Common use of Administration Overhead Clause in Contracts

Administration Overhead. i) Contractor's administrative overhead outside Bangladesh applicable to the Petroleum Operations under this Contract prior to the date of the first Declaration of Commercial Discovery in the Contract Area shall be charged in accordance with the following rates with respect to all expenditures allowable for Cost Recovery other than administrative overheads: Three percent(3%) of the first two million Dollars ($ 2,000,000) paid during the Calendar Year; two percent(2%) of the subsequent three million Dollars ($ 3,000,000) of such expenditures paid during the Calendar Year; and one per cent (1%) of amounts exceeding five million Dollars ($ 5,000,000) of such expenditures paid during the Calendar Year. ii) Contractor's administrative overhead outside Bangladesh applicable to Petroleum Operations under this Contract shall be from the date on which the first Development Plan is approved. The charge shall be at an amount or rate to be agreed on between the Parties and stated in the Development Plan. iii) Contractor shall make provisional quarterly charges to the accounts based on the above rates. iv) Such overhead charges shall be considered full compensation to Contractor's Affiliate wherever located for the following type of assistance provided: A) Executive - Time of executive officers above the rank of regional exploration manager. B) Treasury - Financial and exchange problems and payment of invoices. C) Purchasing and Forwarding - Procuring materials, equipment and forwarding supplies. D) Exploration and Production - Directing, advising and controlling the entire project. E) All indirect services of Contractor's Affiliates not chargeable as direct charges under Sections 3.1 (b) or 3.1 (f) hereof, provided by other departments such as legal, engineering, employee relations and personnel recruiting, administrative, accounting and audit, which contribute, time, knowledge and experience to the operation.

Administration Overhead. i) Contractor's administrative overhead outside Bangladesh applicable to the Petroleum Operations under this Contract prior to the date of the first Declaration of Commercial Discovery in the Contract Area shall be charged in accordance with the following rates with respect to all expenditures allowable for Cost Recovery other than administrative overheads: Three percent(3percent (3%) of the first two million Dollars ($ 2,000,000) paid during the Calendar Year; two percent(2percent (2%) of the subsequent three million Dollars ($ 3,000,000) of such expenditures paid during the Calendar Year; and one per cent percent (1%) of amounts exceeding five million Dollars ($ 5,000,000) of such expenditures paid during the Calendar Year. ii) Contractor's administrative overhead outside Bangladesh applicable to Petroleum Operations under this Contract shall be from the date on which the first Development Plan is approved. The charge shall be at an amount or rate to be agreed on between the Parties and stated in the Development Plan. iii) Contractor shall make provisional quarterly charges to the accounts based on the above rates. iv) Such overhead charges shall be considered full compensation to Contractor's Affiliate wherever located for the following type of assistance provided: A) Executive - Time of executive officers above the rank of regional exploration manager. B) Treasury - Financial and exchange problems and payment of invoices. C) Purchasing and Forwarding - Procuring materials, equipment and forwarding supplies. D) Exploration and Production - Directing, advising and controlling the entire project. E) All indirect services of Contractor's Affiliates not chargeable as direct charges under Sections 3.1 (b) or 3.1 (f) hereof, provided by other departments such as legal, engineering, employee relations and personnel recruiting, administrative, accounting and audit, which contribute, time, knowledge and experience to the operation.