Document:

Exhibit
10.6

 

TECHNICAL
ASSISTANCE CONTRACT

 

between

 

PERUSAHAAN
PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA

(PERTAMINA)

 

AND

 

PT.
BINATEK REKA KRUH

 

CONTRACT
AREA : KRUH

 

     

    

    

 

TECHNICAL
ASSISTANCE CONTRACT

 

between

 

PERUSAHAAN
PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA

(PERTAMINA)

 

AND

 

PT.
BINATEK REKA KRUH

 

CONTRACT
AREA : KRUH

 

     

    

    

 

INDEX 

 

	SECTION	 	TITLE	 	PAGE
	 	 	 	 	 
	I	 	SCOPE AND DEFINITIONS	 	2
	II	 	TERM AND EXCLUSION OF AREAS	 	5
	III	 	WORK PROGRAM AND EXPENDITURES	 	6
	IV	 	RIGHTS AND OBLIGATIONS OF THE PARTIES	 	8
	V	 	RECOVERY OF OPERATING COSTS AND HANDLING OF PRODUCTION	 	14
	VI	 	VALUATION OF CRUDE OIL	 	17
	VII	 	COMPENSATION ASSISTANCE & PRODUCTION BONUS	 	20
	VIII	 	PAYMENTS	 	21
	IX	 	TITLE TO EQUIPMENT	 	22
	X	 	CONSULTATION & ARBITRATION	 	23
	XI	 	EMPLOYMENT AND TRAINING OF INDONESIAN PERSONNEL	 	24
	XII	 	TERMINATION	 	25
	XIII	 	BOOKS AND ACCOUNTS AND AUDITS	 	26
	XIV	 	OTHER PROVISIONS	 	27
	XV	 	PARTICIPATION	 	29
	XVI	 	EFFECTIVENESS	 	30

  

EXHIBITS

 

	“A”	DESCRIPTION OF CONTRACT AREA	A-1
	“B”	MAP OF CONTRACT AREA	B-1
	“C”	ACCOUNTING PROCEDURE	C-1

  

     

    CONTRACT AREA : KRUH

    

 

TECHNICAL
ASSISTANCE CONTRACT

 

between

 

PERUSAHAAN
PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA

(PERTAMINA)

 

and

 

PT.
BINATEK REKA KRUH

 

THIS
CONTRACT, made and entered into on this 22nd Day of May 2000 by and between PERUSAHAAN PERTAMBANGAN MINYAK DAN
GAS BUMI NEGARA,
a State Enterprise, established on the basis of law No. 8/1971, hereinafter called PERTAMINA party of the first part, and
PT. BINATEK REKA KRUH a corporation organized and existing under the laws of Indonesia, hereinafter called “CONTRACTOR”,
party of the second part, both hereinafter sometimes referred to either individually as the “Party” or collectively as
the “Parties”.

 

WITNESSETH

 

WHEREAS,
all mineral oil and gas existing within the statutory mining territory of Indonesia are national riches controlled by the State;
and

 

WHEREAS,
PERTAMINA has an exclusive ” Authority to Mine ” for mineral oil and gas throughout the area described in Exhibit
” A ” and outlined on the map which is Exhibit ” B “, both attached hereto and made a part hereof, which area
is hereinafter referred to as the ” Contract Area “; and

 

WHEREAS,
PERTAMINA wishes to promote the development of the Contract Area and CONTRACTOR wishes to assist PERTAMINA in
accelerating development, enhancing production and exploitation of the Petroleum resources within the Contract Area; and

 

WHEREAS,
CONTRACTOR has the financial ability, technical competence and professional skills necessary to carry out the Petroleum Operations
hereinafter described; and

 

WHEREAS,
in accordance with Law No. 44 Prp/1960 and Law No. 8/1971 cooperative agreements in the form of a Production Sharing Contract may
be entered into in the sector of oil and gas between PERTAMINA and another party.

 

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    CONTRACT AREA : KRUH

    

 

NOW
THEREFORE,
in consideration of the mutual covenants herein contained, it is hereby agreed as follows :

 

SECTION
I

 

SCOPE
AND DEFINITIONS

 

		1.1	SCOPE

 

This
Contract is a Technical Assistance Contract. In accordance with the provisions herein contained, PERTAMINA shall have and
be responsible for the management of the operations contemplated hereunder.

 

CONTRACTOR
shall be responsible to PERTAMINA for the execution of such operations in accordance with the provisions of this Contract,
and is hereby appointed and constituted the exclusive company to conduct Petroleum Operations.

 

CONTRACTOR
shall provide all the financial and technical assistance for such operations. CONTRACTOR shall carry the risk of Operating
Costs required in carrying out operations and shall therefore have an economic interest in the development of the Petroleum deposits
in the Contract Area. Such costs shall be included in Operating Costs recoverable as provided in Section V.

 

Except
as may otherwise be provided in this Contract, in the Accounting Procedure attached hereto or by written agreement of PERTAMINA,
CONTRACTOR will not incur interest expenses to finance its operations hereunder.

 

During
the term of this Contract the total production of Petroleum achieved in the conduct of such operations shall be divided in accordance
with the provisions of Section V hereof.

 

		1.2	DEFINITIONS

 

In
the text of this Contract, the words and terms defined in Article 1 of Law No. 44 Prp/1960 shall have the meaning in accordance
with such definitions.

 

		1.2.1	Affiliated
Company or Affiliate means a company or other entity that controls, or is controlled by a Party to this Contract, or a
company or other entity which controls or is controlled by a company or other entity which controls a Party to this Contract, it
being understood that control shall mean ownership by one company or entity at least 51% of (a) the voting stock, if the other
company is a corporation issuing stock, or (b) the controlling rights or interests, if the other entity is not a corporation.

 

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    CONTRACT AREA : KRUH

    

 

		1.2.2	Barrel
means a quantity or unit of oil, forty-two (42) United States gallons at the temperature of sixty (60) degrees Fahrenheit.

 

		1.2.3	Barrel
of Oil Equivalent (BOE) means six thousand (6,000) standard cubic feet of Natural Gas, based on the gas having a calorific
value of one thousand (1,000) British Thermal Units per cubic foot (BTU/CFT).

 

		1.2.4	Budget
of Operating Costs means cost estimates of all items included in the Work Program.

 

		1.2.5	Calendar
Year or Year means a period of twelve (12) months commencing with January 1 and ending on the following December 31, according
to the Gregorian Calendar.

 

		1.2.6	Contract
Year means a period of twelve (12) consecutive months according to the Gregorian Calendar counted from the Effective Date
of this Contract or from an anniversary of such Effective Date.

 

		1.2.7	Contract
Area means the Area within the statutory mining territory of Indonesia covered by the “Authority to Mine” which
is the subject of this Contract, which Contract Area is described and outlined in Exhibits “A” and “B” attached
hereto and made a part hereof.

 

		1.2.8	Crude Oil
means crude mineral oil, asphalt, ozokerite and all kinds of hydrocarbons and bitumens, both in solid and in liquid form, in their
natural state or obtained from Natural Gas by condensation or extraction.

 

		1.2.9.	Deepening
means all drilling activities conducted deeper than the current producing zones of the existing well (s) and/or new well
(s) in the Contract Area.

 

		1.2.10	Effective
Date means the date of the approval of this Contract by the Government of the Republic of Indonesia in accordance with
the provisions of the applicable law.

 

		1.2.11	Enhanced
Oil Recovery (EOR) means the recovery of Incremental Oil by appropriate process or method including but not limited to
energy injection into oil bearing formations, usually in the form of liquids, liquid with surfactant, polymers or other chemicals,
gas, steam or heat, injected through an input well or input wells. Enhanced Oil Recovery includes secondary recovery and tertiary
recovery.

 

		1.2.12	Enhanced
Oil Recovery Operations means all activities conducted for the purpose of carrying out the Enhanced Oil Recovery on a certain
field or fields in the Contract Area including the Pilot Program, which may includes, but not limited to engineering studies, drilling,
production testing, work over and maintenance of injection and productions wells and water supply wells, if any; construction,
transportation, operation and maintenance of water gathering lines, water treatment plant, water storage facilities, injection
facilities and injection lines, day to day injection operations, operations of the Enhanced Oil Recovery production wells and facilities
up to inlet flange of PERTAMINA’s common pipe line facilities servicing the Contract Area.

 

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    CONTRACT AREA : KRUH

    

 

		1.2.13	Force Majeure
means delays or default in performance under this Contract caused by circumstances beyond the control and without the fault or
negligence of PERTAMINA and/or CONTRACTOR that may affect economically or otherwise the continuing of operations
under this Contract, including but not restricted to Acts of God or the public enemy, perils of navigation, fire, hostilities,
war (declared or undeclared), blockade, labor disturbances, strikes, riots, insurrections, civil commotion, quarantine restrictions,
epidemics, storms, earthquakes, or accidents.

 

		1.2.14	Foreign
Exchange means currency other than that of the Republic of Indonesia but acceptable to PERTAMINA and to the Republic
of Indonesia and to CONTRACTOR.

 

		1.2.15	Indonesian
Income Tax Law means the current Tax Code including all the appropriate regulations.

 

		1.2.16	Natural
Gas means all associated and/or non associated gaseous hydrocarbons produced from wells, including wet mineral gas, dry
mineral gas, casinghead gas and residue gas remaining after the extraction of the liquid hydrocarbons from wet gas.

 

		1.2.17	Operating
Costs means expenditures made and obligations incurred in carrying out Petroleum Operations hereunder determined in accordance
with the Accounting Procedure attached hereto and made a part hereof as Exhibit “C”.

 

		1.2.18	Petroleum
means oil and gas, hereafter called Crude Oil and Natural Gas as defined in Law No. 44 Prp/1960.

 

		1.2.19	Petroleum
Operations means exploration, development, extraction, producing, transportation, marketing, abandonment and site restoration
operations authorized or contemplated under this Contract.

 

		1.2.20	Point of
Export means the outlet flange of the loading arm after final sales meter at the export terminal, or some other point (s)
mutually agreed by the Parties.

 

		1.2.21	Work Program
means a statement itemizing the Petroleum Operations to be carried out in the Contract Area as set forth in Section III.

 

—oOo—

 

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    CONTRACT AREA : KRUH

    

 

SECTION
II

 

TERM
AND EXCLUSION OF AREAS

 

		2.1	The term of this
Contract shall be twenty (20) years as from the Effective Date.

 

		2.2	If at the end
of the initial two (2) years as from the Effective Date the Petroleum Operations have not yet indicated adequate data to determine
a commercial development, CONTRACTOR shall have the option either to terminate this Contract or request PERTAMINA
for an extension of an additional one (1) year, at the latest thirty (30) days before the end of such initial two (2) years.

 

PERTAMINA
will consider such request and agree to extend the Contract, provided that CONTRACTOR has fulfilled all its obligations
under this Contract, and its performance in the execution of this Contract has been satisfactorily accepted by PERTAMINA.

 

		2.3	If at the end
of the initial two (2) years as from the Effective Date or the extension thereto the field is proven not commercial to be developed
in the judgment of PERTAMINA and CONTRACTOR based on considerations of all pertinent operating and financial data,
then without prejudice to Section XII, this Contract shall automatically terminate in its entirety.

 

		2.4	Without prejudice
to subsection 2.3 above, at any time during the Contract term, if the field is proven not commercial to be developed or continuously
to be produced in the judgment of PERTAMINA and CONTRACTOR based on consideration of all pertinent operating and
financial data, CONTRACTOR shall relinquish such field to PERTAMINA.

 

—oOo—

 

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    CONTRACT AREA : KRUH

    

 

SECTION
III

 

WORK
PROGRAM AND EXPENDITURES

 

		3.1	CONTRACTOR
shall commence Petroleum Operations hereunder not later than six (6) months after the Effective Date.

 

		3.2	The
amount to be spent and the program to be carried out by CONTRACTOR in conducting Petroleum Operations pursuant to the terms
of this Contract, during the first six (6) Contract Years following the Effective Date shall in the aggregate be not less than
hereinafter specified for each of the Contract Years as follows:

 

	Contract Year	 	Program	 	Amount (US$)
	 	 	 	 	 
	First	 	G & G Evaluation	 	
        Eight
        hundred thousand United States Dollars.

        (US
        $ 800,000.00)

	 	 	 	 	 
	Second	 	Drilling	 	
        Three
        million and three hundred thousand United States Dollars.

        (US
        $ 3,300,000.00)

	 	 	 	 	 
	Third	 	Drilling, Production & Development Preparation	 	
        Four
        million and three hundred thousand United States Dollars.

        (US
        $ 4,300,000.00)

	 	 	 	 	 
	Fourth	 	Development & Drilling	 	
        Three
        million and five hundred thousand United States Dollars.

        (US
        $ 3,500,000.00)

	 	 	 	 	 
	Fifth	 	Development & Drilling	 	
        Four
        million United States Dollars.

        (US
        $ 4,000,000.00)

	 	 	 	 	 
	Sixth	 	Development & Drilling	 	
        Three
        million and five hundred thousand United States Dollars.

        (US
        $ 3,500,000.00)

 

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    CONTRACT AREA : KRUH

    

 

CONTRACTOR
shall carry out Petroleum Operations during the
first two (2) Contract Years, during which period CONTRACTOR shall
commit to spend at least Four million and one hundred thousand United States Dollars (US $ 4,100,000.00) called the firm commitment.

 

If
during any Contract Year CONTRACTOR should spend less than the amount of money required to be so expended, an amount equal
to such under expenditure may, with PERTAMINA’s consent, be carried
forward and added to the amount to be expended in the following Contract Year without prejudice to CONTRACTOR’s
right hereunder.

 

If
during any Contract Year CONTRACTOR should expend more than the amount of money required to be so expended, the excess may
be subtracted from the amount of money to be so expended by CONTRACTOR during the succeeding Contract Years.

 

		3.3	At least three
(3) months prior to the beginning of each Calendar Year or at such other time as otherwise mutually agreed by the Parties, CONTRACTOR
shall prepare and submit for approval to PERTAMINA a Work Program and Budget of Operating Costs for the Contract Area setting
forth the Petroleum Operations which CONTRACTOR proposes to carry out during the ensuing Calendar Year.

 

		3.4	Should PERTAMINA
wish to propose a revision as to certain specific features of said Work Program and Budget of Operating Costs, it shall within
thirty (30) days after receipt thereof so notify CONTRACTOR specifying in reasonable detail its reason therefor. Promptly
thereafter, the Parties will meet and endeavor to agree on the revisions proposed by PERTAMINA. In any event, any portion
of the Work Program as to which PERTAMINA has not proposed a revision shall insofar as possible be carried out as prescribed
herein.

 

		3.5	It is recognized
by the Parties that the details of a Work Program may require changes in the light of existing circumstances and nothing herein
contained shall limit the right of CONTRACTOR to make such changes, provided they do not change the general objective of
the Work Program, nor increase the expenditures in the approved Budget of Operating Costs.

 

		3.6	It is further
recognized that in the event of emergency or extraordinary circumstances requiring immediate actions, either Party may take all
actions it deems proper or advisable to protect their interests and those of their respective employees and any costs so incurred
shall be included in the Operating Costs.

 

		3.7	PERTAMINA
agrees that the approval of a proposed Work Program and Budget of Operating Costs will not be unreasonably withheld.

 

—oOo—

 

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    CONTRACT AREA : KRUH

    

 

SECTION
IV

 

RIGHTS
AND OBLIGATIONS
OF THE PARTIES

 

		4.1	Subject to the
provisions of clauses 4.2.6. and 4.2.7.

 

		4.2	CONTRACTOR
shall :

 

		4.2.1	advance all necessary
funds and purchase or lease all equipment, supplies and materials required to be purchased or leased with Foreign Exchange pursuant
to the Work Program;

 

		4.2.2	furnish all technical
aid, including foreign personnel, required for the performance of the Work Program, payment whereof requires Foreign Exchange;

 

		4.2.3	furnish such
other funds for the performance of the Work Program that requires payment in Foreign Exchange, including payment to foreign third
parties who perform services as a contractor;

 

		4.2.4	be responsible
for the preparation and execution of the Work Program, which shall be implemented in a workmanlike manner and by appropriate scientific
methods;

 

		4.2.5	(a)	conduct
                                         an environmental baseline assessment at the beginning of CONTRACTOR’s activities;

 

		(b)	take the necessary
precautions for protection of the ecological systems, navigation and fishing and shall prevent extensive pollution of the area,
sea or rivers, and other as the result of operations undertaken under the Work Program;

 

		(c)	after
                                         the Contract expiration or termination, or relinquishment of part of the Contract Area,
                                         or abandonment of any field, remove all equipment and installations from the area in
                                         a manner acceptable to PERTAMINA, and perform all necessary site restoration activities
                                         in accordance with the applicable Government regulations to prevent hazards to human
                                         life and property of others or environment, provided however, if PERTAMINA takes
                                         over any area or field prior to its abandonment, CONTRACTOR shall be released
                                         from its obligations to remove the equipment and installations and perform the necessary
                                         site restoration activities of the field in such area. In such event all accumulated
                                         funds reserved
                                         for
                                         the removal and restoration operations shall be transferred to PERTAMINA;

 

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    CONTRACT AREA : KRUH

    

 

		(d)	include in the
annual Budget of Operating Costs, estimates of the anticipated abandonment and site restoration costs for each well in the Work
Program. All expenditures incurred by the CONTRACTOR in the abandonment of all such wells and restoration of their drillsites
shall be treated as Operating Costs in accordance with the Accounting Procedure attached hereto as Exhibit “C”;

 

		(e)	include in the
requisite plan of development for each commercial discovery, an abandonment and site restoration program together with a funding
procedure for such program. The amount of monies estimate to be required for this program shall be determined each Year in conjunction
with the Budget of Operating Costs for the plan in accordance with article 3.7 of the Accounting Procedure attached hereto as Exhibit
“C”;

 

		4.2.6	have the right
to sell, assign, transfer, convey or otherwise dispose of all or any part of its rights and interests under this Contract to any
Affiliated Company without the prior written consent of PERTAMINA, provided that PERTAMINA shall be notified in writing
of the same beforehand and further provided that any assignee whom such rights and interests are assigned to under any clause of
this Contract shall not hold more than one Technical Assistance Contract or Production Sharing Contract at any given time;

 

		4.2.7	have the right
to sell, assign, transfer, convey or otherwise dispose of all or any part of its rights and interests under this Contract to the
parties other than Affiliated Companies with the prior written consent of PERTAMINA and the Government of the Republic of
Indonesia, which consent shall not be unreasonably withheld, also provided that any assignee whom such rights and interests are
assigned to under any clause of this Contract shall not hold more than one Technical Assistance Contract or Production Sharing
Contract at any given time, except during the first three (3) Contract Years, CONTRACTOR shall hold more dominant participating
interest than any other participant and shall hold operatorship of this Contract;

 

		4.2.8	retain
                                                                  control to all leased property paid for with Foreign Exchange and brought into Indonesia, and be entitled to freely remove
                                                                  the same therefrom;

			

 

		4.2.9	have the right
of ingress to and egress from the Contract Area and to and from facilities wherever located at all times:

 

		4.2.10	have the right
to use and have access to, and PERTAMINA shall furnish all geological, geophysical, drilling, well, production and other
information held by PERTAMINA, relating to the Contract Area including well locations maps;

 

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    CONTRACT AREA : KRUH

    

 

		4.2.11	submit to PERTAMINA
copies of all such original geological, geophysical, drilling, well, production and other data and reports as it may compile during
the term hereof;

 

		4.2.12	prepare and carry
out plans and programs for industrial training and education of Indonesians for all job classifications with respect to operations
contemplated hereunder;

 

		4.2.13	have the right
during the term hereof to freely lift, dispose of and export its share of Crude Oil; and retain abroad the proceeds obtained therefrom;

 

		4.2.14	appoint an authorized
representative with respect to this Contract, who shall have an office in Jakarta;

 

		4.2.15	after commercial
production commences, fulfill its obligations towards the supply of the domestic market in Indonesia.

 

CONTRACTOR
agrees to sell and deliver to PERTAMINA a portion of the share of the Crude Oil to which CONTRACTOR is entitled pursuant
to clause 5.1.3 of Section V calculated for each Year as follows:

 

		(a)	multiply the
total quantity of Crude Oil produced from the Contract Area by a fraction the numerator of which is the total quantity of Crude
Oil to be supplied and the denominator is the entire Indonesian production of Crude Oil of all petroleum companies:

 

		(b)	compute twenty
five percent (25%) of total quantity of Crude Oil produced from the Contract Area;

 

		(c)	multiply the
lower quantity computed, either under (a) or (b) by CONTRACTOR’s entitlements as provided under clause 5.1.3.

 

The
quantity of Crude Oil computed under (c) shall be the maximum quantity to be supplied by CONTRACTOR in any Year pursuant
to this paragraph, and deficiencies, if any, shall not be carried forward to any subsequent Year; provided that if for any Year
the recoverable Operating Costs exceeds the difference of total sales proceeds from sixty-five percent (65%) of Crude Oil produced
and saved hereunder as provided under Section V hereof, CONTRACTOR shall be relieved from this supply obligation for such
Year.

 

The
price at which such Crude Oil shall be delivered and sold under this clause 4.2.15 shall be fifteen percent (15%) of the price
as determined under clause 6.1.2 hereof, CONTRACTOR shall not be obligated to transport such Crude Oil beyond the Point
of Export but upon request CONTRACTOR shall assist in arranging transportation and such assistance shall be without cost
or risk to CONTRACTOR.

 

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    CONTRACT AREA : KRUH

    

 

Notwithstanding
the foregoing, for the initial period of sixty (60) months starting the month of the first delivery of Crude Oil produced and saved
from each field in the Contract Area, the fee per Barrel for the quantity of Crude Oil supplied to the domestic market from each
such field shall be equal to the price determined in accordance with Section V hereof for Crude Oil from such field taken for the
recovery of Operating Costs. The proceeds in excess of the aforesaid fifteen percent (15%), shall preferably be used to assist
financing of continued exploration and development efforts by CONTRACTOR in the Contract Area or in other areas of the Republic
of Indonesia if such opportunity exists. In case no such opportunity can be demonstrated to exist in accordance with good oil field
practice, CONTRACTOR shall be free to use such proceeds at its own discretion;

 

		4.2.16	give preference
to such goods and services which are produced in Indonesia or rendered by Indonesian nationals, provided such goods and services
are offered at equally advantageous conditions with regards to quality, price, availability at the time and in the quantities required;

 

		4.2.17	severally be
subject to and pay to the Government of the Republic of Indonesia the value added tax and the income tax including the final tax
on profits after tax deduction imposed on it pursuant to Indonesian Income Tax Law and its implementing regulations and comply
with the requirements of the tax law in particular with respect to filing of returns, assessment of tax and keeping and showing
of books and records. The value added tax paid by CONTRACTOR in an any given Year shall be included in, and be recoverable
as the Operating Costs of such Year;

 

		4.2.18	comply with all
applicable laws of Indonesia. It is also understood that the execution of the Work Program shall be exercised so as not to conflict
with obligations imposed on the Government of the Republic of Indonesia by international laws;

 

		4.2.19	not disclose
geological, geophysical, petrophysical, engineering, well logs and completion, status reports and any other data as CONTRACTOR
may compile during the term hereof to third parties without PERTAMINA’s written consent. This clause shall survive the term
of this Contract.

 

		4.3	PERTAMINA
shall:

 

		4.3.1	have and be responsible
for the management of the operations contemplated hereunder, however, PERTAMINA shall assist and consult with CONTRACTOR
with a view to the fact that CONTRACTOR is responsible for the Work Program;

 

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		4.3.2	except with respect
to CONTRACTOR’s obligation to pay the income tax and the final tax on profits after tax deduction as set forth in clause
4.2.17, assume and discharge all other Indonesian taxes of CONTRACTOR including transfer tax, import and export duties on
materials, equipment and supplies brought into Indonesia by CONTRACTOR, its contractor and subcontractors; exaction in respect
of property, capital, net worth, operations, remittances or transactions including any tax or levy on or in connection with operations
performed hereunder by CONTRACTOR.

 

PERTAMINA
shall not be obliged to pay CONTRACTOR’s income lax including the final tax on profits after tax deduction nor taxes on
tobaccos, liquor and personal income tax; and other taxes not listed above of its contractors and subcontractors.

 

The
obligations of PERTAMINA hereunder shall be deemed to have been complied with by the delivery to CONTRACTOR within
one hundred and twenty (120) days after the end of each Calendar Year, of documentary proof in accordance with the Indonesian fiscal
laws that liability for the above mentioned taxes has been satisfied, except that with respect to any of such liabilities which
CONTRACTOR may be obliged to pay directly, PERTAMINA shall reimburse it only out of its share of the production hereunder
within sixty (60) days after receipt of invoices therefor.

 

PERTAMINA
should be consulted prior to payment of such taxes by CONTRACTOR or by any other party on CONTRACTOR’s behalf:

 

		4.3.3	otherwise assist
and expedite CONTRACTOR’s execution of the Work Program by providing facilities, supplies and personnel including, but not
limited to, supplying or otherwise making available all necessary visas, work permits, transportation, security protection and
rights of way and easements as may be requested by CONTRACTOR and made available from the resources under PERTAMINA’s
control. In the event such facilities, supplies or personnel are not readily available, then PERTAMINA shall promptly secure
the use of such facilities, supplies and personnel from alternative sources. Expenses thus incurred by PERTAMINA at CONTRACTOR’s
request shall be reimbursed to PERTAMINA by CONTRACTOR and included in the Operating Costs. Such reimbursement will
be made in United States Dollars computed at the rate of exchange extended by Indonesian Government at the time of conversion.

 

CONTRACTOR
shall advance to PERTAMINA before the beginning of each annual Work Program a minimum amount of thirty seven thousand five
hundred United States Dollars (US$ 37,500.00) for the purpose of enabling PERTAMINA to meet Rupiah expenditures incurred
pursuant to this clause 4.3.3.

 

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If
at any time during the annual Work Program period the minimum amount advanced under this clause 4.3.3 has been fully expended,
separate additional advance payment as may be necessary to provide for the Rupiah expenses estimated to be incurred by PERTAMINA
during the balance of such annual Work Program period will be made.

 

If
any amount advanced hereunder is not expended by PERTAMINA by the end of an annual Work Program period, such unexpended
amount shall be credited against the minimum amount to be advanced pursuant to this clause 4.3.3 for the succeeding annual Work
Program period:

 

		4.3.4	ensure that at
all times during the term hereof sufficient Rupiah funds shall be available to cover the Rupiah expenditure necessary for the execution
of the Work Program;

 

		4.3.5	have title to
all original data resulting from the Petroleum Operations including but not limited to geological, geophysical, petrophysical,
engineering, well logs and completion, status reports and any other data as CONTRACTOR may compile during the term hereof:
provided, however, that all such data shall not be disclosed to third parties without informing CONTRACTOR and giving CONTRACTOR
the opportunity to discuss the disclosure of such data if CONTRACTOR so desires and further provided that CONTRACTOR
may retain copies of such data.

 

		4.3.6	to the extent
that it does not interfere with CONTRACTOR’s performance of the Petroleum Operations, use the equipment which becomes its
property by virtue of this Contract, solely for the Petroleum Operations envisaged under this Contract, and if PERTAMINA
wishes to use such equipment for any alternative purpose, then PERTAMINA shall first consult CONTRACTOR.

 

—oOo—

 

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SECTION
V

 

RECOVERY
OF OPERATING COSTS AND HANDLING OF PRODUCTION

 

		5.1	CRUDE
OIL

 

		5.1.1	CONTRACTOR
is authorized by PERTAMINA and obligated to market all Crude Oil produced and saved from the Contract Area subject to the
provisions hereinafter set forth.

 

		5.1.2	CONTRACTOR
will recover all Operating Costs out of the sales proceeds or other disposition of the required quantity of Crude Oil equal in
value to such Operating Costs to a maximum of Sixty Five percent (65%) per annum of Crude Oil produced and saved hereunder and
not used in Petroleum Operations. Except as provided in clauses 6.1.4 and 6.1.5, CONTRACTOR shall
be entitled to take and receive and freely export such Crude Oil. For purposes of determining the quantity of Crude Oil delivered
to CONTRACTOR required to recover said Operating Costs, the weighted average price of all Crude Oil produced and sold from
the Contract Area during the Calendar Year will be used, excluding however, deliveries made pursuant to clause 4.2.15. If, in any
calendar Year, the Operating Costs exceed sixty-five percent (65%). of the value of Crude Oil produced and saved hereunder and
not used in Petroleum Operations, then the unrecovered excess shall be recovered in succeeding Years.

 

		5.1.3	Of the Crude
Oil remaining after deducting Operating Costs. PERTAMINA shall be entitled to take and receive seventy three point two one
four three percent (73.2143%) and CONTRACTOR shall be entitled to take and receive twenty six point seven eight five seven
percent (26.7857%).

 

		5.1.4	Title to CONTRACTOR’s
portion of Crude Oil under clauses 5.1.3 and 5.1.7 as
well as to such portion of Crude Oil exported and sold to recover Operating Costs and the investment credit provided for in clause
5.1.7 shall pass to CONTRACTOR
at the Point of Export, or, in the case of oil delivered to PERTAMINA pursuant to clause 4.2.15 or otherwise, at the point
of delivery.

 

		5.1.5	CONTRACTOR
will use its best reasonable efforts to market the Crude Oil to the extent markets are available. Either Party shall be entitled
to take and receive their respective portion in kind.

 

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		5.1.6	If PERTAMINA
elects to take any of its portion of Crude Oil in kind, it shall so advise CONTRACTOR in writing not less than ninety (90)
days prior to the commencement of each semester of each Calendar Year specifying the quantity which it elects to take in kind,
such notice to be effective for the ensuing semester of each Calendar Year, provided however, that such election shall not interfere
with the proper performance of any Crude Oil sales agreement for Petroleum produced within the Contract Area which CONTRACTOR
has executed prior to the notice of such election. Failure to give such notice shall he conclusively deemed to evidence the election
not to take in kind. Any sale of PERTAMINA’s portion of Crude Oil shall not be for a term of more than one Calendar Year
without PERTAMINA’s consent.

 

		5.1.7	Investment Credit:

 

		(a)	CONTRACTOR
may recover an investment credit amounting to fifteen point seven eight zero zero percent (15.7800%) of the capital investment
cost directly required for developing Crude Oil production facilities (as provided under Article II paragraph 2.3.3 of Exhibit
“C” hereof) out of deduction from gross production before recovering Operating Costs, commencing in the earliest production
Year or Years before tax deduction (to be paid in advance in such production Year when taken).

 

		(b)	The investment
credit referred to in paragraph (a) above may be applied to new secondary recovery and Enhanced Oil Recovery projects, but are
not applicable to interim production scheme.

 

		5.2	NATURAL GAS

 

		5.2.1	Any Natural Gas
produced from the Contract Area to the extent not used in Petroleum Operations hereunder, may be flared if the processing and utilization
thereof is not economical. Such flaring shall be permitted to the extent that gas is not required to effectuate the maximum economic
recovery of Petroleum by secondary
recovery operations, including repressing
and recycling.

 

		5.2.2	Should PERTAMINA
and CONTRACTOR consider that the processing and utilization of Natural Gas is economical and choose to participate in the
processing and utilization thereof, in addition
to that used in secondary recovery operations, then the construction and installation of facilities, for such processing and utilization
shall be carried out pursuant to an approved Work Program. It is hereby agreed that all costs and revenues derived from such processing,
utilization and sale of Natural Gas shall be treated on a basis equivalent to that provided for herein concerning Petroleum Operations
and disposition of Crude Oil except, of the Natural Gas, or the propane and butane fractions extracted from Natural Gas but not
spiked in Crude Oil, remaining after deducting Operating Costs associated with the Natural Gas operations as stipulated in Exhibit
“C”, PERTAMINA shall be entitled to take and receive thirty seven point five zero zero zero percent (37.5000 %)
and CONTRACTOR shall be entitled to take and receive sixty two point five zero zero zero percent (62.5000 %).

 

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		5.2.3	In the event,
however, CONTRACTOR considers that the processing and utilization of Natural Gas is not economical, then PERTAMINA
may choose to take and utilize such Natural Gas that would otherwise he flared, all costs of taking and handling to be for the
sole account and risks of PERTAMINA.

 

—oOo—

 

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SECTION
VI

 

VALUATION
OF CRUDE OIL

 

		6.1	Crude Oil sold
to third parties shall be valued as follows:

 

		6.1.1	All Crude Oil
taken by CONTRACTOR including its share and the share for the recovery of Operating Costs and investment credit, if any,
and sold to third parties shall be valued at the net realized price f.o.b. Indonesia received by CONTRACTOR for such Crude
Oil.

 

			

		6.1.2	All of PERTAMINA’s
Crude Oil taken by CONTRACTOR and sold to third parties shall be valued at the net realized price f.o.b. Indonesia received
by CONTRACTOR for such Crude Oil.

 

		6.1.3	PERTAMINA
shall be duly advised before the sales referred to in clauses 6.1.1 and 6.1.2 are made.

 

		6.1.4	Subject to any
existing Crude Oil sales agreement, if a more favourable net realized price is available to PERTAMINA for the Crude Oil
as referred to in clauses 6.1.1 and 6.1.2 of this subsection, except CONTRACTOR’s portion of the Crude Oil, then PERTAMINA
shall so advise CONTRACTOR in writing not less than ninety (90) days prior to the commencement of the deliveries under PERTAMINA’s
proposed sales Contract. Forty-five (45) days prior to the start of such deliveries, CONTRACTOR shall notify PERTAMINA
regarding CONTRACTOR’s intention to meet the more favorable net realized price in relation to the quantity and period
of delivery concerned in said proposed sales contract. In the absence of such notice PERTAMINA shall market said Crude Oil.

 

		6.1.5	PERTAMINA’s
                                                                 marketing of such Crude Oil as referred to in clause 6.1.4 of
                                                                 this subsection shall continue forty-five (45) days after PERTAMINA’s net realized price on said Crude Oil becomes
                                                                 less favorable. CONTRACTOR’s obligation to market said Crude Oil shall not apply until after PERTAMINA has
                                                                 given CONTRACTOR at least forty-five (45) days advance notice of its desire to discontinue such sales. As long as PERTAMINA
                                                                 is marketing the Crude Oil referred to above, it shall account to CONTRACTOR, on the basis of the more favorable net
                                                                 realized price.

 

		6.1.6	Without prejudice
to any of the provisions of Section V and Section VI. CONTRACTOR may at its option transfer to PERTAMINA during any
Calendar Year the right to market any Crude Oil which is in excess of CONTRACTOR’s normal and contractual requirements provided
that the price is not less than the net realized price from the Contract Area. PERTAMINA’s request stating the quantity
and expected loading date must be submitted in writing at least thirty (30) days prior to lifting said Crude Oil. Such lifting
must not interfere with CONTRACTOR’s scheduled tanker movements. PERTAMINA shall account to CONTRACTOR in
respect of any sale made by it hereunder.

 

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		6.1.7	PERTAMINA
                                         shall have the option, in any Year in which the quantity
                                         of
                                         Petroleum to which it is entitled pursuant to clause 5.1.3 hereof is less than fifty
                                         percent (50%) of the total Crude Oil production by ninety (90) days written notice in
                                         advance of that Year, to market for the
                                         account
                                         of CONTRACTOR, at the price provided for in Section VI hereof for the recovery
                                         of the Operating Costs, a quantity of Petroleum which together with PERTAMINA’s
                                         entitlement under clause 5.1.3 equals fifty percent (50%) of the total Crude Oil produced
                                         and saved from the Contract Area.

 

		6.2	Crude Oil sold
to other than third parties shall be valued as follows:

 

		6.2.1	by using the
weighted average per unit price received by CONTRACTOR and PERTAMINA from sales to third parties (excluding, however,
commissions and brokerages paid in relation to such third party sales) during the three (3) months preceding such sale adjusted
as necessary for quality, grade and gravity; or

 

		6.2.2	if no such third
party sales have been made during such period of time, then on the basis used to value Indonesian Crude Oil of similar quality,
grade and gravity and taking into consideration any special circumstances with respect to sales of such Indonesian Crude Oil.

 

		6.3	Third party sales
referred to in this Section VI shall mean sales by CONTRACTOR to purchasers independent of CONTRACTOR, that is purchasers
with whom (at the time the sale is made) CONTRACTOR has no contractual interest involving directly or indirectly any joint
interest.

 

		6.4	Commissions or
brokerages incurred in connection with sales to third parties, if any, shall not exceed the customary and prevailing rate.

 

		6.5	During any given
Calendar Year, the handling of production (i.e. the implementation of the provisions of Section V hereof) and the proceeds thereof
shall be provisionally dealt with on the basis of the relevant Work Program and Budget of Operating Costs based upon estimates
of quantities of Petroleum to be produced, of internal consumption in Indonesia, of marketing possibilities, of prices and other
sale conditions as well as of any other relevant factor.

 

Within
thirty (30) days after the end of said given Year, adjustments and cash settlements between the Parties shall be made on the basis
of the actual quantities, amounts and prices involved, in order to comply with the provisions of this Contract. 

 

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		6.6	In the event
the Petroleum Operations involve the segregation of Crude Oil of different quality and/or grade and if the Parties do not otherwise
mutually agree:

 

		6.6.1	any and all provisions
of this Contract concerning evaluation of Crude Oil shall separately apply to each segregated Crude Oil;

 

		6.6.2	each Crude Oil
produced and segregated in given Year shall contribute to:

 

		(a)	the “required
quantity” destined in such Year to the recovery of all investment credit and Operating Costs pursuant to clause 5.1.2 hereof;

 

		(b)	the “required
quantity” of Crude Oil to which a Party is entitled in such Year pursuant to clause 5.1.3 hereof;

 

		(c)	the “required
quantity” of Crude Oil which CONTRACTOR agrees to sell and deliver in such Year for domestic consumption in Indonesia
pursuant to clause 4.2.15 hereof, out of the share of Crude Oil to which it is entitled pursuant to clause 5.1.3;

 

with
 quantities, each of which shall bear to the respective “required quantity” {referred to in (a) or (b) or (c) above}
the same proportion as the quantity of such Crude Oil produced and segregated in such given Year bears to the total quantity of
Crude Oil produced in such Year from the Contract Area.

 

—oOo—

 

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SECTION
VII

 

COMPENSATION,
ASSISTANCE AND PRODUCTION BONUS

 

		7.1	CONTRACTOR
                                         shall pay to PERTAMINA as compensation for information now held by PERTAMINA
                                         the sum of two hundred thousand United States Dollars (US $ 200,000.00), after the
                                         approval of this Contract by the government of the Republic of Indonesia in accordance
                                         with the provisions of applicable law. Such payment shall be made within thirty (30)
                                         days after the Effective Date.

 

		7.2	CONTRACTOR
shall within thirty (30) days after Pertamina’s request provide PERTAMINA with equipment or services in amount not exceeding
one hundred thousand United States Dollars (US $ 100,000.00), for exploration and production activities in Indonesia’s Petroleum
industry.

 

		7.3	CONTRACTOR
shall pay to PERTAMINA the sum of twenty five thousand United States Dollars (US $ 25,000.00), within thirty (30) days after
commencement of commercial Petroleum production from the Contract Area: and

 

CONTRACTOR
shall also pay to PERTAMINA the sum of fifty thousand United States Dollars (US $ 50,000.00) within thirty (30) days after
cumulative Petroleum production from the Contract Area has reached one (1) million Barrels of Oil Equivalent (3 MMBOE); and

 

CONTRACTOR
shall also pay to PERTAMINA the sum of one hundred thousand United States Dollars (US $ 100,000.00) within thirty (30) days
after cumulative Petroleum production from the Contract Area has reached three (3) million Barrels of Oil Equivalent (3 MMBOE);
and

 

CONTRACTOR
shall also pay to PERTAMINA the sum of three hundred thousand United Slates Dollars (US $ 300,000.00) within thirty (30)
days after cumulative Petroleum production from the Contract Area has reached seven (7) million Barrels of Oil Equivalent (7 MMBOE).

 

		7.4	Such bonus payments
shall be solely borne by CONTRACTOR and shall not be included in the Operating Costs

 

—oOo—

 

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SECTION
VIII

 

PAYMENTS

 

		8.1	All payments
which this Contract obligates CONTRACTOR to make to PERTAMINA or the Government of the Republic of Indonesia shall
be made in United States Dollars currency at a bank to be designated by each of them and agreed upon by Bank Indonesia or at the
CONTRACTOR’s election, other currency acceptable to them, except that, CONTRACTOR may make such payments in Indonesian
Rupiahs to the extent that such currencies are realized as a result of the domestic sale of Crude Oil or Natural Gas or Petroleum
products, if any.

 

		8.2	All payments
due to CONTRACTOR shall be made in United States Dollars or at PERTAMINA’s election, other currencies acceptable
to CONTRACTOR at a bank to be designated by CONTRACTOR.

 

		8.3	Any payments
required to be made pursuant to this Contract shall be made within thirty (30) days following the end of the month in which the
obligation to make such payments occurs. 

 

—oOo—

 

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SECTION
IX 

 

TITLE
TO EQUIPMENT

 

		9.1	Equipment purchased
by CONTRACTOR pursuant to the Work Program becomes the property of PERTAMINA (in case of import, when landed at the
Indonesian ports of import) and will be used in Petroleum Operations hereunder; however, CONTRACTOR shall retain custody
and control to such properties during the performance of this Contract and maintain such properties in good conditions.

 

		9.2	The provisions
of subsection 9.1 of this Section IX shall not apply to leased equipment belonging to third parties who perform services as a contractor,
which equipment may be freely exported from Indonesia.

 

—oOo—

 

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SECTION
X 

 

CONSULTATION
AND ARBITRATION

 

		10.1	Periodically,
PERTAMINA and CONTRACTOR shall meet to discuss the conduct of the Petroleum Operations envisaged under this Contract
and will make every effort to settle amicably any problem arising therefrom.

 

		10.2	Disputes, if
any, arising between PERTAMINA and CONTRACTOR relating to this Contract or the interpretation and performance of
any of the clauses of this Contract, and which cannot be settled amicably, shall be submitted to the decision of arbitration. PERTAMINA
on the one hand and CONTRACTOR on the other hand shall each appoint one arbitrator and so advise the other Party and these
two arbitrators will appoint a third. If either Party fails to appoint an arbitrator within thirty (30) days after receipt of a
written request to do so, such arbitrators shall, at the request of the other Party, if the Parties do not otherwise agree, be
appointed by the Chairman of the Badan Arbitrasi Nasional Indonesia (BANI : the Indonesian National Arbitration Board). If the
first of the two arbitrators appointed as aforesaid fail to agree on a third within thirty (30) days following the appointment
of the second arbitrator, the third arbitrator shall, if the Parties do not otherwise agree, be appointed, at the request of either
Party, by the Chairman of the Badan Arbitrasi Nasional Indonesia. If an arbitrator fails or is unable to act, his successor will
be appointed in the same manner as the arbitrator whom he succeeds.

 

		10.3	The decision
of a majority of the arbitrators shall be final and binding upon the Parties.

 

		10.4	Arbitration shall
be conducted in Jakarta and in accordance with the Rules of the Badan Arbitrasi Nasional Indonesia (BANI).

 

—oOo—

 

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SECTION
XI

 

EMPLOYMENT
AND TRAINING OF INDONESIAN PERSONNEL

 

		11.1	CONTRACTOR
agrees to employ qualified Indonesian personnel and after commercial production commences will undertake the schooling and training
of Indonesian personnel for labor and staff positions including administrative and executive management positions. At such time,
CONTRACTOR shall also consider with PERTAMINA a program of assistance for training of PERTAMINA’s personnel.

 

		11.2	Costs
                                         and expenses of training Indonesian personnel for its own employment shall be included
                                         in Operating Costs. Costs and expenses for a program of training for PERTAMINA’s
                                         personnel shall be borne on a basis to be agreed by PERTAMINA and CONTRACTOR.

 

—oOo—

 

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SECTION
XII

 

TERMINATION

 

		12.1	This Contract
cannot be terminated by CONTRACTOR during
the first two (2) Contract Years as from the Effective Date, except by provisions as stipulated in subsection 12.5 hereunder. However,
if during this period CONTRACTOR elects to relinquish its rights and be relieved of its further obligations CONTRACTOR
has not completed the work Program, and spent less than the amount to be so expended pursuant to subsection 3.2 hereof, CONTRACTOR
shall transfer the remaining amount of the initial two (2) Contract Years firm expenditures commitment.

 

		12.2	At any time following
the end of the second Contract Year as from the Effective Date, if in the opinion of CONTRACTOR circumstances
do not warrant continuation of the Petroleum Operations, CONTRACTOR may, by giving written notice to that effect to PERTAMINA
and after consultation with PERTAMINA,
relinquish its rights and be relieved of its obligations except such rights and obligations as related to the period prior to such
relinquishment.

 

		12.3	If at the end
of the third (3rd) Contract Year, CONTRACTOR has failed to perform as a reasonable and prudent Operator and has failed to
fulfill any of its obligations as specified in Sections III and VII hereof, PERTAMINA shall have the right to issue to the
CONTRACTOR a “Performance Deficiency Notice”. Said Notice shall detail the specific performance deficiencies
of CONTRACTOR under this Contract.

 

Upon
receipt of the Performance Deficiency Notice, CONTRACTOR shall have one hundred and twenty (120) days in which to remedy
the deficiencies detailed in said Notice. Should CONTRACTOR fail to remedy the deficiencies within the specified one hundred
and twenty (120) days or the Parties fail to agree on an extension of the period of time in which CONTRACTOR can remedy
the deficiencies, PERTAMINA shall have the right to terminate the Contract in its entirety without prejudice to CONTRACTOR’s
right to invoke arbitration as stipulated in Section X.

 

		12.4	In the event
CONTRACTOR fails to fulfill any of its obligations as specified in subsections 3.1 and 7.1 hereof, PERTAMINA shall
have the right to terminate this Contract in its entirety.

 

		12.5	Without prejudice
to the provisions stipulated in subsection 12.1 hereinabove, either Party shall be entitled to terminate this Contract in its entirety
by a ninety (90) days written notice if a major breach of Contract is committed by the other Party, provided that conclusive evidence
thereof is proved by arbitration as stipulated in Section X.

 

—oOo—

 

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SECTION
XIII 

 

BOOKS
AND ACCOUNTS AND AUDITS

 

		13.1	BOOKS
AND ACCOUNTS

 

Subject
to the requirements of clause 4.2.17 of Section IV, PERTAMINA shall be responsible for keeping complete books and accounts
with the assistance of CONTRACTOR reflecting
all Operating Costs as well as monies received from the sale of Crude Oil, consistent with modern petroleum industry practices
and proceedings as described in Exhibit “C” attached hereto. Should there be any inconsistency between the provisions
of this Contract and the provisions of Exhibit “C” then the provisions of clause 5.1.2 of this Contract shall prevail.
Until such time that commercial production commences, however. PERTAMINA delegates to CONTRACTOR its obligations
to keep books and accounts.

 

		13.2	AUDITS

 

		13.2.1	CONTRACTOR
                                         shall have the right to inspect and audit PERTAMINA’s books and accounts relating
                                         to this Contract for any Calendar Year within one (1) year period following the end of
                                         such Calendar Year. Any such audit will be satisfied within twelve (12) months after
                                         its commencement. Any exception must be made in writing within sixty (60) days following
                                         the end of such audit and failure to give such written exception within such time shall
                                         establish the correctness of PERTAMINA’s books and accounts.

 

		13.2.2	PERTAMINA
and the Government of Republic of Indonesia shall have the right to inspect and audit CONTRACTOR’s books and account
relating to this Contract for any Calendar Year covered by this Contract. Any exception must be made in writing within sixty (60)
days following the completion of such audit.

 

In
addition, PERTAMINA and the Government of the Republic of Indonesia may require CONTRACTOR to engage its independent
accountants to examine, in accordance with generally accepted auditing standards, the CONTRACTOR’s books and accounts relating
to this Contract for any Calendar Year or perform such auditing procedures as deemed appropriate by PERTAMINA.

 

A
copy of the independent accountant’s report or any exceptions shall be forwarded to PERTAMINA within sixty (60) days following
the completion of such audit. The costs related to the engagement of such independent accountants shall be included in the Operating
Costs.

 

—oOo—

 

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SECTION
XIV

 

OTHER
PROVISIONS

 

		14.1	NOTICES

 

Any
notices required or given by either Party to the other shall be deemed to have been delivered when properly acknowledged for receipt
by the receiving Party. All such notices shall be addressed to:

 

PERUSAHAAN
PERTAMBANGAN MlNYAK DAN GAS BUMI NEGARA (PERTAMINA)

 

Jalan
Medan Merdeka Timur 1-A

Jakarta
10110

Indonesia

 

	Attention	:	Senior Vice President Director

 Exploration and Production

 

PT.
BINATEK REKA KRUH

Pusat
Niaga Duta Mas Fatmawati 

Blok
C-1 No. 02-03 

Jl.
R.S. Fatmawati No. 39 

Jakarta
12150

 

	Attention	:	President Director

 

Either
Party may substitute or change such address on written notice thereof to the other.

 

		14.2	LAWS
AND REGULATIONS

 

		14.2.1	The
laws of the Republic of Indonesia shall apply to this Contract.

 

		14.2.2	No
term or provisions of this Contract, including the agreement of the Parties to submit to arbitration hereunder, shall prevent
or limit the Government of the Republic of Indonesia from exercising its inalienable rights.

 

		14.3	SUSPENSION
OF OBLIGATIONS

 

		14.3.1	Any
failure or delay on the part of either Party in the performance of their obligations or duties hereunder shall be excused to the
extent attributable to Force Majeure.

 

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    CONTRACT AREA : KRUH

    

 

		14.3.2	If
operations are delayed, curtailed or prevented by such causes, then the time for carrying out the obligations thereby affected,
the term of this Contract and all rights and obligations hereunder shall be extended for a period equal to the period thus involved.

 

		14.3.3	The
Party whose ability to perform its obligations so affected shall notify the other Party thereof in writing, stating the cause,
and both Parties shall do all reasonable efforts within their power to remove such cause.

 

		14.4	PROCESSING
OF PRODUCTS

 

		14.4.1	CONTRACTOR
shall be willing to consider to come to another contract or loan agreement for the processing of products derived from the
Petroleum Operations hereunder, on mutually agreeable terms.

 

		14.4.2	Within
the framework of the preceding principle, CONTRACTOR would agree subject to the conditions stated below to have refined
in Indonesia twenty-eight point five seven percent (28.57%) of the portion of Crude Oil to which it is entitled pursuant to clause
5.1.3 hereof and should no refining capacity be available therefore to set up a corresponding refining capacity for that purpose.

 

The
conditions above referred to are that:

 

		(a)	PERTAMINA
has first requested CONTRACTOR thereto;

 

		(b)	CONTRACTOR’s
portion of Crude Oil pursuant to clause 5.1.3 hereof be not less than seventy five thousand (75,000) Barrels per day; and

 

		(c)	if
refining capacity has to be erected that the setting up and use of such refining capacity be economical in the judgment of the
Parties.

 

		14.4.3	It
is further agreed that CONTRACTOR may in lieu of setting up such refining capacity, but subject to the same conditions,
make an equivalent investment in another project related to petroleum or petrochemical industries.

 

		14.4.4	Petroleum
to be delivered to such facilities would be sold by CONTRACTOR at the net realized prices f.o.b. Indonesia received by
CONTRACTOR established pursuant to Section VI hereof or at another mutually agreed price.

 

—oOo—

 

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SECTION
XV

 

PARTICIPATION

 

		15.1	PERTAMINA
shall have the right to demand from CONTRACTOR that a ten percent (10%) undivided interest in the total rights and
obligations under this Contract be offered to itself (hereinafter called “PERTAMINA Participating Interest”).

 

		15.2	The
                                         right referred to in subsection 15.1 shall lapse unless exercised by PERTAMINA
                                         not later than three (3) months after CONTRACTOR’s notification by registered
                                         letter to PERTAMINA of its decision to proceed with development of the first commercial
                                         Petroleum production in the Contract Area. PERTAMINA shall make its demand known
                                         to CONTRACTOR by registered letter.

 

		15.3.	For
                                         the acquisition of a ten percent (10%) undivided interest in the total of the rights
                                         and obligations arising out of this Contract, PERTAMINA shall reimburse CONTRACTOR
                                         an amount equal to ten percent (10%) of the sum of Operating Costs which CONTRACTOR
                                         has incurred for and on behalf of its activities in the Contract Area up to the date
                                         of CONTRACTOR’s notification to PERTAMINA mentioned in subsection 15.2,
                                         ten percent (10%) of the compensation paid to PERTAMINA for information referred
                                         to in subsection 7.1 hereof,
                                         and ten percent (10%) of the amount referred to in subsection 7.2 hereof, by way of payment
                                         out of production of fifty percent (50%) of PERTAMINA’s (as partner) production
                                         entitlement under this Contract.

 

—oOo—

 

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SECTION
XVI 

 

EFFECTIVENESS

 

		16.1	This
Contract shall come into effect on the Effective Date.

 

		16.2	This
Contract shall not be annulled, amended or modified in any respect, except by the mutual consent in writing of the Parties hereto.

 

IN
WITNESS WHEREOF, the Parties hereto have executed this Contract, in quadruplicate and in the English language, as of the day
and year first above written.

 

	PERUSAHAAN
    PERTAMBANGAN MINYAK DAN GAS BUMI NEGARA (PERTAMINA)	 	PT.
    BINATEK REKA KRUH
	 	 	 
	 	 	 
	Presiden Director
    and Chief Executive Officer	 	Presiden Director

 

    	 	 	Page # 30

    CONTRACT
                                         AREA : KRUH FIELD

    

 

EXHIBIT
“A”

 

This
Exhibit “A” is attached to and made an integral part of the Contract between PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA (PERTAMINA) and PT. BINATEK REKA KRUH dated the 22nd day of May 2000.

 

DESCRIPTION
OF CONTRACT AREA

 

KRUH
FIELD

 

Using
the Geographic Coordinate system beginning at point A located at 03° 00’ 00” South Latitude, 103°
35’ 00” East Longitude; proceed Eastward in a direct line to point B located
at intersection point of 03° 00’ 00” South Latitude, 103° 37’ 00” East Longitude,
thence proceed Southward in a direct line to point C located at intersection point of 03° 01’ 00” South
Latitude, 103° 37’ 00” East Longitude, thence proceed Eastward in a direct line to point D located
at intersection point of 03° 01’ 00” South Latitude, 103° 38’ 00” East Longitude,
thence proceed Southward in a direct line to point E located at intersection point of 03° 02’
00” South Latitude, 103° 38’
00” East Longitude, thence proceed Eastward in a direct line to point F located
at intersection of 03° 02’ 00” South Latitude, 103° 39’ 00” East Longitude, thence
proceed Southward in a direct line to point G located at intersection of 03° 04’ 30” South Latitude,
103° 39’ 00” East Longitude, thence proceed Eastward in a direct line to point H located at intersection
of 03° 04’ 30” South Latitude, 103° 40’ 00” East Longitude, thence proceed Southward
in a direct line to point I located
at intersection of 03° 05’ 30” South Latitude, 103° 40’ 00” East Longitude, thence
proceed Eastward in a direct line to point J located at intersection of 03° 05’ 30” South Latitude,
103° 40’ 30” East Longitude, thence proceed Southward in a direct line to point K located at intersection
of 03° 06’ 00” South Latitude, 103° 40’ 30” East Longitude, thence proceed Eastward
in a direct line to point L located at intersection of 03° 06’ 00” South Latitude, 103° 40’
45” East Longitude, thence proceed Southward in a direct line to point M located at intersection of 03°
06’ 12” South Latitude, 103° 40’ 45” East Longitude, thence proceed Eastward in a direct
line to point N located at intersection of 03° 06’ 12” South Latitude, 103° 41’ 00”
East Longitude, thence proceed Southward in a direct line to point O located
at intersection of 03° 09’ 00” South Latitude, 103° 41’ 00” East Longitude, thence
proceed Eastward in a direct line to point P located at intersection of 03° 09’ 00” South Latitude,
103° 41’ 30” East Longitude, thence proceed Southward in a direct line to point Q located at intersection
of 03° 10’ 30” South Latitude, 103° 41’ 30” East Longitude, thence proceed Westward
in a direct line to point R located at intersection of 03° 10’ 30” South Latitude, 103° 41’
00” East Longitude, thence proceed Southward in a direct line to point S located at intersection of 03°
11’ 00” South
Latitude, 103° 41’ 00” East Longitude, thence proceed Westward in a direct line to point T located at
intersection of 03° 11’ 00” South Latitude, 103° 40’ 30” East Longitude, thence
proceed Southward in a direct line to point U located at intersection of 03° 13’ 00” South Latitude,
103° 40’ 30” East Longitude, thence proceed Westward in a direct line to point V located
at intersection of 03° 13’ 00” South Latitude, 103° 39’ 30” East Longitude, thence
proceed Southward in a direct line to point W located at intersection of 03° 14’ 00” South Latitude,
103° 39’ 30” East Longitude, thence proceed Westward in a direct line to point X located at intersection
of 03° 14’ 00” South Latitude, 103° 39’ 00” East Longitude, thence proceed Southward
in a direct line to point Y located at intersection of 03° 14’ 30” South Latitude, 103° 39’
00” East Longitude, thence proceed Westward in a direct line to point Z located at intersection of 03°
14’ 30” South Latitude, 103° 38’ 30” East Longitude, thence proceed Southward in a direct
line to point AA located at intersection of 03° 15’ 00” South Latitude, 103° 38’ 30”
East Longitude, thence proceed Westward in a direct line to point AB located at intersection of 03° 15’
00” South Latitude, 103° 37’ 30” East Longitude, thence proceed Northward in a direct line to
point AC located at intersection of 03° 14’ 00” South Latitude, 103° 37’ 30”
East Longitude, thence proceed Westward in a direct line to point AD located at intersection of 03° 14’
00” South Latitude, 103° 37’ 00” East Longitude, thence proceed Northward in a direct line to
point AE located at intersection of 03° 13’ 00” South Latitude, 103° 37’ 00”
East Longitude, thence proceed Westward in a direct line to point AF located at intersection of 03° 13’
00” South Latitude, 103° 35’ 00” East Longitude, thence proceed Northward in a direct line to
point AG located at intersection of 03° 12’ 30” South Latitude, 103° 35’ 00”
East Longitude, thence proceed Westward
in a direct line to point AH located at intersection of 03° 12’ 30” South Latitude, 103°
33’ 00” East Longitude, thence proceed Northward in a direct line to point AI located at intersection of
03° 12’ 00”
South Latitude, 103° 33’ 00” East Longitude,
thence proceed Westward in a direct line to point AJ located at intersection of 03° 12’ 00” South Latitude,
103° 32’ 30” East Longitude, thence proceed Northward in a direct line to point AK located at intersection
of 03° 11’ 30” South Latitude, 103° 32’ 30” East Longitude, thence proceed Westward
in a direct line to point AL located at intersection of 03° 11’ 30” South Latitude, 103° 32’
00” East Longitude, thence proceed Northward in a direct line to point AM located at intersection of 03°
10’ 30” South Latitude, 103° 32’ 00” East Longitude, thence proceed Westward in a direct
line to point AN located at intersection of 03° 10’ 30” South Latitude, 103° 31’ 00”
East Longitude, thence proceed Northward in a direct line to point AO located at intersection of 03° 09’
00” South Latitude, 103° 31’ 00” East Longitude, thence proceed Eastward in a direct line to
point AP located at intersection of 03° 09’ 00” South Latitude, 103° 35’ 00”
East Longitude, thence proceed Northward in a direct line to point AQ located at intersection of 03° 06’
00” South Latitude, 103° 35’ 00” East Longitude, thence proceed Eastward in a direct line to
point AR located at intersection of 03° 06’ 00” South Latitude, 103° 36’ 00”
East Longitude, thence proceed Northward in a direct line to point AS located at intersection of 03° 02’
00” South Latitude, 103° 36’ 00” East Longitude, thence proceed Westward in a direct line to
point AT located at intersection of 03° 02’ 00” South Latitude, 103° 35’ 00”
East Longitude, thence proceed Northward in a direct line to point A point of beginning.

 

The
area described above shall consist of approximately 258.10 square kilometers.

 

    	 	 	Page A-1

    CONTRACT
                                         AREA : KRUH FIELD

    

 

EXHIBIT
“B”

 

This
Exhibit “B” is attached to and made an integral part of the Contract between PERUSAHAAN PERTAMBANGAN MINYAK
DAN GAS BUMI NEGARA (PERTAMINA) and PT. BINATEK REKA KRUH dated the 22nd day of May 2000.

 

MAP
OF CONTRACT AREA

 

    	 	 	Page B-1

    

    

  

 

     

    CONTRACT AREA : KRUH

    

 

EXHIBIT
“C”

 

This
Exhibit “C” is attached to and made an integral part of the Contract between PERUSAHAAN PERTAMBANGAN MINYAK DAN GAS
BUMI NEGARA (PERTAMINA) and PT. BINATEK REKA KRUH dated the ...........day of ........... 2000 ........... 

 

ACCOUNTING
PROCEDURE 

 

ARTICLE
I 

 

General
Provisions

 

		2.1.	DEFINITIONS

 

The
accounting procedure herein provided for is to be followed and observed in the performance of either Party’s obligations
under the Contract to which this Exhibit is attached. The definition and terms appearing in this Exhibit “C” shall
have the same meaning as those defined in said Contract.

 

		2.1	ACCOUNTS
AND STATEMENTS

 

PERTAMINA’s
and CONTRACTOR’s, as the case may be, accounting records and books will be kept in accordance with generally accepted
and recognized accounting systems, consistent with modern petroleum industry practices and procedures. Books and reports will be
maintained and prepared in accordance with methods established by PERTAMINA. The chart of accounts and related account definitions
will be prescribed by PERTAMINA. Reports will be organized for the use of PERTAMINA in carrying out its management
responsibilities under this Contract.

 

ARTICLE
II 

 

Operating
Costs

 

		2.1.	DEFINITION

 

For
any year in which commercial production occurs, Operating Costs consists of (a) current Year Non-capital Costs, (b) current Year’s depreciation for Capital Costs and (c) current Year allowed recovery of prior Year’s unrecovered Operating Costs.

 

    	 	 	Page C-1

    CONTRACT AREA : KRUH

    

  

		2.2.	NON-CAPITAL
COSTS

 

Non-capital
Costs means those Operating Costs incurred that relate to current Year’s operations. In addition to costs relating only to current
operations, the costs of surveys and the intangible costs of drilling exploratory and development wells, as described in clauses
2.2.3, 2.2.4 and 2.2.5below, will
be classified as Non-capital costs. Non-capital costs include, but are not limited to the following:

 

		2.2.1	Operations

Labour,
materials and services used in day to day oil well operations, oil field production facilities operations, secondary recovery operations,
storage, handling, transportation and delivery operations, gas well operations, gas field production facilities operations, gas
transportation, and delivery operations, gas processing auxiliaries, and utilities, and other operating activities, including repairs
and maintenance.

 

		2.2.2	Office,
services and general administration

General
services including technical and related services, material services, transportation, rental of specialized and heavy engineering
equipment, site rentals and other rentals of services and property, personnel expenses, public relations, and other expenses abroad.

 

		2.2.3	Production
drilling

Labour,
materials and services used in drilling wells with the object of penetrating a proven reservoir, including the drilling of delineation
welts as well as redrilling, deepening or recompleting wells and access roads leading directly to wells.

 

		2.2.4	Exploratory
drilling

Labour,
material and services used in the drilling of wells with the object of finding unproven reservoirs of oil and gas, and access roads
leading directly to wells.

 

		2.2.5	Surveys

Labour,
materials and services used in aerial, geological, topographical, geophysical and seismic surveys, and core hole drilling.

 

		2.2.6	Other
exploration expenditures

Auxiliary
or temporary facilities having lives of one year or less used in exploration and purchased geological and geophysical information.

 

		2.2.7	Training

Training
of Indonesian personnel as set forth in Section XI of the Contract.

 

    	 	 	Page C-2

    CONTRACT AREA : KRUH

    

 

		2.3.	CAPITAL
COSTS

 

Capital
Costs means expenditures made for items which normally have a useful life beyond the year incurred. A reasonable annual allowance
for depreciation of Capital Costs, computed as describe in Article III Section 3.1. will be allowed as a recoverable Operating
Costs for the current Year. Capital Costs include classification described herein but are not limited to the following specifications:

 

		2.3.1	Construction
utilities and auxiliaries

Workshops,
power and water facilities, warehouses, cargo jetties, and field roads except the access roads mentioned in paragraphs 2.2.3 and
2.2.4 above.

 

		2.3.2	Construction
housing and welfare

Housing,
recreational facilities and other tangible property incidental to construction.

 

		2.3.3	Production
Facilities

Offshore
platform (including the costs of labour, fuel, hauling and supplies for both the offsites fabrication and onsite installation of
platforms, and other construction costs in erecting platforms and installing submarine pipelines), wellhead equipment, subsurface
lifting equipment, production tubing, sucker rods, surface pumps, flow lines, gathering equipment, delivery lines and storage facilities.
Costs of oil jetties and anchorages, treating plants and equipment, secondary and tertiary recovery systems, gas plants and steam
systems.

 

		2.3.4	Movables

Surface
and subsurface drilling and production tools, equipment and instruments, barges, floating craft, automotive equipment, aircraft,
construction equipment, furniture and office equipment and miscellaneous equipment.

 

—oOo—

 

    	 	 	Page C-3

    CONTRACT AREA : KRUH

    

  

ARTICLE
III 

 

Accounting
Methods To Be Used To Calculate

 

Recovery
Of Operating Costs

 

		3.1.	DEPRECIATION

 

Depreciation
will be calculated beginning the Calendar Year in which the asset is placed into service with a full year’s depreciation allowed
the initial Calendar Year. The method used to calculate each Year’s allowable Recovery of Capital Costs is the declining
balance depreciation method. Calculation of each such Year’s allowable recovery of Capital Costs should be based on the individual
asset’s Capital Costs at the beginning of such Year multiplied by the depreciation factor as follows, for:

 

-   Group1
=50%

-   Group2
=25%

 

For
the Groups of capital assets for any Crude Oil projects and/or Natural Gas projects apply useful lives as follows:

 

	GROUP 1 :	 	 
	 	 	 
	Automobile	1.5	years
	Trucks-light (13,000 pounds or less) and tractor units	2	years
	Trucks-heavy (more than 13,000 pounds)	3	years
	Busses	4.5	years
	Aircraft	3	years
	Construction Equipment	3	years
	Furniture and Office Equipment	5	years
	 	 	 
	GROUP 2:	 	 
	 	 	 
	Construction utilities and auxiliaries	5	years
	Construction housing and welfare	10	years
	Production facilities	5	years
	Railroad cars and locomotives	7.5	years
	Vessels, barges, tugs and similar water transportation equipment	9	years
	Drilling and production tools, equipment and instrument	5	years

 

Balance
of unrecovered Capital Costs is eligible for full depreciation at the end of the individual asset’s useful life.

 

The
undepreciated balance of assets taken out of services will not be charged to Operating Costs but will continue depreciating based
upon lives describe above, except where such assets have been subjected to unanticipated destruction, for example, by fire or accident.

 

    	 	 	Page C-4

    CONTRACT AREA : KRUH

    

  

		3.2.	OVERHEAD
ALLOCATION

 

General
and administrative costs, other than direct charges, allocable to this operation should be determined by a detailed study, and
the method determined by such study should be applied each Year consistently. The method selected must be approved by PERTAMINA,
and such approval can be reviewed periodically by PERTAMINA and CONTRACTOR.

 

		3.3.	INTEREST
RECOVERY

 

Interest
on loans obtained by CONTRACTOR from Affiliates or parent companies or from third party non-affiliates at rates not exceeding
prevailing commercial rates for capital investments in Petroleum Operations may be recoverable as Operating Costs. Details of any
financing plan and amounts must be included in each year’s Budget of Operating Costs for the prior approval of PERTAMINA.
All other financing must also be approved by PERTAMINA.

 

		3.4.	GAS
COSTS

 

Operating
Costs directly associated with the production of Natural Gas will be directly chargeable against Natural Gas revenues in determining
entitlements under Section V clause 5.2.2. Operating Costs incurred for production of both Natural Gas and Crude Oil will be allocated
to Natural Gas and Crude Oil based on the relative value of the products produced for the current Year. Common support costs will
be allocated on an equitable basis agreed to by both parties.

 

If
after commencement of production the Natural Gas revenues do not permit full recovery of Natural Gas costs, as outlined above,
then the excess costs shall be recovered from Crude Oil revenues.

 

Likewise,
if excess Crude Oil costs (Crude Oil costs less Crude Oil revenues) exists, this excess can be recovered from Natural Gas revenues.

 

If
production of either Natural Gas or Crude Oil has commenced while the other has not, the allocable production costs and common
support costs will be allocated in an equitable manner. Propane and butane fractions extracted from Natural Gas but not spiked
in Crude Oil shall be deemed as Natural Gas for the purpose of accounting.

 

		3.5.	INVENTORY
ACCOUNTING

 

The
costs of non-capital items purchased for inventory will be recoverable at such time the items have landed in Indonesia.

 

    	 	 	Page C-5Exhibit 10.7

 

Confidential
Treatment Requested by Indonesia Energy Corporation Limited.

Confidential
treatment requested with respect to certain portions hereof denoted with

“***”

 

OPERATIONS COOPERATION AGREEMENT

 

BETWEEN

 

PT PERTAMINA EP

 

AND

 

PT GREEN WORLD NUSANTARA

 

FOR PRODUCTION

 

ON

 

KRUH

OPERATING AREA

 

     

     

    

 

Table of Contents

 

	SECTION	Headings	Page

No.
	 	 	 
	I.	Definitions and Interpretations	5
	 	 	 
	II.	Scopes and Durations of Agreement	11
	 	 	 
	III.	Work Program and Budget	14
	 	 	 
	IV.	Rights and Obligations	20
	 	 	 
	V.	Recovery of Operating Costs and Handling of Production	32
	 	 	 
	VI.	Transfer of Rights and Obligations and Change of Control	36
	 	 	 
	VII.	Bank Guarantee and Cash in Advance	38
	 	 	 
	VIII.	Payments	44
	 	 	 
	IX.	Assets	46
	 	 	 
	X.	Governing Law and Settlement of Disputes	47
	 	 	 
	XI.	Confidentiality	48
	 	 	 
	XII.	Force Majeure	49
	 	 	 
	XIII.	Indemnification	51
	 	 	 
	XIV.	Employment and Training of Indonesian Personnel	53
	 	 	 
	XV.	Termination of The Agreement	54
	 	 	 
	XVI.	Books and Accounts and Audits	60
	 	 	 
	XVII.	Notices and Correspondences	62
	 	 	 
	XVIII.	Other Provisions	63

 

    	 	1	 

     

    

 

	SECTION	Headings	Page

No.
	 	 	 
	Exhibit – I	Operating Area Map	68
	 	 	 
	Exhibit – II	Description of Operating Area	69
	 	 	 
	Exhibit – III	Accounting Procedure	71
	 	 	 
	• Article – I                General Provisions	71
	 	 	 
	• Article – II              Operating Costs	72
	 	 	 
	• Article – III             Accounting Methods To Calculate Recovery of Operating Costs	76
	 	 	 
	Exhibit – IV	Baseline Production	81
	 	 	 
	Exhibit – V	Organization Structure	83
	 	 	 
	Exhibit – VI	Petroleum Revenue Flow Distribution	84
	 	 	 
	Exhibit – VII	Berita Acara Serah Terima Area Operasi	85
	 	 	 
	Exhibit – VIII	Bank Guarantee Form	86

 

    	 	2	 

     

    

 

OPERATIONS COOPERATION

AGREEMENT

BETWEEN

PT PERTAMINA EP

AND

PT GREEN WORLD NUSANTARA

 

This Agreement (hereinafter referred to
as “Agreement”) is made and entered into on July 26, 2019 (“Signing Date”), by and between
PT PERTAMINA EP, a company organized and existing under the laws of Republic of Indonesia hereinafter in this Agreement
called “PERTAMINA EP” and “NUSANTARA” company organized and existing under the laws of Republic
of Indonesia hereinafter in this Agreement called “PARTNER”, both PERTAMINA EP and PARTNER hereinafter
sometimes referred to either individually as the “Party” or collectively as the “Parties”.

 

WITNESSETH

 

	A.	WHEREAS, PERTAMINA EP signed a Kontrak Minyak dan Gas Bumi PERTAMINA (hereinafter called “PERTAMINA EP KKS”) with Badan Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi (BPMIGAS, the role and function of BPMIGAS has recently been substituted by SKK Migas based on Peratur-an Presiden No. 9 Year 2013) on September 17, 2005, and therefore PERTAMINA EP is the company with exclusive rights to conduct petroleum operations, among others, in the Operating Area as outlined in the map of Operating Area in Exhibit - I and coordinates of Operating Area as described in Exhibit - II, both attached hereto and made as an integral part hereof; and

 

	B.	WHEREAS, with reference to clause 4.2 of SECTION IV of PERTAMINA EP KKS, in conducting Operations thereof PERTAMINA EP may establish a cooperation agreement with another party in which PARTNER has no participating interest in PERTAMINA EP KKS and has no direct relationship with SKK Migas and/or the Government of the Republic of Indonesia represented by the ministry which has the authority in the oil and gas sector; and

 

    	 	3	 

     

    

 

	C.	WHEREAS, PERTAMINA EP based on SECTION IV PERTAMINA EP KKS, has conducted a tender process to select a PARTNER to perform exploration, development and production in the Operating Area and PARTNER which is willing and committed to carry out exploration, and or accelerating development and production of the Petroleum resources in the Operating Area by conducting the Operations as defined below; and

 

	D.	WHEREAS, PERTAMINA EP and PARTNER are bound to Technical Assistance Contract between Perusahaan Pertambangan Minyak dan Gas Bumi Negara (Pertamina) and PT Binatek Reka Kruh (now PT Green World Nusantara) for contract area Kruh, dated May 22th 2000 and Novation Agreement on dated May 26th 2011, that will ended on May 21st, 2020 at 24.00 WIB; and

 

	E.	WHEREAS, based on PARTNER’s Letter on Permohonan Kontrak Baru Pengelolaan Wilayah Kerja Perminyakan Kruh No. 006/GWN-DIR/X/2017 on dated October 31th, 2017, PARTNER proposed to continue the Operations in the Operating Area; and

 

	F.	WHEREAS, PERTAMINA EP and PARTNER have been discussed the continuation of the Operations on September 4th, 2018, through Operations Cooperation scheme; and

 

    	 	4	 

     

    

 

	G.	WHEREAS, based on PERTAMINA EP’s Letter No. 715/EP0000/2019-S0 tanggal 11 Juli 2019 on Rencana KSO Produksi Area Operasi Kruh pada Wilayah Kerja PT Pertamina EP, PERTAMINA EP has agreed that PARTNER shall continue the Operations in the Operating Area; and

 

	H.	WHEREAS, PARTNER, which has the financial ability, technical competence, organizations and professional skills necessary to carry out the Operations as well as its other obligations pursuant to this Agreement;

 

NOW, THEREFORE, in considerations
of the premises herein contained, it is hereby agreed as follows:

 

SECTION I 

DEFINITION AND INTERPRETATION

 

The following terms unless otherwise
specified herein shall have the meanings assigned to them under the following provisions:

 

	1.1	DEFINTIONS

 

	1.1.1	Budget means Budget of Operating Cost and Investment Budget

 

	1.1.2	Budget of Operating Costs means estimated costs of all items related to Operation activities and included in the Work Program and Budget.

 

	1.1.3	Investment Budget means estimated capital costs included in the Work Program and Budget.

 

	1.1.4	Operating Area means the area where PARTNER conducts Operations which in the area as outlined and described in Exhibit – I and Exhibit – II attached hereto and made part hereof.

 

    	 	5	 

     

    

 

	1.1.5	Asset means movable and non-movable asset including but not limited to: tools, machinery, materials, inventory goods, houses/buildings, vehicles, land and other production facilities which are legally possessed, either through ownership or based on other rights, by PERTAMINA EP or PARTNER for Operations purpose based on the Agreement.

 

	1.1.6	Barrel means a quantity or unit of oil, in the amount of forty-two (42) United States gallons standard at the temperature of sixty (60) degrees Fahrenheit.

 

	1.1.7	Operating Costs means expenditures made and obligations incurred in carrying out the Operations hereunder determined in accordance with the Accounting Procedure attached hereto and made a part hereof as Exhibit-Ill.

 

	1.1.8	Cash in Advance means an amount of cash provided by PARTNER to fund the execution of Firm Commitment in the separate account of PARTNER’s as stipulated in SECTION VII of the Agreement.

 

	1.1.9	Barrel of Oil Equivalent (BOE) means six thousand (6,000) standard cubic feet of Natural Gas based on the assumption that such gas has a calorific value of one thousand (1,000) British Thermal Unit per cubic foot (BTU/ft3).

 

	1.1.10	Natural Gas means all gaseous hydrocarbons produced from wells, including wet mineral gas, dry mineral gas, casing head gas and residue gas remaining after the extraction of liquid hydrocarbons from wet gas.

 

    	 	6	 

     

    

 

	1.1.11	Working Days means Monday through Friday, except national holidays as determined by GOI.

 

	1.1.12	Firm Commitment, means the Work Program during the first three Firm Commitment Years and its extension, if any, that shall be conducted by PARTNER as described in Article 3.3 of the Agreement.

 

	1.1.13	Petroleum means mineral oil and gas, hereinafter called Crude Oil and Natural Gas as defined in Law No. 22/2001 concerning Oil and Natural Gas.

 

	1.1.14	Incremental Oil (Shareable Oil) means the amount of Crude Oil lifted from the Operating Area which is in excess of the Baseline Production (Non-Shareable Oil.

 

	1.1.15	Crude Oil means crude mineral oil, asphalt, ozokerite and all kinds of hydrocarbons and bitumens, both in solid and liquid form, in their natural state or obtained from Natural Gas by condensation or extraction.

 

	1.1.16	Operations means all activities conducted in the Operating Area in accordance with Work Program and Budget including but not limited to the preparation of Work Program and Budget Preparation, geological geophysical and reservoir studies; geological and geophysical surveys; drilling; production testing; production facilities; transportation; work over; operation and maintenance of injection and production wells and water supply wells; if any; construction; operation and maintenance of water gathering lines; water treating plant; water storage facilities; injection facilities and injection lines; day to day injection operations; operations of the Enhanced Oil Recovery Production wells and other facilities up to the inlet flange of PERTAMINA EP’s common pipeline facilities servicing the Operating Area, if any. Such inlet flange will be determined by PERTAMINA EP when plan of production is proposed for approval.

 

    	 	7	 

     

    

 

	1.1.17	Control means ownership directly or indirectly of (i) the voting right, in the event the company is a corporation issuing a stock; or (ii) the controlling of rights or interests, in the event the other company or entity is not a corporation.

 

	1.1.18	Change of Control means any direct or indirect change of Control of PARTNER (whether through merger, sale of share or other equity interests, or otherwise) through a single transaction or series of related transactions.

 

	1.1.19	Government of Indonesia (“GOI”) means any government authorities or agencies of Republic of Indonesia.

 

	1.1.20	Affiliate means a company or other entity that controls, or is controlled by a company or other entity which Control a Party in this Agreement.

 

	1.1.21	Third Party means any party other than The Parties. For avoidance of doubt, specifically for SECTION VI Third Party means any party other than The Parties and its Affiliate.

 

	1.1.22	Baseline Production means the average production of Petroleum in the Operation Area which has resulted in the decline of production curve so agreed by the Parties as stipulated in Exhibit - IV, which constitutes the minimum production to be produced from the Operation Area.

 

    	 	8	 

     

    

 

	1.1.23	Gross Production means the total amount of Crude Oil and/or Natural Gas produced from the Operating Area.

 

	1.1.24	Work Program means detail of the Operations to be carried out in the Operating Area as set forth in SECTION III of the Agreement which has been approved by PERTAMINA EP.

 

	1.1.25	Substitution Program means a replacement program of Firm Commitment as described in clause 3.7 of this Agreement.

 

	1.1.26	SKK Migas means Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi, being the special working unit that, as at the date of this Agreement, has been assigned by GOI to implement the controlling function in oil and gas upstream activity, and shall also mean any entity, unit, agency or other authority that is assigned to be the successor to such special working unit.

 

	1.1.27	Year(s) means a period of twelve (12) consecutive months commencing from January 1 and ending on the following December 31, according to the Gregorian calendar.

 

	1.1.28	Firm Commitment Year(s), means a period of twelve (12) consecutive months counted from Commencement of Firm Commitment Date pursuant to clause 1.32 hereunder.

 

	1.1.29	Agreement Year means a period of twelve (12) consecutive months according to the Gregorian calendar counted from the Effective Date.

 

	1.1.30	Effective Date is on May 22th, 2020 after the fulfillment of the Conditions Precedent as provided under clause 2.3 hereunder.

 

    	 	9	 

     

    

 

	1.1.31	Commencement of Firm Commitment Date means the date when PARTNER shall commence Firm Commitment starting from the commencement of Work Program that is the date stipulated in PERTAMINA EP written approval of the PARTNER’s first Work Program and Budget.

 

	1.1.32	Signing Date means the signing date of the Agreement which stipulated first above.

 

	1.1.33	Point of Export/Sale/Lifting means the outlet flange of the closest loading arm after final sales meter at the delivery terminal or some other point decided by PERTAMINA EP. Point of export/sales/ lifting will be defined specifically under separate procedures.

 

	1.2	INTERPRETATION

 

	1.2.1	References to SECTION, clauses and Exhibits refer to the SECTION and Exhibits of this Agreement, including any changes, renewals and additions thereto.

 

	1.2.2	Approval as stipulated in this Agreement shall always be interpreted as a written approval.

 

	1.2.3	The provisions of the law shall refer to any applicable law in the Republic of Indonesia including any amendments or additions thereto issued from time to time.

 

------End of SECTION I------

 

    	 	10	 

     

    

 

SECTION II

SCOPE AND DURATION OF AGREEMENT

 

	 	2.1	SCOPE OF AGREEMENT

 

	 	2.1.1	This Agreement is an agreement to carry out Operations in accordance with the provisions herein contained;

 

	 	2.1.2	PARTNER shall be responsible to PERTAMINA EP for the execution of such Operations in accordance with the provisions of the Agreement and is hereby appointed as a company to conduct the Operations;

 

	2.1.3	PARTNER shall provide all the financial, technical, organization and skills for such Operations;

 

	2.1.4	PARTNER shall carry all the risk of the Operating Costs required in carrying out the Operations. Such costs shall be included in the Operating Costs and treated as provided in SECTION V hereof and therefore PARTNER shall have the economic rights in accordance with SECTION V hereof;

 

	2.1.5	During the term of the Agreement and subject to the terms and conditions of this Agreement, for the production of Petroleum derived from the Operations, PARTNER will be entitled to the portion in accordance with the provisions of SECTION V hereof.

 

	2.2	DURATION OF AGREEMENT

 

	2.2.1	Unless terminated earlier in accordance with the provisions of this Agreement, the duration of this Agreement shall be 10 (ten) Years as of the Effective Date with such term may be extended once for a maximum until the expiration of PERTAMINA EP KKS.

 

    	 	11	 

     

    

 

	2.2.2	PARTNER may, the earliest ten (10) Years and the latest two (2) Years before the Agreement expires, submit a written request for extension of the Agreement with techno-economy, operational, and commercial justification to PERTAMINA EP. Such extension of the duration of the Agreement shall be conducted in accordance with the prevailing regulations in PERTAMINA EP.

 

	2.3	CONDITIONS PRECEDENT

 

	2.3.1	PARTNER shall submit an irrevocable and unconditional Bank Guarantee to PERTAMINA EP as stipulated in SECTION VII hereof (“Conditions Precedent”).

 

	2.3.2	Handing over of Operating Area, Asset and data from PERTAMINA EP to PARTNER shall be conducted on the Effective Date or at the latest on the first date of the subsequent month after the fulfillment of the Conditions Precedent set out in clause 2.3.1 or on other date as determined by PERTAMINA EP with written prior notice to PARTNER (“Effective Date”).

 

	2.3.3	If the Conditions Precedent are not satisfied within sixty (60) calendar days after the Signing Date or any other time determined in written by PERTAMINA EP, then PERTAMINA EP has the right to terminate the Agreement in which case PERTAMINA EP shall incur no liabilities toward PARTNER.

 

    	 	12	 

     

    

 

	2.3.4	For the avoidance of doubt the handing over of Operating Area, Asset, and data from PERTAMINA EP to PARTNER shall not be interpreted by the Parties, in anyway and in any situation, as PERTAMINA EP’s “inbreng” or capital or equity or contribution into the Agreement.

 

------End of Section II------

 

    	 	13	 

     

    

 

SECTION III

WORK PROGRAM AND BUDGET

 

	3.1	PARTNER shall submit to PERTAMINA EP Work Program and Budget for the first Year and Manpower Planning no later than *** as of the Effective Date to obtain PERTAMINA EP’s written approval as the basis for the cost recovery calculation. If PARTNER fails to submit the first Year Work Program and Budget including Manpower Planning within *** since the Effective Date, then PERTAMINA EP shall have the right to terminate the Agreement in which case PERTAMINA EP shall incur no liabilities toward PARTNER.

 

	3.2	Notwithstanding clause 3.1 above, PARTNER shall, no later than *** prior to the beginning of each Year, prepare and submit the Work Program and Budget of Operating Cost for the Operating Area setting forth the Operations which PARTNER proposes to PERTAMINA EP for the approval to carry out during the ensuing Year.

 

	3.3	The Work Program shall be carried out by PARTNER in conducting Operations during the *** Firm Commitment years and budget in respect of each of such Firm Commitment years is as follows:

 

    	 	14	 

     

    

 

Firm Commitment

 

*** 

 

	3.4	PARTNER shall carry out the program pursuant to clause 3.3 above, since the Effective Date with the details of Firm Commitment as follows:

 

	 	a.	If during the *** Firm Commitment Year, PARTNER has not performed the required Work Program in such Firm Commitment year, PARTNER may propose a written request to PERTAMINA EP no later than *** before the end of such Firm Commitment year to carry forward the Work Program which are not performed to the next Firm Commitment year. If such request is approved by PERTAMINA EP, PARTNER shall complete such Work Program no later than the end of the subsequent Firm Commitment year;

 

    	 	15	 

     

    

 

	 	b.	If during the *** Firm Commitment Year, PARTNER performs less Work Program than required in such Firm Commitment Year, with prior written approval by PERTAMINA EP, PARTNER may propose to carry forward the Work Program which are not performed at the latest *** before the end of the of second Firm Commitment Year and shall complete such Work Program no later than the end of the third Firm Commitment Year;

 

	 	c.	If during the *** of Firm Commitment and/or the *** of Firm Commitment, PARTNER performs more work than required in such Firm Commitment year, PARTNER, may subtract such excess work from the work to be performed by PARTNER in the subsequent Firm Commitment years;

 

	 	d.	If there are activities at the *** of Firm Commitment which are not performed at the end of such year, PARTNER, no later than *** before the end of third Firm Commitment Year, may propose a written request to PERTAMINA EP to extend the period of the Firm Commitment. PERTAMINA EP shall have full discretion to approve or deny such request for extension.

 

	 	e.	in the event the PARTNER requests for an extension of the Firm Commitment period, PARTNER shall accompany such requests with:

 

    	 	16	 

     

    

 

	 	(i)	detailed explanation and sufficient evidences of the cause of such requests;

 

	 	(ii)	plan of additional activity that shall be performed up to the end of the proposed extension Firm Commitment period, if any;

 

	 	(iii)	detailed of the uncompleted Firm Commitment activities; and

 

	 	(iv)	An irrevocable and unconditional Bank Guarantee in the amount equal to *** Firm Commitment activities, with a period covering the whole proposed extension Firm Commitment period plus additional *** after the expiration of the proposed extension Firm Commitment period for claim and disbursement period of such Bank Guarantee.

 

	 	f.	Such approval or denial for the extension of Firm Commitment period proposal from PARTNER shall not be unreasonably withheld.

 

	 	g.	If PERTAMINA EP denied the PARTNER’s proposal, PERTAMINA EP shall have the right to terminate the Agreement and forfeit Bank Guarantee.

 

	 	h.	For each one year of extension of the Firm Commitment period which is approved by PERTAMINA EP, except if such extension is caused by the PARTNER’s Non Default, PARTNER shall pay to PERTAMINA EP a compensation for such extension in the amount of *** percent (***%) of the remaining value of Firm Commitment and shall extend the term of the Bank Guarantee as described in clause 7.3 of this Agreement. The payment mechanism of such compensation shall be determine in the approval letter for the Firm Commitment extension from PERTAMINA EP.

 

    	 	17	 

     

    

 

	3.5	In the event of any part or all of Firm Commitment of each Firm Commitment year, cannot be performed, then PARTNER may submit a replacement program of such Firm Commitment (“Substitution Program”) to PERTAMINA EP not later than *** before the end of each such Firm Commitment Year with a value is no less than the value of Firm Commitment be replaced. Such Substitution Program shall be performed by PARTNER after obtaining the prior written approval of PERTAMINA EP.

 

	3.6	In the event PARTNER is proposing Substitution Program in the third Firm Commitment Period or Extension of Firm Commitment period, then PARTNER shall propose Substitution Program simultaneously with the Extension of Firm Commitment period proposal which is at the latest *** prior to the expiration of third Firm Commitment and/or its extension thereof as set forth in clause 3.4.

 

	3.7	If the Substitution Program as stipulated in clause 3.7 of this Agreement cannot be carried out regardless the cause other than Force Majeure then the value of the Firm Commitment that cannot be carried out shall become the right of PERTAMINA EP as a compensation from PARTNER. In the event that PERTAMINA EP has been compensated, then PARTNER has been released from its Substitution Program obligation which compensation shall not be subject to cost recovery.

 

    	 	18	 

     

    

 

	3.8	It is recognized that in the event of emergencies or extraordinary circumstances which are not included as Force Majeure as specified in clause 12.1 of the Agreement, which interfering the Operation and requiring immediate actions including but not limited to blow out, work accident and environmental disturbance, either Party may take all actions it deems proper or advisable to protect its interests and those of its respective employees and any reasonable costs incurred shall be included in the Operating Costs to the extent such costs can be recovered by PERTAMINA EP under PERTAMINA EP KKS and applicable regulations governing cost recovery in Indonesia.

 

Appraisal of such reasonable
costs can be determined by independent appraisal (if necessary) taking into account causes of such emergencies or extraordinary
circumstances.

 

	3.9	Any failures in completing all of Firm Commitment including its Substitution Program (if any) may cause the termination of the Agreement and forfeiture of Bank Guarantee in accordance to Section XV hereof by PERTAMINA EP.

 

------End of SECTION III------

 

    	 	19	 

     

    

 

SECTION IV

RIGHTS AND OBLIGATIONS

 

	4.1	PARTNER shall:

 

	4.1.1	be solely and fully responsible for conducting Operations in accordance with terms and condition hereof, applicable prevailing laws and related regulations, including SKK MIGAS requirements and regulations;

 

	4.1.2	be responsible to obtaining any documents, permit or certificates from GOI, and bear all incurred cost which shall be treated as Operating Costs;

 

	4.1.3	subject to SECTION III herein above:

 

	 	a.	provide all necessary funds, purchase and/or lease all Asset required to carrying out the Work Program pursuant to the Budget;

 

	 	b.	provide such other funds for the performance of the Work Program including payment to Third Parties who perform service(s) as contractors or consultants. The selection or appointment of the contractors or consultants shall comply with the prevailing law and regulations, including but not limited to procurement regulations and policies issued by SKK Migas and/or PERTAMINA EP;

 

	 	c.	accept Operating Area, Asset and data in ‘as is’ and ‘where is’ condition and maintain the Operating Area including all Asset and data in Operating Area until termination of this Agreement.

 

    	 	20	 

     

    

 

	4.1.4	furnish all technical aid required for the performance of the Work Program pursuant to Budget;

 

	4.1.5	be responsible to prepare and to implement the Work Program, in a workmanlike manner in accordance with the appropriate scientific methods and the good engineering practices;

 

	4.1.6	obtain written approval from PERTAMINA EP in the event of: (i) any changes of Organization Structure as attached in Exhibit-IV; or (ii) formation of new Organization Structure to conduct Operations in the Operating Area pursuant to the provisions herein contained;

 

	4.1.7	implement PERTAMINA EP’s standard of Health, Safety and Environment (HSE) and corporate social responsibility in Operating Area, including but not limited to take the necessary precautions for protection of ecological systems, navigation and fishing and shall prevent pollution of the area, and the sea or rivers and the area surrounding the Operating Area as the direct result of Operations;

 

	4.1.8	unless determined otherwise by PERTAMINA EP, after expiration or termination of the Agreement, or surrender part of or the whole of the Operating Area, or abandon of any field, PARTNER shall remove all equipment and installations from the Operating Area in a manner as determined by PERTAMINA EP, and perform all necessary site restoration activities in accordance with the applicable GOI’s regulations to prevent hazards to human life and property of others or environment;

 

    	 	21	 

     

    

 

	4.1.9	include in the annual Budget of Operating Costs, an estimate of the anticipated abandonment and site restoration costs and its funding for all existing wells contributed to the production and all of new wells in the Work Program and Budget. All expenditures incurred by PARTNER in the abandonment and site restoration of all such wells shall be treated as Operating Costs in accordance with the Accounting Procedure attached hereto as Exhibit – III of the Agreement. Management of fund for site restoration as mentioned above is stipulated by PERTAMINA EP;

 

	4.1.10	include in requisite plan of development for each commercial discovery, the program and funding procedure for abandonment and site restoration activities. The amount of costs estimated and its funding to be required for this program shall be determined each Year in conjunction with the Budget of Operating Costs for the field development plan. All expenditures incurred by PARTNER shall be treated as Operating Costs in accordance with the Accounting Procedure attached hereto as Exhibit-Ill. Management of fund for site restoration as mentioned above shall be decided by PERTAMINA EP. For the avoidance of doubt, if the Agreement is ended by whatsoever reasons, PARTNER waives all of its rights to the abandonment and site restoration fund;

 

	4.1.11	submit to PERTAMINA EP all such original geological, geophysical, drilling, well, production and other data and final reports as it may compile from each activity conducted pursuant to the Work Program at the earliest time and the maximum *** following such data obtaining, processing and interpretation;

 

    	 	22	 

     

    

 

	4.1.12	give preference to goods and services which are produced in Indonesia or rendered by Indonesian nationals, provided such goods and services are offered at equally advantageous conditions with regard to quality, price and availability at the time and in the quantities required;

 

	4.1.13	comply with all applicable laws and regulations of Indonesia particularly which are applicable in PERTAMINA EP among others the Procurement regulations, gas sales regulations, employment regulations, and any other regulations related to PARTNER’s Operations hereunder and the policy of GOI or PERTAMINA EP’s shareholders on the security of domestic supply of Crude Oil and Natural Gas;

 

	4.1.14	in case Natural Gas is discovered in sufficient quantity to be developed in the judgment of PERTAMINA EP, PARTNER seek market opportunity for Natural Gas on behalf of PERTAMINA EP in order to firm up a commercial gas market;

 

	4.1.15	maintain regular reporting on the implementation of the Agreement and submit to PERTAMINA EP, including the operational, technical and financial phases, to account for the progress thereof;

 

	4.1.16	with its best effort maintain and furnish to PERTAMINA EP, data, records accounts and statements on such forms approved by PERTAMINA EP for the purpose of its own internal requirements;

 

    	 	23	 

     

    

 

	4.1.17	at all time maintain insurance on well control, properties (including but not limited to surface facilities), and third party liabilities through PERTAMINA EP pursuant to PERTAMINA EP’s policy. The costs of such insurance shall be included in Operating Costs.

 

The above mentioned insurance
shall be reported by PARTNER by submitting a copy of the insurance policy to PERTAMINA EP at the latest *** since
the Signing Date;

 

	4.1.18	in the event PARTNER is a Permanent Establishment (foreign established company), establish an authorized representative office in Jakarta, Indonesia, which fully authorizes to execute this Agreement;

 

	4.1.19	deliver Baseline Production as stipulated in Exhibit - IV of this Agreement. If within a certain period, the production of Crude Oil is lesser than the Baseline Production, PARTNER has to meet and to deliver such shortfall to PERTAMINA EP as a first priority from Incremental Oil. If incremental production is never achieved which results in termination of the Agreement, then the obligation shall be considered fulfilled;

 

    	 	24	 

     

    

 

	4.1.20	fulfill its obligation towards the supply of the domestic market in Indonesia (Domestic Market Obligation “DMO”), PARTNER agrees to sell and deliver to PERTAMINA EP a portion of the share of the Petroleum to which PARTNER is entitled pursuant to clause 5.1.4 and 5.2.3 of this Agreement of calculated for each Year as follows:

 

	 	i.	For Crude Oil:

 

	 	(a)	multiply the total quantity of Crude Oil produced from Operating Area by a fraction the numerator of which is the total quantity of domestic Crude Oil to be supplied and the denominator is the entire Indonesian production of Crude Oil of all petroleum companies;

 

	 	(b)	compute *** percent (***%) of total quantity of Crude Oil produced from the Operating Area;

 

	 	(c)	multiply the lower quantity computed, either under point (a) or point (b) by the resultant percentage of PARTNER’s share as provided under clause 5.1.3 of SECTION V hereof;

 

The quantity of Crude Oil calculated
under point (c) shall be the quantity to be supplied by PARTNER in any Year pursuant to this clause, and deficiencies, if
any, shall not be carried forward to any subsequent Year; provided that if for any Year the recover-able Operating Costs exceed
the difference of total sales proceeds of Crude Oil produced and sold hereunder as provided under SECTION V hereof, PARTNER
shall be relieved from this supply obligation for such Year;

 

    	 	25	 

     

    

 

The price at which such Crude
Oil be delivered and sold under this clause shall be *** percent (***%) of the price as determined under clause 5.1.2 hereof;

 

PARTNER shall not be obligated
to transport such Crude Oil beyond the Point of Export/Sale/Lifting but upon request of PERTAMINA EP, PARTNER shall assist
in arranging transportation and such assistance shall be without costs or risk to PARTNER;

 

Notwithstanding the foregoing,
for the period of *** starting the month of the first delivery of Crude Oil produced and sold from Operating Area, the price per
Barrel for the quantity of Crude Oil supplied to the domestic market from the Operating Area shall be equal to the price determined
in accordance with clause 5.1.2 of hereof for Crude Oil taken for the recovery of Operating Costs.

 

	ii.	For Natural Gas:

For every new reservoir of Natural
Gas discovered in the period following the Effective Date which can be produced commercially, fulfill its obligation towards the
supply of the domestic market (DMO) as set out below:

 

	 	(a)	Upon the discovery of a new reservoir of Natural Gas following the Effective Date, PARTNER shall notify PERTAMINA EP regarding such discovery;

 

	 	(b)	Following such notification as stipulated in point (a) above the Parties shall agree on the quantity of proven reserves of Natural Gas in the discovered reserves;

 

    	 	26	 

     

    

 

	 	(c)	Within the period of *** following agreement by the Parties on the quantity of proven reserves as stipulated in point (b) above, PERTAMINA EP shall first give the opportunity for domestic buyer to purchase such Natural Gas;

 

	 	(d)	No later than *** following the expiration of *** stipulated in point (c) above, PERTAMINA EP shall notify PARTNER concerning the condition of domestic market demand;

 

	 	(e)	In case that in the period as stipulated in point (d) above, PERTAMINA EP notifies PARTNER of the existence of domestic buyer, PERTAMINA EP and PARTNER shall enter into negotiations with such domestic buyer for the sale of the DMO quantity as stipulated in this clause. In case that within *** after PERTAMINA EP’s notice, such negotiations did not reach any result in a binding sale and purchase agreement, then PARTNER shall be obliged to report to PERTAMINA EP.

 

	 	(f)	In case that in the period as stipulated in point (d) above PERTAMINA EP does not notify PARTNER of the existence of domestic buyer or negotiation as stipulated in point (e) above did not reach any result in a binding sale and purchase agreement, PARTNER shall request the prior written approval of PERTAMINA EP to market the DMO quantity in the international market;

 

    	 	27	 

     

    

 

	 	(g)	The quantity of Natural Gas which PARTNER shall be obligated to supply for the consumption of domestic market (DMO) shall be calculated as follows:

 

	 	(i)	compute ***percent (***%) of the quantity of Natural Gas produced and sold from the Operating Area;

 

	 	(ii)	multiply the amount stipulated in point (g).l. with the percentage of PARTNER’s share provided under clause 5.2.3 hereof;

 

	 	(iii)	total amount of Natural Gas calculated pursuant to point (g).2. is the amount that shall be fulfilled by PARTNER in every Year during the terms of the Agreement;

 

The price at which such Natural
Gas be delivered and sold under this clause 4.1.21.ii.(g) shall be based on negotiation between PERTAMINA EP, PARTNER and
buyer which has been approved by GOI;

 

PARTNER shall not be obligated
to transport such Natural Gas beyond the Point of Export/Sale/Lifting but upon request of PERTAMINA EP, PARTNER shall assist
in arranging transportation and such assistance shall be without costs or risk of PARTNER;

 

Notwithstanding the clauses above,
PARTNER shall comply with GOI’s policy to fulfill at any time domestic demand;

 

    	 	28	 

     

    

 

		4.1.21	shall be obliged to periodically
carry out metering of Crude Oil production in the Operating Area and PERTAMINA EP has the right at all times, to request
PARTNER to execute such metering of Crude Oil production in the Operating Area;

 

		4.1.22	conduct community development
for the community surrounding the Operating Area;

 

		4.1.23	not to create, incur to allow
any lien or encumbrance on GOI’s and/or PERTAMINA EP’s Crude Oil and/or Natural Gas as stipulated hereunder
for any indebtedness, obligations or liabilities in whatsoever way, except only PARTNER’s net share after pass through
Point of Export/Sale/ Lifting as provided under SECTION V;

 

		4.1.24	severally be subject to and
pay the GOI all taxes pursuant to the Indonesian Tax Law and its implementing regulations;

 

		4.1.25	deposit cash amount in PERTAMINA
EP before the commencing of the First Annual Work Program in the minimum amount of *** United States Dollars (USD***) for
the requirements of PERTAMINA EP to meet any expenditure incurred to accelerate PARTNER work implementation in normal
conditions, with additional obligation to deposit cash amount upon cost required under clause 4.1.1. The amount of cash needed
for the purpose of obtaining such licenses will be determined by PERTAMINA EP and shall be paid by PARTNER. The
cash deposit which is not used will be returned to PARTNER after the termination of the Agreement. If there is any partial
or entire expenditures from the cash deposit during the Annual Work Program, then PARTNER shall refill cash amount, which
has been used up to the minimum amount of *** United States Dollars (USD***);

 

    	 	29	 

     

    

 

	4.1.26	conduct all activities related to management of production water to achieve zero discharge program pursuant to the prevailing laws and regulations;

 

	4.1.27	ensures and warrants the continuity of consortium agreement or joint venture agreement during Firm Commitment period, if during the submission of proposal for cooperation PARTNER is a consortium or a joint venture. In case of termination of the consortium agreement or the joint venture agreement during the Firm Commitment period, PERTAMINA EP has the right to terminate this Agreement and forfeit the Bank Guarantee; and

 

	4.1.28	accept the assignment and continue all agreements of goods/services that are already executed in the Operating Area from PERTAMINA EP.

 

	4.2	PERTAMINA EP shall:

 

	4.2.1	have the authority to market and sell all Crude Oil and Natural Gas produced and sold from the Operating Area, except for PARTNER’s entitlement of Crude Oil received by PARTNER after Point of Export/Sale/ Lifting for recovery of Operating Cost and PARTNER’s share as stipulated in of SECTION V of the Agreement;

 

	4.2.2	have the right to approve the Organizational Structure and the Manpower Planning;

 

	4.2.3	have title to all original data resulting from the Operations including but not limited to geological, geophysical, petrophysical, engineering, well logs and completion, status reports and any other data collected by PARTNER during the term of the Agreement;

 

    	 	30	 

     

    

 

	4.2.4	have the rights to assign all agreements of goods/services that have been already executed in the Operating Area to PARTNER;

 

	4.2.5	If PARTNER fail to fulfill its obligation as described in clauses 4.1.2, then PERTAMINA EP has the rights to use the deposited cash as stipulated in clause 4.1.26 to settle PARTNER’s obligation. For the avoidance of doubts, the action taken by PERTAMINA EP as stipulated in this clause, cannot be interpreted in any forms a transfer of liabilities of PARTNER.

 

	4.2.6	shall have the right to deduct any indebtness or other liabilities of PARTNER to PERTAMINA EP or damages that PERTAMINA EP has incurred due to PARTNER unsatisfactory performance of the Operations against amounts owed to PARTNER hereunder.

 

	4.2.7	In the event the Agreement is terminated, there are still PARTNER’s invoices remaining which may be paid by PERTAMINA EP under this Agreement and PARTNER has not settle its obligation to pay its workers, then PARTNER hereby grant power of attorney to PERTAMINA EP to settle PARTNER’s obligation to pay PARTNER’s workers’ salaries up to the amount of the remaining of such PARTNER’s invoices. For the avoidance of doubts, the action taken by PERTAMINA EP as stipulated in this clause, cannot be interpreted in any way as to create a partnership or other joint venture or association or a trust. The Agreement shall not be deemed or construed to authorize any Party to act as an agent, representative, or employee for any other Party for any purpose whatsoever except as explicitly set forth in the Agreement.

 

------End of SECTION IV------

 

    	 	31	 

     

    

 

SECTION V

RECOVERY OF OPERATING COSTS AND HANDLING
OF PRODUCTION

 

	5.1	CRUDE OIL

 

	5.1.1	PERTAMINA EP shall have the right to sell all of the Crude Oil produced and sold from the Operating Area, except for the Crude Oil of PARTNER’s entitlement stipulated hereunder;

 

	5.1.2	PARTNER will receive cost recovery of Operating Costs out of Crude Oil equal in value to such Operating Costs, which is produced and sold from the Operating Area and not used in the Operations subject to the terms and conditions stipulated in this Agreement. The right of PARTNER to recover Operating Costs referred to above shall be subject to the following:

 

	 	(i)	PARTNER may recover its Operating Cost up to a maximum amount of *** percent (***%) from Gross Production produced and sold and not used for Operations in each Year, and will be set out in the cost recovery of Operating Costs Procedure which is inseparable part hereof;

 

	 	(iii)	PARTNER shall only be entitled to recover Operating Costs to the extent such costs has been approved by PERTAMINA EP under the PERTAMINA EP KKS and prevailing regulations governing cost recovery for production sharing contractors in Indonesia;

 

    	 	32	 

     

    

 

	 	(iv)	PERTAMINA EP shall have the right to reconcile the actual Crude Oil production against the target production in each current Year. If it is proven based on the reconciliation result that the actual production target is below the target production in the respective current Year, PARTNER is not entitled to cost recovery.

 

	 	(v)	For the purposes of determining the quantity of Crude Oil delivered to PARTNER required to recover the Operating Costs, the weighted average price of all Crude Oil produced and sold from the Operating Area during the Year will be used.

 

	 	(vi)	PARTNER shall have no right over any portion of the Crude Oil produced if it is the same as or below the Baseline Production and sold from the Operating Area.

 

	5.1.3	For the Crude Oil produced from the Operating Area remaining after deducting the Operating Costs in accordance with clause 5.1.2 above and deducting *** percent (***%) of SKK Migas’s share under the PERTAMINA EP KKS, PARTNER shall be entitled to receive each Year, *** percent (***%) share which is taken from *** percent (***%) share of PERTAMINA EP under PERTAMINA EP KKS before corporate and dividend taxes of PERTAMINA EP’s share. The details of calculation of Cost Recovery allocation will be set out in the Oil Lifting Accounting Procedure which is inseparable part hereof; and

 

    	 	33	 

     

    

 

	5.1.4	Title to PARTNER’s entitlement of Crude Oil to recover the Operating Costs under clause 5.1.2 and PARTNER’s share un-der clause 5.1.4 shall pass to PARTNER after the Point of Export/Sale/Lifting. PARTNER shall be entitled to take and receive and freely export their Crude Oil.

 

	5.2	NATURAL GAS

 

	5.2.1	Any Natural Gas produced from the Operating Area to the extent not used in the Operations hereunder may be flared if the processing and utilization thereof is not economical. Such flaring shall be conducted in reference to the prevailing laws and regulations and to the extent that the Natural Gas is not required to effectuate the maximum economic recovery of the Petroleum by secondary recovery Operations, including repressuring and recycling;

 

	5.2.2	Should PERTAMINA EP and PARTNER consider that the processing and utilization of Natural Gas is commercial, in addition to that used in secondary recovery Operations, then the construction and installation of facilities for such processing and utilization shall be carried out pursuant to an approved Work Program and Budget. It is hereby agreed that all costs and revenues derived from such processing, utilization and sale of Natural Gas, shall be treated on a basis equivalent to that pro-vided for herein concerning Operations and disposition of Crude Oil, maximum *** percent (***%) shall be allocated for Operating Costs associated with the Natural Gas Operations of such Natural Gas in such Year. If, in any Year, the Operating Costs exceed the value of such Natural Gas allocated for the Operating Costs in such Year, then the unrecovered excess shall be recovered in succeeding Years;

 

    	 	34	 

     

    

 

	5.2.3	Of the sales proceeds of Natural Gas produced and sold from the Operating Area remaining after deducting Operating Costs in accordance with clause 5.2.2 above and deducting *** percent (***%) of SKK Migas’s share under PERTAMINA EP KKS, PARTNER shall be entitled to receive its share each Year, ** *percent (***%) which is taken from *** percent (***%) share of PERTAMINA EP under PERTAMINA EP KKS before corporate and dividend taxes of PERTAMINA EP’s share, after the Point of Export/Sale/Lifting;

 

	5.2.4	In the event, however, PARTNER considers that the processing and utilization of Natural Gas is not economical, then PERTAMINA EP may choose to take and utilize such Natural Gas that would otherwise be flared in accordance with clause 5.2.1, all costs of taking and handling to be for the sole account and risks of PERTAMINA EP.

 

------End of Section V------

 

    	 	35	 

     

    

 

SECTION VI 

TRANSFER OF RIGHTS AND OBLIGATIONS
AND CHANGE OF CONTROL

 

	6.1	PARTNER may only transfer its rights and obligations of this Agreement to a Third Party (“Assignment”) or make Change of Control, by first fulfilling requirements set as follows:

 

	 	a.	PARTNER shall have completed all Firm Commitments as stipulated in clause 3.3 of hereof; and

 

	 	b.	PARTNER submits a prior written proposal to PERTAMINA EP of such Assignment or Change of Control to obtain PERTAMINA EP’s written approval; and

 

	 	c.	PERTAMINA EP has given its approval for PARTNER’s proposal as stipulated in clause 6.1 point b above. If within *** after receiving PARTNER’s proposal as stipulated in clause 6.1 point b, PERTAMINA EP has not responded to PARTNER’s proposal, then PERTAMINA EP shall be deemed to have denied;

 

	6.2	In the event such Assignment or Change of Control is given to its Affiliate and/or PARTNER’s existing shareholder(s), then PARTNER shall give a prior written notice at the latest *** to PERTAMINA EP before such Assignment and/or Change of Control is effective.

 

	6.3	PARTNER has furnished a written guarantee ensuring that the transferee shall abide upon all terms, conditions and all obligations which has been vested and which will arise in the future in accordance with the Agreement.

 

    	 	36	 

     

    

 

	6.4	In the event that after the Assignment in accordance with clause 6.1, there is more than one party holding the rights and obligations as PARTNER hereunder, then, for the conduct of the Operations, one of the party shall be appointed as operator. The appointment of such operator shall obtain PERTAMINA EP’s prior written approval.

 

------End of SECTION VI------

 

    	 	37	 

     

    

 

SECTION VII 

BANK GUARANTEE AND CASH IN ADVANCE

 

BANK GUARANTEE:

 

	7.1	PARTNER shall deliver to PERTAMINA EP an irrevocable and unconditional Bank Guarantee, in the format as per Exhibit - VI, to guarantee the execution of Firm Commitment, in the amount of ***% (***percent) from the total value of Firm Commitment or USD ***  (*** United States Dollar), whichever amount is higher.

 

Any cost incurred as a result
of the issuance of the Bank Guarantee and any of its extensions, if any, shall be borne solely by PARTNER and shall not
be treated as recoverable cost.

 

	7.2	Bank Guarantee submitted by PARTNER to PERTAMINA EP shall be valid, registered in and administered by Bank or issued by Lembaga Pembiayaan Ekspor Indonesia (LPEI)/Indonesia Eximbank.

 

In the event of such Bank Guarantee
issued by a bank, the issuing bank of such Bank Guarantee shall be an Indonesian state owned bank, or private bank domiciled or
licensed in Indonesia, and have Capital Adequacy Ratio (CAR) above average pursuant to the regulation of Central Bank of Indonesia.

 

	7.3	Such Bank Guarantee shall be effective for ***Agreement Years plus additional *** for claim and disbursement period of such Bank Guarantee.

 

    	 	38	 

     

    

 

	7.4	Notwithstanding clause 3.4 point e (iv), such Bank Guarantee as stipulated in clause 2.3.1 hereunder shall be delivered to PERTAMINA EP no later than *** as of the Signing Date. If PARTNER does not deliver any of the Bank Guarantee nor its extension within the determined period, then PERTAMINA EP shall have the right to terminate the Agreement as stipulated in SECTION XV hereof.

 

	7.5	In case that such Bank Guarantee is not valid pursuant to Indonesian banking regulations, PARTNER shall deposit a substitution cash, in the same amount with the Bank Guarantee that should have been delivered, to PERTAMINA EP’s account no later than *** since such Bank Guarantee is declared not valid by the issuing bank. If PARTNER fails to deposit a substitution cash no later than *** since such Bank Guarantee is declared not valid by the issuing bank, PERTAMINA EP shall have the right to terminate the Agreement and the right to claim damages from PARTNER pursuant to this Agreement and to the prevailing laws and regulations. PARTNER shall have no right to claim any reimbursement for any expenses incurred or to claim any damages caused by the termination of this Agreement.

 

	7.6	Bank Guarantee or substitution cash (with no interest incurred) shall be returned once PARTNER has completed the entire Firm Commitment.

 

	7.7	PERTAMINA EP shall have the right to forfeit such Bank Guarantee or a substitution cash for the interest of PERTAMINA EP in case: (i) PARTNER does not fulfill its obligation in connection with the Firm Commitment regardless PERTAMINA EP exercises its right to terminate this Agreement or not pursuant to clause 3.4 or clause 3.11 of the Agreement; or (ii) when PARTNER elects to surrender its rights and be relieved of its further obligations stipulated in the Agreement under clause 15.3 of this Agreement; or (iii) in case of any termination of this Agreement under clause 15.6, clause 15.7 of this Agreement.

 

    	 	39	 

     

    

 

	7.8	In the event PERTAMINA EP decides to forfeit the Bank Guarantee without terminate the Agreement as stipulated in clause 7.7 point (i), then PARTNER, no later than *** since the forfeiture of the Bank Guarantee by PERTAMINA EP, shall submit a Bank Guarantee replacement to PERTAMINA EP in the amount of ***% from the remaining value of uncompleted Firm Commitment, with a period covering the whole proposed extension Firm Commitment period plus additional *** after the expiration of the proposed extension Firm Commitment period for claim and disbursement period of such Bank Guarantee. PERTAMINA EP have the rights to terminate the Agreement if PARTNER fail to submit the Bank Guarantee replacement as stipulated in this clause.

 

	7.9	CASH IN ADVANCE:

To ensure the financial continuity
of the implementation of Firm Commitment as stipulated in clause 3.3 of the Agreement, PARTNER shall provide the funds as
Cash in Advance which is deposited in stage into the separate account on behalf of PARTNER in bank which shall be domiciled
in Indonesia, preferably an Indonesian State owned Bank.

 

Copies of bank statement shall
be submitted to PERTAMINA EP no later than the 10th of each month every month from the Bank where the account
of Cash in Advanced is opened

 

	7.10	Deposit of Cash in Advance as stipulated in clause 7.8 above for the first year Firm Commitment shall be made in the same amount in *** stages with each stage of *** percent (***%) of the value of first year Firm Commitment as follows:

 

    	 	40	 

     

    

 

	 	a.	the first deposit is not later than *** after the Effective Date;

 

	 	b.	the second deposit is not later than *** after the Effective Date;

 

	 	c.	the third deposit is not later than *** after the Effective Date;

 

	 	d.	the fourth deposit is not later than *** after the Effective Date.

 

The amount of Cash in Advance
shall be calculated based on the value of Firm Commitment. However, if the Work Program & Budget and AFE have been already
approved therefore the amount of Cash in Advance shall be calculated from the Work Program & Budget and AFE.

 

	7.11	Deposit of Cash in Advance as stipulated in clause 7.8 above for the second and third years of Firm Commitment shall be made in the same amount in *** stages with each stage of ***  (***%) of the value of second or third year Firm Commitment as follows:

 

	 	a.	the first deposit is no later than the commencement of *** Firm Commitment Year;

 

	 	b.	the second deposit is no later than *** after the commencement of *** Firm Commitment Year;

 

	 	c.	the third deposit is no later than *** after the commencement of *** Firm Commitment Year;

 

	 	d.	the fourth deposit is no later than *** after the commencement of *** Firm Commitment Year.

 

    	 	41	 

     

    

 

	7.12	PERTAMINA EP and PARTNER each shall be obliged to appoint three (3) persons as the representative signatory of checks/giro for withdrawal Cash in Advance. In addition, check/giro for withdrawal Cash in Advance shall be signed jointly by one (1) person appointed by PERTAMINA EP and one (1) person appointed by PARTNER.

 

	7.13	No earlier than ***after the submission of the Cash In Advance, PARTNER may demand for withdrawal of Cash In Advance through the written request to PERTAMINA EP which shall be completed with attachment of the program to utilize such fund in relation to the implementation of the Firm Commitment and evidences which shall be consist of AFE approval (if required) and any evidence of implementation of the work including but not limited to contract and/or work order/purchase order. PERTAMINA EP no later than *** shall give the approval to such submission of Cash In Advance after PARTNER has submitted all the requirements as stated herein. In the event that PERTAMINA EP grants such approval more than *** and PARTNER has paid to the Third Party with regard to the work as included in Firm Commitment as evidenced by providing copy of payment confirmation, thus the subsequent PARTNER’s obligation in relation to the submission of Cash In Advance shall be calculated to such Third Party settlement.

 

PARTNER shall maintain
minimum balance remaining in the Cash in Advance account amounted to *** United States Dollars (USD***) until PARTNER completed
all Firm Commitment.

 

    	 	42	 

     

    

 

	7.14	PERTAMINA EP agrees to give consent upon the withdrawal of remaining amount of Cash in Advance and closing such account by PARTNER after all of the Firm Commitment has been completed by PARTNER or in the event PARTNER elects to surrender its rights and be relieved of its further obligations in accordance to clause 15.3 of SECTION XV of the Agreement.

 

	7.15	If at each time specified above, PARTNER does not fulfill its obligations pursuant to clause 7.9 and clause 7.10 above, then PERTAMINA EP shall have the right to terminate the Agreement and without relieving PERTAMINA EP’s other rights pursuant to the Agreement hereto and by law, except in terms of the total deposit of Cash In Advance has complied with the obligation in relation with Firm Commitment after taking into account with the PARTNER’s payment to the Third Party pursuant to clause 7.13 above

 

------End of SECTION VII------

 

    	 	43	 

     

    

 

SECTION VIII

PAYMENTS

 

	8.1	All Payments to be made pursuant to the Agreement shall be made in United States Dollar currency at a bank to be designated by the Party receiving such payment, unless otherwise agreed by the Parties or stipulated by rules and regulation to make such payments in other currencies.

 

	8.2	Any payments made pursuant to the Agreement, unless specified otherwise, shall be made within *** after PERTAMINA EP received the invoice with all the required supporting documents.

 

	8.3	Related to the PARTNER’s obligation to deliver Baseline Production (NSO) pursuant to clause 4.1.19, for the payment of Baseline Production (NSO) shortfall the following provisions shall apply:

 

	 	a.	In the event the Incremental Oil production is larger than Baseline Production, then PARTNER shall pay to PERTAMINA EP the entire Baseline Production shortfall;

 

	 	b.	In the event the Incremental Oil production is less than Baseline Production, then PARTNER shall settle Baseline Production shortfall to PERTAMINA EP minimum of *** percent (***%) of Incremental Oil production. Such settlement of Baseline Production shortfall shall be fully settled within *** period as of the first Incremental Oil production occurred;

 

    	 	44	 

     

    

 

	 	c.	In the event that period as describe in point-b is continuing nevertheless PARTNER’s Baseline Production shortfall in point-b has not been fully settled, then PARTNER shall pay Baseline Production shortfall to PERTAMINA EP minimum of *** percent (***%) of Incremental Oil production. The settlement of Baseline Production shortfall shall be applicable for the subsequent *** after the period as described in point-b occurred;

 

	 	d.	In the event the Baseline Production shortfall in point-c above has not been fully settled, thus PARTNER has the right to terminate this Agreement pursuant to clause 15.16 of the Article XV of this Agreement and PARTNER shall be released from the obligation of Baseline Production shortfall.

 

------End of SECTION VIII------

 

    	 	45	 

     

    

 

SECTION IX 

ASSETS

 

	9.1	Asset which right to manage is transferred from PERTAMINA EP to PARTNER and/or the Asset purchased by PARTNER pursuant to the Work Program and Budget and has landed in Indonesia customs territory, is the property of PERTAMINA EP qq. GOI.

 

	9.2	PERTAMINA EP may extend, but no obligation, its import facilities to PARTNER if PARTNER purchases or leases Third Parties Asset from outside Indonesian customs territory for the purpose of Operation.

 

	9.3	PARTNER shall maintain such Asset in good conditions during the term of the Agreement, properly recording such Asset and periodically reporting the Asset status to PERTAMINA EP.

 

	9.4	In the event of bankruptcy and/or termination of the Agreement regardless of any cause, PERTAMINA EP is not obliged for the whereabouts and/or the conditions of Asset which are not listed as the property of GOI and/or PERTAMINA EP. The whereabouts and/or the conditions of Asset of PARTNER whether loaned or rented from Third Party, shall be solely borne by PARTNER.

 

------End of SECTION IX------

 

    	 	46	 

     

    

 

SECTION X 

GOVERNING LAW AND SETTLEMENT
OF DISPUTES

 

	10.1	This Agreement is governed and subject to the laws and regulations of the Republic of Indonesia.

 

	10.2	Disputes, if any, arising between PERTAMINA EP and PARTNER relating to the implementation of the Agreement and/or interpretation of any clauses of the Agreement, PERTAMINA EP and PARTNER will make every effort to settle amicably any dispute arising therefrom.

 

	10.3	Any disputes between PERTAMINA EP and PARTNER which cannot be settled amicably within ninety (90) Working Days as of the date of a written request to hold deliberation for amicable settlement, shall be submitted to the District Court pursuant to domicile of Head Office of PERTAMINA EP.

 

------End of SECTION X------

 

    	 	47	 

     

    

 

SECTION XI 

CONFIDENTIALITY

 

	11.1	PARTNER shall obtain written permit of GOI through PERTAMINA EP pursuant to prevailing laws and regulations to utilize any data relating to Crude Oil and Natural Gas other than data from the Operations Area to utilize including but not limited to geological, geophysical, petrophysical, engineering, well logs and completion, status reports and any other technical data including interpretations prepared and gathered in connection with, utilized in, and/or obtained pursuant to the Agreement (hereinafter referred to as “Confidential Information”).

 

	11.2	PARTNER and all of its officers, directors, employees, Affiliates, advisors, agents, PARTNERs, legal counsel and representatives shall keep in strict confidence all of the Confidential Information and any information related to the Agreement and shall not disclose or permit to be disclosed any Confidential Information to any other person, firm, company or body, without obtaining the prior written consent from PERTAMINA EP.

 

	11.3	Without the prior written consent of PERTAMINA EP, PARTNER shall not use any Confidential Information and any information related to the Agreement for any purpose other than as provided in the Agreement, unless required to be disclosed by applicable law or court order.

 

	11.4	Confidential Information shall not include data or information which has becomes part of the public domain.

 

	11.5	This provisions of this SECTION XI shall bind the Parties as of the Signing Date and shall remain in force after the termination of the Agreement.

 

------End of Section XI------

 

    	 	48	 

     

    

 

SECTION XII 

FORCE MAJEURE

 

	12.1	Force Majeure means any events beyond the control of the Parties and not caused by negligence or omission of the affected Party and was not reasonably foreseeable and beyond the control of the parties to resolve which resulted from whatsoever cause which shall include but not limited to: fire, earthquake, hurricane, heavy rains, flood and other acts of God, insurrection, explosion, riots, war, blockade, labor conflict, mass strike, epidemics, acts of GOI or changes in law or regulation, that affect directly to the implementation of the Agreement including termination of the PERTAMINA EP’s KKS by GOI. Lack of access to fund or lack of fund is not regarded as a Force Majeure.

 

	12.2	If any Party is unable to perform or fulfill its obligations hereunder, wholly or in part, by reason of Force Majeure, then the affected Party must take all necessary actions to minimize any losses that might incur during the event of Force Majeure.

 

	12.3	As soon as practicable but in no case shall be no later than *** from the time should have been known or from the time of the Force Majeure occurs, the affected Party shall serve a notice in writing to the non-affected Party describing such Force Majeure which provides a good faith estimate of duration of the Force Majeure and to the time that performance is expected to be resumed. Within *** after receiving of such notice, the non-affected Party shall respond in writing. In the absence of such response within the ***, the non-affected Party is deemed accepting such Force Majeure. Disputes, if any, arising between the Parties relating to the such Force Majeure event, then such dispute shall be resolved pursuant to SECTION X hereunder.

 

    	 	49	 

     

    

 

	12.4	If for temporary period the Operations are delayed, curtailed or prevented by such causes, then the term of this Agreement can be extended for a period equal to the period thus involved.

 

	12.5	If a Force Majeure event take place or predicted to take place more than ***, then The Parties may declare such Force Majeure as permanent and The Parties may terminate the Agreement. All rights and obligations incurred prior to Force Majeure happened must be fulfilled.

 

	12.6	If a condition or event occurs other than Force Majeure during the Firm Commitment Year(s) which:

 

	 	a.	is beyond the reasonable control of PARTNER; and

 

	 	b.	adversely affects the performance by PARTNER of its obligations and commitments under clause 3.2 of this Agreement,

 

then PARTNER may propose,
and PERTAMINA EP may approve, having considered all relevant factors such as permitting issues, that the relevant condition/event
constitute a PARTNER non-default. Any event which is approved by PERTAMINA EP as a PARTNER non-default will
constitute a “Operation Obstacle”.

 

------End of SECTION XII------

 

    	 	50	 

     

    

 

SECTION XIII 

INDEMNIFICATION

 

	13.1	PARTNER shall, at all times defends, save and hold harmless and indemnify PERTAMINA EP from any actions, claims, proceedings, costs, charges, expenses (including but not limited to reasonable attorney’s fees, court costs and expenses incurred in defense of PERTAMINA EP and its Affiliates); arising out of or in connection with the performance of this Agreement or non-performance by PARTNER of its commitments and obligations hereunder, including problems or disputes arising between PARTNER and Third Party including its covertures, shareholder, affiliates, Partners, employee including with GOI institution or arising between share holder and PARTNER’s company organization which in the settlement process: (i) involving PERTAMINA EP including its employee in any capacity in such dispute; (ii) may be indicated to create any material or immaterial damage to PERTAMINA EP as evidenced by any summons from the authorized GOI institution; (iii) occurs claims and demands whatsoever which may be made or brought against PERTAMINA EP or its Affiliates by any Third Party including PARTNER’s shareholder, covertures, employees regarding with the performance of the Agreement.

 

    	 	51	 

     

    

 

	13.2	PARTNER at any time shall indemnify PERTMINA EP of any responsibilities whatsoever that may arise from the performance of Operations, for the avoidance of doubts, PARTNER declare that any approval from PERTAMINA EP shall not be deemed as act of takeover or involvement by PERTAMINA EP in the performance of Operations by PARTNER.

 

	13.3	Putting aside the clause 15.4 of this Agreement, in the event that PARTNER violates the clause 13.1 and 13.2 hereunder, PERTAMINA EP shall have the right to terminate the Agreement at once.

 

------End of SECTION XIII------

 

    	 	52	 

     

    

 

SECTION XIV 

EMPLOYMENT AND TRAINING OF INDONESIAN
PERSONNEL

 

	14.1	PARTNER shall employ Indonesian personnel and undertake the schooling and training of Indonesian personnel for labor and staff positions including administrative and executive management positions with the Indonesian personnel shall be arrange for agreed number by the Parties and PARTNER shall report to PERTAMINA EP at least once in a year.

 

	14.2	Costs and expenses of schooling and training Indonesian personnel shall be included in Operating Costs.

 

------End of SECTION XIV------

  

    	 	53	 

     

    

 

SECTION XV

TERMINATION OF THE AGREEMENT

 

	15.1	The Parties hereby waive the provisions of Articles 1266 paragraph 2, 3, and 4 of the Indonesian Civil Code to the extent it requires a court decision for the termination of this Agreement.

 

	15.2	PARTNER shall have no right to terminate the Agreement until the PARTNER has satisfactorily completed its Firm Commitment, except by provisions as stipulated in clause 15.3 hereunder.

 

	15.3	If in the *** Firm Commitment Year period, PARTNER has not completed all of its Firm Commitment pursuant to SECTION III and after consultation with PERTAMINA EP, PARTNER selects to surrender its rights and be relieved of its further obligations hereunder (not including PARTNER’s liability towards any Third Party) may deliver a *** prior written notice, then PERTAMINA EP shall have the right to forfeit the Bank Guarantee pursuant to SECTION VII, for the interest of PERTAMINA EP and to terminate the Agreement without any obligations toward PARTNER.

 

	15.4	If at any time during the term of this Agreement, PARTNER has failed to perform as a reasonable and prudent PARTNER or has failed to fulfill any of its obligations hereunder, PERTAMINA EP shall have the right to issue to PARTNER “Performance Deficiency Notice”. Said notice shall describe the performance deficiencies of PARTNER hereunder and the period given by PERTAMINA EP to PARTNER to remedy the deficiencies.

 

    	 	54	 

     

    

 

Upon receipt of the Performance
Deficiency Notice, PARTNER shall immediately remedy the deficiencies describe in said Performance Deficiency Notice within
the period as stated in said notice. Should the PARTNER fail to remedy the deficiencies within the specified period as stated
in the notice or the Parties fail to agree on an extension of the period of time in which PARTNER can remedy the deficiencies,
the elapse of such time shall become a conclusive evidence of PARTNER’s breach. PERTAMINA EP, with prior written
notice to PARTNER, shall have the right to terminate this Agreement effectively as of the date of such notice. Therefore
PARTNER shall immediately relinquish the Operation Area to PERTAMINA EP.

 

	15.5	PERTAMINA EP may terminate the Agreement if:

 

	 	a.	PARTNER fails to deliver Bank Guarantee in accordance with clause 2.3.1, clause 7.1 and clause 7.4 of the Agreement; or

 

	 	b.	PARTNER submits an invalid Bank Guarantee as stated in clause 7.5 of the Agreement; or

 

	 	c.	PARTNER made Assignment any rights and obligations hereunder and/or made Change of Control not in accordance the conditions set forth in clause 6.1 of the Agreement. If such assignment and Change of Control occurred during Firm Commitment period, PERTAMINA EP shall have the right to forfeit the Bank Guarantee.

 

	15.6	In the event PARTNER files or is filed for bankruptcy and/or suspension of payment, PERTAMINA EP shall have the right to terminate the Agreement with immediate effect by serving a written notice of termination to PARTNER and PERTAMINA EP is entitled to forfeit Bank Guarantee, if any.

 

    	 	55	 

     

    

 

	15.7	In the event PERTAMINA EP denied PARTNER’s request to carry forward the Firm Commitment as per clause 3.4 point a or denied the request for an extension of the Firm Commitment period as per clause 3.4 point d, PERTAMINA EP shall have the right to terminate the Agreement and to forfeit the Bank Guarantee

 

	15.8	In the event the PARTNER fails to perform all of its Firm Commitment including the Substitution Program (if any), therefore PERTAMINA EP shall have the right to terminate this Agreement and forfeit the Bank Guarantee.

 

	15.9	if in the second Firm Commitment Year PARTNER only completed the carried forward first Firm Commitment Year Firm Commitment and fails to perform the second Firm Commitment Year Firm Commitments, PERTAMINA EP shall have the right to terminate the Agreement and to forfeit the Bank Guarantee:

 

	15.10	If PARTNER fails to deposit Cash in Advance as stipulated in clause 7.10 and 7.11 hereunder, then PERTAMINA EP shall have the right to terminate the Agreement and to forfeit the Bank Guarantee.

 

	15.11	With regard to the discovery of Natural Gas within three (3) Firm Commitment Years, or the extension thereto, which is considered economical for processing and utilization, PERTAMINA EP may give the maximum of twenty two (2) Year as of the approval of PERTAMINA EP to be developed. The of two (2) Year period is approved in order to obtain potential gas buyer(s) and to make POD. In the event that after f the two (2) Year expired there is no available potential gas buyer, and no economical Crude Oil production, then PERTAMINA EP shall have the right to terminate the Agreement.

 

    	 	56	 

     

    

 

	15.12	If PARTNER has completed the Firm Commitment, and PERTAMINA EP considered that there is no commercial discovery, PERTAMINA EP shall have the right to terminate the Agreement.

 

	15.13	If there is any issues between PARTNER and Third Party including its co-ventures, shareholders, Affiliates, PARTNERs, employees, including GOI institution or arising between shareholders and PARTNER’s company organization that cause PERTAMINA EP including its shareholders, directors or its personnel being involved in such issues, PERTAMINA EP shall have the right to terminate this Agreement.

 

	15.14	PERTAMINA EP shall have the right to terminate the Agreement and to forfeit the Bank Guarantee if during the Firm Commitment period PARTNER fails to fulfill its obligations hereunder.

 

	15.15	At any time following the end of Firm Commitment period, if in the opinion of PARTNER circumstances do not warrant continuation of Operations, PARTNER may, by giving a written notice to that effect to PERTAMINA EP, and after consultation with PERTAMINA EP, relinquish its right and be relieved of its obligation pursuant to this Agreement, except such rights and obligations related to the period prior to such relinquishment.

 

	15.16	In the event the Baseline Production shortfall of PARTNER pursuant to clause 8.3 point-d Section VIII of the Agreement has not been fully settled, then PERTAMINA EP shall have the right to terminate this Agreement without approval from or interference by the court and without prejudice to PERTAMINA EP’s other right including the right to obtain compensation from and other remedies against PARTNER as provided in the Agreement and/or by laws, and PARTNER shall be released from the obligation of Baseline Production shortfall.

 

    	 	57	 

     

    

 

	15.17	In case of any termination of the Agreement pursuant to SECTION XV of this Agreement, PARTNER shall have no right to claim for damages and/or compensation in whatsoever form toward PERTAMINA EP and PERTAMINA EP shall only be obliged to satisfy PARTNER’s right arisen, which has been approved by PERTAMINA EP, prior to such termination.

 

	15.18	Subject to clause 9.1 of this Agreement, in the event of termination of the Agreement, all assets including but not limited to the implementation of Firm Commitment, whether the cost has or has not been recovered, remains owned by PERTAMINA EP and PARTNER can not demand any losses and/or compensation to PERTAMINA EP.

 

	15.19	Subject to clause 18.6 of this Agreement, in the event of expiration of the Agreement as specified under clause 2.2 of this Agreement, settlement for the rights and obligations herein, if any, shall be completed in good faith by the Parties no later than *** after the termination date of the Agreement.

 

	15.20	In the event of any audit finding by a GOI institution regarding the rights and obligations of Parties after *** of the termination of this Agreement, then the Party which suffer loss may seek settlement as provided in SECTION X of the Agreement.

 

    	 	58	 

     

    

 

	15.21	The termination of the Agreement based on SECTION XV does not waive a Party right to claim damages and take any other available legal actions against the other Party pursuant to this Agreement and/or prevailing laws and regulations.

 

------End of SECTION XV------

 

    	 	59	 

     

    

 

SECTION XVI

BOOKS AND ACCOUNTS AND AUDITS

 

	16.1	BOOKS AND ACCOUNTS

 

PARTNER shall be responsible
for keeping proper and complete books and accounts reflecting all Operating Costs consistent with customary petroleum industry
practices and procedures as described in Exhibit-Ill attached hereto. Should there be any inconsistency between the provisions
of SECTION V of the Agreement and the provisions of Exhibit-Ill, then the provisions of SECTION V of the Agreement shall prevail.

 

	16.2	AUDITS

 

	 	16.2.1 	PERTAMINA EP shall have the right to inspect and audit PARTNER’S books and accounts relating to the Agreement for any Year, or at any time, if necessary. Any exception must be made in writing within *** following the completion of such audit. PERTAMINA EP may require PARTNER to engage a reputable independent public accountant to audit, in accordance with generally accepted auditing standards, the PARTNER’s books and accounts relating to the Agreement for any Year or perform such auditing procedures as deemed appropriate by PERTAMINA EP. A copy of the independent public accountant’s report or any exceptions shall be forwarded to PERTAMINA EP within *** following the completion of such audit. The costs related to the engagement of such independent accountants shall be included in Operating Costs.

 

    	 	60	 

     

    

 

	 	16.2.2 	The audit result as stipulated in clause 16.2.1 above is final after it has been agreed by the Parties’ representative in audit close out meeting. PARTNER shall settle all findings in such final audit despite the Agreement has ended for whatsoever reason.

 

------End of SECTION XVI------

 

    	 	61	 

     

    

 

SECTION XVII

NOTICES AND CORRESPONDENCES

 

Any notices required or given by
either Party to the other shall be deemed to have been delivered when properly acknowledged for receipt by the receiving Party.

 

All such notices shall be addressed
to:

 

PT PERTAMINA EP

Menara Standard Chartered 12th Floor

Jalan Prof. Dr. Satrio No. 164

Jakarta 12950, Indonesia

	Telephone	: 62-21- 57893001 
	Fax 	: 62-21- 57946333
	Attn.	: President Director

 

PT GREEN WORLD NUSANTARA

Dea Tower 1, 11th
Floor, Suite 1103

Kawasan Mega Kuningan

Jl. Mega Kuningan Barat

Kav. E 4.3 No. 1-2

Jakarta, Indonesia

	Telephone	: +62 21 576 8888
	Fax	: +62 21 576 1009
	Attn. 	: Direktur Utama

 

Either Party may: (i) delegate
to its sub-ordinate for any correspondences, (ii) substitute or (iii) change such address on written notice thereof to the other.

 

------End of Section XVII------

 

    	 	62	 

     

    

 

SECTION XVIII

OTHER PROVISIONS

 

	18.1	PERTAMINA EP’s approval and stipulation in accordance with its authorities in this Agreement shall not be interpreted as any waiver or derogation of PARTNER’s responsibility or taking over by or involvement of PERTAMINA EP in the PARTNER’s responsibilities in conducting the Operations. For the avoidance of doubts, notwithstanding any provisions set forth otherwise in this Agreement, PARTNER shall remain to be fully liable for the performance of Operations in the Operating Area.

 

	18.2	Handing over of Operation Area to and from PARTNER shall be conducted with berita acara serah terima as stipulated in Exhibit - VII hereunder.

 

	18.3	The Agreement constitutes the entire agreement between PERTAMINA EP and PARTNER concerning the subject matter hereof. All previous documents, undertakings and agreements, whether verbal, written or otherwise, between the Parties prior to this Agreement, except all of administrative documents of PARTNER as required when PARTNER submitted a cooperation proposal for the purpose of this Agreement, hereby declared void and shall not affect or modify any of the terms or obligations set forth in the Agreement, including the terms of any of the Exhibits of the Agreement.

 

	18.4	In the event that there is a straddling of structure in the Operating Area which exceeds the borders of the Operating Area, then:

 

	 	a.	If the borders of such straddling are in the contract area of another Cooperation Contract, then PERTAMINA EP shall have the right to negotiate with the relevant contractor for the possibility of unitization;

 

    	 	63	 

     

    

 

	 	b.	If the borders of straddling are in an open area, then PERTAMINA EP shall consult with SKK Migas in relation to the solution of such matter.

 

	 	c.	If the borders of straddling are in an Operating Area of PARTNER and the other business partner’s (KSO/Technical Assistance Contract) of PERTAMINA EP, then PERTAMINA EP shall determine the entitlement or portion for each of those partners in term of unitization within the operating area.

 

	18.5	PERTAMINA EP and PARTNER agree that all of the percentages as stipulated in SECTION V of the Agreement have been determined on the assumption that PARTNER is subject to corporate and dividends taxes on profits after tax under Indonesian Income Tax Law and is not sheltered by any tax treaty to which the GOI has become a party.

 

	18.6	In the event that, any PARTNER’s portion in the Agreement becomes subject to a tax treaty or new Indonesian Income Tax Law, then all of the percentages appearing in SECTION V as applicable only to the portion of PARTNER in the Agreement so affected by a tax treaty and/or the new Indonesian Income Tax Law shall be revised in order to maintain the same net split for PARTNER in the Agreement, due to basically PARTNER’s net split hereunder shall be *** percent (***%) net split after corporate and dividend taxes for Crude Oil before DMO pursuant to SECTION IV of the Agreement and *** percent (***%) net after corporate and dividend taxes for Natural Gas before DMO pursuant to SECTION IV of the Agreement.

 

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	18.7	Value Added Tax, Import Duties, Personal Income Tax for PARTNER shall have equal treatment to PERTAMINA EP as provided under KKS between PERTAMINA EP and SKK Migas, and/or other related regulations, and the implementation.

 

	18.8	In the event that the Agreement terminates because whatsoever cause including the expiration of the Agreement, PARTNER shall have no right to the unrecovered amount of Operating Costs except for the cost recovery of the Operating Cost which PARTNER has already entitled before the termination of the Agreement and has fulfilled the requirements set out in SECTION V and Exhibit III of this Agreement and has been approved by PERTAMINA EP.

 

	18.9	The rights, obligations and liabilities of The Parties hereunder shall be individual, not jointly or collectively. The Parties do not intent to create or to construe a partnership or other joint venture or association or a trust. The Agreement shall not be deemed or construed to authorize any Party to act as an agent, representative, or employee for any other Party for any purpose whatsoever except as explicitly set forth in the Agreement.

 

	18.10	For the avoidance of doubt this Agreement shall not include the cultivation of the coal bed methane, shale gas and oil well which shall be classified as old well as described in the prevailing laws and regulations.

 

In the event there is old well
in the Operation Area as described in the prevailing laws and regulations then the arrangement for such old well shall be further
stipulated by PERTAMINA EP.

 

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	18.11	Headings in the Agreement shall be intended for convenience purposes only and shall not affect the interpretation of the Agreement and the Exhibits hereto.

 

	18.12	The Agreement shall not be annulled, amended or modified in any respect without any mutual consent in writing of the Parties hereto, except in case any termination of the Agreement as stipulated hereunder.

 

	18.13	In the event of any changes to the terms and conditions of the Agreement, including but not limited to any effect of amendment of the existing regulations, then such changes will be stated in a side letter or through amendment of the Agreement which signed by the respective authorized representatives of the Parties and made as integral part hereof.

 

	18.14	Investment for capital expenses can be exercised by PARTNER no later than *** prior to the expiration of the Agreement pursuant to clause 2.2 of the Agreement. In the event the investment for capital expenses is exercised after such at less than *** prior to the expiration of the Agreement, then the recovery of investment for capital expenses through prevailing depreciation mechanism pursuant to Exhibit III of the Agreement, could not be accelerated (fully depreciated) thus the remaining depreciation amount, if any, shall not be cost recoverable.

 

	18.15	Since the Effective Date of this Agreement shall include the transfer of the management of Operating Area, Asset, and related data from PERTAMINA EP to PARTNER, Furthermore, the Parties shall complete the formalities associated with the transfer of management of Operating Area, assets and related data no later than *** from the Effective Date.

 

    	 	66	 

     

    

 

	18.16	If any provision of the Agreement is determined to be void or unenforceable, this finding shall not render any other provision void or unenforceable. In such event, the Parties shall seek in good faith to agree an alternative, duly enforceable provision that conforms as nearly as possible to the intent of the original provision, failing which the void or unenforceable provision shall simply be deemed deleted from the Agreement.

 

	18.17	This Agreement made in two (2) versions, in Bahasa and English, in the event any different interpretation and/or dispute for the terms and conditions in this Agreement, then the Indonesian version shall prevail.

 

	For and on behalf of 

PT GREEN WORLD NUSANTARA 	 
	 	 
	/s/ MIRZA FERRINTO SAID	 
	MIRZA FERRINTO SAID	 
	(Direktur Utama/Director)	 

 

    	 	67	 

     

    

 

EXHIBIT
– I

 

This
Exhibit-I is attached to and formed an integral part of the Agreement between PT PERTAMINA EP and PT GREEN WORLD NUSANTARA,
dated 26th day of July, 2019

 

PETA
AREA OPERASI 

(OPERATING
AREA MAP)

KRUH

 

 

    	 	68	 

     

    

 

EXHIBIT
- II

 

This
Exhibit-II is attached to and formed an integral part of the Agreement between PT PERTAMINA EP and PT GREEN WORLD NUSANTARA,
dated the 26 day of July, 2019

 

DESKRIPSI
AREA OPERASI 

(DESCRIPTION
OF OPERATING AREA)

KRUH

 

*** 

 

    	 	69	 

     

    

 

***

 

    	 	70	 

     

    

 

EXHIBIT – III

 

This
Exhibit-Ill is attached to and formed an integral part of the Agreement between PT PERTAMINA EP and PT GREEN WORLD NUSANTARA,
dated the 26th day of  July, 2019

 

ACCOUNTING
PROCEDURE

 

Article
I

General
Provisions

 

	1.1	Definitions

 

The
accounting procedure herein provided for is to be followed and observed in the performance of either Party's obligations under
the Agreement to which this Exhibit is attached subject to prevailing laws and regulations.

 

The
definition and terms appearing in this Exhibit-III shall have the same meaning as those defined in said Agreement.

 

	1.2	Accounting and Reporting

 

PERTAMINA EP and PARTNER,
as the case may be, accounting records and books will be kept in accordance with generally accepted and recognized accounting
systems, consistent with modern petroleum industry practices and procedures. Books and reports will be maintained and prepared
in accordance with methods established by PERTAMINA EP. The chart of accounts and related account definitions and other
related matters will be prescribed by PERTAMINA EP. Reports will be organized for the use of PERTAMINA EP in carrying
out its management responsibilities under the Agreement.

 

    	 	71	 

     

    

 

Article
II

Operating
Costs

 

	2.1.	Definition

 

For
any Year in which commercial production occurs, Operating Costs consists of (a) current Year Non-capital Costs, (b) current Year's
depreciation for Capital Costs and (c) current Year's allowed recovery of prior Year's unrecovered Operating Costs.

 

	2.2.	Non-capital Costs

 

Non-capital
Costs means those Operating Costs incurred that relate to current Year's Operations. In addition to costs relating only to current
Operations, the costs of surveys and the intangible costs of drilling exploratory and development wells, as described in paragraphs
2.2.3, 2.2.4 and 2.2.5 below, will be classified as Non-Capital Costs.

 

Non-capital
Costs include, but are not limited to the following:

 

	2.2.1	Operation

 

Labor,
materials and services used in day to day oil well operations, oil field production facilities operations, improved oil recovery
operations, storage handling transportation and delivery operations, gas well operations, gas field production facilities operations,
gas transportation, and delivery operations, gas processing auxiliaries and utilities, well and site restorations and other operating
activities, including repairs and maintenance, community development of the surrounding and gas marketing;

 

	2.2.2	Office, services and general administration

 

General
services including technical and related services, material services, transportation, rental of specialized and heavy engineering
equipment, site rentals and other rentals of services and property, personnel expenses, public relations.

 

    	 	72	 

     

    

 

	2.2.3	Production Drilling

 

Labor,
materials and services used in drilling wells with the object of penetrating a provenreservoir, including the drilling of delineation
wells as well as redrilling, recompleting wells, and access roads leading directly to wells;

 

	2.2.4	Exploratory Drilling

 

Labor,
materials and services used in the drilling of wells with the object of finding unproven reservoirs of oil and gas, and access
roads leading directly to wells;

 

	2.2.5	Surveys

 

Labor,
materials and services used in aerial, geological, topographical, geophysical and seismic surveys, and core hole drilling;

 

	2.2.6	Other Exploration Expenditures

 

Auxiliary
or temporary facilities having lives of one Year or less used in exploration and purchased geological and geophysical information.

 

	2.3.	Capital Costs

 

Capital
Costs mean expenditures made for items which normally have a useful life beyond the Year incurred. A reasonable annual allowance
for depreciation of Capital Costs, computed as described in Article III paragraph 3.1, will be allowed as a recoverable Operating
Costs for the current Year.

 

    	 	73	 

     

    

 

Capital
Costs include classification described herein but are not limited to the following specifications:

 

	2.3.1	Constructions utilities and auxiliaries

 

Workshops,
power and water facilities, warehouses, cargo jetties, and field roads except the access roads mentioned in paragraphs 2.2.3 and
2.2.4 above;

 

	2.3.2	Construction housing and welfare

 

Housing,
recreational facilities and other tangible property incidental to construction;

 

	2.3.3	Production facilities

 

Offshore
platform (including the costs of labor, fuel, hauling and supplies for both the offsite fabrication and onsite installation of
platforms, and other construction costs in erecting platforms and installing submarine pipelines), wellhead equipment, subsurface
lifting equipment, production tubing, sucker rods, surface pumps, flow lines, gathering equipment, delivery lines and storage facilities.
Costs of oil jetties and anchorages, treating plants and equipment, improved oil recovery systems, gas plants and steam systems;

 

	2.3.4	Movables

 

Surface
and subsurface drilling and production tools, equipment and instruments, barges, floating craft, automotive equipment, aircraft,
construction equipment, furniture and office equipment and miscellaneous equipment.

 

    	 	74	 

     

    

 

	2.4	Home Office Overhead of Holding Company

 

Home Office Overhead Cost of
holding company shall not to include as Operating Cost. Then, such cost shall not be cost recovered.

 

    	 	75	 

     

    

 

Article
III

Accounting
Methods To Calculate

Recovery
of Operating Costs

 

	3.1	Depreciation

 

Depreciation
will be calculated beginning the Year in which the asset is placed into service with a full Year's depreciation allowed the initial
Year. The method used to calculate each Year's allowable recovery of Capital Costs is the declining balance depreciation method.
Calculation of each such Year's allowable recovery of capital costs should be based on the individual asset's capital cost at the
beginning of such Year multiplied by the depreciation factor as follows, for:

 

-   Group
1 = 50%

-   Group
2 = 25%

 

For
the Groups of capital assets for any Crude Oil projects and/or Natural Gas projects apply useful lives as follows:

 

GROUP
1 :

 

	Automobile	1.5 Years
	Truck-light (13,000 pounds or less) and tractor units	2 Years
	Trucks-heavy (more than 13,000 pounds)	3 Years
	Buses	4.5 Years
	Aircraft	3 Years
	Construction equipment	3 Years
	Furniture and office	5 Years
	equipment	 
	 	 
	GROUP 2	 
	 	 
	Construction utilities and auxiliaries	5 Years
	Construction housing and welfare	10 Years
	Production facilities	5 Years
	Railroad cars and locomotives 	7.5 Years
	Vessel, barges, tugs and similar water transportation equipment	9 Years
	Drilling and production tools, equipment and Instruments	5 Years

 

    	 	76	 

     

    

 

The
undepreciated balance of assets taken out of service will not be charged to Operating Costs but will continue depreciating based
upon the lives described above, except where such assets have been subjected to unanticipated destruction, for example, by fire
or accident.

 

	3.2	Inventory Accounting

 

The
costs of non-capital items purchased for inventory will be recoverable if such inventory already exists in Indonesia.

 

	3.3	Gas Costs

 

Operating
Costs directly associated with the production of Natural Gas will be directly chargeable against Natural Gas revenues in determining
share under paragraph 5.2.3 of SECTION V of the Agreement. Operating Costs incurred for production of both Natural gas and Crude
Oil will be allocated to Natural Gas and Crude Oil based on the relative value of the products produced for the current Year. Common
support costs will be allocated on an equitable basis agreed.

 

If
after commencement of production the Natural Gas revenues do not permit full recovery of Natural Gas costs, as outlined above,
then the excess costs shall be recovered from Crude Oil revenues.

 

Likewise,
if excess Crude Oil costs (Crude Oil costs less Crude Oil revenues) exists, this excess can be recovered from Natural Gas revenues.

 

    	 	77	 

     

    

 

If
production of either Natural Gas or Crude Oil has commenced while the other has not, the allocable production costs and common
support costs will be allocated in an equitable manner. Propane and butane fractions extracted from Natural Gas but not spiked
in Crude Oil shall be deemed as Natural Gas for the purpose of accounting.

 

	3.4	Insurance and Claims

 

Operating
Costs shall include premiums paid for insurance normally required to be carried for the Operations relating to PARTNER's
obligations conducted under the Agreement, together with all expenditures incurred and paid in settlement of any and all losses,
claims, damages, judgments, and other expenses, including fees relating to PARTNER's obligation under the Agreement.

 

Revenue
from Insurance claim shall reduce cost recovery.

 

	3.5	Abandonment and Site Restoration

 

Operating
Costs shall include all expenditures incurred in the abandonment of all exploratory wells and the restoration of their drillsites,
together with estimates of all of monies and funds required for the funding of any abandonment and site restoration program established
in conjunction with an approved plan of development for a commercial discovery in the judgement of PERTAMINA EP.

 

Expenditures
incurred in the abandonment of exploratory wells and the restoration of their drill sites shall be charged as Operating Costs in
accordance with Article II of this Exhibit-III.

 

    	 	78	 

     

    

 

Estimates
of monies required for the funding of any abandonment and site restoration program established pursuant to clause 4.1.8 of the
Agreement shall be charged as Operating Costs annually on the basis of accounting accruals beginning in the Year of first production.

 

The fund of such abandonment
and site restoration shall be used by PARTNER upon PERTAMINA EP prior written approval.

 

The
amount charged in each Year will be calculated by dividing the total estimated cost of abandonment and site restoration for each
discovery by the total estimated number of Years in the economic life of each discovery. The estimates of monies required for all
abandonment and site restoration activities shall be reviewed on an annual basis and such estimates shall be adjusted each Year
as required.

 

Such
available abandonment and site restoration fund shall be deposited into separate bank account in the name of PERTAMINA EP and
SKK Migas.

 

PARTNER
shall deposit and report to PERTAMINA EP the abandonment and site restoration fund to such account initially after the
first year production and for the subsequent year shall be executed by PARTNER every *** in
any Agreement Year.

 

	3.6	Termination and Benefit Plan

 

Operating
Costs shall include all expenditures incurred in the termination and benefit plan of all employees dedicated for Oil and Natural
Gas Operations in PARTNER shall be charged as an Operating Cost in each year beginning in the Year of first production,
together with estimates of all of monies and funds required for termination and benefit plan program for employees dedicated for
Oil and Gas Operations in MITRA shall be charged as Operating Costs annually on the basis accounting acrual beginning in
the Year of first production, and shall be included in the annual Work Program and Budget.

 

    	 	79	 

     

    

 

Such
expenditures incurred in the termination and benefit plan of all employees fund shall be deposited as big as cost which is already
been burdened by accrual method into separate account and shall be reported to PERTAMINA EP periodically. The fund of such
abandonment and site restoration shall be used by PARTNER upon PERTAMINA EP prior written approval.

 

	3.7	Application of Cost Recovery Regulation bv the GOI

 

PARTNER
agrees to comply with the provisions regarding cost recovery and taxes as provided in Government Regulation No.79 of 2010 on
recoverable operating cost and income tax treatment in oil and gas upstream sector and its replacement and implementation regulations.

 

	3.8	Over/Under Lifting

 

In
the event PARTNER recovers all the Operation Cost as provided under Article V, Clause 5.1 and 5.2 therefore PARTNER shall
prepare the calculation of Over/Under Lifting at the end of each period of the current year and PARTNER shall submit such
calculation to PERTAMINA EP not later than the *** of the subsequent year.

 

------ End of Exhibit – III ------

 

    	 	80	 

     

    

 

EXHIBIT
– IV

 

This Exhibit-IV is attached to and formed
an integral part of the Agreement between PT PERTAMINA EP and PT GREEN WORLD NUSANTARA, dated the 26th
day of July, 2019

 

TABEL
PRODUKSI DASAR / NSO

 

***

 

    	 	81	 

     

    

 

 ***

 

------ End of Exhibit -IV ------

 

    	 	82	 

     

    

 

EXHIBIT
– V

 

This
Exhibit-V is attached to and formed an integral part of the Agreement between PT PERTAMINA EP and PT GREEN WORLD NUSANTARA,
dated the 26th day of July, 2019.

 

STRUKTUR
ORGANISASI

(ORGANIZATION
STRUCTURE)

 

 

During
implementation of the Agreement, PARTNER may, with PERTAMINA EP's prior written consent, change or modify the organization
structure and/or Manager position as required.

 

------End
of Exhibit –V------

 

    	 	83	 

     

    

 

EXHIBIT
– VI

 

This
Exhibit-VI is attached to and formed an integral part of the Agreement between PT PERTAMINA EP and PT GREEN WORLD NUSANTARA,
dated the 26th day of July, 2019

 

SKEMA
PEMBAGIAN HASIL MINYAK DAN GAS BUMI

(PETROLEUM
REVENUE FLOW DISTRIBUTION)

 

 

------End
of Exhibit -VI------

 

    	 	84	 

     

    

 

EXHIBIT
– VII

 

This
Exhibit-VII is attached to and formed an integral part of the Agreement between PT PERTAMINA EP and PT GREEN WORLD NUSANTARA,
dated the 26th day of July, 2019.

 

DRAFT
LAMPIRAN BERITA ACARA SERAH TERIMA

 

 

BERITA
ACARA SERAH TERIIWA ASSET

AREA
OPERASI KRUH

DARI

PT
PERTAMINA EP

KEPADA

PT
GREEN WORLD NUSANTARA 

 

No.           
/EPXXXX/20XX-S0

 

Pada
hari ini _____ Tanggal _____ Bulan XXX Tahun XXX, kami yang bertandatangan di bawah ini:

 

	1	________, XXX PT Pertamina EP, dalam hal ini bertindak untuk dan atas nama PT Pertamina EP selanjutnya disebut “ PT PERTAMINA EP.”

 

	1	________, XXX PT Green World Nusantara, dalam hal ini bertindak untuk dan atas nama PT GREEN WORLD NUSANTARA selanjutnya disebut " MITRA."

 

	2.	Berdasarkan Berita Acara Serah Terima Pengelolaan Area Operasi Kruh dari PERTAMINA EP kepada MITRA tanggal ____ xxx 20xx dengan ini PERTAMINA EP menyerahkan kepada MITRA asset-asset yang terdapat dan terletak di Area Operasi Kruh sebagaimana disebutkan dalam Daftar Aset terlampir, dan merupakan bagian yang tidak terpisahkan dari Berita Acara Serah Terima Pengelolaan Area Operasi Kruh tersebut di atas.

 

Aset-aset
tersebut merupakan aset yang terkait dengan kegiatan Operasi KSO Produksi di Area Operasi Kruh yang telah diinventarisir oleh PT
PERTAMINA EP dengan status terakhir per tanggal _____, xxx 20xx.

 

Jenis,
kondisi dan/atau jumlah Aset yang diserahkan telah dikenal, diketahui serta disetujui oleh kedua belah pihak sebagaimana adanya
("as it is") sehingga penjelasan lebih lanjut tidak diperlukan lagi.

 

Terhitung
mulai tanggal ______, xxx 20xx segala risiko, kewajiban-kewajiban dan/atau biaya-biaya yang timbul terhadap Asset yang diserahkan
sepenuhnya menjadi tanggung jawab MITRA, dan MITRA wajib mengelola asset-asset tersebut sesuai dengan ketentuan dan peraturan yang
berlaku di PT PERTAMINA EP.

 

Hal-hal
yang belum diatur atau belum cukup diatur dalam Berita Acara Serah Terima Asset ini akan diatur kemudian.

 

Demikian
Berita Acara Serah Terima Asset ini dibuat dengan sebenarnya pada hari, tanggal, bulan dan tahun sebagaimana tersebut diatas untuk
dapat dipergunakan sesuai keperluan.

 

	PT GREEN WORLD NUSANTARA	 	PT PERTAMINA EP	 
	 	 	 	 
	 	 	 	 
	XXX	 	XXX	 

 

------End
of Exhibit -VII------

 

    	 	85	 

     

    

 

EXHIBIT
– VIII

 

This
Exhibit-VIII is attached to and formed an integral part of the Agreement between PT PERTAMINA EP and PT GREEN WORLD NUSANTARA,
dated the 26th day of July, 2019.

 

FORMAT
GARANSI BANK

(BANK
GUARANTEE FORM)

 

BANK
GUARANTEE

 

_______________ (hereinafter called the
"BANK"), refers the article 1832 of Indonesian Civil Code releasing our privilege under the law, as referred in
article 1831 of Indonesian Civil Code, hereby guarantee __________ having its office at __________ (hereinafter called "_________")
to PT PERTAMINA EP having its office at Menara Standard Chartered 21-29 floor Jl. Prof. Dr. Satrio No. 164 South Jakarta
12950 (hereinafter called "PERTAMINA EP") to pay the amount of USD __________ (___________ U.S. dollars)
with the terms as follows;

 

	1.	This BANK GUARANTEE is meant to guarantee the accomplishment of firm commitment in accordance with the Operations Cooperation Agreement between ____________ and PERTAMINA EP on the Operating Area of _________ that has been signed on ____________ hereinafter called the "OC Agreement".

 

	2.	The BANK hereby agrees that it shall guarantee unconditionally and irrevocably payment to PERTAMINA EP pursuant to Section __________ of the OC Agreement, Immediately after PERTAMINA EP demands in writing of the BANK, with the following provisions:

 

If
_____________ has failed to fulfill the activities of its firm commitment as prescribed under Section ___________ clause __________
of the OC Agreement; or because of any other cause that proved __________ is fault which result in firm commitment is unperformed
or ___________ has withdrawn from and be relieved of the rights and obligations under the OC Agreement, than upon Bank shall pay
PERTAMINA EP the said amount in accordance with PERTAMINA EP's letter of demand with attachments as follows:

 

	 	(1)	a copy of letter of notification of failure to fulfill the Firm Commitment obligations; or

 

	 	(2)	a copy of letter of termination of the OC Agreement from PERTAMINA EP; or

 

    	 	86	 

     

    

 

	 	(3)	a copy of letter of withdrawn confirmation from _____________.

 

Termination
of OC shall be conducted by waiver of Articles 1266 and 1267 of Indonesian Civil Code, without interference by the court and without
prejudice to PERTAMINA EP’s other rights and remedies against ___________ as provided in the OC Agreement and by laws.

 

	3.	This BANK GUARANTEE shall be effective as of the date of the Bank Guarantee issued until the end of *** Firm Commitment Year plus *** for claim and draw down of BANK GUARANTEE or as soon as ____________________ has been recognized by PERTAMINA EP to have fulfilled all of its firm commitment obligation under the OC Agreement, whichever occurs earlier, except if any extension of the firm commitment, then BANK GUARANTEE shall be extent pursuant to the extension period of such firm commitment

 

	4.	Any claim made under this BANK GUARANTEE shall be made in writing to the BANK not less than *** from the date of the letter of notification of failure to fulfill the Firm Commitment obligations or the termination letter from PERTAMINA EP or letter of withdrawn confirmation from _______, after which the BANK shall be discharged from its liabilities under this BANK GUARANTEE.

 

Executed
in Jakarta on _____, 20__ in the Indonesian and English languages, which the English version is unofficial translation, and in
case of any divergence between them, The Indonesian version shall prevail.

 

------End
of Exhibit –VIII------

 

    	 	87

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