Contractor may want to amend this section so that the Development and Production Period only runs from the date of finalisation of the Development Plan. This would be similar to the Mauritania PSC, where granting of the exclusive exploitation authorization occurs within a certain number of days following approval of the development and production programme (and the development / production period runs from the date of authorisation grant). Alternatively, as per the Indian PSC or the Madagascar PSC, Contractor could amend so that the Development and Production Period only runs from the time of grant of the corresponding development / production lease / mining title. Production run-off following expiry of Development and Production Period Contractor may wish to add a provision regarding expiry of the Development and Production Period so that if commercial production from a particular production area is still possible, the Contractor can request an extension of the applicable Development and Production Period, for example, by five years (as is the case in the Kurdistan PSC), or possibly longer in the event of a commercial production of non-associated natural gas (see, for example, the India PSC, 11.5(b)). Relinquishments (section 4) Section 4.1 provides for automatic relinquishment of areas within the Contract Area on expiry of the Exploration Period. Section 4.2 allows for voluntary relinquishment by the Contractor. Phased relinquishment Contractor should note that there is no phased relinquishment under the PSC, so that the entire Contract area other than all Discovery Areas and Development and Production Areas are automatically relinquished at the end of the Exploration Period. Under other PSC regimes, certain percentages of the contract area are relinquished on fixed dates during or at the end of the exploration period (see for example the Madagascar, Kurdistan and Bangladesh PSCs) Minimum expenditure commitment (section 5) Section 5 (which provides the framework for minimum expenditure during the Exploration Period) is broadly acceptable, although the minimum amounts are not yet specified. Please refer to the PSC Comparison Table for some examples of minimum expenditures in third country PSCs. Form of guarantee
Section 21 provides that the governing law of the Myanmar PSC shall be the laws of Myanmar, with the parties agreeing to submit to the jurisdiction of the courts in Myanmar. Waiver of sovereign immunity We would recommend to include an express waiver of sovereign immunity by MOGE in the Myanmar PSC (see, for example, the Kurdistan PSC). Deletion of courts submission clause As section 22 of the PSC provides for dispute resolution through arbitration, it may not be appropriate to include a contradictory provision for submission to the courts of Myanmar (to the extent this may cast doubt on the agreement to arbitrate). Instead, we can include a provision allowing for enforcement of any arbitration award in any court having competent jurisdiction. Consultation and arbitration (section 22) Section 21 provides for resolution of disputes through arbitration conducted under the Myanmar Arbitration Act, 1944 (Myanmar Act IV, 1944), which is generally considered to be a very outdated piece of legislation. Alternative mechanisms for disputes of a technical nature As discussed in paragraph 11 above in relation to disagreements on valuation of Crude Oil, Contractor might establishing an alternative mechanism to address certain specified disputes of a technical nature which could be referred to a expert (or to an expert appointed through a pre-agreed process). As a dispute resolution method, expert determination can be less formal than arbitration, and it allows for the appointment of an expert who is familiar with the relevant technical issues. International arbitration procedures / forum We understand that in contracts for its entities, the Government of Myanmar typically insists on Myanmar substantive law and arbitration. However, certain investors in a strong bargaining position have been able to insist on foreign governing law and international arbitration outside Myanmar (under, for example, International Chamber of Commerce (“ICC”) or the Arbitration Rules of the United Nations Commission on International Trade Law (“UNCITRAL”)). Contractor may consider whether to pursue such an option. Please note that that although Myanmar has acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”), it is still necessary to amend Myanmar’s domestic arbitration laws