DISCOVERY AND DEVELOPMENT. 6.1 In the event of a Discovery of Petroleum in the Area, Operator shall promptly inform the DGPC, and, by further notice in writing within three (3) Months from the date of termination of drilling and testing of the respective Exploration Well inform the DGPC whether or not the Discovery, in the opinion of Operator, merits Appraisal. 6.2 If Operator notifies the DGPC that the Discovery does not merit Appraisal, DGPC shall have the option, on three (3) Months written notice, to require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall: (a) not comprise more than the vertical projection to the surface of the geological structure on which the Exploration Well resulting in the Discovery was drilled; and (b) be determined based on geophysical and other technical information obtained from the Discovery. 6.3 If Operator notifies DGPC that the Discovery merits Appraisal, Operator shall submit to the DGPC for approval within six (6) Months from the date of completion of the Exploration Well resulting in the Discovery, an Appraisal Programme which highlights the Appraisal area and provides for the Appraisal of the Discovery in the most efficient and timely manner. 6.4 Not later than three (3) Months from the date on which the Appraisal Programme has been completed, or within such further period as the DGPC may reasonably allow (taking into account the relevant technical and economic conditions), Operator shall by notice in writing inform the DGPC, whether or not, in the opinion of Operator, the Discovery is a Commercial Discovery or a Significant Gas Discovery. 6.5 Where Operator has not informed the DGPC that the Discovery is a Commercial Discovery or Significant Gas Discovery, the DGPC may, by notice in writing, require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall be determined as specified in Article 6.2. 6.6 In the event the Operator considers that the Discovery is a Commercial Discovery or a Significant Gas Discovery, Operator will select the Discovery Area or Significant Gas Discovery Area, which should not exceed the geological entity covering the Commercial Discovery or a Significant Gas Discovery subject to the limitations of the Area. The Operator will request DGPC for retention for Significant Gas Discovery for period as allowed in accordance with the Rules together with the justification. If the Operator does not declare a Significant Gas Discovery as a Commercial Discovery during the allowed retention period, the Operator shall relinquish the Significant Gas Discovery Area and the Licence shall terminate automatically upon the termination of the allowed retention period. If Operator declares a Commercial Discovery during the allowed retention period, Operator will select the Discovery Area out of the Significant Gas Discovery Area, and the provisions of the Agreement and the Rules for grant of approval of Development Plan and the grant of Lease shall apply mutatis mutandis. 6.7 Where the Operator has by written notice notified the DGPC that the Discovery is a Commercial Discovery such notice shall accompany, a detailed report on each Commercial Discovery as provided for in the Rules for approval by DGPC. Within a period no later than six (6) Months from the Date of Commercial Discovery or within such time period as may be allowed by DGPC, the Operator will submit an application for grant of Lease together with Development Plan for the each Commercial Discovery for approval by DGPC. 6.8 When the Government has approved the Development Plan, pursuant to Rule 33 of the Rules, it shall grant to the Working Interest Owners a Lease covering the Discovery Area in accordance with the Rules promptly provided the Working Interest Owners have furnished all requisite information to DGPC. The said Lease shall, on the basis of the available seismic and well data, comprise the Discovery Area to enable each Commercial Discovery to be developed and produced efficiently. The duration of the Lease shall not exceed the time limit as indicated in the Rules. 6.9 The report on each Commercial Discovery shall cover all the relevant factors as required under the Rules including, but not be limited to: (a) the chemical composition, physical properties and quality of Petroleum discovered; (b) the thickness and extent of the production strata; (c) petrophysical properties of the reservoirs; (d) the productivity indices for ▇▇▇▇▇ tested at various rates of flow; (e) permeability and porosity of the reservoirs; (f) the estimated Production capacity of the reservoirs; and (g) all relevant economic and commercial information which is necessary for the determination of a Discovery as a Commercial Discovery. 6.10 Each Development Plan shall contain detailed proposals by Operator for the construction, and establishment of all facilities and services for and incidental to the recovery, storage and transportation of Petroleum from the Area, as required under the Rules including but not limited to: (a) description of the nature and characterization of reserves, data, statistics, interpretation and conclusion of all aspects of the geology, reservoir evaluation, Petroleum engineering factors, reservoir models, estimates of reserves in place, possible Production estimates, nature and ratio of Petroleum fluids and analysis of produceable Petroleum; (b) proposals for the Development and Production of the Commercial Discovery including possible alternatives, work programmes and budgets and proposals relating to the disposition of Associated Gas. Operator should make specific recommendations as to the particular Development proposal that it would prefer. This should include information regarding projections of the economics and profitability of the Joint Operations related to such Development proposals. (c) proposals relating to the spacing, drilling and completion of ▇▇▇▇▇, the Production and storage installations, and transport and delivery facilities required for the Production, storage and transport of Petroleum. Such proposals will include, but not be limited to: (i) the estimated number, size and Production capacity of Production facilities/platforms, if any; (ii) estimated number of Production ▇▇▇▇▇; (iii) particulars of Production equipment and storage facilities; (iv) particulars of feasible alternatives for the transportation of Petroleum including pipelines; (v) particulars of equipment required for the Joint Operations; (d) estimate of the rates of Production to be established and projection of the possible sustained rate of Production in accordance with Good Oilfield Practices under proposed Development proposal and/or alternative Development proposals; (e) cost estimates under such Development proposal and alternative Development proposals, if any; (f) proposals related to the establishment of processing facilities (if any); (g) safety measures to be adopted in the course of the Joint Operations, including a contingency plan and measures to deal with emergencies; (h) anticipated adverse impact on environment and measures proposed to be taken for prevention thereof and for general protection of the environment; (i) a description of the organizational set up of Operator in Pakistan; (j) an estimate of the time required to complete each phase of the proposed Development; (k) a description of the measures to be taken regarding the employment and training of Pakistani personnel in accordance with the Rules; (l) a description of the abandonment plan, to be implemented whenever a piece of equipment or facility or installation needs to be abandoned prior to or on termination of this Agreement; (m) a map or maps of the outline of the discovered reservoir(s) together with technical or other back up justification; and (n) a plan for utilization of local goods and services. 6.11 After approval of a Development Plan, Operator shall carry out the Joint Operations substantially in accordance with this plan, subject to such modifications, which may be necessary from time to time, which are approved by the DGPC in accordance with the Rules. 6.12 Not less than ninety (90) Days prior to the beginning of each Calendar Year following the commencement of regular shipments of Crude Oil, Condensate, LPG or Natural Gas, Operator shall prepare and furnish to DGPC a forecast statement, and the basis thereof, setting forth by quarters the total quantity of Crude Oil, Condensate, LPG and Natural Gas (by quality, grade and gravity) that Operator estimates can be produced, saved and transported hereunder during such Calendar Year. 6.13 Operator shall, with respect to each Lease: (a) annually update and submit to DGPC maps required under Article 6.10(m) on the basis of the then most recent well, geological, and geophysical information indicating on such maps which reservoirs are in Commercial Production including such parts of reservoirs which are required for water injection; (b) within ten (10) Years of the commencement of Commercial Production from each Commercial Discovery, relinquish such part of Development Area which does not cover wholly or partially the vertical projections to the surface of reservoirs from which Commercial Production is being obtained or which are not required for water injection as per approved Development Plan; and (c) provide DGPC with a map with description of the relinquished areas and map referred to in Article 6.13(a) and (b) upon such relinquishment. 6.14 DGPC shall, within ninety (90) Days of receipt of the maps specified in Article 6.13(c) inform Operator in writing of: (a) DGPC approval of the relinquished areas, or (b) the need for Operator to relinquish further areas which are not vertical projections to the surface of reservoirs from which Commercial Production is being obtained, or which are not required for water injection. Operator shall, within sixty (60) Days of DGPC notification under Article 6.14(b) relinquish such area unless Operator disputes such notification in writing to DGPC in which case dispute resolution proceedings may be initiated by Operator through a sole expert unless mutually agreed otherwise, the cost of which will be charged to Joint Account. 6.15 The Operator shall have an organisation in Pakistan with sufficient competence and capacity to conduct the Joint Operations as required under the Rules. 6.16 If following the Discovery of Petroleum, a Working Interest Owner considers the Discovery to be a Commercial Discovery, it may give notice in writing to the other Working Interest Owners, stating in the said notice all the reasons for the evidence supporting its opinion and inviting the other Working Interest Owners to participate in the preparation of a Development Plan. If within ninety (90) Days of receipt of the notice, other Working Interest Owners inform the Operator, that they agree to participate in the Development of the Commercial Discovery, the Operating Committee shall define the Discovery Area and instruct the Operator to proceed with the preparation of the Development Plan. If any Working Interest Owner elects not to join in the Development of the Commercial Discovery, it shall assign its Working Interest in the Commercial Discovery on a pro rata basis to the remaining Working Interest Owners as may be mutually agreed. The remaining Working Interest Owners have the right to define the Discovery Area and develop the Commercial Discovery at their own cost and THE PRESIDENT shall in accordance with the Rules grant a Lease to the remaining Working Interest Owners. If a Working Interest Owner proceeds to develop the Commercial Discovery at its own cost, it shall own all of the production from such discovery and shall bear all the cost of developing and operating such Commercial Discovery and the other Working Interest Owners shall assign to it all their rights, title, and interest in and to the Petroleum in the Discovery Area in accordance with the Rules, provided always that such assignment shall be and remain contingent upon the Working Interest Owners carrying out such development expeditiously.
Appears in 3 contracts
Sources: Petroleum Concession Agreement, Petroleum Concession Agreement, Petroleum Concession Agreement
DISCOVERY AND DEVELOPMENT. 6.1 In the event of a Discovery of Petroleum in the Area, Operator shall promptly inform notify the DGPCDGPC in accordance with the Rules, and, by further notice in writing within three (3) Months from the date of termination of drilling and testing of the respective Exploration Well inform the DGPC whether or not the Discovery, in the opinion of Operator, merits Appraisal.
6.2 If Operator notifies the DGPC that the Discovery does not merit Appraisal, DGPC shall have the option, on three (3) Months written notice, to require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall:
(a) not comprise more than the vertical projection to the surface of the geological structure on which the Exploration Well resulting in the Discovery was drilled; and
(b) be determined based on geophysical and other technical information obtained from the Discovery.
6.3 If Operator notifies DGPC that the Discovery merits Appraisal, Operator shall submit to the DGPC for approval within six (6) Months from the date of completion of the Exploration Well resulting in the Discovery, an Appraisal Programme which highlights the Appraisal area and provides for the Appraisal of the Discovery in the most efficient and timely manner.
6.4 Not later than three (3) Months from the date on which the Appraisal Programme has been completed, or within such further period as the DGPC may reasonably allow (taking into account the relevant technical and economic conditions), Operator shall by notice in writing inform the DGPC, whether or not, in the opinion of Operator, the Discovery is a Commercial Discovery or a Significant Gas Discovery.
6.5 Where Operator has not informed the DGPC that the Discovery is a Commercial Discovery or Significant Gas Discovery, the DGPC may, by notice in writing, require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall be determined as specified in Article 6.2.
6.6 In the event the Operator considers that the Discovery is a Commercial Discovery or a Significant Gas Discovery, Operator will select the Discovery Area or Significant Gas Discovery Area, which should not exceed the geological entity covering the Commercial Discovery or a Significant Gas Discovery subject to the limitations of the Area. The Operator will request DGPC for retention for of Significant Gas Discovery for period as allowed in accordance with the Rules together with the justification. If the Operator does not declare a Significant Gas Discovery as a Commercial Discovery during the allowed retention period, the Operator shall relinquish the Significant Gas Discovery Area and the Licence shall terminate automatically upon the termination of the allowed retention period. If Operator declares a Commercial Discovery during the allowed retention period, Operator will select the Discovery Area out of the Significant Gas Discovery Area, and the provisions of the Agreement and the Rules for grant of approval of Development Plan and the grant of Lease shall apply mutatis mutandis.
6.7 Where the Operator has by written notice notified the DGPC that the Discovery is a Commercial Discovery such notice shall accompany, a detailed report on each Commercial Discovery as provided for in the Rules for approval by DGPC. Within a period no not later than six (6) Months from the Date of Commercial Discovery or within such time period as may be allowed by DGPC, the Operator will submit an application for grant of Lease together with Development Plan for the each Commercial Discovery for approval by DGPC.
6.8 When the Government has approved the Development Plan, pursuant to Rule 33 of the Rules, it shall grant to the Working Interest Owners a Lease covering the Discovery Area in accordance with the Rules promptly provided the Working Interest Owners have furnished all requisite information to DGPC. The said Lease shall, on the basis of the available seismic and well data, comprise the Discovery Area to enable each Commercial Discovery to be developed and produced efficiently. The duration of the Lease shall not exceed the time limit as indicated in the Rules.
6.9 The report on each Commercial Discovery shall cover all the relevant factors as required under the Rules including, but not be limited to:
(a) the chemical composition, physical properties and quality of Petroleum discovered;
(b) the thickness and extent of the production strata;
(c) petrophysical properties of the reservoirs;
(d) the productivity indices for ▇▇▇▇▇ tested at various rates of flow;
(e) permeability and porosity of the reservoirs;
(f) the estimated Production capacity of the reservoirs; and
(g) all relevant economic and commercial information which is necessary for the determination of a Discovery as a Commercial Discovery.
6.10 6.9 Each Development Plan shall contain detailed proposals by Operator for the construction, and establishment of all facilities and services for and incidental to the recovery, storage and transportation of Petroleum from the Area, as required under the Rules including but not limited to:
(a) description of the nature and characterization of reserves, data, statistics, interpretation and conclusion of all aspects of the geology, reservoir evaluation, Petroleum engineering factors, reservoir models, estimates of reserves in place, possible Production estimates, nature and ratio of Petroleum fluids and analysis of produceable producible Petroleum;
(b) proposals for the Development and Production of the Commercial Discovery including possible alternatives, work programmes and budgets and proposals relating to the disposition of Associated Natural Gas. Operator should make specific recommendations as to the particular Development proposal that it would prefer. This should include information regarding projections of the economics and profitability of the Joint Operations related to such Development proposals.
(c) proposals relating to the spacing, drilling and completion of ▇▇▇▇▇, the Production and storage installations, and transport and delivery facilities required for the Production, storage and transport of Petroleum. Such proposals will include, but not be limited to:
(i) the estimated number, size and Production capacity of Production facilities/platforms, if any;
(ii) estimated number of Production ▇▇▇▇▇;
(iii) particulars of Production equipment and storage facilities;
(iv) particulars of feasible alternatives for the transportation of Petroleum including pipelines;
(v) particulars of equipment required for the Joint Operations;
(d) estimate of the rates of Production to be established and projection of the possible sustained rate of Production in accordance with Good International Oilfield Practices under proposed Development proposal and/or alternative Development proposals;
(e) cost estimates under such Development proposal and alternative Development proposals, if any;
(f) proposals related to the establishment of processing facilities (if any);
(g) safety measures to be adopted in the course of the Joint Operations, including a contingency plan and measures to deal with emergencies;
(h) anticipated adverse impact on environment and measures proposed to be taken for prevention thereof and for general protection of the environment;
(i) a description of the organizational set up of Operator in Pakistan;
(j) an estimate of the time required to complete each phase of the proposed Development;
(k) a description of the measures to be taken regarding the employment and training of Pakistani personnel in accordance with the Rules;
(l) a description of the abandonment plan, to be implemented whenever a piece of equipment or facility or installation needs to be abandoned prior to or on termination of this Agreement;
(m) a map or maps of the outline of the discovered reservoir(s) together with technical or other back up justification; and
(n) a plan for utilization of local goods and services.
6.10 When the Government has approved the Development Plan, in accordance with the Rules, it shall grant to the Working Interest Owners a Lease covering the Discovery Area in accordance with the Rules promptly provided the Working Interest Owners have furnished all requisite information to DGPC. The said Lease shall, on the basis of the available seismic and well data, comprise the Discovery Area to enable each Commercial Discovery to be developed and produced efficiently. The duration of the Lease shall not exceed the time limit as indicated in the Rules.
6.11 After approval of a Development Plan, Operator shall carry out the Joint Operations substantially in accordance with this plan, subject to such modifications, which may be necessary from time to time, which are approved by the DGPC in accordance with the Rules.
6.12 Not less than ninety (90) Days prior to the beginning of each Calendar Year following the commencement of regular shipments of Crude Oil, Condensate, LPG or Natural Gas, Operator shall prepare and furnish to DGPC a forecast statement, and the basis thereof, setting forth by quarters the total quantity of Crude Oil, Condensate, LPG and Natural Gas (by quality, grade and gravity) that Operator estimates can be produced, saved and transported hereunder during such Calendar Year.
6.13 Operator shall, with respect to each Lease:
(a) annually update and submit to DGPC maps required under Article 6.10(m) on the basis of the then most recent well, geological, and geophysical information indicating on such maps which reservoirs are in Commercial Production including such parts of reservoirs which are required for water injection;
(b) within ten (10) Years of the commencement of Commercial Production from each Commercial Discovery, relinquish such part of Development Area which does not cover wholly or partially the vertical projections to the surface of reservoirs from which Commercial Production is being obtained or which are not required for water injection as per approved Development Plan; and
(c) provide DGPC with a map with description of the relinquished areas and map referred to in Article 6.13(a) and (b) upon such relinquishment.
6.14 DGPC shall, within ninety (90) Days of receipt of the maps specified in Article 6.13(c) inform Operator in writing of:
(a) DGPC approval of the relinquished areas, or
(b) the need for Operator to relinquish further areas which are not vertical projections to the surface of reservoirs from which Commercial Production is being obtained, or which are not required for water injection. Operator shall, within sixty (60) Days of DGPC notification under Article 6.14(b) relinquish such area unless Operator disputes such notification in writing to DGPC in which case dispute resolution proceedings may be initiated by Operator through a sole expert unless mutually agreed otherwise, the cost of which will be charged to Joint Account.
6.15 The Operator shall have an organisation in Pakistan with sufficient competence and capacity to conduct the Joint Operations as required under the Rules.
6.16 If following the Discovery of Petroleum, a Working Interest Owner considers the Discovery to be a Commercial Discovery, it may give notice in writing to the other Working Interest Owners, stating in the said notice all the reasons for the evidence supporting its opinion and inviting the other Working Interest Owners to participate in the preparation of a Development Plan. If within ninety (90) Days of receipt of the notice, other Working Interest Owners inform the Operator, that they agree to participate in the Development of the Commercial Discovery, the Operating Committee shall define the Discovery Area and instruct the Operator to proceed with the preparation of the Development Plan. If any Working Interest Owner elects not to join in the Development of the Commercial Discovery, it shall assign its Working Interest in the Commercial Discovery on a pro rata basis to the remaining Working Interest Owners as may be mutually agreed. The remaining Working Interest Owners have the right to define the Discovery Area and develop the Commercial Discovery at their own cost and THE PRESIDENT shall in accordance with the Rules grant a Lease to the remaining Working Interest Owners. If a Working Interest Owner proceeds to develop the Commercial Discovery at its own cost, it shall own all of the production from such discovery and shall bear all the cost of developing and operating such Commercial Discovery and the other Working Interest Owners shall assign to it all their rights, title, and interest in and to the Petroleum in the Discovery Area in accordance with the Rules, provided always that such assignment shall be and remain contingent upon the Working Interest Owners carrying out such development expeditiously.
Appears in 2 contracts
Sources: Petroleum Concession Agreement, Petroleum Concession Agreement
DISCOVERY AND DEVELOPMENT. 6.1 5.1 In the event of a Discovery of Petroleum in the Contract Area, Operator shall promptly inform the DGPC, and, DGPC in accordance with Rule 59 of the Rules and by further notice in writing within three (3) Months from the date of termination of drilling and testing of the respective Exploration Well inform the DGPC whether or not the Discovery, in the opinion of OperatorContractor, merits Appraisal.
6.2 5.2 If Operator Contractor notifies the DGPC that the Discovery does not merit Appraisal, DGPC shall have the option, on three six (36) Months written notice, to require Operator Contractor to immediately relinquish the Designated Area unless the Operator Contractor has provided valid justification to retain the area covering the Discovery. The Designated Area shall:
(a) not exceed 150 Sections;
(b) not comprise more than the vertical projection to the surface of the geological structure on which the Exploration Discovery Well resulting in the Discovery was drilled; and
(bc) be determined based on geophysical and other technical information obtained from the Discovery.
6.3 5.3 If Operator Contractor notifies DGPC that the Discovery merits Appraisal, Operator Contractor shall submit to the DGPC for approval within six (6) Months from the date of completion of the Exploration Well resulting notice referred to in the DiscoveryArticle 5.1, an Appraisal Programme which highlights the Appraisal area Area and provides for the Appraisal of the Discovery within a period of one (1) Year from the date of approval of such Appraisal Programme, which may consist drilling of an Appraisal Well to the estimated depth of the reservoir discovered in the most efficient and timely mannerDiscovery well.
6.4 5.4 Not later than three six (36) Months from the date on which the Appraisal Programme has been completed, or within such further period as the DGPC may reasonably allow (taking into account the relevant technical and economic conditions), Operator Contractor shall by notice in writing inform the DGPC, whether or not, in the opinion of OperatorContractor, the Discovery is a Commercial Discovery or a Significant Gas Discovery.
6.5 5.5 Where Operator Contractor has not informed the DGPC that the Discovery is not a Commercial Discovery or Significant Gas Discovery, the DGPC may, by notice in writing, require Operator Contractor to immediately relinquish the Designated Area. The Designated Area shall be determined as specified in Article 5.2 unless the Operator Contractor has provided valid justification to retain the area covering the Discovery. The Designated Area shall be determined as specified in Article 6.2.
6.6 In 5.6 Where Contractor has informed the event the Operator considers DGPC that the Discovery is a Commercial Discovery or a Significant Gas Discovery, Operator Contractor will select the Discovery Development Area or Significant Gas Discovery Area, which should as the case may be, in the following manner :
(i) it will not exceed the geological entity covering the Commercial Discovery or a Significant Gas Discovery; and
(ii) the Development Area or the Significant Gas Discovery Area shall be an area of no more than 150 contiguous Sections selected by Contractor, subject to the limitations of the Contract Area, whereby the Sections are connected and have in common at least one side of thirty (30) seconds latitude or longitude and. The Operator will request If Contractor can provide conclusive evidence based on geological, geophysical and other data that 150 Sections are not sufficient to cover the vertical projection to the surface of the discovered reservoirs, then DGPC may at its discretion approve a Development Area covering more than 150 Sections to account for retention the vertical projection to the surface of the discovered reservoirs within the boundaries of the Licence.
5.7 Where Contractor has by written notice informed the DGPC that the Discovery is a Commercial Discovery, Contractor shall, no later than twelve (12) Months from the date of such notice or within such time period as may be allowed by DGPC, present:
(a) a detailed report on each Commercial Discovery as provided for in Article 5.10 to DGPC; and
(b) a Development Plan for the Commercial Discovery for approval by DGPC.
5.8 Upon the approval of each Development Plan, the Government shall subject to the terms of this Agreement and the Rules grant a Lease to GHPL for a period not exceeding twenty-five (25) Years covering the Development Area within three (3) Months of the approval of the Development Plan.
5.9 Contractor shall subject to the terms of this Agreement and the Rules be entitled to the Retention Period of each Significant Gas Discovery Area of a Significant Gas Discovery for a maximum period as of up to five (05) Years following the Date of a Significant Gas Discovery. A further period of up to five (05) years will be available subject to justification acceptable to the Authority. No such retention period shall be allowed for an oil discovery. The application for the Retention Period in respect of the Significant Gas Discovery Area shall be submitted for approval of DGPC in accordance with the Rules together with the justificationRules. If the Operator Contractor does not declare a Significant Gas Discovery as a Commercial Discovery during the allowed retention periodRetention Period, the Operator Contractor shall relinquish the Significant significant Gas Discovery Area and the Licence shall terminate automatically upon the termination of the allowed retention periodRetention Period. If Operator Contractor declares a Commercial Discovery during the allowed retention periodRetention Period, Operator Contractor will select the Discovery Development Area out of the Significant Gas Discovery Area, and the provisions of the Agreement Articles 5.6, 5.7 and the Rules for grant of approval of Development Plan and the grant of Lease 5.8 shall apply mutatis mutandisapply.
6.7 Where the Operator has by written notice notified the DGPC that the Discovery is a Commercial Discovery such notice shall accompany, a detailed report on each Commercial Discovery as provided for in the Rules for approval by DGPC. Within a period no later than six (6) Months from the Date of Commercial Discovery or within such time period as may be allowed by DGPC, the Operator will submit an application for grant of Lease together with Development Plan for the each Commercial Discovery for approval by DGPC.
6.8 When the Government has approved the Development Plan, pursuant to Rule 33 of the Rules, it shall grant to the Working Interest Owners a Lease covering the Discovery Area in accordance with the Rules promptly provided the Working Interest Owners have furnished all requisite information to DGPC. The said Lease shall, on the basis of the available seismic and well data, comprise the Discovery Area to enable each Commercial Discovery to be developed and produced efficiently. The duration of the Lease shall not exceed the time limit as indicated in the Rules.
6.9 5.10 The report on each Commercial Discovery referred to in Article 5.7 shall cover all the relevant factors as required under the Rules including, but not be limited to:
(a) the chemical composition, physical properties and quality of Petroleum discovered;
(b) the thickness and extent of the production strata;
(c) petrophysical properties of the reservoirs;
(d) the productivity indices indexes for ▇▇▇▇▇ tested at various rates of flow;
(e) permeability and porosity of the reservoirs;
(f) the estimated Production capacity of the reservoirs; and
(g) all relevant economic and commercial information which is necessary for the determination of a Discovery as a Commercial Discovery.
6.10 5.11 Each Development Plan referred to in Article 5.7 shall contain detailed proposals by Operator Contractor for the construction, and establishment of all facilities and services for and incidental to the recovery, storage and transportation of Petroleum from the Contract Area, as required under the Rules including but not limited to:
(a) description of the nature and characterization of reserves, data, statistics, interpretation and conclusion of all aspects of the geology, reservoir evaluation, Petroleum engineering factors, reservoir models, estimates of reserves in place, possible Production estimatesestimates of quantities of Petroleum produced, nature and ratio of Petroleum fluids and analysis of produceable Petroleum;
(b) proposals for the Development and Production of the Commercial Discovery including possible alternatives, work programmes and budgets and proposals relating to the disposition of Associated Gas. Operator Contractor should make specific recommendations as to the particular Development proposal that it would prefer. This should include information regarding projections of the economics and profitability of the Joint Petroleum Operations related to such Development proposals.as well as indication of the proposed financing arrangements and terms of funding the Development;
(c) proposals relating to the spacing, drilling and completion of ▇▇▇▇▇, the Production and storage installations, and transport and delivery facilities required for the Production, storage and transport of Petroleum. Such proposals will include, but not be limited to:
(i) the estimated number, size and Production capacity of Production facilities/platforms, if any;
(ii) estimated number of Production ▇▇▇▇▇;
(iii) particulars of Production equipment and storage facilities;
(iv) particulars of feasible alternatives for the transportation of Petroleum including pipelines;
(v) particulars of equipment required for the Joint Petroleum Operations;
(d) estimate of the rates of Production to be established and projection of the possible sustained rate of Production in accordance with Good Oilfield Practices good international Petroleum industry practices under proposed Development proposal and/or alternative Development proposals;
(e) cost estimates under such Development proposal proposed and alternative Development proposals, if any;
(f) proposals related to the establishment of processing facilities (if any);
(g) safety measures to be adopted in the course of the Joint Petroleum Operations, including a contingency plan and measures to deal with emergencies;
(h) anticipated adverse impact on environment and measures proposed to be taken for prevention thereof and for general protection of the environment;
(i) a description of the organizational set up of Contractor/Operator in Pakistan;
(j) an estimate of the time required to complete each phase of the proposed Development;
(k) a description of the measures to be taken regarding the employment and training of Pakistani personnel in accordance with the Rulespersonnel;
(l) a description of the abandonment plan, to be implemented whenever a piece of equipment or equipment, facility or installation a platform needs to be abandoned prior to or on termination of this Agreement;
(m) a map or maps of the outline of the discovered reservoir(s) together with technical or other back up justification; and
(n) a plan for utilization of local goods and services.
6.11 5.12 Each Development Plan requires approval of the DGPC in accordance with the Rules. Such approval will not be unreasonably withheld or delayed. The DGPC may only disapprove of the Development Plan, where such plan is not materially in accordance with the terms and conditions of this Agreement and the Rules.
5.13 After approval of a Development Plan, Operator Contractor shall carry out the Joint Petroleum Operations substantially in accordance with this plan, subject to such modifications, modifications which may be necessary from time to time, time which are approved by the DGPC in accordance with the Rules.
6.12 5.14 Contractor shall with the approval of DGPC amend the Development Plan as required or where a new Commercial Discovery is made as a result of further Exploration in the Development Area.
5.15 Not less than ninety (90) Days prior to the beginning of each Calendar Year following the commencement of regular shipments of Crude Oil, Condensate, LPG or Natural Gas, Operator Contractor shall prepare and furnish to DGPC and GHPL a forecast statement, and the basis thereof, setting forth by quarters the total quantity of Crude Oil, Condensate, LPG and Natural Gas (by quality, grade and gravity) that Operator Contractor estimates can be produced, saved and transported hereunder during such Calendar Year.
6.13 Operator 5.16 Contractor shall, with respect to each Lease:
(a) annually update and submit to DGPC maps required under Article 6.10(m5.11(m) on the basis of the then most recent well, geological, and geophysical information indicating on such maps which reservoirs are in Commercial Production including such parts of reservoirs which are required for water injection;
(b) within ten (10) Years of the commencement of Commercial Production from each Commercial Discovery, relinquish such part of from the Development Area all Sections which does do not cover wholly or partially the vertical projections to the surface of reservoirs from which Commercial Production is being obtained in accordance with approved Development Plan or which are not required for water injection as per approved Development Plan; and
(c) provide DGPC with a map with description of the relinquished areas Sections and map referred to in Article 6.13(a5.16(a) and (b) upon such relinquishment.
6.14 5.17 DGPC shall, within ninety (90) Days of receipt of the maps specified in Article 6.13(c) inform Operator in writing of:
(a) DGPC approval of the relinquished areas, or
(b) the need for Operator to relinquish further areas which are not vertical projections to the surface of reservoirs from which Commercial Production is being obtained, or which are not required for water injection. Operator shall, within sixty (60) Days of DGPC notification under Article 6.14(b) relinquish such area unless Operator disputes such notification in writing to DGPC in which case dispute resolution proceedings may be initiated by Operator through a sole expert unless mutually agreed otherwise, the cost of which will be charged to Joint Account.
6.15 The Operator shall have an organisation in Pakistan with sufficient competence and capacity to conduct the Joint Operations as required under the Rules.
6.16 If following the Discovery of Petroleum, a Working Interest Owner considers the Discovery to be a Commercial Discovery, it may give notice in writing to the other Working Interest Owners, stating in the said notice all the reasons for the evidence supporting its opinion and inviting the other Working Interest Owners to participate in the preparation of a Development Plan. If within ninety (90) Days of receipt of the notice, other Working Interest Owners inform the Operator, that they agree to participate in the Development of the Commercial Discovery, the Operating Committee shall define the Discovery Area and instruct the Operator to proceed with the preparation of the Development Plan. If any Working Interest Owner elects not to join in the Development of the Commercial Discovery, it shall assign its Working Interest in the Commercial Discovery on a pro rata basis to the remaining Working Interest Owners as may be mutually agreed. The remaining Working Interest Owners have the right to define the Discovery Area and develop the Commercial Discovery at their own cost and THE PRESIDENT shall in accordance with the Rules grant a Lease to the remaining Working Interest Owners. If a Working Interest Owner proceeds to develop the Commercial Discovery at its own cost, it shall own all of the production from such discovery and shall bear all the cost of developing and operating such Commercial Discovery and the other Working Interest Owners shall assign to it all their rights, title, and interest in and to the Petroleum in the Discovery Area in accordance with the Rules, provided always that such assignment shall be and remain contingent upon the Working Interest Owners carrying out such development expeditiously.5.16
Appears in 2 contracts
Sources: Offshore Production Sharing Agreement, Offshore Production Sharing Agreement
DISCOVERY AND DEVELOPMENT. 6.1 In the event of a Discovery of Petroleum in the Area, Operator shall promptly inform the DGPC, and, by further notice in writing within three (3) Months from the date of termination of drilling and testing of the respective Exploration Well inform the DGPC whether or not the Discovery, in the opinion of Operator, merits Appraisal.
6.2 If Operator notifies the DGPC that the Discovery does not merit Appraisal, DGPC shall have the option, on three (3) Months written notice, to require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall:
(a) not comprise more than the vertical projection to the surface of the geological structure on which the Exploration Well resulting If Crude Oil is discovered in the Discovery was drilled; and
(b) be determined based on geophysical and other technical information obtained from the Discovery.
6.3 If Operator notifies DGPC that the Discovery merits AppraisalContract Area, Operator shall submit to the DGPC for approval Contractor will, within six (6) Months from the date of completion of the Exploration Well resulting in the Discovery, an Appraisal Programme which highlights the Appraisal area and provides for the Appraisal of the Discovery in the most efficient and timely manner.
6.4 Not later than three (3) Months thirty days from the date on which evaluated test results relating to the Appraisal Programme has been completeddiscovery are submitted to TPDC, or within such further period as the DGPC may reasonably allow (taking into account the relevant technical and economic conditions), Operator shall inform TPDC by notice in writing inform the DGPC, whether or not, not the discovery is in the opinion of Operator, the Discovery is a Commercial Discovery or a Significant Gas DiscoveryContractor of potential commercial interest.
6.5 Where Operator has not informed the DGPC that the Discovery is a Commercial Discovery or Significant Gas Discovery, the DGPC may, by notice in writing, require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall be determined as specified in Article 6.2.
6.6 In the event the Operator considers that the Discovery is a Commercial Discovery or a Significant Gas Discovery, Operator will select the Discovery Area or Significant Gas Discovery Area, which should not exceed the geological entity covering the Commercial Discovery or a Significant Gas Discovery subject to the limitations of the Area. The Operator will request DGPC for retention for Significant Gas Discovery for period as allowed in accordance with the Rules together with the justification. If the Operator does not declare a Significant Gas Discovery as a Commercial Discovery during the allowed retention period, the Operator shall relinquish the Significant Gas Discovery Area and the Licence shall terminate automatically upon the termination of the allowed retention period. If Operator declares a Commercial Discovery during the allowed retention period, Operator will select the Discovery Area out of the Significant Gas Discovery Area, and the provisions of the Agreement and the Rules for grant of approval of Development Plan and the grant of Lease shall apply mutatis mutandis.
6.7 Where the Operator has by written notice notified the DGPC that the Discovery is a Commercial Discovery such notice shall accompany, a detailed report on each Commercial Discovery as provided for in the Rules for approval by DGPC. Within a period no later than six (6) Months from the Date of Commercial Discovery or within such time period as may be allowed by DGPC, the Operator will submit an application for grant of Lease together with Development Plan for the each Commercial Discovery for approval by DGPC.
6.8 When the Government has approved the Development Plan, pursuant to Rule 33 of the Rules, it shall grant to the Working Interest Owners a Lease covering the Discovery Area in accordance with the Rules promptly provided the Working Interest Owners have furnished all requisite information to DGPC. The said Lease shall, on the basis of the available seismic and well data, comprise the Discovery Area to enable each Commercial Discovery to be developed and produced efficiently. The duration of the Lease shall not exceed the time limit as indicated in the Rules.
6.9 The report on each Commercial Discovery shall cover all the relevant factors as required under the Rules including, but not be limited to:
(a) the chemical composition, physical properties and quality of Petroleum discovered;
(b) If Contractor informs TPDC that, in its opinion, utilizing good oilfield practice, the thickness discovery is of eventual commercial interest and extent TPDC agrees with such determination, then the Minister shall be advised to agree to allow the Contractor to retain the Discovery Block for the duration of the production strata;
(c) petrophysical properties of the reservoirs;
(d) the productivity indices for ▇▇▇▇▇ tested at various rates of flow;
(e) permeability Exploration Licence and porosity of the reservoirs;
(f) the estimated Production capacity of the reservoirs; and
(g) all relevant economic and commercial information which is necessary for the determination of a Discovery as a Commercial Discovery.
6.10 Each Development Plan shall contain detailed proposals by Operator for the constructionany renewal thereof, and establishment of all facilities and services for and incidental to the recovery, storage and transportation of Petroleum from the Area, as required under the Rules including but not limited to:
(a) description of the nature and characterization of reserves, data, statistics, interpretation and conclusion of all aspects of the geology, reservoir evaluation, Petroleum engineering factors, reservoir models, estimates of reserves in place, possible Production estimates, nature and ratio of Petroleum fluids and analysis of produceable Petroleum;
(b) proposals for the Development and Production of the Commercial Discovery including possible alternatives, work programmes and budgets and proposals relating to the disposition of Associated Gas. Operator should make specific recommendations as to the particular Development proposal that it would prefer. This should include information regarding projections of the economics and profitability of the Joint Operations related to such Development proposals.
(c) proposals relating to the spacing, drilling and completion of ▇▇▇▇▇, the Production and storage installations, and transport and delivery facilities required for the Production, storage and transport of Petroleum. Such proposals will include, but not be limited toprovided that:
(i) the estimated numberdetermination of eventual and/or potential commerciality shall be based on relevant economic criteria, size and Production capacity of Production facilities/platformsincluding but not limited to, if anypotential crude oil production rates, crude oil prices, development costs, operating costs as well as any other relevant criteria, as established by the Contractor;
(ii) estimated number Contractor shall reassess the commerciality of Production ▇▇▇▇▇Discovery every two (2) years, based on the same economic criteria as set out in Article 8(b)(i) above; in case of further discoveries that could be tied and developed together in order to make economies of scale; the Contractor shall inform TPDC accordingly;
(iii) particulars Contractor shall within 30 days after the re-assessment inform TPDC whether it determines the Discovery still to be of Production equipment and storage facilitieseventual commercial interest. TPDC shall inform the Minister the re- assessment study results;
(iv) particulars if the results of feasible alternatives for Contractor’s re-assessment determine that the transportation Discovery has become of Petroleum including pipelinespotential commercial interest, the provisions of Articles 9(f) and 8(g) shall apply;
(v) particulars if the results of equipment required Contractor’s assessment in the first instance in (b) above or re-assessment determine that the discovery is or remains only of eventual commercial interest, but TPDC considers that it is of present commercial interest, at the election of either Party by notice to the other, the dispute shall be referred for the Joint Operations;
(d) estimate of the rates of Production determination by a sole expert to be established and projection appointed by agreement between the Parties. If the Parties fail to appoint the expert within thirty (30) days after receipt of such notice, the possible sustained rate Parties may apply to British Institute of Production Petroleum, for appointment of an expert in accordance with Good Oilfield Practices under proposed Development proposal and/or alternative Development proposals;
(e) cost estimates under such Development proposal and alternative Development proposalsits Rules. In each instance, if any;
(f) proposals related the sole expert to whom the matter in dispute is to be referred shall be an authority in the discipline or disciplines relating to the establishment matter in dispute. The expert shall make his determination within sixty (60) days of processing facilities (if any);
(g) safety measures to be adopted in his appointment, or such earlier date that the course of the Joint OperationsParties may agree, including a contingency plan and measures to deal with emergencies;
(h) anticipated adverse impact on environment and measures proposed to be taken for prevention thereof and for general protection of the environment;
(i) a description of the organizational set up of Operator in Pakistan;
(j) an estimate of the time required to complete each phase of the proposed Development;
(k) a description of the measures to be taken regarding the employment and training of Pakistani personnel in accordance with the Rules;
(l) a description of the abandonment plan, to be implemented whenever a piece of equipment or facility or installation needs to be abandoned prior to or on termination of this Agreement;
(m) a map or maps of the outline of the discovered reservoir(s) together with technical or other back up justification; and
(n) a plan for utilization of local goods provisions contained herein and services.
6.11 After approval of a Development Plan, Operator shall carry out the Joint Operations substantially in accordance with this plan, subject to such modifications, which may be necessary from time to time, which are approved by the DGPC in accordance with the Rules.
6.12 Not less than ninety (90) Days prior to the beginning of each Calendar Year following the commencement of regular shipments of Crude Oil, Condensate, LPG or Natural Gas, Operator shall prepare and furnish to DGPC a forecast statement, and the basis thereof, setting forth by quarters the total quantity of Crude Oil, Condensate, LPG and Natural Gas (by quality, grade and gravity) that Operator estimates can be produced, saved and transported hereunder during such Calendar Year.
6.13 Operator shall, with respect to each Lease:
(a) annually update and submit to DGPC maps required under Article 6.10(m) on the basis of the then most recent wellterms of reference agreed by the Parties to the dispute; provided that, geologicalif such Parties are not able to agree on such terms of reference, the expert shall decide such terms. Representatives of the Parties shall have the right to consult with the expert and furnish him with data and information, provided the expert may impose reasonable limitations on this right. The expert shall be free to evaluate the extent to which any data, information or other evidence is substantiated or pertinent. The expert’s fees and expenses, and geophysical information indicating on such maps which reservoirs are in Commercial Production including such parts the costs associated with an appointment, if any, made by the above mentioned chosen institution, shall be borne equally by the Parties to the dispute. The determination of reservoirs which are required for water injectionthe expert shall be final and binding;
(bvi) within ten if the results of Contractor’s re-assessment determine that the Discovery is no longer of potential commercial interest, the provisions of Article 8 (10c) Years of the commencement of Commercial Production from each Commercial Discovery, relinquish such part of Development Area which does not cover wholly or partially the vertical projections to the surface of reservoirs from which Commercial Production is being obtained or which are not required for water injection as per approved Development Plan; andbelow shall apply.
(c) provide DGPC with a map with description If Contractor informs TPDC that in its opinion the discovery is not of potential commercial interest then TPDC will have the option to require the Contractor to surrender its rights and be relieved of its obligations in respect of the relinquished areas and map referred to Block or Blocks comprising the geological feature (as outlined by the relevant seismic data) in Article 6.13(a) and (b) upon such relinquishmentwhich the discovery is located.
6.14 DGPC shall, (d) The option in sub-articles (c) of this Article will lapse if not exercised by the TPDC within ninety (90) Days of receipt of twelve months from the maps specified in Article 6.13(c) inform Operator in writing of:
date on which notice was given to TPDC by Contractor pursuant to sub-article (a) DGPC approval of this Article and during the said period of twelve months, and any subsequent period if the option lapses without being exercised, the Minister will in respect of the relinquished areas, or
(b) discovery to which that notice relates exempt TPDC from the need for Operator to relinquish further areas which are not vertical projections to the surface requirements of reservoirs from which Commercial Production is being obtained, or which are not required for water injection. Operator shall, within sixty (60) Days of DGPC notification under Article 6.14(b) relinquish such area unless Operator disputes such notification in writing to DGPC in which case dispute resolution proceedings may be initiated by Operator through a sole expert unless mutually agreed otherwise, the cost of which will be charged to Joint Account.
6.15 The Operator shall have an organisation in Pakistan with sufficient competence and capacity to conduct the Joint Operations as required under the Rules.
6.16 If following the Discovery of Petroleum, a Working Interest Owner considers the Discovery to be a Commercial Discovery, it may give notice in writing to the other Working Interest Owners, stating in the said notice all the reasons for the evidence supporting its opinion and inviting the other Working Interest Owners to participate in the preparation of a Development Plan. If within ninety (90) Days of receipt of the notice, other Working Interest Owners inform the Operator, that they agree to participate in the Development of the Commercial Discovery, the Operating Committee shall define the Discovery Area and instruct the Operator to proceed with the preparation of the Development Plan. If any Working Interest Owner elects not to join in the Development of the Commercial Discovery, it shall assign its Working Interest in the Commercial Discovery on a pro rata basis to the remaining Working Interest Owners as may be mutually agreed. The remaining Working Interest Owners have the right to define the Discovery Area and develop the Commercial Discovery at their own cost and THE PRESIDENT shall in accordance with the Rules grant a Lease to the remaining Working Interest Owners. If a Working Interest Owner proceeds to develop the Commercial Discovery at its own cost, it shall own all of the production from such discovery and shall bear all the cost of developing and operating such Commercial Discovery and the other Working Interest Owners shall assign to it all their rights, title, and interest in and to the Petroleum in the Discovery Area in accordance with the Rules, provided always that such assignment shall be and remain contingent upon the Working Interest Owners carrying out such development expeditiously.Section 32
Appears in 2 contracts
Sources: Production Sharing Agreement, Production Sharing Agreement
DISCOVERY AND DEVELOPMENT. 6.1 In the event of a Discovery of Petroleum in the Area, Operator shall promptly inform notify the DGPC, DGPC in accordance with the Rules and, by further notice in writing within three (3) Months from the date of termination of drilling and testing of the respective Exploration Well Well, inform the DGPC whether or not the Discovery, in the opinion of Operator, merits Appraisal.
6.2 If Operator notifies the DGPC that the Discovery does not merit Appraisal, DGPC shall have the option, on three (3) Months written notice, to require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall:
(a) not comprise more than the vertical projection to the surface of the geological structure on which the Exploration Well resulting in the Discovery was drilled; and
(b) be determined based on geophysical and other technical information obtained from the Discovery.
6.3 If Operator notifies DGPC that the Discovery merits Appraisal, Operator shall submit to the DGPC for approval within six (6) Months from the date of completion of the Exploration Well resulting in the Discovery, an Appraisal Programme which highlights the Appraisal area and provides for the Appraisal of the Discovery in the most efficient and timely manner▇▇▇▇▇▇.▇▇ case, the appraisal program is for a period of not more than one year, no approval of DGPC will be required.
6.4 Not later than three (3) Months from the date on which the Appraisal Programme has been completed, or within such further period as the DGPC may reasonably allow (taking into account the relevant technical and economic conditions), Operator shall by notice in writing inform the DGPC, whether or not, in the opinion of Operator, the Discovery is a Commercial Discovery or or, if applicable pursuant to the Rules, a Significant Gas Discovery.
6.5 Where Operator has not informed the DGPC that the Discovery is a Commercial Discovery or Significant Gas Discovery, the DGPC may, by notice in writing, require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall be determined as specified in Article 6.2.
6.6 In the event the Operator considers that the Discovery is a Commercial Discovery or a Significant Gas Discovery, Operator will select the Discovery Area or Significant Gas Discovery Area, which should not exceed the geological entity covering the Commercial Discovery or a Significant Gas Discovery subject to the limitations of the Area. The Operator will request DGPC for retention for of Significant Gas Discovery for period as allowed in accordance with the Rules together with the justification. If the Operator does not declare a Significant Gas Discovery as a Commercial Discovery during the allowed retention period, the Operator shall relinquish the Significant Gas Discovery Area and the Licence shall terminate automatically upon the termination of the allowed retention period. If Operator declares a Commercial Discovery during the allowed retention period, Operator will select the Discovery Area out of the Significant Gas Discovery Area, and the provisions of the Agreement and the Rules for grant of approval of Development Plan and the grant of Lease shall apply mutatis mutandis.
6.7 Where the Operator has by written notice notified the DGPC that the Discovery is a Commercial Discovery such notice shall accompany, accompany a detailed report on each Commercial Discovery as provided for in the Rules for approval by DGPCRules. Within a period no not later than six (6) Months from the Date of Commercial Discovery or within such time period as may be allowed by DGPC, the Operator will submit an application for grant of Lease together with Development Plan for the each Commercial Discovery for approval by DGPC.
6.8 When . Notwithstanding the Government has approved the Development Planabove, pursuant to Rule 33 submission of the Rules, it notice for declaration of commercial discovery shall grant not result in accruing any right or privilege to the Working Interest Owners a Lease covering the Discovery Area in accordance with the Rules promptly provided the Working Interest Owners have furnished all requisite information respect to DGPC. The said Lease shall, on the basis pricing of the available seismic Petroleum and well data, comprise the Discovery Area to enable each Commercial Discovery to be developed and produced efficiently. The duration of the Lease shall not exceed the time limit be construed as indicated acceptance of any assumptions used in the Rulespreparation of economic/financial viability for developing a discovery/field.
6.9 6.8 The report on each Commercial Discovery shall cover all the relevant factors as required under the Rules including, but not be limited to:
(a) the chemical composition, physical properties and quality of Petroleum discovered;
(b) the thickness and extent of the production strata;
(c) petrophysical properties of the reservoirs;
(d) the productivity indices for ▇▇▇▇▇ tested at various rates of flow;
(e) permeability and porosity of the reservoirs;
(f) the estimated Production capacity of the reservoirs; and
(g) all relevant economic and commercial information which is necessary for the determination of a Discovery as a Commercial Discovery.
6.10 Each Development Plan shall contain detailed proposals by Operator for the construction, and establishment of all facilities and services for and incidental to the recovery, storage and transportation of Petroleum from the Area, as required under the Rules including but not limited to:
(a) description of the nature and characterization of reserves, data, statistics, interpretation and conclusion of all aspects of the geology, reservoir evaluation, Petroleum engineering factors, reservoir models, estimates of reserves in place, possible Production estimates, nature and ratio of Petroleum fluids and analysis of produceable Petroleum;
(b) proposals for the Development and Production of the Commercial Discovery including possible alternatives, work programmes and budgets and proposals relating to the disposition of Associated Gas. Operator should make specific recommendations as to the particular Development proposal that it would prefer. This should include information regarding projections of the economics and profitability of the Joint Operations related to such Development proposals.
(c) proposals relating to the spacing, drilling and completion of ▇▇▇▇▇, the Production and storage installations, and transport and delivery facilities required for the Production, storage and transport of Petroleum. Such proposals will include, but not be limited to:
(i) the estimated number, size and Production capacity of Production facilities/platforms, if any;
(ii) estimated number of Production ▇▇▇▇▇;
(iii) particulars of Production equipment and storage facilities;
(iv) particulars of feasible alternatives for the transportation of Petroleum including pipelines;
(v) particulars of equipment required for the Joint Operations;
(d) estimate of the rates of Production to be established and projection of the possible sustained rate of Production in accordance with Good Oilfield Practices under proposed Development proposal and/or alternative Development proposals;
(e) cost estimates under such Development proposal and alternative Development proposals, if any;
(f) proposals related to the establishment of processing facilities (if any);
(g) safety measures to be adopted in the course of the Joint Operations, including a contingency plan and measures to deal with emergencies;
(h) anticipated adverse impact on environment and measures proposed to be taken for prevention thereof and for general protection of the environment;
(i) a description of the organizational set up of Operator in Pakistan;
(j) an estimate of the time required to complete each phase of the proposed Development;
(k) a description of the measures to be taken regarding the employment and training of Pakistani personnel in accordance with the Rules;
(l) a description of the abandonment plan, to be implemented whenever a piece of equipment or facility or installation needs to be abandoned prior to or on termination of this Agreement;
(m) a map or maps of the outline of the discovered reservoir(s) together with technical or other back up justification; and
(n) a plan for utilization of local goods and services.
6.11 After approval of a Development Plan, Operator shall carry out the Joint Operations substantially in accordance with this plan, subject to such modifications, which may be necessary from time to time, which are approved by the DGPC in accordance with the Rules.
6.12 Not less than ninety (90) Days prior to the beginning of each Calendar Year following the commencement of regular shipments of Crude Oil, Condensate, LPG or Natural Gas, Operator shall prepare and furnish to DGPC a forecast statement, and the basis thereof, setting forth by quarters the total quantity of Crude Oil, Condensate, LPG and Natural Gas (by quality, grade and gravity) that Operator estimates can be produced, saved and transported hereunder during such Calendar Year.
6.13 Operator shall, with respect to each Lease:
(a) annually update and submit to DGPC maps required under Article 6.10(m) on the basis of the then most recent well, geological, and geophysical information indicating on such maps which reservoirs are in Commercial Production including such parts of reservoirs which are required for water injection;
(b) within ten (10) Years of the commencement of Commercial Production from each Commercial Discovery, relinquish such part of Development Area which does not cover wholly or partially the vertical projections to the surface of reservoirs from which Commercial Production is being obtained or which are not required for water injection as per approved Development Plan; and
(c) provide DGPC with a map with description of the relinquished areas and map referred to in Article 6.13(a) and (b) upon such relinquishment.
6.14 DGPC shall, within ninety (90) Days of receipt of the maps specified in Article 6.13(c) inform Operator in writing of:
(a) DGPC approval of the relinquished areas, or
(b) the need for Operator to relinquish further areas which are not vertical projections to the surface of reservoirs from which Commercial Production is being obtained, or which are not required for water injection. Operator shall, within sixty (60) Days of DGPC notification under Article 6.14(b) relinquish such area unless Operator disputes such notification in writing to DGPC in which case dispute resolution proceedings may be initiated by Operator through a sole expert unless mutually agreed otherwise, the cost of which will be charged to Joint Account.
6.15 The Operator shall have an organisation in Pakistan with sufficient competence and capacity to conduct the Joint Operations as required under the Rules.
6.16 If following the Discovery of Petroleum, a Working Interest Owner considers the Discovery to be a Commercial Discovery, it may give notice in writing to the other Working Interest Owners, stating in the said notice all the reasons for the evidence supporting its opinion and inviting the other Working Interest Owners to participate in the preparation of a Development Plan. If within ninety (90) Days of receipt of the notice, other Working Interest Owners inform the Operator, that they agree to participate in the Development of the Commercial Discovery, the Operating Committee shall define the Discovery Area and instruct the Operator to proceed with the preparation of the Development Plan. If any Working Interest Owner elects not to join in the Development of the Commercial Discovery, it shall assign its Working Interest in the Commercial Discovery on a pro rata basis to the remaining Working Interest Owners as may be mutually agreed. The remaining Working Interest Owners have the right to define the Discovery Area and develop the Commercial Discovery at their own cost and THE PRESIDENT shall in accordance with the Rules grant a Lease to the remaining Working Interest Owners. If a Working Interest Owner proceeds to develop the Commercial Discovery at its own cost, it shall own all of the production from such discovery and shall bear all the cost of developing and operating such Commercial Discovery and the other Working Interest Owners shall assign to it all their rights, title, and interest in and to the Petroleum in the Discovery Area in accordance with the Rules, provided always that such assignment shall be and remain contingent upon the Working Interest Owners carrying out such development expeditiously.
Appears in 2 contracts
Sources: Petroleum Concession Agreement, Petroleum Concession Agreement
DISCOVERY AND DEVELOPMENT. 6.1 5.1 In the event of a Discovery of Petroleum in the Contract Area, Operator Contractor shall promptly inform the DGPC, and, by further notice in writing within three (3) Months from the date of termination of drilling and testing of the respective Exploration Well inform the DGPC whether or not the Discovery, in the opinion of OperatorContractor, merits Appraisal.
6.2 5.2 If Operator Contractor notifies the DGPC that the Discovery does not merit Appraisal, DGPC shall have the option, on three (3) Months written notice, to require Operator Contractor to immediately relinquish the Designated Area unless the Operator Contractor has provided valid justification to retain the area covering the Discovery. The Designated Area shall:
(a) not exceed 150 Sections;
(b) not comprise more than the vertical projection to the surface of the geological structure on which the Exploration Discovery Well resulting in the Discovery was drilled; and
(bc) be determined based on geophysical and other technical information obtained from the Discovery.
6.3 5.3 If Operator Contractor notifies DGPC that the Discovery merits Appraisal, Operator Contractor shall submit to the DGPC for approval within six (6) Months from the date of completion of the Exploration Well resulting in the Discovery, an Appraisal Programme which highlights the Appraisal area Area and provides for the Appraisal of the Discovery within a period of two (2) Years from the date of approval of such Appraisal Programme, consisting of the drilling of a minimum of one Appraisal Well to the estimated depth of the reservoir discovered in the most efficient and timely mannerDiscovery well.
6.4 5.4 Not later than three (3) Months from the date on which the Appraisal Programme has been completed, or within such further period as the DGPC may reasonably allow (taking into account the relevant technical and economic conditions), Operator Contractor shall by notice in writing inform the DGPC, whether or not, in the opinion of OperatorContractor, the Discovery is a Commercial Discovery or a Significant Gas Discovery.
6.5 5.5 Where Operator Contractor has not informed the DGPC that the Discovery is not a Commercial Discovery or Significant Gas Discovery, the DGPC may, by notice in writing, require Operator Contractor to immediately relinquish the Designated Area. The Designated Area shall be determined as specified in Article 5.2 unless the Operator Contractor has provided valid justification to retain the area covering the Discovery. The Designated Area shall be determined as specified in Article 6.2.
6.6 In 5.6 Where Contractor has informed the event the Operator considers DGPC that the Discovery is a Commercial Discovery or a Significant Gas Discovery, Operator Contractor will select the Discovery Development Area or Significant Gas Discovery Area, which should as the case may be, in the following manner
(i) it will not exceed the geological entity covering the Commercial Discovery or a Significant Gas Discovery and
(ii) the Development Area or the Significant Gas Discovery Area shall be an area of no more than 150 contiguous Sections selected by Contractor, subject to the limitations of the Area. The Operator will request DGPC for retention for Significant Gas Discovery for period as allowed in accordance with the Rules together with the justification. If the Operator does not declare a Significant Gas Discovery as a Commercial Discovery during the allowed retention period, the Operator shall relinquish the Significant Gas Discovery Area and the Licence shall terminate automatically upon the termination of the allowed retention period. If Operator declares a Commercial Discovery during the allowed retention period, Operator will select the Discovery Area out of the Significant Gas Discovery Contract Area, whereby the Sections are connected and the provisions have in common at least one side of the Agreement and the Rules for grant of approval of Development Plan and the grant of Lease shall apply mutatis mutandis.
6.7 Where the Operator has by written notice notified the DGPC that the Discovery is a Commercial Discovery such notice shall accompany, a detailed report on each Commercial Discovery as provided for in the Rules for approval by DGPC. Within a period no later than six (6) Months from the Date of Commercial Discovery or within such time period as may be allowed by DGPC, the Operator will submit an application for grant of Lease together with Development Plan for the each Commercial Discovery for approval by DGPC.
6.8 When the Government has approved the Development Plan, pursuant to Rule 33 of the Rules, it shall grant to the Working Interest Owners a Lease covering the Discovery Area in accordance with the Rules promptly provided the Working Interest Owners have furnished all requisite information to DGPC. The said Lease shall, on the basis of the available seismic and well data, comprise the Discovery Area to enable each Commercial Discovery to be developed and produced efficiently. The duration of the Lease shall not exceed the time limit as indicated in the Rules.
6.9 The report on each Commercial Discovery shall cover all the relevant factors as required under the Rules including, but not be limited to:
(a) the chemical composition, physical properties and quality of Petroleum discovered;
(b) the thickness and extent of the production strata;
(c) petrophysical properties of the reservoirs;
(d) the productivity indices for ▇▇▇▇▇ tested at various rates of flow;
(e) permeability and porosity of the reservoirs;
(f) the estimated Production capacity of the reservoirs; and
(g) all relevant economic and commercial information which is necessary for the determination of a Discovery as a Commercial Discovery.
6.10 Each Development Plan shall contain detailed proposals by Operator for the construction, and establishment of all facilities and services for and incidental to the recovery, storage and transportation of Petroleum from the Area, as required under the Rules including but not limited to:
(a) description of the nature and characterization of reserves, data, statistics, interpretation and conclusion of all aspects of the geology, reservoir evaluation, Petroleum engineering factors, reservoir models, estimates of reserves in place, possible Production estimates, nature and ratio of Petroleum fluids and analysis of produceable Petroleum;
(b) proposals for the Development and Production of the Commercial Discovery including possible alternatives, work programmes and budgets and proposals relating to the disposition of Associated Gas. Operator should make specific recommendations as to the particular Development proposal that it would prefer. This should include information regarding projections of the economics and profitability of the Joint Operations related to such Development proposals.
(c) proposals relating to the spacing, drilling and completion of ▇▇▇▇▇, the Production and storage installations, and transport and delivery facilities required for the Production, storage and transport of Petroleum. Such proposals will include, but not be limited to:
(i) the estimated number, size and Production capacity of Production facilities/platforms, if any;
(ii) estimated number of Production ▇▇▇▇▇;
(iii) particulars of Production equipment and storage facilities;
(iv) particulars of feasible alternatives for the transportation of Petroleum including pipelines;
(v) particulars of equipment required for the Joint Operations;
(d) estimate of the rates of Production to be established and projection of the possible sustained rate of Production in accordance with Good Oilfield Practices under proposed Development proposal and/or alternative Development proposals;
(e) cost estimates under such Development proposal and alternative Development proposals, if any;
(f) proposals related to the establishment of processing facilities (if any);
(g) safety measures to be adopted in the course of the Joint Operations, including a contingency plan and measures to deal with emergencies;
(h) anticipated adverse impact on environment and measures proposed to be taken for prevention thereof and for general protection of the environment;
(i) a description of the organizational set up of Operator in Pakistan;
(j) an estimate of the time required to complete each phase of the proposed Development;
(k) a description of the measures to be taken regarding the employment and training of Pakistani personnel in accordance with the Rules;
(l) a description of the abandonment plan, to be implemented whenever a piece of equipment or facility or installation needs to be abandoned prior to or on termination of this Agreement;
(m) a map or maps of the outline of the discovered reservoir(s) together with technical or other back up justification; and
(n) a plan for utilization of local goods and services.
6.11 After approval of a Development Plan, Operator shall carry out the Joint Operations substantially in accordance with this plan, subject to such modifications, which may be necessary from time to time, which are approved by the DGPC in accordance with the Rules.
6.12 Not less than ninety (90) Days prior to the beginning of each Calendar Year following the commencement of regular shipments of Crude Oil, Condensate, LPG or Natural Gas, Operator shall prepare and furnish to DGPC a forecast statement, and the basis thereof, setting forth by quarters the total quantity of Crude Oil, Condensate, LPG and Natural Gas (by quality, grade and gravity) that Operator estimates can be produced, saved and transported hereunder during such Calendar Year.
6.13 Operator shall, with respect to each Lease:
(a) annually update and submit to DGPC maps required under Article 6.10(m) on the basis of the then most recent well, geological, and geophysical information indicating on such maps which reservoirs are in Commercial Production including such parts of reservoirs which are required for water injection;
(b) within ten (10) Years of the commencement of Commercial Production from each Commercial Discovery, relinquish such part of Development Area which does not cover wholly or partially the vertical projections to the surface of reservoirs from which Commercial Production is being obtained or which are not required for water injection as per approved Development Plan; and
(c) provide DGPC with a map with description of the relinquished areas and map referred to in Article 6.13(a) and (b) upon such relinquishment.
6.14 DGPC shall, within ninety (90) Days of receipt of the maps specified in Article 6.13(c) inform Operator in writing of:
(a) DGPC approval of the relinquished areas, or
(b) the need for Operator to relinquish further areas which are not vertical projections to the surface of reservoirs from which Commercial Production is being obtained, or which are not required for water injection. Operator shall, within sixty (60) Days of DGPC notification under Article 6.14(b) relinquish such area unless Operator disputes such notification in writing to DGPC in which case dispute resolution proceedings may be initiated by Operator through a sole expert unless mutually agreed otherwise, the cost of which will be charged to Joint Account.
6.15 The Operator shall have an organisation in Pakistan with sufficient competence and capacity to conduct the Joint Operations as required under the Rules.
6.16 If following the Discovery of Petroleum, a Working Interest Owner considers the Discovery to be a Commercial Discovery, it may give notice in writing to the other Working Interest Owners, stating in the said notice all the reasons for the evidence supporting its opinion and inviting the other Working Interest Owners to participate in the preparation of a Development Plan. If within ninety (90) Days of receipt of the notice, other Working Interest Owners inform the Operator, that they agree to participate in the Development of the Commercial Discovery, the Operating Committee shall define the Discovery Area and instruct the Operator to proceed with the preparation of the Development Plan. If any Working Interest Owner elects not to join in the Development of the Commercial Discovery, it shall assign its Working Interest in the Commercial Discovery on a pro rata basis to the remaining Working Interest Owners as may be mutually agreed. The remaining Working Interest Owners have the right to define the Discovery Area and develop the Commercial Discovery at their own cost and THE PRESIDENT shall in accordance with the Rules grant a Lease to the remaining Working Interest Owners. If a Working Interest Owner proceeds to develop the Commercial Discovery at its own cost, it shall own all of the production from such discovery and shall bear all the cost of developing and operating such Commercial Discovery and the other Working Interest Owners shall assign to it all their rights, title, and interest in and to the Petroleum in the Discovery Area in accordance with the Rules, provided always that such assignment shall be and remain contingent upon the Working Interest Owners carrying out such development expeditiously.thirty
Appears in 1 contract
DISCOVERY AND DEVELOPMENT. 6.1 In the event of a Discovery of Petroleum in the Area, Operator shall promptly inform the DGPC, and, by further notice in writing within three (3) Months from the date of termination of drilling and testing of the respective Exploration Well inform the DGPC whether or not the Discovery, in the opinion of Operator, merits Appraisal.
6.2 If Operator notifies the DGPC that the Discovery does not merit Appraisal, DGPC shall have the option, on three (3) Months written notice, to require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall:
(a) not comprise more than the vertical projection to the surface of the geological structure on which the Exploration Well resulting in the Discovery was drilled; and
(b) be determined based on geophysical and other technical information obtained from the Discovery.
6.3 If Operator notifies DGPC that the Discovery merits Appraisal, Operator shall submit to the DGPC for approval within six (6) Months from the date of completion of the Exploration Well resulting in the Discovery, an Appraisal Programme which highlights the Appraisal area and provides for the Appraisal of the Discovery in the most efficient and timely manner.
6.4 Not later than three (3) Months from the date on which the Appraisal Programme has been completed, or within such further period as the DGPC may reasonably allow (taking into account the relevant technical and economic conditions), Operator shall by notice in writing inform the DGPC, whether or not, in the opinion of Operator, the Discovery is a Commercial Discovery or a Significant Gas Discovery.
6.5 Where Operator has not informed the DGPC that the Discovery is a Commercial Discovery or Significant Gas Discovery, the DGPC may, by notice in writing, require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall be determined as specified in Article 6.2.
6.6 In the event the Operator considers that the Discovery is a Commercial Discovery or a Significant Gas Discovery, Operator will select the Discovery Area or Significant Gas Discovery Area, which should not exceed the geological entity covering the Commercial Discovery or a Significant Gas Discovery subject to the limitations of the Area. The Operator will request DGPC for retention for Significant Gas Discovery for period as allowed in accordance with the Rules together with the justification. If the Operator does not declare a Significant Gas Discovery as a Commercial Discovery during the allowed retention period, the Operator shall relinquish the Significant Gas Discovery Area and the Licence shall terminate automatically upon the termination of the allowed retention period. If Operator declares a Commercial Discovery during the allowed retention period, Operator will select the Discovery Area out of the Significant Gas Discovery Area, and the provisions of the Agreement and the Rules for grant of approval of Development Plan and the grant of Lease shall apply mutatis mutandis.
6.7 Where the Operator has by written notice notified the DGPC that the Discovery is a Commercial Discovery such notice shall accompany, a detailed report on each Commercial Discovery as provided for in the Rules for approval by DGPC. Within a period no later than six (6) Months from the Date of Commercial Discovery or within such time period as may be allowed by DGPC, the Operator will submit an application for grant of Lease together with Development Plan for the each Commercial Discovery for approval by DGPC.
6.8 When the Government has approved the Development Plan, pursuant to Rule 33 of the Rules, it shall grant to the Working Interest Owners Owner(s) a Lease covering the Discovery Area in accordance with the Rules promptly provided the Working Interest Owners Owner(s) have furnished all requisite information to DGPC. The said Lease shall, on the basis of the available seismic and well data, comprise the Discovery Area to enable each Commercial Discovery to be developed and produced efficiently. The duration of the Lease shall not exceed the time limit as indicated in the Rules.
6.9 The report on each Commercial Discovery shall cover all the relevant factors as required under the Rules including, but not be limited to:
(a) the chemical composition, physical properties and quality of Petroleum discovered;
(b) the thickness and extent of the production strata;
(c) petrophysical properties of the reservoirs;
(d) the productivity indices for ▇▇▇▇▇ tested at various rates of flow;
(e) permeability and porosity of the reservoirs;
(f) the estimated Production capacity of the reservoirs; and
(g) all relevant economic and commercial information which is necessary for the determination of a Discovery as a Commercial Discovery.
6.10 Each Development Plan shall contain detailed proposals by Operator for the construction, and establishment of all facilities and services for and incidental to the recovery, storage and transportation of Petroleum from the Area, as required under the Rules including but not limited to:
(a) description of the nature and characterization of reserves, data, statistics, interpretation and conclusion of all aspects of the geology, reservoir evaluation, Petroleum engineering factors, reservoir models, estimates of reserves in place, possible Production estimates, nature and ratio of Petroleum fluids and analysis of produceable Petroleum;
(b) proposals for the Development and Production of the Commercial Discovery including possible alternatives, work programmes and budgets and proposals relating to the disposition of Associated Gas. Operator should make specific recommendations as to the particular Development proposal that it would prefer. This should include information regarding projections of the economics and profitability of the Joint Operations related to such Development proposals.
(c) proposals relating to the spacing, drilling and completion of ▇▇▇▇▇, the Production and storage installations, and transport and delivery facilities required for the Production, storage and transport of Petroleum. Such proposals will include, but not be limited to:
(i) the estimated number, size and Production capacity of Production facilities/platforms, if any;
(ii) estimated number of Production ▇▇▇▇▇;
(iii) particulars of Production equipment and storage facilities;
(iv) particulars of feasible alternatives for the transportation of Petroleum including pipelines;
(v) particulars of equipment required for the Joint Operations;
(d) estimate of the rates of Production to be established and projection of the possible sustained rate of Production in accordance with Good Oilfield Practices under proposed Development proposal and/or alternative Development proposals;
(e) cost estimates under such Development proposal and alternative Development proposals, if any;
(f) proposals related to the establishment of processing facilities (if any);
(g) safety measures to be adopted in the course of the Joint Operations, including a contingency plan and measures to deal with emergencies;
(h) anticipated adverse impact on environment and measures proposed to be taken for prevention thereof and for general protection of the environment;
(i) a description of the organizational set up of Operator in Pakistan;
(j) an estimate of the time required to complete each phase of the proposed Development;
(k) a description of the measures to be taken regarding the employment and training of Pakistani personnel in accordance with the Rules;
(l) a description of the abandonment plan, to be implemented whenever a piece of equipment or facility or installation needs to be abandoned prior to or on termination of this Agreement;
(m) a map or maps of the outline of the discovered reservoir(s) together with technical or other back up justification; and
(n) a plan for utilization of local goods and services.
6.11 After approval of a Development Plan, Operator shall carry out the Joint Operations substantially in accordance with this plan, subject to such modifications, which may be necessary from time to time, which are approved by the DGPC in accordance with the Rules.
6.12 Not less than ninety (90) Days prior to the beginning of each Calendar Year following the commencement of regular shipments of Crude Oil, Condensate, LPG or Natural Gas, Operator shall prepare and furnish to DGPC a forecast statement, and the basis thereof, setting forth by quarters the total quantity of Crude Oil, Condensate, LPG and Natural Gas (by quality, grade and gravity) that Operator estimates can be produced, saved and transported hereunder during such Calendar Year.
6.13 Operator shall, with respect to each Lease:
(a) annually update and submit to DGPC maps required under Article 6.10(m) on the basis of the then most recent well, geological, and geophysical information indicating on such maps which reservoirs are in Commercial Production including such parts of reservoirs which are required for water injection;
(b) within ten (10) Years of the commencement of Commercial Production from each Commercial Discovery, relinquish such part of Development Area which does not cover wholly or partially the vertical projections to the surface of reservoirs from which Commercial Production is being obtained or which are not required for water injection as per approved Development Plan; and
(c) provide DGPC with a map with description of the relinquished areas and map referred to in Article 6.13(a) and (b) upon such relinquishment.
6.14 DGPC shall, within ninety (90) Days of receipt of the maps specified in Article 6.13(c) inform Operator in writing of:
(a) DGPC approval of the relinquished areas, or
(b) the need for Operator to relinquish further areas which are not vertical projections to the surface of reservoirs from which Commercial Production is being obtained, or which are not required for water injection. Operator shall, within sixty (60) Days of DGPC notification under Article 6.14(b) relinquish such area unless Operator disputes such notification in writing to DGPC in which case dispute resolution proceedings may be initiated by Operator through a sole expert unless mutually agreed otherwise, the cost of which will be charged to Joint Account.
6.15 The Operator shall have an organisation in Pakistan with sufficient competence and capacity to conduct the Joint Operations as required under the Rules.
6.16 If following the Discovery of Petroleum, a Working Interest Owner considers the Discovery to be a Commercial Discovery, it may give notice in writing to the other Working Interest OwnersOwner(s), stating in the said notice all the reasons for the evidence supporting its opinion and inviting the other Working Interest Owners Owner(s) to participate in the preparation of a Development Plan. If within ninety (90) Days of receipt of the notice, other Working Interest Owners Owner(s) inform the Operator, that they agree to participate in the Development of the Commercial Discovery, the Operating Committee shall define the Discovery Area and instruct the Operator to proceed with the preparation of the Development Plan. If any Working Interest Owner elects not to join in the Development of the Commercial Discovery, it shall assign its Working Interest in the Commercial Discovery on a pro rata basis to the remaining Working Interest Owners Owner(s) as may be mutually agreed. The remaining Working Interest Owners Owner(s) have the right to define the Discovery Area and develop the Commercial Discovery at their own cost and THE PRESIDENT shall in accordance with the Rules grant a Lease to the remaining Working Interest OwnersOwner(s). If a Working Interest Owner proceeds to develop the Commercial Discovery at its own cost, it shall own all of the production from such discovery and shall bear all the cost of developing and operating such Commercial Discovery and the other Working Interest Owners Owner(s) shall assign to it all their rights, title, and interest in and to the Petroleum in the Discovery Area in accordance with the Rules, provided always that such assignment shall be and remain contingent upon the Working Interest Owners Owner(s) carrying out such development expeditiously.
Appears in 1 contract
Sources: Petroleum Concession Agreement
DISCOVERY AND DEVELOPMENT. 6.1 In the event of a Discovery of Petroleum in the Area, Operator shall promptly inform notify the DGPC, DGPC in accordance with the Rules and, by further notice in writing within three (3) Months from the date of termination of drilling and testing of the respective Exploration Well Well, inform the DGPC whether or not the Discovery, in the opinion of Operator, merits Appraisal.
6.2 If Operator notifies the DGPC that the Discovery does not merit Appraisal, DGPC shall have the option, on three (3) Months written notice, to require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall:
(a) not comprise more than the vertical projection to the surface of the geological structure on which the Exploration Well resulting in the Discovery was drilled; and
(b) be determined based on geophysical and other technical information obtained from the Discovery.
6.3 If Operator notifies DGPC that the Discovery merits Appraisal, Operator shall submit to the DGPC for approval within six (6) Months from the date of completion of the Exploration Well resulting in the Discovery, an Appraisal Programme which highlights the Appraisal area and provides for the Appraisal of the Discovery in the most efficient and timely manner.
6.4 Not later than three (3) Months from the date on which the Appraisal Programme has been completed, or within such further period as the DGPC may reasonably allow (taking into account the relevant technical and economic conditions), Operator shall by notice in writing inform the DGPC, whether or not, in the opinion of Operator, the Discovery is a Commercial Discovery or or, if applicable pursuant to the Rules, a Significant Gas Discovery.
6.5 Where Operator has not informed the DGPC that the Discovery is a Commercial Discovery or Significant Gas Discovery, the DGPC may, by notice in writing, require Operator to immediately relinquish the Designated Area unless the Operator has provided valid justification to retain the area covering the Discovery. The Designated Area shall be determined as specified in Article 6.2.
6.6 In the event the Operator considers that the Discovery is a Commercial Discovery or a Significant Gas Discovery, Operator will select the Discovery Area or Significant Gas Discovery Area, which should not exceed the geological entity covering the Commercial Discovery or a Significant Gas Discovery subject to the limitations of the Area. The Operator will request DGPC for retention for of Significant Gas Discovery for period as allowed in accordance with the Rules together with the justification. If the Operator does not declare a Significant Gas Discovery as a Commercial Discovery during the allowed retention period, the Operator shall relinquish the Significant Gas Discovery Area and the Licence shall terminate automatically upon the termination of the allowed retention period. If Operator declares a Commercial Discovery during the allowed retention period, Operator will select the Discovery Area out of the Significant Gas Discovery Area, and the provisions of the Agreement and the Rules for grant of approval of Development Plan and the grant of Lease shall apply mutatis mutandis.
6.7 Where the Operator has by written notice notified the DGPC that the Discovery is a Commercial Discovery such notice shall accompany, a detailed report on each Commercial Discovery as provided for in the Rules for approval by DGPC. Within a period no later than six (6) Months from the Date of Commercial Discovery or within such time period as may be allowed by DGPC, the Operator will submit an application for grant of Lease together with Development Plan for the each Commercial Discovery for approval by DGPC.
6.8 When the Government has approved the Development Plan, pursuant to Rule 33 of the Rules, it shall grant to the Working Interest Owners a Lease covering the Discovery Area in accordance with the Rules promptly provided the Working Interest Owners have furnished all requisite information to DGPC. The said Lease shall, on the basis of the available seismic and well data, comprise the Discovery Area to enable each Commercial Discovery to be developed and produced efficiently. The duration of the Lease shall not exceed the time limit as indicated in the Rules.
6.9 The report on each Commercial Discovery shall cover all the relevant factors as required under the Rules including, but not be limited to:
(a) the chemical composition, physical properties and quality of Petroleum discovered;
(b) the thickness and extent of the production strata;
(c) petrophysical properties of the reservoirs;
(d) the productivity indices for ▇▇▇▇▇ tested at various rates of flow;
(e) permeability and porosity of the reservoirs;
(f) the estimated Production capacity of the reservoirs; and
(g) all relevant economic and commercial information which is necessary for the determination of a Discovery as a Commercial Discovery.
6.10 Each Development Plan shall contain detailed proposals by Operator for the construction, and establishment of all facilities and services for and incidental to the recovery, storage and transportation of Petroleum from the Area, as required under the Rules including but not limited to:
(a) description of the nature and characterization of reserves, data, statistics, interpretation and conclusion of all aspects of the geology, reservoir evaluation, Petroleum engineering factors, reservoir models, estimates of reserves in place, possible Production estimates, nature and ratio of Petroleum fluids and analysis of produceable Petroleum;
(b) proposals for the Development and Production of the Commercial Discovery including possible alternatives, work programmes and budgets and proposals relating to the disposition of Associated Gas. Operator should make specific recommendations as to the particular Development proposal that it would prefer. This should include information regarding projections of the economics and profitability of the Joint Operations related to such Development proposals.
(c) proposals relating to the spacing, drilling and completion of ▇▇▇▇▇, the Production and storage installations, and transport and delivery facilities required for the Production, storage and transport of Petroleum. Such proposals will include, but not be limited to:
(i) the estimated number, size and Production capacity of Production facilities/platforms, if any;
(ii) estimated number of Production ▇▇▇▇▇;
(iii) particulars of Production equipment and storage facilities;
(iv) particulars of feasible alternatives for the transportation of Petroleum including pipelines;
(v) particulars of equipment required for the Joint Operations;
(d) estimate of the rates of Production to be established and projection of the possible sustained rate of Production in accordance with Good Oilfield Practices under proposed Development proposal and/or alternative Development proposals;
(e) cost estimates under such Development proposal and alternative Development proposals, if any;
(f) proposals related to the establishment of processing facilities (if any);
(g) safety measures to be adopted in the course of the Joint Operations, including a contingency plan and measures to deal with emergencies;
(h) anticipated adverse impact on environment and measures proposed to be taken for prevention thereof and for general protection of the environment;
(i) a description of the organizational set up of Operator in Pakistan;
(j) an estimate of the time required to complete each phase of the proposed Development;
(k) a description of the measures to be taken regarding the employment and training of Pakistani personnel in accordance with the Rules;
(l) a description of the abandonment plan, to be implemented whenever a piece of equipment or facility or installation needs to be abandoned prior to or on termination of this Agreement;
(m) a map or maps of the outline of the discovered reservoir(s) together with technical or other back up justification; and
(n) a plan for utilization of local goods and services.
6.11 After approval of a Development Plan, Operator shall carry out the Joint Operations substantially in accordance with this plan, subject to such modifications, which may be necessary from time to time, which are approved by the DGPC in accordance with the Rules.
6.12 Not less than ninety (90) Days prior to the beginning of each Calendar Year following the commencement of regular shipments of Crude Oil, Condensate, LPG or Natural Gas, Operator shall prepare and furnish to DGPC a forecast statement, and the basis thereof, setting forth by quarters the total quantity of Crude Oil, Condensate, LPG and Natural Gas (by quality, grade and gravity) that Operator estimates can be produced, saved and transported hereunder during such Calendar Year.
6.13 Operator shall, with respect to each Lease:
(a) annually update and submit to DGPC maps required under Article 6.10(m) on the basis of the then most recent well, geological, and geophysical information indicating on such maps which reservoirs are in Commercial Production including such parts of reservoirs which are required for water injection;
(b) within ten (10) Years of the commencement of Commercial Production from each Commercial Discovery, relinquish such part of Development Area which does not cover wholly or partially the vertical projections to the surface of reservoirs from which Commercial Production is being obtained or which are not required for water injection as per approved Development Plan; and
(c) provide DGPC with a map with description of the relinquished areas and map referred to in Article 6.13(a) and (b) upon such relinquishment.
6.14 DGPC shall, within ninety (90) Days of receipt of the maps specified in Article 6.13(c) inform Operator in writing of:
(a) DGPC approval of the relinquished areas, or
(b) the need for Operator to relinquish further areas which are not vertical projections to the surface of reservoirs from which Commercial Production is being obtained, or which are not required for water injection. Operator shall, within sixty (60) Days of DGPC notification under Article 6.14(b) relinquish such area unless Operator disputes such notification in writing to DGPC in which case dispute resolution proceedings may be initiated by Operator through a sole expert unless mutually agreed otherwise, the cost of which will be charged to Joint Account.
6.15 The Operator shall have an organisation in Pakistan with sufficient competence and capacity to conduct the Joint Operations as required under the Rules.
6.16 If following the Discovery of Petroleum, a Working Interest Owner considers the Discovery to be a Commercial Discovery, it may give notice in writing to the other Working Interest Owners, stating in the said notice all the reasons for the evidence supporting its opinion and inviting the other Working Interest Owners to participate in the preparation of a Development Plan. If within ninety (90) Days of receipt of the notice, other Working Interest Owners inform the Operator, that they agree to participate in the Development of the Commercial Discovery, the Operating Committee shall define the Discovery Area and instruct the Operator to proceed with the preparation of the Development Plan. If any Working Interest Owner elects not to join in the Development of the Commercial Discovery, it shall assign its Working Interest in the Commercial Discovery on a pro rata basis to the remaining Working Interest Owners as may be mutually agreed. The remaining Working Interest Owners have the right to define the Discovery Area and develop the Commercial Discovery at their own cost and THE PRESIDENT shall in accordance with the Rules grant a Lease to the remaining Working Interest Owners. If a Working Interest Owner proceeds to develop the Commercial Discovery at its own cost, it shall own all of the production from such discovery and shall bear all the cost of developing and operating such Commercial Discovery and the other Working Interest Owners shall assign to it all their rights, title, and interest in and to the Petroleum in the Discovery Area in accordance with the Rules, provided always that such assignment shall be and remain contingent upon the Working Interest Owners carrying out such development expeditiously.retention
Appears in 1 contract
Sources: Petroleum Concession Agreement
DISCOVERY AND DEVELOPMENT. 6.1 5.1 In the event of a Discovery of Petroleum in the Contract Area, Operator shall promptly inform the DGPC, and, DGPC in accordance with Rule 58 of the Rules and by further notice in writing within three (3) Months from the date of termination of drilling and testing of the respective Exploration Well inform the DGPC whether or not the Discovery, in the opinion of OperatorContractor, merits Appraisal.
6.2 5.2 If Operator Contractor notifies the DGPC that the Discovery does not merit Appraisal, DGPC shall have the option, on three six (36) Months written notice, to require Operator Contractor to immediately relinquish the Designated Area unless the Operator Contractor has provided valid justification to retain the area covering the Discovery. The Designated Area shall:
(a) not exceed 150 Sections;
(b) not comprise more than the vertical projection to the surface of the geological structure on which the Exploration Discovery Well resulting in the Discovery was drilled; and
(bc) be determined based on geophysical and other technical information obtained from the Discovery.
6.3 5.3 If Operator Contractor notifies DGPC that the Discovery merits Appraisal, Operator Contractor shall submit to the DGPC for approval within six (6) Months from the date of completion of the Exploration Well resulting notice referred to in the DiscoveryArticle 5.1, an Appraisal Programme which highlights the Appraisal area Area and provides for the Appraisal of the Discovery within a period of two (2) Years from the date of approval of such Appraisal Programme, consisting of the drilling of a minimum of one Appraisal Well to the estimated depth of the reservoir discovered in the most efficient and timely mannerDiscovery well.
6.4 5.4 Not later than three six (36) Months from the date on which the Appraisal Programme has been completed, or within such further period as the DGPC may reasonably allow (taking into account the relevant technical and economic conditions), Operator Contractor shall by notice in writing inform the DGPC, whether or not, in the opinion of OperatorContractor, the Discovery is a Commercial Discovery or a Significant Gas Discovery.
6.5 5.5 Where Operator Contractor has not informed the DGPC that the Discovery is not a Commercial Discovery or Significant Gas Discovery, the DGPC may, by notice in writing, require Operator Contractor to immediately relinquish the Designated Area. The Designated Area shall be determined as specified in Article 5.2 unless the Operator Contractor has provided valid justification to retain the area covering the Discovery. The Designated Area shall be determined as specified in Article 6.2.
6.6 In 5.6 Where Contractor has informed the event the Operator considers DGPC that the Discovery is a Commercial Discovery or a Significant Gas Discovery, Operator Contractor will select the Discovery Development Area or Significant Gas Discovery Area, which should as the case may be, in the following manner :
(i) it will not exceed the geological entity covering the Commercial Discovery or a Significant Gas Discovery; and
(ii) the Development Area or the Significant Gas Discovery Area shall be an area of no more than 150 contiguous Sections selected by Contractor, subject to the limitations of the Contract Area. The Operator will request DGPC for retention for Significant Gas Discovery for period as allowed , whereby the Sections are connected and have in accordance with the Rules together with the justificationcommon at least one side of thirty (30) seconds latitude or longitude and. If Contractor can provide conclusive evidence based on geological, geophysical and other data that 150 Sections are not sufficient to cover the Operator does not declare a Significant Gas Discovery as a Commercial Discovery during vertical projection to the allowed retention period, the Operator shall relinquish the Significant Gas Discovery Area and the Licence shall terminate automatically upon the termination surface of the allowed retention period. If Operator declares discovered reservoirs, then DGPC may at its discretion approve a Commercial Discovery during Development Area covering more than 150 Sections to account for the allowed retention period, Operator will select vertical projection to the Discovery Area out surface of the Significant Gas Discovery Area, and discovered reservoirs within the provisions boundaries of the Agreement and the Rules for grant of approval of Development Plan and the grant of Lease shall apply mutatis mutandisLicence.
6.7 5.7 Where the Operator Contractor has by written notice notified informed the DGPC that the Discovery is a Commercial Discovery such notice shall accompanyDiscovery, a detailed report on each Commercial Discovery as provided for in the Rules for approval by DGPC. Within a period Contractor shall, no later than six twelve (612) Months from the Date date of Commercial Discovery such notice or within such time period as may be allowed by DGPC, the Operator will submit an application for grant of Lease together with Development Plan for the each Commercial Discovery for approval by DGPC.present:
6.8 When the Government has approved the Development Plan, pursuant to Rule 33 of the Rules, it shall grant to the Working Interest Owners (a) a Lease covering the Discovery Area in accordance with the Rules promptly provided the Working Interest Owners have furnished all requisite information to DGPC. The said Lease shall, on the basis of the available seismic and well data, comprise the Discovery Area to enable each Commercial Discovery to be developed and produced efficiently. The duration of the Lease shall not exceed the time limit as indicated in the Rules.
6.9 The detailed report on each Commercial Discovery shall cover all the relevant factors as required under the Rules including, but not be limited to:
(a) the chemical composition, physical properties and quality of Petroleum discovered;
(b) the thickness and extent of the production strata;
(c) petrophysical properties of the reservoirs;
(d) the productivity indices provided for ▇▇▇▇▇ tested at various rates of flow;
(e) permeability and porosity of the reservoirs;
(f) the estimated Production capacity of the reservoirs; and
(g) all relevant economic and commercial information which is necessary for the determination of a Discovery as a Commercial Discovery.
6.10 Each Development Plan shall contain detailed proposals by Operator for the construction, and establishment of all facilities and services for and incidental to the recovery, storage and transportation of Petroleum from the Area, as required under the Rules including but not limited to:
(a) description of the nature and characterization of reserves, data, statistics, interpretation and conclusion of all aspects of the geology, reservoir evaluation, Petroleum engineering factors, reservoir models, estimates of reserves in place, possible Production estimates, nature and ratio of Petroleum fluids and analysis of produceable Petroleum;
(b) proposals for the Development and Production of the Commercial Discovery including possible alternatives, work programmes and budgets and proposals relating to the disposition of Associated Gas. Operator should make specific recommendations as to the particular Development proposal that it would prefer. This should include information regarding projections of the economics and profitability of the Joint Operations related to such Development proposals.
(c) proposals relating to the spacing, drilling and completion of ▇▇▇▇▇, the Production and storage installations, and transport and delivery facilities required for the Production, storage and transport of Petroleum. Such proposals will include, but not be limited to:
(i) the estimated number, size and Production capacity of Production facilities/platforms, if any;
(ii) estimated number of Production ▇▇▇▇▇;
(iii) particulars of Production equipment and storage facilities;
(iv) particulars of feasible alternatives for the transportation of Petroleum including pipelines;
(v) particulars of equipment required for the Joint Operations;
(d) estimate of the rates of Production to be established and projection of the possible sustained rate of Production in accordance with Good Oilfield Practices under proposed Development proposal and/or alternative Development proposals;
(e) cost estimates under such Development proposal and alternative Development proposals, if any;
(f) proposals related to the establishment of processing facilities (if any);
(g) safety measures to be adopted in the course of the Joint Operations, including a contingency plan and measures to deal with emergencies;
(h) anticipated adverse impact on environment and measures proposed to be taken for prevention thereof and for general protection of the environment;
(i) a description of the organizational set up of Operator in Pakistan;
(j) an estimate of the time required to complete each phase of the proposed Development;
(k) a description of the measures to be taken regarding the employment and training of Pakistani personnel in accordance with the Rules;
(l) a description of the abandonment plan, to be implemented whenever a piece of equipment or facility or installation needs to be abandoned prior to or on termination of this Agreement;
(m) a map or maps of the outline of the discovered reservoir(s) together with technical or other back up justification; and
(n) a plan for utilization of local goods and services.
6.11 After approval of a Development Plan, Operator shall carry out the Joint Operations substantially in accordance with this plan, subject to such modifications, which may be necessary from time to time, which are approved by the DGPC in accordance with the Rules.
6.12 Not less than ninety (90) Days prior to the beginning of each Calendar Year following the commencement of regular shipments of Crude Oil, Condensate, LPG or Natural Gas, Operator shall prepare and furnish to DGPC a forecast statement, and the basis thereof, setting forth by quarters the total quantity of Crude Oil, Condensate, LPG and Natural Gas (by quality, grade and gravity) that Operator estimates can be produced, saved and transported hereunder during such Calendar Year.
6.13 Operator shall, with respect to each Lease:
(a) annually update and submit to DGPC maps required under Article 6.10(m) on the basis of the then most recent well, geological, and geophysical information indicating on such maps which reservoirs are in Commercial Production including such parts of reservoirs which are required for water injection;
(b) within ten (10) Years of the commencement of Commercial Production from each Commercial Discovery, relinquish such part of Development Area which does not cover wholly or partially the vertical projections to the surface of reservoirs from which Commercial Production is being obtained or which are not required for water injection as per approved Development Plan; and
(c) provide DGPC with a map with description of the relinquished areas and map referred to in Article 6.13(a) and (b) upon such relinquishment.
6.14 DGPC shall, within ninety (90) Days of receipt of the maps specified in Article 6.13(c) inform Operator in writing of:
(a) DGPC approval of the relinquished areas, or
(b) the need for Operator to relinquish further areas which are not vertical projections to the surface of reservoirs from which Commercial Production is being obtained, or which are not required for water injection. Operator shall, within sixty (60) Days of DGPC notification under Article 6.14(b) relinquish such area unless Operator disputes such notification in writing to DGPC in which case dispute resolution proceedings may be initiated by Operator through a sole expert unless mutually agreed otherwise, the cost of which will be charged to Joint Account.
6.15 The Operator shall have an organisation in Pakistan with sufficient competence and capacity to conduct the Joint Operations as required under the Rules.
6.16 If following the Discovery of Petroleum, a Working Interest Owner considers the Discovery to be a Commercial Discovery, it may give notice in writing to the other Working Interest Owners, stating in the said notice all the reasons for the evidence supporting its opinion and inviting the other Working Interest Owners to participate in the preparation of a Development Plan. If within ninety (90) Days of receipt of the notice, other Working Interest Owners inform the Operator, that they agree to participate in the Development of the Commercial Discovery, the Operating Committee shall define the Discovery Area and instruct the Operator to proceed with the preparation of the Development Plan. If any Working Interest Owner elects not to join in the Development of the Commercial Discovery, it shall assign its Working Interest in the Commercial Discovery on a pro rata basis to the remaining Working Interest Owners as may be mutually agreed. The remaining Working Interest Owners have the right to define the Discovery Area and develop the Commercial Discovery at their own cost and THE PRESIDENT shall in accordance with the Rules grant a Lease to the remaining Working Interest Owners. If a Working Interest Owner proceeds to develop the Commercial Discovery at its own cost, it shall own all of the production from such discovery and shall bear all the cost of developing and operating such Commercial Discovery and the other Working Interest Owners shall assign to it all their rights, title, and interest in and to the Petroleum in the Discovery Area in accordance with the Rules, provided always that such assignment shall be and remain contingent upon the Working Interest Owners carrying out such development expeditiously.Article
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