\n1. 0 25.000.000 0 0.10 0
\n2. 25.000.001 50.000.000 2.500.000 0.08 25.000.000
\n3. 50.000.001 100.000.000 4.500.000 0.07 50.000.000
\n4. 100.000.001 200.000.000 8.000.000 0.06 100.000.000
\n5. 200.000.001 300.000.000 14.000.000 0.04 200.000.000
\n6. 300.000.001 400.000.000 18.000.000 0.02 300.000.000
\n7. 400.000.001 or more 20.000.000 0.01 400.000.000
\n<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\nThe equation shall be applied only once per year in each case with the value of
\nthe constants corresponding to the total value of the annual investments and
\nexpenses.<\/p>\n
22.7 The monthly statements of account referred to in Clause 22 (paragraph 22.4)
\nmay be revised or challenged by either Party from the time they are received by
\nthem, up to two (2) years after the end of the calendar year covered by such
\nstatements, clearly specifying the corrected or challenged items and the reason
\ngiven for the objections. Any account not corrected or challenged within the
\nsaid period shall be considered as final and correct.<\/p>\n
22.8 Operator shall carry account records, vouchers and reports for the Joint
\nAccount in Colombian Pesos, in<\/p>\n
57<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
conformity with Colombian law, and every debit or credit to the Joint Account
\nshall be made in accordance with the accounting procedure , Exhibit “B”, made a
\npart of this contract. In case of any discrepancy between the accounting
\nprocedure and the provisions hereunder, the latter shall prevail.<\/p>\n
22.9 Operator may sale materials or equipment during the first twenty (20) years
\nof the Exploitation Period or the first twenty eight (28) years of the
\nExploitation Period, if dealing with a Gas Field, for the benefit of the Joint
\nAccount, provided the amount of any one sale does not exceed five thousand
\nUnited States dollars (US$5.000) or its equivalent in Colombian pesos. Any sales
\nin excess of these amounts or sales or real property shall have to be approved
\nby the Executive Committee. Sale of such materials or equipment shall be made at
\na commercial reasonable price according to the conditions of use of the good.<\/p>\n
22.10 Any machinery, equipment or other personal property or facilities acquired
\nby Operator for the performance of this Contract, charged to the Joint Account,
\nshall belong to the Parties by equal shares. However, if one of the Parties
\ndecides to terminate its interest in the Contract prior to the end of the first
\nseventeen (17) years of the Exploitation period, except for the case under
\nClause 25, such Party agrees to sell part or all of its interest in<\/p>\n
58<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
the said items to the other Party at reasonable commercial price or at their
\nbook value, whichever is lower. In case the other Party should not wish to
\npurchase such items within ninety (90) days following a formal offer of same
\nmade to it, the Party wishing to terminate shall have the right to assign to a
\nthird party its interest in such equipment and facilities. Should THE ASSOCIATE
\ndecide to withdraw after seventeen (17) years of the Exploitation Period have
\nelapsed, its interest in the Joint Operation shall pass on to ECOPETROL on a
\nfree-of-charge basis, upon its acceptance.<\/p>\n
CHAPTER VI-LENGTH OF THE CONTRACT<\/p>\n
CLAUSE 23. MAXIMUM LENGTH<\/p>\n
This Contract shall have a maximum duration of twenty eight (28) years counted
\nas from the Effective Date, divided up as follows: Up to six (6) years as the
\nExploration Period, under Clause 5, without prejudice to the provisions of
\nClause 9 (paragraphs 9.3 and 9.8); and twenty two (22) years as the Exploitation
\nPeriod, counted as from the date of the termination of the Exploration period.
\nIt is understood that in the events contemplated hereunder in respect to the
\nextension of the Exploration Period, it is considered that such events shall in
\nno case extend the total term of duration beyond twenty eight (28) years, except
\nas provided in paragraph 1 of this Clause.<\/p>\n
59
\n SWORN TRANSLATION No.30154\/Err<\/p>\n
PARAGRAPH 1. The Exploitation Period for Gas Fields discovered inside the
\nContract Area shall have a maximum duration of thirty (30) years as of
\nexpiration of the Exploration Period or the Retention Period granted. In no case
\nthe total term of duration shall extend beyond forty (40) years counted as from
\nthe Effective Date.<\/p>\n
PARAGRAPH 2. Notwithstanding the preceding, ECOPETROL and THE ASSOCIATE, at
\nleast five (5) years in advance to the date of exploration of each Field, will
\nrevise the conditions to continue the operation after the term mentioned in this
\nclause. In case that the parties agree to continue the operation, they shall
\ndefine the terms and conditions under which they will carry them out.<\/p>\n
CLAUSE 24. TERMINATION<\/p>\n
This Contract shall terminate in any of the following cases:<\/p>\n
24.1 Due to the expiration of the Exploration Period without THE ASSOCIATE’S
\nhaving discovered a Commercial Field, except as provided in Clauses 9
\n(paragraphs 9.5, and 9.8 ) and Clause 34.<\/p>\n
24.2 Upon expiration of the term of duration of the Contract , as set forth in
\nClause 23.<\/p>\n
24.3 At any time at THE ASSOCIATE’s discretion, upon fulfillment of its
\nobligations as set forth in Clause 5, and of any others entered into hereunder.<\/p>\n
60<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
24.4 Due to the special causes set forth in Clause 25.<\/p>\n
CLAUSE 25. UNILATERAL TERMINATION CAUSES<\/p>\n
25.1 ECOPETROL may terminate the Contract hereunder unilaterally at any time
\nbefore expiration of the term agreed in Clause 23, in any of the following
\ncases:<\/p>\n
25.1.1. Due to the dissolution of THE ASSOCIATE and its assignees<\/p>\n
25.1.2. In the event THE ASSOCIATE or its assignees were to assign this Contract
\nin whole or in part without complying with the requirements under Clauses 27.<\/p>\n
25.1.3. Due to the financial incapacity of THE ASSOCIATE and its assignees,
\nwhich incapacity is presumed to exist when a Court declares bankruptcy or
\ncreditors’ proceedings are opened against them.<\/p>\n
25.1.4 Due to failure to comply with the obligations entered into by THE
\nASSOCIATE hereunder. Upon expiration of each one of the periods contemplated for
\nfulfillment of the exploratory obligations, THE ASSOCIATE shall furnish a
\nwritten report evidencing compliance with the obligations of the respective
\nperiod. In the event that said obligations have not been fulfilled, THE OPERATOR
\nshall have sixty (60) calendar days to fulfill them diligently according to good<\/p>\n
61<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
Petroleum practices. Should this term not be enough , the parties may by common
\nagreement determine an additional term to fulfill said obligations. If after
\nsaid term the agreed works have not been completed, a default will be
\nconstituted and therefore, Ecopetrol may proceed pursuant to Clause 25.3.<\/p>\n
25.2 In case of a declaration of Unilateral Termination , THE ASSOCIATE’s rights
\nas set forth in this Contract shall cease both in its capacity as Party thereto
\nand as Operator, if at the time of such declaration of unilateral termination,
\nTHE ASSOCIATE has both capacities.<\/p>\n
25.3 ECOPETROL may only declare the
\nUnilateral Termination of this Contract after sixty (60) calendar days have
\nelapsed from its having given written notice to THE ASSOCIATE or its assignees,
\nclearly specifying the grounds invoked for making such a declaration, and only
\nif the other Party has failed to present explanations satisfactory to ECOPETROL
\nor if THE ASSOCIATE has failed to correct the failure in the performance of the
\ncontract without prejudice of the ASSOCIATE’s right to file the legal remedies
\nas it may consider advisable.<\/p>\n
CLAUSE 26. OBLIGATIONS IN CASE OF TERMINATION<\/p>\n
62<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
26.1 Upon termination of the Contract pursuant to Clause 24 during the
\nExploration, Retention or Exploitation Period, THE ASSOCIATE shall leave in
\nproduction any wells that are then producing and shall turn over all
\nconstructions , pipelines, transference lines and other real property of the
\nJoint Account ( located in the Contract Area), all of which shall pass
\nfree-of-charge to ECOPETROL, with any rights-of way and assets acquired in
\nbenefit of the Contract, even though either the former or the latter be located
\noutside the Contract Area.<\/p>\n
26.2 If this Contract terminates for any reason after the expiration of the
\nfirst seventeen (17) years of the Exploitation Period, all of THE ASSOCIATE’s
\ninterest in the machinery, equipment, and other personal property or facilities
\nused or acquired by THE ASSOCIATE or by Operator for the performance of this
\nContract shall pass to ECOPETROL on a free-of-charge basis.<\/p>\n
26.3 If the Contract terminates before the end of seventeen (17) years of the
\nExploitation Period, the provisions of Clause 22 ( paragraph 22.10) shall apply.<\/p>\n
26.4 In case this Contract is terminated due to the declaration of Unilateral
\nTermination, made at any time, all the real or personal property acquired for
\nthe sole benefit of the Joint Account shall pass to ECOPETROL on a free-of
\ncharge basis.<\/p>\n
26.5 Upon termination of this Contract for whatever reason and at whatever time,
\nthe Parties are obliged to<\/p>\n
63<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
fulfill satisfactorily their legal obligations between each other and with third
\nParties, as well as those contracted hereunder.<\/p>\n
CHAPTER VII- MISCELLANEOUS PROVISIONS<\/p>\n
CLAUSE 27. RIGHT OF ASSIGNMENT<\/p>\n
27.1 THE ASSOCIATE shall have the right, upon prior written approval by the
\nMinister of Mines and Energy and the President of Empresa Colombiana de
\nPetroleos ECOPETROL, to assign or transfer all of part of its interest, rights
\nand obligations hereunder to any person, company or group.<\/p>\n
Consequently, any project involving assignment or total or partial assignment of
\nthe interests, rights and obligations in the contract, shall be informed to the
\nMinister of Mines and Energy and to the President of Empresa Colombiana de
\nPetroleos , Ecopetrol, through a written communication of THE ASSOCIATE
\nindicating the essential elements of the negotiation, such as prospective
\nassignee , value, interests, rights and obligations to be assigned, scope of the
\noperation, etc. Within the next thirty (30) working days , the Minister of Mines
\nand Energy and the President of Empresa Colombiana de Petroleos Ecopetrol, shall
\nexercise the<\/p>\n
64<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
discretionary power to analyze qualifications of the prospective assignees,
\nafter which they will adopt their decision without being bound to justify their
\nreasons. In all cases, the opinion of the Minister of Mines and Energy shall
\nprevail.<\/p>\n
27.2 Should more than thirty (30) working days elapsed, as of the date of
\nreception of the request by the Minister of Mines of Energy without THE
\nASSOCIATE having received an answer, it is understood for all purposes that the
\nrequest has been accepted.<\/p>\n
27.3 Assignments made during the Exploration Period among companies legally
\nestablished in Colombia, will not be subject to the above-mentioned procedure
\nand shall be formalized through a written authorization by Empresa Colombiana de
\nPetroleos, ECOPETROL, and signing of the respective instrument.<\/p>\n
27.4 Any amendment or modifications in the contract relations of THE ASSOCIATE
\nand Empresa Colombiana de Petroleos ECOPETROL, resulting from total or partial
\ndirect negotiations with respect to interests, quotas or stock in THE ASSOCIATE
\nshall also subject to the approval procedure by the Ministry of Mines and Energy
\nand of the President of Empresa Colombiana de Petroleos ECOPETROL.<\/p>\n
27.5 However, said changes or amendments shall not require authorization by the
\nMinister of Mines and Energy and Empresa Colombiana de Petroleos, in the
\nfollowing cases:<\/p>\n
65<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
27.5.1 When transactions are carried out at the stock exchange or open stock
\nmarket.<\/p>\n
27.5.2 If dealing with assignments or transfers resulting from events beyond the
\nwill of THE ASSOCIATE or of the companies supervising or directing it, such as
\ngovernment orders, legal judgement, partition and awarding of assets and
\nauctions. 27.5.3 When negotiations are carried out among companies supervising
\nor directing the ASSOCIATE, or its affiliates or subsidiaries, or among
\ncompanies forming a same economic group, in whose cases it will be enough to
\ngive timely notice on said assignment to the Minister of Mines and Energy and to
\nEmpresa Colombiana de Petroleos ECOPETROL.<\/p>\n
27.6 Except for the above mentioned exceptions, assignments, transfers,
\nnegotiations, transactions or operations dealt with herein, not having approval
\nof the Ministry of Mines and Energy and of the President of Empresa Colombiana
\nde Petroleos, ECOPETROL, shall give rise to application of Clause 25 of the
\nAssociation Contract.<\/p>\n
27.7 Operations carried out for the development of this clause and that
\naccording to the Colombian tax law are assessable , shall pay the corresponding
\ntaxes.<\/p>\n
66<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
CLAUSE 28. DISAGREEMENTS<\/p>\n
28.1 In all cases of disagreement or contradiction in the interpretation of the
\nClauses of this Contract in relation to those contained in Annex “B ” called
\n“Operating Agreement”, the provisions of the contract shall prevail.<\/p>\n
28.2 Any cases of disagreement between the Parties on matters of law relating to
\nthe interpretation and performance of the Contract, which cannot be settled
\namicably, shall be submitted for the cognizance and decision of the
\njurisdictional branch of Colombian public power.<\/p>\n
28.3 Any difference as to operational or technical matters between the Parties
\nhereto by reason of the interpretation or application of this contract, that
\ncannot be settled amicably, shall be referred for the final decision of experts
\n, appointed as follows: one by each Party, and a third one, or umpire, appointed
\nby mutual agreement of the two so designated. Should these two fail to reach an
\nagreement as to the appointment of the third expert, the latter shall be
\ndesignated, upon request of either party, by the Board of Directors of the
\nColombian Association of Engineers,”SCI”, with headquarters in Bogota.<\/p>\n
28.4 Any difference of an accounting nature between the Parties hereto by reason
\nof the interpretation and<\/p>\n
67<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
implementation of the Contract, that cannot be settled amicably, shall be
\nreferred for the decision of experts, who shall be Chartered Public Accountants,
\ndesignated as follows: one by each Party, and a third one, or umpire, appointed
\nby the two principal experts. Should these two fail to reach an agreement, such
\nthird expert shall be designated, upon request of either Party, by the Central
\nBoard of Accountants of Bogota.<\/p>\n
28.5 Both Parties declare that the experts’ decision shall have the full effects
\nof a settlement between them, and in consequence, such decision shall be final.<\/p>\n
28.6 In case of disagreement between the Parties as to the technical, accounting
\nor legal nature of the controversy, the same shall be considered to be legal and
\nclause 28 (paragraph 28.2) shall apply.<\/p>\n
CLAUSE 29. LEGAL REPRESENTATION<\/p>\n
Without prejudice to THE ASSOCIATE’s legal rights as a consequence of legal
\nregulations or of the clauses of this Contract, ECOPETROL shall represent the
\nparties before Colombian authorities on any matters concerning the exploitation
\nof the Contract Area, whenever it be applicable to do so, and shall furnish
\nGovernment officials and departments with any data and reports that may be
\nlegally required. Operator shall be obliged to prepare and furnish ECOPETROL
\nwith the pertinent reports. Any expenses incurred by ECOPETROL to attend to any<\/p>\n
68<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
matter referred to this Clause shall be charged to the Joint Account, and where
\nsuch expenses exceed five thousand United States Dollars ( US$5.000) or its
\nequivalent in Colombian currency, the Operator’s prior approval shall be
\nnecessary. The Parties represent, for purposes of their relations with Third
\nParties, that neither the provisions of this Clause nor any other contained
\nelsewhere in this Contract implies the granting of a general power of attorney
\nor the fact that the Parties have formed a civil or commercial partnership or
\nany other relationship whereby either Party might be considered together liable
\nfor the acts or omissions of the other party or as having authority or powers
\nthat might be binding upon the other Party in relation to any obligations. This
\nContract is related to operations within the Republic of Colombia and although
\nECOPETROL is a Colombian industrial and Commercial State owned enterprise, the
\nParties agree that THE ASSOCIATE , should it be the case, may decide to be
\nexcluded from all the provisions of Sub-chapter K entitled PARTNERS AND
\nPARTNERSHIPS of the Internal Revenue Code of the United States of America. THE
\nASSOCIATE shall make said election on its behalf in an appropriate manner.<\/p>\n
CLAUSE 30 LIABILITIES<\/p>\n
30.1 Operator shall carry our the operations subject matter of this Contract in
\nan efficient an adequate<\/p>\n
69<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
manner, in accordance with Petroleum industry practices internationally accepted
\nfor these type of operations, it being understood that Operator shall at no time
\nbe liable for errors of judgement or for any loss or damage that is not due to
\nthe Operator’s gross negligence.<\/p>\n
30.2 The liabilities contracted hereunder by ECOPETROL and THE ASSOCIATE in
\nrelation to Third Parties shall not be joint and, in consequence each Party is
\nseparately liable for its share of the expenses, investments or obligations
\nresulting as a consequence of such liabilities.<\/p>\n
30.3 Out of the value of the expenses incurred and the contracts entered by the
\nOperator for a value exceeding forty thousand dollars of the United States of
\nAmerica (US$40.000) or its equivalent in colombian pesos which have not been
\ntimely authorized by the Executive Committee, except for the assumptions of
\nClause 11 (Paragraph 11.7) , the only party liable before third Parties shall be
\nthe Operator, who shall assume the total corresponding value. When such expense
\nis accepted by the Executive Committee, the Operator will be refunded the value
\nof the work, study or purchase, according to the guidelines defined by the
\nExecutive Committee. In case that the good or asset is not accepted by the
\nExecutive Committee, the Operator, if possible, may withdraw such good
\nreimbursing the partners any cost that said withdrawal may cause to the
\noperation. If it is not possible that the Operator withdraws such good, or that
\nit declines to so, the resulting benefit or increase in equity resulting from
\nsaid expenses or contracts, shall<\/p>\n
70<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
belong to the Parties in proportion to their participation in the Operation.<\/p>\n
30.4 ECOLOGICAL CONTROL. THE ASSOCIATE, in the development of all contract
\nactivities, shall timely comply with the provisions of the National Code of
\nRenewable Natural Resources and of Environmental Protection and remaining legal
\nprovisions on the subject. For said purpose, THE ASSOCIATE agrees to permanently
\nexecute a preventive plan to guarantee conservation and restoration of natural
\nresources in the areas where Exploration, exploitation and transportation works
\nunder this contract are carried out.<\/p>\n
Said plans and programs shall be disclosed by THE ASSOCIATE to national and
\nregional entities related to this matter. Also, specific contingency plans shall
\nbe established for emergencies and remedial actions. For said purpose, THE
\nASSOCIATE shall coordinate said plans and actions with competent authorities.
\nThe respective programs and budgets shall be prepared by THE ASSOCIATE in
\nagreement with the pertinent clauses of this contract.<\/p>\n
All costs incurred shall be on the ASSOCIATE’s account in the Exploration Period
\nand in the Exploitation under the sole risk modality, and by both Parties
\ncharged to the Joint Account during the Exploitation Period.<\/p>\n
71<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
CLAUSE 31. TAXES, CHARGES AND OTHERS<\/p>\n
Any taxes and charges accruing after the establishment of the Joint Account and
\nbefore the Parties receive their share of the production, that are chargeable to
\nthe exploitation of Hydrocarbons, shall be charged to the Joint Account. Income,
\npatrimony and supplementary taxes shall be for the sole account of each Party,
\nas applicable to each of them.<\/p>\n
CLAUSE 32. PERSONNEL<\/p>\n
32.1 When THE ASSOCIATE is the Operator, appointment of the Operator’s Manager
\nshall be made after consultation with ECOPETROL.<\/p>\n
32.2 Pursuant to the terms of this Contract and subject to the norms to be
\nestablished, Operator shall have autonomy in appointing the personnel required
\nfor the operations hereunder, being able to fix their remuneration, functions,
\nrank, number and conditions. Operator shall adequately and diligently train such
\nColombian personnel as be required to replace the foreign personnel that
\nOperator may consider necessary for the performance of the operations hereunder.
\nIn any case, Operator shall comply with the legal regulations setting the
\nproportion of national and foreign employees and laborers.<\/p>\n
32.3 TECHNOLOGICAL TRANSFERENCE. THE ASSOCIATE agrees to carry out on its
\naccount a training program for ECOPETROL professionals in areas related to the
\ndevelopment of the contract.<\/p>\n
In order to meet this obligation during the Exploration Period, supervised
\ntraining may include among other subjects, the areas of geology, geophysical
\nand the like,<\/p>\n
72<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
evaluation of reserves and characterization of oil reservoirs, drilling and
\nproduction. Supervised training shall be carried out during all the initial
\nexploration period and its extensions, through integration of professionals
\nappointed by ECOPETROL, to the work group that THE ASSOCIATE organizes for the
\nContract Area or for other activities related to THE ASSOCIATE.<\/p>\n
In order to opt for the waiver dealt with in Clause 5 hereunder, THE ASSOCIATE
\nmust have complied with the training programs herein contemplated.<\/p>\n
During the Exploitation period, the scope, duration, place, participants,
\ntraining conditions and other aspects shall be established by the Executive
\nCommittee of the Association.<\/p>\n
All supervised training costs, except for labor costs caused in favor the
\nprofessionals receiving them, shall be assumed by THE ASSOCIATE during the
\nExploration Period and by both Parties charged to the Joint Account during the
\nExploitation Period.<\/p>\n
PARAGRAPH: In order to meet the obligations on Technology Transference in
\nagreement with the provisions hereunder, during the first three years of the
\nExploration Period and for each year, THE ASSOCIATE agrees to carry out
\nsupervised training programs to Ecopetrol Professionals for thirty thousand ( US
\n$30.000.oo) dollars of the United States of America per year. The subject and
\ntype of program shall be previously approved by ECOPETROL and THE ASSOCIATE. In
\nthe event that the Exploration Period is extended, supervised training shall
\nconsist of similar programs to those set forth herein.<\/p>\n
73<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
32.4 According to this contract, the Operator during the Exploitation Period,
\nshall have the right to carry out any operations hereunder through contractors,
\nsubject to the authority of the Executive Committee to approve contracts whose
\nvalue exceeds forty thousand dollars of the United States of America (US$40.000)
\nor its equivalent in Colombian pesos.<\/p>\n
CLAUSE 33. INSURANCE The Operator shall be covered by all
\nthe insurance required by Colombian law. The Operator shall likewise demand that
\neach contractor performing any work hereunder must obtain and maintain
\nup-to-date such insurance as be deemed necessary by the Operator. The Operator
\nshall further provide any other insurance considered necessary by the Executive
\nCommittee.<\/p>\n
CLAUSE 34. FORCE MAJEURE OR ACTS OF GOD<\/p>\n
The Obligations referred to in this Contract shall be suspended for the entire
\nduration of time in which either Party is unable to meet them, in whole or in
\npart, due to unforeseen events constituting force majeure or Acts of God such as
\nstrikes, lockouts, war, earthquake, floods or other catastrophes; government
\nlaws or regulations, or decrees hindering the provision of essential material
\nand, in general, any no-financial reason that actually prevents the operations
\neven though not listed herein but<\/p>\n
74<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
that affects the parties and is outside their control. Should either Party be
\nunable due to force majeure or Acts of God to comply with the obligations
\nhereunder, it shall promptly give notice thereof to the other Party, for its
\nconsideration, specifying the reasons which are preventing it. In no case shall
\noccurrences of force majeure extend the total Exploration, Retention and
\nExploitation Period beyond the twenty eight (28) calendar years as from the
\nEffective Date, as set forth in Clause 23, but any impediment of force majeure
\nduring the six (6) year Exploration Period referred to in Clause 5, which lasts
\nover thirty (30) consecutive days, shall extend this six (6) year period by the
\nsame time as the length of such impediment.<\/p>\n
CLAUSE 35. APPLICATION OF COLOMBIAN LAW<\/p>\n
The Parties set the city of Santa Fe de Bogota, Republic of Colombia, as the
\ndomicile for any purposes hereunder. This Contract is governed throughout by
\nColombian law, and THE ASSOCIATE submits to the jurisdiction of Colombian Courts
\nand waives any diplomatic claim in respect to its rights and obligations
\nhereunder, except in the case of denial of justice. Denial of justice shall not
\nbe deemed to exist when THE ASSOCIATE in its condition as Party hereto or as
\nOperator, has had access to all the resources and means of action which may be
\nused under Colombian law before the jurisdictional branch of public power.<\/p>\n
75<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
CLAUSE 36. NOTICES Notices or communications between the Parties, connected with
\nthis Contract shall require, in order to be valid, the mention of the pertinent
\nClauses, and sent to the Parties at the following addresses:<\/p>\n
TO ECOPETROL: Carrera 13 No.36-24 Santafe de
\n Bogota, Colombia.
\nTO THE ASSOCIATE: Carrera 6A No. 115-65 Of 514 F
\n Santafe de Bogota, Colombia.<\/p>\n
Any change of address shall be notified in advance to the other party.<\/p>\n
CLAUSE 37. VALUE OF THE HYDROCARBONS<\/p>\n
Payments or reimbursements under Clauses 9 (paragraphs 9.2 and 9.4) and 22
\n(paragraph 22.5), shall be made in United States Dollars, or in Hydrocarbons, on
\nthe basis of the current price and the limitations established under Colombian
\nlegislation for the sale of the dollar portion of the Hydrocarbons from the
\nContract Area destined for refining in national territory.<\/p>\n
CLAUSE 38. PRICES FOR CRUDE HYDROCARBONS<\/p>\n
38.1 THE ASSOCIATE’s share of hydrocarbons hereunder, destined for refining or
\ninternal use, shall be paid delivered to the refineries where Hydrocarbons are
\nto be processed or at the reception site, as agreed by the Parties, abiding the
\nstanding government rules or regulations or those replacing them.<\/p>\n
76<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
38.2 Any difference arising from the application of this clause shall be settled
\nby the method provided for in this Contract.<\/p>\n
CLAUSE 39. DELEGATION AND MANAGEMENT<\/p>\n
THE PRESIDENT of EMPRESA COLOMBIANA DE PETROLEOS-ECOPETROL delegates to the
\nExploration and Production Vice President management of this contract, pursuant
\nto ECOPETROL’S rules and provisions, with power to execute all procedures
\nrelated to the Contract development. The Exploration and Production Vice
\nPresident may exercise this delegation through the Associate Operation Assistant
\nVice-President.<\/p>\n
CLAUSE 40. VALIDITY<\/p>\n
To take legal effect, this contract requires the approval of the Ministry of
\nMines and Energy.<\/p>\n
IN WITNESS WHEREOF, the parties sign, before witnesses, in Bogota, on the twenty
\nfourth (24th) day of the month of December , nineteen hundred and ninety seven
\n(1997).<\/p>\n
EMPRESA COLOMBIANA DE PETROLEOS
\n ECOPETROL
\n SIGNED,
\n ENRIQUE AMOROCHO CORTES
\n President<\/p>\n
HARKEN DE COLOMBIA, LTD
\n SIGNED,
\n GABRIEL GUSTAVO CANO VELASQUEZ
\n Legal Representative<\/p>\n
Witnesses<\/p>\n
Signed, Illegible signature<\/p>\n
—————————<\/p>\n
77<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
INDEX<\/p>\n
\n
\nCHAPTER I………………………………………………………………………………2<\/p>\nGENERAL PROVISIONS<\/p>\n
CLAUSE 1. Object of this contract…………………………………………………………2
\nCLAUSE 2. Application of the Contract …………………………………………………….3
\nCLAUSE 3. Contract Area………………………………………………………………….4
\nCLAUSE 4. Definitions……………………………………………………………………6<\/p>\n
CHAPTER II<\/p>\n
EXPLORATION
\nCLAUSE 5. Terms and conditions …………………………………………..12
\nCLAUSE 6. Supply of Information during Exploration………………………….14
\nCLAUSE 7. Exploration Budget and Programs………………………………….16
\nCLAUSE 8. Restitution of Areas……………………………………………17<\/p>\n
CHAPTER III<\/p>\n
EXPLOITATION
\nCLAUSE 9. Terms and Conditions……………………………………………19
\nCLAUSE 10. Technical Control of the Operations………………………………26
\nCLAUSE 11. Exploitation Programs and Budgets………………………………..27
\nCLAUSE 12. Production…………………………………………………….30
\nCLAUSE 13. Royalties……………………………………………………..32
\nCLAUSE 14. Distribution and Availability of
\n Hydrocarbons…………………………………………………..33
\nCLAUSE 15. Use of Associated Gas…………………………………………..41
\nCLAUSE 16. Unitization……………………………………………………41
\nCLAUSE 17. Information and Inspection under
\n Exploitation…………………………………………………..42<\/p>\n
CHAPTER IV<\/p>\n
EXECUTIVE COMMITTEE
\nCLAUSE 18. Formation …………………………………………………….43
\n<\/c><\/s><\/table>\n
78<\/p>\n
SWORN TRANSLATION No.30154\/Err<\/p>\n
\n
\nCHAPTER V<\/p>\nEXPLORATION<\/p>\n
CLAUSE 19. Functions…………………………………………………….44
\nCLAUSE 20. Decision in case of disagreement
\n in the Operation……………………………………………….46
\nCLAUSE 21. Operations under the risk of one of the
\n Parties ………………………………………………………47
\nCLAUSE 22. Handling ……………………………………………………..51
\nCLAUSE 23. Maximum Length ………………………………………………..56
\nCLAUSE 24. Termination……………………………………………………57
\nCLAUSE 25. Unilateral Termination Causes……………………………………58
\nCLAUSE 26. Obligations in case of Termination……………………………….59
\nCLAUSE 27. Right of Assignment…………………………………………….61
\nCLAUSE 28. Disagreements………………………………………………….63
\nCLAUSE 29. Legal Representation……………………………………………65
\nCLAUSE 30. Liabilities …………………………………………………..66
\nCLAUSE 31. Taxes, charges and others ………………………………………68
\nCLAUSE 32. Personnel……………………………………………………..68
\nCLAUSE 33. Insurance……………………………………………………..70
\nCLAUSE 34. Force Majeure or Acts of God ……………………………………71
\nCLAUSE 35. Application of Colombian Law…………………………………….71
\nCLAUSE 36. Notices……………………………………………………….72
\nCLAUSE 37. Value of the Hydrocarbons……………………………………….72
\nCLAUSE 38. Prices for Crude Hydrocarbons……………………………………72
\nCLAUSE 39. Delegation and Management……………………………………….73
\nCLAUSE 40. VALIDITY………………………………………………………73
\n<\/c><\/s><\/table>\n
CERTIFIED TO BE A TRUE AND COMPLETE TRANSLATION DONE BY TERESA JIMENEZ DE
\nMONTES. SWORN TRANSLATOR AND INTERPRETER. RES.220 ISSUED BY THE MINISTRY OF
\nJUSTICE OF COLOMBIA. SANTAFE DE BOGOTA, D.C., FEBRUARY 20TH, 1998.<\/p>\n
Certified to be a true and complete translation done by Teresa Jimenez de
\nMontes. Sworn Translator and Interpreter. Res. 220 issued by the Ministry of
\nJustice of Colombia. Santafe de Bogota, D.C.,February 20th, 1998.<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7721],"corporate_contracts_industries":[9409],"corporate_contracts_types":[9613,9617],"class_list":["post-42090","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-harken-oil---gas-inc","corporate_contracts_industries-energy__exploration","corporate_contracts_types-operations","corporate_contracts_types-operations__jv"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42090","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42090"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42090"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42090"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}