Common use of NON-ASSOCIATED GAS Clause in Contracts

NON-ASSOCIATED GAS. (a) When the Contractor in accordance with Article 8.2 has informed the Minister of any non - associated gas discovery within the contract area that is of potential commercial interest, the Parties shall promptly carry out friendly negotiations to reach agreement on the additional terms necessary for commercial development and production of the discovery. The agreement, which shall form an annex to this Agreement, shall be based on and include the following principles- The petroleum production licence shall be extended as may be required to allow for commitment of the reserves for the life of the gas project and consistent with the terms for marketing that may be negotiated with the buyers of the gas. The cost recovery rate and the Contractor’s profit gas share shall be negotiated by the Parties taking into consideration the actual conditions in the gas field and the markets for such gas so that the Contractor shall be able to obtain an economic benefit acceptable to the Contractor. If the Parties fail to reach an agreement within three (3) years after the date of commencement of negotiations, the Government shall have the right unilaterally to put up the gas field for bidding but shall keep as confidential the substance of any previous and future negotiations undertaken with Contractor. In such case, Contractor shall be entitled to participate in the bidding.