SOLE RISK OPERATIONS. 1. Any party may undertake petroleum operations at sole risk (hereinafter referred to as "sole risk project") in a participation area, subject to the provisions of this Article. 2. The following types of sole risk project may be proposed- (a) the drilling of a well or the deepening, side-tracking, completing, plugging back, testing or reworking of an existing well drilled for the joint account of the parties, in order to test a formation in which no jointly-owned well has been completed as a well producing or capable of producing petroleum; (b) The installation of production and transportation facilities. 3. The conduct of a project in a development area may not be the subject of a sole risk notice under this Article until after it has been proposed in complete form to the operating committee for consideration pursuant to Article 4 hereof and has not been approved within the period therein provided. In the event that such project fails to obtain the requisite approval of the operating committee, then any party may serve notice on the other parties of its intention to carry out that project at sole risk. The other parties may give counter-notice that they wish to participate in the project within sixty (60) days after receipt thereof but, where a drilling rig is on the location and has not been released, the period is reduced to seventy-two (72) hours after receipt thereof. The periods set forth in this Article 11 (3) shall be extended for any period of time mutually agreed by the parties as necessary or desirable for acquiring or developing additional information on the sole risk project. 4. If all the other parties elect to participate in the project identified in the proposing party's notice within the period thereof provided, such project is considered as being approved by the operating committee and the provisions of Article 4 (8) of this Participation Agreement shall apply. 5. In the event that less than all the parties elect to participate in the project, the parties which elected to participate (hereafter referred to as "sole risk parties") shall be entitled to have the sole risk project carried out. The interest of each sole risk party in a sole risk project shall be in proportion to its participation interest in this Participation Agreement, or in such other proportion as the sole risk parties may agree. Any sole risk project shall be carried out at the sole risk, cost and expense of the sole risk parties in the proportion of their respective interests. 6. A sole risk project shall be carried out by the operator on behalf of the sole risk parties under the provisions of this participation agreement. No sole risk project may be commenced after one hundred and eighty (180) days following the expiration of the notice period prescribed in Article 11 (3), but the operator shall commence work as promptly as reasonably possible if the notice period of seventy two (72) hours, set forth in Article 11 (3), applies. The operator shall complete the sole risk project with due diligence provided that it does not jeopardize, hinder or unreasonably interfere with petroleum operations carried out under the Contract and adopted by the operating committee pursuant to Article 4 of this Participation Agreement. The sole risk parties may use for the sole risk project any production, handling, processing and/or transporting facilities, which are joint property, subject to a determination by the operating committee as to usage fees, availability of capacity and production compatibility. 7. In connection with any sole risk project- (a) the sole risk project will be carried out under the overall supervision and control of the sole risk parties in lieu of the operating committee; (b) the computation of costs and expenses of the sole risk project incurred by the sole risk parties shall be made in accordance with the principles set out in exhibit “A" attached hereto; (c) the operator carrying out the sole risk project shall maintain separate books, records and accounts (including bank accounts) for the sole risk project which shall be subject to the same right of examination and audit by the sole risk parties; (d) the costs and expenses of the sole risk project shall not be reflected in the statements and billing rendered by the operator for petroleum operations under the Participation Agreement; and (e) if the operator is carrying out a sole risk project on behalf of the sole risk parties, the operator shall be entitled to request the sole risk parties in connection with the sole risk project to advance their share of the estimated expenditure and shall not use joint account funds or be required to use its own funds for the purpose of paying the costs and expenses of the sole risk project; furthermore the operator shall not be obliged to commence or, having commenced, to continue the sole risk project unless and until relevant advances have been received from the sole risk parties. 8. The sole risk parties shall indemnify and hold harmless the other parties against all actions, claims, demands and proceedings whatsoever brought by any third party arising out of or in connection with the sole risk project and shall further indemnify the other parties against all damages, costs, losses and expenses whatsoever directly or indirectly caused to or incurred by them as a result of anything done or omitted to be done in the course of carrying out such sole risk project. 9. Subject to the provision of Article 11 (10) below, the sole risk project, including data and information, is wholly owned by the sole risk parties in accordance with the provisions of the Contract, but the sole risk parties shall keep the other parties informed about the project. In the event that such project results in an increase of production of petroleum from the participation area, the portion of such increase, which is available to the Contractor, shall be owned solely by the sole risk parties. Each of them shall have the right and obligation to take in kind, and separately dispose of its proportional share of supplementary petroleum production. 10. Any party or parties which are not participating in the sole risk project may, by giving thirty (30) days' notice to the sole risk parties, become participants in such project, at any time after the sole risk parties have recovered from the supplementary petroleum production the following sums of money to which they are entitled on the project:
Appears in 1 contract
SOLE RISK OPERATIONS. 1. Any party may undertake petroleum operations at sole risk (hereinafter referred to as "sole risk project") in a participation area, subject 24.1 Subject to the provisions of this ArticlePart, a party (“Proposing Party”) may give to the other parties (“Receiving Parties”) and the Operator a notice (“Sole Risk Notice”) stating that party’s intention to carry out a Sole Risk Operation and stating the proposed location, purpose and estimated cost of the Sole Risk Operation.
2. The 24.2 A Sole Risk Operation may comprise any of the following:
(a) drilling an Exploration Well;
(b) deepening, re-working, sidetracking, testing or completing an Appraisal Well or an Exploration Well;
(c) drilling an Appraisal Well; or
(d) drilling a Development Well.
24.3 A party shall not give a Sole Risk Notice if any of the following types of sole risk project may be proposed-conditions exist:
(a) the work proposed to be carried out under the Sole Risk Operation is included in a programme and budget for JV Activities previously approved by the Committee but not yet carried out;
(b) any work is being carried out or has been proposed or included in an approved programme and budget for JV Activities which has the same objective as the work in respect of which a Sole Risk Notice is desired to be given; or
(c) the work proposed is part of the Work Obligation.
24.4 A party may give a Sole Risk Notice only if the activities covered by the Sole Risk Notice have been proposed to the Committee and the Committee has resolved not to carry out those activities as JV Activities. A Sole Risk Notice shall be effective only if it is given within the following periods:
(a) where the proposed Sole Risk Operation is the drilling of an Exploration Well, an Appraisal Well or a Development Well, within 30 days after the decision of the Committee not to carry out the proposed activities as JV Activities; or
(b) where the proposed Sole Risk Operation is the deepening reworking sidetracking, testing or completing of an Appraisal Well or an Exploration Well, prior to commencement of operations to abandon the well.
24.5 Within 30 days after receipt of the Sole Risk Notice, each Receiving Party, shall give notice to the Proposing Party whether that Receiving Party will participate in the Sole Risk Operation, failing which that Receiving Party shall be deemed to have given notice to the Proposing Party that it will not participate in the Sole Risk Operation.
24.6 Where a drilling rig is on the location of the well, the time to respond to a Sole Risk Notice with respect to deepening, reworking, sidetracking or testing or completing of the well shall be reduced to 24 hours, after which rig time shall be at the expense of the SR Parties PROVIDED HOWEVER that if “the Sole Risk Operation is not carried out, the same additional expense shall be borne by the Proposing Party.
24.7 Each party electing to participate in the Sole Risk Operation shall be an SR Party.
24.8 The SR Parties shall be associated in a Sole Risk Venture on the following terms:
(a) the purpose of the Sole Risk Venture shall be to carry out the Sole Risk Operation;
(b) each party shall have an SR Interest equal to the proportion that its Percentage Interest bears to the aggregate Percentage Interests of all of the SR Parties;
(c) the SR Parties shall pay all costs and expenses and bear all liabilities incurred in connection with the Sole Risk Operation in proportion to their respective SR Interests;
(d) if the Operator is a SR Party, it shall be the operator of the Sole Risk Venture (“SR Operator”). If the Operator is not a SR Party, it shall carry out the operations on behalf of the SR Parties, unless it declines to do so, in which case the SR Parties shall appoint a SR Operator by majority vote; and
(e) except as otherwise provided, the relationship between the SR Parties in relation to the Sole Risk Venture shall be governed by the terms of this Agreement, mutatis mutandis.
24.9 As soon as the SR Parties have been determined in accordance with this clause, the SR Operator shall forthwith give notice to all the SR Parties how the costs, risks and liabilities of the Sole Risk Operation will be shared, and may thereafter commence the Sole Risk Operation.
24.10 Sole Risk Operations shall not be commenced more than 180 days after the Sole Risk Notice with respect thereto was given PROVIDED THAT a Sole Risk Notice may again be given for the same Sole Risk Operation within or after the expiration of the said 180 day period.
24.11 If following the giving of a Sole Risk Notice all parties elect to participate, the proposed operation shall be conducted by the Operator as JV Activities, and the programme and budget for the then current Work Period shall be revised accordingly.
25.1 If the Sole Risk Operation is the drilling of a well and if the operation results in discovery of Petroleum in Paying Quantities, then the following provisions shall apply:
(a) if the well is completed for production, the SR Parties shall separately be entitled to take all Petroleum production derived therefrom by any Production Venture in proportion to their SR Interests until the Net Value of the Petroleum so taken equals 100% of the SR Costs incurred by the SR Parties in relation to that well;
(b) if the well is not completed for production, the SR Parties shall separately be entitled to take all Petroleum production derived by any Production Venture from any and all subsequent ▇▇▇▇▇ completed for production in the same Petroleum Pool until the Net Value thereof equals 100% of the SR Costs incurred by the SR Parties in relation to that well; and
(c) whether or not the well is completed for production the SR Parties shall, after recovery of the aforesaid 100% of SR Costs, be entitled to receive all further Petroleum production (“Premium Share of Production”) derived by any Production Venture from such well and any and all subsequent ▇▇▇▇▇ completed for production in the same Petroleum Pool until the Net Value thereof is an amount equal to 1000% in the case of an Exploration Well and 700% in the case of an Appraisal Well and 500% in the case of a Development Well of the SR Costs incurred by the SR Parties in relation to that well, 26 SOLE RISK DEEPENING, REWORKING, SIDETRACKING, TESTING, COMPLETION ETC
26.1 If the Sole Risk Operation is the deepening, reworking, side tracking, completion or testing of a well, and if the operation results in the discovery of Petroleum in Paying Quantities, then the SR Parties shall be entitled to take all Petroleum production derived by any Production Venture from the well until the Net Value of the Petroleum production so taken equals 500% of the SR Costs incurred by the SR Parties in relation to that operation.
26.2 If the Sole Risk Operation is the deepening of a well, the following provisions shall apply:-
(a) if the initial drilling of that well up to a depth at which deepening operations commenced (“Initial Depth”) was also carried out as a Sole Risk Operation, then the Non SR Parties in the drilling to the Initial Depth shall nevertheless have the right to participate in the deepening operation in proportion to their respective SR Interests in the deepening operation;
(b) if the deepening does not result in the discovery of Petroleum in Paying Quantities, the SR Parties who participated in the deepening but not in the drilling of the well to the Initial Depth shall have not obligation to contribute to the costs of drilling the well to the Initial Depth (except as to costs of materials, supplies and equipment assumed by the deepening parties); and
(c) if the deepening operation results in the discovery of Petroleum in Paying Quantities, the SR Parties participating in the completion of the well for the taking of Petroleum production from a formation into which the well was drilled as part of the deepening operation shall reimburse in cash to the SR Parties participating in the drilling of the well to the Initial Depth 100% of the SR Costs incurred in drilling the well to the Initial Depth.
26.3 A Sole Risk Notice for a deepening, reworking or side-tracking, completing, plugging back, testing or reworking of an existing well drilled for the joint account of the parties, in order tracking operation may be given with respect to test a formation in which no jointly-owned well has been completed as a well producing or capable of producing petroleum;
(b) The installation of production and transportation facilities.
3. The conduct of a project Petroleum in a development area may not be the subject of a sole risk notice under this Article until after it has been proposed Paying Quantities and, in complete form to the operating committee for consideration pursuant to Article 4 hereof and has not been approved within the period therein provided. In the event that such project fails to obtain the requisite approval of the operating committee, then any party may serve notice on the other parties of its intention to carry out that project at sole risk. The other parties may give counter-notice that they wish to participate in the project within sixty (60) days after receipt thereof but, where a drilling rig is on the location and has not been releasedevent, the period is reduced to seventy-two (72) hours after receipt thereof. The periods set forth in this Article 11 (3) shall be extended for any period of time mutually agreed by the parties as necessary or desirable for acquiring or developing additional information on the sole risk project.
4. If all the other parties elect to participate in the project identified in the proposing party's notice within the period thereof provided, such project is considered as being approved by the operating committee and the following provisions of Article 4 (8) of this Participation Agreement shall apply.
5. In the event that less than all the parties elect to participate in the project, the parties which elected to participate (hereafter referred to as "sole risk parties") shall be entitled to have the sole risk project carried out. The interest of each sole risk party in a sole risk project shall be in proportion to its participation interest in this Participation Agreement, or in such other proportion as the sole risk parties may agree. Any sole risk project shall be carried out at the sole risk, cost and expense of the sole risk parties in the proportion of their respective interests.
6. A sole risk project shall be carried out by the operator on behalf of the sole risk parties under the provisions of this participation agreement. No sole risk project may be commenced after one hundred and eighty (180) days following the expiration of the notice period prescribed in Article 11 (3), but the operator shall commence work as promptly as reasonably possible if the notice period of seventy two (72) hours, set forth in Article 11 (3), applies. The operator shall complete the sole risk project with due diligence provided that it does not jeopardize, hinder or unreasonably interfere with petroleum operations carried out under the Contract and adopted by the operating committee pursuant to Article 4 of this Participation Agreement. The sole risk parties may use for the sole risk project any production, handling, processing and/or transporting facilities, which are joint property, subject to a determination by the operating committee as to usage fees, availability of capacity and production compatibility.
7. In connection with any sole risk project-:
(a) in drilling beyond the sole risk project point where the well is or may be productive in Paying Quantities, the deepening parties will protect the hole so that the well can be carried out under plugged back to the overall supervision and control depth at which the presence of the sole risk parties Petroleum in lieu of the operating committeePaying Quantities was found or suspected;
(b) the computation deepening panics shall, if the deepening does not result in the discovery of costs and expenses of Petroleum in Paying Quantities, plug back the well at the sole risk project incurred by and expense of the sole risk deepening parties to the point at which Petroleum was discovered or suspect in Paying Quantities, if at least one of the parties so requires; or
(c) should the well be capable of producing Petroleum in Paying Quantities from both above and below the depth at which the deepening operation began and one or more of the respective parties entitled to attempt to complete the well in the respective productive formations wish to do so, the respective SR Parties will co-operate in causing the well to be duly completed. If this is not possible or feasible in accordance with good engineering practice, then completion shall be made in accordance with the principles set out in exhibit “A" attached hereto;
(c) formation within the operator carrying out the sole risk project shall maintain separate books, records and accounts (including bank accounts) for the sole risk project which shall be subject to the same right of examination and audit by the sole risk parties;
(d) the costs and expenses of the sole risk project shall not be reflected in the statements and billing rendered by the operator for petroleum operations under the Participation Agreement; and
(e) if the operator originally proposed depth provided that such completion is carrying out a sole risk project on behalf of the sole risk parties, the operator shall be entitled to request the sole risk parties in connection with the sole risk project to advance their share of the estimated expenditure and shall not use joint account funds or be required to use its own funds for the purpose of paying the costs and expenses of the sole risk project; furthermore the operator shall not be obliged to commence or, having commenced, to continue the sole risk project unless and until relevant advances have been received from the sole risk parties.
8. The sole risk parties shall indemnify and hold harmless the other parties against all actions, claims, demands and proceedings whatsoever brought by any third party arising out of or in connection with the sole risk project and shall further indemnify the other parties against all damages, costs, losses and expenses whatsoever directly or indirectly caused to or incurred by them as a result of anything done or omitted to be done in the course of carrying out such sole risk project.
9. Subject to the provision of Article 11 (10) below, the sole risk project, including data and information, is wholly owned by the sole risk parties in accordance with the provisions of the Contract, but the sole risk parties shall keep the other parties informed about the project. In the event that such project results in an increase of production of petroleum from the participation area, the portion of such increase, which is available to the Contractor, shall be owned solely by the sole risk parties. Each of them shall have the right and obligation to take in kind, and separately dispose of its proportional share of supplementary petroleum productiongood engineering practice.
10. Any party or parties which are not participating in the sole risk project may, by giving thirty (30) days' notice to the sole risk parties, become participants in such project, at any time after the sole risk parties have recovered from the supplementary petroleum production the following sums of money to which they are entitled on the project:
Appears in 1 contract
SOLE RISK OPERATIONS. 1In case any Party (Sole Risk Party) wishes to carry out Exploration and/ or Appraisal Operations not included in any Work and/ or Appraisal Program and Budget of Operating Costs it shall so notify JOB within fifteen (15)days of the adoption of the said Work and/ or Appraisal Program and Budget of Operating Costs. Any party may undertake petroleum Such notice shall specify in detail the operations at sole risk (hereinafter referred that the Sole Risk Party wishes to as "sole risk project"have carried out. JOB shall promptly prepare a program and budget covering the said operations(Sole Risk Operations) in a participation area, subject and shall submit the same to the provisions of this Article.
2Sole Risk Party. The following types of sole risk project may be proposed-
(a) the drilling of a well or the deepening, side-tracking, completing, plugging back, testing or reworking of an existing well drilled for the joint account of the parties, in order to test a formation in which no jointly-owned well has been completed as a well producing or capable of producing petroleum;
(b) The installation of production and transportation facilities.
3. The conduct of a project in a development area may not be the subject of a sole risk notice under this Article until after it has been proposed in complete form to the operating committee for consideration pursuant to Article 4 hereof and has not been approved within the period therein provided. In the event that such project fails to obtain the requisite Sole Risk Party shall upon its approval of the operating committeeprogram and budget satisfy JOB as to his financial arrangements for carrying out such program and budget, then any party may serve notice on the other parties of its intention to carry out that project at sole risk. The other parties may give counter-notice that they wish to participate in the project within sixty (60) days after receipt thereof but, where a drilling rig is on the location and has not been released, the period is reduced to seventy-two (72) hours after receipt thereof. The periods set forth in this Article 11 (3) shall be extended for any period of time mutually agreed by the parties as necessary or desirable for acquiring or developing additional information on thereafter the sole risk project.
4. If all the other parties elect to participate program and budget shall be included in the project identified Work Program and Budget of Operating Costs to be submitted to PERTAMINA in the proposing party's notice within the period thereof provided, such project is considered as being approved by the operating committee and the provisions accordance with subsection 4.4 of Article 4 (8) of this Participation Agreement shall apply.
5. In the event that less than all the parties elect to participate in the project, the parties which elected to participate (hereafter referred to as "sole risk parties") shall be entitled to have the sole risk project carried out. The interest of each sole risk party in a sole risk project shall be in proportion to its participation interest in this Participation Agreement, or in such other proportion as the sole risk parties may agree. Any sole risk project shall be carried out at the sole risk, cost and expense section IV of the sole risk parties in Contract. After approval of the proportion Work Program And Budget of their respective interests.
6. A sole risk project Operating Costs by PERTAMINA, any geophysical survey to be conducted under Sole Risk Operations shall be carried out by the operator JOB on behalf of the Sole Risk Party at the Party's sole risk parties under the provisions of this participation agreement. No sole risk project may be commenced after one hundred and eighty (180) days following the expiration of the notice period prescribed in Article 11 (3), but the operator shall commence work as promptly as reasonably possible if the notice period of seventy two (72) hours, set forth in Article 11 (3), appliesexpense. The operator shall complete the sole risk project with due diligence provided that it does not jeopardize, hinder or unreasonably interfere with petroleum operations carried out under the Contract and adopted by the operating committee pursuant to Article 4 of this Participation Agreement. The sole risk parties may use for the sole risk project any production, handling, processing and/or transporting facilities, which are joint property, subject to a determination by the operating committee as to usage fees, availability of capacity and production compatibility.
7. In connection with any sole risk project-
(a) the sole risk project will be carried out under the overall supervision and control of the sole risk parties in lieu of the operating committee;
(b) the computation of costs and expenses of the sole risk project incurred by the sole risk parties shall be made in accordance with the principles set out in exhibit “A" attached hereto;
(c) the operator carrying out the sole risk project shall maintain separate books, records and accounts (including bank accounts) for the sole risk project which shall be subject to the same right of examination and audit by the sole risk parties;
(d) the costs and expenses of the sole risk project shall not be reflected in the statements and billing rendered by the operator for petroleum operations under the Participation Agreement; and
(e) if the operator is carrying out a sole risk project on behalf of the sole risk parties, the operator shall be entitled to request the sole risk parties in connection with the sole risk project to advance their share of the estimated expenditure and shall not use joint account funds or be required to use its own funds for the purpose of paying the costs and expenses of the sole risk project; furthermore the operator shall not be obliged to commence or, having commenced, to continue the sole risk project unless and until relevant advances have been received from the sole risk parties.
8. The sole risk parties shall indemnify and hold harmless the other parties against all actions, claims, demands and proceedings whatsoever brought by any third party arising out of or in connection with the sole risk project and shall further indemnify the other parties against all damages, costs, losses and expenses whatsoever directly or indirectly caused to or incurred by them as a result of anything done or omitted to be done in the course of carrying out such sole risk project.
9. Subject to the provision of Article 11 (10) below, the sole risk project, including data and information, is wholly owned by the sole risk parties in accordance with the provisions of the Contract, but the sole risk parties shall keep the other parties informed about the project. In the event that such project results in an increase of production of petroleum from the participation area, the portion of such increase, which is available to the Contractor, shall be owned solely by the sole risk parties. Each of them Non Sole Risk Party shall have the right and obligation to take be deemed to have participated in kind, and separately dispose such survey by giving notice at any time to the Sole Risk Party of its proportional share of supplementary petroleum production.
10. Any party or parties which are not participating in intention to do so and paying to the sole risk project may, by giving said Sole Risk Party within thirty (30) days' days from the date of giving such notice twice its Participating Interest share of the total cost of such survey already incurred. In respect of any well to the sole risk partiesbe drilled on a location selected pursuant to a geophysical survey, become participants a Party shall not be entitled to participate in such project, well unless either (1) the geophysical survey was carried out at any time after the sole risk parties that Party's Sole Risks or (2) that Party has elected to be deemed to have recovered from the supplementary petroleum production the following sums of money to which they are entitled on the project:participated in such survey as provided for above.
Appears in 1 contract
SOLE RISK OPERATIONS. 1. Any party may undertake petroleum operations at sole risk (hereinafter referred to as "sole risk project") in a participation area, subject 24.1 Subject to the provisions of this ArticlePart, a Party (“Proposing Party”) may give to the other Parties (“Receiving Parties”) and the Operator a notice (“Sole Risk Notice”) stating that Party’s intention to carry out a Sole Risk Operation and stating the proposed location, purpose and estimated cost of the Sole Risk Operation.
2. The 24.2 A Sole Risk Operation may comprise any of the following:
(a) drilling an Exploration Well;
(b) deepening, re-working, sidetracking, testing or completing an Appraisal Well or an Exploration Well; or
(c) drilling an Appraisal Well.
24.3 A Party shall not give a Sole Risk Notice if any of the following types of sole risk project may be proposed-conditions exist:
(a) the work proposed to be carried out under the Sole Risk Operation is included in a Work Program and Budget for JV Activities previously approved by the Committee but not yet carried out;
(b) any work is being carried out or has been proposed or included in an approved Work Program and Budget for JV Activities which has the same objective as the work in respect of which a Sole Risk Notice is desired to be given; or
(c) the work proposed is part of the Work Obligation.
24.4 A Party may give a Sole Risk Notice only if the activities covered by the Sole Risk Notice have been proposed to the Committee and the Committee has resolved not to carry out those activities as JV Activities. A Sole Risk Notice shall be effective only if it is given within the following periods:
(a) where the proposed Sole Risk Operation is the drilling of an Exploration Well or an Appraisal Well, within 30 days after the decision of the Committee not to carry out the proposed activities as JV Activities; or
(b) where the proposed Sole Risk Operation is the deepening reworking sidetracking, testing or completing of an Appraisal Well or an Exploration Well, prior to commencement of operations to abandon the well.
24.5 Within 30 days after receipt of the Sole Risk Notice, each Receiving Party shall give notice to the Proposing Party whether that Receiving Party will participate in the Sole Risk Operation, failing which that Receiving Party shall be deemed to have given notice to the Proposing Party that it will not participate in the Sole Risk Operation.
24.6 Where a drilling rig is on the location of the well, the time to respond to a Sole Risk Notice with respect to deepening, reworking, sidetracking or testing or completing of the well shall be reduced to 48 hours, after which rig time shall be at the expense of the SR-Parties PROVIDED HOWEVER that if the Sole Risk Operation is not carried out, the same additional expense shall be borne by the Proposing Party.
24.7 Each Party electing to participate in the Sole Risk Operation shall be a SR-Party.
24.8 The SR-Parties shall be associated in a Sole Risk Venture on the following terms:
(a) the purpose of the Sole Risk Venture shall be to carry out the Sole Risk Operation;
(b) each Party shall have an SR-Interest equal to the proportion that its Percentage Interest bears to the aggregate Percentage Interests of all of the SR-Parties;
(c) the SR-Parties shall pay all costs and expenses and bear all liabilities incurred in connection with the Sole Risk Operation in proportion to their respective SR-Interests;
(d) except as otherwise provided, the relationship between the SR-Parties in relation to the Sole Risk Venture shall be governed by the terms of this Agreement, mutatis mutandis.
24.9 As soon as the SR-Parties have been determined in accordance with this clause, the Operator shall forthwith give notice to all the SR-Parties how the costs, risks and liabilities of the Sole Risk Operation will be shared, and may thereafter commence the Sole Risk Operation.
24.10 Sole Risk Operations shall not be commenced more than 180 days after the Sole Risk Notice with respect thereto was given PROVIDED THAT a Sole Risk Notice may again be given for the same Sole Risk Operation within or after the expiration of the said 180 day period.
24.11 If following the giving of a Sole Risk Notice all Parties elect to participate, the proposed operation shall be conducted by the Operator as JV Activities, and the Work Program and Budget for the then current Work Period shall be revised accordingly.
25.1 If the Sole Risk Operation is the drilling of a well and if the operation results in discovery of Petroleum in Paying Quantities, then the following provisions shall apply:
(a) if the well is completed for production, the SR-Parties shall separately be entitled to take all Petroleum production derived therefrom by any Production Venture in proportion to their SR-Interests until the Net Value of the Petroleum so taken equals 100% (One Hundred Percent) of the SR-Costs incurred by the SR-Parties in relation to that well;
(b) if the well is not completed for production, the SR-Parties shall separately be entitled to take all Petroleum production derived by any Production Venture from any and all subsequent ▇▇▇▇▇ completed for production in the same Petroleum Pool until the Net Value thereof equals 100% of the SR-Costs incurred by the SR-Parties in relation to that well; and
(c) whether or not the well is completed for production the SR-Parties shall, after recovery of the aforesaid 100% (One Hundred Percent) of SR-Costs, be entitled to receive all further Petroleum production (“Premium Share of Production”) derived by any Production Venture from such well and any and all subsequent ▇▇▇▇▇ completed for production in the same Petroleum Pool until the Net Value thereof is an amount equal to 500% (Five Hundred Percent) in the case of an Exploration Well and 500% (Five Hundred Percent) in the case of an Appraisal Well of the SR-Costs incurred by the SR-Parties in relation to that well.
26.1 If the Sole Risk Operation is the deepening, reworking, side tracking, completion or testing of a well, and if the operation results in the discovery of Petroleum in Paying Quantities, then the SR-Parties shall be entitled to take all Petroleum production derived by any Production Venture from the well until the Net Value of the Petroleum production so taken equals 500% (Five Hundred Percent) of the SR-Costs incurred by the SR-Parties in relation to that operation.
26.2 If the Sole Risk Operation is the deepening of a well, the following provisions shall apply:-
(a) if the initial drilling of that well up to a depth at which deepening operations commenced (“Initial Depth”) was also carried out as a Sole Risk Operation, then the Non-SR-Parties in the drilling to the Initial Depth shall nevertheless have the right to participate in the deepening operation in proportion to their respective SR-Interests in the deepening operation;
(b) if the deepening does not result in the discovery of Petroleum in Paying Quantities, the SR-Parties who participated in the deepening but not in the drilling of the well to the Initial Depth shall have no obligation to contribute to the costs of drilling the well to the Initial Depth (except as to costs of materials, supplies and equipment assumed by the deepening Parties); and
(c) if the deepening operation results in the discovery of Petroleum in Paying Quantities, the SR-Parties participating in the completion of the well for the taking of Petroleum production from a formation into which the well was drilled as part of the deepening operation shall reimburse in cash to the SR-Parties participating in the drilling of the well to the Initial Depth, 100% (One Hundred Percent) of the SR-Costs incurred in drilling the well to the Initial Depth.
26.3 A Sole Risk Notice for a deepening, reworking or side-tracking, completing, plugging back, testing or reworking of an existing well drilled for the joint account of the parties, in order tracking operation may be given with respect to test a formation in which no jointly-owned well has been completed as a well producing or capable of producing petroleum;
(b) The installation of production and transportation facilities.
3. The conduct of a project Petroleum in a development area may not be the subject of a sole risk notice under this Article until after it has been proposed Paying Quantities and, in complete form to the operating committee for consideration pursuant to Article 4 hereof and has not been approved within the period therein provided. In the event that such project fails to obtain the requisite approval of the operating committee, then any party may serve notice on the other parties of its intention to carry out that project at sole risk. The other parties may give counter-notice that they wish to participate in the project within sixty (60) days after receipt thereof but, where a drilling rig is on the location and has not been releasedevent, the period is reduced to seventy-two (72) hours after receipt thereof. The periods set forth in this Article 11 (3) shall be extended for any period of time mutually agreed by the parties as necessary or desirable for acquiring or developing additional information on the sole risk project.
4. If all the other parties elect to participate in the project identified in the proposing party's notice within the period thereof provided, such project is considered as being approved by the operating committee and the following provisions of Article 4 (8) of this Participation Agreement shall apply.
5. In the event that less than all the parties elect to participate in the project, the parties which elected to participate (hereafter referred to as "sole risk parties") shall be entitled to have the sole risk project carried out. The interest of each sole risk party in a sole risk project shall be in proportion to its participation interest in this Participation Agreement, or in such other proportion as the sole risk parties may agree. Any sole risk project shall be carried out at the sole risk, cost and expense of the sole risk parties in the proportion of their respective interests.
6. A sole risk project shall be carried out by the operator on behalf of the sole risk parties under the provisions of this participation agreement. No sole risk project may be commenced after one hundred and eighty (180) days following the expiration of the notice period prescribed in Article 11 (3), but the operator shall commence work as promptly as reasonably possible if the notice period of seventy two (72) hours, set forth in Article 11 (3), applies. The operator shall complete the sole risk project with due diligence provided that it does not jeopardize, hinder or unreasonably interfere with petroleum operations carried out under the Contract and adopted by the operating committee pursuant to Article 4 of this Participation Agreement. The sole risk parties may use for the sole risk project any production, handling, processing and/or transporting facilities, which are joint property, subject to a determination by the operating committee as to usage fees, availability of capacity and production compatibility.
7. In connection with any sole risk project-:
(a) in drilling beyond the sole risk project point where the well is or may be productive in Paying Quantities, the deepening Parties will protect the hole so that the well can be carried out under plugged back to the overall supervision and control depth at which the presence of the sole risk parties Petroleum in lieu of the operating committeePaying Quantities was found or suspected;
(b) the computation deepening Parties shall, if the deepening does not result in the discovery of costs and expenses of Petroleum in Paying Quantities, plug back the well at the sole risk project incurred by and expense of the sole risk parties deepening Parties to the point at which Petroleum was discovered or suspect in Paying Quantities, if at least one of the Parties so requires; or
(c) should the well be capable of producing Petroleum in Paying Quantities from both above and below the depth at which the deepening operation began and one or more of the respective Parties entitled to attempt to complete the well in the respective productive formations wish to do so, the respective SR-Parties will co-operate in causing the well to be duly completed. If this is not possible or feasible in accordance with good engineering practice, then completion shall be made in accordance with the principles set out in exhibit “A" attached hereto;
(c) formation within the operator carrying out the sole risk project shall maintain separate books, records and accounts (including bank accounts) for the sole risk project which shall be subject to the same right of examination and audit by the sole risk parties;
(d) the costs and expenses of the sole risk project shall not be reflected in the statements and billing rendered by the operator for petroleum operations under the Participation Agreement; and
(e) if the operator originally proposed depth provided that such completion is carrying out a sole risk project on behalf of the sole risk parties, the operator shall be entitled to request the sole risk parties in connection with the sole risk project to advance their share of the estimated expenditure and shall not use joint account funds or be required to use its own funds for the purpose of paying the costs and expenses of the sole risk project; furthermore the operator shall not be obliged to commence or, having commenced, to continue the sole risk project unless and until relevant advances have been received from the sole risk parties.
8. The sole risk parties shall indemnify and hold harmless the other parties against all actions, claims, demands and proceedings whatsoever brought by any third party arising out of or in connection with the sole risk project and shall further indemnify the other parties against all damages, costs, losses and expenses whatsoever directly or indirectly caused to or incurred by them as a result of anything done or omitted to be done in the course of carrying out such sole risk project.
9. Subject to the provision of Article 11 (10) below, the sole risk project, including data and information, is wholly owned by the sole risk parties in accordance with the provisions of the Contract, but the sole risk parties shall keep the other parties informed about the project. In the event that such project results in an increase of production of petroleum from the participation area, the portion of such increase, which is available to the Contractor, shall be owned solely by the sole risk parties. Each of them shall have the right and obligation to take in kind, and separately dispose of its proportional share of supplementary petroleum productiongood engineering practice.
10. Any party or parties which are not participating in the sole risk project may, by giving thirty (30) days' notice to the sole risk parties, become participants in such project, at any time after the sole risk parties have recovered from the supplementary petroleum production the following sums of money to which they are entitled on the project:
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