**Exhibit 4.84**

**[****] CONFIDENTIAL TREATMENTREQUESTED**

**Confidentialmaterial has been omitted and filed separately with the Commission.**

**AGREEMENTFOR THE PROVISION AND OPERATION OF AFLOATING PRODUCTION STORAGE AND OFFLOADINGVESSEL FOR THE ETTRICK FIELD**

**NEXENPETROLEUM U.K. LIMITED**

**(onbehalf of itself and the Co-venturers)**

**and**

**BLUEWATERETTRICK PRODUCTION (UK) LIMITED**

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF A FLOATING, PRODUCTION, STORAGE AND**

**OFFLOADINGVESSEL FOR THE ETTRICK FIELD**

**TABLE OFCONTENTS**
| 1. | DEFINITIONS                                                  | 6  |
|----|--------------------------------------------------------------|----|
| 2. | INTERPRETATION                                               | 17 |
| 3. | DELIVERY AND ACCEPTANCE                                      | 19 |
| 4. | REPRESENTATIVES OF THE  PARTIES                              | 21 |
| 5. | CONTRACTOR’S  REPRESENTATIONS, WARRANTIES AND COVENANTS | 22 |
| 6. | COMPANY’S  REPRESENTATIONS, WARRANTIES AND COVENANTS    | 25 |
| 7. | LIABILITIES AND  INDEMNITIES                                 | 27 |
| 8  | CONTRACT MANAGEMENT                                          | 32 |
| 9  | CONTRACTOR PERSONNEL                                         | 33 |
| 10 | CAPACITY                                                     | 35 |
| 11 | CHANGE ORDER PROCEDURE                                       | 36 |
| 12 | PAYMENT                                                      | 36 |
| 13 | AUDIT                                                        | 43 |
| 14 | RESPONSIBILITY OF THE  CONTRACTOR TO INFORM ITSELF           | 45 |
| 15 | RESPONSIBILITY OF THE  CONTRACTOR TO INFORM THE COMPANY      | 46 |
| 16 | LIENS                                                        | 47 |
| 17 | COMPLIANCE WITH LAW                                          | 48 |
| 18 | TAXES AND CHARGES TO BE  PAID BY THE CONTRACTOR              | 48 |
| 19 | INSURANCE                                                    | 53 |
| 20 | SUB-CONTRACTORS                                              | 56 |
| 21 | HEALTH, SAFETY AND  ENVIRONMENT                              | 57 |
| 22 | INDEPENDENT CONTRACTOR                                       | 59 |
| 23 | RECORDS AND REPORTS                                          | 60 |
| 24 | CONFIDENTIALITY                                              | 60 |
| 25 | DURATION                                                     | 62 |
| 26 | TERMINATION                                                  | 64 |
| 27 | FORCE MAJEURE                                                | 68 |
| 28 | ASSIGNMENT                                                   | 70 |
| 29 | ADDITIONAL FIELDS                                            | 70 |
| 30 | PATENT INDEMNIFICATION                                       | 71 |

 

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| 31  | NOTICES                         | 72 |
|-----|---------------------------------|----|
| 32  | ABANDONMENT PROVISIONS          | 73 |
| 33. | LIQUIDATED DAMAGES FOR  DELAY   | 74 |
| 34  | GUARANTEES                      | 74 |
| 35  | DISPUTE RESOLUTION              | 75 |
| 36  | GOVERNING LAW AND  JURISDICTION | 76 |
| 37  | CONTRACTOR FACILITIES  UPGRADE  | 76 |
| 38  | MISCELLANEOUS                   | 77 |

 

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**SCHEDULES**
| **Schedule A** | -          | **Description of ETTRICK Field,  location of the FPSO, and Ettrick Field Production Profile** |
|----------------|------------|-----------------------------------------------------------------------------------------------|
| ** **     | ** ** | ** **                                                                                    |
| **Schedule B** | **-**      | **Health, Safety and Environment**                                                            |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule C** | **-**      | **Company Services**                                                                          |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule D** | **-**      | **Contractor Services**                                                                       |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule E** | **-**      | **Interface and responsibility  matrix**                                                      |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule F** | **-**      | **Payment Obligations**                                                                       |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule G** | **-**      | **OPEX Budgeting, Methodology and  Procedures**                                               |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule H** | **-**      | **Project Schedule**                                                                          |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule I** | **-**      | **Project Control Reporting**                                                                 |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule J** | **-**      | **Change Order Procedures**                                                                   |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule K** | **-**      | **Quality Assurance and  Inspection Requirements**                                            |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule L** | **-**      | **Company Representatives  Facilities**                                                       |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule M** | **-**      | **Contractor Parent Company  Guarantee**                                                      |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule N** | **-**      | **Company Parent Company  Guarantee**                                                         |
| ** **     | ** ** | ** **                                                                                    |
| **Schedule O** | **-**      | **Quiet Enjoyment Agreement**                                                                 |

 

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**THIS AGREEMENT**issigned on 31st March 2006 and is made effective as of the 27th February 2006 (the “Effective Date”)

**BETWEEN:**

**(1)****                                 NEXENPETROLEUM U.K. LIMITED,**a company incorporated under the laws of England,registered under Company number 1051137 and having its registered office atCharter Place Vine Street, Uxbridge, Middlesex, UB8 1JG, England, acting on itsown behalf, and on behalf of the Co-venturers, (hereinafter referred to as the “Company”);

-  and -

**(2)****                                 BLUEWATERETTRICK PRODUCTION (UK) LIMITED,**a company incorporated under the laws ofEngland, having its registered office at 15 Appold Street, London, EC2A 2HB,England (hereinafter referred to as the “Contractor”).

**WHEREAS**

(A)                              TheCompany is the operator of the Ettrick Field and together with theCo-venturers, wishes to develop and produce the Ettrick Field reserves and possiblyother reserves using the Contractor’s Facilities;

(B)                                TheContractor wishes to enter into this Agreement as contractor for the provisionof the Contractor’s Facilities and the ancillary services thereto as moreparticularly described in Schedule D.

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**NOW IT IS HEREBY AGREED**asfollows:

# **1.****                                      DEFINITIONS**

## For thepurposes of this Agreement including the Schedules;

1.1.                              “Actual Production” means the number of Barrels of SCO produced inany particular period from the Ettrick Field and any other Field delivered tothe Delivery Point in respect of SCO, as measured for such period by themetering systems aboard the FPSO;

1.2.                              “Affiliate”means, in relation to any Party, any company that is a subsidiary of such Partyor a company of which such Party is a subsidiary. For the purpose of thisdefinition, “subsidiary” shall have the meaning assigned to that term underSection 736 of the Companies Act 1985 as amended by Section 144 of theCompanies Act 1989;

1.3.                              “Agreement”means this agreement including Schedules A through O inclusive, as theforegoing may be amended from time to time and “body of this Agreement” meansthis Agreement without the Schedules;

1.4.                              “BankingDay” means days on which banks in Amsterdam, New York and London are open forbusiness;

1.5.                              “Barrel(s)”or “Bbl” means that quantity of liquid hydrocarbons which, at fifteen degrees(15°) Celsius and a pressure of one (1) bar, occupies the volume of point onefive eight nine eight eight (0.158988) cubic metres;

1.6.                              “Block”means a particular area of the UKCS identified on the reference map depositedat the principal office of the DTI;

1.7.                              “ChangeOrder” means a Change Order Request Form duly signed by authorisedrepresentatives of the Company and the Contractor;

1.8.                              “ChangeOrder Procedure” means the procedures described in Schedule J;

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1.9.                              “ChangeOrder Request Form” means attachment J1 to Schedule J completed in the mannerprescribed in the Change Order Procedure authorising a change in the ContractorServices;

1.10.                        “CharterHire” means the rate referred to in Clause 12 and Schedule F;

1.11.                        “CharterHire Payment Date” means the last day of each Charter Hire Payment Period;

1.12.                        “CharterHire Payment Period” means each of the one (1) calendar month periods for whichCharter Hire shall be paid as set out in Schedule F hereof;

1.13.                        “CharterPeriod” means the period commencing on First Oil up to and including the datethat this Agreement has been terminated and the demobilisation of ContractorFacilities from the Ettrick Field has been completed;

1.14.                        “Claims”means all claims, liens, judgements, awards, remedies, debts, fines, penalties,imposts, damages (including punitive damages), costs (including legal costs)expenses and liabilities;

1.15.                        “ClassificationSociety” means Det Norske Veritas (“DNV”), or if the Parties agree, anotherequivalent body;

1.16.                        “CMS” or “CorporateManagement System” means a demonstrable method of conveying and ensuringcontrol of information relating to the management of the Company and/or theContractor. Information contained within such documents are related to but notlimited to principal standard policy and philosophy particularly in respect ofSESR matters;

1.17.                        “CompanyFacilities” means all property of the Company and Co-venturers, and of theirAffiliates and Sub-contractors, relating in any way to the Field or to theprovision of the Company Services, the Subsea Systems, and, subject to Clause7.8, the Mooring System, including but not limited to those facilities providedby the Company as listed in Schedule C hereof;

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1.18.                        “CompanyGroup” means the Company, its Co-venturers, its Subcontractors, its othercontractors, its or their Affiliates, its or their agents and its or theiremployees, officers and directors, excluding any member of Contractor Group;

1.19.                        “CompanyOperations Representative” means the person designated by the Company, havingthe responsibilities set out in Schedule C;

1.20.                        “CompanyPersonnel” means all officers, directors, employees and agents of the Companyand all officers, directors, employees and agents of all Sub-contractors of theCompany, directly or indirectly engaged by the Company from time to time in theperformance of the Company Services;

1.21.                        “CompanyServices” means the services to be provided by the Company pursuant to ScheduleC;

1.22.                        “ContractManagement Committee” or “CMC” means that committee formed pursuant to Clause8;

1.23.                        “ContractorFacilities” means all property provided or owned by the Contractor, itsAffiliates and Sub-contractors, for the purpose of performing the ContractorServices, including all equipment to be utilised or intended to be utilised inProduction, and the delivery of SCO and Natural Gas to the respective DeliveryPoints, including but not limited to the FPSO, all related equipment, and,subject to Clause 7.8, the Mooring System, as further defined in Schedule D;

1.24.                        “ContractorGroup” means the Contractor, its Sub-contractors, its or their Affiliates, itsor their agents and its or their employees, officers and directors;

1.25.                        “ContractorPersonnel” means all officers, directors, employees and agents of theContractor and all officers, directors, employees and agents of allSub-contractors directly or indirectly engaged by the Contractor in theperformance of the Contractor Services;

1.26.                        “ContractorServices” means the construction or suitable modification, maintenance,mobilisation, transportation, preparation and hook-up at

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the Site of the FPSO as necessary for the commencementand continuation of Production in accordance with the timing provided inSchedule H, including the extraction, production, process, storage andoffloading of Petroleum and disposal of related substances including SCO,Natural Gas and effluents from the Field, providing necessary information tothe Company Operations Representative and other appropriate Company Personnel,decommissioning of the Contractor Facilities upon cessation of Production inaccordance with Schedule D and any other service added as a Contractor Servicepursuant to the Change Order Procedure;

1.27.                        “Co-venturers”means Company, Nexen Ettrick U.K. Limited, Bow Valley Petroleum (U.K.) Limitedand Atlantic Petroleum UK Limited and their respective successors and permittedassignees of an interest in the Field;

1.28.                        “Cubicfoot” means that quantity of Natural Gas which at 60 degrees Fahrenheit and atan absolute pressure of 30 Inches of Mercury, and the Natural Gas beingsaturated with water vapour at that same pressure and temperature, occupies onecubic foot;

1.29.                        “DeliveryPoint” means:

(i)                                            inrespect of SCO to be delivered by the Contractor, the outer flange of theloading facility on board or attached to the shuttle tanker to which theoffloading hose from the FPSO will be attached during offloading; and

(ii)                                         inrespect of Natural Gas delivered by the Contractor, the gas export riser topflange, downstream of the emergency shutdown valve and metering;

1.30.                        “Dollar”, “US$”or “$” means the legal tender of the United States of America;

1.31.                        “Downtime”means the period of days or period of a day or part of a day that the FPSOceased Production for reasons solely attributable to

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Contractor, including planned and unplanned downtimefor maintenance;

1.32.                        “DowntimeCompensation Period” means the period defined in Clause 25.4 or Clause 25.6 asthe case may be;

1.33.                        “DTI”means the UK Department of Trade and Industry or its successor;

1.34.                        “DutyHolder” shall have the meaning given to it in the Offshore Installations(Safety Case) Regulations 2005 (SI 2005: 3117) or any replacement thereto oramendment thereof;

1.35.                        “EntryPoints” means the manifold flanges of the FPSO to which the risers areconnected;

1.36.                        “EttrickField” means the Petroleum accumulation within the zone described in Section 1of Schedule A;

1.37.                        “ExtensionTerm” means the period by which the Charter Period exceeds the Primary Term asa result of Company executing the options pursuant to Clause 25.2;

1.38.                        “Field”means the Ettrick Field and any other field tied-in to the FPSO pursuant toClause 29;

1.39.                        “First Oil”means the event upon which Petroleum is being introduced in the process plantof the FPSO and has passed the Entry Points;

1.40.                        “First OilDate” means 00:00 a.m. London time on the date of First Oil;

1.41.                       “ForceMajeure” has the meaning given in Clause 27;

1.42.                       “Force MajeureRate” means the rate described in Schedule F;

1.43.                        “FormalSafety Assessment” shall include but not be limited to:

(i)                                            identificationof the events which could give rise to a major incident or emergencyevacuation;

(ii)                                         evaluationof the likelihood and consequences of said event;

(iii)                                      estimationof the risk to life associated with said event;

(iv)                                     identification,documentation and justification of key design decisions which may impact therisk levels for the FPSO;

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(v)                                 identificationand establishment of performance standards for safety critical systems whichare required to ensure integrity of the Contractors Facilities and the CompanyFacilities;

(vi)                              demonstrationthat the risks to personnel on board the installation have been identified andevaluated and that in respect of these risks the relevant, statutory provisionsare complied with, as required in the Offshore Installations (Safety Case)Regulations 2005 (SI 2005: 3117), and associated Guidance;

(vii)                         employmentof a safety tracking system to ensure that all safety queries arising duringthe design are rigorously processed to a satisfactory conclusion and documentedin an auditable format;

(viii)                      ademonstration that the proposed design can be operated and maintained in a costeffective and safe manner.

1.44.                       “FPSO”means the floating, production, storage and offloading vessel currently knownas the Aoka Mizu, registered in the Netherlands Antilles, as modified toaccommodate, inter alia, the receipt, processing and storage of Petroleum, SCOand Natural Gas from the Ettrick Field, and which is capable of being operatedin the manner set out in Schedule D, meets the functional specificationsdescribed in Schedule D and is otherwise capable of satisfactorily performingall the services required by this Agreement. For the avoidance of doubt theFPSO does not include the Mooring System;

1.45.                        “Fuel Gas”means all gases used for fuel, including flare purge gas, required for theoperation of the FPSO;

1.46.                        “GBP”, “Pounds”or “₤” means the legal tender of the United Kingdom;

1.47.                        “GovernmentBody” means any national, state or local government or government department,commission, board, bureau, agency, autonomous body or authority of any countryor any state or territory or any country having jurisdiction over the Partiesand/or any parts or the Field, the Site or the Contractor Facilities;

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1.48.                        “HSE”means the Health and Safety Executive of the Department of the Environment ofthe UK or its successor in office or any other body for the time beingresponsible for carrying out the function at present carried out by the HSE inrelation to the Field;

1.49.                        “ImpactStatement” means the statement prepared in furtherance of the Change OrderProcedure as described in section 4.3 of Schedule J;

1.50.                        “Inches ofMercury” means that pressure exerted by a column of mercury one inch high at 32degrees Fahrenheit and under standard gravitational force (an acceleration of32.174 feet per second per second) equal to 0.491154 pounds force per squareinch absolute;

1.51.                        “InsuranceCosts” has the meaning as defined in Clause 12.8;

1.52.                        “InterestRate” means three (3) months LIBOR plus [****] %;

1.53.                        “LegislativeRequirements” means all applicable treaties, Acts, statutory instruments, regulations,requirements of the Classification Society or codes of practice in effect asamended from time to time forming part of the laws and codes of practice of theUK or the flag state of the FPSO;

1.54.                        “LIBOR”means in relation to the amount and currency of the sum in question, the rateper annum at which a deposit for three (3) months would have been offered bythe National Westminster Bank to prime banks in the London Interbank Market atsuch banks’ request at or about 11:00 am (London time) on the first BusinessDay of the period specified hereunder in respect of which interest (or anamount equivalent to interest) is to be calculated;

1.55.                        “Location”means the lands, waters and other places on, under, in or through which theContractor Services are to be performed, including offshore installations,floating construction equipment, vessels (including the area covered byapproved anchor patterns) or places of any kind, including all design offices,workshops and places where construction or modification work to the FPSO isbeing performed or

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where equipment, materials or supplies are beingobtained, stored or used for the purposes of this Agreement;

1.56.                        “MooringLegs” means the nine (9) composite mooring legs assemblies made up of anchorchain and steel wire rope (complete with uni-joint assemblies, connectionshackles, link plates and all other relevant appurtenances) which run from themooring leg connection lugs on the lower end of the disconnectable turretmooring system to the connection pad eyes of the mooring anchor piles andincludes the anchor piles;

1.57.                        “MooringSystem” means the disconnectable turret mooring system and the Mooring Legs;

1.58.                        “NaturalGas” means any hydrocarbons or mixture of hydrocarbons and other gases which atsixty (60) degrees Fahrenheit and at atmospheric pressure is in the gaseousstate, including, without prejudice to the generality of the foregoing, gasfrom gas wells, gas produced with crude oil and residue liquids resulting fromthe processing of gas;

1.59.                        “OperatingCosts” has the meaning as defined in Clause 12.7 hereof;

1.60.                        “Owner”means Bluewater (Aoka Mizu) N.V., the registered owner of the FPSO in theNetherlands Antilles Ships Registry;

1.61.                        “Party”means a signatory to this Agreement, its successors and permitted assigns and “Parties”means both of them together;

1.62.                        “PermittedDelay” means any delay resulting in First Oil not being on or before theScheduled First Oil Date:

(a)                                 tothe extent caused by any act or omission of any member of the Company Group; or

(b)                               tothe extent caused by Company or its Subcontractors not having successfullycompleted the installation, commissioning and testing of the Mooring Systemprior to the Scheduled Arrival Date; or

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(c)                                resultingfrom the Ettrick Field and/or the Company Facilities not being ready in amaterial respect when required for installation, testing and start-up of theFPSO in accordance with Schedule D; or

(d)                                tothe extent caused by any Change Order; or

(e)                                 tothe extent caused by technical disputes to the extent that the ClassificationSociety holds the Contractor not liable therefor; or

(f)                                   resultingfrom Force Majeure; or

(g)                                tothe extent caused by any failure of the Field, wells or wellheads.

1.63.                        “PermittedDelay Day Rate” means the day rate so described as set out in Schedule F;

1.64.                        “Petroleum”means any mineral oil, relative hydrocarbon, and/or Natural Gas (excludingcoal, bituminous shales from other stratified deposits from which oil can beextracted by destructive distillation);

1.65.                        “PrimaryTerm” means the period commencing on the First Oil Date and ending on the fifth(5th) anniversary thereof unless otherwise extended under Clause 25.3;

1.66.                        “Production”or “Producing” means the production of Petroleum and other substances from theField, the receipt of such Petroleum at the Entry Points, the storage andprocessing of such Petroleum and the storage and then delivery of SCO andNatural Gas to the Delivery Points and includes all other processes, handling,and treatments associated with each of the forgoing;

1.67.                        “ProductionTariff” has the meaning as defined in Clause 12.5 hereof;

1.68.                        “ProjectSchedule” means the schedule attached hereto and marked as Schedule H;

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1.69.                        “QuietEnjoyment Agreement” means the quiet enjoyment agreement relating to the use bythe Company of the FPSO and Mooring System, to be entered into between amongstothers the Company, the Owner, the Contractor and the facility agent acting onbehalf of the financiers of the Contractor. The Contractor shall use its reasonableendeavours to ensure that the principles set out in Schedule O, Attachment O1are reflected in the Quiet Enjoyment Agreement. The Quiet Enjoyment Agreementshall be agreed as soon as reasonably possible after the Effective Date andshall be attached to this Agreement as Schedule O;

1.70.                        “Reasonableand Prudent Operator” means in relation to either Party, a person seeking ingood faith to perform its contractual obligations and, in so doing and in thegeneral conduct of its undertaking, exercising that degree of skill, diligence,prudence and foresight which would reasonably and ordinarily be expected from askilled and experienced operator engaged in the same type of undertaking in theUKCS and in similar circumstances who is complying with all relevant laws andregulations;

1.71.                        “RedeliveryPort” means the port as defined in Clause 32.3;

1.72.                        “ReservoirRelated Pollution” means pollution of the environment or other properties bysubstances originating from the Field but excluding any pollution emanatingfrom the Contractor Facilities or otherwise caused by the performance of theContractor Services;

1.73.                        “SESR”means Safety, Environment and Social Responsibility as defined within theCompany’s key policy documentation.

1.74.                        “ScheduledArrival Date” means the scheduled date of arrival of the FPSO on the EttrickField, being the date or period as further described in Schedule H;

1.75.                        “ScheduledFirst Oil Date” means the date as defined in Clause 33.1 hereof;

1.76.                        “Secretary”means the Secretary of State for Trade and Industry for the UK or his or hersuccessor in office or any other person for the time

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being responsible for carrying out the functionscurrently carried out by the Secretary;

1.77.                        “Site”means the designated offshore location in the Ettrick Field more particularlydesignated by the Company in Schedule A where the FPSO is to be installed;

1.78.                        “StabilisedCrude Oil” or “SCO” means liquid Petroleum which has been processed andrendered safe to the appropriate specification as set out in Schedule D by theContractor for delivery to the Delivery Point;

1.79.                        “StandbyRate” means the rate described in Schedule F;

1.80.                        “Sub-contractor”means, in relation to the Contractor, any party with whom the Contractor has acontract for the supply, installation or operation of all or any part of theContractor Facilities or the performance of all or any part of in any way ofthe Contractor Services, and in relation to the Company, any party with whomthe Company has a contract for the supply, installation or operation of theCompany Facilities and/or the Mooring System, other than the Contractor or itsAffiliates, and each case shall extend to include such party’s sub-contractorsand all subsequent sub-contractors, of each and every tier;

1.81.                        “SubseaSystem” means the subsea systems as defined in Schedule C;

1.82.                        “TerminationDate” means the date designated by the Company in writing to the Contractor forthe termination of the Contractor Services pursuant to Clause 26;

1.83.                        “TotalLoss” means (a) an actual or constructive or compromised or agreed (between theinsured and underwriters) or arranged total loss of the FPSO including any suchloss as may arise during a requisition for hire; or (b) compulsory acquisitionof the FPSO unless the FPSO is released therefrom and returned for the use andbenefit of the Company and property of the Contractor, within six (6) months ofthe occurrence thereof; or (c) any hijacking, theft, confiscation, forfeiture,seizure, condemnation, capture, restraint or disappearance of the FPSO unlessthe FPSO is released therefrom, and returned to the use and

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benefit of the Company and property of the Contractor,within six (6) months of the occurrence thereof; or (d) if the insurers do notadmit a claim for an actual or constructive Total Loss, a Total Loss issubsequently adjudged by a final order or final award given by a competentcourt of law or arbitration tribunal;

1.84.                        “UK” meansthe United Kingdom of Great Britain and Northern Ireland;

1.85.                        “UKCS”means the United Kingdom Continental Shelf;

1.86.                        “VB/CS”means the relevant verification body or classification society designatedpursuant to any of the Legislative Requirements;

1.87.                        “WilfulMisconduct” means an intentional and conscious or reckless disregard of the rightsand obligations of a person, the terms of this Agreement or good oilfieldpractice, but shall not include any act or omission reasonably required to meetemergency conditions, including without limitation the safeguarding of life andproperty or any error of judgement or mistake made by any director, employee,agent or contractor of the particular person in the exercise, in good faith, ofany function, authority or discretion conferred upon such person;

1.88.                        [****]means the rate described in Schedule F.

# **2.****                                      INTERPRETATION**

## 2.1.                              Wheneverin this Agreement the singular number or masculine gender occurs, the sameshall be respectively construed as the plural, or neuter, or feminine gender,and vice versa as the context or reference to the Parties may require.

## 2.2.                              Nooral instruction, objection, claim or notice by any Party to the other shallaffect or modify any of the terms or obligations contained in any of thisAgreement, and none of the provisions of this Agreement shall be held to be modifiedby reason of any act whatsoever, other than by

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## an agreedmodification thereof in writing signed by the authorised representatives of theParties.

## 2.3.                              Noheading, index, title, subtitle, subheading or marginal note of this Agreementshall limit, alter or affect the meaning or operation of this Agreement.

## 2.4.                              Unlessotherwise specified, a reference to an Article or Clause shall be deemed to bea reference to that same Article or Clause of the body of this Agreement and areference to a Schedule shall be deemed to be a reference to a Schedule of thisAgreement.

## 2.5.                              Allcorrespondence, documentation and discussion with respect to this Agreement andthe obligations as defined herein shall be in the English language.

## 2.6.                              Allinstructions, notifications, agreements, authorisations, approvals andacknowledgements shall be in writing.

## 2.7.                              Anyreview, survey, approval or acknowledgement by the Company shall not relievethe Contractor from any liability or obligation under this Agreement or at law,except to the extent that said review, survey, approval or acknowledgementspecifically and in writing states that its purpose is to relieve theContractor from a specific liability or obligation under this Agreement.

## 2.8.                              Ifany part, term or provision of this Agreement shall for any reason be held tobe invalid, illegal or unenforceable in any respect, such invalidity,illegality or unenforceability shall not affect any other part, term orprovision hereof and this Agreement shall be construed as if such invalid,illegal or unenforceable provision had never been contained herein.

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## 2.9.                              Thefailure of either Party hereto in any one or more instances to insist upon theperformance of any of the provisions of this Agreement, or to exercise anyrights hereunder, shall not be construed as a waiver or relinquishment of thefuture performance of any such provision or he future exercise of any suchright, and the obligations of the other Party with respect thereto willcontinue in full force and effect.

## 2.10.                        Theseveral documents forming this Agreement are to be taken as mutuallyexplanatory of one another, but in the event of any inconsistency between thebody of this Agreement and any Schedule, the provisions of the body of thisAgreement prevails. In the event of any conflict in the provisions of theSchedules, they shall be given priority in the order as listed on page 4 ofthis Agreement;

## 2.11.                        Referencesto time in this Agreement shall be calculated according to the Gregoriancalendar. References to years, months and days shall mean calendar years,calendar months and calendar days.

# **3.****                                      DELIVERYAND ACCEPTANCE**

3.1                                TheContractor shall deliver the FPSO to the Site by the Scheduled Arrival Date,and shall have;

(a)                                   arrangedfor the FPSO to be classified by the Classification Society to the standardspecified in Schedule D and such classification shall be evidenced byprovisional certification;

(b)                                  compliedwith the acceptance methodology as set out in Schedule D; and

(c)                                   obtainedall necessary permits and authorisations necessary for it to assume the role ofDuty Holder in order commence the Production and export of Petroleum from theEttrick Field.

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3.2                              (notused)

3.3                                Priorto the Scheduled Arrival Date the Company shall have completed the preparationof the Site, the installation and commissioning of the Mooring System and theSubsea System, and the Company shall have obtained all necessary permits andlicences for the mobilisation, installation and operation of the FPSO at theSite in accordance with the schedule specified in Schedule H so that the FPSOmay be installed at the Site by the Contractor. The Contractor shall notprovide the FPSO at the Site before the Scheduled Arrival Date without theCompany’s approval in writing, which shall not be unreasonably withheld.

3.4

(a)                                  Inthe event of any Permitted Delay occurring at any time prior to the First OilDate, the Contractor will be entitled to payment of the Permitted Delay DayRate specified in Schedule F (with addition of Operating Costs and InsuranceCosts to be re-imbursed by the Company) for the period of this delay. However,this accrued entitlement to the Permitted Delay Day Rate will not becomepayable to the Contractor until the Scheduled First Oil Date, at which timeonwards subject to Clause 3.4 (b), any accrued entitlement to the PermittedDelay Day Rate will become payable a day at a time (and pro rata for part of aday), for each day (or part of a day) which elapses on and after the ScheduledFirst Oil Date until the First Oil Date.

(b)                                 Ifthe FPSO does not arrive on or before the Scheduled First Oil Date due toContractor’s delay (not contributed to by Permitted Delay), then the Company’spayment obligations pursuant to Clause 3.4 (a) in respect of Permitted Delayshall be set-off against each day of the Contractor’s delay under this Clause3.4 (b).

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(c)                                  Clause3.4 (b) will not apply where the Contractor can demonstrate that delay causedby it results from the FPSO having been rescheduled in a reasonable manner tocorrespond to a revised schedule resulting from Permitted Delay.

(d)                                 Subjectalways to the provisions of Clause 33, the Company acknowledges that theContractor has no liability to the Company in respect of any delay which is nota Permitted Delay, even if caused by the Contractor’s negligence.

(e)                                  TheContractor will use reasonable endeavours to minimise the impact of anyPermitted Delay on its schedule as shown in Schedule H and to keep the Companyinformed of such.

# **4.****                                      REPRESENTATIVESOF THE PARTIES**

## 4.1.                              Priorto providing the Contractor Services each Party shall appoint a representativewith authority to act on its behalf in all matters concerning this Agreement,and appoint a deputy to act in his stead. Each Party may, by giving fourteen(14) days written notice to the other Party, substitute a representative ordeputy.

## 4.2.                             Arepresentative or his deputy may delegate specific tasks to one or more personsappointed by him. In such case the other Party’s representative shall give atleast five (5) days prior written notice clarifying the authority given to suchappointed person or persons.

## 4.3.                             Subjectto Contractor’s policy for visitors, the Contractor shall afford the Company’srepresentatives access to a Location, the FPSO and the Contractor Facilities atall times during normal working hours. However, Contractor shall duringProduction afford Company’s Operations Representative access to the FPSO at alltimes.

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## 4.4.                             Ifin the opinion of the Contractor, the progress of the Contractor Services isimpeded by the presence of the Company’s representative, Contractor shallwithout undue delay, submit a Change Order Request Form in accordance withClause 11.

# **5.****                                      CONTRACTOR’SREPRESENTATIONS, WARRANTIES AND COVENANTS**

## 5.1.                             The Contractor herebyrepresents, warrants and covenants to the Company that:

(a)                                  Itis, and shall continue to be, a corporation duly organised, validly subsistingand in good standing under the laws of England and the laws of thosejurisdictions in which it is required to be registered; and

(b)                                 Itnow has and shall have at all times material to the transactions contemplatedhereby, all requisite corporate power and authority to enter into thisAgreement and to perform its obligations under this Agreement; and

(c)                                  Withinthirty (30) days from the Effective Date, or as soon as reasonably possiblythereafter, it shall have and continue to have a valid charter for the FPSOfrom the Owner and it shall not do anything to breach or jeopardise the charterterms; and

(d)                                 ThisAgreement has been duly executed and delivered by the Contractor andconstitutes a legal, valid, binding and enforceable obligation of theContractor; and

(e)                                  Theconsummation by the Contractor of the transactions contemplated by thisAgreement will not, in any material respect, violate or conflict with:

(i)                                            itsconstituting documents;

(ii)                                         itsby-laws or governing documents;

(iii)                                      any provision ofany agreement or instrument to which the Contractor is or will be a party or bywhich the

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Contractor Facilities orthe Contractor Services are or will be bound;

(iv)                                     anyjudgement;

(v)                                        anydecree;

(vi)                                     anyorder;

(vii)                                  anystatute; or

(viii)                               anyrule or regulation applicable to the Contractor, Contractor Facilities orContractor Services; and

(f)                                    Ithas complied with, performed, observed and satisfied and will continue toperform, observe and satisfy all material terms, conditions, obligations andliabilities which have heretofore arisen and may hereafter arise and are theobligations of the Contractor under any of the provisions of any agreementaffecting the Contractor Facilities or the Contractor Services or under anyexisting or future statute, order, writ, injunction or decree of anygovernmental agency or court relating to the Contractor, the ContractorFacilities or the Contractor Services; and

(g)                                 TheContractor shall conduct the Contractor Services in accordance with the standardof a Reasonable and Prudent Operator; and

(h)                                 Itshall procure any and all permits, approvals and licenses necessary for thefulfilment of its obligations pursuant to this Agreement (other than permits,approvals and/or licences which can only be granted to the Company) and shallat all times comply with such permits, approvals and licences; and

(i)                                     Allof Contractor Facilities shall be and shall continue to be, in good condition,in compliance with Schedule D, and operated, when required, in accordance withthe performance and reliability criteria in Schedule D; and

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(j)                                     Asfrom arrival on the Field it shall maintain and preserve the FPSO and all theContractor’s Facilities in good operating condition, working order and repair,so that the FPSO and all the Contractor’s Facilities shall be, in so far as duediligence can make it so, tight, staunch, strong and well and sufficientlytackled, apparelled, furnished, equipped and in every respect seaworthy and sothat the FPSO, and all the Contractor Facilities conform to the FPSOdescription and specifications set out in Schedule D; and

(k)                                  Itshall maintain or procure the maintenance of the FPSO’s classification; and

(l)                                     Itshall maintain the Duty Holder classification throughout the term of thisAgreement unless the Company otherwise agrees in writing that another partyshall replace the Contractor as Duty Holder; and

(m)                               TheContractor Personnel shall be fully qualified, trained and competent for theirrespective assignments and shall comply with all applicable laws andregulations in connection therewith; and

(n)                                 TheContractor Personnel shall be fully familiar with and experienced in safetymatters and procedures relating to any place where they may be working(including, but not limited to, travel to and from work, vessels, theContractor Facilities and travel via helicopters) and that they, individuallyor as a group, shall be under a positive obligation to request on their owninitiative safety information and the location of safety equipment, facilities,exit routes and related matters at all times; and

(o)                                 Itshall maintain sufficient liquidity so as to ensure that it is able to meet allof its obligations to third parties as they fall

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due in a manner that will not jeopardise thefulfilment of the Contractor’s obligations hereunder; and

(p)                                 Itshall not, without the Company’s written consent, and the consent of theContractor’s financiers, at any time between the Effective Date and theScheduled First Oil Date offer the FPSO for use by any third party and theContractor hereby expressly acknowledges that in the event that the FPSO doesnot arrive on the Scheduled First Oil Date as a result of the FPSO beingoffered to a third party, then in addition to any direct damages that theCompany may be entitled to, any loss of profits or anticipated profits that theCompany and the Co-venturers may suffer as a result of any loss of or delay toproduction are (notwithstanding the provisions of Clause 7.2) direct and notconsequential losses and may be recovered in full by the Company from theContractor on behalf of itself and the Co-venturers. Notwithstanding any otherprovision in this Agreement, Contractor’s maximum liability as per this Clause5.1 (p), whether by contract, tort, statute or otherwise at Law for loss ofprofits or anticipated profits that by the provisions of Clause 5.1(p) areagreed as direct damages, shall be limited to an amount of [****].

# **6.****                                      COMPANY’SREPRESENTATIONS, WARRANTIES AND COVENANTS**

## 6.1.                             TheCompany hereby represents, warrants and covenants to the Contractor that:

(a)                                  Itis, and shall continue to be, a corporation duly organised, validly subsistingand in good standing under the laws of England and the laws of thosejurisdictions in which it is required to be registered; and

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(b)                                 Ithas and shall have at all times material to the transactions contemplatedhereby, all requisite corporate power and authority to enter into thisAgreement and to perform its obligations under this Agreement; and

(c)                                  ThisAgreement has been duly executed and delivered by the Company and itconstitutes a legal, valid, bidding and enforceable obligation of the Company;and

(d)                                 TheCompany shall conduct the Company Services in accordance with the standard of aReasonable and Prudent Operator; and

(e)                                  Theconsummation by the Company of the transactions contemplated by this Agreementwill not, in any material respect, violate or conflict with:

(i)                                     itsconstituting documents;

(ii)                                  itsby-laws or governing documents;

(iii)                               anyprovision of any agreement or instrument to which the Company is or will be aparty or by which the Company, the Company Facilities or the Company Servicesare or will be bound;

(iv)                              anyjudgement;

(v)                                 anydecree;

(vi)                              anyorder;

(vii)                           anystatute; or

(viii)                        any ruleor regulation applicable to the Company, the Company Facilities or the CompanyServices.

## 6.2                                TheCompany shall provide such information of the Field, the Company Facilities andthe Company Services, and the geological and reservoir data as is necessary forthe Contactor to perform the Contractor Services. It is recognised that it isnot reasonably possible for the Contractor to satisfy itself to the accuracy ofthe abovementioned

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## information,and the Contractor shall be entitled to rely upon the accuracy of theinformation provided.

6.3.                              Anydocuments (other than a Change Order Request Form) that requires the acceptanceor approval of the Company pursuant to this Agreement shall be accepted andeither approved or rejected by the Company within two (2) weeks of receiptthereof. In the absence of a timely reply of the Company, the Contractor shallnotify the Company and inform the Company that it has not received Company’sresponse to the relevant document and will invite the Company to revert withintwo (2) weeks of receipt of the notification whether it accepts the relevantdocument, failing which the document is deemed to have been accepted and/orapproved.

6.4                                 Thetime frames set out in Clause 6.3 above shall not apply to documentsnecessitated as a result of a safety related issue and the Parties shall useall reasonable efforts to agree all such safety related documents as soon as ispracticable.

6.5                                 TheCompany shall ensure and provide the Contractor free and unrestricted access tothe Field to enable the Contractor to perform the Contractor Services as perthis Agreement.

6.6                                 TheCompany shall provide such assistance and support as are necessary to enablethe Contractor to obtain any consent and/or permissions of any Government Bodyrequired to perform the Contractor Services.

# **7.****                                      LIABILITIESAND INDEMNITIES**

7.1                                 NotUsed.

## 7.2                                TheCompany and the Contractor shall bear their own consequential and/or indirectlosses and shall be responsible for, indemnify and hold harmless the otherParty in respect of Claims of the Contractor Group

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## or the CompanyGroup (as the case may be) from any liability therefor, howsoever caused(subject always to Clause 5.1(p)). Consequential loss shall include but not belimited to loss of Production, loss of use, loss of profits, loss of revenue,business interruption and increased cost of working.

## 7.3                                TheContractor shall be responsible for, indemnify and hold harmless the CompanyGroup from all Claims in connection with:

(a)                                         personalinjury, including fatal injury or disease to; and

(b)                                        subjectto Clause 7.7, loss of or damage to or loss of use of property of;

the Contractor Grouphowsoever caused.

## 7.4                                TheCompany shall be responsible for, indemnify and hold harmless the ContractorGroup from all Claims in connection with:

(a)                                        personalinjury, including fatal injury or disease to; and/or

(b)                                       lossof or damage to or loss of use of property of;

the Company Group howsoever caused. For the avoidanceof doubt the Parties agree that the Petroleum whether entering the FPSO, beingprocessed and stored on board the FPSO and/or delivered thought the DeliveryPoints shall be the property and at the risk of the Company Group.

## 7.5                                TheContractor shall be responsible for, indemnify and hold harmless the CompanyGroup from all Claims in connection with:

(a)                                         personalinjury, including fatal injury or disease to; and

(b)                                        lossof or damage to or loss of use of property of;

third parties arising out of or in connection with theperformance of the obligations of the Contractor under this Agreement or ifcaused by a member of the Contractor Group.

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## 7.6                                TheCompany shall be responsible for, indemnify and hold harmless the ContractorGroup from all Claims in connection with:

(a)                                         personalinjury, including fatal injury or disease to; and

(b)                                        lossof or damage to or loss of use of property of;

third parties arising outof or in connection with the performance of the obligations of the Companyunder this Agreement or if caused by a member of the Company Group.

## 7.7                                TheParties agree that the Company shall be responsible for, indemnify and holdharmless the Contractor Group from all Claims in connection with the formationof any waxes, tar, scale, calcium napthanate, or the development of any other chemicalproducts causing restrictions to the operation of the FPSO that were notreasonably foreseeable by the Contractor at the Effective Date.

## 7.8                                Forthe purpose of clarity, Parties agree that the Mooring Legs, upon delivery bythe Contractor to the mobilisation port as nominated by the Company, shallbecome the property of Company as per Clause 7.4.

## 7.9                                Regardlessof any other provision in this Clause 7, the Parties agree that the Contractorshall be responsible for, indemnify and hold the Company Group harmless fromall Claims arising from any pollution emanating from the FPSO or otherwisecaused by the performance of the Contractor Services, to a maximum of i) [****]per event which results in the pollution, or ii) the sum of the actual paymentsmade by Contractor’s protection and indemnity insurer for that particularevent, whichever is the greater. Save in the event of Contractor’s WilfulMisconduct, the Company shall be responsible for, indemnify and hold ContractorGroup harmless for all such Claims to the extent that, for each event whichresults in pollution, they exceed the foregoing maximum limit.

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## 7.10                          TheCompany shall be responsible for, indemnify and hold harmless the ContractorGroup from all Claims arising from Reservoir Related Pollution.

## 7.11                          TheCompany shall be responsible for the removal and where appropriate the markingor lighting of any wreck or debris in the Field (other than that emanating fromthe Contractor’s Facilities) which is within the anticipated FPSO anchorpattern, is interfering with the intended operations of the FPSO, or is ahazard to fishing or navigation and the Company shall be responsible for,indemnify and hold harmless the Contractor Group in respect of all Claimsarising out of such wreck or debris.

## 7.12                          Uponarrival of the FPSO in the Ettrick Field up to demobilisation of the FPSO asper Clause 32, the Contractor shall be responsible for the removal and whereappropriate the marking or lighting of any wreck or debris forming part of theContractor Facilities where required by law or by any Government Body which isor was within the FPSO anchor pattern, is interfering with the operations ofthe Company, or is hazard to fishing or navigation and shall be responsiblefor, indemnify and hold harmless the Company Group in respect of all Claimsarising out of such wreck or debris.

## 7.13                          Ifa Claim is asserted in circumstances which does or may give rise to anindemnity under this Clause 7, the Party against whom the Claim is assertedshall forthwith give written notice thereof to the Party required to indemnifyand the Parties shall consult and co-operate in respect thereof and indetermining whether the Claim and any legal proceedings relating thereto shouldbe resisted, compromised or settled.  EachParty shall make available to the other all information in its possession or towhich it has access which is or may be relevant to the particular Claim. TheParties shall provide each other with

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## reasonableaccess to any and all of the equipment operated by the other Party, to theextent reasonably necessary in connection with the Claim. No such Claim shallbe settled or compromised hereunder without the written consent of theindemnifying Party, which consent shall not be unreasonably withheld.

## 7.14                           Regardlessof any other provision in this Clause 7, the Parties agree that the Companyshall be responsible for, indemnify and hold harmless the Contractor Group fromall costs arising from any and all changes in all Legislative Requirements,regulations and industry practises which become effective after the EffectiveDate and which were not known to the Contractor nor reasonably foreseeable bythe Contractor prior to the Effective Date.

## 7.15                           Theindemnities given hereunder shall apply irrespective of the negligence orbreach of duty, statutory or otherwise, of the person and/or company to beindemnified and both Parties shall take all reasonable measures to ensure thatthe indemnity provisions set out in this Agreement are reciprocated in allother contracts and subcontracts associated with this Agreement.Notwithstanding any other provision to the contrary, each indemnity givenhereunder shall not apply to the extent that the particular person and/orcompany being indemnified is guilty of Wilful Misconduct save for thoseindemnities given under Clause 7.2.

## 7.16                          Forthe limited purposes of extending the benefit of the indemnities givenhereunder:

(a)                                         theCompany contracts on its own behalf and as agent and trustee on behalf of theCompany Group, and each member of Company Group shall be or be deemed to be aparty to this Agreement and the Company confirms that such provisions are

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fully reflected in all such agreements between theCompany and the other members of the Company Group in so far as such agreementsare germane to this Agreement; and

(b)                                        theContractor contracts on its own behalf and as agent and trustee on behalf ofthe Contractor Group, and each member of Contractor Group shall be or be deemedto be a party to this Agreement and the Contractor confirms that suchprovisions are fully reflected in all such agreements between the Contractorand the other members of the Contractor Group in so far as such agreements aregermane to this Agreement.

# **8****                                         CONTRACTMANAGEMENT**

## 8.1                                Withoutprejudice to the obligations of the Contractor as Duty Holder, the Partiesshall form the CMC.

## 8.2                                TheParties shall appoint an equal number of representatives to the CMC. Each Partymay substitute its representative(s) by giving fourteen (14) days writtennotice to the other Party.

## 8.3                                Fromthe Effective Date and throughout the Charter Period the CMC shall meet monthlyon an agreed date, time and location. Formal agendas shall be mutually agreed and shall include but not belimited to a review of:

(a)                                         ProjectSchedule;

(b)                                        criticalpath items;

(c)                                         FPSOmobilisation dates;

(d)                                        designchanges including functional specifications and interfaces;

(e)                                         safetycases prepared in furtherance of Clause 21 and Schedule B;

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(f)                                           suchother items and issues as either Party may request to be included on theagenda.

## 8.4                                NotwithstandingClause 8.3 the CMC can meet at the request of either Party giving the otherParty seven (7) days written notice.

## 8.5                                Minutesshall be taken during the CMC meetings by the Contractor, which minutes shallbe submitted for approval at the following CMC meeting. The CMC meetings willbe chaired by the Contractor.

## 8.6                                TheCompany has the right to invite representatives of Co-venturers as observers toCMC meetings.

## 8.7                                 Subjectto Schedule B of this Agreement, the Contractor shall put or have in place andfollow a HSE Corporate Management System which ensures that all applicablehealth, safety and environmental protection legislation and approved codes ofpractice are complied with. The HSE Management System shall, inter alia includea system of document control to ensure that operating manuals for theContractor Facilities contain all relevant information and are up-to-date.

# **9****                                         CONTRACTORPERSONNEL**

## 9.1                                TheContractor warrants that it has the experience and capability includingsufficient and competent supervisors and other personnel to efficiently andexpeditiously perform the Contractor Services in accordance with the standardof a Reasonable and Prudent Operator.

## 9.2                                TheContractor further warrants that it shall use its reasonable efforts to ensurethat key personnel shall not be replaced without the prior approval of theCompany, such approval shall not be unreasonably withheld or delayed.  In order to ensure that the continuity of theContractor Services is maintained, any replacement personnel shall,

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## where possible,work alongside the person who is to be replaced for a reasonable handoverperiod, at no cost to the Company.

## 9.3                                TheContractor shall ensure that key personnel and supervisory personnel of theContractor and Sub-contractors shall read, write and speak English to astandard which is commensurate with their obligations and in any event to astandard which ensures the safety of the Contractor Facilities.

## 9.4                                TheContractor shall make its own arrangements for the engagement of personnel,local or otherwise, and save in so far as this Agreement otherwise provides,for their transport, accommodation, maintenance and payment.

## 9.5                                TheCompany may instruct the Contractor, on written notice providing reasonablejustification, to remove from the Contractor Facilities or any location of theCompany or from any area where the Contractor Services are being performed, anindividual forming part of Contractor Personnel provided that such right is notexercised frivolously or vexatiously. Said person shall be removed as quicklyas is reasonably possible in the circumstances at the expense of the Contractorand shall not be engaged in the carrying out of the Contractor Services againor on any other work for Company or sited in any location or premises of theCompany without the prior approval of the Company.  The Company shall give the Contractor theopportunity to make representations to reinstate the individual but only aftersuch removal has been effected.  As soonas reasonably practicable, those persons who shall be removed shall be replacedwith suitable personnel at the expense of the Contractor.

## 9.6                                TheContractor shall ensure that the Contractor Personnel engaged in theperformance of the Contractor Services comply with applicable

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## immigrationlaws and where required are in possession of a valid work permit for theduration of their employment or contract with respect to the ContractorFacilities.

## 9.7                                TheContractor shall be responsible for ensuring that only the Contractor Personnelwho are adequately experienced and trained shall perform the ContractorServices.

## 9.8                                Thetraining of the Contractor Personnel shall take into account any reasonablerequirements of the Company as well as applicable industry standards andLegislative Requirements.  The Contractorshall furnish all records of competence for all the Contractor Personnel whenrequested to do so by the Company. The Company shall have the right to witnessall or part of the training and competency processes.

# **10****                                  CAPACITY**

## 10.1                          TheCompany enters into this Agreement on its own behalf and on behalf of theCo-venturers.

## 10.2                          TheCompany may enforce this Agreement on its own behalf and on behalf of theCo-venturers and may commence proceedings in its name to enforce allobligations and liabilities of the Contractor and make any claim which theCo-venturers may have pursuant to this Agreement.

## 10.3                          TheContractor will look only to the Company for the performance of this Agreementand, notwithstanding any other provision of this Agreement, the Contractorshall not commence any proceeding or action directly against the Co-venturers.Notwithstanding the right of the Company to recover a portion of its costshereunder from the Co-venturers, the Company shall, vis-a-vis the Contractor,be responsible for all the obligations of Company and its Co-venturershereunder.

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# **11****                                  CHANGEORDER PROCEDURE**

## 11.1                          Amendmentsor changes to the Contractor Services or the Company Services shall be effectedin accordance with the Change Order Procedure subject to the relevant aspectsof Schedule J.

## 11.2                          TheContractor shall notify the Company forthwith of all things which, in theopinion of the Contractor, appear to be deficiencies, omissions, contradictionsor ambiguities in this Agreement or which conflict with LegislativeRequirements.

# **12****                                  PAYMENT**

## 12.1                          (notused)

### 12.2                           In consideration of theperformance of the Contractor Services the Company shall, throughout theCharter Period, pay to the Contractor the applicable rates, tariffs and costsas described below in this Clause 12 and more particularly set out in SchedulesF and G.

12.3                            Paymentof all invoices submitted by the Contractor in respect of the ContractorServices as referred to in Clause 12.2 shall be sent to the Company’s addressreferred in Clause 31 below and shall be paid by the Company so that thepayment is received by the Contractor within the time limits specified in thisClause 12.

12.4                           Throughoutthe Charter Period and notwithstanding any Downtime, the Company shall pay tothe Contractor for the hire of the FPSO the Charter Hire as described inSchedule F except where, under the provisions of thisAgreement, the Force Majeure Rate, the Standby Rate or [****] is payable.

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12.5                           Subjectto the Actual Production of the Contractor’s Facilities in the relevant CharterHire Payment Period, the Company shall pay to the Contractor a tariff (the “ProductionTariff”) as set out in Schedule F;

12.6                           (notused)

12.7                          As fromFirst Oil or, if earlier, from the date the Contactor is entitled to be paidthe Permitted Delay Day Rate, Company shall reimburse the Contractor’s costscovering all operational costs and expenses on a cost plus profit allowance asmore particularly described in Schedule G, Section 1.1 (the “Operating Costs”)to operate the Contractor Facilities in accordance with the requirements ofthis Agreement and all Legislative Requirements. The Operating Costs do notinclude the Insurance Costs.

12.8                          As fromFirst Oil or, if earlier, from the date the Contactor is entitled to be paidthe Permitted Delay Day Rate, the Company shall reimburse the Contractor thepremiums payable for the insurances taken out by the Contractor under Clause19.1 (c) and (d) (the “Insurance Costs”).

12.9                           TheContractor shall present to the Company separate invoices for the payment ofthe Charter Hire, the Operating Costs, the Insurance Costs and the ProductionTariff.

**Charter Hire**

The invoices for the Charter Hire shall be presentedfor the forthcoming Charter Hire Payment Period thirty (30) days prior to theCharter Hire Payment Date and shall be paid and received on or before the lastBanking Day prior to the Charter Hire Payment Date to which it relates.

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The invoice for theCharter Hire shall be for the full Charter Hire (100%) for the relevant CharterHire Payment Period.

**Operating Costs**

Invoices for the ‘core’ elements of the OperatingCosts as identified in Schedule G shall be presented for the forthcomingCharter Hire Payment Period thirty (30) days prior to the Charter Hire PaymentDate to which they relate and shall be paid and received on or before the lastBanking Day prior to the Charter Hire Payment Period to which they relate.

Invoices for the ‘variable’ elements of the OperatingCosts as identified in Schedule G shall be agreed between the Parties andpresented at the end of each Charter Hire Payment Period and shall be paid andreceived on or before the last Banking Day of the month following the end ofthe Charter Hire Payment Period to which they relate.

Within thirty (30) days after the end of each calendaryear, the Parties shall settle any shortfall between the Operating Costsinvoiced and paid for that year and the actual operating costs calculated anddue in accordance with the provisions of Schedule G.

**Insurance Costs**

The invoices forInsurance Costs shall be presented as soon as possible after receipt by theContractor of the relevant insurance premium invoice from underwriters.Contractor’s invoices for Insurance Costs shall be paid and received withintwenty one (21) days of the Company receiving the Contractor’s invoice.

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**Production Tariff**

As an advance payment of the Production Tariff to beearned in each Charter Hire Payment Period, the Contractor may invoice theCompany [****] for each day of the forthcoming Charter Hire Payment Period.

The invoice for the advance payment portion of theProduction Tariff shall be presented for the forthcoming Charter Hire PaymentPeriod thirty (30) days prior to the relevant Charter Hire Payment Date andshall be paid and received on or before the last Banking Day prior to theCharter Hire Payment Period to which it relates.

The invoice for thebalance of the Production Tariff shall be presented at the end of each CharterHire Payment Period and shall be paid and received on or before the last BankingDay of the month following the end of the Charter Hire Payment Period to whichit relates. The amount due on the invoice shall take into account the advancepayment portion for the relevant Charter Hire Payment Period.

12.10                     The Company’sobligation to pay and the Contractor’s right to claim payment of the CharterHire, the Production Tariff, the Insurance Costs and the Operating Costs shallterminate and expire upon any of the following events:

(i)                                   theFPSO becomes a Total Loss, actual or constructive, for any reason includingForce Majeure, or

(ii)                                thisAgreement is lawfully terminated by either of the Parties in accordance withthe provisions herein.

12.11                    NotwithstandingClause 12.10 (ii) hereof, unless such termination is a result of Contractor’sdefault as set out in Clause 26.2 and/or Clause 26.4 below, the Company shallbe obliged to pay the Charter Hire, any earned Production Tariff, the InsuranceCosts and Operating Costs

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during the time after termination required to completedemobilisation of the FPSO and the Mooring System up to redelivery as perClause 32.3, provided always that such work is carried out by the Contractor asexpeditiously as possible.

12.12                     If theCompany terminates this Agreement within the Primary Term (other than for duecause in accordance with the provisions of Clause 26.2 and/or Clause 26.4), theCompany agrees that the amount payable to Contractor in lieu of the outstandingCharter Hire and Production Tariff shall be the relevant amount as moreparticularly described in Section 9.1 of Schedule F.

12.13                     Payment ofCharter Hire, the Production Tariff, the Insurance Costs and the OperatingCosts shall be made free of bank charges in immediately available funds to theaccounts of the Contractor, which shall be designated by notice in writing tothe Company prior to the first payment of Charter Hire, the Production Tariff,Insurance Costs and Operating Cost due hereunder. Save for the Company’s rightsof set-off under Clause 18.11 and Clause 19.8 below, any payment due hereundershall be made without any set off, counterclaim and/or discount and/orreductions of whatsoever nature.

12.14                     The CharterHire, the Production Tariff, the Insurance Costs and the Operating Costs agreedto above shall be paid exclusive of any value added tax. In the eventapplicable value added tax laws and regulations in the UK should be changed sothat value added tax has to be calculated on and paid in addition to theCharter Hire, the Production Tariff and the Operating Costs, the Company herebyagrees to pay for such value added tax. In the event that Contractor (for thepurposes of the Insurance Costs) is liable for insurance premium tax

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pursuant to this Agreement and this is not recoverableby Contractor, the Company shall reimburse Contractor such insurance premiumtax.

12.15                     Should cessation of Production through the Contractor’s Facilitiesoccur as a result of an event that is likely to be recognised as a Total Lossthe Production Tariff shall cease to apply from the date and time of cessationof Production.

However, the Company shall continue to pay i) anyfurther reasonable Operating Costs covering inter alia the costs required forthe demobilisation of the FPSO (in as far as not covered by Contractor’sinsurance), the Mooring System and other Contractor Services, provided alwaysthat such activities are carried out by Contractor as expeditiously aspossible, and ii) and, in as far as the Insurance Costs continue to apply afterthe day of the cessation of Production, the Insurance Costs.

The Charter Hire shall cease to apply from i) thedate and time of the casualty or event following which the FPSO was accepted asa Total Loss by the insurers of the FPSO, and payment of the minimum insuredvalue as set out in Clause 19 has been made to the Contractor or its financiersbeing the mortgagee, as the case may be, or ii) [****] from the cessation ofProduction, whichever is the earlier. Upon receipt of payment of monies equalto such minimum insured value by the Contractor or the mortgagee, as the casemay be, the Contractor shall refund to the Company all the Charter Hirepayments made by Company to the Contractor from the date of cessation ofProduction as referred to in this Clause 12.15.

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12.16                     Any delay inpayment of an undisputed invoice as referred to in Clause 12.9 shall entitlethe Contractor to charge Company interest in accordance with the Interest Rateas defined in this Agreement.

If the Company disputes any invoice in whole or inpart, the Company shall promptly notify the Contractor of the dispute and theContractor shall issue its invoice for the undisputed amount and a credit noteto cancel the original invoice and the Company shall use all reasonableendeavours to pay the re-issued, undisputed invoice within the originaltimeframe and in any event, within thirty (30) days of receipt of there-issued, undisputed invoice. The Contractor and the Company shall endeavourto agree and settle and adjust any disputed amount forthwith and the provisionsof Clause 35 shall apply to any such dispute.

If the Company disputes any invoice in whole or inpart, payment of Company interest which is due or which shall become due to theContractor in respect of the disputed element of the subject invoice shall bepostponed until the disputed invoice or part thereof has been resolved, inwhich case interest in accordance with the Interest Rate shall then be payableby the Company to the Contractor in respect of the outstanding amount from thedate that interest in respect thereof first became payable to the Contractor,accruing to the date of actual payment.

If payment of an undisputed invoice for the CharterHire, Production Tariff, Insurance Costs or Operating Costs has not beenreceived by the Contractor on the payment dates as described in Clause 12.9 oras set out above, the Contractor shall notify the Company of the default. Inthe event that payment has not been received by the Contractor thirty (30) daysafter the Contractor submitted to the Company a written notice of such default,the Contractor shall have the right to withdraw the Vessel from the service ofthe Company and lawfully terminate this Agreement.

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12.17                     On the sixth (6th) anniversary of First Oil and therebytaking into consideration Clause 25.5, the Parties agree to review the CharterHire referred to in Schedule F. If the review demonstrates that the actualand/or budgeted capital expenditures for the repair & lifetime extensionprogram for the Contractor’s Facilities to enable the Contractor to continuethe Contractor’s Services after the seventh (7th) anniversary of First Oil, the Partiesshall - provided the Parties wish to continue the Charter Period after theseventh (7th)anniversary of First Oil - discuss and agree in good faith revised Charter Hireto be effective for subsequent years and this Agreement shall be amendedaccordingly. In the event that Parties fail to agree written terms withinninety (90) days from the start of the sixth (6th) anniversary of First Oil, thisAgreement shall terminate as of the seventh (7th) anniversary of First Oil.

**13****                                  AUDIT**

13.1                           Financialaudit; for a period beginning on the First Oil Date and ending on that datewhich is six (6) years from the relevant year Contractor invoiced Company ortwo (2) years from the termination of completion of abandonment anddecommissioning of the Contractor’s Facilities pursuant to this Agreement,whichever is the earlier,

(a)                                  theCompany and its authorised representatives shall have access to and the rightto audit any of the Contractor’s and its major Sub-contractors’, books,vouchers, receipts, correspondence, memoranda and other records relating to orbearing upon the correctness of any Operational Costs and/or Insurance Costsclaimed by the Contractor to the Company for payment, and

(b)                                 theCompany and its authorised representatives shall have access to and the rightto audit all meter readings and any documentation relating to the accuracy ofsuch meter readings, any tank

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measurements and related data related to or bearing upon thecorrectness of any Production Tariff claimed by the Contractor to the Companyfor payment.

## 13.2                           TheContractor shall preserve and will, where possible, cause its Sub-contractorsto preserve all of the records and information referred to in Clause 13.1during the aforementioned period, and will, upon written request, make themavailable to the Company. Such audits will be conducted during the Contractor’snormal working hours.

## 13.3                           TheCompany shall notify the Contractor of any matters arising in a financial auditwhich necessitate an adjustment, and such adjustment, if agreed by Parties, byreimbursement of the Company or otherwise, shall then promptly be made.  The Company shall also have the right toobtain statements from any of the Contractor Personnel to the extent it deemsnecessary, and the Contractor shall make Contractor Personnel available attheir assigned location if still under employment with the Contractor.

## 13.4                           Health,Safety and Environmental Audit; without prejudice to the Contractor’sobligations as set out herein, the Company shall have the right to carry outsafety inspections and safety management systems audits during performance ofthe Contractor Services.  In addition,the Company shall have the right to comment on and review the Contractor’soperational and combined operations safety cases prior to the submission of thesame to HSE.  The Company shall exerciseits rights under this Clause 13.4 so as not unreasonably to affect theperformance of the Contractor Services.

## 13.5                           Withoutprejudice to the Contractor obligations as set out herein the Company shallhave the right to carry out environmental inspections and audits during performanceof the Contractor Services.

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## 13.6                           TheContractor shall accept and implement, or justify grounds for rejection of, anynon-compliance issues or suggestions for improvement identified in any audit asper Clause 13.4 and/or Clause 13.5 in a timely manner.

## 13.7                           TechnicalAudit / Engineering Review; without prejudice to the Contractor’s obligationsas set out herein, the Company shall have the right to carry out technicalaudits and engineering reviews during performance of the ContractorServices.  The Company shall exercise itsrights under this Clause so as to not unreasonably affect the Contractorperformance of the Contractor Services.

## 13.8                           Subsequentto any audit or review carried out in furtherance of Clause 13.7, the Companymay make technical or engineering recommendations to the Contractor. TheContractor shall consider recommendations of the Company taking account of thefunctional specification (Attachment D.1 to Schedule D). In case of theContractor’s design, procurement, engineering and/or construction of the FPSObeing out with the said functional specification the Contractor shall implementsuch recommendations. In case of the Company’s recommendations being anoptimisation of Contractor Services within the said functional specification,the Contractor is free to consider and implement such recommendation.

**14****                                  RESPONSIBILITYOF THE CONTRACTOR TO INFORM ITSELF**

## 14.1                           Subjectto Clause 6.2 above, the Contractor agrees that the Contractor has informeditself as to the nature of its obligations pursuant to this Agreement,including, but not limited to, the supervision and all other necessaryservices, labour and materials, plant, facilities, tools,

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## equipment, consumables and supplies required,the correctness and sufficiency of the payment obligations referred to inSchedule F, general and local conditions especially climatic, sea and otherwater conditions, weather conditions, subsea terrain and bearing values whereapplicable and all other matters which could affect progress or performance ofits obligations pursuant to this Agreement. Any failures by the Contractor to take account of matters which affectthe Contractor Services shall not relieve the Contractor from its obligationsunder this Agreement.

## 14.2                           TheContractor assumes full responsibility for all the Contractor Servicesperformed by the Contractor that are based upon data and information notcontained in this Agreement.

**15****                                  RESPONSIBILITYOF THE CONTRACTOR TO INFORM THE COMPANY**

## 15.1                           TheContractor shall immediately notify the Company of accidents or incidents whichmay affect the interest or other operations of the Company or Co-venturersrelated to this Agreement.

## 15.2                           TheContractor shall notify the Company immediately of any impending or actualstoppages of work, industrial disputes or other matters affecting or likely toaffect the performance of the Contractor Services.

## 15.3                           TheContractor shall notify the Company immediately in the event it does notreceive any required approval for the provision of the Contractor Facilities orotherwise.

15.4                           TheContractor shall notify the Company immediately in the event of any accidentsor litigation in relation to the Contractor Facilities.

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**16****                                  LIENS**

## 16.1                           TheContractor shall keep all assets, tangible or intangible, including theContractor Facilities and the Contractor Services free and clear of all liens,claims, assessments, fines and levies except for:

(a)                                  securityinterests in favour of Contractor’s financiers, in respect of which a QuietEnjoyment Agreement will be entered into, security interests in favour ofassignees of such lenders who first agree to be bound by provisions of suchagreement, or security interests in favour of other lenders who first agree tobe bound by an agreement substantially in the form of that agreement;

(b)                                 liensin favour of the Company or the Co-venturers; and

(c)                                  securityinterests arising by operation of law in respect of taxes which are not overduefor payment other than taxes being contested in good faith by appropriate stepsand in respect of which appropriate reserves have been made.

## 16.2                           TheContractor shall be responsible for, indemnify and hold harmless the Companyfrom all costs, claims, losses or liabilities whatsoever arising from any andall liens except for those listed in Clause 16.1(b).

## 16.3                           The Companyshall be responsible for, indemnify and hold harmless the Contractor Group andthe Owner from all costs, claims, losses or liabilities whatsoever arising fromliens imposed by any creditors of the Company Group.

## 16.4                           TheCompany shall be responsible for, indemnify and hold harmless the ContractorGroup and the Owner from all costs, claims, losses or liabilities whatsoeverarising from the liens listed in Clause 16.5 and/or Clause 16.6 in case thecrew, the master’s or offshore installation

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## manager is directly or indirectly employed byor on behalf of the Company.

## 16.5                           TheContractor shall keep all assets, tangible or intangible, including theContractor Facilities and the Contractor Services free and clear of liens forunpaid crew’s wages in accordance with usual maritime practice incurred in theordinary course of employment, provided the Company has paid to the Contractorthe Operating Costs due.

## 16.6                           TheContractor shall keep all assets, tangible or intangible, including theContractor Facilities and the Contractor Services free and clear of liens formaster’s or offshore installation manager’s disbursements incurred in theordinary course of trading and any other lien arising by operation of law orotherwise in the ordinary course of the operation, repair or maintenance of theContractor Facilities, provided the Company has paid to the Contractor theOperating Costs due.

**17****                                  COMPLIANCEWITH LAW**

## 17.1                           Subjectto Clause 7.14 hereof, the Contractor shall comply with all treaties, laws andregulations (including any applicable codes of practice approved by anyrelevant regulatory authority) of any government having jurisdiction over theField, the Contractor Facilities, the Contractor Services, the Contractor orotherwise in effect at any time and shall be responsible for, indemnify andhold harmless the Company from and against any and all Claims resulting fromthe Contractor’s failure to so comply.

**18****                                  TAXESAND CHARGES TO BE PAID BY THE CONTRACTOR**

## 18.1                           Subjectto Clause 12.13, the Contractor shall exercise reasonable endeavours to ensurethat any of its Sub-contractors shall timely file all

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## appropriate returns and promptly pay alltaxes and duties including but not limited to income, profit and corporationtaxes and taxes on capital gains, turnover, payroll and added value, dulyassessed by any competent authority of the UK or any other authority on theprofits, gains, turnover, wages, salaries or other remuneration or added valuearising from the operations under this Agreement.

## 18.2                           TheContractor shall exercise reasonable endeavours to ensure that any of itsSub-contractors shall comply with all statutory obligations to timely file allappropriate returns and make deductions on account of and remit the requiredamounts to the relevant government department in respect of income tax, Pay AsYou Earn (PAYE) tax, national insurance, employee taxes, charges, socialsecurity costs, levies and contributions imposed by any competent authority ofthe UK or any other authority whether or not they are measured by the wages,salaries or other remuneration or benefits paid to any person employed by theContractor or any of its Sub-contractors.

## 18.3                           If theCompany is required to pay taxes, duties, PAYE deductions, national insurancecontributions, employee taxes, social security costs, contributions or anyother type of taxes and costs referred to in Clauses 18.1 and 18.2 whether withrespect to the Contractor or any of its Sub-contractors or any other personhowsoever connected, associated or related to the Contractor or any of itsSub-contractors in connection with this Agreement then the Contractor shallwithin fourteen (14) days of receiving notice thereof from the Company, pay tothe Company such taxes or costs or failing which the Company shall be entitledto deduct any such taxes or costs from any Operating Costs due, or which maybecome due, to the Contractor provided that Company provides reasonabledocumentary evidence to Contractor so as to allow Contractor to claim anyallowable credit from HM Revenue

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## and Customs (or a relevant taxationauthority) for the amounts so deducted.

## 18.4                           TheContractor shall supply to the Company and shall procure that any of itsSub-contractors shall supply to the Company such particulars in relation toactivities under this Agreement which are required to be given by the Companyto an authorised inspector of taxes or any other government authority whetherof the UK or elsewhere.

## 18.5                           TheCompany shall save, indemnify, defend and hold harmless the Contractor Groupagainst all levies, charges, contributions and taxes of the type referred to inthis Clause 18 and any interest or penalty thereon which may be assessed, byany appropriate government authority whether of the UK or elsewhere, on theCompany in connection with this Agreement and from all costs incurred inconnection therewith, other than those levies, charges, contributions and taxeswhich the provisions of this Clause 18 allow the Company to recover from theContractor.

## 18.6                           TheContractor agrees that if the Company is liable to withhold any amounts underSection 559 Income and Corporation Tax Act 1988 or other enactment whichprovides for a similar obligation and to make any payment to HM Revenue andCustoms (or a relevant taxation authority) by virtue of Section 559 Income andCorporation Taxes Act 1988 or any other enactment which provides for a similarobligation or any payment of any applicable national insurance contributionsfrom payments received by the Contractor under this Agreement, the Companyshall be entitled to deduct the sums which are due to HM Revenue and Customs(or a relevant taxation authority) from any  Operating Costs due, or which become due tothe Contractor, provided that Company provides reasonable documentary evidenceto Contractor so as to allow Contractor to claim any allowable credit from HM

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## Revenue and Customs (or a relevant taxationauthority) for the amounts so deducted.

## 18.7                           TheContractor agrees to indemnify and hold the Company harmless in respect of allcosts, expenses and liabilities incurred by the Company by virtue of theapplication of Section 559 Income Corporation Taxes Act 1988 to payments madeby the Company pursuant to this Agreement, including but not limited to allcosts and expenses of whatsoever kind incurred by the Company in administeringany deductions made by the Contractor or any tax payments made to HM Revenueand Customs (or a relevant taxation authority).

## 18.8                           Wherethe Contractor or any of its Sub-contractors or any other person employed byContractor or any of its Sub-contractors in connection with this Agreement isnot resident in the United Kingdom for the purpose of Section 830, Income andCorporation Taxes Act 1988 the Contractor shall be responsible for obtaining acertificate from HM Revenue and Customs (or a relevant taxation authority)under the provisions of paragraph 7 of Schedule 15 of the Finance Act 1973 infavour of the Company for itself and any of its Sub-contractors and for anyother person employed by Contractor or any of its Sub-contractors in connectionwith this Agreement any of whom is or may become liable for tax under Section830, Income and Corporation Taxes Act 1988 in respect of any profits or gainsor assumed profits or gains arising out of the performance of this Agreement.  A copy of such certificate must be submittedto the Company within fourteen (14) Days of its receipt by the Contractor.

## 18.9                           In theevent that all the certificates required pursuant to the provisions of Clause18.8 are not obtained by the Contractor within forty five (45) days of theFirst Oil Date or if any such certificate is withdrawn or cancelled by HMRevenue and Customs (or a relevant taxation

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## authority) then the Contractor shallimmediately supply an irrevocable bank guarantee, at no cost to the Company,granted by a recognised UK clearing bank in favour of the Company in respect ofthe maximum potential tax liability which may arise out of this Agreement. Inthe event that such a bank guarantee is required under the terms of this Clausebut is not received by the Company or is not, in the Company’s view, sufficientto protect the Company and its Co-venturers against the maximum potential taxliability which in the Company’s opinion may arise out of this Agreement thenthe Company shall be entitled to make deductions up to such maximum amount fromany monies due or which may become due to the Contractor.

## 18.10                     If theCompany or any Co-venturer is required to pay any taxes by virtue of paragraph4 of Schedule 15, Finance Act 1973 as amended or any interest due thereon underSection 86, Taxes Management Act 1970 or any other interest or penalty, theContractor shall within thirty (30) days of receiving written notice from theCompany pay to the Company any such taxes or interest due thereon free of anywithholding or deduction.  If such taxesor interest are not so paid by the Contractor the Company shall be entitled todeduct the sums due to HM Revenue and Customs (or a relevant taxationauthority) from any Operating Costs due, or which become due to the Contractor,provided Company provides reasonable documentary evidence to Contractor so asto allow Contractor to claim any allowable credit from HM Revenue and Customs(or a relevant taxation authority) for the amounts so deducted.

## 18.11                     The Companyshall be entitled to off-set and deduct all sums owed by the Contractorpursuant to this Clause 18 from the Operating Costs due to the Contractor only.

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## 18.12                     The Companyshall develop with government authorities, customs procedures for importing andexporting the Contractor’s Facilities to and from the Ettrick Field. Contractorshall, if requested by Company, use reasonable endeavours to assist Companyherein.

## 18.13                     The Companyshall be responsible for the importation of the Contractor Facilities and anyand all parts and spare parts into the UK for the Contractor Services. Companyshall defend, indemnify and hold Contractor harmless for any costs, taxes,import duties related to the importation of the FPSO in the UK.

## 18.14                     For theavoidance of doubt this Clause 18 is subject to Clause 7.14 hereof.

**19****                                  INSURANCE**

## 19.1                           TheContractor shall secure and maintain the following insurance coverage duringthe performance of this Agreement all insurances as required by law, includingbut not limited to;

(a)                                  Employers Liability insurance to comply with theEmployers Liability (Compulsory Insurance) Act 1969 or any statutoryre-enactment modification or extension thereof for the time being in force withcoverage extended as applicable to cover North Sea or overseas working.  In addition, insurance to comply with Workmen’sCompensation Acts and such other laws (including but not limited toOccupational Disease Laws) to the extent applicable.  For those employees not required to becovered under the provision of the above Acts, Employers Liability insurance inan amount as required by the legal system applicable to the relevant employmentagreement.  Such insurance shall beendorsed to the effect that claims formulated

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by Contractor Personnel against the Company shall be treated as claimsagainst the Contractor and compensated by such insurances,

(b)                                 Third Party Public Liability insurance coveringbodily injury and/or death and/or property damage in an amount of at least [****]per occurrence or series of occurrences arising from the one event.

(c)                                  hull and machinery insurance covering theFPSO and, as from the First Oil Date, the Mooring System, but always excludingthe Mooring Legs, including marine war and terrorist risk coverage andcollision liability, in as far as not covered by the P&Iinsurance.

(d)                                 protection and indemnity (P&I) insurance includingremoval of wreck and debris and pollution liability in an amount not less thanthe normal limit available under prevailing market conditions with a P&IClub which is a member of the International Group of P&I Clubs and extendedto include Comprehensive General Liability Insurance for liabilities arisingout of the operation of the FPSO in Contractor’s capacity as an employer with alimit of not less than [****].

(e)                                  constructionall risk (or equivalent) insurance in an amount not less than the project coststo cover all costs associated with reinstatement and repair of any damaged partof such works;

## 19.2                           Partiesagree that during the Charter Period in respect of marine risk and hullinterest the minimum combined insured value of the Contractor Facilities shallbe equal to the amount of the total investment made by Contractor or any of itsAffiliates to achieve First

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## Oil together with its equipment used inperformance of this Agreement during all operations.

## 19.3                           TheContractor shall require its Sub-contractors to take out insurance identifiedin Clause 19.1(a) and 19.1(b) with limits commensurate with the activity andall insurances required by law.

## 19.4                           TheContractor shall ensure that all of the above policies mentioned in Clauses19.1 (b), (c), (d) and (e), are endorsed to show the Company as additionaland/or protective co-insured and shall contain a waiver of underwriter’s rightsof subrogation against the Company Group.

## 19.5                           Uponrequest of Company, Contractor shall arrange for certificates of insurance, inrespect of the insurance cover to be placed by Contractor, to be provided tothe Company.

## 19.6                           TheParties shall afford each other all reasonable assistance which may be requiredfor the preparation and negotiation of insurance claims.

## 19.7                           Any andall deductibles in the above described insurance policies shall be assumed by,shall be for the account of and at the sole risk of the Contractor, unless theclaim is the result of circumstances which are the responsibility of theCompany and for which the Company is liable under this Agreement, in which casethe deductibles for that claim will be for account and risk of the Company.

## 19.8                           Contractor’sinsurance broker shall, on first request of the Company, undertake towards theCompany that it shall advise the Company promptly in case the underwriters orthe assured issue any notice of cancellation or decrease in respect of any ofthe insurance policies to be maintained by the Contractor. If the Contractorfails or refuses to obtain any insurance required to be obtained by it underthe provisions

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## of this Clause 19.8 or to provide the Companywith evidence of insurance or copies of certificates as and when requested, theCompany shall have the right to procure such insurance on the Contractor’sbehalf and expense, in which event any sum so paid by the Company for thispurpose shall immediately become due and payable to the Company by theContractor and the Company may be entitled to deduct such sum from theOperating Cost or Insurance Cost due or which may become due to the Contractorin addition to any other remedy the Company may have under this Agreement.

## 19.9                           Companyshall secure and maintain;

(a)                                  constructionall risk (or equivalent) insurance for coverage of the Mooring System as fromits delivery by the Contractor to the mobilisation yard as nominated by theCompany, up to the First Oil Date,

## (b)                               insurancefor the Mooring Legs as from delivery by the Contractor to the mobilisationyard as nominated by the Company throughout the duration of this Agreement.

## 19.10                     The Companyshall ensure that all of the above policies mentioned in Clauses 19.9 (a) and(b) are endorsed to show the Contractor and Owner as additional/protectiveco-insured and shall contain a waiver of underwriter’s rights of subrogationagainst the Contractor Group.

# **20****                                  SUB-CONTRACTORS**

## 20.1                           TheContractor shall be fully responsible for the acts or omissions of any of itsSub-contractor as if it had done the work itself. Nothing in this Agreementshall create any contractual relationship between the Company andSub-contractor of the Contractor, and all such sub-contracts shall contain aclear statement that the Contractor is entering

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## into such sub-contract as principal and notas agent either for the Company nor to Company Group.

**21****                                  HEALTH,SAFETY AND ENVIRONMENT**

## 21.1                           Contractor’sObligations

(a)                                  TheContractor shall comply with the provisions of Schedule B.

(b)                                 TheContractor Personnel shall observe and carry out the Contractor Services inaccordance with Legislative Requirements and as a Reasonable and PrudentOperator, the management system of the Contractor and such specific health,safety and environmental standards as may be issued by the Company.  The Contractor shall take all measuresreasonably necessary and properly to provide safe working conditions and toprotect the environment in which the Contractor operates in the performance ofits obligations pursuant to this Agreement.

(c)                                  TheContractor shall on an on going basis adequately instruct, monitor and auditall the Contractor Personnel in the use of safety equipment and properly workprocedures for the purpose of doing everything reasonably practicable toprevent personal injury and damage to equipment and operations, and shallprovide to its employees and the Company copies of operations manuals andwritten instructions pertaining to the operation of the Contractor Facilitiesin accordance with the Legislative Requirements or as reasonably requested bythe Company.

(d)                                 TheContractor shall report all incidents, accidents and work-related illnesses inaccordance with the Legislative Requirements and as a Reasonable and PrudentOperator. The Contractor shall carry out investigations of such incidents,accidents and work related illnesses as required by law and shall promptlyreport such incidents to the Company representative and the Company 

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Operations Representative has the right to observesuch investigations. The Company reserves the right to carry out investigationsof said incidents, accidents and work-related illnesses and the Contractorshall render such assistance as the Company may reasonably request relating toits investigations. In the event of doubt as to whether a report should bemade, a decision on the matter shall be made by the Company representative.

(e)                                  TheContractor shall conduct a Formal Safety Assessment no later than six (6)months prior to the First Oil Date.

(f)                                    TheContractor and the Company shall, as part of the detailed design process,conduct an operability and maintainability study as soon as is practicable inorder to ensure that the Contractor Facilities can be safely maintained andoperated.

(g)                                 TheContractor shall be Duty Holder of the Contractor Facilities.  The Contractor hereby accepts its appointmentas operator and Duty Holder and the associated responsibilities, and confirmsthat the safety cases in Schedule B shall be prepared and submitted to theappropriate Government Bodies by the Contractor in its capacity of operator andDuty Holder.  Prior to said submission,the Company shall have the right to review and comment upon said safety cases.

(h)                                 TheContractor shall provide all necessary assistance to the Company to allow theCompany to fulfil its obligations as Licensee as required under the OffshoreInstallations (Safety Case) Regulation 2005 (SI 2005: 3117) as amended fromtime to time.

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## 21.2                            EmergencyResponse and Environmental Clean-up

(a)                                  Boththe Company and the Contractor shall comply with the provisions on emergencyresponse and environmental clean-up as set out in Schedule B.

## 21.3                           Non-performanceHSE and SESR

(a)                                  Notwithstandingany right of the Company pursuant to Clause 13 and subject to Clause 21.3(c),in the event of serious non-compliance on the part of the Contractor withrespect to obligations relating to health, safety or the environment, theParties agree that the Company may at its sole discretion, either instruct theContractor to cease Production until such time as the non-compliance issue hasbeen resolved to the Company’s satisfaction or intervene and provide themanagement activities required to rectify the non-compliance.

(b)                                 TheContractor shall co-operate with and assist the Company in furtherance of theCompany’s election pursuant to clause 21.3(a).

*(c)*                                  For the purposes of this Clause 21.3 seriousnon-compliance means an act, omission, circumstance or state of affairs ofwhich the Contractor has been made aware by the Company, the Contractor Personnel,regulatory bodies, VB/CS or members of the public, which has the potential, ifnot remedied promptly, of causing serious harm to persons, environment andproperty.

**22****                                  INDEPENDENTCONTRACTOR**

## 22.1                           In theperformance of the Contractor obligations pursuant to this Agreement, theContractor shall be an independent contractor. The presence of and theinspection by the Company’s representative shall not relieve the Contractor ofany Contractor obligations and responsibilities.

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## 22.2                           In noevent shall the relationship of the Parties be construed to be that ofprincipal and agent or master and servant or a partnership.

**23****                                  RECORDSAND REPORTS**

## 23.1                           TheContractor shall provide the Company with complete and accurate records andreports as described in Schedule I of this Agreement.

**24****                                  CONFIDENTIALITY**

## 24.1                           Alldata and information that has been or is hereafter acquired or received byeither Party (whether orally, in writing or in some other form) in connectionwith this Agreement and the contents of this Agreement shall be heldconfidential and shall not be divulged in any way to any third party, withoutthe prior written consent of the other Party, provided however that any Partymay, without such approval, disclose such data and information:

(a)                                  toany Affiliate and in the case of the Company, the Co-venturers and theirAffiliates provided that the disclosing Party shall procure that suchCo-venturers and/or their Affiliates hold such data and information on similarterms of confidentiality;

(b)                                 toany director, officer, employee, external legal adviser or statutory auditor ofa Party or to any in-house contractor of a Party (being a contractor, anemployee or contractor of such contractor working as a member of staff or aParty but not falling within the legal definition of an employee) who is madeaware of the confidential nature of such data or information;

(c)                                  toany outside professional consultant of a Party (other than an external legaladviser or statutory auditor) or to any external contractor of a Party (beingany contractor not falling within the description of an in-house contractor setout in sub-clause

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24.1(b) above), upon obtaining a similar undertakingof confidentiality from such consultant or external contractor provided thatsuch Party shall prior to such disclosure inform the other Party of the name ofsuch consultant or external contractor and the data and information to bedisclosed to it;

(d)                                 toany bank or financial institution from whom such Party is seeking or obtainingfinance or security, upon obtaining a similar undertaking or confidentialityfrom such bank or institution;

(e)                                  tothe extent required by the rules and regulations of any recognised stockexchange or in compliance with the rules and regulations of any jurisdiction towhich a Party is subject;

(f)                                    toany Government Body having the right to require such information to the extentrequired by any applicable laws:

(g)                                 toany court of competent jurisdiction acting in pursuance of its powers;

(h)                                 tothe extent that such data and/or information is generally available to thepublic other than through breach of this agreement or by unauthoriseddisclosure; or

(i)                                     toa bona fide potential assignee upon obtaining from it a similar commitment ofconfidentiality.

## 24.2                           Specificitems of information shall not be considered to be in the public domain merelybecause more general information is found therein.  Each Party shall remain liable for any breachof confidentiality by those persons to whom it has disclosed informationpursuant to Clauses 24.1 (a), (b), (c) and (d) above.

## 24.3                           For theavoidance of doubt, each Party shall remain bound by the provisions of thisClause 24 both before and after the Termination Date.

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## 24.4                           TheCompany shall control the issuing of press releases and other public announcementsprovided however that if such announcement addresses the performance of theFPSO or any of the terms of this Agreement, it shall not do so unless priorthereto it furnishes the Contractor with a copy of such announcement andobtains the approval of the Contractor, such approval not to be unreasonablywithheld.  Notwithstanding the foregoing,no Party or any Affiliate of such Party shall be prohibited (but subject alwaysto providing a prior copy to the other Party) from issuing or making any suchpublic announcement or statement if it is necessary to do so in order to complywith Legislative Requirements or the regulations of a recognised stock exchangeor the information is in the public domain.

**25****                                  Duration**

## 25.1                           ThisAgreement shall come into effect on the Effective Date and shall continue forat least the Primary Term and for such limited time thereafter to allow for thecomplete demobilisation of the Contractor’s Facilities.

## 25.2                           TheCompany may exercise the option to enter into orcontinue the Extension Term (to be exercised by notice in writing at leasttwelve (12) months prior to the expiration of the Primary Term or the ExtensionTerm as the case may be) and if the Company exercises the option, thisAgreement shall extend beyond the Primary Term for a period of one (1) year upto a maximum of two (2) consecutive years unless otherwise agreed in writing byParties.

## 25.3                           Withoutprejudice to the provisions of Clause 25, the Primary Term shall be extendedby;

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(a)                                  theequivalent number of days or parts of a day for which the Force Majeure Rate,the Standby Rate or [****] was applied during the Primary Term, and

## (b)                                 the DowntimeCompensation Period.

## 25.4                           TheDowntime Compensation Period during the Primary Term means the number of daysor parts of a day that the Downtime (excluding any period within the PrimaryTerm that the Force Majeure Rate, the Standby Rate or [****] applies) exceeds [****]being the sum of i) the allowance for non-availability of [****].

## 25.5                           Withoutprejudice to the provisions of Clause 25, the Extension Period shall beextended by;

(a)                                  theequivalent number of days or parts of a day for which the Force Majeure Rate,the Standby Rate or [****] was applied during the Extension Term, and

## (b)                                 theDowntime Compensation Period for that Extension Term.

## 25.6                           TheDowntime Compensation Period during an Extension Term means the number of daysor parts of a day that the Downtime (excluding any period within the PrimaryTerm that the Force Majeure Rate, the Standby Rate or [****] applies) exceeds [****]being the sum of i) the allowance for non-availability of [****].

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**26****                                  TERMINATION**

## 26.1                           If:

(a)                                  theFPSO becomes a Total Loss;

(b)                                 priorto the Scheduled First Oil Date, the construction of the Contractor Facilitiesis more than [****] behind the schedule referred to in Schedule H, for anyreason excluding Force Majeure or any other Permitted Delay;

the Company may terminatethis Agreement forthwith upon serving written notice on the Contractor.

## 26.2                           If atany time the Contractor is in material breach of any of the warranties given inthis Agreement, or if the Contractor fails to fulfil any of its materialobligations hereunder, the Company shall notify the Contractor in writingspecifying the nature of the failure to comply with the Contractor obligations.If the Contractor fails to commence (including the ordering of any necessaryreplacement equipment and/or the submission to the Company of a plan forremedying the matters complained of) to remedy the matters complained of withinseven (7) days after such notice is received by the Contractor or fails tocontinue thereafter to remedy the same, all in a manner and time period thatwould be expected from a Reasonable and Prudent Operator, the Company may,subject to the Quiet Enjoyment Agreement, terminate this Agreement forthwithupon serving written notice on the Contractor.

## 26.3                           If atany time the Contractor is in repeated material breach of its fundamentalobligations to operate the Contractor Facilities as per the provisions in thisAgreement, and such breaches or series of breaches cause the FPSO to stopProduction for thirty (30) days or more in any twelve month period (excludingany agreed, planned maintenance and

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## excluding anyallowed non-availability of 5% per annum), the Company shall notify theContractor in writing  specifying thenature of the failure to comply with the Contractor obligations. If theContractor fails to commence to remedy the matters complained of within thirty(30) days after such notice is received by the Contractor or fails to continuethereafter to remedy the same, all in a manner and time period that would beexpected from a Reasonable and Prudent Operator, the Company may,  subject to the provisions of the QuietEnjoyment Agreement, request the Contractor to replace this Agreement by abareboat charter arrangement enabling the Company to take over the operation ofthe FPSO (including the Mooring System). The Parties shall negotiate the termsof such bareboat charter arrangement and hereby agree that such bareboatcharter agreement shall be based on the following principles;

## (a)                                  theCompany shall pay to the Contractor a daily charter hire equal to at least theCharter Hire and the Production Tariff as set out in Schedule F of thisAgreement, and

## (b)                                 thecharter period under the bareboat charter arrangement shall be at least equalto the remaining period of the Primary Term as defined in this Agreement, and

## (c)                                  ifwithin the Primary Term the Parties enter into such bareboat charter replacingthis Agreement, no termination fee (as set out in Schedule F) shall be payableby the Company as a result of the early termination of this Agreement, and

## (d)                                 thecondition of the FPSO on redelivery by the Company to the Contractor shall besimilar to the condition of the FPSO upon delivery by the Contractor to theCompany under the such bareboat charter arrangement, fair wear and tearexcepted.

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## Upon the FPSOand the Mooring System being delivered under the bareboat charter arrangementas agreed by Parties, this Agreement shall terminate but always subject to anyrights and liabilities having accrued or arisen under this Agreement prior toits termination as a result of this Clause 26.3.

## 26.4                           If theContractor or any person having an ownership, leasehold or charter right in theFPSO goes into liquidation (otherwise than voluntarily for the purposes ofamalgamation or reconstruction), makes an assignment for the benefit ofcreditors, makes an arrangement, composition or compromise with its creditorsunder any applicable laws or has a receiver appointed in respect of the wholeor any part of its assets, or if the Company reasonably believes that any ofthe foregoing is imminent, the Company may, subject to the Quiet EnjoymentAgreement, terminate this Agreement forthwith upon serving written notice onthe Contractor.

## 26.5                           Uponthe relevant Government Body confirming that they do not object to thecessation of Production, the Company may terminate this Agreement at any timewithout cause at its sole discretion by providing one (1) years’ prior writtennotice. If such termination becomes effective within the Primary Term, theCompany shall pay the Contractor the appropriate termination payments and feesin accordance with the provisions of Section 9.1 of Schedule F. If suchtermination becomes effective within the Extension Term, the Company shall paythe Contractor the appropriate termination payments and fees in accordance withthe provisions of Section 9.2 of Schedule F.

## 26.6                           If theCompany terminates this Agreement prior to First Oil other than for reasons setout in Clause 26.1 above, the Company shall indemnify the Contractor all itsdocumented reasonable costs for the pre-Agreement phase (preparing the tender,travel, costs external experts,

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## negotiations,etc), overhead, the design, engineering, construction, transport, hook up, etc.of the Contractor’s Facilities, any cancellation costs, its finance costs, andany other direct costs resulting from such termination, [****].

## 26.7                           Upontermination of this Agreement pursuant to the foregoing Clauses 26.1, 26.2 and26.4 no further sums shall be due to the Contractor or recoverable from theCompany, save for any amounts due as a result of Clause 12.11, and save for anyamounts already accrued for the Contractor Services already provided, or as mayarise or be outstanding under any claims for indemnity.

## Upon thisAgreement terminating as per Clause 26.3 last paragraph, no further sums shallbe due to the Contractor or recoverable from the Company save for any amountsalready accrued for the Contractor Services already provided, or as may ariseor be outstanding under any claims for indemnity.

## 26.8                           Notwithstandinganything to the contrary in this Agreement, any election by the Company toterminate this Agreement pursuant to this Clause 26 shall not relieve theContractor of its obligations pursuant to Clause 30 nor its obligations underClause 30 to take action to protect the Ettrick Field or any other Fieldtied-in to the FPSO, Contractor Personnel, Contractor Facilities, CompanyPersonnel, Company Facilities, third parties and the property of third parties.

## 26.9                           If thesuspension as per Clause 27.4 continues for a period of [****] or more theCompany shall be entitled to terminate this Agreement by providing theContractor written notice of termination and clarification of the Force Majeureevent.

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## 26.10                     Notwithstanding any other provisions in thisClause 26, each Party shall be entitled but not obliged to terminate thisAgreement and to recover from the other Party the amount of any direct loss ordamage resulting from such a termination if the other Party, or theirrespective officers, in relation to this Agreement, shall have committed anyact whether before, on or after the Effective Date of this Agreement, which, bya final judicial decision is proven to be an offence under the Prevention ofCorruption Acts 1889 - 1916, the Anti-Terrorism, Crime and Security Act 2001,or any statutory amendment, modification or re-enactment thereof, or would haveconstituted such an offence if:

## (a)                                the other Party, not being an agenthereunder, was deemed for this purpose to be an agent; or

## (b)                                 the act, having been committed outside theUnited Kingdom, was deemed to have been committed within the United Kingdom.

**27****                                  FORCE MAJEURE**

## 27.1                           NeitherParty shall be responsible for any failure or delay in performance of any obligation,other than the obligation to make any payment hereunder, if such failure ordelay is attributable to “Force Majeure”, which shall include, but is notlimited to, wars, hostilities, terrorists acts, boycotts, embargoes, publicdisorders, acts of enemies, strikes, lockouts, labour or employmentdifficulties, acts of God, or any cause beyond its control whether or notsimilar to any of the foregoing. Notwithstanding the foregoing:

(a)                                  mechanicalbreakdown of whatsoever kind unless caused by a Force Majeure event;

(b)                                 weatherdowntime (excluding downtime caused by catastrophic weather conditions); or

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(c)                                  strikes,lockouts, labour or employment difficulties involving Contractor Personnel orCompany Personnel

are expressly excludedfrom the definition of Force Majeure.

## 27.2                           If theContractor is affected by occurrences referred to above, it shall give noticethereof without delay (and in any event within two days of the Force Majeureevent becoming known to it) in writing to the Company and shall commence andcontinuously proceed to endeavour to remove or overcome the circumstance or theoccurrence or the effects of Force Majeure. Failure to give such notice shall preclude the Contractor from claimingthat his performance was delayed by any such occurrence.

## 27.3                           Therelevant Party shall be excused and relieved from performing its obligationspursuant to this Agreement only to the extent and for the time that such delayor failure to perform,

(a)                                  iscaused by an event of Force Majeure as described above; and

(b)                                 couldnot reasonably be anticipated or protected against.

Notwithstanding the first sentence of this Clause27.3, if during the Charter Period the Contractor Services are affected byForce Majeure the Insurance Costs, the Operating Costs, and the Force MajeureRate as described in Schedule F shall be payable by Company.

27.4                           Subjectto Clause 25, in the event of Force Majeure, the Company and the Contractoragree that, although operations are suspended, this Agreement shall remain inforce pending relief of the circumstances of Force Majeure, provided alwaysthat the Company shall have the right to terminate this Agreement in accordancewith Clause 26.9 in which case the last paragraph of Section 9.1.2 of ScheduleF applies.

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**28****                                  ASSIGNMENT**

## 28.1                           The Companymay freely assign its rights and obligations under this Agreement to anAffiliate of the Company, provided that the parent company guarantee assubmitted by the Company as per Clause 34.1 of this Agreement remains in force.Subject to the Contractor’s written consent which shall not be unreasonablywithheld, the Company may assign its rights and obligations under thisAgreement to any of the Co-venturers or to a technically and financiallyresponsible successor operator of the Ettrick Field. A failure of the assigneeto provide a parent company guarantee in a form similar to Schedule N from aparent having a similar or better rating than Company’s parent is a reasonableground to Contractor to withhold its consent.

## 28.2                           TheContractor shall not assign any right, benefit, obligation or otherwisepursuant to this Agreement to any party other than those lenders who havecomplied with Clause 16.1(a).

## 28.3                           ACo-venturer may assign its rights and obligations under this Agreement providedhowever that such Co-venturer first complies with its agreements with otherCo-venturers relating to its interest in the Field.

**29****                                  ADDITIONAL FIELDS**

## 29.1                           TheCompany or the Co-venturers may, prior to the Termination Date, propose totie-in to the FPSO fields other than the Ettrick Field.  The Contractor will agree to any such tie-in,subject to approval of the insurers, the VB/CS and the Contractor’s financiersand subject to safety requirements and capacity and/or process constraints ofthe Contractor Facilities, but will be under no obligation to relocate theContractor Facilities for this purpose. Subject to the Parties agreeing a

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## Change Order pursuant to Clause 37, theContractor shall provide any additional equipment required to facilitate suchtie-ins and related Production and the Charter Hire shall be adjustedaccordingly.

**30****                                  PATENT INDEMNIFICATION**

## 30.1                           TheContractor shall defend at its own expense any suit or action brought againstthe Company based on a claim that the FPSO or any item of equipment or partthereof furnished hereunder by the Contractor constitutes an infringement ofany patent, if the Contractor is notified promptly in writing by the Companyfor the defence of the same.  TheContractor shall pay all damages and costs awarded therein against the Company andin addition shall reimburse the Company for its reasonable costs, expenses andattorneys’ fees incurred in connection with such claim. In case the FPSO or anyitem of equipment or any part thereof is held in such suit to constituteinfringement and its use enjoined, the Contractor shall at its own expenseeither procure for the Company the right to continue using the FPSO or saidequipment, or replace the same with non-infringing components or equipment, ormodify it so it becomes non-infringing.

## 30.2                           TheCompany shall defend at its own expense any suit or action brought against theContractor based on a claim that any sub-sea equipment (including the flowlinesand risers) supplied by the Company to facilitate the extraction ofhydrocarbons from the Ettrick Field or any item of equipment or part thereoffurnished hereunder by the Company constitutes an infringement of any patent,if the Company is notified promptly in writing by the Contractor for thedefence of the same.  The Company shallpay all damages and costs awarded therein against the Contractor in additionshall reimburse the Contractor for its reasonable costs, expenses and attorneys’fees incurred in connection with such

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## claim. In case the sub-sea equipment,flowlines and risers or any other equipment or part thereof is held in suchsuit to constitute infringement and its use enjoined, the Company shall at itsown expense either procure for the Contractor the right to continue using theequipment or part thereof or replace the same with non-infringing components orequipment, or modify it so it becomes non-infringing.

## 30.3                           Anydiscoveries, inventions, improvements, processes, designs, drawings,calculations, formulae, photographs or documents, whether patentable or not,made discovered or developed by the Contractor in the course of, or by reasonof, the performance of the Contractor Services for the Company shall be theproperty and copyright of the Contractor and are to be considered to beconfidential information of the Contractor (to which Clause 24 will apply).

**31****                                  NOTICES**

## 31.1                           Anynotices required to be served hereunder shall be served on the relevant Partyat the address set out below:

Company:                                          NEXENPETROLEUM U.K. LIMITEDCharter PlaceVine StreetUxbridgeMiddlesex UB8 1JGEnglandAttn:                    Jeff Dickinson(Project Manager)Fax No. +44 (0)1895 272 918

Contractor:                                 BLUEWATERETTRICK PRODUCTION (UK) LIMITEDc/o Bluewater Services (UK) LimitedBluewater House,Badentoy Industrial Estate,Portlethen,Aberdeen AB12 4YDAttention: General ManagerFax:  +44 (0)1224 403 340

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Notices sent by fax will be effective on the date of transmission, ifsent and received on or before 4.00 p.m. UK time.  Notices sent by electronic mail shall bedeemed to have been duly given or made at the time of successful transmissionas shown on the transmission report from the machine from which the email wassent in its entirety and without alteration to its integrity to the emailaddress of the recipient. Notices sent by hand will be effective on the date ofreceipt.  Notices sent by registered postwill be effective five (5) days after mailing.

**32****                                  ABANDONMENT PROVISIONS**

## 32.1                           Immediatelyafter the Termination Date, the Contractor shall expeditiously decommission anddemobilise the FPSO and the Mooring System in accordance with LegislativeRequirements which shall include ensuring that the sea bed is free of allmooring equipment which could be considered as an obstruction to future fishingactivities.

## 32.2                           Immediatelyafter the Termination Date, the Company shall, if the Field is to be abandoned,abandon the Company Facilities in accordance with Legislative Requirements,which shall include plugging and abandoning of the wells.

## 32.3                           TheContractor shall redeliver the FPSO and the Mooring System safely afloat withall tanks cleaned at a port on the North East side of the UK (the “RedeliveryPort”) and the Company shall indemnify the Contractor Group for any Claimsdirectly or indirectly related to the demobilisation of the Mooring System orany part thereof from the Field.

## 32.4                           Thecosts of the activities referred to in Clause 32.1 shall be reimbursed by theCompany on a [****] basis, as further detailed in Schedule F.

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## 32.5                           Afterredelivery of the Mooring Legs or any part thereof as per Clause 32.3, the Contractorshall purchase from the Company and the Company shall sell to the Contractorthe Mooring Legs or said parts against payment by the Contractor to the Companyof [****].

**33.****                               liquidated damages for delay**

## 33.1                           TheContractor agrees that liquidated damages of [****] shall be payable byContractor for each and every day the Contractor delays achieving First Oil onor before 28 March 2008 (the “Scheduled First Oil Date”) (unless excusedpursuant to the terms of this Agreement, or prevented by the acts or omissionsof Company Group). Parties agree that a grace period of [****] applies prior toCompany being entitled to claim payment of the liquidated damages. TheContractor’s overall aggregate liability under this Clause shall be limited to [****].Subject to Clause 26.1(b), these liquidated damages shall be the Company’s soleremedy in case of delay.

## 33.2                           Allamount of Liquidated Damages for which Contractor may become liable under thisClause are agreed between the Parties as a genuine pre-estimate of the losswhich may be sustained by the Company in the event Contractor fails tosatisfactorily accomplish First Oil by the date set forth in Clause 33.1.

**34****                                  GUARANTEES**

## 34.1                           TheContractor acknowledges receipt of the parent company guarantee provided by theCompany in the form of Schedule M and the Company acknowledges receipt of theparent company guarantee provided by the Contractor in the form of Schedule N.

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**35****                                  dispute resolution**

35.1                           Exceptas otherwise expressly provided in this Agreement, if a dispute difference orclaim arises between the Parties concerning the interpretation, performance, orbreach of this Agreement which the representatives of the Parties are unable toresolve (hereinafter referred to as the “Dispute”), the Parties will  use the following procedures to finallyresolve the Dispute.

All requests, statements, referrals and recommendations under theDispute resolution procedures shall be made in writing.

35.2                           Withinseven (7) days after a specific request by a Party, each Party will appoint arepresentative from its senior management and negotiate with the other Party topromptly reach an equitable, mutually acceptable resolution of the Dispute. EachParty will delegate to its representative(s) the authority to resolve theDispute on behalf of that Party. Within five (5) days after the good faithnegotiations begin, the Parties’ representatives shall prepare a specificstatement of the matters to be resolved.

Within thirty (30) days after the negotiations begin the Parties’representatives will either (i) agree upon an equitable resolution of theDispute or (ii) refer the Dispute for resolution through mediation. Eachreferral will specifically state the matters to be resolved by the mediator.

35.3                           Withinten (10) days after referral pursuant to Clause 35.2, the Parties will select amutually acceptable, impartial, qualified mediator to recommend a resolution tothe Dispute. To expedite this selection process, as soon as reasonably possibleafter the execution of this Agreement the Parties will prepare a list of notless than three potential mediators and will keep this list updated asnecessary. In the event that the Parties cannot agree on the selection of amediator, the Chairman of the Bar Council of England and Wales will select a

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mediator. Upon selection of a mediator, the Parties will beginmediation. The mediation will be conducted informally, impartially andreasonably with the co-operation of the Parties. Unless the Parties achieve asettlement during the mediation, the mediator will recommend a resolution ofthe Dispute to the Parties within thirty (30) days after the commencement ofthe mediation. Within fourteen (14) days after receiving the mediator’srecommendation, the Parties will either (i) agree upon an equitable resolutionof the Dispute, or (ii) refer the Dispute for resolution according to Clause36.1.

35.4                           Withinninety (90) days after the mediator’s recommendation if neither Party hasinstituted proceedings in respect of the Dispute in accordance with Clause36.1, both Parties shall have irrevocably waived their rights to take anyfurther action in respect of the Dispute.

**36****                                  governing law and jurisdiction**

36.1                           ThisAgreement shall be governed by and construed in all respects in accordance withthe laws of England and, subject to Clause 35 hereof, the Parties submit anyDispute to the exclusive jurisdiction of the English courts in London.

**37****                                  Contractor Facilities upgrade**

## 37.1                           Any upgradesor modifications to the Contractor Facilities after First Oil (to the extentthat such modifications are not necessary to ensure performance by Contractorof the Contractor Services under this Agreement) that are specificallyrequested by the Company, shall be subject to the Change Order Procedure asdescribed in Schedule J. During any production shutdown and/or demobilisationof the FPSO required for or resulting from such upgrade or modification theOperating Costs and the Insurance Costs shall be payable, and the Standby Rateinstead of the Charter Hire shall be payable.

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**38****                                  MISCELLANEOUS**

## 38.1                           ThisAgreement constitutes the entirety of this Agreement between the Partiesrelating to the operation of the Field and any prior correspondence, meeting notes,memoranda or other documentation prior to the date of this Agreement shall bedisregarded in the interpretation of this Agreement.

## 38.2                           ThisAgreement shall not be deemed to be a Contract for the Carriage of Goods by Seawithin the scope of the Carriage of Goods by Sea Acts 1924 and 1971.

## 38.3                           Aperson who is not a Party to this Agreement shall have no right under theContracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

## 38.4                           Notwithstandingany other provision of this Agreement, the following conditions shall surviveexpiration or termination of this Agreement (together with any accrued paymentobligations of the Parties and obligations relating to the redelivery anddemobilisation of the FPSO and the Contractor’s Facilities):

Clauses 1, 2, 3, 5, 6, 7, 12, 13, 16, 17, 18, 19, 24, 25, 26 (to theextent it relates to obligations arising from termination), 27, 28, 29, 30, 31,32, 35, 36, and 38.

IN WITNESS WHEREOF theParties have caused this Agreement to be executed by their duly authorisedsignatories.
| Nexen Petroleum U.K. Limited |   | Bluewater Ettrick Production (UK) Limited |
|------------------------------|--------|-------------------------------------------|
|                         |   |                                      |
| By                           | :      |                                      |   | By | : |   |
|                         |   |                                      |   |   |   |   |
| Name                         | :      | Philip Oldham                             |   | Name | : | Hugo J. Heerema |
| Title                        | :      | Managing Director                         |   | Title | : | Attorney in fact |

 

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF**

**A FLOATING, PRODUCTION, STORAGEAND OFFLOADING**

**VESSELFOR THE ETTRICK FIELD**

**SCHEDULEA**

**DESCRIPTIONOF THE ETTRICK FIELD**

**LOCATIONOF THE FPSO**

**THE ETTRICK PRODUCTION PROFILE**

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**SCHEDULE A**

**DESCRIPTIONOF THE ETTRICK FIELDLOCATION OF THE FPSOTHE ETTRICK PRODUCTION PROFILE**

**TABLE OFCONTENTS**
| 1. | INTRODUCTION | 3 |
|----|--------------|---|

 

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**1.****                                     INTRODUCTION**

The Ettrick fieldis located in the UK sector of the Central North Sea.  The Ettrick Field lies in the Outer Moray Firthand is approximately 120km NE of Aberdeen, 65km from Peterhead and 20km East ofthe Nexen operated Buzzard field.  TheEttrick Field unitised area straddles UKCS Blocks 20/2a and 20/3a in the SouthHalibut Basin (Ettrick Sub-Basin), which are covered by the P273 and P317licenses that were awarded in the 5th and 6th rounds respectively.  The Ettrick Field is situated in 115m LAT ofwater.

The Ettrick Fieldwas discovered in 1981 by the 20/2-1 well drilled by BNOC, which penetratedoil-bearing sandstone in the Upper Jurassic, Middle Volgian Ettrick Sandsreservoir, and was tested at 4538 bopd. The Ettrick Field was further appraised by seven wells from 1982 to1985, four of which produced hydrocarbons to surface.  The last appraisal well was drilled in 1985(20/2-7Z).  Nexen Petroleum U.K. Limitedbecame operator in 2004 after the purchase of the UK assets of EnCana.  The Co-Ventureres comprise Nexen (79.73%),Bow Valley Petroleum (U.K.) Limited (12%) and Atlantic Petroleum UK Limited (8.27%).  Nexen Petroleum U.K. Limited is thedesignated operator and the programme coordinator of the Ettrick Field.

Estimated grossoil in place is 100MMbbls STOOIP.  Thefield contains an estimated 38MMboes of gross reserves to be developed over anestimated field life up to seven (7) years. The depth of the reservoir isapproximately 10,500 ft TVDSS.

Development willbe based on three producing wells and three water injectors tied back to aleased floating production storage offloading system (FPSO).  The Contractor, will operate and maintain theFPSO.  Oil will be offloaded to shuttletankers and gas production will be exported via a pipeline to the local gasexport infrastructure.

The FPSO shall belocated in the Ettrick Field at approximately UTM (zone 30) 643052E, 6421684N.

Company provided data onfield lay-out, reservoir fluid properties, production chemistry, productionprofile, soil data, and metocean data are included in the FunctionalSpecification (Attachment D.1 to Schedule D).

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**AGREEMENTFOR THE PROVISION AND OPERATION OF**

**AFLOATING, PRODUCTION, STORAGE AND OFFLOADING**

**VESSEL FOR THE ETTRICK FIELD**

**SCHEDULE B**

**HEALTH, SAFETY AND ENVIRONMENT**

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**SCHEDULE B**

**HEALTH,SAFETY AND ENVIRONMENT**

**TABLE OFCONTENTS**
| 1. | SCOPE                         | 3 |
|----|-------------------------------|---|
| 2. | POLICY                        | 3 |
| 3. | GENERAL OBLIGATIONS           | 3 |
| 4. | OBLIGATIONS DURING OPERATIONS | 5 |

 

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**1****                                         SCOPE**

1.1.                              Itis the Contractor’s obligation to comply with all of its own, the Company’s,and the Legislative Requirements for health, safety and environment inaccordance with the terms of the Agreement and particularly this Schedule B.

**2****                                         POLICY**

2.1.                              TheContractor shall apply an integrated safety policy and safety management system(“SMS”) during the provision of the Contractor Services.  The Contractor shall ensure that all of itsSub-contractors comply with SMS.

2.2.                              TheContractor shall ensure compliance with SMS, the Company’s requirements andLegislative Requirements for each stage of the development lifecycle ofContractor Facilities from conceptual design through decommissioning andabandonment.  Furthermore, the design andoperation of the Contractor Facilities shall ensure that risk to persons andenvironment is as low as reasonably practicable (“ALARP”).

**3****                                         GENERAL OBLIGATIONS**

3.1.                              Inaccordance with the Offshore Installations and Pipeline Works (Management andAdministration) Regulations 1995 (MAR), the Contractor shall be defined as the DutyHolder meaning, in relation to a fixed installation, the operator and theContractor accepts the designation and obligations of Duty Holder.

3.2                                 TheContractor has the responsibility to take primary action and respond to any/allincidents on the Contractor Facilities by designating an incident as minor ormajor and notifying the Company (reference is made to the Onshore EmergencyResponse Procedure for FPSO’s Managed by Aberdeen Operations BWOA-Q-100-PR-7110as amended from time to time).

3.3                                 TheContractor shall develop and maintain an offshore emergency response plan.

3.4                                 TheCompany shall be responsible for providing onshore emergency responseorganization and facilities and for maintaining and managing all third partyemergency response services (both offshore and onshore).

3.5                                 TheContractor, in conjunction with the Company, shall prepare an onshore emergencyresponse plan detailing the interfaces between the Contractor’s organizationand the Company’s emergency response organization.

3.6                                 TheContractor shall have a duty manager available at all times. The Contractorshall mobilize its duty manager to the Company’s emergency response centre incase of any incident requiring emergency response.

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3.7                                 TheContractor shall prepare a health, safety and environment plan and schedulewhich clearly state the key milestones in the project, any project criticalpath activities and the Company’s involvement. This plan shall be issued to the Company within thirty (30) days of theexecution of the Agreement.

3.8                                 TheContractor shall prepare and submit the design safety case/design notificationto the HSE. The Contractor shall submit the design safety case/designnotification in a timely manner as prescribed by the safety case regulations. Whereapplicable, the Contractor shall process HSE issue notes in a manner acceptableto the HSE.

3.9                                 TheContractor shall prepare and submit the original and subsequent re-submissionsof the operational safety case to the HSE. The Contractor shall submit theoperational safety case and all subsequent re-submissions in a manner asprescribed by the safety case regulations. The Contractor shall be responsiblefor ensuring acceptance of the operational safety case submissions by the HSE.

3.10                           TheCompany may, at its discretion, participate in health, safety and environmentrelated matters. The participation of the Company in said matters is to assistthe Contractor in meeting its health, safety and environment obligations andobjectives.

3.11                           TheCompany shall provide required documentation to the Contractor for itsinclusion in regulatory submissions. The Company and the Contractor shall agreethe scope, interfaces and responsibilities for the preparation and theincorporation of the Company provided documentation for regulatory submissionsand assessments, which shall be incorporated into the Contractor’s permits,license, authorizations, notifications and consents, matrix (“PLANC Matrix”).

3.12                           TheCompany, in consultation with Contractor, shall identify those submissions toregulatory bodies including but not limited to HSE and DTI that need to bereviewed by Company prior to submission. The Company reserves the right to comment upon any submissions definedin PLANC Matrix.

3.13                           Health,safety and environment objectives shall be of primary importance in the designof Contractor Facilities, where practicable. Designed safety levels shall bemaintained in accordance with SMS.

3.14                           TheParties recognise that the quality of safety management is critical. Therefore,the Contractor shall operate and maintain the Contractor Facilities in a safeand cost effective manner.  Operationsand maintenance personnel of Contractor Facilities shall be involved in thedesign and operation of Contractor Facilities. The Company and the Contractorshall, prior to the First Oil Date, agree a series of key perfomance indicators(“kpis”) to incentivise the Contractor’s operations and maintenance personnelto perform their work to the highest safety standards appropriate throughoutthe duration of the Primary Term and any Extension Term(s).

3.15                           TheContractor shall provide, within thirty (30) days of the execution of theAgreement, the operating and maintenance philosophy for the ContractorFacilities and the Company Facilities. Said philosophy shall include, but notbe limited to, the

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basis from which operating and maintenance procedures are produced forthe Contractor Facilities and the Company Facilities.

3.16                           Companyshall be responsible for the application and obtaining of all license permitsand consents in relation to Field operation and pipeline operatorship. Contractorshall assist Company, where relevant, in the preparation of all submissions forcompliance with Legislative Requirements.

3.17                           TheContractor shall assist the Company in the preparation of an environmentalimpact assessment.

3.18                           TheContractor shall comply with its requirements, the Company requirementsattached or referred to in the Agreement and Legislative Requirements for theprotection of health.

**4****                                         OBLIGATIONS DURING OPERATIONS**

4.1.                              Duringcommissioning, operation, and maintenance, the Contractor shall, in accordancewith the provisions of Clause 21, implement SMS at the Contractor Facilitiesand the Company Facilities. SMS shall include but not be limited to:

(a)                                 astaff recruitment, training and competency assurance programs for staff andcontract personnel;

(b)                                apermit to work system;

(c)                                 regularsafety meetings with work force involvement through safety representatives;

(d)                                adequateprovision and use of personal protective equipment;

(e)                                 adequateprocedures for controlling over-side working;

(f)                                   tasksafety analysis for routine and non-routine operations;

(g)                                emergencydrills and exercises;

(h)                                adverseweather policies;

(i)                                    changecontrol and management procedures and systems;

(j)                                    operatingand safety manuals and procedures for Contractor Facilities and CompanyFacilities;

(k)                                 inspectionand maintenance; of safety systems and equipment on board the FPSO.”

(l)                                    independentverification of safety critical elements;

5

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(m)                              identificationof all Legislative Requirements to be complied with;

(n)                                systemfor the assurance of technical integrity of Contractor Facilities and subseafacilities;

(o)                                regularaudits to ensure compliance;

(p)                                emergencyresponse,

6

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF**

**A FLOATING, PRODUCTION, STORAGEAND OFFLOADING**

**VESSELFOR THE ETTRICK FIELD**

**SCHEDULE C**

**COMPANYSERVICES**

----

**AGREEMENT FOR THE PROVISION ANDOPERATION OF A FLOATING, PRODUCTION, STORAGE AND OFFLOADING VESSEL FOR THEETTRICK FIELD**

**SCHEDULEC - COMPANY SERVICES**

**SCHEDULE C**

**COMPANYSERVICES**

**TABLE OFCONTENTS**
| 1. |   | SCOPE COMPANY SERVICES |   | 3 |
|----|--------|------------------------|--------|---|

 

2

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# **1.****                                      SCOPECOMPANY SERVICES**

As from the EffectiveDate up to the end of the Charter Period, the Company shall provide at no costto the Contractor the following services (the “Company Services”);

1.1                                 TheCompany shall design, engineer, procure, certify and insure the subsea systemswhich include amongst others x-mas trees, manifolds, flowlines, jumpers,umbilicals, and the riser system and the associated subsea controls (the “SubseaSystems”)

1.2                                 TheCompany shall install and test the Subsea Systems prior to the ScheduledArrival Date. The Company shall commission the Subsea System once the FPSO ishooked-up to the Contractor Mooring System.

1.3                                 TheCompany shall provide all repair, spare parts, replacement (if required),maintenance, operation and inspection activities associated with the SubseaSystems.

1.4                                 TheCompany shall perform geotechnical and geophysical investigations at themooring point locations.  The Companyshall make available to the Contractor the detailed results of the geotechnicaland geophysical investigation at the mooring point locations no later than three(3) months after receipt of the Contractor information as per Section 2.3.3 ofSchedule D.

1.5                                 TheCompany shall be responsible for the removal of any debris and wreckage in wayof the mooring line corridors.

1.6                                 TheCompany shall free issue to the Contractor at a time and place to be mutuallyagreed, those elements of the control systems to be installed onboard the FPSOfor the operation of the Subsea Systems. The Company shall be responsible forthe commissioning of the said elements.

The Company’s responsibilities with regard to the controlsystems referred to in Section 2.5 of Schedule D are as follows:

A.                                   Companyshall provide installation procedure(s) to Contractor for connecting thecontrol systems installed onboard the FPSO to the disconnectable turret-buoy

B.                                     Companyshall instruct Contractor with respect to all repair, replacement (ifrequired), maintenance, operation and inspection activities associated with thecontrol systems onboard the FPSO and their connections to the buoy.

C.                                     Companyshall instruct Contractor in operation of the subsea control systems.

1.7                                 Companyshall have the responsibility for managing the interface between the FPSO andthe subsea control systems. The subsea control interface is included in theFunctional Specification (Attachment D.1 to Schedule D).

3

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1.8                                 TheCompany shall be responsible for managing the interface of the flexible risersystem and the Contractor Mooring System. The subsea riser interface is includedin the Functional Specification (Attachment D.1 to Schedule D)~~.~~

1.9                                 TheCompany shall design, engineer, procure, install, and insure the subsea gasexport system including riser system, pipeline, pipeline appurtenances andconnection to the gas export pipeline (the “Subsea Gas Export System”).

1.10                           The Companyshall install the Subsea Gas Export System prior to the Scheduled Arrival Date.

1.11                           The Companyshall provide all repair, replacement (if required), maintenance, operation andinspection activities associated with the Subsea Gas Export System.

1.12                           The Companyshall install in the Field the Contractor Mooring System and hook-up the SubseaSystem to the Contractor Mooring System prior to Scheduled Arrival Date.

1.13                           Withrespect to Sections 1.1, 1.2, 1.3, and 1.12 of this Schedule C.  The Company shall strictly adhere to anyinstructions of the Contractor issued in its capacity as Duty Holder or asotherwise set out in this Agreement and in accordance with the LegislativeRequirements.

1.14                           TheCompany shall be the pipeline operator.

1.15                           TheCompany shall be fully responsible for reservoir management, flow assurance andthe selection, compatibility and provision of production chemicals.

1.16                           Companyshall provide helicopter services, medical evacuation services, guard vessel(s),stand-by vessel(s) and shuttle tankers (shuttle tankers shall be North Seastandard DP II shuttle tankers as per UKOOA Tandem Loading Guidelines).

1.17                           TheCompany shall provide emergency response services as set out in Schedule B.

1.18                           The Companyshall provide the Contractor with copies of the Company SESR documents and providethe Contractor with updates of these documents whenever available.

1.19                           The Companyshall make available for use by Contractor supply boat services, onshore supplybase facilities, onshore warehousing, onshore craneage and stevedoring andhandling of equipment, supplies and waste. This may be arranged by means of a Companylogistics service contractor whereby the Contractor, acting for and on behalfof the Company, manages the logistics. The Company shall bear all cost of theCompany logistics service contractor(s).

1.20                         The Companyshall in case of introduction of in-field activities outwith the FPSO operationprovide adequate measures to ensure the health and safety of personnel and theavailability of the FPSO.

4

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1.21                           The Companyshall provide a Company Operations Representative who shall be the Companydesignated person for all operational issues aboard the FPSO. The CompanyOperations Representative’s responsibilities shall include but not be limitedto:

(a)                                  Liaisingwith onshore reservoir specialists to optimise well controls and to provide theContractor with well choke settings, water injection rates, chemical selectiondetails and chemical injection rates related to subsea and reservoir matters;

(b)                                 Resolutionof operational disputes;

(c)                                  Monitoringof operations offshore in order to verify and plan well uptime and to ensurethat said uptime is maximised without compromising technical integrity;

(d)                                 Monitoringthe Contractor compliance with health, safety and environment requirements;

(e)                                  Monitoringwell performance;

(f)                                    Monitoringand reviewing the collection and transfer of data to ensure the Companyinformation requirements are met;

(g)                                 Providingadditional information on the operation as required by the Company;

(h)                                 Monitoringcorrosion management results and attending monitoring meetings;

(i)                                     Administrationof services provided pursuant to Sections 1.14, 1.15, 1.16 and 1.17 of thisSchedule C;

(j)                                     Participationin audits pursuant to Clause 13 of the terms of the Agreement.

1.22                           The Companyshall be responsible and shall inform the Contractor of any inspection,certification, maintenance, replacement, modification or repair required inrespect of the Company Facilities and which is not the responsibility of theContractor under this Agreement.

1.23                         The Companyshall provide to Contractor metocean data in accordance with the provisions ofSchedule D. In the event that this data is not specific to the Ettrick Fieldthe Company shall provide to the Contractor a formal statement from arecognised organization, acceptable to the Certifying Authority, that themetocean data provided is also applicable to and valid for the Ettrick Field.This statement shall be made available to the Contractor no later than sixty (60)days after the Effective Date.

1.24                           The Companyshall share available information regarding forecast production profiles forthe remaining years of Field life with the Contractor.

1.25                          TheCompany shall provide Company Services in accordance with the LegislativeRequirements and standard North Sea practices.

5

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1.26                          TheCompany shall, in a timely manner, provide the Contractor with manuals requiredin connection with the Company Services.

1.27                          TheCompany shall be responsible for preparing and submitting to the DTI anapplication to abandon the Ettrick Field. The Contractor shall, if required, provide all technical documentsassociated with removal of the FPSO and assist the Company in the preparationof its application to abandon the Ettrick Field.

1.28                          Suchother services as the Company and the Contractor may from time to time agree.

The provision by the Companyof the Company Services is further detailed in Schedule E (Responsibility andInterface Matrix).

6

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF**

**A FLOATING, PRODUCTION, STORAGEAND OFFLOADING**

**VESSELFOR THE ETTRICK FIELD**

**SCHEDULED**

**CONTRACTORSERVICES**

----

**SCHEDULED**

**CONTRACTORSSERVICES**

**TABLE OFCONTENTS**
| 1      |   | GENERAL                                                       |   | 3      |
|--------|--------|---------------------------------------------------------------|--------|--------|
|   |   |                                                          |   |   |
| 2      |   | PROVISION OF THE FPSO                                         |   | 3      |
|   |   |                                                          |   |   |
| 3      |   | OPERATION OF THE CONTRACTOR FACILITIES AND SUBSEA  FACILITIES |   | 8      |
|   |   |                                                          |   |   |
| 4      |   | DE-COMMISSIONING                                              |   | 10     |

#  

2

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# **1****                                         GENERAL**

As from the Effectivedate up to the end of the Charter Period, Contractor shall provide thefollowing services (the “Contractor Services”);

1.1                                ContractorServices shall consist of four main elements;

·                  theprovision of the Contractor Facilities (including the FPSO)

·                  theoperation and maintenance of the FPSO

·                  theoperation and maintenance as per Company’s instructions of the Subsea Systems(as defined in Schedule C) via the subsea control systems aboard the FPSO

·                  thede-commissioning of the FPSO and Mooring System and, if requested by theCompany, the Subsea Systems.
| **2**      | ** ** | **PROVISION OF THE FPSO**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **2.1**    | ** ** | **GENERAL**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ** ** | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 2.1.1      |       | Based on the Functional Specification (Attachment  D.1) the Contractor shall design, procure, engineer, construct an FPSO;                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 2.1.2      |       | The Contractor shall install the FPSO on the Field;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 2.1.3      |       | Upon completion of the installation of the FPSO on  the Field, the Contractor shall ensure the FPSO fulfils the requirements of  this Schedule D, at all times during the term of this Agreement.                                                                                                                                                                                                                                                                                                                                                                                  |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 2.1.4      |       | The export product specifications shall be as per  the attached Functional Specification (Attachment D.1). Parties acknowledge  and accept that the Contractor can not guarantee the BS&W content of the  SCO passing the Delivery Points meets the maximum BS&W content of zero  decimal point five zero percent (0.5%). The Contractor shall use reasonable  endeavours to deliver at the Delivery Points SCO with a maximum BS&W  content of zero decimal point five zero percent (0.5%) by means of the  operation of the FPSO cargo handling and storage systems. |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 2.1.5      |       | The overall FPSO systems from the Entry Point (top  of Riser at Turret) up to the Delivery Points required for processing,  storing and exporting the products offered by the Ettrick Field shall be  designed, constructed, installed and operated to provide a target  availability of at least ninety five percent (95%) (calculated over the  Primary Term and excluding the Company approved planned downtime allowance of  fourteen (14) days for each twelve (12) month period).                                                                                            |

3

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| 2.1.6      | The produced water re-injection system will be designed,  constructed, installed and operated to provide a target availability of at  least ninety eight percent (98%) (calculated over the Primary Term and  excluding a planned downtime allowance of fourteen (14) days for each twelve  (12) month period).                                                               |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                                                                                                                          |
| **2.2**    | **FPSO - VESSEL**                                                                                                                                                                                                                                                                                                                                                             |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                    |
| 2.2.1      | Reference is made to the Functional Specification in  Attachment D.1. The FPSO shall include the hull and deck structure, oil  storage system, offloading system, accommodation, utilities and other systems  which are required for Production and operation on the Field.                                                                                                   |
|       |                                                                                                                                                                                                                                                                                                                                                                          |
| 2.2.2      | The FPSO vessel shall be designed to remain on  Ettrick Field for a minimum of 5 years to a maximum of ten (10) years from  the Scheduled First Oil Date.                                                                                                                                                                                                                     |
|       |                                                                                                                                                                                                                                                                                                                                                                          |
| 2.2.3      | The FPSO will be provided with a heli-deck designed  to accommodate an aircraft type EH101.                                                                                                                                                                                                                                                                                   |
|       |                                                                                                                                                                                                                                                                                                                                                                          |
| **2.3**    | **FPSO – TURRET MOORING SYSTEM**                                                                                                                                                                                                                                                                                                                                         |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                    |
| 2.3.1      | Reference is made to the Functional Specification in  Attachment D.1; the FPSO turret mooring system shall include a suitable  mooring system that complies with the Functional Specification.                                                                                                                                                                                |
|       |                                                                                                                                                                                                                                                                                                                                                                          |
| 2.3.2      | The Contractor shall provide the Mooring System to  the Company at the Company’s installation contractor mobilisation yard at a  North Sea port for installation. During installation of the Mooring System by  the Company, the Contractor will make available two (2) installation  witnesses onboard the installation spread for a maximum period of nine (9)  weeks. |
|       |                                                                                                                                                                                                                                                                                                                                                                          |
| 2.3.3      | The Contractor will advise the Company on the  locations of the mooring points and the survey specification (including depth  of CPT’s/boreholes) no later than six (6) weeks after Effective Date.                                                                                                                                                                      |
|       |                                                                                                                                                                                                                                                                                                                                                                          |
| 2.3.4      | The Contractor shall perform the offshore connection  and hook-up of the FPSO to the pre-installed Mooring System.                                                                                                                                                                                                                                                            |
|       |                                                                                                                                                                                                                                                                                                                                                                          |
| **2.4**    | **FPSO - TOPSIDES**                                                                                                                                                                                                                                                                                                                                                           |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                    |
| 2.4.1      | Reference is made to the Functional Specification in  Attachment D.1. The FPSO topsides shall be designed and provided in  compliance with the Functional Specification.                                                                                                                                                                                                      |
|       |                                                                                                                                                                                                                                                                                                                                                                          |
| 2.4.2      | The Contractor shall ensure the FPSO meets the  specifications for CO2 emissions as defined in the Functional Specification  in Attachment D.1. Throughout the Charter Period Company shall acquire CO2  allowances that are sufficient to cover normal operations of the FPSO without  being subject to civil penalties under The Greenhouse                                 |

4

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Gas Emissions Trading Scheme Regulations (SI2005/925).  The civil penalty set to come into force onJanuary 1st 2008 is one hundred (100) Euro per tonne ofCO2 discharged from the FPSO.

The civil penalty for exceeding allocated CO2emissions in case Contractor’s equipment on board the FPSO does not meet theFunctional Specification under normal operations, or, should the Contractor sorequire, Company’s documented actual costs to acquire additional allowances tocater for the emissions exceeding the allowances required for normaloperations, whichever is the less, shall be for the Contractor’s account.

In the event normal operations can not be carried outon board the FPSO for reasons such as, but not limited to Field performance,fuel gas composition, modifications to the FPSO, etc., Company shall indemnifyand hold harmless the Contractor Group from and against any such penaltieswhich are the result of such operations. Parties agree that the start up periodup to twelve (12) months from the First Oil Date shall not be considered normaloperations.

2.4.3                       Thewellstream fluids shall be separated into oil, water and gas. Crude oil shallbe processed in accordance with the Functional Specification in Attachment D.1.SCO will be stored in the cargo tanks before being exported as described in theFunctional Specification in Attachment D.1.

2.4.4                       TheContractor shall ensure the FPSO meets the specifications for discharge ofproduced water as defined in the Functional Specification in Attachment D.1.The penalty for oil in produced water discharged overboard is for theContractor’s account and will be levied in accordance with the penalties setout in the Offshore Petroleum Facilities (Oil Pollution Prevention and Control)Regulations 2005 or any amendment thereto or replacement thereof. As at theEffective Date, the penalty is £280 per kilogram of dispersed oil in producedwater discharged in excess of allowances. The charge will not be applicable inthe case of discharge of marine slops as defined under MARPOL (e.g. after tankcleaning).

2.4.5                       The FPSOshall be capable of ensuring that all produced fluids collected at low pressurepoints such as storage tanks can be returned to the process separation trainfor treatment without contamination from surface water and other oxygenatedliquids.

2.4.6                       A seawaterinjection system shall be provided as described in the Functional Specificationin Attachment D.1.

2.4.7                       Thetopsides process plant shall have the capacity to process the Natural Gas fromthe Ettrick Field as described in the Functional Specification in AttachmentD.1.

2.4.8                       The processplant shall have the capacity to provide gas for lift and fuel and shall becapable of exporting any excess gas as described in the FunctionalSpecification in Attachment D.1.  Theprocess plant shall be capable of flaring produced gas as described in theFunctional Specification in Attachment D.1.

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| 2.4.9      | Gas from the separation train shall be capable of  being used as Fuel Gas. During the operation of the FPSO, the Contractor shall,  where practicable, use Fuel Gas in lieu of diesel and other fuels.                                                                                                                                                          |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                                                                                                            |
| 2.4.10     | The FPSO shall be provided with a system which is  capable of flaring gas as described in the Functional Specification in  Attachment D.1.                                                                                                                                                                                                                      |
|       |                                                                                                                                                                                                                                                                                                                                                            |
| 2.4.11     | Fiscal metering for oil and gas on board the FPSO  shall be provided by the Contractor as per the Functional Specification  (Attachment D.1). The fiscal metering systems on board the FPSO are subject  to approval by the DTI and such approval is to be arranged by the Company and  the Contractor shall assist the Company in facilitating such approvals. |
|       |                                                                                                                                                                                                                                                                                                                                                            |
| **2.5**    | **SUBSEA INTERFACE AND CONTROL SYSTEM**                                                                                                                                                                                                                                                                                                                         |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                      |
| 2.5.1      | Reference is made to the Functional Specification in  Attachment D.1. The FPSO shall include a sub sea control system and the FPSO  shall be connected to the flexible riser system free issued by the Company.  Reference is made to Section 1.7 of Schedule C, Contractor’s responsibility  with regard to the control system are as follows:            |
|       |                                                                                                                                                                                                                                                                                                                                                            |
|       | A.                                                                                                                                                                                                                                                                                                                                                              | The Contractor shall be responsible for connecting the  control systems installed onboard the FPSO to the disconnectable turret-buoy,  such connection(s) to be carried out in accordance with Company’s  installation procedure(s). |
|       |                                                                                                                                                                                                                                                                                                                                                            |   |
|       | B.                                                                                                                                                                                                                                                                                                                                                              | The Contractor shall provide under instructions of  the Company all repair, replacement (if required), maintenance, operation and  inspection activities associated with the control systems onboard the FPSO  and their connections to the buoy. |
|       |                                                                                                                                                                                                                                                                                                                                                            |   |
|       | C.                                                                                                                                                                                                                                                                                                                                                              | The Contractor shall operate the subsea control  systems in accordance with the Company’s instructions. |
|       |                                                                                                                                                                                                                                                                                                                                                            |   |
| 2.5.2      | The Contractor shall operate the Ettrick subsea  control system under the Company’s direction and in accordance with the  Company’s operating procedures.                                                                                                                                                                                             |
|       |                                                                                                                                                                                                                                                                                                                                                            |
| 2.5.3      | The Contractor shall perform the introduction of  hydrocarbons and the initial start up of the Subsea Systems via the subsea  control systems aboard the FPSO. The start-up of the Subsea Systems shall be  under the Company’s direction and in accordance with the Company’s operating  procedures.                                                 |
|       |                                                                                                                                                                                                                                                                                                                                                            |
| **2.6**    | **CRUDE OIL EXPORT**                                                                                                                                                                                                                                                                                                                                            |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                      |
| 2.6.1      | As part of the FPSO, the Contractor shall provide  all of the facilities on board the FPSO required for offloading SCO from the  storage tanks via the Delivery Point to shuttle tankers as described in the  Functional Specification in Attachment D.1.                                                                                                       |

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| 2.6.2      | The Contractor shall ensure that the FPSO and its  offloading equipment are fully compatible with the North Sea standard DP II  Shuttle Tankers as per UKOOA Tandem Loading Guidelines.                                                                                                                  |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                                                     |
| 2.6.3      | As per the Functional Specification the FPSO shall  be capable of allowing shuttle tanker to connect in sea states up to 4.5  metres significant wave height and once connected, to continue loading in sea  states up to 5.5 metres significant wave height.                                            |
|       |                                                                                                                                                                                                                                                                                                     |
| 2.6.4      | As per Section 2.4.9 of this Schedule, the  Contractor shall provide support in developing a description of the SCO  metering system and measurement operations in sufficient detail to allow the  Company to achieve DTI approval for measurement proposals for the Ettrick  Field.                     |
|       |                                                                                                                                                                                                                                                                                                     |
| **2.7**    | **ACCEPTANCE METHODOLOGY**                                                                                                                                                                                                                                                                               |
| ** ** | ** **                                                                                                                                                                                                                                                                                               |
| 2.7.1      | The Contractor shall adhere to the Regulatory  Compliance Plan (Attachment  D.2). Reference is made to Attachment D.3 listing certain documents  from the Regulatory Compliance Plan that Contractor shall have to submit to  Company prior to:                                                          |
|       |                                                                                                                                                                                                                                                                                                     |
|       | ·                                                                                                                                                                                                                                                                                                   | FPSO leaving the construction yard |
|       | ·                                                                                                                                                                                                                                                                                                   | FPSO entering the Ettrick Field |
|       | ·                                                                                                                                                                                                                                                                                                   | Introducing hydrocarbons from the Ettrick Field in  to the FPSO |
|       |                                                                                                                                                                                                                                                                                                     |   |
| **2.8**    | **QUALITY ASSURANCE**                                                                                                                                                                                                                                                                                    |
| ** ** | ** **                                                                                                                                                                                                                                                                                               |
| 2.8.1      | The Contractor shall be responsible for the  development, implementation and maintenance of a quality assurance system as  detailed in Schedule K.                                                                                                                                                       |   |
|       |                                                                                                                                                                                                                                                                                                     |   |
| **2.9**    | **APPROVALS AND CERTIFICATION**                                                                                                                                                                                                                                                                          |   |
| ** ** | ** **                                                                                                                                                                                                                                                                                               |   |
| 2.9.1      | Reference is made to the Regulatory Compliance Plan  in Attachment D.2.                                                                                                                                                                                                                                  |   |
|       |                                                                                                                                                                                                                                                                                                     |   |
| 2.9.2      | The Contractor shall obtain and maintain all related  approvals, certificates and permits, necessary for the FPSO to operate at the  Ettrick Field which can be obtained in the name of the Contractor. Company  shall provide all reasonable assistance Contractor may require in connection  herewith. |   |
|       |                                                                                                                                                                                                                                                                                                     |   |
| 2.9.3      | For the approvals, certificates and permits that  Company has to obtain in its own name, Contractor shall provide reasonable  assistance to Company in obtaining the approvals, certificates and permits.                                                                                                |   |
|       |                                                                                                                                                                                                                                                                                                     |   |
| 2.9.4      | Each Party shall provide the other Party with copies  of all certificates of approvals necessary for the provision of the  Contractor Services and/or the Company Services.                                                                                                                              |   |
|       |                                                                                                                                                                                                                                                                                                     |   |
| **2.10**   | **MANUALS**                                                                                                                                                                                                                                                                                              |   |
| ** ** | ** **                                                                                                                                                                                                                                                                                               |   |
| 2.10.1     | The Contractor shall compile, edit and prepare and  have approved by regulatory bodies, all manuals as applicable, required for  the operation of the FPSO. In as far as reasonably required, the Company  shall assist the Contractor in having the manuals                                             |   |
|            |                                                                                                                                                                                                                                                                                                          |  |  |  |

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|            | approved.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2.10.2     | The Company shall supply the Contractor with copies  of all documentation relevant to the Company supplied equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **3**      | **OPERATION OF THE CONTRACTOR FACILITIES AND  SUBSEA FACILITIES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 3.1        | Throughout the Charter Period Contractor shall  operate the FPSO on the Field and shall operate the subsea facilities as per  the instructions of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2        | The Company plans to monitor data from the wells in  the Ettrick Field. This information may include subsea and process  information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2.1      | During the course of operations the Company may,  from time to time, request the Contractor to modify the set up of the data  handling system. Appropriate instructions in this respect will be provided by  the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2.2      | Routine production and well data shall be reported  by the Contractor daily in a mutually agreed format. Data transfer by  Contractor between the Contractor’s FPSO based data monitoring system and the  Company offices on the FPSO shall be electronic.                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2.3      | In order to gather information on significant  changes in well conditions, the Contractor’s monitoring system on the FPSO  shall be capable of gathering bottom hole pressure and temperature at  sampling periods ranging from four (4) seconds to nine hundred (900) seconds  over forty eight (48) hours. Normally the data will be collected  automatically, however the Company may request that the Contractor provides  assistance in making the raw data available electronically at the Company’s  offices aboard the FPSO as soon as possible after data collection and in an  ASCII software format which is compatible with the Company’s other  operational activities. |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.3        | Operations conducted by the Contractor in the  provision of the Contractor Services shall include but not be limited to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|       | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Operation of the FPSO including marine systems and  utilities, accommodation, topsides processing and subsea facilities to  achieve the target availability and processing throughput; |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|       | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Operation of the FPSO storage, ballasting and crude  oil handling systems; |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|       | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Offloading operations and operation of mooring and  offloading equipment on board the FPSO; |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|       | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Monitoring of and reporting on all fluids including  produced water and injection water to ensure quality in line with the  functional specifications; |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|       | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Crude oil inventory monitoring and reporting of  Production, gas metering (including fuel, flared and lift gas), water  metering (including produced and |

8

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injected water), fuels,chemicals as required by the Company and the Contractors own procedures;

(f)                                  Monitoring,sampling and reporting of all environmental emissions as required by allapplicable environmental legislation, by the Company and the Contractors ownprocedures.

(f)                                    Supportand maintenance of the crude oil allocation system, including when required aspart of the reconciliation process manual readings of tank levels and manualsampling of crude oil streams.

(g)                                 Injectionof chemicals as required by the Company;

(h)                                 Developmentof a strategic maintenance plan as applicable to Scope of Contractor and use ofa maintenance management system to optimise plant usage and availability and toensure that plant capacity matches production requirements. The Contractorshall ensure a sufficient inventory of operational spare parts is maintainedand readily available for Contractor’s Scope. All inspection and repair shallbe carried out to the satisfaction of the VB/CS and HSE;

(i)                                     Implementationof choke settings via the subsea control system aboard the FPSO to the Company’sinstructions pursuant to Schedule C.

(j)                                     TheParties shall supply consumables, services and equipment in accordance withSchedule E.

(k)                                  Containerisationfor transportation to shore for disposal of all wastes. The Company shallarrange for transport to shore and onshore disposal;

(l)                                     Provisionof onshore support to the management of the offshore operation;

(m)                               Maintenanceof the Company’s gas chromatograph equipment onboard the FPSO.  This includes the Contractor carrying out adaily visual inspection of said equipment, providing first line repair andmaintenance of and supply of gas for calibration of said equipment and supportrequired for other non first line repair and maintenance of said equipment;

(n)                                 Maintenanceof the Company’s subsea control equipment pertaining to the Ettrick Field andlocated on the topside of the FPSO. This includes the Contractor carrying out adaily visual inspection of said equipment, providing first line repair andmaintenance of said equipment and support required for other non first linerepair and maintenance of said equipment (which shall include the Contractorrefilling and cleaning up hydraulic fluid associated with such repair andmaintenance). The Contractor shall also provide support with the administrationof spares for such equipment.

9

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3.4                                 AllInspection, Repair and Maintenance (IRM) is to be planned, conducted andreported in accordance with VB/CS and HSE requirements.  The Contractor’s planned maintenance routineshall include but not be limited to the underwater hull, Mooring Systemexcluding Mooring Legs, topsides facilities and structures.  Safety and production uptime are not to becompromised by deficiencies in the planning and execution of IRM activities.

3.5                                 TheContractor shall be responsible for the maintenance and operation of:

(a)                                  Theshuttle tanker mooring and offloading system aboard the FPSO including hawser,chafe chain, messenger line, buoyancy, etc.;

(b)                                 Anytelemetry or similar system aboard the FPSO that may be necessary forcommunication between the FPSO and the shuttle tanker; and

(c)                                  FPSOlocated handling systems for hose and hawser systems.

3.6                                 TheContractor shall be responsible for the provision, maintenance and operation ofa bunkering hose up to and including the end coupling.

**4****                                          DE-COMMISSIONING**

 

4.1                                 Contractorshall commence de-commissioning upon receiving instruction from Company to doso.

4.2                                 Decommissioningcost shall be reimbursed as outlined in Schedule F and Schedule E.

4.3                                 TheContractor’s services regarding de-commissioning may include, but shall not belimited to:

(a)                                  Providingtechnical documents to support the Company in its preparation of theapplication to abandon the Field;

(b)                                 Obtainingapproval for removal of all in field equipment;

(c)                                  Removingand disposing of all items of the FPSO and Mooring System and, if requested bythe Company, the Subsea Systems which have been installed in the Ettrick Fieldas per instructions of the Company;

(d)                                 Providingdemobilisation and de-commissioning personnel, equipment and services.

(e)                                  Leavingthe Subsea Systems in a safe and environmentally acceptable condition and inany other state as per instructions by the Company.

4.5                                 Ifrequested by the Company, the Contractor shall carry out a seabed video surveyto inspect the Site on debris.

4.6                                 TheContractor shall plan and perform decommissioning with due regard to the needto co-ordinate and cooperate with the removal of items within the Company’sresponsibility.

10

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Attachment D.1:Functional Specification Part 1, 2 and 3

·                  AM-G-100-SP-1069-001rev B                                     FunctionalSpecification Part I – General

·                  AM-G-100-SP-1069-002rev B                                     FunctionalSpecification Part II – Basis of Design

·                  AM-G-100-SP-1069-003rev B                                     FunctionalSpecification Part III – FPSO Description

Attachment D.2:Regulatory Compliance Plan

·                  Document to beprovided by the Contractor and will be attached to the Agreement within 60 daysfrom the Effective Date.

Attachment D.3: FPSOAcceptance Methodology

11

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ATTACHMENT D.1:FUNCTIONAL SPECIFICATION PART 1, 2 AND 3

The applicable documentsreferenced in the Functional Specification are listed below: 

**FUNCTIONAL SPECIFICATION**
| ** ** | ** ** | **Document  number** | ** ** | **Rev** | ** ** | **Document title**                                   |
|------------|------------|----------------------|------------|---------|------------|------------------------------------------------------|
| 1          |       | AM-G-100-SP-0169-001 |       | B       |       | Functional Specification Part I - General            |
| 2          |       | AM-G-100-SP-0169-002 |       | B       |       | Functional Specification Part II - Basis of Design   |
| 3          |       | AM-G-100-SP-0169-003 |       | B       |       | Functional Specification Part III - FPSO Description |

 

**COMPANYPROVIDED DATA**
| ** ** | ** ** | **Document  number**                               | ** ** | **Rev** | ** ** | **Document title**                                                                                                      |
|------------|------------|----------------------------------------------------|------------|---------|------------|-------------------------------------------------------------------------------------------------------------------------|
| 4          |       | RPS Energy EOG  0526-R-01-01 Dated 03 October 2005 |       | 01      |       | Ettrick Field Development UKCS Blocks 13/30, 14/26,  14/27, 20/1, 20/2, 20/6 Geotechnical Desk Study                    |
| 5          |       | Fugro report no.  65-8713.7 Dated 03 February 2006 |       | 0       |       | Pipeline Route Survey UKCS Block 20, proposed location  Ettrick FPSO to SAGE tie-in, Volume 1 Geophysical Survey Report |
| 6          |       | PhysE  C-14-02-R040-2F Dated 17 March 2003         |       | 2       |       | Buzzard Field Metocean Criteria for Design                                                                              |
| 7          |       | RBP.001 /  P317/P273-102-1 Dated September 2001    |       | —  |       | Review of well sampling and reported analysis                                                                           |
| 8          |       | RBP.002 /  P317/P273-102-1 Dated November 2001     |       | —  |       | Addional sampling analysis and fluid studies                                                                            |
| 9          |       | REN.003 / 11688  OP Dated 28 June 2004             |       | —  |       | Waxing tendency of Ettrick E crude                                                                                      |

 

**FPSO**
| ** ** | ** ** | **Document  number**   | ** ** | **Rev** | ** ** | **Document title**                              |
|------------|------------|------------------------|------------|---------|------------|-------------------------------------------------|
| 10         |       | AM-G-100-LG-0164-001   |       | A       |       | List of Rules, Regulations, Codes and Standards |
| 11         |       | AM02-A-100-DG-0100-001 |       | A       |       | General Arrangement                             |
| 12         |       | AM02-A-100-DG-0101-001 |       | B       |       | Capacity Plan                                   |
| 13         |       | AM02-E-405-DD-1500-001 |       | B       |       | Key One Line Diagram                            |
| 14         |       | AM02-J-700-DD-1500-001 |       | B       |       | Overall control Block Diagram                   |
| 15         |       | AM02-A-100-SH-0118-001 |       | A       |       | Data Sheet Ship Motions and Accelerations       |
| 16         |       | AM02-Z-500-PH-0150-001 |       | A       |       | Subsea wells start-up & shutdown philosophy |

 

**TOPSIDES**
| ** ** | ** ** | **Document  number**   | ** ** | **Rev** | ** ** | **Document title**                                         |
|------------|------------|------------------------|------------|---------|------------|------------------------------------------------------------|
| 17         |       | AM02-G-100-RP-7900-001 |       | C2      |       | Materials selection report                                 |
| 18         |       | AM02-B-505-DF-8000-001 |       | 1B      |       | PFD - Crude Oil System – HP Section                   |
| 19         |       | AM02-B-505-DF-8001-001 |       | 1B      |       | PFD - Crude Oil System – LP Section                   |
| 20         |       | AM02-B-510-DF-8002-001 |       | 1B      |       | PFD - Produced Water Treatment System                      |
| 21         |       | AM02-B-515-DF-8003-001 |       | 1B      |       | PFD - HP / LP Flare System                                 |
| 22         |       | AM02-B-525-DF-8004-001 |       | 1B      |       | PFD - LP Gas Compression System                            |
| 23         |       | AM02-B-525-DF-8005-001 |       | 1B      |       | PFD - HP Gas Compression System                            |
| 24         |       | AM02-B-525-DP-8012-001 |       | 1B      |       | PFD - MP and HP Gas Compression                            |
| 25         |       | AM02-B-535-DF-8006-001 |       | 1B      |       | PFD - Water Injection System                               |
| 26         |       | AM02-B-540-DF-8007-001 |       | 1B      |       | PFD - Methanol Injection System                            |
| 27         |       | AM02-B-550-DF-8008-001 |       | 1B      |       | PFD - Fuel Gas System                                      |
| 28         |       | AM02-B-220-DF-8010-001 |       | 1B      |       | PFD - VOC Recovery System                                  |
| 29         |       | AM02-B-530-DF-8009-001 |       | 1B      |       | PFD - Closed Drain System                                  |
| 30         |       | AM02-B-540-DF-8011-001 |       | 1B      |       | PFD - Chemical Injection Down hole / Wellhead / Flow  line |
| 31         |       | AM02-B-540-DF-8011-002 |       | 1B      |       | PFD - Chemical Injection Production / Water  Injection     |

 

**TURRETMOORING SYSTEM**
| ** ** | ** ** | **Document  number** | ** ** | **Rev** | ** ** | **Document title**                                   |
|------------|------------|----------------------|------------|---------|------------|------------------------------------------------------|
| 32         |       | AM-E-410-DD-5000-001 |       | B       |       | Block Diagram Turntable Electrical / Instrumentation |
| 33         |       | AM-G-A40-DG-5165-001 |       | B       |       | Interface drawing Buoy Mooring and Riser Layout      |

 

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ATTACHMENT D.2:REGULATORY COMPLIANCE PLAN

DOCUMENT TO BEPROVIDED BY THE CONTRACTOR AND WILL BE ATTACHED TO THE AGREEMENT WITHIN 60 DAYSFROM THE EFFECTIVE DATE.

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ATTACHMENT D.3

FPSO ACCEPTANCEMETHODOLOGY

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**EttrickFPSO Acceptance Methodology – Attachment D.3**
| **BW Item  No.** | ** ** | **Description**                                                                                                               | ** ** | **Regs**     | ** ** | **Nexen  NAPC No.** | ** ** | **Comments**               |
|------------------|------------|-------------------------------------------------------------------------------------------------------------------------------|------------|--------------|------------|---------------------|------------|----------------------------|
| ** **       | ** ** | ** **                                                                                                                    | ** ** | ** **   | ** ** | ** **          | ** ** | ** **                 |
| ** **       | ** ** | **To Be In Place Prior To Sailaway From Shipyard  To Europe:**                                                                | ** ** | ** **   |
| 0601 / 13        |       | Interim Certificate of Class                                                                                                  |       |         |       |                |       |                       |
| 0603             |       | Flag Registry                                                                                                                 |       |         |       | 118                 |       |                       |
| 0621             |       | Document of Compliance (SINA)                                                                                                 |       |         |       |                |       |                       |
| 0605             |       | Load Line Certificate                                                                                                         |       |         |       | 161                 |       |                       |
| 0602             |       | Safe Manning Document                                                                                                         |       |         |       | 174                 |       |                       |
|             |       |                                                                                                                          |       |         |       |                |       |                       |
|             |       | **To Be In Place Prior To FPSO Entering Field And  Commencing hook-up To Mooring System (Also Prior To Entry To UK Waters):** |
| 0804             |       | Written Scheme For PFEER                                                                                                      |       | SI 1995/743  |       | —              |       | Not an NAPC-type  activity |
|             |       | Verification Scheme For Operations                                                                                            |       | SI 2005/3117 |       |                |       |                       |
| 0817             |       | FPSO Ops Safety Case Approval                                                                                                 |       |         |       | 48                  |       |                       |
| 0701             |       | Notification of Arrival of Installation                                                                                       |       |         |       | 8                   |       |                       |
| 0807             |       | Helideck design / construction approval                                                                                       |       |         |       | 55                  |       |                       |
| —           |       | Permit to Work System                                                                                                         |       | SI 1995/738  |       | —              |       | Not an NAPC-type  activity |
| —           |       | Garbage Management Plan                                                                                                       |       | SI 1998/1377 |       | —              |       | Not an NAPC-type  activity |
| —           |       | Aids To Navigation Monitoring & Maintenance  Scheme (checklist)                                                           |       | ON 2002/14   |       | —              |       | Not an NAPC-type  activity |
|             |       | Bluewater Pressure Equipment Directive - Declaration  of Conformity for the Overall Installation                              |       |         |       |                |       |                       |
|             | ** ** | ** **                                                                                                                    | ** ** | ** **   | ** ** | ** **          | ** ** | ** **                 |   |
|             | ** ** | **To Be In Place Prior To Introducing Hydrocarbons  Into The FPSO:**                                                          |       |         |
| 0801             |       | Statement of Verification and Report                                                                                          |       |         |       |                |       |                       |   |
| —           |       | Approval of Oil Pollution Emergency Plan                                                                                      |       |         |       | 173                 |       |                       |   |
| —           |       | Consult Involved Parties Concerning Offshore  Emergency Plan                                                                  |       |         |       | 217                 |       |                       |   |
| —           |       | Arrangements For Emergencies                                                                                                  |       | SI 1995/743  |       | —              |       | Not an NAPC-type  activity |   |
| 10.04            |       | Consent To Discharge or Use Chemicals                                                                                         |       |         |       | 208                 |       |                       |   |
|                  |            |                                                                                                                               |            |              |            |                     |            |                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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**Notes:**

BW Item No = Item number from Bluewaterdocument number: AMO2-G-100-PC-0167-001 / Rev A;

AnNAPC (notifications, authorisations, permits and consent) type activity is alegislatively required permit and consent interface with an authority.

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF**

**A FLOATING, PRODUCTION, STORAGEAND OFFLOADING**

**VESSELFOR THE ETTRICK FIELD**

**SCHEDULE E**

**INTERFACEAND RESPONSIBILITY MATRIX**

----

# **AGREEMENT FOR THE PROVISION AND OPERATION OF AFLOATING, PRODUCTION, STORAGE AND OFFLOADING VESSEL FOR THE ETTRICK FIELD**

# **SCHEDULEE – INTERFACE AND RESPONSIBILITY MATRIX**

# **Schedule E**

# **Matrix ofResponsibilities – Equipment**

| ** ** | ** ** | ** **                                                                                                                                                          | ** ** | **Supplied/Undertaken By** | ** ** | **At Expense Of** |
|------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------|------------|-------------------|
| ** ** | ** ** | **Item**                                                                                                                                                            | ** ** | **Contractor**             | ** ** | **Company**       | ** ** | **Contractor** | ** ** | **Company** |
| **1**      | ** ** | **Design and Procure**                                                                                                                                              | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| 1.1        |       | Subsea wells  including trees                                                                                                                                       | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.2        |       | Subsea  manifolds, seabed flowlines & umbilicals                                                                                                                | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.3        |       | Riser system,  including but not limited to bend stiffeners and pull-in head                                                                                        | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.4        |       | Gas export  pipeline and tie-in                                                                                                                                     | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.5        |       | Company subsea  control system (note 1)                                                                                                                             | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.6        |       | Contractor  connections to subsea control system (note 1) on FPSO                                                                                                   | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 1.7        |       | Manage subsea  contractor                                                                                                                                           | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.8        |       | FPSO, including  shuttle tanker hawser and hose                                                                                                                     | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 1.9        |       | Mooring System  (excluding Mooring Legs)                                                                                                                            | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 1.10       |       | Mooring Legs                                                                                                                                                        | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.11       |       | Seabed surveys,  soil surveys and metocean data                                                                                                                     | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       |                                                                                                                                                                | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| **2**      | ** ** | **Mobilisation  required for First Oil**                                                                                                                            | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| 2.1        |       | Subsea wells  including trees                                                                                                                                       | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.2        |       | Subsea  manifolds, seabed flowlines & umbilicals                                                                                                                | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.3        |       | Riser system,  including but not limited to bend stiffeners and pull-in head                                                                                        | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.4        |       | Gas export  pipeline and tie-in                                                                                                                                     | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.5        |       | Company subsea  control system (note 1)                                                                                                                             | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.6        |       | Contractor  connections to subsea control system (note 1) on FPSO                                                                                                   | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 2.7        |       | Installation  Contractor and Installation Spread, excluding that specifically required to  support the connection of the turret buoy to the FPSO                    | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.8        |       | FPSO, including  shuttle tanker hawser and hose, to site, and any marine spread required to  support the operation of the connection of the turret buoy to the FPSO | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 2.9        |       | Mooring System  (except Mooring Legs); from supplier to installation contractor’s  mobilisation harbour. (location TBA by Company)                             | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 2.10       |       | Mooring Legs  (including anchor piles); from supplier to installation contractor’s  mobilisation harbour. (location TBA by Company)                            | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 2.11       |       | Mooring System  (including Mooring Legs); from mobilisation harbour to Site                                                                                         | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.12       |       | Guard vessel(s)                                                                                                                                                     | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |

 

2

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| **3**  | ** ** | **Installation**                                                             | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|--------|------------|------------------------------------------------------------------------------|------------|------------|------------|------------|------------|------------|------------|------------|
| 3.1    |       | Subsea wells  including trees                                                | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.2    |       | Subsea  manifolds, seabed flowlines & umbilicals                         | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.3    |       | Riser system,  from seabed flange up to and including pull-in head           | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.4    |       | Gas export  pipeline and tie-in                                              | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.5    |       | Company subsea  control system (note 1)                                      | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.6    |       | Contractor  connections to subsea control system (note 1) on FPSO            | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** |
| 3.7    |       | Tie-in subsea  flow-lines, umbilicals and risers to FPSO turret mooring buoy | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.8    |       | Installation  Contractor and Installation Spread                             | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.9    |       | FPSO, including  shuttle tanker hawser and hose                              | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** |
| 3.10   |       | Mooring System  (including Mooring Legs) (note 2)                            | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.11   |       | Guard vessel(s)                                                              | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
|   | ** ** | ** **                                                                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **4**  | ** ** | **One  Year Operational Spares**                                             | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| 4.1    |       | Subsea wells  including trees                                                | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.2    |       | Subsea  manifolds, seabed flowlines & umbilicals                         | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.3    |       | Riser system,  including but not limited to bend stiffeners and pull-in head | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.4    |       | Gas export  pipeline and tie-in                                              | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.5    |       | Company subsea  control system (note 1)                                      | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.6    |       | Contractor  connections to subsea control system (note 1) on FPSO            | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** |
| 4.7    |       | FPSO, including  shuttle tanker hawser and hose                              | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** |
| 4.8    |       | Mooring System  excluding Mooring Legs                                       | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** |
| 4.9    |       | Mooring Legs                                                                 | ** ** | **X**      | ** ** | ** ** | ** ** | ** ** | ** ** | **X**      |

 

----

 
| NOTES   |                                                                                                                                                                                                                                                                                                  |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                  |
| General | All items marked as Contractor expense throughout  the Schedules of Responsibilities are deemed to be included in the rates and  prices in Schedule F. Please note that all items related to operations are  marked as at Company expense due to the reimbursable nature of the operations  services. |
| (1)     | For limits of Company and Contractor scope, refer to  Schedules C and D.                                                                                                                                                                                                                              |
| (2)     | Company is responsible for contracting and managing  subsea contractor; Contractor will advise and witness only; Contractor will  supply installation procedures.                                                                                                                                     |

#  

3

----

# **Matrix ofResponsibilities - Consumables**

| ** ** | ** ** | ** **                                                                   | ** ** | **Supplied/Undertaken By** | ** ** | **At Expense Of** |
|------------|------------|------------------------------------------------------------------------------|------------|----------------------------|------------|-------------------|
| ** ** | ** ** | **Item**                                                                     | ** ** | **Contractor**             | ** ** | **Company**       | ** ** | **Contractor** | ** ** | **Company** |
| **1**      | ** ** | **Installation Comsumables**                                                 | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| 1.1        |       | Subsea wells  including trees                                                | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.2        |       | Subsea  manifolds, seabed flowlines & umbilicals                         | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.3        |       | Riser system,  including but not limited to bend stiffeners and pull-in head | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.4        |       | Gas export  pipeline and tie-in                                              | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.5        |       | Company subsea  control system (note 1)                                      | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.6        |       | Contractor  connections to subsea control system (note 1) on FPSO            | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 1.7        |       | Subsea control  system control fluids (note 3)                               | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.8        |       | FPSO fuel oil  and fresh water prior to arrival at the Ettrick Field         | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 1.9        |       | FPSO fuel oil,  fuel gas, flare pilot gas and fresh water                    | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.10       |       | FPSO all other  gases and oils such as lube                                  | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 1.11       |       | FPSO including  accommodation                                                | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 1.13       |       | Mooring System  excluding Mooring Legs (note 5)                              | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 1.14       |       | Mooring Legs  (note 5)                                                       | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.15       |       | Installation  Contractor and Installation Spread                             | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.16       |       | Guard Vessel                                                                 | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| ** ** | ** ** | ** **                                                                   | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| **2**      | ** ** | **Commissioning  Consumables**                                               | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| 2.1        |       | Subsea wells  including trees                                                | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.2        |       | Subsea  manifolds, seabed flowlines & umbilicals                         | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.3        |       | Riser system,  including but not limited to bend stiffeners and pull-in head | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.4        |       | Gas export pipeline  and tie-in                                              | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.5        |       | Company subsea  control system (note 1)                                      | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.6        |       | Contractor  connections to subsea control system (note 1) on FPSO            | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 2.7        |       | Subsea control  system control fluids (note 3)                               | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.8        |       | FPSO fuel oil,  fuel gas, flare pilot gas and fresh water                    | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.9        |       | FPSO all other  gases and oils such as lube                                  | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 2.10       |       | FPSO laboratory  items and chemicals                                         | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.11       |       | FPSO production  chemicals (note 2)                                          | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.12       |       | FPSO all other  chemicals                                                    | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |
| 2.13       |       | FPSO including  accommodation                                                | ** ** | **X**                      | ** ** | ** **        | ** ** | **X** | ** ** | ** ** |

 

4

----

 
| **3**  | ** ** | **Operations – Consumables**                                                                                                                                                                               | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|------------|------------|------------|------------|------------|
| 3.1    |       | Subsea wells  including trees                                                                                                                                                                                   | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.2    |       | Subsea  manifolds, seabed flowlines & umbilicals                                                                                                                                                            | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.3    |       | Riser system,  including but not limited to bend stiffeners and pull-in head                                                                                                                                    | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.4    |       | Gas export  pipeline and tie-in                                                                                                                                                                                 | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.5    |       | Company subsea  control system (note 1)                                                                                                                                                                         | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.6    |       | Contractor  connections to subsea control system (note 1)                                                                                                                                                       | ** ** | **X**      | ** ** | ** ** | ** ** | ** ** | ** ** | **X**      |
| 3.7    |       | Subsea control  system control fluids                                                                                                                                                                           | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.8    |       | FPSO fuel oil,  fuel gas, flare pilot gas and fresh water                                                                                                                                                       | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.9    |       | FPSO all other  gases and oils such as lube                                                                                                                                                                     | ** ** | **X**      | ** ** | ** ** | ** ** | ** ** | ** ** | **X**      |
| 3.10   |       | FPSO laboratory  items and chemicals                                                                                                                                                                            | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.11   |       | FPSO production  chemicals (note 2)                                                                                                                                                                             | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 3.12   |       | FPSO all other chemicals                                                                                                                                                                                        | ** ** | **X**      | ** ** | ** ** | ** ** | ** ** | ** ** | **X**      |
| 3.13   |       | FPSO including  accommodation                                                                                                                                                                                   | ** ** | **X**      | ** ** | ** ** | ** ** | ** ** | ** ** | **X**      |
|   |       |                                                                                                                                                                                                            | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **4**  | ** ** | **De-commissioning  – Consumables**                                                                                                                                                                        | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| 4.1    |       | Subsea wells  including trees                                                                                                                                                                                   | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.2    |       | Subsea  manifolds, seabed flowlines & umbilicals                                                                                                                                                            | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.3    |       | Riser system,  including but not limited to bend stiffeners and pull-in head                                                                                                                                    | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.4    |       | Gas export  pipeline and tie-in                                                                                                                                                                                 | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.5    |       | Company subsea  control system (note 1)                                                                                                                                                                         | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.6    |       | Contractor  connections to subsea control system (note 1)                                                                                                                                                       | ** ** | **X**      | ** ** | ** ** | ** ** | ** ** | ** ** | **X**      |
| 4.7    |       | FPSO all items  (including cleaning materials and removal and disposal of all wastes,  corrosion and scaling products arising from hydrocarbon processing on the  FPSO) required under regulatory requirements. | ** ** | **X**      | ** ** | ** ** | ** ** | ** ** | ** ** | **X**      |
| 4.8    |       | FPSO fuel oil  and fresh water up to the arrival of the FPSO at Redelivery Port.                                                                                                                                | ** ** | **X**      | ** ** | ** ** | ** ** | ** ** | ** ** | **X**      |
| 4.9    |       | FPSO fuel and  fresh water after arrival at the Redelivery Port.                                                                                                                                                | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** |
| 4.10   |       | Mooring System  (excluding Mooring Legs)                                                                                                                                                                        | ** ** | **X**      | ** ** | ** ** | ** ** | ** ** | ** ** | **X**      |
| 4.11   |       | Mooring Legs                                                                                                                                                                                                    | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |
| 4.12   |       | Debris from  seabed                                                                                                                                                                                             | ** ** | ** ** | ** ** | **X**      | ** ** | ** ** | ** ** | **X**      |

 

----

NOTES
| General | All items are marked as Company expense due to the  reimbursable nature of the operations services.                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | For limits of Company and Contractor scope, refer to  Schedules C and D                                                                                                                       |
| (2)     | Production chemicals will be supplied by Company by  use in the Subsea System as instructed by and under the aegis of the Company  Operations Representative.                                 |
| (3)     | Under instruction of on-board Company  Representative.                                                                                                                                        |
| (4)     | Production chemicals are listed in the Functional  Specification (as attached to Schedule D) and to be used at instruction by  and under responsibility of Company Operations Representative. |
| (5)     | Company is responsible for contracting and managing  subsea contractor; Contractor will advise and witness only; Contractor will  supply installation procedures.                             |

 

5

----

**Matrix ofResponsibilities – Operations**
| ** ** | ** ** | ** **                                                                            | ** ** | **Supplied/Undertaken By** | ** ** | **At Expense Of** |
|------------|------------|---------------------------------------------------------------------------------------|------------|----------------------------|------------|-------------------|
| ** ** | ** ** | **Item**                                                                              | ** ** | **Contractor**             | ** ** | **Company**       | ** ** | **Contractor** | ** ** | **Company** |
|       |       |                                                                                  | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| **1**      | ** ** | **Operations**                                                                        | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| 1.1        |       | Subsea wells including trees (note 3)                                                 | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.2        |       | Subsea manifolds, seabed flowlines & umbilicals  (note 3)                         | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.3        |       | Riser system, including but not limited to bend  stiffeners and pull-in head (note 3) | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.4        |       | Gas export pipeline and tie-in (note 3)                                               | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.5        |       | Company subsea control system (note 1+3)                                              | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.6        |       | Contractor connections to subsea control system  (note 1) on FPSO                     | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.7        |       | FPSO, including shuttle tanker hawser and hose                                        | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.8        |       | DP shuttle tanker as per UKOOA Tandem Loading  Guidelines (note 2)                    | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.9        |       | Mooring System (Including Mooring Legs)                                               | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       |                                                                                  | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| **2**      | ** ** | **De-commissioning**                                                                  | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| 2.1        |       | Subsea wells including trees                                                          | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.2        |       | Subsea manifolds, seabed flowlines & umbilicals                                   | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.3        |       | Riser system, including but not limited to bend  stiffeners and pull-in head          | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.4        |       | Gas export pipeline and tie-in                                                        | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.5        |       | Company subsea control system (note 1)                                                | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.6        |       | Contractor connections to subsea control system  (note 1) on FPSO                     | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 2.7        |       | FPSO, including shuttle tanker hawser and hose                                        | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 2.8        |       | Mooring System (including Mooring Legs)                                               | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.9        |       | Debris from seabed                                                                    | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |

 

----

 
| NOTES  |                                                                     |
|--------|--------------------------------------------------------------------------|
|   |                                                                     |
| (1).   | For limits of Company and Contractor scope, refer to  Schedules C and D. |
| (2).   | Including trial offloading and acceptance procedure.                     |
| (3).   | Under instruction of on-board Company  Representative.                   |

 

6

----

# **Matrix ofResponsibilities – Services**

| ** ** | ** ** | ** **                                                                                                    | ** ** | **Supplied/Undertaken By** | ** ** | **At Expense Of** |
|------------|------------|---------------------------------------------------------------------------------------------------------------|------------|----------------------------|------------|-------------------|
| ** ** | ** ** | **Item**                                                                                                      | ** ** | **Contractor**             | ** ** | **Company**       | ** ** | **Contractor** | ** ** | **Company** |
| **1**      | ** ** | **Operations – Services**                                                                                | ** ** | ** **                 |       |              |   |   |   |   |
| 1.1        |       | Certification VB/CS                                                                                           | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.2        |       | Insurance – FPSO                                                                                         | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Mooring System (excluding Mooring Legs)                            | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Mooring Legs                                                       | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Subsea wells including trees                                       | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Subsea manifolds, templates, flowlines &  umbilicals           | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       -Subsea controls system                                            | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| 1.3        |       | Weather forecasting                                                                                           | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.4        |       | Navigation, positioning, markers and beacons                                                                  | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.5        |       | Communications to/from plus equipment                                                                         | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
|       |       | ·       FPSO to/from Contractor                                            | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       FPSO to/from Company                                               | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.6        |       | Regular survey for:                                                                                           | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
|       |       | ·       Mooring System (excluding Mooring Legs)                            | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Mooring Legs                                                       | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       wells & subsea equipment                                       | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 1.7        |       | Metocean - design data                                                                                        | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       |                  - weather reports | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.8        |       | Accommodation for Company personnel                                                                           | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 1.9        |       | Reservoir  Management and Flow Assurance                                                                      | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       |                                                                                                          | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| **2**      | ** ** | **Operations – Services**                                                                                | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| 2.1        |       | Safety                                                                                                        | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
|       |       | ·       first aid                                                          | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       emergency response services                                        | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       standby vessel                                                     | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       emergency control room (offshore) – Contractor                | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       emergency control room (onshore) – Company                    | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       |                                                                                                          | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
| 2.2        |       | Transport including associated handling                                                                       | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
|       |       | Personnel                                                                                                     | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
|       |       | ·       Contractor’s - home to & from Aberdeen                    | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Contractor’s - Aberdeen to and from Field                     | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Company’s                                                     | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |

 

7

----

 
| ** ** | ** ** | ** **                                                                                                              | ** ** | **Supplied/Undertaken By** | ** ** | **At Expense Of** |
|------------|------------|-------------------------------------------------------------------------------------------------------------------------|------------|----------------------------|------------|-------------------|
| ** ** | ** ** | **Item**                                                                                                                | ** ** | **Contractor**             | ** ** | **Company**       | ** ** | **Contractor** | ** ** | **Company** |
| 2.3        |       | Transport including associated handling of minor  equipment, supplies, wastes, etc                                      | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
|       |       | ·       Contractor’s source to supply base                                      | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Supply Base to and from Field                                                | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Company’s                                                               | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.4        |       | Handling of Equipment and Supplies                                                                                      | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
|       |       | ·       Offshore on FPSO                                                             | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Offshore in transit                                                          | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Onshore - Contractor’s items                                            | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Onshore – Company’s items                                          | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.5        |       | Handling of  Waste                                                                                                      | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
|       |       | ·       Offshore to Shore                                                            | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Onshore - Contractor’s items                                            | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Onshore – Company’s items                                          | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.6        |       | Spare parts,  inspection, maintenance and repair                                                                        | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
|       |       | ·       Subsea wells including trees                                                 | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Subsea manifolds, flowlines & umbilicals                                 | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Riser system, including but not limited to  bend stiffeners and pull-in head | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Gas export pipeline and tie-in                                               | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Company subsea control system (note 1)                                       | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Contractor connections to subsea control  system (note 1) on FPSO            | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       FPSO - Contractor’s items                                               | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       FPSO - Company’s items                                                  | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Mooring System                                                               | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 2.7        |       | Office facilities                                                                                                       | ** ** | ** **                 | ** ** | ** **        | ** ** | ** ** | ** ** | ** ** |
|       |       | ·       Contractor personnel                                                         | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       Company personnel offshore                                                   | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
|       |       | ·       VB/CS/HSE/DTI/other regulatory bodies                                        | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 2.8        |       | Support vessels (note 3)                                                                                                | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |
| 2.9        |       | Accommodation, catering and welfare                                                                                     | ** ** | **X**                      | ** ** | ** **        | ** ** | ** ** | ** ** | **X** |
| 2.10       |       | DP Shuttle tankers as per UKOOA Tandem Loading  Guidelines (note 2)                                                     | ** ** | ** **                 | ** ** | **X**             | ** ** | ** ** | ** ** | **X** |

 

8

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| ** ** | ** ** | ** **                                                                                                              | ** ** | **Supplied/Undertaken By** | ** ** | **At Expense Of** | ** ** | ** **     |
|------------|------------|-------------------------------------------------------------------------------------------------------------------------|------------|----------------------------|------------|-------------------|------------|----------------|
| ** ** | ** ** | **Item**                                                                                                                | ** ** | **Contractor**             | ** ** | **Company**       | ** ** | **Contractor** | ** ** | **Company** |
| **3**      | ** ** | **De-commissioning – Services**                                                                                    | ** ** | ** **                 | ** ** | ** **        | ** ** | ** **     | ** ** | ** ** |
| 3.1        |       | Safety                                                                                                                  | ** ** | ** **                 | ** ** | ** **        | ** ** | ** **     | ** ** | ** ** |
|       |       | ·       first aid                                                                    | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
|       |       | ·       emergency services                                                           | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       standby vessel                                                               | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       emergency control room - Contractor                                          | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
|       |       | ·       emergency control room - Company                                             | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
| 3.2        |       | Transport including associated handling                                                                                 | ** ** | ** **                 | ** ** | ** **        | ** ** | ** **     | ** ** | ** ** |
|       |       | Personnel                                                                                                               | ** ** | ** **                 | ** ** | ** **        | ** ** | ** **     | ** ** | ** ** |
|       |       | ·       Contractor’s - home to & from Aberdeen                              | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
|       |       | ·       Contractor’s - Aberdeen to and from Field                               | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       Company’s                                                               | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | Minor equipment,  supplies, wastes, etc.                                                                                | ** ** | ** **                 | ** ** | ** **        | ** ** | ** **     | ** ** | ** ** |
|       |       | ·       Contractor’s - Source to Aberdeen                                       | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
|       |       | ·       Aberdeen to and from Field                                                   | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       Company’s                                                               | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
| 3.3        |       | Handling of equipment and supplies                                                                                      | ** ** | ** **                 | ** ** | ** **        | ** ** | ** **     | ** ** | ** ** |
|       |       | ·       offshore                                                                     | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       onshore - Contractor’s items                                            | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
|       |       | ·       onshore – Company’s items                                          | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
| 3.4        |       | Handling of  waste                                                                                                      | ** ** | ** **                 | ** ** | ** **        | ** ** | ** **     | ** ** | ** ** |
|       |       | ·       offshore to shore                                                            | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       onshore – Contractor’s items                                       | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       onshore – Company’s items                                          | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
| 3.5        |       | Recovery and  abandonment                                                                                               | ** ** | ** **                 | ** ** | ** **        | ** ** | ** **     | ** ** | ** ** |
|       |       | ·       subsea wells including trees                                                 | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       subsea manifolds, flowlines & umbilicals                                 | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       riser system, including but not limited to  bend stiffeners and pull-in head | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       gas export pipeline and tie-in                                               | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       Company subsea control system (note 1)                                       | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       Contractor connections to subsea control  system (note 1)                    | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
|       |       | ·       FPSO – Contractor’s items                                          | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
|       |       | ·       FPSO – Company’s items                                             | ** ** | ** **                 | ** ** | **X**             | ** ** | ** **     | ** ** | **X** |
|       |       | ·       Mooring System including Mooring Legs                                        | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
| 3.6        |       | Office facilities including secretarial support                                                                         | ** ** | ** **                 | ** ** | ** **        | ** ** | ** **     | ** ** | ** ** |
|       |       | ·       Contractor personnel                                                         | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
|       |       | ·       Company personnel                                                            | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
|       |       | ·       VB/CS/HSE/DTI/other regulatory bodies                                        | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
| 3.7        |       | Support vessels                                                                                                         | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |
| 3.8        |       | Accommodation, catering and welfare                                                                                     | ** ** | **X**                      | ** ** | ** **        | ** ** | ** **     | ** ** | **X** |

 

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| NOTES   |                                                                                                                                                                                         |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                         |
| General | All items are marked as Company expense due to the  reimbursable nature of the operations services.                                                                                          |
| (1)     | For limits of Company and Contractor scope, refer to  Schedule D, Attachment D1.                                                                                                             |
| (2)     | Shuttle tanker acceptance procedures and acceptance  inspections shall be carried out as per UKOOA Tandem Loading Guidelines by  Contractor on behalf of Company at cost of Company.         |
| (3)     | Including field support vessels during close  proximity operations, such as but not limited to, tug to support a shuttle  tanker when offloading while there is a drilling rig in the field. |

 

9

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**AGREEMENTFOR THE PROVISION AND OPERATION OFA FLOATING, PRODUCTION, STORAGE AND OFFLOADINGVESSEL FOR THE ETTRICK FIELD**

**SCHEDULE F**

**PAYMENT OBLIGATIONS**

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF A FLOATING, PRODUCTION, STORAGE AND OFFLOADING VESSEL FOR THEETTRICK FIELD**

**SCHEDULEF - PAYMENT OBLIGATIONS**

**SCHEDULE F**

**TABLE OFCONTENTS**
| 1.  |   | PAYMENT OBLIGATIONS       |   | 3 |
|-----|--------|---------------------------|--------|---|
| 2.  |   | CHARTER HIRE              |   | 3 |
| 3.  |   | PRODUCTION TARIFF         |   | 3 |
| 4.  |   | FORCE MAJEURE RATE        |   | 4 |
| 5.  |   | PERMITTED DELAY DAY RATE  |   | 4 |
| 6.  |   | STAND-BY RATE             |   | 4 |
| 7.  |   | [****]                    |   | 5 |
| 8.  |   | PAYMENT MOORING LEGS      |   | 5 |
| 9.  |   | TERMINATION PAYMENTS      |   | 6 |
| 10. |   | OPERATIONS COST PAYMENTS  |   | 7 |
| 11. |   | ADDITIONAL COSTS          |   | 7 |
| 12. |   | DE-COMMISSIONING PAYMENTS |   | 7 |

#  

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# **1.****                                      PAYMENTOBLIGATIONS**

1.1                                In consideration of thefulfilment by the Contractor of its obligations and its compliance with theterms of this Agreement, the Company shall pay the Contractor in accordancewith this Schedule F.

# **2.****                                      CHARTERHIRE**

2.1                                Subject always to Sections4, 6, and/or 7 of this Schedule F (in which event a rate different from theCharter Hire shall be due to the Contractor), for each day on and after the FirstOil Date until the Termination Date, the Company shall pay to the Contractor theapplicable Charter Hire (the “Charter Hire”) as per Table 2.1 below.

Table 2.1: Charter Hire
| Period | ** **              | **Charter Hire** |
|--------|-------------------------|------------------|
| 2.2    | Primary Term            |             | 2.3 | US$ | 112,500 per day |
| 2.4    | 1st Extension Term |             | 2.5 | [****] |
| 2.6    | 2nd Extension Term |             | 2.7 | [****] |

 

**3.****           PRODUCTION TARIFF**

3.1                                Duringthe Primary Term

### 3.1.1            Foreach Charter Hire Payment Period during the Primary Term, the Company shall payto the Contractor an amount equal to [****] (the “Production Tariff”)multiplied by the Actual Production in the relevant Charter Hire PaymentPeriod.

### 3.1.2            Theminimum guaranteed total number of produced Barrels of SCO for which theProduction Tariff shall be payable during the Primary Term is twenty seven million(27,000,000) Barrels (the “Minimum Guaranteed Production”).

### 3.1.3            Ifat the end of the Primary Term the Actual Production during the Primary Term forwhich the Production Tariff has been paid is less than the Minimum GuaranteedProduction, Company will pay Contractor the shortfall between the ActualProduction and the Minimum Guaranteed Production for the Primary Term, multipliedby the Production Tariff and multiplied by a deferred income factor of [****].

3.2                                DuringExtension Term

### 3.2.1            Foreach day during each Charter Hire Payment Period within the Extension

3

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### Term, the Company shall pay to the Contractor an amount equal to the ProductionTariff multiplied by the Actual Production of that day.

### 3.2.2            Theminimum guaranteed number of produced Barrels of SCO per day for which theProduction Tariff is payable within the Extension Term shall be [****] Barrels perday (the “Daily Minimum Guaranteed Production”).

### 3.2.3            Ifwithin the Extension Term the Actual Production of a day is less than the DailyMinimum Guaranteed Production Company shall pay to Contractor for that day anamount equal to the Production Tariff multiplied by the Daily Minimum GuaranteedProduction.

# **4.****                                      FORCEMAJEURE RATE**

4.1                                Foreach day or part thereof, after the First Oil Date until the Termination Dateor the last day of Production, whichever is the latest, during which theContractor Facilities are prevented from operating as a result of ForceMajeure, the Company shall pay to the Contractor [****] per day (the “ForceMajeure Rate”) or pro rata part thereof. For clarity, the Parties agree thatduring the period that the Force Majeure Rate applies, the Operating Costs andthe Insurance Costs remain payable by the Company.

# **5.****                                      PERMITTEDDELAY DAY RATE**

5.1                                Foreach day or part thereof after the Scheduled First Oil Date, during which theContractor Facilities are prevented from First Oil as a result of a PermittedDelay (not being the result of a Change Order), the Company shall pay to theContractor [****] per day (the “Permitted Delay Day Rate”) or pro rata partthereof. Parties agree that during the period that the Permitted Delay Day Rateis payable as per this Section 5.1, the Operating Costs and the Insurance Costsshall be payable by the Company.

5.2                                Ifas a result of a Change Order Request initiated prior to First Oil, the Partiesagree that the Change Order shall result into First Oil being later than the ScheduledFirst Oil Date, Company shall compensate the Contractor as part of that ChangeOrder an amount equal to the agreed days of delay multiplied by the PermittedDelay Day Rate.

# **6.****                                      STAND-BYRATE**

6.1                                Foreach day or part thereof after First Oil during which the Contractor Facilitiesare prevented from producing as a result of;

4

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### 6.1.1                       an act oromission of any member of the Company Group; or

### 6.1.2                       any failureof Company Facilities; or

### 6.1.3                       a ChangeOrder; or

### 6.1.4                       technicaldisputes to the extent that the Classification Society holds the Contractor notliable therefor; or

### 6.1.5                       any failureof the Field, wells or wellheads, or

### 6.1.6                       an upgradeor modification as per Clause 37 of this Agreement, the Company shall pay tothe Contractor [****] per day (the “Standby Rate”) or pro rata part thereof.For clarity, Parties agree that during the period that the Standby Rateapplies, the Operating Costs and the Insurance Costs shall remain payable bythe Company.

# **7.****           [****]**

7.1                                Foreach day or part thereof during which the FPSO is prevented from Producing as aresult of:

## i)                      a materialbreach of Contractor of its obligations as per Clause 26.2 of the Agreement, or

## ii)                   the FPSO being demobilisedfrom the Field solely for unscheduled repairs of the FPSO to an onshorelocation for reasons other than when the Force Majeure Rate or the Standby Rateapplies,

## the Company shall pay to the Contractor [****] per day (the [****]) or pro rata partthereof. For clarity, Parties agree that during the period that the [****] ispayable, the Operating Costs and the Insurance Costs shall remain payable bythe Company for up to a maximum period of sixty (60) consecutive days per eventcausing such prevention of Production. Thereafter, these costs shall be for theaccount of the Contractor until such time as the Company either terminates thisAgreement under Clause 26.2 or the FPSO returns to the Field and re-commences Production.

# **8.****           PAYMENT MOORING LEGS**

8.1                                TheContractor shall invoice the Company all costs in respect of the procurement, anddelivery of the Mooring Legs to the mobilisation port as nominated by the Company.The Company shall reimburse the Contractor on a [****] basis. The Company shallpay Contractor within thirty (30) days of receipt of each invoice.

5

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# **9.****           TERMINATION PAYMENTS**

## 9.1                                Terminationduring Primary Term

## 9.1.1                       If, aspermitted under the terms of the Quiet Enjoyment Agreement, the Companyterminates the Agreement by notice received by the Contractor prior to the endof the Primary Term other than for those reasons set out in Clause 26.1, 26.2,26.3 or 26.4 (in which events — subject to Clause 12.11 - no termination feesor Production Tariff shall be due to the Contractor), the Company shall pay tothe Contractor as a lump sum; i) the relevant termination fee as per Table 9.1below plus ii) an amount equal to any shortfall between the Actual Production duringthe period from First Oil up to the Termination Date and the Minimum GuaranteedProduction multiplied by the Production Tariff.

## 9.1.2                       Subject tothe Termination Date being a day within a year as set out in Table 9.1, thetermination fee shall be;

**Table 9.1: Termination Fees**
| Year | ** ** | **Termination Date being in the year starting  from** | ** ** | **Termination Fee** |
|------|------------|-------------------------------------------------------|------------|---------------------|
| 1    |       | First Oil Date                                        |       | [****]              |
| 2    |       | First anniversary of First Oil Date                   |       | [****]              |
| 3    |       | Second anniversary of First Oil Date                  |       | [****]              |
| 4    |       | Third anniversary of First Oil Date                   |       | [****]              |
| 5    |       | Fourth anniversary of First Oil Date                  |       | [****]              |

 

## If the Company terminates this Agreement pursuant to Clause 26.9, theForce Majeure Rate paid by the Company to the Contractor as a result of theForce Majeure event giving rise to the termination shall be deducted from theTermination Fee. For the purpose of determining the Termination Fee, the TerminationDate shall be deemed to be the commencement date of the Force Majeure eventgiving rise to the termination.

## 9.1.3                       In additionto the payments under Section 9.1.1 and 9.1.2 of this Schedule F, the Companyshall reimburse the Contractor the Operating Cost associated with terminationprior to the end of the Primary Term as described in Schedule G (for examplebut not limited to FPSO lay-up costs, cost of early termination of employeecontracts and supplier agreements) and the Insurance Costs.

## 9.2                                Terminationafter Primary Term

### 9.2.1                       If, aspermitted under the terms of the Quiet Enjoyment Agreement, the Companyterminates the Agreement by notice received by the Contractor during theExtension Term (other than for those reasons set out in Clause 26.1, 26.2, 26.3or 26.4 in which event – subject to Clause 12.11 - no further Charter Hire orProduction Tariff under

6

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this Agreement shall be due to the Contractor) the Company shall pay tothe Contractor for each remaining day of the Extension Term an amount of [****]per day.

# **10.          OPERATIONSCOST PAYMENTS**

## 10.1                          The Companyshall pay the Contractor the cost of operating the Contractor’s Facilities asdescribed in Clause 12 and Schedule G of this Agreement.

# **11.****           ADDITIONALCOSTS**

## 11.1                          Inrecognition of the additional costs incurred by the Contractor between the Company’sreceipt of the Contractor’s commercial proposal in December 2005 in accordancewith the provisions of the FEED contract entered into between the Company andBluewater Energy Services BV on the 3rd October 2005 and any amendments thereof up tothe Effective Date of this Agreement and the Company’s acceptance thereof onthe Effective Date, the Company agrees to pay the Contractor the sum of [****]. The Contractor shall invoice the Companyfor this sum no earlier than thirty (30) days after the Effective Date and theCompany shall pay the Contractor therefore within thirty (30) days of receiptof such invoice.

# **12.****           DE-COMMISSIONINGPAYMENTS**

## 12.1                          If theCompany terminates the Agreement and it is necessary to demobilise anddecommission the FPSO and the Mooring System, the Company shall pay to theContractor the actual costs of all the decommissioning activities performed bythe Contractor pursuant to Schedule D, [****], together with Operating Costsand the daily average actual cost of insurance premiums multiplied by thenumber of days in the decommissioning period.

7

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**AGREEMENTFOR THE PROVISION AND OPERATION OF****A FLOATING, PRODUCTION, STORAGE AND OFFLOADING****VESSEL FOR THE ETTRICK FIELD**

**SCHEDULE G**

**OPEX BUDGETING,METHODOLOGY and PROCEDURE**

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**AGREEMENT FOR THE PROVISION AND OPERATION OF A FLOATING, PRODUCTION,STORAGE AND OFFLOADING VESSEL FOR THE ETTRICK FIELD**

**SCHEDULE G - OPEX BUDGETING METHODOLOGY AND PROCEDURES**

**SCHEDULE G**

**OPEXBUDGETING, METHODOLOGY and PROCEDURE**

**TABLE OFCONTENTS**
| 1      |   | INTRODUCTION               |   | 3      |
|--------|--------|----------------------------|--------|--------|
|   |   |                       |   |   |
| 2      |   | OPEX BUDGET                |   | 3      |
|   |   |                       |   |   |
| 3      |   | OPEX BUDGETING METHODOLOGY |   | 3      |
|   |   |                       |   |   |
| 4      |   | INCENTIVE ELEMENTS         |   | 4      |

 

2

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# **1****              INTRODUCTION**

1.1           This Schedule describes the methodology and procedure fordetermination, and payment of the Operating Costs by Company to Contractor. TheCompany shall fully reimburse Contractor the actual Operating Costs [****] tocover the cost of operating Contractor Facilities in accordance with therequirements of the Agreement and Legislative Requirements

# **2****              OPEX BUDGET**

2.1           The OPEX budget shall be based on all anticipated Operating Costs. TheCompany and Contractor shall agree on the OPEX budget for each calendar year,the first year being the year ending 31st December in which First Oil is achieved.

2.2           Within level 2 of the OPEX budget, Contractor shall identify costs aseither ‘core’ or ‘variable’ OPEX budget elements. The ‘core’ budget elementsbeing fixed monthly costs such as offshore manning costs and the ‘variable’budget elements being variable monthly costs such as consumables and equipmentspares, payment of these Operating Costs will commence as stated in Clause 12.7and will be for the duration of the Agreement.

2.3           The OPEX budget shall be agreed between Company and Contractoraccording to the OPEX budgeting methodology and procedure that is detailed inthe following section.

# **3****              OPEX BUDGETINGMETHODOLOGY**

3.1           Procedure for Agreeing OPEX Budget

3.1.1        A draft OPEX budget, to meet the annual anticipated operating costs andexpenses shall be compiled by the Aoka Mizu OIM by the end of September of thepreceding year for which the budget is applicable.

3.1.2        The draft OPEX budget shall be forwarded to the Contractor’s office foronshore input before being presented to Company for review and agreement by theend of October of the preceding year for which the budget is applicable.

3.2           Core and Variable Budget Variations

All variations to the agreedOPEX budget expenditures, within the operating year, will be proposed by theContractor and agreed by the Company prior to commitment of the expenditurevariation.

3.3           OPEX Budget Format

3.3.1       Thelevel 1 OPEX budget shall consist of the following budget responsibilityowners;

AssetManager

OffshoreInstallation Manager (OIM)

OffshoreTeam Leader (OTL)

Marine Superintendent

Level 2 and 3 OPEX budget components shallbe, in general, as per the format given in the project tender phase.

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3.3.2        The level 2 OPEX budget components for OIM, OTL, Marine and Cateringoffshore salaries and Aberdeen Base costs are to be considered as ‘core’ budgetelements. All other budget costs are to be considered as ‘variable’ budgetelements.

3.3.3        The ‘variable’ budget elements are based on anticipated costs for eachCharter Hire Payment Period.

3.4           Payment for the ‘core’ and ‘variable’ OPEX budget elements will be as perClause 12.9 of the Agreement.

# **4****              INCENTIVE ELEMENTS**

4.1           The Contractor shall propose an OPEX budget incentive element based onthe ‘variable’ OPEX budget elements to ensure the yearly actual OPEX budgetexpenditures are as prudent and efficient as possible. This incentive shall bebased on series of key performance indicators (KPIs) including a percentage ofany under spends in the ‘variable’ elements of the OPEX budget to encourage theContractor’s personnel to efficiently operate the FPSO and the topsides to the standardsas expected by a Reasonable and Prudent Operator.

4.2           The Contractor and theCompany shall agree, prior to First Oil and thereafter on an annual basis inconjunction with the development of the OPEX budget, an incentive scheme whichshall adjust (plus or minus) the profit element of the OPEX budget to promotethe efficient use of the Company Services (such as helicopters, supply vesselsand diesel oil consumption) and the efficient use of the FPSO so as to minimizeenvironmental pollution including inter alia, a water injection rate andquality (subject to Field performance, of up to [****] per day with an oxygencontent of less than [****] of particles larger than [****], or as otherwiseset out in the Functional Specification in Attachment D.1), green house gasemissions (other than CO2). In case the Company and the Contractor cannot agreeto KPIs on water injection rate and quality as aforesaid and/or green house gasemissions (other than CO2), Contractor will accept a [****] until such time asParties are able to agree to mutually satisfactory KPIs on water injection rateand quality as aforesaid and/or other green house gas emissions (other thanCO2).

4

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**AGREEMENTFOR THE PROVISION AND OPERATION OF****A FLOATING, PRODUCTION, STORAGE AND OFFLOADING****VESSEL FOR THE ETTRICK FIELD**

**SCHEDULEH**

**PROJECTSCHEDULE**

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**AGREEMENT FOR THE PROVISIONAND OPERATION OF A FLOATING, PRODUCTION, STORAGE AND OFFLOADING VESSEL FOR THE ETTRICKFIELD**

**SCHEDULEH - PROJECT SCHEDULE**

**SCHEDULEH**

**PROJECTSCHEDULE (BAR CHART INCLUDING KEY DATES) ATTACHED OVERLEAF**

2

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**AGREEMENTFOR THE PROVISION AND OPERATION OF****A FLOATING, PRODUCTION, STORAGE AND OFFLOADING****VESSEL FOR THE ETTRICK FIELD**

**SCHEDULEI**

**REPORTING**

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**AGREEMENT FOR THE PROVISIONAND OPERATION OF A FLOATING, PRODUCTION, STORAGE AND OFFLOADING VESSEL FOR THE ETTRICKFIELD**

**SCHEDULEI - REPORTING**

**SCHEDULE I**

**REPORTING**

**TABLE OFCONTENTS**
| 1.     |   | OBJECTIVE                 |   | 3      |
|--------|--------|---------------------------|--------|--------|
|   |   |                      |   |   |
| 2.     |   | PROJECT REPORTING         |   | 3      |
|   |   |                      |   |   |
| 3.     |   | OPERATIONS REPORTING      |   | 5      |
|   |   |                      |   |   |
| 4.     |   | DECOMMISSIONING REPORTING |   | 5      |

 

2

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# **1.****                                      OBJECTIVE**

To define reporting statements during the execution,operation and decommissioning phases of the Contractor Facilities and theContractor Services.

# **2.****                                      PROJECTREPORTING**

The Contractor shall providethe Company with accurate reports for the duration of the design, constructionand installation of the FPSO. The reports shall generally provide:

1.            narrative andstatistical data;

2.                                       explanations for deviations from the plan,proposals for remedial action, together with any revised plans, schedules orprojections, as may be required by the Company.

3.            a clear statement ofthe status of the work at the progress cut-off;

4.            a historical recordof the status of the work at the progress cut-off;

5.            an agenda for progress meetings.

The detailed format andcontent of the Contractor’s reports shall be agreed by the Company, who intendto operate a policy of exception reporting. Where problems are experiencedhowever, the report should explain the problem and propose a solution at theappropriate level of detail. The reports will be issued on a weekly or monthlybasis as described below.

**Weekly Progress Reports**

Throughout the duration ofthe design and construction phases of the work, the Contractor shall issueup-to-date, concise and accurate Weekly Progress Reports, by email or facsimileto the Company. The progress report shall include as a minimum the following:

1.                                       highlights of significant accomplishmentsduring the reporting period including achievement of milestones;

2.            delays and/oranticipated delays;

3.            actions for the nextweek;

4.            any outstandinginformation required from the Company;

5.            areas of concern /exceptions / remedial actions;

6.                                       the status of any Change Orders and ChangeOrder Requests in a register format

7.                                       any accidents / incidents associated with thework (including high potential incidents). A summary of corrective actionstaken shall be included.

The period covered shall befrom Monday to Sunday inclusive and the Weekly Report shall be submitted to theCompany by 5:00pm on the Wednesday immediately following the cut-off.

3

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**Monthly Progress Reports**

The Contractor shall issue aMonthly Progress report to the Company the format of which shall be as outlinedbelow. The report shall be concise and accurate and submitted no later than Fridayprior to the project review date with the Company (as per the attached cut-offcalendar – Attachment I-2).

In addition to the itemswithin the weekly report, the monthly report shall also include;-

·                  An update oflevel 1 and 2 schedules, progress curves and manning levels. The informationprovided will be based on main elements and show actual achieved againstplanned.

·                  A register ofproject issues and concerns that will affect the project schedule.

·                  The status ofall purchased main equipment. Additional information may be required during thephase up to delivery to the Field, this will be requested via the Contractorrepresentative.

·                  A coststatement, indicating Change Orders ,invoiced to date together with their valueand paid to date value and any Change Order Requests and their values.

·                  A review of EHS performance with a summary ofinitiatives undertaken and any new initiatives. Details of any accidents /incidents associated with the work and corrective actions a completed SESRreport in the form provided as Attachment I - 1.

·                  A summary of progress achieved in relation tothe key dates set out in the Contract Master Schedule. Trends, criticalactivities and slippages shall be highlighted.

·                  A summary of quality assurance and controlaspects in performance of the Work including audits performed against thoseplanned, non conformances raised and outstanding both internally and onSubcontractors. Weld repair rates where appropriate.

**Daily Reports** (FPSO Sail, Installation and HUC at Ettrick)

During the FPSO sail,installation and hook-up & commissioning periods the Contractor shall issuea daily progress report, by email or facsimile, to the Company representativewhich shall be received no later than 10am following the day under review. Theformat of the daily report shall be as required by the Company representativeand shall include but not be limited to:

·                  Expected near term weather conditions foreither the immediate route or the installation area.

·                  Location during the sail

·                  List of operations completed in the previous24 hours;

·                  List of operations to be undertaken in thenext 72 hours;

·                  Areas of concern

·                  Any accidents / incidents associated with thework (including high potential incidents)

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# **3.****                                      OPERATIONSREPORTING**

## The Contractorshall provide concise daily reports to the Company covering, as a minimum,major activities and items of concern during operations.  These daily reports shall be transmitted tothe Company’s office in Aberdeen and be supported offshore by daily meetingsbetween the Contractor and the Company Operations Representatives andteleconference calls between the FPSO and Contractor’s and Company’s office.  Meetings will be held in Aberdeen on amonthly basis with ad hoc meetings and conference calls with the FPSO asrequired.  The Contractor shall supplyplans and schedules covering work on the FPSO. The Contractor shall also provide incident reports, potential incidentreports, annual inspection reports and other single occurrence reports asrequested by the Company.  Daily reportsmay include any information which is not commercially sensitive.

Production data and well data for the Ettrick Fieldshall be reported by Contractor daily in a format to be mutually agreed priorto the Effective Date.

# **4.            DECOMMISSIONINGREPORTING**

Reporting during decommissioning shall consist ofconcise daily progress reports to the Company. During offshore activities dailyprogress meetings shall be held between the Company and the Contractor’soffshore representatives.

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**ATTACHMENT I – 1**

**MONTHLY SESR REPORTING FORM**

6

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**Monthly SESR Reporting Form**
| Ettrick Development Monthly  SESR Statistical Reporting |
|---------------------------------------------------------|
|                                                    |   |   |
| Location:                                               |   | xxx |
| Month:                                                  |   | xxx |
| Year:                                                   |   | xxx |

 
| Personnel*                  | ** ** | ** ** |   |
|-----------------------------|------------|------------|--------|
| Average Number of Personnel |       |       |
| Estimated Man hours         |       |       |

 
| Performance  Data*                                                   | ** ** | ** ** | ** ** |
|----------------------------------------------------------------------|------------|------------|------------|
| **Health and Safety Incidents**                                      | ** ** | ** ** |
| Fatalities                                                           |       |       |
| Lost Time Incidents  3DLTI/LTI                                       |       |       |
| Days Lost to LTIs                                                    |       |       |
| Medical Treatment Case                                               |       |       |
| Restricted Work Case                                                 |       |       |
| First Aid Case                                                       |       |       |
| High Potential Incident                                              |       |       |
| Non Injurious Incident                                               |       |       |
| Security Incident                                                    |       |       |
| **Environmental**                                                    | ** ** | ** ** |
| Number of Spills                                                     |       |       |
| Total Amount Spilt (m3)                                              |       |       |
| PON 1 Submissions (offshore  only)                                   |       |       |
| If any of the above  incidents were RIDDOR reportable, include below |       |       |
| Fatality                                                             |       |       |
| 3-day LTI                                                            |       |       |
| Dangerous Occurrence                                                 |       |       |
| Industrial Illness                                                   |       |       |

 

7

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**ATTACHMENT I – 2**

**CUT-OFF CALENDER 2006**

8

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**AGREEMENT FOR THE PROVISION AND OPERATION OF****A FLOATING, PRODUCTION, STORAGEAND OFFLOADING****VESSEL FOR THE ETTRICK FIELD**

**SCHEDULE J**

**CHANGE ORDER PROCEDURE**

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**AGREEMENT FOR THE PROVISION AND OPERATION OF A FLOATING, PRODUCTION,STORAGE AND OFFLOADING VESSEL FOR THE ETTRICK FIELD**

**SCHEDULEJ - CHANGE ORDER PROCEDURE**

**SCHEDULE J**

**CHANGEORDER PROCEDURE**

**TABLE OFCONTENTS**

 
| 1.   SCOPE                                     |   | 3      |
|----------------------------------------------------------|--------|--------|
|                                                     |   |   |
| 2.   CONDITIONS WHICH RESULT IN CHANGE ORDERS  |   | 3      |
|                                                     |   |   |
| 3.   PARTIES’ RESPONSIBILITIES            |   | 3      |
|                                                     |   |   |
| 4.   GENERAL PROCEDURES                        |   | 4      |
|                                                     |   |   |
| 5.   DOCUMENTATION                             |   | 6      |
|                                                     |   |   |
| 6.   TIME PERIODS                              |   | 6      |
|                                                     |   |   |
| ATTACHMENT J1 – Change Order Request Form           |   |   |
|                                                     |   |   |
| ATTACHMENT J2 – Bluewater Manhour Rates for Changes |   |   |

 

 

2

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# **1.****                                      SCOPE**

## 1.1.                             ThisSchedule J sets out the procedure (the “Change Order Procedure”) to change theContractor Services as set out in the Agreement and Schedules.

# **2.****                                      CONDITIONSWHICH RESULT IN CHANGE ORDERS**

## 2.1.               Contractor requestedChange Orders

#### (a)                TheContractor may request a change to the Contractor Services in accordance withthe procedure set out herein.  Thesechanges may include additions to, deletions from or modifications to theContractor Services.

#### (b)                Arequest for a Change Order shall not be approved by the Company if the proposedchange in the Contractor Services arises out of the Contractor’s non compliancewith the Agreement.

#### (c)                Requestsby the Contractor for changes to the Contractor Services shall be made inaccordance with Section 4.1 hereof.

## 2.2.               Company requestedChange Orders

#### (a)                TheCompany shall have the right at any time to request a change to the ContractorServices.

#### (b)                Requestsby the Company for changes to the Contractor Services shall be made in accordancewith Section 4.2 hereof.

## 2.3                A Party requestinga change shall have to complete and sign section 1 of the Change Order RequestForm attached to this Schedule J as Attachment J1. Such request for a ChangeOrder is hereinafter also referred to a “Change Order Request”.

# **3.****                   PARTIES’RESPONSIBILITIES**

## 3.1.               The Contractor andthe Company shall follow the procedure as provided in Section 4 hereof.

## 3.2.               Each Change OrderRequest shall address the consequences of one cause for change only.

## 3.3.               A Change OrderRequest shall become a Change Order and shall be binding as soon as i) theChange Order Request is signed by the initiator, ii) any cost and scheduleimpact are agreed by Parties and iii) the Change Order Request is approved andsigned by the Company.

## 3.4.               Operations andactivities which are the subject of a Change Order Request shall not commenceuntil the Contractor has received a Change Order.

3

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# **4.****                                      GENERALPROCEDURES**

## 4.1.                             ContractorChange Order Requests

#### (a)                                TheContractor may initiate a change by properly completing and submitting a ChangeOrder Request to the Company.  TheContractor Representative shall sign such Change Order Request.

#### (b)                               Eachsuch Change Order Request shall include an Impact Statement describing theeffect of the change on the payment obligations in Schedule F in accordancewith Section 4.3 hereof.

#### (c)                                Uponreceipt of a Change Order Request from the Contractor, the Company shallrespond to the Contractor within fourteen (14) calendar days as to whether itaccepts or rejects the Change Order Request.

#### (d)                               Ifthe Company rejects the Change Order Request:

###### (i)                                   the Contractor mayeither accept the rejection or carry out the proposed change without prejudiceto its rights under the Agreement;

###### (ii)                                if the Company rejectsthe Change Order Request on the ground that the change is within the ContractorServices, the Company may nevertheless direct the Contractor to carry out theproposed change without prejudice to the rights of either Party under theAgreement and the Contractor shall effect said change.

## 4.2.               Company ChangeOrder Request

#### (a)                TheCompany may initiate a change by properly completing and submitting a ChangeOrder Request signed by the Company representative.

#### (b                  Uponreceipt of a Change Order Request from the Company, the Contractor shallsupplement the Change Order Request by providing an Impact Statement to theCompany within twenty eight (28) calendar days thereof. Upon receipt of theImpact Statement, the Company shall notify the Contractor as soon as isreasonably practicable and in any event within not more than fourteen (14) calendardays whether or not it wishes to proceed with the Change Order Request; if theCompany does so, the Contractor shall also sign the Change Order Request andreturn it to the Company whereupon it shall then become a binding Change Order.

## 4.3.                             ImpactStatement

#### (a)                TheChange Order Procedure is within the Contractor Services; therefore no chargesof any nature for preparation or processing Change Order Requests and ChangeOrders shall be included in the Change Order Request, provided however, if thecost of preparing an Impact Statement is mutually agreed to be significant, theCompany shall issue a separate Change Order Request for its 

4

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#### preparation.

#### (b)                               TheImpact Statement shall include any effect of the change on the ScheduledDelivery Date and other target and/or completion dates in Schedule H. If thereis any effect on the Scheduled Delivery Date, the Contractor shall provide acritical path analysis. If the Change Order Request is approved by Company, allrelevant plans and schedules shall be modified to reflect the new and approveddates.

#### (c)                                TheImpact Statement shall include the effect of the change on the paymentobligations in Schedule F on one of the following bases as agreed by theParties prior to the issue of the Impact Statement:

###### (i)                  anestimate of the total actual reimbursable costs and the mark-up of ten percent (10%)together with any change in interest costs caused by the change, and whichshall be supported by detailed estimate sheets using the Change Order ratesattached as Attachment J2 as appropriate and other vendor or Sub-contractorquotations or estimates as appropriate, or

###### (ii)                afixed lump sum price or rebate to which the Contractor is prepared to commitwhich shall be supported by detailed estimate sheets and vendor orSub-contractor quotations or estimates as appropriate.

#### (d)                               Ifthe Company accepts alternative 4.3(c)(i) the Contractor shall invoice theCompany, on a monthly basis as the relevant costs are incurred, for the actualcosts of the change to the Contractor and its Affiliates, provided however thatthose services referred to in Attachment J2 shall be charged using the ChangeOrder rates in Attachment J2.  TheContractor shall also include and indicate in its invoice the ten percent (10%)mark-up and any additional interest costs caused by the change so that theChange Order is performed on a costs neutral basis to Contractor. Such invoicesshall be supported by applicable time sheets, material and equipment reportsand vendor or Sub-contractor invoices.

#### (e)                                Ifthe Company accepts alternative 4.3(c)(ii) the Contractor shall invoice theCompany the lump sum in equal monthly installments as from the date Contractorstarts the works for the change.

#### (f)                                  Ifthe Company wishes to consider a payment methodology alternative to thatproposed on the basis of 4.3(c)(ii), it may, within thirty (30) days of receiptof the Impact Statement, request the Contractor to propose a fixed change inthe Charter Hire. If the Company accepts alternative 4.3(c)(ii) as a fixedchange in the foregoing Charter Hire as proposed by or negotiated with theContractor and as approved by Contractor’s financiers, the Company shall soinform the Contractor within fourteen (14) calendar days of receipt of the Contractor’sproposal in writing. Unless agreed otherwise, on completion of the change theContractor shall initiate the foregoing change in the Charter Hire and ScheduleF, Section 9, Table 9.1 shall be amended accordingly.

#### (g)                               Anyequipment installed as a result of a Change Order issued under the aegis ofClause 37 of the Agreement shall become the property of the Contractor, 

5

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#### unless agreed otherwise.

## 4.4.                             ChangeOrder prior to First Oil

#### (a)                                Ifthe Change Order is released in the period prior to First Oil the ImpactStatement shall include an estimate of the number of days that First Oil willbe delayed after the Scheduled First Oil Date. Parties agree that the ScheduledFirst Oil Date can not be altered by means of a Change Order.

#### (b)                               IfParties agree that the as a result of the Change Order First Oil will bedelayed for a certain period of days after the Scheduled First Oil Date,Company shall compensate Contractor via that Change Order an amount equal tothe agreed days of delay multiplied by the Permitted Delay Day Rate.

#### (c)                                Inaddition to Section 4.3(g) hereabove, if the fixed lump sum of Change Ordersprior to First Oil exceed a cumulative value of ten million Dollars(US$10,000,000) Contractor may refuse to accept a change in the Charter Hire.

## 4.5                                ChangeOrder subsequent to First Oil

#### (a)                                Partiesagree that Contractor shall not be obliged to offer or accept a change in theCharter Hire as per Section 4.3(f) for a Change Order Request initiated subsequentto First Oil.

# **5.****                                      DOCUMENTATION**

## 5.1.               Change Order Requestsand Change Orders shall bear a unique and sequential number for the purposes ofidentification.

## 5.2.               The Contractorshall maintain logs for all Change Order Requests and approved ChangeOrders.  The logs shall include thefollowing:

#### (a)                                ChangeOrder Request and Change Order number, revision number and date, and

#### (b)                               abrief description of the change.

# **6.****                                      TIMEPERIODS**

## 6.1                                 Ifthe time period for an action or response by a Party pursuant to this ChangeOrder Procedure can be reasonably demonstrated by such Party to be unreasonablegiven the magnitude of the Change Order Request or Impact Statement, such timeperiod shall be extended accordingly.

6

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|  | ** ** |
|--|------------|

 

**ATTACHMENT J1**

**CHANGE ORDER REQUEST FORM**
| **FPSO AOKA MIZU**                       | ** ** | **COMPANY ORDER NO.**    |
|------------------------------------------|------------|--------------------------|
| **LOCATION/SITE**                        | ** ** | ** **               | **Rev.** |
| ** **                               | ** ** | ** **               | ** ** |
| **References:  Letters, Drawings, etc.** | ** ** | **CONTRACTOR ORDER NO.** |
| ** **                               | ** ** | ** **               | **Rev.** |

 
| **SECTION 1 - CHANGE ORDER - DESCRIPTION:** |       |       |
|---------------------------------------------|------------|------------|
| ** **                                  |       |       |
| **Initiator:**                              | ** ** | ** ** | **Date:** | ** ** | ** ** | ** ** | ** ** |
| ** **                                  | ** ** | ** ** |
| **COMPANY  / CONTRACTOR**                   | ** ** | ** ** |
|                                             |            |            |  |  |  |  |  |

 

 
| **SECTION 2 - IMPACT STATEMENT**                                                    |            |       |
|-------------------------------------------------------------------------------------|-----------------|------------|
| ** **                                                                          |            |       |
| ** **                                                                          |            |       |
| Cost Impact (per  attached details):                                                |            |       |
|                                                                                |            |       |
| o    No Cost Effect                                                  |            |       |
|                                                                                |            |       |
| o    Estimated Reimbursable Cost                                     |            | (Currency) |   |   |
|                                                                                |            |       |
| o    Fixed Lump Sum Price (or  Rebate)                               |            | (Currency) |   |   |
|                                                                                |            |       |
| o    Effect on Charter Hire                                          |            | US$        |   |   |
|  

                                                                       |            |       |
| **SECTION 3 – SCHEDULE (ONLY RELEVANT FOR CHANGE  ORDERS PRIOR TO FIRST OIL)** |
| ** **                                                                          |
| Schedule Impact  (per attached details):                                            |
|                                                                                |
| o    No effect on Scheduled  Arrival Date Contractor Facilities      |
|                                                                                |
| o    Effect on Scheduled Arrival  Date Contractor Facilities         | Add/Deduct Days |       |   |
|                                                                                |            |       |
| o    No effect on First Oil Date                                     |            |       |
|                                                                                |            |       |
| o    Effect on First Oil Date                                        | Add/Deduct Days |       | from Scheduled  First Oil Date |
|                                                                                |            |       |
| Signed for and on behalf of CONTRACTOR:                                             |            |       |
|                                                                                |            |       |
| Title: Contractor representative                                                    | Date:           |       |   |
|                                                                                     |                 |            |  |  |  |  |  |  |  |  |  |  |  |

 
| **SECTION 4 - COMPANY RESPONSE**                                                                                                                                                                                                                                                                                                      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                                                                                                                                                                                                                                                                                                                            |
| o    Approved by COMPANY, proceed  with the above change on the basis of:                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                  |
| o                               Reimbursable  Cost on Periodic                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                  |
| o                               Basis  Fixed Lump Sum Price (or Rebate)                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                  |
| o                                            [...fill  in number of Days...] x .......Permitted Delay Day Rate |
|                                                                                                                                                                                                                                                                                                                                  |
| o    Rejected by COMPANY for  reasons attached, do not proceed with the above change                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                  |
| o Rejected by COMPANY. Proceed with the change  as COMPANY interprets this change to be within the CONTRACTOR’s Services.                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                  |
| Signed for and on behalf of COMPANY:                                                                                                                                                                                                                                                                                                  |   |   |
|                                                                                                                                                                                                                                                                                                                                  |
| Title: Company representative                                                                                                                                                                                                                                                                                                         | Date: |   |   |
|                                                                                                                                                                                                                                                                                                                                       |  |  |  |  |

 

7

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**ATTACHMENT  J2**

**BLUEWATER MANHOUR RATES FOR CHANGES**

8

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**ATTACHMENT  J.2**

**BLUEWATER MANHOUR RATES FOR CHANGES**

 
| **PERSONNEL RATES 2006**(1)

  |
|-------------------------------------|

 
| **Function** | ** ** | **In Bluewater Office**                   | ** ** | **Outside   Office**                                                                                                                  |
|--------------|------------|-------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------|
| **Group**    | ** ** | **Category**                              | ** ** | **Titles**                                                                                                                            | ** ** | **Hourly   Rate in   Euro** | ** ** | **Day Rate  in  Euro (2)** | ** ** | **Day Rate   in  Euro (3)** |
| 1            |       | Managers                                  |       | Project Manager   Department Manager                                                                                                  |   | 140 |   | 1120 |   | 1400 |
| 2            |       | Sub-managers /   Supervisors              |       | Construction Supervisor  Installation Supervisor   Discipline Section Head Superintendent                                             |   | 120 |   | 960 |   | 1200 |
| 3            |       | Lead Engineers                            |       | Project Engineer   Proposal Engineer                                                                                                  |   | 112 |   | 896 |   | 1120 |
| 4            |       | Discipline - &   Specialist Engineers |       | Techn.& Dev.Engineer   Planning Engineer   Purchaser Inspector/Expeditor   QA/QC Engineer   Safety Engineer   Document Controller |   | 90 |   | 720 |   | 900 |
| 5            |       | Information   Technology                  |       | Programmer   Support Assistant   Junior Engineer   CAD operators                                                                      |   | 75 |   | 600 |   | 750 |
| 6            |       | Financial /   Administrative   Services   |       | Controller   Bookkeeper   Administrator                                                                                               |   | 65 |   | 520 |   | 650 |
| 7            |       | General Services                          |       | Project Secretary   Repro Assistant                                                                                                   |   | 57 |   | 456 |   | 570 |

 

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Notes:

(1)                                  Escalationfor year 2007 is 5% per annum and beyond 3% per annum

(2)                                 Dayrate in the Bluewater office in Hoofddorp is based on 8 working hours per day,40 hours per week.

(3)                                  Dayrate outside the Bluewater office in Hoofddorp is based on 10 working hours perday

*                                         Ratesinclude taxes and social securities in the Netherlands.

*                                         Allcosts for travel, board and lodging will be charged at cost plus 5%.

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF**

**A FLOATING, PRODUCTION, STORAGEAND OFFLOADING**

**VESSEL FORTHE ETTRICK DEVELOPMENT PROJECT**

**SCHEDULE K**

**QUALITY ASSURANCE AND INSPECTION REQUIREMENTS**

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**AGREEMENTFOR THE PROVISION AND OPERATION OF****A FLOATING,PRODUCTION, STORAGE ANDOFFLOADING****VESSEL FOR THE ETTRICKFIELDSCHEDULE K - QUALITY INSURANCE AND INSPECTION REQUIREMENTS**

SCHEDULE K

QUALITY ASSURANCEAND INSPECTION REQUIREMENTS

**TABLE OF CONTENTS**
| 1      | SCOPE                                                     | 3      |
|--------|-----------------------------------------------------------|--------|
|   |                                                      |   |
| 2      | QUALITY POLICY                                            | 4      |
|   |                                                      |   |
| 3      | QUALITY MANAGEMENT COMPLIANCE                             | 5      |
|   |                                                      |   |
| 4      | ORGANISATIONAL REQUIREMENTS                               | 5      |
|   |                                                      |   |
| 5      | NATIONAL CODES, STANDARDS & REGULATORY  REQUIREMENTS. | 6      |
|   |                                                      |   |
| 6      | QUALITY MANAGEMENT OF SUBCONTRACTORS                      | 6      |
|   |                                                      |   |
| 7      | AUDIT BY THE CONTRACTOR                                   | 6      |
|   |                                                      |   |
| 8      | AUDIT BY THE COMPANY                                      | 6      |
|   |                                                      |   |
| 9      | INDEPENDENT AUDIT OR SURVEILLANCE                         | 7      |
|   |                                                      |   |
| 10     | QUALITY RECORDS                                           | 7      |
|   |                                                      |   |
| 11     | CHANGE ORDERS, DEVIATIONS, WAIVERS AND CONCESSIONS        | 7      |

 

ATTACHMENT A

·                  CORPORATEPOLICY

·                  HSEQPOLICY

·                  CODEOF BUSINESS CONDUCT AND ETHICS

·                  BEHAVIOURALPOLICY

2

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# **1****                               Scope**

**1.1**                       The Company requirestransparency

Of the processes applied by the Contractor, throughoutthe development and operational phase in order to ensure that the quality ofthe Contractor Facilities and the Contractor Services, are managed in fullcompliance with the requirements of ISO 9001:2000 principles and good industrypractice.  Contractor shall take fullresponsibility for all aspects of quality related to the provision andoperation of the Contractor Facilities and the Contractor Services, byproviding objective evidence to the Company using controlled copies of itsquality assurance and control procedures in the form of a Project QualityAssurance and Control Manual **(“PQACM”)**, andby giving the Company the right to audit and monitor the Contractor’simplementation of and compliance with the Contractor’s quality system.

**1.2**                       The procedures containedin the PQACM shall apply to the provision of the Contractor Facilities and theContractor Services, irrespective of location. The manual will be divided intotwo parts:

a)              Contractor’s CorporateManagement System (“CMS”)

b)             Contractor’s Project QualityPlan (“PQP”)

**1.3**                       The CMS does include, but isnot limited to:

a)              the complete Contractorpolicy statement, clearly emphasising the Contractor commitment to quality andsigned by the chief executive;

b)             Contractor managementsystems and organisations, clearly identifying project management, operationsmanagement, quality management and lines of reporting responsibilities;

c)              Quality Assurance systemaudit;

d)             communication,meeting schedules, progress reporting and reporting format agreed with Company

e)              Change order controlprocedure;

f)                Non-conformanceand corrective and preventative action recording procedure.

In addition theContractor shall confirm that all of the subjects required by ISO 9001:2000 areaddressed and are included in the CMS.

3

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**1.4**                       The PQP will include butis not limited to:

a)              identify risks tothe planned execution of the Work along with measures to mitigate the possibleeffects;

b)             incorporate a plan toidentify and achieve the timely acquisition of all Regulatory Consents andApprovals;

c)              include plans forthe timely acquisition of resources to complete the Work in accordance withContract requirement;

d)             incorporate the Internaland Subcontractor audits programme;

e)              show a structuredformalised mechanism in order to effect continuous improvement of service andservice delivery;

f)                make specificreference to, or include as an attachment, all subcontractors Quality Plans;

g)             a list of activitiesstructured in the sequence in which they will be performed;

h)             reference to theContract standards, specifications or other documents which define theacceptance criteria for each activity;

i)                 special attentionto be given to Offshore commissioning; Operations; Decommissioning; Inspectionand;

j)                 the number andtitle of the procedure that will be used to convey the requirements forexecution of the Work;

k)              any other QualityAssurance related issues which are not fully addressed in the CMS for theproper execution of the Work.

# **2****                               QUALITY POLICY**

**2.1**                       The Contractor shallunderstand the Quality Policy of Nexen Petroleum UK to be:

to establish,communicate, and meet quality requirements for the products, services andactivities, which affect the integrity of the final project outputs. Qualityrequirements include conformance with all applicable regulatory requirements,performance standards specifications, codes, and standards, and definedexpectations of Project’s interested parties.

4

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**2.2**                       The Contractor’s QualityPolicy is:

To provide FPSO services which satisfy the Client’s and Regulator’srequirements in an effective, efficient and safe way. This will ensureBluewater’s reputation as a reliable and innovative company in the offshoreindustry, and contribute to a positive growth of the organisation.’

Contractors policies arelaid down in four major topical policies (see attachment A). Together theseconstitute Contractor’s prime considerations in doing business:

·                  CorporatePolicy

·                  HSEQpolicy

·                  Codeof Business Conduct and Ethics

·                  BehaviouralPolicy

# **3****                               QUALITY MANAGEMENT COMPLIANCE**

## 3.1                       The Contractor shall have a documented andsystematic approach to Quality Management, and a Quality Management System(QMS) which is in compliance with or equivalent to:

a)              BS-EN ISO 9001: 2000edition

b)             BS-EN ISO 19011: 2002edition — Guidelines for quality and/or environmental systems auditing

# **4****                               ORGANISATIONAL REQUIREMENTS**

## 4.1                       The Contractor shall provide organisationcharts for the Project which,

a)              Identify keypositions for quality, including lines of authority and communication withinProject and their relationship within the Contractor’s company.

b)             The Contractor’squality organisation charts shall include descriptions of the roles andresponsibilities of all proposed positions.

c)              If requested, Contractorshall submit updated quality organisation charts as a part of any Project QualityPlan (PQP) or each time key personnel changes are accepted by the Company orthe organisation is changed.

5

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# **5****                               NATIONAL CODES, STANDARDS & REGULATORYREQUIREMENTS.**

## 5.1                       The Contractor shall keep up to date withrevisions to the national codes & standards (or the equivalentinternational standards), European Directives and other Regulatory requirementsas being applicable to the Work.

# **6****                               QUALITY MANAGEMENT OF SUBCONTRACTORS**

## 6.1                       The Contractor shall ensure, through theapplication of procedures, that each Subcontractor operates an effective QualityManagement System in accordance with the relevant requirements of BS-EN ISO9001: 2000. The Contractor shall maintain records that demonstrate thisobjective is achieved.

# **7****                               AUDIT BY THE CONTRACTOR**

## 7.1                       The Contractor is required to regularly andsystematically perform self audits and Subcontractor audits by formallyimplementing the principles of:

BS-EN ISO 19011:2002 edition — Guidelines for quality and/or environmental systems auditing

# **8****                               AUDIT BY THE COMPANY**

## 8.1                       The Company may assess the effectiveness ofthe Contractor’s QMS by either:

a)              performing qualitysurveillance, reviews of documentation or audits or,

b)             participating inContractor led audits or surveillance activities in accordance with the QMSaudit and quality control plan.

## 8.2                       The Company, or its authorisedrepresentatives, shall have unrestricted access at all reasonable times to thefacilities, equipment, materials, personnel and records of the Contractor andthe Subcontractors to audit their respective QMS. The Contactor shall implementall agreed recommendations arising from the audits within a mutually agreedtime scale.

## 8.3                       Based on the Contractor’s Project QualityPlan, the Company will prepare a Quality Surveillance plan for monitoringContractor’s and their sub contractors quality

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## performance. The Company’sQS activities shall not relieve the Contractor or his subcontractors of anyresponsibility in regards to their quality of work.

# **9****                               INDEPENDENT AUDIT OR SURVEILLANCE**

## 9.1                       The results of any audit or surveillance,which has been performed by Regulatory Bodies having statutory rights of accessfor the purposes of verifying aspects of the Work, shall be notified to theCompany within seven (7) working days of receipt by the Contractor.

## 9.2                       Contractor shall provide the CompanyRepresentative with the Contractor’s current test and acceptance program insufficient time to allow Company representation at test and acceptance tasks.The Contractor shall make available to the Company Representative, all relevantengineering design documentation, including specifications, codes, drawings,calculations and data sheets.

# **10****                        QUALITY RECORDS**

## 10.1                 The Contractor shall maintain, and makeavailable to the Company as required during the execution of the Work, recordsthat provide objective evidence that all QMSs, including those of Subcontractor’s,involved in the Work have been effective and that the product and or servicecomplies with the specified requirements.

# **11****                        CHANGE ORDERS, DEVIATIONS, WAIVERS ANDCONCESSIONS**

## 11.1                 The Contractor shall use formal proceduresfor processing Change Orders, requesting approval of deviations, waivers and concessionsand following approved requests through to completion.

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**ATTACHMENTA**

CORPORATE POLICY

HSEQ POLICY

CODE OF BUSINESSCONDUCT AND ETHICS

BEHAVIOURAL POLICY

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|  |
|--|

 

**CorporatePolicy Statement**

The policy of Bluewater is to provide FPSO and SPM services whichsatisfy the Client’s and Regulator’s requirements in an effective, efficientand safe way. This will ensure Bluewater’s reputation as a reliable and innovativecompany in the offshore industry, and contribute to a positive growth of theorganisation.

 

To achieve this, the following objectives have been set:

 

·                  Management andindividual responsibilities are clearly defined for all aspects of work

·                  The companyculture promotes Quality, Health, Safety and Environmental consciousness

·                  Staff andcontractors are suitable for their task

·                  Equipment issuitable for its use

·                  The place ofwork is adequate and safe

·                  Tasks can beexecuted effectively, efficiently and safely

·                  Response toemergencies and non-conformities is swift and adequate

·                  The managementsystem is regularly reviewed and continuously improved

 

To support theseobjectives, management will ensure that all employees are highly motivated andaware of their own individual responsibilities.
| /s/ H.J. Heerema |   |
|------------------|--------|
| H.J. Heerema     |
| President        |
| January 10 2005  |

 

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**HSEQPolicy**

Bluewater providesFloating Production (FP) and Single Point Mooring (SPM) related products andservices in a manner which demonstrates active commitment to:

·                  preventing harmto our employees and any other person,

·                  preventingpollution and minimising adverse impacts on the environment,

·                  continuallyimproving the quality of our work processes.

These objectives rankabove all other commercial business objectives.

To this end, theCompany’s Management shall:

·                  Ensure compliance with applicable lawor higher voluntary standards to which Bluewater may subscribe.

·                  Ensure the efficient use of materialsand energy for Bluewater’s technologies, products and services.

·                  Set objectives and targets forcontinual improvement and measure and review Bluewater’s performance and theirClients’ satisfaction.

·                  Identify hazardous aspects of ongoingand new activities and control the associated risks and their effects.

·                  Maintain and relinquish all sites andfacilities in an acceptable condition by means of the application of bestpractice.

·                  Maintain contingency arrangements inco-operation with Authorities, Clients, Subcontractors and Emergency Services.

·                  Require Bluewater’s contractors andsubcontractors to implement standards compatible with Bluewater’s ownstandards.

·                  Conduct and support Research andDevelopment to improve the performance and efficiency of Bluewater’stechnologies, products and services.

·                  Work with Governmental and otherbodies to develop policies, regulations and standards, and to promote bestpractices in FP and SPM activities.

·                  Promote and ensure a culture in whichall employees and contractors demonstrate their individual care and fulfiltheir responsibility in implementing Bluewater’s Health, Safety, Environmentand Quality Policy.

·                  IncludeHealth, Safety and Environment performance in the appraisal of relevant staffand reward accordingly.
| /s/ Hugo J. Heerema |   |
|---------------------|--------|
| Hugo J. Heerema     |
| President           |
| January 10, 2005    |

 

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**Code ofBusiness Conduct and Ethics**

**1.****              Purpose**

The Management Board(each, a “Board”) of the Bluewater Group of Companies (the “Group”) has adoptedthe following Code of Business Conduct and Ethics for their respective managingdirectors and officers. This Code is intended to focus each Board and eachmanaging director and officer on areas of ethical risk, provide guidance tomanaging directors and officers to help them recognize and deal with ethicalissues, provide mechanisms to report unethical conduct, and help foster aculture of honesty and accountability. Each managing director and officer mustcomply with the letter and spirit of this Code.

No code or policy cananticipate every situation that may arise. Accordingly, this Code is intendedto serve as a source of guiding principles for managing directors and officers.Managing directors and officers are encouraged to bring questions aboutparticular circumstances that may involve one or more of the provisions of thisCode to the attention of other members of the relevant Board or, if there areno other members of the relevant Board, the shareholders of the relevantCompany or other appropriate persons within the Company or the Group (each, a“Designated Person” and, together, “Designated Persons”) who may consult withinside or outside legal counsel as appropriate.

**2.****              Introduction**

Each managing directorand officer is expected to adhere to a high standard of ethical conduct. Thegood name of any company depends on the way it conducts its business and theway the public perceives that conduct. Unethical actions, or the appearance ofunethical actions, are not acceptable. Managing directors and officers areexpected to be guided by the following principles in carrying out theirresponsibilities:

·                  **Loyalty.** No managing director or officer should be, orappear to be, subject to influences, interests or relationships that conflictwith the best interests of the Group.

·                  **Compliance with Applicable Laws.** The Company, its managingdirectors, officers, and its employees are expected to comply with laws andregulations applicable to the Group’s activities.

·                  **Observance of Ethical Standards.** In the conduct of theirduties, each managing director and officer must adhere to high ethicalstandards. These include honesty and fairness.

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**3.****              Conflict of Interest**

Managing directors andofficers must avoid any conflicts of interest between the managing director orofficer, as the case may be, and the Group. Any situation that involves, or mayinvolve, a conflict of interest with the Group, should be disclosed promptly tothe relevant Designated Person or Designated Persons, who may consult withinside or outside legal counsel as appropriate.

A “**conflict ofinterest**” can occur when a managing director’s or officer’s personalinterest is adverse to, or may appear to be adverse to, the interests of theGroup as a whole. Conflicts of interest also arise when a managing director, anofficer, or a member of his or her immediate family, receives improper personalbenefits as a result of his or her position as a managing director or officerof the Company. For this purpose, an “immediate family” includes a person’sspouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law,brothers and sisters-in-law and anyone (other than employees) who share suchperson’s home.

This Code does notattempt to describe all possible conflicts of interest which could develop.Some of the more common conflicts from which managing directors must refrain,however, are set out below.
    - Improper conduct and activities.      Managing directors and officers may not engage in any conduct or     activities that are inconsistent with the Group’s best interests or that     disrupt or impair the Group’s relationship with any person or entity with     which the Group has or proposes to enter into a business or contractual     relationship.
    - Compensation from non-Group sources.      Managing directors and officers may not accept compensation (in any form)     for services performed for the Group from any source other than the Group.
    - Gifts.  Managing     directors, officers, and members of their immediate families may not     accept gifts from persons and entities where any such gift is being made     in order to influence the managing director’s or officer’s actions, or     where acceptance of the gifts could create the appearance of a conflict of     interest.
    - Personal use of Group assets.      Managing directors and officers may not use Group assets, labour or     information for personal use unless approved by the relevant Designated     Person or Designated Persons or as part of a compensation or expense     reimbursement program available to managing directors and officers.

**4.****              CorporateOpportunities**

Managing directors andofficers are prohibited from taking for themselves personally opportunitiesrelated to the Group’s business using the Group’s property, information, orposition for personal gain or competing with the Group for businessopportunities, provided, however, if the relevant corporate body determines

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that the Group will notpursue an opportunity that relates to the Group’s business, after disclosure ofall material facts by the managing director seeking to pursue the opportunity,the managing director may do so.

**5.****              Confidentiality**

Each managing directorand officer should maintain the confidentiality of information entrusted to himor her by the Group and any other confidential information about the Group, itsbusiness, customers or suppliers that comes to him or her, from whateversource, in his or her capacity as a managing director or officer, as the casemay be, except when disclosure is authorised or legally mandated. For purposesof this Code, “**confidential information**” includesall non-public information relating to the Group, its business, customers orsuppliers.

**6.****              Compliance withLaws, Rules and Regulations; Fair Dealing**

Managing directors andofficers shall comply, and oversee policies designed to promote compliance byemployees, officers and other managing directors, with laws, rules and regulationsapplicable to the Group, including insider trading laws. Managing directors andofficers shall oversee policies designed to promote ethical dealing byemployees and officers with the Group’s customers, suppliers, competitors andemployees.

**7.****              Encouraging theReporting of Illegal or Unethical Behaviour**

Managing directors andofficers should promote ethical behaviour and encourage an environment in whichthe Group encourages employees to talk to supervisors, managers and otherappropriate personnel when in doubt about the best course of action in aparticular situation, encourages employees to report violations of laws, rules,or regulations to appropriate personnel and informs employees that the Groupwill not allow retaliation for reports made in good faith.

**8.****              Conclusion**

Managing directors andofficers should communicate any suspected violations of this Code promptly tothe relevant Designated Person or Designated Persons. Violations will beinvestigated by the relevant Designated Person or Designated Persons or by aperson or persons designated by them and appropriate action will be taken inthe event of any violations of the Code.
| /s/ Hugo J. Heerema |   |
|---------------------|--------|
| Hugo J. Heerema     |
| President           |
| May 02 2005         |

 

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**Behavioural Policies**

**Drugs and Alcohol Policy**

·                  Toassist Bluewater in achieving a safe working environment, the use, sale,distribution and/or possession of non-prescription drugs, at any Bluewatercontrolled workplace or in any company controlled vehicle, is totallyprohibited.

·                  Toensure compliance, Bluewater reserves the right to search or screen any Employeereasonably believed to be in violation with this policy. Violation or refusalto submit to searches or screening shall result in disciplinary action andremoval of the Employee from Bluewater premises.

·                  Bluewater mayalso have any Employee removed from Bluewater premises who is under theinfluence of prescribed drugs or alcohol if medical opinion judges that he isputting himself or his colleagues at risk or he is unable to fulfil his duties.

**Equal Opportunity Policy**

Bluewater supports the Equal Opportunity principle. Bluewater does notpermit discrimination nor harassment of any kind against any person on groundsof:

·                  Colour

·                  Creedor religion

·                  Raceor ethnic origins

·                  Nationalityor national origin

·                  Sex

·                  Maritalstatus

·                  Disability

**Direct discrimination** is definedas treating a person less favourably than others are, or would be treated inthe same or similar circumstances.

**Indirect discrimination** isdefined as when a requirement or condition is applied which, whetherintentional or not, adversely affects a considerably larger proportion ofpeople of one race, religion, sex or marital status than another and cannot bejustified on grounds other than that race, religion, sex or marital status.

Bluewater regardsdiscrimination as defined in the above paragraphs, as gross misconduct, and anyemployee of Bluewater who discriminates against any other person shall besubject to disciplinary action. In applying the policy to the disabled, theproviso is that the disability does not prevent any aspects of the jobjunction, on- or off-shore, from being carried out, safely, and in accordancewith the relevant statutory provisions.

**Sexual and Racial Harassment Policy**

·                  Bluewatershall ensure that neither sexual nor racial harassment occurs within Bluewaterand that the dignity of employees, other workers and visitors is properlyprotected.

·                  Allemployees have a responsibility to help ensure that the dignity of employeesand others is respected by setting standards of conduct for themselves not tocause offence.

·                  Disciplinaryaction will be taken against harassers. 
| /s/ Hugo J. Heerema |   |
|---------------------|--------|
| Hugo J. Heerema     |
| President           |
| January 10 2005     |

 

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF**

**A FLOATING, PRODUCTION, STORAGEAND OFFLOADING**

**VESSELFOR THE ETTRICK FIELD**

**SCHEDULE L**

**COMPANY REPRESENTATIVES FACILITIES**

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**AGREEMENT FOR THE PROVISION AND OPERATION OF A FLOATING, PRODUCTION,STORAGE AND OFFLOADING VESSEL FOR THE ETTRICK FIELD**

**SCHEDULEL  - COMPANY REPRESENTATIVES FACILITIES**

**SCHEDULE L**

**COMPANYREPRESENTATIVES FACILITIES**

**TABLE OFCONTENTS**
| 1.     |   | SCOPE                                                |   | 3      |
|--------|--------|------------------------------------------------------|--------|--------|
|   |   |                                                 |   |   |
| 2.     |   | CONSTRUCTION AND ENGINEERING LOCATIONS               |   | 3      |
|   |   |                                                 |   |   |
| 3.     |   | FLOATING PRODUCTION, STORAGE AND OFFLOADING FACILITY |   | 3      |

 

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# **1.**                                      **SCOPE**

1.1                                TheContractor shall provide the availability of and access to the accommodationand facilities as set out in this Schedule L. 

# **2.**                                      **CONSTRUCTION AND ENGINEERINGLOCATIONS**

2.1                                TheContractor shall make available suitable facilities for Company Representativesat the topsides construction yard, hull conversion yard, turret constructionyard and FPSO integration yard and at the topsides and hull design contractoroffices and at the Contractor’s office in the Netherlands.  These facilities shall include but not belimited to:

(a)                                  One(1) office at each location with the usual office facilities (e.g. furniture,stationary and air-conditioning) suitable for accommodating up to four CompanyRepresentatives.

(c)                                Upto four (4) telephones and computers with Microsoft office suite and e-mail andinternet access in the Company’s Representatives office at the Contractor’soffices in the Netherlands.

(d)                                 Upto two (2) telephones and computers with Microsoft office suite and e-mail andinternet access in the Company’s Representatives office at the topsidescontractor offices.

(e)                                  Upto two (2) telephones and computers with Microsoft office suite and e-mail andinternet access in the Company’s Representatives office at the other locations.

(f)                                       Accessto and possibility of use of photocopying and fax equipment at each location.

(g)                                   UponCompany request Contractor shall provide video conferencing or desk top videounits at the construction yards and topsides design contractor office. Cost forthese services and equipment are for Company account at documented cost.

Company shall reimburseContractor the cost of internet connections and international phone calls/facsimilesfor all locations at documented cost.

# **3.****                                     FLOATINGPRODUCTION, STORAGE AND OFFLOADING FACILITY**

3.1                                TheContractor shall supply suitable facilities for the Company staff aboard theFPSO and facilities sufficient to collect data for Ettrick Field operation andreporting.  These facilities shall includebut not be limited to:

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(a)                                  Two(2) private single cabins, catering and domestic services of a standard equalto that used by Contractor’s OIM, for the Company Operations Representatives.

(b)                                 Two(2) offices on board the FPSO with the usual offshore office facilities,capable of accommodating the Company Operations Representative.

(c)                                TheContractor’s communication system shall include use of two (2) separate linesfor telephone or fax in the Company’s offices.

(d)                                 TheContractor shall provide facilities for transmission of production datacovering subsea/subsurface and topsides to an onshore location via one of theCompany lines in Section 3.1 (c) to onshore locations nominated by the Company.

3.2                                Sufficientfacilities are to be provided by Contractor to accommodate HSE, DTI and VB/CSrepresentatives and personnel associated with inspection, repair, maintenanceand certification activities.

3.3                                Inaddition to the facilities described in Sections 3.1 and 3.2 the Contractorshall provide accommodation, catering and domestic services on board the FPSO,of a standard equal to that used by the Contractor for two (2) individualsdesignated by the Company on an as required basis.

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF**

**A FLOATING, PRODUCTION, STORAGEAND OFFLOADING**

**VESSELFOR THE ETTRICK FIELD**

**SCHEDULEM**

**CONTRACTORPARENT COMPANY GUARANTEE**

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**PARENTCOMPANY GUARANTEE**

**Issued byultimate parent of Bluewater**

THE GUARANTEE is given this          dayof March 2006 and delivered to **NEXEN PETROLEUM U.K. LIMITED**a company incorporated in England having its registered office at CharterPlace Vine Street, Uxbridge, Middlesex, UB8 1JG England (hereinafter called the“COMPANY”)

By **AURELIA ENERGY NV**,a company incorporated in the Netherlands Antilles and having its registeredoffice at Landhuis Joonchi, Kaya Richard Beaujon z/n, the Netherlands Antilles (hereinaftercalled the “PARENT”)

**WITNESSETH**

In consideration of COMPANY entering into the Agreementfor the Provision and Operation of a Floating Production Storage and OffloadingVessel for the Ettrick Field dated on or about the 29th March 2006 (hereinafter called the “AGREEMENT”)with Bluewater (Ettrick) Production (UK) Limited (hereinafter called the “SUBSIDIARY”)whose registered office is at 15 Appold Street, London, EC2A 2HB, England it ishereby agreed as follows:

1.                                       PARENT(on behalf of itself, its successors and assigns) hereby absolutely,irrevocably and unconditionally guarantees to COMPANY, (its successors andassigns) the full and faithful performance by SUBSIDIARY (its successors andassigns) of the terms, provisions, conditions, obligations and agreements onthe part of SUBSIDIARY to be made, carried out, performed or observed as providedin the AGREEMENT, as amended in writing from time to time.

2.                                       If,at any time SUBSIDIARY (its successors and assigns) is in breach of any of theterms, provisions, conditions, obligations and agreements or in breach of anyother matter or things pertaining to the AGREEMENT or in breach of the paymentof any sums payable pursuant thereto which are to be made, carried out,performed, paid or observed by SUBSIDIARY (its successors and assigns),following receipt of written notice from COMPANY advising PARENT of the natureof such breach, PARENT  will well andtruly perform, or cause to be so performed, each and every one of the terms,provisions, conditions, obligations and agreements contained in the AGREEMENT andwill pay any sum that may be payable by SUBSIDIARY (its successors and assigns)in accordance with terms, provisions, conditions, obligations and agreementscontained in the AGREEMENT.  PARENT shallhowever be subrogated to all rights, elections, defences and remedies to whichSUBSIDIARY (its 

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successors and assigns) may be entitled underthe terms of the AGREEMENT or under applicable law, and the obligations of thePARENT under this GUARANTEE shall therefore under no circumstances be greaterthan those of SUBSIDIARY, except to the extent such rights, elections, defencesand remedies arise solely from any bankruptcy, dissolution, liquidation,insolvency, receivership or other disability of SUBSIDIARY.

3.                                       PARENT’sguarantee and undertakings hereunder shall continue in force until the earlierof:

(i)                                     allof SUBSIDIARY’s obligations, liabilities and indemnities under the AGREEMENTand all PARENT’s obligations hereunder have been duly performed; or

(ii)                                  the date upon whichthe interest of SUBSIDIARY under the AGREEMENT has been transferred to an assigneeand which assignee has demonstrated to the reasonable satisfaction of COMPANYits ability to discharge the obligations incumbent upon it under the AGREEMENT;or

(iii)                               the date upon whichSUBSIDIARY is no longer an Affiliate of PARENT and

(a)                                 without prejudice toclause 4 below, SUBSIDIARY or an Affiliate of SUBSIDIARY has demonstrated tothe reasonable satisfaction of COMPANY the ability of SUBSIDIARY to dischargethe obligations incumbent upon it under the AGREEMENT without the need for areplacement of this GUARANTEE; or

(b)                            anAffiliate of SUBSIDIARY (which has a financial rating (by Standard and Poor,Moody’s, Fitch or A.M. Best) no less than PARENT) has delivered to COMPANY afully executed guarantee in same terms hereof in replacement of this GUARANTEE,failing which this GUARANTEE shall remain in full force and effect.

The term “Affiliate” used in this clause shall be given the meaningused in the AGREEMENT.

4.                                       This GUARANTEEmay not be changed, modified, assigned, discharged or terminated orally or inany manner except with the prior written consent of PARENT and COMPANY.

5.                                       This GUARANTEEshall be governed by the laws of England and any dispute arising out of or inconnection with this GUARANTEE shall be referred to arbitration in London in accordancewith the Arbitration Act 1996 or any statutory modification or re-enactmentthereof.

6.                                       The PARENTirrevocably appoints Messrs Watson Farley & Williams LLP of 15 AppoldStreet, London, EC2A 2HB, England to accept on its behalf service of any legalproceedings relating to this GUARANTEE.

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Signed as a deed

AURELIA ENERGY N.V.
| Per      | :      |   |   |   |
|----------|--------|--------|--------|--------|
|     |   |   |   |   |
| Name     | :      |   |   |   |
|     |   |   |   |   |
| Position | :      |   |   |   |
|     |   |   |   |   |
| Date     | :      |   |   |   |

 

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF**

**A FLOATING, PRODUCTION, STORAGEAND OFFLOADING**

**VESSELFOR THE ETTRICK FIELD**

**SCHEDULE N**

**COMPANYPARENT COMPANY GUARANTEE**

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**PARENTCOMPANY GUARANTEE**

**Issued byultimate parent of Nexen Petroleum U.K. Limited**

THE GUARANTEE is given this          dayof March 2006 and delivered to **BLUEWATER (ETTRICK)PRODUCTION (UK) LIMITED**, a company incorporated in England and havingits registered office at 15 Appold Street, London, EC2A 2HB, England(hereinafter called the “COMPANY”)

By **NEXEN INC.**acompany amalgamated under the laws of Canada and having its registered officeat 2900, 801-7th Avenue SW, Calgary, Alberta, T2P 3P7, Canada(hereinafter called the “PARENT”)

**WITNESSETH**

In consideration of COMPANY entering into the Agreementfor the Provision and Operation of a Floating Production Storage and OffloadingVessel for the Ettrick Field dated on or about the 27th March 2006 (hereinafter called the “AGREEMENT”)with Nexen Petroleum U.K. Limited (hereinafter called the “SUBSIDIARY”) whoseregistered office is at Charter Place Vine Street, Uxbridge, Middlesex, UB8 1JGEngland it is hereby agreed as follows:

1.                                       PARENT(on behalf of itself, its successors and assigns) hereby absolutely,irrevocably and unconditionally guarantees to COMPANY, (its successors andassigns) the full and faithful performance by SUBSIDIARY (its successors andassigns) of the terms, provisions, conditions, obligations and agreements onthe part of SUBSIDIARY to be made, carried out, performed or observed as providedin the AGREEMENT, as amended in writing from time to time.

2.                                       If,at any time SUBSIDIARY (its successors and assigns) is in breach of any of theterms, provisions, conditions, obligations and agreements or in breach of anyother matter or things pertaining to the AGREEMENT or in breach of the paymentof any sums payable pursuant thereto which are to be made, carried out,performed, paid or observed by SUBSIDIARY (its successors and assigns),following receipt of written notice from COMPANY advising PARENT of the natureof such breach, PARENT  will well andtruly perform, or cause to be so performed, each and every one of the terms,provisions, conditions, obligations and agreements contained in the AGREEMENTand will pay any sum that may be payable by SUBSIDIARY (its successors andassigns) in accordance with terms, provisions, conditions, obligations andagreements contained in the AGREEMENT. PARENT shall however be subrogated to all rights, elections, defencesand remedies to which SUBSIDIARY (its successors and assigns) may be entitledunder the terms of the AGREEMENT or 

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under applicable law, and the obligations ofthe PARENT under this GUARANTEE shall therefore under no circumstances begreater than those of SUBSIDIARY, except to the extent such rights, elections,defences and remedies arise solely from any bankruptcy, dissolution,liquidation, insolvency, receivership or other disability of SUBSIDIARY.

3.                                       PARENT’sguarantee and undertakings hereunder shall continue in force until the earlierof:

(i)                                     the date uponwhich the interest of SUBSIDIARY under the AGREEMENT has been transferred to anassignee and such assignee has either:

(a)                                   demonstrated to the reasonablesatisfaction of COMPANY and COMPANY’s financiers its continuous ability todischarge the obligations, liabilities and indemnities incumbent upon it underthe AGREEMENT for the full duration of the AGREEMENT; or

(b)                                withoutprejudice to clause 4 below, an Affiliate of assignee (which has a financialrating (by Standard and Poor, Moody’s, Fitch or A.M. Best) no less than PARENT)has delivered to COMPANY a fully executed guarantee in the same terms hereof inreplacement of this GUARANTEE; or

(ii)                                  allof SUBSIDIARY’s obligations, liabilities and indemnities under the AGREEMENTand all PARENT’s obligations hereunder have been duly performed; or

(iii)                               SUBSIDIARYhas demonstrated to the reasonable satisfaction of COMPANY and COMPANY’sfinanciers its continuous ability to discharge the obligations, liabilities andindemnities incumbent upon it under the AGREEMENT for the full duration of theAGREEMENT; or

(iv)                              thedate upon which SUBSIDIARY is no longer an Affiliate of PARENT and,:

 (a)                             SUBSIDIARYor an Affiliate of SUBSIDIARY has demonstrated to the reasonable satisfactionof COMPANY and COMPANY’s financiers the continuous ability of SUBSIDIARY orsuch Affiliate to discharge the obligations, liabilities and indemnitiesincumbent upon it under the AGREEMENT for the full duration of the AGREEMENT or

(b)                       withoutprejudice to clause 4 below, an Affiliate of SUBSIDIARY (which has a financialrating (by Standard and Poor, Moody’s, Fitch or A.M. Best) no less than PARENT)has delivered to COMPANY a fully executed guarantee in same terms hereof inreplacement of this GUARANTEE, failing which this GUARANTEE shall remain infull force and effect.

The term “Affiliate” used in this clause shall be given the meaningused in the AGREEMENT.

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4.                                       This GUARANTEEmay not be changed, modified, assigned, discharged or terminated orally or inany manner except with the prior written consent of PARENT and COMPANY.

5.                                       This GUARANTEEshall be governed by the laws of England and any dispute arising out of or inconnection with this GUARANTEE shall be referred to arbitration in London inaccordance with the Arbitration Act 1996 or any statutory modification orre-enactment thereof.

6.                                       The PARENTirrevocably appoints the Company Secretary for the time being of NexenPetroleum U.K. Limited, whose address for service is Charter Place, VineStreet, Uxbridge, Middlesex, UB8 1JG to accept on its behalf service of anylegal proceedings relating to this GUARANTEE.

Signed as a deed

NEXEN INC.
| Per      | :      |   |   |   |
|----------|--------|--------|--------|--------|
|     |   |   |   |   |
| Name     | :      |   |   |   |
|     |   |   |   |   |
| Position | :      |   |   |   |
|     |   |   |   |   |
| Date     | :      |   |   |   |

 

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**AGREEMENT FOR THE PROVISION ANDOPERATION OF**

**A FLOATING, PRODUCTION, STORAGEAND OFFLOADING**

**VESSELFOR THE ETTRICK FIELD**

**SCHEDULE O**

**QUIETENJOYMENT AGREEMENT**

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**AGREEMENT FOR THE PROVISION AND OPERATION OF A FLOATING, PRODUCTION,STORAGE AND OFFLOADING VESSEL FOR THE ETTRICK FIELD**

**SCHEDULE O – QUIET ENJOYMENTAGREEMENT**

 

The Quiet Enjoyment Agreement(see definition 1.69) shall be agreed as soon as reasonably possible after theEffective Date and shall be attached to this Agreement as Schedule O.

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**ATTACHMENTO1**

**PRINCIPLESQUIET ENJOYMENT AGREEMENT**

1.                                       Allrelevant terms of the Agreement to continue to remain in full force and effectmutatis mutandis provided that the Company continues to pay the Charter Hire,the Production Tariff and the Insurance Costs, and assumes responsibility foroperating the FPSO.

2.                                       Rightto have modifications carried out to the FPSO to be carried out subject toprovisions of this Agreement and the financiers’ agreement.

3.                                       Rightto extend the Charter Period subject to the provisions of this Agreement andthe financiers’ agreement.

4.                                       Providedthe Company takes over the operations of the FPSO, the right to negotiate withall legal and statutory authorities (HSE, DTi, etc) in respect of alloperational matters (safety case, Duty Holder, operating permits, pollutionexemptions, etc).

5.                                       TheBareboat Charter between the Contractor and the Owner remaining in full forceand effect.

6.                                       Rightto have new Fields tied-in, subject to the provision of this Agreement.

7.                                       Subjectto the rights of the financiers’ to accelerate their financing in case theirposition would otherwise be materially adversely affected.

8.                                       Inthe event of a default under its financing arrangement with the banks byBluewater before arrival of the FPSO in the Ettrick Field  resulting in Bluewater not being able tocomplete the conversion of the FSPO or maintain it in the Field, the financiersand the Company will use their reasonable endeavours to find a mutuallybeneficial structure and solution to the situation that will result in the FPSObeing completed for and delivered to or remaining in the Ettrick Field on termssimilar to the provisions of the Agreement.

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