CONTE. TION AND PRODUCTION | 2. _BED METHANE BETWEED INDIA VE RNMENT xp GREAT RASTEI NERERGY CO WUEH RESPEClo} 18 1 2a 4 LE OF CONTENTS CONTENTS PAGE NO. Preamble a2 Definiions xt Particspating. Interests 2 License and Exploriuon Period td Relinguishment 1B Work Programme ty Steering Committee wt ‘Operatorship, Ope Operating: Commitice 2 General Rights and Obligations of the Pasties, 20.18 Government Assistance 7 Development and #roduetion 34-31 CBM Minny, Lease 3233 Unit Development 34.3 Measurement of CBM 36 Protection of the Environment 37.41 Fees, Rentals, Levies, Taxes, Royalty, Production i evel Payments (PLPy ete 4245 Customs Duties 4 Currency an Control Provisions ATs Sale of CRM 29.80 Employnicnt, Training and Transfer of Technology Local Goods and Services Insurance and Indemnification Records, Reports, Accounts and Audit Information, Data, Confidentiality, Inspec Title to CBM, Data and Assets Assignment of Participati Financial Term and Tern Force Majeure “Applicable Laey and Lanta Sole Expert Conciliation and Artitration Change of Stasis of Contractor jon andl Seeurily Performance Guarantees jon of Contract Fotie Aprcenient, Amemine Waiver and Ms oTLanepiesAPPENDICES Appendix 4 pendix Bo Ayfpendix C= EN > pendix Do pendix = ppendia-F ppendix-G = ICLE CONTENTS Cenificates, Notices Description of Conteact Area Map of Contract Area Accounting Procedure to the Contract for Exploration and Production of CBM Form of Parent Financial and Performance guarantee Procedure for Acquisition of Goods and Services Performa of Bank Guarantee te be provided pursuant to Article 26 Work Programme 5 16-77 81-98 99-100 TOL Los 105-107 108-109 ivVHEREAS » (3) a This Contract made on this 31” day of May 2001 between: “The President of India. acting through the Joint Secretary, Ministry of Petrolewn and Natural Gas (hereinafter referred to as “Government”) of the FIRST PART: AND Great Eastern Energy Corporation Limited, a Company incorporated under the laws of India (hereinafter referred to as “GEECL") having its Registered office at 210 Okhla Industrial Estate, Phase-lll, New Delhi- 110020, which expression shall include its successors and such assigns fas are permitted under Article 25 hereof of the SECOND PART : (in case of Contractor consisting of more than ene Company, this will apply for all such Companies) The Oise esaion and Den mand Natal Trersinaler referred tas “the Act”) and the Petroleum and Natural Gas Rules, 1959 (hereinafter referred to as “the Rules”) made qhereunder make provision, inter alia, for the regulation of Petroleum Operations and grant of Licences and Leases for exploration, development and production of Petroleum in India, “The Coal/Lignite Bed Methane (CBM) is a Natural Gas, and, therefore itis governed by the Act and the Rules; ‘The Rules provide for the grant of Licences and Leases in respect of land vested in a State Government by that State Government with the previous approval of the Central Government, and GEECL has applied for a License to carry out CBM Operations in that area identified as Block Raniganj and more particularly deseribed in Appendix-A, Rule § of the Rules proviele for an agreement between the Government and the Licensee or Leste with respect to additional terms and conditions with respect tw the License or Lease: The Government desires that the CHM resources which exist in Indi he assessed and exploited a comme } quantities with the uunest jsa expedition in the overall interest of India in accordance with modem oilfield and petroleum industry practices: GEECL has committed that it has, or will acquire and make available, the necessary technical and financial resources: and the technical and indusinal competence and experience necessary for proper discharge andior performance of all obligations required to be performed under this Contract in accordance with mode oilfield and petroleum industry practices and will provide guarantecs as required under Article 26 for the due performance of its obligations hereunder, and As a result of discussions between representatives of the Government and GEECL on the proposal of GEECL, the Government has agreed to enter into this Contract with GEECL with respect to the said area referred to in paragraph (3) above on the terms and conditions herein set forth. NOW, THEREFORE. in consideration of the premises and covenants and conditions herein contained, IT IS HEREBY AGREED between the Parties as follows.14 1s 16 ARTICL! DEFINITIONS in this Contract, unless the context requires other. the following terms shall have the meaning ascribed to them hereunder: “Accounting Procedure” means the principles and procedures of accounting set out in Appendix C. Agr? means The Oilfields (Regulation and Development) Act, 1948, as amended from time to time, affiliate” means a company oF a body, fa) which directly. ot indirectly controls. or controlled by 2 Company which is a Party to this Contract: of (&) which directly oF indirectly controls oF is controlled by 2 Campany which directly or indirectly controls or 1s controlled Sea Company whieh isa Party to this Contract For the purpose of this definition itis understood that “control” means: i) ownership by one company of more than fifty percent (50%) of the voting securities of the other company: Or ai) the power to direct, administer and dictate policies of the other Traupeny. oven where the voting securtics held by sich ccinpany exercising such effective control in that other company is less than fifly percent (50%) and the term cconmyailed” shall have a corresponding meaning. “Appendix” means an appendix attached to this Contract and made @ part thereof, approved Work Programme” means a Work Programme that has Farin paved by the Steering Committee pursvant to the provisions of this Contract, ctamms Length Sales” mean sales made freely in the open enadket, freely convertible currencies, between willing and unrelated sellers and fuvers and an ahich such buyers and sellers have no contractual oF payers ee nonship, directly or indirectly. or any common oF SU aoe enn tavonably ikely to influence selling prices ane shall, interest jade sales (whether diet or rndirect, through Broker Of ee es) anvolving Affiiates, sales bepween Companies which aoe ie hs Contract, sales between Governments and Government 3 a10 u 13 116 ‘owned entities, counter trades, restricted or distress sales, sales involving barter arrangements and generally any transactions ‘motivated in whole or in part by considerations other than normal commercial practices Article” means an Article of this Contract and the team “Articles” means more than one Article. “Borehole” means a hole drilled in the sub-surface with or without obtaining the cores of rock samples for the purpose of ascertaining the Tithostratiyraphy, structure, physical and chemical parameters of the rocks widget” means a budget formulated in relation to a Work Programme. “Calendar Day” means any of the seven (7) days of a week. Calendar Month” means any of the twelve (12) months of the Calendar Year Calendar Quarter” means a period of three consecutive Calendar Months commencing on the first day of January, April, July and October of each Calendar Year. “Calendar Year” means a period of twelve consecutive Calendar Months according to the Gregorian calendar, commencing, with the first day of January and ending with the thirty first (31°) day of December. “CBM means Natural Gas (mainly Methane) contained in coal or bituminous lignite beds under reservoir condition and extracted therefrom during CBM Operations BM Field” means an area within the Contract Area consisting of a single CBM reservoir or multiple CBM reservoirs all grouped on or related 10 the same individual geological structure or stratigraphic Conuitions, (to include the maximum area of potential productivity in the Contract Area) in respect of which a Potential Commercial ‘Assessment has been declared, Commercial Assessment has been made and 4 Development Plan has been approved in accordance with Article S CRM Operations” means, as the context may require. Exploration Operations, Development Operations or Production Operations or any cambmnaton of hwo or more such operations including, but not iimtted fo, construction, operation and maintenance of all necessary facilities, plugging and abardonment of Wells, envirenmental “protection. Tansportancn, storage, sale oF disposition of CBM to the Delivery 4 AL18 19 20 N21 Point, Site Restoration and all other incidental operaticns of activities as may be necessary. Commercial Assessment” means an assessment made by the Contractor for the purpose of determining whether or not CBM accumulations in the Contract Area are commercially exploitable and whether or not Commercial Production is viable after consideration of all pertinent tcchnieal, financial and economic data and other relevant factors according to generally accepted modem oilfield and petroleum industry practices. “Commercial Assessment Area” means such producing and producible parts of the Contract Area about which, based upon Commercial Assessment and the results obtained from a Well or Wells drilled such part, the Contractor isiare of the opinion that CBM exists in commercial quantities, “Commercial Production” means production of CBM from the Contract Area and delivery of the same at the relevant Delivery Point(s) under a programme of regular preduction and sale. “Company” for the purpose of this Contract means a company whieh is a Party t0 this Contract and, where more than one Company 15 2 Party to the Contract, the term “Companies” shall mean all such Companies collectively, including their respective successors and permiticd assigns under Article 25 “Contract” means this agreement and the Appendices mentioned herein and attached hereto and made an integral part hercof and any amendments made thereto pursuant to the terms hereof. “Contract Area” means on the Effective Date, the arca described in Appendix A and delineated on the map attached as Appendix B, or any portion of the said area remaining. after relinquishment or surrender from time to time pursuant to the tems of the Contract including any additional area as provided under Article 11.2, if any. “Contract Cost: Production Costs, * mean Exploration Costs, Development Costs and defined in Section 2 of the Accounting Procedure: “Contract Year” means a period of twelve consecutive months counted from the Effective Date or from the anniversary of the Effective Date ~ Contractor” means the Companies. Corchole™ means a Horchole in which coring is cared out ep te the final depth of thie Borehole tor the puxpose of detailed study of various parameters of rock samples127 128 Ls 130 “Delivery Point” means, except as otherwise herein provided or as may bbe otherwise agreed between the Parties having regard to intemational practice, the point at which CBM reaches the outlet flange of the delivery facility and different Delivery Points may be established for purposes of sales. Delivery Point(s) for che purpose of sales} of CBM from the Contract Area shall be approved by the Steering Committee. “Development Area” means that part of the Contract Area corresponding to the area of one or more CBM Field{s) delineated for development. “Development Costs" mean those costs and expenditures incurred in carrying out Development Operations, as ¢lassified and defined in Section 2 of the Accounting Procedure, “Development Operations” mean operations conducted in accordance with the Development Plan, including but not limited to the purchase. storage of equipment and materials used in developing CBM accumulations, the drilling. completion and testing of Development Wells, the drilling and completion of Wells for de-watering, gas or water injection, the laying of gathering lines, the installation of separators, tankage, pumps. other producing and injection facilities required to produce, process anu transport CBM inte mi or gas processing facilities, including the laying of pipelines within or outside the Contract Area, to storage and te the Delivery Point or Points, the installation of said storage or Gas processing facilities required for the development and production of the said CBM accumulations and for the delivery of CBM at the Delivery Point and also ineluding incidental operations not specifically referred to hercin fas required for the most efficient and economic development and production of the said CBM accumwlations in uecordance with modem ‘oilfield and petroleum industry practices. 5 stOrae “Development Phase” means a period of five(S) Contract Years dur which the Development Operations may be carried out by the Contractor pursuant to Article 10, ns a plan submitted by the Contractor for the development of CBM Fiekd Steering Committee or Government “Development Plan” 1 containing proposals require which has been approved by thi pursuant to Article 5 “Development Well” means a Well drilled, deepened or completed after the date of approval of the Development Plan pursant 10 Development Operations ar Production Operations for the purpose of producing CBM, increasing production, sustaining prodgction or Necelerating ¢atraction of CBM including production Wells, ds watering Wells, mjeetion Wells and dry Wells13 13 140 “DGH™ means “The Directorate General of Hydrocarbons or its successors and assigns”. ~Bffective Date" means the later date on which this Contract is executed by the Parties or the License in respect of the Contract Area is issued by the State Goverament(s). “Environmental Damage” means soil erosion, removal of vegetation, destruction of wildlife, pollution of groundwater or surface water, land contamination, air pollution, noise pollution, bush fire, disruption to water supplies to natural drainage or natural flow of rivers or streams, damage to archacological, palacontological and cultural sites and shall include any damage or injury te, or destruction of, soil or water in their physical aspects together with vegetation associated therewith, aquatic or terrestrial mammals, fish, avi-fauna or any plant or animal life, "Exploration Costs” mean thase costs and expenditures incurred in carrying out Exploration Operations, as classified and defined in Section 2 of the Accounting Procedure. “Exploration Operations" mean operations conducted in the Contr Area pursuant to this Contract in searching for commercial CBM accumulations and shall include, but not limited to aerial, geological gcophysical, geechemieal, —palaeontological, _palynological topographical and seismic surveys, analyses, studies and their interpretation, investigations relating to the subsurface geolouy including structure test drilling, stratigraphic test drilling, drilling of pilot Wells for the purpose of assessment of CBM potential, carrying out other related activities such as surveying, drill-site preparation and all work necessarily connected therewith and conducted in connection with CBM exploration (ineluding preparation of techno-eeonomig pe feasibility studies, market surveys and commitments and full seals comimereial Development Plan). “Exploration Well" means a Well drilled for the purpose of searching for potential assessment of CBM accumulations on any geologic! ‘entity (be it of structural, stratigraphic or pressure nature) inclu Contholes. eld” means CBM field in respect of whieh a Development Plan has been duly approved in accordance with Article 5 hereof, “Financial Year” means the period from the first day of Apnl to the thirty-first day of March of the following Caiendar Year Foreign Company” means a Company: within the meaning of Ses 59% of the Companies Act, 19561p Vay “Frontier Area” means any area identitied, deruarcated and so declared by the Government for the purpose of exploration and exploitation of CBM, which is logistically and technically difficult and lacks in infrastructural and or marketing facilities etc “Government” or “Central Government” means the Goverment of India, unless otherwise stated “Lease” means @ petroleum mining lease granted for the purpose of exploitation of CBM issued under the Rules. “Lessee” means the Contractor to whem a Lease is issued under the rules for the purpose of carrying out CBM Operations in the Contract Area ~LIBOR™ means the London Inter-Bank Offered Rate for six-month deposits of United States Dollars as quoted by the London office of the Bank of America (or such other Bank as the Parties may agree) for the day or days in question. “License” means a petroleum exploration license granted for the Purpose of carrying out Exploration Operations for CBM issved under the Rules. “Licensee” means the Contractor to whom a Licence is issued under the Rules for the purpose of camying out CBM Operations in the ‘Contract Area. “Methane” means, methane, a colourless, edourless, inflammable gaseous hydrocarbon, the simplest of alkane series and the main constituent of Natural Gas. “Minimum Work Programme” means with respect to Phasc-I and. Phase-Il, the Work Programme specified in Article 5 with respect to such phases “Month” means Calendar Month “Natwral Gas” means ysis obtained from Borcholes and consisting primasily of hydrocarhens and includes CBM but does not include helium occurring in association with such hydrocarbons, “Operating Agreement means the operating agreement entered by the constituent of Companies. in accordance with Article 7, with respect to the conduct of CBM Operations ‘ans the committee established by tha pursuant to Article 7 “Operating Committee’ in the Operating Agreemes