Exhibit 10.1
AGREEMENT ON CRUDE OIL SALES
DATED 04 FEBRUARY 2005 (THE "AGREEMENT")
CONCLUDED BETWEEN NINOTSMINDA OIL COMPANY LIMITED AND PRIMROSE FINANCIAL GROUP
AS FOLLOWS:
1.
SELLER:
NINOTSMINDA OIL COMPANY LIMITED
22, STASICRATOUS
OLGA COURT
P.O.BOX 48
NICOSIA, CYPRUS
2.
BUYER:
PRIMROSE FINANCIAL GROUP
OMAR HODGE BUILDING, WICKHAMS CAY, ROAD TOWN
TORTOLA
BRITISH VIRGIN ISLANDS
3.
CONTRACT PERIOD:
THIS AGREEMENT COMMENCES ON 01 FEBRUARY 2005 AND SHALL CONTINUE FOR A PERIOD OF
THREE YEARS FOLLOWING COMPLETION OF DELIVERY OF THE MINIMUM CONTRACT QUANTITY
(AS DEFINED BELOW) STIPULATED
HEREIN ("CONTRACT PERIOD").
4.
QUANTITY:
THE SELLER SHALL MAKE AVAILABLE TO THE BUYER THE SELLER'S ENTIRE SHARE OF CRUDE
OIL PRODUCED FROM THE NINOTSMINDA FIELD ("CONTRACT QUANTITY"). THE CONTRACT
QUANTITY SHALL INCLUDE A MINIMUM CONTRACT QUANTITY IN THE TOTAL AMOUNT OF 68,555
(SIXTYEIGHT THOUSAND FIVE HUNDRED FIFTY FIVE) METRIC TONNES TO BE DELIVERED
UNDER THIS AGREEMENT ("MINIMUM CONTRACT QUANTITY"). IN THE EVENT THAT THE SELLER
FAILS TO PRODUCE THE MINIMUM CONTRACT QUANTITY THE SELLER SHALL HAVE NO
LIABILITY TO THE BUYER AS A RESULT OF THAT FAILURE.
5.
QUALITY:
OIL MADE AVAILABLE UNDER THIS AGREEMENT SHALL BE NINOTSMINDA CRUDE OIL OF NORMAL
EXPORT QUALITY WITH THE FOLLOWING GUARANTEED SPECIFICATION ("OIL"):
- DENSITY AT 200 C
820 - 840 KG/CSM
- SULPHUR
MAX 0,2 WT PCT
- WATER
MAX 1.0 PCT
QUALITY OF OIL SHOULD COINCIDE WITH THE EXISTING NORMS. SELLER AND BUYER SHALL
MEET TO AGREE THE APPOINTMENT OF AN INDEPENDENT EXPERT LABORATORY, TO WHOM ANY
DISPUTES CONCERNING THE QUALITY OF THE OIL OR THE METHOD OF TESTING THEREOF
SHALL BE REFERRED AND BOTH PARTIES MUST ACCEPT THE DECISION OF THE EXPERT.
6.
DELIVERY:
ON A MONTHLY BASIS ON A DATE TO BE AGREED BETWEEN BUYER AND SELLER. SELLER SHALL
MAKE OIL AVAILABLE TO THE BUYER AT GEORGIAN OIL'S STORAGE RESERVOIRS AT SAMGORI
(NGDU) IN CAR TANKS PROVIDED BY THE BUYER ("DELIVERY POINT"). OIL SHALL BE
CONSIDERED DELIVERED AS THE OIL PASSES THE FILLING HOSE TO THE CAR TANKS. THE
SELLER, BUYER AND THE OPERATOR OF THE OIL STORAGE AND LOADING FACILITY WILL SIGN
THE RELATED DELIVERY ACT. IN THE CASE OF OIL PURCHASED FOR EXPORT THE SELLER
WILL USE ITS REASONABLE ENDEAVOURS TO ASSIST THE BUYER WITH THE DELIVERY OF OIL
TO THE RAIL LOADING TERMINAL AT VAZIANI AND WITH ALL RELATED CUSTOMS
DECLARATIONS AND RAILWAY DOCUMENTS. FOR THE AVOIDANCE OF DOUBT THE BUYER WILL BE
RESPONSIBLE FOR THE PROVISION OF CAR TANKS AND ALL COSTS ASSOCIATED WITH THE
DELIVERY OF OIL FROM THE DELIVERY POINT INCLUDING ANY COSTS INCURRED BY THE
SELLER.
7.
PRICE:
THE PRICE IN US DOLLARS PER NET US BARREL AT THE DELIVERY POINT FOR OIL
DELIVERED DURING EACH MONTH SHALL BE EQUAL TO THE AVERAGE OF THE MEAN OF THREE
QUOTATIONS IN THE PLATTS CRUDE OIL MARKETWIRE FOR BRENT DATED QUOTATIONS MINUS A
DISCOUNT IN US DOLLARS PER NET US BARREL ESTABLISHED IN ACCORDANCE WITH THE
FOLLOWING CRITERIA:
(A)
FOR OIL COMPRISING THE MINIMUM CONTRACT QUANTITY THE FOLLOWING DISCOUNT
SHALL APPLY:
DATED BRENT (US$/BBL)
DISCOUNT (US$/BBL)
LESS