Document:

Exhibit 4.83

OP/AG

Upon this twenty-ninth
day of June two thousand and six came and appeared before me, Andreas Maria
Petrus Eshuis, a civil-law notary of Curaçao:

1.                                       misses
Arelys Rose-Garda Altagracia Gomez-Isenia, notarial employee, married, born in Curaçao
on the twenty-third day of January nineteen hundred sixty-one, resident of Curaçao,
with office address in Curaçao, Rooi Catootjeweg 1, in her capacity of written
mandatory of the limited liability company: BLUEWATER
OFFSHORE PRODUCTION SYSTEMS N.V., established at Curaçao,
Netherlands Antilles, Kaya Richard J. Beaujon z/n, hereinafter referred to as:
the “Owner”; and

2.                                       misses
Maike Bergervoet, attorney, married, born in Zeeland, the Netherlands, on the
twenty-ninth day of January nineteen hundred seventy-six, resident of Curaçao,
with office address in Curaçao, Julianaplein 5, in her capacity of written
mandatory of the limited liability company: ING BANK
N.V., established in Amsterdam, The Netherlands, acting through
its office at De Amsterdamse Poort, Bijlmerplein 888, hereinafter referred to
as: the “Security Trustee” or the “Mortgagee”, acting (i) for itself as a Bank and (ii) in its
capacity as Security Trustee for the ratable benefit of

(A)                           the
limited liability company: ING Bank N.V., established in Amsterdam, The
Netherlands, acting through its office at De Amsterdamse Poort, Bijlmerplein
888, Post Office Box 1800, 1000 BV Amsterdam, The Netherlands,

and each of its respective successors, permitted transferees and
assigns,

hereinafter collectively referred to as: the “Banks”,

(B)                             the
limited liability company: ING Bank N.V., established in Amsterdam, The
Netherlands, acting through its office at De Amsterdamse Poort, Bijlmerplein
888, Post Office Box 1800, 1000 BV Amsterdam, The Netherlands (in its capacity
as Arranger),

hereinafter referred to as: the “Arranger”;

(C)                             the
limited liability company: ING Bank N.V., established in Amsterdam, The
Netherlands, acting through its office at De Amsterdamse Poort, Bijlmerplein
888, Post Office Box 1800, 1000 BV Amsterdam, The Netherlands (in its capacity
as Facility Agent),

hereinafter referred to as: the “Facility Agent”;

(D)                            the
limited liability company: ING Bank N.V., established in Amsterdam, The
Netherlands, acting through its office at De Amsterdamse Poort, Bijlmerplein
888, Post Office Box 1800, 1000 BV Amsterdam, The Netherlands (in its capacity
as Security Trustee Account Bank), hereinafter referred to as: the “Security Trustee Account Bank”.

together with (a) each of the Hedging Providers who is a party to an
Assigned Hedging Agreement, and (b) each of the abovementioned parties’
respective successors in title, and any permitted assignee or transferee of all
or any of the rights and obligations of them,

hereinafter collectively referred to as: the “Beneficiaries”.

The appearers, acting in
their capacities stated, declared as follows:

WHEREAS:

A.                                   The
Owner is the owner of the Vessel, as defined below;

B.                                     The
parties referred to in paragraphs (A), (B), (C), and (D) above, together with
Bluewater Holding B.V., Bluewater Energy Services B.V. and Bluewater (Aoka
Mizu) N.V., have entered into a EIGHT HUNDRED AND FIFTY MILLION UNITED STATES
DOLLARS (US$850,000,000.-) revolving credit facility agreement dated the
twenty-ninth day of June two 

thousand and six (hereinafter referred to as: the “Credit
Agreement”);

C.                                     The
Banks have agreed, according to their several obligations, to make available to
the Borrowers a revolving credit facility up to an amount of EIGHT HUNDRED AND
FIFTY MILLION UNITED STATES DOLLARS (US$850,000,000.-) (hereinafter referred to
as: the “Credit”), to be used for the purposes
of financing and refinancing part of the amounts required by the Borrowers to
pay, repay, perform, satisfy and discharge certain of their respective
obligations and liabilities in relation to, among other things, the Equipment
under the terms and conditions set out in the Credit Agreement;

D.                                    It
is a condition to the Banks making the Credit available to the Borrowers that
the Owner grants a first preferred ship mortgage over the Vessel (as defined
below), and the Owner has agreed to grant such mortgage in order to satisfy
that condition;

E.                                      In
consideration of the premises, the Owner and the Mortgagee, acting (i) for
itself and (ii) in its capacity as the Security Trustee for the benefit of the
Beneficiaries have agreed to enter into and to execute this Deed on the
following terms and conditions.

1.                                      DEFINITIONS

1.1                                 DEFINED EXPRESSIONS

Words and expressions defined in schedule 9 to the Credit Agreement
shall bear the same respective meanings when used in this Deed.

A copy of the definitions mentioned in the Credit Agreement and a copy
of clause 23 of the trust deed and deed of proceeds and priorities (the “Deed of Proceeds and Priorities”) dated the twenty-ninth
day of June two thousand and six between amongst other certain of the parties
referred to above, shall be attached to this Deed.

1.2                                DEFINITIONS

In this Deed, unless the context otherwise requires:

“Netherlands Antilles Secured Obligations”
means (i) the Relevant Obligations (as defined in the Credit Agreement) of the
Owner to the Mortgagee, (ii) the Parallel Obligations (as defined in clause 23
of the Deed of Proceeds and Priorities), and (iii) the obligations of the Owner
to the Mortgagee pursuant to this Deed;

“Vessel” means the Netherlands
Antilles Vessel denominated “UISGE GORM”,
flying the Dutch flag and registered in Curaçao, the Netherlands Antilles,
mainly built of steel in the year nineteen hundred eighty-three on the yard of
Odense Steel Shipyard, Linde, Denmark, propelled by one propeller, driven by a
five cylinder B & W dieselengine, with a capacity of ten thousand seven
hundred and forty (10,740) kiloWatts, with one deck and no mast, pursuant to
the International Tonnage Certificate (1969), with serial number SINA 2315,
issued on behalf of the Head of the Department of Tonnage Measurement of Ships
in Willemstad, Curaçao, Netherlands Antilles on the fourth day of December two
thousand and three, measuring: gross-tonnage: fifty-three thousand one
hundred seventy-six (53,176); and net-tonnage: thirty-one thousand two
hundred and eighteen (31,218), and her machinery, boats, tackle, outfit,
consumable and other stores, spare parts, belongings and appurtenances whether
on board or ashore, with official number 1994-C-1445, which vessel has been
registered under the laws of the Netherlands Antilles at the Office of the
Registrar of Mortgages and Ship Documents in Curaçao in the name of the Owner,
in connection with the transcript on the eleventh day of November nineteen
hundred ninety four in Register CSI, volume 9, number 1445 pursuant to a
declaration of ownership dated the eighth day of November nineteen hundred
ninety four.

1.3                                HEADINGS

Clause headings are inserted for convenience of reference only and
shall be ignored in the 

 2
 

interpretation of this Deed.

1.4                                CONSTRUCTION OF CERTAIN TERMS

In this Deed, unless the context otherwise requires:

(a)                                  references
to clauses are to be construed as references to clauses of this Deed;

(b)                                 references
to (or to any specified provision of) this Deed or any other document shall be
construed as references to this Deed, that provision or that document as in
force for the time being and as amended in accordance with the terms thereof,
or, as the case may be, with the agreement of the relevant parties and (where
such consent is, by the terms of this Deed or the relevant document, required
to be obtained as a condition to such amendment being permitted) the prior
written consent of the Mortgagee;

the contents and meaning of any other document,
other than this Deed, the Credit Agreement and the Deed of Proceeds and Priorities
referred to in this Deed, are sufficiently known to the parties to this Deed
and any further description in this Deed with respect to the applicability of
these documents is not required;

(c)                                  words
importing the plural shall include the singular and vice versa;

(d)                                 references
to a person shall be construed as references to an individual, firm, company,
corporation, unincorporated body of persons or any Government Entity and shall
include their respective successors and permitted assigns; and

(e)                                  references
to statutory provisions shall be construed as references to those provisions as
replaced, amended or re-enacted from time to time.

2.                                      GRANT OF MORTGAGE

2.1                                 As
security for the Netherlands Antilles Secured Obligations the appearer
mentioned under 1., acting on behalf of the Owner as third party security,
declared to (i) grant a right of a first priority mortgage on the Vessel to the
extent of the Owner’s rights, title and interest therein in favour of the
Mortgagee, which accepts the same on the Vessel; (ii) as far as possible
assign/pledge in favour of the Mortgagee, which hereby accepts the
assignment/pledge from the Owner, of all rights and actions which the Owner has
and/or will have in respect of the Vessel and the Owner authorizes the
Mortgagee to solely and without the cooperation of the Owner serve upon the
relevant third parties notice thereof and (iii) pledge to the Mortgagee, who
accepts this pledge, the movable goods or things which belong to the Owner and
are intended to serve the Vessel on a lasting basis and which can be recognized
as such by their form as such but not limited to her engines, machinery, boats,
tackle, outfit, spare gear, fuel, consumable or other store, belongings and
appurtenances whether on board or ashore and whether or not owned or
hereinafter acquired (hereinafter referred to as: “Movable
Goods”) which Movable Goods can be executed together with the
mortgaged goods in accordance with the rules applicable to mortgage, all three
types of security to the extent up to a total amount equal to EIGHT HUNDRED AND FIFTY MILLION UNITED STATES
DOLLARS (US$850,000,000).

2.2                                 Without
explicit written consent of the Mortgagee the lay out, the shape or the purpose
of the Vessel may not be altered, other than to the extent permitted pursuant
to the terms of the General Assignment. Changes and additions made or to be
made to the Vessel serve as further security for the claims for which the
mortgage is granted as security, except to the extent that the Owner is
permitted pursuant to the terms of the General Assignment to remove such
changes and additions. The Owner is not allowed to take off or take away any
changes and additions made to the secured assets other than to the extent
permitted pursuant to the terms of the General Assignment.

 3
 

2.3                                 The
Owner represents and warrants that it has full and unconditional power to
dispose of the Vessel (to the extent of the Owner’s rights, title and interest
therein) and that the same is free from Encumbrances other than Permitted
Encumbrances. The Owner further represents and warrants that it has a full
power to perform the legal acts referred to above.

2.4                                 Upon
the satisfaction, performance, discharge, repayment or payment, as the case may
be, of all of the Netherlands Antilles Secured Obligations, the Mortgagee
shall, at the request and cost of the Owner, release the security constituted
by this Deed to the Owner or as it may direct. The Mortgagee can by cancellation
in writing terminate in whole or in part the mortgage and rights of pledge
granted to it.

3.                                      COVENANTS

3.1                                 The
Owner hereby covenants with the Mortgagee and undertakes throughout the
Security Period that it will:

(a)                                  VESSEL’S
NAME AND REGISTRATION

keep the Vessel registered as a Netherlands Antilles ship at the port
of Willemstad, Curaçao and not do or suffer to be done anything, or omit to do
anything the doing or omission of which could or might result in such
registration being forfeited or imperilled or which could or might result in
the Vessel being required to be registered otherwise than as a Netherlands
Antilles ship at the port of Willemstad, Curaçao;

(b)                                 CHARTER,
LEASE, SALE OR OTHER DISPOSAL

subject to clause 2.6.1 of the Credit Agreement, not sell, transfer,
assign, discount, pledge, charges or otherwise dispose of or deal with, or
permit, any third party right to arise over or in relation to, or create or
permit to subsist any Encumbrance (other than Permitted Encumbrances) over or
in relation to, the Vessel nor attempt or agree or purport so to do;

(c)                                  CONVEYANCE
ON DEFAULT

when the Vessel is (or is to be) sold in exercise of any power
contained in clause 4 of this Deed conferred on the Mortgagee in accordance
with Article 3:268 of The Netherlands Antilles Civil Code, execute, forthwith
upon request by the Mortgagee, such form of conveyance of the Vessel as the
Mortgagee may reasonably require;

(d)                                 REGISTRATION
OF THE DEED

cause this Deed to be duly registered and otherwise comply with and satisfy
all the requirements and formalities established by the laws of The Netherlands
Antilles and perfect this Deed as a valid and enforceable first priority
mortgage upon the Vessel and furnish to the Mortgagee from time to time such
proof as the Mortgagee may reasonably request in order to satisfy itself that
the Owner has complied with this sub-clause.

4.                                      EVENT OF DEFAULT/ACCELERATION EVENT

4.1                                 Each
of the events listed in clause 10.1 (Events of Default) of the Credit
Agreement, a copy of which clause is attached hereto, shall constitute an Event
of Default for the purposes of this Deed.

4.2                                 ACCELERATION EVENTS

Each of the events listed in clause 4.3 (Acceleration Events) of the
Credit Agreement, a copy of which clause is attached hereto, shall constitute
an Acceleration Event for the purposes of this Deed.

4.3                                 ACCELERATION

Upon the occurrence of any Event of Default or (subject always to
clause 13.4 of the Credit 

 4
 

Agreement) any Acceleration Event and at any time thereafter, if any
Event of Default or (subject always to clause 13.4 of the Credit Agreement) any
Acceleration Event is then continuing, the Facility Agent may, and if so
requested by the Qualified Majority Banks shall, without prejudice to any other
power, right or remedy of the Beneficiaries, by written notice to the
Borrowers:

(a)                                  declare
that the obligations of the Banks to make any further Advance shall immediately
cease, whereupon the same shall immediately cease and all of the Commitments of
all of the Banks shall be reduced to zero forthwith; and/or

(b)                                 declare
that the Credit at that time shall become immediately repayable in full,
whereupon the same shall become immediately due and repayable, together with
accrued interest and commitment commission and all other amounts expressed to
be due and payable under and pursuant to the Facility Documents.

Upon the occurrence of any Facility Event (whether or not the Facility
Agent shall have issued any Acceleration Notice and whether or not the Security
Trustee has made any demand under clause 3.1 of the Facility Guarantee, but
subject always to clause 13.4 of the Credit Agreement) the Mortgagee shall
become forthwith entitled (but provided always that the Mortgagee may only
commence any such enforcement action at a time at which a Facility Event is
continuing unremedied and unwaived in writing) to:

(a)                                  discharge,
compound, release or compromise claims in respect of the Vessel which have
given or may give rise to any charge or lien or other claim on the Vessel or
which are or may be enforceable by proceedings against the Vessel; and/or

(b)                                 have
the Vessel and the Movable Goods publicly sold as provided in Article 3:268 et
seq of The Netherlands Antilles Civil Code at any place designated by the
Mortgagee, according to local use, to arrange the conditions of sale, receive
the purchase money and give receipts therefor, to deliver the Vessel and to
sign all documents and official records in order to satisfy the Netherlands
Antilles Secured Obligations from the proceeds of sale (such right of sale to include
the right to suspend the sale entirely or in part and to pass on to a second
sale if, in the Mortgagee’s judgment, the price obtained would not be
sufficient or if the purchase price and costs due at the sale are not duly paid
by the buyer) and the Owner shall in case of such public sale or resale permit
the Vessel to be publicly inspected for two days a week (the dates to be
determined by the Mortgagee) and the Owner shall vacate the Vessel on the date
to be determined in the conditions of sale (in case of default such vacation to
be effected pursuant to the first authentic copy of the deed of auction) or
request the Court in First Instance to permit a private execution as meant in
Article 3:268 paragraph 2 of The Netherlands Antilles Civil Code; and/or

(c)                                  in
the case of default of payment, after having obtained authorisation of the
Court in First Instance, have the Vessel located at the place of sale
determined by the Mortgagee, where the Vessel shall remain located at the
expense of the Owner, the Owner being obliged to vacate or to have vacated the
Vessel at the first demand and to physically deliver the Vessel to the
Mortgagee, and with or without the benefit of any charterparty, and free from
any claim by the Owner (whether in admirality, in equity, at law or by statute)
by public auction, at such place and upon such terms as the Mortgagee in its
absolute discretion may determine, with power to postpone any such sale and
without being answerable for any loss occasioned by such sale or resulting from
postponement thereof; and/or

 5
 

(d)                                 after
having obtained authorisation of the Court in First Instance, manage, insure,
maintain and repair the Vessel, and to employ, sail or lay up the Vessel in
such manner and for such period as the Mortgagee, in its absolute discretion,
deem expedient, accounting only for net profits arising from any such
employment in accordance with Article 3:267 of The Netherlands Antilles Civil
Code. Furthermore the Mortgagee is authorised, if such is required in view of
the execution, to take possession of the Vessel and to demand that vacation
takes place, if needed by virtue of the executory copy of this Deed; and/or

(e)                                  to
recover from the Owner on demand all Expenses incurred or paid by the Mortgagee
in connection with the exercise of the powers (or any of them) referred to in
this clause 4.

4.4                                 DEALINGS WITH MORTGAGEE

Upon any sale of the Vessel or any share or interest therein by the
Mortgagee pursuant to clause 4.3, the purchaser shall not be bound to see or
enquire whether the Mortgagee’s power of sale has arisen in the manner provided
in this Deed and the sale shall be deemed to be within the power of the
Mortgagee and receipt of the Mortgagee for the purchase money shall effectively
discharge the purchaser who shall not be concerned with the manner of
application of the proceeds of sale or be in any way answerable therefor and
the sale shall operate to divest the Owner of all rights, title and interest of
any nature whatsoever in the Vessel and to bar any such interest of the Owner
and all persons claiming through or under the Owner.

5.                                      APPLICATION OF MONEYS

5.1                                 All
moneys received by the Mortgagee in respect of any sale of the Vessel or
collection under or in respect of any other part thereof shall be applied in
the manner specified in clause 9 of the Deed of Proceeds and Priorities.

5.2                                 In
the case of voluntary sale of the Vessel no clearing of the mortgage will take
place.

5.3                                 All
costs and rights due with respect to the granting of the mortgage and the
rights of assignment by this Deed, of the first authentic copy of the Deed and
of the additional documents, of the registration, termination and cancellation
of all legal notices and other documents, legal measures or acts connected with
the mortgage, including but not limited to the registration of any transferees,
successors or assigns of the Beneficiaries and including those of any
non-terminated execution of sale in virtue Article 3:268 of The Netherlands
Antilles Civil Code and any and all costs incurred by the Mortgagee in safeguarding
its interest or executing its rights hereunder, shall be for the account of the
Owner.

6.                                      COSTS AND INDEMNITIES

6.1                                 COSTS

The Owner shall pay to the Mortgagee on demand on a full indemnity
basis all Losses incurred by the Mortgagee in connection with the exercise or
enforcement of, or preservation of any rights under, this Deed or otherwise in
respect of the Netherlands Antilles Secured Obligations and the security
therefor, or in connection with the preparation, completion, execution or registration
of this Deed.

6.2                                 BENEFICIARIES’ INDEMNITY

The Owner hereby agrees and undertakes to indemnify the Mortgagee and
each other Beneficiary against all Losses which may now or hereafter be
incurred by the Mortgagee, by any other Beneficiary or by any manager, agent,
officer or employee for whose liability, act or omission the Mortgagee or any
other Beneficiary may be answerable, the Mortgagee, each 

 6
 

other Beneficiary and each such person hereinafter referred to as: an “Indemnified Person”, in respect of, in relation to, or in
connection with anything done or omitted in the exercise or purported exercise
of the powers contained in this Deed or otherwise in connection therewith and
herewith or with the Vessel, the other Security or otherwise howsoever in relation
to, or in connection with, any of the matters dealt with in this Deed.

7.                                  LAW AND
JURISDICTION

7.1                             LAW

This Deed is governed by, and shall be construed in accordance with the
laws of The Netherlands Antilles.

7.2                                 SUBMISSION TO JURISDICTION

For the benefit of the Mortgagee, the parties thereto irrevocably and
unconditionally agree that any legal action or proceeding arising out of or in
connection with this Deed may be brought in the English courts, which shall
have jurisdiction to settle or determine any dispute or claim arising out of or
in connection with this Deed, and irrevocably and unconditionally submits to
the exclusive jurisdiction of the English courts. The Owner irrevocably and
unconditionally designates, appoints and empowers WFW Legal Services Limited,
at the address of its registered office for the time being (presently of 15
Appold Street, London EC2A 2HB, England), to receive, for it and on its behalf,
service of process issued out of the English courts in any legal action or
proceeding arising out of or in connection with this Deed. The submission to
such jurisdiction shall not (and shall not be construed so as to) limit the
right of the Mortgagee to take any legal action or proceeding against the Owner
in any other court of competent jurisdiction nor shall the taking of any legal
action of proceeding in any one or more jurisdictions preclude the taking of
any legal action or proceeding in any other jurisdiction, whether concurrently
or not. The parties further agree that only the English courts and not those of
any other jurisdiction shall have jurisdiction to settle and determine any
dispute or claim which the Owner may have against the Mortgagee arising out or
in connection with this Deed.

The appearer under 2,
acting in her capacity stated, declared to accept on behalf of the Mortgagee
the mortgage and all other stipulations and conditions herein.

Finally the appearers
declared, acting as aforementioned to elect domicile for the purpose of the
execution of the present Deed at the office of the custodian of this Deed, at
the office of the Registrar of Mortgages and Ship Documents on Curaçao and at
the office of the Mortgagee.

Creating of power of
attorney

Mentioned powers of
attorney have sufficiently been established to me, civil-law notary.

The granting of the
powers of attorney to appearer under 1 sufficiently appears from a deed
executed before me, civil-law notary on the twenty-seventh day of June two
thousand and six.

The granting of the power
of attorney to appearer under 2 sufficiently appears from a private deed,
executed on the twenty-first day of June two thousand and six, which deed,
after having been acknowledged for true in accordance with the law, has been
attached to a deed of mortgage executed on this twenty-ninth day of June two
thousand and six before me.

The appearers are known
to me.

IN WITNESS WHEREOF, this
Deed was drawn up at Curaçao on the day mentioned in the heading hereof. After
the contents of the deed were factually stated to the appearers, the appearers
declared to be informed of the contents of the deed and not to desire a
complete reading aloud thereof.

 7
 

Thereupon this Deed was
after abbreviated reading aloud signed by the appearers and me at nine o’clock
in the morning.

(signed) A. Gomez; M.
Bergervoet; A. Eshuis.

ISSUED FOR TRUE
COPY!

[seal and signature]

 8Exhibit 4.84

[****] CONFIDENTIAL TREATMENT
REQUESTED

Confidential
material has been omitted and filed separately with the Commission.

AGREEMENT
FOR THE PROVISION AND OPERATION OF A

FLOATING PRODUCTION STORAGE AND OFFLOADING

VESSEL FOR THE ETTRICK FIELD

NEXEN
PETROLEUM U.K. LIMITED

(on
behalf of itself and the Co-venturers)

and

BLUEWATER
ETTRICK PRODUCTION (UK) LIMITED

AGREEMENT FOR THE PROVISION AND
OPERATION OF A FLOATING, PRODUCTION, STORAGE AND

OFFLOADING
VESSEL FOR THE ETTRICK FIELD

TABLE OF
CONTENTS

	
  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

  

 

 2
 

 

	
  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

  

 

 3
 

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

  

 

 4
 

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

BETWEEN:

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

-  and -

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

WHEREAS

(A)                              The
Company is the operator of the Ettrick Field and together with the
Co-venturers, wishes to develop and produce the Ettrick Field reserves and possibly
other reserves using the Contractor’s Facilities;

(B)                                The
Contractor wishes to enter into this Agreement as contractor for the provision
of the Contractor’s Facilities and the ancillary services thereto as more
particularly described in Schedule D.

 5
 

NOW IT IS HEREBY AGREED as
follows:

1.                                      DEFINITIONS

For the
purposes of this Agreement including the Schedules;

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

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

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

1.4.                              “Banking
Day” means days on which banks in Amsterdam, New York and London are open for
business;

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 one
five eight nine eight eight (0.158988) cubic metres;

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

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

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

 6
 

1.9.                              “Change
Order Request Form” means attachment J1 to Schedule J completed in the manner
prescribed in the Change Order Procedure authorising a change in the Contractor
Services;

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

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

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

1.13.                        “Charter
Period” means the period commencing on First Oil up to and including the date
that this Agreement has been terminated and the demobilisation of Contractor
Facilities 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.                        “Classification
Society” means Det Norske Veritas (“DNV”), or if the Parties agree, another
equivalent body;

1.16.                        “CMS” or “Corporate
Management System” means a demonstrable method of conveying and ensuring
control of information relating to the management of the Company and/or the
Contractor. Information contained within such documents are related to but not
limited to principal standard policy and philosophy particularly in respect of
SESR matters;

1.17.                        “Company
Facilities” means all property of the Company and Co-venturers, and of their
Affiliates and Sub-contractors, relating in any way to the Field or to the
provision of the Company Services, the Subsea Systems, and, subject to Clause
7.8, the Mooring System, including but not limited to those facilities provided
by the Company as listed in Schedule C hereof;

 7
 

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

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

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

1.21.                        “Company
Services” means the services to be provided by the Company pursuant to Schedule
C;

1.22.                        “Contract
Management Committee” or “CMC” means that committee formed pursuant to Clause
8;

1.23.                        “Contractor
Facilities” means all property provided or owned by the Contractor, its
Affiliates and Sub-contractors, for the purpose of performing the Contractor
Services, including all equipment to be utilised or intended to be utilised in
Production, and the delivery of SCO and Natural Gas to the respective Delivery
Points, 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.                        “Contractor
Group” means the Contractor, its Sub-contractors, its or their Affiliates, its
or their agents and its or their employees, officers and directors;

1.25.                        “Contractor
Personnel” means all officers, directors, employees and agents of the
Contractor and all officers, directors, employees and agents of all
Sub-contractors directly or indirectly engaged by the Contractor in the
performance of the Contractor Services;

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

 8
 

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

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

1.28.                        “Cubic
foot” means that quantity of Natural Gas which at 60 degrees Fahrenheit and at
an absolute pressure of 30 Inches of Mercury, and the Natural Gas being
saturated with water vapour at that same pressure and temperature, occupies one
cubic foot;

1.29.                        “Delivery
Point” means:

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

(ii)                                         in
respect of Natural Gas delivered by the Contractor, the gas export riser top
flange, 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 FPSO
ceased Production for reasons solely attributable to

 9
 

Contractor, including planned and unplanned downtime
for maintenance;

1.32.                        “Downtime
Compensation Period” means the period defined in Clause 25.4 or Clause 25.6 as
the case may be;

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

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

1.35.                        “Entry
Points” means the manifold flanges of the FPSO to which the risers are
connected;

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

1.37.                        “Extension
Term” means the period by which the Charter Period exceeds the Primary Term as
a 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 to
Clause 29;

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

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

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

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

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

(i)                                            identification
of the events which could give rise to a major incident or emergency
evacuation;

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

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

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

 10
 

(v)                                 identification
and establishment of performance standards for safety critical systems which
are required to ensure integrity of the Contractors Facilities and the Company
Facilities;

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

(vii)                         employment
of a safety tracking system to ensure that all safety queries arising during
the design are rigorously processed to a satisfactory conclusion and documented
in an auditable format;

(viii)                      a
demonstration that the proposed design can be operated and maintained in a cost
effective and safe manner.

1.44.                       “FPSO”
means the floating, production, storage and offloading vessel currently known
as the Aoka Mizu, registered in the Netherlands Antilles, as modified to
accommodate, inter alia, the receipt, processing and storage of Petroleum, SCO
and Natural Gas from the Ettrick Field, and which is capable of being operated
in the manner set out in Schedule D, meets the functional specifications
described in Schedule D and is otherwise capable of satisfactorily performing
all the services required by this Agreement. For the avoidance of doubt the
FPSO does not include the Mooring System;

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

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

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

 11
 

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

1.49.                        “Impact
Statement” means the statement prepared in furtherance of the Change Order
Procedure as described in section 4.3 of Schedule J;

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

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

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

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

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

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

 12
 

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

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

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

1.58.                        “Natural
Gas” means any hydrocarbons or mixture of hydrocarbons and other gases which at
sixty (60) degrees Fahrenheit and at atmospheric pressure is in the gaseous
state, including, without prejudice to the generality of the foregoing, gas
from gas wells, gas produced with crude oil and residue liquids resulting from
the processing of gas;

1.59.                        “Operating
Costs” 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 the
Netherlands 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.                        “Permitted
Delay” means any delay resulting in First Oil not being on or before the
Scheduled First Oil Date:

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

(b)                               to
the extent caused by Company or its Subcontractors not having successfully
completed the installation, commissioning and testing of the Mooring System
prior to the Scheduled Arrival Date; or

 13
 

(c)                                resulting
from the Ettrick Field and/or the Company Facilities not being ready in a
material respect when required for installation, testing and start-up of the
FPSO in accordance with Schedule D; or

(d)                                to
the extent caused by any Change Order; or

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

(f)                                   resulting
from Force Majeure; or

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

1.63.                        “Permitted
Delay 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 (excluding
coal, bituminous shales from other stratified deposits from which oil can be
extracted by destructive distillation);

1.65.                        “Primary
Term” 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 the
Field, the receipt of such Petroleum at the Entry Points, the storage and
processing of such Petroleum and the storage and then delivery of SCO and
Natural Gas to the Delivery Points and includes all other processes, handling,
and treatments associated with each of the forgoing;

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

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

 14
 

1.69.                        “Quiet
Enjoyment Agreement” means the quiet enjoyment agreement relating to the use by
the Company of the FPSO and Mooring System, to be entered into between amongst
others the Company, the Owner, the Contractor and the facility agent acting on
behalf of the financiers of the Contractor. The Contractor shall use its reasonable
endeavours to ensure that the principles set out in Schedule O, Attachment O1
are reflected in the Quiet Enjoyment Agreement. The Quiet Enjoyment Agreement
shall be agreed as soon as reasonably possible after the Effective Date and
shall be attached to this Agreement as Schedule O;

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

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

1.72.                        “Reservoir
Related Pollution” means pollution of the environment or other properties by
substances originating from the Field but excluding any pollution emanating
from the Contractor Facilities or otherwise caused by the performance of the
Contractor Services;

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

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

1.75.                        “Scheduled
First 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 her
successor in office or any other person for the time

 15
 

being responsible for carrying out the functions
currently carried out by the Secretary;

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

1.78.                        “Stabilised
Crude Oil” or “SCO” means liquid Petroleum which has been processed and
rendered safe to the appropriate specification as set out in Schedule D by the
Contractor for delivery to the Delivery Point;

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

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

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

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

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

 16
 

benefit of the Company and property of the Contractor,
within six (6) months of the occurrence thereof; or (d) if the insurers do not
admit a claim for an actual or constructive Total Loss, a Total Loss is
subsequently adjudged by a final order or final award given by a competent
court of law or arbitration tribunal;

1.84.                        “UK” means
the 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 designated
pursuant to any of the Legislative Requirements;

1.87.                        “Wilful
Misconduct” means an intentional and conscious or reckless disregard of the rights
and obligations of a person, the terms of this Agreement or good oilfield
practice, but shall not include any act or omission reasonably required to meet
emergency conditions, including without limitation the safeguarding of life and
property 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, of
any function, authority or discretion conferred upon such person;

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

2.                                      INTERPRETATION

2.1.                              Whenever
in this Agreement the singular number or masculine gender occurs, the same
shall 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.                              No
oral instruction, objection, claim or notice by any Party to the other shall
affect or modify any of the terms or obligations contained in any of this
Agreement, and none of the provisions of this Agreement shall be held to be modified
by reason of any act whatsoever, other than by

 17
 

an agreed
modification thereof in writing signed by the authorised representatives of the
Parties.

2.3.                              No
heading, index, title, subtitle, subheading or marginal note of this Agreement
shall limit, alter or affect the meaning or operation of this Agreement.

2.4.                              Unless
otherwise specified, a reference to an Article or Clause shall be deemed to be
a reference to that same Article or Clause of the body of this Agreement and a
reference to a Schedule shall be deemed to be a reference to a Schedule of this
Agreement.

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

2.6.                              All
instructions, notifications, agreements, authorisations, approvals and
acknowledgements shall be in writing.

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

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

 18
 

2.9.                              The
failure of either Party hereto in any one or more instances to insist upon the
performance of any of the provisions of this Agreement, or to exercise any
rights hereunder, shall not be construed as a waiver or relinquishment of the
future performance of any such provision or he future exercise of any such
right, and the obligations of the other Party with respect thereto will
continue in full force and effect.

2.10.                        The
several documents forming this Agreement are to be taken as mutually
explanatory of one another, but in the event of any inconsistency between the
body of this Agreement and any Schedule, the provisions of the body of this
Agreement prevails. In the event of any conflict in the provisions of the
Schedules, they shall be given priority in the order as listed on page 4 of
this Agreement;

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

3.                                      DELIVERY
AND ACCEPTANCE

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

(a)                                   arranged
for the FPSO to be classified by the Classification Society to the standard
specified in Schedule D and such classification shall be evidenced by
provisional certification;

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

(c)                                   obtained
all necessary permits and authorisations necessary for it to assume the role of
Duty Holder in order commence the Production and export of Petroleum from the
Ettrick Field.

 19
 

3.2                              (not
used)

3.3                                Prior
to the Scheduled Arrival Date the Company shall have completed the preparation
of the Site, the installation and commissioning of the Mooring System and the
Subsea System, and the Company shall have obtained all necessary permits and
licences for the mobilisation, installation and operation of the FPSO at the
Site in accordance with the schedule specified in Schedule H so that the FPSO
may be installed at the Site by the Contractor. The Contractor shall not
provide the FPSO at the Site before the Scheduled Arrival Date without the
Company’s approval in writing, which shall not be unreasonably withheld.

3.4

(a)                                  In
the event of any Permitted Delay occurring at any time prior to the First Oil
Date, the Contractor will be entitled to payment of the Permitted Delay Day
Rate specified in Schedule F (with addition of Operating Costs and Insurance
Costs 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 become
payable to the Contractor until the Scheduled First Oil Date, at which time
onwards subject to Clause 3.4 (b), any accrued entitlement to the Permitted
Delay Day Rate will become payable a day at a time (and pro rata for part of a
day), for each day (or part of a day) which elapses on and after the Scheduled
First Oil Date until the First Oil Date.

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

 20

(c)                                  Clause
3.4 (b) will not apply where the Contractor can demonstrate that delay caused
by it results from the FPSO having been rescheduled in a reasonable manner to
correspond to a revised schedule resulting from Permitted Delay.

(d)                                 Subject
always to the provisions of Clause 33, the Company acknowledges that the
Contractor has no liability to the Company in respect of any delay which is not
a Permitted Delay, even if caused by the Contractor’s negligence.

(e)                                  The
Contractor will use reasonable endeavours to minimise the impact of any
Permitted Delay on its schedule as shown in Schedule H and to keep the Company
informed of such.

4.                                      REPRESENTATIVES
OF THE PARTIES

4.1.                              Prior
to providing the Contractor Services each Party shall appoint a representative
with 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 or
deputy.

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

4.3.                             Subject
to Contractor’s policy for visitors, the Contractor shall afford the Company’s
representatives access to a Location, the FPSO and the Contractor Facilities at
all times during normal working hours. However, Contractor shall during
Production afford Company’s Operations Representative access to the FPSO at all
times.

 21
 

4.4.                             If
in the opinion of the Contractor, the progress of the Contractor Services is
impeded by the presence of the Company’s representative, Contractor shall
without undue delay, submit a Change Order Request Form in accordance with
Clause 11.

5.                                      CONTRACTOR’S
REPRESENTATIONS, WARRANTIES AND COVENANTS

5.1.                             The Contractor hereby
represents, warrants and covenants to the Company that:

(a)                                  It
is, and shall continue to be, a corporation duly organised, validly subsisting
and in good standing under the laws of England and the laws of those
jurisdictions in which it is required to be registered; and

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

(c)                                  Within
thirty (30) days from the Effective Date, or as soon as reasonably possibly
thereafter, it shall have and continue to have a valid charter for the FPSO
from the Owner and it shall not do anything to breach or jeopardise the charter
terms; and

(d)                                 This
Agreement has been duly executed and delivered by the Contractor and
constitutes a legal, valid, binding and enforceable obligation of the
Contractor; and

(e)                                  The
consummation by the Contractor of the transactions contemplated by this
Agreement will not, in any material respect, violate or conflict with:

(i)                                            its
constituting documents;

(ii)                                         its
by-laws or governing documents;

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

 22
 

Contractor Facilities or
the Contractor Services are or will be bound;

(iv)                                     any
judgement;

(v)                                        any
decree;

(vi)                                     any
order;

(vii)                                  any
statute; or

(viii)                               any
rule or regulation applicable to the Contractor, Contractor Facilities or
Contractor Services; and

(f)                                    It
has complied with, performed, observed and satisfied and will continue to
perform, observe and satisfy all material terms, conditions, obligations and
liabilities which have heretofore arisen and may hereafter arise and are the
obligations of the Contractor under any of the provisions of any agreement
affecting the Contractor Facilities or the Contractor Services or under any
existing or future statute, order, writ, injunction or decree of any
governmental agency or court relating to the Contractor, the Contractor
Facilities or the Contractor Services; and

(g)                                 The
Contractor shall conduct the Contractor Services in accordance with the standard
of a Reasonable and Prudent Operator; and

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

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

 23
 

(j)                                     As
from arrival on the Field it shall maintain and preserve the FPSO and all the
Contractor’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 due
diligence can make it so, tight, staunch, strong and well and sufficiently
tackled, apparelled, furnished, equipped and in every respect seaworthy and so
that the FPSO, and all the Contractor Facilities conform to the FPSO
description and specifications set out in Schedule D; and

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

(l)                                     It
shall maintain the Duty Holder classification throughout the term of this
Agreement unless the Company otherwise agrees in writing that another party
shall replace the Contractor as Duty Holder; and

(m)                               The
Contractor Personnel shall be fully qualified, trained and competent for their
respective assignments and shall comply with all applicable laws and
regulations in connection therewith; and

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

(o)                                 It
shall maintain sufficient liquidity so as to ensure that it is able to meet all
of its obligations to third parties as they fall

 24
 

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

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

6.                                      COMPANY’S
REPRESENTATIONS, WARRANTIES AND COVENANTS

6.1.                             The
Company hereby represents, warrants and covenants to the Contractor that:

(a)                                  It
is, and shall continue to be, a corporation duly organised, validly subsisting
and in good standing under the laws of England and the laws of those
jurisdictions in which it is required to be registered; and

 25
 

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

(c)                                  This
Agreement has been duly executed and delivered by the Company and it
constitutes a legal, valid, bidding and enforceable obligation of the Company;
and

(d)                                 The
Company shall conduct the Company Services in accordance with the standard of a
Reasonable and Prudent Operator; and

(e)                                  The
consummation by the Company of the transactions contemplated by this Agreement
will not, in any material respect, violate or conflict with:

(i)                                     its
constituting documents;

(ii)                                  its
by-laws or governing documents;

(iii)                               any
provision of any agreement or instrument to which the Company is or will be a
party or by which the Company, the Company Facilities or the Company Services
are or will be bound;

(iv)                              any
judgement;

(v)                                 any
decree;

(vi)                              any
order;

(vii)                           any
statute; or

(viii)                        any rule
or regulation applicable to the Company, the Company Facilities or the Company
Services.

6.2                                The
Company shall provide such information of the Field, the Company Facilities and
the Company Services, and the geological and reservoir data as is necessary for
the Contactor to perform the Contractor Services. It is recognised that it is
not reasonably possible for the Contractor to satisfy itself to the accuracy of
the abovementioned

 26
 

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

6.3.                              Any
documents (other than a Change Order Request Form) that requires the acceptance
or approval of the Company pursuant to this Agreement shall be accepted and
either approved or rejected by the Company within two (2) weeks of receipt
thereof. In the absence of a timely reply of the Company, the Contractor shall
notify the Company and inform the Company that it has not received Company’s
response to the relevant document and will invite the Company to revert within
two (2) weeks of receipt of the notification whether it accepts the relevant
document, failing which the document is deemed to have been accepted and/or
approved.

6.4                                 The
time frames set out in Clause 6.3 above shall not apply to documents
necessitated as a result of a safety related issue and the Parties shall use
all reasonable efforts to agree all such safety related documents as soon as is
practicable.

6.5                                 The
Company shall ensure and provide the Contractor free and unrestricted access to
the Field to enable the Contractor to perform the Contractor Services as per
this Agreement.

6.6                                 The
Company shall provide such assistance and support as are necessary to enable
the Contractor to obtain any consent and/or permissions of any Government Body
required to perform the Contractor Services.

7.                                      LIABILITIES
AND INDEMNITIES

7.1                                 Not
Used.

7.2                                The
Company and the Contractor shall bear their own consequential and/or indirect
losses and shall be responsible for, indemnify and hold harmless the other
Party in respect of Claims of the Contractor Group

 27
 

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

7.3                                The
Contractor shall be responsible for, indemnify and hold harmless the Company
Group from all Claims in connection with:

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

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

the Contractor Group
howsoever caused.

7.4                                The
Company shall be responsible for, indemnify and hold harmless the Contractor
Group from all Claims in connection with:

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

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

the Company Group howsoever caused. For the avoidance
of doubt the Parties agree that the Petroleum whether entering the FPSO, being
processed and stored on board the FPSO and/or delivered thought the Delivery
Points shall be the property and at the risk of the Company Group.

7.5                                The
Contractor shall be responsible for, indemnify and hold harmless the Company
Group from all Claims in connection with:

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

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

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

 28
 

7.6                                The
Company shall be responsible for, indemnify and hold harmless the Contractor
Group from all Claims in connection with:

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

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

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

7.7                                The
Parties agree that the Company shall be responsible for, indemnify and hold
harmless the Contractor Group from all Claims in connection with the formation
of any waxes, tar, scale, calcium napthanate, or the development of any other chemical
products causing restrictions to the operation of the FPSO that were not
reasonably foreseeable by the Contractor at the Effective Date.

7.8                                For
the purpose of clarity, Parties agree that the Mooring Legs, upon delivery by
the Contractor to the mobilisation port as nominated by the Company, shall
become the property of Company as per Clause 7.4.

7.9                                Regardless
of any other provision in this Clause 7, the Parties agree that the Contractor
shall be responsible for, indemnify and hold the Company Group harmless from
all Claims arising from any pollution emanating from the FPSO or otherwise
caused 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 payments
made by Contractor’s protection and indemnity insurer for that particular
event, whichever is the greater. Save in the event of Contractor’s Wilful
Misconduct, the Company shall be responsible for, indemnify and hold Contractor
Group harmless for all such Claims to the extent that, for each event which
results in pollution, they exceed the foregoing maximum limit.

 29
 

7.10                          The
Company shall be responsible for, indemnify and hold harmless the Contractor
Group from all Claims arising from Reservoir Related Pollution.

7.11                          The
Company shall be responsible for the removal and where appropriate the marking
or lighting of any wreck or debris in the Field (other than that emanating from
the Contractor’s Facilities) which is within the anticipated FPSO anchor
pattern, is interfering with the intended operations of the FPSO, or is a
hazard to fishing or navigation and the Company shall be responsible for,
indemnify and hold harmless the Contractor Group in respect of all Claims
arising out of such wreck or debris.

7.12                          Upon
arrival of the FPSO in the Ettrick Field up to demobilisation of the FPSO as
per Clause 32, the Contractor shall be responsible for the removal and where
appropriate the marking or lighting of any wreck or debris forming part of the
Contractor Facilities where required by law or by any Government Body which is
or was within the FPSO anchor pattern, is interfering with the operations of
the Company, or is hazard to fishing or navigation and shall be responsible
for, indemnify and hold harmless the Company Group in respect of all Claims
arising out of such wreck or debris.

7.13                          If
a Claim is asserted in circumstances which does or may give rise to an
indemnity under this Clause 7, the Party against whom the Claim is asserted
shall forthwith give written notice thereof to the Party required to indemnify
and the Parties shall consult and co-operate in respect thereof and in
determining whether the Claim and any legal proceedings relating thereto should
be resisted, compromised or settled.  Each
Party shall make available to the other all information in its possession or to
which it has access which is or may be relevant to the particular Claim. The
Parties shall provide each other with

 30
 

reasonable
access to any and all of the equipment operated by the other Party, to the
extent reasonably necessary in connection with the Claim. No such Claim shall
be settled or compromised hereunder without the written consent of the
indemnifying Party, which consent shall not be unreasonably withheld.

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

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

7.16                          For
the limited purposes of extending the benefit of the indemnities given
hereunder:

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

 31
 

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

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

8                                         CONTRACT
MANAGEMENT

8.1                                Without
prejudice to the obligations of the Contractor as Duty Holder, the Parties
shall form the CMC.

8.2                                The
Parties shall appoint an equal number of representatives to the CMC. Each Party
may substitute its representative(s) by giving fourteen (14) days written
notice to the other Party.

8.3                                From
the Effective Date and throughout the Charter Period the CMC shall meet monthly
on an agreed date, time and location. 
Formal agendas shall be mutually agreed and shall include but not be
limited to a review of:

(a)                                         Project
Schedule;

(b)                                        critical
path items;

(c)                                         FPSO
mobilisation dates;

(d)                                        design
changes including functional specifications and interfaces;

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

 32
 

(f)                                           such
other items and issues as either Party may request to be included on the
agenda.

8.4                                Notwithstanding
Clause 8.3 the CMC can meet at the request of either Party giving the other
Party seven (7) days written notice.

8.5                                Minutes
shall be taken during the CMC meetings by the Contractor, which minutes shall
be submitted for approval at the following CMC meeting. The CMC meetings will
be chaired by the Contractor.

8.6                                The
Company has the right to invite representatives of Co-venturers as observers to
CMC meetings.

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

9                                         CONTRACTOR
PERSONNEL

9.1                                The
Contractor warrants that it has the experience and capability including
sufficient and competent supervisors and other personnel to efficiently and
expeditiously perform the Contractor Services in accordance with the standard
of a Reasonable and Prudent Operator.

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

 33
 

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

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

9.4                                The
Contractor 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                                The
Company may instruct the Contractor, on written notice providing reasonable
justification, to remove from the Contractor Facilities or any location of the
Company or from any area where the Contractor Services are being performed, an
individual forming part of Contractor Personnel provided that such right is not
exercised frivolously or vexatiously. Said person shall be removed as quickly
as is reasonably possible in the circumstances at the expense of the Contractor
and shall not be engaged in the carrying out of the Contractor Services again
or on any other work for Company or sited in any location or premises of the
Company without the prior approval of the Company.  The Company shall give the Contractor the
opportunity to make representations to reinstate the individual but only after
such removal has been effected.  As soon
as reasonably practicable, those persons who shall be removed shall be replaced
with suitable personnel at the expense of the Contractor.

9.6                                The
Contractor shall ensure that the Contractor Personnel engaged in the
performance of the Contractor Services comply with applicable

 34
 

immigration
laws and where required are in possession of a valid work permit for the
duration of their employment or contract with respect to the Contractor
Facilities.

9.7                                The
Contractor shall be responsible for ensuring that only the Contractor Personnel
who are adequately experienced and trained shall perform the Contractor
Services.

9.8                                The
training of the Contractor Personnel shall take into account any reasonable
requirements of the Company as well as applicable industry standards and
Legislative Requirements.  The Contractor
shall furnish all records of competence for all the Contractor Personnel when
requested to do so by the Company. The Company shall have the right to witness
all or part of the training and competency processes.

10                                  CAPACITY

10.1                          The
Company enters into this Agreement on its own behalf and on behalf of the
Co-venturers.

10.2                          The
Company may enforce this Agreement on its own behalf and on behalf of the
Co-venturers and may commence proceedings in its name to enforce all
obligations and liabilities of the Contractor and make any claim which the
Co-venturers may have pursuant to this Agreement.

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

 35
 

11                                  CHANGE
ORDER PROCEDURE

11.1                          Amendments
or changes to the Contractor Services or the Company Services shall be effected
in accordance with the Change Order Procedure subject to the relevant aspects
of Schedule J.

11.2                          The
Contractor shall notify the Company forthwith of all things which, in the
opinion of the Contractor, appear to be deficiencies, omissions, contradictions
or ambiguities in this Agreement or which conflict with Legislative
Requirements.

12                                  PAYMENT

12.1                          (not
used)

12.2                           In consideration of the
performance of the Contractor Services the Company shall, throughout the
Charter Period, pay to the Contractor the applicable rates, tariffs and costs
as described below in this Clause 12 and more particularly set out in Schedules
F and G.

12.3                            Payment
of all invoices submitted by the Contractor in respect of the Contractor
Services as referred to in Clause 12.2 shall be sent to the Company’s address
referred in Clause 31 below and shall be paid by the Company so that the
payment is received by the Contractor within the time limits specified in this
Clause 12.

12.4                           Throughout
the Charter Period and notwithstanding any Downtime, the Company shall pay to
the Contractor for the hire of the FPSO the Charter Hire as described in
Schedule F except where, under the provisions of this
Agreement, the Force Majeure Rate, the Standby Rate or [****] is payable.

 36
 

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

12.6                           (not
used)

12.7                          As from
First Oil or, if earlier, from the date the Contactor is entitled to be paid
the Permitted Delay Day Rate, Company shall reimburse the Contractor’s costs
covering all operational costs and expenses on a cost plus profit allowance as
more particularly described in Schedule G, Section 1.1 (the “Operating Costs”)
to operate the Contractor Facilities in accordance with the requirements of
this Agreement and all Legislative Requirements. The Operating Costs do not
include the Insurance Costs.

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

12.9                           The
Contractor shall present to the Company separate invoices for the payment of
the Charter Hire, the Operating Costs, the Insurance Costs and the Production
Tariff.

Charter Hire

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

 37
 

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

Operating Costs

Invoices for the ‘core’ elements of the Operating
Costs as identified in Schedule G shall be presented for the forthcoming
Charter Hire Payment Period thirty (30) days prior to the Charter Hire Payment
Date to which they relate and shall be paid and received on or before the last
Banking Day prior to the Charter Hire Payment Period to which they relate.

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

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

Insurance Costs

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

 38
 

Production Tariff

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

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

The invoice for the
balance of the Production Tariff shall be presented at the end of each Charter
Hire Payment Period and shall be paid and received on or before the last Banking
Day of the month following the end of the Charter Hire Payment Period to which
it relates. The amount due on the invoice shall take into account the advance
payment portion for the relevant Charter Hire Payment Period.

12.10                     The Company’s
obligation to pay and the Contractor’s right to claim payment of the Charter
Hire, the Production Tariff, the Insurance Costs and the Operating Costs shall
terminate and expire upon any of the following events:

(i)                                   the
FPSO becomes a Total Loss, actual or constructive, for any reason including
Force Majeure, or

(ii)                                this
Agreement is lawfully terminated by either of the Parties in accordance with
the provisions herein.

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

 39
 

during the time after termination required to complete
demobilisation of the FPSO and the Mooring System up to redelivery as per
Clause 32.3, provided always that such work is carried out by the Contractor as
expeditiously as possible.

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

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

12.14                     The Charter
Hire, the Production Tariff, the Insurance Costs and the Operating Costs agreed
to above shall be paid exclusive of any value added tax. In the event
applicable value added tax laws and regulations in the UK should be changed so
that value added tax has to be calculated on and paid in addition to the
Charter Hire, the Production Tariff and the Operating Costs, the Company hereby
agrees to pay for such value added tax. In the event that Contractor (for the
purposes of the Insurance Costs) is liable for insurance premium tax

 40
 

pursuant to this Agreement and this is not recoverable
by Contractor, the Company shall reimburse Contractor such insurance premium
tax.

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

However, the Company shall continue to pay i) any
further reasonable Operating Costs covering inter alia the costs required for
the demobilisation of the FPSO (in as far as not covered by Contractor’s
insurance), the Mooring System and other Contractor Services, provided always
that such activities are carried out by Contractor as expeditiously as
possible, and ii) and, in as far as the Insurance Costs continue to apply after
the day of the cessation of Production, the Insurance Costs.

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

 41
 

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

If the Company disputes any invoice in whole or in
part, the Company shall promptly notify the Contractor of the dispute and the
Contractor shall issue its invoice for the undisputed amount and a credit note
to cancel the original invoice and the Company shall use all reasonable
endeavours to pay the re-issued, undisputed invoice within the original
timeframe and in any event, within thirty (30) days of receipt of the
re-issued, undisputed invoice. The Contractor and the Company shall endeavour
to agree and settle and adjust any disputed amount forthwith and the provisions
of Clause 35 shall apply to any such dispute.

If the Company disputes any invoice in whole or in
part, payment of Company interest which is due or which shall become due to the
Contractor in respect of the disputed element of the subject invoice shall be
postponed until the disputed invoice or part thereof has been resolved, in
which case interest in accordance with the Interest Rate shall then be payable
by the Company to the Contractor in respect of the outstanding amount from the
date 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 Charter
Hire, Production Tariff, Insurance Costs or Operating Costs has not been
received by the Contractor on the payment dates as described in Clause 12.9 or
as set out above, the Contractor shall notify the Company of the default. In
the event that payment has not been received by the Contractor thirty (30) days
after 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 of
the Company and lawfully terminate this Agreement.

 42

12.17                     On the sixth (6th) anniversary of First Oil and thereby
taking into consideration Clause 25.5, the Parties agree to review the Charter
Hire referred to in Schedule F. If the review demonstrates that the actual
and/or budgeted capital expenditures for the repair & lifetime extension
program for the Contractor’s Facilities to enable the Contractor to continue
the Contractor’s Services after the seventh (7th) anniversary of First Oil, the Parties
shall - provided the Parties wish to continue the Charter Period after the
seventh (7th)
anniversary of First Oil - discuss and agree in good faith revised Charter Hire
to be effective for subsequent years and this Agreement shall be amended
accordingly. In the event that Parties fail to agree written terms within
ninety (90) days from the start of the sixth (6th) anniversary of First Oil, this
Agreement shall terminate as of the seventh (7th) anniversary of First Oil.

13                                  AUDIT

13.1                           Financial
audit; for a period beginning on the First Oil Date and ending on that date
which is six (6) years from the relevant year Contractor invoiced Company or
two (2) years from the termination of completion of abandonment and
decommissioning of the Contractor’s Facilities pursuant to this Agreement,
whichever is the earlier,

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

(b)                                 the
Company and its authorised representatives shall have access to and the right
to audit all meter readings and any documentation relating to the accuracy of
such meter readings, any tank

 43
 

measurements and related data related to or bearing upon the
correctness of any Production Tariff claimed by the Contractor to the Company
for payment.

13.2                           The
Contractor shall preserve and will, where possible, cause its Sub-contractors
to preserve all of the records and information referred to in Clause 13.1
during the aforementioned period, and will, upon written request, make them
available to the Company. Such audits will be conducted during the Contractor’s
normal working hours.

13.3                           The
Company shall notify the Contractor of any matters arising in a financial audit
which necessitate an adjustment, and such adjustment, if agreed by Parties, by
reimbursement of the Company or otherwise, shall then promptly be made.  The Company shall also have the right to
obtain statements from any of the Contractor Personnel to the extent it deems
necessary, and the Contractor shall make Contractor Personnel available at
their assigned location if still under employment with the Contractor.

13.4                           Health,
Safety and Environmental Audit; without prejudice to the Contractor’s
obligations as set out herein, the Company shall have the right to carry out
safety inspections and safety management systems audits during performance of
the Contractor Services.  In addition,
the Company shall have the right to comment on and review the Contractor’s
operational and combined operations safety cases prior to the submission of the
same to HSE.  The Company shall exercise
its rights under this Clause 13.4 so as not unreasonably to affect the
performance of the Contractor Services.

13.5                           Without
prejudice to the Contractor obligations as set out herein the Company shall
have the right to carry out environmental inspections and audits during performance
of the Contractor Services.

 44
 

13.6                           The
Contractor shall accept and implement, or justify grounds for rejection of, any
non-compliance issues or suggestions for improvement identified in any audit as
per Clause 13.4 and/or Clause 13.5 in a timely manner.

13.7                           Technical
Audit / Engineering Review; without prejudice to the Contractor’s obligations
as set out herein, the Company shall have the right to carry out technical
audits and engineering reviews during performance of the Contractor
Services.  The Company shall exercise its
rights under this Clause so as to not unreasonably affect the Contractor
performance of the Contractor Services.

13.8                           Subsequent
to any audit or review carried out in furtherance of Clause 13.7, the Company
may make technical or engineering recommendations to the Contractor. The
Contractor shall consider recommendations of the Company taking account of the
functional specification (Attachment D.1 to Schedule D). In case of the
Contractor’s design, procurement, engineering and/or construction of the FPSO
being out with the said functional specification the Contractor shall implement
such recommendations. In case of the Company’s recommendations being an
optimisation of Contractor Services within the said functional specification,
the Contractor is free to consider and implement such recommendation.

14                                  RESPONSIBILITY
OF THE CONTRACTOR TO INFORM ITSELF

14.1                           Subject
to Clause 6.2 above, the Contractor agrees that the Contractor has informed
itself as to the nature of its obligations pursuant to this Agreement,
including, but not limited to, the supervision and all other necessary
services, labour and materials, plant, facilities, tools,

 45
 

equipment, consumables and supplies required,
the correctness and sufficiency of the payment obligations referred to in
Schedule F, general and local conditions especially climatic, sea and other
water conditions, weather conditions, subsea terrain and bearing values where
applicable and all other matters which could affect progress or performance of
its obligations pursuant to this Agreement. 
Any failures by the Contractor to take account of matters which affect
the Contractor Services shall not relieve the Contractor from its obligations
under this Agreement.

14.2                           The
Contractor assumes full responsibility for all the Contractor Services
performed by the Contractor that are based upon data and information not
contained in this Agreement.

15                                  RESPONSIBILITY
OF THE CONTRACTOR TO INFORM THE COMPANY

15.1                           The
Contractor shall immediately notify the Company of accidents or incidents which
may affect the interest or other operations of the Company or Co-venturers
related to this Agreement.

15.2                           The
Contractor shall notify the Company immediately of any impending or actual
stoppages of work, industrial disputes or other matters affecting or likely to
affect the performance of the Contractor Services.

15.3                           The
Contractor shall notify the Company immediately in the event it does not
receive any required approval for the provision of the Contractor Facilities or
otherwise.

15.4                           The
Contractor shall notify the Company immediately in the event of any accidents
or litigation in relation to the Contractor Facilities.

 46
 

16                                  LIENS

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

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

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

(c)                                  security
interests arising by operation of law in respect of taxes which are not overdue
for payment other than taxes being contested in good faith by appropriate steps
and in respect of which appropriate reserves have been made.

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

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

16.4                           The
Company shall be responsible for, indemnify and hold harmless the Contractor
Group and the Owner from all costs, claims, losses or liabilities whatsoever
arising from the liens listed in Clause 16.5 and/or Clause 16.6 in case the
crew, the master’s or offshore installation

 47
 

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

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

16.6                           The
Contractor shall keep all assets, tangible or intangible, including the
Contractor Facilities and the Contractor Services free and clear of liens for
master’s or offshore installation manager’s disbursements incurred in the
ordinary course of trading and any other lien arising by operation of law or
otherwise in the ordinary course of the operation, repair or maintenance of the
Contractor Facilities, provided the Company has paid to the Contractor the
Operating Costs due.

17                                  COMPLIANCE
WITH LAW

17.1                           Subject
to Clause 7.14 hereof, the Contractor shall comply with all treaties, laws and
regulations (including any applicable codes of practice approved by any
relevant regulatory authority) of any government having jurisdiction over the
Field, the Contractor Facilities, the Contractor Services, the Contractor or
otherwise in effect at any time and shall be responsible for, indemnify and
hold harmless the Company from and against any and all Claims resulting from
the Contractor’s failure to so comply.

18                                  TAXES
AND CHARGES TO BE PAID BY THE CONTRACTOR

18.1                           Subject
to Clause 12.13, the Contractor shall exercise reasonable endeavours to ensure
that any of its Sub-contractors shall timely file all

 48
 

appropriate returns and promptly pay all
taxes and duties including but not limited to income, profit and corporation
taxes and taxes on capital gains, turnover, payroll and added value, duly
assessed by any competent authority of the UK or any other authority on the
profits, gains, turnover, wages, salaries or other remuneration or added value
arising from the operations under this Agreement.

18.2                           The
Contractor shall exercise reasonable endeavours to ensure that any of its
Sub-contractors shall comply with all statutory obligations to timely file all
appropriate returns and make deductions on account of and remit the required
amounts to the relevant government department in respect of income tax, Pay As
You Earn (PAYE) tax, national insurance, employee taxes, charges, social
security costs, levies and contributions imposed by any competent authority of
the 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 the
Contractor or any of its Sub-contractors.

18.3                           If the
Company is required to pay taxes, duties, PAYE deductions, national insurance
contributions, employee taxes, social security costs, contributions or any
other type of taxes and costs referred to in Clauses 18.1 and 18.2 whether with
respect to the Contractor or any of its Sub-contractors or any other person
howsoever connected, associated or related to the Contractor or any of its
Sub-contractors in connection with this Agreement then the Contractor shall
within fourteen (14) days of receiving notice thereof from the Company, pay to
the Company such taxes or costs or failing which the Company shall be entitled
to deduct any such taxes or costs from any Operating Costs due, or which may
become due, to the Contractor provided that Company provides reasonable
documentary evidence to Contractor so as to allow Contractor to claim any
allowable credit from HM Revenue

 49
 

and Customs (or a relevant taxation
authority) for the amounts so deducted.

18.4                           The
Contractor shall supply to the Company and shall procure that any of its
Sub-contractors shall supply to the Company such particulars in relation to
activities under this Agreement which are required to be given by the Company
to an authorised inspector of taxes or any other government authority whether
of the UK or elsewhere.

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

18.6                           The
Contractor agrees that if the Company is liable to withhold any amounts under
Section 559 Income and Corporation Tax Act 1988 or other enactment which
provides for a similar obligation and to make any payment to HM Revenue and
Customs (or a relevant taxation authority) by virtue of Section 559 Income and
Corporation Taxes Act 1988 or any other enactment which provides for a similar
obligation or any payment of any applicable national insurance contributions
from payments received by the Contractor under this Agreement, the Company
shall 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 to
the Contractor, provided that Company provides reasonable documentary evidence
to Contractor so as to allow Contractor to claim any allowable credit from HM

 50
 

Revenue and Customs (or a relevant taxation
authority) for the amounts so deducted.

18.7                           The
Contractor agrees to indemnify and hold the Company harmless in respect of all
costs, expenses and liabilities incurred by the Company by virtue of the
application of Section 559 Income Corporation Taxes Act 1988 to payments made
by the Company pursuant to this Agreement, including but not limited to all
costs and expenses of whatsoever kind incurred by the Company in administering
any deductions made by the Contractor or any tax payments made to HM Revenue
and Customs (or a relevant taxation authority).

18.8                           Where
the Contractor or any of its Sub-contractors or any other person employed by
Contractor or any of its Sub-contractors in connection with this Agreement is
not resident in the United Kingdom for the purpose of Section 830, Income and
Corporation Taxes Act 1988 the Contractor shall be responsible for obtaining a
certificate from HM Revenue and Customs (or a relevant taxation authority)
under the provisions of paragraph 7 of Schedule 15 of the Finance Act 1973 in
favour of the Company for itself and any of its Sub-contractors and for any
other person employed by Contractor or any of its Sub-contractors in connection
with this Agreement any of whom is or may become liable for tax under Section
830, Income and Corporation Taxes Act 1988 in respect of any profits or gains
or assumed profits or gains arising out of the performance of this Agreement.  A copy of such certificate must be submitted
to the Company within fourteen (14) Days of its receipt by the Contractor.

18.9                           In the
event that all the certificates required pursuant to the provisions of Clause
18.8 are not obtained by the Contractor within forty five (45) days of the
First Oil Date or if any such certificate is withdrawn or cancelled by HM
Revenue and Customs (or a relevant taxation

 51
 

authority) then the Contractor shall
immediately 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 of
the maximum potential tax liability which may arise out of this Agreement. In
the event that such a bank guarantee is required under the terms of this Clause
but is not received by the Company or is not, in the Company’s view, sufficient
to protect the Company and its Co-venturers against the maximum potential tax
liability which in the Company’s opinion may arise out of this Agreement then
the Company shall be entitled to make deductions up to such maximum amount from
any monies due or which may become due to the Contractor.

18.10                     If the
Company or any Co-venturer is required to pay any taxes by virtue of paragraph
4 of Schedule 15, Finance Act 1973 as amended or any interest due thereon under
Section 86, Taxes Management Act 1970 or any other interest or penalty, the
Contractor shall within thirty (30) days of receiving written notice from the
Company pay to the Company any such taxes or interest due thereon free of any
withholding or deduction.  If such taxes
or interest are not so paid by the Contractor the Company shall be entitled to
deduct the sums due to HM Revenue and Customs (or a relevant taxation
authority) from any Operating Costs due, or which become due to the Contractor,
provided Company provides reasonable documentary evidence to Contractor so as
to 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 Company
shall be entitled to off-set and deduct all sums owed by the Contractor
pursuant to this Clause 18 from the Operating Costs due to the Contractor only.

 52
 

18.12                     The Company
shall develop with government authorities, customs procedures for importing and
exporting the Contractor’s Facilities to and from the Ettrick Field. Contractor
shall, if requested by Company, use reasonable endeavours to assist Company
herein.

18.13                     The Company
shall be responsible for the importation of the Contractor Facilities and any
and all parts and spare parts into the UK for the Contractor Services. Company
shall 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 the
avoidance of doubt this Clause 18 is subject to Clause 7.14 hereof.

19                                  INSURANCE

19.1                           The
Contractor shall secure and maintain the following insurance coverage during
the performance of this Agreement all insurances as required by law, including
but not limited to;

(a)                                  Employers Liability insurance to comply with the
Employers Liability (Compulsory Insurance) Act 1969 or any statutory
re-enactment modification or extension thereof for the time being in force with
coverage extended as applicable to cover North Sea or overseas working.  In addition, insurance to comply with Workmen’s
Compensation Acts and such other laws (including but not limited to
Occupational Disease Laws) to the extent applicable.  For those employees not required to be
covered under the provision of the above Acts, Employers Liability insurance in
an amount as required by the legal system applicable to the relevant employment
agreement.  Such insurance shall be
endorsed to the effect that claims formulated

 53
 

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

(b)                                 Third Party Public Liability insurance covering
bodily 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 the
FPSO and, as from the First Oil Date, the Mooring System, but always excluding
the Mooring Legs, including marine war and terrorist risk coverage and
collision liability, in as far as not covered by the P&I
insurance.

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

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

19.2                           Parties
agree that during the Charter Period in respect of marine risk and hull
interest the minimum combined insured value of the Contractor Facilities shall
be equal to the amount of the total investment made by Contractor or any of its
Affiliates to achieve First

 54
 

Oil together with its equipment used in
performance of this Agreement during all operations.

19.3                           The
Contractor shall require its Sub-contractors to take out insurance identified
in Clause 19.1(a) and 19.1(b) with limits commensurate with the activity and
all insurances required by law.

19.4                           The
Contractor shall ensure that all of the above policies mentioned in Clauses
19.1 (b), (c), (d) and (e), are endorsed to show the Company as additional
and/or protective co-insured and shall contain a waiver of underwriter’s rights
of subrogation against the Company Group.

19.5                           Upon
request of Company, Contractor shall arrange for certificates of insurance, in
respect of the insurance cover to be placed by Contractor, to be provided to
the Company.

19.6                           The
Parties shall afford each other all reasonable assistance which may be required
for the preparation and negotiation of insurance claims.

19.7                           Any and
all 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 the
claim is the result of circumstances which are the responsibility of the
Company and for which the Company is liable under this Agreement, in which case
the deductibles for that claim will be for account and risk of the Company.

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

 55
 

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

19.9                           Company
shall secure and maintain;

(a)                                  construction
all risk (or equivalent) insurance for coverage of the Mooring System as from
its delivery by the Contractor to the mobilisation yard as nominated by the
Company, up to the First Oil Date,

(b)                               insurance
for the Mooring Legs as from delivery by the Contractor to the mobilisation
yard as nominated by the Company throughout the duration of this Agreement.

19.10                     The Company
shall 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/protective
co-insured and shall contain a waiver of underwriter’s rights of subrogation
against the Contractor Group.

20                                  SUB-CONTRACTORS

20.1                           The
Contractor shall be fully responsible for the acts or omissions of any of its
Sub-contractor as if it had done the work itself. Nothing in this Agreement
shall create any contractual relationship between the Company and
Sub-contractor of the Contractor, and all such sub-contracts shall contain a
clear statement that the Contractor is entering

 56
 

into such sub-contract as principal and not
as agent either for the Company nor to Company Group.

21                                  HEALTH,
SAFETY AND ENVIRONMENT

21.1                           Contractor’s
Obligations

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

(b)                                 The
Contractor Personnel shall observe and carry out the Contractor Services in
accordance with Legislative Requirements and as a Reasonable and Prudent
Operator, 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 measures
reasonably necessary and properly to provide safe working conditions and to
protect the environment in which the Contractor operates in the performance of
its obligations pursuant to this Agreement.

(c)                                  The
Contractor shall on an on going basis adequately instruct, monitor and audit
all the Contractor Personnel in the use of safety equipment and properly work
procedures for the purpose of doing everything reasonably practicable to
prevent personal injury and damage to equipment and operations, and shall
provide to its employees and the Company copies of operations manuals and
written instructions pertaining to the operation of the Contractor Facilities
in accordance with the Legislative Requirements or as reasonably requested by
the Company.

(d)                                 The
Contractor shall report all incidents, accidents and work-related illnesses in
accordance with the Legislative Requirements and as a Reasonable and Prudent
Operator. The Contractor shall carry out investigations of such incidents,
accidents and work related illnesses as required by law and shall promptly
report such incidents to the Company representative and the Company 

 57
 

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

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

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

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

(h)                                 The
Contractor shall provide all necessary assistance to the Company to allow the
Company to fulfil its obligations as Licensee as required under the Offshore
Installations (Safety Case) Regulation 2005 (SI 2005: 3117) as amended from
time to time.

 58
 

21.2                            Emergency
Response and Environmental Clean-up

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

21.3                           Non-performance
HSE and SESR

(a)                                  Notwithstanding
any 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 with
respect to obligations relating to health, safety or the environment, the
Parties agree that the Company may at its sole discretion, either instruct the
Contractor to cease Production until such time as the non-compliance issue has
been resolved to the Company’s satisfaction or intervene and provide the
management activities required to rectify the non-compliance.

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

(c)                                  For the purposes of this Clause 21.3 serious
non-compliance means an act, omission, circumstance or state of affairs of
which 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, if
not remedied promptly, of causing serious harm to persons, environment and
property.

22                                  INDEPENDENT
CONTRACTOR

22.1                           In the
performance of the Contractor obligations pursuant to this Agreement, the
Contractor shall be an independent contractor. The presence of and the
inspection by the Company’s representative shall not relieve the Contractor of
any Contractor obligations and responsibilities.

 59
 

22.2                           In no
event shall the relationship of the Parties be construed to be that of
principal and agent or master and servant or a partnership.

23                                  RECORDS
AND REPORTS

23.1                           The
Contractor shall provide the Company with complete and accurate records and
reports as described in Schedule I of this Agreement.

24                                  CONFIDENTIALITY

24.1                           All
data and information that has been or is hereafter acquired or received by
either Party (whether orally, in writing or in some other form) in connection
with this Agreement and the contents of this Agreement shall be held
confidential and shall not be divulged in any way to any third party, without
the prior written consent of the other Party, provided however that any Party
may, without such approval, disclose such data and information:

(a)                                  to
any Affiliate and in the case of the Company, the Co-venturers and their
Affiliates provided that the disclosing Party shall procure that such
Co-venturers and/or their Affiliates hold such data and information on similar
terms of confidentiality;

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

(c)                                  to
any outside professional consultant of a Party (other than an external legal
adviser or statutory auditor) or to any external contractor of a Party (being
any contractor not falling within the description of an in-house contractor set
out in sub-clause

 60
 

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

(d)                                 to
any bank or financial institution from whom such Party is seeking or obtaining
finance or security, upon obtaining a similar undertaking or confidentiality
from such bank or institution;

(e)                                  to
the extent required by the rules and regulations of any recognised stock
exchange or in compliance with the rules and regulations of any jurisdiction to
which a Party is subject;

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

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

(h)                                 to
the extent that such data and/or information is generally available to the
public other than through breach of this agreement or by unauthorised
disclosure; or

(i)                                     to
a bona fide potential assignee upon obtaining from it a similar commitment of
confidentiality.

24.2                           Specific
items of information shall not be considered to be in the public domain merely
because more general information is found therein.  Each Party shall remain liable for any breach
of confidentiality by those persons to whom it has disclosed information
pursuant to Clauses 24.1 (a), (b), (c) and (d) above.

24.3                           For the
avoidance of doubt, each Party shall remain bound by the provisions of this
Clause 24 both before and after the Termination Date.

 61
 

24.4                           The
Company shall control the issuing of press releases and other public announcements
provided however that if such announcement addresses the performance of the
FPSO or any of the terms of this Agreement, it shall not do so unless prior
thereto it furnishes the Contractor with a copy of such announcement and
obtains the approval of the Contractor, such approval not to be unreasonably
withheld.  Notwithstanding the foregoing,
no Party or any Affiliate of such Party shall be prohibited (but subject always
to providing a prior copy to the other Party) from issuing or making any such
public announcement or statement if it is necessary to do so in order to comply
with Legislative Requirements or the regulations of a recognised stock exchange
or the information is in the public domain.

25                                  Duration

25.1                           This
Agreement shall come into effect on the Effective Date and shall continue for
at least the Primary Term and for such limited time thereafter to allow for the
complete demobilisation of the Contractor’s Facilities.

25.2                           The
Company may exercise the option to enter into or
continue the Extension Term (to be exercised by notice in writing at least
twelve (12) months prior to the expiration of the Primary Term or the Extension
Term as the case may be) and if the Company exercises the option, this
Agreement shall extend beyond the Primary Term for a period of one (1) year up
to a maximum of two (2) consecutive years unless otherwise agreed in writing by
Parties.

25.3                           Without
prejudice to the provisions of Clause 25, the Primary Term shall be extended
by;

 62

(a)                                  the
equivalent 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 Downtime
Compensation Period.

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

25.5                           Without
prejudice to the provisions of Clause 25, the Extension Period shall be
extended by;

(a)                                  the
equivalent 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)                                 the
Downtime Compensation Period for that Extension Term.

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

 63
 

26                                  TERMINATION

26.1                           If:

(a)                                  the
FPSO becomes a Total Loss;

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

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

26.2                           If at
any time the Contractor is in material breach of any of the warranties given in
this Agreement, or if the Contractor fails to fulfil any of its material
obligations hereunder, the Company shall notify the Contractor in writing
specifying the nature of the failure to comply with the Contractor obligations.
If the Contractor fails to commence (including the ordering of any necessary
replacement equipment and/or the submission to the Company of a plan for
remedying the matters complained of) to remedy the matters complained of within
seven (7) days after such notice is received by the Contractor or fails to
continue thereafter to remedy the same, all in a manner and time period that
would be expected from a Reasonable and Prudent Operator, the Company may,
subject to the Quiet Enjoyment Agreement, terminate this Agreement forthwith
upon serving written notice on the Contractor.

26.3                           If at
any time the Contractor is in repeated material breach of its fundamental
obligations to operate the Contractor Facilities as per the provisions in this
Agreement, and such breaches or series of breaches cause the FPSO to stop
Production for thirty (30) days or more in any twelve month period (excluding
any agreed, planned maintenance and

 64
 

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

(a)                                  the
Company shall pay to the Contractor a daily charter hire equal to at least the
Charter Hire and the Production Tariff as set out in Schedule F of this
Agreement, and

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

(c)                                  if
within the Primary Term the Parties enter into such bareboat charter replacing
this Agreement, no termination fee (as set out in Schedule F) shall be payable
by the Company as a result of the early termination of this Agreement, and

(d)                                 the
condition of the FPSO on redelivery by the Company to the Contractor shall be
similar to the condition of the FPSO upon delivery by the Contractor to the
Company under the such bareboat charter arrangement, fair wear and tear
excepted.

 65
 

Upon the FPSO
and the Mooring System being delivered under the bareboat charter arrangement
as agreed by Parties, this Agreement shall terminate but always subject to any
rights and liabilities having accrued or arisen under this Agreement prior to
its termination as a result of this Clause 26.3.

26.4                           If the
Contractor or any person having an ownership, leasehold or charter right in the
FPSO goes into liquidation (otherwise than voluntarily for the purposes of
amalgamation or reconstruction), makes an assignment for the benefit of
creditors, makes an arrangement, composition or compromise with its creditors
under any applicable laws or has a receiver appointed in respect of the whole
or any part of its assets, or if the Company reasonably believes that any of
the foregoing is imminent, the Company may, subject to the Quiet Enjoyment
Agreement, terminate this Agreement forthwith upon serving written notice on
the Contractor.

26.5                           Upon
the relevant Government Body confirming that they do not object to the
cessation of Production, the Company may terminate this Agreement at any time
without cause at its sole discretion by providing one (1) years’ prior written
notice. If such termination becomes effective within the Primary Term, the
Company shall pay the Contractor the appropriate termination payments and fees
in accordance with the provisions of Section 9.1 of Schedule F. If such
termination becomes effective within the Extension Term, the Company shall pay
the Contractor the appropriate termination payments and fees in accordance with
the provisions of Section 9.2 of Schedule F.

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

 66
 

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

26.7                           Upon
termination of this Agreement pursuant to the foregoing Clauses 26.1, 26.2 and
26.4 no further sums shall be due to the Contractor or recoverable from the
Company, save for any amounts due as a result of Clause 12.11, and save for any
amounts already accrued for the Contractor Services already provided, or as may
arise or be outstanding under any claims for indemnity.

Upon this
Agreement terminating as per Clause 26.3 last paragraph, no further sums shall
be due to the Contractor or recoverable from the Company save for any amounts
already accrued for the Contractor Services already provided, or as may arise
or be outstanding under any claims for indemnity.

26.8                           Notwithstanding
anything to the contrary in this Agreement, any election by the Company to
terminate this Agreement pursuant to this Clause 26 shall not relieve the
Contractor of its obligations pursuant to Clause 30 nor its obligations under
Clause 30 to take action to protect the Ettrick Field or any other Field
tied-in to the FPSO, Contractor Personnel, Contractor Facilities, Company
Personnel, Company Facilities, third parties and the property of third parties.

26.9                           If the
suspension as per Clause 27.4 continues for a period of [****] or more the
Company shall be entitled to terminate this Agreement by providing the
Contractor written notice of termination and clarification of the Force Majeure
event.

 67
 

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

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

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

27                                  FORCE MAJEURE

27.1                           Neither
Party 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 or
delay is attributable to “Force Majeure”, which shall include, but is not
limited to, wars, hostilities, terrorists acts, boycotts, embargoes, public
disorders, acts of enemies, strikes, lockouts, labour or employment
difficulties, acts of God, or any cause beyond its control whether or not
similar to any of the foregoing. 
Notwithstanding the foregoing:

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

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

 68
 

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

are expressly excluded
from the definition of Force Majeure.

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

27.3                           The
relevant Party shall be excused and relieved from performing its obligations
pursuant to this Agreement only to the extent and for the time that such delay
or failure to perform,

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

(b)                                 could
not reasonably be anticipated or protected against.

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

27.4                           Subject
to Clause 25, in the event of Force Majeure, the Company and the Contractor
agree that, although operations are suspended, this Agreement shall remain in
force pending relief of the circumstances of Force Majeure, provided always
that the Company shall have the right to terminate this Agreement in accordance
with Clause 26.9 in which case the last paragraph of Section 9.1.2 of Schedule
F applies.

 69
 

28                                  ASSIGNMENT

28.1                           The Company
may freely assign its rights and obligations under this Agreement to an
Affiliate of the Company, provided that the parent company guarantee as
submitted 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 unreasonably
withheld, the Company may assign its rights and obligations under this
Agreement to any of the Co-venturers or to a technically and financially
responsible successor operator of the Ettrick Field. A failure of the assignee
to provide a parent company guarantee in a form similar to Schedule N from a
parent having a similar or better rating than Company’s parent is a reasonable
ground to Contractor to withhold its consent.

28.2                           The
Contractor shall not assign any right, benefit, obligation or otherwise
pursuant to this Agreement to any party other than those lenders who have
complied with Clause 16.1(a).

28.3                           A
Co-venturer may assign its rights and obligations under this Agreement provided
however that such Co-venturer first complies with its agreements with other
Co-venturers relating to its interest in the Field.

29                                  ADDITIONAL FIELDS

29.1                           The
Company or the Co-venturers may, prior to the Termination Date, propose to
tie-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 financiers
and subject to safety requirements and capacity and/or process constraints of
the Contractor Facilities, but will be under no obligation to relocate the
Contractor Facilities for this purpose. 
Subject to the Parties agreeing a

 70
 

Change Order pursuant to Clause 37, the
Contractor shall provide any additional equipment required to facilitate such
tie-ins and related Production and the Charter Hire shall be adjusted
accordingly.

30                                  PATENT INDEMNIFICATION

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

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

 71
 

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

30.3                           Any
discoveries, 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 reason
of, the performance of the Contractor Services for the Company shall be the
property and copyright of the Contractor and are to be considered to be
confidential information of the Contractor (to which Clause 24 will apply).

31                                  NOTICES

31.1                           Any
notices required to be served hereunder shall be served on the relevant Party
at the address set out below:

Company:                                          NEXEN
PETROLEUM U.K. LIMITED

Charter Place

Vine Street

Uxbridge

Middlesex UB8 1JG

England

Attn:                    Jeff Dickinson
(Project Manager)

Fax No. +44 (0)1895 272 918

Contractor:                                 BLUEWATER
ETTRICK PRODUCTION (UK) LIMITED

c/o Bluewater Services (UK) Limited

Bluewater House,

Badentoy Industrial Estate,

Portlethen,

Aberdeen AB12 4YD

Attention: General Manager

Fax:  +44 (0)1224 403 340

 72
 

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

32                                  ABANDONMENT PROVISIONS

32.1                           Immediately
after the Termination Date, the Contractor shall expeditiously decommission and
demobilise the FPSO and the Mooring System in accordance with Legislative
Requirements which shall include ensuring that the sea bed is free of all
mooring equipment which could be considered as an obstruction to future fishing
activities.

32.2                           Immediately
after 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                           The
Contractor shall redeliver the FPSO and the Mooring System safely afloat with
all tanks cleaned at a port on the North East side of the UK (the “Redelivery
Port”) and the Company shall indemnify the Contractor Group for any Claims
directly or indirectly related to the demobilisation of the Mooring System or
any part thereof from the Field.

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

 73
 

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

33.                               liquidated damages for delay

33.1                           The
Contractor agrees that liquidated damages of [****] shall be payable by
Contractor for each and every day the Contractor delays achieving First Oil on
or before 28 March 2008 (the “Scheduled First Oil Date”) (unless excused
pursuant to the terms of this Agreement, or prevented by the acts or omissions
of Company Group). Parties agree that a grace period of [****] applies prior to
Company being entitled to claim payment of the liquidated damages. The
Contractor’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 sole
remedy in case of delay.

33.2                           All
amount of Liquidated Damages for which Contractor may become liable under this
Clause are agreed between the Parties as a genuine pre-estimate of the loss
which may be sustained by the Company in the event Contractor fails to
satisfactorily accomplish First Oil by the date set forth in Clause 33.1.

34                                  GUARANTEES

34.1                           The
Contractor acknowledges receipt of the parent company guarantee provided by the
Company in the form of Schedule M and the Company acknowledges receipt of the
parent company guarantee provided by the Contractor in the form of Schedule N.

 74
 

35                                  dispute resolution

35.1                           Except
as otherwise expressly provided in this Agreement, if a dispute difference or
claim arises between the Parties concerning the interpretation, performance, or
breach of this Agreement which the representatives of the Parties are unable to
resolve (hereinafter referred to as the “Dispute”), the Parties will  use the following procedures to finally
resolve the Dispute.

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

35.2                           Within
seven (7) days after a specific request by a Party, each Party will appoint a
representative from its senior management and negotiate with the other Party to
promptly reach an equitable, mutually acceptable resolution of the Dispute. Each
Party will delegate to its representative(s) the authority to resolve the
Dispute on behalf of that Party. Within five (5) days after the good faith
negotiations begin, the Parties’ representatives shall prepare a specific
statement 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 the
Dispute or (ii) refer the Dispute for resolution through mediation. Each
referral will specifically state the matters to be resolved by the mediator.

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

 75
 

mediator. Upon selection of a mediator, the Parties will begin
mediation. The mediation will be conducted informally, impartially and
reasonably with the co-operation of the Parties. Unless the Parties achieve a
settlement during the mediation, the mediator will recommend a resolution of
the Dispute to the Parties within thirty (30) days after the commencement of
the mediation. Within fourteen (14) days after receiving the mediator’s
recommendation, the Parties will either (i) agree upon an equitable resolution
of the Dispute, or (ii) refer the Dispute for resolution according to Clause
36.1.

35.4                           Within
ninety (90) days after the mediator’s recommendation if neither Party has
instituted proceedings in respect of the Dispute in accordance with Clause
36.1, both Parties shall have irrevocably waived their rights to take any
further action in respect of the Dispute.

36                                  governing law and jurisdiction

36.1                           This
Agreement shall be governed by and construed in all respects in accordance with
the laws of England and, subject to Clause 35 hereof, the Parties submit any
Dispute to the exclusive jurisdiction of the English courts in London.

37                                  Contractor Facilities upgrade

37.1                           Any upgrades
or modifications to the Contractor Facilities after First Oil (to the extent
that such modifications are not necessary to ensure performance by Contractor
of the Contractor Services under this Agreement) that are specifically
requested by the Company, shall be subject to the Change Order Procedure as
described in Schedule J. During any production shutdown and/or demobilisation
of the FPSO required for or resulting from such upgrade or modification the
Operating Costs and the Insurance Costs shall be payable, and the Standby Rate
instead of the Charter Hire shall be payable.

 76
 

38                                  MISCELLANEOUS

38.1                           This
Agreement constitutes the entirety of this Agreement between the Parties
relating to the operation of the Field and any prior correspondence, meeting notes,
memoranda or other documentation prior to the date of this Agreement shall be
disregarded in the interpretation of this Agreement.

38.2                           This
Agreement shall not be deemed to be a Contract for the Carriage of Goods by Sea
within the scope of the Carriage of Goods by Sea Acts 1924 and 1971.

38.3                           A
person who is not a Party to this Agreement shall have no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

38.4                           Notwithstanding
any other provision of this Agreement, the following conditions shall survive
expiration or termination of this Agreement (together with any accrued payment
obligations of the Parties and obligations relating to the redelivery and
demobilisation 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 the
extent it relates to obligations arising from termination), 27, 28, 29, 30, 31,
32, 35, 36, and 38.

IN WITNESS WHEREOF the
Parties have caused this Agreement to be executed by their duly authorised
signatories.

	
  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

  

 

 77

AGREEMENT FOR THE PROVISION AND
OPERATION OF

A FLOATING, PRODUCTION, STORAGE
AND OFFLOADING

VESSEL
FOR THE ETTRICK FIELD

SCHEDULE
A

DESCRIPTION
OF THE ETTRICK FIELD

LOCATION
OF THE FPSO

THE ETTRICK PRODUCTION PROFILE

SCHEDULE A

DESCRIPTION
OF THE ETTRICK FIELD

LOCATION OF THE FPSO

THE ETTRICK PRODUCTION PROFILE

TABLE OF
CONTENTS

	
  1.

  	
  INTRODUCTION

  	
  3

  

 

 2
 

1.                                     INTRODUCTION

The Ettrick field
is located in the UK sector of the Central North Sea.  The Ettrick Field lies in the Outer Moray Firth
and is approximately 120km NE of Aberdeen, 65km from Peterhead and 20km East of
the Nexen operated Buzzard field.  The
Ettrick Field unitised area straddles UKCS Blocks 20/2a and 20/3a in the South
Halibut Basin (Ettrick Sub-Basin), which are covered by the P273 and P317
licenses that were awarded in the 5th and 6th rounds respectively.  The Ettrick Field is situated in 115m LAT of
water.

The Ettrick Field
was discovered in 1981 by the 20/2-1 well drilled by BNOC, which penetrated
oil-bearing sandstone in the Upper Jurassic, Middle Volgian Ettrick Sands
reservoir, and was tested at 4538 bopd. 
The Ettrick Field was further appraised by seven wells from 1982 to
1985, four of which produced hydrocarbons to surface.  The last appraisal well was drilled in 1985
(20/2-7Z).  Nexen Petroleum U.K. Limited
became 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 the
designated operator and the programme coordinator of the Ettrick Field.

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

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

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

Company provided data on
field lay-out, reservoir fluid properties, production chemistry, production
profile, soil data, and metocean data are included in the Functional
Specification (Attachment D.1 to Schedule D).

 3

AGREEMENT
FOR THE PROVISION AND OPERATION OF

A
FLOATING, PRODUCTION, STORAGE AND OFFLOADING

VESSEL FOR THE ETTRICK FIELD

SCHEDULE B

HEALTH, SAFETY AND ENVIRONMENT

SCHEDULE B

HEALTH,
SAFETY AND ENVIRONMENT

TABLE OF
CONTENTS

	
  1.

  	
  SCOPE

  	
  3

  
	
  2.

  	
  POLICY

  	
  3

  
	
  3.

  	
  GENERAL OBLIGATIONS

  	
  3

  
	
  4.

  	
  OBLIGATIONS DURING OPERATIONS

  	
  5

  

 

 2
 

1                                         SCOPE

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

2                                         POLICY

2.1.                              The
Contractor 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 its
Sub-contractors comply with SMS.

2.2.                              The
Contractor shall ensure compliance with SMS, the Company’s requirements and
Legislative Requirements for each stage of the development lifecycle of
Contractor Facilities from conceptual design through decommissioning and
abandonment.  Furthermore, the design and
operation of the Contractor Facilities shall ensure that risk to persons and
environment is as low as reasonably practicable (“ALARP”).

3                                         GENERAL OBLIGATIONS

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

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

3.3                                 The
Contractor shall develop and maintain an offshore emergency response plan.

3.4                                 The
Company shall be responsible for providing onshore emergency response
organization and facilities and for maintaining and managing all third party
emergency response services (both offshore and onshore).

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

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

 3
 

3.7                                 The
Contractor shall prepare a health, safety and environment plan and schedule
which clearly state the key milestones in the project, any project critical
path activities and the Company’s involvement. 
This plan shall be issued to the Company within thirty (30) days of the
execution of the Agreement.

3.8                                 The
Contractor shall prepare and submit the design safety case/design notification
to the HSE. The Contractor shall submit the design safety case/design
notification in a timely manner as prescribed by the safety case regulations. Where
applicable, the Contractor shall process HSE issue notes in a manner acceptable
to the HSE.

3.9                                 The
Contractor shall prepare and submit the original and subsequent re-submissions
of the operational safety case to the HSE. The Contractor shall submit the
operational safety case and all subsequent re-submissions in a manner as
prescribed by the safety case regulations. The Contractor shall be responsible
for ensuring acceptance of the operational safety case submissions by the HSE.

3.10                           The
Company may, at its discretion, participate in health, safety and environment
related matters. The participation of the Company in said matters is to assist
the Contractor in meeting its health, safety and environment obligations and
objectives.

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

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

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

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

3.15                           The
Contractor shall provide, within thirty (30) days of the execution of the
Agreement, the operating and maintenance philosophy for the Contractor
Facilities and the Company Facilities. Said philosophy shall include, but not
be limited to, the

 4
 

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

3.16                           Company
shall be responsible for the application and obtaining of all license permits
and consents in relation to Field operation and pipeline operatorship. Contractor
shall assist Company, where relevant, in the preparation of all submissions for
compliance with Legislative Requirements.

3.17                           The
Contractor shall assist the Company in the preparation of an environmental
impact assessment.

3.18                           The
Contractor shall comply with its requirements, the Company requirements
attached or referred to in the Agreement and Legislative Requirements for the
protection of health.

4                                         OBLIGATIONS DURING OPERATIONS

4.1.                              During
commissioning, operation, and maintenance, the Contractor shall, in accordance
with the provisions of Clause 21, implement SMS at the Contractor Facilities
and the Company Facilities. SMS shall include but not be limited to:

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

(b)                                a
permit to work system;

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

(d)                                adequate
provision and use of personal protective equipment;

(e)                                 adequate
procedures for controlling over-side working;

(f)                                   task
safety analysis for routine and non-routine operations;

(g)                                emergency
drills and exercises;

(h)                                adverse
weather policies;

(i)                                    change
control and management procedures and systems;

(j)                                    operating
and safety manuals and procedures for Contractor Facilities and Company
Facilities;

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

(l)                                    independent
verification of safety critical elements;

 5
 

(m)                              identification
of all Legislative Requirements to be complied with;

(n)                                system
for the assurance of technical integrity of Contractor Facilities and subsea
facilities;

(o)                                regular
audits to ensure compliance;

(p)                                emergency
response,

 6

AGREEMENT FOR THE PROVISION AND
OPERATION OF

A FLOATING, PRODUCTION, STORAGE
AND OFFLOADING

VESSEL
FOR THE ETTRICK FIELD

SCHEDULE C

COMPANY
SERVICES

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

SCHEDULE
C - COMPANY SERVICES

SCHEDULE C

COMPANY
SERVICES

TABLE OF
CONTENTS

	
  1.

  	
   

  	
  SCOPE COMPANY SERVICES

  	
   

  	
  3

  

 

 2
 

1.                                      SCOPE
COMPANY SERVICES

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

1.1                                 The
Company shall design, engineer, procure, certify and insure the subsea systems
which include amongst others x-mas trees, manifolds, flowlines, jumpers,
umbilicals, and the riser system and the associated subsea controls (the “Subsea
Systems”)

1.2                                 The
Company shall install and test the Subsea Systems prior to the Scheduled
Arrival Date. The Company shall commission the Subsea System once the FPSO is
hooked-up to the Contractor Mooring System.

1.3                                 The
Company shall provide all repair, spare parts, replacement (if required),
maintenance, operation and inspection activities associated with the Subsea
Systems.

1.4                                 The
Company shall perform geotechnical and geophysical investigations at the
mooring point locations.  The Company
shall make available to the Contractor the detailed results of the geotechnical
and 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 of
Schedule D.

1.5                                 The
Company shall be responsible for the removal of any debris and wreckage in way
of the mooring line corridors.

1.6                                 The
Company shall free issue to the Contractor at a time and place to be mutually
agreed, those elements of the control systems to be installed onboard the FPSO
for the operation of the Subsea Systems. The Company shall be responsible for
the commissioning of the said elements.

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

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

B.                                     Company
shall instruct Contractor with respect to 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.                                     Company
shall instruct Contractor in operation of the subsea control systems.

1.7                                 Company
shall have the responsibility for managing the interface between the FPSO and
the subsea control systems. The subsea control interface is included in the
Functional Specification (Attachment D.1 to Schedule D).

 3
 

1.8                                 The
Company shall be responsible for managing the interface of the flexible riser
system and the Contractor Mooring System. The subsea riser interface is included
in the Functional Specification (Attachment D.1 to Schedule D).

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

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

1.11                           The Company
shall provide all repair, replacement (if required), maintenance, operation and
inspection activities associated with the Subsea Gas Export System.

1.12                           The Company
shall install in the Field the Contractor Mooring System and hook-up the Subsea
System to the Contractor Mooring System prior to Scheduled Arrival Date.

1.13                           With
respect to Sections 1.1, 1.2, 1.3, and 1.12 of this Schedule C.  The Company shall strictly adhere to any
instructions of the Contractor issued in its capacity as Duty Holder or as
otherwise set out in this Agreement and in accordance with the Legislative
Requirements.

1.14                           The
Company shall be the pipeline operator.

1.15                           The
Company shall be fully responsible for reservoir management, flow assurance and
the selection, compatibility and provision of production chemicals.

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

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

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

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

1.20                         The Company
shall in case of introduction of in-field activities outwith the FPSO operation
provide adequate measures to ensure the health and safety of personnel and the
availability of the FPSO.

 4
 

1.21                           The Company
shall provide a Company Operations Representative who shall be the Company
designated person for all operational issues aboard the FPSO. The Company
Operations Representative’s responsibilities shall include but not be limited
to:

(a)                                  Liaising
with onshore reservoir specialists to optimise well controls and to provide the
Contractor with well choke settings, water injection rates, chemical selection
details and chemical injection rates related to subsea and reservoir matters;

(b)                                 Resolution
of operational disputes;

(c)                                  Monitoring
of operations offshore in order to verify and plan well uptime and to ensure
that said uptime is maximised without compromising technical integrity;

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

(e)                                  Monitoring
well performance;

(f)                                    Monitoring
and reviewing the collection and transfer of data to ensure the Company
information requirements are met;

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

(h)                                 Monitoring
corrosion management results and attending monitoring meetings;

(i)                                     Administration
of services provided pursuant to Sections 1.14, 1.15, 1.16 and 1.17 of this
Schedule C;

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

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

1.23                         The Company
shall provide to Contractor metocean data in accordance with the provisions of
Schedule D. In the event that this data is not specific to the Ettrick Field
the Company shall provide to the Contractor a formal statement from a
recognised organization, acceptable to the Certifying Authority, that the
metocean 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 Company
shall share available information regarding forecast production profiles for
the remaining years of Field life with the Contractor.

1.25                          The
Company shall provide Company Services in accordance with the Legislative
Requirements and standard North Sea practices.

 5
 

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

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

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

The provision by the Company
of the Company Services is further detailed in Schedule E (Responsibility and
Interface Matrix).

 6

AGREEMENT FOR THE PROVISION AND
OPERATION OF

A FLOATING, PRODUCTION, STORAGE
AND OFFLOADING

VESSEL
FOR THE ETTRICK FIELD

SCHEDULE
D

CONTRACTOR
SERVICES

SCHEDULE
D

CONTRACTORS
SERVICES

TABLE OF
CONTENTS

	
  1

  	
   

  	
  GENERAL

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  PROVISION OF THE FPSO

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  OPERATION OF THE CONTRACTOR FACILITIES AND SUBSEA
  FACILITIES

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  DE-COMMISSIONING

  	
   

  	
  10

  

 

 2
 

1                                         GENERAL

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

1.1                                Contractor
Services shall consist of four main elements;

·                  the
provision of the Contractor Facilities (including the FPSO)

·                  the
operation and maintenance of the FPSO

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

·                  the
de-commissioning of the FPSO and Mooring System and, if requested by the
Company, 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
 

 

	
  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
 

Gas Emissions Trading Scheme Regulations (SI2005/925).  The civil penalty set to come into force on
January 1st 2008 is one hundred (100) Euro per tonne of
CO2 discharged from the FPSO.

The civil penalty for exceeding allocated CO2
emissions in case Contractor’s equipment on board the FPSO does not meet the
Functional Specification under normal operations, or, should the Contractor so
require, Company’s documented actual costs to acquire additional allowances to
cater for the emissions exceeding the allowances required for normal
operations, whichever is the less, shall be for the Contractor’s account.

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

2.4.3                       The
wellstream fluids shall be separated into oil, water and gas. Crude oil shall
be 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 the
Functional Specification in Attachment D.1.

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

2.4.5                       The FPSO
shall be capable of ensuring that all produced fluids collected at low pressure
points such as storage tanks can be returned to the process separation train
for treatment without contamination from surface water and other oxygenated
liquids.

2.4.6                       A seawater
injection system shall be provided as described in the Functional Specification
in Attachment D.1.

2.4.7                       The
topsides process plant shall have the capacity to process the Natural Gas from
the Ettrick Field as described in the Functional Specification in Attachment
D.1.

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

 5
 

 

	
  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.

  

 6
 

 

	
  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

  	 

					

 7
 

 

	
  

  	
  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
 

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 all
applicable environmental legislation, by the Company and the Contractors own
procedures.

(f)                                    Support
and maintenance of the crude oil allocation system, including when required as
part of the reconciliation process manual readings of tank levels and manual
sampling of crude oil streams.

(g)                                 Injection
of chemicals as required by the Company;

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

(i)                                     Implementation
of choke settings via the subsea control system aboard the FPSO to the Company’s
instructions pursuant to Schedule C.

(j)                                     The
Parties shall supply consumables, services and equipment in accordance with
Schedule E.

(k)                                  Containerisation
for transportation to shore for disposal of all wastes. The Company shall
arrange for transport to shore and onshore disposal;

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

(m)                               Maintenance
of the Company’s gas chromatograph equipment onboard the FPSO.  This includes the Contractor carrying out a
daily visual inspection of said equipment, providing first line repair and
maintenance of and supply of gas for calibration of said equipment and support
required for other non first line repair and maintenance of said equipment;

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

 9
 

3.4                                 All
Inspection, Repair and Maintenance (IRM) is to be planned, conducted and
reported in accordance with VB/CS and HSE requirements.  The Contractor’s planned maintenance routine
shall include but not be limited to the underwater hull, Mooring System
excluding Mooring Legs, topsides facilities and structures.  Safety and production uptime are not to be
compromised by deficiencies in the planning and execution of IRM activities.

3.5                                 The
Contractor shall be responsible for the maintenance and operation of:

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

(b)                                 Any
telemetry or similar system aboard the FPSO that may be necessary for
communication between the FPSO and the shuttle tanker; and

(c)                                  FPSO
located handling systems for hose and hawser systems.

3.6                                 The
Contractor shall be responsible for the provision, maintenance and operation of
a bunkering hose up to and including the end coupling.

4                                          DE-COMMISSIONING

 

4.1                                 Contractor
shall commence de-commissioning upon receiving instruction from Company to do
so.

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

4.3                                 The
Contractor’s services regarding de-commissioning may include, but shall not be
limited to:

(a)                                  Providing
technical documents to support the Company in its preparation of the
application to abandon the Field;

(b)                                 Obtaining
approval for removal of all in field equipment;

(c)                                  Removing
and disposing of all items of the FPSO and Mooring System and, if requested by
the Company, the Subsea Systems which have been installed in the Ettrick Field
as per instructions of the Company;

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

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

4.5                                 If
requested by the Company, the Contractor shall carry out a seabed video survey
to inspect the Site on debris.

4.6                                 The
Contractor shall plan and perform decommissioning with due regard to the need
to co-ordinate and cooperate with the removal of items within the Company’s
responsibility.

 10
 

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

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

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

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

Attachment D.2:
Regulatory Compliance Plan

·                  Document to be
provided by the Contractor and will be attached to the Agreement within 60 days
from the Effective Date.

Attachment D.3: FPSO
Acceptance Methodology

 11

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

The applicable documents
referenced 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

  

 

COMPANY
PROVIDED 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

  

 

TURRET
MOORING 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

  

 

ATTACHMENT D.2:
REGULATORY COMPLIANCE PLAN

DOCUMENT TO BE
PROVIDED BY THE CONTRACTOR AND WILL BE ATTACHED TO THE AGREEMENT WITHIN 60 DAYS
FROM THE EFFECTIVE DATE.

ATTACHMENT D.3

FPSO ACCEPTANCE
METHODOLOGY

Ettrick
FPSO 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

  	
   

  	
   

  	 

																								

Notes:

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

An
NAPC (notifications, authorisations, permits and consent) type activity is a
legislatively required permit and consent interface with an authority.

AGREEMENT FOR THE PROVISION AND
OPERATION OF

A FLOATING, PRODUCTION, STORAGE
AND OFFLOADING

VESSEL
FOR THE ETTRICK FIELD

SCHEDULE E

INTERFACE
AND RESPONSIBILITY MATRIX

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

SCHEDULE
E – INTERFACE AND RESPONSIBILITY MATRIX

Schedule E

Matrix of
Responsibilities – 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
 

 

	
  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 of
Responsibilities - 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 of
Responsibilities – 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 of
Responsibilities – 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
 

 

	
   

  	
   

  	
   

  	
   

  	
  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

  

 

	
  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

 

AGREEMENT
FOR THE PROVISION AND OPERATION OF

A FLOATING, PRODUCTION, STORAGE AND OFFLOADING

VESSEL FOR THE ETTRICK FIELD

SCHEDULE F

PAYMENT OBLIGATIONS

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

SCHEDULE
F - PAYMENT OBLIGATIONS

SCHEDULE F

TABLE OF
CONTENTS

	
  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

  

 

 2
 

1.                                      PAYMENT
OBLIGATIONS

1.1                                In consideration of the
fulfilment by the Contractor of its obligations and its compliance with the
terms of this Agreement, the Company shall pay the Contractor in accordance
with this Schedule F.

2.                                      CHARTER
HIRE

2.1                                Subject always to Sections
4, 6, and/or 7 of this Schedule F (in which event a rate different from the
Charter Hire shall be due to the Contractor), for each day on and after the First
Oil Date until the Termination Date, the Company shall pay to the Contractor the
applicable 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                                During
the Primary Term

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

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

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

3.2                                During
Extension Term

3.2.1            For
each day during each Charter Hire Payment Period within the Extension

 3
 

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

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

3.2.3            If
within the Extension Term the Actual Production of a day is less than the Daily
Minimum Guaranteed Production Company shall pay to Contractor for that day an
amount equal to the Production Tariff multiplied by the Daily Minimum Guaranteed
Production.

4.                                      FORCE
MAJEURE RATE

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

5.                                      PERMITTED
DELAY DAY RATE

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

5.2                                If
as a result of a Change Order Request initiated prior to First Oil, the Parties
agree that the Change Order shall result into First Oil being later than the Scheduled
First Oil Date, Company shall compensate the Contractor as part of that Change
Order an amount equal to the agreed days of delay multiplied by the Permitted
Delay Day Rate.

6.                                      STAND-BY
RATE

6.1                                For
each day or part thereof after First Oil during which the Contractor Facilities
are prevented from producing as a result of;

 4
 

6.1.1                       an act or
omission of any member of the Company Group; or

6.1.2                       any failure
of Company Facilities; or

6.1.3                       a Change
Order; or

6.1.4                       technical
disputes to the extent that the Classification Society holds the Contractor not
liable therefor; or

6.1.5                       any failure
of the Field, wells or wellheads, or

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

7.           [****]

7.1                                For
each day or part thereof during which the FPSO is prevented from Producing as a
result of:

i)                      a material
breach of Contractor of its obligations as per Clause 26.2 of the Agreement, or

ii)                   the FPSO being demobilised
from the Field solely for unscheduled repairs of the FPSO to an onshore
location for reasons other than when the Force Majeure Rate or the Standby Rate
applies,

the Company shall pay to the Contractor [****]
 per day (the [****]) or pro rata part
thereof. For clarity, Parties agree that during the period that the [****] is
payable, the Operating Costs and the Insurance Costs shall remain payable by
the Company for up to a maximum period of sixty (60) consecutive days per event
causing such prevention of Production. Thereafter, these costs shall be for the
account of the Contractor until such time as the Company either terminates this
Agreement under Clause 26.2 or the FPSO returns to the Field and re-commences Production.

8.           PAYMENT MOORING LEGS

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

 5
 

9.           TERMINATION PAYMENTS

9.1                                Termination
during Primary Term

9.1.1                       If, as
permitted under the terms of the Quiet Enjoyment Agreement, the Company
terminates the Agreement by notice received by the Contractor prior to the end
of 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 fees
or Production Tariff shall be due to the Contractor), the Company shall pay to
the Contractor as a lump sum; i) the relevant termination fee as per Table 9.1
below plus ii) an amount equal to any shortfall between the Actual Production during
the period from First Oil up to the Termination Date and the Minimum Guaranteed
Production multiplied by the Production Tariff.

9.1.2                       Subject to
the Termination Date being a day within a year as set out in Table 9.1, the
termination 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, the
Force Majeure Rate paid by the Company to the Contractor as a result of the
Force Majeure event giving rise to the termination shall be deducted from the
Termination Fee. For the purpose of determining the Termination Fee, the Termination
Date shall be deemed to be the commencement date of the Force Majeure event
giving rise to the termination.

9.1.3                       In addition
to the payments under Section 9.1.1 and 9.1.2 of this Schedule F, the Company
shall reimburse the Contractor the Operating Cost associated with termination
prior to the end of the Primary Term as described in Schedule G (for example
but not limited to FPSO lay-up costs, cost of early termination of employee
contracts and supplier agreements) and the Insurance Costs.

9.2                                Termination
after Primary Term

9.2.1                       If, as
permitted under the terms of the Quiet Enjoyment Agreement, the Company
terminates the Agreement by notice received by the Contractor during the
Extension Term (other than for those reasons set out in Clause 26.1, 26.2, 26.3
or 26.4 in which event – subject to Clause 12.11 - no further Charter Hire or
Production Tariff under

 6
 

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

10.          OPERATIONS
COST PAYMENTS

10.1                          The Company
shall pay the Contractor the cost of operating the Contractor’s Facilities as
described in Clause 12 and Schedule G of this Agreement.

11.           ADDITIONAL
COSTS

11.1                          In
recognition of the additional costs incurred by the Contractor between the Company’s
receipt of the Contractor’s commercial proposal in December 2005 in accordance
with the provisions of the FEED contract entered into between the Company and
Bluewater Energy Services BV on the 3rd October 2005 and any amendments thereof up to
the Effective Date of this Agreement and the Company’s acceptance thereof on
the Effective Date, the Company agrees to pay the Contractor the sum of [****].
 The Contractor shall invoice the Company
for this sum no earlier than thirty (30) days after the Effective Date and the
Company shall pay the Contractor therefore within thirty (30) days of receipt
of such invoice.

12.           DE-COMMISSIONING
PAYMENTS

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

 7

AGREEMENT
FOR THE PROVISION AND OPERATION OF

A FLOATING, PRODUCTION, STORAGE AND OFFLOADING

VESSEL FOR THE ETTRICK FIELD

SCHEDULE G

OPEX BUDGETING,
METHODOLOGY and PROCEDURE

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

OPEX
BUDGETING, METHODOLOGY and PROCEDURE

TABLE OF
CONTENTS

	
  1

  	
   

  	
  INTRODUCTION

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  OPEX BUDGET

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  OPEX BUDGETING METHODOLOGY

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  INCENTIVE ELEMENTS

  	
   

  	
  4

  

 

 2
 

1              INTRODUCTION

1.1           This Schedule describes the methodology and procedure for
determination, and payment of the Operating Costs by Company to Contractor. The
Company shall fully reimburse Contractor the actual Operating Costs [****] to
cover the cost of operating Contractor Facilities in accordance with the
requirements of the Agreement and Legislative Requirements

2              OPEX BUDGET

2.1           The OPEX budget shall be based on all anticipated Operating Costs. The
Company 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 as
either ‘core’ or ‘variable’ OPEX budget elements. The ‘core’ budget elements
being fixed monthly costs such as offshore manning costs and the ‘variable’
budget elements being variable monthly costs such as consumables and equipment
spares, payment of these Operating Costs will commence as stated in Clause 12.7
and will be for the duration of the Agreement.

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

3              OPEX BUDGETING
METHODOLOGY

3.1           Procedure for Agreeing OPEX Budget

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

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

3.2           Core and Variable Budget Variations

All variations to the agreed
OPEX budget expenditures, within the operating year, will be proposed by the
Contractor and agreed by the Company prior to commitment of the expenditure
variation.

3.3           OPEX Budget Format

3.3.1       The
level 1 OPEX budget shall consist of the following budget responsibility
owners;

Asset
Manager

Offshore
Installation Manager (OIM)

Offshore
Team Leader (OTL)

Marine Superintendent

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

 3
 

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

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

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

4              INCENTIVE ELEMENTS

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

4.2           The Contractor and the
Company shall agree, prior to First Oil and thereafter on an annual basis in
conjunction with the development of the OPEX budget, an incentive scheme which
shall adjust (plus or minus) the profit element of the OPEX budget to promote
the efficient use of the Company Services (such as helicopters, supply vessels
and diesel oil consumption) and the efficient use of the FPSO so as to minimize
environmental pollution including inter alia, a water injection rate and
quality (subject to Field performance, of up to [****] per day with an oxygen
content of less than [****] of particles larger than [****], or as otherwise
set out in the Functional Specification in Attachment D.1), green house gas
emissions (other than CO2). In case the Company and the Contractor cannot agree
to KPIs on water injection rate and quality as aforesaid and/or green house gas
emissions (other than CO2), Contractor will accept a [****] until such time as
Parties are able to agree to mutually satisfactory KPIs on water injection rate
and quality as aforesaid and/or other green house gas emissions (other than
CO2).

 4

AGREEMENT
FOR THE PROVISION AND OPERATION OF

A FLOATING, PRODUCTION, STORAGE AND OFFLOADING

VESSEL FOR THE ETTRICK FIELD

SCHEDULE
H

PROJECT
SCHEDULE

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

SCHEDULE
H - PROJECT SCHEDULE

SCHEDULE
H

PROJECT
SCHEDULE (BAR CHART INCLUDING KEY DATES) 

ATTACHED OVERLEAF

 2

AGREEMENT
FOR THE PROVISION AND OPERATION OF

A FLOATING, PRODUCTION, STORAGE AND OFFLOADING

VESSEL FOR THE ETTRICK FIELD

SCHEDULE
I

REPORTING

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

SCHEDULE
I - REPORTING

SCHEDULE I

REPORTING

TABLE OF
CONTENTS

	
  1.

  	
   

  	
  OBJECTIVE

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  PROJECT REPORTING

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  OPERATIONS REPORTING

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  DECOMMISSIONING REPORTING

  	
   

  	
  5

  

 

 2
 

1.                                      OBJECTIVE

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

2.                                      PROJECT
REPORTING

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

1.            narrative and
statistical data;

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

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

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

5.            an agenda for progress meetings.

The detailed format and
content of the Contractor’s reports shall be agreed by the Company, who intend
to operate a policy of exception reporting. Where problems are experienced
however, the report should explain the problem and propose a solution at the
appropriate level of detail. The reports will be issued on a weekly or monthly
basis as described below.

Weekly Progress Reports

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

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

2.            delays and/or
anticipated delays;

3.            actions for the next
week;

4.            any outstanding
information required from the Company;

5.            areas of concern /
exceptions / remedial actions;

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

7.                                       any accidents / incidents associated with the
work (including high potential incidents). A summary of corrective actions
taken shall be included.

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

 3
 

Monthly Progress Reports

The Contractor shall issue a
Monthly Progress report to the Company the format of which shall be as outlined
below. The report shall be concise and accurate and submitted no later than Friday
prior to the project review date with the Company (as per the attached cut-off
calendar – Attachment I-2).

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

·                  An update of
level 1 and 2 schedules, progress curves and manning levels. The information
provided will be based on main elements and show actual achieved against
planned.

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

·                  The status of
all purchased main equipment. Additional information may be required during the
phase up to delivery to the Field, this will be requested via the Contractor
representative.

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

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

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

·                  A summary of quality assurance and control
aspects in performance of the Work including audits performed against those
planned, non conformances raised and outstanding both internally and on
Subcontractors. 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 issue
a daily progress report, by email or facsimile, to the Company representative
which shall be received no later than 10am following the day under review. The
format of the daily report shall be as required by the Company representative
and shall include but not be limited to:

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

·                  Location during the sail

·                  List of operations completed in the previous
24 hours;

·                  List of operations to be undertaken in the
next 72 hours;

·                  Areas of concern

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

 4
 

3.                                      OPERATIONS
REPORTING

The Contractor
shall 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 to
the Company’s office in Aberdeen and be supported offshore by daily meetings
between the Contractor and the Company Operations Representatives and
teleconference calls between the FPSO and Contractor’s and Company’s office.  Meetings will be held in Aberdeen on a
monthly basis with ad hoc meetings and conference calls with the FPSO as
required.  The Contractor shall supply
plans and schedules covering work on the FPSO. 
The Contractor shall also provide incident reports, potential incident
reports, annual inspection reports and other single occurrence reports as
requested by the Company.  Daily reports
may include any information which is not commercially sensitive.

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

4.            DECOMMISSIONING
REPORTING

Reporting during decommissioning shall consist of
concise daily progress reports to the Company. During offshore activities daily
progress meetings shall be held between the Company and the Contractor’s
offshore representatives.

 5
 

ATTACHMENT I – 1

MONTHLY SESR REPORTING FORM

 6
 

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
 

ATTACHMENT I – 2

CUT-OFF CALENDER 2006

 8

AGREEMENT FOR THE PROVISION AND OPERATION OF

A FLOATING, PRODUCTION, STORAGE
AND OFFLOADING

VESSEL FOR THE ETTRICK FIELD

SCHEDULE J

CHANGE ORDER PROCEDURE

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

SCHEDULE
J - CHANGE ORDER PROCEDURE

SCHEDULE J

CHANGE
ORDER PROCEDURE

TABLE OF
CONTENTS

 

	
  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
 

1.                                      SCOPE

1.1.                             This
Schedule J sets out the procedure (the “Change Order Procedure”) to change the
Contractor Services as set out in the Agreement and Schedules.

2.                                      CONDITIONS
WHICH RESULT IN CHANGE ORDERS

2.1.               Contractor requested
Change Orders

(a)                The
Contractor may request a change to the Contractor Services in accordance with
the procedure set out herein.  These
changes may include additions to, deletions from or modifications to the
Contractor Services.

(b)                A
request for a Change Order shall not be approved by the Company if the proposed
change in the Contractor Services arises out of the Contractor’s non compliance
with the Agreement.

(c)                Requests
by the Contractor for changes to the Contractor Services shall be made in
accordance with Section 4.1 hereof.

2.2.               Company requested
Change Orders

(a)                The
Company shall have the right at any time to request a change to the Contractor
Services.

(b)                Requests
by the Company for changes to the Contractor Services shall be made in accordance
with Section 4.2 hereof.

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

3.                   PARTIES’
RESPONSIBILITIES

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

3.2.               Each Change Order
Request shall address the consequences of one cause for change only.

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

3.4.               Operations and
activities which are the subject of a Change Order Request shall not commence
until the Contractor has received a Change Order.

 3
 

4.                                      GENERAL
PROCEDURES

4.1.                             Contractor
Change Order Requests

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

(b)                               Each
such Change Order Request shall include an Impact Statement describing the
effect of the change on the payment obligations in Schedule F in accordance
with Section 4.3 hereof.

(c)                                Upon
receipt of a Change Order Request from the Contractor, the Company shall
respond to the Contractor within fourteen (14) calendar days as to whether it
accepts or rejects the Change Order Request.

(d)                               If
the Company rejects the Change Order Request:

(i)                                   the Contractor may
either accept the rejection or carry out the proposed change without prejudice
to its rights under the Agreement;

(ii)                                if the Company rejects
the Change Order Request on the ground that the change is within the Contractor
Services, the Company may nevertheless direct the Contractor to carry out the
proposed change without prejudice to the rights of either Party under the
Agreement and the Contractor shall effect said change.

4.2.               Company Change
Order Request

(a)                The
Company may initiate a change by properly completing and submitting a Change
Order Request signed by the Company representative.

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

4.3.                             Impact
Statement

(a)                The
Change Order Procedure is within the Contractor Services; therefore no charges
of any nature for preparation or processing Change Order Requests and Change
Orders shall be included in the Change Order Request, provided however, if the
cost of preparing an Impact Statement is mutually agreed to be significant, the
Company shall issue a separate Change Order Request for its 

 4
 

preparation.

(b)                               The
Impact Statement shall include any effect of the change on the Scheduled
Delivery Date and other target and/or completion dates in Schedule H. If there
is any effect on the Scheduled Delivery Date, the Contractor shall provide a
critical path analysis. If the Change Order Request is approved by Company, all
relevant plans and schedules shall be modified to reflect the new and approved
dates.

(c)                                The
Impact Statement shall include the effect of the change on the payment
obligations in Schedule F on one of the following bases as agreed by the
Parties prior to the issue of the Impact Statement:

(i)                  an
estimate 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 which
shall be supported by detailed estimate sheets using the Change Order rates
attached as Attachment J2 as appropriate and other vendor or Sub-contractor
quotations or estimates as appropriate, or

(ii)                a
fixed lump sum price or rebate to which the Contractor is prepared to commit
which shall be supported by detailed estimate sheets and vendor or
Sub-contractor quotations or estimates as appropriate.

(d)                               If
the Company accepts alternative 4.3(c)(i) the Contractor shall invoice the
Company, on a monthly basis as the relevant costs are incurred, for the actual
costs of the change to the Contractor and its Affiliates, provided however that
those services referred to in Attachment J2 shall be charged using the Change
Order rates in Attachment J2.  The
Contractor 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 the
Change Order is performed on a costs neutral basis to Contractor. Such invoices
shall be supported by applicable time sheets, material and equipment reports
and vendor or Sub-contractor invoices.

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

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

(g)                               Any
equipment installed as a result of a Change Order issued under the aegis of
Clause 37 of the Agreement shall become the property of the Contractor, 

 5
 

unless agreed otherwise.

4.4.                             Change
Order prior to First Oil

(a)                                If
the Change Order is released in the period prior to First Oil the Impact
Statement shall include an estimate of the number of days that First Oil will
be delayed after the Scheduled First Oil Date. Parties agree that the Scheduled
First Oil Date can not be altered by means of a Change Order.

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

(c)                                In
addition to Section 4.3(g) hereabove, if the fixed lump sum of Change Orders
prior 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                                Change
Order subsequent to First Oil

(a)                                Parties
agree that Contractor shall not be obliged to offer or accept a change in the
Charter Hire as per Section 4.3(f) for a Change Order Request initiated subsequent
to First Oil.

5.                                      DOCUMENTATION

5.1.               Change Order Requests
and Change Orders shall bear a unique and sequential number for the purposes of
identification.

5.2.               The Contractor
shall maintain logs for all Change Order Requests and approved Change
Orders.  The logs shall include the
following:

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

(b)                               a
brief description of the change.

6.                                      TIME
PERIODS

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

 6
 

 

	
  

  	
   

  

 

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
 

ATTACHMENT  J2

BLUEWATER MANHOUR RATES FOR CHANGES

 8
 

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

  

 

Notes:

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

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

(3)                                  Day
rate outside the Bluewater office in Hoofddorp is based on 10 working hours per
day

*                                         Rates
include taxes and social securities in the Netherlands.

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

 9

AGREEMENT FOR THE PROVISION AND
OPERATION OF

A FLOATING, PRODUCTION, STORAGE
AND OFFLOADING

VESSEL FOR
THE ETTRICK DEVELOPMENT PROJECT

SCHEDULE K

QUALITY ASSURANCE AND INSPECTION REQUIREMENTS

AGREEMENT
FOR THE PROVISION AND OPERATION OF  A FLOATING,
PRODUCTION, STORAGE AND

OFFLOADING  VESSEL FOR THE ETTRICK
FIELD

SCHEDULE K - QUALITY INSURANCE AND INSPECTION REQUIREMENTS

SCHEDULE K

QUALITY ASSURANCE
AND 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

·                  CORPORATE
POLICY

·                  HSEQ
POLICY

·                  CODE
OF BUSINESS CONDUCT AND ETHICS

·                  BEHAVIOURAL
POLICY

 2
 

1                               Scope

1.1                       The Company requires
transparency

Of the processes applied by the Contractor, throughout
the development and operational phase in order to ensure that the quality of
the Contractor Facilities and the Contractor Services, are managed in full
compliance with the requirements of ISO 9001:2000 principles and good industry
practice.  Contractor shall take full
responsibility for all aspects of quality related to the provision and
operation of the Contractor Facilities and the Contractor Services, by
providing objective evidence to the Company using controlled copies of its
quality assurance and control procedures in the form of a Project Quality
Assurance and Control Manual (“PQACM”), and
by giving the Company the right to audit and monitor the Contractor’s
implementation of and compliance with the Contractor’s quality system.

1.2                       The procedures contained
in the PQACM shall apply to the provision of the Contractor Facilities and the
Contractor Services, irrespective of location. The manual will be divided into
two parts:

a)              Contractor’s Corporate
Management System (“CMS”)

b)             Contractor’s Project Quality
Plan (“PQP”)

1.3                       The CMS does include, but is
not limited to:

a)              the complete Contractor
policy statement, clearly emphasising the Contractor commitment to quality and
signed by the chief executive;

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

c)              Quality Assurance system
audit;

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

e)              Change order control
procedure;

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

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

 3
 

1.4                       The PQP will include but
is not limited to:

a)              identify risks to
the planned execution of the Work along with measures to mitigate the possible
effects;

b)             incorporate a plan to
identify and achieve the timely acquisition of all Regulatory Consents and
Approvals;

c)              include plans for
the timely acquisition of resources to complete the Work in accordance with
Contract requirement;

d)             incorporate the Internal
and Subcontractor audits programme;

e)              show a structured
formalised mechanism in order to effect continuous improvement of service and
service delivery;

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

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

h)             reference to the
Contract standards, specifications or other documents which define the
acceptance criteria for each activity;

i)                 special attention
to be given to Offshore commissioning; Operations; Decommissioning; Inspection
and;

j)                 the number and
title of the procedure that will be used to convey the requirements for
execution of the Work;

k)              any other Quality
Assurance related issues which are not fully addressed in the CMS for the
proper execution of the Work.

2                               QUALITY POLICY

2.1                       The Contractor shall
understand the Quality Policy of Nexen Petroleum UK to be:

to establish,
communicate, and meet quality requirements for the products, services and
activities, which affect the integrity of the final project outputs. Quality
requirements include conformance with all applicable regulatory requirements,
performance standards specifications, codes, and standards, and defined
expectations of Project’s interested parties.

 4
 

2.2                       The Contractor’s Quality
Policy is:

To provide FPSO services which satisfy the Client’s and Regulator’s
requirements in an effective, efficient and safe way. This will ensure
Bluewater’s reputation as a reliable and innovative company in the offshore
industry, and contribute to a positive growth of the organisation.’

Contractors policies are
laid down in four major topical policies (see attachment A). Together these
constitute Contractor’s prime considerations in doing business:

·                  Corporate
Policy

·                  HSEQ
policy

·                  Code
of Business Conduct and Ethics

·                  Behavioural
Policy

3                               QUALITY MANAGEMENT COMPLIANCE

3.1                       The Contractor shall have a documented and
systematic approach to Quality Management, and a Quality Management System
(QMS) which is in compliance with or equivalent to:

a)              BS-EN ISO 9001: 2000
edition

b)             BS-EN ISO 19011: 2002
edition — Guidelines for quality and/or environmental systems auditing

4                               ORGANISATIONAL REQUIREMENTS

4.1                       The Contractor shall provide organisation
charts for the Project which,

a)              Identify key
positions for quality, including lines of authority and communication within
Project and their relationship within the Contractor’s company.

b)             The Contractor’s
quality organisation charts shall include descriptions of the roles and
responsibilities of all proposed positions.

c)              If requested, Contractor
shall submit updated quality organisation charts as a part of any Project Quality
Plan (PQP) or each time key personnel changes are accepted by the Company or
the organisation is changed.

 5
 

5                               NATIONAL CODES, STANDARDS & REGULATORY
REQUIREMENTS.

5.1                       The Contractor shall keep up to date with
revisions to the national codes & standards (or the equivalent
international standards), European Directives and other Regulatory requirements
as being applicable to the Work.

6                               QUALITY MANAGEMENT OF SUBCONTRACTORS

6.1                       The Contractor shall ensure, through the
application of procedures, that each Subcontractor operates an effective Quality
Management System in accordance with the relevant requirements of BS-EN ISO
9001: 2000. The Contractor shall maintain records that demonstrate this
objective is achieved.

7                               AUDIT BY THE CONTRACTOR

7.1                       The Contractor is required to regularly and
systematically perform self audits and Subcontractor audits by formally
implementing 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 of
the Contractor’s QMS by either:

a)              performing quality
surveillance, reviews of documentation or audits or,

b)             participating in
Contractor led audits or surveillance activities in accordance with the QMS
audit and quality control plan.

8.2                       The Company, or its authorised
representatives, shall have unrestricted access at all reasonable times to the
facilities, equipment, materials, personnel and records of the Contractor and
the Subcontractors to audit their respective QMS. The Contactor shall implement
all agreed recommendations arising from the audits within a mutually agreed
time scale.

8.3                       Based on the Contractor’s Project Quality
Plan, the Company will prepare a Quality Surveillance plan for monitoring
Contractor’s and their sub contractors quality

 6
 

performance. The Company’s
QS activities shall not relieve the Contractor or his subcontractors of any
responsibility 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 access
for the purposes of verifying aspects of the Work, shall be notified to the
Company within seven (7) working days of receipt by the Contractor.

9.2                       Contractor shall provide the Company
Representative with the Contractor’s current test and acceptance program in
sufficient time to allow Company representation at test and acceptance tasks.
The Contractor shall make available to the Company Representative, all relevant
engineering design documentation, including specifications, codes, drawings,
calculations and data sheets.

10                        QUALITY RECORDS

10.1                 The Contractor shall maintain, and make
available to the Company as required during the execution of the Work, records
that provide objective evidence that all QMSs, including those of Subcontractor’s,
involved in the Work have been effective and that the product and or service
complies with the specified requirements.

11                        CHANGE ORDERS, DEVIATIONS, WAIVERS AND
CONCESSIONS

11.1                 The Contractor shall use formal procedures
for processing Change Orders, requesting approval of deviations, waivers and concessions
and following approved requests through to completion.

 7
 

ATTACHMENT
A

CORPORATE POLICY

HSEQ POLICY

CODE OF BUSINESS
CONDUCT AND ETHICS

BEHAVIOURAL POLICY

 8
 

 

	
  

  

 

Corporate
Policy Statement

The policy of Bluewater is to provide FPSO and SPM services which
satisfy the Client’s and Regulator’s requirements in an effective, efficient
and safe way. This will ensure Bluewater’s reputation as a reliable and innovative
company in the offshore industry, and contribute to a positive growth of the
organisation.

 

To achieve this, the following objectives have been set:

 

·                  Management and
individual responsibilities are clearly defined for all aspects of work

·                  The company
culture promotes Quality, Health, Safety and Environmental consciousness

·                  Staff and
contractors are suitable for their task

·                  Equipment is
suitable for its use

·                  The place of
work is adequate and safe

·                  Tasks can be
executed effectively, efficiently and safely

·                  Response to
emergencies and non-conformities is swift and adequate

·                  The management
system is regularly reviewed and continuously improved

 

To support these
objectives, management will ensure that all employees are highly motivated and
aware of their own individual responsibilities.

	
  /s/ H.J. Heerema

  	
   

  
	
  H.J. Heerema

  
	
  President

  
	
  January 10 2005

  

 

 9
 

 

 

HSEQ
Policy

Bluewater provides
Floating Production (FP) and Single Point Mooring (SPM) related products and
services in a manner which demonstrates active commitment to:

·                  preventing harm
to our employees and any other person,

·                  preventing
pollution and minimising adverse impacts on the environment,

·                  continually
improving the quality of our work processes.

These objectives rank
above all other commercial business objectives.

To this end, the
Company’s Management shall:

·                  Ensure compliance with applicable law
or higher voluntary standards to which Bluewater may subscribe.

·                  Ensure the efficient use of materials
and energy for Bluewater’s technologies, products and services.

·                  Set objectives and targets for
continual improvement and measure and review Bluewater’s performance and their
Clients’ satisfaction.

·                  Identify hazardous aspects of ongoing
and new activities and control the associated risks and their effects.

·                  Maintain and relinquish all sites and
facilities in an acceptable condition by means of the application of best
practice.

·                  Maintain contingency arrangements in
co-operation with Authorities, Clients, Subcontractors and Emergency Services.

·                  Require Bluewater’s contractors and
subcontractors to implement standards compatible with Bluewater’s own
standards.

·                  Conduct and support Research and
Development to improve the performance and efficiency of Bluewater’s
technologies, products and services.

·                  Work with Governmental and other
bodies to develop policies, regulations and standards, and to promote best
practices in FP and SPM activities.

·                  Promote and ensure a culture in which
all employees and contractors demonstrate their individual care and fulfil
their responsibility in implementing Bluewater’s Health, Safety, Environment
and Quality Policy.

·                  Include
Health, Safety and Environment performance in the appraisal of relevant staff
and reward accordingly.

	
  /s/ Hugo J. Heerema

  	
   

  
	
  Hugo J. Heerema

  
	
  President

  
	
  January 10, 2005

  

 

 10
 

 

 

Code of
Business Conduct and Ethics

1.              Purpose

The Management Board
(each, a “Board”) of the Bluewater Group of Companies (the “Group”) has adopted
the following Code of Business Conduct and Ethics for their respective managing
directors and officers. This Code is intended to focus each Board and each
managing director and officer on areas of ethical risk, provide guidance to
managing directors and officers to help them recognize and deal with ethical
issues, provide mechanisms to report unethical conduct, and help foster a
culture of honesty and accountability. Each managing director and officer must
comply with the letter and spirit of this Code.

No code or policy can
anticipate every situation that may arise. Accordingly, this Code is intended
to serve as a source of guiding principles for managing directors and officers.
Managing directors and officers are encouraged to bring questions about
particular circumstances that may involve one or more of the provisions of this
Code to the attention of other members of the relevant Board or, if there are
no other members of the relevant Board, the shareholders of the relevant
Company or other appropriate persons within the Company or the Group (each, a
“Designated Person” and, together, “Designated Persons”) who may consult with
inside or outside legal counsel as appropriate.

2.              Introduction

Each managing director
and officer is expected to adhere to a high standard of ethical conduct. The
good name of any company depends on the way it conducts its business and the
way the public perceives that conduct. Unethical actions, or the appearance of
unethical actions, are not acceptable. Managing directors and officers are
expected to be guided by the following principles in carrying out their
responsibilities:

·                  Loyalty. No managing director or officer should be, or
appear to be, subject to influences, interests or relationships that conflict
with the best interests of the Group.

·                  Compliance with Applicable Laws. The Company, its managing
directors, officers, and its employees are expected to comply with laws and
regulations applicable to the Group’s activities.

·                  Observance of Ethical Standards. In the conduct of their
duties, each managing director and officer must adhere to high ethical
standards. These include honesty and fairness.

 11
 

3.              Conflict of Interest

Managing directors and
officers must avoid any conflicts of interest between the managing director or
officer, as the case may be, and the Group. Any situation that involves, or may
involve, a conflict of interest with the Group, should be disclosed promptly to
the relevant Designated Person or Designated Persons, who may consult with
inside or outside legal counsel as appropriate.

A “conflict of
interest” can occur when a managing director’s or officer’s personal
interest is adverse to, or may appear to be adverse to, the interests of the
Group as a whole. Conflicts of interest also arise when a managing director, an
officer, or a member of his or her immediate family, receives improper personal
benefits as a result of his or her position as a managing director or officer
of the Company. For this purpose, an “immediate family” includes a person’s
spouse, 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 such
person’s home.

This Code does not
attempt 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.              Corporate
Opportunities

Managing directors and
officers are prohibited from taking for themselves personally opportunities
related to the Group’s business using the Group’s property, information, or
position for personal gain or competing with the Group for business
opportunities, provided, however, if the relevant corporate body determines

 12
 

that the Group will not
pursue an opportunity that relates to the Group’s business, after disclosure of
all material facts by the managing director seeking to pursue the opportunity,
the managing director may do so.

5.              Confidentiality

Each managing director
and officer should maintain the confidentiality of information entrusted to him
or her by the Group and any other confidential information about the Group, its
business, customers or suppliers that comes to him or her, from whatever
source, in his or her capacity as a managing director or officer, as the case
may be, except when disclosure is authorised or legally mandated. For purposes
of this Code, “confidential information” includes
all non-public information relating to the Group, its business, customers or
suppliers.

6.              Compliance with
Laws, Rules and Regulations; Fair Dealing

Managing directors and
officers shall comply, and oversee policies designed to promote compliance by
employees, officers and other managing directors, with laws, rules and regulations
applicable to the Group, including insider trading laws. Managing directors and
officers shall oversee policies designed to promote ethical dealing by
employees and officers with the Group’s customers, suppliers, competitors and
employees.

7.              Encouraging the
Reporting of Illegal or Unethical Behaviour

Managing directors and
officers should promote ethical behaviour and encourage an environment in which
the Group encourages employees to talk to supervisors, managers and other
appropriate personnel when in doubt about the best course of action in a
particular situation, encourages employees to report violations of laws, rules,
or regulations to appropriate personnel and informs employees that the Group
will not allow retaliation for reports made in good faith.

8.              Conclusion

Managing directors and
officers should communicate any suspected violations of this Code promptly to
the relevant Designated Person or Designated Persons. Violations will be
investigated by the relevant Designated Person or Designated Persons or by a
person or persons designated by them and appropriate action will be taken in
the event of any violations of the Code.

	
  /s/ Hugo J. Heerema

  	
   

  
	
  Hugo J. Heerema

  
	
  President

  
	
  May 02 2005

  

 

 13
 

 

 

Behavioural Policies

Drugs and Alcohol Policy

·                  To
assist Bluewater in achieving a safe working environment, the use, sale,
distribution and/or possession of non-prescription drugs, at any Bluewater
controlled workplace or in any company controlled vehicle, is totally
prohibited.

·                  To
ensure compliance, Bluewater reserves the right to search or screen any Employee
reasonably believed to be in violation with this policy. Violation or refusal
to submit to searches or screening shall result in disciplinary action and
removal of the Employee from Bluewater premises.

·                  Bluewater may
also have any Employee removed from Bluewater premises who is under the
influence of prescribed drugs or alcohol if medical opinion judges that he is
putting 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 not
permit discrimination nor harassment of any kind against any person on grounds
of:

·                  Colour

·                  Creed
or religion

·                  Race
or ethnic origins

·                  Nationality
or national origin

·                  Sex

·                  Marital
status

·                  Disability

Direct discrimination is defined
as treating a person less favourably than others are, or would be treated in
the same or similar circumstances.

Indirect discrimination is
defined as when a requirement or condition is applied which, whether
intentional or not, adversely affects a considerably larger proportion of
people of one race, religion, sex or marital status than another and cannot be
justified on grounds other than that race, religion, sex or marital status.

Bluewater regards
discrimination as defined in the above paragraphs, as gross misconduct, and any
employee of Bluewater who discriminates against any other person shall be
subject to disciplinary action. In applying the policy to the disabled, the
proviso is that the disability does not prevent any aspects of the job
junction, on- or off-shore, from being carried out, safely, and in accordance
with the relevant statutory provisions.

Sexual and Racial Harassment Policy

·                  Bluewater
shall ensure that neither sexual nor racial harassment occurs within Bluewater
and that the dignity of employees, other workers and visitors is properly
protected.

·                  All
employees have a responsibility to help ensure that the dignity of employees
and others is respected by setting standards of conduct for themselves not to
cause offence.

·                  Disciplinary
action will be taken against harassers. 

	
  /s/ Hugo J. Heerema

  	
   

  
	
  Hugo J. Heerema

  
	
  President

  
	
  January 10 2005

  

 

 14

AGREEMENT FOR THE PROVISION AND
OPERATION OF

A FLOATING, PRODUCTION, STORAGE
AND OFFLOADING

VESSEL
FOR THE ETTRICK FIELD

SCHEDULE L

COMPANY REPRESENTATIVES FACILITIES

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

SCHEDULE
L  - 
COMPANY REPRESENTATIVES FACILITIES

SCHEDULE L

COMPANY
REPRESENTATIVES FACILITIES

TABLE OF
CONTENTS

	
  1.

  	
   

  	
  SCOPE

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  CONSTRUCTION AND ENGINEERING LOCATIONS

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  FLOATING PRODUCTION, STORAGE AND OFFLOADING FACILITY

  	
   

  	
  3

  

 

 2
 

1.                                      SCOPE

1.1                                The
Contractor shall provide the availability of and access to the accommodation
and facilities as set out in this Schedule L. 

2.                                      CONSTRUCTION AND ENGINEERING
LOCATIONS

2.1                                The
Contractor shall make available suitable facilities for Company Representatives
at the topsides construction yard, hull conversion yard, turret construction
yard and FPSO integration yard and at the topsides and hull design contractor
offices and at the Contractor’s office in the Netherlands.  These facilities shall include but not be
limited 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 Company
Representatives.

(c)                                Up
to four (4) telephones and computers with Microsoft office suite and e-mail and
internet access in the Company’s Representatives office at the Contractor’s
offices in the Netherlands.

(d)                                 Up
to two (2) telephones and computers with Microsoft office suite and e-mail and
internet access in the Company’s Representatives office at the topsides
contractor offices.

(e)                                  Up
to two (2) telephones and computers with Microsoft office suite and e-mail and
internet access in the Company’s Representatives office at the other locations.

(f)                                       Access
to and possibility of use of photocopying and fax equipment at each location.

(g)                                   Upon
Company request Contractor shall provide video conferencing or desk top video
units at the construction yards and topsides design contractor office. Cost for
these services and equipment are for Company account at documented cost.

Company shall reimburse
Contractor the cost of internet connections and international phone calls/facsimiles
for all locations at documented cost.

3.                                     FLOATING
PRODUCTION, STORAGE AND OFFLOADING FACILITY

3.1                                The
Contractor shall supply suitable facilities for the Company staff aboard the
FPSO and facilities sufficient to collect data for Ettrick Field operation and
reporting.  These facilities shall include
but not be limited to:

 3
 

(a)                                  Two
(2) private single cabins, catering and domestic services of a standard equal
to 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)                                The
Contractor’s communication system shall include use of two (2) separate lines
for telephone or fax in the Company’s offices.

(d)                                 The
Contractor shall provide facilities for transmission of production data
covering subsea/subsurface and topsides to an onshore location via one of the
Company lines in Section 3.1 (c) to onshore locations nominated by the Company.

3.2                                Sufficient
facilities are to be provided by Contractor to accommodate HSE, DTI and VB/CS
representatives and personnel associated with inspection, repair, maintenance
and certification activities.

3.3                                In
addition to the facilities described in Sections 3.1 and 3.2 the Contractor
shall provide accommodation, catering and domestic services on board the FPSO,
of a standard equal to that used by the Contractor for two (2) individuals
designated by the Company on an as required basis.

 4

AGREEMENT FOR THE PROVISION AND
OPERATION OF

A FLOATING, PRODUCTION, STORAGE
AND OFFLOADING

VESSEL
FOR THE ETTRICK FIELD

SCHEDULE
M

CONTRACTOR
PARENT COMPANY GUARANTEE

PARENT
COMPANY GUARANTEE

Issued by
ultimate parent of Bluewater

THE GUARANTEE is given this          day
of March 2006 and delivered to NEXEN PETROLEUM U.K. LIMITED
a company incorporated in England having its registered office at Charter
Place 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 registered
office at Landhuis Joonchi, Kaya Richard Beaujon z/n, the Netherlands Antilles (hereinafter
called the “PARENT”)

WITNESSETH

In consideration of COMPANY entering into the Agreement
for the Provision and Operation of a Floating Production Storage and Offloading
Vessel 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 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 and
assigns) the full and faithful performance by SUBSIDIARY (its successors and
assigns) of the terms, provisions, conditions, obligations and agreements on
the part of SUBSIDIARY to be made, carried out, performed or observed as provided
in 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 the
terms, provisions, conditions, obligations and agreements or in breach of any
other matter or things pertaining to the AGREEMENT or in breach of the payment
of 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 nature
of such breach, PARENT  will well and
truly perform, or cause to be so performed, each and every one of the terms,
provisions, conditions, obligations and agreements contained in the AGREEMENT and
will pay any sum that may be payable by SUBSIDIARY (its successors and assigns)
in accordance with terms, provisions, conditions, obligations and agreements
contained in the AGREEMENT.  PARENT shall
however be subrogated to all rights, elections, defences and remedies to which
SUBSIDIARY (its 

 2
 

successors and assigns) may be entitled under
the terms of the AGREEMENT or under applicable law, and the obligations of the
PARENT under this GUARANTEE shall therefore under no circumstances be greater
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’s
guarantee and undertakings hereunder shall continue in force until the earlier
of:

(i)                                     all
of SUBSIDIARY’s obligations, liabilities and indemnities under the AGREEMENT
and all PARENT’s obligations hereunder have been duly performed; or

(ii)                                  the date upon which
the interest of SUBSIDIARY under the AGREEMENT has been transferred to an assignee
and which assignee has demonstrated to the reasonable satisfaction of COMPANY
its ability to discharge the obligations incumbent upon it under the AGREEMENT;
or

(iii)                               the date upon which
SUBSIDIARY is no longer an Affiliate of PARENT and

(a)                                 without prejudice to
clause 4 below, SUBSIDIARY or an Affiliate of SUBSIDIARY has demonstrated to
the reasonable satisfaction of COMPANY the ability of SUBSIDIARY to discharge
the obligations incumbent upon it under the AGREEMENT without the need for a
replacement of this GUARANTEE; or

(b)                            an
Affiliate 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 a
fully 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 meaning
used in the AGREEMENT.

4.                                       This GUARANTEE
may not be changed, modified, assigned, discharged or terminated orally or in
any manner except with the prior written consent of PARENT and COMPANY.

5.                                       This GUARANTEE
shall be governed by the laws of England and any dispute arising out of or in
connection with this GUARANTEE shall be referred to arbitration in London in accordance
with the Arbitration Act 1996 or any statutory modification or re-enactment
thereof.

6.                                       The PARENT
irrevocably appoints Messrs Watson Farley & Williams LLP of 15 Appold
Street, London, EC2A 2HB, England to accept on its behalf service of any legal
proceedings relating to this GUARANTEE.

 3
 

Signed as a deed

AURELIA ENERGY N.V.

	
  Per

  	
  :

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
  :

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Position

  	
  :

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  :

  	
   

  	
   

  	
   

  

 

 4

AGREEMENT FOR THE PROVISION AND
OPERATION OF

A FLOATING, PRODUCTION, STORAGE
AND OFFLOADING

VESSEL
FOR THE ETTRICK FIELD

SCHEDULE N

COMPANY
PARENT COMPANY GUARANTEE

PARENT
COMPANY GUARANTEE

Issued by
ultimate parent of Nexen Petroleum U.K. Limited

THE GUARANTEE is given this          day
of March 2006 and delivered to BLUEWATER (ETTRICK)
PRODUCTION (UK) LIMITED, a company incorporated in England and having
its registered office at 15 Appold Street, London, EC2A 2HB, England
(hereinafter called the “COMPANY”)

By NEXEN INC. a
company amalgamated under the laws of Canada and having its registered office
at 2900, 801-7th Avenue SW, Calgary, Alberta, T2P 3P7, Canada
(hereinafter called the “PARENT”)

WITNESSETH

In consideration of COMPANY entering into the Agreement
for the Provision and Operation of a Floating Production Storage and Offloading
Vessel 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”) whose
registered office is at Charter Place Vine Street, Uxbridge, Middlesex, UB8 1JG
England 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 and
assigns) the full and faithful performance by SUBSIDIARY (its successors and
assigns) of the terms, provisions, conditions, obligations and agreements on
the part of SUBSIDIARY to be made, carried out, performed or observed as provided
in 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 the
terms, provisions, conditions, obligations and agreements or in breach of any
other matter or things pertaining to the AGREEMENT or in breach of the payment
of 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 nature
of such breach, PARENT  will well and
truly perform, or cause to be so performed, each and every one of the terms,
provisions, conditions, obligations and agreements contained in the AGREEMENT
and will pay any sum that may be payable by SUBSIDIARY (its successors and
assigns) in accordance with terms, provisions, conditions, obligations and
agreements contained in the AGREEMENT. 
PARENT shall however be subrogated to all rights, elections, defences
and remedies to which SUBSIDIARY (its successors and assigns) may be entitled
under the terms of the AGREEMENT or 

 2
 

under applicable law, and the obligations of
the PARENT under this GUARANTEE shall therefore under no circumstances be
greater 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’s
guarantee and undertakings hereunder shall continue in force until the earlier
of:

(i)                                     the date upon
which the interest of SUBSIDIARY under the AGREEMENT has been transferred to an
assignee and such assignee has either:

(a)                                   demonstrated to the reasonable
satisfaction of COMPANY and COMPANY’s financiers its continuous ability to
discharge the obligations, liabilities and indemnities incumbent upon it under
the AGREEMENT for the full duration of the AGREEMENT; or

(b)                                without
prejudice to clause 4 below, an Affiliate of assignee (which has a financial
rating (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 in
replacement of this GUARANTEE; or

(ii)                                  all
of SUBSIDIARY’s obligations, liabilities and indemnities under the AGREEMENT
and all PARENT’s obligations hereunder have been duly performed; or

(iii)                               SUBSIDIARY
has demonstrated to the reasonable satisfaction of COMPANY and COMPANY’s
financiers its continuous ability to discharge the obligations, liabilities and
indemnities incumbent upon it under the AGREEMENT for the full duration of the
AGREEMENT; or

(iv)                              the
date upon which SUBSIDIARY is no longer an Affiliate of PARENT and,:

 (a)                             SUBSIDIARY
or an Affiliate of SUBSIDIARY has demonstrated to the reasonable satisfaction
of COMPANY and COMPANY’s financiers the continuous ability of SUBSIDIARY or
such Affiliate to discharge the obligations, liabilities and indemnities
incumbent upon it under the AGREEMENT for the full duration of the AGREEMENT or

(b)                       without
prejudice to clause 4 below, an Affiliate 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 a fully 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 meaning
used in the AGREEMENT.

 3
 

4.                                       This GUARANTEE
may not be changed, modified, assigned, discharged or terminated orally or in
any manner except with the prior written consent of PARENT and COMPANY.

5.                                       This GUARANTEE
shall be governed by the laws of England and any dispute arising out of or in
connection with this GUARANTEE shall be referred to arbitration in London in
accordance with the Arbitration Act 1996 or any statutory modification or
re-enactment thereof.

6.                                       The PARENT
irrevocably appoints the Company Secretary for the time being of Nexen
Petroleum U.K. Limited, whose address for service is Charter Place, Vine
Street, Uxbridge, Middlesex, UB8 1JG to accept on its behalf service of any
legal proceedings relating to this GUARANTEE.

Signed as a deed

NEXEN INC.

	
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 4

AGREEMENT FOR THE PROVISION AND
OPERATION OF

A FLOATING, PRODUCTION, STORAGE
AND OFFLOADING

VESSEL
FOR THE ETTRICK FIELD

SCHEDULE O

QUIET
ENJOYMENT AGREEMENT

 1
 

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

SCHEDULE O – QUIET ENJOYMENT
AGREEMENT

 

The Quiet Enjoyment Agreement
(see definition 1.69) shall be agreed as soon as reasonably possible after the
Effective Date and shall be attached to this Agreement as Schedule O.

 2
 

ATTACHMENT
O1

PRINCIPLES
QUIET ENJOYMENT AGREEMENT

1.                                       All
relevant terms of the Agreement to continue to remain in full force and effect
mutatis mutandis provided that the Company continues to pay the Charter Hire,
the Production Tariff and the Insurance Costs, and assumes responsibility for
operating the FPSO.

2.                                       Right
to have modifications carried out to the FPSO to be carried out subject to
provisions of this Agreement and the financiers’ agreement.

3.                                       Right
to extend the Charter Period subject to the provisions of this Agreement and
the financiers’ agreement.

4.                                       Provided
the Company takes over the operations of the FPSO, the right to negotiate with
all legal and statutory authorities (HSE, DTi, etc) in respect of all
operational matters (safety case, Duty Holder, operating permits, pollution
exemptions, etc).

5.                                       The
Bareboat Charter between the Contractor and the Owner remaining in full force
and effect.

6.                                       Right
to have new Fields tied-in, subject to the provision of this Agreement.

7.                                       Subject
to the rights of the financiers’ to accelerate their financing in case their
position would otherwise be materially adversely affected.

8.                                       In
the event of a default under its financing arrangement with the banks by
Bluewater before arrival of the FPSO in the Ettrick Field  resulting in Bluewater not being able to
complete the conversion of the FSPO or maintain it in the Field, the financiers
and the Company will use their reasonable endeavours to find a mutually
beneficial structure and solution to the situation that will result in the FPSO
being completed for and delivered to or remaining in the Ettrick Field on terms
similar to the provisions of the Agreement.

 3

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