satisfactory evidence that the
CONTRACTOR, SUBCONTRACTOR or other person employed by them or providing services
to them on or in connection with the CONTRACT has paid all taxes arising out of
the CONTRACT and the Board of Inland Revenue will not be serving a notice on the
COMPANY under paragraph 4 of Schedule 15 Finance Act 1973.

     

    "designated
area" shall for the purpose of this Clause 15.3 bear the same meaning as that
given in Section 38 Finance Act 1973 and/or Section 830 Income and Corporation
Taxes Act 1988 and/or Section 276 Taxation of Chargeable Gains Act
1992.

     

    "resident"
shall for the purpose of this Clause 15.3 mean that the company or person is
regarded by the Inland Revenue as United Kingdom resident.

     

    
      
        	
                15.4

              	
                Where
      any of the WORK involves the performance of construction activities
      specified in Section 567 (2) Income and Corporation Taxes Act 1988, the
      CONTRACTOR shall obtain for itself a U.K. Inland Revenue Certificate of
      Exemption or Registration Card in accordance with part XIII Chapter IV
      Income and Corporation Taxes Act 1988. The CONTRACTOR shall immediately
      upon receipt thereof, forward such exemption certificate or registration
      card to the COMPANY or shall notify the COMPANY that such exemption
      certificate or registration card has been refused or
      cancelled.

              


      

    

     

    Where at
the due date for payment, the COMPANY has received such exemption certificate,
the COMPANY shall pay any invoiced amounts due to the CONTRACTOR without
deduction.

     

    Where at
the due date for payment, the COMPANY has received such registration card, the
COMPANY will deduct tax at the rate applicable from the full payment due to the
CONTRACTOR in respect of such construction activities, except for elements which
are exempt from deduction under the terms of the Act.

     

    Where at
the due date for payment, the COMPANY has not received such exemption
certificate or registration card or where the CONTRACTOR has notified the
COMPANY of cancellation of said exemption certificate or registration card, the
COMPANY, under prevailing legislation, is unable to make payment of any amounts
which would otherwise be due to the CONTRACTOR in respect of such construction
activities except for elements which are exempt from deduction under the terms
of the Act.

     

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    The
CONTRACTOR shall notify the COMPANY immediately of any change to, or
cancellation or renewal of any such exemption certificate or registration card,
In the event of the failure of the CONTRACTOR to so notify the COMPANY, the
CONTRACTOR shall save, indemnify, defend and hold harmless the COMPANY from any
costs or penalties which may be imposed by any government authority in respect
thereof.

     

    
      
        	
                15.5

              	
                The
      CONTRACTOR shall save, indemnify, defend and hold harmless the COMPANY
      against all levies, charges, contributions and taxes of the type referred
      to in this Clause and any interest or penalty thereon which may be
      assessed, by any appropriate government authority whether of the United
      Kingdom or elsewhere, on the CONTRACTOR in connection
      with the CONTRACT and from all reasonable costs
      incurred in connection
therewith.

              


      

    

     

    
      
        	
                15.6

              	
                If
      the COMPANY receives a notice requiring it to pay any levies, charges,
      contributions or taxes of the types referred to in this Clause and/or any
      interest or penalty thereon whether with respect to the CONTRACTOR, any
      SUBCONTRACTOR or any other person employed by them or providing any
      services to them on or in connection with the CONTRACT, the COMPANY shall
      forthwith notify the CONTRACTOR who shall work with the COMPANY to make
      all reasonable endeavours to make any valid appeal against such payment.
      In the event that the COMPANY is ultimately required to make such payment,
      the COMPANY may recover from the CONTRACTOR any such sums and all
      reasonable costs incurred in connection therewith and the CONTRACTOR shall
      within fourteen (14) days of receiving written notice from the COMPANY pay
      to the COMPANY any such sum or the COMPANY shall be entitled to deduct
      such sums from any monies due, or which may become due, to the
      CONTRACTOR.

              


      

    

     

    
      
        	
                15.7

              	
                The
      COMPANY shall save, indemnify, defend and hold harmless the CONTRACTOR
      against all levies, charges, contributions and taxes of the type referred
      to in this Clause and any interest or penalty thereon which may be
      assessed, by any appropriate government authority whether of the United
      Kingdom or elsewhere, on the COMPANY in connection with the CONTRACT and
      from all costs incurred in connection therewith, other than those taxes
      and other matters referred to above, which the provisions of this Clause
      allow the COMPANY to recover from the
  CONTRACTOR.

              


      

    

     

    
      16.
OWNERSHIP

    

     

    
      
        	
                16.1

              	
                The
      COMPANY shall retain title to COMPANY provided items and information,
      including, but not limited to TECHNICAL INFORMATION and materials and
      equipment.

              


      

    

     

    
      	
              16.2

            	
              All
      equipment, materials and supplies provided by the CONTRACTOR for permanent
      incorporation into the WORK shall become and be clearly identified as the
      property of the COMPANY upon delivery to the offshore part of the WORKSITE
      or payment by the COMPANY whichever is the
  earlier.

            


    

     

    The
CONTRACTOR shall ensure that all CONTRACTOR provided items are free from all
liens and/or retention of title claims from any third party.

     

    
      
        	
                16.3

              	
                Title
      in any equipment, materials and supplies provided by the CONTRACTOR which
      do not comply with the requirements of the CONTRACT and which are rejected
      by the COMPANY, shall re-vest immediately in the
    CONTRACTOR.

              


      

    

     

    Title in such items provided by the CONTRACTOR for
which no payment has been made by the COMPANY and which are no longer required
for the purposes of the CONTRACT, shall revest in the
CONTRACTOR.

     

    Edition 2 - March 2001
Page No.
23

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    
      WELL
SERVICES

       

      
        	
                16.4

              	
                Where
      designs, drawings, reports, sketches and other documents and data to be
      provided by the CONTRACTOR hereunder are created and stored
      electronically, the CONTRACTOR shall provide to the COMPANY such designs,
      drawings, reports, sketches and other documents and data on a disk or
      other electronic media compatible with the COMPANY’S systems at the times
      specified in Section IV - Scope of Work or if no times are specified, when
      reasonably required by the COMPANY. The COMPANY and the CONTRACTOR shall
      agree the system compatibility requirements applicable to the
      WORK.

              


      

       

      
        	
                16.5

              	
                Title
      to all reports, test results and charts of whatever nature in respect of
      COMPANY’S wells including information on the geology and formations
      encountered in the well that have been created by the CONTRACTOR in the
      performance of the WORK shall vest in the COMPANY with effect from the
      date of creation. Upon completion, suspension or abandonment of each well
      or if earlier upon completion of CONTRACTOR’S WORK in connection with that
      well, the CONTRACTOR shall issue to the COMPANY all such documents in its
      possession.

              


      

       

      
        17.
PATENTS AND OTHER PROPRIETARY RIGHTS

      

       

      
        	
                17.1

              	
                Neither
      the COMPANY nor the CONTRACTOR shall have the right of use, other than for
      the purposes of the CONTRACT, whether directly or indirectly, of any
      patent, copyright, proprietary right or confidential know how, trademark
      or process provided by the other party and the intellectual property
      rights in such shall remain with the party providing such patent,
      proprietary right, copyright or confidential know how, trademark or
      process.

              


      

       

      
        	
                17.2

              	
                Where
      any potential patent or registrable right in any country in the world
      results from :

              


      

       

      
        	
                 
      

              	
                (a)

              	
                developments
      by the CONTRACTOR GROUP which are based wholly on data, equipment,
      processes, substances and the like in the possession of the CONTRACTOR
      GROUP at the EFFECTIVE DATE OF COMMENCEMENT OF THE CONTRACT or otherwise
      produced outside of the CONTRACT;
or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                enhancements of or
      in the existing intellectual property rights of the CONTRACTOR GROUP,
      such
      rights shall vest in the CONTRACTOR
      GROUP.

              


      

       

      
        	
                17.3

              	
                Where
      any potential patent or registrable right in any country in the world
      results from :

              


      

       

      
        	
                 
      

              	
                (a)

              	
                developments
      by the COMPANY GROUP which are based wholly on data, equipment, processes,
      substances and the like in the possession of the COMPANY GROUP at the
      EFFECTIVE DATE OF COMMENCEMENT OF THE CONTRACT or otherwise produced
      outside the CONTRACT; or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                enhancements of or
      in the existing intellectual property rights of the COMPANY GROUP, such
      rights shall vest in the COMPANY
    GROUP.

              


      

       

      
        	
                17.4

              	
                Except
      as provided in Clause 17.1, Clause 17.2 and Clause 17.3, where any
      potential patent or registrable right in any country in the world arises
      out of the WORK and is invented during the term of the CONTRACT, such
      rights shall vest in the party or parties as specified in Appendix 1 to
      Section I - Form of Agreement.

              


      

       

      Edition 2 - March 2001
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      WELL
SERVICES

       

      
        	
                17.5

              	
                Where
      under Clause 17.4 a right vests in one of the parties absolutely, such
      party may at its sole discretion give the other party and its AFFILIATES
      and its CO- VENTURERS a royalty-free, irrevocable, non-exclusive,
      non-transferable, worldwide licence to use such right which shall not be
      sub-licensed.

              


      

       

      
        	
                17.6

              	
                Where
      under Clause 17.4 a right vests in the parties jointly, then the parties
      shall unless otherwise agreed in writing jointly file a patent or other
      registration application in that joint
right.

              


      

       

      
        	
                17.7

              	
                The
      CONTRACTOR shall save, indemnify, defend and hold harmless the COMPANY
      GROUP from all claims, losses, damages, costs (including legal costs),
      expenses, and liabilities of every kind and nature for, or arising out of,
      any alleged infringement of any patent or proprietary or protected right,
      arising out of or in connection with the performance of the obligations of
      the CONTRACTOR under the CONTRACT except where such infringement
      necessarily arises from the TECHNICAL INFORMATION and/or the COMPANY’s
      instructions. However, the CONTRACTOR shall use its reasonable endeavours
      to identify any infringement in the TECHNICAL INFORMATION and/or in the
      COMPANY’s
      instructions of any patent or proprietary or protected right, and should
      the CONTRACTOR become aware of such infringement or possible infringement
      then the CONTRACTOR shall inform the COMPANY
  immediately.

              


      

       

      
        	
                17.8

              	
                Subject
      to the provisions of Clause 17.7, the COMPANY shall save, indemnify,
      defend and hold harmless the CONTRACTOR GROUP from all claims, losses,
      damages, costs (including legal costs), expenses, and liabilities of every
      kind and nature for, or arising out of, any alleged infringement of any
      patent or proprietary or protected right arising out of or in connection
      with the performance of the obligations of the COMPANY under the CONTRACT
      or the use by the CONTRACTOR of TECHNICAL INFORMATION or materials or
      equipment supplied by the COMPANY.

              


      

       

      
        
          	
                  18.

                	
                  LAWS
      AND REGULATIONS

                


        

      

       

      
        
          	
                  18.1

                	
                  The
      CONTRACTOR shall comply with all applicable laws, rules and regulations of
      any governmental or regulatory body having jurisdiction over the WORK
      and/or the WORKSITE.

                


        

      

       

      
        
          	
                  18.2

                	
                  The
      CONTRACTOR shall obtain all licences, permits, temporary permits and
      authorisations required by the applicable laws, rules and regulations for
      the performance of the WORK, save to the extent that the same can only be
      legally obtained by the
COMPANY.

                


        

      

       

      
        	
                18.3

              	
                Should
      changes in any applicable laws, rules and regulations made after the
      EFFECTIVE DATE OF COMMENCEMENT OF THE CONTRACT, result in increases in the
      cost to the CONTRACTOR of performing the WORK, the CONTRACTOR shall only
      be entitled to an adjustment in the CONTRACT PRICE to the extent described
      in Section III - Remuneration, or where, at its sole discretion, the
      COMPANY may consider such to be
appropriate.

              


      

       

      
        
          	
                  19.

                	
                  INDEMNITIES

                


        

      

       

      
        
          	
                  19.1

                	
                  The
      CONTRACTOR shall be responsible for and shall save, indemnify, defend and
      hold harmless the COMPANY GROUP from and against all claims, losses,
      damages, costs (including legal costs) expenses and liabilities in respect
      of:

                


        

      

       

      
        
          	
                	
                  (a)

                	
                  subject
      to Clause 19.5, loss of
      or damage to property of the CONTRACTOR GROUP whether owned, hired,
      leased or otherwise provided by the CONTRACTOR GROUP arising from or
      relating to the performance of the CONTRACT;
and

                


        

      

       

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      WELL
SERVICES

       

      
        
          	
                	
                  (b)

                	
                  personal
      injury including death or disease to any person employed by the CONTRACTOR
      GROUP arising from or relating to the performance of the CONTRACT;
      and

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  subject
      to any other express provisions of the CONTRACT, personal injury including
      death or disease or loss of or damage to the property of any third party
      to the extent that any such injury, loss or damage is caused by the
      negligence or breach of duty (whether statutory or otherwise) of the
      CONTRACTOR GROUP. For the purposes of this Clause 19.1(c) "third party"
      shall mean any party which is not a member of the COMPANY GROUP or
      CONTRACTOR GROUP.

                


        

      

       

      
        
          	
                  19.2

                	
                  The
      COMPANY shall be responsible for and shall save, indemnify, defend and
      hold harmless the CONTRACTOR GROUP from and against all claims, losses,
      damages, costs (including legal costs) expenses and liabilities in respect
      of:

                


        

      

       

      
        
          	
                	
                  (a)

                	
                  loss
      of or damage to property of the COMPANY GROUP arising from or related to
      the performance of the CONTRACT located at the WORKSITE;
    and

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  personal
      injury including death or disease to any person employed by the COMPANY
      GROUP arising from or relating to the performance of the CONTRACT;
      and

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  subject
      to any other express provisions of the CONTRACT, personal injury including
      death or disease or loss of or damage to the property of any third party
      to the extent that any such injury, loss or damage is caused by the
      negligence or breach of duty (whether statutory or otherwise) of the
      COMPANY GROUP. For the purposes of this Clause 19.2(c) "third party" shall
      mean any party which is not a member of the CONTRACTOR GROUP or COMPANY
      GROUP; and

                


        

      

       

      
        
          	
                	
                  (d)

                	
                  loss
      of or damage to such permanent third party oil and gas production
      facilities and pipelines and consequential losses arising therefrom, as
      specified and defined in and in accordance with Appendix 1 to Section I -
      Form of Agreement where such loss or damage arises from or relates to the
      performance of the CONTRACT. The provisions of this Clause 19.2(d) shall
      apply notwithstanding the provisions of Clause
  19.1(c).

                


        

      

       

      
        	
                19.3

              	
                Notwithstanding
      the provisions of Clause 19.1(c) and except as provided by Clause 19.1(a),
      Clause 19.1(b) and Clause 19.4 the COMPANY shall save, indemnify, defend
      and hold harmless the CONTRACTOR GROUP from and against any claim of
      whatsoever nature arising from pollution and/or contamination including
      without limitation such pollution or contamination emanating from the
      reservoir and/or from any equipment or property of the COMPANY GROUP or
      the CONTRACTOR GROUP arising from or related to the performance of the
      CONTRACT.

              


      

       

      
        	
                19.4

              	
                Notwithstanding
      the provisions of Clause 19.2(c) and except as provided by Clause 19.2(a),
      Clause 19.2(b), Clause 19.2(d) and Clause 19.10(b) the CONTRACTOR shall
      save, indemnify, defend and hold harmless the COMPANY GROUP
      from and against any claim
      of whatsoever
      nature arising from
      pollution arising from or relating to the performance of the CONTRACT
      where :

              


      

       

      
        
          	
                	
                  (a)

                	
                  such
      pollution occurs on the premises of the CONTRACTOR GROUP;
    or

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  such
      pollution originates from the property or equipment of the CONTRACTOR
      GROUP whilst on CONTRACTOR
      GROUP provided transportation between the premises of the
      CONTRACTOR GROUP and the wellsite;
or

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  to
      the extent of any negligence or breach of duty (whether statutory or
      otherwise) of the CONTRACTOR GROUP, such pollution emanates from the
      property or equipment of the CONTRACTOR
      GROUP which is located at the wellsite above the rotary table or
      above the bottom of the vessel where WORK is performed from a vessel,
      whichever is the higher, or pollution originating from
      any
      property or equipment of the CONTRACTOR GROUP whilst on COMPANY
      GROUP provided
transportation.

                


        

      

       

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      WELL
SERVICES

       

      Notwithstanding
the provisions of Clause 19.1(c) and except as provided by Clause 19.1(a) and
Clause 19.1(b) the COMPANY shall save, indemnify, defend and hold harmless the
CONTRACTOR GROUP for any claims, losses, damages, costs (including legal costs),
expenses and liabilities in respect of Clause 19.4(c) above in excess of the
CONTRACTOR’s
limit of liability set out in Appendix 1 to Section I - Form of
Agreement.

       

      
        
          	
                  19.5

                	
                  Notwithstanding
      the provisions of Clause 19.1(a) and except to the extent of fair wear and
      tear, the COMPANY shall reimburse the CONTRACTOR in respect of loss of or
      damage to property, materials or equipment of the CONTRACTOR GROUP which
      occurs whilst in-hole below the rotary table except to the extent that
      such damage is caused by the negligence or breach of duty (whether
      statutory or otherwise) of the CONTRACTOR
GROUP.

                


        

      

       

      The
COMPANY’s
liability for such loss or damage shall, subject to the depreciation provision
in Clause 19.7 be either the actual repair or replacement cost, whichever is the
lesser, as substantiated by the CONTRACTOR to the COMPANY. Where repair is
possible, the COMPANY shall, at its sole option, reimburse the CONTRACTOR in
respect of either the foregoing repair or replacement costs.

       

      
        
          	
                  19.6

                	
                  Notwithstanding
      the provisions of Clause 19.1(a), and except to the extent of fair wear
      and tear, if the CONTRACTOR can demonstrate that the CONTRACTOR
      GROUP’s
      equipment other than that located downhole has been subject to abnormal
      damage (meaning damage which could not be reasonably expected) which has
      resulted directly from corrosion, erosion or abrasion caused by the nature
      of the well effluent, the CONTRACTOR shall be reimbursed for the costs of
      repair or replacement resulting from such damage except to the extent that
      such damage is caused by the negligence or breach of duty (whether
      statutory or otherwise) of the CONTRACTOR GROUP. Where repair is possible,
      the COMPANY shall, at its sole option, reimburse the CONTRACTOR in respect
      of either the foregoing repair or replacement
  costs.

                


        

      

       

      
        
          	
                  19.7

                	
                  Any
      replacement cost for which the COMPANY is liable under Clause 19.5 and
      Clause 19.6 shall be reimbursed to the CONTRACTOR subject to the deduction
      of depreciation which shall be calculated from the substantiated date of
      the original purchase or the last refurbishment as applicable of each item
      or component part thereof, at the percentage rate per month applied to
      such replacement cost up to a percentage maximum as set out in Appendix 1
      to Section I - Form of
Agreement.

                


        

      

       

      The
CONTRACTOR shall notify the COMPANY in writing within thirty (30) days of the
date of recorded loss or of return of the CONTRACTOR’s
equipment to the CONTRACTOR as applicable giving full details of any loss and/or
damage to such equipment and the amount of reimbursement due to the CONTRACTOR
under Clause 19.5 and Clause 19.6.

       

      
        
          	
                  19.8

                	
                  Notwithstanding
      the provisions of Clause 19.1, the COMPANY shall save, indemnify, defend
      and hold harmless the CONTRACTOR GROUP from and against any claim of
      whatever nature relating to the costs of recovery of the property provided
      by the CONTRACTOR GROUP lost overboard during transportation by the
      COMPANY. Where the COMPANY elects to perform such recovery or is required
      to do so to comply with its statutory obligations, except to the extent
      that such claim arises as a consequence of the negligence or breach of
      duty (whether statutory or otherwise) of the CONTRACTOR GROUP, such costs
      shall include but not be limited to heavy lifting, uncovering and removal
      of the property and (where applicable) work at or below the water line,
      diving support, transportation to and from the agreed onshore base
      together with all costs of a similar nature. The COMPANY’s
      liability for wreck or debris removal shall include all direct and
      indirect costs incurred to comply with any law, rule, regulation, license
      or directive from a governmental, statutory or regulatory authority or
      similar authority that may have jurisdiction over the wreck recovery or
      debris removal.

                


        

      

       

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      WELL
SERVICES

       

      
        	
                19.9

              	
                Subject
      to Clause 19.1 and Clause 19.4 but notwithstanding anything contained
      elsewhere in the CONTRACT to the contrary, the COMPANY shall save,
      indemnify, defend and hold harmless the CONTRACTOR GROUP against all
      claims, losses, damages, costs (including legal costs) expenses and
      liabilities resulting from:

              


      

       

      
        
          	
                	
                  (a)

                	
                  loss
      of or damage to any well or hole;
and

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  blow-out,
      fire, explosion, cratering or any other uncontrolled well condition
      (including the costs to control a wild well and the removal of debris);
      and

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  damage
      to any reservoir, geological formation or underground strata or the loss
      of oil or gas therefrom.

                


        

      

      
         

        
          
            	
                    19.10

                  	
                    (a)

                  	
                    Except
      as provided by Clause 19.2, the CONTRACTOR shall save, indemnify, defend
      and hold harmless the COMPANY GROUP from and against all claims, losses,
      damages, costs (including legal costs), expenses and liabilities resulting
      from the use of radioactive tools downhole or any contamination therefrom
      (including retrieval and/or containment and clean up) to the extent that
      such losses are caused by the negligence or breach of duty (statutoiy or
      otherwise) of the CONTRACTOR GROUP. The CONTRACTOR’s
      liability arising therefrom shall be limited to the relevant sum specified
      in Appendix 1 to Section I - Form of
Agreement.

                  


          

        

      

       

      
        
          
            	
                  	
                    (b)

                  	
                    Except
      as provided by Clause 19.1(a) and Clause 19.1(b), the COMPANY shall save,
      indemnify, defend and hold harmless the CONTRACTOR GROUP from and against
      all such claims, losses, damages, costs (including legal costs), expenses
      and liabilities in excess of the CONTRACTOR’s
      limit of liability referred to in Clause 19.10(a) and specified in
      Appendix 1 to Section I - Form of
Agreement.

                  


          

        

      

       

      
        
          	
                  19.11

                	
                  All
      exclusions and indemnities save for those under Clause 19.1(c), Clause
      19.2(c), Clause 19.4(c), Clause 19.5, Clause 19.6 and Clause 19.10 (a)
      given under this Clause 19 and Clause 21 shall apply irrespective of cause
      and notwithstanding the negligence or breach of duty (whether statutory or
      otherwise) of the indemnified party or any other entity or party and shall
      apply irrespective of any claim in tort, under contract or otherwise at
      law.

                


        

      

       

      
        
          	
                  19.12

                	
                  If
      either party becomes aware of any incident likely to give rise to a claim
      under the above indemnities, they shall notify the other and both parties
      shall co-operate fully in investigating the
  incident.

                


        

      

       

      
        
          	
                  19.13

                	
                  Mutual
      Waiver and Indemnity

                


        

      

       

      
        
          	  	
                  (a)

                	
                  For
      the purpose of this Clause 19.13, the following definitions additional to
      those set out in Clause 1 General Conditions of Contract for Well Services
      - Edition 2 - March 2001 shall
apply:

                


        

      

       

      
        	
                 
      

              	
                (i)

              	
                "OTHER
      CONTRACTOR" shall mean any other contractor engaged by the COMPANY to
      perform work at the offshore WORKSITE or other wellsite and which has
      entered into contract(s) with the COMPANY;
and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                "OTHER
      CONTRACTOR GROUP" shall mean the OTHER CONTRACTOR, its subcontractors, its
      and their AFFILIATES, its and their respective directors, officers and
      employees (including agency personnel) but shall not include any member of
      the COMPANY GROUP or the CONTRACTOR
GROUP.

              


      

       

      Edition
2-March 2001

       

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      WELL
SERVICES

       

      
        
          	
                	
                  (b)

                	
                  Commencing
      from the effective date on which any OTHER CONTRACTOR became bound by a
      clause effectively containing the same undertaking as this Mutual Waiver
      and Indemnity, in any contract which any OTHER CONTRACTOR has entered into
      with the COMPANY, and for the duration that the OTHER CONTRACTOR remains
      bound by the provisions of such clause, the CONTRACTOR shall save,
      indemnify, defend and hold harmless the OTHER CONTRACTOR GROUP from and
      against all claims, losses, damages, costs (including legal costs),
      expenses and liabilities in respect of
:

                


        

      

       

      
        	
                 
      

              	
                (i)

              	
                loss
      of or damage to property of the CONTRACTOR GROUP whether owned, hired,
      leased or otherwise provided by the CONTRACTOR GROUP arising from or
      relating to the performance of the CONTRACT;
and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                personal
      injury including death or disease to any person employed by the CONTRACTOR
      GROUP arising from or related to the performance of the CONTRACT;
      and

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                any
      consequential loss sustained by the CONTRACTOR GROUP. Consequential losses
      shall mean indirect losses and/or loss of production, loss of product,
      loss of use and loss of revenue, profit or anticipated profit, arising
      from or relating to the performance of the CONTRACT and whether or not
      such losses were foreseeable at the time of entering into the
      CONTRACT.

              


      

       

      
        	
                 
      

              	
                (c)

              	
                All
      exclusions and indemnities given under this Mutual Waiver and Indemnity
      shall apply irrespective of cause and notwithstanding the negligence or
      breach of duty (whether statutory or otherwise) of the indemnified party
      or any other entity or party and shall apply irrespective of any claim in
      tort, under contract or otherwise at
law.

              


      

       

      
        	
                 
      

              	
                (d)

              	
                All
      the CONTRACTOR’s
      insurances shall be endorsed to provide that underwriters waive any rights
      of recourse, including in particular subrogation rights against the OTHER
      CONTRACTOR and its AFFILIATES to the extent of the obligations assumed
      herein.

              


      

       

      
        20.
INSURANCE BY CONTRACTOR

      

       

      
        
          	
                  20.1

                	
                  The
      CONTRACTOR shall arrange as a minimum the insurances set out in this
      Clause 20 and ensure that they are in full force and effect throughout the
      life of the CONTRACT. All such insurances shall be placed with reputable
      and substantial insurers, satisfactory to the COMPANY, and shall for all
      insurances (including insurances provided by SUBCONTRACTORS) other than
      Employers Liability Insurance/Workmen’s Compensation to the extent of the
      liabilities assumed by the CONTRACTOR under the CONTRACT, include the
      COMPANY, CO-VENTURERS and its and their respective AFFILIATES as
      additional assureds. All insurances required under this Clause 20 shall be
      endorsed to provide that underwriters waive any rights of recourse,
      including in particular subrogation rights against the COMPANY,
      CO-VENTURERS and its and their respective AFFILIATES in relation to the
      CONTRACT to the extent of the liabilities assumed by the CONTRACTOR under
      the CONTRACT. Such insurances shall also where possible, provide that the
      COMPANY shall be given not less than thirty (30) days' notice of
      cancellation of or material change to cover. The provisions of this Clause
      20 shall in no way limit the liability of the CONTRACTOR under the
      CONTRACT.

                


        

      

       

      
        
          	
                  20.2

                	
                  The
      insurances required to be effected under Clause 20.1 shall be as follows
      (to the extent that they are relevant to the
  WORK):

                


        

      

       

      Edition
2-March 2001

       

      Edition 2 - March 2001
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      WELL
SERVICES

       

      
        
          	
                	
                  (a)

                	
                  Employers
      Liability and/or (where the jurisdiction of where the WORK is to be
      performed or under which the employees employed requires the same)
      Workmen’s Compensation insurance covering personal injury to or death of
      the employees of the CONTRACTOR engaged in the performance of the WORK to
      the minimum value required by any applicable legislation including
      extended cover (where required) for working offshore or such greater sum
      as is set out in Appendix 1 to Section I - Form of Agreement;
      and

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  General
      Third Party Liability insurance for any incident or series of incidents
      covering the operations of the CONTRACTOR in the performance of the
      CONTRACT, in an amount not less than that set out in Appendix 1 to Section
      1 - Form of Agreement; and

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  Third
      Party and Passenger Liability insurance and other motor insurance as
      required by applicable jurisdiction;
and

                


        

      

       

      
        
          	
                	
                  (d)

                	
                  Such
      further insurances (if any) as set out in Appendix 1 to Section I - Form
      of Agreement.

                


        

      

       

      
        
          	
                  20.3

                	
                  The
      CONTRACTOR shall supply the COMPANY with evidence of such insurance on
      demand.

                


        

      

       

      
        
          	
                  20.4

                	
                  The
      CONTRACTOR shall procure that SUBCONTRACTORS are insured to appropriate
      levels as may be relevant to their
work.

                


        

      

       

      
        	
                21.

              	
                CONSEQUENTIAL
      LOSS

              


      

       

      
        	
                21.1

              	
                For
      the purposes of this Clause 21 the expression "Consequential Loss" shall
      mean indirect losses and/or loss of production, loss of product, loss of
      use and loss of revenue, profit or anticipated profit, arising from or
      related to the performance of the CONTRACT and whether or not such losses
      were foreseeable at the time of entering into the
  CONTRACT.

              


      

       

      
        
          	
                  21.2

                	
                  Notwithstanding
      any provisions to the contrary elsewhere in the CONTRACT and except to the
      extent of any agreed liquidated damages (including any predetermined
      termination fees) provided for in the CONTRACT, the COMPANY shall save,
      indemnify, defend and hold harmless the CONTRACTOR GROUP from the COMPANY
      GROUFs own Consequential Loss and the CONTRACTOR shall save, indemnify,
      defend and hold harmless the COMPANY GROUP from the CONTRACTOR GROUP’S own
      Consequential Loss.

                


        

      

       

      
        	
                22.

              	
                CONFIDENTIALITY

              


      

       

      
        
          	
                  22.1

                	
                  The
      CONTRACTOR shall at no time without the prior agreement of the COMPANY
      either:

                


        

      

       

      
        
          
            	  	
                    (a)

                  	
                    make
      any publicity releases or announcements concerning the subject matter of
      the CONTRACT; or

                  


          

        

      

       

      
        
          	
                	
                  (b)

                	
                  except
      as may be necessary to enable the CONTRACTOR to perform itsobligations
      under the CONTRACT, use, reproduce, copy, disclose to, place at the
      disposal of or use on behalf of any third party or enable any third party
      to use, peruse or copy any information including but not limited to
      drawings, data, and computer software
which:

                


        

      

       

      
        (i) is
provided to the CONTRACTOR by or on behalf of the COMPANY, the CO-VENTURERS or
its or their AFFILIATES in or in relation to the CONTRACT; or

      

       

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      (ii)       vest
in the COMPANY in accordance with the CONTRACT; or

       

      (iii)      the
CONTRACTOR prepares in connection
with the WORK.

       

      
        
          	
                  22.2

                	
                  The
      provisions of Clause 22.1 shall not apply to information
      which:

                


        

        
        

      

      
        
          	  	
                  (a)

                	
                  is
      part of the public domain; or

                


        

           

      

      
        
          	  	
                  (b)

                	
                  was
      in the possession of the CONTRACTOR prior to award of the CONTRACT and
      which was not subject to any obligation of confidentiality owed to the
      COMPANY; or

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  was
      received from a third party whose possession is lawful and who is under no
      obligation not to disclose;
or

                


        

      

       

      
        
          	
                	
                  (d)

                	
                  is
      required to be disclosed in order to comply with the requirements of any
      law, rule or regulation of any governmental or regulatory body having
      jurisdiction over the WORK or the CONTRACTOR, or of any relevant stock
      exchange; or

                


        

      

       

      
        
          	
                	
                  (e)

                	
                  is
      used or disclosed by the CONTRACTOR five (5) years or more after the
      completion of the WORK.

                


        

      

       

      
        
          	
                  22.3

                	
                  The
      CONTRACTOR shall ensure that the provisions of this Clause 22 are
      incorporated in any SUBCONTRACT and that the officers, employees and
      agents of the CONTRACTOR and of the SUBCONTRACTORS comply with the
      same.

                


        

      

       

      
        
          	
                  22.4

                	
                  All
      information provided by the CONTRACTOR which the CONTRACTOR wishes to
      remain confidential shall be clearly marked as confidential provided
      however that any such information relating to the CONTRACTOR’s
      pricing and trade secrets shall always be treated as confidential by the
      COMPANY without any necessity on the part of the CONTRACTOR to clearly
      mark as such. In respect of such confidential information, the COMPANY
      shall be entitled to:

                


        

      

       

      
        
          	
                	
                  (a)

                	
                  disclose
      to and authorise use by the COMPANY GROUP;
and

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  disclose
      pursuant to any statutory or other legal requirement;
  and

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  subject
      to the CONTRACTOR’s
      prior consent, which shall not be unreasonably withheld or delayed,
      disclose to and authorise use by third parties to the extent necessary for
      the execution and maintenance of the project in connection with which the
      WORK is to be performed.

                


        

      

       

      Notwithstanding
the above, the COMPANY shall, and shall ensure that its officers, employees and
agents take all reasonable measures to protect confidential information of the
CONTRACTOR concerning or arising from the CONTRACT for a period of five (5)
years from THE EFFECTIVE DATE OF COMMENCEMENT OF THE CONTRACT.

       

      
        
          
            23.
TERMINATION

          

        

      

       

      
        
          	
                  23.1

                	
                  The
      COMPANY shall have the right by giving notice to terminate all or any part
      of the WORK or the
      CONTRACT at such time or times as the COMPANY may consider
      necessary for any or all of the following
  reasons:

                


        

      

       

      
        
          	
                	
                  (a)

                	
                  to
      suit the convenience of the COMPANY;
OR

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  subject
      only to Clause 23.2 in the event of any default on the part of the
      CONTRACTOR; OR

                


        

      

       

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                  (c)

                	
                  in
      the event of the CONTRACTOR becoming bankrupt or making acomposition
      or arrangement with its creditors or a winding-up order of the CONTRACTOR
      being made or (except for the purposes of amalgamation or reconstruction)
      a resolution for its voluntary winding-up passed or a provisional
      Liquidator, Receiver, Administrator or Manager of its business or
      undertaking appointed or presenting a petition or having a petition
      presented applying for an administration order to be made pursuant to
      Section 9 Insolvency Act 1986, or possession being taken by or on behalf
      of the holders of any debenture secured by a Floating Charge of any
      property comprised in or subject to the Floating Charge, or any equivalent
      act or thing should be done or suffered under any applicable
      law.

                


        

      

       

      
        
          	
                  23.2

                	
                  In
      the event of default on the part of the CONTRACTOR and before the issue by
      the COMPANY of an order of termination of all or any part of the WORK or
      the CONTRACT, the COMPANY shall give notice of default to the CONTRACTOR
      giving the details of such default. If the CONTRACTOR upon receipt of such
      notice does not commence and thereafter continuously proceed with action
      satisfactory to the COMPANY to remedy such default the COMPANY may issue a
      notice of termination in accordance with the provisions of Clause
      23.1.

                


        

      

       

      
        
          	
                  23.3

                	
                  In
      the event of the COMPANY giving the CONTRACTOR notice of termination of
      all or any part of the WORK or the CONTRACT, such notice shall become
      effective on the date specified therein (or in the absence of any
      specified date at the date of receipt of the notice)
      whereupon the CONTRACTOR shall
  immediately:

                


        

      

       

      
        
          	
                	
                  (a)

                	
                  cease
      performance of the WORK or such part thereof as may be specified in the
      notice; and

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  allow
      the COMPANY or its nominee full right of access to take over the WORK or
      the relevant part of the WORK;
and

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  assign
      to the COMPANY, or its nominee, to the extent desired by the COMPANY all
      or the relevant parts of the rights, titles, liabilities and SUBCONTRACTS
      relating to the WORK which the CONTRACTOR may have acquired or entered
      into.

                


        

      

       

      In the
event of termination under Clause 23.1(b) or Clause 23.1(c) the COMPANY shall
have the right to obtain completion of the WORK or the relevant part of the WORK
by other contractors.

       

      
        
          	
                  23.4

                	
                  In
      the event of termination under Clause 23.1(a) the CONTRACTOR shall be
      entitled to payment as set out in Section III - Remuneration for the part
      of the WORK performed in accordance with the CONTRACT together with such
      other payments and fees as may be set out in that Section or in the
      absence of any such provisions such reasonable costs as agreed between the
      parties at the time of
termination.

                


        

      

       

      
        
          	
                  23.5

                	
                  In
      the event of termination of part of the WORK in accordance with Clause
      23.1(b) the CONTRACTOR shall be entitled to payment only as set out in
      Section III - Remuneration for the part of the WORK performed in
      accordance with the CONTRACT, Any additional costs reasonably incurred by
      the COMPANY as a direct result of such termination shall be recoverable
      from the CONTRACTOR. The CONTRACTOR’s
      liability in respect of such additional costs shall be limited to the sum
      specified in Appendix 1 to Section I - Form of
  Agreement.

                


        

      

       

      
        
          	
                  23.6

                	
                  In
      the event of termination of all of the WORK or the CONTRACT in accordance
      with Clause 23.1(b) or Clause 23.1(c) the following conditions shall
      apply:

                


        

      

       

      
        
          	
                	
                  (a)

                	
                  the CONTRACTOR
      shall cease to be entitled to receive any money or monies on account of
      the CONTRACT until the costs of completion and all other costs arising as
      a result of the CONTRACTOR’S default or other events giving rise to the
      termination have been finally
ascertained;

                


        

      

       

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                  (b)

                	
                  thereafter
      and subject to any deductions that may be made under the provision of the
      CONTRACT the CONTRACTOR shall be entitled to payment only as set out in
      Section III - Remuneration for the part of the WORK completed in
      accordance with the CONTRACT up to date of termination,
  and

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  any
      additional costs reasonably incurred by the COMPANY as a direct result of
      the CONTRACTOR’s
      default or other events giving rise to termination shall be recoverable
      from the CONTRACTOR. The CONTRACTOR’s
      liability in respect of such additional costs shall be limited to the sum
      specified in Appendix 1 to Section I - Form of
  Agreement.

                


        

      

      
         

        
          
            	23.7	
                    (a)

                  	
                    In
      the event of termination of the CONTRACT the rights and obligations of the
      parties included in the following Sections and Clauses shall remain in
      full force and effect:

                  


          

        

      

       

      
        
          	
                	
                  (i)

                	
                  Section
      I - Form of Agreement; and

                


        

      

       

      
        
          	
                	
                  (ii)

                	
                  Section
      II - Conditions of Contract Clauses 4, 14, 15, 16, 17, 18, 19, 20, 21, 22,
      23, 24, 25, 26, 27, 29 and 30;
and

                


        

      

       

      
        
          	
                	
                  (iii)

                	
                  Such
      additional Clauses and Special Conditions of Contract (if any) as are set
      out in Appendix 1 to Section I - Form of
  Agreement;

                


        

      

       

      
        
          
            	  	
                    (b)

                  	
                    In
      the event of termination of all or any part of the WORK the whole of the
      CONTRACT shall remain in full force and
effect.

                  


          

        

      

       

      
        
          
            	
                    23.8

                  	
                    Notwithstanding
      Clause 13.5, Clause 23.5 and Clause 23.6, should a suspension for any one
      incident lead to termination of the WORK, the CONTRACTOR’s
      cumulative liability for the COMPANY’s
      additional costs in respect of that suspension and termination shall be
      limited to the sum specified in Appendix 1 to Section I - Form of
      Agreement.

                  


          

        

      

       

      
        
          24*
AUDIT

        

      

       

      
        
          	
                  24.1

                	
                  During
      the course of the WORK and for a period ending two (2) years thereafter,
      the COMPANY or its duly authorised representative shall have the right to
      audit at all reasonable times and, upon request, take copies of all of the
      CONTRACTOR’S records, books, personnel records, accounts, correspondence,
      memoranda, receipts, vouchers and other papers of every kind relating
      to:

                


        

      

       

      
        	
              	
                (a)

              	
                all
      invoiced charges made by the CONTRACTOR on the COMPANY;
  and

              


      

       

      
        
          	
                	
                  (b)

                	
                  any
      provision of this CONTRACT under which the CONTRACTOR has obligations the
      performance of which is capable of being verified by
  audit.

                


        

      

       

      In this
respect the COMPANY shall not be entitled to investigate the make up of rates
and lump sums included in the CONTRACT except to the extent necessaiy for the
proper evaluation of any VARIATIONS.

       

      
        
          	
                  24.2

                	
                  The
      CONTRACTOR shall co-operate fully with the COMPANY and/or its
      representatives in the carrying out of any audit required by the COMPANY.
      The COMPANY will conduct any audit in a manner which will keep to a
      reasonable minimum any inconvenience to the
  CONTRACTOR.

                


        

      

       

      
        
          	
                  24.3

                	
                  The
      CONTRACTOR shall obtain equivalent rights of audit to those specified
      above from all SUBCONTRACTORS and will cause such rights to extend to the
      COMPANY.

                


        

      

       

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        25.
LIENS

      

       

      
        
          	
                  25.1

                	
                  The
      CONTRACTOR shall not claim any lien, charge or the like on the WORK or on
      any property of the COMPANY in the possession of the CONTRACTOR or at the
      WORKSITE.

                


        

      

       

      
        
          	
                  25.2

                	
                  Without
      prejudice to any other provisions of this Clause 25, the CONTRACTOR shall
      save, indemnify, defend and hold harmless the COMPANY from and against all
      liens, attachments, charges or claims by any SUBCONTRACTORS in connection
      with or arising out of the
CONTRACT.

                


        

      

       

      
        
          	
                  25.3

                	
                  The
      CONTRACTOR shall immediately notify the
      COMPANY of any possible lien, attachment, charge or claim which may
      affect the WORK or any part
thereof.

                


        

      

       

      
        
          	
                  25.4

                	
                  If
      at any time there is evidence of any lien, attachment, charge or claim to
      which, if established, the COMPANY or its property might be subjected,
      whether made by any persons against the CONTRACTOR or made by any
      SUBCONTRACTOR against the COMPANY, then the COMPANY shall have the right
      to withhold and/or set off or otherwise recover from the CONTRACTOR such
      sum of money as will fully indemnify the COMPANY against any such lien,
      attachment, charge or claim.

                


        

      

       

      
        
          	
                  25.5

                	
                  Before
      withholding any payment due to the CONTRACTOR in accordance with Clause
      25.4, the COMPANY shall give to the CONTRACTOR a reasonable opportunity to
      demonstrate that the purported lien, attachment, charge or claim is either
      unenforceable or is covered by the provisions of an enforceable policy of
      insurance.

                


        

      

       

      
        
          	
                  25.6

                	
                  For
      the purpose of this Clause 25 references to the COMPANY shall include the
      CO- VENTURERS and its and their AFFILIATES and references to the
      CONTRACTOR shall include its
AFFILIATES.

                


        

      

       

      
        26
BUSINESS ETHICS

      

       

      
        
          	
                  26.1

                	
                  The
      COMPANY shall be entitled to terminate the WORK and to recover from
      theCONTRACTOR
      the amount of any loss or damage resulting from such a termination if any
      member of the CONTRACTOR GROUP shall in relation to the CONTRACT, have
      committed any act whether before, on or after THE EFFECTIVE DATE OF
      COMMENCEMENT OF THE CONTRACT, which is an offence under the Prevention of
      Corruption Acts 1889 - 1916, or any statutory amendment, modification or
      re- enactment thereof, or would have constituted such an offence
      if;

                


        

      

       

      
        
          	
                	
                  (a)

                	
                  such
      member of the CONTRACTOR GROUP, not being an agent hereunder, was deemed
      for this purpose to be an agent;
or

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  the
      act, having been committed outside the United Kingdom had been committed
      within the United Kingdom; or

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  the
      CONTRACTOR, having been requested to do so by the COMPANY, refuses to
      remove from the WORK the member of the CONTRACTOR GROUP who has committed
      the relevant act.

                


        

      

       

      
        27.
GENERAL LEGAL PROVISIONS

      

       

      
        27.1
Waiver

      

       

      None of
the terms and conditions of the CONTRACT shall be considered to be waived by
either the COMPANY or the CONTRACTOR unless a waiver is given in writing by one
party to the other. No failure on the part of either party to enforce any of
the terms and conditions of the CONTRACT shall constitute a waiver of such
terms.

       

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                27.2

              	
                Retention
      of Rights

              


      

       

      Subject
to the provisions of Clause 19, unless otherwise specifically stated in the
CONTRACT, both the COMPANY and the CONTRACTOR shall retain all rights and
remedies, both under the CONTRACT and at law, which either may have against the
other.

       

      The
CONTRACTOR shall not be relieved from any liability or obligation under the
CONTRACT by any review, approval, authorisation, acknowledgement or the like, by
the COMPANY.

       

      
        	
                27.3

              	
                CONTRACTOR’s
      AFFILIATES

              


      

       

      Any
limitation of liability given by the COMPANY to the CONTRACTOR under the
CONTRACT shall include the AFFILIATES of the CONTRACTOR.

       

      
        	
                27.4

              	
                Independence
      of the CONTRACTOR

              


      

       

      The
CONTRACTOR shall act as an independent contractor with respect to the WORK and
shall exercise control, supervision, management and direction as to the method
and manner of obtaining the results required by the COMPANY.

       

      
        	
                27.5

              	
                Proper
      Law and Language

              


      

       

      The
CONTRACT shall be construed and take effect in accordance with English Law
excluding those conflict of law rules and choice of law principles which would
deem otherwise, and subject to the provisions of Clause 28, shall be subject to
the exclusive jurisdiction of the English Courts.

       

      The
ruling language of the CONTRACT shall be the English Language.

       

      
        	
                27.6

              	
                Notices

              


      

       

      All
notices in respect of the CONTRACT shall be given in writing and delivered by
hand, by telex, by telefax or by first class post to the relevant address
specified in Appendix 1 to Section I - Form of Agreement and copied to such
other office or offices of the parties as shall from time to time be nominated
by them in writing to the other.

       

      Such
notices shall be effective:

       

      
        	
              	
                (a)

              	
                if
      delivered by hand, at the time of delivery;
or

              


      

       

      
        
          	
                	
                  (b)

                	
                  if
      sent by telex or telefax, on the first working day at the recipient
      address following the date of sending;
or

                


        

      

       

      
        	
              	
                (c)

              	
                if
      sent by first class post, forty eight (48) hours after the time of
      posting,

              


      

       

      
        	
                27.7

              	
                Status
      of COMPANY

              


      

       

      The
COMPANY enters into the CONTRACT for itself and as agent for and on behalf of
the other CO-VENTURERS. Without prejudice to the provisions of Clause 29 and
notwithstanding the above:

       

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                  (a)

                	
                  the
      CONTRACTOR agrees to look only to the COMPANY for the due performance of
      the CONTRACT and nothing contained in the CONTRACT will impose any
      liability upon, or entitle the CONTRACTOR to commence any proceedings
      against any CO-VENTURER other than the COMPANY;
  and

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  the
      COMPANY is entitled to enforce the CONTRACT on behalf of all CO- VENTURERS
      as well as for itself. For that purpose the COMPANY may commence
      proceedings in its own name to enforce all obligations and liabilities of
      the CONTRACTOR and to make any claim which any CO- VENTURER may have
      against the CONTRACTOR; and

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  All
      losses, damages, costs (including legal costs) and expenses recoverable by
      the COMPANY pursuant to the CONTRACT or otherwise shall include the
      losses, damages, costs (including legal costs) and expenses of the
      COMPANY’s
      CO-VENTURERS and its and their respective AFFILIATES except that
      such losses, damages, costs (including legal costs) and expenses shall be
      subject to the same limitations or exclusions of liability as are
      applicable to the COMPANY or the CONTRACTOR under the
      CONTRACT.

                


        

      

       

      
        	
                27.8

              	
                Entire
      Agreement

              


      

       

      The
CONTRACT constitutes the entire agreement between the parties hereto with
respect to the WORK and supersedes all prior negotiations, representations or
agreements related to the CONTRACT, either written or oral. No amendments to the
CONTRACT shall be effective unless evidenced in writing and signed by the
parties to the CONTRACT.

       

      
        	
                27.9

              	
                Mitigation
      of Loss

              


      

       

      Both the
COMPANY and the CONTRACTOR shall take all reasonable steps to mitigate any loss
resulting from any breach of CONTRACT by the other party.

       

      
        	
                27.10

              	
                Extent
      of Exclusion or Limitation of
Liability

              


      

       

      Any
exclusion or limitation of liability under the CONTRACT shall exclude or limit
such liability not only in contract but also in tort or otherwise at
law.

       

      
        	
                27.11

              	
                Invalidity
      and Severability

              


      

       

      If any
provision of this CONTRACT shall be found by any court or administrative body of
competent jurisdiction to be invalid or unenforceable, the invalidity or
unenforceability of such provision shall not affect the other provisions of this
CONTRACT and all provisions not affected by such invalidity or unenforceability
shall remain in full force and effect. The COMPANY and the CONTRACTOR hereby
agree to attempt to substitute, for any invalid or unenforceable provision, a
valid or enforceable provision which achieves to the greatest possible extent,
the economic, legal and commercial objectives of the invalid or unenforceable
provision.

       

      
        	
                27.12

              	
                Interpretation
      of Well Data

              


      

       

      The
CONTRACTORS interpretation of well or other related data is a matter of opinion
on which professional geophysicists or analysts may differ. Accordingly, the
CONTRACTOR does not warrant the accuracy or completeness of any data or
interpretations, recommendations or reservoir or other models based on such data
or interpretations. The CONTRACTOR does not accept responsibility for decisions
by the COMPANY on matters of policy regarding any subsequent
operations.

       

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                28.

              	
                RESOLUTION
      OF DISPUTES

              


      

       

      
        
          	
                  28.1

                	
                  Any
      dispute between the COMPANY and the CONTRACTOR in connection with or
      arising out of the CONTRACT or the WORK shall be resolved by means of the
      following procedure:

                


        

      

       

      
        
          	
                	
                  (a)

                	
                  the
      dispute shall initially be referred to the COMPANY REPRESENTATIVE and
      CONTRACTOR REPRESENTATIVE who shall discuss the matter in dispute and make
      all reasonable efforts to reach an
agreement;

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  if
      no agreement is reached under Clause 28.1(a) the dispute shall be referred
      to the two persons named in Appendix 1 to Section I - Form of Agreement.
      Such persons are nominated one by the COMPANY and one by the CONTRACTOR.
      Such persons may be replaced by the party which nominated them by notice
      to the other party ;

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  if
      no agreement is reached under Clause 28.1(b) the dispute shall be referred
      to the Managing Directors of the COMPANY and the
    CONTRACTOR.

                


        

      

       

      
        
          	
                  28.2

                	
                  In
      the absence of any agreement being reached on a particular dispute either
      party may take appropriate action in the Courts to resolve the dispute at
      any time.

                


        

      

       

      
        
          	
                  28.3

                	
                  Whilst
      any matter or matters are in dispute, the CONTRACTOR shall proceed with
      the execution and completion of the WORK and both the CONTRACTOR and the
      COMPANY shall comply with all the provisions of the
    CONTRACT.

                


        

      

       

      
        
          	
                  29.

                	
                  CONTRACTS
      (RIGHTS OF THIRD PARTIES) ACT

                


        

      

       

      
        
          	
                  29.1

                	
                  Subject
      to Clause 29.3, the parties intend that no provision of the CONTRACT
      shall, by virtue of the Contracts (Rights of Third Parties) Act 1999 ("the
      Act") confer any benefit on, nor be enforceable by any person who is not a
      party to the CONTRACT.

                


        

      

       

      
        
          	
                  29.2

                	
                  For
      the purpose of this Clause 29, "Third Party" shall mean any member of the
      COMPANY GROUP (other than the COMPANY) or CONTRACTOR GROUP (other than the
      CONTRACTOR) or in respect of the provisions of Clause 19.13 hereof, the
      OTHER CONTRACTOR GROUP.

                


        

      

       

      
        
          	
                  29.3

                	
                  Subject
      to the remaining provisions of the
CONTRACT,

                


        

      

       

      
        
          	
                	
                  (a)

                	
                  Clause
      17.7, Clause 17,8, Clause 19, Clause 20 and Clause 21 are intended to be
      enforceable by a Third Party;
and

                


        

      

       

      
        
          	
                	
                  (b)

                	
                  Clause
      27.3 is intended to be enforceable by the AFFILIATES of the CONTRACTOR by
      virtue of the Act.

                


        

      

       

      
        
          	
                  29.4

                	
                  Notwithstanding
      Clause 29.3, the CONTRACT may be rescinded, amended or varied by the
      parties to the CONTRACT without notice to or the consent of any Third
      Party even if, as a result, that Third Party’s right to enforce a term of
      this CONTRACT may be varied or
extinguished.

                


        

      

       

      
        
          	
                  29.5

                	
                  The
      rights of any Third Party under Clause 29.3 shall be subject to the
      following

                


        

      

       

      
        
          	
                	
                  (a)

                	
                  any
      claim, or reliance on any term of the CONTRACT by a Third Party against a
      party to the CONTRACT shall be notified in writing in accordance with the
      requirements of Clause 19.12 and Clause 27.6 by such Third Party to each
      party to the CONTRACT as soon as such Third Party becomes aware that an
      event is likely to give rise to such a claim and such notification shall
      contain the following information as a
minimum:

                


        

      

       

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37

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      WELL
SERVICES

       

      
        	
              	
                (i)

              	
                details
      of the occurrence giving rise to the claim;
and

              


      

       

      
        	
              	
                (ii)

              	
                the
      right relied upon by the Third Party under the
  CONTRACT,

              


      

       

      
        
          	
                	
                  (b)

                	
                  the
      provisions of Clause 28 shall apply in respect of any claim by a Third
      Party in that the relevant parties agree to resolve any dispute between
      them in a prompt and amicable manner by adopting the provisions of Clause
      28.

                


        

      

       

      
        
          	
                	
                  (c)

                	
                  the
      Third Party’s written agreement to submit irrevocably to the jurisdiction
      of the English Courts in respect of all matters relating to such
      rights.

                


        

      

       

      
        
          	
                  29.6

                	
                  In
      enforcing any right to which it is entitled by virtue of the Act and the
      provisions of this CONTRACT, the remedies of a Third Party shall be
      limited to damages.

                


        

      

       

      
        
          	
                  29.7

                	
                  A
      Third Party shall not be entitled to assign any benefit or right conferred
      on it under this CONTRACT by virtue of the
Act.

                


        

      

       

      
        30.
CUSTOMS PROCEDURES

      

       

      
        
          	
                  30.1

                	
                  When
      applicable the COMPANY and the CONTRACTOR shall each apply to HM Customs
      and Excise for Shipwork End Use (SEU) and shall also where appropriate
      apply for Inward Processing Relief (IPR), Outward Processing Relief (OPR)
      and Returned Goods Relief (RGR) for their respective import, export and
      re-import of materials, goods, tools, equipment and supplies required for
      the CONTRACT.

                


        

      

       

      
        
          	
                  30.2

                	
                  The
      CONTRACTOR undertakes to import, export and re-import any items for the
      WORK which are subject to Customs control in such a way as to enable
      maximum advantage to be taken of HM Customs and Excise
      procedures.

                


        

      

       

      
        
          	
                  30.3

                	
                  The
      COMPANY and the CONTRACTOR shall each develop with government authorities,
      customs procedures for their respective export to the WORKPOINT and
      re-import from the WORKPOINT of all materials, goods, tools, equipment and
      supplies to be provided under the
CONTRACT.

                


        

      

       

      
        
          	
                  30.4

                	
                  The
      COMPANY and the CONTRACTOR shall each respectively be accountable and
      liable for compliance with Customs procedures based on each party being a
      Customs authorised trader and who is in possession (not ownership) of the
      items subject to Customs control at any given
  time.

                


        

      

       

      
        
          	
                  30.5

                	
                  For
      the purpose of this Clause 30, "WORKPOINT" shall mean an offshore location
      or vessel from which exploration or exploitation of oil and/or gas is
      carried out.

                


        

      

       

      
        
          	
                  30.6

                	
                  The
      CONTRACTOR shall pay and make payment at such times when due and payable,
      all import / export licenses and import/export taxes and duties on
      materials, goods, tools, equipment and supplies required for the CONTRACT
      and imported or exported by the
CONTRACTOR.

                


        

      

       

      
        
          	
                  30.7

                	
                  Where
      equipment and materials are sold to the COMPANY under the CONTRACT the
      CONTRACTOR shall :

                


        

      

       

      
        
          
            	
                  	
                    (a)

                  	
                    prepare
      and provide to the COMPANY full documentation to show and certify all
      information regarding items subject to Customs control, including the
      origin, customs status and customs commodity code number as may
      benecessary
      for the COMPANY to minimise or nullify the effect of customs duty on such
      items; and make
      available on a confidential basis to HM Customs and Excise all data
      reasonably necessary to enable the CONTRACTOR to obtain the maximum
      benefits in terms of reliefs and shall pass all such benefits in full to
      the COMPANY; and inform
      the COMPANY without delay in the event that the CONTRACTOR is unsuccessful
      in any application for reliefs. In such event, the COMPANY shall have the
      option to import or export or re-import any items affected under its own
      authorised
procedure.

                  


          

        

      

       

      Edition 2 - March 2001
Page No.
38

    

    
      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      
        
          
            
              	
                      WELL SER VICES SECTION I - FORM OF
      AGREEMENT

                    	 
	 
      	 
	
                      (SAMPLE)

                    	 


            

          

        
 

      This
CONTRACT is made between the following parties:

       

      
        having
its registered office at _____

         

      

      hereinafter
called the "COMPANY* and

       

      
        having
its main or registered office at
_________________________________________

      

      
         

        hereinafter
called the "CONTRACTOR".

      

       

      
        WHEREAS:

      

       

      
        
          	
                  1)

                	
                  the
      COMPANY wishes that the WORK shall be carried out, all as described in the
      CONTRACT; and

                


        

      

       

      
        
          	
                  2)

                	
                  the
      CONTRACTOR wishes to carry out the WORK in accordance with the terms of
      the CONTRACT.

                


        

      

       

      
        NOW:

      

       

      
        The
parties hereby agree as follows:

      

       

      
        
          	
                  1)

                	
                  in
      the CONTRACT all capitalised words and expressions shall have the meanings
      assigned to them in this FORM OF AGREEMENT or elsewhere in the CONTRACT.
      Such words and expressions shall have the same defined meaning whether
      used in the singular or the
plural.

                


        

      

       

      
        
          	
                  2)

                	
                  the
      following Sections shall be deemed to form and be read and construed as
      part of the CONTRACT:

                


        

      

       

      1.         Section
I Form of Agreement including Appendix 1

       

      2.         Section
II a) General Conditions of Contract for Well Services - Edition 2

      - March
2001

       

      
        
          
            
              
                	 
      	 
      	
                        b)
      Special Conditions of Contract

                      
	 	 	 
	
                        3.

                      	
                        Section
      III

                      	
                        Remuneration

                      
	 	 	 
	
                        4.

                      	
                        Section
      IV

                      	
                        Scope
      of Work

                      
	 	 	 
	
                        5.

                      	
                        Section
      V

                      	
                        Health,
      Safety and Environment

                      
	 	 	 
	
                        6.

                      	
                        Section
      VI

                      	
                        Company’s
      General
Obligations

                      


              

            

          

        

      

       

      The
Sections shall be read as one document, the contents of which, in the event of
ambiguity or contradiction between Sections, shall be given precedence in the
order listed, with the exception that the Special Conditions of Contract shall
take precedence over the General Conditions of Contract.

       

      
        
          	
                  3)

                	
                  In
      accordance with the terms and conditions of the CONTRACT, the CONTRACTOR
      shall perform and complete the WORK and the COMPANY shall pay the CONTRACT
      PRICE,

                


        

      

       

      
        
          	
                  4)

                	
                  The
      terms and conditions of the CONTRACT shall apply from the date specified
      in Appendix 1 to this Section I - Form of Agreement which date shall be
      the EFFECTIVE DATE OF COMMENCEMENT OF THE
  CONTRACT.

                


        

      

       

      Edition 2 - March 2001
Page No.
39

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      WELL
SERVICES

       

      
        	
                5)

              	
                The
      duration of the CONTRACT shall be as set out in Appendix 1 to this Section
      IForm
      of Agreement.

              


      

       

      The
authorised representatives of the parties have executed the CONTRACT in
duplicate upon the dates indicated below:

       

      
        
          
            
              
                	
                        For:

                      	
                        For:

                      
	 	 
	
                        (CONTRACTOR)

                      	
                        (COMPANY)

                      
	 	 
	
                        Name:

                      	
                        Name:

                      
	 	 
	
                        Title:

                      	
                        Title:

                      
	 	 
	
                        Date:

                      	
                        Date:

                      


              

            

          

        

      

       

      Edition 2 - March 2001
Page No.
40

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      WELL
SERVICES

       

      APPENDIX
1 TO SECTION I - FORM OF AGREEMENT

       

      Reference
Section I

       

      
        	 
      	
                Clause
      4

              	
                The
      EFFECTIVE DATE OF COMMENCEMENT OF THE CONTRACT
  is

              


      

       

      
        	
                Clause
      5

              	
                The
      duration of the CONTRACT is
      ____________________________________________

              
	 
      	 
      
	
                Section
      II

              	 
      
	 
      	 
      
	
                Clause
      3.1(a)

              	
                The
      COMPANY REPRESENTATIVE is
      __________________________________________

              
	 
      	 
      
	 
      	
                The
      CONTRACTOR REPRESENTATIVE is
      _______________________________________

              
	 
      	 
      
	
                Clause
      4.5(b)

              	
                Materials
      and Equipment with no implied warranties
etc.

              


      

      


      
        	 
      	
                The
      COMPANY designated heliport is
      __________________________________________

              
	
                Clause 5.1

              	
                The
      COMPANY designated supply base
      is _______________________________________

              
	 
      	 
      
	 
      	
                The
      defects notification periods are

              
	 
      	 
      
	
                Clause 10.1

              	
                (a)
      ______________________________________________________________________

              
	 
      	 
      
	 
      	
                (b)
      ______________________________________________________________________

              
	 
      	 
      
	 
      	
                Limit
      of liability for defective WORK:

              
	 
      	 
      
	
                Clause 10.2

              	
                The
      sum
      is ________________________________________________________________

              
	 
      	 
      
	 
      	
                Limit
      of liability for additional costs:

              
	 
      	 
      
	
                Clause 10.4

              	
                The
      sum
      is ________________________________________________________________

              
	 
      	 
      
	 
      	
                Limit
      of liability for additional costs for suspension:

              
	 
      	 
      
	
                Clause 13.5

              	
                The
      sum
      is ________________________________________________________________

              
	 
      	 
      
	 
      	
                The
      period of suspension
      is ___________________________________________________

              
	 
      	 
      
	
                Clause 13.8 

              	
                Latest
      time for receipt of invoices after completion of the whole of the
      WORK __________

              
	 
      	 
      
	
                Clause 14.3

              	
                The
      address for invoicing
      is ___________________________________________________

              
	 
      	 
      
	
                Clause 14.5

              	
                Interest
      rate per annum - Base Rate plus ___________ percent
      p.a.

              
	 
      	 
      
	
                Clause 14.9

              	
                Rights
      shall vest
      in __________________________________________________________

              
	 
      	 
      
	
                Clause 17.4 

              	
                This
      indemnity is given in respect of the following property and is subject to
      any exclusions or limitations specified below:

              
	 
      	 
      
	
                Clause

              	
                (i)
      Property directly affected by the
      WORK ________________________________________

              
	 
      	 
      
	
                19.2(d)

              	
                (ii)
      Other
      property ___________________________________________________________

              


      

       

      Edition
2-March 2001 Page No. 33

       

      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      WELL
SER VICES

       

      
        
          
            	 
      	
                    (iii)
      For the purposes of 19.2(d) only, consequential losses shall
      mean

                  
	 
      	 
      
	
                    Clause
      19.4

                  	
                    Limit
      of liability for pollution in respect of Clause
19.4(c):

                  
	 
      	 
      
	 
      	
                    The
      sum
      is ________________________________________________________________

                  
	 
      	 
      
	
                    Clause
      19.7

                  	
                    Depreciation
      rate per month of _________________%

                  
	 
      	 
      
	 
      	
                    Depreciation
      maximum of _____________________%

                  
	 
      	 
      
	
                    Clause
      19.10

                  	
                    Limit
      of Liability for costs:

                  
	 
      	 
      
	 
      	
                    The
      sum
      is ________________________________________________________________

                  
	 
      	 
      
	
                    Clause
      20.2

                  	
                    Insurance
      by CONTRACTOR, the amounts are

                  
	 
      	 
      
	 
      	
                    20.2(a)
      Employers
      Liability ____________________________________________________

                  
	 
      	 
      
	 
      	
                    20.2(b)
      General Third
      Party ____________________________________________________

                  
	 
      	 
      
	 
      	
                    20.2(d)
      Other insurances (if applicable)
      ___________________________________________

                  
	 
      	 
      
	
                    Clause
      23.5

                  	
                    Limit
      of liability for additional costs of termination:

                  
	 
      	 
      
	 
      	
                    The
      sum
      is ________________________________________________________________

                  
	 
      	 
      
	
                    Clause
      23.6(c) Limit of liability for additional costs of
      termination:

                  
	 
      
	 	
                    The
      sum
      is ________________________________________________________________

                  
	 
      	 
      
	
                    Clause
      23.7(a)(iii) Additional Clauses and Special Conditions remaining in full
      force and effect shall be:

                  
	 
      
	
                    Clause
      23.8

                  	
                    Cumulative limit of
      liability for additional costs of suspension and termination:

                  
	 
      	 
      
	 
      	
                    The
      sum
      is ________________________________________________________________

                  
	 
      	 
      
	
                    Clause
      27.6

                  	
                    The
      addresses for the service of notices are:

                  
	 
      	 
      
	 
      	
                    (i)
      The
      COMPANY __________________________________________________________

                  
	 
      	 
      
	 
      	
                    (ii)
      The
      CONTRACTOR _______________________________________________________

                  
	 
      	 
      
	
                    Clause
      28.1(b) Resolution of Disputes. The nominees are:

                  
	 
      
	 
      	
                    (i)
      The COMPANY

                  
	 
      	 
      
	 
      	
                    (ii)
      The CONTRACTOR

                  


          

        

      

       

      Edition 2 - March 2001
Page No.
34

      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      WELL
SERVICESWELL SERVICESWELL SERVICES

      General
Conditions of Contract for Well Services

       

      Part 2 -
Guidance Notes

       

      Guidance Notes: Edition 2 - March
2001

      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      
 

      WELL SER VICES GUIDANCE
NOTES

       

      Well
Services General Conditions of Contract

       

      Introduction

       

      The model
contract for which these guidance notes are written is the General Conditions of
Contract for Well Services, Edition 2, March 2001,

       

      For
guidance on use of this model, see "Intended Applications", below.

       

      The case
for a standard approach

       

      By common
consent the UKCS is in its maturity, resulting in increasing unit costs and
competition for investment from other prospective oil provinces across the
world. These circumstances make the need for efficiency in support of
operations, while always necessary, even more important. Consider therefore how
we have traditionally managed contracting for goods and services.

       

      Invitations
to Tender issued by UKCS operators contained individual specific contract terms
and conditions. More often than not these terms would differ from the form
previously seen by contractors thus necessitating a fresh review on each and
every occasion. A variety of contracts, legal and project/operational personnel
will typically be involved in this process. The contract form issued by the
operator would normally be drafted in the operator’s favour, anticipating, and
receiving, lengthy qualifications by tenderers. Tenderers in turn would demand
more concessions than they would expect the operator to agree to as
"negotiation" was expected. Often lengthy discussion follows, involving many
individuals, before an agreed position is reached.

       

      The
above, on an industry wide basis, taking into account the number of operators,
contractors and suppliers involved and the whole range of exploration,
development and production activities covered, will have a very significant
resource and cost impact.

       

      What did
or does this process achieve? For many who have worked with this arrangement
over many years the belief is that it achieves very little. Risk is not managed
or allocated where it can most appropriately be borne, rather it is pushed from
one party to another depending on prevailing market conditions. Additional
insurance costs can result and contract costs may be increased due to
uncertainties and/or contingencies being added. Ultimately, however, the
contracts that are signed by different operators and contractors often end up
being remarkably alike.

       

      So there
is a compelling case for standard contracts, not, it should be said, in the case
of scopes of work, company health, safety and environment matters, technical
specifications, or in the area of true commercial and pricing issues, where of
course it is normal and necessary to encourage competition, innovation and a
vigorous relationship between contracting parties. Standardisation in this
context deals only with the general terms and conditions, the "boiler plate",
where little value, but significant cost, attaches to a repetitive adversarial
approach.

       

      Purpose
of Model Contract

       

      The
purpose of the model General Conditions of Contract is to provide a commonly
known and understood foundation around which the Company and the Contractor can
build their particular requirements.

       

      
        Guidance Notes: Edition 2 - March
2001

        Page No.
45

      

      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      
 

      WELL
SERVICES

       

      This
eliminates much of the effort historically spent reviewing, qualifying and
reviewing qualifications to the many different sets of general conditions
offered by the industry. That time is now available to focus on developing
specific terms directly beneficial to the work to be done.

       

      The model
General Conditions are supported by a model Form of Agreement which includes a
schedule of other sections to the contract. These facilities allow the Company
to shape the total contract to match the Scope of Work.

       

      Provision
is made in the model Form of Agreement for Special Conditions of Contract. This
enables the Company, in negotiation with the Contractor, to adapt the General
Conditions as necessary to suit their specific requirements and
purpose.

       

      
        Purpose
of Guidance Notes

      

       

      During
the development of the General Conditions it was considered that the meanings
and intentions behind certain parts of the General Conditions might usefully be
explained for the benefit of users. These guidance notes make those
explanations. They are intended for use by practitioners in the industry as
practical support in getting the best value from using the Model Contracts. These guidance
notes do not form part of the General Conditions of Contract and are not to be
taken as a legal
interpretation of the General
Conditions.

       

      
        Intended
Applications

      

       

      The Well
Services General Conditions have been prepared to serve scopes of work for
service contracts associated with well engineering work.

       

      
        Feedback

      

       

      It is
intended that these model contracts should be documents that evolve to meet the
changing needs of the industry. To this end it is important that the industry
provides feedback on its experience with use of the model
contracts.

       

      
        LOGIC
requests specifically:

      

       

      
        	
                •

              	
                details
      of common areas of concern which give rise to consistent modifications to
      material terms of the Contract through custom and
  usage,

              


      

       

      
        	
                •

              	
                case
      histories of the model contracts being either helpful or unhelpful with
      specific detail of why that was so,

              


      

       

      
        	
                •

              	
                recommendations
      to develop the scope of existing model contracts or additional models
      which would serve the industry
well,

              


      

       

      
        	
                •

              	
                suggested
      modifications or additions to the guidance
  notes.

              


      

       

      
        All
feedback should be sent in the first instance to;

      

       

      Contracts
for the Offshore Oil and Gas Industry: Comments LOGIC, 

      Exploration
House, Offshore 

      Technology
Park ABERDEEN. 

      AB23
8GX

       

      
        
          	
                  Note:

                	
                  At
      the time of printing, consideration is being given to a Model Contracts
      web page to be constructed as part of the LOGIC website - www.logic-oil.com
      Use of this medium, when available, for feedback is
      recommended.

                


        

      

       

      
        Guidance Notes: Edition 2 - March
2001

        Page No.
46

      

      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      WELL
SERVICES

      Acknowledgements

       

      LOGIC
wishes to acknowledge the contributions made by the UKOOA Competition and Supply
Committee, IPLOCA, IADC, OCA, WSCA, members of the specialist sub committees,
and the work of the Standard Contracts Committee in preparing the model
contracts.

       

      Current
members of the Standard Contracts Committee are:

      


      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                	
                                                                                        Eric
      Johnston

                                                                                      	
                                                                                        Amerada
      Hess Limited Shell UK Limited

                                                                                        Santa Fe Drilling Company (North Sea)
    

                                                                                      	
                                                                                        Chairman

                                                                                      
	
                                                                                        Roger
      Reynolds

                                                                                      	
                                                                                        Limited/International
      Association of Drilling Contractors

                                                                                      	
                                                                                        Secretary

                                                                                      
	 	 	 
	
                                                                                        David
      Bell

                                                                                      	
                                                                                        Wood
      Group Engineering Limited/Offshore Contractors
  Association

                                                                                      
	 	 
	
                                                                                        Nick
      Brown

                                                                                      	
                                                                                        Talisman
      Energy (UK) Limited ALSTOM Power UK Limited 

                                                                                        Coflexip
      Stena Offshore Limited/International Marine Contractors
      Association

                                                                                      
	 	 
	
                                                                                        Jacquelynn
      Craw

                                                                                      	
                                                                                        
                                                                                          Shell
      UK Limited

                                                                                        

                                                                                      
	 	 
	
                                                                                        Barry
      Coulson

                                                                                      	
                                                                                        
                                                                                          Trinity
      International Services Ltd/Offshore Contractors
      Association

                                                                                        

                                                                                      
	 	 
	
                                                                                        Denise
      Greenhalgh

                                                                                      	
                                                                                        
                                                                                          BP
      Exploration Operating Company Limited

                                                                                          
                                                                                             

                                                                                            BJ
      Services Company/Well Services Contractors
      Association

                                                                                          

                                                                                        

                                                                                      
	 	 
	
                                                                                        Peter
      Holland Stuart

                                                                                      	
                                                                                        
                                                                                          U.K.Offshore
      Operators Association

                                                                                        

                                                                                      
	 
      	
                                                                                         

                                                                                      
	
                                                                                        MacBride

                                                                                      	
                                                                                        
                                                                                        

                                                                                      	 
      
	 	 	 
	
                                                                                        Alan
      Mclnnes

                                                                                      	 
      	 
      
	 	 	 
	
                                                                                        Jack
      Meredith

                                                                                      	 
      	 
      
	 	 	 
	
                                                                                        David
      Odling

                                                                                      	 
      	 
      
	 	 	 
	
                                                                                        Mark
      Watson

                                                                                      	 
      	 
      


                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      


      Acknowledgements
are extended also to the following past members of the committee for their
contributions:

       

      John
Chandler - Contracts Consultant, Lynette Marne ~ Crine Network Facilitiator,
Peter Foreman - Kvaerner Oil & Gas, Mike Hobson - Arco, Ian Kelly - Santa
Fe/IADC, Seamus Kilgallan - Shell UK Limited, Jim McGregor - BP Exploration,
Steve Nuttall - Scottish Enterprise, Johan Rasmussen - Stolt Comex Seaway,
Judith Tocher - Halliburton, David Richardson - Sonat/IADC, Paul Archer -
Schlumberger, David Goulding - ALSTOM Power.

      


      AMEC Services
Limited


       

      
        Guidance Notes: Edition 2 - March
2001

        Page No.
47

      

      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      WELL
SERVICES

      Other
Relevant Publications

       

      The
following publications may be of interest to users of this document. Model
General Conditions of Contract (with supporting Guidance Notes)

       

      •         Construction

       

      •         Marine
Construction

       

      •         Offshore
Services

       

      •         Onshore
Services

       

      •         Well
Services

       

      •         Design

       

      •         Mobile
Drilling Rig

       

      •         Supply
of Major Items of Plant and Equipment

       

      •         Purchase
Order Terms and Conditions (Short Form)

       

      •         Small/Medium
Enterprises (SME) Services

       

      •         Subcontract
Small/Medium Enterprises (SME) Services

       

      Copies of
these documents can be obtained from:

       

      Portland
Press Ltd.,

      Commerce
Way,

      Whitehall
Industrial Estate,

      Colchester.

      C02
8HP

      U.K.

       

      Tel:
+44(0)1206 796351 

      Fax:
+44(0) 1206 799331 

      Email:
sales@portlandpress.com

       

      
        Guidance Notes: Edition 2 - March
2001

        Page No.
48

      

      
        
          
             


          

          
            
            

            
              

            

          

          
             


          

        

      

      


      WELL
SERVICES

       

      
        Explanatory
Notes

      

       

      
        
          	
                  1.

                	
                  Structure of the
      Contract

                


        

      

       

      
        
          	
                  1.1

                	
                  The
      structure of the Contract that has been assumed is set out in the Sample
      Form of Agreement attached to the General Conditions of Contract. There, a
      number of Sections are listed which, in some cases, are referred to in the
      General Conditions of Contract. The document has been drafted in this way
      in an attempt to make the use and understanding of Contracts as easy as
      possible. It is however recognised that some Operating Companies and Main
      Contractors may not wish to set out their Contracts in this way. If
      certain of the Sections listed are not required, this can easily be taken
      into account in the Special Conditions of Contract (Section II b) by
      including a Clause which details where the relevant information can be
      found and changes all references to discarded
  Sections.

                


        

      

       

      
        	
                1.2

              	
                A
      Form of Agreement must of course be drafted taking into account the
      specific Contract to which it relates. The Sample Form should not however
      require much if any alteration. The Appendix 1 attached to the Form of
      Agreement must however be completed for each Contract as discussed
      below.

              


      

       

      
        	
                1.3

              	
                Attached
      to the Sample Form of Agreement is an Appendix 1 which refers to various
      Clauses included in the General Conditions of Contract. Such Clauses are
      drafted in a manner that each individual Operating Company or Main
      Contractor can include its own requirements for matters such as insurances
      etc. in the Appendix.

              


      

       

      It is
clearly essential that as far as possible, the information listed in Appendix 1
is supplied to tenderers as part of the invitation to tender documents, in order
that tenderers may price the requirements of the Company.

       

      All
outstanding information, including the names of the Contractor Representative,
the Contractor’s address to which notices are to be sent, etc. must be completed
and included in any signed Contract.

       

      
        	
                1.4

              	
                The
      General Conditions of Contract may be supplemented by Special Conditions
      as provided for in the Sample Form of Agreement. Such Special Conditions
      should include any additional matters for a specific contract which are
      not dealt with in the General Conditions. In addition the Special
      Conditions may modify or delete certain Clauses included in the General
      Conditions, but it is hoped that Operating Companies and Main Contractors
      will only modify the General Conditions when such modifications are
      considered to be essential.

              


      

       

      
        	
                1.5

              	
                Included
      in Appendix 1 are two important entries which define the period of the
      Contract. These are the Effective Date of Commencement of the Contract and
      the duration of the Contract.

              


      

       

      Users may
add any additional important dates for a particular contract in Section 11(b) -
Special Conditions of Contract.

       

      
        	
                1.6

              	
                The
      whole of the contract document has been drafted with the aim of keeping
      the wording as simple and short as reasonably possible but
      comprehensive.

              


      

       

      
        	
                1.7

              	
                In
      the preparation of the General Conditions of Contract, no attempt has been
      made to comply fully with the relevant provisions of the Housing Grants,
      Construction and Regeneration Act 1996 since it appears that such
      provisions do not apply to the types of work which it is anticipated will
      be carried out under the various Model
  Contracts.

              


      

       

      
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      If
however any such Contracts are to be used for types of work which are covered by
the Act, modifications will be necessary by the way of Special Conditions in
order to meet the relevant
requirements of the Act, failing which the "Scheme for Construction Contracts"
published in relation to the Act will apply to any such Contracts,

       

      
        
          
            	
                    1.8

                  	
                    When
      issuing invitation to tender documents it is anticipated that the General
      Conditions
      of Contract will not be included in such documents but will be
      incorporated by reference in resulting contracts and simply referred to in
      tender documents.

                  


          

        

         

      

      
        
          
            	
                    2.

                  	
                    Comments on Specific
      Clauses included in the General Conditions of
    Contract.

                  


          

        

         

      

      
        	
                2.1

              	
                Clause 1 - Definitions
      Clause 1.1 - 'Affiliate'

              


      

      A general
definition is included in Clause 1.1 but users should review this Clause and
amend as necessary in the Special Conditions to take into
account their own particular corporate structure, should the general definition
be unsuitable.

       

      In
addition to changes required in relation to the corporate structure of the
Company, an additional definition may be required for the Contractor. For
example, in the case of a Joint Venture Company, which may well have no
Affiliates, the Joint Venture Partners and their Affiliates may have to be taken
into account.

       

      Clause 1.6 - 'Contractor
Group'

      Clause
1.6 defines the "Contractor Group" as including not only the first tier
Subcontractors but also those subcontractors of any tier who are performing the
Work at the offshore worksite or any wellsite. It does not include
subcontractors who are working elsewhere or are purely suppliers of equipment or
materials.

       

      
        	
                2.2

              	
                Clause 4 -
      Contractor’s General Obligations Clause
  4.5(b)

              


      

      This
clause provides that any supplies to the Company which are intended to be
covered by warranty which is restricted to compliance with specifications in the
Contract must be specified in Section IV - Scope of Work.

       

      
        	
                2.3

              	
                Clause 6 - Contractor
      to Inform Itself

              


      

      This
Clause provides that generally the Contractor has satisfied itself concerning
all of its obligations and the conditions under which the Work is to be
performed.

       

      The
Contractor is required to check information, the Company is required to resolve
errors and thereafter the Contractor may rely on Technical
Information.

       

      
        	
                2.4

              	
                Clause 8 - Assignment
      and Subcontracting Clause 8.1 -
  Assignment

              


      

      Although
this Clause gives the Company wide powers to assign the Contract, it is possible
that some Operating Company Joint Operating Agreements will require even wider
powers in which case this Clause should be amended in the Special
Conditions.

       

      Clause 8.2 -
Subcontracting.

      It is
considered that generally, if substantial parts of the Work are to be
subcontracted, such arrangements should be discussed before signature of the
Contract and, wherever possible named subcontractors should be listed in the
Contract itself. If that is not done however. Clause 8,2 will still provide
reasonable powers for the Company in relation to the award of such
subcontracts.

       

      
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                2.5

              	
                Clause 10 - Defective
      Performance

              


      

       

      The
Notification Period to be specified in Appendix 1 will vary depending on the
type of well service and when any defect is likely to be discovered. The period
will also need to reflect the timing of completion of that part of the Work in
relation to when the Contractor is due to demobilise and in particular, if the
Work is to be performed on a mobile drilling rig, when the rig is due to
demobilise.

       

      Provision
is included for a limitation of Contractor’s liability for the Company’s costs
in connection with defective work. In deciding this limit, consideration should
be given to the possibility that the Company will have the defective work
performed by another contractor, the cost of which may be higher than the
original Contractor. However this position would be unknown at the time of
agreeing the conditions of contract.

       

      
        	
                2.6

              	
                Clause 11 -
      Variations

              


      

       

      Clause
11.1 gives the Company wide powers to vary the Work as long as the change is
'within the capability and resources of the Contractor'. Clearly anything else
would be unreasonable in a service contract.

       

      Clause
11.2 provides for valuation of varied Work either at appropriate rates included
in the Contract or, in the absence of any such rates, that a fair valuation is
to be made.

       

      
        	
                2-7

              	
                Clause 12 - Force
      Majeure

              


      

       

      Clause
12.2 defines Force Majeure for the purposes of the Contract in order to ensure a
proper understanding of the term.

       

      
        	
                2.8

              	
                Clause 13 -
      Suspension

              


      

       

      Clause
13.4 provides that unless a suspension results from some default on the part of
the Contractor, the Contract Price shall be adjusted in accordance with the
relevant provisions of Section III - Remuneration. It is therefore necessary
that such payment section includes appropriate rates for suspension. This must
be decided specifically for each Contract. If no provision were made in this
respect a ‘fair valuation’ would be due under Clause 11.2.

       

      Clause
13.5 provides that where suspension results from some default on the part of the
Contractor, the Company is entitled to recover its own additional costs in
respect thereof. However, the Contractor’s liability for this exposure may be
limited to the amount specified in Appendix 1 to the Form of
Agreement.

       

      
        	
                2.9

              	
                Clause 14 - Terms of
      Payment

              


      

       

      Clause
14.2 emphasises the normal position that the rates and prices in the Contract
are deemed to include for eveiything that the Contractor must supply or do,
unless the Contract specifically states to the contrary. Accordingly statements
to the effect that the Contractor shall cariy out a particular operation at his
own cost are not included elsewhere in the General Conditions since that is the
normal position. This Clause does however include a general statement that
certain remedial work will be carried out at the cost of the Contractor. In
fully reimbursable contracts where it is the intention to pay for rework etc.,
that must be specifically addressed in Section III - Remuneration in such a way
as to override this particular provision.

       

      Clause
14.4 deals with Value Added Tax and states that VAT should be added to the
Contract Price as appropriate. Accordingly all rates and prices included in the
Contract should be quoted without any inclusion for VAT and the Invitation to
Tender documents and Section III - Remuneration should make this very
clear.

       

      
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      Clause
14.9 provides for interest to be paid for late payment of invoices. The Late
Payment of Commercial Debts (Interest) Act came into effect on 1 November 1998
which gives certain businesses the statutory right to claim interest for late
payment of its invoices at bank base rate plus a suggested 8% per annum.
Appendix 1 allows for the percentage over the base rate to be specified in each
contract to cater, for instance, for flexible arrangements in terms of delivery
on the part of the Contractor which might be offset against a beneficial credit
period / interest rate on the part of the Company. The default position is 3%.
However, it is important to ensure that the amount of interest remains
'substantial* in the eyes of the Court who at a later date may consider it
insufficient to reflect the intent of the legislation.

       

      Clause
14.11 includes for the purposes of the Contract, a definition of the word
'costs' in respect of Clauses which provide for the recovery of
'costs'.

       

      
        	
                2.10

              	
                Clause 15 - Taxes and
      Taxation Exemption
Certificates

              


      

       

      Clause
15.4 deals with 'Construction Activities' as specified in Section 567 (2) Income
and Corporation Taxes Act 1988. The standard reflects the legislation which came
into effect on 1st August
1999.

       

      
        	
                2.11

              	
                Clause 16 -
      Ownership

              


      

       

      Clause
16.4 It is intended that the parties should agree the system compatibility
requirement before entering into the contract.

       

      Clause
16.5 it is not intended to vest title in the Company of reports, test results
and charts that relate to the performance, functionality or efficiency of the
Contractor's equipment, materials and personnel, or techniques utilised by the
Contractor.

       

      
        	
                2.12

              	
                Clause 17 - Patents
      and Other Proprietary Rights

              


      

       

      Clause
17.2 provides that where any potential patent or registrable right results from
developments by the Contractor Group prior to the Contract or outside the
Contract or enhancements to existing intellectual property rights of the
Contractor Group then such rights shall vest in the Contractor
Group.

       

      Clause
17.3 provides that where any potential patent or registrable right results from
developments by the Company Group prior to the Contract or outside the Contract
or enhancements to existing property rights of the Company Group then such
rights will vest in the Company Group.

       

      Clause
17.4 provides that where a potential patent or registrable right results from
the Work, the rights will vest in either the Company or the Contractor or
jointly between the parties as specified in Appendix 1.

       

      
        	
                2.13

              	
                Clause 18 - Laws and
      Regulations

              


      

       

      Clause
18.2 provides that the Contractor shall obtain all licences etc. required for
the performance of the Work other than those which can only be obtained legally
by the Company.

       

      In any
particular case it may be necessary to specify in the Special Conditions of
Contract, precisely what licences etc. will be obtained by the
Company.

       

      Clause
18.3 deals with changes in laws etc. and specifies that the Contractor's
entitlement to reimbursement for any additional cost, which may result from such
changes, is as set out in Section III - Remuneration. Accordingly Section III
should address any specific areas, such as changes in safety legislation
requiring changes to vessels etc., where some specified payment is to be
made.

       

      
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                2.14

              	
                Clause 19 -
      Indemnities

              


      

       

      Generally
this Clause includes reciprocal indemnities in respect of property and personnel
of the Company Group and the Contractor Group and third parties (as defined in
Clause 19.1(c)). There are however exceptions in relation to property of the
Company Group in that the indemnity included in Clause 19.2(a) is limited to
property at the 'Worksite'.

       

      'Worksite'
is as defined in Clause 1.14 and includes the area within the approved anchor
pattern of any vessels used by the Contractor for the Work. Any restrictions on
such anchor patterns for third party or Company Group property should be
included in the Contract.

       

      The
Clause has been drafted for the general case where the Company Group owns all
property at the Worksite likely to be affected by the Contractor.

       

      In cases
where all such property is not owned by the Company Group, the Company should be
prepared to inform the Contractor of exact details of ownership together with
indemnities given in respect of third party property. By agreement between the
parties Clause 19.2(d) is intended to establish indemnities in favour of
Contractor in the event of damage to such property. A risk to be considered will
be consequential losses arising from damage to third party property. Care must
be taken in defining the categories of loss included.

       

      As
discussed above, the indemnity in Clause 19.2(a) is in respect of Company Group
property. Some Operating Company Joint Operating Agreements may not allow the
operator to give such indemnities in respect of Co-Venturer's property. It is
suggested that, in such cases, separate agreements should be obtained from the
Co-Venturers to the use of that Clause since it is considered to be unreasonable
to give anything less in the way of indemnity.

       

      The
reciprocal indemnities between the Company and the Contractor relate only to the
parties included in the Company and Contractor Groups as defined in Clauses 1.2
and 1.6.

       

      For the
purposes of Clauses 19.1 (c) and 19.2 (c), Third Parties' are defined as any
party who is not a member of the Company or Contractor Groups.

       

      Under
Clause 19.4, the Contractor's liability resulting from certain categories of
pollution may be limited to amount(s) set out in Appendix I to the Form of
Agreement.

       

      Under
Clause 19.10, the Contractor's liability resulting from the use of radioactive
tools may be limited to an amount set out in Appendix I to the Form of
Agreement.

       

      Clause
19.13 makes provision for a mutual waiver and indemnity arrangement to be set up
for all contractors of the Company engaged to work at the offshore Worksite
whereby all such contractors indemnify each other for their respective loss or
damage to their property, injury or death to their personnel and their
consequential losses. The Clause has been drafted in such a way as it can be
lifted' out of this model contract and inserted into all other relevant Company
contracts for work offshore.

       

      Taking
the above into account, in order that liabilities may be properly defined and
insurance costs may be minimised, consideration should be given to the following
when preparing contracts;

       

      
        
          	
                	
                  (a)

                	
                  Where
      the Company has obtained an indemnity from a third party, such as another
      Operating Company, in respect of items of its property affected by the
      Work, such agreement should specify that the indemnity extends to the
      Contractor Group. The Company should disclose to the Contractor details of
      such indemnity.

                


        

      

       

      
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                (b)

              	
                Where
      an indemnity of the type discussed in (a) only commences above a specified
      value, insurance for claims up to such amount must be considered. If the
      Contractor is to insure such risk, clearly it must pass the cost back to
      the Company.

              


      

       

      
        	
                 
      

              	
                (c)

              	
                Similarly,
      where the Company leases substantial items, every effort should he made to
      include the Contractor Group in any indemnity given to the Company in
      respect of such property.

              


      

       

      
        	
                 
      

              	
                (d)

              	
                As
      an alternative to Clause 19.13, on Worksites where a number of contractors
      will be working in close proximity to each other, (for example a
      maintenance contractor on a platform where the Contractor is to install a
      new fabrication or, in the case of an FPSO, contractors engaged in subsea
      work), consideration should be given both by the Company and by the
      various contractors involved, to the use of a stand alone mutual hold
      harmless agreement, signed by all the relevant parties. By the use of a
      suitable document the parties can define their obligations to each other
      in respect of a particular project, thereby simplifying insurance
      arrangements and minimising costs.

              


      

       

      
        	
                2.15

              	
                Clause 20 - Insurance
      by Contractor

              


      

       

      The
insurances required under the provisions of this Clause will vaiy
depending on the workscope of each particular contract and this is recognised by
the opening paragraph of Clause 20.2. The exact values of insurances required by
the Company must be specified in Appendix 1 as discussed above.

       

      Clause
20.4 requires that Subcontractors carry appropriate levels of insurance as may
be relevant to their work.

       

      
        	
                2.16

              	
                Clause 21 -
      Consequential Loss

              


      

       

      Since
there is no generally recognised meaning of the expression "Consequential Loss"
under English Law, such term is defined for the purpose of this
Clause.

       

      The
second paragraph is drafted in the form of an indemnity since the exclusions of
liability in respect of Consequential Loss apply between the Company Group
(Company where appropriate) and the Contractor Group and not simply between the
Company and the Contractor.

       

      As with
other indemnities discussed under that Clause, some Joint Operating Agreements
may not permit the Operating Company to give the indemnities included in this
Clause on behalf of its Co-Venturers. It is suggested in any such cases that
separate agreements should be obtained from Co-Venturers to the use of this
Clause since it is considered to be unreasonable to give anything less in the
way of an indemnity.

       

      
        	
                2.17

              	
                Clause 23 -
      Termination

              


      

       

      Section
III - Remuneration should include full details of any termination fees or
similar to be paid in the event of termination to suit the convenience of the
Company, as described in Clause 23.3.

       

      
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      The
Clause does allow the alternative of agreeing such fees at the time of
termination but it is strongly recommended that any such fees should be included
in the Contract. Clause 23 includes for both termination of part or all of the
work or termination of the Contract. Accordingly a 'continuing 'obligations'
Clause - Clause 23.7 - is included to cover all possibilities. In the event of
termination of all or part of the Work the whole Contract remains in full force
and effect. In the event of termination of the Contract however only certain
obligations are specified to remain (please see Clause 23.7(a)). If important
Clauses are included in any Special Conditions of Contract, it may be a
requirement that such Clauses remain in being after termination of the Contract
and these must be listed in Appendix 1 as provided for in Clause
26.7(a)(iii).

       

      Clauses
23.5 and 23.6(c) provide that where termination results from default by the
Contractor, the Company is entitled to recover its additional costs in this
connection. Appendix 1 allows for the Contractor's liability for these costs
under each of these clauses to be subject to a specified limit.

       

      Clause
23.8 provides that where suspension leads to termination due to the default of
the Contractor, the Contractor's liability for the Company's additional costs
may be limited to an amount specified in Appendix 1.

       

      
        	
                2.18

              	
                Clause 28 - Resolution
      of Disputes

              


      

       

      This
Clause assumes that, in the event that the parties cannot settle any disputes
that may arise, their final recourse is to the Courts.

       

      It is
recognised however that other methods of finally resolving disputes may be
appropriate in certain cases.

       

      
        	
                2.19

              	
                Clause 29 - Contracts
      [Rights of Third Parties)
Act

              


      

       

      The
Contracts (Rights of Third Parties) Act 1999 applies to all contracts with an
effective date of commencement of 11 May 2000 or later unless specified
otherwise. This clause provides that only those rights of third parties referred
under the provisions of Clause 17 - Patents and Proprietary Rights, Clause 19 - Indemnities,
Clause 20 - Insurance by Contractor and Clause 21 - Consequential Loss shall be
enforceable under the Act.

       

      
        	
                2.20

              	
                Clause 30 - Customs
      Procedures

              


      

       

      In view
of the new regulations introduced by HM Customs and Excise on 1 January 2001, it
is recommended that advice be sought by the respective parties on the procedures
to be employed under the Contract.

       

      
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