▇▇▇▇▇▇▇ ▇▇.▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ LLC
CONTRACT
SECTION 1
FORM OF AGREEMENT
FORM OF AGREEMENT
HIRE OF A DRILLING UNIT
This Contract (CONTRACT) between BP TRINIDAD AND TOBAGO LLC, a company
incorporated in the State of Delaware and registered under the Companies Act,
1995 of the Laws of the Republic of Trinidad and Tobago (hereinafter referred to
as "OPERATOR"), and ▇▇▇▇▇▇ OFFSHORE INC. a company incorporated in the State of
Delaware (hereinafter referred to as "CONTRACTOR") is to engage the CONTRACTOR
to carry out drilling services (DRILLING SERVICES) in accordance with the
following terms and conditions.
OPERATOR enters into this Contract on behalf of itself and all participants in
the concession area (CO-VENTURERS) but notwithstanding this fact or anything
else in the CONTRACT to the contrary:
(a) The CONTRACTOR agrees to look only to OPERATOR for the due
performance of the CONTRACT and nothing herein contained shall impose
any liability upon or entitle the CONTRACTOR to commence any
proceedings against any of OPERATOR'S CO-VENTURERS.
(b) OPERATOR shall be entitled to enforce the CONTRACT on behalf of its
CO-VENTURERS as well as for OPERATOR and for this purpose OPERATOR
and only OPERATOR may commence proceedings in its own name to enforce
all obligations and liabilities of the CONTRACTOR under this CONTRACT
and to make any claim which OPERATOR, its CO-VENTURERS may have
against the CONTRACTOR.
1. DOCUMENTS
The CONTRACT shall comprise the following documents:
1.1 This Contract Agreement
1.2 Conditions of Contract (section 2 hereto)
1.3 Contractor's Insurance (section 3 hereto)
1.4 Statement of Requirements (section 4 hereto)
1.5 Rates and Charges (section 5 hereto)
1.6 Contractor's Personnel (section 6 hereto)
1.7 Specification of Contractor's Equipment (section 7 hereto)
2. DEFINITIONS
In this Agreement words and expressions shall have the same meanings
as are respectively assigned to them in the Conditions of Contract.
3. THE SERVICES
The Scope of the SERVICES shall be the provision of the DRILLING UNIT
and DRILLING EQUIPMENT as more fully described in SECTION 7 hereto
and PERSONNEL as more fully described in SECTION 6 hereto and
providing services as more fully described in SECTION 4 hereto for
the drilling of ▇▇▇▇▇ as more fully described in the documents
hereto.
SECTION 1
FORM OF AGREEMENT
PAGE 2 OF 5
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4. OPERATOR'S REPRESENTATIVE
The OPERATOR'S REPRESENTATIVE shall be ▇▇▇ ▇▇▇▇▇▇▇▇, Manager, Well
Operations
BP Trinidad and Tobago LLC
5 & ▇▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇
Trinidad
Tel No. ▇▇▇ ▇▇▇-▇▇▇▇
Fax No. ▇▇▇ ▇▇▇-▇▇▇▇
5. CONTRACTOR'S REPRESENTATIVE
The CONTRACTOR'S REPRESENTATIVE shall be
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
▇▇▇▇▇▇ Offshore Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
6. DURATION OF THE CONTRACT
6.1 Duration
Notwithstanding the date hereof the CONTRACT shall be
deemed to have come into effect on the date that the
DRILLING UNIT is under tight tow to Pascagoula, Mississippi
to begin the Make Ready Period as further described below
and shall, subject to OPERATOR'S rights of termination
hereunder, continue until the third anniversary of the
Commencement Date subject to any extensions pursuant to
Clause 6.2 of this Section 1, and subject to extension for
any period necessary to complete any WELL being drilled
upon such anniversary.
6.2 Options to Extend
The OPERATOR may, at its option, extend the term of the
CONTRACT by exercising up to two (2) one-year extensions,
such extensions to run consecutively with the preceding
CONTRACT term, subject to OPERATOR's rights of termination
hereunder. If OPERATOR elects to exercise the option for
the first one-year extension of the term of the CONTRACT,
OPERATOR shall give CONTRACTOR written notice of the
exercise of such extension option at least six (6) months
prior to the third anniversary of the Commencement Date.
Upon CONTRACTOR's receipt of such written notification,
OPERATOR and CONTRACTOR shall negotiate in good faith to
determine the mutually agreeable rates for the DRILLING
UNIT that shall apply during such one-year extension
period. If OPERATOR and CONTRACTOR reach a mutually
acceptable agreement on such rates by the date three (3)
months after the date of such written notice by OPERATOR of
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FORM OF AGREEMENT
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its exercise of the extension option, the term of the
CONTRACT shall be extended by one (1) year, and such agreed
rates shall apply in lieu of the rates previously
applicable to the CONTRACT. If OPERATOR and CONTRACTOR do
not reach a mutually acceptable agreement on such rates by
the date three (3) months after the date of such written
notice by OPERATOR of its exercise of the extension option,
then there shall be no extension of the term of this
CONTRACT based on the extension options granted to OPERATOR
hereunder, and CONTRACTOR shall be free to enter into
agreements for the utilization of the DRILLING UNIT for
periods after the expiration of the term of the CONTRACT.
If the CONTRACT term is extended by one (1) year pursuant
to the foregoing provision, then OPERATOR shall retain the
option to extend the term of the CONTRACT for the second
one-year option period. If OPERATOR elects to exercise such
option for the second one-year extension of the term of the
CONTRACT, OPERATOR shall give CONTRACTOR written notice of
the exercise of such extension option at least six (6)
months prior to the fourth anniversary of the Commencement
Date. Upon CONTRACTOR's receipt of such written
notification, OPERATOR and CONTRACTOR shall negotiate in
good faith to determine the mutually agreeable rates for
the DRILLING UNIT that shall apply during such one-year
extension period. If OPERATOR and CONTRACTOR reach a
mutually acceptable agreement on such rates by the date
three (3) months after the date of such written notice by
OPERATOR of its exercise of the extension option, the term
of the CONTRACT shall be extended by one (1) year, and such
agreed rates shall apply in lieu of the rates previously
applicable to the CONTRACT. If OPERATOR and CONTRACTOR do
not reach a mutually acceptable agreement on such rates by
the date three (3) months after the date of such written
notice by OPERATOR of its exercise of the extension option,
then there shall be no extension of the term of this
CONTRACT based on the second one-year extension option
granted to OPERATOR hereunder, and CONTRACTOR shall be free
to enter into agreements for the utilization of the
DRILLING UNIT for periods after the expiration of the term
of the CONTRACT.
6.3 Make Ready Period
Upon completion of the tow of the DRILLING UNIT from the
last location in the U.S. Gulf of Mexico in Main Pass Block
300 to Pascagoula, Mississippi, the DRILLING UNIT will
undergo certain modifications and equipment additions and
changes as set forth on the attached Schedule 6.3, at the
expense of CONTRACTOR. All cost for modifications and
equipment additions and changes as set forth on the
attached Schedule 6.3 is included in the Day Rates.
Any additions and changes requested by OPERATOR other than
those listed on the attached Schedule 6.3 shall be at
OPERATOR's expense, including the payment of the
PROVISIONING RATE for any delay in the departure of the
DRILLING UNIT from Pascagoula, Mississippi caused by such
requested additions and changes, beyond fourteen (14) days
from the time the DRILLING UNIT is jacked up dockside in
Pascagoula, Mississippi. OPERATOR and CONTRACTOR
acknowledge and agree that the drill pipe listed on the
attached Schedule 6.3 is not scheduled to arrive while the
DRILLING UNIT is in Pascagoula, Mississippi, and will be
delivered to the DRILLING UNIT after it arrives in the
CONTRACT AREA. Due to the timing of the required start of
SECTION 1
FORM OF AGREEMENT
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operations in CONTRACT AREA, the DRILLING UNIT must be
removed from service in the U.S. Gulf of Mexico at the end
of the current program in Main Pass Block 300, and
CONTRACTOR must make certain equipment purchase commitments.
Such Make Ready Period is anticipated to last fourteen (14)
days from the time that the DRILLING UNIT is jacked up
dockside in Pascagoula, Mississippi. If the departure of the
DRILLING UNIT is delayed beyond fourteen (14) days from the
start of such period due to the request of the OPERATOR for
additional modifications or additional changes requested by
OPERATOR, OPERATOR shall pay CONTRACTOR the PROVISIONING
RATE as stated in Section 5 of the CONTRACT for such period
of delay.
6. RIG AUDIT
OPERATOR shall carry out an audit of the DRILLING UNIT in
Pascagoula, Mississippi. CONTRACTOR shall be required to
correct any deficiencies identified during the audit, at its
own costs and expenses, prior to the COMMENCEMENT DATE or as
otherwise agreed between CONTRACTOR and OPERATOR. All
DRILLING UNIT audit recommendations which would affect safe
and efficient operations must have been carried out or the
OPERATOR's REPRESENTATIVE and CONTRACTOR'S REPRESENTATIVE
must have mutually agreed in writing to a schedule for
completion of outstanding DRILLING UNIT audit
recommendations.
7. RIG ACCEPTANCE
OPERATOR shall conduct RIG ACCEPTANCE of the DRILLING UNIT
pursuant to OPERATOR's rig acceptance procedure, as soon as
the DRILLING UNIT has been pinned at the LOCATION. The
period commencing on the pinning of the DRILLING UNIT to the
completion of the RIG ACCEPTANCE exercise shall be charged
at the STANDBY RATE.
In the event that OPERATOR shall not accept the DRILLING
UNIT after the completion of the RIG ACCEPTANCE exercise,
the DRILLING UNIT will go on NIL Rate until the deficiencies
identified during the RIG ACCEPTANCE exercise have been
rectified to the satisfaction of OPERATOR.
8. REMUNERATION
In full consideration of the satisfactory performance of the Services
set out in Clause 3 hereof the CONTRACTOR shall be paid as set out in
SECTION 5 hereto. Such rates will be subject only to adjustments for
documented changes, pursuant to Section 5, clause 5.7, in
CONTRACTOR'S costs of operations in the CONTRACT AREA.
Rates of payment for any extended term, which OPERATOR elects to
exercise shall be mutually agreed upon as stated in sub-clause 6.2
above.
SECTION 1
FORM OF AGREEMENT
PAGE 5 OF 5
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9. ACKNOWLEDGEMENT
Kindly confirm acceptance of the terms of this Contract by signing and
returning the attached duplicate.
FOR BP TRINIDAD AND TOBAGO LLC
Signed: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ Name ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------- ------------------------------------------
(Block Capitals)
Position: ASSOCIATE PRESIDENT & CHAIRMAN Date 8/6/01
---------------------------------------- ------------------------------------------
Signed: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇ Name ▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------- ------------------------------------------
(Block Capitals)
Position: WELL OPERATIONS MANAGER Date 8/6/01
---------------------------------------- ------------------------------------------
Signed: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------- ------------------------------------------
(Block Capitals)
Position: MANAGER, CONTRACTS Date 8/6/01
---------------------------------------- ------------------------------------------
We confirm our acceptance of this CONTRACT.
FOR ▇▇▇▇▇▇ OFFSHORE INC.
Signed: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------- ------------------------------------------
(Block Capitals)
Position: CHIEF EXECUTIVE OFFICER Date 8/6/01
---------------------------------------- ------------------------------------------
SECTION 2
CONDITIONS OF CONTRACT
CONDITIONS OF CONTRACT
CONTENTS
CLAUSE 1. DEFINITIONS 2
CLAUSE 2. CARRY OUT DRILLING SERVICES 3
CLAUSE 3. TERMINATION 3
CLAUSE4. ACCESS TO LOCATIONS 5
CLAUSE 5. OPTIONAL RIGHTS OF THE OPERATOR IN THE EVENT OF
DEFAULT BY THE CONTRACTOR 5
CLAUSE 6. LIABILITIES AND INDEMNITIES 8
CLAUSE.7. CONTRACTOR'S INSURANCES 12
CLAUSE.8. TAX INFORMATION AND INDEMNITY 13
CLAUSE 9. BANKRUPTCY OR LIQUIDATION 15
CLAUSE 10. FORCE MAJEURE 15
CLAUSE 11. FREEDOM FROM LIENS 16
CLAUSE 12. CONTRACTOR TO MAINTAIN REPRESENTATION 16
CLAUSE 13. GIVING OF NOTICES AND PAYMENT OF FEES 17
CLAUSE 14. CONFIDENTIAL INFORMATION 17
CLAUSE 15. PUBLICITY 17
CLAUSE 16. ASSIGNMENT AND SUB-CONTRACTING 17
CLAUSE 17. APPLICATION OF LAWS AND REGULATIONS 18
CLAUSE 18. SERVING OF NOTICES 18
CLAUSE 19. VARIATION AND WAIVER 18
CLAUSE 20. INDEPENDENT CONTRACTOR RELATIONSHIP 19
CLAUSE 21. INFRINGEMENT OF PATENTS 19
CLAUSE 22. PERMITS AND LICENCES 19
CLAUSE 23. APPLICABLE LAW 19
CLAUSE 24. ARBITRATION 20
CLAUSE 25. EXCLUSION OF PREVIOUS CORRESPONDENCE 20
CLAUSE 26. AUDIT 20
CLAUSE 27. SEVERABILITY
1. Personnel 1
2. Equipment 1
3. Third Party 2
4. Automobiles 2
5. Certificates of Insurance 2
A. GENERAL DESCRIPTION 1
1
SECTION 2
CONDITIONS OF CONTRACT
PAGE 2 OF 22
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CONDITIONS OF CONTRACT
CLAUSE 1. DEFINITIONS
In the CONTRACT the following words and expressions
shall have the meanings assigned to them, except where
the context otherwise requires.
1.1 "AFFILIATE" as applied to OPERATOR shall mean and
include BP Trinidad and Tobago LLC and any company
which is directly or indirectly controlled by BP
Trinidad and Tobago LLC. "Affiliate" as applied to
CONTRACTOR shall include ▇▇▇▇▇▇ Offshore Inc. and any
company, which is directly or indirectly controlled by
▇▇▇▇▇▇ Offshore Inc. Control means the ownership
directly or indirectly of more than fifty (50) percent
of the voting rights in a company, partnership or
legal entity.
1.2 "AGENCY" means any agency, authority, department,
court, government, legislature, minister, ministry,
official, or public person (whether autonomous or not)
of the Republic of Trinidad and Tobago, the United
States of America and any other nation, state,
jurisdiction, supernational organisation or any
political subdivision of the foregoing;
1.3 "CERTIFICATION" shall mean the ABS Maltese Cross A-1
Self Elevating Drilling Unit.
1.4 The "COMMENCEMENT DATE" shall mean the date on which
the DRILLING UNIT is pinned on the first LOCATION in
the CONTRACT AREA and the OPERATOR provided RIG
ACCEPTANCE.
1.5 "COMPLETION DATE" shall mean the date when the
DRILLING UNIT has completed the last WELL and all
OPERATOR'S MATERIAL'S and SERVICE COMPANY EQUIPMENT
has been offloaded and the DRILLING UNIT has been
towed to the mutually agreed on port in Trinidad.
1.6 "CONTRACT" shall mean all those documents forming the
Contract as stated in Clause 1 of the Contract
Agreement.
1.7 The "CONTRACT AREA" shall mean the OPERATOR'S
concession areas offshore the east coast of the
Republic of Trinidad and Tobago (Block 27) and any
onshore area used in association therewith, or other
areas agreed between the parties.
1.8 The "CONTRACT DEPTH" shall mean the DEPTH to which
the CONTRACTOR may be required to carry out the
DRILLING SERVICES.
1.9 The "CONTRACTOR'S EQUIPMENT" shall mean the Drilling
Unit (as hereinafter defined) together with all the
drilling and associated equipment listed in SECTION 7
Group 2 (hereinafter referred to as the "DRILLING
EQUIPMENT") together with the CONTRACTOR'S stock of
spare parts.
1.10 The "CONTRACTOR'S PERSONNEL" or "its PERSONNEL" shall
mean the CONTRACTOR'S labour and supervisory personnel
listed in SECTION 6.
2
SECTION 2
CONDITIONS OF CONTRACT
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1.11 "CO-VENTURERS" as applied to OPERATOR shall mean any
parties to a joint venture agreement whereby the
OPERATOR undertakes to act as operator for such
participants of any Licence Block in which the
CONTRACTOR may be required to perform the DRILLING
SERVICES.
1.12 "DEMOBILISATION" shall mean the period of time after
the DRILLING UNIT has been moved to a mutually agreed
port in Trinidad and all of OPERATOR'S and SERVICE
COMPANY's materials have been offloaded.
1.13 "DEPTH" shall mean the depth of the hole as obtained
by measuring the drilling string with a steel tape,
using as datum the top of the Rotary Table.
1.14 The "DRILLING SERVICES" shall mean the operations as
defined in SECTION 4.
1.15 The "DRILLING UNIT" shall mean the vessel as
specified in SECTION 7 - Group 1.
1.16 "EFFECTIVE DATE" shall mean the point in time that
the DRILLING UNIT is under tight tow to Pascagoula,
Mississippi to begin the Make Ready Period.
1.17 LAW" means any treaty, statute, law, directive,
by-law, rule, order, decree, regulation, injunction,
license, permit, approval, agreement or delegated
legislation in each case of any Agency;
1.18 "LOCATION" shall mean the location of any WELL.
1.19 "MOBILISATION" shall mean the period of time from
when the DRILLING UNIT is under tight tow to
Pascagoula, Mississippi, until the Make Ready Period
has been completed, and until the COMMENCEMENT DATE.
1.20 "MONTH" shall mean a calendar month.
1.21 "OPERATOR" shall mean BP TRINIDAD AND TOBAGO LLC or
any subsidiary thereof and also any reference to
"OPERATOR" in this CONTRACT shall also include
OPERATOR'S AFFILIATES and CO-VENTURERS.
1.22 "OPERATOR'S MATERIALS" shall mean the equipment,
materials, services and supplies to be provided by
the OPERATOR.
1.23 "OPERATOR'S REPRESENTATIVE" and "CONTRACTOR'S
REPRESENTATIVE" shall mean those persons who are
appointed as such from time to time by the OPERATOR
and the CONTRACTOR respectively and whose names have
been notified in writing by the appointing party to
the other party.
1.24 "RIG ACCEPTANCE" shall mean that the OPERATOR'S
REPRESENTATIVE certifies in writing on the IADC-API
Official Daily Drilling Report Form that the
CONTRACTOR'S EQUIPMENT is acceptable to commence the
DRILLING SERVICES
3
SECTION 2
CONDITIONS OF CONTRACT
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1.25 "RIG STAFF" shall mean the Rig Manager, Assistant Rig
Manager (if any), Toolpushers, Tour Pushers (if any),
Drillers and Assistant Drillers of the CONTRACTOR'S
PERSONNEL.
1.26 The "SERVICE COMPANIES" shall mean the contractors
(including their servants and agents) hired by the
OPERATOR and providing miscellaneous services in
conjunction with the DRILLING SERVICES.
1.27 The "SUB-CONTRACTORS" shall mean the contractors
approved by the OPERATOR and hired by the CONTRACTOR
for any services in conjunction with the DRILLING
SERVICES.
1.28 "WELL" shall mean any OPERATOR'S well or drilling
location (as hereinafter defined) whether already
drilled, or yet to be drilled by OPERATOR in the
CONTRACT AREA under the terms and conditions of the
CONTRACT.
1.29 "THIRD PARTY" shall for the avoidance of doubt, mean
those parties excluding CONTRACTOR, SERVICE COMPANIES,
OPERATOR, or SUB-CONTRACTORS.
1.30 "TRINIDAD" means the Republic of Trinidad and Tobago.
Words importing the singular only also include the
plural and vice versa where the context requires.
The headings in these CONDITIONS OF CONTRACT shall not
be deemed to be part thereof or be taken into
consideration of construction thereof or of the
CONTRACT.
In the event of any conflict between this Section 2
and any of the other Sections of this CONTRACT, the
provisions of this Section 2 shall prevail.
CLAUSE 2. CARRY OUT DRILLING SERVICES
The CONTRACTOR shall carry out the DRILLING SERVICES
according to the specifications and instructions
issued from time to time by the OPERATOR consistent
with the terms of the CONTRACT.
CLAUSE 3. TERMINATION
3.1 Termination upon Loss of or Damage to the DRILLING
UNIT
i. The CONTRACT shall be terminated upon the
total loss (as hereinafter defined) of the
DRILLING UNIT, as certified by a mutually
acceptable independent marine surveyor of
the calibre of ▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇
▇▇▇▇▇▇. The surveyor shall be retained by
and at the expense of the CONTRACTOR.
Termination of the CONTRACT shall be at the
date and time of such determination by such
marine surveyor or the date of such
compromised or arranged total loss.
In the context of this sub-clause 3.1(i)
"total loss" shall mean an actual,
constructive, compromised or arranged total
loss of the DRILLING UNIT.
4
SECTION 2
CONDITIONS OF CONTRACT
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ii. The CONTRACT shall be terminated if the
DRILLING UNIT shall suffer damage that
renders it incapable of continuing
operations within one (1) month of suffering
such damage, as certified by a mutually
acceptable independent marine surveyor of
the calibre of ▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇
▇▇▇▇▇▇. The surveyor shall be retained by
and at the expense of the CONTRACTOR.
Termination of the CONTRACT shall be at the
date and time of such determination by such
marine surveyor.
3.2 Failure to keep CONTRACTOR'S EQUIPMENT in
CERTIFICATION
OPERATOR shall have the right to terminate the
CONTRACT:
(i) forthwith if the CONTRACTOR fails to comply
with the requirements of sub-clause 4.2 of
SECTION 4.
(ii) by giving the CONTRACTOR seven days written
notice after 10 days of expiry of
CERTIFICATION if the CONTRACTOR has not
commenced action to restore same.
(iii) by giving the CONTRACTOR seven days written
notice after 30 days of expiry of
CERTIFICATION if the DRILLING UNIT has not
been re-certified.
3.3 Termination upon expiry of the Term
Subject to the termination rights of OPERATOR, this
CONTRACT shall terminate on the COMPLETION DATE,
subject to the DEMOBILISATION obligations of OPERATOR.
OPERATOR shall furnish towing vessels and related
services, and pay the MOVING RATE to move the DRILLING
UNIT to the mutually agreed port and to pay the
lump-sum DEMOBILISATION CHARGE as described herein.
The OPERATOR shall be relieved from its obligation to
pay the DEMOBILISATION CHARGE if the DRILLING UNIT is
under contract to a third party to commence work for
such third party in the waters of Trinidad and Tobago,
or if a third party is paying for mobilization of the
DRILLING UNIT from the waters of Trinidad and Tobago.
In such event, the CONTRACT shall terminate when the
OPERATOR's and SERVICE COMPANY's materials are
offloaded and the DRILLING UNIT is under tight tow to
the third party location. In such event, CONTRACTOR
shall furnish towing vessels and related services to
take the DRILLING UNIT to its new location.
3.4 Termination Without Cause
Commencing six (6) months from the COMMENCEMENT DATE,
OPERATOR may terminate the CONTRACT without cause
after six (6) month's written notice to CONTRACTOR.
Should OPERATOR terminate the CONTRACT without cause,
and not pursuant to Clause 3.1 or 3.2 of hereof or
the default of the CONTRACTOR with regard to
unsatisfactory performance, failure to provide
equipment, breach of CONTRACT, requisition,
liquidation or insolvency, all as described in clause
5 hereof, or force majeure as described in clause 10
hereof, the OPERATOR will reimburse the CONTRACTOR as
follows:
5
SECTION 2
CONDITIONS OF CONTRACT
PAGE 6 OF 22
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The DEMOBILIZATION CHARGE (if applicable), plus 60% of
the OPERATING RATE for the remaining balance of the
term of the CONTRACT that has not been utilised, and
the unamortized portion of the Make Ready additions
and changes described on Schedule 6.3, based on the
"BP Amortized Amount" set forth on Schedule 6.3. The
CONTRACT shall terminate upon CONTRACTOR's receipt of
payment of such amounts from OPERATOR.
For example, if OPERATOR gives written notice to
CONTRACTOR eighteen (18) months after the COMMENCEMENT
DATE that the CONTRACT will terminate twenty-four (24)
months after the COMMENCEMENT DATE, then the OPERATOR
would pay to CONTRACTOR (i) $2,800,000 for the
DEMOBILIZATION CHARGE, (ii) $15,987,000 (60% of the
OPERATING RATE of $73,000 for the then remaining 365
days of the term of the CONTRACT), and (iii) $551,008
for OPERATOR's share of the unamortized amount of the
Make Ready additions pursuant to Schedule 6.3 (such
amounts are exclusive of any applicable VAT payable by
OPERATOR).
CLAUSE 4. ACCESS TO LOCATIONS
The OPERATOR shall secure for the CONTRACTOR and its
SUB-CONTRACTORS rights of access to and from
LOCATIONS. The OPERATOR shall use its best endeavours
to advise the CONTRACTOR of any limitations,
restriction or conditions, which may affect such
access, and the CONTRACTOR shall abide by such
limitations, restrictions and conditions as aforesaid.
OPERATOR shall be responsible for selecting, marking
and clearing drilling LOCATIONS, for providing proper
and sufficient certificates, permits or permission
necessary to enter upon and operate on the LOCATIONS,
and for notifying CONTRACTOR of any impediments or
hazards to operations at each LOCATION or within the
anchor pattern, including, without limitation, any
pipelines, cables, boulders, mud filled depressions or
faulty bottom conditions in the area. OPERATOR also
shall provide CONTRACTOR with soil and sea bottom
condition surveys at each LOCATION adequate to satisfy
CONTRACTOR's marine surveyor. In the event the
DRILLING UNIT is used over a platform, all surveys to
determine the structural integrity of the platform
will be the responsibility of OPERATOR.
Should seabed conditions be unsatisfactory to properly
support or moor the DRILLING UNIT upon arrival at the
LOCATION, OPERATOR shall continue to pay CONTRACTOR
the STANDBY RATE set forth in Schedule 5.1 to Section
5 of this CONTRACT, until seabed conditions are
ultimately remedied. All expenses associated with
improvements to the seabed and repositioning of the
DRILLING UNIT at the LOCATION shall be for OPERATOR's
account.
Notwithstanding any other provision of this CONTRACT,
except in the event of CONTRACTOR'S negligence, should
there be obstructions at or within the area of the
LOCATION, including the anchor pattern, or faulty
bottom conditions, which have not been identified by
OPERATOR and these obstructions or faulty bottom
conditions damage CONTRACTOR'S EQUIPMENT, or
CONTRACTOR'S EQUIPMENT damages these obstructions, or
6
SECTION 2
CONDITIONS OF CONTRACT
PAGE 7 OF 22
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if seabed conditions prove unsatisfactory to properly
support or moor the DRILLING UNIT during operations
hereunder, OPERATOR will be responsible for and
indemnify and hold harmless CONTRACTOR for all
resulting damages, including, without limitation,
payment of the STANDBY RATE during required repairs,
but OPERATOR will receive credit for any physical
damage insurance proceeds received by CONTRACTOR as a
result of any damage to the DRILLING UNIT
CLAUSE 5. OPTIONAL RIGHTS OF THE OPERATOR IN THE EVENT OF
DEFAULT BY THE CONTRACTOR
5.1 Unsatisfactory performance by the CONTRACTOR
In the event that the OPERATOR is dissatisfied with
the performance of the CONTRACTOR hereunder on account
of sustained, unreasonably slow progress or for
demonstrated incompetency as a result of causes
reasonably within the CONTRACTOR'S control, including,
without limitation, time lost from lack of crews,
stores, or poorly maintained equipment, or failure to
observe safe operating practices, the OPERATOR shall
notify the CONTRACTOR in writing with specificity as
to the cause of its dissatisfaction. Should the
CONTRACTOR fail to demonstrate to the OPERATOR'S
satisfaction that it has taken measures to remedy the
matters so specified within a period of not more than
seven (7) days, the OPERATOR shall have the right to
terminate the CONTRACT upon completion of the current
operation then being performed at the time of receipt
of the notification of dissatisfaction as aforesaid.
In the case of events requiring replacement of parts
or equipment, CONTRACTOR shall be allowed a reasonable
time for transit of materials and clearances through
customs, subject to OPERATOR's payment obligations
pursuant to Clause 5.3 of Section 5. No further
payments shall be due to the CONTRACTOR other than
those outstanding for work done prior to the said
termination and the DEMOBILISATION CHARGE.
5.2 CONTRACTOR'S failure to perform its obligations or to
provide the CONTRACTOR'S EQUIPMENT
In the event of the CONTRACTOR'S continuous failure to
perform any of its obligations or to provide any of
the CONTRACTOR'S EQUIPMENT or in the event that the
CONTRACTOR fails to demonstrate that the CONTRACTOR'S
EQUIPMENT is capable of meeting the manufacturer's
rating for such equipment for sustained operations, in
each case so as to jeopardize the integrity of the
well bore or which results in unreasonably slow
progress, the OPERATOR shall notify the CONTRACTOR in
writing specifying the deficiencies of CONTRACTOR's
performance or such CONTRACTOR'S EQUIPMENT which the
CONTRACTOR has so failed to provide or for which
CONTRACTOR has failed to demonstrate that such
CONTRACTOR'S EQUIPMENT is capable of meeting the
manufacturer's rating for such equipment for sustained
operations, and immediately thereafter the OPERATOR
shall have the right to exercise one of the following
options:-
7
SECTION 2
CONDITIONS OF CONTRACT
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(a) To shutdown such operations until such time
as the CONTRACTOR shall have made good the
deficiencies in the said equipment whether
as to provision or to performance.
For any such period of shutdown the OPERATOR
shall pay the CONTRACTOR:
(i) at the REPAIR RATE in accordance
with SECTION 5 hereof provided the
shutdown is due to an abnormal
failure of a component of
CONTRACTOR'S EQUIPMENT. An abnormal
failure is defined as being a
failure, which is not due to a lack
of proper maintenance, by the
CONTRACTOR.
(ii) at NIL rate if the shutdown is due
to lack of proper maintenance by
the CONTRACTOR.
In all such instances referred to in (i) and
(ii) above the OPERATOR shall have the
exclusive right to terminate the CONTRACT
any time after a shutdown period has
exceeded twenty-one (21) days.
In such event the OPERATOR shall not be
liable for any further payments to the
CONTRACTOR, other than those outstanding for
work done prior to the said termination and
the DEMOBILISATION CHARGE.
(b) To hire from the nearest available source
satisfactory to the OPERATOR all such
equipment as may be required to complete
essential operations:
(i) arising out of the CONTRACTOR'S
failure so to provide the DRILLING
EQUIPMENT or any part thereof,
until the CONTRACTOR shall have
provided as aforesaid, or
(ii) arising out of any sustained
failure of the DRILLING EQUIPMENT
or any part thereof that CONTRACTOR
cannot demonstrate that it can meet
manufacturer's specifications for
sustained operations, until the
CONTRACTOR can demonstrate to the
OPERATOR that the said equipment or
part thereof can meet the said
manufacturer's specifications for
sustained operations.
All costs incurred by the OPERATOR in hiring
and transporting such equipment shall be a
debt due to the OPERATOR from the CONTRACTOR
and shall be deducted from any monies due to
the CONTRACTOR from the OPERATOR.
5.3 Breach of the CONTRACT by the CONTRACTOR
Subject to other provisions in the CONTRACT, in the
event of a material breach by the CONTRACTOR of any of
the terms and conditions of the CONTRACT, the OPERATOR
shall have the right to give written notice to the
CONTRACTOR specifying such breach and calling upon the
CONTRACTOR to remedy the breach forthwith and the
CONTRACTOR shall not be entitled to payment for work
8
SECTION 2
CONDITIONS OF CONTRACT
PAGE 9 OF 22
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performed in making good the breach. If after receipt
of such notice the CONTRACTOR does not remedy such
breach within a reasonable period (which period the
OPERATOR shall advise in the aforesaid written notice
and which shall take into account the nature of the
breach), but in no event less than ten (10) days, then
the OPERATOR may at its own option adopt one of the
following provisions:
(i) terminate the CONTRACT as soon as is
practicable on expiry of the said period.
After such termination the OPERATOR shall
not be liable for any payments to the
CONTRACTOR other than those outstanding for
work done prior to the said termination and
the DEMOBILISATION CHARGE.
(ii) in the event the OPERATOR does not wish to
terminate pursuant to (i) above, OPERATOR
may instruct the CONTRACTOR to shut down the
CONTRACTOR'S EQUIPMENT and the OPERATOR
shall pay the CONTRACTOR at SHUTDOWN WITH
CREW RATE for such period as OPERATOR
requires from the date of such shutdown and
thereafter apply the provisions of (i) of
this sub-clause.
CLAUSE 6. LIABILITIES AND INDEMNITIES
6.1 The CONTRACTOR'S EQUIPMENT
(a) The CONTRACTOR shall indemnify the OPERATOR
and the SERVICE COMPANIES and hold the
OPERATOR and the SERVICE COMPANIES harmless
from and against any and all liability for
loss, damage or destruction of the
CONTRACTOR'S EQUIPMENT whether arising out
of the CONTRACT or in tort, and against all
claims, demands, proceedings and causes of
action resulting therefrom, regardless of
how such loss, damage or destruction occurs,
notwithstanding that such loss or damage as
aforesaid may have been due to the
negligence of the OPERATOR or its SERVICE
COMPANIES and its or their personnel or
agents excepting only CONTRACTOR's EQUIPMENT
below the rotary table as stated in
sub-clause 6.1(b) below.
(b) The OPERATOR shall assume liability at all
times during the DRILLING SERVICES for loss
of or damage to the CONTRACTOR'S equipment
below the rotary table except fair wear and
tear. Notwithstanding anything in the
CONTRACT to the contrary, the OPERATOR shall
reimburse the CONTRACTOR for the replacement
cost less depreciation of any such equipment
so lost, and in respect of equipment so
damaged whichever shall be the lesser of the
replacement on-site cost less depreciation
or the repair cost, provided that such
equipment and the operation during which or
as a result of which the said equipment has
been lost or damaged as aforesaid has been
approved by the OPERATOR'S REPRESENTATIVE
prior to such operation and unless such loss
or damage is due to the negligence and/or
default of the CONTRACTOR, its
SUB-CONTRACTORS or the PERSONNEL or agents
of the CONTRACTOR in conducting the
operation at that time.
Depreciation shall be calculated monthly
from the original purchase date and price at
one (1) percent per month, but not to exceed
50% of the current replacement cost.
Reimbursement
9
SECTION 2
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shall be reduced by any amount recovered by
CONTRACTOR through insurance, which
CONTRACTOR shall diligently seek to recover.
6.2 The OPERATOR'S MATERIALS
(a) The CONTRACTOR shall take all reasonable
precautions (including but not limited to the
making out of loading notes) to protect and
save from loss or damage items of the
OPERATOR'S MATERIALS and materials of the
SERVICE COMPANIES while in the custody of the
CONTRACTOR. Subject to sub clause 6.2(b) below
when no longer required for operations
hereunder the CONTRACTOR shall return to the
OPERATOR after use such of the said OPERATOR'S
MATERIALS as have not been properly consumed,
in the same condition as when handed to the
CONTRACTOR fair wear and tear excepted.
(b) The CONTRACTOR shall not be liable to the
OPERATOR for any loss of or damage to items of
the OPERATOR'S MATERIALS except that caused by
the negligence or default of the CONTRACTOR
its personnel or agents or the SUB-CONTRACTORS
or their personnel or agents, while in the
custody of the CONTRACTOR.
6.3 Personnel and Property
(a) Subject always to subclauses 6.5(a),
6.5(b)(ii) and (iii), and 6.5(c), the
CONTRACTOR shall indemnify the OPERATOR and
hold the OPERATOR harmless from and against
any and all liability for sickness, injury or
death of any THIRD PARTY person or the loss of
or damage to any THIRD PARTY property and
against all claims, demands, proceedings and
causes of action resulting therefrom due to
any negligent act or default on the part of
the CONTRACTOR, its SUB-CONTRACTORS or its or
their personnel or agents in the performance
of any of its obligations hereunder or
otherwise arising in connection with the
CONTRACT.
(b) The CONTRACTOR shall indemnify the OPERATOR
and the SERVICE COMPANIES and hold the
OPERATOR and the SERVICE COMPANIES harmless
from and against any and all liability for
loss of or damage to property of or in the
possession and control of the CONTRACTOR'S
PERSONNEL and SUB-CONTRACTOR'S personnel and
against any and all liability for sickness,
injury or death to any of the CONTRACTOR'S
PERSONNEL and SUB-CONTRACTOR'S personnel
arising out of the CONTRACT or in tort and
against all claims, demands, proceedings and
causes of action resulting therefrom
notwithstanding that such loss or damage to
such property or sickness, injury or death
to the personnel as aforesaid may have been
due to the negligence or default of the
OPERATOR or its personnel or agents or the
SERVICE COMPANIES or their personnel or
agents.
(c) The OPERATOR shall indemnify the CONTRACTOR
and hold the CONTRACTOR harmless from and
against any and all liability for loss of or
damage to property of or in the possession
and control of the OPERATOR'S personnel or
SERVICE COMPANY personnel and against any
and all liability for sickness, injury, or
death to any of the OPERATOR'S personnel or
SERVICE COMPANY personnel arising out of the
CONTRACT or in tort and against all claims,
demands, proceedings and causes of action
resulting
10
SECTION 2
CONDITIONS OF CONTRACT
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therefrom notwithstanding that such loss or
damage to such property or sickness, injury
or death to the personnel as aforesaid may
have been due to the negligence or default
of the CONTRACTOR or its PERSONNEL or agents
or the SUB-CONTRACTORS or their personnel or
agents or the SERVICE COMPANIES or their
personnel or agents..
(d) The OPERATOR shall indemnify the CONTRACTOR
and hold the CONTRACTOR harmless from and
against any and all liability for sickness,
injury or death of any THIRD PARTY person or
the loss of or damage to any THIRD PARTY
property and against all claims, demands,
proceedings and causes of action resulting
therefrom due to any negligent act or default
on the part of the OPERATOR, its SERVICE
COMPANIES, or its or their personnel or agents
in the performance of any of its obligations
hereunder or otherwise arising in connection
with the CONTRACT.
6.4 Loss of or Damage to the Hole
In the event that the hole should be lost or damaged
arising out of operations hereunder due to the
negligence of the CONTRACTOR, its personnel or agents
then the OPERATOR may instruct the CONTRACTOR either
to drill a new hole to the depth at which the said
loss or damage occurred or to re-drill such section of
the damaged hole in both instances at the REDRILLING
RATE and in accordance with the terms of the CONTRACT.
Except for the foregoing obligation of CONTRACTOR, and
notwithstanding anything else in this CONTRACT to the
contrary, CONTRACTOR shall not be liable for damage to
or loss of the WELL.
6.5 Underground Damage and Control of Blowout and
Pollution
(a) Reservoir Damage
Notwithstanding anything in the CONTRACT to
the contrary, the OPERATOR shall indemnify and
hold the CONTRACTOR harmless against any
damage to or destruction of or loss or
impairment of any property right in or to oil,
gas or other mineral substance or water if at
the time of the act or omission causing such
damage, destruction, loss or impairment the
said substance had not been reduced to
physical possession above the surface of the
sea-bed, and for any loss or damage to any
formation strata or reservoir beneath the
seabed resulting from operations under the
CONTRACT. The CONTRACTOR shall not make any
payment due hereunder without prior approval
from the OPERATOR.
(b) Pollution
(i) Notwithstanding anything in the
CONTRACT to the contrary, the
CONTRACTOR shall assume all
responsibility for, including control
and removal of, and hold the OPERATOR
harmless from, loss or damage
originating from the DRILLING UNIT
arising from pollution or
contamination from, by way of example,
11
SECTION 2
CONDITIONS OF CONTRACT
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================================================================================
spills of fuels, drilling fluids (except as
provide for under Clause 6.5 (b)(iii),
lubricants, motor oils, pipe dope, paints,
solvents, ballast, bilge and garbage wholly
in the CONTRACTOR'S or its SUB-CONTRACTOR'S
possession and control.
(ii) Except as provided in (i) of this
sub-clause, and notwithstanding anything in
the CONTRACT to the contrary, the OPERATOR
shall assume all responsibility for
pollution, including control and removal of
pollution or contamination, which may result
from fire, blowout, cratering, seepage, or
any other uncontrolled flow of oil, gas,
wastes or other substance from any WELL
arising out of the CONTRACT, or which may
emanate from any platform, pipeline or other
equipment or facility owned or operated by
the OPERATOR, and the OPERATOR shall
indemnify and hold harmless the CONTRACTOR
from and against any and all claims,
demands, proceedings and causes of action
from any party under this CONTRACT or any
THIRD PARTY (including, without limitation,
any AGENCY) resulting from or connected with
the above.
(iii) The OPERATOR shall further assume all
responsibility for any pollution or
contamination arising from the use or
disposal of oil emulsion, oil based or
chemically treated drilling fluids,
contaminated cuttings and cavings, lost
circulation materials and fluids as well as
the furnishing, transportation and disposal
or containerisation of any materials when
such are required unless caused by the
negligence of the CONTRACTOR, or its
SUB-CONTRACTORS or its or their personnel or
agents.
(iv) The CONTRACTOR shall immediately notify the
OPERATOR of all instances of pollution
arising out of operations hereunder and
confirm such notification in writing or by
e-mail to the OPERATOR within twelve (12)
hours of the event.
(c) Notwithstanding anything in this CONTRACT to the
contrary, OPERATOR shall be solely responsible for,
and indemnify and hold harmless CONTRACTOR from and
against, all costs of regaining control of any wild
well.
6.6 Sunken Property
When required by law or governmental authority or when
CONTRACTOR'S sunken property interferes with present
or future operations of the OPERATOR, the CONTRACTOR
shall at its own expense raise and remove the DRILLING
UNIT and any property of the CONTRACTOR or its SUB-
CONTRACTORS which may sink in the course of operations
hereunder or otherwise deal with it in accordance with
the OPERATOR'S direction. In the event that the
CONTRACTOR does not carry out these obligations the
OPERATOR may buoy and light the sunken DRILLING UNIT
or property and may remove it (without prejudice to
the OPERATOR'S rights) and in such event CONTRACTOR
shall refund to the OPERATOR all costs so incurred.
The fact that the sunken DRILLING UNIT or property is
insured or has been declared a total loss shall not
absolve the CONTRACTOR from its obligations to raise
and/or remove same. This CLAUSE shall remain binding
on the CONTRACTOR and OPERATOR notwithstanding the
termination of the CONTRACT for any reason.
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SECTION 2
CONDITIONS OF CONTRACT
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6.7 Consequential Damages
Notwithstanding any other provision in the CONTRACT in
no event shall the CONTRACTOR, SERVICE COMPANIES or
OPERATOR or its CO-VENTURERS in the CONTRACT AREA be
liable one to the other for any consequential damages
which may be suffered by any or all parties in
connection with the performance of or otherwise
arising under the CONTRACT notwithstanding that such
consequential damages may have been due to the
negligence of any of the parties aforesaid.
Consequential damages shall mean, but not by way of
limitation, loss of profits, loss of production or
business interruption.
6.8 Notwithstanding anything to the contrary contained in
sub clauses 6.1 to 6.7 inclusive, it is clearly
understood between all parties that the CONTRACTOR
only provides the above indemnities in respect of
SERVICE COMPANIES and likewise OPERATOR only provides
indemnities in respect of SERVICE COMPANIES on the
express understanding that SERVICE COMPANIES provide
reciprocal indemnities to CONTRACTOR as contained in
the SERVICE COMPANIES contracts with OPERATOR.
6.9 The rights of CONTRACTOR and of OPERATOR under this
Clause 6 shall extend to their respective Affiliates
and employees and employees of their respective
Affiliates.
6.10 The rights and obligations under this Clause 6 shall
continue notwithstanding the completion or
termination of the work under this CONTRACT.
CLAUSE.7. CONTRACTOR'S INSURANCES
7.1 The CONTRACTOR shall take out and maintain appropriate
first class insurance with respect to its liabilities
assumed and indemnities given under the CONTRACT and
as specifically required in SECTION 3 hereof. All such
policies shall contain waivers of rights of
subrogation against the OPERATOR, its CO-VENTURERS,
AFFILIATES and the SERVICE COMPANIES.
The CONTRACTOR shall give the OPERATOR thirty days
written notice of any proposed material change in any
policy.
7.2 The CONTRACTOR shall extend to the OPERATOR, its
CO-VENTURERS and the SERVICE COMPANIES the benefit of
any Hull and Machinery insurance cover, which may
exist under the CONTRACTOR'S insurance provisions.
7.3 If the CONTRACTOR shall fail to effect and keep in
force any of the Insurances referred to herein, then
the OPERATOR may effect and keep the same in force and
pay such premium as may be necessary for that purpose
and from time to time deduct the amount so paid by the
OPERATOR as aforesaid from any monies due or which may
become due to the CONTRACTOR or recover the same as a
debt due from the CONTRACTOR.
7.4 CONTRACTOR shall require its SUB-CONTRACTORS to
obtain, maintain and keep in force during the time in
which they are engaged in performing any work
13
SECTION 2
CONDITIONS OF CONTRACT
PAGE 14 OF 22
================================================================================
hereunder, insurance coverage acceptable to CONTRACTOR
and furnish CONTRACTOR acceptable evidence of such
insurance. CONTRACTOR shall require all insurance
policies carried by the SUB-CONTRACTOR to contained
endorsements waiving insurer's rights of subrogation
against the OPERATOR, its CO-VENTURERS, AFFILIATES and
the SERVICE COMPANIES.
CLAUSE.8. TAX INFORMATION AND INDEMNITY
8.1 CONTRACTOR shall be responsible for, and shall hold
OPERATOR harmless from the reporting, filing and
payment of any taxes (wherever and whenever arising),
duties, charges or fees (and any related fines,
penalties, or interest) imposed (except as provided in
Section 8.2 herein) directly or indirectly on
CONTRACTOR or its SUB-CONTRACTORS, shareholder(s),
employees, agents or servants as a result of
CONTRACTOR's performance under this CONTRACT in all
jurisdictions. OPERATOR may withhold from sums
otherwise due CONTRACTOR under this Contract any taxes
or amounts required by applicable law to be withheld
and paid to the appropriate taxing authorities and,
OPERATOR shall provide CONTRACTOR with all receipts
evidencing the payment to such authorities of the
taxes or amounts so withheld.
8.2 The payments provided for pursuant to Section 5 are
exclusive of any value added taxes or sales/service
taxes which may be imposed on such payments by the
taxing authorities having jurisdiction. Subject to
OPERATOR's right to verify that CONTRACTOR and its
SUB-CONTRACTORS are registered in accordance with the
appropriate section of the Trinidad and Tobago Value
Added Tax Act; and the right to verify that such taxes
apply to the payments made hereunder, and subject to
OPERATOR's right to verify CONTRACTOR's payment of
such taxes to the appropriate taxing authorities,
OPERATOR shall pay CONTRACTOR the amount of such taxes
upon receipt of invoice, including the amount of such
taxes, which invoice is issued in compliance with the
applicable tax laws. CONTRACTOR shall use its best
efforts to avail itself of any and all exemptions from
and/or reductions of such taxes.
8.3 CONTRACTOR shall comply and shall use reasonable
efforts to ensure that all SUB-CONTRACTORS comply,
with all legal contractual and administrative
requirements in relation to their status and presence
in Trinidad, including, without limitation,
registration for corporation tax and value added tax
purposes. For the avoidance of doubt, CONTRACTOR will
be registered for corporation tax and value added tax
under the appropriate sections of the Government of
the Republic of Trinidad and Tobago Income Tax Act
and/or Corporation Tax Act and Value Added Tax Act for
the duration of this CONTRACT and will provide
OPERATOR satisfactory evidence to that effect.
CONTRACTOR shall indemnify and hold harmless OPERATOR
for any failure by it or its SUB-CONTRACTORS to comply
with the requirements of this clause.
8.4 For all personnel of CONTRACTOR and its
SUB-CONTRACTORS, and all local personnel directly
employed by CONTRACTOR and its SUB-CONTRACTORS in
Trinidad in connection with CONTRACTOR's performance
under this Contract, personal income tax obligations,
including withholding tax, shall be the responsibility
of CONTRACTOR. CONTRACTOR shall indemnify and hold
OPERATOR harmless from any failure by it or its
SUB-CONTRACTORS to calculate and collect this income
tax and pay it directly to the applicable authorities.
In no instance shall such personnel be considered to
be employees of OPERATOR.
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SECTION 2
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8.5 Any fines, interest, penalties or other costs incurred
by CONTRACTOR or its agents, employees or
SUB-CONTRACTORS for non-compliance by CONTRACTOR, its
agents, employees or SUB-CONTRACTORS with the
requirement of any LAWS shall be the sole
responsibility of CONTRACTOR.
8.6 CONTRACTOR shall indemnify OPERATOR against any and
all costs including fines, interest, penalties and
reasonable legal costs suffered or incurred by
OPERATOR and resulting from CONTRACTOR's failure to
comply with relevant taxation and import or custom
duty requirements.
8.7 CONTRACTOR shall be liable for and shall indemnify and
hold harmless OPERATOR against any taxes, duties,
levies, charges, and/or fees assessed in connection
with the importation, sale or disposition of assets of
CONTRACTOR, or assets of any SUB-CONTRACTOR and for
the failure to export such previously imported assets
or the assets of any SUB-CONTRACTOR following the
conclusion of the work to be performed under this
Contract. OPERATOR shall not be liable and OPERATOR
shall not reimburse CONTRACTOR for any third party
fees or charges in connection with such importation or
exportation.
8.8 CONTRACTOR acknowledges that it is aware that OPERATOR
is anticipated to obtain a Minister's License under
the Customs Act of the laws of the Republic of
Trinidad and Tobago, which will provide for exemption
from import duties in Trinidad in relation to imports
associated with OPERATOR's offshore petroleum and
exploration operations. CONTRACTOR undertakes to
comply fully and to procure the compliance of all
SUB-CONTRACTORS with all legal, contractual and
administrative requirements of OPERATOR and any AGENCY
and to provide accurate and timely information to
enable OPERATOR to fully benefit from such exemption
in connection with any imports associated with or
linked to CONTRACTOR's performance under this
Contract. CONTRACTOR shall indemnify and hold harmless
OPERATOR for any failure by CONTRACTOR or its
SUB-CONTRACTORS to comply with such requirements,
which results in any imposition of import duties,
penalties, interest or fines in respect of such
imports.
CLAUSE 9. BANKRUPTCY OR LIQUIDATION
If the CONTRACTOR shall become bankrupt or insolvent,
or have a receiving order made against it, or present
a petition in bankruptcy or make an arrangement with
or an assignment in favour of its creditors, or shall
agree to carry out the CONTRACT under a Committee of
Inspection of its creditors, or commence to be wound
up (not being a member's voluntary winding up for the
sake of reconstruction), or shall carry on its
business under a receiver for the benefit of its
creditors or any of them then the OPERATOR shall be at
liberty either
(a) to suspend immediately all or any of the
operations then in progress and to remove
its property and the property of its SERVICE
COMPANIES located on the DRILLING UNIT or in
the possession of the CONTRACTOR, or
(b) to give such receiver liquidator or any
other person in whom the CONTRACT may become
vested the option of carrying out the
CONTRACT
15
SECTION 2
CONDITIONS OF CONTRACT
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subject to his providing a guarantee in an
amount to be agreed for the due and faithful
performance of the CONTRACT without
prejudice in either event to any right of
action or remedy which shall have accrued or
shall accrue thereafter to the OPERATOR, or
(c) to terminate the CONTRACT upon the
completion of the current operations then
being performed. No further payments shall
be due to the CONTRACTOR or its receiver
other than those for work done prior to the
said termination
CLAUSE 10. FORCE MAJEURE
No failure or omission by either party to carry out or
observe any of the stipulations, conditions or
obligations to be performed hereunder shall, except as
herein expressly agreed to the contrary, give rise to
any claim against such party or be deemed to be a
breach of the CONTRACT if such failure or omission
arises from an event of force majeure.
An event of force majeure shall mean expropriation or
confiscation, orders of governmental authority, acts
of war (declared or undeclared), insurrection,
rebellion or sabotage, civil disturbances, strikes
(except of the CONTRACTOR'S or SUB-CONTRACTOR'S own
workforce), actions of the elements (except waiting on
weather in the field) or other causes beyond the
reasonable control of the parties affected thereby but
specifically excluding financial distress.
If by any reason of force majeure either party shall
be prevented from executing or continuing to execute
the CONTRACT, the party so prevented shall forthwith
give notice in writing to the other party of such
prevention and the reasons therefor. Except for the
obligation to pay monies due under the CONTRACT, the
obligations of the parties as have been thus affected
shall be suspended for the duration of such
prevention.
In the event that the CONTRACTOR is unable to carry
out the DRILLING SERVICES by reason of force majeure
the OPERATOR shall have the right to instruct the
CONTRACTOR to remain on LOCATION or to move to a new
LOCATION and the appropriate rate as set out in
SECTION 5 shall be payable.
In the event the OPERATOR does not exercise this right
and the execution of the CONTRACT has been prevented
for a period of not less than 28 days (during which
period the Schedule 5.1 - FORCE MAJEURE a) Rate shall
be payable by OPERATOR) then either party shall have
the right to terminate the CONTRACT by giving
twenty-one (21) days written notice to the other
(during which period the Schedule 5.1 - FORCE MAJEURE
b) Rate shall be payable by OPERATOR). Upon such
notice being given the CONTRACT shall forthwith be
terminated in respect of that operation or the whole
of the CONTRACT according to the subject matter of the
notice, but without prejudice to the claim of any
party in respect of any antecedent breach thereof. In
such event, OPERATOR shall pay the DEMOBILISATION FEE
in accordance with the other provisions of this
CONTRACT.
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CLAUSE 11. FREEDOM FROM LIENS
Without prejudice to any other provision of the
CONTRACT the CONTRACTOR shall hold harmless and
indemnify the OPERATOR from and against all liens,
attachments or claims by or on behalf of any of the
CONTRACTOR'S suppliers, CONTRACTOR'S PERSONNEL or
SUB-CONTRACTORS (or persons alleging to be suppliers,
CONTRACTORS PERSONNEL or SUB-CONTRACTORS) in
connection with or arising out of the CONTRACT.
CLAUSE 12. CONTRACTOR TO MAINTAIN REPRESENTATION
For a period of not less than 2 years after the
termination or completion of the CONTRACT howsoever
arising the CONTRACTOR shall maintain representation
in the Republic of Trinidad and Tobago through the
services of a person, firm or corporation resident in
the CONTRACT AREA. Such person, firm or corporation
shall be empowered to act and shall have the right to
receive summonses on behalf of the CONTRACTOR in any
matter having reference to the business or affairs of
the CONTRACTOR and arising out of or connected with
the CONTRACT. Before appointing any such person, firm
or corporation the CONTRACTOR shall obtain the prior
approval of the OPERATOR thereto.
CLAUSE 13. GIVING OF NOTICES AND PAYMENT OF FEES
The CONTRACTOR shall in connection with the CONTRACT
give all notices and pay all fees and any other monies
required to be given or paid under any Statute,
Ordinance, Decree, Proclamation or any other Order or
any other enactment or any regulations or By-law of
any Local or other duly constituted authority having
the force of law in the CONTRACT AREA and under the
rules and regulations of all public bodies and public
companies whose property or rights are affected or may
be affected, provided always that the OPERATOR will
repay or allow to the CONTRACTOR all such sums as
OPERATOR'S REPRESENTATIVE shall certify to have been
properly and necessarily payable and paid by the
CONTRACTOR in respect of any such fees or monies the
obligation for which does not exist at the date
hereof, provided further that in respect of any such
fees or monies the obligation for payment of which
does exist at the date hereof but which ceases after
the date hereof the CONTRACTOR shall repay or allow to
the OPERATOR all such sums as OPERATOR'S
REPRESENTATIVE shall certify are not properly payable
by it or which if paid are refundable to it.
CLAUSE 14. CONFIDENTIAL INFORMATION
All information obtained by the CONTRACTOR in the
course or conduct of its services hereunder shall be
considered confidential and shall not be divulged by
the CONTRACTOR, its personnel or agents to any person,
firm or corporation other than the OPERATOR'S
designated representatives. CONTRACTOR'S report shall
contain only such information as is authorised for
release by the OPERATOR's representative. The
obligations under this clause shall continue
notwithstanding the completion or termination of the
work under this CONTRACT.
17
SECTION 2
CONDITIONS OF CONTRACT
PAGE 18 OF 22
================================================================================
CLAUSE 15. PUBLICITY
The CONTRACTOR shall not publish or permit to be
published either alone or in conjunction with any
other person any articles, photographs or other
illustrations relating to the OPERATOR'S business
generally or to the work hereunder, without prior
reference to and approval in writing from OPERATOR.
Such consent shall only apply to each specific
application and relate only to that application. The
accuracy of any information, which was not supplied
directly by OPERATOR, shall be the absolute
responsibility of the CONTRACTOR. As an exception to
the requirement for reference to and approval of
OPERATOR in respect to publications or the permitting
of publications of any articles, photographs or other
illustrations relating to the work hereunder,
CONTRACTOR shall not be obligated to make such
reference and obtain such consent if such publication
is required, in CONTRACTOR's reasonable opinion, to be
disclosed by applicable LAWS or stock exchange rules.
In such event, CONTRACTOR shall inform OPERATOR prior
to making such disclosure. The obligations of this
clause shall continue notwithstanding the completion
or termination of the work under this CONTRACT.
CLAUSE 16. ASSIGNMENT AND SUB-CONTRACTING
16.1 Assignment
Except to wholly-owned subsidiary of CONTRACTOR
capable of performing CONTRACTOR'S obligations
hereunder the CONTRACTOR shall not without the prior
written consent of the OPERATOR assign the CONTRACT or
any part thereof or any benefit or interest therein or
thereunder. Such consent shall not be unreasonably
withheld. In the event of assignment to a wholly-owned
subsidiary of CONTRACTOR, CONTRACTOR shall give prior
written notice of the intended assignment and
CONTRACTOR shall remain primarily responsible to
OPERATOR for the obligations of the assignee which
pertain to this CONTRACT and shall be liable for any
and all obligations set forth herein in the event that
such assignee fails to fulfil any obligation imposed
on the CONTRACTOR herein.
OPERATOR may assign or sub-let the whole or part of
its rights, liabilities and obligations to a wholly
owned subsidiary of the BP Amoco plc upon the terms
and conditions as those agreed between the parties
hereto without the consent of the CONTRACTOR, and to
any other party with the consent of the CONTRACTOR and
such consent shall not be unreasonably withheld.
16.2 Sub-Contracting
The CONTRACTOR shall not enter into any sub-contract
for the whole or any part of its obligations under the
CONTRACT without the prior written consent of the
OPERATOR and such consent if given shall not relieve
the CONTRACTOR from any liability or obligation under
the CONTRACT and the CONTRACTOR shall be responsible
for the acts, defaults and negligence of any
SUB-CONTRACTOR, its personnel or agents as fully as if
they were the acts, defaults or neglects of the
CONTRACTOR, its personnel or agents.
18
SECTION 2
CONDITIONS OF CONTRACT
PAGE 19 OF 22
================================================================================
The CONTRACTOR shall ensure that all its sub-contracts
shall include provisions to the like effect as the
provisions hereof. In addition the CONTRACTOR shall
ensure that the SUB-CONTRACTOR'S personnel (where
applicable) are made aware of, and follow the
provisions for Fire and Safety Precautions and
Emergency Procedures as set out in SECTION 4.
CLAUSE 17. APPLICATION OF LAWS AND REGULATIONS
The CONTRACTOR shall comply with all laws, rules and
regulations of Government or local or other authority
which are effective at the date hereof or may in the
future become applicable to the CONTRACTOR'S business,
CONTRACTOR'S EQUIPMENT and CONTRACTOR'S PERSONNEL
engaged in the operations hereunder. The CONTRACTOR
shall promptly advise the OPERATOR of any such laws,
rules or regulations with which it believes it is
unable to comply.
The CONTRACTOR shall ensure that its PERSONNEL,
SUB-CONTRACTORS and agents observe all such laws,
rules and regulations and shall at the CONTRACTOR'S
expense replace any CONTRACTOR'S PERSONNEL or
SUB-CONTRACTOR'S personnel or agents whose conduct or
behaviour may reasonably be considered by the OPERATOR
to be in breach or conflict with such laws, rules or
regulations.
CLAUSE 18. SERVING OF NOTICES
18.1 Any notice in writing to be given hereunder to the
OPERATOR shall be sent by hand, telex, facsimile or
registered post to the OPERATOR to the at the
following address:
BP TRINIDAD AND TOBAGO LLC
▇.▇. ▇▇▇ ▇▇▇ or by handQueen's Park Plaza
Port of Spain 5 & ▇▇ ▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ Port of Spain, Trinidad
Attention: THE CONTRACTS MANAGER
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
18.2 Any notice in writing to be given hereunder to the
CONTRACTOR shall be sent to it by hand, telex,
facsimile or registered post at its address stated in
the CONTRACT or some address in the CONTRACT AREA
stated by it to be in lieu thereof for the purpose of
this sub-clause.
▇▇▇▇▇▇ Offshore Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
19
SECTION 2
CONDITIONS OF CONTRACT
PAGE 20 OF 22
================================================================================
18.3 Any such notice given by facsimile shall be deemed to
have been received and shall take effect at the
expiration of 24 (twenty-four) hours after the
sending.
CLAUSE 19. VARIATION AND WAIVER
No variation or waiver of any obligation hereunder
shall be valid or effective unless confirmed in
writing in the case of a variation by all parties and
in the case of a waiver then by the party towards whom
the obligation shall have been undertaken.
CLAUSE 20. INDEPENDENT CONTRACTOR RELATIONSHIP
20.1 In the performance of the DRILLING SERVICES the
CONTRACTOR shall be an independent Contractor with the
authority to control and direct the performance
thereof, but the DRILLING SERVICES shall be subject to
the approval of the OPERATOR and be subject to a
general right of inspection and any necessary
supervision thereof which the OPERATOR may choose to
exercise if necessary to secure the satisfactory
completion thereof.
20.2 The actual performance and superintendence of the
DRILLING SERVICES hereunder shall be by the CONTRACTOR
but the OPERATOR REPRESENTATIVE shall at all times
have access to all parts of the DRILLING UNIT for the
purpose of inspecting the CONTRACTOR'S EQUIPMENT or
observing tests or inspecting the DRILLING SERVICES in
order to judge whether in the OPERATOR'S opinion the
CONTRACTOR'S EQUIPMENT is complete and in an efficient
operating condition and whether the DRILLING SERVICES
are being performed by the CONTRACTOR in accordance
with the provisions of this CONTRACT. In addition,
operations shall be carried out at the request and in
accordance with the instructions of the OPERATOR'S
REPRESENTATIVE who shall inform the CONTRACTOR'S
REPRESENTATIVE of the end result desired from any
operation, but the CONTRACTOR shall have the entire
responsibility for the proper and timely execution
thereof.
20.3 The CONTRACTOR shall give all reasonable assistance to
the OPERATOR'S REPRESENTATIVE in the performance of
his duties. However, the presence of and/or inspection
and/or supervision by the OPERATOR'S REPRESENTATIVE
hereunder shall not relieve the CONTRACTOR of any of
its obligations or responsibilities hereunder.
CLAUSE 21. INFRINGEMENT OF PATENTS
The CONTRACTOR shall save harmless and indemnify the
OPERATOR from and against all claims proceedings and
liabilities for or on account of infringement or
alleged infringement of any patent rights design trade
▇▇▇▇ or name or other protected right of any THIRD
PARTY arising in connection with the use of any
CONTRACTOR furnished equipment machinery materials or
process and shall defend at its sole expense any and
all such proceedings to which both parties are
defendants. Both the CONTRACTOR and the OPERATOR shall
at all times have the right to be represented
respectively by their own counsel and to participate
in the defence of any such proceedings if both shall
be made parties defendant thereto. The CONTRACTOR
20
SECTION 2
CONDITIONS OF CONTRACT
PAGE 21 OF 22
================================================================================
shall give notice in writing forthwith to the OPERATOR
of any such claims and proceedings as aforesaid and
shall supply the OPERATOR with all information and
documents in connection therewith as the OPERATOR may
reasonably require.
The OPERATOR shall save harmless and indemnify the
CONTRACTOR from and against all claims, proceedings
and liabilities for or on account of infringement or
alleged infringement of any patent rights, design,
trade ▇▇▇▇ or name or other protected right of any
THIRD PARTY arising in connection with the use of any
OPERATOR or SERVICE COMPANY furnished equipment,
machinery, materials or process and shall defend at
its sole expense any and all such proceedings to which
both parties are defendants. Both the OPERATOR and the
CONTRACTOR shall at all times have the right to be
represented respectively by their own counsel and to
participate in the defence of any such proceedings if
both shall be made parties defendant thereto. The
OPERATOR shall give notice in writing forthwith to the
CONTRACTOR of any such claims and proceedings as
aforesaid and shall supply the CONTRACTOR with all
information and documents in connection therewith as
the CONTRACTOR may reasonably require.
CLAUSE 22. PERMITS AND LICENCES
22.1 CONTRACTOR shall be responsible for obtaining and
maintaining all authorisations, permits and licenses
necessary for the Work, which may be obtained in the
name of CONTRACTOR, its SUB-CONTRACTORS, its vendors,
and their respective employees. OPERATOR shall provide
reasonable assistance to CONTRACTOR in that endeavour,
if asked by CONTRACTOR.
22.2 CONTRACTOR shall be responsible for obtaining all the
necessary visas, customs clearances or other
government authorisations required for moving
CONTRACTOR's PERSONNEL or its SUB-CONTRACTORS'
personnel into and out of the country having
jurisdiction over the CONTRACT AREA, including without
limitation work permits and tax exit certificates for
such personnel. OPERATOR shall, if asked by
CONTRACTOR, assist CONTRACTOR in obtaining such work
permits. OPERATOR does not warrant that the authority
having jurisdiction over work permits will issue any
work permit.
CLAUSE 23. APPLICABLE LAW
The CONTRACT shall be governed by and construed in
accordance with the laws of the Republic of Trinidad
and Tobago .
CLAUSE 24. ARBITRATION
If any dispute or difference of any kind whatsoever
shall arise between the parties hereto in connection
with or arising out of the CONTRACT or any
interpretation thereof which cannot be resolved by
agreement between the parties hereto the same shall be
determined in accordance with the Arbitration Act
Chap. 5:01 of the laws of the Republic of Trinidad and
Tobago. Arbitration proceedings shall take place in
Trinidad unless otherwise agreed by the parties.
21
SECTION 2
CONDITIONS OF CONTRACT
PAGE 22 OF 22
================================================================================
CLAUSE 25. EXCLUSION OF PREVIOUS CORRESPONDENCE
All previous correspondence, negotiations,
representations, explanations, statements, promises or
guarantees whether oral or written are hereby excluded
from the CONTRACT.
CLAUSE 26. AUDIT
The OPERATOR shall have the right to audit during
normal business hours the relevant books and accounts
of the CONTRACTOR at its address herein in relation to
reimbursable items paid for by OPERATOR under the
CONTRACT at any time until the expiry of twenty-four
months following the settlement of the final account.
Any incorrect payments made by OPERATOR shall be
adjusted in accordance with the findings of the said
audit. The CONTRACTOR shall make all relevant books
and accounts available and give the auditors all
reasonable assistance and ensure that its
SUB-CONTRACTORS comply with such provisions.
CLAUSE 27. SEVERABILITY
If any provision of this CONTRACT or any application
thereof shall be determined to be invalid or
unenforceable such invalidity or unenforceability
shall not affect remaining provision of this CONTRACT
and remaining provisions shall continue in full force
and effect.
CLAUSE 28. MORTGAGE OF THE RIG
THIS CONTRACT IS SUBJECT TO EACH OF THE RIGHTS AND
REMEDIES OF THE SECRETARY OF TRANSPORTATION OF THE
UNITED STATES OF AMERICA, AND HAS BEEN ASSIGNED TO THE
SECRETARY UNDER A SECURITY AGREEMENT AND MORTGAGE,
EACH EXECUTED BY THE CONTRACTOR AS SHIPOWNER IN FAVOR
OF THE SECRETARY WITH RESPECT TO THE DRILLING UNIT.
OPERATOR ACKNOWLEDGES THAT CONTRACTOR IS REQUIRED TO
PROVIDE MARAD WITH A COPY OF THIS CONTRACT WITHIN TEN
(10) DAYS OF ITS EXECUTION.
22
SECTION 3
CONTRACTOR'S INSURANCE
It is the intention that the OPERATOR and all Contractors working together to
undertake the drilling operations should carry out their work in accordance with
good oilfield and/or industry practice. It is recognised, however, that
accidents and damage may from time to time occur. Such risks are to be covered
in the following manner:-
1. PERSONNEL
1.1. Employers' Liability or similar, including the local
legal coverage in the CONTRACT AREA or any other
jurisdiction, for which CONTRACTOR is obliged to pay
benefits and including, but not limited to for
example, Maritime Employer's Liability to provide
transportation, maintenance and cure. Employer's
Liability limit shall be in accordance with any
applicable legislation but not less than US$2,000,000
each incident per person.
The underwriter shall, in addition, waive all rights
of Subrogation against the other parties involved in
the drilling operations.
2. EQUIPMENT
2.1. For equipment other than vessels:
All risks insurance with policy limits equal to the
market value of the CONTRACTOR'S equipment.
2.2. For Vessels:
(a) Hull and Machinery Insurance (extended to
cover all risks including Collision Liability)
with policy limits equal to the replacement
value of the vessels having a deductible not
greater than US$250,000 each or 10% of the
replacement value which ever is the lesser
each and every loss.
(b) Protection and Indemnity Insurance with
policy limits equal to the replacement value
of the vessels.
2.3. For Fixed and Rotary Wing Aircraft
Hull insurance for the current or replacement value of
each aircraft and covering any accident or damage
thereto, howsoever caused.
2.4. Wreck and Debris:
Wreck and debris removal insurance coverage on the
CONTRACTOR'S EQUIPMENT, vessels or aircraft as
appropriate as per terms of sub clause 6.6 of SECTION
2 (Conditions of Contract).
2.5. War risk insurance coverage on the CONTRACTOR'S
EQUIPMENT, vessels or aircraft as appropriate covered
by the CONTRACT, if necessary.
SECTION 3
CONTRACTOR'S INSURANCE
PAGE 2 OF 2
================================================================================
CONTRACTOR'S EQUIPMENT, vessels or aircraft as
appropriate covered by the CONTRACT, if necessary.
The underwriters shall, in addition, waive all rights
of Subrogation against the other parties involved in
the drilling operations and name OPERATOR and its
SERVICE COMPANIES as Additional Assureds.
3. THIRD PARTY
Each Contractor shall carry:-
Comprehensive General Liability Insurance, including
premises, operations, independent contractors,
contractual and collision liability for any written
agreement and coverage for the operation of the
CONTRACTOR'S EQUIPMENT, vessels or aircraft as
appropriate covered by the CONTRACT.
Bodily Injury US $10,000,000 any one occurrence
Property Damage US $10,000,000 any one occurrence
In addition for aircraft, aircraft Third Party Legal
Liability including passenger, baggage and cargo (in
the names of CONTRACTOR and OPERATOR) up to a combined
single limit of US$80,000,000 (eighty million US
Dollars) any one accident or occurrence, each
aircraft.
The underwriters shall, in addition, waive all rights
of Subrogation against the other parties involved in
the drilling operations.
4. AUTOMOBILES
Comprehensive Automobile Liability Insurance covering
all owned, hired and non-owned automotive equipment,
including compliance with all local legislation on
automobile insurance in the state or country in which
the automotive equipment is being used.
The underwriters shall, in addition, waive all rights
of Subrogation against the other parties involved in
the drilling operations.
5. CERTIFICATES OF INSURANCE
Before commencing performance of this CONTRACT,
CONTRACTOR shall furnish OPERATOR with Certificates of
Insurance indicating:
5.1. kinds and amounts of insurance as required.
5.2. insurance company and companies carrying
the aforesaid coverage.
5.3. effective and expiry dates of policies.
2
SECTION 4
STATEMENT OF REQUIREMENTS
CONTENTS
1. OBLIGATIONS OF THE CONTRACTOR
2. WORK TO BE PERFORMED BY THE CONTRACTOR
3. FACILITIES TO BE PROVIDED BY CONTRACTOR
4. THE CONTRACTOR'S EQUIPMENT
5. SAFETY
6. CONTRACTOR'S OTHER OBLIGATIONS
7. RESPONSIBILITIES OF THE OPERATOR
ATTACHMENT 1 - CHECK LIST OF RESPONSIBILITIES
ATTACHMENT 2 - REPORTING
STATEMENT OF REQUIREMENTS
CLAUSE 1 OBLIGATIONS OF THE CONTRACTOR
The CONTRACTOR shall carry out the DRILLING SERVICES
and perform all its obligations under the CONTRACT
with due diligence and care, in a good and workmanlike
manner, in accordance with good drilling practices,
without undue delays and in conformity in all respects
with the terms and conditions of the CONTRACT.
CONTRACTOR shall be solely responsible for the
operation of the DRILLING UNIT including, without
limitation, supervising moving operations and the
positioning of the DRILLING UNIT on LOCATIONS as
required by OPERATOR, subject to Clause 4 of SECTION 2
of this CONTRACT, as well as such operations on board
the DRILLING UNIT as may be necessary for the safety
of the DRILLING UNIT.
CLAUSE 2 WORK TO BE PERFORMED BY THE CONTRACTOR
Consistent with the provisions of this CONTRACT, the
CONTRACTOR shall:
2.1 Drilling
Drill vertically or directionally, complete,
suspend, plug and abandon or workover ▇▇▇▇▇
and carry out such other drilling operations
on ▇▇▇▇▇ in accordance with the drilling and
other programmes issued by or instructions
given by the OPERATOR from time to time. The
DEPTHS specified in such programmes are
predictions and may be subject to change by
the OPERATOR.
The maximum depth shall not exceed 24,607
ft.
2.2 Casing and Tubing
Run strings of casing, liner and tubing
(hereinafter referred to as "Tubulars") as
specified in the WELL programmes issued by
the OPERATOR from time to time. The
CONTRACTOR shall store, handle, run and land
with such Tubulars in accordance with the
OPERATOR'S procedures.
2.3 Recovery of Tubulars
Whenever so requested by the OPERATOR
endeavour to recover strings of Tubulars
from a WELL.
2.4 Depth Measurement
Keep an accurate measurement of the DEPTH in
feet and record such DEPTHS on OPERATOR'S
daily drilling report and on IADC-API Daily
Drilling Report Forms. OPERATOR shall have
the right at any time to require CONTRACTOR
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 2 OF 16
================================================================================
to make check measurements of the DEPTH in
such manner as OPERATOR may specify.
Measure and make diagram sketch of all
tubulars going into the hole with Inner
Diameter and Outer Diameter and the fishing
neck. Check to be made if fishing tools
available to suit all sizes run in hole.
2.5 Specialised Operations
Whenever so instructed by OPERATOR permit
and assist SERVICE COMPANIES to carry out
cementation, formation testing, stimulation,
logging, diamond drilling, turbine drilling,
coring, directional drilling, inspection and
making up and/or pressure testing of
tubulars or any other specialised operation.
2.6 Pressure Testing
Carry out pressure testing of wellheads,
casing strings, blow-out prevention
equipment, casing cement jobs and other
equipment specified by the OPERATOR in
accordance with the procedures prescribed
from time to time by the OPERATOR. The
results of all such tests shall be noted on
said OPERATOR'S Daily Drilling Report and on
IADC-API Daily Drilling Report Forms.
Provide charted recordings.
2.7 Drilling Fluid
Make, condition and control drilling fluid
in accordance with mud programmes issued
from time to time by the OPERATOR, under the
supervision of or in accordance with
instructions given by the OPERATOR.
2.8 Cores
Whenever required to do so by the OPERATOR'S
REPRESENTATIVE to provide assistance in
carrying out coring operations as required
by the OPERATOR.
2.9 WELL Deviation Surveys
Make deviation surveys with instruments
listed in SECTION 7 whenever the OPERATOR
may so require.
2.10 Care and Use of Tubulars
(a) properly handle, store and tally
all Tubulars while in the
CONTRACTOR'S possession.
(b) retain thread protectors on all
Tubulars until instructed by
OPERATOR to remove for cleaning and
lubricating with API approved
thread cleaning and thread
lubricating compounds provided
prior to running in the hole.
2
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 3 OF 16
================================================================================
(c) check Tubular drift diameters
with mandrels provided by
OPERATOR or CONTRACTOR whenever
so instructed by the OPERATOR and
report any rejected joints in the
IADC report.
(d) employ "Klampon" or equivalent
Tubular thread protector provided
by OPERATOR when handling
Tubulars between the rack and the
rig floor.
2.11 On LOCATION Inspection of OPERATOR'S
MATERIALS
Inspect visually for defects all OPERATOR'S
MATERIALS before using them and notify the
OPERATOR of any such defects apparent
therein.
Also verify the quantities and shortfall, if
any, and pay attention to certification and
inspection records (e.g. MSDS sheets for
chemicals).
2.12 Work Period
Operate the DRILLING UNIT on the basis of a
24 (twenty-four) hour day and a 7 (seven)
day week without shutdown for holidays
unless otherwise instructed by OPERATOR or
unless required so to do in order to comply
with the laws and regulations of the
government or properly authorised local
authority having jurisdiction over the
CONTRACT AREA.
Crew change periods shall be in accordance
with Schedule 6.1 of SECTION 6 hereto.
2.13 Handling and Storage of OPERATOR'S MATERIALS
and SERVICE COMPANY materials
Whenever required by the OPERATOR (who shall
not so require unreasonably, taking account
of constraints of weather, availability of
CONTRACTOR'S PERSONNEL, capacity of
CONTRACTOR'S EQUIPMENT and space or weight
limitations on the DRILLING UNIT) take on
board in Trinidad or such other location
designated by OPERATOR or unload OPERATOR'S
MATERIALS and SERVICE COMPANY materials from
OPERATOR'S work boats onto the DRILLING UNIT
and store and handle OPERATOR'S MATERIALS
and SERVICE COMPANY materials thereon.
Whenever so required by OPERATOR (who shall
not so require unreasonably as aforesaid)
unload OPERATOR'S MATERIALS and SERVICE
COMPANY materials from the DRILLING UNIT
onto OPERATOR'S work boats or in Trinidad or
such other location designated by OPERATOR.
It is the responsibility of the CONTRACTOR
to store and maintain records of such
storage of all items of equipment and
material loaded onto the DRILLING UNIT.
3
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 4 OF 16
================================================================================
2.14 Documentation for OPERATOR'S MATERIALS and
SERVICE COMPANY materials
Acknowledge receipt and despatch of
OPERATOR'S MATERIALS and SERVICE COMPANY
materials in accordance with instructions
laid down by OPERATOR from time to time. The
CONTRACTOR shall exercise appropriate care
towards all such materials and equipment,
which have been left in its possession for
safe storage by OPERATOR and SERVICE
COMPANIES.
2.15 Materials and Logistics Support
CONTRACTOR shall employ a fully qualified
and experienced Materials/Logistics
Supervisor who shall be approved by OPERATOR
and shall be permanently based in Trinidad
and shall be available at all times to
arrange and supervise all CONTRACTOR'S
EQUIPMENT and PERSONNEL movements. The
Materials/Logistics Supervisor shall
maintain day to day liaison with OPERATOR'S
Base Manager in Trinidad in order that
efficient and timely scheduling, loading and
unloading of supply vessels and helicopter
operations is maximised.
CONTRACTOR shall at all times comply with
OPERATOR'S instructions and requirements
with regard to all materials and logistics
operations including the import and export
of EQUIPMENT, materials and supplies
together with the movement of PERSONNEL.
Such instructions, as aforesaid, shall be
supplied to CONTRACTOR in writing and may be
modified from time to time at OPERATOR'S
discretion.
CLAUSE 3 FACILITIES AND SERVICES TO BE PROVIDED BY CONTRACTOR
Unless otherwise stated the CONTRACTOR shall at its
cost and expense furnish all facilities and services
necessary for the proper performance of its
contractual obligations including but not by way of
limitation:
3.1 Accommodation and messing for its PERSONNEL
on the DRILLING UNIT to standard reasonably
acceptable to OPERATOR.
3.2 Accommodation and messing for OPERATOR'S
personnel, its trainees, its SERVICE
COMPANIES' personnel on the DRILLING UNIT to
the same standard provided by the CONTRACTOR
for its PERSONNEL.
3.3 One room on the DRILLING UNIT shall be used
exclusively as an infirmary and shall be
designed and equipped to standards
reasonably acceptable to OPERATOR together
with adequate medical supplies. OPERATOR
shall evacuate any casualties among the
CONTRACTOR'S PERSONNEL on the DRILLING UNIT
and the CONTRACTOR shall reimburse the
OPERATOR there for up to the limit of the
CONTRACTOR'S insurance. CONTRACTOR shall be
entirely liable at its cost for any
subsequent medical treatment.
3.4 CONTRACTOR shall provide paramedics to work
a 28/28 rotation on board the DRILLING UNIT.
Such paramedics shall be hired by CONTRACTOR
4
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 5 OF 16
================================================================================
and paid for by the OPERATOR. During the
term of this CONTRACT, CONTRACTOR shall use
its best efforts to train a national to
assume the role of paramedic, with the
intent to build local capability and replace
the expatriate paramedic with a national
paramedic.
3.5 OPERATOR shall have the right to inspect
such accommodation, messing and medical
facilities at any time. The CONTRACTOR shall
comply with OPERATOR's standard procedures
in respect of safety and hygiene as the
OPERATOR may issue from time to time.
3.6 CONTRACTOR shall provide two (2) Safety and
Training Coordinators (STC) to work a 28/28
rotation on board the DRILLING UNIT. Such
STC shall be hired by and paid for by the
CONTRACTOR.
3.7 OPERATOR requires and CONTRACTOR shall
provide free of charge suitable space and
general support services, including but not
limited to, communication equipment
(telephone) and DRILLING UNIT Alarm system,
air, water and electricity for the SERVICE
CONTRACTOR'S equipment and installations as
listed above.
CLAUSE 4 THE CONTRACTOR'S EQUIPMENT
The CONTRACTOR shall:
4.1 at the COMMENCEMENT DATE make the
CONTRACTOR'S EQUIPMENT available to OPERATOR
at the first LOCATION in the CONTRACT AREA.
4.2 prior to the COMMENCEMENT DATE give written
evidence to the OPERATOR that the DRILLING
UNIT has proper CERTIFICATION.
4.3 ensure that Classification and the said
CERTIFICATION is maintained at CONTRACTOR'S
cost and expense throughout the duration of
the CONTRACT and any extensions thereto.
In the event that during the continuance of
the CONTRACT the said CERTIFICATION lapses
then the CONTRACTOR shall use its best
endeavours to have the DRILLING UNIT
re-certified by the said Authorities for the
remainder of the period of CONTRACT by means
of on-site inspection, tests and trials (by
the said Authorities) at a time or times
agreed with the OPERATOR.
4.4 use its best endeavours to implement without
delay, but after consultation with the
OPERATOR, any alteration, replacement or
other change to the DRILLING UNIT that may
be required by any statute, ordinance,
decree, proclamation or any other order or
enactment or regulation or by-law of any
local or duly constituted authority having
the force of law in the CONTRACT AREA. All
costs incurred by the CONTRACTOR in
implementing such alterations as aforesaid
shall be to its account.
5
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 6 OF 16
================================================================================
4.5 give the OPERATOR an undertaking that at the
COMMENCEMENT DATE, CONTRACTOR does not have
knowledge of any damage or defects of the
DRILLING UNIT and associated equipment,
which would necessitate repairs to the
DRILLING UNIT during the continuance of the
CONTRACT.
4.6 upon request of OPERATOR, make available to
OPERATOR all or any of the following:
(a) the environmental design criteria
of the DRILLING UNIT.
(b) all records of surveys, repairs and
modifications of a structural
nature that have been made to the
DRILLING UNIT since it was first
launched.
(c) of the current and past official
Marine Log Books pertaining to the
DRILLING UNIT, records of Inclining
Test Results of the DRILLING UNIT
and any other records which have
been made which report on the
structural integrity and stability
history of the DRILLING UNIT.
(d) authorisation from the CONTRACTOR
to the Classification Society by
whom the DRILLING UNIT is
classified to enable the said
Society to release to OPERATOR such
details or information concerning
the DRILLING UNIT as OPERATOR may
request and which is available in
the records of the said Society.
4.7 during the continuance of the CONTRACT
maintain and repair the DRILLING EQUIPMENT
to ensure that its performance meets the
specifications quoted by the manufacturers
and that the quantities of the said
EQUIPMENT are maintained.
4.8 whenever so requested by the OPERATOR permit
and give every assistance for an inspection
of the CONTRACTOR'S EQUIPMENT to be carried
out by the OPERATOR or its SERVICE COMPANY.
The OPERATOR shall have the right to reject
all or any of the CONTRACTOR'S EQUIPMENT so
inspected and take such action, as it deems
fit, pursuant to its rights and remedies
described in clause 5.2 of Section 2 in
regard to CONTRACTOR'S EQUIPMENT. The cost
of inspection (if any) of the CONTRACTOR's
EQUIPMENT rejected shall be a debt due to
the OPERATOR from the CONTRACTOR.
4.9 prior to the COMMENCEMENT DATE arrange at
its cost and expense for the CONTRACTOR'S
in-hole equipment to be inspected by an
independent tubular inspection service
company approved by OPERATOR and make the
certificates of inspection available to the
OPERATOR. The OPERATOR shall have the right
to reject any defective in-hole equipment so
inspected and the CONTRACTOR shall at its
cost and expense repair or replace such
rejected items to the DS-1 appropriate
standard, (DS 1 Level 4 for drill pipe and
DS 1 Level 3 - 5 for drill collars and heavy
weight drill pipe).
4.10 Arrange thereafter at the cost and expense
of the parties as provided in Attachment 1
to Section 4, for all items of the
CONTRACTOR'S in-hole equipment to be
inspected by an independent tubular
6
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 7 OF 16
================================================================================
inspection company, approved by the
OPERATOR, at times to be agreed with the
OPERATOR'S REPRESENTATIVE and at intervals
as follows:
(a) Top Drive, saver subs and Bottom
Hole Assembly, comprising drill
collars, Hevi-Wate drill pipe and
substitutes, at intervals of one
WELL or more frequently as found to
be necessary by the parties;
(b) Drill pipe and pup joints prior to
each WELL.
In the event of drill string failure during
the aforesaid intervals the CONTRACTOR shall
arrange at its cost and expense for an
inspection to be made, as aforesaid, as soon
as possible thereafter, at a time to be
agreed with the OPERATOR'S REPRESENTATIVE.
As a consequence of the inspection, the
CONTRACTOR shall:
EITHER
(i) repair or replace, at its cost and
expense, items rejected as
consequence of such inspection. If
in the opinion of the OPERATOR'S
REPRESENTATIVE the rejection of any
item of the CONTRACTOR'S in-hole
equipment jeopardizes the integrity
of the well bore or results in
unreasonably slow progress, then the
provisions of clause 5.2 of SECTION
2 (the Conditions of Contract) shall
apply.
OR
(ii) in the event that the CONTRACTOR
can demonstrate, by reference to
records or to the report of an
OPERATOR approved independent
company, that the rejection of any
item of the drill string was caused
by either the published performance
limits of the drill string having
been exceeded or by having been
exposed to the deleterious effects
of H2S and/or gases or liquids,
during the performance of
operations under this CONTRACT,
then the CONTRACTOR shall repair or
replace items rejected and the
OPERATOR shall reimburse the
CONTRACTOR for the cost of any
additional inspection carried out
in accordance with the foregoing
and for the costs of repair or
replacement of any item rejected in
accordance with this sub-clause.
For the purpose of this sub-clause,
"inspection" shall include full
inspection to T ▇ ▇▇▇▇ ▇▇-▇ ▇▇▇▇▇ ▇
for drill pipe and DS-1 Level 3 - 5
for drill collars and heavy weight
drill pipe. Drill collar connections
(over 5" and including tools and subs)
to incorporate stress relief features
either stress relief grooves to API 7
and API RP 7G or the "Drilco bore back
box".
The CONTRACTOR shall make the certificates
and reports of all such inspections
available to the OPERATOR.
7
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 8 OF 16
================================================================================
4.11 At intervals of not longer than 6 (six)
MONTHS arrange for magnetic particle
inspection of its tongs, elevators, bails,
upper string connections and other lifting
equipment to be carried out at its cost and
expense by an independent inspection company
approved by the OPERATOR. The CONTRACTOR
shall make all such inspection reports
available to the OPERATOR and shall replace
or repair at its cost and expense any item
so rejected.
4.12 Whenever so requested by the OPERATOR'S
REPRESENTATIVE in writing after the
COMMENCEMENT DATE, and subject to the
allocation between OPERATOR and CONTRACTOR
of the costs and expenses being agreed to by
the parties, supply and deliver to and
operate all such further equipment,
materials or modifications to the
CONTRACTOR'S EQUIPMENT as the OPERATOR'S
REPRESENTATIVE may require, which shall then
be listed in SECTION 7 hereof and thereafter
be deemed to be part of the CONTRACTOR'S
EQUIPMENT.
4.13 Maintain on board the DRILLING UNIT at all
times the following quantities and sizes of
shale shaker screens:
SCALPER SHAKERS: MIN. MAX.
---------------- ---- ----
12 mesh square single layer 15 30
20 mesh oblong single layer 20 40
40 mesh oblong single layer 20 40
60 mesh oblong single layer 20 40
80 mesh oblong single layer 20 40
LINEAR SHAKERS:
38 mesh Diamondback Plus 20 40
50 mesh Diamondback Plus 20 40
84 mesh Diamondback Plus 20 40
110 mesh Diamondback Plus 20 40
140 mesh Diamondback Plus 20 40
175 mesh Diamondback Plus 20 40
210 mesh Diamondback Plus 20 40
4.14 Importation and Exportation of CONTRACTOR'S
EQUIPMENT and materials
CONTRACTOR shall comply with OPERATOR's
policy on the importation of machinery,
equipment and materials to be used in
OPERATOR's operations under this CONTRACT as
stated in Schedule 4.1.hereto.
CLAUSE 5 SAFETY
5.1 Safety Precautions and Emergency Procedures
(a) The CONTRACTOR shall ensure that an
organisation with defined authority
and responsibility for all matters
associated with the safety of the
DRILLING UNIT and the DRILLING
EQUIPMENT and the safety, health
and welfare of the CONTRACTOR'S
8
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 9 OF 16
================================================================================
PERSONNEL is maintained throughout the
duration of the CONTRACT within the CONTRACT
AREA. The CONTRACTOR shall appoint and
clearly display on board the DRILLING UNIT
the name of the person who is in overall
charge of the DRILLING UNIT and who shall
also be responsible for all matters related
to the safety, health, welfare and
environment associated with the CONTRACTOR'S
PERSONNEL, the DRILLING UNIT and its
activities.
The procedures for making any change in the
person in overall charge as aforesaid shall
be clearly set out in the CONTRACTOR'S
Operating Procedures and any change so made
shall be recorded in the logbook of the
DRILLING UNIT and the name of the person in
overall charge so replaced shall immediately
be removed from the place where it was
clearly displayed as aforesaid and the name
of the new person so appointed shall be
substituted.
(b) To the extent that they are neither
inconsistent with nor less stringent than
the CONTRACTOR'S rules, policies and
procedures pertaining to the safety of
CONTRACTOR'S PERSONNEL and the CONTRACTOR'S
EQUIPMENT, the CONTRACTOR shall observe
OPERATOR'S Safety regulations and comply
with rules, regulations, and codes relating
to equipment, personnel, communications,
supply, transportation and safety practices
as specified by the government bodies and
institutions exercising jurisdiction in the
CONTRACT AREA. The CONTRACTOR shall use its
best efforts to obtain, if not provided by
OPERATOR, and read and understand such rules
and regulations as aforesaid.
5.2 Blowout and Fire Hazards
(a) The CONTRACTOR shall maintain certification
of well control equipment and shall maintain
said equipment in good operating condition
during operations hereunder, and shall use
all reasonable means to prevent fire or
blowout and to protect the WELL. The
CONTRACTOR shall deploy the blowout
prevention equipment as instructed by the
OPERATOR on all strings of casing during the
DRILLING SERVICES and shall keep and
maintain such equipment in good operating
condition. The CONTRACTOR shall examine and
test all blowout prevention devices in
accordance with OPERATOR'S instructions and
OPERATOR'S approved test procedures.
Test results shall be noted on the relevant
test report sheets in addition to the
IADC-API Daily Drilling Report Form.
The BOP stack and rubbers shall be inspected
by an independent third party or supplier
prior to the COMMENCEMENT DATE. In the event
that the inspection is satisfactory the BOP
shall be tested to close on a 3 1/2" drill
pipe effectively. If the test is
satisfactory the BOP shall be deemed to be
accepted. If it fails the test then the
replacement parts are to CONTRACTOR'S
account.
9
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 10 OF 16
================================================================================
In the event that BOP is used for
non-routine work during the CONTRACT, i.e.
well control, stripping through, then
OPERATOR shall pay for replacement
consumable parts as necessary.
(b) In the event of kick, blowout or fire in any
WELL, or if any WELL gets out of control in
any manner, the OPERATOR'S REPRESENTATIVE
shall have the right to assume complete
control and supervise the work required to
regain full control of the WELL. During such
period the CONTRACTOR shall use its best
endeavours to make its PERSONNEL and
services available at the WELL; if the
CONTRACTOR'S PERSONNEL are not available
during any such period when the OPERATOR has
assumed control the applicable Daily Rate
specified herein shall be reduced by
OPERATOR to reflect any savings made by the
CONTRACTOR.
In the event that a WELL being drilled
hereunder shall blowout or crater, it is
understood and agreed that the OPERATOR
shall bear the entire cost and expense of
killing the WELL or otherwise bringing it
under control. Subject to the foregoing, all
rights and indemnities otherwise granted
herein shall remain unaffected.
5.3 Safety Management
(a) The CONTRACTOR shall carry out the DRILLING
SERVICES and all other activities hereunder
in a workmanlike manner with due regard for
safety and shall comply with CONTRACTOR's
Safety Management Systems and OPERATOR's
bridging document. CONTRACTOR shall make
available to the OPERATOR whenever the
OPERATOR may so request, full documentation
to include, but not by way of limitation,
the following standards, instructions,
procedures and records:
- CONTRACTOR'S Safety Regulations,
- Operating Procedures Manuals (detailing
the operating limits of the DRILLING UNIT)
- Emergency Procedures Manual,
- Accident Reporting Procedure,
- Work Permit Procedures,
- records of drills, exercises and safety
meetings
- JSAs, Risk Assessments, ASAs, pre-Tour and
Toolbox meetings.
(b) The CONTRACTOR shall designate persons who
shall be responsible for the operation,
maintenance and training of its PERSONNEL in
the use of the fire control and safety
equipment listed in Group l Section 'O' of
Section 7 hereto and to this end shall
arrange for exercises in DRILLING UNIT
firefighting and evacuation to be carried
out fortnightly by its PERSONNEL on
10
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 11 OF 16
================================================================================
board the DRILLING UNIT and lifeboat drills
to be carried out by all persons on board
the DRILLING UNIT at weekly intervals.
Additionally the CONTRACTOR shall ensure
that all its PERSONNEL are issued with the
OPERATOR'S instructions on safety issued
from time to time and shall use its best
endeavours to ensure that its PERSONNEL
comply with such instructions. CONTRACTOR'S
PERSONNEL shall meet weekly on the DRILLING
UNIT to discuss the matters relating to
safety and at which meetings the OPERATOR'S
REPRESENTATIVE and SERVICE COMPANY personnel
will attend.
The CONTRACTOR shall make available to the
OPERATOR minutes of all such meetings.
(c) In the event that the CONTRACTOR'S
standards, instructions or procedures in
matters of safety do not exist or are
inadequate or are in any such way not
reasonably acceptable to the OPERATOR, then
the OPERATOR may from time to time issue
such standards, instructions or procedures
as aforesaid which the CONTRACTOR shall
observe and follow.
(d) The CONTRACTOR shall also provide OPERATOR
with copies of documents concerning the
operational safety of the DRILLING UNIT
including but not by way of limitation
accident reports, near-miss incidents and
permits to work.
(e) The CONTRACTOR shall maintain an accurate
daily "persons-on-board" list and next of
kin details for all its PERSONNEL and
maintain the list both on the DRILLING UNIT
and at a shore base agreed between the
parties hereto.
(f) The CONTRACTOR shall provide the OPERATOR
with a copy of the CONTRACTORS Emergency
Procedures Manual listing the
responsibilities and procedures in case of
emergency incidents.
5.4 Safety Policies and Reporting
CONTRACTOR agrees to keep open fires and stoves out
of the ▇▇▇▇▇▇▇ and tool houses adjacent to ▇▇▇▇▇▇▇
floor and to prohibit and enforce its policy against
its employees smoking on the rig floor, under the
substructure, mud pit area, and other areas
designated by the OPERATOR'S REPRESENTATIVE as "No
Smoking" areas during the performance of any work
hereunder. Smoking is prohibited in all areas of the
DRILLING UNIT save the area on the DRILLING UNIT
designated as a Smoking area.
CONTRACTOR ALSO AGREES TO CONFORM TO RECOMMENDATION
ON ACCIDENT PREVENTION AND SAFE PRACTICES OF THE
INTERNATIONAL ASSOCIATION OF DRILLING CONTRACTORS
(IADC) AND OPERATOR'S SAFETY REQUIREMENTS.
11
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 12 OF 16
================================================================================
CONTRACTOR shall report all injuries, property and
equipment damage causedby accident immediately to
OPERATOR's REPRESENTATIVE on board. Within
twenty-four (24) hours of occurrence of the accident
CONTRACTOR shall provide a written report for the
OPERATOR's HSE Manager. A complete accident
investigation report will be submitted within
forty-eight (48) hours of the occurrence.
CONTRACTOR acknowledges it is the policy of the
OPERATOR to achieve and maintain a safe working
environment free from the influence of alcohol and
illicit drugs in order to assure the safety and
protection of its employees, non employees,
operations, assets and the localities in which it
functions. CONTRACTOR will enforce its Drug and
Alcohol Policy with respect to CONTRACTOR'S PERSONNEL
and the personnel of its SUB-CONTRACTORS, which shall
include provision that the possession, use,
distribution or sale of illicit drugs or controlled
substances in the work place is prohibited and that
such personnel are forbidden from being under the
influence of alcohol while on CONTRACTOR owned,
leased or operated premises. CONTRACTOR agrees to
conduct periodic searches and testing for such
substances. The personnel of the OPERATOR and the
SERVICE COMPANIES shall be subject to the OPERATOR's
Drug and Alcohol Policy.
CONTRACTOR shall submit the following information on
its safety performance each month:
1. Total man hours worked (month/YTD)
2. Total lost time accidents (month/YTD)
3. Total lost time days (month/YTD)
4. Total recordable accidents (month/YTD)
5. Total first aid cases (month/YTD)
CLAUSE 6 CONTRACTOR'S OTHER OBLIGATIONS
6.1 CONTRACTOR not to start DRILLING SERVICES without
Permission
The CONTRACTOR shall not at any LOCATION commence any
DRILLING SERVICES until the OPERATOR'S REPRESENTATIVE
has certified in writing on the IADC Report Form that
the CONTRACTOR'S EQUIPMENT is acceptable and ready to
commence the said SERVICES.
6.2 Training & Secondment of Nominees of OPERATOR by
CONTRACTOR
The CONTRACTOR hereby undertakes to accept for
training on board the DRILLING UNIT such number of
nominees of OPERATOR as the OPERATOR may request from
time to time and the CONTRACTOR shall train such
nominees as aforesaid in accordance with such
conditions and in such categories as the OPERATOR may
prescribe.
The OPERATOR shall not so request more than five such
local personnel or nominees on board at any one time.
12
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 13 OF 16
================================================================================
6.3 CONTRACTOR not to entice
The CONTRACTOR shall not at any time or in any manner
nor for any purpose whatsoever entice either directly
or indirectly any person employed by the OPERATOR or
in the employment of any SERVICE COMPANY.
6.4 Moving Operations
Before any moving operations are undertaken the
CONTRACTOR shall consult with the OPERATOR upon
weather and other information available at the time
but, notwithstanding Clause 4 of Section 2 of this
CONTRACT, the responsibility for the decision to
commence moving operations shall be the CONTRACTOR'S.
Towing vessels provided by the OPERATOR shall be
subject to approval of the CONTRACTOR. The OPERATOR
shall provide to the CONTRACTOR if so requested the
conditions of the charter party for such towing
operations.
6.5 Inspection of CONTRACT AREA
The CONTRACTOR shall be deemed to be satisfied as to
the nature of all existing harbours and means of
transport or communication on the mainland of the
CONTRACT AREA, and as to possible interruptions
thereto and as to access to and from the CONTRACT
AREA; to have made enquiries, examined and satisfied
itself as to workyard sites and such depots and
buildings as may be required for carrying out its
obligations under the CONTRACT; to have made local
and independent enquiries as to storms, prevailing
winds and climatic considerations generally and other
similar matters; to be satisfied as to the sources
and means of obtaining adequate supplies of skilled
and unskilled persons and all other things required
for carrying out the CONTRACT; to have considered the
possible effects on the carrying out of the CONTRACT
that may be caused by the break down of
communications or by reason of storms, prevailing
winds and adverse climatic weather conditions which
may arise at any time during the continuance of the
CONTRACT within the CONTRACT AREA; to have examined
the CONTRACT generally and to have obtained all
necessary information on all matters whatsoever which
may effect its performance thereof.
In the event that the CONTRACTOR does not satisfy
itself on any of such matters as aforesaid this shall
not relieve it from its obligations hereunder and
shall not entitle it to any increase in any rate or
charge under the CONTRACT nor to any compensation or
amount whatsoever additional to such charges, and in
the event of any claim under the CONTRACT or law
being made by any party the CONTRACTOR shall be
deemed to have so visited, examined and satisfied
itself as aforesaid prior to the date hereof.
13
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 14 OF 16
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CLAUSE 7 RESPONSIBILITIES OF THE OPERATOR
The OPERATOR shall provide the following equipment, materials,
supplies spare parts, services and personnel at its cost and
expense unless stated otherwise.
7.1. PERSONNEL
1. The OPERATOR'S REPRESENTATIVE and persons
delegated by the OPERATOR to act on behalf
of the OPERATOR'S REPRESENTATIVE from time
to time.
2. The OPERATOR'S technical specialists.
7.2. SERVICES AND EQUIPMENT
1. Specialist services.
2. Emergency medical evacuation services as
available (on cost recoverable basis within
the scope of CONTRACTOR'S insurances at
OPERATOR'S option).
3a. Towing and positioning services in the
CONTRACT AREA between LOCATIONs.
3b. Towing Services to an acceptable port at the
conclusion of the DRILLING SERVICES.
4. Workboat supply service for all materials
and a standby/workboat service.
5. Transport for CONTRACTOR'S PERSONNEL and
SUB-CONTRACTOR'S personnel between
OPERATOR'S designated point of embarkation
on the mainland of the CONTRACT AREA and the
DRILLING UNIT and between the OPERATOR'S
point of embarkation in the Republic of
Trinidad and Tobago and the mainland of the
CONTRACT AREA for the purposes of routine
crew change.
In the event that crew changes are delayed
for reasons of weather or non-availability
of helicopter or damage to DRILLING UNIT
which prevents a helicopter from landing,
CONTRACTOR will arrange and OPERATOR will
pay reasonable overnight hotel accommodation
and meal costs and substantiated overtime
costs.
6. Offshore drilling permit(s).
7. Drilling site surveys, buoying and clearing
of obstructions.
8. All marine and air transport of CONTRACTOR'S
and OPERATOR'S items between OPERATOR'S
designated marine and air supply bases and
the DRILLING UNIT. OPERATOR shall select
type of transport.
14
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 15 OF 16
================================================================================
9. All cementing services.
10. Mud engineer if required by OPERATOR (but
CONTRACTOR will carry out routine mud
testing and treatment).
11. Mud logging service, if required by
OPERATOR.
12. Geological services.
13. Directional drilling service engineer and
directional drilling equipment if required
by OPERATOR.
14. Drilling water if required, except that
CONTRACTOR'S water making unit can be used
in cases of emergency.
15. Bits and other downhole tools not supplied
by CONTRACTOR and listed in SECTION 7.
16. Conductor pipe, casing, tubing and
attachments, drive hammer, and all related
handling tools.
17. Wellhead housings, casing hangers, seat
protectors, pack-offs, wear bushings,
corrosion cap and all associated running
tools.
18. Temporary and Permanent Guide Bases
19. Cement and additives.
20. Mud chemicals and mud additives, including
pallets if required by OPERATOR.
21. Diesel fuel for use on the DRILLING UNIT.
22. Well test unit and associated equipment for
production testing, including Separators and
other test vessels.
23. Drill pipe and drill collars, Kellys or subs
other than those listed in SECTION 7.
24. Stabilizers, hole openers, reamers and
centralizers other than those listed in
SECTION 7.
25. Drill stem testing equipment.
26. Radio equipment other than that listed in
SECTION 7.
15
SECTION 4
STATEMENT OF REQUIREMENTS
PAGE 16 OF 16
================================================================================
27. Loading and unloading services at supply/
load out bases or heliport of all material
and equipment of CONTRACTOR and OPERATOR.
28. Containers for disposal of refuse as well as
transport to shore and disposal of same,
except for liquid waste generated by
CONTRACTOR.
29. Crude oil burner assemblies unless supplied
by CONTRACTOR and listed under SECTION 7.
30. Navigation and positioning systems for
siting the DRILLING UNIT.
31. Diving and ROV Services if required by
OPERATOR.
32. Potable Water in excess of water provided by
the desalination unit on board the DRILLING
UNIT.
33. Fishing Tools.
16
SCHEDULE 4.1.
OPERATOR'S POLICY ON IMPORTATION OF MACHINERY, EQUIPMENT, & MATERIALS
CONTRACTOR shall comply with the provisions of OPERATOR's general policy on the
importation of machinery, equipment, and materials by CONTRACTOR for use in
OPERATOR's operations, specifically with respect to the procedure for Exemption
from Customs Duty on Bills of Entry as set forth below.
PROCEDURE
EXEMPTION FROM CUSTOMS DUTY ON BILLS OF ENTRY
1. Introduction
Goods imported into Trinidad and Tobago are generally subject to customs
duty at rates prescribed by tariff, and to Value Added Tax (VAT). The
Customs Act (Act) provides for a total (or partial exemption as the case
may be) exemption from such duty in respect of: (a) goods imported for
temporary use and which are to be subsequently re-exported, and (b) such
goods specified in the Third Schedule of the Act, which in any
particular case are exempted by Order of the Minister responsible for
Industry.
Included among the goods generally qualifying for exemption are those
items of machinery, equipment, and materials for exploration and
extraction of minerals, including natural gas.
2. General
In order to make use of the exemptions granted, the following procedure
is to be used when machinery, equipment, or materials are being imported
into Trinidad and Tobago by CONTRACTOR:
a. In the case of items being imported for a short time to perform a
particular job and then be re-exported, these items should be
imported under the exemption for goods imported for temporary use.
b. In the case of all other items being imported by CONTRACTOR
(including any consumables which must be imported while operations
are in progress and which are going to be used up in Trinidad and
Tobago and, as far as legally possible, subsequent spare parts for
equipment, machinery, etc., previously imported into Trinidad and
Tobago), these items should be imported under a Minister's License.
For the purpose of OPERATOR obtaining a Minister's License,
CONTRACTOR must submit full details of the goods to be imported to
OPERATOR well in advance of the date of importation, and the goods
are not to be landed in Trinidad and Tobago unless previously
authorised by OPERATOR.
If after OPERATOR has cleared CONTRACTOR's equipment and supplies
into Trinidad and Tobago, CONTRACTOR desires to import additional
material, equipment, supplies, tools, and other items for use in
the Work, OPERATOR will endeavour to assist CONTRACTOR in such
importation subject to Section 2 Clause 22 of the CONTRACT.
c. In no circumstance whatsoever are any goods which have been
imported under a Minister's License granted to OPERATOR be
subchartered, loaned, sold, or otherwise disposed of to any other
OPERATOR or person in Trinidad and Tobago without the prior written
authorisation of the appropriate OPERATOR's Business Unit Leader.
Each case will have to be discussed with Government of the Republic
of Trinidad and Tobago ("GORTT") authorities to determine proper
procedure.
ATTACHMENT 1
TO
SECTION 4
CHECKLIST OF RESPONSIBILITIES
JACKUP
CHECK LIST OF RESPONSIBILITIES FOR SERVICES AND MATERIALS
PROVIDED BY OPERATOR (O) AND THE CONTRACTOR (C)
A. DRILLING LOCATION
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. Licences and consents to perform the
operations, including suspension or abandonment. O O
2. LOCATION survey to include marker buoys and side O O
scan sonar, and soil borings.
3. Rig positioning services including Satnav. O O
4. Insurance underwriter representatives. C C
--------------- ----------------
B. TRANSPORTATION/HANDLING
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. Helicopter or Marine transportation including emergency transportation for all
personnel between designated point of embarkation and the DRILLING UNIT.
O O
2. Marine transportation for equipment and spare parts between the OPERATOR'S shore
base and the DRILLING UNIT. O O
3. Transportation of CONTRACTOR'S PERSONNEL and SUB-CONTRACTOR'S
personnel to and from the point of embarkation designated by the
OPERATOR and the CONTRACTOR'S base of operations or personnel's point
of origin.
C C
4. Immigration clearance for CONTRACTOR'S PERSONNEL and SUB-CONTRACTORS' PERSONNEL
C C
5. In the event crew changes are delayed for reasons set out in sub-clause 7.2.5 of
SECTION 4 for overnight hotel accommodation and meal costs including any
overtime charges
C O
6. Transportation of CONTRACTOR'S EQUIPMENT between the OPERATOR'S shore base or
heliport and CONTRACTOR'S shore base
C C
7. Dock and dockside facilities, labour and equipment for loading/unloading the
OPERATOR'S MATERIALS or CONTRACTOR'S EQUIPMENT at the OPERATOR'S shore base (to
include in storage).
O O
--------------- ----------------
ATTACHMENT 1 TO SECTION 4
CHECKLIST OF RESPONSIBILITIES
PAGE 2 OF 9
================================================================================
B. TRANSPORTATION/HANDLING (CONT'D)
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
8. Offloading facilities to transfer personnel and cargo from the
OPERATOR'S supply vessel onto the DRILLING UNIT. No CONTRACTOR'S
PERSONNEL or SUB-CONTRACTOR'S personnel will be to go on board the
supply vessel for the purpose of loading or offloading cargo.
C C
9. Tie up lines for mooring supply vessel to the DRILLING UNIT
4" medium lay, 120-150 ft.
First set
Replacement set(s) C C
C O
10a. Floating Hoses and couplings for transfer of bulk and liquid materials between
supply vessels and the DRILLING UNIT.
First Set C C
Replacement sets C O
10b. Check valve on hoses at both ends C O
11. a. Transportation and containers for disposing of waste, contaminated
cuttings and fluids required. O O
b. Containers for disposal of CONTRACTOR's liquid hazardous waste C C
12. Qualified and competent offshore radio and computer operator for 24 hour duty
(trained for MAPS) C C
13. Communications equipment (including satellite communication equipment) required
for use on the DRILLING UNIT for communication with OPERATOR'S shore base
(OPERATOR to pay for satellite calls made by or on behalf of OPERATOR)
6 handheld radios with handsfree headsets
4 handheld radios with handsfree headsets
C C
C O
14. Standby Vessel O O
15. Fenders for DRILLING UNIT C C
--------------- ----------------
2
ATTACHMENT 1 TO SECTION 4
CHECKLIST OF RESPONSIBILITIES
PAGE 3 OF 9
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C. SHORE BASE USED BY THE CONTRACTOR
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. Office, warehouse and storage facilities CONTRACTOR'S EQUIPMENT and CONTRACTOR'S
PERSONNEL C C
Note: CONTRACTOR'S shore base shall be as close as possible to the OPERATOR'S
shore base
--------------- ----------------
D. DRY DOCKING/CERTIFICATION
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. For time in dock for statutory testing inspections or trials (but excluding
moving time) C C
2. Port fees, taxes, licences, import tariffs, pilotage fees, wharfage fees canal
fees and cost of similar charges including any brokerage fees in respect of
CONTRACTOR'S EQUIPMENT C C
3. Customs Duties, import tariffs in respect of Trinidad and Tobago Regulations O O
--------------- ----------------
E. THIRD PARTY SERVICES
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. Diving equipment services and installation costs and R.O.V. O O
2. Drill stem testing tools and services O O
3. Electric well logging equipment and services O O
4. Mud logging equipment and services O O
5. Mud engineering services and supervision O O
6. Geological/mud laboratory and test equipment O O
7. Acidizing, fracturing and other specialist services O O
8. Directional drilling equipment and services O O
9. Cementing services using cementing unit provided on a "free placement" basis
O O
9a Maintenance of cementing unit if provided by CONTRACTOR C C
9b Maintenance of cementing unit if provided by OPERATOR O O
--------------- ----------------
3
ATTACHMENT 1 TO SECTION 4
CHECKLIST OF RESPONSIBILITIES
PAGE 4 OF 9
================================================================================
E. THIRD PARTY SERVICES (CONT'D)
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
10. Coring Services and equipment O O
11. Tubing and casing running services O O
12. Extra welders and welding material used on welding and cutting the OPERATOR'S
equipment as authorised by the OPERATOR C O
13. Well completion services O O
14. Well test equipment and services O O
15. Weather forecasting and reporting services O O
16. Specialist services and equipment not designated herein but required for the
operations O O
17. Inspection of Top Drive, drill pipe, drill collars, other in-hole equipment as
per Clause 4.10 SECTION 4.
- Initial C C
- Other and Routine C O
18 Space, assistance and services for SERVICE COMPANY personnel and equipment
C C
--------------- ----------------
F. MATERIALS AND SUPPLIES
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. Cement and cement additives O O
2. Mud chemicals and completion fluids O O
3. Fuel for DRILLING UNIT O O
4. Lubes for DRILLING UNIT C C
5. Casing and tubing dope (to be specified by OPERATOR) O O
--------------- ----------------
4
ATTACHMENT 1 TO SECTION 4
CHECKLIST OF RESPONSIBILITIES
PAGE 5 OF 9
================================================================================
F. MATERIALS AND SUPPLIES (CONT'D)
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
6. Grease, pipe dope (friction factor 1 pipe dope) and lubricants (other than 4.
above) for equipment supplied by CONTRACTOR C C
7. Hydraulic fluid for blow-out preventers and control unit C C
8. Drilling Water O O
9. Potable water in excess of rated production capacity of water distillation unit
installed on board. O O
10. Drilling bits, diamond bits, and core heads O O
11. Shale shaker screens (Refer Section 4, Clause 4.13) C C
12. Repair and replacement parts for safety joint fishing jars and fishing tools,
resulting from" in-hole" damage O O
13. Casing protectors for drill pipe
- initial set C C
- replacement set(s) C O
14. BOP and riser consumables C O
15. Repair kits for: float valves, ▇▇▇▇▇ ▇▇▇▇▇ (upper and lower) and inside BOP's
C C
--------------- ----------------
G. DRILLING EQUIPMENT AND UNIT
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. CONTRACTOR'S EQUIPMENT C C
2. Fishing tools for CONTRACTOR's In Hole Equipment O O
3. Tubing O O
4. Tubing handling equipment O O
5. 3.1/2" drill pipe including drill collars and handling tools. (If specified by
OPERATOR). O O
6. Cementing heads O O
5
ATTACHMENT 1 TO SECTION 4
CHECKLIST OF RESPONSIBILITIES
PAGE 6 OF 9
================================================================================
G. DRILLING EQUIPMENT AND UNIT (CONT`D)
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
7. 2 sets Elevators, tongs and handling tools for 30", 20"16", 113/4", 13 3/8", 9
5/8" and 7" casing (As specified in Section 7 Part 2 only) O O
8. Drilling Jars O O
9. 36" and 26" Hole openers c/w spare cutters O O
9a. Reamers and stabilisers O O
10. Drill pipe wipers C C
11. Fishing tools other than those described in 2 above O O
12. Casing cutters & casing spears O O
13. Casing power tongs and hydraulic power unit O O
14. Replacement and/or repair of any equipment when lost or damaged below the rotary
table other than arising out of fair wear and tear. C O
15. Mud pump fluid and power end parts and consumables
Liner Sizes of 6" and 7" required C C
Mud pump fluid and power end parts and consumables C O
Liner Sizes of 5 1/2" required
16. Spares for choke manifold C C
17. Replacement of tubulars after inspection pursuant to SECTION 4 Clause 4.10 hereof
C C
20. Maintenance and spare parts for all CONTRACTOR'S EQUIPMENT unless otherwise
provided herein C C
--------------- ----------------
6
ATTACHMENT 1 TO SECTION 4
CHECKLIST OF RESPONSIBILITIES
PAGE 7 OF 9
================================================================================
H. WELL EQUIPMENT
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. All tubular goods, including conductor pipe, casing and tubing O O
2. Casing shoes, collars, baskets, centralisers float equipment, baffles,
scratchers and all other such in-hole consumables O O
3. Wellhead housings including casing hangers wear bushings and all such associated
wellhead equipment. O O
4. Valves, Xmas Trees and necessary tools and equipment for installation
O O
5. All running and pressure testing tools for wellhead equipment supplied by the
OPERATOR O O
6. Replacement and repair and all consumables for items provided under 5 above
O O
7. Wellhead ring joint gaskets, other than those required for installation between
items of the CONTRACTOR'S EQUIPMENT C O
8. Permanent and Temporary Guide Bases O O
--------------- ----------------
I. SAFETY
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. Radio equipment for communication with tugs, supply vessels and helicopters
including portable sets (See B. 13.) C C
2. Permits, licences required for operation of communication equipment. C C
3. First aid, infirmary, equipment and medical attention on board the DRILLING UNIT
for all persons while on board C C
3a Paramedic on board the DRILLING UNIT (to be specified by OPERATOR, refer ▇▇▇▇▇▇▇
▇, ▇▇▇▇▇▇ ▇.▇) ▇ ▇
▇▇ ▇▇▇ (▇▇▇ ▇▇▇▇▇) on board the DRILLING UNIT (refer SECTION 4, Clause 3.6) C C
--------------- ----------------
7
ATTACHMENT 1 TO SECTION 4
CHECKLIST OF RESPONSIBILITIES
PAGE 8 OF 9
================================================================================
I. SAFETY
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
4. Safety hats, safety boots, safety glasses, hearing protection, fire resistant
clothing (Nomex), HLO fire resistant suit and gloves for CONTRACTOR'S PERSONNEL C C
and SUB-CONTRACTOR'S Personnel
4a PPE for synthetic oil-based muds and brine C O
5. Fire fighting equipment as required to comply with the OPERATOR'S and government
regulations C C
6. Onshore medical services for CONTRACTOR'S and SUB-CONTRACTOR'S personnel
C C
7. Refuelling system on the DRILLING UNIT for helicopter fuel, when requested by O O
OPERATOR.
8. Helicopter refuelling inspection kits and filters C C
9. All necessary life saving and safety equipment to conform with regulations and
requirements of the LAW and OPERATOR C C
10 Fluorescent vest for HLO and banks men C C
--------------- ----------------
J. MISCELLANEOUS
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. Helicopter deck as required by government regulations and to accommodate Super
Puma helicopter or similar C C
2. All hand and power tools required for normal maintenance of the DRILLING UNIT
C C
3. Office on the DRILLING UNIT for the OPERATOR'S Drilling Supervisors
C C
4. Catering on board for all CONTRACTOR'S and SUB-CONTRACTOR'S personnel, plus 16
OPERATOR'S personnel or SERVICE COMPANY PERSONNEL
C C
5. Catering for all OPERATOR and SERVICE COMPANY PERSONNEL in excess of above at
cost C O
6. Subsea T.V. System O O
7. Replacement parts to Subsea T.V. System O O
--------------- ----------------
8
ATTACHMENT 1 TO SECTION 4
CHECKLIST OF RESPONSIBILITIES
PAGE 9 OF 9
================================================================================
J. MISCELLANEOUS (CONT'D)
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
8. On board entertainment, video, films, satellite TV. C C
9. CONTRACTOR'S PERSONNEL and SUB-CONTRACTOR'S PERSONNEL
C C
10. Additional personnel as requested by the OPERATOR employed by CONTRACTOR
C O
11. Overtime for CONTRACTOR'S PERSONNEL authorised by the OPERATOR in writing
C O
12. Survival Suits for use during helicopter flights for CONTRACTOR'S personnel and
CONTRACTORS Service personnel O O
13. Waste disposal onshore O O
14. Cargo baskets and containers for equipment supplied by OPERATOR O O
15. Mud laboratory test equipment for routine and testing and treatment. (See
sub-clause 4.8.2 para 10). O O
16. Replacement of additional anchors, buoys and pennant wire C C
17. Burners O O
--------------- ----------------
K. THE VESSEL
--------------- ----------------
PROVIDED BY TO ACCOUNT
--------------- ----------------
1. Damage to or loss of DRILLING UNIT: C C
Inspection C C
Repairs C C
Replacement C C
--------------- ----------------
9
ATTACHMENT 2
TO
SECTION 4
REPORTING RESPONSIBILITIES OF THE CONTRACTOR
The following forms and reports shall be completed by the CONTRACTOR and handed
over to the OPERATOR.
1. The Daily IADC Tour Sheet
2. Morning drilling report
3. Drilling Parameters Record Charts (Drilling Recorder)
4. Pit Level Indicator Chart
5. Loading Notes and/or cargo manifests
6. Drilling Unit & Drilling Equipment Inspection (a) Safety
(b) General
7. Testing of B.O.P. Equipment and Charted
8. Accident/Near Miss Report
9. Time Breakdown Report
10. Bed/Meal Tickets
11. Minutes of Safety Meetings
12. Barge Engineer's Report
13. Trip Sheet
14. Trend indication while drilling - Torque and Drag and Pump Pressure
15. Bottom Hole Assembly and Diagrams
16. Circulating time on jars and thrusters
17. Environment Emission Report
G.1 THE DAILY TOUR SHEET
The Daily IADC Tour Sheet will be comprehensively filled in by the
Drillers, checked on the DRILLING UNIT by the CONTRACTOR'S Toolpusher
and by the OPERATOR'S REPRESENTATIVE or, by the latter's delegation,
another OPERATOR'S Supervisor on board. Both the said Toolpusher and
the OPERATOR'S REPRESENTATIVE on the DRILLING UNIT will sign the
Daily Tour Sheet.
G.2 THE MORNING DRILLING REPORT
This report shall be filled in every morning on the DRILLING UNIT by
the OPERATOR'S Drilling Supervisor assisted by the CONTRACTOR'S
Toolpusher. It shall contain a summary of the previous day's
operations and shall be transmitted each morning at an agreed time to
the OPERATOR'S onshore office.
G.3 DRILLING PARAMETERS RECORD CHARTS (DRILLING RECORDER)
The main drilling parameters i.e. weight on bit, pump pressure, pump
strokes per minute, R.O.P., rotary torque, R.P.M., will be recorded
on a single chart. In the event of any failure of the Drilling
Parameters Recorder the CONTRACTOR will give immediate notice to the
OPERATOR'S REPRESENTATIVE of such failure. The OPERATOR'S Drilling
Supervisor will be responsible for collecting the charts and sending
them to the OPERATOR'S Office (Drilling Department).
G.4 PIT LEVEL INDICATOR
This recorder shall always be connected during all operations from
spud to release.
ATTACHMENT 2 TO SECTION 4
REPORTING RESPONSIBILITIES OF THE CONTRACTOR
PAGE 2 OF 3
================================================================================
The CONTRACTOR will give immediate notice to the OPERATOR'S Drilling
Supervisor of any failure of the Pit Level Indicator. The OPERATOR'S
Drilling Supervisor will be responsible for collecting the charts and
sending them to the OPERATOR'S Office (Drilling Department).
MUD REPORT (Prepared by OPERATOR)
The OPERATOR'S mud engineer will prepare a complete mud report for
every WELL; this mud report will consist of:
1 Daily Mud Report
2 End of Phase Mud Report
3 Mud Material used and transferred
4 Usage and Cost per Interval
G.5 LOADING NOTES
The CONTRACTOR shall prepare Loading Notes in respect of such of
OPERATOR'S MATERIALS as are consigned to the OPERATOR from the
DRILLING UNIT, and shall check receipts of such MATERIALS at the
DRILLING UNIT against the Loading Note prepared by the OPERATOR or
its SERVICE COMPANY and advise the OPERATOR'S REPRESENTATIVE
forthwith of any discrepancies therein.
G.6 BED/MEAL TICKETS
Any invoice sent to the OPERATOR in respect of beds or meals taken by
the OPERATOR'S PERSONNEL or the SERVICE COMPANY PERSONNEL on the
DRILLING UNIT shall be substantiated by daily vouchers clearly and
properly completed by the CONTRACTOR and countersigned by OPERATOR'S
Drilling Supervisor.
G.7 DRILLING UNIT AND DRILLING EQUIPMENT INSPECTION
(A) SAFETY
(B) GENERAL
Inspection shall be carried out as directed by the CONTRACTOR's Rig
Manager. After the OPERATOR'S Drilling Supervisor and the
CONTRACTOR'S Rig Manager have conducted such inspections, the
inspection forms shall be completed by the said Rig Manager in the
presence of the said OPERATOR's Drilling Supervisor and signed by
both parties.
G.8 PERIODIC TESTING OF B.O.P. EQUIPMENT
Testing of the Blowout Preventers and associated equipment shall take
place as directed by the OPERATOR'S Drilling Supervisor. The
CONTRACTOR'S Toolpusher and OPERATOR's Drilling Supervisor shall sign
the form after it has been completed by the CONTRACTOR's Engineer.
G.9 ACCIDENT/NEAR MISS REPORTS
Whenever an accident or near miss occurs (as defined below) the
CONTRACTOR shall immediately notify the OPERATOR'S REPRESENTATIVE and
2
ATTACHMENT 2 TO SECTION 4
REPORTING RESPONSIBILITIES OF THE CONTRACTOR
PAGE 3 OF 3
================================================================================
as soon as possible thereafter deliver to the said REPRESENTATIVE an
Incident Report on a form to be provided by the OPERATOR and
completed by the CONTRACTOR.
An accident is defined as an undesired event that results in harm to
people, damage to property or loss to process. This includes all
security accidents.
A near miss is defined as an undesired event, which, although not
actually resulting in loss, could have resulted, under slightly
different circumstances, in harm to people, damage to property or
loss to process.
G.10 TIME BREAKDOWN REPORT
This form shall be filled in by the OPERATOR'S Drilling Supervisor on
the DRILLING UNIT. There will be one such form per month per WELL.
The Time Breakdown Report shall be signed by the CONTRACTOR'S
REPRESENTATIVE and the OPERATOR'S Drilling Supervisor at a convenient
time following the end of each WELL and/or each month. The time
breakdown will be agreed by both parties before any invoice is
presented to OPERATOR.
G.11 MINUTES OF SAFETY MEETINGS
Minutes of Safety Meetings shall be supplied by CONTRACTOR to the
OPERATOR for all Safety Meetings carried out on board the DRILLING
UNIT. The CONTRACTOR shall sign the minutes as being correct and
accurate.
G.12 BARGE ENGINEER'S REPORT
Daily report on usage of bulk, fuel, water, liquid muds, helicopter
fuel, anchor tension, environmental conditions and variable deckload.
G.13 TRIP SHEET REPORT
G.17 EMISSION REPORT
To be completed monthly and sent to the OPERATOR's HSE Department.
3
SECTION 5
RATES AND CHARGES
PREAMBLES
5.1 GENERAL
The Rates and Charges shall be fully inclusive of all costs, expenses,
overheads and profit arising out of the provision of the DRILLING
SERVICES, PERSONNEL and EQUIPMENT set out in Sections 1,2,3,4,6 and 7
hereof.
5.2 MOBILISATION AND DEMOBILISATION
(a) MOBILISATION CHARGE shall be the amount payable for the
MOBILISATION of the CONTRACTOR'S EQUIPMENT and CONTRACTOR'S
PERSONNEL to the first drilling LOCATION in the CONTRACT AREA
including
- setting up a base in the CONTRACT AREA
- towage,
- air passages,
- sea freight,
- lighterage,
- port dues,
- pilotage,
- wharfage,
- cranage,
- cargo handling,
until the agreed time and date that the legs are pinned at the
first LOCATION.
Any time in excess of twenty-four (24) hours waiting on
weather in the CONTRACT AREA shall be paid to CONTRACTOR at
the Standby Rate.
(b) DEMOBILISATION CHARGE shall be the amount payable for the
DEMOBILISATION of the CONTRACTOR'S EQUIPMENT and CONTRACTOR'S
PERSONNEL from a mutually agreed port in the CONTRACT AREA
including
- closing down a base in the CONTRACT AREA,
- towage,
- air passages,
- sea freight,
- lighterage,
- port dues,
- pilotage,
- wharfage,
- cranage,
- cargo handling,
from the time the DRILLING UNIT is under tight tow from the
mutually agreed port. Unloading of OPERATOR'S MATERIALS and
SERVICE COMPANY equipment and materials at the Republic of
Trinidad and Tobago or such other designated location shall
be reimbursed at the DEPROVISIONING RATE.
1
SECTION 5
RATES AND CHARGES
PAGE 2 OF 7
================================================================================
Should the CONTRACTOR have continuing work for another
operator in the waters of Trinidad and Tobago, or if another
operator is paying for mobilization of the DRILLING UNIT from
the waters of Trinidad and Tobago the DRILLING UNIT may, with
the OPERATOR'S agreement, be left on the last LOCATION and the
OPERATOR shall pay NIL rate. In such case the DEMOBILISATION
CHARGE shall not apply. NIL rate shall apply if the move is
delayed by the other operator.
(c) Standing Down/Re-mobilisation Charge
The CONTRACTOR will be paid a reimbursement for all actual
costs reasonably and properly incurred by the CONTRACTOR in
standing down at a port on the mainland of the CONTRACT AREA
nominated by the OPERATOR, or, at the OPERATOR'S option, at
the individual home bases of the CONTRACTOR'S PERSONNEL, and
(as the case may be) in demobilising from said port or home
bases the CONTRACTOR'S PERSONNEL as a direct consequence of
the DRILLING UNIT being shutdown by reason of Force Majeure.
Full supporting documents must accompany any invoice for this
charge.
5.3 DAILY RATES
All rates per day described hereunder refer to a day of 24 hours. For
parts of a day all such daily rates shall be prorated to the nearest
one-quarter hour.
(a) The OPERATING RATE shall be the amount per day payable for the
normal performance of the DRILLING SERVICES. The OPERATING
RATE shall apply for normal operations from the COMMENCEMENT
DATE until the DRILLING UNIT arrives at the mutually agreed
port at the end of the term of the CONTRACT and all OPERATOR'S
and SERVICE COMPANY equipment has been offloaded.
The OPERATING RATE shall not apply during provisioning,
deprovisioning, stand-by, moving, or during any periods of
shut down however caused.
In particular shutdown for revalidation of CERTIFICATION,
compliance with regulations, or rejection of equipment shall
be payable at nil rate.
Cessation of operations in order to slip, cut or change the
drilling line, or routine lubrication for routine maintenance
purposes as further described in clause 5.3(e) of this Section
5,up to 1/2 hour per shift per day, which cannot be safely and
properly carried out without suspending the DRILLING SERVICES
shall not be deemed to be shut down for the purposes of this
sub-clause.
The OPERATING RATE shall apply in a similar manner at each
subsequent LOCATION.
(b) The PROVISIONING RATE/ DEPROVISIONING RATE shall be the amount
per day applicable when the DRILLING UNIT is moored at
anchorage or alongside a suitable quay in Pascagoula,
Mississippi and the Republic of Trinidad and Tobago or such
other designated location and the OPERATOR'S MATERIALS and
SERVICE COMPANY EQUIPMENT are being loaded/ unloaded. The
PROVISIONING RATE/ DEPROVISIONING RATE shall apply for such
period in excess of fourteen (14) days for the Make Ready
period described in Section 1, Clause 6.3.
2
SECTION 5
RATES AND CHARGES
PAGE 3 OF 7
================================================================================
(c) The STANDBY RATE shall be the amount per day applicable when
the DRILLING UNIT is fully manned and in a state of readiness
to start or resume operations, during any period of delay or
suspension of operations on account of
- adverse sea or weather conditions
- waiting on OPERATOR'S orders or on OPERATOR'S MATERIALS
or on SERVICE COMPANIES
- during wireline logging operations from the time
the first logging tool passes through the rotary
table until the last tool of the logging suite is
retrieved through the rotary table
- failure of equipment provided by the OPERATOR or the
SERVICE COMPANIES
- any act or omission of OPERATOR or its SERVICE COMPANIES,
until such time as operations are resumed.
During such Standby the CONTRACTOR may, subject to the
agreement of the OPERATOR, carry out maintenance or repairs to
the CONTRACTOR'S EQUIPMENT.
In the event the CONTRACTOR is unable to ▇▇▇▇ up at the first
LOCATION on account of weather conditions only, then the
STANDBY RATE shall apply after twenty-four (24) hours from
arrival of the DRILLING UNIT in the CONTRACT AREA. .
(d) The MOVING RATE shall be the amount per day which shall apply
from the time the DRILLING UNIT is under tight tow on
completion of the WELL at the first LOCATION until the legs
are pinned at the next LOCATION and similarly at subsequent
LOCATIONS thereafter.
(e) The REPAIR RATE shall be applicable during such times as there
is a shutdown in operations for repairs to the DRILLING
EQUIPMENT in the manner set out below:
- REPAIR RATE applies for a cumulative ten (10) hours per MONTH
shut down, unless such shutdown is for repairs not reasonably
within the control of CONTRACTOR, in which case the REPAIR
RATE shall be applicable for a cumulative thirty-six (36)
hours per month, and
- thereafter at NIL Rate.
In the event that any such shutdown which is caused by or
arises from the same incident shall continue from one month
into the next, then for the purposes of this sub-clause the
incident shall be treated as though it occurred in the same
month.
For cumulative downtime less than ten (10) hours per calendar
month, CONTRACTOR shall earn the incentive payment specified
in Schedule 5.1.
Downtime for the following instances shall be considered
normal drilling operations and shall not be considered as
repair time:
3
SECTION 5
RATES AND CHARGES
PAGE 4 OF 7
================================================================================
Industry standard thirty minutes rig service per tour
including, but not limited to, inspection of equipment,
lubrication, repacking swivel or top drive, slipping and/or
cutting drilling line, changing pump liners or swabs and
routine top drive service.
(f) The REDRILLING RATE being 75 percent of the OPERATING RATE
shall apply during all time spent in redrilling the hole or
during remedial work on the hole due to circumstances set out
in Clause 6.4 of the Conditions of Contract.
(g) The FISHING RATE being the amount per day applicable during
all times when fishing operations (or sidetracking operations
arising out of fish in the hole) are being carried out,
starting from the time that normal drilling operations are
interrupted on account of the need to begin fishing operations
and continuing until such time as normal drilling operations
are resumed. The Rate for all such fishing or sidetracking
operations shall be either the OPERATING RATE or, in the event
such operations are due to or arise out of the negligence of
the CONTRACTOR or its PERSONNEL then the rate shall be 75% of
the OPERATING RATE. In the event that sidetracking operations
are being carried out at 75% of the OPERATING RATE then normal
drilling operations shall be deemed to have been resumed when
the depth is reached at which the said fishing operations
occurred in the first place. 'Fishing operations' shall be
deemed to include all operations incurred in attempting to
remove a fish from the WELL or to push a fish to one side or
to pick up a fish.
(h) The SHUTDOWN WITH CREW RATE being the amount per day quoted in
Schedule 5.1 which shall apply during all such time as the
DRILLING UNIT has been shutdown and the DRILLING SERVICES have
been suspended for any reason by the OPERATOR. The Rate shall
include the CONTRACTOR'S costs in maintaining its PERSONNEL
and of protective maintenance at the DRILLING UNIT.
(i) The SHUTDOWN WITHOUT CREW RATE being the amount per day of the
SHUTDOWN WITH CREW RATE less any savings effected by the
CONTRACTOR in reducing the numbers of CONTRACTOR'S PERSONNEL
to skeleton strength for caretaker purposes only. The OPERATOR
shall give the CONTRACTOR 30 (thirty) days prior written
notice of the application of this Rate, which shall be
applicable for a period of not less than 30 (thirty) days.
In addition, the OPERATOR shall reimburse the CONTRACTOR the
Standing Down/ Remobilisation Charge.
(j) The FORCE MAJEURE a) Rate and the FORCE MAJEURE b) Rate shall
be payable by the OPERATOR as provided in Section 2, Clause
10.
5.4 CHARGE FOR MEALS AND ACCOMMODATION PROVIDED BY CONTRACTOR
This charge shall be the amount per man-day applicable for meals and
accommodation provided by CONTRACTOR to OPERATOR'S and SERVICE
COMPANIES' Personnel eating and/or staying overnight on the DRILLING
UNIT in excess of 16 (sixteen) such Personnel per day. Where Personnel
stay overnight on the DRILLING UNIT, the said Charge shall apply
irrespective of whether the said Personnel are in fact each provided
with no meals per day or one or two or three meals per day, and the
substantiation for the application of this Charge shall be the daily
"people on board" telex.
4
SECTION 5
RATES AND CHARGES
PAGE 5 OF 7
================================================================================
Where Personnel are not staying overnight on the DRILLING UNIT, but
have meals on board, the Casual Meal Rate shall apply.
5.5 PERSONNEL
(a) Additional Personnel
The CONTRACTOR shall be paid at the rates set out in Schedule
2 hereto for personnel additional to those listed in Section 6
Schedule 6.1 requested by the OPERATOR. CONTRACTOR shall
provide additional supervisory personnel for familiarization
of the crew and safety and supervision on the DRILLING UNIT,
during the transition period through ninety (90) days after
the COMMENCEMENT DATE. OPERATOR shall pay CONTRACTOR fifty
percent (50%) of the rates, costs, and expenses for such
additional personnel during such transition period, up to a
maximum payment by OPERATOR of $150,000.
(b) Courses
The OPERATOR shall reimburse the CONTRACTOR for all costs and
expenses in respect of travel, accommodation and subsistence
reasonably and properly incurred by CONTRACTOR'S RIG STAFF who
attend the OPERATOR'S or OPERATOR'S approved in-house required
courses. Invoices for such reimbursement shall be supported by
the requisite bills, tickets and other such substantiation as
the OPERATOR may reasonably require.
(c) Replacement
Pending replacement of personnel the OPERATOR shall deduct
from any monies due to the CONTRACTOR at the appropriate rate
per day quoted in Schedule 5.2 for all days in excess of 7
(seven) days that such person shall not have been so replaced.
5.6 ADDITIONAL EQUIPMENT
The OPERATOR shall reimburse the CONTRACTOR as follows for additional
equipment provided after the COMMENCEMENT DATE:
(a) The capital costs of modifications to the DRILLING UNIT or
additional equipment purchased on the instructions of the
OPERATOR shall be reimbursed to the CONTRACTOR in accordance
with the provisions of sub-clause (b) hereunder.
(b) The agreed rental costs of listed equipment under the Schedule
5.3 hereto or if not listed the costs of materials or charges
for hire of additional equipment or services required by the
OPERATOR'S REPRESENTATIVE at net invoice cost, after deduction
of all discounts plus an addition of 10% for all items not
exceeding US$3,000 (three thousand dollars) and 6% on all
items exceeding US$3,000 (three thousand dollars) to cover the
CONTRACTOR'S additional costs, overhead charges and profit.
(c) The costs of transport and shipping the further equipment and
materials to the CONTRACT AREA.
5
SECTION 5
RATES AND CHARGES
PAGE 6 OF 7
================================================================================
(d) An agreed rental rate to be incorporated in the Schedule 5.3
hereto covering CONTRACTOR'S operating and maintenance costs
for each item on such additional equipment included in Section
7 hereof.
The OPERATOR shall not reimburse the CONTRACTOR for any further
equipment or materials supplied and delivered by it which the
OPERATOR'S REPRESENTATIVE has not first requested in writing as
aforesaid.
5.7 FIXED RATES
The rates and charges specified in Schedule 5.1, 5.2 and 5.3 shall be
fixed for the duration of the CONTRACT subject only to adjustments for
documented normal and customary changes in CONTRACTOR'S operating
costs, including but not limited to, all personnel related costs,
catering, insurance, repair and maintenance, travel expenses, and third
party towing charges in the fixed price demobilisation fees. CONTRACTOR
shall use reasonable efforts to keep the operating costs in line with
industry practice.
5.8 PAYMENT PROVISIONS
5.8.1 Monthly Account and Invoicing
(a) Within the first fifteen (15) days of each MONTH the
CONTRACTOR shall submit to the OPERATOR in triplicate
a monthly account in respect of DRILLING SERVICES
performed by it during the previous MONTH for which
payment is due, and also in respect of services given
and/or materials supplied (if any) for which payment
is due.
(b) Such account shall be accompanied by one copy of the
Time Breakdown Report and such other invoice support
documents or information as the OPERATOR may
reasonably require from time to time.
(c) Such account shall comprise one invoice for each WELL
on which the DRILLING UNIT has operated during the
previous MONTH.
(d) CONTRACTOR shall be responsible for ensuring timely
receipt of invoices by the OPERATOR. OPERATOR will
only pay CONTRACTOR's invoices submitted within two
(2) months of completion of the DRILLING SERVICES for
a particular well under this CONTRACT, except for
third party invoices which must be submitted within
four (4) months of completion of the DRILLING
SERVICES for a particular well. Invoices submitted
more than two (2) months or four (4) months as the
case may be, after completion of the DRILLING
SERVICES for a particular well under this CONTRACT
will be settled at the OPERATOR's discretion and may
result in non-payment.
(e) Invoices shall be numbered serially and submitted to
the OPERATOR at the following address, bearing the
CONTRACT reference number and well description:
6
SECTION 5
RATES AND CHARGES
PAGE 7 OF ▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ LLC
CONTRACT: C- 2600
WELL DESCRIPTION: (Well being drilled)
Marked for the attention of: THE INVOICE PROCESSING
SUPERVISOR (Well Operations)
or other address as may be advised to the CONTRACTOR
from time to time.
5.8.2 Payments by the OPERATOR
(a) To the extent it is not disputed by the OPERATOR, the
OPERATOR shall pay all invoices within 30 (thirty)
days after receipt thereof to bank accounts nominated
by the CONTRACTOR. In the event any undisputed
invoices are not so paid by the OPERATOR within the
said 30 (thirty) days, then the OPERATOR shall pay
interest on such unpaid amounts at the rate of 10%
per annum or pro rata thereof from the due date until
paid. The bank account to which OPERATOR shall make
payments under the CONTRACT shall be as follows:
BANK:
ACCOUNT:
Any change to the above details shall be the subject
of a formal amendment to CONTRACT.
(b) In the event that the OPERATOR disputes an invoice or
part thereof, the OPERATOR shall within 20 (twenty)
days of receipt thereof notify the CONTRACTOR in
writing of the invoice or part thereof so disputed
and specifying the reason therefor. Payment of such
disputed invoice or part thereof shall be withheld
until settlement of the said dispute. Such payments
so withheld shall not be subject to interest charges
unless the original invoices as submitted by the
CONTRACTOR are subsequently agreed by OPERATOR to be
correct based solely on the original support
documents or information provided.
(c) Payment by the OPERATOR of the CONTRACTOR'S invoices
shall be without prejudice to the OPERATOR's rights
subsequently to challenge the correctness thereof.
(d) Any expenditure of whatsoever nature incurred by the
CONTRACTOR in connection with the CONTRACT for which
responsibility has not been assumed in the CONTRACT
by the OPERATOR shall be a cost to be borne by the
CONTRACTOR.
(e) Payment by the OPERATOR of any account submitted by
the CONTRACTOR shall not discharge or release the
CONTRACTOR from any of its obligations under the
CONTRACT or be deemed approval or acceptance of work
covered by such account.
(f) All invoices shall be submitted in and payment made
in US Dollars.
7
SCHEDULE 5.1
RATES AND CHARGES
NAME OF DRILLING UNIT:...............................▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
REF. NO. DESCRIPTION OF RATE OR CHARGE AMOUNT US$
MOBILISATION - DEMOBILISATION
OFFSHORE EAST COST OF TRINIDAD
1. MOBILISATION - direct to LOCATION $3,600,000 Lump Sum
- Via the Republic of Trinidad and Tobago $3,600,000 Lump Sum
2. DEMOBILISATION - from the REPUBLIC of Trinidad and Tobago $2,800,000 Lump Sum
3. STANDING DOWN/ REMOBILISATION CHARGE NA
DAILY RATES
4. OPERATING $73,000 per day
5. PROVISIONING/ DEPROVISIONING $68,000 per day
6. STANDBY $71,000 per day
7. MOVING $71,000 per day
8. REPAIR 85% of OPERATING RATE
9. REDRILLING 75% of OPERATING RATE
10. FISHING 75% of OPERATING RATE
11. SHUTDOWN WITH CREW $71,000 per day
12. SHUTDOWN WITHOUT CREW $71,000 per day
13. FORCE MAJEURE a) $71,000 per day
b) $60,000 per day
14 REPAIR RATE INCENTIVE $1000 per hour
(Payable for each hour of repair time less
than 10 hours per month)
SCHEDULE 5.1 TO SECTION 5
RATES AND CHARGES
PAGE 2 OF 2
================================================================================
MISCELLANEOUS SERVICES FOR OPERATOR'S PERSONNEL
15. Meals and accommodation provided by
CONTRACTOR (in excess of 16 (sixteen) $60.00 per man per day per day
OPERATOR'S personnel)
Casual Meal Rate $15.00 per meal
16. The Rate per day for CONTRACTOR'S PERSONNEL who have
been removed and who have not been replaced by the
CONTRACTOR shall be a deduction of the amount of the
rate in schedule 5.2 hereto for the person so removed
for all days in excess of seven (7) days that such
person shall not have been so replaced until such time
as the said person so removed has been replaced.
2
SCHEDULE 5.2
RATES FOR
CONTRACTOR'S PERSONNEL
(SEE NEXT PAGE)
TRINIDADIAN OPERATIONS
======================
TITLE TOTAL NUMBER * ON BOARD EXPATRIATE OR WORK SCHEDULE ANNUAL BASE
===== ============== ======== ============== ============= ============
NATIONAL SALARY
======== ======
EXPATRIATE
==========
Rig Manager 2 1 Expatriate 28 On/28 Off $ 81,600
Assistant Rig Manager 2 1 Expatriate 28 On/28 Off 72,000
Rig Engineer (Barge Engineer) 2 1 Expatriate 28 On/28 Off 66,326
Safety & Training Coordinator 2 1 Expatriate 28 On/28 Off 46,290
Mechanic 2 1 Expatriate 28 On/28 Off 58,035
Electrician 2 1 Expatriate 28 On/28 Off 58,035
Crane Operator 4 2 Expatriate 28 On/28 Off 48,363
Driller 4 2 Expatriate 28 On/28 Off 59,417
SUB-TOTAL 20 10
========= == ==
NATIONAL
========
Assistant Driller 4 2 National 14 On/14 Off $ 35,000
Derrickman 4 2 National 14 On/14 Off 28,000
Shaker Hand 4 2 National 14 On/14 Off 26,500
Floorman 12 6 National 14 On/14 Off 26,000
Assistant Electrician 2 1 National 14 On/14 Off 28,000
Motorman 4 2 National 14 On/14 Off 28,000
Clerk/Radio Operator 2 1 National 14 On/14 Off 28,000
Storeman 2 1 National 14 On/14 Off 25,000
Welder 2 1 National 14 On/14 Off 30,000
Lead Roustabout 4 2 National 14 On/14 Off 28,000
Roustabout 12 6 National 14 On/14 Off 26,000
▇▇▇▇▇▇▇ 2 1 National 14 On/14 Off 28,000
Night ▇▇▇▇ 4 2 National 14 On/14 Off 26,000
Utility Hand 8 4 National 14 On/14 Off 24,000
SUB-TOTAL 66 33
========= == ==
TOTAL PERSONNEL 86 43
=============== == ==
** Rates are per position. This rate includes two persons, one for crew A, one
for crew B. Does not include additional travel cost, if any and /or additional
catering costs
==============================================================================
TABLE CONTINUED......
TRINIDADIAN OPERATIONS 25% 37.2%
====================== === =====
TITLE FOREIGN SERVICE OVERHEAD & TOTAL ANNUAL DAY RATE WITH CREW
===== ================ =========== ============= ============== ====
PREMIUM INSURANCE COST PER BURDEN PER PERSON ADDITIONS/DAY/POSITION**
======= ========== ========= ================= ========================
BURDEN PERSON
====== ======
EXPATRIATE
==========
Rig Manager $ 20,400 $ 30,355 $ 132,355 $ 362.62 $ 725.23
Assistant Rig Manager 18,000 26,784 116,784 319.96 639.91
Rig Engineer (Barge Engineer) 16,582 24,673 107,581 294.74 589.48
Safety & Training Coordinator 11,573 17,220 75,082 205.71 411.41
Mechanic 14,509 21,589 94,133 257.90 515.80
Electrician 14,509 21,589 94,133 257.90 515.80
Crane Operator 12,091 17,991 78,445 214.92 429.83
Driller 14,854 22,103 96,374 264.04 528.08
SUB-TOTAL
=========
NATIONAL
========
Assistant Driller - 13,020 48,020 131.56 263.12
Derrickman - 10,416 38,416 105.25 210.50
Shaker Hand - 9,858 36,358 99.61 199.22
Floorman - 9,672 35,672 97.73 195.46
Assistant Electrician - 10,416 38,416 105.25 210.50
Motorman - 10,416 38,416 105.25 210.50
Clerk/Radio Operator - 10,416 38,416 105.25 210.50
Storeman - 9,300 34,300 93.97 187.95
Welder - 11,160 41,160 112.77 225.53
Lead Roustabout - 10,416 38,416 105.25 210.50
Roustabout - 9,672 35,672 97.73 195.46
▇▇▇▇▇▇▇ - 10,416 38,416 105.25 210.50
Night ▇▇▇▇ - 9,672 35,672 97.73 195.46
Utility Hand - 8,928 32,928 90.21 180.43
SUB-TOTAL
=========
TOTAL PERSONNEL
===============
** Rates are per position. This rate includes two persons, one for crew A, one
for crew B. Does not include additional travel cost, if any and /or additional
catering costs
==============================================================================
SECTION 6
CONTRACTOR'S PERSONNEL
6.1 PROVISION OF CONTRACTOR'S PERSONNEL
The CONTRACTOR shall provide all CONTRACTOR'S PERSONNEL listed in
Schedule 6.1 hereof in the numbers and categories referred to
therein. Such numbers and categories shall not be exceeded or reduced
without prior written approval of the OPERATOR and any change in the
numbers and/or categories so approved shall be recorded by amendment
to Schedule 6.1. Should the OPERATOR require the CONTRACTOR to
provide additional PERSONNEL in excess of the full complement of
CONTRACTOR'S PERSONNEL or SUB-CONTRACTOR'S personnel listed in
Schedules 6.1 and 6.2 then the CONTRACTOR shall be reimbursed at the
day rates included under SECTION 5. The CONTRACTOR shall give the
OPERATOR'S REPRESENTATIVE the name and work history, education and
training history including courses attended of such CONTRACTORS
PERSONNEL including any person proposed as a replacement therefor.
The OPERATOR may at its discretion approve or veto the provision of
any such CONTRACTOR'S PERSONNEL by stating the reason therefor and
may within fourteen (14) days of receipt of such histories notify the
CONTRACTOR in writing of its approval or veto. Absence of such
notification by the OPERATOR within fourteen (14) days shall
constitute approval.
The selection, replacement, hours of labour and remuneration of
CONTRACTOR's PERSONNEL shall be determined by CONTRACTOR.
6.2 CONTRACTORS REPRESENTATIVE
The CONTRACTOR shall provide a competent and authorised
Representative who shall be nominated in writing and be acceptable to
the OPERATOR. The CONTRACTOR'S REPRESENTATIVE shall be available at
all times and shall be authorised to receive on behalf of the
CONTRACTOR all directions and instructions in connection with the
SERVICES from the OPERATOR'S REPRESENTATIVE.
CONTRACTOR's REPRESENTATIVE shall be in charge of all CONTRACTOR's
personnel and shall have authority to resolve all day to day matters
which arise between OPERATOR and CONTRACTOR.
6.3 GENERAL
The CONTRACTOR shall adhere to all labour standards and practices
applicable to the CONTRACT AREA.
All personnel provided by the CONTRACTOR in accordance with
sub-clause 6.1 above, shall be deemed to be the employees of the
CONTRACTOR and the CONTRACTOR shall be solely responsible for payment
of salaries to such personnel.
The CONTRACTOR shall meet all costs for its PERSONNEL, including but
without limitation those associated with travel, accommodation,
holiday and sickness throughout the duration of the SERVICES.
The CONTRACTOR'S PERSONNEL shall be sufficiently conversant with the
English language to enable the OPERATOR'S REPRESENTATIVE to issue
instructions and to receive written and verbal reports in the English
language and so that operations hereunder are not hampered or
SECTION 6
CONTRACTOR'S PERSONNEL
PAGE 2 OF 4
================================================================================
endangered on account of language barriers. The radio and computer
operator must be English speaking.
The CONTRACTOR shall be responsible for all matters relating to rest
periods for its personnel including inter alia the provision of a
relief operating crew where the performance of the SERVICES as
required by the OPERATOR so dictates.
6.4 TRAINING
The CONTRACTOR shall ensure that all personnel proposed in compliance
with the foregoing shall have undertaken courses in accordance with
the CONTRACTOR'S operations manual and good oilfield practice and all
OPERATOR required HSE training requirements.
6.5 MEDICAL CERTIFICATES
The CONTRACTOR shall make available to the OPERATOR'S REPRESENTATIVE
valid medical certificates stating that each person travelling to the
DRILLING UNIT on behalf of the CONTRACTOR is fit to do so.
6.6 PERSONNEL RECORDS
The CONTRACTOR shall keep medical records, wages books and time
sheets and full records of the CONTRACTOR'S PERSONNEL. The CONTRACTOR
shall keep details of its PERSONNEL'S next of kin on the DRILLING
UNIT and at its shore base.
6.7 QUALIFICATIONS AND TRAINING OF CONTRACTOR'S PERSONNEL
(a) General
All CONTRACTOR'S PERSONNEL and SUB-CONTRACTOR'S personnel
on board the DRILLING UNIT shall be required to have
attended an Offshore Basic Fire Course and an Offshore
Survival Course held at an OPERATOR approved training
centre prior to working on board the DRILLING UNIT with
refresher training every three years. Specialist training
for helicopter refuelling crews and fire teams is also
required. All costs incurred shall be to the account of the
CONTRACTOR.
(b) Drilling Personnel
The CONTRACTOR shall prior to the COMMENCEMENT DATE ensure
that the RIG STAFF shall have satisfactorily completed a
well control procedure training course and have obtained a
Well Pressure Control Certificate from a training
establishment approved by IWCF or the relevant authorities
in the CONTRACT AREA. The CONTRACTOR shall at its cost
further ensure that the RIG STAFF shall attend refresher
courses at such approved training establishments at
intervals of not more than twelve months and maintain
validity of certification for all RIG STAFF throughout the
term of the CONTRACT and any extension thereto.
Whenever so requested by the OPERATOR the CONTRACTOR shall
make available to the OPERATOR certificates evidencing such
validity. The CONTRACTOR shall arrange, at regular weekly
intervals, for on site training of its PERSONNEL engaged in
drilling operations on the DRILLING UNIT in matters
relating to health, safety, accident prevention and
2
SECTION 6
CONTRACTOR'S PERSONNEL
PAGE 3 OF 4
================================================================================
environmental protection and, in addition, prior to the
commencement of specialised operations such as drill stem
and production testing and radioactive logging. Minutes of
meetings held to fulfil such training requirements shall be
made available to the OPERATOR and shall be posted on
notice boards on the DRILLING UNIT.
Notwithstanding the foregoing provisions, the CONTRACTOR'S
RIG STAFF shall if required by OPERATOR attend the
OPERATOR'S Pressure Control and HP and HT course. Such
attendance if required shall take place at times and dates
to be arranged between the CONTRACTOR and OPERATOR but in
any case prior to the COMMENCEMENT DATE.
(c) Marine and Installation Personnel
The CONTRACTOR shall ensure that prior to the COMMENCEMENT
DATE and throughout the continuance of the CONTRACT the
Captain or the equivalent person but under a different
title are properly qualified for their respective positions
and experienced in carrying out their duties on the
DRILLING UNIT.
The CONTRACTOR shall ensure that, (otherwise than in the
event of total DRILLING UNIT evacuation on the instructions
of the OPERATOR) there is always one person on board who is
fully competent in respect of, and is designated
responsible for, marine operations and calculation of deck
loadings.
6.8 EMPLOYMENT OF LOCAL PERSONNEL AND RATES OF PAY
The CONTRACTOR shall, if applicable to this CONTRACT, employ local
labour subject to availability and suitability of qualifications and
experience. The CONTRACTOR shall ensure early contact is made with
the Trinidad authorities to ascertain its requirements in this
regard.
The CONTRACTOR shall comply with all relevant governmental rules,
regulations and instructions with respect to the employment of local
labour.
6.9 PASSPORTS AND VISAS
The CONTRACTOR shall ensure that when appropriate all CONTRACTOR'S
PERSONNEL are in possession of valid passports and shall obtain all
visas and entry or other permits required to enable such CONTRACTOR'S
PERSONNEL to proceed to and work in the CONTRACT AREA and shall
assist such PERSONNEL in clearing immigration in Trinidad.
6.10 TRANSPORTATION
The CONTRACTOR shall make its own arrangements and meet all expenses
for the transport of all the CONTRACTOR'S PERSONNEL to and from and
within the CONTRACT AREA other than between the DRILLING UNIT and the
OPERATOR'S designated crew change location in the CONTRACT AREA.
6.11 REMOVAL OF PERSONS PROVIDED BY THE CONTRACTOR AND THE SUB-CONTRACTORS
At the instruction of the OPERATOR in writing the CONTRACTOR shall
remove from duties hereunder or lawfully secure such removal of any
of the CONTRACTOR'S PERSONNEL who is unacceptable to the OPERATOR.
3
SECTION 6
CONTRACTOR'S PERSONNEL
PAGE 4 OF 4
================================================================================
OPERATOR shall state the reason for such removal in the written
instruction.
6.12 REPLACEMENT OF PERSONS REMOVED BY THE CONTRACTOR
The CONTRACTOR shall forthwith at its cost and expense replace any
such person removed under the provisions of sub clause 6.11 hereof
such replacement being a person qualified and capable of performing
in an efficient manner the duties of any such person being replaced.
This sub-clause shall also apply to CONTRACTOR'S PERSONNEL leaving of
their own volition.
6.13 RESTRICTION AS TO DRUGS AND ALCOHOLIC LIQUORS
The CONTRACTOR shall not except for bona fide medical purposes, sell,
barter, give, dispense or otherwise dispose of any drugs or alcoholic
liquors to any person at the LOCATION, shall prohibit any such sale,
barter, gift, dispensation or other disposal to be made by any of the
CONTRACTOR'S PERSONNEL.
6.14 RECOGNISED FESTIVALS AND RELIGIOUS AND OTHER CUSTOMS
The CONTRACTOR shall at all times and in all respects in all dealings
with the CONTRACTOR'S PERSONNEL observe and pay full deference to all
recognised festivals and religious or other customs.
6.15 DISORDERLY CONDUCT
The CONTRACTOR shall take all requisite precautions and use his best
endeavours to prevent any riotous or unlawful behaviour by or amongst
any of the CONTRACTOR'S PERSONNEL.
6.16 BRIBERY
The CONTRACTOR shall not make or offer any bribe or any gift,
gratuity, reward, commission or other inducement in money or of any
description whatsoever to any person in the employment of the
OPERATOR or SERVICE COMPANIES.
6.17 REPATRIATION OF CONTRACTOR'S PERSONNEL
The CONTRACTOR shall, pending the repatriation of any of the
CONTRACTOR'S PERSONNEL maintain such CONTRACTOR'S PERSONNEL in a
proper manner until such time as they shall have left the CONTRACT
AREA and in default thereof the OPERATOR may maintain and repatriate
such CONTRACTOR'S PERSONNEL and recover the cost thereof from the
CONTRACTOR.
6.18 SAFETY
The CONTRACTOR shall provide its personnel with protective clothing
and safety equipment identifying them as the CONTRACTOR'S PERSONNEL
to designs approved by the OPERATOR for offshore working conditions
in the CONTRACT AREA.
4
SCHEDULE 6.1 AND 6.2
INITIAL STAFFING OF CONTRACTOR'S AND SUB-CONTRACTOR'S PERSONNEL
TRINIDADIAN OPERATIONS
----------------------
TITLE TOTAL NUMBER* ON BOARD EXPATRIATE OR WORK SCHEDULE
----- ------------ -------- ------------- -------------
NATIONAL
--------
EXPATRIATE
==========
Rig Manager 2 1 Expatriate 28 On/28 Off
Assistant Rig Manager 2 1 Expatriate 28 On/28 Off
Rig Engineer (Barge Engineer) 2 1 Expatriate 28 On/28 Off
Safety & Training Coordinator 2 1 Expatriate 28 On/28 Off
Mechanic 2 1 Expatriate 28 On/28 Off
Electrician 2 1 Expatriate 28 On/28 Off
Crane Operator 4 2 Expatriate 28 On/28 Off
Driller 4 2 Expatriate 28 On/28 Off
Paramedic 2 1 Expatriate 28 On/28 Off
========= = =
SUB-TOTAL 22 11
========= == ==
NATIONAL
========
Assistant Driller 4 2 National 14 On/14 Off
Derrickman 4 2 National 14 On/14 Off
Shaker Hand 4 2 National 14 On/14 Off
Floorman 12 6 National 14 On/14 Off
Assistant Electrician 2 1 National 14 On/14 Off
Motorman 4 2 National 14 On/14 Off
Clerk/Radio Operator 2 1 National 14 On/14 Off
Storeman 2 1 National 14 On/14 Off
Welder 2 1 National 14 On/14 Off
Lead Roustabout 4 2 National 14 On/14 Off
Roustabout 12 6 National 14 On/14 Off
▇▇▇▇▇▇▇ 2 1 National 14 On/14 Off
Night ▇▇▇▇ 4 2 National 14 On/14 Off
Utility Hand 8 4 National 14 On/14 Off
SUB-TOTAL 66 33
========= == ==
TOTAL PERSONNEL 88 44
=============== == ==
SCHEDULE 6.3
LIST OF MODIFICATION TO BE PROVIDED BY CONTRACTOR
AMORTIZATION PERIOD: 3 years
--------------------
AMORTIZATION RATE: 15%
------------------
RESIDUAL BP BP
VALUE RESIDUAL AMORTIZED DAILY
NO. ITEM COST RATE VALUE AMOUNT RATE
----------------------------------------------------------------------------------------------------------------------------------
A. EXPLORATORY ▇▇▇▇▇
-- -----------------
1 25,000' 5-1/2" S-135 drill pipe with HT 55 connections, 7" OD x
3-3/4" ID $1,447,635 50% 723,818 $ 723,818 ($821)
1A Credit for 5" DP on Rig Now (18,000' X $20/ft.) (360,000) 0% - $(360,000) 408
2 30 joints of 5-1/2" Spiral-wate drill pipe with HT 55 conn. $ 128,220 50% 64,110 $ 64,110 (73)
2A Credit for 5" HW on Rig Now (30 jts. X $1,500 each) (45,000) 0% - $ (45,000) 51
3 All subs and accessories for above, including inspections 91,100 50% 45,550 45,550 (52)
4 Miscellaneous handling tools, rams, etc. for above 167,650 50% 83,825 83,825 (95)
5 Freight, 18 loads tubulars @ 1,800. 32,400 50% 16,200 16,200 (18)
6 Relocate Schlumberger logging unit to port leg
200,000 100% 200,000 - -
7 Relocate cement unit to centerline under elevated piperack 100,000 100% 100,000 - -
8 Reroute exhausts to aft of port leg 150,000 100% 150,000 - -
9 Extra high pressure washdown equipment 10,000 100% 10,000 - -
10 Trash Compactor 18,000 100% 18,000 - -
11 Additional man rider air hoist under floor 25,000 100% 25,000 - -
12 International spare parts inventory 500,000 100% 500,000 - -
13 21-1/4" 5M double ram with 21-1/4" 5M Bag (option rental) 850,000 50% 425,000 425,000 (482)
14 Maximum quarters capacity (100 preferred) 200,000 50% 100,000 100,000 (113)
15 UV Purifier 15,000 100% 15,000 - -
16 Crane Rests (Reinstall) 5,000 100% 5,000 - -
17 Rig LAN and CORIS and Satellite 125,000 50% 62,500 62,500 (71)
18 Flare Boom Stanchions 25,000 100% 25,000 - -
19 Thru hull dump 10,000 100% 10,000 - -
20 Change Name of rig to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 20,000 100% 20,000 - -
21 Site specific survey and analysis 25,000 100% 25,000 - -
------------------------------------------------------------
SUB-TOTAL $3,740,005 NA $2,579,003 $1,116,003 $(1,266)
------------------------------------------------------------
B. KAPOK DEVELOPMENT PROGRAM
-- -------------------------
22 Increase base oil storage to 1,000 bbls. 100,000 75% 75,000 25,000 (28)
23 Increase mud capacity by 800 bbls. 175,000 75% 131,250 43,750 (50)
24 Add 2 each 700 bbl. Brine storage tanks - 1,400 bbls. Total 150,000 75% 112,500 37,500 (43)
25 P-Quip Super Mud Bucket 45,000 75% 33,750 11,250 (13)
26 2 anchor winches, fairleads, buoys, anchors, racks, etc. 400,000 50% 200,000 200,000 (227)
27 Relocate welding shop 20,000 100% 20,000 - -
------------------------------------------------------------
SUB-TOTAL $ 890,000 NA $ 572,500 $ 317,500 $ (360)
------------------------------------------------------------
TOTAL $4,630,005 NA $3,151,503 $1,433,503 $(1,626)
============================================================
NOTES:
------
1 If contract terminates earlier than three (3) years for any reason, BP
will owe the Unamortized principal balance
2 Above included in contract rates
SECTION 7
PART I
DRILLING UNIT, EQUIPMENT, SUPPLIES AND
SERVICES TO BE PROVIDED BY THE CONTRACTOR
(SEE NEXT PAGE)
▇▇▇▇▇▇ CORONADO JACKUP DRILLING UNIT
--------------------------------------------------------------------------------
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is a ▇▇▇▇▇▇▇▇▇▇ Super 116 jackup mobile offshore
drilling unit, designed by ▇▇▇▇▇▇▇▇▇▇, Inc., Longview, Texas. The unit is
classed by the American Bureau of Shipping (ABS) and complies with the IMO
MODU Code. A cantilevered drilling structure and substructure allows the
unit to drill or workover ▇▇▇▇▇ on existing fixed production platforms.
The ▇▇▇▇▇▇ CORONADO is designed to work in water depths as shallow as 16
feet and up to 360 feet. Fully air-conditioned quarters can accommodate a
crew of 94.
A. GENERAL DESCRIPTION
--------------------------------------------------------------------------------
Type: ▇▇▇▇▇▇▇▇▇▇ Super 116 Class Independent Leg Cantilever Jackup
Builder: TDI Halter Marine - Pascagoula, MS
Year Built: 1999
Class: ABS Maltese Cross A1 Self-Elevating Mobile Drilling Unit, 1996 Rules.
IMO MODU Code for the Construction & Equipping of Mobile Offshore
Drilling Units, 1989
Flag: Panama
Elevating System: ▇▇▇▇▇▇▇▇▇▇ Electric Rack and Pinion Jacking System
1. Principal Dimensions
Length Overall 243'-0"
Breadth 206-'0"
Depth of Hull 26'-0"
Length of Legs 477'-0"
Spud Tank Diameter 46 "-0"
2. Hull Draft and Displacement
Lightship Draft - Minimum 14'-0"
Loadline Draft - Maximum 16'-0"
Lightship Displacement (Kips) 22933
Loadline Displacement (Kips) 25935
3. Quarters
Complete air-conditioned accommodations for a ninety-four
(94) person crew. In addition to accommodations, the
four-story quarter's structure contains a galley/mess room,
six (6) man treatment room, fitness room, crew change room,
offices, recreation rooms, control room, and radio room.
4. Heliport
73' octagonal steel cantilevered heliport designed to
withstand loads imposed by a Sikorsky S-61N helicopter or
equal. Heliport is lighted and equipped with tie downs,
perimeter safety nets, and access stairs.
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DRILLING UNIT, EQUIPMENT, SUPPLIES
PAGE 2 OF 9
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5. Storage Capacities
Diesel fuel 4,611 bbls.
Drill water 14,592 bbls.
Potable water 1,220 bbls.
Liquid mud (in main mud pits) 3,300 bbls.
Base oil 1,000 bbls.
Brine (Completion Fluid) 1,400 bbls.
Bulk Mud 5,440 cu. ft.
Bulk Cement 5,440 cu. ft.
Sack Storage 5,000 sacks
Hook Load 1500 kips
Rotary Load 1500 kips
Setback Load 600 kips
B. LOADING AND ENVIRONMENTAL CONDITIONS
--------------------------------------------------------------------------------
1. On Bottom Conditions
Severe Storm Operating
------------ ---------
Water Depth (feet)(1) 328 350
Wind Velocity (knots) 100 70
Current (knots) 1.0 1.0
Wave Height (feet) 47 35
Wave Period (sec) 15 15
Min. Air Gap (feet) 50 35
Max. Leg Can Penetration (feet) 25 25
Maximum Variable Load (kips)
in above conditions (2) 3,300 4,800
Comb.Rig.Flr.Loads (kips)(3) 750 1,500
Well Position (feet)
Aft of Hull Transom (feet) 00.0 65.0
P/S off CL Vessel (feet) 00.0 15.0
2. Transit Condition:
-----------------
Minimum Draft (Lightship) 14'-0"
ABS Load Line (Hull Draft) 16'-0"
Total Variable Load (Kips) (4) 3,300
Total Variable Load While Jacking (Kips) 3,300
Notes:
-----
(1) Maximum water depth must include consideration for
high tides and storm surge.
(2) Does not include combined rig floor loads listed
below.
(3) Maximum individual rig floor loads are:
Hook Load............................1,500 kips
Rotary Load..........................1,500 kips
Setback Load...........................600 kips
Above loads valid up to 70 knot wind speed, however
no setback load allowed above 50 knots. Hook load
varies according to well center location. Max.
combined drill floor load is 1,500 kips. Pipe rack
load during skidding is 1,000 kips.
2
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DRILLING UNIT, EQUIPMENT, SUPPLIES
PAGE 3 OF 9
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(4) Displacement of vessel at the load line minus
displacement of vessel at lightship.
C. PLATFORM EQUIPMENT
--------------------------------------------------------------------------------
1. Primary Generators
Four (4) Caterpillar Model 3606 diesel engines rated at
2,514 HP each driving 3000 KVA continuous, 60 Hz, 600 volt
▇▇ ▇▇▇▇ generators.
2. Standby/Emergency Generator
One (1) Caterpillar Model 3508 diesel engine driving a 893
KVA continuous, 60 Hz, 480 volt generator complete with
switch gear, automatic start, breakers and DC battery bank.
3. SCR System
Five (5) ▇▇▇▇ ▇▇▇▇ Controls 600V, 2200 amps each.
Universal Switch Gear Inc. leg elevator contactors, AC
breaker panels and two (2) ground detector panels: SCR
room cooled by two (2) 15 Ton Carrier central air
conditioner units.
4. Watermaker
One (1) Specific Equipment - Model SE 132 ROM-1, reverse
osmosis watermaker, rated at 13,200 gallons per day.
5. Water Purifier
One (1) Specific Equipment Ultra Violet Purifier for
Purification of rig potable water - Model I-H-16-L,
capacity 330 GPM.
6. Pressure Washer
One (1) Sioux - Model EN270-H4-300, steam/pressure washer,
rated at 4.5 GPM at 3,000 psi.
7. Waste Treatment Unit
One (1) Exceltec 12MX, 120 Person Marine Sanitation Device.
8. Trash Compactor
One (1) Dolphin - Model 4000, 40 cu./ft. capacity
9. Air Compressors
a. One (1) Airdyne cold start air compressor rated
at 46 CFM powered by 2-cylinder Lister Diesel
engine with electric start.
b. Two (2) Airdyne 500 HOSS-JS rotary air
compressors, each rated at 500 CFM at 125 psi
powered by 125 HP AC electric motors.
c. One (1) Airdyne 500 HOSS-JS bulk dual air
compressor, rated at 500 cfm, 40 psi.
3
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PAGE 4 OF 9
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d. One (1) Refrigerated Air Dryer - ▇▇▇▇▇▇▇▇▇
Model 80600, 750 cfm @ 38 degrees F.
10. Welding Equipment
Two (2) ▇▇▇▇▇▇ SRH-444, 400 amp welding machines.
11. System Pumps
a. Two (2) Bilge Pumps, ▇▇▇▇▇▇ ▇▇▇▇ 25 HP
self-priming pumps.
b. Two (2) Salt Water/Fire Pumps, 75 HP, Mission 4
x 3 x 13 centrifugal pumps.
c. Two (2) Drill Water Pumps, 30 HP, Mission 4 x 3
x 13 centrifugal pumps.
d. One (1) Waste Oil Pump, gear type.
e. Two (2) Fuel Oil Transfer Pumps, 5 HP, gear
type.
f. Three (3) Peerless Model 14-MB/4 stage,
submersible salt-water service pumps. 75 HP
rated @ 1,000 gpm @ 65 psi.
g. Two (2) Each Potable and Salt Water Pressure
Sets with Specific Brand 150 2" centrifugal
vertical type pumps powered by AC electric
motors with approximately 200-gallon pressure
tanks.
h. Two (2) Brake Cooling Water Pumps, 20 HP, 3 x 2
x 13 Mission centrifugal pumps.
12. Cranes
Three (3) ▇▇▇▇▇▇▇▇▇▇ pedestal cranes, two (2) with 100'
booms, port midship crane with 120' boom, 50 ton capacity
at 20' radius with 4-part line. Complete with operator
cabs.
13. Mooring System
Two (2) each ▇▇▇▇▇▇▇▇▇▇ W-1500 anchor winches, 800 feet of
1-5/8" wire rope, fairleads, two (2) 10,000 lb. stockless
anchors, buoys, and pendant wire.
14. Flare Boom Base
Basic flare boom bases with stanchions
D. SAFETY AND LIFESAVING EQUIPMENT
--------------------------------------------------------------------------------
1. Lifeboats/Liferafts
Three (3) Survival Systems International, self-propelled,
enclosed lifeboats with launch davits approved for
50-person capacity each. Four (4) 25-man inflatable life
rafts with hydrostatic release.
2. Miscellaneous
Life preservers, life rings, litters and first aid
equipment in compliance with U.S. Coast Guard and IMO
regulations.
3. Fire Stations
Approximately twenty-five (25) salt-water fire stations
with 50' hose each. Fixed CO2 fire extinguishing systems
complete with cylinders, piping, nozzles, sensors and
controls for engine room, paint locker, and galley.
Complete fire and gas detection system.
4. Treatment Room
Fully equipped with Paramedic capability
4
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5. Fog Horn
One (1) AB-560 Audiobeam 2-mile Fog Signal with automatic
signal device.
E. DRILLING EQUIPMENT
--------------------------------------------------------------------------------
1. ▇▇▇▇▇▇▇
▇▇▇▇▇ 170' clear height x 40' x 32' base, with a 1,500,000
lb. hook load capacity.
2. Crown Block
Dreco crown block, 680 ton rated with six (6) 60" diameter
forged steel sheaves grooved for 1-5/8" drill line with
dual fast line sheaves and dual dead line sheaves.
3. Drawworks
National 1625-UDBE with disc brakes, nominal depth rating
30,000 feet
a. Three (3) each GE-752 DC electric motors rated
1085 HP each
b. Elmagco Model 7838 Eddy Current Auxiliary Brake
▇. ▇▇▇▇▇ grooved drum for 1-5/8" drilling line
d. Two (2) breakout and makeup spinning catheads
4. Travelling Block
National, 650 ton, Hook/Block Combination with seven (7)
60" diameter sheaves grooved for 1-5/8" drill line.
5. Power Swivel (Top Drive)
National-Oilwell PS2 650/650 Power Swivel rated at 650
tons. Two speed with maximum continuous torque rating of
47,859 foot pounds @ 109 RPM. Driven by one (1) GE 752 DC
Hi-Torque electric motor. 4" bore, 7,500 psi WP. Maximum
RPM in low gear - 113, in high gear - 231.
6. Rotary Table
National Model D-495, 49 1/2" rotary independently driven
by a GE 752 DC Hi-Torque electric motor, 1130 HP, with
standard two speed transmission. Varco MPCH hinged master
bushing, with insert bowls for 2 3/8" - 8 5/8" tubulars.
7. Rotating Mouse Hole Assembly for Stand Building
a. International Model 1994 rotating mouse hole
for right or left hand rotation.
b. International Model TT-1998 torque tool
assembly. Operating range 3-1/2" drill pipe to
8-1/2" drill collars. Torque range 0 to 108,000
ft. Lbs.
8. Mud Pumps
Three (3) National 14-P-220 triplex pumps, rated at 2,200
HP each, with 7,500 psi fluid ends, each driven by two (2)
GE 752 DC Hi-Torque electric motors. Each mud pump is
equipped with a PPDR-130-7500C5 discharge dampener and
PPSC-80-025C5 flow through cellular suction stabilizer, and
a reset type relief valve. Maximum speed - 95 spm. Maximum
discharge pressure - 90% of liner rating.
5
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9. Iron Roughneck
National "Iron Roughneck" Model IR-170.
10. Mud System
a. Mixing Pumps: Two (2) Mission Magnum 6 x 8
centrifugal pumps powered by 100 HP
AC electric motors.
b. Charging Pumps: Three (3) Mission Magnum 6 x 8
centrifugal pump powered by 100 HP
AC electric motor.
c. Agitators: Ten (10) each 25 HP, 1,200 rpm for
main & brine pits.
Four (4) each 10 HP, 1,200 rpm for
auxiliary pits.
Four (4) each 5 HP, 1,200 rpm for
solids control pits.
d. Mud Cleaner/
Desilter: One (1) ▇▇▇▇▇▇ LCM-2D-CMC Linear
Motion Mud Conditioner with
thirty-two (32) 4" cones, 1,920 gpm,
discharging over a LCM-2D linear
motion shaker deck. Supplied by two
(2) Mission Magnum 6 x 8 pumps with
100 HP AC motors.
▇. ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇ LCM-2D-CMC Linear Motion Mud
Conditioner with four (4) 12" cones,
2,000 gpm, discharging over a LCM-2D
linear motion shaker deck. Supplied
by (1) 6 x 8 pump with 100 HP AC
motor.
f. Shale Shakers: Five (5) ▇▇▇▇▇▇ LCM-2D Linear Motion
Cascade Screen Separators, each
rated at 400-600 gpm. One (1) ▇▇▇▇▇▇
Nutec Gumbo Chain System.
g. Degasser: Two (2) ▇▇▇▇▇▇ ▇▇-10 Degassers,
supplied by (2) Mission Magnum
6 x 8 pumps with 100 HP AC motors.
h. Trip Tank: Two (2) x 34-barrel capacity with
two (2) Halco 3 x 4 x 10 pumps with
40 HP AC electric motors.
11. Stand Pipe and Manifold
Dual standpipes rated at 7,500 psi W.P.
Demco standpipe manifold rated at 11,250-psi test pressure
and 7,500 psi W.P.
Dual cement manifold with stand pipes rated at 15,000 psi.
12. Rotary Hose Two (2) -4" ID Copperstate rotary hoses
rated at 7,500 psi W.P.
13. Bulk Storage Tanks
a. Bulk Mud: Four (4) each, 1,360 cu. ft.
b. Bulk Cement: Three (3) each, 1,360 cu. ft.
c. Bulk Gel: One (1) each, 1,360 cu. Ft.
c. Bulk Mud Surge Tank: One (1) each, 45 cu. ft.
14. Cementing Unit
Halliburton (On Main Deck)
6
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DRILLING UNIT, EQUIPMENT, SUPPLIES
PAGE 7 OF 9
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15. Blow-Out Preventers
a. 13-5/8" X 10,000 Blow-Out Preventers
(1) Annular: One (1) Cameron type DL spherical
preventer, 10,000 WP with 10,000# WP
studded top and 15,000# WP flanged
bottom connection, H2S trim.
(2) Rams: One (1) Cameron Type U 15,000-psi
W.P. double ram preventer and One
(1) Cameron Type U 15,000-psi W.P.
single ram preventer with three (2)
sets of 5" pipe rams and one set of
blind rams. Four (4) 3-1/16"
15,000-psi WP flanged outlets,
flanged top and bottom, H2S trim.
(3) Additional Rams: One (1) set of Shearing Blind Rams,
One (1) set of 31/2" Pipe Rams, One
(1) set of 9 5/8" casing rams, One
(1) set of 7 5/8" casing rams, One
(1) set of 7" casing rams, One (1)
set of 3 1/2" x 5" VBR rams.
b. 13 5/8" X 15,000 Blow-Out Preventers
(1) Annular: One (1) Cameron type DL spherical
preventer, 10,000 WP with 10,000# WP
studded top and 15,000# WP flanged
bottom connection, H2S trim.
(2) Rams: One (1) Cameron Type U 15,000-psi
W.P. double ram preventer and One
(1) Cameron Type U 15,000-psi W.P.
single ram preventer with three (2)
sets of 5" pipe rams and one set of
blind rams. Four (4) 3-1/16"
15,000-psi WP flanged outlets,
flanged top and bottom, H2S trim.
c. 21 1/4" 10,000 Blow-Out Preventers
(1) One (1) ▇▇▇▇▇▇▇ wedge top spherical preventer, 5,000
with 5,000 WP studded top and 10,000 WP flanged bottom
connection, H2S trim.
(2) Two (2) Cameron Type U 10,000 # WP single ram
preventers, flanged top and bottom, with 41/16 10,000 WP
side outlets. Complete with one (1) set of 5" straight
bore pipe rams, one (1) set of conventional blind rams and
one (1) set of blind shear rams.
d. Choke and Kill Valves
Choke Line Valves: Two (2) 3-1/16" - 10,000 psi gate
valves. One hydraulic, one manual.
H2S trim.
Kill Line Valves: Two (2) 3-1/16" x 10,000-psi gate
valves, one manual, one hydraulic.
H2S trim.
e. Diverter System
One (1) ABB Vetco ▇▇▇▇ KFDJ-J-2000 permanent diverter
system, with ABB Offshore Systems Diverter panel with
auto open feature.
f. Choke Manifold
Cameron 3-1/16" - 15,000 psi WP with two (2) Cameron
hydraulically adjustable choke, two (2) manual chokes.
7
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g. Mud Gas Separator
▇▇▇▇▇▇ 48" diameter X 18' long mud gas separator, with
dual 6" inlets, 10" mud discharge and 8" gas discharge
vent line piped to crown. Pressure rating 125 psig.
h. BOP Control System
3,000 psi, Massco/▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Model SSB2403S11
Control Unit.
(1) Twenty-four (24) -11 gal. bladder type
accumulators
(2) One (1) 25 HP triplex pump and three (3)
60:1 -- 8-1/2" air pumps
(3) Nine (9) station control manifold with two
(3) remote electric operated stations.
i. Instrumentation
One (1) HITEC/National Driller's Control
Station with HITEC SDI 120 Instrumentation
Package equipped with CCTV system for
monitoring racking and stabbing boards.
ii. Air Hoists
Two (2) Ram Winch K6UL air hoists on rig floor,
15,000 lb. pull @ 51 fpm. Two (2) Airdyne model
ML 336-38 dedicated man rider winches. One
mounted on the drill floor and one mounted
below the drill floor. Four (4) Ram Winch K6UL
air hoist under substructure for BOP
manoeuvres.
iii. Drilling Line
7,500' of 1-5/8" 6 x 19 EIPS IWRC regular right
lay.
16. Wireline Unit
One (1) ▇▇▇▇▇▇ "Surveyor" Wireline Unit with 30,000 ft. of
.108" wire.
17. Drive Pipe Support System
One (1) Drive Pipe Support System with tensioning
capability to tension drive pipe to 300 kips vertical
force and provide lateral restraint at wellhead.
18. Tubulars
25,000' (approximately 800 joints) 51/2" O.D., 21.90
lb/ft, S-135 drill pipe with HTSJ connections 7" O.D. X
33/4" I.D. Grant Prideco x-metal 7000 hard banding on box
and pin tool joints 3/32" raised. Thirty (30) joints 51/2"
O.D. conventional Hevi-Wate drill pipe with HT55
connections 7" O.D. X 3 15/16" I.D. Weight 1,800 lb/per
joint
Six (6) 9 1/2" OD drill collars with 7 5/8" Regular
connections.
Nine (9) 8" OD drill collars with 6-5/8" Regular
connections. Twenty One (21) 6 1/2" OD drill collars with
4 1/2" X-Hole connections. Necessary X-Over Subs, ▇▇▇▇▇
Subs, and Bit Subs for Contractor's drill string.
8
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DRILLING UNIT, EQUIPMENT, SUPPLIES
PAGE 9 OF 9
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19. Mud Buckets
One (1) P-Quip Hydraulic Mud Bucket complete with air
hoses, connections, side seals and end seals for 5" & 5
1/2" drill pipe.
F. COMMUNICATIONS EQUIPMENT
--------------------------------------------------------------------------------
1. Radio Equipment
a. Two (2) fixed marine VHF transceivers, four (4)
survival craft transceivers, six (6) hand held
marine VHF transceivers.
b. One (1) VHF-AM aeronautical base station
transceiver capable of 6-channel operation,
with crystals for 3 channels installed, unity
gain ground plane antenna, and manual, 115 VAC.
c. One (1) Global Maritime Distress & Safety
System (GMDSS) as per SOLAS Regulations 5, 6,
Part C.
d. Satellite communications and data transfer.
2. Internal Telephone Communications and Public Address
System
One (1) Multi-station Gaitronics System for platform
intercommunication.
3. File Server, Computer, and External Communications System
Rig LAN digital computer and telecommunications system.
Microwave or Satellite voice and data links from offices,
drill floor, conference room, and the rig LAN. Additional
capabilities of the computer and link system (CORIS)
include:
a. Customer and contractor offices on board rig
have access to drilling and performance data in
"real-time" personnel information, liquid and
bulk variable inventories, and weather.
b. Internet access provided to certain computers
for E-mail and file transfer.
c. Above data available via CORIS system.
9
CONTRACT SUMMARY
----------------------------- ----------------------------------------------------------------------------------
Contract No. C-2600
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Nature of Contract: Hire of Drilling Unit
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Parties: BP Trinidad and Tobago LLC and ▇▇▇▇▇▇ Offshore Inc.
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Effective Date: The date that the DRILLING UNIT is under tight tow to Pascagoula, Mississippi to
begin the Make Ready Period (July 10, 2001)
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Commencement Date: The date on which the DRILLING UNIT is pinned on the first LOCATION in the
CONTRACT AREA and the OPERATOR provided RIG ACCEPTANCE.
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Term: Three Years from Commencement Date
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Description of Services/
Scope of Work: To carry out drilling services in support BP Trinidad and Tobago LLC's Drilling
Program
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Compensation: Mobilisation: US $3,600,000
Day Rate: US $73,000
Demobilisation: US $2,800,000
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Payment Terms: Thirty Days from Receipt of Invoice
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Termination: Without Cause - three months notice - 60% of Day Rate for the remainder of the
term ($43,800)
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Estimated Value of Contract $79,935,000
----------------------------- ----------------------------------------------------------------------------------
----------------------------- ----------------------------------------------------------------------------------
Distribution:
----------------------------- ----------------------------------------------------------------------------------