EXHIBIT 10.7
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REPUBLIC OF KENYA
PRODUCTION SHARING CONTRACT
BETWEEN
THE GOVERNMENTOF THE REPUBLIC OF
KENYA
AND
CAMAC ENERGYKENYALIMITED
RELATING TO
BLOCK L28
Production Sharing Contract Block L28 Ministry of Energy Page 1
TABLE OF CONTENTS
PART I
SCOPE ANDINTERPRETATION
7
1ASCOPE
7
The Contractorshall
7
1B INTERPRETATION
7
PART II TERM,EXPLORATION OBLIGATIONSANDTERMINATION
14
2.TERM
14
3.SURRENDER
14
4.MINIMUMEXPLORATION WORK ANDEXPENDITURE OBLIGATIONS
15
5.SIGNATURE BONUS AND SURFACE FEES
17
6.TERMINATION ANDWITHDRAWAL
18
PART IIIRIGHTSANDOBLIGATIONS OF THE CONTRACTOR
19
7.RIGHTSOF THE CONTRACTOR
19
8.GENERAL STANDARDS OF CONDUCT
20
9. JOINT LIABILITYANDINDEMNITY
21
10. WELLS ANDSURVEYS
21
11.OFFSHORE OPERATIONS
23
12.FIXTURES ANDINSTALLATIONSANDTITLETOASSETS
23
13.LOCAL EMPLOYMENT, TRAININGANDCOMMUNITYDEVELOPMENT PROJECT
24
14.DATAANDSAMPLES
25
15.REPORTS
26
PART IVRIGHTS ANDOBLIGATIONS OF THE GOVERNMENT ANDTHEMINISTER
27
16.RIGHTSOF THE GOVERNMENT
27
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17.OBLIGATIONS OF THE GOVERNMENT
28
PART V WORK PROGRAMME,DEVELOPMENT ANDPRODUCTION
29
18.EXPLORATION WORK PROGRAMME
29
19.DISCOVERYANDEVALUATION WORK PROGRAMME
29
20.DEVELOPMENT PLAN ANDDEVELOPMENT WORK PROGRAMME
30
21.UNITISATION
31
22.MARGINAL ANDNON-COMMERCIAL DISCOVERIES
32
23.NATURAL GAS
33
24.PRODUCTION LEVELSANDANNUAL PRODUCTION PROGRAMME
34
25.MEASUREMENT OF PETROLEUM
34
26.VALUATION OF CRUDE OIL ANDNATURAL GAS
34
PART VI
COST RECOVERY,PRODUCTION SHARING,MARKETING AND PARTICIPATION
36
27.COST RECOVERY,PRODUCTION SHARING, WINDFALL ANDINCOMETAX
36
28.GOVERNMENT PARTICIPATION
40
29.DOMESTIC CONSUMPTION
41
PART VIIBOOKS,ACCOUNTS,AUDITS,IMPORTS,EXPORTSANDFOREIGN EXCHANGE
42
30.BOOKS,ACCOUNTS ANDAUDITS
42
31.PREFERENCE TOKENYAN GOODS ANDSERVICES
43
32.EXPORTSANDIMPORTS
44
33.EXCHANGE ANDCURRENCYCONTROLS
45
PART VIII GENERAL
47
34.PAYMENTS
47
35.ASSIGNMENT
47
36.MANAGER, ATTORNEYANDJOINT OPERATION AGREEMENT
47
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37.CONFIDENTIALITY 47
38.FORCE MAJEURE 48
39. WAIVER 49
40.GOVERNINGLAW 49
41.ARBITRATION 50
42.ABANDONMENT
ANDDECOMMISSIONING OPERATIONS 51
43.NOTICES 54
44.HEADING
ANDAMENDMENTS 56
APPENDIX"A" 58
THE CONTRACT AREA-BLOCK L28
APPENDIX"B" 59
ACCOUNTING PROCEDURE
APPENDIX"C" 71
PARTICIPATION AGREEMENT 72
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Production Sharing Contract Block L28 Ministry of Energy Page 5
PRODUCTIONSHARING
CONTRACTBETWEEN
THEGOVERNMENTOFTHEREPUBLIC OFKENYA
AND
CAMAC
ENERGYKENYA LIMITED
This CONTRACT is made and entered into on the 10th day of
May,
2012 by and
between the Government of the Republic of Kenya (hereinafter referred to as the
"Government") represented for the purpose of this Contract by the Minister for
the time being responsible for energy (hereinafter referred to as the
"Minister"); and CAMAC Energy Kenya Limited acompany incorporated inaccordance
withthe Laws of Kenya (hereinafter referred to as "The Contractor").
The Government and the Contract or herein are referred to either individually as
"Party" or collectively as "Parties".
WITNESSETH:
WHEREAS
the title to all Petroleum resources existing in their natural
conditions in Kenya is vested in the Government; and
WHEREAS the Government wishes to promote and encourage the exploration and the
development of Petroleum resources in and throughout the Contract Area, as
defined here in; and
WHEREAS the Contractor desires to join and assist the Government in accelerating
the exploration and development of the potential Petroleum resources within the
Contract Area; and
WHEREAS the Contractor has the financial ability, technical competence and
professional skills necessary to carry out the Petroleum Operations hereinafter
described; and
WHEREAS in