basrah gas development agreement among ... - iraq oil … · basrah gas development agreement ....

Initialing Draft – 12 July 2011

CONFIDENTIAL

BASRAH GAS DEVELOPMENT AGREEMENT

Among

SOUTH GAS COMPANY

and

SHELL GAS IRAQ B.V.

and

DIAMOND GAS IRAQ B.V.

DRAFT - SUBJECT TO APPROVAL OF THE IRAQ COUNCIL OF MINISTERS AND THE BOARDS OF DIRECTORS OF THE PARTIES

AND SUBJECT TO THOSE MATTERS MARKED FOR COMPLETION BEFORE SIGNATURE

THIS INITIALLED AGREEMENT REPRESENTS THE LATEST POSITIONS NEGOTIATED

BETWEEN THE PROPOSED PARTIES AND IS NON-BINDING

i

TABLE OF CONTENTS

1. DEFINIT

2. TERM, B DA EFFE

3. BASRAH AS COM

4. COMPA ’S OBLI

5. PLANNING .............

6. PROJEC ACILIT

7. RAW GAS SUPPLY

8. PETROL M PRO

9. LNG PROJECTS....

10. VENTUR

11. INVEST T FRAPAYMENT SECURI

12. INFORM ION, RE

13. DEFAUL

14. TRANSFERS...........

15. GOVER

16. CONFID T

17. GENER

18. NOTICE

19. REPRES ATION

20. EXPERT

21. ETHICS

22. FORCE JEURE

EXHIBIT 1 PRE-OPCOMMENCEMENT

EXHIBIT 2 INITIAL

EXHIBIT 3 JPCC T

EXHIBIT 4 CONFID

EXHIBIT 5 PRINCI

EXHIBIT 6 DEDICA

EXHIBIT 7 LNG OF

EXHIBIT 8 SOMO A

IONS AND INTERPRETATION; TERMINATION OF HOA ..........2

G CTIVE DATE & PRE-OPERATIONS PERIOD ...........22

G PANY, THE VENTURE AND VENTURE RIGHTS.....24

NY GATIONS.............................................................................29

................................................................................................29

T F IES & PROJECT DEVELOPMENT ...............................31

...............................................................................................35

EU DUCTS..................................................................................48

................................................................................................57

E OPERATIONS....................................................................................58

MEN MEWORK, PROJECT ENTITIES AND SGC TY.........................................................................................62

AT CORDS, AUDIT AND INSPECTION.............................69

T AND TERMINATION .......................................................................72

................................................................................................76

NING LAW AND DISPUTE RESOLUTION .......................................78

ENTIALI Y ............................................................................................79

AL...............................................................................................................80

S.................................................................................................................82

ENT S AND WARRANTIES.....................................................83

..................................................................................................................86

...................................................................................................................90

MA ................................................................................................91

ERATIONS PERIOD AND CONDITIONS PRECEDENT TO OF OPERATIONS............................................................97

PHASE FACILITIES ..........................................................................108

ERMS OF REFERENCE.......................................................................111

ENTIALITY ..........................................................................................115

PLES OF PRICING ...............................................................................120

TED FIELDS.........................................................................................133

FSHORE SITE.......................................................................................137

GENCY AGREEMENT.......................................................................138

EXHIBIT 9 TERMS

EXHIBIT 10 FORM

EXHIBIT 11 KEY T

EXHIBIT 12 KEY T

EXHIBIT 13 KEY T

EXHIBIT 14 KEY T

EXHIBIT 15 FORMAGREEMENT ........

EXHIBIT 16 GAS SU

EXHIBIT 17 FORM

EXHIBIT 18 AGREE

OF ASSET TRANSFER AGREEMENT ............................................139

OF COMPANY CONTRACT..............................................................152

ERMS OF RAW GAS SUPPLY AGREEMENT ................................161

ERMS OF DRY GAS SUPPLY AGREEMENT .................................181

ERMS OF LPG AND CONDENSATE SUPPLY AGREEMENTS ..204

ERMS OF LNG SALE AND PURCHASE AGREEMENT...............225

OF INITIAL PROJECT DOCUMENTS ACCESSION ..............................................................................................227

PPLY AND OFFTAKE PLAN............................................................230

OF GSOP AMENDMENT NOTICE...................................................231

D FORM OF LETTER OF CONFIRMATION ................................232

ii

1

THIS BASRAH GAentered into this [●] da

1. SOUTH GAS OMCompanies Registrar No 22 of 1997, represe

2. SHELL GAS RAQaccordance with the la

3. DIAMOND G IRaccordance with the la

each of them individu

WHEREAS:

(A) The Ministry l Developments B.V., (2008 (as extended by3rd March 2010, the “Hof an incorporated joimplement and carry detailed in this Agreewas approved by theMinistry and SGPDBV2009, and Mitsubishi C

(B) The Ministry h sihas designated ShelCorporation has desCorporation) to be theand Mitsubishi will, Company (“BGC”) toof this Agreement, enobligations, as SharehAgreement”).

(C) SGC, Shell a itShareholders. SGC isgas processing compaMinistry of Oil no. 10

(D) At the earliest Project Documents Aparty to this AgreeAgreement), and SGCDomestic Sale and Pu

S DEVELOPMENT AGREEMENT (this “Agreement”) is made and y of [●], 2011 by and among:

C PANY, a public company incorporated by a decree of the dated 30 June 1998 in accordance with the State Companies Law nted by its Director-General (“SGC”);

I B.V., a private limited liability company incorporated in ws of The Netherlands (“Shell”); and

AS AQ B.V., a private limited liability company incorporated in ws of The Netherlands (“Mitsubishi”),

ally as a “Party” and, collectively, as the “Parties”.

of Oi of the Republic of Iraq (the “Ministry”) and Shell Gas & Power “SGPDBV”) entered into a Heads of Agreement on 22 September agreements between the parties thereto dated 28th February and OA”), which provided for (among other things) the establishment

int venture between SGC and SGPDBV (or their Affiliates) to out a project in the South of Iraq. Such project (as it is further ment) is referred to herein as the “Venture.” Entry into the HOA Council of Ministers pursuant to Decree no. 329/2008. The invited Mitsubishi Corporation to join the Venture on 13 August orporation accepted such invitation.

as de gnated SGC (a Wholly Owned Affiliate of the Ministry), SGPDBV l (a Wholly Owned Affiliate of SGPDBV) and Mitsubishi ignated Mitsubishi (a Wholly Owned Affiliate of Mitsubishi ir respective participants in the Venture. Accordingly, SGC, Shell following the signing of this Agreement, incorporate Basrah Gas carry out the Venture, and each of them shall, on or about the date ter into a shareholders’ agreement that will govern their rights and olders, with respect to the Venture and BGC (the “Shareholders’

nd M subishi are entering into this Agreement in their capacity as also entering into this Agreement in its capacity as the Iraqi State ny pursuant to the Ratification Decree and the Law of Organizing 1 of 1976.

time following Incorporation, each of the Parties shall enter into the Initial ccession Agreement (under which BGC will become an additional ment, the Shareholders’ Agreement and the Asset Transfer and BGC shall enter into the Raw Gas Supply Agreement and

rchase Agreements.

(E) Certain obliga oguaranteed by their rsimultaneously with th

(F) The Parties wi scertain Project Docum

NOW THEREFOREhereinafter set forth, th

1. DEFINITI

1.1 Definitions

The following terms,following meanings (u

“Acceptable Credit R

tions f Shell and Mitsubishi with respect to the Venture have been espective Guarantors, pursuant to financial guarantees executed e execution of this Agreement and the Shareholders’ Agreement.

sh to et out their rights and obligations with respect to the Venture and ents and the terms and conditions applicable to the same.

, in consideration of the foregoing, and subject to the terms and conditions e Parties hereby agree as follows:

ONS AND INTERPRETATION; TERMINATION OF HOA

when capitalised and used in this Agreement, shall have the nless it is expressly stated otherwise):

ating” has the meaning given to it in Article 11.5.1.

“Acceptable Credit Support” has the meaning given to it in Article 11.5.3.

“Additional Assets” h

“Additional Volumes

as the meaning given to it in the Asset Transfer Agreement.

” has the meaning given to it in Article 7.1.4.

“Advances” has the m

“Adverse Change” ha

eaning given to it in the Shareholders’ Agreement.

s the meaning given to it in Article 11.3.1.

“Affected Provision” has the meaning given to it in Article 17.3.

“Affiliate” means:

(a) in relation to Enindirectly such first EEntity; or (iii) is direindirectly Controls suc

(b) in relation to S ndControlled directly orSGC, the Ministry

Notwithstanding the fShareholder and eachShareholder, and (ii) Agency, that does notan Affiliate of SGC.

“Agreed GSOP Chan

any tity, any other Entity that: (i) Controls either directly or ntity; (ii) is Controlled directly or indirectly by such first ctly or indirectly Controlled by an Entity that directly or h first Entity; and

GC a the Ministry, an Affiliate also includes (i) any Entity that is indirectly by SGC or the Ministry and (ii) in the case of

oregoing, (i) BGC shall be deemed not to be an Affiliate of each Shareholder shall be deemed not to be an Affiliate of each other any Government Agency, or Entity Controlled by a Government fall under paragraph (b) of this definition shall be deemed not to be

ge” has the meaning given to it in Article 5.3.3.

2

“Agreement” means t

“Allocation Date” Development Plans Agreement have beeCommittee (or the accordance with that a

“Ancillary Products”treatment and processi

“Annual Budget” has

“Annual Business Pla

“Annual Funding Pla

“Approval” means awhatsoever nature.

“Approved Annual Agreement.

“Approved Annual BAgreement.

“Approved Annual FAgreement.

“Approved InfrastruShareholders’ Agreem

“Asset Transfer Agre Exhibit 9

his agreement (including all Exhibits hereto).

means the date on which one or more First Infrastructure meeting the requirements of article 11.6 of the Shareholders’ n Validly Prepared and submitted to the Higher Management Joint Management Committee, as applicable) for approval in rticle.

means products, other than Petroleum Products, resulting from the ng of Raw Gas including sulphur, CO2 and other by-products.

the meaning given to it in the Shareholders’ Agreement.

n” has the meaning given to it in the Shareholders’ Agreement.

n” has the meaning given to it in the Shareholders’ Agreement.

ny consent, license, approval, permit or other authorisation of

Budget” has the meaning given to it in the Shareholders’

usiness Plan” has the meaning given to it in the Shareholders’

unding Plan” has the meaning given to it in the Shareholders’

cture Development Plan” has the meaning given to it in the ent.

ement” means the agreement substantially on the terms set forth in to be entered into by

transferor), and later Accession Agreement

“Availability Window

each of the Shareholders and SGC (in its capacity as acceded to by BGC pursuant to the Initial Project Documents

, under which SGC will transfer the SGC Transfer Assets to BGC.


“Available Gas” meathat serves the Dominfrastructure in operadomestic market requi

(a) is availabfields;

(b) is alloca

ns natural gas (i) that can be delivered to the transmission network estic Offtaker(s) and its (or their) offtakers on the basis of tion at the time of determination, (ii) that is not needed to satisfy rements during the relevant period, and (iii) that:

le from potential additional gas production from non-associated gas

ted for sale on a spot or interruptible basis;

3

(c) is in ex

(d) is allocafor the avoidaforementione

(e) is othecommitments.

“Available V

cess of the firm delivery commitments of the Domestic Offtaker(s);

ted to any export project other than the Initial Phase LNG Project (save, ance of doubt, any export project that is not connected to the d transmission network until such time as it is connected); or

rwise not committed to any firm domestic offtaker in respect of its firm

olume Profile” has the meaning given to it in Article 7.1.7(a).

“Best Endeavours” mof all steps within its poutcome would take uBest Endeavours wilobligation that is unreof the required outcomoutcome), (b) take anregulation applicable tor the Environment, (dunder any of the ProDocuments), or (e) ifaction that is inconsistAnnual Business Planincur any expenditureShareholders’ Agreem

“BGC” has the meani

eans, in relation to any particular outcome, the taking by an Entity ower that a reasonable and prudent obligee desiring to achieve that nder the same or similar circumstances; provided that the use of

l not require an Entity to (a) incur any expenditure or other asonable or disproportionate (when viewed objectively and in light

e and the consequences to the Venture of failing to achieve that y action that would be in violation of any Law or any other law or o that Entity, (c) take any action that could jeopardise health, safety ) waive, or take any other action that is inconsistent with, its rights

ject Documents (to the extent it is a party to any of the Project such Entity is acting in its capacity as a Shareholder, take any ent with any Approved Infrastructure Development Plan, Approved , Approved Annual Budget or Approved Annual Funding Plan, or beyond the payment of Cash Calls made in accordance with the ent.

ng given to it in Recital B.

“BGC Tax Assessment” has the meaning given to it in Article 11.4.1.

“BGDA Effective Date” has the meaning given to it in Article 2.1.2.

“Business Improvement Program” has the meaning given to it in Article 10.1.2.

“Capital Contributio

“Capitalisable Costs”

“Cash Calls” has the

“Change in Law” mAgreement: (a) a chana new Law; or (c) a chor interpretation thereo

ns” has the meaning given to it in the Shareholders’ Agreement.

has the meaning given to it in the Shareholders’ Agreement.

meaning given to it in the Shareholders’ Agreement.

eans any of the following events occurring after the date of this ge in, or repeal of, an existing Law; (b) an enactment or making of ange in the manner in which a Law is applied or in the application f.

4

“Commencement of Commencement of O Exhibit 1

Operations” means the date specified as such in the Notice of perations issued in accordance with the terms of Section 3 of

.

“Committed VolumArticle

es” in respect of Raw Gas has the meaning given to it in 7.6.1 and in re Dry

in Article spect of Gas, Condensate and LPG has the meaning given to it

8.6.1.

“Company ContractCompanies Law, whic

” means the contract referred to in article 13 of the Private h contract shall be substantially in the form attached in Exhibit 10

as may otherwise be agreed by all Shareholders. or with such revisions

“Condensate” meanscomposed principally

“Confidential Inform

a mixture of liquid hydrocarbons extracted from Raw Gas and of pentanes and heavier hydrocarbons.

ation” has the meaning given to it in Section 1(a) of Exhibit 4.

“Confirmation Noticthe relevant Domestic

“Confirmed CapitalAgreement.

“Control” means theright to exercise 50% to ensure that the actithe directions or wish“Controls” shall be co

“Council of Ministechapter 2(2) of the Co

“Dedicated Fields” mthis Agreement) as Zuin Exhibit 6

e” has the meaning given to it in the Raw Gas Supply Agreement or Sale and Purchase Agreement (as applicable).

isable Costs” has the meaning given to it in the Shareholders’

legal power to direct the policies and decisions of an Entity, the or more of the shares or voting rights of an Entity and/or the right vities and business of an Entity are conducted in accordance with es of the relevant Party or Entity, and the phrase “Controlled” and nstrued accordingly.

rs” means the government body referred to in section 3 of nstitution of the Republic of Iraq.

eans the fields located in southern Iraq known (as of the date of bair, Rumaila and West Qurna 1, and having the coordinates set out

.

“Dedicated Volume Profile” has the meaning given to it in Article 7.1.7(b).

“Dedicated Volume Requirement” has the meaning given to it in Article 7.1.7(c).

“Dedicated Volumes” has the meaning given to it in Article 7.1.1(a) and includes t, as of the relevant time, have been dedicated pursuant to

any Deficit Volumes thaArticle 7.1.2(c) and a itional dedicated pursuant to

ny Add Volumes that, as of the relevant time, have been Article 7.1.4.

“Default Transfer No

“Defaulting Shareho

tice” has the meaning given to it in the Shareholders’ Agreement.

lder” has the meaning given to it in the Shareholders’ Agreement.

5

“Deficit Volumes” has the meaning given to it in Article 7.1.2(c).

“Depreciated Replacement Cost” has the meaning given to it in Article 13.6.3.

“Development Projec

“Direct Pay Letter of

t” has the meaning given to it in the Shareholders’ Agreement.

Credit” has the meaning given to it in Article 11.5.3(a)(i).

“Disclosed Encumbrances” has the meaning given to it in Section 1.3(b) of Exhibit 1.

“Disclosing Party” has the meaning given to it in Section 1(a)(ii) of Exhibit 4.

“Dispute” has the meaning given to it in Article 15.2.

“Domestic Offtaker”Agreements.

“Domestic Payment (in whole or in part) dDomestic Sale and Pu

(a) Petroleum Pro aone or more of the Do

(b) any other sumsubject of an unresolvBGC in writing.

“Domestic Sale and PLPG and Condensateentered into between B

“Dry Gas” means theRaw Gas and that, in rsupplied at an agreeAgreement.

“Dry Gas Supply Ag

means the purchaser under the Domestic Sale and Purchase

Default” means a failure by the Domestic Offtaker to pay any sum ue and payable to BGC or a Project Entity under one or more of the rchase Agreements in respect of either:

ducts ctually delivered by BGC to the Domestic Offtaker under mestic Sale and Purchase Agreements; or

(including any “take or pay” or similar payment) that is not the ed bona fide dispute notified by the Domestic Offtaker to

urchase Agreements” means the Dry Gas Supply Agreement, the Supply Agreement, and any other Sale and Purchase Agreement GC and the Domestic Offtaker.

gaseous product resulting from the treatment and processing of elation to any such products to be supplied by the Venture, is to be d specification as set out in the relevant Sale and Purchase

reement” has the meaning given to it in Article 8.4.2(a).

“ED Condition Precedent” has the meaning given to it in Article 2.2.1.

“Encumbrance” measecurity interest, rightpreferential right, or orecorded or lodged wi

“Encumbrance Discl

ns a title defect or retention, mortgage, charge, pledge, lien, option, of first refusal, right of pre-emption or any other security interest, ther right exercisable by a third party (whether or not registered,

th a relevant Government Agency).

osure List” has the meaning given to it in Section 1.3(b) of Exhibit 1.

6

“End of PSH Term Value” has the meaning given to it in Article 13.6.2.

“Entity” means an inor any other legal ensuccessors and permit

“Environment” meanland, air and water.

“Equivalent Proporti

“Event of Default” ha

“Excess Volumes” ha

dividual, partnership, corporation, company, Government Agency tity, and all references to an “Entity” shall include such Entity’s ted assigns.

s any and all organisms (including humans), ecosystems, property,

on” has the meaning given to it in the Shareholders’ Agreement.

s the meaning given to it in the Shareholders’ Agreement.

s the meaning given to it in Article 7.2(c)(i).

“Excess Volumes Proposal” has the meaning given to it in Article 7.2(c)(i).

“Excluded Projects”

(a) any project(s) xindividually or in thedate on which SGC mavailable to BGC to Operations or to reduc

(b) any exports of derived from a Ministr

(c) any exports of Gfrom a project underta

(i) the federal governmen

(ii) the Ministry, o

(iii) any Governm

lacks the abiliin accordanceMinistry or su

“Exclusive Site Rightexclusively occupy anincludes any other righ

means:

to e port Raw Gas or Dry Gas from Iraq in volumes that, aggregate, could not reasonably be expected to cause the akes the first Raw Gas for the Initial Phase LNG Project

occur later than seven years following Commencement of e the volumes available for the Initial Phase LNG Project;

Raw Gas or Dry Gas where such Raw Gas or Dry Gas is not y Project, and

Raw as or Dry Gas where such Raw Gas or Dry Gas is derived ken by an Entity with respect to which:

t of Iraq,

r

ent Agency of the federal government or the Ministry,

ty to ensure that such Entity’s activities and business are conducted with the directions or wishes of the federal government, the ch Government Agency.

s” means, in respect of a site or area, the right to lease or otherwise d use such site or area (subject to any Minor Encumbrances), and ts referred to in Article 3.3(k)(i) in respect of such site or area.

“Exclusivity Termination Date” has the meaning given to it in Article 8.10.1.

“Existing Assets” has the meaning given to it in Exhibit 9.

7

“Existing Dispute” has the meaning given to it in Article 15.8.

“Expert” has the meaning given to it in Article 20.1.

“Expert Matters” has the meaning given to it in Article 20.2.

“Export SPAs” hasAgreement.

“E&Y Valuation R“Independent valuatiothat are proposed to beand dated 24th May 20

“Feedstock Gas” meproduction of LNG wi

“Final Aggregate Ass

the meaning given to it in Exhibit 12 to the Shareholders’

eport” means the report issued by Ernst & Young titled n (as at 31 October 2009) of South Gas Company’s fixed assets transferred into a joint venture to be called Basrah Gas Company” 10.

ans a treated hydrocarbon gas stream that can be used for the thout further extraction of any component.

et Transfer Price” has the meaning given to it in Exhibit 9.

“Final Development Shareholders’ Agreemon behalf of such PDevelopment Decisioproject.

“Final Tax Assessme

Decision” in respect of BGC has the meaning given to it in the ent, and in respect of a Project Entity means any decision of, by, or roject Entity that has substantially the same effect as a Final n, being a final investment decision to proceed with the applicable

nt” has the meaning given to it in Article 11.4.1(b).

“Finance Director” h

“First Completion Da

as the meaning given to it in the Shareholders’ Agreement.

te” has the meaning given to it in Exhibit 9.

“First Gas Export Right” has the meaning given to it in Article 8.10.1.

“First InfrastructurShareholders’ Agreem

“First Iraq LNG Pro

e Development Plan” has the meaning given to it in the ent.

ject Right” has the meaning given to in Article 8.10.3.

“Force Majeure” has the meaning given to it in Article 22.1(a).

“Force Majeure Termination Notice” has the meaning given to it in Article 22.6.

“Gas Parties” means

“Gas Supply and Of

the Raw Gas Supplier, the Domestic Offtaker and BGC.

ftake Plan” means the plan attached hereto as Exhibit 16 (as the from time to time in accordance with Article 5.3). same may be amended

“Government” means the government of Iraq and any Government Agency.

8

“Government Agencprovincial, ministerialagency or instrumentaof any of the foreadministrative functio

“Government Party”Affiliates of any of the

“Government RepreCommittee appointed not a Private Sharehol

“GSOP Amendment

y” means (a) any governmental, semi-governmental, regional, , local or judicial entity, body or authority or any subdivision or lity thereof and (b) any Entity under the direct or indirect Control

going exercising executive, legislative, judicial, regulatory or ns of or pertaining to government, in each case of or in Iraq.

means SGC, the Ministry, any other Government Agency, and any m.

sentative” means any representative to the Higher Management pursuant to the Shareholders’ Agreement by a Shareholder that is der.

Notice” has the meaning given to it in Article 5.3.6.

“GTL” means the proliquids producing synt

“Guarantee” has the

“Guarantor” means Mitsubishi, the Mitsuwhich a Guarantee is the Entity providing su

“Higher ManagemenAgreement.

“HOA” has the meani

cess known as “gas-to-liquids” for the conversion of natural gas to hetic oil products.

meaning given to it in the Shareholders’ Agreement.

(a) with respect to Shell, the Shell Guarantor, (b) with respect to bishi Guarantor, and (c) with respect to any other Shareholder for required pursuant to article 18.2.2 of the Shareholders’ Agreement, ch Guarantee.

t Committee” has the meaning given to it in the Shareholders’

ng given to it in Recital A.

“ICC Rules” has the meaning given to it in Article 15.3.

“IFRS” has the meani

“Incorporated” and with the Private Comp

“Independent Gas Cpetroleum engineers.

“Infrastructure DeveAgreement.

“Initial Existing Asse

ng given to it in the Shareholders’ Agreement.

“Incorporation” means the establishment of BGC in accordance anies Law.

onsultant” means a firm of internationally recognised independent

lopment Plan” has the meaning given to it in the Shareholders’

t Transfer Price” has the meaning given to it in Exhibit 9.

“Initial Gas Supply and Offtake Plan” has the meaning given to it in Article 5.2.2.

“Initial Phase Activities” means:

9

(a) the oper

(b) the rejTransfer Assets;

(c) the developmand North RumJoint ManagemCommenceme

(d) the intemporary poTransfer Assets;

(e) the remconstruction cam

(f) the unfeasibility of the In

(g) all anrespect of any

“Initial Phase Allocat

ation of the SGC Transfer Assets;

uvenation, rehabilitation, upgrade and/or on-going construction of the SGC

ent and construction of construction camps at the Khor Al Zubair aila facilities and of any Development Projects approved by the ent Committee or the Higher Management Committee prior to

nt of Operations;

stallation of ‘Frame 5’ gas turbine generators at Khor al Zubair and wer generation units as required for the operation of the other SGC

oval and clearing of any mines or unexploded ordnance in and around ps and the facilities described in sub-paragraph (d) above;

dertaking of surveys and engineering activities required to confirm the itial Phase LNG Project; and

cillary and related activities that are required to be undertaken for or in of the foregoing activities.

ion” has the meaning given to it in Article 8.2.1.

“Initial Phase FaciliParts A and B of Exhi

ties” means the plant, infrastructure and facilities described in bit 2 and all related plant, infrastructure and facilities.

“Initial Phase LNG Project” has the meaning given to it in Article 9.1(a).

“Initial Project Docuinto by each of the PAgreement, the Sharagreement to be substa

ments Accession Agreement” means the agreement to be entered arties under which BGC shall become an additional Party to this eholders’ Agreement and the Asset Transfer Agreement (such ntially in the form attached in Exhibit 15).

“Interested Party” has the meaning given to it in Article 20.3(a).

“Iraq” means the Rep

“Iraq Development Nations Security Couaccount established fo

“Iraqi Dinar” means

“JMTC” has the mean

“Joint Management Agreement.

ublic of Iraq.

Fund” means the fund of that name established pursuant United ncil resolution 1483 of May 22, 2003, or any successor fund or r substantially the same purpose.

the lawful currency of Iraq.

ing given to it in the Shareholders’ Agreement.

Committee” has the meaning given to it in the Shareholders’

10

“JPC Committee” has the meaning given to it in Article 5.1.

“JPCC Member” has the meaning given to it in Exhibit 3.

“JPCC Secretary” has the meaning given to it in Exhibit 3.

“JPCC Terms of Refout in Exhibit 3

erence” means the terms of reference for the JPC Committee as set .

“Law” means any deextent having the forcforegoing relating to hor promulgated by anyextensions, replaceme

“Letter of Confirmat

cree, resolution, law, statute, act, ordinance, rule, directive (to the e of law), order, treaty, code or regulation (including any of the ealth or safety matters, Taxes or the Environment) enacted, issued Governmental Agency, including any amendments, modifications,

nts or re-enactments thereof.

ion” has the meaning given to it in Article 2.1.3.

“Liquefaction Facilitproduce LNG and infrastructure may infacilities, gas compreLPG facilities, and poarms, LNG storage tan

“LNG” means naturabelow its boiling poin

“LNG Buyer” mean uAgreement.

“LNG Offshore Site”

ies” means facilities for the liquefaction of natural gas so as to all related facilities and infrastructure (which facilities and clude gas treatment facilities, NGL extraction and fractionation ssors, sulphur recovery, LPG treatment, storage tanks and other rt and loading facilities, including LNG jetties, berths and loading ks and utilities).

l gas consisting predominantly of methane in a liquid state at or t at a pressure of approximately one atmosphere.

s a purchaser of LNG p rsuant to any LNG Sale and Purchase

means the offshore area set out in Exhibit 7 or any alternith

ative site agreed in accordance w Article 9.6.

“LNG Projects” meaProject(s).

“LNG Sale and Purcsale of LNG.

“Long Term Off-Spe

ns the Initial Phase LNG Project and any Second Phase LNG

hase Agreement” means any sale and purchase agreement for the

cification Gas” has the meaning given to it in Article 7.4.2.

“LPG” means liquepredominantly of prop

“LPG and CondenArticle

fied petroleum gas extracted from Raw Gas consisting either ane or butane or a combination of both.

sate Supply Agreement” has the meaning given to it in 8.4.2(b) and in nt that, the eve as contemplated in Article 8.4.2(b), the Parties ele

agreements for the sale and purchase of LPG and Condensate, then ct

to enter into separate

11

the term “LPG and Cagreements as the con

“LPG Processing and

ondensate Supply Agreement” shall refer to either or both of such text requires.

Handling Agreement” has the meaning given to it in Article 8.9.

“Managing Director”

“Mandatory GSOP C


hange” has the meaning given to it in Article 5.3.2.

“Matching Amount”

“Matching Commitmcounting) of:

(a) all Confirmed Capitalto such time;

(b) all Capital Co utitime;

(c) all amounts d narrangements entereddevelopment and/or included in the First In

(d) all amounts th ill years after the Commarrangements entereddevelopment and/or included in the First extent such amounts anotice to proceed (orcommence full perfornotice to proceed (or e

“Matching Date” has

“Ministry” has the m


ents” means, at the relevant time, the aggregate (without double

isable Costs incurred by the Private Shareholders at or prior

ntrib ons made by the Private Shareholders at or prior to such

ue a d payable but not yet paid under binding contractual into by or on behalf of BGC, relating to infrastructure activities in furtherance of infrastructure development frastructure Development Plan(s); and

at w become due and payable after such time, but less than four encement of Operations, pursuant to binding contractual

into by or on behalf of BGC relating to infrastructure activities in furtherance of infrastructure development Infrastructure Development Plan(s) (in each case to the re identified in such contractual arrangements and, where a equivalent) is required for the counterparty thereunder to mance of its obligations to which such amounts relate, such quivalent) has been provided).


eaning given to it in Recital A and shall include any successors of the Ministry.

“Ministry Project” operation of crude oiapproved by the MiniMinistry or (b) in whControl of the Ministr

“Minor Encumbrancbe expected to), in a

means a project or other undertaking for the development or l or natural gas fields and/or for related infrastructure (a) that is stry or any Entity that is under the direct or indirect Control of the ich the Ministry or any Entity that is under the direct or indirect y is a participant.

es” means any Encumbrances that do not (or could not reasonably ny material respect (either individually or in the aggregate), (i)

12

interfere with or hindeand otherwise utilise accordance with its orPrudent Operator or (Project Facilities or th

(a) Encumbrances ing(and not as a result ofyet due;

(b) utility rights of

(c) rights of passa er

(d) public easemen

but excluding pre-emTransfer Assets.

“Mitsubishi” has the

“Mitsubishi Guarant

r the ability of BGC or any Project Entity to fully access, operate the asset burdened thereby or any other of the Project Facilities in their intended purpose and with the standards of a Reasonable and ii) adversely impact the value of such asset or of any of the other e Venture, including:

aris by operation of law and in the ordinary course of trading any default or omission) securing an obligation that is not

way / easements;

ge ov the lands which the SGC Transfer Assets occupy; and

ts (e.g. for public roadways, bridges and railways),

ption rights, rights of first refusal or similar rights over the SGC

meaning given to it in the preamble of this Agreement.

ee” has the meaning given to it in Article 19.5(b).

“Mitsubishi Guarantthe laws of Japan.

“MMscf” means milli

“MMscfd” means mil

“Modern Equivalent

or” means Mitsubishi Corporation, a corporation organised under

on standard cubic feet.

lion standard cubic feet per day.

Asset” has the meaning given to it in Article 13.6.4.

“mtpa” means million

“NGLs” means the praccording to their vapvapour pressure (natur

“Non-Affiliated Govthat is directly or indMinistry and (b) any E

“Non-Exclusive Site use, on a non-exclusivArticle

metric tonnes per annum.

opane and heavier components of natural gas that can be classified our pressures as low vapour pressure (Condensate), intermediate al gasoline) and high vapour pressure (LPG).

ernmental Entity” means any Government Agency or any Entity irectly Controlled by a Government Agency, other than (a) the ntity Controlled by the Ministry.

Rights” means, in respect of a site or area, the right to occupy or e basis, such site or area and includes any other rights referred to in

3.3(k)(ii) in res such site

“Non-Transferable A

pect of or area.

sset” has the meaning given to it in Exhibit 9.

13

“Non-Transferring SAgreement.

“Notice” has the mean

hareholders” has the meaning given to it in the Shareholders’

ing given to it in Article 18.1.

“Notice of Commenc Exhibit 1

ement of Operations” has the meaning given to it in Section 3.5 of .

“Notice of Termination” has the meaning given to it in Section 3.8 of Exhibit 1.

“Notice of Intention to Complete” has the meaning given to it in Section 3.1 of Exhibit 1.

“Novatable Agreement” has the meaning given to it in Section 3.9.3 of Exhibit 1.

“Operational Reasons” has the meaning given to it in Article 7.9.2.

“Operations Conditions Precedent” has the meaning given to it in Section 2 of Exhibit 1.

“Other Entities” has the meaning given to it in Article 11.2.4.

“Partial Carry FacilAgreement.

“Partial Carry Loan”

“Party” or “Parties” this Agreement in asuccessors in title andthem. As at the date and are together the Initial Project Docume

“Permitted Recipient

ity Agreement” has the meaning given to it in the Shareholders’


means any Entity that from time to time is, or becomes a party to ccordance with its provisions (and shall include such Entities’ permitted assigns), and a reference to “Parties” shall mean all of of this Agreement, SGC, Shell and Mitsubishi are each a “Party” “Parties”. BGC shall become a “Party” upon its entry into the nts Accession Agreement.

” has the meaning given to it in Section 2.1(d) of Exhibit 4.

“Petroleum Productsother hydrocarbon-bas

“Planned Volumes” i

” means Dry Gas, LNG, Condensate, LPG and other NGLs, and ed products derived from Raw Gas.

n respect of Raw Gas has the meaning given to it in Article 7.6.1(b) ry Gas, Condensate and LPG has the meaning given to it in and in respect of D

Article 8.6.1(b).

“Potential Volumes” in respect of Raw Gas has the meaning given to it in Article 7.6.1(c) and in respect of Dry Article

Gas, Condensate and LPG has the meaning given to it in 8.6.1(c).

“Pre-Operations Period” has the meaning given to it in Article 2.3.2.

14

“Private Companies

“Private Shareholderthe date of this Agreem

“Private ShareholdeArticle

Law” means law number 21 of 1997 of Iraq.

s” mean each Shareholder who is not a Government Party. As at ent, the Private Shareholders are Shell and Mitsubishi.

rs’ Participation Period” has the meaning given to it in 13.3.1 (and sh de anyall inclu extension to such period pursuant to Articles 7.1.3,

7.4.5, 8.2.3, 8.10.5, 13.3.2, 22.4(b) of this Agreement, artAgreement, or as othe

“Production Curtailm

icle 22.3.4 of the Shareholders’ rwise provided in this Agreement or the Shareholders’ Agreement).

ent” has the meaning given to it in Article 7.1.3(a).

“Project DevelopmeAgreement.

“Project Documents”

(a) this Agreem

(b) the Shareho

(c) the Letter of

(d) the Shell Guarantee;

(e) the Mitsubis

(f) the Shareho

(g) the Par

(h) the As

(i) the Ra

(j) the Dr

(k) the LP

(l) the LN

(m) the SO

(n) the LP

(o) any otbetween BGCthat is Controone year; and

nt Process” has the meaning given to it in the Shareholders’

means:

ent;

lders’ Agreement;

Confirmation;

hi Guarantee;

lder Loan Agreement;

tial Carry Facility Agreement;

set Transfer Agreement;

w Gas Supply Agreement;

y Gas Supply Agreement;

G and Condensate Supply Agreement;

G Sale and Purchase Agreement;

MO Agency Agreement;

G Processing and Handling Agreement;

her agreement for the sale of Raw Gas or Petroleum Products that (i) is or a Project Entity, on the one hand, and the Ministry or any Entity lled by the Ministry, on the other and (ii) has a term of greater than

15

(p) any odefinition as a

“Project Entity

ther agreement that the Parties agree in writing to include within this Project Document.


“Project Facilities” mProduct and Ancillarrelated facilities and (including the SGC TLiquefaction Facilitieinfrastructure referred

eans gas gathering, treatment and processing facilities, Petroleum y Product storage, transportation and delivery facilities and all infrastructure required to carry out the Venture and its activities ransfer Assets and other Initial Phase Facilities, Project Pipelines, s (if any), Additional Assets (if any) and all other facilities and to in Article 3.3(k)).

“Project Facilities Agreements” has the meaning given to it in Article 6.7 and shall s listed in exhibit 3 to the Shareholders’ Agreement. include the agreement

“Project Pipelines” Petroleum Products anand between delivery,Gas Supply Agreemensale and purchase aginterconnecting pipeli

“Proportionate Shar

“Quick Win Costs” Agreement.

“Ratification Decree”

mean pipelines used for the purposes of transporting Raw Gas, d Ancillary Products in and between the Project Facilities and in

storage, supply and/or transfer points as are specified in the Raw t, the Sale and Purchase Agreements and any other supply and/or reements entered into in respect of the Venture), including all

nes and all associated stations, infrastructure and equipment.

e” has the meaning given to it in the Shareholders’ Agreement.

has the meaning given to it in exhibit 1 of the Shareholders’

has the meaning given to it in Article 2.2.1(a).

“Raw Gas” means anseparation (including Gas in a gaseous phasany which are deriveextraction or treatmen

“Raw Gas SupplierAgreement.

“Raw Gas Supply Aand the Raw Gas SupBGC shall purchase fr

“Reasonable and Pruits contractual obligatexercising that degreeand ordinarily be expetype of undertaking aapplying standards, p

y gaseous effluent that is in its natural state at the gas/liquid phase all NGLs and other liquefiable constituents existing in such Raw e at atmospheric conditions of temperature and pressure, other than d solely from infield associated gas condensation without any

t).

” means the supplier of Raw Gas under the Raw Gas Supply

greement” means the agreement to be entered into between BGC plier under which the Raw Gas Supplier shall supply to BGC, and om the Raw Gas Supplier, Raw Gas.

dent Operator” means an Entity seeking in good faith to perform ions and in so doing and in the general conduct of its undertaking of skill, diligence, prudence, and foresight that would reasonably cted from a skilled and experienced operator engaged in the same nd under the same or similar circumstances and conditions and ractices and procedures consistent with internationally accepted

16

petroleum industry pPrudent Operator shaforesight.

“Receiving Party” ha

ractices, and any reference to the standard of a Reasonable and ll be a reference to such degree of skill, diligence, prudence and

s the meaning given to it in Section 1(a)(ii) of Exhibit 4.

“Recoverable Volumes” has the meaning given to it in Article 7.1.7(d).

“Referral Person” has the meaning given to it in Article 20.3(c).

“Related Dispute” has the meaning given to it in Article 15.8.

“Released Volumes” has the meaning given to it in Article 7.2(c)(iii).

“Relevant Share” has

“Relevant Third ParSGC Transfer Assets.

“Relieving Factor” mInfrastructure DeveloDevelopment Decisioapplicable article of events that causes suc

(a) the fa(provided thaproposed FinaPlan or Annunecessary to accordance w

(b) any agdecision;

(c) any brDocument;

(d) any faSGC, its Affrevocation, mdespite having comsuch Approvanegligence of

(e) (in the case of submDecision or the mDevelopment Decis


ties” means any third party Entities holding or having rights to any

eans, in the case of a failure to prepare, submit or approve an pment Plan(s) or part thereof, or to make a positive Final n or approve a Development Project in accordance with the

the Shareholders’ Agreement, any one or more of the following h failure:

ilure by any Government Representative to vote in favour of such plan t such plan has been Validly Prepared), or to vote in favour of a l Development Decision or any Annual Budget, Annual Business

al Funding Plan that, in each case, has been Validly Prepared and is allow such submission, approval or decisions to be made in

ith such article;

reement by the Parties to delay such preparation, submission, approval or

each by SGC or a Government Party of its obligations under any Project

ilure by BGC or any Project Entity to obtain any required Approval from iliates, or any Non-Affiliated Governmental Entity, or any

odification or non-renewal of any such Approval, in either case: (i) plied with all material procedures required by Law to obtain

l; and (ii) other than as a result of some other material fault or BGC or such Project Entity;

ission of a Development Project for a Final Development aking of a Final Development Decision), each of the Final ion Conditions have not been satisfied in accordance with the

17

Shareholders’ Agreemto the fault of

(f) the occu

ent (other than where a condition has not been satisfied due a Private Shareholder); or

rrence of any event that would constitute Force Majeure under Article 22.1 (and, for the with any of the

avoidance of doubt, a Party shall not be obligated to comply requirements set forth in Article 22 in order to maintain the

a Relieving Factor pursuant to this sub-clause (f)). occurrence of

“Rental Cap January 1 ofanniversary thereof.

“Representatives” ha

Amount” means an amount equal to USD 10 million increased by 2% on the year in which Commencement of Operations occurs and on each

s the meaning given to it in Section 1(b) of Exhibit 4.

“Required Reserve Level” has the meaning given to it in Article 11.5.1(b).

“Restricted Information” has the meaning given to it in Article 12.4.2.

“Revised LNG FDD Date” has the meaning given to it in Article 8.2.3.

“Sale and Purchase ACondensate Supply Aagreements entered inSOMO pursuant to thAncillary Products pro

“Second Phase LNG

greements” means the Dry Gas Supply Agreement, the LPG and greement, the LNG Sale and Purchase Agreement, and any other to by or on behalf of BGC or any Project Entity (including by e SOMO Agency Agreement) under which Petroleum Products or duced by the Venture are sold.

Project” has the meaning given to it in Article 9.1(b).

“SGC” has the meanin

“SGC Export Producintended to be exporte

“SGC Secondment Agreement.

“SGC Transfer Asset

“SGPDBV” has the m

g given to it in the preamble of this Agreement.

ts” means Petroleum Products that are owned by SGC and that are d through the Project Facilities.

Agreement” has the meaning given to it in the Shareholders’

s” means the Existing Assets and the Subsequent Assets.

eaning given to it in Recital A.

“SHA Payment DefLender of SGC) to pathe Shareholder Loan

“Shareholder Loan Agreement.

“Shareholder Loans”

ault” means a failure by SGC (or any approved SHL Affiliate y any sum due and payable under the Shareholders’ Agreement or Agreement.

Agreement” has the meaning given to it in the Shareholders’


18

“Shareholders” meanfollowing IncorporatioBGC.

“Shareholders’ Agre

s, as at the date of this Agreement, SGC, Shell and Mitsubishi, and n of BGC, means any Entity that holds Shares in the capital of

ement” has the meaning given to it in Recital B.

“Shares” has the mean

“Shell” has the meanin

“Shell Guarantee” ha

ing given to it in the Shareholders’ Agreement.

g given to it in the preamble of this Agreement.

s the meaning given to it in Article 19.4(b).

“Shell Guarantor” mincorporated in accord

“SHL Affiliate Lende

“SOMO” means the Oto as SOMO, registeMinistry in accordanc

“SOMO Agency Agr

eans Shell Petroleum N.V., a public limited liability company ance with the laws of The Netherlands.

r” has the meaning given to it in the Shareholders’ Agreement.

il Marketing Company (Public Company), also commonly referred red on 21 June 1998 as a public company at the request of the e with article 6 of the Public Companies Law No 22 of 1997.

eement” has the meaning given to it in Article 8.5.1.

“Standby Letter of Credit” has the meaning given to it in Article 11.5.3(a)(ii).

“Subsequent Assets”E&Y Valuation Repor

“Supply Shortfall” ha

means the assets identified as “assets under construction” in the t.

s the meaning given to it in Article 7.7.3.

“Tax” and “Taxes” ,withholding, rate, soindirectly on an Entitregard to the manner by the Government. Wincludes any tax comexpenses, a goods andvalue-added tax, or atransporting, storing, LNG), including a caduty or any reconstrucimposed for underrepTaxes.

“Tax Differentiation

means any tax, levy royalty, rate, duty, fee, tariff, bond, due, cial security contribution or other charge imposed directly or y or other person, its assets, income, dividends or profits (without of collection or assessment, whether by withholding or otherwise)

ithout limiting the generality of the foregoing, “Tax” and “Taxes” puted on an actual or deemed net profit basis after deducting services tax, a capital gains tax, any property tax, an excise tax, a ny tax related to environmental effects of producing, processing, supplying, selling or consuming gas and gas products (including rbon tax, any social security or pension contribution, any customs tion levy, and also including any penalties and interest that may be orting, failure to report or late filing of returns or reports for any

Account” has the meaning given to it in Article 11.4.2.

“Tax Surplus” has the meaning given to it in Article 11.4.1.

19

“Technical Information” has the meaning given to it in Section 1(c) of Exhibit 4.

“Term” has the meaning given to it in Article 2.1.1.

“Transfer” has the meaning given to it in Article 14.1.1.

“Transfer Option No

“Ultimate Parent” msuccessor in interest any successor in interin interest thereto, andaccordance with this agreement of the NShareholder.

“Unutilised Volumes

tice” has the meaning given to it in the Shareholders’ Agreement.

eans (a) with respect to Shell, Royal Dutch Shell plc or any thereto, (b) with respect to Mitsubishi, Mitsubishi Corporation or est thereto, (c) with respect to SGC, the Ministry or any successor (d) with respect to any other Entity that becomes a Shareholder in Agreement, the party designated as the Ultimate Parent (with the on-Transferring Shareholders) when such Entity becomes a


“Unutilised Volumes Notice” has the meaning given to it in Article 7.3.1.

“U.S. Dollars” or “US

“Utilised Gas” meanDedicated Fields (incenhanced recovery, toperations) in accordaoperation of such fieldany recovery or commDedicated Fields (othecondensation without

“Validly Prepared” h

D” means the lawful currency of the United States.

s Raw Gas that is utilised in the upstream field operations of the luding for re-injection for the purpose of pressure maintenance, emporary storage or power generation for such upstream field nce with the terms of the technical service contracts governing the s, but will exclude (a) any commercialisation of Raw Gas, and (b) ercialisation of NGLs from the Raw Gas produced within such

r than any NGLs that are derived solely from infield associated gas any extraction or treatment).


“Venture” has the meaning given to it in Article 3.2.

“Venture Interests” h

“Venture Obligations

“Voluntary Principlestablished by the goNetherlands, certain cgovernment organiwww.voluntaryprincip


” has the meaning given to it in the Shareholders’ Agreement.

es on Security and Human Rights” means the principles vernments of the United States of America, United Kingdom, the ompanies in the extractive and energy sectors and certain non-

sations as set out in the internet web address les.org as at the date of this Agreement.

“Wholly Owned Aff(a) Solely Controls edirectly or indirectly b

iliate” means, in relation to any Entity, any other Entity that: ither directly or indirectly such Entity; (b) is Solely Controlled y such Entity; or (c) is directly or indirectly Solely Controlled by

20

http://www.voluntaryprinciples.org/

an Entity which directdefinition “Sole Contan Entity, or the soleconducted in accordaphrase “Sole Contrforegoing, the presencsuch Entity has the mdirectors’ qualifying sOwned Affiliate of an

1.2 Interpre

In this Agreement, unl

(a) headinany way, the m

(b) referencereferences to unless otherw

(c) all Recconstrued as i

(d) whereplural and vice-versa

(e) periods of tim

(f) the wowords “without lim“among other things”;

(g) any referendocument as the samtime in accord

(h) whereconstrued acc

(i) references to legisdelegated leglegislation as alegislation rep

ly or indirectly Solely Controls such Entity. For the purpose of this rol” means the sole right to exercise the shares or voting rights of right to ensure that the activities and business of such Entity are nce with the directions or wishes of the relevant Entity and the olled” shall be construed accordingly. Notwithstanding the e of shareholders of an Entity solely for purposes of ensuring that inimum number of shareholders required by law, or the holding of hares, shall not preclude an Entity from being considered a Wholly-other Entity.

tation

ess the context requires otherwise:

gs of Articles are for convenience of reference only and shall not affect, in eaning or interpretation of this Agreement;

s to Articles in this Agreement are to the articles in this Agreement and Sections are to the sections in the relevant Exhibit to this Agreement ise specified;

itals to this Agreement and all Exhibits to this Agreement shall be ntegral parts of this Agreement;

the sense requires, words denoting the singular only may also include the , and words importing one gender include the other;

e refer to the Gregorian calendar;

rds “including”, “include” or “includes” shall be construed to include the iting the generality of the foregoing” or “without limitation” or

ce to an agreement or document shall mean such agreement or e may be supplemented, amended or modified from time to

ance with its terms;

a word or expression is defined, cognate words and expressions shall be ordingly; and

lation include any statute, law, regulation, rule, subordinate or islation or order; and reference to any legislation is to such

mended, modified or consolidated from time to time and to any lacing it or made under it.

21

1.3 Acces

At the earliest time foProject Documents AParty to this AgreemFor the avoidance of liability for the debts a

1.4 Termi

On and from the BGDAgreement and the Spurposes as if terminathe HOA which haveHOA which are statedwhich article shall be

sion by Company

llowing Incorporation, each of the Parties shall enter into the Initial ccession Agreement under which BGC shall become an additional ent, the Shareholders’ Agreement and Asset Transfer Agreement. doubt, the Shareholders (in their capacity as such) shall have no nd obligations of BGC, save as may be provided by Law.

nation of the HOA

A Effective Date the HOA shall be superseded by the terms of this hareholders’ Agreement and the HOA shall be treated for all

ted by the parties thereto, save for any rights and obligations under accrued up to the BGDA Effective Date or any provisions of the therein to survive termination (other than article 12 of the HOA, superseded by Exhibit 4 of this Agree f, and to the extent, or inconsistency or ambiguity between the provisions of this hareholders’ Agreement and the provisions of the HOA, this areholders’ Agreement (as applicable) shall prevail.

ment). Ithere is any conflictAgreement or the SAgreement and the Sh

1.5 Joint Man

Notwithstanding Arti

agement Committee

cle 1.4 or the Joint Man ment Committee terms of reference , the Joint Management Committee formed pursuant to the HOA nage and make all decisions related to the development of the ration and formation of the Higher Management Committee. The composition of, and terms of reference of, the Joint Management s stated in the “Revised Joint Management Committee Terms of s exhibit 8 of the Shareholders’ Agreement, which revised terms of de the terms of reference dated 7 October 2008.

agedated 7 October 2008shall continue to maVenture until IncorpoParties agree that the Committee shall be aReference” attached areference shall superse

2. TERM, BG

2.1 BGDA Effe

2.1.1 With the ex

DA EFFECTIVE DATE & PRE-OPERATIONS PERIOD

ctive Date and Term

ception of Articles 1, 2, 3.1, 3.2, 7.1.1, 10.2.3, 10.8, 12.4, 14 to 21 (inclusive) and Exhibit 1 and Exhibit 4 (which come into full force and effect in their entirety on and

this Agreement), this Agreement shall come into full force and effect on fective Date and shall continue in full force and effect until terminated in

from the date ofthe BGDA Efaccordance with Article 13 or Section 3 of Exhibit 1 (the “Term” . )

2.1.2 The “Bset out in Artic

GDA Effective Date” is the date on which each of the ED Conditions Precedents le 2.2 are satisfied or waived by the applicable Party or Parties.

2.1.3 The PGovernment rights, conseGovernmenta

arties acknowledge that SGC requires the support of the Ministry and other Agencies to provide to the Private Shareholders and BGC the necessary nts and Approvals from SGC, its Affiliates, and Non-Affiliated l Entities to conduct the Venture and therefore the Parties enter into this

22

Agreement anundertaking t

d shall implement the Venture in consideration of and reliance upon an o be entered into by the Ministry in the form attached as Exhibit 18 (the nfirmation”). “Letter of Co

2.2 Conditions Preceden

2.2.1 Each oor waived by come into full

t to BGDA Effective Date

f the following conditions (each, an “ED Condition Precedent”) must be satisfied the applicable Party or Parties in order for the entirety of this Agreement to force and effect pursuant to Article 2.1:

(a) approvAgreement bysuch form as i

(b) entry b

(c) signatucountersignatu

2.2.2 Each PEndeavours to prequired to betime following

2.2.3 SGC available, a csoon as practicab

al of the Venture and ratification of the terms of, and entry into, this decree of the Council of Ministers (the “Ratification Decree”) in s agreed by the Parties (acting reasonably);

y each of the Shareholders into the Shareholders’ Agreement; and

re by the Minister of Oil of the Letter of Confirmation and re by each of SGC, Shell and Mitsubishi.

arty shall take (and procure that its Affiliates take), and SGC shall use its Best rocure that all Non-Affiliated Governmental Entities take, all actions

taken by them to satisfy each of the ED Conditions Precedent at the earliest the date of this Agreement.

shall procure that an original counterpart (or, if an original counterpart is not opy) of the Ratification Decree is provided to the Private Shareholders as

le following fulfilment of the condition set out in Article 2.2.1(a).

2.3 Pre-Opera

2.3.1 Prior tand processinProducts resuits Affiliates Commencemeother Project Documwithin the scope of

tions Period and Conditions Precedent to Commencement of Operations

o Commencement of Operations, all activities relating to the gathering, treatment g of Raw Gas within the south of Iraq and the sale and supply of Petroleum lting therefrom have been and will continue to be carried out by SGC and and any other Entities that may be acting on their behalf. On and from nt of Operations, BGC shall (subject to the terms of this Agreement and the

ents) carry out certain of those activities to the extent that they fall the Venture as defined in Article 3.2.

2.3.2 DuringOperations (sParties shall care referred to in

the period from the date of this Agreement up to the date of Commencement of uch period referred to herein as the “Pre-Operations Period”) each of the arry out such activities in readiness for Commencement of Operations as

Exhibit 1, including king all necessary actions to satisfy the nditions Precedent set out in Section 2 of

taOperations Co Exhibit 1.

2.3.3 If anyterms of Exhibit

Operations Conditions Precedent are not met or waived in accordance with the 1 within 9 months, 12 months and 15 months from the BGDA Effective

isions set out in Sections Date, the prov 3.6 3.7 3.8, and , respectively, of Exhibit 1 shall apply.

23

2.4 Transf

2.4.1 SGC sTransfer Assepay for the Swith SGC in accordan

2.4.2 SGC sthe Asset TranAssets and in

(a) to ente

(b) to proAgreement inAccession Ag

2.4.3 WithoAssets, SGC sto cause all Ractions that are necessSGC Transfer

2.4.4 In conaccordance w

(a) all Shaof Capital CMatching Date; and

(b) thereaShareholders’ Agreemany required C

3. BASRAH G

3.1 The Sharehoincorporate a mwhich companinto the Comp Exhibit 10

er of SGC Transfer Assets and Shareholder Funding

hall, as part of its Shareholder contribution to the Venture, Transfer the SGC ts to BGC in accordance with the Asset Transfer Agreement. BGC shall GC Transfer Assets by settling the Final Aggregate Asset Transfer Price

ce with exhibit 1, part 1 of the Shareholders’ Agreement.

hall Transfer the SGC Transfer Assets on the terms set out in this Agreement and sfer Agreement, and SGC (in its capacity as transferor of the SGC Transfer

its capacity as a Shareholder), Shell and Mitsubishi agree:

r into the Asset Transfer Agreement; and

cure that, following Incorporation, BGC accedes to the Asset Transfer accordance with the terms of the Initial Project Documents

reement.

ut limitation to any other obligations in respect of the Transfer of the SGC Transfer hall take, shall cause its Affiliates to take, and shall use its Best Endeavours elevant Third Parties and Non-Affiliated Governmental Entities to take, all

ary or reasonably required to give full effect to the Transfer of the Assets in accordance with the terms of the Asset Transfer Agreement.

sideration of SGC’s Transfer of the SGC Transfer Assets and pursuant to and in ith the Shareholders’ Agreement:

reholders (other than SGC) shall be required to fund their Relevant Share ontributions for which Cash Calls are made by BGC until the

fter, and subject to article 6 of, and Section 3.3 of Exhibit 1 to, the ent, all Shareholders shall fund their Proportionate Share of

apital Contributions for which Cash Calls are made by BGC.

AS COMPANY, THE VENTURE AND VENTURE RIGHTS

lders shall, at the earliest possible time following the date of this Agreement, ixed limited liability company pursuant to the Private Companies Law,

y shall be named “Basrah Gas Company” (“BGC”), including by entering any Contract (which contract shall be substantially in the form attached in

or as otherwi51%, 44% and

3.2 BGC (of Operations, imGas, and to pmarkets) LPGresulting therefrom

se agreed by all Parties). SGC, Shell and Mitsubishi shall hold 5% (respectively) of the founding Shares of BGC.

together with any Project Entities) shall develop and, on and from Commencement plement and carry out, a joint venture to gather, treat and process Raw

roduce, store, transport, market, sell and supply (to domestic and export , Dry Gas, LNG and other Petroleum Products and Ancillary Products

, on the terms and conditions set out in this Agreement and the other

24

Project Documgive effect to it (inany Project Entity pur

ents. Such venture, and the carrying out of any business and activities to cluding any that are required or permitted to be carried out by BGC or

suant to this Article 3 or any other provision of this Agreement or ect Documents) are referred to herein as the “Venture”. any other Proj

3.3 In furtherance of (but without limiting) Article 3.2, from and after the BGDA Effective d any Project Entity shall irrevocably have all rights that may be reasonably

plement and carry out the Venture during the Term, including the right to: Date BGC annecessary to im

(a) purchaproduced from

se, take delivery of and own Raw Gas (including all volumes of Raw Gas the Dedicated Fields, subject to Article 7.2 and excluding Utilised

Gas);

(b) undertake Rproduce Petroleum

(c) conduother export or dom

(d) conduct feasibility stfor the sale an

(e) markeAgency Agreemthe Venture, Products and

(f) withouthe date of thLaw or otherEntity or is ofPetroleum Proentitled to do so;

(g) acquirrepair, refurbirelated infrastruc

(h) engineProject Facilities (incthird parties, having entere

(i) transpPipelines andowners and/oand by other m

aw Gas gathering, treatment and gas processing activities, and to Products and Ancillary Products;

ct feasibility studies for, and develop and implement, LNG Projects and estic schemes for the sale and supply of Petroleum Products;

udies for, and develop and implement, commercial schemes d supply of sulphur and other Ancillary Products;

t, and to sell for use within Iraq and for export (pursuant to the SOMO ent), all Petroleum Products and Ancillary Products produced by

and to otherwise store, deal with or dispose of such Petroleum Ancillary Products;

t prejudice to the terms of the SOMO Agency Agreement, if, subsequent to is Agreement, the Government permits (as a result of a Change in wise and whether such permission is specific to BGC or a Project

general application) BGC (or any Project Entity) to directly sell ducts for export from Iraq, BGC (or such Project Entity) will be

e the SGC Transfer Assets and any Additional Assets, and to rejuvenate, sh, upgrade, replace and/or operate and maintain all such assets and

ture;

er, procure, construct, acquire, lease, own, use, operate and/or maintain luding to share its Project Facilities and infrastructure with

and to access, use and share the facilities of third parties, subject to d into necessary arrangements to do so);

ort Raw Gas, Petroleum Products and Ancillary Products through Project , subject to entering into any necessary arrangements with existing r operators of the same, any other pipelines and pipeline networks

eans to delivery, supply and/or transfer points;

25

(j) providon behalf of, t

(k) subjecoccupiers of t

(i) lease or othpermitted to Phase Facilitiowned and olocated; and

(ii) occupyoffshore areas as mVenture,

including righdrains and strjetty and harbuse Project Faout all other V

(l) acquirits activities a(such as telecown and/or oproduction anand telecommto access and

(m) bid onrights to do sdevelopment in Iraq);

(n) obtainand related riproceeds therefromwith relevant internNations Framprovided undexchanges);

(o) establish anOther Entity; and

(p) enter into arrangemnecessary or

e services to, receive services from, and operate facilities and infrastructure hird parties;

t to entering into any necessary arrangements with existing owners and/or he applicable sites:

erwise exclusively occupy and use (and to the extent that it is do so by Law, to own) each of the sites where the Initial es (and any other Project Facilities which are be constructed, perated as part of the Venture) are located or are to be

or use, on a non-exclusive basis, such additional onshore and ay be necessary or reasonably required in respect of the

ts of way and rights of access in respect of any roads, pipelines, uctures which are to be constructed for the Venture, including port, our areas and including the right to construct, install, operate and cilities at, and to use existing facilities of third parties and to carry enture operations at, such sites and areas;

e all utilities and services as may be required to carry out the Venture and nd to generate, produce and provide its own utilities and services ommunications, power and water) including the right to construct, perate power generation and distribution systems, water offtake d supply facilities, water and waste treatment and disposal facilities unication and data transmission equipment, and including the right use such water as is required for the Venture operations;

tenders for and develop gas fields (subject to being awarded/granted to the o according to respective rules and regulations for field/upstream

, create, own, transfer, exchange and sell any carbon/greenhouse gas credits ghts arising out of the Venture and its activities and to receive all

(including the right to enter into agreements in accordance ational arrangements and mechanisms provided by the United

ework Convention on Climate Change, such as mechanisms er the Kyoto Protocol and other voluntary offset schemes and

d maintain any Project Entity and establish and participate in any

ents and undertake any other business or activities that are reasonably required to give effect to the above activities or to any

26

others requireAgreement, the Com

in each case, subjeSuch rights shall baccordance w

3.4 Without limrequested by between themshall take, shall cNon-Affiliaterelevant Mininecessary or r

(a) enablefrom SGC, itscarrying out or particreasonably requiredin respect of thaving timely comLaw to obtainby SGC or anShareholders, in relathan (i) one offor the accounwithin 30 daySGC will notPrivate Shareholders

(b) enableExclusive Sit(including ExAssets are locthe applicable Prothe owners anexpenses incuBGC or such Rights or Non-ExclusAffiliates or (BGC and such amfollowing recbe required Shareholders) f

(c) enablerights to acce

d or permitted to be carried out by BGC pursuant to Law, this pany Contract and any other Project Document;

ct to the terms of this Agreement and the other Project Documents. e exercised by BGC and any Project Entity (as applicable) in

ith all applicable Laws and Approvals required under such Laws.

iting any other obligations under the Project Documents, as and when BGC or any one or more Private Shareholders which hold (solely or ) 51% or more of all Shares then held by all Private Shareholders, SGC

ause its Affiliates to take, and shall use its Best Endeavours to cause all d Governmental Entities and any Entities carrying out or participating in stry Projects to take, all such actions within its or their authority that may be easonably required to:

BGC or any Project Entity to secure at all applicable times any Approvals Affiliates, Non-Affiliated Governmental Entities, and Entities

ipating in relevant Ministry Projects that are necessary or to carry out the activities in respect of the Venture (including

he Initial Phase LNG Project), subject to BGC or such Project Entity plied with all material procedures and formalities required by

such Approvals and provided that any costs and expenses incurred y of its Affiliates, and approved in advance by BGC or such Private

tion to securing any such Approvals from any Entity other its Affiliates or (ii) a Non-Affiliated Governmental Entity, shall be t of BGC and such amounts shall be reimbursed by BGC to SGC

s following receipt of SGC’s invoice therefor; provided, further, that be required to incur any such costs or expenses if BGC (or such

) fail to agree to reimburse the same;

BGC or any Project Entity to secure all necessary or reasonably required e Rights and Non-Exclusive Site Rights in respect of the Venture clusive Site Rights in respect of the sites on which the SGC Transfer ated and in respect of the LNG Offshore Site), subject to BGC or

ject Entity agreeing terms (including as to rental amounts) with d/or occupiers of the applicable sites; provided that any costs and rred by SGC or any of its Affiliates, and approved in advance by Private Shareholders, in relation to securing any such Exclusive Site

ive Site Rights from any Entity other than (i) one of its ii) a Non-Affiliated Governmental Entity, shall be for the account of

ounts shall be reimbursed by BGC to SGC within 30 days eipt of SGC’s invoice therefor; provided, further, that SGC will not to incur any such costs or expenses if BGC (or such Private

ail to agree to reimburse the same; and

BGC or any Project Entity to secure all necessary or reasonably required ss, use and share infrastructure, facilities, utilities and services that

27

are owned, opapplicable Projecowners, usersprovided that approved in asuch rights frAffiliated Governmamounts shall be reimSGC’s invoicany such costs oreimburse the sam

3.5 If anyany Ministry Pdescribed in Artic

erated and/or provided by them or by others subject to BGC or the t Entity agreeing terms (including as to payment) with the

or providers of such infrastructure, facilities, utilities and services; any costs and expenses incurred by SGC or any of its Affiliates, and dvance by BGC or such Private Shareholders, in relation to securing om any Entity other than (i) one of its Affiliates or (ii) a Non-

ental Entity, shall be for the account of BGC and such bursed by BGC to SGC within 30 days following receipt of

e therefor; provided, further, that SGC will not be required to incur r expenses if BGC (or such Private Shareholders) fail to agree to

e.

Private Shareholder (or any Affiliate of a Private Shareholder) is a participant in roject from which (or with respect to which) any of the Approvals or rights

le 3.4 are sought, such Private Shareholder shall take, shall cause its take, and shall use its Best Endeavours to cause all other Entities n such Ministry Project to take, all such actions within its or their authority ecessary or reasonably required to enable BGC or any Project Entity to pprovals or rights; provided that any costs and expenses incurred by such

r (or Affiliate) and approved in advance by BGC in relation to such Approvals shall be reimbursed by BGC to such Private Shareholder s following receipt of such Private Shareholder’s invoice therefor; provided, uch Private Shareholder will not be required to incur (or cause its Affiliate uch costs or expenses if BGC fails to agree to reimburse the same.

Affiliates to participating ithat may be nsecure such APrivate Shareholdesecuring any within 30 dayfurther, that sto incur) any s

3.6 Without limrequested by and shall use any Entities carryactions withinenable such PSGC, its Affiparticipating carry out the activLNG Project)material procprovided thatapproved in Approvals froGovernmentaamounts shalfollowing receiprequired to inreimburse the sam

3.7 If, for any Project E

iting any other obligations under the Project Documents, as and when any Private Shareholder, SGC shall take, shall cause its Affiliates to take, its Best Endeavours to cause all Non-Affiliated Governmental Entities and

ing out or participating in relevant Ministry Projects to take, all such its or their authority that may be necessary or reasonably required to rivate Shareholder to secure at all applicable times any Approvals from

liates, Non-Affiliated Governmental Entities, and Entities carrying out or in relevant Ministry Projects that are necessary or reasonably required to

ities in respect of the Venture (including in respect of the Initial Phase , subject to such Private Shareholder having timely complied with all edures and formalities required by Law to obtain such Approvals and any costs and expenses incurred by SGC or any of its Affiliates, and advance by such Private Shareholder, in relation to securing any such m any Entity other than (i) one of its Affiliates or (ii) a Non-Affiliated

l Entity, shall be for the account of such Private Shareholder and such l be reimbursed by such Private Shareholder to SGC within 30 days

t of SGC’s invoice therefor; provided, further, that SGC will not be cur any such costs or expenses if such Private Shareholder fails to agree to

e.

the purposes of the Venture, BGC, any Project Entity or any contractor to BGC or ntity is required to obtain any Approvals from, or requires or seeks to make

28

use of land athat are owned, opershall (or shall pApprovals or than the terms

4. COM

BGC shall on and from

(a) rejuveowned or to b

(b) purcha

(c) treat aDry Gas, Con

(d) marke

(e) operate and mVenture activ

(f) train aProject Entity

(g) carry ou

on and subjeAgreement and the oth

5. PLANNING

5.1 Joint Plan

With effect from the and coordination comduties and procedures

5.2 Gas Su

5.2.1 The Pnew infrastruPetroleum Proof the JPC Command future Rawhich Deficit VolumPetroleum Pr

nd other areas, pipelines, infrastructure, facilities, utilities and/or services ated, controlled and/or provided by SGC or any of its Affiliates, SGC

rocure that its relevant Affiliates shall) grant or make available such usage rights on a non-discriminatory basis and on terms no less favourable that are of general application to other Entities at that time.

PANY’S OBLIGATIONS

Commencement of Operations:

nate, repair, upgrade, replace and/or develop and construct Project Facilities e owned by it;

se and take delivery of Raw Gas;

nd process delivered Raw Gas and produce Petroleum Products (such as densate, LPG and LNG) and Ancillary Products;

t, sell and supply such products;

aintain the Project Facilities which are owned by it, and carry out ities and operations;

nd develop Iraqi nationals employed by (or seconded to) BGC or any to conduct the foregoing activities; and

t all other activities and obligations applicable to it under this Agreement,

ct to the terms and conditions of this Agreement, the Shareholders’ er Project Documents.

ning and Coordination Committee

BGDA Effective Date, the Parties shall establish a joint planning mittee (the “JPC Committee”) with the composition, powers,

set out in the JPCC Terms of Reference.

pply and Offtake Plan

arties acknowledge that the long lead times required to construct and commission cture for the Venture require decisions to be made on the allocation of ducts produced by BGC well in advance of actual usage. A key objective

ittee shall be to assist the Gas Parties to co-ordinate and align current w Gas production from the Dedicated Fields (and any other fields from

es or Additional Volumes are then being supplied) and Raw Gas and oduct supply and offtake plans with infrastructure development so as to

29

enable (a) SGexercise their The JPC Comof (and if nePlan.

5.2.2 The G Exhibit 16

C to accordingly advise the Ministry and (b) each of the Gas Parties to rights and perform their obligations under the relevant Project Documents. mittee shall endeavour to achieve this primarily through the regular review cessary, recommending revisions to) the rolling Gas Supply and Offtake

as Supply and Offtake Plan as at the date of this Agreement is attached hereto as (the “Initial G

agree that thedetails and that, prioRaw Gas Supdetails. For tthe Initial Gas

5.3 Revisi

5.3.1 No chcontained thereinArticle

as Supply and Offtake Plan”). The Parties acknowledge and Initial Gas Supply and Offtake Plan is incomplete in respect of certain

r to the expiry of the “Grace Period” (as such period is defined in the ply Agreement) the Gas Parties will revise such plan to complete such

he avoidance of doubt, the details contained within the attached version of Supply and Offtake Plan are binding as of the BGDA Effective Date.

ons to Gas Supply and Offtake Plan

ange to the Gas Supply and Offtake Plan (including to its format or any details ) shall be made unless such changes are made in accordance with this

5.3.

5.3.2 The Gmake all sucheffect to Article

as Parties shall (after considering any recommendations of the JPC Committee) changes to the Gas Supply and Offtake Plan as may be required to give

s 7.1.4, 7.1.6, 7.2(c)(v), 7.3, 7. . 4 6, .4. 7 8, 7.6.5, 8.2.8, 8.3.2, and 9.3 (each Mandatory GSOP Change”). such change, a “

5.3.3 The Gmake such oththem from tim

5.3.4 The Paor an Agreed

(a) the Commor reduced (as appProducts shalvolumes as aAgreed GSOP

(b) the Gaincrease in CommPlanned VolumCommitted Volumshall likewise amreduction in Commapplicable) anRaw Gas andGas and/or Petroleum

as Parties may, after considering any recommendations of the JPC Committee, er changes to the Gas Supply and Offtake Plan as are otherwise agreed by e to time (each such change once agreed is an “Agreed GSOP Change”).

rties agree that, as and when required to give effect to a Mandatory GSOP Change GSOP Change:

itted Volumes of Raw Gas and Petroleum Products shall be increased licable), and the Planned Volumes of Raw Gas and Petroleum

l be correspondingly reduced or increased (as applicable), by such re required to give effect to such Mandatory GSOP Change or Change;

s Parties shall amend the Gas Supply and Offtake Plan to give effect to any itted Volumes by designating the equivalent volumes of

es of Raw Gas and/or Petroleum Products (as applicable) as es of Raw Gas and/or Petroleum Products (as applicable), and end the Gas Supply and Offtake Plan to give effect to any

itted Volumes of Raw Gas and/or Petroleum Products (as d by designating the equivalent volumes of Committed Volumes of /or Petroleum Products (as applicable) as Planned Volumes of Raw

Products (as applicable); and

30

(c) the Garequired to rreclassify Poapplicable) aapplicable), or

5.3.5 The aMandatory Gchanges. If athe terms of this Agrsuch changes (incVolumes of RGas Supply aany other applicab

5.3.6 All Mthe issue of a

s Parties shall also amend the Gas Supply and Offtake Plan to the extent eflect any decision made in accordance with this Agreement to tential Volumes of Raw Gas and/or Petroleum Products (as s Planned Volumes of Raw Gas and/or Petroleum Products (as

vice versa.

pproval of the Gas Parties or any other Party shall not be required to make SOP Changes or to issue a GSOP Amendment Notice in respect of such t any time a Mandatory GSOP Change is required to be made pursuant to

eement, or the Gas Parties have agreed an Agreed GSOP Change, all luding any increase or decrease in Committed Volumes or Planned

aw Gas or Petroleum Products) shall be deemed to have been made to the nd Offtake Plan, and the Gas Supply and Offtake Plan, this Agreement and

le Project Agreement shall be read and construed accordingly.

andatory GSOP Changes and Agreed GSOP Changes shall be confirmed by way of notice substantially in the form attached hereto as Exhibit 17 with an

of the revised Gas Supply and Offtake Plan incorporating such changes (a ndment Notice”). Each Gas Party shall procure that each GSOP

Notice is signed by a duly authorised representative of that Gas Party sonable delay. BGC shall prepare each GSOP Amendment Notice and upply and Offtake Plan and submit them to the Gas Parties (with copies to

ent Committee and the JPC Committee) for their signature in

attached copy“GSOP AmeAmendment without unrearevised Gas Sthe Higher Managemaccordance with this Article 5.3.

5.3.7 The Partiesaccordance with this

agree that all changes made to the Gas Supply and Offtake Plan in Article 5.3 shall be binding on them for all purposes under this

d any other Project Documents. Agreement an

5.4 Worki

In addition to the JPCdiscuss and coordinatOfftake Plan, the Rawand their day-to-day oworking groups shallagreed in writing by th

6. PROJ

6.1 Subject to

ng Groups

Committee, the Gas Parties shall form working level groups to e matters pertaining to the implementation of the Gas Supply and Gas Supply Agreement and the Sale and Purchase Agreements,

perations. The composition, powers, duties and procedures of such be set out in such agreements and any terms of reference to be e Gas Parties.

ECT FACILITIES & PROJECT DEVELOPMENT

Articles 6.2 to 6.7 and the applicable provisions of the Shareholders’ n and from Commencement of Operations, BGC shall develop Project the treatment and processing of Raw Gas and for the production of ducts and Ancillary Products, in each case subject to and in accordance

ject Development Process. Unless otherwise agreed in writing by the and subject to the Asset Transfer Agreement, all such Project Facilities

Agreement, oFacilities for Petroleum Prowith the ProShareholders

31

shall be owneof BGC and th

6.2 The Pphases leading up toproceed with the appthe constructione phase to tprior satisfactapproval of Committee. quantities of RGas and theShareholders’ Agreemaccordance wthat would require vothat, if BGC wDevelopment or (b) obligeDevelopment

6.3 As parAgreement BGDevelopment Management Commthe phasing of

6.4 As at tProcess and tInfrastructure

(a) the repspecified in Part A of

d and operated by BGC or any Project Entity, together with all other assets e Venture.

arties acknowledge that the Project Development Process will include various the making of a Final Development Decision. A positive decision to licable development will trigger the commencement of, for example,

on or refurbishment of the applicable facilities. The decisions to move from he next, and the making of Final Development Decisions, shall require the ion of specified conditions set out in the Shareholders’ Agreement and the the representatives of the Shareholders or the Higher Management

Such specified conditions shall include the securing by BGC of sufficient aw Gas and binding arrangements with respect to the supply of such Raw

offtake of Petroleum Products. Nothing in this Agreement or the ent shall (a) prohibit BGC or any Shareholder from proposing (in

ith the Project Development Process) any Infrastructure Development Plan lumes of Raw Gas in excess of the Available Volume Profile (such

ere to implement the Development Project described in such Infrastructure Plan, SGC would need to supply Additional Volumes or Deficit Volumes) any Party to approve any Infrastructure Development Plan or Final Decision or any other applicable step in the Project Development Process.

t of the Project Development Process, pursuant to article 11 of the Shareholders’ C or the Private Shareholders (as applicable) will prepare an Infrastructure

Plan or plans, which will be agreed and revised from time by the Higher ittee pursuant to that article and will establish, among other things,

the development of Project Facilities.

he date of this Agreement it is anticipated that (subject to the Project Development he conditions and approvals set out in the Shareholders’ Agreement) the Development Plan(s) will include:

air, rejuvenation, upgrade and/or replacement of the Initial Phase Facilities Exhibit 2; and

(b) the despecified in Part B of

sign, engineering and construction of the additional Initial Phase Facilities Exhibit 2.

6.5 All Prcoordination offtake (inclutechnical and with applicab

6.6 SGC aAffiliates (anAffiliated GovernmProject) uses

oject Facilities shall be developed on the basis of (among other things) the and alignment of anticipated Raw Gas supply and Petroleum Product ding through revisions to the Gas Supply and Offtake Plan) and the operational coordination, interface and alignment of such Project Facilities le upstream facilities and downstream facilities.

nd BGC shall each use their Best Endeavours, and shall procure that each of their d, in the case of SGC, use it Best Endeavours to procure that any Non-

ental Entity and any other Entity undertaking a relevant Ministry its Best Endeavours, to achieve the effective coordination, interface and

32

alignment of including, to production pl(subject to comapprovals therbetween the (including EnProject Entity) will hAll costs andsubclause (ii) of

the Project Facilities with applicable upstream and downstream facilities, the extent possible, through (i) aligning applicable development and

ans and the development and completion of construction of facilities pliance with the Project Development Process and the conditions and

eunder) and (ii) entering into suitable agreements with respect to interfaces Project Facilities and facilities owned or operated by other Entities

tities undertaking Ministry Projects) to ensure that BGC (and/or the relevant ave sufficient rights with respect to such facilities for its operations.

expenses reasonably incurred by SGC and its Affiliates in relation to this Article 6.6 and approved in advance by BGC shall be for the

C and such amounts shall be reimbursed by BGC to SGC (or its Affiliate) s following receipt of SGC’s invoice therefor; provided that SGC will not incur any costs if BGC fails to agree to reimburse the same. To the extent te Shareholder (or any of its Affiliates) is a participant in a Ministry Project e Venture, it will similarly use its Best Endeavours to achieve such interface and alignment. All costs and expenses reasonably incurred by any hareholder (or Affiliate thereof) in relation to this

account of BGwithin 30 daybe required tothat any Privaother than thcoordination, such Private S Article 6.6 and approved

y BGC shall be for the account of BGC and such amounts shall be BGC to such Private Shareholder (or Affiliate) within 30 days following ch Private Shareholder’s invoice therefor; provided that such Private

t be required to incur any costs if BGC fails to agree to reimburse the

in advance breimbursed byreceipt of suShareholder will nosame.

6.7 The fodesign, engineotherwise for any Entity oth

6.7.1 All Prand prior to In

(a) be capthis Agreement)

(b) allow fdisclosed to Bagreeing to becontained in the re

and any PartAgreement sdisclosure. Promto ensure thIncorporation

6.7.2 Notwithstan

llowing provisions shall apply with respect to all contracts for or relating to the ering, construction, procurement and/or installation of Project Facilities or the benefit of, or in furtherance of, the Venture and that are entered into by er than BGC or a Project Entity (the “Project Facilities Agreements”):

oject Facilities Agreements that are entered into after the date of this Agreement corporation shall:

able of being novated to BGC or SGC (including upon any termination of ; and

or their terms, together with all work product produced thereunder, to be GC, SGC and their representatives (subject only to the recipient

bound by confidentiality obligations no more restrictive than those levant Project Facilities Agreement),

y that enters into (or whose Affiliate enters into) any Project Facilities hall ensure that it contains provisions permitting such novation and

ptly following Incorporation, the Parties shall use their Best Endeavours at any Project Facilities Agreements that were entered into prior to are novated to BGC.

ding Article 6.7.1, if the counterparty to a proposed Project Facilities oes not agree to provide an unconditional right to such novation or Agreement d

33

disclosure or rPrivate Sharein the case obligations no Agreement), novation or disclosushall agree the famendments t

equires that some action be taken by a Private Shareholder, an Affiliate of a holder, SGC or BGC in respect of such novation or disclosure (other than, of disclosure, that the recipient agree to be bound by confidentiality

more restrictive than those contained in the relevant Project Facilities the Parties shall discuss with a view to agreeing terms in respect of the

re that are acceptable to them, and prior to entry into the agreement, inal terms relating to same and (with respect to novation) to any

o Section 3.9.3 of Exhibit 1 to take into account such final terms.

6.7.3 To the exten(or an Affiliate ofof its terms orepresentativecounterparty tand all work which such cconfidentialityFacilities Agreem

6.8 To theExclusive Site

(a) are granand

(b) are in relatio

(i) the Initial P

(ii) the Initial P

(iii) the permand Umm Qasr; o

(iv) the temZubair and North Rum

exceed the Ramount of sucsame or (y) permunder the Raw

t that any Project Facilities Agreement that was entered into by a Shareholder a Shareholder) prior to the date of this Agreement restricts disclosure

r any work product produced thereunder to BGC, SGC or their respective s, the Parties shall use their Best Endeavours to obtain consent from the o such Project Facilities Agreement to the disclosure of the terms thereof produced thereunder to BGC, SGC and their respective representatives, onsent may be conditioned upon the recipient agreeing to be bound by obligations no more restrictive than those contained in the relevant Project

ent.

extent that the aggregate rental amounts for any Exclusive Site Rights or Non- Rights that:

ted by SGC, its Affiliates, or any Non-Affiliated Governmental Entity;

n to the land upon which any of the following are or will be located

hase Facilities;

hase LNG Project (including the LNG Offshore Site);

anent accommodation camps at Khor al Zubair, North Rumaila r

porary accommodation and construction camps at the Khor al aila gas plants

ental Cap Amount in any calendar year, SGC shall either (x) refund the h excess to BGC within 60 days following receipt of BGC’s invoice for the

it BGC to deduct such excess from amounts owing by BGC to SGC Gas Supply Agreement.

34

7. RAW GAS SUPPL

7.1 Dedicated F

7.1.1 Subject to

Y

ields and Volumes

Article 7.2:

(a) SGC sthan Utilised

hall procure that all Raw Gas produced from the Dedicated Fields (other Gas but including all NGLs referred to in Article 7.1.1(d)) shall, on

encement of Operations, be dedicated solely to the Venture (the ”);

and from Comm“Dedicated Volumes

(b) SGC gagrees to supp

(i) all Dedicate

(ii) any Deficit VolumArticle

rants to BGC the right to purchase and take delivery of, and own, and SGC ly or procure the supply to BGC or any Project Entity of:

d Volumes;

es that SGC is required to supply to BGC pursuant to 7.1.2; and

(iii) any Additiopursuant to Artic

nal Volumes that SGC may have agreed to supply to BGC le 7.1.4;

in accordanceAgreement orand BGC may

with the terms of this Agreement and the Raw Gas Supply (with respect to any Additional Volumes) such other terms as SGC agree pursuant to Article 7.1.4;

(c) SGC aProject EntityVolumes once desAgreement) othe terms of applicable Projec

(d) SGC asupplied fromNGLs (other condensation

7.1.2 Subject to

grees to supply (or to procure the supply) to BGC (or, if applicable, any ) the Committed Volumes (and any Planned Volumes and Potential

ignated as Committed Volumes in accordance with this f Raw Gas in accordance with the Gas Supply and Offtake Plan and this Agreement, the Raw Gas Supply Agreement and any other

t Document; and

grees that, and shall procure that, all volumes of Raw Gas that are to be the Dedicated Fields and any Deficit Volumes shall include all than any NGLs that are derived solely from infield associated gas without any extraction or treatment).

Article 7.1.3, SGC undertakes that, at all times during the Private Participation Period: Shareholders’

(a) the RecoveRequirement;

(b) the Available Volumto the Venture inyear;

rable Volumes will be no less than the Dedicated Volume

e Profile for each calendar year will be available for supply accordance with the Dedicated Volume Profile for that calendar

35

(c) if at any timthat:

(i) the Reexpected to be) les

(ii) for anwith a high lVolume Profile,

SGC shall dedBGC, such dDedicated VolumProfile (“DeficVolumes andconditions as

7.1.3 Notwithstan

e SGC and BGC agree, or an Independent Gas Consultant certifies,

coverable Volumes are (or, with a high level of certainty, are s than the Dedicated Volume Requirement; and/or

y given calendar year, the Available Volume Profile does not (or, evel of certainty, is not expected to) meet the Dedicated

icate for supply to BGC, and shall supply (or procure the supply) to eficit volumes of Raw Gas that will enable the supply of the

e Requirement in accordance with each Dedicated Volume it Volumes”). Such volumes shall be then also Dedicated

any such supply shall be made in accordance with the terms and stipulated in this Agreement and the Raw Gas Supply Agreement.

ding Article 7.1.2, if:

(a) the nelimits of geneIraq, includinor Deficit Volum

(b) as a rShareholders Deficit VolumDedicated Volumsatisfy the Dedica

then (i) SGC

ed for any Deficit Volumes results from Government-imposed production ral application affecting production of crude oil and natural gas in

g the Dedicated Fields or any field from which Additional Volumes es are being supplied (a “Production Curtailment”); and

esult of such Production Curtailment, SGC notifies BGC and the Private that it is unable to supply (or procure the supply of) sufficient es to (i) cause the Recoverable Volumes to equal or exceed the

e Requirement and/or (ii) cause the Available Volume Profile to ted Volume Profile,

shall be relieved of its obligations under Articles 7.1.1(c) and 7.1.2 for as roduction Curtailment is in effect and to the extent its ability to supply (or pply of) Raw Gas to the Venture is affected by the Production Curtailment rivate Shareholders’ Participation Period shall be extended to the extent

pensate BGC for the loss in revenues resulting from such Production The Parties shall seek in good faith to agree any extension to the Private Participation Period that may be required as a result of this

long as such Pprocure the suand (ii) the Pnecessary to comCurtailment. Shareholders’ Article 7.1.3;

extension that is agreed by SGC together with any one or more Private which hold (solely or between them) 51% or more of all Shares then held Shareholders shall be binding on all of the Parties. If the Parties are unable ch an extension within a period of 12 months from the date on which the

ent is lifted, then upon the request of either (x) SGC or (y) or any one te Shareholders which hold (solely or between them) 51% or more of all

eld by all Private Shareholders, the matter shall be referred for resolution in

and any suchShareholders by all Private to agree on suProduction Curtailmor more PrivaShares then haccordance with Article 20.

7.1.4 Withothis Agreement:

ut prejudice to the rights and obligations of the Parties under any other provision of

36

(a) if the Raw Gas Supplier so requests (or in the circumstances described in Article 7.4.5), SGC and BRaw Gas from

(b) if at athe time the volumlevel of 2,000and the Raw GRaw Gas to use all oany such arrangemof the Project

Any volumes

GC may agree to the supply to BGC of additional volumes of other fields in Iraq; and

ny time there is excess capacity in the Project Facilities (including prior to es from the Dedicated Fields reach their anticipated plateau

MMscfd), BGC may, by notice to the Raw Gas Supplier, request, as Supplier may agree to, the supply of supplementary volumes of

r part of such excess capacity and the Parties will consider ents in good faith in order to maximise the efficient utilisation

Facilities.

of Raw Gas agreed to be supplied pursuant to this Article 7.1.4 shall be s “Additional Volumes” and shall be supplied pursuant to the Raw ent unless the Raw Gas Supplier and BGC agree otherwise. Upon

ent by the Raw Gas Supplier to supply Additional Volumes to BGC, y and Offtake Plan shall be amended to reflect the Additional Volumes that eed to supply as Committed Volumes. Such amendment shall be a OP Change and shall be made in accordance with

referred to herein aGas Supply Agreemany written agreemthe Gas SupplSGC has agrMandatory GS Article 5.3.

7.1.5 If Deficit Volumes are supplied to the Venture pursuant to Article 7.1.2(c), the Raw Gas pay to BGC the amount (if any) reasonably incurred by BGC as a result of the Deficit Volumes (including any costs incurred as a result of it having

es at different delivery points to those from which it would have been ke delivery within the initial Dedicated Fields and/or Deficit Volumes of g of a different composition to that which would have been delivered to the ivery points within the initial Dedicated Fields). All such amounts shall be GC to the Raw Gas Supplier (which such invoice shall contain the full d supporting information for the basis of BGC’s calculation of such , to the extent not the subject of an unresolved bona fide dispute, shall be ble within 60 days following the Raw Gas Supplier’s receipt of such

Supplier shallhaving to taketo take the volumrequired to taRaw Gas beinapplicable delinvoiced by Bparticulars anamounts) anddue and payainvoice.

7.1.6 The GSupply and O

(a) any de

as Parties shall, as and when required, make all necessary amendments to the Gas fftake Plan to give effect to:

dication of Deficit Volumes pursuant to Article 7.1.2(c); and

(b) any agreement to provide Additional Volumes pursuant to Article 7.1.4 or Article 7.4.5;

and all such amaccordance with

endments shall be Mandatory GSOP Changes and shall be made in Article 5.3.

7.1.7 The:

(a) “AvaiGas (net of an

lable Volume Profile” means, for each calendar year, the quantity of Raw y expected Utilised Gas and expressed in MMscfd) that is expected,

37

with a high ledelivery frombeen required to ded

vel of certainty, to be produced, available for supply, and capable of the Dedicated Fields (and if SGC has, at the time of calculation,

icate any Deficit Volumes pursuant to Article 7.1.2(c) and/or supply any Additional Volumes pursuant to has agreed to Article 7.1.4 or Article

7.4.5, from the sour

(b) “Dedisupply of the Gas (as expreOfftake Plan Mandatory GS

(c) “Dedito the aggregate ofGas Supply areflect any Ma

(d) “RecoverabUtilised Gas) thavailable for suppSGC has, at the timVolumes pursuant to

ces of supply of such volumes) on each day during that year;

cated Volume Profile” means, for each calendar year, the schedule for aggregate of all Committed Volumes and Planned Volumes of Raw ssed in MMscfd) in that year, as set out in the Gas Supply and as the same may be amended from time to time to reflect any OP Changes and/or Agreed GSOP Changes;

cated Volume Requirement” means that volume of Raw Gas that is equal all Committed Volumes and Planned Volumes as shown in the

nd Offtake Plan as the same may be amended from time to time to ndatory GSOP Changes and/or Agreed GSOP Changes; and

le Volumes” means the quantity of Raw Gas (net of any expected at is expected, with a high level of certainty, to be produced,

ly, and capable of delivery from the Dedicated Fields (and if e of calculation, been required to dedicate any Deficit

Article 7.1.2(c), and/or has agreed the terms of supply of any es pursuant to Additional Volum Article 7.1.4 or Article 7.4.5, from the sources of

es) to the Venture over the unexpired Private Shareholders’ supply of such volumParticipation Period.

7.1.8 As of Volume Profiprevent the DHigher Managemaggregate requirem

7.1.9 NotwiSGC’s expresdiscretion of the DedicatedVolumes are t

7.2 Releas

(a) Notwithstan

the date of this Agreement, the Parties anticipate that, at plateau, the Dedicated le will not be less than 2,000 MMscfd of Raw Gas. Nothing herein shall edicated Volume Profile from exceeding 2,000 MMscfd of Raw Gas if the

ent Committee so approves by approving Development Projects whose ents for Raw Gas (as set forth in such approvals) exceed such amount.

thstanding anything in this Agreement to the contrary, but without prejudice to s obligations hereunder, nothing in this Agreement shall constrain the

SGC or any of its Affiliates in relation to the development or operation of Fields or any other fields from which Deficit Volumes or Additional o be supplied hereunder.

e of Dedicated Volumes

ding Article 7.1.1, SGC (or its nominee) will be entitled to offtake w Gas produced from the Dedicated Fields under the circumstances volumes of Ra

set forth in this Article 7.2.

(b) At any timofftake any anwould otherwresult of BGC

e and from time to time, SGC (or its nominee) will be entitled to d all volumes of Raw Gas produced from the Dedicated Fields that ise be flared by BGC or the operator of such Dedicated Field as a being unable to take such Raw Gas; provided, however, that if the

38

reason BGC is unof a GovernmInfrastructureof an Excess Volum

able to utilise such volumes of Raw Gas is because of a failure ent Representative to vote in favour of any Validly Prepared

Development Plan in respect of Excess Volumes that are the subject es Proposal pursuant to Article 7.2 (c)(iii), then SGC ( r its

not be entitled to offtake such volumes during the first 12 months would otherwise have been available but for such Government

re. The offtake right specified in this

onominee) willin which theyRepresentative’s failu Article 7.2(b) shall (in

es of Raw Gas and duration of offtake) only apply to the extent t the flaring of Raw Gas during any period in which BGC is

e.

terms of volumnecessary to prevenunable to take the sam

(c) In addition to its rights under Article 7.2(b), SGC (or its nominee) will be entitled Gas produced from the Dedicated Fields under the circumstances to offtake Raw

set forth in this Article 7.2(c).

(i) If, foCommencemeGas Consultant cerAvailable VolumProfile for thDedicated Volumand the Privatfor SGC (or itsDedicated FieSGC is able to dein accordance“Excess Volumes

(ii) Any Excess Volumschedule for tofftaken by Sproposed use(

(iii) If, witManagement CommPlan with resExcess Volumresult of a failurPlan for approval),Volumes”) will beand Offtake Pfailure to approve (odue to any Rremain dedicashall remain s

r any period from and after the third anniversary of the nt of Operations, SGC and BGC agree, or an Independent

tifies (with a high level of certainty), that (A) the e Profile for that period exceeds the Dedicated Volume

at period and (B) the Recoverable Volumes exceed the e Requirement, SGC may prepare and submit to BGC

e Shareholders a proposal (an “Excess Volumes Proposal”) nominee) to offtake any volumes of Raw Gas from the

lds that are in excess of the volumes required to ensure that liver each Dedicated Volume Profile within such period

with the Dedicated Volume Requirement (such volumes, ”).

es Proposal shall set forth (A) the proposed offtake he Excess Volumes (indicating the volumes proposed to be GC (or its nominee) on a month-by-month basis) and (B) the s) for such Excess Volumes.

hin six months of receiving an Excess Volumes Proposal, the Higher ittee fails to approve an Infrastructure Development

pect to one or more Development Projects to utilise the es set forth in the Excess Volumes Proposal (including as a

e to submit a Validly Prepared Infrastructure Development the Excess Volumes in question (the “Released

released to SGC (or its nominee) and the Gas Supply lan will be amended accordingly unless the reason for the

r submit) such Infrastructure Development Plan was elieving Factor, in which case such Excess Volumes shall ted solely to the Venture (but, for the avoidance of doubt, ubject to the ongoing application of this Article 7.2).

39

(iv) If theDevelopment Planutilise some, Volumes Prop(to the extent thais not due to anominee) andaccordingly.

(v) All amArticle

Higher Management Committee approves an Infrastructure with respect to one or more Development Projects to

but not all, of the Excess Volumes set forth in the Excess osal, then at SGC’s option the Excess Volumes in question

t the failure to approve the relevant Development Project ny of the Relieving Factors) will be released to SGC (or its the Gas Supply and Offtake Plan will be amended

endments to the Gas Supply and Offtake Plan pursuant to this 7.2 s

accordance with hall be Mandatory GSOP Changes and shall be made in

Article 5.3.

(d) The provisions of this Article 7.2 are without prejudice to SGC’s obligations under Article 7.1.2(c).

7.3 Reversion V

7.3.1 In the ev

(a) any prReleased Volumcancelled, or Sof such Relea

(b) SGC (Volumes withotherwise becom

SGC shall notifspecify the portion of(the “Unutilis

7.3.2 If, witCommittee farespect to onVolumes set fsubmit such a ValidUnutilised Volumunless the reason fPlan was due to anyextended for Committee apUnutilised Volum

olumes

ent that:

oject or other use to which SGC (or its nominee) intended to dedicate es (as set forth in the relevant Excess Volumes Proposal) is

GC (or its nominee) is otherwise unable to utilise all or any portion sed Volumes; and

or its nominee) is not able to find an alternative use for such Released in 12 months of such cancellation or the date on which SGC

es aware of its inability to utilise such volumes,

y BGC of the same. Such notice (an “Unutilised Volumes Notice”) shall the Released Volumes that SGC (or its nominee) is unable to utilise

ed Volumes”).

hin six months of receiving an Unutilised Volumes Notice, the Higher Management ils to approve a Validly Prepared Infrastructure Development Plan with e or more Development Projects to utilise any portion of the Unutilised orth in the Unutilised Volumes Notice (including as a result of a failure to

ly Prepared Infrastructure Development Plan for approval) then such es (or portion thereof) will thenceforth remain Released Volumes or the failure to approve (or submit) such Infrastructure Development

Relieving Factor, in which case such six-month period will be successive six-month periods until either (i) the Higher Management proves an Infrastructure Development Plan with respect to the relevant

es (in which case Article 7.3.3 will apply) or (ii) there is no longer any tor in effect as at the end of any such extension period (in which case the ilised Volumes will thenceforth remain Released Volumes).

Relieving Facrelevant Unut

40

7.3.3 If the within such InfrastructureVolumes (in the mSupply and O

7.3.4 All am

Higher Management Committee approves such an Infrastructure Development Plan period, then those Unutilised Volumes that are the subject to such

Development Plan will be reclassified as Committed Volumes or Planned anner specified in such Infrastructure Development Plan) and the Gas

fftake Plan will be amended accordingly.

endments to the Gas Supply and Offtake Plan pursuant to this Article 7.3 shall be OP Changes and shall be made in accordance with Mandatory GS Article 5.3.

7.4 Long Term

7.4.1 The GGas to be deliRaw Gas Supsupplied by th

7.4.2 Notwithstanspecification fof the ongoinvolumes of Rset forth in thbecome outsidTerm Off-Sp

7.4.3 If SGCSpecification Term Off-Spesuch notificatCommittee an Infrasinclude modiFacilities) tha

7.4.4 If the Plan as described in

Off-Specification Raw Gas

as Supply and Offtake Plan will set forth the anticipated specifications for all Raw vered by SGC to BGC pursuant to the Raw Gas Supply Agreement, and the ply Agreement will address the consequences of any failure of the Raw Gas e Raw Gas Supplier to meet such specifications.

ding that the Gas Supply and Offtake Plan will set forth the anticipated or Raw Gas, the Parties acknowledge that, over time and as a consequence g development of the Dedicated Fields, the specifications of certain of the aw Gas supplied by the Raw Gas Supplier may vary from the specifications e Gas Supply and Offtake Plan on a long-term basis and as a result may e the operational tolerances of the Project Facilities (such volumes, “Long

ecification Gas”).

, or any other Party, becomes aware of any potential volumes of Long Term Off-Gas (or of any situation that could reasonably be expected to result in Long cification Gas), it will promptly notify the other Parties. Upon receipt of ion, BGC will Validly Prepare and submit to the Higher Management

tructure Development Plan for a Development Project (which may fications to existing Project Facilities or the construction of new Project t will enable it to receive and process the Long Term Off-Specification Gas.

Higher Management Committee fails to approve any Infrastructure Development Article 7.4.3, any Final Development Decision in respect of the

ent Project, or any Annual Budget, Annual Business Plan or Annual in relation thereto, and the Shareholders are unable to resolve such matter with the procedures set forth in article 12 of the Shareholders’ Agreement, the request of any one or more Private Shareholders which hold (solely or ) 51% or more of all Shares then held by all Private Shareholders,

eeting between the Shareholders, BGC and the relevant upstream th the objective of discussing in good faith and agreeing on potential low BGC to continue to utilise the Long Term Off-Specification Gas.

relevant DevelopmFunding Planin accordanceSGC will, at between themcoordinate a mproducers wisolutions to al

7.4.5 SGC wsupply to BGof Long Term(notwithstanding

ill use its Best Endeavours to make available (or cause to be made available) for C (or a Project Entity) Additional Volumes in replacement of any volumes Off-Specification Gas that BGC is unable to utilise. Any such supply shall

Article 7.1.4) be pursuant to the terms of the Raw Gas Supply

41

Agreement anotherwise. In thVolumes for

d shall be for a maximum period of five years unless SGC and BGC agree e event that SGC is unable, or fails, to make available Additional

supply to BGC (or a Project Entity) pursuant to this Article 7.4.5, then the ’ Participation Period shall be extended to the extent necessary to

or the loss in revenues resulting from SGC’s failure or inability to le (or cause to be made available) such Additional Volumes. The Parties ood faith to agree any extension to the Private Shareholders’ Participation y be required as a result of this

Private Shareholderscompensate BGC fmake availabshall seek in gPeriod that ma Article 7.4.5, and any such extension that is

C together with any one or more Private Shareholders which hold (solely or ) 51% or more of all Shares then held by all Private Shareholders shall be l of the Parties. If the Parties are unable to agree on such an extension d of 12 months from the date upon which SGC notifies the other Parties

unable to supply all or any portion of the Additional Volumes required to levant volumes of Long Term Off-Specification Gas, then upon the request SGC or (y) any one or more Private Shareholders which hold (solely or ) 51% or more of all Shares then held by all Private Shareholders, the

e referred for resolution in accordance with

agreed by SGbetween thembinding on alwithin a periothat it will bereplace the reof either (x) between themmatter shall b Article 20.

7.4.6 Except to thLong Term O

e extent that SGC commits to supply Additional Volumes in replacement of ff-Specification Gas pursuant to Article 7.4.5, the Parties will amend the d Offtake Plan to reduce the Committed Volumes and Planned Volumes by

es of Long Term Off-Specification Gas for the period during which pated to be unable to utilise such volumes. All such amendments shall be OP Changes and shall be made in accordance with

Gas Supply anthe relevant volumBGC is anticiMandatory GS Article 5.3.

7.4.7 The PSpecification delivery poinDevelopment Decisoperator(s) of(or its contractorsinstall (or proallow BGC to accesexpense.

7.4.8 If and Gas, includingsuch volumesCommitted VolumSuch amendmwith Article

arties acknowledge that, to allow BGC to utilise volumes of Long Term Off Gas, it may become necessary to install facilities upstream of the applicable ts for Raw Gas. If the Higher Management Committee approves a Final

ion to install any such facilities, SGC will procure that the relevant the facilities upstream of the relevant delivery points either (a) allow BGC

) to install, access and operate such facilities or (b) if BGC so agrees, cure the installation of) and/or operate such facilities on BGC’s behalf and

s such facilities as required, in each case at BGC’s sole cost, risk and

when BGC is able to process and receive volumes of Long Term Off-Specification when it has completed facilities that will enable it to receive and process

, the Parties will amend the Gas Supply and Offtake Plan to increase the es of Raw Gas and to modify as appropriate the gas specifications.

ent will be a Mandatory GSOP Change and shall be made in accordance 5.3.

7.5 Raw Gas Su

At the earliest time fointo the Raw Gas Su Exhibit 11

pply Agreement

llowing Incorporation, the Raw Gas Supplier and BGC will enter pply Agreement, which shall be based on the terms set forth in

, this Article 7, and th ne other releva t provisions of this Agreement. Each of

42

Parties shall take, andof them in order to giRaw Gas Supply Agre

7.6 Gas Su

7.6.1 The PaProject Facilities to trand Offtake Plan (am

(a) “Committesuch in the GaRaw Gas (at and which BGthe Raw Gasotherwise agreed by th

(b) “Planned Volumesin the Gas Sup

(c) “Potentiain the Gas Sup

(i) will incdesignated as Comm

(ii) at plat2,000 MMscCommitted Volum

7.6.2 The Commdate of this Agreempoints) are sho

7.6.3 Witho

each shall cause its Affiliates to take, all actions that are required ve effect to the entry by the Raw Gas Supplier and BGC into the ement at such time.

pply and Offtake Plan and Raw Gas Volumes

rties acknowledge and agree that, in order to facilitate the efficient development of eat and process the Dedicated Volumes, Part 1 of the Gas Supply

ong other things) categorises the volumes of Raw Gas as follows:

d Volumes” of Raw Gas, which means the Raw Gas designated as s Supply and Offtake Plan from time to time, being the volumes of

any given time) which the Raw Gas Supplier shall supply to BGC, C shall accept delivery of, pursuant to the terms and conditions of

Supply Agreement (or such other terms and conditions as are e Parties in connection with Additional Volumes);

” of Raw Gas, which means the Raw Gas designated as such ply and Offtake Plan from time to time; and

l Volumes” of Raw Gas, which means the Raw Gas designated as such ply and Offtake Plan from time to time and:

lude all Dedicated Volumes that, at any given time, are not itted Volumes or Planned Volumes; and

eau, will not be less than the difference (if positive) between (A) fd and (B) the aggregate (expressed in MMscfd) of all

es and Planned Volumes.

itted Volumes, Planned Volumes and Potential Volumes of Raw Gas as at the ent (and the related contract volumes, specifications and delivery

wn in the Initial Gas Supply and Offtake Plan.

ut limiting Article 5.3 and subject to Article 9.1(b):

(a) If at any timDevelopment intended to increto produce Pincreased (anreduced) (in eequal to the aincreased cappoints, in sucdecision, the to give effect to th

e the Higher Management Committee has approved an Infrastructure Plan with respect to one or more Development Projects that are

ase the capacity of the Venture to treat and process Raw Gas or etroleum Products, the Planned Volumes of Raw Gas shall be d the Potential Volumes of Raw Gas shall be correspondingly ach case, automatically as of the date of the decision) by an amount dditional quantity of Raw Gas that will required to fully utilise such acity (as specified in detail, including as to volumes and delivery h Approved Infrastructure Development Plan). Following such

Gas Parties shall forthwith amend the Gas Supply and Offtake Plan e increase in the Planned Volumes of Raw Gas by:

43

(i) designPlanned Volum

(ii) makinare specified in detasuch Approvcorresponding

(iii) makinbe specified in

(b) If the Higher ManageDecision to pincrease the capacPetroleum Prothe Planned Volumautomaticallyquantity of Ra(as specified iDevelopment the Gas Partieeffect to the incre

(i) designCommitted Volum

(ii) makinas are specified in dsuch Final reduction in P

(iii) makinspecified in su

7.6.4 If at any timApproved Infin accordanceimplementatioto the Gas Sup

7.6.5 All am

ating the equivalent amount of Potential Volumes of Raw Gas as es of Raw Gas;

g such increases to the Planned Volumes of Petroleum Products as il (including as to volumes and delivery points) in

ed Infrastructure Development Plan, together with a reduction in Potential Volumes of Petroleum Products; and

g all such other changes to the Gas Supply and Offtake Plan as may such Approved Infrastructure Development Plan.

ment Committee has made a positive Final Development roceed with the development of facilities or infrastructure that will

ity of the Venture to treat and process Raw Gas or to produce ducts, the Committed Volumes of Raw Gas shall be increased (and

es of Raw Gas shall be correspondingly reduced), in each case as of the date of such decision, by an amount equal to the additional w Gas that will be required to fully utilise such increased capacity n detail, including as to volumes and delivery points, in such Final Decision). Following such a positive Final Development Decision, s shall forthwith amend the Gas Supply and Offtake Plan to give

ase in the Committed Volumes of Raw Gas by:

ating the equivalent amount of Planned Volumes of Raw Gas as es of Raw Gas;

g such increases to the Committed Volumes of Petroleum Products etail (including as to volumes and delivery points) in

Development Decision, together with a corresponding lanned Volumes of Petroleum Products; and

g all such other changes to the Gas Supply and Offtake Plan as may ch Final Development Decision.

e the schedule or scope of any development activities contemplated in an rastructure Development Plan or a Final Development Decision is amended with the Shareholders’ Agreement (including as a result of a delay in n or a change in anticipated capacity), the Parties will make such changes ply and Offtake Plan as are appropriate to reflect such changes.

endments to the Gas Supply and Offtake Plan pursuant to this Article 7.6 shall be OP Changes and shall be made in accordance with Mandatory GS Article 5.3.

7.7 Dedicated V

7.7.1 Subject to

olumes of Raw Gas and Feedstock Gas for LNG

Article 7.7.2 and Article 7.7.3 if a positive Final Development Decision is ct of the Initial Phase LNG Project or any Second Phase LNG Project, BGC

ramp-up period in accordance with made in respeshall (subject to any Article 8.2.5 in respect of the

44

Initial Phase LSecond Phase

(a) produce such volumLiquefaction Fand (ii) fulfilAgreements;

(b) allocatrequired to pr

(c) use suProject.

7.7.2 In respecFinal Developm

NG Project and any ramp-up period that may be agreed in respect of any LNG Project) have the right to:

es of Feedstock Gas as are required to (i) permit the acilities of such LNG Project to operate at their nameplate capacity

all supply obligations under any LNG Sale and Purchase

e from the Raw Gas supplied to it such volumes of Raw Gas that are oduce such volumes of Feedstock Gas; and

ch volumes of Feedstock Gas for the production of LNG by such LNG

t of the Initial Phase LNG Project, the Parties agree that, following a positive ent Decision and subject to (a) Article 7.7.3 and (b) any ramp-up period

in accordance with Article 8.2.5, BGC shall have the right to allocate from the Raw Gas such volumes of Raw Gas that are required to produce an annual average of of Feedstock Gas and to produce and use such Feedstock Gas for the LNG by the Initial Phase LNG Project.

supplied to it 600 MMscfd production of

7.7.3 In the is unable to pto offtakers ofthe Venture will be cu

(a) first, sVenture will b

(b) secondDomestic OfDomestic Salextent necesstheir interruptible ofarrangements (if any);

(c) third, Gas to the IniDry Gas fromfirm commitmbe correspond

(d) fourthDomestic OfDomestic Salextent requireofftakers of D

event of any shortfall in deliveries of Raw Gas to the Venture such that the Venture roduce sufficient Dry Gas and/or Feedstock Gas to satisfy its commitments Dry Gas or LNG (a “Supply Shortfall”), then deliveries to offtakers from

rtailed as follows:

upplies of Dry Gas to any interruptible export offtakers of Dry Gas from the e curtailed in respect of their interruptible offtake arrangements;

, to the extent the Supply Shortfall still remains, supplies of Dry Gas to the ftaker(s) under the Dry Gas Supply Agreement (and any other e and Purchase Agreements for Dry Gas) will be curtailed to the ary to allow the Domestic Offtaker(s) to curtail deliveries to its or

ftakers of Dry Gas in respect of their interruptible offtake

to the extent the Supply Shortfall still remains, supplies of (i) Feedstock tial Phase LNG Project and (ii) Dry Gas to any export offtakers of the Venture, will be curtailed on a pro rata basis in respect of their ents by up to 10% (and supplies of LNG to the LNG Buyer(s) will ingly reduced);

, to the extent the Supply Shortfall still remains, supplies of Dry Gas to the ftaker(s) under the Dry Gas Supply Agreement (and any other e and Purchase Agreements for Dry Gas) will be curtailed to the d to allow the Domestic Offtaker(s) to curtail deliveries to their firm ry Gas by up to 10% of their firm commitments; and

45

(e) fifth, tto the Initial Pfrom the VenGas Supply Agreemfor Dry Gas (todeliveries to commitments) will bcommitmentsreduced); provided

o the extent the Supply Shortfall still remains, supplies of (i) Feedstock Gas hase LNG Project, (ii) Dry Gas to any export offtakers of Dry Gas

ture, and (iii) Dry Gas to the Domestic Offtaker(s) under the Dry ent and any other Domestic Sale and Purchase Agreements

the extent required to allow the Domestic Offtaker(s) to curtail its or their firm offtakers of Dry Gas in respect of their firm

e curtailed on a pro rata basis in respect of their firm (and supplies of LNG to the LNG Buyer(s) will be correspondingly

that in no event will the operation of this Article 7.7.3 result in the supply of Feedstock Gas to the Initial Phase LNG Project such Phase LNG Project would be unable to produce LNG at a rate of at

eplate capacity.

a reduction ofthat the Initialleast 50% of its nam

7.7.4 Notwithstanding Article 7.7.3,

(a) in the ev

(i) a Suppthe Raw Gas Sresult from a PGas Supply AgreeAgreement tobligations th

(ii) there are vo

then SGC shall pOfftaker(s) (othe Domesticreceive sufficient vocommitmentsfirm commitmdetermine), anequivalent volumProject in suffto 90% of its firm

(b) if therthe Initial Pharight to alloc

ent that:

ly Shortfall results from a breach by the Raw Gas Supplier under upply Agreement (and, for the avoidance of doubt, does not roduction Curtailment, a force majeure event under the Raw

ment, or any other event under the Raw Gas Supply hat excuses the Raw Gas Supplier from its delivery ereunder); and

lumes of Available Gas,

rocure that such Available Gas is delivered to the Domestic r directly to the Domestic Offtaker(s’) firm offtaker(s) on behalf of Offtaker(s)) such that the Domestic Offtaker(s)’ firm offtakers

lumes of Dry Gas and/or Feedstock Gas to meet their firm (or, if there is insufficient Available Gas to meet such offtakers’

ents, on a pro rata basis or on such other basis as SGC may d BGC shall be entitled to allocate from its existing supply base an

e of Dry Gas and/or Feedstock Gas to the Initial Phase LNG icient quantities to allow the Initial Phase LNG Project to satisfy up

commitment supply obligations.

e have been reductions in the supply of Dry Gas and/or Feedstock Gas to se LNG Project below 600 MMscfd at any time, BGC will have the ate any volumes in excess of Committed Volumes under Article

8.6.1(a) (or volumes imarket requiremproduction ofsame calendar year.

7.7.5 The Rcontain appro

n excess of domestic market requirements, where domestic ents are less than such Committed Volumes), to enable the

the annual average of 600 MMscfd of Feedstock Gas within the

aw Gas Supply Agreement and the Domestic Sale and Purchase Agreements will priate provisions to reflect Articles 7.7.3 and 7.7.4. For purposes of

46

implementing Articles 7.7.3 and 7.7.4, the Parties agree that any agreements between the taker(s) and their respective offtakers that are not, by their terms, manifestly

re will be deemed to constitute firm commitments and that the agreements will be deemed to be firm offtakers for purposes of this

he absence of any “deliver or pay” or other provision imposing liability on Offtaker(s) for failure to supply will not, in and of itself, be sufficient for

ent to be considered to be interruptible in nature.

Domestic Offinterruptible in natuofftakers under suchAgreement. Tthe Domestic any such agreem

7.8 Use of

BGC shall have the derived therefrom toincluding to generate The charge for usage the price payable by

Raw Gas in Venture Operations

right to use such volumes of Raw Gas and Petroleum Products carry out operations and activities in respect to the Venture, electric power to satisfy the Venture’s requirements for electricity. of such Raw Gas and Petroleum Products is included implicitly in BGC for Raw Gas supply as referred to in Article 7.10 and there e, levy, tariff, withholding Tax or royalty applied to such usage. shall be no other charg

7.9 Flaring

7.9.1 BGC sReasons provthat is operationaReasonable an

7.9.2 “Operation

(a) flaringFacilities; or

(b) flaring

(i) emerg

(ii) testing, m

(iii) shutdofacilities;

(iv) loadin

(v) equipm

(vi) mainta

(vii) actionoccurring in th

(viii) Force Majeu

hall be permitted to flare or vent Raw Gas and Petroleum Products for Operational ided that the period and volume of venting or flaring is kept to the minimum

lly and technically feasible (to be measured against the standards of a d Prudent Operator).

al Reasons” in respect of flaring or venting means:

or venting that is necessary for or as a result of the operation of the Project

or venting that is as a result of:

encies or for security, health or safety reasons;

aintenance or commissioning;

wn (both planned and unplanned) and subsequent restart of

g or delivery of Petroleum Products and Ancillary Products;

ent breakdown and repair;

ining the integrity of the flare system and other assets;

s taken in the upstream or the downstream (such as the above e upstream or downstream);

re affecting BGC;

47

(ix) circum

(x) in accordPurchase Agreem

7.9.3 The liabcosts, expenseor venting re

stances permitted under Law; or

ance with the Raw Gas Supply Agreement or any Sale and ent.

ility of BGC, the Raw Gas Supplier and the Domestic Offtaker in respect of s and other liabilities associated with flaring or venting (including flaring ferred to in Article 7.9.1) shall be as set out in the Raw Gas Supply d the Domestic Sale and Purchase Agreements. Agreement an

7.10 Raw G

The price payable by Raw Gas Supply Agre

as Pricing

BGC to the Raw Gas Supplier for Raw Gas supplied to it under the ement shall be based on the principles set out in Exhibit 5, which flected in detail (along with provisions relating to payment and Gas Supply Agreement.

principles shall be reinvoicing) in the Raw

7.11 Delivery Po

The Parties agree that the outlet of each stareceiving Raw Gas wspecific delivery pointand Offtake Plan (and

8. PETR

8.1 Marke

8.1.1 Unless the Parties agformed for suand Ancillary

(a) the Domand Ancillary

(b) subjec

ints

the delivery points for supply of all volumes of Raw Gas shall be at ge of the liquid/gas separator in each of the degassing stations ithin the Dedicated Fields or any other applicable fields. Each shall be more particularly defined and described in the Gas Supply if also required, in the Raw Gas Supply Agreement).

OLEUM PRODUCTS

ting and Sales of Petroleum Products

ree in writing otherwise, BGC (together with any Project Entities ch purpose) shall be the sole marketer and seller of all Petroleum Products Products produced by the Venture, save that:

estic Offtaker shall be entitled to market and sell any Petroleum Products Products it purchases from BGC into the Iraqi domestic market; and

t to Article 3.3(f), all exports of Petroleum Products produced by the e via SOMO pursuant to the SOMO Agency Agreement. Venture will b

8.1.2 Unless theSale and Purc

(a) the Domproduced by tmarket and wProducts that

Parties agree in writing otherwise and subject to the terms of the applicable hase Agreements and the SOMO Agency Agreement:

estic Offtaker will be the sole purchaser of all Petroleum Products he Venture that are destined for consumption in the Iraqi domestic ill have the right (but not the obligation) to purchase any Ancillary are destined for consumption in the Iraqi domestic market; and

48

(b) a Wholly-Owned Afcapitalised to mcompany) will be thAgreement) othe time of thProject Shell (oShareholder wprices and othaccordance w

filiate of Shell (which shall be a company that is suitably eet its obligations or have its obligations guaranteed by such a

e purchaser (via SOMO pursuant to the SOMO Agency f all LNG produced by the Initial Phase LNG Project, so long as at e Final Development Decision in respect of the Initial Phase LNG

r a Wholly-Owned Affiliate of Shell) remains the Private ith the largest Proportionate Share. Sales of LNG will be at market erwise based on purchase terms and conditions to be developed in ith the principles contained in Exhibit 14 and approved by the

ent Committee. Higher Managem

8.1.3 The initial D

8.2 Allocation o

8.2.1 On the

omestic Offtaker will be SGC.

f Raw Gas for the Initial Phase LNG Project

Allocation Date, and subject to Article 8.2.5, SGC will allocate to BGC, on the this basis set forth in Article 8.2, sufficient volumes of Raw Gas to produce at least 600

Gas for the Initial Phase LNG Project (such allocation, the “Initial ”).

MMscfd of FeedstockPhase Allocation

8.2.2 Under the ILNG Project availabof Operations (the “Date, SGC wiwithin the initial threearlier than thfor the Initiaprogressively reasonably anoperation of th

8.2.3 Without prejudice to

nitial Phase Allocation, SGC will make first Raw Gas for the Initial Phase le to BGC between four and seven years following Commencement Availability Window”). Within one year following the Allocation

ll, by notice to BGC, narrow the Availability Window to a 12-month period e-year period, provided that such 12-month period may not begin

e anticipated first gas date indicated in the Infrastructure Development Plan l Phase LNG Project. Thereafter, the Availability Window will be further narrowed on a basis to be agreed by SGC and BGC acting

d in good faith and taking into account the schedule for development and e Initial Phase LNG Project.

Article 8.3, if at the end of five years following Commencement of Operations:

(a) a ValidInitial Phase Committee in accordHigher ManagemFactor; or

(b) a ValidInitial Phase Laccordance wRelieving Factor,

then the Availabresulting delay in thanticipated da

ly Prepared proposal for a Final Development Decision with respect to the LNG Project has been submitted to the Higher Management

ance with article 11 of the Shareholders’ Agreement but the ent Committee fails to approve it as a result of any Relieving

ly Prepared proposal for a Final Development Decision with respect to the NG Project has not been, or has not been able to be, submitted in

ith article 11 of the Shareholders’ Agreement as a result of any

ility Window shall be adjusted to the extent necessary to account for any e development of the Initial Phase LNG Project and the then

te of such Final Development Decision (the “Revised LNG FDD Date”).

49

The Revised Luntil, or in thbeen extendedextended for the sam

8.2.4 If on circumstances

NG FDD Date shall be agreed by SGC and the Private Shareholders (and e absence of, such agreement between the Parties shall be deemed to have by six months), and the Private Shareholders’ Participation Period shall be

e amount of time.

the Revised LNG FDD Date (and any subsequent Revised LNG FDD Date) the set out in Articles 8.2.3(a) and 8.2.3(b) continue to apply, the adjustment

in mechanism set out Article 8.2.3 shall again apply.

8.2.5 At the opinclude a ramInitial Phase Lof Feedstock of Feedstock Gas.

8.2.6 As of Raw Gas to gthat this convperform furthe

8.2.7 The volum

tion of SGC, the allocation of Raw Gas for the Initial Phase LNG Project may p-up period of up to 12 months during which deliveries of Raw Gas for the NG Facility can be less than the volume required to produce 600 MMscfd

Gas but in no event less than the volumes required to produce 300 MMscfd

the date of this Agreement, the Parties estimate that it will require 1.67 MMscfd of enerate one MMscfd of Feedstock Gas. The Parties acknowledge, however, ersion factor is an estimate only and will be further refined as the Parties r technical work in relation to the Venture.

es of Raw Gas allocated to BGC pursuant to this Article 8.2 will automatically nned Volumes as from the Allocation Date. If and when the Higher

ittee approves a positive Final Development Decision with respect to ent of an Initial Phase LNG Project pursuant to the terms of the

ent (and subject to any ramp-up period pursuant to

constitute PlaManagement Commthe developmShareholders’ Agreem Article 8.2.5)

es of Raw Gas shall, automatically as of the date of such decision anner specified in such Final Development Decision, be increased by a to the amount of Raw Gas that will enable the production of sufficient s to:

the Committed Volumand in the mvolume equalFeedstock Ga

(a) permittheir nameplate cap

(b) fulfil all supply comm

and the Plannand agree thVolumes in respecVolume Requirem

the Liquefaction Facilities of the Initial Phase LNG Project to operate at acity; and

itments under the LNG Sale and Purchase Agreement,

ed Volumes shall be correspondingly reduced. The Parties acknowledge at, for the avoidance of doubt, the Planned Volumes and Committed

t of the Initial Phase LNG Project will form part of the Dedicated ent and that, as a result, the provisions of Article 7.1.2(c) will apply.

8.2.8 The Patime to time to ref

rties will make appropriate amendments to the Gas Supply and Offtake Plan from lect the matters set forth in this Article 8.2 (including the initial

Raw Gas, all changes to the Availability Window, and changes in the ctor for Raw Gas into Feedstock Gas). All such amendments shall be OP Changes and shall be made in accordance with

allocation of conversion faMandatory GS Article 5.3.

50

8.3 Revoc

8.3.1 SGC may reif:

(a) within 12 mShareholders Higher Managemfor the InitiaRelieving Factor;

(b) withinDevelopment DecisValidly Prepared andsubmitted) to theresult of anyautomatically extendLNG FDD Danot been (or has noextended peridetermined in

ation of Allocation

voke (or, at its option, delay the availability of) the Initial Phase Allocation

onths following Commencement of Operations, the Private have not Validly Prepared and requested that BGC submit to the

ent Committee for approval an Infrastructure Development Plan l Phase LNG Project, unless such failure is as a result of any

five years following Commencement of Operations, a proposal for a Final ion with respect to the Initial Phase LNG Project has not been

submitted (or has not been able to be Validly Prepared and Higher Management Committee, unless such failure is as a

Relieving Factor, in which case such five-year period shall be ed to the Revised LNG FDD Date (and if on the Revised

te (and any subsequent Revised LNG FDD Date) such proposal has t been able to be) submitted due to any Relieving Factor, such

od shall be further extended to any newly Revised LNG FDD Date accordance with Article 8.2.4); or

(c) the MaOperations unless:

(i) the Prof the First I11.6 of the Sh

(ii) either:

(A) BGC Commitmentsbeen prevented from

(B) each Endeavours tfollowing Comm

8.3.2 Upon to Article

tching Date does not occur within three years following Commencement of

ivate Shareholders have Validly Prepared and requested submission nfrastructure Development Plan in accordance with article areholders’ Agreement; and

and/or the Private Shareholders have made Matching of at least the Matching Amount (or it or they have

doing so due to any Relieving Factor); or

of the Private Shareholders has otherwise used its Best o achieve the Matching Date within three years

encement of Operations.

any revocation (or delay in the availability) of the Initial Phase Allocation pursuant 8.3.1, the Gas Supply and Offtake Plan shall be amended accordingly. Such

all be a Mandatory GSOP Change and shall be made in accordance with amendment shArticle 5.3.

8.4 Dome

8.4.1 The key termDomestic Off

stic Sale and Purchase Agreement

s on which BGC shall supply Dry Gas, LPG and Condensate to the taker, and on which the Domestic Offtaker shall purchase Dry Gas, LPG

51

and Condensate from BGC, have been agreed by all Parties and are set out in Exhibit 12 and Exhibit 13, respectivel y.

8.4.2 At theshall enter into:

(a) a Sale andDomestic Off

(b) a Sale andDomestic OffAgreement”) (opurchase agreem

based on the term

earliest possible time following Incorporation, the Domestic Offtaker and BGC

Purchase Agreement for the sale by BGC, and purchase by the taker, of Dry Gas (the “Dry Gas Supply Agreement”); and

Purchase Agreement for the sale by BGC, and purchase by the taker, of LPG and Condensate (the “LPG and Condensate Supply

r if BGC and the Domestic Offtaker agree, separate sale and ents for LPG and Condensate),

s set out in Exhibit 12 and Exhibit 13 and reflect the provisions of ingthis Article 8 shall take, and eachin order to giv

8.4.3 BGC sof sulphur ansales arrangemProducts in a mArticle

and any other applicable provisions of this Agreement. Each of Parties shall cause its Affiliates to take, all actions that are required of them

e effect to entry into such Sale and Purchase Agreements.

hall use its reasonable endeavours to enter into arrangements providing for the sale d other Ancillary Products on commercial terms. In the absence of such ents, BGC shall be free to dispose of such sulphur and any other Ancillary

anner consistent with the standards, practices and procedures set out in 10.1.1. SGC will have the right (but not the obligation) to purchase any Ancillary

uced by the Venture. Products prod

8.4.4 The PartiesAgreement), Condensate to

(a) in the caand

(b) in the facility and applicable

of the Projectransportationparticularly describedapplicable Do

8.5 Expor

8.5.1 The PPetroleum Prbetween BGC

agree that (unless agreed otherwise in any Domestic Sale and Purchase the delivery points at which BGC shall supply Dry Gas, LPG and the Domestic Offtaker shall be:

se of Dry Gas, at the outlet flange of each applicable gas treatment plant;

case of LPG and Condensate, at the outlet flange of each applicable LPG Condensate facility,

t Facilities, and that the Domestic Offtaker shall be responsible for the of all such products beyond all such points. Each such point shall be more

in the Gas Supply and Offtake Plan and, if necessary, the mestic Sale and Purchase Agreements.

t Sale and Purchase Arrangements

arties agree to appoint SOMO to act as BGC’s agent in respect of exports of oducts by the Venture. Such agency shall be pursuant to an agreement and SOMO that shall be based on the principles set out in Exhibit 8 (the ncy Agreement”). The Parties shall endeavour in good faith (and SGC MO to endeavour in good faith) to agree the terms of the SOMO Agency

“SOMO Ageshall cause SO

52

Agreement ascause SOMO

8.5.2 BGC purchase agreemSOMO Agencommercial termplace pursuant toJMTC terms o

8.5.3 The termInitial Phase which shall in

soon as practicable following the BGDA Effective Date, and SGC shall to enter into the SOMO Agency Agreement on such agreed terms.

shall, as and when required, authorise SOMO as its agent to enter into sale and ents for the export of Petroleum Products pursuant to the terms of the

cy Agreement. All such sale and purchase agreements shall be on s approved by the Higher Management Committee or otherwise put in the procedures set forth in the SOMO Agency Agreement and/or the

f reference included therein.

s and conditions on which the LNG Buyer shall purchase LNG produced by the LNG Project shall be set out in an LNG Sale and Purchase Agreement, clude provisions based on the principles set out in Exhibit 14.

8.6 Comm

8.6.1 The PSupply and O

(a) “Committevolumes of Doperation of Offtake Plan LPG that the and which:

(i) BGC s

(ii) the Dom

at specified delivepursuant and and Purchase Agreem

(b) “Planned Volumesof Dry Gas, Supply and O

(c) “Potentiavolumes of DSupply and O

8.6.2 The CProducts as atand delivery pThe CommitProducts mayapplicable pro

itted Volumes and Gas Supply and Offtake Plan

arties acknowledge and agree that, in addition to other matters, Part 2 of the Gas fftake Plan specifies and shall specify:

d Volumes” of Dry Gas, Condensates and LPG, which means the ry Gas, Condensates and LPG that are (and that are required by the this Agreement to be) designated as such in the Gas Supply and at any given time, being the volumes of Dry Gas, Condensates and Gas Parties agree are destined for supply to the domestic market,

hall supply to the Domestic Offtaker; and

estic Offtaker shall purchase and accept delivery of,

ry points, specification and pressure ranges (if applicable) subject to the terms and conditions of the applicable Domestic Sale

ent;

” of Dry Gas, Condensate and LPG, which means the volumes Condensates and LPG which are designated as such in the Gas fftake Plan at any given time; and

l Volumes” of Dry Gas, Condensate and LPG, which means the ry Gas, Condensates and LPG that are designated as such in the Gas fftake Plan at any given time.

ommitted Volumes, Planned Volumes, and Potential Volumes of Petroleum the date of this Agreement (and the related contract volumes, specification oints where known) are shown in the Initial Gas Supply and Offtake Plan.

ted Volumes, Planned Volumes and Potential Volumes of Petroleum be increased or decreased from time to time in accordance with the visions of this Agreement.

53

8.7 Expor

BGC and/or any Projpursuant to the SOMOthose volumes that tpursuant to the terms o

8.8 Pricing of Petroleum

The price payable byAgreements to BGC agreements shall be

ts of NGLs

ect Entity shall have the right to market and export (via SOMO Agency Agreement) such volumes of NGLs that are in excess of

he Domestic Offtaker is committed to take, but has not taken, f the Domestic Sale and Purchase Agreements.

Products

the Domestic Offtaker under the Domestic Sale and Purchase for Dry Gas, LPG and Condensate supplied to it under those based on the principles set out in Exhibit 5, which prinions relating to payment and invoicing) shall be reflected in the rchase Agreements.

ciples (together with provisDomestic Sale and Pu

8.9 LPG Facilities

SGC (or one of its Aff

(a) utiliseor its Affiliates in

(b) utiliseand

(c) export

subject alwayBGC. Use bProcessing aParties, acting

8.10 Expor

8.10.1 Witho

iliates) shall be entitled to:

BGC’s LPG treatment facilities for the separation of LPG owned by SGC to propane and butane;

BGC’s LPG storage facilities to store LPG owned by SGC or its Affiliates;

LPG owned by SGC or its Affiliates through BGC’s LPG export facilities,

s to current and future availability of capacity surplus to the requirements of y SGC of such facilities shall be pursuant to an agreement (the “LPG nd Handling Agreement”) containing such terms and conditions as the reasonably and in good faith, shall agree.

t Exclusivity; First Iraq LNG Project

ut limiting Article 8.10.3, until the earlier to occur of:

(a) the Alloc

(b) the date that is 24 m

(the “ExclusivityProjects, BGCpriority to anyand/or operatexport from I“First Gas Ex

ation Date; and

onths following Commencement of Operations,

Termination Date”), and other than in respect of the Excluded (and/or any Project Entity formed for such purpose) shall have the right, in other Entity or venture, to undertake the first project to develop, construct

e facilities for the export of LNG, Dry Gas or GTL from Iraq, and/or to raq or produce for such export any LNG, Dry Gas or GTL (such right, the port Right”).

54

8.10.2 As theother than in Affiliates and

(a) export

(b) enter intoGas to any Exclusivity Term

(c) allow or perMinistry Proje

result of the First Gas Export Right, prior to the Exclusivity Termination Date, and respect of the Excluded Projects, SGC shall not, and shall procure that its any other Entity carrying out or participating in a Ministry Project do not:

any Raw Gas or Dry Gas from Iraq;

any contract committing any reserves or supplies of Raw Gas or Dry such exports, where such exports will commence prior to the

ination Date; or

mit any Entity (including any Entity carrying out or participating in a ct) to take any of the actions described in (a) and (b) of this Article

8.10.2.

8.10.3 Subject to Article 8.10.4, BGC (and/or any Project Entity formed for such purpose) shall t, in priority to any other Entity, to undertake the first project to develop, or operate LNG Facilities in Iraq, and/or to export from Iraq, or produce for ny LNG (such right, the “First Iraq LNG Project Right”).

have the righconstruct and/such export, a

8.10.4 The Fexpire on the earlie

(a) the faCommenceme

(b) subjec

irst Iraq LNG Project Right shall apply from the date of this Agreement and shall r to occur of:

ilure of the Allocation Date to occur within six months following nt of Operations;

t to Article 8.10.5, the failure by the Private Shareholders to Validly t BGC to submit to the Higher Management Committee an

Development Plan in respect of the Initial Phase LNG Project ths following Commencement of Operations;

Prepare and requesInfrastructurewithin 12 mon

(c) the daCommittee with respe

(d) subjec

te of a positive Final Development Decision by the Higher Management ct to the Initial Phase LNG Project; and

t to Article 8.10.5, the fifth anniversary of Commencement of Operations.

8.10.5 The First Iraq LNG Project Right shall not expire pursuant to Article 8.10.4(b) or Article 8.10.4(d) in circumstanrequested, or Higher Managem

(a) a proposal fLNG Project w

ces where the Private Shareholders have not Validly Prepared and have not been able to Validly Prepare and request, that BGC submit to the

ent Committee:

or an Infrastructure Development Plan with respect to the Initial Phase ithin the 12 month period referred to in Article 8.10.4(b); or

(b) a propLNG Project w

osal for a Final Development Decision with respect to the Initial Phase ithin the five year period referred to in Article 8.10.4(d),

in each case as a resuand five-year periods

lt of any Relieving Factor. In such circumstances such 12-month shall be extended:

55

(i) in the case of t nfra

(ii) in the case of the FinDate,

and the Private Shareduration.

8.10.6 The pr

he I structure Development Plan, by six months; and

al Development Decision, to the then Revised LNG FDD

holders’ Participation Period shall be extended for an equivalent

ovisions of Article 8.10.5 and the extension mechanism thereunder shall continue e date of expiry of each six month period and each Revised LNG FDD Date

e later of: to apply on th(as applicable) until th

(a) the date ofthe Initial Pha

(b) eight yLNG Project R

8.10.7 As theProject Right is in efEntity carryin

(a) export, or en

(b) supply, or enter inreserves for tprocess all or

(c) allow or perMinistry Proje

the making of a positive Final Development Decision with respect to se LNG Project; and

ears from Commencement of Operations (following which the First Iraq ight will absolutely expire regardless of the circumstances).

result of the First Iraq LNG Project Right, and for so long as the First Iraq LNG fect, SGC shall not, and shall procure that its Affiliates and any other

g out or participating in a Ministry Project do not:

ter into any contract committing to export, LNG from Iraq;

to any contract committing to supply (or committing any he supply of), Raw Gas or Dry Gas to any project intending to a portion of such Raw Gas or Dry Gas into LNG; or

mit any Entity (including any Entity carrying out or participating in a ct) to take any of the actions described in (a) and (b) of this Article

8.10.7.

8.10.8 Subject to the limitations set forth in Article 8.10.2 and Article 8.10.7 and without of the Parties’ rights or obligations under this Agreement or any other

ent, SGC and its Affiliates (alone or with such co-venturers as they may iscretion) shall be free to:

limiting any Project Documselect in their sole d

(a) pursueliquids” produ

(b) producGas or Dry Gand pursue pr

and, in each cBGC, any ProjecShareholder th

other projects for the export of Raw Gas, Dry Gas, LNG and “gas to cts; and

e or export Condensate, LPG or NGLs, supply (or commit to supply) Raw as for the production and/or export of Condensate, LPG or NGLs,

ojects and construct any facilities, in relation to such export,

ase, neither SGC nor any of its Affiliates shall have any obligation to offer t Entity, any Private Shareholder, or any Affiliate of any Private

e right to participate in any such activities.

56

9. LNG PROJ

9.1 BGC (Project Developm

(a) a project orproduce 4 mtp

(b) subjecBGC (or such Projeproject, a “Sec

which projects mconstruction othe capacity of

9.2 The Sharehthrough the vsubject to the termthat nothing Development Project.

9.3 If BGCany LNG ProLNG Project in accoOfftake Plan Decision. Anin accordance with

ECTS

and/or a Project Entity) shall have the right (to be exercised in accordance with the ent Process) to develop, construct, own and operate:

series of projects that will enable BGC (or such Project Entity) to a of LNG (collectively, the “Initial Phase LNG Project”); and

t to Ministry approval, an additional project or projects that will enable ct Entity) to produce additional volumes of LNG (each such

ond Phase LNG Project”),

ay be developed over a number of phases and may include the f new Liquefaction Facilities and the debottlenecking of or expansions to any existing Liquefaction Facilities.

olders agree to pursue the development of the Initial Phase LNG Project arious Project Development Phases of the Project Development Process,

s of this Agreement and the Shareholders’ Agreement and provided in this Agreement shall obligate any Party to approve any Infrastructure Plan or Final Development Decision with respect to the Initial Phase LNG

makes a positive Final Development Decision with respect to the development of ject, BGC shall proceed with development and implementation of such

rdance with the Shareholders’ Agreement, and the Gas Supply and shall be amended in the manner specified in the Final Development

y such amendment shall be a Mandatory GSOP Change and shall be made Article 5.3.

9.4 In the evenconsidered bprejudice to Article

t that a Final Development Decision in respect of an LNG Project is ut a positive Final Development Decision is not made, then without

s 8.2.3, 8.3, and 8.10.5, the Parties shall cause their senior eet and discuss in good faith any changes that may be required to

ject, and/or to the structure and terms of same or any agreements relating to in order to take forward the development of the LNG Project or any G or export project that they agree.

representatives to msuch LNG Prothe Venture alternative LN

9.5 SGC arrangements are in p

(a) BGC Project) is (or will bLNG OffshorProject (inclu

shall procure (and shall procure that the Ministry procures) that binding lace with all applicable Government Agencies under which:

(and/or any Project Entity formed to carry out the Initial Phase LNG e) granted sufficient rights to exclusively occupy and use the

e Site as may be required for the purposes of the Initial Phase LNG ding the construction and operation of Liquefaction Facilities); and

57

(b) such Govern

(i) not to permlocate facilitiewould materia

ment Agencies agree:

it any other Entity to, or grant to any other Entity the right to, s in or otherwise use the LNG Offshore Site if such rights lly interfere with the rights granted under Article 9.5(a); and

(ii) to alloconduct offshassessment anconducted in Offshore Site.

9.6 In thebetween theman alternative will consider any susuch request.

w BGC (or, prior to Incorporation, a Private Shareholder) to ore surveys and investigations, including an environmental d any assessment which may be required by Law to be

respect of the Initial Phase LNG Project and/or at the LNG

event that BGC or any one or more Private Shareholders which hold (solely or ) 51% or more of all Shares then held by all Private Shareholders propose to the LNG Offshore Site as the site for the Initial Phase LNG Project, SGC

ch request in good faith but will have no obligation to agree to any If any such request is agreed, Article 9.5 shall apply with respect to such

alternate site.

10. VENTURE

10.1 General

10.1.1 Subject to

OPERATIONS

Article 10.1.2, on and from Commencement of Operations, BGC shall carry re, its operations and activities in a diligent manner applying standards,

procedures consistent with internationally accepted petroleum industry arily applied (and generally consistent with those applied by Shell and its

parable operations and circumstances and measured against the Reasonable and Prudent Operator, and in compliance with all Laws and

out the Ventupractices andpractices customAffiliates) in comstandard of aApprovals.

10.1.2 Notwithstanding the requirements of Article 10.1.1 or any other provision of this e Parties acknowledge and agree that there will be a transitional phase the operations of the Venture and its Project Facilities (including the SGC

standards, procedures and practices, may not meet or comply with, and pable of being made to meet or comply with, the standards, practices and

ferred to in

Agreement, thduring which Transfer Assets),may not be caprocedures re Article 7.9.1 and Articles 10.1.1, 10.4 and 10.7.1. BGC shall

teps to ensure that such facilities, standards, procedures and practices ply with the requirements of

take all reasonable smeet and com Articles 7.9.1, 10.1.1, 10.4 and 10.7.1 as soon

ably practicable (having regard to existing state and conditions at nt of Operations), and shall adopt a risk based approach when determining for doing so, including through the development and implementation of a

Business Improvement Program”) under the Shareholders’ Agreement ply with such standards, practices and procedures in respect to health,

Environment.

as is reasonCommencemethe priorities program (the “to meet and comsafety and the

58

10.2 Contracting

10.2.1 BGC sas it considers necesVenture (inclusecondees toShareholders’ Agreem

10.2.2 BGC sbids and awaras is practicabof equipment,through comp

10.2.3 The pprocedures anGovernmentaapply to the entry into

10.2.4 BGC shall eto be given toin circumstancompetitive on specawarding conaccordance w

10.3 Personnel, E

10.3.1 The Pain the oil and mind:

(a) BGC sthose activityCommencemeof Operationsfull effect to sam

(b) BGC shall, when fthe requisite qmaximum ext

(c) BGC employees ancompetence iinternational technical, opebe held inside or

hall have the right to engage such personnel, contractors, consultants and advisers sary to provide services and to carry out work in respect of the

ding the right to engage Shareholders as service providers and providers of the Venture on terms to be agreed and approved pursuant to the

ent).

hall establish and implement procedures relating to the tendering and evaluation of ds of contracts for the Venture. Such procedures shall provide that, as far le and subject to specified limited exceptions, all contracts for the provision facilities, goods, materials, supplies and services shall be awarded by BGC etitive bidding.

ublic procurement and Government contracting Laws and related practices, d instructions (such as those which are applicable to contracting by

l Agencies) shall not apply to BGC and any Project Entity and shall not any Project Documents.

stablish and implement practices and procedures that provide for preference Iraqi entities and nationals and to goods and services produced within Iraq ces where they are considered by BGC (acting reasonably) to be materially

ified criteria to those offered by international suppliers, and BGC in tracts shall give priority to such nationals, entities, goods and services in ith those practices and procedures.

mployment and Training

rties acknowledge and agree that the placement and development of Iraqi nationals gas industry is an important objective of the Venture. With this objective in

hall offer secondment opportunities within BGC to all SGC employees in and operation areas which are transferred from SGC to BGC at nt of Operations, and BGC and SGC shall prior to Commencement enter into the SGC Services and Secondment Agreements to give

e;

illing permanent positions within BGC, employ persons with ualifications and experience for the applicable position and, to the

ent possible, employ Iraqi nationals;

shall, as a priority, prepare and implement training programmes for d secondees with the aim of developing skills and improving their n key areas (including training and development in applicable petroleum industry practices and procedures and administrative, rational, finance and management skills, and including training to

outside or Iraq);

59

(d) BGC will dexperienced IIraqi personneare better understoodand structureCommittee’s Such plans shin accordance

(e) the Sharehosecondment oBGC and SGdevelopment (the termapplicable Shcompetition lsecondment o

10.3.2 The Higherimprove the b

10.4 Environm

The Parties acknowledimpact the Environm

evelop plans for the placement, over time, of suitably qualified and raqi personnel in appropriate positions within BGC held by non-l within five years (when the organisational needs and capabilities

) and with regard to any potential changes to the composition of the Management Team arising out the Higher Management review referred to in article 9.2.3 of the Shareholders’ Agreement. all be subject to the approval of the Higher Management Committee with the Shareholders’ Agreement; and

lders shall, from time to time, identify short term assignment or pportunities within their own organizations for suitable personnel of C secondees who are Iraqi nationals for additional training and

s of such assignments and secondments to be agreed by the areholders or the applicable Affiliates and to take into account any aw or antitrust law issues that may arise out of any assignment or pportunities).

Management Committee will, from time to time, consider programs to enefits of BGC employees and secondees.

ent

ge and agree that the activities of the Venture, by their nature, may ent. Notwithstanding this and without limiting Articles 10.1.1 or

10.1.2, BGC shall carry ouenvironmental standaraccepted petroleum inthe Private Shareholdthose applied by Shmeasured against the with all applicable Law

10.5 Imports and Exports

Subject to all applicab

(a) BGC, the Shareholdeservice providinto Iraq, andsubject to Lamaterials and activities with respe

(b) the exgoods and peruse of the emimported prop

t the Venture and its operations and activities applying ds, practices and procedures that are consistent with internationally dustry practices customarily applied in (and for so long as Shell is er with the largest Proportionate Share, generally consistent with ell Affiliates in) comparable operations and circumstances and standard of a Reasonable and Prudent Operator, and in compliance

s relating to the Environment.

le Laws:

rs and their respective Affiliates, contractors and other ers engaged in carrying out the Venture shall be entitled to import shall be entitled to re-export (or to sell into the domestic market w), all or any goods, equipment, vehicles, machinery and other property (including intangible assets such as licenses) to be used for

ct to the Venture; and

patriate employees of each of them shall be entitled to import household sonal effects, provided that such properties are imported for the sole ployee and the employee’s family and provided further that such erty shall be re-exported by employee without any export duty or

60

impost upon termIraq in accord

10.6 Permit

SGC shall provide, anreasonably be requireand work and residenwork and services wiclearances and permitand supplies required

10.7 Measurem

10.7.1 BGC Petroleum Proout in the Rawwhich facilitpetroleum ind

10.7.2 For exisare located outside ofBGC, BGC anshall procureoperation, coprocedures reProducts supp

10.8 Security

SGC shall, and after Inin Iraq in which Ventuand from such areas. armed forces. SGC shIraqi armed forces anAffiliates shall have aIraqi armed forces or security as contemplaopinion and followinpersonnel to be inconsor with the standardsoperations to be condsupplementary measucompetent private seccosts of any such supPrivate Shareholder rParties agree that any

ination of such employee’s employment, or be disposed of in ance with the prevailing Government rules and regulations.

s and Clearances

d shall procure that its Affiliates provide, such assistance as may d by BGC or any Shareholder to obtain and renew required visas cy permits (including for any other Entity or person performing

th respect to the Venture, and for their dependents) and to obtain s in connection with the import and export of materials, equipment in respect of the Venture.

ent Facilities

shall install facilities for the measurement of volumes of Raw Gas received and ducts sold by BGC in accordance with the principles and procedures set Gas Supply Agreement and the Domestic Sale and Purchase Agreements,

ies and procedures shall be consistent with internationally accepted ustry standards for same.

ting and future gas measurement facilities and liquids measurement facilities that BGC’s battery limits and/or are not owned and/or operated by

d the relevant owners and operators of such facilities shall enter (and SGC such entry) into agreements with respect to such facilities and their vering (among other things) measurement obligations, principles and quired to ensure the accurate measuring of Raw Gas and Petroleum lied to and by BGC.

corporation BGC shall also, provide adequate security within areas re operations are or are to be conducted, including during travel to

This security shall as of preference be provided through the Iraqi all be solely liable for the conduct of all security operations by the d neither BGC nor the Private Shareholders or their respective

ny liability or obligation to any party for any acts or activities of the be obliged to reimburse SGC for the cost and expense of providing ted herein. However, if a Private Shareholder, in its reasonable g consultation with SGC, considers the security provided for its istent with its policies on health, safety, Environment and security, of a Reasonable and Prudent Operator, or inadequate to allow ucted safely and without threat to life, it may implement such res as it reasonably requires, including the engagement of urity providers licensed to operate in the Republic of Iraq. The plementary measures shall be paid (prior to Incorporation) by the equesting such measures and (after Incorporation) by BGC. The such costs incurred prior to Commencement of Operations shall be

61

considered “Capitalisthereafter shall be pafrom time to time in rwith the Voluntary Prefforts to implement s

11. INVESSECURITY

11.1 General

11.1.1 Subjecobtaining all necobligations of

(a) BGC, the Project Enthe Term, to:

(i) importsuch currency at poperations individends and paym

(ii) make convertible cudividends, Shand to make engineering, maintenance contemplated agreements rpenalty;

(iii) receivfrom the sale

(iv) maintawheresoever sand bank accoretain or dispo

(v) obtainand loans fromfrom lenders; and

(vi) grant sFinance Parties in connection with prBGC or for th

able Costs” as defined in the Shareholders’ Agreement and id by BGC, and that such security arrangements shall be revised esponse to changes in security conditions. All Parties shall comply inciples on Security and Human Rights and shall support all such uch principles.

TMENT FRAMEWORK, PROJECT ENTITIES AND SGC PAYMENT

t to (but without limiting any activities permitted under) all applicable Laws and to essary Approvals required thereunder, and without limiting any

a Party under any Project Document:

tities and the Private Shareholders shall have the right, during

, export and exchange freely convertible currency, and to exchange revailing rates, in each case as required for their

relation to the Venture (including for the payment of ents of principal and interest on debt);

payments related to the Venture in or outside of Iraq in any freely rrency (including the right to pay and to repatriate/transfer areholder Loans and loan repayments, earnings and capital all necessary payments outside of Iraq in respect of the

procurement, construction, operation, ownership, and financing of the Venture and any other activities hereunder or in the Shareholders’ Agreement and other

elating to the Venture) all without undue delay, cost or

e, retain and dispose of funds outside of Iraq, including all proceeds of Petroleum Products and Ancillary Products;

in and operate bank accounts in whatsoever currency or name and ituated (including maintaining bank accounts outside of Iraq unts inside of Iraq in foreign and/or local currencies) and to se of any funds therein;

financing or refinancing as the case may be, in the form of equity Shareholders (and their Affiliates), and in the form of debt

ecurity over its assets, including contractual rights, in favour of any oviding financing or refinancing to

e Venture (if any); and

62

(b) the Sharehoto any Entity Agreement).

11.1.2 The ri

lders shall have the right to transfer their Shares in the capital of BGC (subject to the provisions of this Agreement and the Shareholders’

ghts granted to the Shareholders under Article 11.1.1(a) shall only apply in relation e and shall not apply with respect to any activities of such Shareholders or

t are not in relation to the Venture. to the Venturtheir Affiliates tha

11.2 Projec

11.2.1 BGC shall houtside Iraq (determine purthat BGC couincluding enticonnection wi

11.2.2 In additionprovision of tBGC, or actiodeemed for albe performedentitled to all suchof the foregoisuch benefits,this Agreement shamanner it app

(a) if a PrArticle

t Entities and Other Entities

ave the right to establish and maintain such Affiliate or Affiliates inside and with such shareholding or participation interests as the Shareholders may suant to the Shareholders’ Agreement) in order to undertake any activity ld undertake itself pursuant to this Agreement (each a “Project Entity”), ties for financing, asset management, personnel, operating or marketing in th the Venture (including any LNG Project).

to those that are stated to expressly apply to a Project Entity under any his Agreement, any benefit, privilege or right conferred on or granted to n to be performed in favour of BGC, pursuant to this Agreement shall be l purposes to confer the relevant benefit, privilege or right upon, and shall in favour of, any such Project Entity, and such Project Entities shall be

benefits and privileges and to exercise all such rights and enforce all ng as if they were parties to this Agreement. In addition, BGC may enforce privileges, rights and such actions on behalf of such Project Entities and

ll be read and interpreted to apply to each Project Entity in the same lies to BGC. Without limiting the generality of the foregoing:

oject Entity is formed to undertake any part of the Venture, all references in 3 and 7.1 to “BGC” shall be read and interpreted as if they also included

t Entity; and references such Projec

(b) if a PArticle

roject Entity is formed to undertake an LNG Project, the references in 7.7 and Article 9 to “BGC” shall be read and interpreted as if they also

rences to such Project Entity and to the LNG Project to be such Project Entity.

included refeundertaken by

11.2.3 Withoa Project Entityuse (and shall procuany Project Erights conferr

11.2.4 Provided ththe right to eactivities thatEntities”). Bshare facilities and inf

ut prejudice to a Party’s obligations under, or to the benefits, privileges or rights of under, this Agreement or any other Project Document, each Party shall

re that each of its Affiliates use) its Best Endeavours to ensure that ntity designated by BGC is able to exercise such benefits, privileges or

ed on BGC pursuant to this Agreement as BGC may elect.

at the Ministry first agrees in writing, BGC or any Project Entity shall have stablish and participate in joint ventures or other Entities that carry out BGC itself has the right to undertake pursuant to this Agreement (“Other GC and any Project Entity shall have the right to provide services to and

rastructure with such Other Entities.

63

11.3 Chang

11.3.1 Subject to

e of Law and Economic Stability

Article 11.3.2, if at any time and from time to time after the date of this Agreement:

(a) there o

(b) BGC Government revocation, m

(i) despiteprocedures and f

(ii) other Entity; or

(c) there opart of the assEntity.

and BGC or awill have) a mwith all ProjePhase LNG P(but only in its“Adverse Changeamendments trequired to reShareholders Adverse Chan

11.3.2 The PartiesAgreement ha35% per annumthen applicable toin the corporateBGC of up tpurposes of this

ccurs any Change in Law;

or any other Project Entity fails to obtain any Approval from any Agency that is required for its operations, or there occurs any odification, or non-renewal of any such Approval, in either case:

BGC or such Project Entity having complied with all material ormalities required by Law to obtain such Approvals; and

than as a result of the fault or negligence of BGC or such Project

ccurs any act of expropriation by any Government Agency of all or any ets of, or shares or other ownership interest in, BGC or any Project

ny Private Shareholder is able to demonstrate that such event has had (or aterial and adverse effect on the economic position of (x) BGC together

ct Entities (taken as a whole), (y) any Project Entity undertaking the Initial roject or any Second Phase LNG Project, or (z) any Private Shareholder capacity as a Shareholder), then such event will be considered to be an

” for purposes of this Agreement and the Parties shall make such o this Agreement and the other Project Documents as may reasonably be store the economic position of BGC, any Project Entity and/or the Private to the overall economic position that they would have enjoyed had such ge not occurred.

agree that the economic benefits of the Project as at the date of this ve been calculated on the basis of an assumed corporate income tax rate of

being applicable to BGC, rather than the 15% corporate income tax rate companies under Law. Accordingly, the Parties agree that any change

income tax rate that results in a corporate income tax rate payable by o 35% per annum shall not be considered an Adverse Change for the

Article 11.3.

11.3.3 If BGCnotify the othsuch amendmto restore the economwhole), (b) anPhase LNG Pthe overall economnot occurred.

or a Private Shareholder believes that an Adverse Change has occurred, it shall er Parties and the Parties shall meet and in good faith endeavour to agree on ents to this Agreement and the other Project Documents as may be required

ic position of (a) BGC together with all Project Entities (taken as a y Project Entity undertaking the Initial Phase LNG Project or any Second roject, or (c) any Private Shareholder (in its capacity as a Shareholder) to

ic position that they would have enjoyed had such Adverse Change If the Parties are unable to agree on the merit of making such amendments

64

or on the subsbe agreed byprovided in Artic

tance thereof within 90 days after such notice (or such other period as may the Parties), any Party may refer the matter in dispute to arbitration as

le 15.

11.4 Tax D

11.4.1 In this

ifferentiation Account

Article 11.4:

(a) “BGCcalculation offinancial year;

(b) “Finalapplicable Iraqi taxtotal and final corpoassessed and agreed

(c) “Tax Surplusin corporate incomsubtracted frompaid annually in cosame financial yeaper annum for

11.4.2 In vie

Tax Assessment” means, in respect of any financial year, BGC’s own the total corporate income tax payable by BGC for the relevant

Tax Assessment” means the final tax assessment agreed by BGC with the authorities for a financial year of BGC pursuant to which the

rate income tax payable by BGC for the relevant year is ; and

” means the amount in Iraqi Dinar that BGC actually pays annually e tax to the applicable Iraqi tax authorities for a financial year

the amount in Iraqi Dinar which BGC would have had to have rporate income tax to the applicable Iraqi tax authorities for the r if the corporate income tax rate applicable to BGC was 35%

such financial year.

w of the assumption set out in Article 11.3.2, immediately following the of the BGC Tax Assessment for each financial year, the Finance Director ultation with the Managing Director) calculate the Tax Surplus and pay the Tax Surplus into an interest bearing onshore bank account in the name of ax Differentiation Account”), such monies to be held by BGC, together thereon, for and on behalf of SGC and subject to

determinationshall (in consamount of theBGC (the “Twith interest Article 11.4.4 below. If

s are required to separately file and pay Taxes in Iraq (rather than iling and payment done on a consolidated basis with BGC), this

any Project Entitiehaving such f Article 11.4.2 will be appliediscretely in accordan

11.4.3 At the mdeterminationDirector and Mcalculation ofthe calculatiodispute withindispute withinan Expert pursuant to

d (mutatis mutandis) to each of such Project Entities separately and ce with applicable Laws and accounting standards.

eeting of the Higher Management Committee immediately following the of the BGC Tax Assessment for each financial year of BGC, the Finance

anaging Director shall present to the Higher Management Committee their the Tax Surplus arising in such financial year. In the event SGC disputes n of the Tax Surplus, the Parties shall seek in good faith to resolve such a period of 30 days. In the event the Parties are unable to resolve such such time period, then any Party may refer such dispute for resolution by

Article 20.

11.4.4 BGC sthe followingResolution” as def

hall apply all amounts standing to the credit of the Tax Differentiation Account in order of priority or in such manner as BGC (acting by a “Special

ined in the Shareholders’ Agreement) may determine:

65

(a) first, forthcoming 12 mand

(b) secondDifferentiatio

11.4.5 To the extenmore in any fDifferentiatio

toward Cash Calls due or contemplated to be due from SGC in the onths pursuant to the then current annual funding plan of BGC;

, to remit the balance of the amounts standing to the credit of the Tax n Account to SGC.

t that the corporate income tax rate applicable to BGC is 35% per annum or inancial year no Tax Surplus payment will be made by BGC into the Tax n Account or otherwise under Article 11.4.7 in respect of such financial

year.

11.4.6 To theAssessment isamounts haveBGC within 6that (a) the Tais greater thanreceives a refthen such amounts (the Tax Surprefund or rebthis Article

extent that the Tax Surplus for any financial year calculated under the Final Tax less than the Tax Surplus calculated under the BGC Tax Assessment and been paid to SGC, the amount of such shortfall shall be repaid by SGC to 0 days of the receipt by BGC of the Final Tax Assessment. To the extent x Surplus for any financial year calculated under the Final Tax Assessment the Tax Surplus calculated under the BGC Tax Assessment or (b) BGC

und or rebate in respect of any corporate income tax previously paid by it, i.e., the amount of the difference between the final Tax Surplus and

lus calculated under the BGC Tax Assessment and/or the amount of the ate, as applicable) shall constitute Tax Surplus to which the provisions of

11.4 shall apply. BGC shall use its Best Endeavours to seek any refund or ct of corporate income taxes to which it may be entitled under Law. rebate in respe

11.4.7 If, for SHA Paymen

(a) BGC entire then-remremitted to SGC; and

(b) BGC will remwhich such 84-m

11.5 SGC Pay

11.5.1 In this

a period of 84 consecutive months, there has been no Domestic Payment Default or t Default, then unless SGC otherwise agrees:

shall cause the closing of the Tax Differentiation Account and cause the aining balance thereof (including accumulated interest) to be

it all Tax Surpluses arising from and after the financial year in onth period ends directly to SGC.

ment Security

Article 11.5:

(a) “Accehigher by Mo

(b) “Requprojected paymunder the Domshall be calcu

ptable Credit Rating” means a long term unsecured credit rating of A3 or ody’s and A- or higher by Standard & Poors; and

ired Reserve Level” means an amount in U.S. Dollars equal to the ents to be made by SGC to BGC for the forthcoming three months estic Sale and Purchase Agreements. The Required Reserve Level

lated at the end of each calendar quarter.

66

11.5.2 Application

SGC hereby authoriseto which SGC is enAgreement or any otAffiliate Lender) is enany Domestic Paymenplace of payment of su

11.5.3 SGC A

(a) On and from Comm

(i) a revolvsatisfactory toAcceptable Cequal to the Rpayment of aAgreements (the “

(ii) a stansatisfactory toAcceptable Cequal to the Rpayments of aAgreements aCredit”).

The Direct Pconstitute “Ac

(b) If SGCof Credit willDomestic Sale andPayment Def

of Payments and Set-off

s BGC to withhold, apply and set-off any payment or credit balance titled under the Raw Gas Supply Agreement, the Shareholders’ her Project Document, or to which SGC (and, if any, its SHL titled to under the Shareholder Loan Agreement, in satisfaction of t Default or SHA Payment Default regardless of the currency or ch credit balance, payment or sum.

cceptable Credit Support

encement of Operations SGC shall provide to BGC either:

ing letter of credit that is in form and substance reasonably BGC and is either issued or confirmed by an Entity with an redit Rating, which such letter of credit will be in an amount

equired Reserve Level and will be used by SGC to effect mounts owing under the Domestic Sale and Purchase

Direct Pay Letter of Credit”); or

dby letter of credit that is in form and substance reasonably BGC and is either issued or confirmed by an Entity with an redit Rating, which such letter of credit will be in an amount equired Reserve Level and will be used by SGC to secure mounts owing under the Domestic Sale and Purchase

nd the Shareholders’ Agreement (the “Standby Letter of

ay Letter of Credit and the Standby Letter of Credit shall each ceptable Credit Support” for purposes of this Agreement.

elects to provide the Direct Pay Letter of Credit, then the Direct Pay Letter be used to effect payment of all amounts owing by SGC under the

Purchase Agreements. In addition, if there occurs an SHA ault and, after BGC exercising its rights to set-off under Article

11.5.2, such SHA Pato draw on theof the SHA PaymLetter of Credit is at aif any quarter

yment Default is not remedied in full, BGC shall be entitled Direct Pay Letter of Credit and to apply such monies in satisfaction

ent Default. SGC shall ensure that the amount of the Direct Pay ll times equal to the Required Reserve Level; provided that

ly calculation of the Required Reserve Level pursuant to Article 11.5.1(b) results in an iperiod of 30 dDirect Pay Le

(c) If SGCCredit will bePurchase Agreemoccurs a Dom

ncrease in the Required Reserve Level, SGC shall have a ays from the date of such calculation to increase the amount of the tter of Credit to the revised Required Reserve Level.

elects to provide the Standby Letter of Credit, then the Standby Letter of used to secure amounts owing by SGC under the Domestic Sale and

ents and the Shareholders’ Agreement, and in the event there estic Payment Default or an SHA Payment Default and, after BGC

67

exercising its rights to set-off under Article 11.5.2, such Domestic Payment ent Default is not remedied in full, BGC shall be entitled to

tandby Letter of Credit and to apply such monies in satisfaction of ent Default or SHA Payment Default. SGC shall ensure that

f the Standby Letter of Credit is at all times equal to the Required l; provided that if any quarterly calculation of the Required Reserve

Default or SHA Paymdraw on the Sthe Domestic Paymthe amount oReserve LeveLevel pursuant to Article 11.5.1(b) results in an ncrease in the Required Reserve

hall have a period of 30 days from the date of such calculation to mount of the Standby Letter of Credit to the revised Required

iLevel, SGC sincrease the aReserve Level.

11.5.4 Ongoi

(a) If at any timbeen remedied in fapplication of

ng SGC Payment Default

e any Domestic Payment Default or SHA Payment Default has not ull within one month of the occurrence thereof through the

Articles 11.5.2 and 11.5.3, then (subject to Article 11.5.4(b)) BGC t (in place of SGC) to lift and sell (via SOMO pursuant to the

cy Agreement) SGC Export Products up to the value of all such able) at the time of such lifting. If BGC elects to exercise such

give not less than one month’s notice to SGC indicating that it (or a on its behalf) is going to exercise its rights to lift SGC Export

shall have the righSOMO Agendefaults (as applicright, it shall Project EntityProducts under this Article 11.5.4. If all Domestic Payment Defaults and SHA

ults are not remedied in full within one month of such notice, then Project Entity) shall commence lifting SGC Export Products and

he proceeds of the sale of any SGC Export Products lifted to estic Payment Defaults and/or SHA Payment Defaults. BGC

ause to be paid) any proceeds from the sale of SGC Export Products ount required to remedy the defaults to SGC.

Payment DefaBGC (or suchshall apply tremedying the Domshall pay (or cin excess of the am

(b) Notwithstanding Article 11.5.4(a), BGC will not have the right to lift and sell roducts to the extent that doing so would cause SGC to be in default

ages under, any agreement with a third party for the sale of SGC cts. If SGC asserts that any lifting of SGC Exports Products is a result of the preceding sentence, then SGC shall procure that such ay the proceeds of the sale by SGC of SGC Export Products to third y to BGC to the extent required to remedy the Domestic Payment r SHA Payment Defaults.

SGC Export Pof, or incur damExport Produprohibited as third parties pparties directlDefaults and/o

11.5.5 Expir

If at any time

(a) there has bperiod of 84 c

ation of Payment Security

een no Domestic Payment Default or SHA Payment Default for a onsecutive months; and

68

(b) SGC has not been in breach of its obligations under Article 11.5.3 to provide (or vel of) Acceptable Credit Support for a period of 84 consecutive restore the le

months,

then, unless SGC otherwise requests, Articles 11.5.3 and 11.5.4 shall cease to have effect.

11.5.6 Projec

The applicable provisi

t Documents

ons of Article 11.5 and any other provisions of this Agreement that ights and obligations of BGC and SGC under this give full effect to the r Article 11.5 shall r incorporated in, the Raw Gas Supply Agreement, the Domestic greements and any other applicable Project Documents and the eement.

also be reflected in, oSale and Purchase AShareholder Loan Agr

11.6 Further Ass

BGC and SGC shall tBest Endeavours to erequired to give full eand the transactions co

urances

ake (and each shall ensure that its Affiliates take and shall use its nsure that all other applicable Entities take) any necessary actions ffect to the rights and obligations of the applicable Parties under, ntemplated in, this Article 11.

12. INFO

12.1 Excha

Subject to Article

RMATION, RECORDS, AUDIT AND INSPECTION

nge of Information

12.4, each Party shall ptly provide (and procure that its Affiliates other Parties:

promprovide) to each of the

(a) all infoexpected to m(including in contemplated

(b) such orequested froreasonably be

(i) materianticipated to

(ii) materially aproduced from

(iii) materianticipated torelating to ufacilities);

rmation of which it is aware relating to any matter that could reasonably be aterially impact the implementation and operation of the Venture relation to the functioning of the JPC Committee in the manner in this Agreement); and

ther information materially impacting the Venture as may reasonably be m time to time, including in relation to any matter that could expected to:

ally increase or decrease the amount of Raw Gas that is or is be produced from the Dedicated Fields;

lter the specifications of Raw Gas that is or is anticipated to be the Dedicated Fields;

ally increase or decrease the amount of Raw Gas that is or is be available for treatment and processing (including matters pstream development and production and/or upstream

69

(iv) materially afsuch Raw Gdevelopment a

(v) materially adelivery of, Petroleumdevelopment and oper

(vi) materidetails contain

12.2 Inform

(a) Withinintervals as the Highfrequently thconnection wEntity), BGCconfirm the Rpreparing suc

(b) In add

fect the ability of BGC to take delivery of or treat and process as (including matters relating to BGC’s infrastructure nd operation of its facilities);

ffect the ability of BGC to deliver, or of any purchaser to take Products (including matters relating to downstream ation of downstream facilities); and

ally impact or change the Gas Supply and Offtake Plan and any ed therein.

ation Regarding Dedicated Fields and Independent Gas Consultant Reports

12 months following Commencement of Operations, and thereafter at such er Management Committee may determine (but no less

an once every four years and as otherwise may be required in ith any financing or refinancing undertaken by BGC or any Project shall commission a report by an Independent Gas Consultant to ecoverable Volumes and the Available Volume Profile. The cost of h report shall be borne by BGC.

ition to the reports under Article 12.2(a), any Shareholder may at any time to time commission a report by an Independent Gas Consultant to ecoverable Volumes and the Available Volume Profile, including in ith the matters set out in

and from timeconfirm the Rconnection w Articles 7.1.2 and 7.2(c) and with any

efinancing undertaken by that Shareholder. The cost of preparing hall be borne by the Shareholder(s) requesting preparation of the

financing or rsuch report ssame.

(c) Each PIndependent Gother assistance as mof a report pu

arty shall provide (and SGC shall procure that the Ministry provides) to the as Consultant such information, access to relevant personnel and

ay reasonably be required in connection with its preparation rsuant to this Article 12.2. Without limiting the foregoing, SGC

and shall cause the Ministry and Entities undertaking relevant ects to make) available to the Independent Gas Consultant all

ct of the Dedicated Fields and any other fields from which es and Additional Volumes will be supplied that is reasonably

the Independent Gas Consultant to determine the Recoverable the Available Volume Profile, including in connection with the t in

shall make (Ministry Projinformation in respeDeficit Volumnecessary forVolumes andmatters set ou Articles 7.1.2 and 7.2(c).

(d) Each assistance it p

(e) The re

Party shall bear its own costs and expenses in connection with any rovides to the Independent Gas Consultant.

ports prepared pursuant to this Article 12.2 will include information with production only and will not include any information with respect or anticipated production of crude oil, and the Independent Gas all be so instructed in connection with the preparation of such

respect to gasto the actual Consultant sh

70

reports. At tagreement undertakinformation relathe course of BGC, any ProjecShareholder.

12.3 JPC Co

Subject to Article

he request of SGC, the Independent Gas Consultant shall sign an ing to maintain the confidentiality of any non-public

ting to actual or anticipated crude oil production that it receives in its work, including an obligation not to disclose such information to

t Entity, any Private Shareholder or any Affiliate of a Private

mmittee

12.4, the relevant Parties shall (and SGC shall procure that the Ministry e to the JPC Committee all information that they are required to ction 5 of the JPCC Terms of Reference.

shall) promptly providprovide pursuant to Se

12.4 Confid

12.4.1 Any inforpursuant to Artic

entiality and Restricted Information

mation provided by or to a Party or to the JPC Committee and JPCC Members les 12.1 or 12.2, any other applicable provision of this Agreement, or the

ference, shall be Confidential Information to which the provisions of JPCC Terms of Re Exhibit 4 shall apply.

12.4.2 Without prejudice to a Party’s obligations under this Article 12, if any information that is equested to be disclosed under this Agreement or any other agreement Venture is:

required or rrelating to the

(a) subjeccontractual ob

(b) a tradeof a commerciasensitive matte

(such information, “other Parties (to the mInformation aof further informprocure that aactions whichRestricted Inforprocure that erelease any othe approval owhen requestethird parties g

12.5 Record

BGC shall prepare, mof its operations and a

t to applicable laws (including competition/anti-trust laws), other legal or ligations, or legal privileges that prevent or restrict its disclosure, or

secret or is otherwise considered (i) by any Party (acting reasonably) to be lly sensitive nature or (ii) by SGC (acting reasonably) to be a

r relating to state policy or national security,

Restricted Information”), the relevant Party shall give notice to the aximum extent permissible) of the general nature of the Restricted

nd its relevance and issues arising from it, and the reasons why disclosure ation is restricted. If requested by a Party, the notifying Party shall

ny consents which it or which its Affiliates are required to provide, or any it or its Affiliates are required to take, in order to enable disclosure of the

mation are provided and taken, and shall use its Best Endeavours, and ach of its Affiliates use its Best Endeavours, to have any other Entities

ther restrictions on the disclosure of such information (including to obtain r consent of applicable third parties to disclose such information). If and d, each Party shall enter into appropriate confidentiality arrangements with overning the disclosure and use of such information.

s and Accounts

aintain and keep at its offices in Iraq accurate accounts and records ctivities with respect to the Venture. All such records and accounts

71

shall be prepared in aindustry practices and

12.6 Audit and Inspection

BGC shall make its government representout their statutory duti

13. DEFAUL

13.1 Effect

If:

(a) a Default TShareholders’ Agreem

(b) a Private Sh

then upon the comAgreement, thautomatically term

manner that is consistent with internationally accepted petroleum international accounting standards which are applicable to same.

books of account and other records available to duly authorised atives at such times and for such purposes as are required to carry es in accordance with Law.

T AND TERMINATION

of Default Transfer Notice or Transfer Option Notice

ransfer Notice or a Transfer Option Notice is given pursuant to the ent; and

areholder is to Transfer its Shares as a result of such notice,

pletion of such Transfer in accordance with the Shareholders’ e rights and obligations of such Shareholder under this Agreement shall

inate, except as provided in Article 17.6.

13.2 Termi

If a Force Majeure T

nation Following Force Majeure Termination Notice

ermination Notice is given pursuant to Article 22, then upon the ransfer of all of the Private Shareholders’ Shares to SGC in le 22.6 of the Shareholders’ Agreement, this Agreement and the s of the Parties hereto shall automatically terminate, except as

completion of the Taccordance with articrights and obligationprovided in Article 17.6.

13.3 Private

13.3.1 Each oa Party to thisyears from thextension pu

Shareholders’ Participation Period

f the Private Shareholders shall be entitled to participate in the Venture, and to be Agreement and to hold their Shares in BGC, for a minimum period of 25 e date of Commencement of Operations. Such minimum period (plus any rsuant to Articles 7.1.3, 7.4.5, 8.2.3, 8.1 .50 , 13.3.2 , 22.4(b) of this rticle 22.3.4 of the Shareholders’ Agreement, or as otherwise provided in

r the Shareholders’ Agreement) is referred to herein as the “Private ’ Participation Period”.

Agreement, athis Agreement oShareholders

13.3.2 The Parties agree to mof Commencemthe date of Common an annualextension to period referred to in

eet within a reasonable time before the 25th anniversary of the date ent of Operations (and in any event, no later than the 22nd anniversary of

encement of Operations) and thereafter on a regular (and in any event, ) basis, for the purpose of discussing and agreeing, in good faith, an the Private Shareholders’ Participation Period beyond the initial 25 year

Article 13.3.1. If the Parties agree to such an extension (and if the

72

Parties agree to anyshall (on each

13.3.3 Upon Shareholders shall Trother Venturedesignated EnShareholder. accordance w

13.3.4 The Ereplacing an Equivalent AArticle

further extensions) the Private Shareholders’ Participation Period occasion) be automatically extended by the agreed period.

expiry of the Private Shareholders’ Participation Period, each of the Private ansfer to SGC, or an Entity designated by SGC, all of its Shares and

Interests and Venture Obligations, against payment from SGC or such tity of an amount equal to the End of PSH Term Value attributable to such Such payment and the Transfer of the related Shares shall be effected in ith article 18.7 of the Shareholders’ Agreement.

nd of PSH Term Value (including the Depreciated Replacement Cost, the cost of asset with its Modern Equivalent Asset, the determination of a Modern sset, and the deductions (and the basis of their calculation) referred to in

13.6.2 shall be as agreed between SGC and the Private Shareholders, applying the ing the methodology set out in definitions and utilis Article 13.6. If the Parties cannot

value (or any part of such value) within 45 days from the date of expiry of areholders’ Participation Period,

agree on suchthe Private Sh Article 13.6.1 shall apply.

13.4 Shareh

If a Shareholder TranTransfer) Transfer theto the transferee and iwith article 18.7 of thand shall have no furt(save for any that maTransferred to the trapursuant to this AgreeArticles specified in A

older Exit

sfers all of its Shares in BGC it shall (simultaneously with such balance of its Venture Interests and all of its Venture Obligations t shall, automatically on completion of such Transfer in accordance e Shareholders’ Agreement, cease to be a Party to this Agreement her rights, obligations or liabilities in its capacity as a Shareholder y have accrued up to the date of such Transfer and have not been nsferee as part of its Venture Interests and Venture Obligations ment and/or the Shareholders’ Agreement) and provided that those rticle 17.6(a) shall continue to apply to such Shareholder.

13.5 Comp

13.5.1 Each PBest Endeavorequired of thVenture Inter

letion of Transfers

arty shall take, and each shall cause its Affiliates to take (and SGC shall use its urs to cause all relevant Government Agencies to take) all actions that are em to give full effect to the completion of any Transfer of Shares and other ests and Venture Obligations to be made in accordance with Article 13,

Article 14 andArticle

/or the Shareholders’ Agreement, and in the case of a Transfer pursuant to 13.3, e

not later than in accordanc

ach Party shall use its Best Endeavours to ensure completion takes place 90 days after the date of agreement or determination of the amount payable e with the relevant provisions of this Article 13, the Shareholders’ d, if applicable, Agreement an Article 20.

13.5.2 All sumade in accoAgreement aShareholders’Agreement an

ch Transfers of Shares and other Venture Interests and Venture Obligations shall be rdance with the procedure set out in article 18.7 of the Shareholders’

nd such provisions, together with articles 18.8, 18.9 and 18.10, of the Agreement shall be deemed to be incorporated in full herein, and this d the Shareholders’ Agreement shall be read and construed accordingly.

73

13.6 Determ

13.6.1 Whereattributable to

ination of End of PSH Term Value

the relevant Parties cannot reach agreement on the End of PSH Term Value a Private Shareholder pursuant to Article 13.3.4 within the 45-day period ein, any one of them may refer the valuation in dispute to an Expert for

rdance with specified therdetermination in acco Article 20, provided that such referral shall be limited

tion and determination of the disputed value applying the relevant d utilising the methodology set out in this

solely to consideradefinitions an Article 13.6.

13.6.2 The “End of PSH Ter(expressed in of:

(a) such PCost of all eArticle

m Value” attributable to a Private Shareholder shall be the amount U.S. Dollars and without double counting) which is equal to the aggregate

rivate Shareholder’s Proportionate Share of the Depreciated Replacement xisting fixed assets of BGC as determined in accordance with

13.6.3, determined as of the end of the most recent financial year;

plus

(b) such Privcovered undermost recent financial y

plus

(c) such Pperiod from the commpracticable date pShareholders

plus

(d) 100% Loans made interest thereon;

less

(e) such Pdetermined aShareholder Lor its SHL Aff

The amounts of BGC’s auditedIFRS. The amaccounts prep

ate Shareholder’s Proportionate Share of the value of all other assets, not (a) above, as shown in BGC's audited accounts as of the end of the

ear;

rivate Shareholder’s Proportionate Share of the net income of BGC for the encement of the then current financial year up to the latest

rior to the date of agreement by SGC and the Private of, or determination by the Expert of, the End of PSH Term Value;

of the total amount of all then outstanding Advances and Partial Carry by or on behalf of the Private Shareholder together with accrued

rivate Shareholder’s Proportionate Share of the total liabilities of BGC, s of the end of the most recent Financial Year (excluding any oans and Partial Carry Loans provided by such Private Shareholder iliate Lender).

referred to in paragraphs (b) and (e) above shall be determined on the basis accounts for the relevant Financial Year, prepared in accordance with

ounts referred to in (c) above shall be determined on the basis of interim ared on the basis of the same accounting principles used to determine the

74

audited annuaDollars on the

13.6.3 The “D(expressed inwith its Modeterioration remaining opinvestment isused in determE&Y Valuatio

13.6.4 The “Mand equivalenand constructed or m

13.7 Other Rem

The provisions of th

l accounts. All such amounts shall be translated from Iraqi Dinar to U.S. basis set forth in article 13.1.4 of the Shareholders’ Agreement.

epreciated Replacement Cost” of all existing assets of BGC shall be the amount U.S. Dollars) that is equal to the cost of replacing each of BGC’s assets dern Equivalent Asset less, for each asset, deductions for physical and all relevant forms of obsolescence and optimisation, based upon the erational life of the assets in the case where no further maintenance or undertaken on such assets. For these purposes, the valuation principles

ining the Asset Transfer Price of the SGC Transfer Assets pursuant to the n Report shall be applied.

odern Equivalent Asset” of an asset means an asset that has a similar function t productive capacity to the asset being valued, but of a then-current design

ade using current materials and techniques.

edies

is Article 13 are intended to supplement, but not override, the 20, 21 and 22 of the Shareholders’ Agreement. The rights of a provisions of articles

Party pursuant to this Article 13 and any other Article of this Agreement or any article of reement shall be without prejudice to any other remedies it may arty or under any other agreement.

the Shareholders’ Aghave at law against a P

13.8 Transition S

Upon a termination

ervices

as described in Article 13.1 (but excluding the case where a m an Event of Default committed by a Defaulting Shareholder who older), or in the circumstances provided for in article 22.3.3 of the ent, the Private Shareholder whose Shares are being transferred

its Affiliates is then a party to a services agreement, secondment agreement with BGC or any Project Entity and if requested by nto an agreement for the provision of transition services to enable t operation of the Venture post-transfer, including in respect to the nt of works being performed under any Project Facilities andover of functions being performed by secondees provided by

ders to the Venture. Any such agreement shall contain those terms ecific Services and Secondees agreed in the Shell Services and

nt list of Key Terms (Exhibit 10 to the Shareholders’ Agreement), m duration of 12 months unless otherwise agreed, and shall have lly reasonable terms as SGC and the departing Private Shareholder, ay agree.

termination results frois not a Private SharehShareholders’ Agreemshall, if it or any of agreement, or similarBGC or SGC, enter ithe continued efficiencontinued managemeAgreements and the hsuch Private Shareholand conditions for SpSecondment Agreemeshall be for a maximusuch other commerciaacting in good faith, m

75

14. TRAN

14.1 Gener

14.1.1 Except withunder Article

SFERS

al rules of Transfers

the prior written consent of the other Parties or as permitted or required 13 and this Article 14 and subject to the applicable provisions of this

Article 14, no“Transfer”) apermit any Encum

14.1.2 If a SharehAgreement orShares) an EVenture Obligwith article 18

14.2 Transf

14.2.1 BGC meach other PAgreement to a Wrequires such righVenture.

14.2.2 A ShaAgreement to a WShareholder’s

14.2.3 BGC many of the Finto) the other Parties.subject to theto the ShareholdersFinance Partiecustomary formthat the Finarelation to theBGC.

14.2.4 All Transf

(a) the pro

Party shall assign, novate, dispose of and/or otherwise transfer (each a ll or any part of its rights and obligations under this Agreement, nor shall it

brance to be created or arise in respect thereof.

older Transfers any Shares pursuant to the terms of the Shareholders’ this Agreement, such Shareholder must also Transfer (together with the quivalent Proportion of such Shareholder’s other Venture Interests and ations. Such Transfers shall take place simultaneously and in accordance .7 of the Shareholders’ Agreement.

ers of Rights and Obligations under this Agreement

ay, without the consent of (but with no less than 30 days’ prior written notice to) arty, Transfer any part or all of its rights and obligations under this

holly Owned Affiliate, or to a Project Entity in so far as such entity ts and obligations in order to carry out its activities with respect to the

reholder must Transfer all or any part of its rights and obligations under this holly Owned Affiliate of such Shareholder that is a transferee of such

Shares in accordance with article 18.5 of the Shareholders’ Agreement.

ay Transfer all or any part of its rights and obligations under this Agreement to ance Parties without the consent of (but with 30 days prior written notice

Each of the Parties shall, as and when requested by BGC, and relevant financing being consistent with the funding plan adopted pursuant

’ Agreement, enter into one or more direct agreements with the s to BGC in relation to the Project Documents, such agreement to be in the

and reasonably acceptable to the Parties. The Shareholders acknowledge nce Parties may require the Shareholders to enter into share pledges in Shares they hold in BGC as a security for any finance facilities provided to

ers shall be subject to:

posed transferee meeting the requirements set out in Article 14.5;

(b) complsuch articles a

iance with article 18 of the Shareholders’ Agreement (if and to the extent pply to such a Transfer); and

76

(c) the prParties covering the m

oposed transferee first entering into a written agreement with the other atters referred to in Article 14.3, which agreement shall be

y the Parties without undue delay. entered into b

14.3 Transf

Any permitted transfewhich SGC is a partTransfer and in addit

er Agreements

ree of any rights and obligations under any Project Document to y (other than the Shareholders’ Agreement) shall, prior to such ion to meeting the requirements set out in Article 14.5 and such ter into a binding agreement(s) with all relevant parties pursuant to Project Document, en

which:

(a) the trarights and obl

(b) the prand/or other athe transferor

(c) any amother agreemParties’ rightTransfer are m

14.4 Transf

(a) Any Tobligations unrestrictions se

nsferor Transfers, and the proposed transferee assumes, all transferred igations;

oposed transferee provides any guarantee, payment security arrangements ssurances that are equivalent to any then provided by or on behalf of in respect of any transferred obligations; and

endments that are required to be made to such Project Documents and any ents to which the transferor is a party to ensure that the existing s and obligations under them are otherwise unaffected by such ade.

ers by a Government Party and Changes in Control of a Ministry Party

ransfer by SGC (or any other Government Party) of any of its rights or der a Project Document may only be made in accordance with the t forth in this Article 14 and in such Project Document.

(b) If the Mother voting ssuch other Governmobligations inits Venture In18.12 of the Smeeting the requirem

inistry ceases to Control (whether as a result of a Transfer of Shares or ecurities or otherwise) SGC or another Government Party, SGC or

ent Party shall forthwith Transfer all of its interests and and under all Project Documents to which it is a party (other than terests and Venture Obligations, to which the provisions of article hareholders Agreement shall apply) to an Affiliate of the Ministry

ents set out in, and accordance with, Articles 14.3 and 14.5.

14.5 Provis

Each Project Documeshall contain a provisi

ions Applicable to Transfers

nt (other than this Agreement and the Shareholders’ Agreement) on equivalent in effect to Articles 14.3, 14.4 and 14.6 and shall also the effect that, except as expressly stated otherwise in this ther Project Document:

contain provisions toAgreement or in any o

(a) any psufficient legthereunder; and

roposed transferee of any party to that Project Document must have al, financial and technical capacity to perform its obligations

77

(b) the tra

(i) the Min

(ii) to the extenobligations toare supportedconfirm in writingsupported to the sam

14.6 Void T

Any purported Transfother rights or obligatnot comply with theShareholders’ Agreemvoid and BGC and oth

15. GOVERNI

15.1 This Agreemobligations ofReference to status shall be deemIraq, and if nEnglish legal that best approximbusiness pracremedy, legal docum

15.2 The Pawith or in relaWhere no sucnotified to all thresolution bysettlement is reachedthe Dispute m

nsferee is a Government Party:

istry must Control the transferee; and

t that any of the obligations of the transferor or any of the be assumed by the transferee under such Project Document by the Letter of Confirmation, the Ministry must first

that the obligations of the transferee will continue to be e extent.

ransfers

er of Shares, other Venture Interests or Venture Obligations or any ions under this Agreement or any other Project Document that does terms of this Agreement and any relevant provisions of the ent and other Project Documents shall be deemed to be null and er Parties shall not recognise such a Transfer.

NG LAW AND DISPUTE RESOLUTION

ent shall be governed, interpreted, and construed, and the rights and the parties determined, in accordance with the laws of the Republic of Iraq. any English legal concept, term, action, remedy, legal document or legal

ed to refer to that which most nearly approximates in the Republic of o such approximation is possible then the Parties agree to interpret such concept, term, action, remedy, legal document or legal status in a manner

ates how it would be applied in the context of standard international tice in order to give full effect to such English legal concept, term, action,

ent or legal status.

rties shall endeavour to settle amicably any dispute arising out of or in connection tion to this Agreement or any provision of this Agreement (the “Dispute”). h settlement is reached within 30 days of the Dispute arising and being

e Parties in writing, then the matter may, as appropriate, be referred for the senior management of the parties to the Dispute. Where no such

within 30 days of such referral to senior management, any party to ay refer the matter to arbitration in accordance with this Article 15, by

s notice to each of the Parties. giving 60 day

15.3 Any Dof Arbitration ofevent of any conf

ispute referred to arbitration shall be conducted and finally settled under the Rules the International Chamber of Commerce (the “ICC Rules”). In the

lict between those rules and the provisions of this Article 15 the this Article shall govern. provisions of

15.4 The place an

15.5 The aronly two Par

d seat of arbitration shall be Geneva, Switzerland.

bitral tribunal shall consist of three arbitrators. For Disputes in which there are ties, each such Party shall appoint one arbitrator and the two appointed

78

arbitrators shall appoare more thanclaimants joinand the two achairman in thunable to agrethe arbitral tribundetermined inbe a national whatsoever w

15.6 The laprovide testimarbitration shbinding on thextent permitted bytribunal. Thethat are partieentitled to immtheir relation judgment upothereover.

15.7 Unlessstopped or del

15.8 The Pathe same as oDispute that hagreement relthe same facarbitral tribunalso be appoinlanguage, vencase, the arbiExisting Disconcurrently tand the Partieas to whetherArticle

int the third arbitrator who shall act as the chairman. Where there two Parties to a Dispute, whether as claimant or respondent, the multiple tly (and the multiple respondents jointly) shall each appoint one arbitrator, ppointed arbitrators shall appoint the third arbitrator who shall act as the e absence of such a joint nomination. Where all parties to the Dispute are e to a method for the constitution of the arbitral tribunal, the members of

al and the designation of one of them to act as chairman shall be accordance with the ICC Rules. The chairman shall not originate from or of the country of either of the Parties and shall have no interest or relation ith either Party or with any of the entities constituting the Parties.

nguage of arbitration shall be the English language, provided that a Party may ony in a language other than English through an interpreter. The award of

all be issued in the English language, and the award shall be final and e parties to the arbitration proceedings. The Parties hereby waive, to the

law, any rights to appeal or to review of, such award by any court or Parties agree that the arbitral award may be enforced against the Parties s to the arbitration proceedings or their assets (other than assets that are unity under the law of the jurisdiction where they are located as a result of

to government or State functions) wherever they may be found and that a n the arbitral award may be entered in any court having jurisdiction

otherwise agreed by all Parties, performance of this Agreement shall not be ayed pending the award of arbitration.

rties acknowledge and agree that if any Dispute raises issues that are substantially r connected with, either based on the facts or at law, issues raised in a as already been referred to arbitration under any other Project Document or ating to the Venture (an “Existing Dispute”), or arises out of substantially ts as are the subject of an Existing Dispute (a “Related Dispute”), the al appointed, or to be appointed, in respect of such Existing Dispute shall ted as the arbitral tribunal in respect of the Related Dispute and the rules,

ue and procedure shall be as mandated for the Existing Dispute. In such tral tribunal may, having regard to the stage of the proceedings of the pute and other relevant circumstances, either consolidate or hear he proceedings arising out of the Existing Dispute and the Related Dispute, s agree to such consolidation or concurrent hearing. If there is any Dispute a dispute is to be classified as a Related Dispute for the purposes of this

15.8, appointed or t

16. CONFIDE

The rights and obligatout in Exhibit 4

such classification dispute shall be resolved by the arbitral tribunal o be appointed in respect of the relevant Existing Dispute.

NTIALITY

ions of the Parties with respect to Confidential Information are set .

79

17. GENERAL

17.1 No faiParty may havthereof, nor spreclude any for remedy. Nunless made i

lure to fully exercise, nor any delay in the exercise of, any right or remedy any e under this Agreement or in connection herewith shall operate as a waiver

hall any single or partial exercise of any such right or remedy prevent or urther or other exercise thereof by such Party of that or any other such right o waiver of any term of this Agreement shall be binding on the Parties

n writing and signed by them (except as provided for in Section 3 of Exhibit 1 in respect of a

17.2 This Agreebetween the Pany previous agreemsuch subject m

17.3 If any(such provisunenforceabilunaffected provisionreasonably anenforceable othe Affected P

17.4 None among any Pano Party shallauthority or riexpress or impwritten consen

17.5 Except as oParties under all other right

17.6 The term

(a) shall n

waiver of the conditions precedent referred to therein).

ment and the other Project Documents shall constitute the entire agreement arties with respect to the subject matter hereof and thereof and supersedes

ent of any kind or nature, whether oral or written, with respect to atter.

provision of this Agreement is or becomes invalid, void, illegal or unenforceable ion, an “Affected Provision”), the invalidity, void, illegality or ity shall not affect the remaining provisions of this Agreement and all such

s shall remain in full force and effect. The Parties will endeavour d in good faith to substitute for any Affected Provision a valid, legal, ne that achieves to the greatest possible extent the principle objectives of rovision.

of the provisions of this Agreement shall be deemed to constitute a partnership rties, nor make one Party the representative or agent of any other Party, and have the authority or right, nor shall a Party hold itself out as having the ght, to assume, create or undertake any obligation of any kind whatsoever, lied, on behalf of or in the name of another Party, without the express prior t of the other Party.

therwise provided herein, the powers, rights and remedies conferred on the this Agreement are cumulative and not exclusive, and shall be in addition to s and remedies available in law.

ination of this Agreement:

ot affect the provisions of this Article 17 and the provisions of Articles 1, 13, 15, 16, 18, 19, 20 and 21, Section 3 of Exhibit 1 and Exhibit 4, which shall

ply in full force and effect; and continue to ap

(b) shall nthis Agreemenliabilities shall su

17.7 This Agreemsuccessors in

ot prejudice any rights, obligations or liabilities arising or incurred under t on or prior to such termination, which such rights, obligations and

rvive such termination until satisfied in full.

ent shall be binding upon and inure for the benefit of the respective title and permitted assignees of each Party.

80

17.8 Each Pinstruments atime to time incontemplated herein.

17.9 This Agreemoriginal but w

17.10 Notwirespective indemparty claims, for loss sufferdelay by the ranticipated to be mdamages (increputation or of contract, or

17.11 Save aPlan, this Agreemall Parties and

17.12 Each transaction animmunity whatsoevein respect of:

(a) itself;

(b) its assof the jurisdgovernment o

(c) any coany interim reof or in relatio

(d) the enforcemaward, judgmprocess or attachmAgreement.

17.13 ExcepParty hereund

arty shall cooperate with the other Parties and execute and deliver to them such nd documents and take such actions as may be reasonably requested from

order to give full effect to this Agreement and the transactions

ent may be executed in several copies, each of which shall be deemed an hich together shall constitute one and the same agreement.

thstanding any other provision of this Agreement, but without limiting the Parties’ nity obligations under the Shareholders’ Agreement in respect of third

in no event shall a Party be liable to any of the other Parties for any claim ed or loss of profits (including profit that is a natural result of a failure or elevant Party due to perform the obligation, or any such profit that had been

ade by the expectant Party), or any indirect, special or consequential luding loss of revenue, loss of capital, loss of interest, loss of business opportunity) arising out of this Agreement, whether such liability arises out is suffered otherwise by any of the other Parties.

s is expressly provided for in respect to revisions to the Gas Supply and Offtake ent may not be amended or supplemented unless agreed in writing by

signed by the authorised representatives of each of them.

Party agrees that this Agreement is being delivered as a part of a commercial d hereby fully and irrevocably waives, to the extent permitted by law, any

r, including sovereign immunity, that may exist now or in the future

ets or revenues (other than assets that are entitled to immunity under the law iction where they are located as a result of their relation to r State functions);

urt, arbitration or expert proceedings or other legal processes (including lief applications and proceedings in aid of such process) arising out n to this Agreement; and

ent, confirmation or execution of any court, arbitration or expert ent, execution on judgment, determination, settlement, service of

ent resulting from the proceedings or processes under this

t where expressly provided otherwise, the rights, obligations and liabilities of a er shall be several, and not joint and not joint and several.

81

18. NOTICES

18.1 All noParty to anotEnglish and sh

tices, statements and other communications to be given, submitted or made by a her Party under this Agreement (“Notices”) shall be in writing and in all be considered valid and, subject to Article 18.2, sufficiently given when and addressed to the Parties at their addresses set out below, provided that hange its address and other notice details by giving at least 10 days written hanges to each other Party:

sent in writinga Party may cnotice of the c

To SGC:

South Gas Company P.O. Box 1201 Iraq-Albasrah-Khour AFacsimile: +964-40-64Email: sgco_office20

lzubair 2341

[email protected] and [email protected] Attention: Director G with copies to: Cleary Gottlieb Steen 12 rue de Tilsitt 75008 Paris, France Facsimile: +33-1-40-7Email: abernstein@cgAttention: Andrew A and Vinson & Elkins LLPP.O. Box 504945 Emirates Towers OfficSheikh Zayed Road Dubai, United Arab EFacsimile: +971 4 330Email: cstrong@velawAttention: Christophe

To Shell

eneral

& Hamilton LLP

4-68-88 sh.com . Bernstein, Esq.

es, 10/F

mirates 1300 .com r B. Strong, Esq

:

Shell Gas Iraq B.V. Carel van Bylandtlaan2596 HR, The Hague, The NetheFax number: +971 4 3Attention: Company S

, 30,

rlands 29 3311 ecretary

82

with a copy to: Shell Gas Iraq B.V c/o Shell EP InternatioDubai Convention TowPO Box 11677 Dubai, United Arab EFax number: +971 4 3Attention: Associate G To Mitsubishi

nal Limited er, 11th floor

mirates 293014 eneral Counsel/Legal

: Diamond Gas Iraq B.Vc/o Mitsubishi NetherlVinoly 12th Floor, ClaAmsterdam, The NethFacsimile: +31 20 549Email: ml.dgi@mitsub

. and B.V. ude Debussylaan 28, 1082 MD erlands 2520 ishicorp.com

Attention: Managing D 18.2 Notices g

in person, by to have been d

18.3 With communicatioboth Arabic a

19. REPRESE

19.1 Each Party m

irector

iven pursuant to this Agreement shall be deemed validly served when delivered courier, by registered post or by facsimile. Such Notices will be considered elivered upon actual receipt at the applicable notice address.

the exception of Notices, if required by a Government Agency, any ns between a Party and such Government Agency shall be in Arabic or in

nd English.

NTATIONS AND WARRANTIES

akes the representations and warranties in Article 19.2, and SGC makes the s and warranties in representation Article 19.3, Shell makes the representations and

warranties in Article 19.4 and Mitsubishi makes the representations and warranties in Article 19.5, becomes a Party),rely thereon.

19.2 Each othat:

(a) it is a coexisting under

(b) it has authothis Agreement;

(c) it has t

as at the date of this Agreement to the other Parties (or as at the date it recognising that each of the other Parties is relying and will continue to

f the Parties hereby represents and warrants severally to each of the other Parties

rporation or other form of legal Entity duly established and validly the law of its incorporation or establishment;

rised its designated representative to execute and deliver on its behalf

he power and authority to execute, deliver, and perform this Agreement;

83

(d) such approved by t

(e) no other conecessary to already been o

(f) this Agreembinding on it; and

(g) the exe

(i) contra

(ii) whetha breach of amodification acceleration in resplease, concessby which it many party to aadverse effecAgreement and the oth

(iii) violatejudgment ordadministrative or jud

(iv) requireapproval of, ogovernmental, admas has been oband effect.

19.3 SGC hexecution andof the Ratificunder this Agreem

19.4 Shell hereby

(a) the Shell Guarantovalidly existin

(b) the Shell Guarantodeliver on its Shell GuaranGuarantee”);

execution, delivery, and performance have been duly authorised and he board or other competent organ of such Party;

rporate or governmental proceedings on the part of such Party are authorise and approve this Agreement (other than those that have btained and are in full force and effect);

ent has been duly executed and delivered by it, and is valid and

cution, delivery and performance by it of this Agreement does not:

vene any provisions of its constituent documents;

er or not after notice or lapse of time or both, conflict with, result in ny provision of, constitute a default under, result in the

or cancellation of, or give rise to any right of termination or ect of, any agreement, instrument, indenture, contract,

ion, obligation or other commitment to which it is a party or ay be bound or affected, or require any consent or waiver of ny of the foregoing, except as would not have a material and t on the Venture or the transactions contemplated by this

er Project Documents;

or conflict with any law, regulation, rule, ordinance, code, er or decree or other requirement of any governmental,

icial authority or arbitral tribunal applicable to it; or

, in respect of it, any authorisation, consent, order, permit or r notice to, or filing, registration or qualification with, any

inistrative or judicial authority, other than such consent tained prior to the date of this Agreement and is in full force

ereby represents and warrants to each of the other Parties that it has (or, upon the delivery of the Letter of Confirmation by the Ministry and the publication ation Decree, will have) full unrestricted power to grant the rights granted

ent.

represents and warrants to each of the other Parties that:

r is a public limited liability company duly established and g under the laws of The Netherlands;

r has authorised its designated representative to execute and behalf the financial guarantee of even date herewith provided by the tor for the benefit of BGC, SGC and Mitsubishi (the “Shell

84

(c) the Shell Gthe Shell Guarantee;


(e) no other corporate oare necessarywhich have al

(f) this Shand is valid an

(g) the exGuarantee does not:

(i) contra

(ii) whetha breach of amodification acceleration in resplease, concessby which it many party to aadverse effecGuarantee;

(iii) violatejudgment, ordjudicial or arb


19.5 Mitsub

(a) the Mestablished and valid

(b) the Mitsubisand deliver onthe MitsubishGuarantee”);

uarantor has the power and authority to execute, deliver, and perform

execution, delivery, and performance have been duly authorised and he board or other competent organ of the Shell Guarantor;

r governmental proceedings on the part of the Shell Guarantor to authorise and approve the Shell Guarantee (other than those ready been obtained and are in full force and effect);

ell Guarantee has been duly executed and delivered by the Shell Guarantor, d binding on it; and

ecution, delivery and performance by the Shell Guarantor of the Shell




ion, obligation or other commitment to which it is a party or ay be bound or affected, or require any consent or waiver of ny of the foregoing, except as would not have a material and t on its ability to perform its obligations under the Shell


itral authority applicable to it; or



ishi hereby represents and warrants to each of the other Parties that:

itsubishi Guarantor is a corporation or other form of legal Entity duly ly existing under the laws of Japan;

hi Guarantor has authorised its designated representative to execute its behalf the financial guarantee of even date herewith provided by i Guarantor for the benefit of BGC, SGC and Shell (the “Mitsubishi

85

(c) the Mperform the Mitsub


(e) no other coGuarantor are necesthan those wh

(f) this MGuarantor, an

(g) the exMitsubishi Gu

(i) contra

(ii) whetha breach of amodification acceleration in resplease, concessby which it many party to aadverse effectGuarantee;

(iii) violatejudgment, ordjudicial or arbitr


20. EXPERT

20.1 Whenesuch dispute Article

itsubishi Guarantor has the power and authority to execute, deliver, and ishi Guarantee;

execution, delivery, and performance have been duly authorised and he board or other competent organ of the Mitsubishi Guarantor;

rporate or governmental proceedings on the part of the Mitsubishi sary to authorise and approve the Mitsubishi Guarantee (other

ich have already been obtained and are in full force and effect);

itsubishi Guarantee has been duly executed and delivered by the Mitsubishi d is valid and binding on it; and

ecution, delivery and performance by the Mitsubishi Guarantor of the arantee does not:




ion, obligation or other commitment to which it is a party or ay be bound or affected, or require any consent or waiver of ny of the foregoing, except as would not have a material and on its ability to perform its obligations under the Mitsubishi


al authority applicable to it applicable to it; or



ver a dispute arises between the relevant Parties in relation to an Expert Matter, shall be exclusively resolved by an expert appointed as described in this

Expert”) in accordance with the procedures set forth in this Article 20. 20 (an “

20.2 Disput

(a) the amReplacement Cost;

es as to the following matters (“Expert Matters”) shall be determined by an Expert:

ount or calculation of the End of Term PSH Value and the Depreciated

86

(b) the calculation of the Tax Surplus pursuant to Article 11.4.3;

(c) the period of extension and amount of lost revenue referred to in Articles 7.1.3 and 7.4.5 (as applic

(d) the ca

able);

lculation of “x” in accordance with Section 3.4.4 of Exhibit 5 and the of replacement indices in accordance with Section 4 of determination Exhibit 5;

and

(e) such othemay be referr20 or (ii) as th

20.3 The pr

(a) any Party eArticle

r matters (i) this Agreement or the Shareholders’ Agreement specifies ed for determination by an Expert appointed pursuant to this Article e Parties may agree.

ocedure for the appointment of an Expert shall be as follows:

ntitled to refer an Expert Matter for determination pursuant to this 20 sha

(such notifyinit is invoking

ll give notice to each other Party involved in such determination g Party and such other involved Parties, an “Interested Party”) that the provisions of this Article 20;

(b) the Interested Partieappropriate Edetermination;

(c) if within

s shall meet in an effort to agree, in good faith, upon an xpert to whom the matter in dispute shall be referred for

20 days after the service of a notice in accordance with Article 20.3(a) le (or where Artic 20.17 applies, within 20 days after the determination of an

nal that such dispute is an Expert Matter), the Interested Parties eet or failed to agree upon an Expert then the matter may be m to the ICC International Centre for Expertise at the ICC

Secretariat in Paris, France (“Referral Person”) who shall be elect an Expert within 10 days;

Arbitral Tribuhave either failed to mreferred by any of theInternational requested to s

(d) upon athe Interestedand shall requwriting) that he orappointment;

(e) if such Expnot have confirmdays, then (unanother Expert) the mReferral Persoshall be repea

(f) the coInterested Parand agreemen

n Expert being agreed or selected in accordance with the above provisions, Parties or Referral Person shall notify such Expert of the selection est the Expert to provide written confirmation within seven days (in

she is willing and able to (and does in fact) accept the

ert is either unwilling or unable to accept such appointment or shall ed acceptance of such appointment within the period of seven

less the Interested Parties are able to agree upon the appointment of atter shall again be referred by any Interested Party to the

n who shall be requested to make a further selection and the process ted until an Expert is found who accepts appointment;

ntract of appointment of the Expert shall be entered into jointly by the ties and all Parties will co-operate in good faith in the negotiation t of the terms and in the administration of the contract of the Expert;

87

provided that on the terms Expert) then decision shall

(g) it shall be a requireminto a confidentiality

20.4 An Expert sfield of expert

20.5 No Enany subsequent tima director, offto any Party (Affiliate of aquoted on a rUSD 5,000 orless than USD 5,000).

20.6 SubjecInterested Par

if there shall be any dispute between the relevant Interested Parties (including the amount of remuneration to be offered to the selected such amount shall be determined by the Referral Person whose be final and binding on the Interested Parties; and

ent of each Expert’s appointment that such Expert shall enter undertaking with the Parties governing the matter in dispute.

hall be generally recognised as an internationally recognised expert in the ise relevant to the specific dispute.

tity shall be appointed an Expert who at or before the time of appointment (or at e before the Expert gives a determination under such appointment) is

iceholder or an employee of or directly or indirectly retained as consultant or any Affiliate of a Party) or who is the holder of shares in any Party or any Party (unless such Party or Affiliate (as the case may be) is a company ecognised stock exchange and the shareholding held is valued at less than is held indirectly through a collective investment fund and the net value is

t to the Expert’s right to call for oral explanations, submissions or information by a ty pursuant to Article 20.8 all communications or submissions from any of Parties to the Expert relating to the matter to be resolved by the Expert glish and made in writing and a copy provided simultaneously to the other ed in the dispute.

the Interestedshall be in EnParties involv

20.7 Each Interesinformation toreceive such oral oParties as thewhich event e

20.8 In the evenexplanations, submInterested Parsuch oral expafford to the o

20.9 The Eadvice as it mInterested Parties.

20.10 Any dExpert Matterrelation to a determupon default or term

ted Party may make such written submissions and may supply such written the Expert as it thinks fit. The Expert shall be entitled to request and

r written explanations submissions or information from the Interested Expert may consider desirable to enable the Expert to reach a decision in ach of the Interested Parties shall comply promptly with any such request.

t that a Party shall be requested by the Expert to make or give any oral issions or information to an Expert, such Party shall give to the other

ties not less than 15 days prior written notice of the time and place at which lanations, submissions or information are to be made or given and shall ther Party the opportunity to be present.

xpert shall be entitled to obtain such independent professional and/or technical ay reasonably require and shall provide copies of all such advice to the

etermination of the Expert shall be limited to a determination in relation to the specifically referred to him for determination under this Agreement. In

ination of a disputed value in connection with the Transfer of Shares ination of this Agreement and the Shareholders’ Agreement, the

88

Expert shall applyShareholders’ Agreem

20.11 The EInterested Parties a dParties shall bthereof whereInterested Parpossible thereafter.

20.12 If witInterested Parties exsuch Expert sInterested Par

the definitions and utilise the methodologies set out herein or in the ent (as applicable).

xpert shall give full written reasons for its determination and shall furnish to the raft of its proposed determination in respect of which the Interested

e entitled to make representations to the Expert within 21 days after receipt upon the Expert shall render its final determination in writing to the ties together with full written reasons for such determination as soon as

hin a reasonable period (which shall not without prior written consent of the ceed 90 days after the acceptance by the Expert of the appointment)

hall not have rendered a final determination, then (at the request of any ty) a new Expert shall be appointed under the provisions of this Article 20 acceptance of appointment by such new Expert the appointment of the ert shall cease; provided that if the previous Expert shall have rendered a ation prior to the date upon which the new Expert accepts the appointment n such determination shall be binding upon the Interested Parties and the the new Expert shall be withdrawn.

and upon theprevious Expfinal determinin writing theinstructions to

20.13 The Edetermination as anapply to suchdetermination

20.14 The fithis Agreemento disclose anthe procedure

xpert shall be deemed not to be an arbitrator but shall render his or her expert and the provisions of any law relating to arbitration shall not

Expert or his or her determination or the procedure by which such is reached.

nal determination of the Expert shall be conclusive and binding upon all Parties to t save in the event of: (a) fraud or manifest error; (b) failure by the Expert

y relevant conflicting interest or duty; or (c) the selection of the Expert or followed by such Expert was not in accordance with this Article 20 (in

matter shall be referred for determination by another Expert in which case, theaccordance with this Article 20, and must, in the case of manifest error, be referred for

r than 30 days following the date of the final determination). determination no late

20.15 Each Psuch determiArticle

arty shall comply with an Expert’s determination. If a Party fails to comply with nation, the other Party may initiate arbitral proceedings pursuant to

15; prExpert’s determ

ovided that the arbitral proceedings shall be limited to reviewing the ination for the considerations set forth in Article 20.14. The the Arbitral Tribunal shall be an arbitral award for all purposes,

ent. determination ofincluding enforcem

20.16 Each witnesses and emindependent ashall be apporconsider fair a

Interested Party shall bear the costs and expenses of all professional advisers, ployees retained by it. The cost and expenses of the Expert and any

dvisers to the Expert applicable to any matter arising under this Agreement tioned between the Interested Parties in such proportions as the Expert shall nd equitable, or failing such determination by the Expert, equally.

89

20.17 If the appointed in accord

Parties do not agree that a Dispute is an Expert Matter, an arbitral tribunal ance with Article 15 shall determine whether such Dispute is an

rdance with the procedures set forth in Expert Matter in acco Article 15. If the arbitral ines that such Dispute: tribunal determ

(a) is an Expert Matter, such Dispute shall be resolved pursuant to this Article 20; or

(b) is not an Exaccordance with

pert Matter, such Dispute shall be resolved pursuant to arbitration in Article 15.

The Party that does noMatter shall battorneys’ fee

20.18 The EEnglish languother than Eng

21. ETHICS

21.1 Each respective perbusiness ethic

21.2 Each Pauthorised and will nosubject of thisother advantaor benefit of aor judicial ofagency, a pubpolitical partyadvantage (if offthe applicableof such Partyeither of themForeign Public OfDecember 17Foreign Corru

21.3 Each Party sfrom and agaarising from or reSuch indemni

t prevail in this determination of whether such Dispute is an Expert ear all of the costs of such arbitration, the arbitrators’ fees and the Parties’ s through the date of that determination by such arbitral tribunal.

xpert determination process, both written and oral, shall be conducted in the age; provided that a Party may provide oral explanations in a language lish through an interpreter.

Party agrees and undertakes, on behalf of itself and its Affiliates and their sonnel, to act at all times in a manner that is consistent with the highest s and ethical standards.

arty represents and warrants that it and its Affiliates have not made, offered, or t make, offer, or authorise, with respect to the matters that are the

Agreement or any other Project Document, any payment, gift, promise or ge (whether directly or indirectly through any other Entity) to or for the use ny public official (such as any person holding a legislative, administrative

fice, including any person employed by or acting on behalf of a public lic enterprise or a public international organisation) or any political party or official or candidate for office, where such payment, gift, promise or

ered or authorised by the applicable Party or Affiliate) would violate: (a) laws of Iraq; (b) the laws of the country of incorporation or establishment and such Party’s Ultimate Parent and of the principal place of business of ; (c) the principles described in the Convention on Combating Bribery of

ficials in International Business Transactions, signed in Paris on , 1997, which entered into force on February 15, 1999; or (d) the US pt Practices Act.

hall defend, indemnify and hold each other Party and its Affiliates harmless inst any and all claims, damages, losses, penalties, costs and expenses

lated to, any breach by such first Party or its Affiliates of such warranty. ty obligation shall survive termination or expiration of this Agreement.

90

22. FORCE M

22.1 Definition

(a) The termcombination oParty (the “Aterms of this Agreemthe extent thaor negligenceParty’s (or its AfAffected ParReasonable an

(b) Subjec

AJEURE

“Force Majeure” shall mean any act, event or circumstance or f acts, events or circumstances that prevents, hinders or delays a ffected Party”) from performing its obligations pursuant to the

ent, other than an obligation to pay money, but only if and to t such acts, events and circumstances are not attributable to the fault of the Affected Party (or its Affiliates), are not within the Affected

filiates’) reasonable control, and the effects of which the ty (or its Affiliates) could not have prevented by acting as a d Prudent Operator.

t to the provisions of Articles 22.1(d), 22.1(e) and 22.7, F rce Majeure and events shall include the following events to the extent that they quences satisfy the requirements of

ocircumstancesor their conse Article 22.1(a):

(i) flood, atmospheric perils of the se

(ii) acts of the public encountries, pointernational military disturbancsabotage, piracy, or se

(iii) fire, acciden

(iv) shipwreck, n

(v) epidem

(vi) radioa

(vii) strikeslock-outs); and

(viii) plane c

(c) It is specifically undan event of Fo

(i) reasonabforeseeable am

(ii) genera

storm, lightning, typhoon, hurricane, tornado, cyclone, earthquake, disturbance, landslide, soil erosion, subsidence, washout, a, or other forces of nature, natural disasters or acts of God;

emy, wars (whether declared or not), blockades (of rts or airports), quarantine restrictions, epidemic, public trade sanctions, embargoes, insurrections, riots, civil and

es, the serious threat of or an act of terrorism or izure of power by military or other illegal means;

t, structural collapse or explosion;

avigational and maritime perils;

ic, plague or quarantine;

ctive contamination or ionising radiation;

, work stoppages or other labour disputes or disturbances (including

rash, train crash and road accidents.

erstood that none of the following conditions shall constitute rce Majeure:

ly foreseeable weather conditions including reasonably bient temperatures and rain;

l economic conditions and exchange rate fluctuations;

91

(iii) the secin which activcontemplated unless those c

(iv) the fin

(v) any event oArticle

urity conditions prevailing on the date of this Agreement in the area ities under this Agreement and the Project Documents are to be conducted, or in Iraq or Basrah Governate generally, onditions prevent the implementation of the Venture;

ancial condition of any Party or any subcontractor; and

r circumstance that affects the obligations of a Party under 7 or Article 8 or otherwise in respect of the dedication, delivery,

hase of Raw Gas and Petroleum Products under this such event or circumstance is of a kind or character that

te a force majeure event under the terms of the Raw Gas ent or other applicable Sale and Purchase Agreement.

sale or purcAgreement ifwould not constituSupply Agreem

(d) Without prejudice to Article 22.1(c), none of the following conditions shall vent of Force Majeure with respect to SGC: constitute an e

(i) a Change in Law; and

(ii) action

(e) Any event or circumthat prevents, imobligations unParty only to t

(i) such evenaffected suchMajeure under this

or failure to act by a Government Agency.

stance that primarily affects a third party or third parties and pedes or delays the performance by a Party of its rights and/or

der this Agreement, shall constitute Force Majeure affecting such he extent that:

t or circumstance is of a kind or character that, had it primarily Party, it would have come within the definition of Force

Article 22; and

(ii) such Pout all or a mAgreement.

22.2 Notice

The Affected Party sh

(a) give wdays after sucMajeure affeparticulars of anticipated duable to resumethe Affected P

arty is rendered unable by such event or circumstance from carrying aterial part of its rights and/or obligations under this

and Reporting Requirements

all:

ritten notice of such Force Majeure to the other Parties no later than 14 h Affected Party becomes aware of that such event results in a Force cting its performance hereunder, which notice shall include full the event and its effect and severity and a good faith estimate of its ration (including the date when the Affected Party anticipates being performance) and what action, if any, has been or is being taken by arty to overcome the effects of such Force Majeure;

92

(b) continas and when such ponce a month

(c) througthe performanother Parties tthe possessionmay reasonainformation wother Party wParty to any prevented fromshall use reainformation to the othis Article

ue to provide updated particulars and good faith estimates of such matters articulars change or are updated, and in any event, at least

until the Force Majeure has ended; and

hout the period during which it is prevented from performing, or delayed in ce of, its rights and/or obligations under this Agreement, allow the o have access to such information, facilities, sites and personnel in , control or employment of the Affected Party as the other Party

bly request in connection with such event, except any such hich the Affected Party may not lawfully make available to the

ithout breaching obligations of confidentiality owed by the Affected Third Party or which the Affected Party may otherwise be legally

disclosing to the other Party, in which case, the Affected Party sonable endeavours to obtain permission to disclose any such

ther Party. Access to any facilities or sites in accordance with 22.2(c) shall be at the risk of the Party requesting such information

d such Party shall reimburse the Affected Party for all reasonable rred by the Affected Party in providing such information

and access anand direct costs incuand/or access.

22.3 Mitiga

The Affected Party sPrudent Operator, toMajeure, and relief un

tion Responsibility

hall use its reasonable endeavours, acting as a Reasonable and circumvent or overcome any event or circumstance of Force der this Article 22 shall cease to be available to the Affected Party re if it fails to use such reasonable endeavours during the pendency claiming Force Majeu

of any such event.

22.4 Conse

(a) Provided th

quences of Force Majeure

at the Affected Party has provided the notice referred to in Article 22.2(a) (but subject to Article 22.4(d)), effective from the date the Affected Party

y the Force Majeure: was affected b

(i) the obperformance Majeure shalMajeure;

(ii) no deoccurrence ofbreach of this Agreemor additional c

(iii) the timParty under thor impeded byday basis for t

ligations of the Affected Party under this Agreement to the extent thereof is prevented or impeded by the event of Force l be suspended for the duration of the period of Force

lay or non-performance by the Affected Party caused by the any event of Force Majeure shall constitute a default or

ent or give rise to any liability or claim for damages ost or expense occasioned thereby;

e period(s) for the performance of the obligations of the Affected is Agreement to the extent performance thereof is prevented the event of Force Majeure shall be extended on a day for

he duration of the relevant period of Force Majeure.

93

(b) If anythis AgreemeParticipation the relevant p

(i) such eForce Majeur

(ii) if a Pr

Party is prevented or delayed in the performance of its obligations under nt as a result of Force Majeure, the Private Shareholders’

Period shall be extended on a day for day basis for the duration of eriod of Force Majeure; provided that:

xtension shall only apply to the extent that aggregate periods of e exceed 30 days in any year; and

ivate Shareholder is the Affected Party, it shall (subject to Article 22.4 (d)) have complied with its obligations under Articles 22.2 and 22.3.

(c) If the obligevent of Forceextent all of sForce Majeure.

(d) A failu

ations of an Affected Party are affected partially as a result of any Majeure, the Affected Party shall continue to perform to the fullest

uch Party’s obligations under this Agreement that are unaffected by

re or delay by a Party in providing the notices required pursuant to Article 22.2 for an event ofthe provisions of

Force Majeure shall not affect its right to subsequently invoke this Article 22 in respect of such event except to the extent the

aterially prejudiced by such failure or delay. other Parties are m

22.5 Notice

As soon as reasonablother Parties of: (a) thdate that the Affected

22.6 Force Majeu

(a) In the evenmaterial activsuspension coor more Privaof all Shares the termination ofnotice shall bShareholders which they aunremedied at the endthe Private ShMajeure even

of Cessation of Force Majeure

y practicable, the Affected Party shall give written notice to the e date on which the period of Force Majeure has ended; and (b) the Party’s operations are reasonably expected to return to normal.

re Termination Notice

t that a Force Majeure results in the suspension of substantially all ities hereunder and otherwise in respect of the Venture, and such ntinues unremedied for a period of 24 consecutive months, any one te Shareholders which hold (solely or between them) 51% or more then held by all Private Shareholders may give a notice to SGC of

this Agreement and the other Project Documents, and such e binding on all Private Shareholders. In the event that the Private do not provide such a notice within six months of the first date on re entitled to do so, and the suspension of activities continues

of such six-month period, then SGC may give a notice to areholders of the termination of this Agreement (unless the Force

t is as described in Article 22.1(d) or results from any act or failure C or any of its Affiliates). Any notice delivered pursuant to this to act by SG

Article 22.6 is

(b) FollowShareholders Obligations toAgreement. U

referred to as a “Force Majeure Termination Notice”.

ing the delivery of a Force Majeure Termination Notice, the Private shall Transfer their Shares, Venture Interests and Venture SGC on the terms set forth in article 22.6 of the Shareholders’ pon the completion of such Transfer pursuant to article 18.7 of the

94

Shareholders’have no furthe

Agreement, this Agreement shall terminate and the Parties shall r obligations hereunder, except as provided in Article 17.6.

22.7 Obliga

This Article

tions under Project Documents

22 shall n nyevents or circumstancobligations under anyagreements shall apply

ot apply to a act, event or circumstance or combination of acts, es that prevents, hinders or delays a Party from performing its other Project Document. The force majeure provisions of those .

95

EXECUTED AS AN

SIGNED: For and on behalf of South Gas Company By:

AGREEMENT by the duly authorised representatives of the Parties:

Date: ______ Print Name:

_________________

For and on behalf of Shell Gas Iraq B.V. By: Date: ______ Print Name:

_________________

For and on behalf of Diamond Gas Iraq B By:

.V.

Date: ______ Print Name:

_________________

96

EXHIBIT 1 PRE-OPERA

TO COMMENCEME

1. Activities d

1.1 DuringAgreement, th

TIONS PERIOD AND CONDITIONS PRECEDENT NT OF OPERATIONS

uring the Pre-Operations Period

the Pre-Operations Period, and subject to the terms of the Shareholders’ e Asset Transfer Agreement and Section 1.2 below, BGC, the Shareholders

iliates will carry out such activities in readiness for Commencement of are set out in article 3 of the Shareholders’ Agreement and as are otherwise ired to be carried out by them during such period under the terms of this e Shareholders’ Agreement and the Asset Transfer Agreement.

and/or their AffOperations asexpressly requAgreement, th

1.2 Without limiting Section 1.1 and Section 1.3 and any other obligations of a Party set out ent and the Asset Transfer Agreement: in this Agreem

1.2.1 the Paincurred or sprespect of theactivities are providdefined and sagreement.

1.2.2 each Party s

(a) undertakendeavours touse its Best Eto procure thundertake) to all things whsmooth transitionRelevant Third Par

(b) undertakendeavours touse its Best Eto procure thundertake) allto satisfy the

rties acknowledge and agree that no costs, expenditures or liabilities shall be ent nor any commitments shall be made by any Party or other Entity in Venture (except on and for their own account) unless such amounts or

ed for in the Pre-Operations Period Work Program and Budget as et out in the Shareholders’ Agreement or as are otherwise specified in that

hall:

e, and ensure that its Affiliates undertake, and use its reasonable ensure that all other Entities undertake (and in addition, SGC shall ndeavours, and procure that its Affiliates use their Best Endeavours, at all other Government Agencies and any Relevant Third Parties work in close coordination and consultation with each other and do ich may be reasonably necessary or desirable in order to ensure a

of operations from SGC (and its relevant Affiliates) and any ties to BGC;

e, and ensure that its Affiliates undertake, and use its reasonable ensure that all other Entities undertake (and in addition, SGC shall ndeavours, and procure that its Affiliates use their Best Endeavours, at all other Government Agencies and any Relevant Third Parties actions which may be necessary to be undertaken by them in order Operations Conditions Precedent set out in Section 2 below so as to

ieve Commencement of Operations at the earliest possible date ing of this Agreement; and

enable BGC to achfollowing sign

(c) keep eachPrecedent andimpact or cau

other informed of the progress in satisfying the Operations Conditions any issues arising therefrom, including any issues which may se delay to their satisfaction (including any which may delay the

97

completion ofthe terms of the Asset

1.3 With r

(a) If andEncumbrancethose assets, (other than Mthem and befo

(b) No later thathorough invreasonably deEncumbrance“Disclosed EThereafter anddetailed consEncumbranceextinguished a

(c) If on EncumbranceSGC TransfeShareholders Relevant Thirregular basis t

(i) the statusbeing taken band/or to cEncumbrances; and

(ii) any opDisclosed Encompletion (athe relevant Pother relevantany proposed

(d) If 14 mthe Parties mEncumbrances) remShareholders SGC that thefollowing manner:

the transfer of any of the SGC Transfer Assets in accordance with Transfer Agreement).

espect to the SGC Transfer Assets:

to the extent that any SGC Transfer Assets are subject to any s, SGC shall use its Best Endeavours to acquire full ownership of and cure, remove or otherwise extinguish all such Encumbrances inor Encumbrances), as soon as practicable after becoming aware of re Commencement of Operations.

n three months after the BGDA Effective Date, and after reasonably estigation, SGC shall provide the Private Shareholders with a tailed list (the “Encumbrance Disclosure List”) of (i) any known s burdening the SGC Transfer Assets identified by such date (the ncumbrances”) and (ii) any known Non-Transferable Assets. until Commencement of Operations SGC shall provide reasonably

olidated monthly updates thereof reflecting any newly-identified s, any Encumbrances that have been cured, removed or otherwise nd any newly-identified Non-Transferable Assets.

the date that is nine months after the BGDA Effective Date, any (other than any Minor Encumbrance) remains in respect of any r Asset, as early as practicable thereafter, SGC and the Private shall (and SGC shall use its Best Endeavours to procure that any d Parties shall) meet and discuss, in good faith (and do so on a hereafter):

of each of the remaining Disclosed Encumbrances and the steps y SGC to acquire full ownership rights to the affected assets, ure, remove or otherwise extinguish such Disclosed

tions that will be available to the Private Shareholders should any cumbrances (other than Minor Encumbrances) remain at s outlined in paragraph (d) below), including any changes to roject Documents and/or new arrangements with SGC and/or parties that, in each case, would be required to give effect to exercise by them of such options.

onths from the BGDA Effective Date, or such earlier completion date as ay agree, any Disclosed Encumbrances (other than Minor

ain in respect of any SGC Transfer Asset, the Private (acting jointly and reasonably) shall give notice to SGC informing y elect to deal with the affected SGC Transfer Assets in the

98

(i) accept thSGC to BGreasonable legal cosincident to claimany person orof the Disclosasset;

(ii) acceptother conditio

(iii) with rEncumbrances) thaPrivate Sharespecified timewhich time SGor otherwise case: (A) thebefore complewith exclusive rany material will be reduced by thsuch reduction

(iv) reject by the amoun

(v) solely withaggregate) woof BGC to unsubstantial pathe Venture, wtransfer of thterminate this Agreem

e transfer of such affected asset, subject to an indemnity from C for all damages, losses, costs, expenses (including

ts, expenses and attorneys’ fees) and liabilities s, demands or causes of action brought by or on behalf of

entity, which claims, demands or causes of action arise out ed Encumbrances (other than Minor Encumbrances) on such

the transfer of such asset, subject to a price adjustment or such ns that the Shareholders must agree before completion;

espect to Disclosed Encumbrances (other than Minor t SGC is able to demonstrate, to the satisfaction of the

holders (acting reasonably), that they will be cured within a period, defer the transfer of such asset to a later date (during C will continue to use its Best Endeavours to cure, remedy

extinguish the relevant Disclosed Encumbrances), in which Shareholders (and any relevant third parties) shall agree tion on the necessary arrangements that would provide BGC

ights to fully access, use and operate such asset, free from disturbance or hindrance; and (B) the Initial Transfer Price

e amount agreed to be allocated to such asset, with payable upon such subsequent completion;

such asset, in which case the Initial Transfer Price will be reduced t agreed to be allocated to such asset; or

respect to any Encumbrance that (individually or in the uld be reasonably expected to materially impair the ability dertake the Initial Phase Activities (taken as a whole or a rt thereof) or to materially impact the economic benefit of hether to (on behalf of BGC) elect not to proceed with the

e SGC Transfer Assets and submit a notice of intent to ent in accordance with Section 3.8(c) of this Exhibit

1, and to termarticle 22.3.4EncumbranceBGDA Effectonly be effecDate, the Privnotice to SGCnotice of term

1.4 SGC sthe completioshall forthwith notiftheir transfer

inate the Shareholders’ Agreement in accordance with of the Shareholders’ Agreement; provided that, if such was disclosed prior to the date that is 11 months from the ive Date, such election and notice of intent to terminate shall tive if, no later than 12 months from the BGDA Effective ate Shareholders (acting jointly) have given a preliminary that they intend to make such election and submit such

ination.

hall keep the Parties informed, on a periodic basis, of the status of the progress of n of the Subsequent Assets against the schedule attached to Exhibit 9, and

y them of any material issues which may impact or cause delay to under the Asset Transfer Agreement. If a material delay or issues arises or

99

is anticipatedexpedite the transf

2. Opera

Each of the following satisfied or waived iOperations:

2.1 the ED Conditions Pr

, the Parties shall meet to discuss, in good faith, measures which will er of those assets and mitigate the impact of any delay.

tions Conditions Precedent

conditions (each an “Operations Condition Precedent”) must be n accordance with this Exhibit prior to the Commencement of

ecedent (as set out in Article 2.2) have been satisfied or waived in accordance with Section 3.2 of this Exhibit;

2.2 BGC has been Incofrom the ComCommittee MemAgreement;

2.3 the Sharehoeach of them Notice of Comm

(a) this Agreem

(b) the Shareho

(c) the As

2.4 the MinShell, and Mi

2.5 each oentered into a

2.6 the followinhas become uCommenceme

(a) the Ra

(b) the Dr

(c) the LP

(d) the Sh

(e) the SG

(f) the SO

rporated as a mixed limited liability company and with certification panies Registrar of the Company Contract, and the Higher Management

bers have been appointed in accordance with the Shareholders’

lders and BGC have each become a party to the following agreements, and has become unconditional (save for any condition relating to the issue of the

encement of Operations):

ent;

lders’ Agreement; and

set Transfer Agreement;

istry has executed and delivered the Letter of Confirmation and each of SGC, tsubishi have countersigned it;

f the Shareholders (and/or any approved SHL Affiliate Lenders) and BGC have Shareholder Loan Agreement;

g agreements have been entered into by the relevant parties and each of them nconditional (save for any condition relating to the issue of the Notice of nt of Operations):

w Gas Supply Agreement;

y Gas Supply Agreement;

G and Condensate Supply Agreement;

ell Services and Secondment Agreement(s);

C Secondment Agreement(s);

MO Agency Agreement; and

100

(g) the LP

2.7 all of the Ex

(a) have bfree from any Encum

(i) Minor

(ii) Disclosed Eof the election

G Processing and Handling Agreement;

isting Assets either:

een transferred to BGC in accordance with the Asset Transfer Agreement brances other than:

Encumbrances; and

ncumbrances where the Private Shareholders have made either s specified in Sections 1.3(d)(i) or 1.3(d)(ii),

(b) have had their transfer to BGC deferred in accordance with Section 1.3(d)(iii); or

(c) to the exShareholders’

tent constituting Non-Transferable Assets or assets that the Private have elected to reject in accordance with Section 1.3(d)(iv), been n the case of Non-Transferable Assets) accepted by the Private at their election, and in the case of any such acceptance BGC and

to an agreement (including in relation to a price adjustment) with the Asset Transfer Agreement.

rejected or (iShareholders SGC have entered inin accordance

2.8 if the Iraq DevelopmCommencemewhich requireaccount beforbetween all relevof Acceptablefor its existenany Shareholder odue (such agreem

2.9 any mEntities under

(a) to alloany Subseque

(b) to be o

have been obtconfirmation that thPrivate Shareholders,obtain any sustudy, environmafter CommencemOperations Co

ent Fund is expected to remain in existence beyond the date of nt of Operations or another mechanism is then or is to be put in place s the proceeds of Petroleum Product sales to be deposited into any fund or e disbursement to the seller, binding arrangements have been entered into

ant Entities which provide a lawful mechanism (including the provision Credit Support) to ensure that all amounts paid into such funds which, but ce, would have otherwise been paid directly to BGC, any Project Entity or

r in respect of the Venture are received by them as and when they are ent and mechanism to be satisfactory to the Private Shareholders);

aterial Approvals from SGC, its Affiliates, Non-Affiliated Governmental Entities, taking Ministry Projects, and any Relevant Third Parties that are required:

w the transfer of the SGC Transfer Assets to BGC (other than in respect of nt Assets that will not then be transferred);

btained by BGC in order for BGC to carry out the Initial Phase Activities,

ained or all relevant Government Agencies or other Entities have provided ey will be granted (such confirmation in a form satisfactory to the

acting reasonably); provided, that if it is necessary, in order to ch Approval, to prepare an Infrastructure Development Plan, engineering

ental study or other study or document that is to be produced or obtained ent of Operations, then such Approval shall not constitute an

ndition Precedent;

101

2.10 bindinto the PrivatunconditionalCommenceme

(a) BGC has beland and sites

(i) all SG

(ii) the permand Umm Qathe Higher Managemwill be located (sufficiently dRights),

in each case, on termthe Private Sh

(b) BGC (in Article

g arrangements between BGC and all relevant Entities (each in a form satisfactory e Shareholders, acting reasonably) are in place and each has become (save for any condition relating to the issue of the Notice of nt of Operations) under which:

en granted, for the Term, Exclusive Site Rights with respect to the on which:

C Transfer Assets are located; and

anent accommodation camps at Khor al Zubair, North Rumaila sr and any Development Project that has been approved by

ent Committee or the Joint Management Committee to the extent the plans for such Development Project are

etailed to allow the delineation of such Exclusive Site

s (including as to rental amounts) reasonably acceptable to areholders;

or SGC on BGC’s behalf) has secured the binding arrangements referred to 9.5 with respect to the LNG Offshore Site (subject only to Minor

Encumbrances);

(c) BGC are necessarysites referred to in

has been granted Non-Exclusive Site Rights over such additional areas as in order to carry out the Initial Phase Activities and to access the

Section 2.10(a) (including lay-down areas, pipeline and other s (including as to rental amounts) reasonably acceptable to

areholders (subject only to Minor Encumbrances); and rights of way) on termthe Private Sh

(d) BGC hservices and Activities (anGovernment own);

2.11 the Sh

(a) the Bu

(b) the insurinsurances ref

(c) the staAgreement inmanagement a

as secured supplies of water, power, telecommunications and other similar utilities as are necessary in order to carry out the Initial Phase d/or BGC has secured all necessary Approvals from the relevant Agencies required for it to generate, produce and/or provide its

areholders have approved, in accordance with the Shareholders’ Agreement:

siness Improvement Program;

ance strategy referred to in the Shareholders’ Agreement, and all material erred to in that strategy have been put in place;

ndards and/or practices referred to in article 15.1.4 of the Shareholders’ respect of project management, asset integrity, process safety nd operational excellence;

102

2.12 BGC interface agreemowned and/orissues (such amaintenance, separator vesswith the Initial Phas

2.13 a phasQasr storage termpurpose, amoDevelopment in such a wayand

2.14 complZubair and North Rum

3. Satisfaction

3.1 When Operations Coout a proposeshall then praccordance w

3.2 The Por all of theconditions precedenConditions Precedendue to the fault ofany or all ofsatisfied due to thsubject to conditionsdate), and (b) mthe other Shar

3.3 If an Olater date, suimpact, Commence3.8 apply to a 1.2.2(b) and 1.2.2(c) o e

3.4 For th 3.8 of this Exhibit esAgreement or

and South Oil Company (and any other relevant Entities) have entered into such ents with respect to facilities, infrastructure and equipment which is

operated by South Oil Company or such other Entities and other interface s the shared utilities, flaring and other common facilities and associated process control and safeguarding, including low pressure compressors, els and emergency flaring) as may reasonably be required in connection

e Activities;

ed shut-down of the Khor al Zubair and North Rumaila gas plants and the Umm inal, together with a full site survey of each of the same (for the

ng other things, of determining the content of the First Infrastructure Plan(s)) has been completed (and each such shut-down shall be performed so as to minimise disruption to the continued operation of such facilities);

etion of the temporary accommodation and construction camps at the Khor al aila gas plants.

of Operations Conditions Precedent

the Private Shareholders are of the view that satisfaction (or waiver) of the nditions Precedent is imminent, they shall deliver a notice to SGC setting

d First Completion Date (“Notice of Intention to Complete”). The Parties epare for the completion of transfer of the SGC Transfer Assets in ith the Asset Transfer Agreement.

rivate Shareholders may (acting jointly and in their absolute discretion) waive any Operations Conditions Precedent set out in Section 2 (including any

t set out in the Asset Transfer Agreement but excluding any ED t), other than Operations Conditions Precedent that are not satisfied

the Private Shareholders. SGC may (in its absolute discretion) waive the Operations Conditions Precedent set out in Section 2 that are not

e fault of the Private Shareholders. Any such waiver: (a) may be made (including with respect to the fulfilment of the condition at a later

ust be made in writing signed by relevant Shareholder(s) and provided to eholder(s).

perations Condition Precedent is waived with the condition that it be satisfied at a ch waiver will not be treated as a condition subsequent to, and will not

ment of Operations, nor will the termination rights set out in Section ny subsequent non-fulfilment of such condition. The provisions of Sections

f this Exhibit 1 shall continu to apply to such waived conditions.

e avoidance of doubt, a Party shall not be considered “at fault” under Section 3.2 or 1 if it exercis its rights under the Shareholders’ Agreement, this

the Asset Transfer Agreement.

103

3.5 Upon accordance wnotice (a “Nodate of Commencefollowing the

3.6 All Paeach of the Othat is nine mPrecedent arediscuss with a

3.7 If, dessatisfied by the dashall meet anPrecedent mafaith, any chawhich are necany Project equivalent to Precedent were mPrecedent relachanges whicSGC Transfebenefits, right

3.8 If despite ssatisfied or wParties have bagreements re

(a) unlessfrom the fault of

each of the Operations Conditions Precedent having been satisfied or waived in ith Section 3.2, the Private Shareholders (acting jointly) shall give written tice of Commencement of Operations”) to SGC and BGC specifying the

ment of Operations (which date shall be no later than 20 days date of such notice).

rties shall act in good faith and use their Best Endeavours to achieve satisfaction of perations Conditions Precedent at the earliest possible date prior to the date onths from the BGDA Effective Date. If any of the Operations Conditions not satisfied within such nine month period the Parties shall meet and view to resolving any issues affecting their satisfaction.

pite such efforts, any of the Operations Conditions Precedent have not been te which is twelve months from the BGDA Effective Date, the Parties

d discuss and if it appears that that any such Operations Conditions y not be capable of being met, they shall make, and shall negotiate in good nges to the structure of the Venture or any agreements relating thereto essary to ensure that the Parties (including the Shareholders) and BGC and Entity will have rights, benefits, obligations and liabilities which are those which they would have had if the unsatisfied Operations Conditions

et (including, in the case of an unsatisfied Operations Condition ting to the transfer of the SGC Transfer Assets or Exclusive Site Rights,

h would provide BGC with exclusive rights to access, use and operate any r Assets and other Initial Phase Facilities and to obtain the equivalent s, title and interests in other tangible and intangible assets).

uch efforts, any of the Operations Conditions Precedent have not been aived by the date that is 15 months from the BGDA Effective Date and the een unable to agree to such changes to the structure of the Venture or any lating thereto:

the failure to satisfy any of the Operations Conditions Precedent results the Private Shareholders or is subject to Section 3.8(c), the

olders shall have the option (at any time at which one or more such nditions Precedent remain unsatisfied) to terminate this Agreement

intly in writing) to the other Parties (a “Notice of

Private SharehOperations Coby notice (given joTermination”); and

(b) if the fthe fault of thwhich one or mterminate this Agreem“Notice of TeOperations CShell, then SGbinding irrevothan 100%) of

ailure to satisfy any of the Operations Conditions Precedent results from e Private Shareholders, SGC shall have the option (at any time at

ore such Operations Conditions Precedent remain unsatisfied) to ent by notice (given in writing) to the other Parties (also, a

rmination”); provided, however, that if the failure to satisfy such onditions Precedent results from the fault of Mitsubishi and not of C shall allow Shell a period of 90 days during which to enter into a cable arrangement with Mitsubishi to purchase 100% (but not less the Shares held by Mitsubishi and its Affiliates, and (iii) cause any

104

Operations CMitsubishi to be satisfday period (ansatisfied due to the fterminate this Agreem

onditions Precedent that were not satisfied due to the fault of ied, and if Shell can accomplish the same within such 90-

d there are no Operations Conditions Precedent that have not been ault of Shell) then SGC will no longer have the option to ent pursuant to this Section 3.8; and

(c) if the existence of a

non-satisfaction of the Operations Conditions Precedent is due to the ny Encumbrance described in Section 1.3(d)(v) of this Exhibit 1,

ent will terminate automatically at the time of termination of the Agreement pursuant to article 22.3.4 of the Shareholders’

then this AgreemShareholders’Agreement

3.9 In the event such Notice of Termination is given in accordance with Section 3.8(a) or (b) ent terminates pursuant to or this Agreem Section 3.8(c):

3.9.1 if it is given by the Private Shareholders pursuant to Section 3.8(a) or this Agreement rsuant to terminates pu Section 3.8(c), SGC shall refund to each of the Private

their Relevant Share of all Capitalisable Costs; and Shareholders

3.9.2 if it is given by SGC pursuant to Section 3.8(b), SGC shall refund to each of the Private their relevant share of all Quick Win Costs and any costs and expenses curred by such Private Shareholder and/or their Affiliates as a result of the

Shareholders reasonably intermination; and

3.9.3 regard

(a) this Agreem

less of the identity of the Party that gives the Notice of Termination:

ent (save for the provisions specified in Article 17.6) shall be terminated;

(b) all Project Fthis Agreement) that:

(i) were n

(ii) can bethereto (or whbeen obtained),

(collectively, thenovated to BG

(c) with respto the date of this Agrand (y) are noAffiliate is) a parrequest, use it

acilities Agreements (including any entered into prior to the date of

ot entered into in the name of BGC; and

novated to BGC or SGC without the consent of the other party ere, if consent to such novation is required, such consent has

“Novatable Agreements”) shall, upon SGC’s request, be C or SGC (as chosen by SGC);

ect to all Project Facilities Agreements (including any entered into prior eement) that (x) were not entered into in the name of BGC

t Novatable Agreements, the Private Shareholder who is (or whose ty to that Project Facilities Agreement shall, upon SGC’s

s Best Endeavours to either:

105

(i) secureProject Facilitterms (which termor other reasoProjects Facilitie

(ii) if, desconsent, put arrangPrivate Shareholderealise the besuch Project F

(d) if:

(i) SGC eBGC pursuant to

the consent of the other party thereto to the novation of such ies Agreement to BGC or SGC on commercially reasonable

s may include BGC or SGC providing a letter of credit nable security for the remaining amounts payable under such

s Agreement); or

pite having used its Best Endeavours, it is unable to obtain such ements in place reasonably acceptable to SGC and such r such that BGC or SGC will otherwise be able to

nefits of (and bear the costs and liabilities associated with) acilities Agreement,

lects not to have any Project Facilities Agreement novated to it or to Section 3.9.3(b) or to put in place alternative

to novation of such Project Facilities Agreement as ection 3.9.3(c)(ii)

arrangements described in S ; or

(ii) despite having used its Best Endeavours as described in Section 3.9.3(c), a holder is not able to secure consent to the novation of a

ement to which it or its Affiliate is a party or to put native arrangements to novation as described in

Private ShareProject Facilities Agrein place alter Section 3.9.3(c)(ii), oenter into a nNotice of Termtermination pu

r if consent to novation is secured but BGC or SGC do not ovation agreement, in either case within 120 days of the ination being provided or becoming effective or the date of

rsuant to Section 3.8(c) (as the case may be),

such Private Project Facilit

Shareholder (or its Affiliate) shall be entitled to terminate such ies Agreement and Section 3.9.3(e) shall apply; and

(e) SGC shall re

(i) any coany Affiliate ofProject Facilirespect to whSection 3.9.3(c)(ii)

imburse:

sts and expenses reasonably incurred by any Private Shareholder (or a Private Shareholder) as a result of the termination of any

ties Agreement that is not novated to BGC or SGC, or with ich alternative arrangements to novation as described in

are not put in place, together with

(ii) any otany such Affiup to the darrangements to novbeen reimburs

her amounts reasonably incurred by such Private Shareholder (or liate) with respect to any such Project Facilities Agreement ate on which such novation, termination or alternative

ation become effective (and that have not otherwise ed to such Private Shareholder pursuant to Section 3.9.1 or

Section 3.9.2);

provided thatSection 3.9.3

such Private Shareholder has complied with its obligations under with respect to such Project Facilities Agreement.

106

3.9.4 All payments provided for in this Section 3.9 shall be made no later than 60 days h Notice of Termination or the date of termination of this Agreement ction 3.8(c)

following sucpursuant to Se (as applicable) (or, in the case of payments pursuant to Section 3.9.3(e), no Shareholder’stermination, o

later than 60 days following SGC’s receipt of the relevant Private invoice therefor, which such invoice shall be delivered after novation, r alternative arrangements to novation (as applicable) become effective).

107

EXHIBIT 2 INITIAL PH

Purpose

ASE FACILITIES

As at the date of thiswill include:

(a) the repair, reju tio

(b) the development of aprocessing activities o

As the repair, rejuvefacilities will be subjeSGC Transfer Assets tShareholders’ Agreem

Agreement it is anticipated that BGC’s infrastructure development plans

vena n, upgrade and/or replacement of Existing Assets; and

dditional facilities to support the expansion of gas gathering and f BGC.

nation, upgrade, replacement and/or development of such assets and ct to, among other things, such plans, the completion of the transfer of the o BGC and the conditions and approvals required to be obtained under the ent, the following Parts A and B of this Exhibit 2 are indicative only of

ies. such assets and facilit

Part A: Existing Facilities

All Existing Assets anhigh level below:

Gas Gathering & Trea

d related plant, infrastructure and facilities, including those described at a

ting Facilities

All existing gas gathadjacent to the oil deand West Qurna 1. Tfrom the oil separaticompress sufficiently

Transportation

ering and treating lines and facilities, including their utilities located gassing stations on the three Dedicated Fields known as Zubair, Rumaila hese raw gas facilities were designed to gather raw gas released directly on banks/facilities for the Dedicated Fields and to process, treat and the associated hydrocarbons for transportation.

This includes:

- All transportat andFacilities to the North

- All transportat andNGL Plant and the Khmarine terminal at Um

North Rumaila NGL P

In the North Rumaila treating, storage andhydrocarbons delivere

ion receiving lines and facilities, from the Gas Gathering & Treating Rumaila NGL Plant and the Khor Al Zubair NGL/LPG Plant.

ion receiving lines and facilities, from and between the North Rumaila or Al-Zubair NGL/LPG Plant as well as the receiving, storage and m Qasr.

lant and Khor Al-Zubair NGL/LPG Plant

NGL Plant and Khor Al Zubair the NGL/LPG Plant, all feed, processing, transportation facilities built to process the raw gas and associated d from the gas gathering and treating facilities into various products.

108

All safety, utility, comAll related infrastrucother administrative b

Umm Qasr Receiving

mon and ancillary systems to service the processing and treating facilities. ture including workshops, warehousing, control rooms, substations and uildings.

/ Storage Terminal

The Umm Qasr Recsection and storage sec

Umm Qasr Marine Te

eiving/Storage Terminal consisting of a receiving section, refrigeration tion.

rminal

The Umm Qasr Maringasoline products and

Part B: Additional F

e Terminal consisting of two berths to load propane, butane and natural a vapour recovery blower system and a service jetty.

acilities And Infrastructure

Power Generation Facilities

Two new ‘Frame 5’ adjacent to the KAZ

gas turbine power generation units are currently planned to be installed NGL/LPG described in Part A of this Exhibit 2. Additional power nd ‘Frame 9’ or equivalent gas turbines, may be required to be installed to uirements. If developed, it is likely that these new power generation units t to the North Rumaila gas processing facilities.

generation, based arousupport gas growth reqwill be located adjacen

Compression Stations

New compression stagenerated through incwould depend on oil f

Gas Processing Facilit

tions would be required to support additional gas production volumes reased oil production. The location, timing and design of these facilities ield development plans and BGC’s Project Development Process.

ies

New gas processing pextract NGLs from suwould be located adjPlant described in Part

lants would be required to remove acid gas components, dehydrate and ch additional gas production. If developed, it is likely that such facilities acent to the existing North Rumaila NGL Plant and/or KAZ NGL/LPG A of this Exhibit 2.

Fractionation Facilities

It is envisaged that adas a result of gas growexisting fractionation

ditional fractionation trains would be required to process NGLs produced th. If developed, these facilities would likely be installed adjacent to the

units in Khor Al Zubair.

109

LPG Storage Refrigeration

Additional refrigeratioproduction that is assoUmm Qasr Receiving/

n units for LPG storage would be required to support the increase in LPG ciated with gas growth. If developed, these units would be located at the Storage terminal described in Part A of this Exhibit 2.

LNG Projects / Liquefaction Facilities

Liquefaction facilities

Supporting infrastruct

for the Initial Phase LNG Project.

ure

In addition to plant, ifacilities, supporting roads) would be requi

nfrastructure and facilities related and ancillary to the operation of such infrastructure (such as permanent offices, construction camps and access red for the execution and subsequent operation of new facilities.

110

EXHIBIT 3 JPCC TERM

1. Appoi

1.1 The JPappointed by by BGC.

1.2 Each of the JPCC Meappropriate leThe Ministryresponsible inmembers fromMembers reprthe ManagingManager (as t

1.3 Each Jby the relevan

2. Meetings

2.1 The JPagreed by thCommittee unmeeting shalltime and placendeavour to Ministry, SGC

2.2 The JSecretary”) frommeetings shal

3. Power

3.1 The role of

(a) regulaelements of orArticle

S OF REFERENCE

ntment of JPCC Members

C Committee shall consist of eight members (each a “JPCC Member”), two the Ministry, two appointed by SGC and four of whom shall be appointed

mbers shall be a senior employee of the appointee possessing the vel of expertise and experience necessary to perform the duties effectively. shall endeavour to appoint one of its members from persons who are the Ministry for upstream oil and gas operations and the other of its persons responsible in the Ministry for downstream operations. JPCC

esenting BGC shall be appointed from the following positions within BGC: Director, the Finance Director, the Commercial Manager and the Technical hose positions are defined in the Shareholders’ Agreement).

PCC Member (and any removal and replacement of such member) shall be made t Party by notice in writing given to the other Parties.

C Committee shall meet once every month (or at such other times as may be e JPC Committee or as is required to carry out the duties of the JPC der any Project Document). The JPCC Members at each JPC Committee

fix the date, time and place of the next scheduled meeting (or such date, e as notified by the JPCC Secretary as soon as possible thereafter) and shall hold such meetings on a rotational basis at the headquarters of each of the and BGC.

PCC Members will appoint the secretary for the JPC Committee (the “JPCC one of the JPCC Members appointed by BGC. The JPC Committee

l be chaired by one of the JPCC Members appointed by the Ministry.

s and Functions of JPC Committee

the JPC Committee shall be to:

rly review the rolling Gas Supply and Offtake Plan and the various factors underlying the plan (including the information referred to in

12 and in Section 5 below);

(b) considSupply and OChanges);

er, and if thought fit, recommend to the Gas Parties changes to the Gas fftake Plan (which, if approved, would constitute Agreed GSOP

111

(c) make other recommMinistry, SGCother matters

(d) submithem pursuanPurchase Agreem

(e) subjec

endations and provide advice to the Gas Parties, or to the and BGC, on matters coming before the JPC Committee or any

that they may (jointly) request of it;

t to relevant working groups all information required to be submitted to t to the terms of the Raw Gas Supply Agreement and Sale and

ents;

t to Section 6, take any other action or carry out any other activity which is taken by the JPC Committee under this Agreement or any other ent or which is agreed in writing by each of the Ministry, SGC and

required to beProject DocumBGC; and

(f) to the subject to Section 6

extent that it is within its powers under any Project Document to do so and , give full effect to and implement all Mandatory GSOP

greed GSOP Changes. Changes and A

4. Recommen

Any action to be takeCommittee shall requishall be recorded or m

5. Provis

5.1 At eacOfftake Plan and:

(a) Subject to

dations and Provision of Advice

n, recommendation to be made or advice to be given by the JPC re the prior written approval of all JPCC Members. Such approval ade in writing and signed by each JPCC Member.

ion and Consideration of Information

h JPC Committee meeting, the JPC Committee shall review the Gas Supply and

Article 12.4, the following (then current) information:

(i) all lon

(ii) detailed upDedicated Fivolumes, timrequested);

(iii) detailemarket (inclPetroleum Prequested);

(iv) detailed inform

(v) timely

(vi) any ot

g-term Iraq gas supply/demand information available;

stream gas development plans and production forecasts of the elds (including location and potential delivery points, ing, gas composition and other relevant information

d Petroleum Products demand/marketing plans for the domestic uding location of potential delivery points, volumes, roducts specifications and other relevant information

ation on downstream infrastructure development plans;

updates and adjustments to information previously provided; and

her information provided or requested pursuant to Article 12,

112

which informMembers to B

(b) subjec

ation shall be provided by the Ministry, SGC and/or their JPCC GC and its JPCC Members;

t to Article 12.3, the following (then current) information:

(i) the ininformation rela

(A) information rinfrastructure and faci

(B) information relating under development; an

(ii) informby the Venture;

(iii) timely

(iv) any ot

frastructure development plans of the Venture and relevant ting to such plans, including:

elating to existing and planned future gas lities;

to the status of gas infrastructure projects d

ation on potential export markets for future gas volumes produced

updates and adjustments to information previously provided; and

her information provided or requested pursuant to Article 12,

which informMinistry, SGC

(c) any re

ation shall be provided by BGC and/or its JPCC Members to the and their JPCC Members; and

port commissioned pursuant to Article 12.2, which reports shall be provided issioning such report. by the Party comm

5.2 The Partiessafeguards, inthe JPCC Meminformation alaws applicab

6. Autho

The JPC Committee Parties shall not be boMembers, nor shall sfrom the respective rinor any JPCC Membevary any agreement, c

7. Further Assurances

Each Party shall procuall such actions as meffect to the terms of t

shall, at the request of any Party, prepare and agree on appropriate cluding firewall protective procedures, to be utilised by the JPC Committee,

bers and the Parties in respect of the dissemination of sensitive nd to otherwise ensure compliance with any antitrust or anti-competition le to the activities of any Party.

rity of JPC Committee and JPCC Members

is, and shall be, an advisory committee only. Accordingly, the und by recommendations or advice of the JPC Committee or JPCC uch recommendations or advice derogate in any way whatsoever ghts and obligations of the Parties, and neither the JPC Committee r shall have the authority, power or right to bind or enter into or

ommitment or obligation of any Party.

re that the JPC Committee and its appointed JPCC Members take ay be reasonably necessary for them to take in order to give full his Agreement and any other Project Document.

113

8. Conflict

If, and to the extent,Reference and any Prlatter shall prevail. Reference to ensure co

there is any conflict or inconsistency between these Terms of oject Document (including the main body of this Agreement) the The Parties shall, as and when required, amend these Terms of nsistency with same.

114

EXHIBIT 4 CONFIDENTIALI

1. Definitions

For the purposes of th

TY

is Exhibit 4:

(a) “Confidential Inform

(i) the Project Docum

(ii) any acompilations, Information) Party”) and/oParty”) and/opursuant to Artic

ation” means:

ents and the terms thereof;

nd all knowledge, data, reports, records, correspondence, notes, studies and other information (including Technical

disclosed directly or indirectly by a Party (a “Disclosing r its Representatives to the receiving Party (a “Receiving r its Representatives (including any information provided

le 12 or Section 5 of the JPCC Terms of Reference), or ctly or indirectly by a Party and/or its Representatives, in any way connected with the Venture or the Disclosing epresentatives or any of their actual or proposed business

acquired direrelating to orParty or its Ractivities; and

(iii) any kreferred to in

nowledge, data and information derived from the information paragraphs (i) of this Section 1(a),

whether such informreadable formis identified as conf

(b) “Reprthe Affiliates ofAffiliates; andand JPCC Mem

(c) “Technature (such economic or f

2. Under

2.1 Each ofundertakes:

(a) to use thotherwise carrying

(b) to keep th

ation is disclosed or acquired orally, in writing, in machine or by any other means and regardless of whether such information

idential;

esentatives” means the: (i) directors, officers, or employees of a Party; (ii) a Party, and the directors, officers or employees of such

(iii) a Party’s appointed Higher Management Committee Members bers; and

nical Information” means Confidential Information that is proprietary in as processes or product specifications) and not of a business,

inancial nature.

taking by the Parties

the Parties acknowledges that the Confidential Information is confidential and

e Confidential Information solely for the purpose of implementing or out the Venture;

e Confidential Information in strict confidence;

115

(c) to not:

(i) disclose this Agreemhereof or therof each other

(ii) discloswithout the pr

other than, in each cas

(iii) its Repres(and in the legitimate neein relation to t

(iv) any In

(v) its actuVenture and t

(vi) any btransferee to a

(each a “Perm

(d) to infconfidentiality pursuInformation topersons with liable to the obligations;

(e) before discconsultants, aobligations ulenders or prthem on terms

ent or any other Project Document, or any terms eof, to any Entity or person without the prior written consent party to the relevant agreement; and

e any other Confidential Information to any Entity or person ior written consent of the Disclosing Party,

e, to:

entatives, agents, auditors, consultants, advisers and contractors case of SGC, any Government Agencies) who have a d to know such information in order to perform their duties he Venture;

dependent Gas Consultant;

al or prospective lenders providing financing in connection with the heir consultants and advisers; and

ona fide prospective transferee of its Shares in order for such ssess and evaluate the Venture and its participation therein,

itted Recipient”);

orm the Permitted Recipient of the Disclosing Party’s obligations of ant to this Agreement before disclosing Confidential

any Permitted Recipient, to ensure compliance by such Entities or such obligations as if they were parties to this Agreement and be other Parties for breaches by such Entities or persons of such

losing Confidential Information to any of its agents, auditors, dvisers (other than legal advisors bound by client confidentially nder the relevant professional associations), contractors or such ospective transferees, to obtain confidentiality undertakings from which are substantially equivalent in their effect to this Exhibit 4;

(f) to givewhich may be imInformation oare notified in

(g) to givinformation fimposed on it

effect to any applicable restrictions on the use of Confidential Information posed on the Disclosing Party by the supplier of the Confidential

r the supplier of goods and services to the Disclosing Party which writing by the Disclosing Party to the Receiving Party; and

e effect to any applicable restrictions on the disclosure and use of any alling within the definition of Confidential Information which are under any other Project Document to which it is a party.

116

2.2 The undertakings in Section 2.1 of this Exhibit 4 shall not ap ly to any Confidential pInformation which:

(a) at the timRecipient) or breach of anywhom it has d

(b) the Racquisition or disto it by, any Entity o

(c) the Recereceived by it afteparty (other RepresentativConfidential InfRepresentatives);

(d) the Receivindependentlyreliance on orParty (or its R

(e) the Recereceived by it

The foregoingembraced by or insuch exceptioinformation (exceptions.

2.3 Public

Notwithstanding Secti

e of disclosure to or acquisition by the Receiving Party (or Permitted thereafter has become part of public knowledge or literature without of the said undertakings by such Party or any Permitted Recipient to isclosed such information;

eceiving Party can demonstrate was in its possession at the time of closure hereunder and was not acquired by it from, or disclosed

r individual under an obligation of confidence;

iving Party (or Permitted Recipient) can demonstrate was acquired or r the time of acquisition or disclosure hereunder from a third

than one disclosing on behalf of the Disclosing Party or its es) who could lawfully do so and who did not derive the

ormation from the Disclosing Party (or any of its

ing Party (or Permitted Recipient) can demonstrate was developed by its employees (or its Representatives’ employees) without access to the Confidential Information disclosed by the Disclosing epresentatives); or

iving Party (or Permitted Recipient) can demonstrate was acquired or at least five years since the time of first disclosure hereunder.

exceptions shall not apply to: (i) specific information merely because it is cluded with other information which falls within any one or more of

ns; or (ii) any combination of information merely because specific but not the combination itself) fall within any one or more of such

Announcements and Required Disclosures

on 2.1 or Section 2.2:

(a) each Partyconcerning thlaw or the rulAffiliates are trada reasonable oof its issuance;

(b) each RInformation wexchange or secuSection 2.3(a)

may make any public release or disclosure or announcement is Agreement, including its execution, which may be required by es of any stock exchange on which the securities of such Party or its

ed, provided that such Party shall provide the other Parties with pportunity to comment on such release or announcement in advance

eceiving Party (or its Representatives) may disclose any Confidential hich any court or legislative or regulatory body (except any stock

rities regulator, which disclosure shall be subject to ) requests or requires be disclosed; provided that, the Receiving

117

Party will promDisclosing PaIn the event that suchReceiving Party (or its Representatives) mportion of theand (ii) the Rthat confidentia(iii) the Recedisclosure waParty (or its R

(c) SGC (this Agreemenand presentedthe Venture, includprovided that

ptly and prior to disclosure notify the Parties so that the rty can seek an appropriate protective order and/or take other action.

protective order is not, or cannot be, obtained, then: (i) the ay disclose to the appropriate body that

Confidential Information which it is legally required to disclose; eceiving Party shall use reasonable endeavours to obtain assurances

l treatment will be accorded to the Confidential Information; and iving Party shall not be liable for such disclosure unless such s caused by or resulted from a previous disclosure by Receiving epresentatives) that was not permitted by this Agreement;

and/or the Ministry) shall be entitled to publicly disclose (i) the terms of t and the Shareholders’ Agreement and (ii) information (compiled

on an aggregate basis) relating to sales of Petroleum Products by ing in each case by publishing that information on its website;

Exhibit 5 to this Ag ment shall not be disclosed unless its equired (i) by Law or (ii) pursuant to the principles of the Extractive nsparency Initiative (as applied by the Ministry and its Affiliates in anner in relation to all Ministry Projects).

reedisclosure is rIndustries Traa consistent m

2.4 Techn

If at any time a Discldisclose Technical Incontractors, the Disclnon-confidential basisInformation, and (c) Receiving Party shallsuch Technical Informthe Technical InformInformation is safeguany such additional us

2.5 Proper

Confidential InformaRepresentatives) whoDisclosing Party, the Disclosing Party, destConfidential Informatwithout the destructiRepresentatives or its and (b) destroy all anprepared by the Receireflect or are based Confidential Informat

ical Information

osing Party, or any of its Representatives or contractors, wishes to formation to the Receiving Party or any of its Representatives or osing Party shall first notify the Receiving Party in writing on a of (a) the nature of the information, (b) the fact that it is Technical the additional use or other restrictions attaching to it, and the

then have the right to decide whether or not to accept receipt of ation. If the Receiving Party decides to accept the disclosure of ation, the Receiving Party shall ensure that the Technical

arded in accordance with this Agreement and in accordance with e or other restrictions attaching to it.

ty in and return of Confidential Information

tion shall remain the property of the Disclosing Party (or its retains all right, title and interest thereto. Upon request by the Receiving Party shall promptly: (a) return or, at the option of the roy all Confidential Information that is in tangible form (including, ion contained on computer disks or other electronic media, but on of the hard disk) furnished to the Receiving Party or its Permitted Recipients, together with any copies or extracts thereof; alyses, compilations, studies or other documents which have been ving Party or its Representatives or Permitted Recipients and which upon any Confidential Information, except to the extent such ion is incorporated into corporate or governmental documents or

118

reports which such Pacase such Party will ta

2.6 General

Each

rty is required to retain by law or its internal procedures, in which ke appropriate measures to preserve its continuing confidentiality.

2.6.1 of the Parties acknowledges and agrees that the provisions of this Exhibit 4 provisions of article 12 of the HOA and that the provisions of this Exhibit

ormation disclosed or obtained by it or its Affiliates during the term supersede theshall apply to any infof the HOA.

For th2.6.2 e avoidance of doubt, the foregoing provisions of this Exhibit 4 shall not pre udice, supersede or affect in any other way any provision of any other agreement arties and/or their Affiliates relating to the restriction on use and disclosure or the requirement to disclose information (including any provision of any

ent or any other agreement between the Parties).

jvary, amend, between the Pof informationother Project Docum

The provisions of this 2.6.3 Exhibit 4 shall survive expiry or termination of this Agreement and inding upon any Party even after it has ceased to be a Party. shall remain b

119

EXHIBIT 5 PRINCIPLE

Introduction

SGC shall, pursuant toand such Transfer wiShareholder Loan in adate of the HOA up toRelevant Shares of Ccontributed by SGC tother relevant provisio

It is the intention of thGas will increase fromMatching Date reflect

g Date the

S OF PRICING

the Asset Transfer Agreement, Transfer the SGC Transfer Assets to BGC, ll be treated as part of SGC’s initial Capital Contributions by way of a ccordance with the Shareholders’ Agreement. During the period from the the Matching Date, the Private Shareholders have paid and shall pay their apital Contributions in order to proportionately match the value of assets o BGC (as determined under, and in accordance with, exhibit 1 to, and ns of, the Shareholders’ Agreement.)

e Parties that the pricing for Dry Gas, LPG and Condensate and for Raw the initial prices applicable as at date of signature of this Agreement to

ing such increasing contribution of the Private Shareholders, and that after the Matchin Contract Price will be equal to the Reference Price. This Exhibit 5 sets

lation of pricing for Condensate, Dry Gas, LPG and Raw Gas to achieve arties shall include provisions reflecting the terms of this

out the basis of calcuthis intention. The P Exhibit 5, as a Raw Gas Supply Agreement and the Domestic Sale and Purchase ppropriate, in the Agreements.

Pricing of LPG, CondGas will be on a mondone monthly in accoPurchase Agreements.

1. General

The:

(a) price payabLPG and Conand Purchase Agreem

(b) price pGas Supplier)

shall be calcuExhibit 5

ensate and Dry Gas will be on a Calendar Quarter basis and pricing of Raw thly basis. Billing for LPG, Condensate, Dry Gas and Raw Gas will be rdance with the Raw Gas Supply Agreement and the Domestic Sale and

le by SGC (in its capacity as Domestic Offtaker) to BGC for Dry Gas, densate delivered to it pursuant to the terms of the Domestic Sale

ents; and

ayable by BGC for any Raw Gas delivered by SGC (in its capacity as Raw to it pursuant to the terms of the Raw Gas Supply Agreement,

lated and applicable from time to time in accordance with the terms of this .

2. Definitions

The following terms, meanings. Other capithem in Article

when capitalised and used in this Exhibit, shall have the following talised terms used in this Exhibit shall have the meaning ascribed to

1.1of this Agreement.

120

“Additional Assets” h

“Additional Asset TrAgreement.

“Asset Transfer Agr

as the meaning given to it in the Asset Transfer Agreement.

ansfer Price” has the meaning given to it in the Asset Transfer

eement” means, for purposes of this Exhibit 5, (i) exhibit 9 to the ment Agreement, until such time as a definitive asset transfer nd (ii) thereafter, such definitive asset transfer agreement.

Basrah Gas Developagreement is signed, a

“BTU” (British Thermtemperature of one (1Fahrenheit (60°F) to sPSIA.

“Barrel” shall consistto a temperature of sPSIA.

“Calculation Date” m

“Calendar Quarter”01 January – 31 Marc31 December, all date

“Condensate PaymenCondensate delivered and (ii) the Contract includes such month.

“Confirmed CapitalAgreement.

“Contract Price” mewith Section 3

al Unit) shall mean the amount of energy required to raise the ) pound of pure water one degree Fahrenheit from sixty degrees ixty-one degrees Fahrenheit (61°F) at a constant pressure of 14.65

of forty-two (42) United States gallons, liquid measure, corrected ixty degrees Fahrenheit (60°F) at atmospheric pressure of 14.65

eans each 30 June and 31 December.

means a period of three consecutive calendar months as follows: h, 01 April – 30 June, 01 July – 30 September and 01 October –

s inclusive.

t” for any calendar month means the product of (i) the amount of to the Domestic Offtaker during such month (expressed in Barrels), Price for Condensate applicable during the Calendar Quarter that

isable Costs” has the meaning given to it in the Shareholders’

ans the contract price of each product determined in accordance of this

“Dry Gas Payment” Gas delivered to the D(ii) the Contract Pricesuch month.

“Initial Asset TransExisting Asset Transfe

“Initial Existing AsseAgreement.

“LPG Payment” for delivered to the Dome

Exhibit.

for any calendar month means the product of (i) the amount of Dry omestic Offtaker during such month (expressed in MMBTU), and

for Dry Gas applicable during the Calendar Quarter that includes

fer Price” means an amount equal to the sum of (a) the Initial r Price plus (b) the Subsequent Assets Transfer Price.

t Transfer Price” has the meaning given to it in the Asset Transfer

any calendar month means the product of (i) the amount of LPG stic Offtaker during such month (expressed in metric tonnes), and

121

(ii) the Contract Pricemonth.

“Matching Level” (oras follows:

where:

A is the sum of italShareholders up to thU.S. Dollars;

B is the sum of th ropo

C is the Proportio te Sh

D is the sum of t InitiPrice of any Additionaprior to First Completi

provided however thafrom and after the Ma

“MMBtu” means one

“Reference Price” mwith Section 3

for LPG applicable during the Calendar Quarter that includes such

“ML”) means for a given Calculation Date, the amount calculated

Cap isable Costs incurred and Cash Calls paid by the Private e Calculation Date (without double counting), expressed in

e P rtionate Shares of the Private Shareholders;

na are of SGC; and

he al Asset Transfer Price plus the Additional Assets Transfer l Assets which have been the subject of a Completion on or on Date, expressed in U.S. Dollars,

t (a) if ML exceeds 1 then it is deemed to be equal to 1; and (b) tching Date ML shall be deemed to be equal to 1.

million British Thermal Units.

eans the reference price of each product determined in accordance

xD C

B

A ML

of this

3. Prices

The Contract Price foeach Calendar Quartere.g. the Contract Pricfrom 01 April to 30 Ju

The Contract Price fomonth and shall applycalculated at the beg30 April inclusive.

Exhibit.

r each Petroleum Product shall be calculated at the beginning of and shall apply to product supplied during such Calendar Quarter, e calculated at the beginning of April applies to products supplied ne inclusive.

r Raw Gas shall be calculated at the beginning of each calendar to Raw Gas supplied during such month, e.g. the Contract Price inning of April applies to products supplied from 01 April to

122

3.1 Dry Gas

3.1.1 Dry G

The Dry Gas PaymenSales and Purchase Ain MMBtu based on therein.

3.1.2 Contr

The Contract Price faccordance with the fo

CPDG = [(1-ML * CX

where:

CPDG is the Contractexpressed in U.S. Dol

CX is an inflation =BGDA Effective Date

n is the number o earsDate and the date of ca

ML is the Matching lto four decimal places

IPDG is the Initial Pr D

RPDG is the Referencexpressed in U.S. Dol

For the avoidance of which the Matching Lfirst Calculation DateContract Price for Dry

3.1.3 Refere

The Reference Price fin accordance with the

RPDG = F * PB / H

as Payment

t for sales of Dry Gas to the domestic market under the Dry Gas greement shall be determined based on the quantity sold, measured he gross heating value and Contract Price for Dry Gas as set out

act Price for Dry Gas

or Dry Gas for any Calendar Quarter shall be determined in llowing formula:

) * IPDG ] + [(ML * RPDG)]

Price for Dry Gas applicable in the relevant Calendar Quarter, lars per MMBtu;

factor (1 + 0.02) n, provided that during the first year after the , CX shall be 1;

f y , expressed as an integer, between the BGDA Effective lculation of the Contract Price for Dry Gas;

Leve determined on the most recent Calculation Date, expressed ;

ice for ry Gas, being USD 1.04 per MMBtu; and

e Price for Dry Gas applicable in the relevant Calendar Quarter, lars per MMBtu.

doubt, from and after the earlier of: (i) the Calculation Date on evel is first determined to be equal to or greater than 1, and (ii) the that follows the Matching Date, by operation of this formula the Gas will be the Reference Price for Dry Gas (RPDG).

nce Price for Dry Gas

or Dry Gas (“RPDG”) for any Calendar Quarter shall be determined following formula:

123

where:

RPDG is the Referenc

F is a constant w alu

PB is the arithmehundredth of a cent, o(HSFO) 180 FOB AraArab Gulf Market ScaPB for the period from1 January to 31 March

H is a constant w valexpressed in MMBtu.

3.2 LPG

3.2.1 LPG P

The LPG Payment fCondensate Supply AContract Price for LPG

3.2.2 Contr

The Contract Price fowith the following for

CPLPG = [(1-ML) *

where;

CPLPG is the Contraexpressed in U.S. Dol



ML is the Matchin elto four decimal places

IPLPG is the Initial Pr

RPLPG is the Referenexpressed in U.S. Dol

e Price for Dry Gas;

ith v e of 0.336;

tic average in U.S. Dollars per metric tonne, calculated to the nearest f the daily high and low quotations of Spot High Sulphur Fuel Oil b Gulf quoted under the heading Asia Products in the Asia Pacific / n (Platts) for each day within the preceding Calendar Quarter, e.g. 1 April to 30 June is the arithmetic average for the period from

; and

ith ue 37.661 reflecting the heating value of a metric tonne of HSFO

ayment

or sales of LPG to the domestic market under the LPG and greement shall be determined based on the volumes sold and as set out herein.

act Price for LPG

r LPG for any Calendar Quarter shall be determined in accordance mula:

IPLPG * CX] + [(ML * RPLPG)]

ct Price for LPG applicable in the relevant Calendar Quarter, lars per metric tonne;


f y , expressed as an integer, between the BGDA Effective lculation of the Contract Price for LPG;

g Lev determined on the most recent Calculation Date, expressed ;

ice for LPG, being USD 85.00 per metric tonne; and

ce Price for LPG applicable in the relevant Calendar Quarter, lars per metric tonne.

124

For the avoidance of which the Matching Lfirst Calculation DateContract Price for LPG

3.2.3 Refer

The Reference Price faccordance with the fo

RPLPG = (Sp x FEIProp

where:

Sp is the share of panCalendar Quarter, and

Propane

doubt, from and after the earlier of: (i) the Calculation Date on evel is first determined to be equal to or greater than 1, and (ii) the that follows the Matching Date, by operation of this formula the will be the Reference Price for LPG (RPLPG).

ence Price for LPG

or LPG (“RPLPG”) for any Calendar Quarter shall be determined in llowing formula:

ane) + (Sb x FEIButane) - BLPG

Pro e by weight contained in LPG delivered in the preceding is calculated as:

Propane + Butane

Sb is the share of tanCalendar Quarter, and

Butane

Bu e by weight contained in LPG delivered in the preceding is calculated as:

Propane + Butane

where Sb + Sp = 1

FEIPropane is the heading “Asia Far Eaas published in ArguCalendar Quarter, e.g.the arithmetic average

FEIButane is the heading “Asia Far Eaas published in ArguCalendar Quarter, e.gthe arithmetic average

BLPG is the daily arithmeticRate one” for the prec30 June is the arithm31 March.

arithmetic average of the daily quotations for Propane under the st index” under “Asia Pacific Refrigerated Cargoes” s International LPG for each day in the preceding FEIPropane for the period from 1 April to 30 June is for the period from 1 January to 31 March.

arithmetic average of the daily quotations for Butane under the st index” under “Asia Pacific Refrigerated Cargoes” s International LPG for each day in the preceding . FEIButane for the period from 1 April to 30 June is for the period from 1 January to 31 March.

average of the Baltic Exchange titled “LPG freight eding quarter, e.g. B for the period from 1 April to etic average for the period from 1 January to

125

3.3 Condensate

3.3.1 Conde

The Condensate Paymand Condensate SuppContract Price for Con

3.3.2 Contr

The Contract Price faccordance with the fo

CPCondensate = [(1-ML

where;

CPCondensate is the C foexpressed in U.S. Doll

CX is an in n factor =the BGDA Effective D

n is the number of yearsEffective Date and theCondensate;

ML is the M g Levelexpressed to four deci

IPCondensate is the In

RPCondensate is the aquotations of Spot Crof the Singapore tradiavailable electronicalleach day in the precedfrom 1 April to 30 Ju1 January to 31 March

For the avoidance of which the Matching Lfirst Calculation DateContract Price for Con

nsate Payment

ent for sales of Condensate to the domestic market under the LPG ly Agreement shall be determined based on the volumes sold and densate as set out herein.

act Price for Condensate

or Condensate for any Calendar Quarter shall be determined in llowing formula:

) * IPCondensate * CX] + [(ML * RPCondensate)]

ontract Price r Condensate for the relevant Calendar Quarter, ars per Barrel;

flatio (1 + 0.02) n, provided that during the first year after ate, CX shall be 1;

, expressed as an integer, between the BGDA date of calculation of the Contract Price for

atchin determined on the most recent Calculation Date, mal places;

itial Price for Condensate, being USD 6.74 per Barrel; and

rithmetic average (in US Dollars per Barrel) of the high and low ude Price Assessments Dubai Crude Oil at the close ng (as published by Platts Oilgram Price Report or y from Platts File Transfer Protocol Dispatch) for ing Calendar Quarter, e.g. RPCondensate for the period ne is the arithmetic average for the period from .

doubt, from and after the earlier of: (i) the Calculation Date on evel is first determined to be equal to or greater than 1, and (ii) the that follows the Matching Date, by operation of this formula the densate will be the Reference Price for Condensate (RPCondensate).

126

3.4 Raw Gas

3.4.1 Raw G

The Raw Gas PaymeAgreement shall be dGas as set out herein.

3.4.2 Contr

The Contract Price fothe following formula

CPRG = [(1-ML) * I

where:

CPRG is the Contract fU.S. Dollars per MMs




IPRG is the Initial Pr R

RPRG is the ReferencUSD per MMscf.

For the avoidance of which the Matching Lfirst Calculation DateContract Price for Raw

3.4.3 Refere

The Reference Price accordance with the fo

RPRG = [(X * R) + ((1

as Payment

nt for sales of Raw Gas to BGC under the Raw Gas Supply etermined based on the volumes sold and Contract Price for Raw

act Price for Raw Gas

r Raw Gas for any month shall be determined in accordance with :

PRG * CX] + [(ML * RPRG)]

Price or Raw Gas applicable in the relevant month, expressed in cf;


f y , expressed as an integer, between the BGDA Effective lculation of the Contract Price for Raw Gas;


ice for aw Gas, being USD 16.95 per MMscf; and

e Price for Raw Gas applicable in the relevant month, expressed in

doubt, from and after the earlier of: (i) the Calculation Date on evel is first determined to be equal to or greater than 1, and (ii) the that follows the Matching Date, by operation of this formula the Gas will be the Reference Price for Raw Gas (RPRG).

nce Price for Raw Gas

for Raw Gas (“RPRG”) for any month shall be determined in llowing formula:

- X) * W)] / V

127

Where:

V is the total volu of expressed in million st

X is a constant determinExhibit 5.

R is the sum, exp sed i

(i) the Dry Gas Pa ent

(ii) the LPG Paym

(iii) the Condensate Payme

(iv) the sales proc fAncillary Products (ifto any Sale and Purcha

(v) the sales proce rompreceding month pursbeen produced using R

(vi) all Taxes (othe cof any of the aforemother taxes that are ramounts payable to a G

(vii) the cost of any pthe aforementioned prless

(viii) any fees paid trespect of the sale of t

W is the windfall adjustwith following formul

W= K x DV x D

where:

K is a constant w alu

DV is the volume immediately preceding

me Raw Gas supplied during the immediately preceding month, andard cubic feet.

ed for each calendar year in accordance with Section 3.4.4 of this

res n U.S. Dollars and without double counting, of:

ym for the immediately preceding month; plus

ent for the immediately preceding month; plus

nt for the immediately preceding month; plus

eeds rom the sale of other Petroleum Products (if any) and any) by BGC in the immediately preceding month pursuant se Agreement; plus

eds f the sale of electricity (if any) by BGC in the immediately uant to any agreement for such sales (which electricity has aw Gas delivered to BGC by SGC); less

r than orporate income tax) payable by BGC in respect of the sale entioned products in any month (less any value added or ecovered in the relevant month, either by deduction from

overnment Agency or through a refund); less

trans ort and delivery beyond the applicable delivery points for oducts to the extent that such costs are incurred by BGC;

o SOMO pursuant to the SOMO Marketing Agency Agreement in he aforementioned products.

ment expressed in US Dollar which is determined in accordance a:

ith v e 0.75;

of Dry Gas sold under the Dry Gas Supply Agreement during the month expressed in MMBtu;

128

D equals Contrac ice Price, expressed in US

The Baseline Price fowith the following for

Baseline Price for Dr

where:

IPDG is the Initial Pr

CX is an inflation r BGDA Effective Date



BP represents Con PrCrude Oil, expressed with the following for

BP = F * [(BB * CX *

where:

F is a constant w alu

BB is a constant with valOil;

Z is a constant with valubetween HSFO prices

Y is a constant w alubetween HSFO prices

H is a constant w vatonne of HSFO expres

3.4.4 Determ

For purposes of detReference Price for RExhibit 5, the followithrough (d) shall be su

t Pr for Dry Gas Price (CPDG) minus Baseline Price for Dry Gas D/MMBtu.

r Dry Gas, expressed in USD/MMBtu, is determined in accordance mula:

y Gas = [(1-ML) * (IPDG * CX)] + [(ML * BP)]

ice of Dry Gas, set out in Section 3.1.2;

facto = (1 + 0.02) n, provided that during the first year after the , CX shall be 1;

f y , expressed as an integer, between the BGDA Effective lculation of the Contract Price for Raw Gas;


tract ice for Dry Gas under assumed pricing conditions for Brent in US Dollar per MMBtu, and determined in accordance

mula:

Z) – Y]/H

ith v e of 0.336;

ue 50 reflecting the baseline value of Brent Crude

e 0.82 reflecting the slope in the linear relationship and Brent Crude Oil prices;

ith v e 6 reflecting the intercept in the linear relationship and Brent Crude Oil prices; and

ith lue 37.661 reflecting the heating value of a metric sed in MMBtu.

ination of X-Factor

ermining the constant “X” in the formula for calculating the aw Gas in any calendar year pursuant to Section 3.4.3 of this

ng shall apply (for the avoidance of doubt, each of paragraphs (a) bject to the adjustment set forth in paragraph (e), if applicable):

129

(a) For thequal to 0.100

(b) If the following yea

(c) If the following yea

(d) If the for the immewith the following forthousandths ro

Xn = 0.1000 + (5 * (IR where: n is the calend ear fo

IRRn-1 is the IRR expressed as a decima

(e) If the Carry FacilityShareholders Agreemaccordance wdetermined pureduced by an am

For purposes expressed as aof a percent ro

(1 + IRR

where

a is the calen year fformula above, meanifor which “X” is being

e calendar year in which the BGDA Effective Date occurs, “X” shall be 0 (or 10%).

IRR for any calendar year is 17.5% or less, then “X” for the immediately r shall be equal to 0.1000 (or 10%).

IRR for any calendar year is 27.5% or more, then “X” for the immediately r shall be equal to 0.6000 (or 60%).

IRR for any calendar year is more than 17.5% but less than 27.5%, then “X diately following calendar year shall be determined in accordance

mula (rounded to four decimal places, with five hundred-unded upwards):

Rn-1 – 0.1750))

ar y r which X is calculated, and

for the calendar year immediately preceding year “n,” l rather than as a percentage.

Private Shareholders make Partial Carry Loans to BGC under the Partial Agreement, then from the date specified in article 6.3.3 of the

ent until the Partial Carry Loans are repaid in full (in ith article 6.3.1 or 7.3 of the Shareholders’ Agreement), “X” as rsuant to paragraphs (a) through (d) above (as applicable) shall be

ount equal to 0.0800 (or 8.0%).

of the foregoing, the “IRR” for any calendar year shall be equal to the rate, percentage (rounded to the nearest tenth of a percent, with five hundredths unded upwards), determined in accordance with the following formula:

a

Σ

y= 1

NCFy

)y = 0

dar or which IRR is being calculated (“n-1” in the ng the calendar year immediately preceding that calculated);

130

y is the calend year inshall be 1), and each ca value of 1 plus the vthrough and including

NCFy means the N Fpositive or negative), (used in) operating acinvesting activities, consolidated cash floprepared under IFRS idirectly in such cash frecords of BGC); pexcluded from the foAnnual Budget for thethe Higher Managemincurred due to an Shareholders’ Agreemworking capital shall net cash from (used account in determinin

If the above equation the IRR for that calend

During the portion of the audited consolidacalendar year becomeof “X” as calculated fyear “z” is greater ththen an adjustment pfollowing the month available.

In the event of a dispSGC or BGC may, determination by an payments shall be ma(or if “X” for such prebasis of “X” for the madjustment payment othe resolution.

3.4.5 Certa

Notwithstanding anythBGC (or a Project En

ar which the BGDA Effective Date occurs (which alendar year thereafter (each of which shall have alue of the immediately preceding calendar year), calendar year “a”; and

et Cash low of BGC for calendar year “y” (which may be equal to the sum of (i) net cash (after tax) from tivities and (ii) net cash (after tax) from (used in) in each case as determined in the audited w statement of BGC for such calendar year n U.S. dollars (and, for any information not found low statement, as determined from the accounting rovided, however, that expenditures shall be regoing if they are not part of the Approved relevant calendar year or otherwise approved by ent Committee, unless such expenditures are

Emergency (as defined in article 14.6 of the ent). For the avoidance of doubt, changes in

be included within the above calculation, whereas in) financing activities shall not be taken into

g Net Cash Flow for purposes of this formula.

to calculate the IRR does not yield a solution for any calendar year, ar year shall be deemed to be 0%.

any calendar year (“z”) through (and including) the month in which ted financial statements of BGC for the immediately preceding available, the Raw Gas Payment shall be determined on the basis or such immediately preceding calendar year. If “X” for calendar an or less than “X” for the immediately preceding calendar year, ayment or deduction (as applicable) will be made in the month in which the audited consolidated financial statements become

ute relating to the calculation of “X” for any calendar year, either by 30 days’ written notice to the other, refer the matter for Expert pursuant to Article 20. Pending resolution, Raw Gas

de on the basis of “X” for the immediately preceding calendar year ceding calendar year is the subject of an unresolved dispute, on the ost recent calendar year for which there was no such dispute). An r deduction (as applicable) shall be made in the month following

in Adjustments

ing in this Agreement to the contrary, if any stamp duties levied on tity) pursuant to Law exceed 0.2%, then an appropriate adjustment

131

will be made to the Rain respect of such excduties levied pursuant

4. Refere

If any of the above pudiscontinued or suspenprice development in Parties originally inteParties shall, in goodcombination of indiceunable to agree on aforementioned noticeaccordance with Articby the Expert, the lastapply.

w Gas Payment to keep BGC (or the relevant Project Entity) whole ess. Otherwise, no adjustment will be made in respect of stamp

to Law.

nce Publications

blications used to determine the Contract Price of the products is ded or changed in another way so that it does not longer reflect the the market of the goods which it refers to, in the manner which

nded, then on notice from any one Party to the other Parties, the faith, endeavour to agree upon a suitable replacement index or s that will achieve the effect originally intended. If the Parties are

such replacement indices within thirty (30) days from the , then any Party may refer the matter to an Expert for resolution in le 20 of the BGDA. Pending agreement by the Parties or resolution Contract Price that could be correctly determined shall continue to

132

EXHIBIT 6 DEDICATED FIE

The Dedicated Fieldscorner points shown aU.T.M. co-ordinates a

A.) Dedicated Field Ruma

LDS

are defined by Universal Transverse Mercator (U.T.M.) co-ordinates for nd connected through straight lines as in the respective maps below. All re within the U.T.M. Zone 38N.

ila

133

B.) Dedicated Fiel st d We Qurna (1st Phase)

135

C.) Dedicated Fiel bai

d Zu r

136

EXHIBIT 7 LNG OFFSH

The LNG Offshore sitbelow:

Coordinates

ORE SITE

e shall be located within an area whose latitude and longitude are specified

Latitude 29-33’-52” N Longitude 048-49’-38” E

The area for such loca

shall be ca100,000 metri

shall havelocated) and a securwith a radius and

may be m

tion:

pable to berth “Q-Flex” LNG Tankers (with storage capacity of 220,000 m3 / c tones of LNG), with 13.5 m water depth requirement;

an exclusion zone (within which the offshore Liquefaction Facilities will be ity warning zone (as defined by international maritime standards)

of 2 km and 3 km (respectively) around the above mentioned coordinates;

odified by agreement between BGC and relevant Government Agency.

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EXHIBIT 8 SOMO AGENCY AGREEMENT

The detailed terms and conditions governing SOMO’s involvement in the export of Petroleum Products shall be set out in an agency agreement (the “SOMO Agency Agreement”), to be entered into between BGC and SOMO. The SOMO Agency Agreement shall include (but not be limited to) provisions based on the following principles:

1. BGC shall designate SOMO as its export agent to act on behalf of BGC.

2. In such capacity, SOMO shall (as an agent, for and on behalf of BGC) (i) enter into Export SPAs which have been negotiated by or under the direction of the JMTC in accordance with the JMTC Terms of Reference (which terms of reference shall be agreed by SOMO and the Parties and shall be included in the SOMO Agency Agreement) and (ii) perform such other functions and provide such market information as the JMTC may determine.

3. SOMO shall receive an agency fee of 1% of the gross revenue from sales under the Export SPAs as received by BGC.

4. The Export SPAs shall require the purchaser thereunder to secure or meet their payment obligations for the purchase of Petroleum Product by arranging for one or more letters of credit by financial institutions with an Acceptable Credit Rating. Such letters of credit shall be either in the name of BGC (as beneficiary) or assignable to BGC solely if such assignment:

a. is simultaneous with the issuance of the letter of credit;

b. with respect to LNG, is (in the opinion of BGC) reasonably expected to be acceptable to any Finance Parties with respect to the Initial Phase LNG Project; and

c. does not (in the opinion of BGC) give rise to attachment risk with respect to the proceeds under the Export SPAs.

5. Export SPAs shall provide for title and risk with respect to Petroleum Products to transfer from BGC to the purchaser at the relevant export delivery point.

6. The SOMO Agency Agreement will include the JMTC terms of reference as developed in accordance with the Shareholders’ Agreement.

7. The SOMO Agency Agreement shall include standard liability limitation clauses for the benefit of SOMO applicable to an agent and the scope of its authority.

8. The SOMO Agency Agreement shall be governed by Iraqi law and shall include arbitration provisions equivalent to those in this Agreement.

138

EXHIBIT 9 TERMS OF ASSET

TRANSFER AGREEMENT

NO. CLAUSE PRINCIPLES 1. Parties South Gas Company as “Transferor”

South Gas Company (in its capacity as a future shareholder of the Basrah Gas Company) (“SGC”) Shell Gas Iraq BV (“Shell”) Diamond Gas Iraq BV (“Diamond Gas” and together with SGC and Shell, the “Interim Transferees”)

2. Preambles Transfer of assets is being undertaken as provided for in the Basrah Gas Development Agreement (“BGDA”).

3. Key Definitions

Additional Assets: means assets not forming Existing Assets or Subsequent Assets, agreed to be transferred from time to time between Transferor and the Company. No obligation on Transferor or the Company to transfer or accept Additional Assets. Additional Completion Date: means the date of completion of the transfer of any Additional Assets. Company: means Basrah Gas Company. Completion Date: means the Additional Completion Date, the First Completion Date, the Subsequent Completion Date, or any other date agreed by the parties for the completion of the transfer of the relevant assets. Confirmation Notice: means a notice confirming the intention to complete on the relevant Completion Date and providing related information as provided in Section 5 of this Exhibit 9. Disclosed Encumbrances: means any Encumbrance identified and disclosed by the Transferor to the Company and included in the Encumbrance Disclosure List. E&Y Valuation Report: has the meaning given to it in the BGDA.

139

NO. CLAUSE PRINCIPLES Encumbrance: has the meaning given to it in the BGDA. Encumbrance Disclosure List: means a list of all Disclosed Encumbrances issued by the Transferor, as such list may be updated in accordance with the BGDA and/or Asset Transfer Agreement prior to the relevant Completion Date Excluded Encumbrances: means any Disclosed Encumbrance and any Minor Encumbrance. Existing Assets: means those assets set out in Appendix A of the E&Y Valuation Report (other than assets listed as “out of scope”), together with the spares that were included for the purposes of the calculation of the valuation of the SGC Transfer Assets pursuant to the E&Y Valuation Report, which spares shall be listed (or described by way of cross reference) in the Asset Transfer Agreement. First Completion Date: means the date of completion of the transfer of the Existing Assets. Full Title Guarantee: means a guarantee and warranty in favour of the Company as to title and ownership rights of SGC Transfer Assets and any Additional Assets that these assets vest indisputably with the Company. Non-Transferable Asset: means any SGC Transfer Asset or Additional Asset that, at the relevant completion date, does not exist, or has been destroyed or (in the case of the Existing Assets) is in a materially adverse condition from that as of the date of the E&Y Valuation Report rendering them incapable of operation. Minor Encumbrances: has the meaning given to it in the BGDA. Perfection: The completion of the administrative/customary processes required in the Republic of Iraq to conclusively vest all rights of ownership of the SGC Transfer Assets and any Additional Assets in the Company. Relevant Affiliates: Any Affiliates of Transferor holding or having rights to any SGC Transfer Assets or Additional Assets. Relevant Third Parties: Any third parties holding or having

140

NO. CLAUSE PRINCIPLES rights to any SGC Transfer Assets or Additional Assets. SGC Transfer Assets: has the meaning given to it in the BGDA. Subsequent Assets: Those assets described in the E&Y Valuation Report as “Assets under construction,” a list of which is attached to this Exhibit 9. Subsequent Completion Date: The date of completion of the transfer of any Subsequent Assets.

4. Accession by the Company

SGC, Shell and Diamond Gas are entering into the agreement pending Incorporation of the Company. Once the Company is incorporated, their rights and obligations as the transferee of the SGC Transfer Assets and Additional Assets will be assigned to the Company. Until such time as the Company is formed and the rights and obligations are assigned to the Company, the obligations of SGC, Shell and Diamond Gas are several (in proportion to proposed shareholding percentages in the Company) and not joint and several.

5. Transfer of Assets

The Asset Transfer Agreement will set out certain obligations of the Transferor with respect to Encumbrances burdening the SGC Transfer Assets equivalent in effect to those set out in Section 1.3 of Exhibit 1 of the BGDA. All Existing Assets are to be transferred simultaneously (or as close as practicable to simultaneously) at the First Completion Date. A First Completion Confirmation Notice confirms the definitive list of Existing Assets, contracts and records being transferred, along with the Final Existing Assets Transfer Price. Subsequent Assets are transferred as they are completed. A Subsequent Completion Confirmation Notice confirms the list of Subsequent Assets, contracts and records being transferred at such Subsequent Completion Date, along with the Subsequent Assets Transfer Price for such assets. Additional Assets are transferred as and when agreed. An Additional Completion Confirmation Notice confirms the list of Additional Assets, contracts and records being transferred at such Additional Completion Date, along with the Additional

141

NO. CLAUSE PRINCIPLES Assets Transfer Price for such assets. Conditions precedent will be agreed for completion of the transfer of Subsequent Assets and Additional Assets. Transferor gives Full Title Guarantee to the Company with respect to the SGC Transfer Assets and Additional Assets and indemnifies the Company for any loss attributable to breach of this guarantee in accordance with Section 10. Land is not dealt with in this agreement, as it is addressed in the BGDA. All liabilities attributable to the period before the relevant completion date for specific assets remain with Transferor and are not transferred to the Company (subject to the terms of article 16.6 of the Shareholders’ Agreement with respect to environmental liabilities). All liabilities attributable to the period from the relevant Completion Date for assets transferred to the Company rest with the Company. The following are NOT transferred to the Company: -employees of Transferor, Relevant Affiliates or Relevant Third Parties (employees are dealt with in a secondment agreement to be entered into between SGC and the Company). -tax liabilities of Transferor, Relevant Affiliates or Relevant Third Parties. -payables or liabilities of Transferor, Relevant Affiliates or Relevant Third Parties accrued or attributable to the period prior to relevant completion dates subject to the terms of article 16.6 of the Shareholders’ Agreement with respect to environmental liabilities.

6. Conditions Precedent to First Completion

Incorporation of the Company. Accession of the Company to the Asset Transfer Agreement. Written evidence (confirming to the satisfaction of the Private Shareholders, acting reasonably) that Perfection of the transfer of all of the SGC Transfer Assets (other than with respect to Excluded Encumbrances affecting Perfection and any Subsequent Asset that is then under construction and any Non-Transferable Assets that have not been accepted) will be possible on or immediately after the First Completion Date.

142

NO. CLAUSE PRINCIPLES Certification by SGC that it reasonably expects the Perfection of the transfer of all of the Subsequent Assets (other than with respect to Excluded Encumbrances affecting Perfection and any Non-Transferable Assets that have not been accepted) will be possible on or immediately after the relevant Completion Date. The LPG import operation has been reviewed against Shell technical and operating standards and any shortfalls mitigated to the reasonable satisfaction of the Company. Fire fighting systems and emergency response procedures have been agreed and temporary measures are in place for Khor al Zubair and North Rumaila gas plants and the Umm Qasr storage and loading terminals. Fire and gas detection systems will also be in place and operating at the North Rumaila and Khor al Zubair gas plants. A leak management and emergency response procedure is in place and tested for pipeline operation. Adequate security system is in place for Khor al Zubair gas plant which include security fence, security lighting, biometric access control, x-ray and explosive detection systems. Without limiting any other obligation under the BGDA or the Asset Transfer Agreement, both Transferor and the Company to both undertake to use their Best Endeavours to achieve satisfaction of the conditions precedent within their control. The Conditions precedent may be waived by the Company (as decided by the Private Shareholders). If Exhibit 1, section 3.7 of the BGDA is triggered and agreement with respect thereto is reached, then the Parties shall make all corresponding changes to the Asset Transfer Agreement to give effect to what is agreed under the BGDA.

7. Asset Transfer Price

The “Initial Existing Assets Transfer Price” is USD 851,042,000 as set out in the E&Y Valuation Report. The “Subsequent Asset Transfer Price” is USD 647,831,000 and reflects “assets under construction” in the E&Y Valuation Report. The Additional Assets Transfer Price is to be agreed from time

143

NO. CLAUSE PRINCIPLES to time. The Initial Existing Assets Transfer Price can be reduced for (i) any Non Transferable Assets that the Private

Shareholders have elected not to accept in accordance with Section 8 of this Exhibit 9 and any Existing Assets with Disclosed Encumbrances that the Private Shareholders elected not to accept or to defer the transfer thereof in accordance with Section 1.3(d)(iii) or (iv) of Exhibit 1 of the BGDA, in each case by the amount allocated to such asset in the E&Y Valuation Report; and

(ii) any Non-Transferable Assets and any Existing Assets

with Disclosed Encumbrances that the Private Shareholders have elected to accept in accordance with Section 8 of this Exhibit 9 or Section 1.3(d)(ii) of Exhibit 1 of the BGDA, subject to a price adjustment in the amount so agreed,

the Initial Existing Assets Transfer Price less such reductions is the “Final Existing Assets Transfer Price.” The Final Existing Assets Transfer Price, the Subsequent Assets Transfer Prices and any Additional Asset Transfer Prices for Additional Assets transferred before the First Completion Date will be settled between Transferor and the Company by effect of the “matching” mechanism in the Shareholders’ Agreement. When all SGC Transfer Assets have been transferred to the Company, sum of Final Existing Assets Transfer Price and Subsequent Asset Transfer Prices is the Final Aggregate Asset Transfer Price. SGC shall be liable for any Taxes that apply to the transfer of, and its proceeds under, any transfer of SGC Transfer Assets.

8. Completion The First Completion Date will occur on the date set out in the Notice of Intention to Complete delivered under the BGDA. Prior to the relevant Completion, SGC shall provide a consolidated Encumbrance Disclosure List and the Private Shareholders, acting reasonably will determine, in respect of each separately affected SGC Transfer Asset (or category thereof), whether (on behalf of BGC) to exercise the options set out in Section 1.3(d) of Exhibit 1 of the BGDA.

144

NO. CLAUSE PRINCIPLES The Company is not required to complete on the First Completion Date unless the transfer of all of the Existing Assets can be completed (other than those assets the transfer of which has been rejected or deferred in accordance with Section 1.3(d)(iii) or (iv) and any Non-Transferable Asset) and each of the Conditions Precedent are satisfied. Without limiting the obligation of the Transferor under Section 1.3 of Exhibit 1, if completion cannot occur on any Completion Date due to Transferor failure or if an asset is a Non-Transferable Asset, the Company can elect to postpone such completion or to complete (and will have the right to accept, or to elect not to accept, the transfer of a Non-Transferable Asset), in each case, with or without conditions and without impacting the Transferor’s obligations, provided that the Transferor remains liable to complete the rest of the transaction. Upon execution of agreement, Transferor will begin liaising with third parties to ensure that Perfection of the Existing Assets can occur on or immediately following the First Completion Date. These provisions apply (with due alteration of details) to any Subsequent Completion Date and Additional Completion Date.

9. Pre-Operations Period Activities

Without limiting any other obligations on a Party under the BGDA, the Transferor agrees that the Company, Shell and Diamond Gas (and their representatives) will be undertaking various activities under the BGDA and the Shareholders’ Agreement and as such grants full access to the SGC Transfer Assets (and any Additional Assets) and whatever reasonable assistance is reasonably required to undertake these activities. The Company, Shell and Diamond Gas shall, as and when requested by the Transferor, comply with all applicable procedures of the Transferor when carrying out such activities. Obligations After the BGDA Effective Date, the Parties (and post Incorporation, the Company) will form a technical implementation team will be formed to focus on technical improvement of the operational safety standards of SGC Transfer Assets. The Parties shall make available the resources needed to complete these activities:

145

NO. CLAUSE PRINCIPLES (a) All SGC personnel seconded to the Company have

completed a basic health, safety and environment induction, life saving rules training and signed an undertaking in respect of wearing of personal protection equipment and all members of the SGC leadership team and all personnel required to work permanently in process areas have completed a hazard awareness training module.

(b) Clear demarcation barriers have been erected around all live processing areas in North Rumaila gas plant, Khor al Zubair gas plant and Umm Qasr loading terminal.

(c) All portable buildings in critical areas will have been removed.

(d) Muster points, evacuation routes, identified and indicated, emergency response plans have been agreed and put in place for all locations with operating assets.

(e) High H2S areas in all assets have been identified and indicated.

(f) The integrity of the supports of the spheres at the Khor al Zubair gas plant has been reviewed and any necessary modifications implemented.

(g) Potential subsidence at compression station 4 and compression station 5 has been reviewed and any necessary remediation measures agreed and implemented.

(h) Control rooms in all operating locations have been reviewed against the Shell standards and any shortcomings rectified.

(i) All rigging and lifting equipment that does not meet Shell’s standards has been destroyed or removed from all Company operating locations.

(j) Competent personnel are demonstrated to be available for all high risk activities including but not limited to scaffolding, live line working, rigging and lifting, gas testing, electrical and mechanical isolation.

(k) The existing “permit to work” system is demonstrated to be operable.

(l) A camp has been constructed and is available for occupation at Khor al Zubair gas plant for Shell secondees.

(m) SGC shall demonstrate to the reasonable satisfaction of the Company that existing operations are in compliance with the laws of Iraq.

(n) A phased shut-down of the Khor al Zubair and North Rumaila gas plants and the Umm Qasr storage terminal, together with a full site survey of each of the same (for the purpose, among other things, of determining the content of the First Infrastructure Plan(s)) has been completed (and

146

NO. CLAUSE PRINCIPLES each such shut-down shall be performed in such a way so as to minimise disruption to the continued operation of such facilities).

Business Improvement Program The Parties acknowledge that the SGC Transfer Assets and operating arrangements are currently below Shell and/or international oil industry minimum standards. The Parties therefore agree that an 18 month planned programme of improvement will commence upon signature of the Asset Transfer Agreement, which is aimed at bringing the SGC Transfer Assets and the facilities and/or operating processes to a minimum acceptable level. This programme of work will form Phase 1 of the Business Improvement Program and will include work to support satisfaction of the conditions precedent to commencement of operation included within the Asset Transfer Agreement. Specifically the parties agree:

I. That within 1 month of the signing of the Asset Transfer Agreement they:

will have formed a steering committee chaired by the technical manager of the Company to oversee and report on a monthly basis to the joint management committee and later the Higher Management Committee of the Company on progress against the Business Improvement Program Phase 1

SGC and Shell will have appointed full time change managers to be responsible for day to day implementation of Phase 1 of the Business Improvement Program

will have agreed and appointed a full time team of up to 25 SGC and 15 Shell staff reporting to the change managers to implement Phase 1 of the Business Improvement Program.

II. The parties agree that they will monitor the progress

against the Phase 1 Business Improvement Program on a monthly basis at the Joint Management Committee and later at the Higher Management Committee to ensure that sufficient competent staff are made available to support the completion of the Business Improvement Program within the 18 month programme.

III. Any changes to the Business Improvement Program

will require agreement of the joint management

147

NO. CLAUSE PRINCIPLES committee and / or the Higher Management Committee of the Company.

Transferor to prevent adverse interference. “Knock-for-knock” provisions where each of the Transferor and the Company agree to be liable for their own losses arising out of these activities in relation to personal injury, death and disease to its employees and damage to its own property.

10. Warranties Transferor warrants to the Company, Shell and Diamond Gas that each warranty is true, accurate and not misleading, at date of the agreement. Warranties repeat at each Completion Date (with reference to facts and circumstances at such date). Transferor acknowledges that the Company, Shell and Diamond Gas are entering into agreement in reliance on each warranty also being given as a representation with intention of inducing the Company, Shell and Diamond Gas to enter into this agreement. Between execution of agreement and the First Completion Date, Transferor will comply with obligations relating to Pre-Operations Activities, actions pending completion and immediately notify the Company, Shell and Diamond Gas if a warranty becomes untrue, inaccurate or misleading. The SGC Transfer Assets will be transferred “as is” and without warranty relating thereto as to condition or operational quality. The only warranty with respect to the SGC Transfer Assets will be a Full Title Guarantee and that the SGC Transfer Assets are free from Encumbrances (other than Excluded Encumbrances).

11. Remedies The Private Shareholders shall have the right to terminate the Basrah Gas Development Agreement in the circumstances set out in Section 1.3(d)(v) of Exhibit 1 of the BGDA. With respect to warranty claims relating to Encumbrances (other than Minor Encumbrances) that become known after the transfer of the relevant SGC Transfer Assets, SGC shall be required in the first instance to remove such Encumbrance, to take additional steps to perfect title or to provide a replacement asset. If the foregoing is not achieved within the time period set

148

NO. CLAUSE PRINCIPLES out in the Asset Transfer Agreement, SGC shall indemnify BGC for all losses it may incur arising out of such breach. Any other warranties, remedies, and limitations on remedies shall be agreed by the Parties and set out in the ATA.

12. Contracts After relevant Completion Date, the Company performs obligations of any Contracts transferred from Transferor. With respect to the Contracts transferred: (i) Transferor indemnifies the Company, Shell and

Diamond Gas for any liability, claim and losses incurred under such Contract prior to the relevant Completion Date; and

(ii) the Company, Shell and Diamond Gas indemnify

Transferor for liability, claims and losses incurred under such Contract from the relevant Completion Date.

If Contract cannot be transferred, then Transferor continues to perform Contract on behalf of the Company, subject to reimbursement of costs and expenses of the Transferor incurred in connection with such performance. The Asset Transfer Agreement will contain a mutual waiver of consequential damages, etc.

13. Post-Completion Obligations

If the Company elects to accept an asset where title has not been Perfected, Transferor will hold such asset on behalf of the Company so that the Company will have all rights to the non-Perfected Asset.

14. Confidentiality To be consistent with what is required under the Basrah Gas Development Agreement.

15. General provisions

Notices provision. Asset Transfer Agreement terminates on earlier of (i) termination of the Basrah Gas Development Agreement or (ii) at the Final Completion Date, subject to survival for warranty, indemnity and other customary provisions Variation of agreement must be in writing signed by all parties.

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NO. CLAUSE PRINCIPLES Representation regarding no violation of United States Foreign Corrupt Practices Act or applicable law in Republic of Iraq or any other jurisdiction. In addition, the following “boilerplate” clauses to be included: “no waiver”, “remedies cumulative”, “obligations remain in force after Completion”, “entire agreement”, “no assignment without consent of all parties”, and “counterparts” provision.

16. Governing Law and Dispute Resolution

Republic of Iraq, provided that if English legal terms or concepts are incapable of translation into Iraq law then such term or concept to be interpreted in context of international business practice. Dispute resolution to match what is in Basrah Gas Development Agreement. Sovereign immunity waiver.

17. Signatories SGC, Shell and Diamond Gas

18. Schedules 1 – E&Y Valuation Report 2 – Asset Registers 3 – Information in First Completion Notice 4 – Information in Subsequent and Additional Completion Notice 5 – Technical Conditions Precedent 6 – Warranties 7 – Completion Requirements 8 – Technical Activities (Survey and Assess) 9 – Subsequent Assets Schedule (attached) 10 – Actions Pending Completion 11 – Subsequent Assets 12 – Perfection

150

Subsequent Assets Schedule of Key Dates

Key Milestone Zubair II Hammar Zubair

Rafidiah

Zubair II Hammar Mishrif Zubair Mishrif

West Qurna CS 7& 8

West Qurna CS 6

West Qurna Gas Compression

1. Start of Design and Procurement

Jan. 2008 Jan 2008 Sep 2007 Nov 2009 Mar 2010

2. Completion of Basic Design

Package No information No information No information

No information

Feb 2011

3 Start of Civil Construction

Not commenced Not Commenced Jul 2009 No

information Feb 2011

4.

Delivery of Major Eq’t &

Balance of Plant Materials

Compressor Oct 2009

BOP May 2010

Compressor Jan 2011

BOP Feb 2011

Compressor Dec 2008

BOP Dec 2009

Civil Mar 2010

Compressor Dec 2010

BOP Feb 2011

Civil Jun 2011

Compressor Dec 2010

BOP May 2011

Civil May 2011

5. Commencement of Mechanical Construction

Not Commenced Not Commenced In progress Not

Commenced Not Commenced

6. Commissioning

& Handover Jul. 2013 Jan 2013 Dec 2011 Jul 2013 Jun 2013

151

152

EXHIBIT 10 FORM OF COMPANY CONTRACT

__________________________________________________________________________

Company Contract of

Basrah Gas Company

Mixed Limited Liability Company

First: Company’s name: Basrah Gas Company Mixed Limited Liability Company (the “Company”).

Second: Company’s head office: Basrah, and the Company is authorised to open branches or subsidiaries in any other governorate in the Republic of Iraq.

Third: Objects of the Company: To contribute to supporting the national economy through carrying out gas projects and the gathering of raw gas, including natural gas liquids, and the treatment and processing of such to produce dry gas, condensates, liquid petroleum gas, liquefied natural gas and other petroleum products and ancillary products and to sell such gas and other petroleum products and ancillary products for domestic consumption and export. In furtherance of its objects, and to the fullest extent permitted by Iraqi law, the Company may carry out any activity which directly or indirectly favours the realisation of its objects, including and not limited to the following:

1. develop, implement, and carry out gas projects including the gathering of raw gas and natural gas liquids, and the treatment and processing of such to produce hydrocarbon based products and other products derived from raw gas including but not limited to dry gas, natural gas liquids (including condensates and liquid petroleum gas) and liquefied natural gas (collectively referred to as “petroleum products”), and other products resulting from the treatment and processing of raw gas, including but not limited to sulphur, carbon dioxide and other by-products (“ancillary products”);

2. produce, store, market, transport, sell and supply petroleum products and ancillary products to domestic and export markets and deal with or dispose of such products, including entering into agreements for the sale and export of dry gas, liquid petroleum gas, liquefied natural gas, condensates and ancillary products, provided that export sales of petroleum products shall be made through the State Oil Marketing Organisation (or any successor entity) as agent for the Company, unless the Iraqi government (under law or otherwise) permits the Company to sell petroleum products for export directly;

3. purchase, take delivery of, own and sell raw gas, including natural gas liquids, and petroleum products and ancillary products from and to any party including any government or government/state owned entity or Iraqi or non-Iraqi private entity and enter into agreements for the supply, procurement, sale and purchase of raw gas,

including natural gas liquids, petroleum products and ancillary products with any party including any government or government/state owned entity or Iraqi or non-Iraqi private entity, in each case subject to article Third (2) above in the case of export sales;

4. transport raw gas, including natural gas liquids, and petroleum products and ancillary products through pipelines and pipeline networks and other means, including all associated stations, infrastructure and equipment, to delivery points, storage points, supply points and transfer points;

5. conduct feasibility studies and design, engineer, procure, construct, develop, install, import, acquire, lease, rent, own, use, operate and/or maintain infrastructure, facilities, plants and assets, including but not limited to gas gathering, treatment and processing facilities, raw gas, petroleum product and ancillary product storage, transportation and delivery facilities, pipelines, liquefied natural gas liquefaction facilities, roads, drains, structures, ports, jetties, harbour areas, metering and measurement facilities, systems, equipment, machines, spare parts and other articles and requirements, and all related facilities, infrastructure, plants and assets required for the Company to carry out its objects and activities and any expansion thereof (collectively referred to as “project facilities”), including to share project facilities with others, and to access, use and share the facilities and infrastructure of others;

6. rejuvenate, repair, refurbish, upgrade, replace, develop, expand, redesign, construct, operate and maintain project facilities; possess any other forms of property suitable for the purposes of the Company; register property and assets under the Company name at relevant offices; sell, lease, and mortgage property and assets and practise any kind of transactions in relation to them, including signing contracts and constructing buildings, stores and different structures relevant to the Company’s objects and activities;

7. explore for gas and develop gas fields, subject to being awarded or granted the rights to do so according to the relevant rules and regulations for field or upstream exploration and development in Iraq, and bid on tenders for the same;

8. obtain, create, own, transfer, exchange and sell any carbon or greenhouse gas credits and related rights arising out of the Company’s operations and activities, and receive all proceeds therefrom, and enter into agreements in accordance with relevant arrangements and mechanisms including those provided by the United Nations Framework Convention on Climate Change, the Kyoto Protocol, and other voluntary offset schemes and exchanges;

9. enter into any agreement to develop, implement, operate and maintain gas projects and project facilities, and any other contract, arrangement, transaction or agreement required to give effect to the objects and activities of the Company;

10. acquire moveable and immoveable assets (including infrastructure) related to the objects and activities of the Company from any person or Iraqi or non-Iraqi private or state-owned entity, and do all things necessary to perfect the transfer of ownership of such assets;

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11. enter into agreements with owners of moveable and immovable assert (including infrastructure), including but not limited to entering into leases, licenses, rights of access and rights of use;

12. provide services to others, receive services from others, and operate facilities and infrastructure on behalf of others;

13. enter into agreements with owners and/or occupiers of land and other areas (both onshore and offshore), including but not limited to entering into: leases, licenses, rights to occupy, rights of easements, rights of way, rights of access and rights of use; and if it becomes permissible under Iraqi law, to enter into agreements with owners to purchase land and other areas for carrying out the Company’s operations and activities;

14. acquire, construct, lease, own, operate and/or or enter into agreements for all utilities and services relevant to carrying out the Company operations and activities, including water and electricity generation and distribution systems, water offtake production and supply facilities, water and waste treatment and disposal facilities, and telecommunications and data transmission networks and equipment;

15. enter into agreements to procure, access, drill for, own and use water, including sub-surface water, relevant to the Company’s operations and activities;

16. carry out activities relevant to the Company’s objects and activities inside or outside of Iraq, and establish and maintain any entity in any jurisdiction as may be appropriate or necessary and relevant to the Company’s objects and activities, including but not limited to entities for project development, financing, asset ownership and management, personnel, operating or marketing and including establishing, investing in, forming ventures or partnerships with, sharing in the founding of, or merging or amalgamating with, Iraqi or foreign companies, and subscribing for and purchasing share capital in other companies as may be appropriate or necessary and relevant to the Company’s objects and activities;

17. transfer any part or all of the Company’s rights and obligations under any agreement to an affiliate of the Company, or to any other entity so far as such transferee entity requires rights and obligations in order to obtain rights and carry out activities with respect to the Company’s operations and activities, or to any other entity that the Company and its shareholders may agree;

18. take part in government and private contracts and auctions and tenders of various types relevant to the Company’s objects and activities including any concessions, licenses, permits or other exclusive or non-exclusive rights of any kind;

19. contract for or provide such security as may be necessary for the protection of the Company’s personnel, activities and assets provided that the Company and the security contractors of the Company shall comply with any relevant law and regulations for the licensing of security activities;

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20. flare or vent raw gas and petroleum products and ancillary products for operational reasons and use such volumes of raw gas and petroleum products and ancillary products as reasonably required to carry out operations in respect of the Company’s objects and activities, including for electricity generation and the on-sale and supply of any such electricity generated;

21. withhold, apply and set-off, any payment or credit balance (whether or not matured) to which a shareholder or another party is entitled to be paid by the Company under a written agreement with the Company, in satisfaction of any sum due and payable by a shareholder or party to the Company under any other written agreement (including cash calls under a shareholders’ agreement and payments due under a domestic sale and purchase agreement), regardless of the currency or place of payment of such credit balance, payment or sum;

22. deduct, credit, withdraw or draw down payments to which the Company is entitled under a written agreement with a shareholder or party, and apply such payments in accordance with the terms of the relevant written agreement;

23. lift raw gas, petroleum products, or other hydrocarbon products owned by a shareholder or other party up to the value of any payment default by such shareholder or other party, and sell and receive the proceeds from such products, and credit any relevant account for amounts received from the sale of such hydrocarbon products to off-set or satisfy any payment default;

24. import, export and exchange freely convertible currency, and to exchange such currency at prevailing rates, in each case as required for its operations in relation to the Venture (including for the payment of dividends and payments of principal and interest on debt);

25. make payments related to its objects and activities in or outside of Iraq in any currency, including and not limited to the right to pay and to repatriate or transfer dividends, shareholder loans and loan repayments, earnings and capital and to make all necessary payments outside of Iraq, including but not limited to payments in respect of the engineering, procurement, construction, operation, ownership, maintenance and financing of the Company’s projects and any other activities;

26. receive, retain and dispose of funds outside of Iraq, including all proceeds from the sale of petroleum products and ancillary products;

27. open and maintain accounts, including current, fixed deposit, savings and other accounts, with Iraqi and foreign banks and government, private or public financial institutions, in national or foreign currency, and retain or dispose of any funds therein;

28. issue and accept cheques and other bills of exchange; open letters of credit and amend, renew, cancel or reword them; create withdraw, return, dispose in any manner with bills of exchange, or exchangeable documents including bills of lading, commercial bills and indorse them, reserve them earning bank facilitation with or without guarantees; conduct all commercial correspondence and transactions, including but not limited to the

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organisation, withdrawal, issuance and receipt of cheques, bonds, bills of lading and other financial instruments;

29. borrow, raise and earn funds from Iraqi and foreign banks, government, private or public financial institutions and companies, and issue debentures or other securities of any description; make loans; request and draw down loans; issue any securities to carry out and finance its objects and activities; secure and discharge any debt or obligation and mortgage the Company's movable and immovable assets as collateral for loans; create debentures or other securities of any description; and issue any securities which the Company has the power to issue, including contractual rights, in favour of any lender or financial institutions in connection with providing financing or refinancing to the Company or for its projects and activities; and obtain financing or refinancing as the case may be, in the form of equity and loans from shareholders and their affiliate entities; permit or grant a charge, lien, encumbrance or other security interest over the Company’s assets, rights or interests, including future rights or interests;

30. guarantee or indemnify or provide security by whatever means for the performance of any contracts or obligations of any person, firm or company;

31. transfer all or any part of its rights and obligations under an agreement to its lenders and request its shareholders or its affiliates to enter into one or more direct agreements with the lenders to the Company;

32. raise funds from its shareholders, from its revenues or cash reserves or from any third party financial institution or other provider of finance (including any export credit agency, multi-lateral agency, guarantor, insurer or shareholder) and enter into agreements relating to funding and financing, including shareholder loans;

33. employ and engage local and foreign personnel, contractors, sub-contractors, consultants, advisors and other persons, including engaging shareholders and their affiliates and employing, engaging and seconding personnel of shareholders and their affiliates;

34. obtain or grant a power of attorney and revoke or refuse any such appointment;

35. conduct any legal transactions and actions related to its activities and objects and enter into arrangements, negotiations and agreements with any government or government/state-owned entity or Iraqi or non-Iraqi private entity and undertake any other business, obligations or activities and obtain or procure the obtainment of any approvals relevant to its objects and activities from any government or government/state-owned entity or authority;

36. own, purchase, accept, license, acquire and utilise all kinds of patents, commercial marks, industrial samples, privileged rights, know-how, copyright or other intellectual property relevant to the company's objects and activities and grant permission to third parties for the use of such rights and manage them;

37. prepare, implement, maintain and undertake programs, policies, standards, procedures and practices including but not limited to: health, safety, security, environment, project

156

management, asset integrity, process safety management, operational excellence, security management, sustainable development and social performance, risk management and internal control, human resources and personnel, financial control and accounting, governance, information management and security, treasury, reputation, anti-bribery and corruption and business principles;

38. undertake and arrange for all types of insurance of the Company's property, assets, Company personnel and third party losses;

39. support and invest in local community development activities including pro bono grants and services; and

40. carry out any other objects, activities and rights granted by the Ministry of Oil of the Republic of Iraq or a successor of the Ministry or other relevant Iraqi government body or Iraqi state-owned entity.

Fourth: Decisions of the Company

41. If the law requires a resolution of the shareholders at a general assembly meeting, the approval of such resolution shall require the unanimous consent of all shareholders at such general assembly meeting if such resolution relates to any of the following matters:

(a) the approval of a manual of authorities and any variations thereto

(b) subject to any applicable terms specified in a shareholders’ agreement and except to the extent addressed in the approved manual of authorities, any confirmations, approvals, instructions and recommendations required in respect of the managing director and the managing director’s position, authority, and powers;

(c) the sale, transfer or other disposal of or the creation of a security interest over any assets or undertakings of the Company (except for the sale of assets in the ordinary course of business);

(d) any variation to the following principles in respect of shares - there shall only be one class of issued shares in the capital of the Company and each share shall: be issued at a nominal value of one Iraqi dinar per share; be issued when fully paid; carry one vote; carry rights identical to each other share; and have such voting, dividend and other rights agreed between the shareholders;

(e) any increase, decrease or other alteration in the share capital of the Company (except an increase in share capital for the purposes of or resulting from a cash call), and any proposed grant of an option or other arrangement over or in respect of shares and any other proposed actions that may have the effect of varying the share capital, the proportionate shares held by a shareholder, or any rights or obligations attaching thereto;

(f) any amendment to this Company Contract and the carrying out of any business or activity that is outside the scope or nature of those activities referred to in an

157

agreement between, among others, the shareholders related to the Basrah gas project, or which is outside the ordinary course of the Company’s business;

(g) the liquidation, dissolution or winding up of the Company, or the taking of any other form of insolvency action, and the appointment of a liquidator, receiver (or similar official) and the terms thereof; and

(h) the merger, consolidation or amalgamation with or into any other entity, or other form of transformation or reorganisation of the Company.

42. If any matter other than a matter listed in article Fourth (1) of this Company Contract requires a resolution of the shareholders at a general assembly meeting, the approval of such resolution shall require the consent of shareholders who between them hold 76 per cent or more of the total issued shares of the Company.

43. The quorum for a duly convened general assembly meeting (including any adjourned meeting) shall be the presence of shareholders who between them hold 76 per cent or more of the total issued shares (or their duly appointed representatives or proxies). If the quorum is not reached within 60 minutes of the scheduled commencement time the general assembly meeting shall be adjourned. Such adjourned general assembly meeting shall apply the same quorum requirements and shall be held at the same time and place on the date which is two weeks from the date of the initial general assembly meeting (unless circumstances are such that it is not possible to do so at that time and/or place). The managing director shall give no less than 7 days written notice of the adjourned general assembly meeting, its place and time to each of the shareholders (including those who were not present at the initial general assembly meeting).

44. Notwithstanding articles Fourth (1), (2) and (3), in the event that:

(a) any shareholder that is not an Iraqi Ministry or other Iraqi governmental body, or an Iraqi state-owned entity (“private shareholder”) has not made a capital contribution to the Company as may be required pursuant to an agreement between the shareholders or any private shareholder or any affiliate of such private shareholder has not made a loan to the Company as may be required by an agreement between the shareholders; and any other shareholder or the Company has given notice to the non-paying shareholder that the non-paying shareholder or its affiliate must make such capital contribution or loan, and the non-paying shareholder or its affiliate has not made such capital contribution or such loan within 30 days of the date of such notice; or

(b) any private shareholder has committed an event of default pursuant to an agreement between the shareholders and as defined in such agreement,

then the non-paying shareholder or defaulting shareholder shall not be included in the calculation of the quorum requirement for a general assembly meeting until the non-paying shareholder has satisfied its payment obligations or remedied such event of default, and the term “shareholders” as used in articles Fourth (1), (2) and (3) shall mean shareholders except the non-paying or defaulting shareholder.

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Fifth: Company’s capital: The capital of the Company is [USD 20,000,000 equivalent] Iraqi Dinars divided into [TBC] shares. The value of each share is one Iraqi Dinar.

The South Gas Company, Shell Iraq Gas B.V. and Diamond Gas Iraq BV agree to establish Basrah Gas Company [Mixed Limited Liability Company] after the consent of the Registrar of Companies and authorise [Attorney’s name to be inserted] to make the application for incorporation and to be the authorised representative for service of legal process in Iraq. The provisions of Iraqi Law No 21 1997 (as amended) shall apply for any issue not mentioned in this Company Contract.

This contract is authenticated by Advocate [Lawyer’s name to be inserted].

Details of the shareholders are as follows:

SHAREHOLDER NAME

South Gas Company SHARES

[TBC ]

SIGNATURE ………………

[NAME]

OCCUPATION

State Company controlled by the Ministry of Oil

NATIONALITY

Iraqi

CIVIL ID NO

Incorporated pursuant to a decision of the Companies Registrar dated 30 June 1998

CAPITAL PERCENTAGE

51 per cent

ADDRESS

Basrah City,

Basrah Governorate

TELEPHONE

[•] I CONFIRM CORRECTNESS OF THE INFORMATION ABOVE

E-MAIL

[•]

SHAREHOLDER NAME

Shell Gas Iraq B.V. SHARES SIGNATURE

159

[TBC]] ………………

[NAME]

OCCUPATION

Gas Projects Company

NATIONALITY:

Dutch

CIVIL ID NO [•] CAPITAL PERCENTAGE

44 per cent

ADDRESS Carel van Bylandtlaan, 30 2596 HR The Hague, The Netherlands

TELEPHONE [•] I CONFIRM CORRECTNESS OF THE INFORMATION ABOVE

E-MAIL [•]

SHAREHOLDER NAME

Diamond Gas Iraq B.V.

SHARES

[TBC]]

SIGNATURE

………………

[NAME]

OCCUPATION

Gas Projects Company

NATIONALITY: Dutch

CIVIL ID NO [•] CAPITAL PERCENTAGE

5 per cent

ADDRESS [•]

TELEPHONE [•] I CONFIRM CORRECTNESS OF THE INFORMATION ABOVE

E-MAIL [•]

160

EXHIBIT 11 KEY TERMS OF RAW GAS SUPPLY AGREEMENT

South Gas Company (“Seller”) PARTIES

Basrah Gas Company (“Buyer”)

INTERPRETATION

The South Gas Company, Diamond Gas Iraq B.V. and Shell Gas Iraq B.V. have entered into the Basrah Gas Development Agreement (“BGDA”);

The BGDA stipulates, inter alia, that the Seller and the Buyer shall enter into an agreement, based on this Term Sheet (the “Raw Gas Supply Agreement”), for the Seller to supply, and for the Buyer to purchase, Raw Gas at the specified Delivery Points;

The BGDA further stipulates that (subject to the Seller’s ramp-up rights) in the event of an LNG export project, the Seller will allocate sufficient Raw Gas to produce a minimum of 600 MMscfd of Feedstock Gas (as defined in the BGDA) for such project;

In accordance with the BGDA a Joint Planning and Coordination Committee (or “JPC Committee”) will be established in accordance with the JPCC Terms of Reference to co-ordinate and align, inter alia, current and future Raw Gas production and the offtake of Dry Gas, LNG, LPG and Condensate (“Petroleum Products”), with infrastructure development so as to enable the Parties to meet their obligations and exercise their rights;

Pursuant to the BGDA a plan in respect of the current and future Raw Gas production and offtake of Petroleum Products shall be established (the “Gas Supply and Offtake Plan”). This Plan (and any amendments thereof) together with the Raw Gas Supply Agreement shall form a basis for the Seller to sell and for the Buyer to buy Raw Gas;

The JPC Committee shall make recommendations on updating and amending the Gas Supply and Offtake Plan;

Pursuant to the Gas Supply and Offtake Plan

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(and any amendments testablish a confirmatiosubject of this AgreemNotice”).

hereof) the Parties shall n note relevant to the ent (the “Confirmation

SALE AND PURCHAS

The sale and deliverypurchase and acceptanBuyer at the Delivery described in the Raw Ga

E by the Seller and the ce of Raw Gas by the Points, in the quantities s Supply Agreement.

RAW GAS

Any gaseous effluent, state at the gas/liq(including all NGLs constituents existing tdefined in the BGDA.

which is in its natural uid phase separation and other liquefiable

herein) and as further

DEDICATED FIELDS The Raw Gas Supply pro isions as appropriaof the BGDA.

Agreement will contain te to reflect Article v 12.2

TERM

The Raw Gas Supply Aeff tive on the date ofcontinue until terminateterms.

greement shall become

its execution and shall d in accordance with its

ec

CONTRACT YEAR

A Contract Year will However, the first commence at 00:00 houthe Commencement DatBasrah local time on 1 year; the last Contract hours Basrah local termination of the Raw G

equal a calendar year. Contract Year shall rs Basrah local time on e and end at 00.00 hours January of the following Year shall end at 00:00 time on the date of

as Supply Agreement.

QUANTITIES Committed Volumes

The quantities (in MMsSeller is obliged to delivthe Buyer is obliged to of the specified DeliverYear will be set out in thamended from time to ti

In case a Confirmationbo or in cabe nfirmatiSu Offtake Plout in the Gas Supply anParties’ respective oblidelivery and accepting d

Resulting from the Cannual contract quantitcontract quantity (“Mquantity (“DCQ”) and t(“DMQ”) shall be estab

cfd) of Raw Gas which the er to the Buyer and which accept delivery of at each y Points in each Contract e Confirmation Notice (as

me).

Notice is not signed by se of any inconsistency

on Notice and the Gas an, then the quantities set d Off-take Plan set out the gations in respect of the elivery of the Raw Gas.

th Parties, tween a Copply and

ommitted Volumes, the y (“ACQ”), the monthly CQ”), the daily contract he daily minimum quantity lished.

162

Delivery Points

The points set out in thGas Supply and Offtakeoutlet of each stage of each of the degassing stto e Se

Each specific deliverparticularly defined anSupply and Offtake Plathe Raw Gas Supply Ag

e Confirmation Notice and Plan, being generally the the liquid/gas separator in ations at which Raw Gas is ller to the Buyer. be delivered by th

y point shall be more d described in the Gas n (and if also required, in reement).

Commencement Date

The Commencement “Commencement of Ofor the Committed VoluGa OConfirmation Notice.

Any additional Commiassociated therewith (Date”) will be set out inNotice(s).

Date (established as perations” in the BGDA) mes shall be set out in the fftake Plan and the s Supply and

tted Volumes and date(s) each a “First Delivery subsequent Confirmation

FIRST DELIVERY DATE

Infrastructure

The Buyer will provide (i) such infrastructure dPoints as may be necessits obligations under Agreement, including athe facilities of the Sean lities rof the BGDA as may be

The Parties shall aliinterface issues in rinfrastructure throughCoordination Group aArticle 6.6 of the BGDA

and construct (if required): ownstream of the Delivery ary for the performance of

the Raw Gas Supply ll necessary connections to ller’s upstream suppliers; eferred to in Article d (ii) such faci 7.4.7 approved by the HMC.

gn and coordinate any espect of the relevant the Planning and nd in accordance with .

Information Exchange

Th agree co and inf at is reletheir respective obligatio

e Parties mmunication ormation th

to maintain close to exchange available vant to the fulfilment of ns.

INFORMATION EXCHANGE, PLANNING AND COORDINATION GROUP

Planning and Coordination Group

Each Party shall appoinjoint planning and coorand Coordination GroCoordination Group ipra the exSu t.

Th ning and Camongst other thingdiscussing, agreeing anmatters and procedures.

The Planning and Coo

t three representatives to a dination group (“Planning up”). The Planning and s to meet as soon as ecution of the Raw Gas cticable after

pply Agreemen

e Plan oordination Group shall s be responsible for d carrying out operational

rdination Group will have

163

no power to amend the Raw Gas Supply Agreement or to create, waive or vary any legal or contractual obligation of either of the Parties.

DELIVERY PROGRAMMES

General

The Planning and Coordination Group shall develop delivery programmes (envisaged to be Annual, Monthly, Weekly Programmes and Daily Nomination, as well as indicative ones) based on the Gas Supply and Offtake Plan and the Confirmation Notice.

The Committed Volumes Confirmation Notice shall form the basis for the Parties to plan and coordinate their operations.

Specification Each Confirmation Notice will contain the applicable specifications for the Raw Gas to be delivered thereunder (the “Specification”).

QUALITY AND MEASUREMENT Measurement of

Quantity and Quality

The Parties shall develop principles and procedures on measuring and/or determining the quantity and quality of Raw Gas delivered, which principles and procedures shall be consistent with internationally accepted petroleum industry standards.

The Buyer shall carry out the reading of instruments, and the collection and processing of sample data. The Buyer shall make all data obtained available to the Seller.

The Seller may designate representatives who shall have the right to be present and witness any measurement, sampling or testing of the quantity and quality of Raw Gas.

For existing and future measurement facilities located outside of the Buyer’s facilities or facilities not owned or operated by the Buyer, the Buyer and the relevant owner(s) and operator(s) of such facilities shall enter into agreements with respect to such facilities and their operation, covering measurement obligations, principles and procedures required to ensure the accurate measuring of Raw Gas. The Seller shall, and shall procure that its Affiliates shall procure that such persons enter such agreements.

If required, the Seller shall provide and shall procure that its Affiliates provide access to the Buyer to the aforementioned measurement facilities.

The Buyer shall be entitled to appoint a representative to inspect and audit such owners’

164

and operators’ Raw Gas measurement facilities.

Notification of Non-Compliance with Specification

The first Party to identify that Raw Gas being made available at the Delivery Point will not or does not conform to the Specification shall as soon as reasonably practicable notify the other Party of the type and degree of such non-conformance, together with (to the extent known):

(a) details of the cause of non-compliance;

(b) the composition of the Raw Gas;

(c) the estimated duration; and

(d) any proposals for mitigation.

Off-Specification Gas

If:

(1) any Raw Gas offered for delivery fails at any Delivery Point to conform to the applicable Specification; or

(2) the Buyer is made aware that any Raw Gas is or will be non-compliant with the applicable Specification,

then such Raw Gas will be referred to herein as “Off-Specification Gas”.

Buyer Election

If Off-Specification Gas is tendered for delivery, the Buyer may:

(a) reject (further) delivery of such Off-Specification Gas until the Buyer is satisfied that the Raw Gas meets the Specification; or

(b) accept delivery of such Off-Specification Gas;

provided that the Buyer shall use reasonable endeavours to accept Off-Specification Gas, if (i) it can do so without suffering any material loss, damage, costs or expenses and (ii) it is able to on-sell such Off-Specification Gas (after treatment in the Buyer’s processing facilities and in a commingled stream with other gas) under a Sale and Purchase Agreement.

At the request of either the Buyer or the Seller, a meeting of the JPC Committee shall be called to discuss potential solutions for handling Off-Specification Gas.

Buyer Rejects Off- If the Buyer rejects Off-Specification Gas

165

Specification Gas (whether flared or not), then the quantity so rejected:

(a) shall be deducted from the ToP Quantity such that the Buyer will not have any Take or Pay liability in respect of such quantities, and

(b) shall be deducted from the Seller’s Adjusted MCQ, such that the Seller will not have any liability for Shortfall Payments; in respect of such quantities.

Buyer Accepts Off-Specification Gas

If the Buyer accepts Off-Specification Gas the price for such Off-Specification Gas shall be (a) the price for on-Specification Raw Gas less (b) all incremental costs reasonably incurred by the Buyer in processing the Off-Specification Gas into Petroleum Products that meet the applicable specifications; provided however that the price shall not be less than zero.

In addition, if prior to the date upon which the Buyer installs (or should have installed in accordance with an Approved Infrastructure Development Plan and subject to the applicable provisions of the BGDA and the Shareholders’ Agreement) analysis equipment at the relevant Delivery Point(s) and despite having acted as an RPO, the Buyer unknowingly accepts Off-Specification Gas, the Seller shall be liable to and indemnify the Buyer for any other reasonable cost, loss and/or expense incurred or suffered by the Buyer in relation to personal injury to the Buyer’s personnel or to third parties as a result of having taken delivery of such Off-Specification Gas.

The Buyer shall mitigate such costs, losses and expenses.

Liability of Seller is Limited

The Buyer will have no right or remedy, and the Seller will have no liability, with respect to Off-Specification Gas other than as expressly set out in the Off-Specification provisions and the rights of the Buyer as set out in the Flaring provision in respect of Off-Specification Gas.

Without prejudice to the remedies specified in this term sheet in relation to deliveries of Off-Specification Gas, the Seller will make no warranties with regard to the quality of Raw Gas

166

delivered under the Rawor its compliance with implied warranties in expressly disclaimed.

Gas Supply Agreement the Specifications, and all relation thereto will be

Quality Disputes

The Parties shall try toquality of Raw Gas amcan be reached, the maan

Until such dispute is reRaw Gas in dispute shaSpecification Gas. Tapply accordingly.

settle a dispute on the icably. If no settlement tter shall be referred to

expert.

solved, the quantity of ll be deemed to be Off-he relevant provisions

Title to and risk or losG solSeller to the Buyer aDelivery Points.

s of or damage to Raw d, shall pass from the t each of the relevant

as delivered and TITLE AND DELIVERY Transfer of Title

GRACE PERIOD Parties Released from Liabilities

“Grace Period”: thCommencement Date month falling one caCommencement Date (oParties may agree).

During the Grace Perireleased from the folloliabilities:

(1

(2

(3) Excess Gas;

(4) Flaring; and

(5) Supply and deliverACQ.

But

e period from the to the last day of the lendar year after the r such other date as the

od the Parties shall be wing obligations and/or

) Take or Pay;

) Shortfall;

y of at least 30% of the

: The Parties endeavours to fulfil thunder the Raw Gas Supp

shall use reasonable eir respective obligations ly Agreement.

RAW GAS PAYMENT

For the duration of Agreement, the Buyer Raw Gas on a monthlyPayment (or “RGP”) shvolume of Raw Gas fmultiplied by the prdetermined under Exhib

If at the end of a month,cannot be calculated, previous month shall b

the Raw Gas Supply shall pay the Seller for basis. This Raw Gas all be the product of the or the relevant month ice for Raw Gas as it 5 to the BGDA.

the RGP of such month then the RGP for the e used on a provisional

167

basis with a true-up adthe actual RGP is determ

The Raw Gas Supply provisions which refleBGDA.

justment to occur once ined.

Agreement will contain ct Article 7.1.5 of the

TAKE OR PAY Take or Pay Obligation

Subject to the terms oBuyer shall be obliged tfor if not taken, a quan(x) 90% of the ACQ counting) any quantities

(i) not made availa foplanned maintenance facilities (or any facilitiSeller’s facilities) or wtaken due to planned mBuyer’s facilities;

(ii) not made availa oFacilities Developmenfacilities (or any facilitiSeller’s facilities) or wtaken due to Facilities DBuyer’s facilities;

(i e availa planned capa

in the FacilSchedule in respect facilities;

(iv) that could not b nplanned capacity expanthe Facilities Developrespect of the Buyer’s that the Buyer acted implementing the FaciSchedule, and providedelays in respect oDevelopment Schedule12 months, calculated fhand-over date(s), exdelays result from Majeure);

(v) constituting Short

(vi) that the Buyer flared, as a result of su

f the Grace Period, the o take and pay for, or pay tity of Raw Gas equal to less (y) (without double :

ble r delivery due to of the Seller’s

es upstream of the hich could not be aintenance of the

ble f r delivery due to t of the Seller’s es upstream of the hich could not be evelopment of the

ii) not maddelays toset out

ble for delivery due to city expansions as ities Development

of the Seller’s

e take due to delays to sions as set out in ment Schedule in facilities, provided as an RPO while lities Development d further that any f the Facilities

will be capped at rom the anticipated cept where such Events of Force

fall Quantities;

rejected, or is otherwise ch Raw Gas being

168

Off-Specification Gas;

(vii) not delivered by the Seller or taken by the Buyer due to the occurrence of a Force Majeure Event; and

(viii) not made available for delivery by the Seller as a result of a Production Curtailment.

(“ToP Quantity”).

In no event shall the ToP Quantity exceed the total quantity of Raw Gas meeting the applicable Specification tendered by the Seller for delivery in any Contract Year.

Take or Pay Payment

If at the end of a Contract Year the aggregate quantity of Raw Gas taken by the Buyer at all of the Delivery Points during that Contract Year (“Aggregate Annual Quantity Taken”) is less than the ToP Quantity then such shortfall quantity shall be referred to as the “ToP Quantity Deficiency”.

At the end of each relevant Contract Year, the Buyer shall pay the Seller an amount in USD (the “ToP Payment”) in accordance with the following calculation:

ToP Payment = a * b / c

Where:

“a” is the ToP Quantity Deficiency;

“b” is the sum of the Raw Gas Payments for all months in the relevant Contract Year; and

“c” is the Aggregate Annual Quantity Taken.

Payment of the ToP Payment will be the Seller’s sole and exclusive remedy for the Buyer’s failure to take Raw Gas under the Raw Gas Supply Agreement.

Take or Pay During Grace Period and Last Contract Year

In respect of (i) the Contract Year during which the Grace Period ends and (ii) the last Contract Year, the ToP provisions shall apply to the maximum extent possible and any payment calculations to be made shall be done on a pro-rata basis for such Contract Year.

SHORTFALL Obligations to Subject to the terms of the Grace Period, the

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Supply Gas Seller shall be obliged to make available for delivery, or pay for if not made available, a quantity of Raw Gas equal to (x) 85% of the MCQ less (y) any quantities:

(i) not made available for delivery due to planned maintenance of the Seller’s facilities or any facilities upstream of the Seller’s facilities;

(ii) not made available for delivery due to Facilities Development of the Seller’s facilities or any facilities upstream of the Seller’s facilities;

(iii) not made available for delivery due to delays to planned capacity expansions as set out in the Facilities Development Schedule in respect of (a) the Seller’s facilities (provided that the Seller acted as an RPO while implementing the Facilities Development Schedule, and provided further that any delays in respect of the Facilities Development Schedule will be capped at 12 months, calculated from the anticipated hand-over date(s), except where such delays result from Events of Force Majeure), or (b) facilities upstream of the Seller’s facilities;

(iv) not made available for delivery due to a Force Majeure Event;

(v) not made available for delivery, or that the Buyer rejects or flares, as a result of being Off-Specification Gas;

(vi) not made available for delivery as a result of any breach by the Buyer of the Raw Gas Supply Agreement;

(vii) not made available as a result of suspension by a Party under the Raw Gas Supply Agreement; and

(viii) not made available for delivery by the Seller as a result of a Production Curtailment.

(the “Seller’s Adjusted Monthly Contract Quantity” or the “Seller’s Adjusted MCQ”).

The “Seller’s Adjusted Monthly Delivery Quantity” or “Seller’s Adjusted MDQ” is the

170

Seller’s adjusted quantity of Raw Gas actually made available for delivery to the Buyer at the Delivery Points and is determined for each month as follows:

Seller’s Adjusted MDQ = A – D

where:

“A” means the (unadjusted) quantity of Raw Gas actually made available by the Seller for delivery to the Buyer at the Delivery Points in such month;

“D” means the sum (without duplication) of the following quantities (in MMscf) of Raw Gas in such month:

(i) quantities below the DMQ that the Buyer was unable to accept or was forced to flare in accordance with the Raw Gas Supply Agreement during such month; and

(ii) quantities that the Buyer was unable to accept, or flared, as a result of such quantities being Off-Specification Gas.

The “Shortfall Quantity” for a month shall be calculated as follows:

SQ = SAMCQ – SAMDQ - EG

Where:

“SQ”` is the Shortfall Quantity for the relevant month

“SAMCQ” is the Seller’s Adjusted MCQ for the relevant month

“SAMDQ” is the Seller’s Adjusted MDQ for the relevant month, and

“EG” is the sum of the quantities of Excess Gas accepted by the Buyer during that month;

provided however that if such amount is negative,

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it shall be deemed to be zero.

Calculation of Shortfall Payment

The Seller shall pay the Buyer (in USD) the Shortfall Payment. The “Shortfall Payment” shall be calculated as follows:

Shortfall Payment = a * p

where:

“a” is the Shortfall Quantity for month M; and

“p” is equal to the lesser of (i) $0.006 (six tenths of one USD cent) per SCF, increased annually by 2% on each anniversary of the first month end following Commencement of Operations and (ii) the then applicable price for Dry Gas (as determined in accordance with Exhibit 5 to the BGDA and expressed on a per-SCF basis).

The Buyer has the right to deduct any undisputed Shortfall Payment from the Raw Gas Payment (the “Adjusted Raw Gas Payment”). If this calculation results in a negative Adjusted Raw Gas Payment for month M, such negative balance shall be carried forward on a rolling basis to the following month unless month M is the last month of the Contract Year. If month M is the last month of the Contract Year, the negative balance shall be referred to as the “Shortfall Entitlement Payment”. The Buyer may submit an invoice to the Seller for the Shortfall Entitlement Payment.

Deliver or Pay During Grace Period and Last Contract Year

In respect of (i) the Contract Year during which the Grace Period ends and, (ii) of the last Contract Year, the Shortfall provisions shall apply to the maximum extent possible and any payment calculations to be made shall be done on a pro-rata basis for such Contract Year.

BUYER EXCESS QUANTITIES

“Excess Gas” is the quantity of Raw Gas the Seller delivers or intends to deliver to the Buyer in excess of the applicable MCQ at each Delivery Point.

The Buyer shall use its reasonable endeavours to accept delivery of Excess Gas.

The terms and conditions of the Raw Gas Supply Agreement shall apply to any Excess Gas taken by

172

the Buyer.

Rejected Excess Gas that is flared is subject to the relevant flaring provisions of the Raw Gas Supply Agreement.

At the request of either the Buyer or the Seller, a meeting of the JPC Committee shall be called to discuss potential solutions for handling Excess Gas.

Seller Flares Raw Gas

If the Buyer fails to take delivery of Raw Gas and as a result the Seller flares Raw Gas, the Buyer shall, subject to the exceptions set out below, be liable to the Seller for all fines or penalties that any Government Agency may impose against the Seller as a result thereof. The Buyer shall reimburse and/or indemnify the Seller accordingly.

Obligation on the Seller to mitigate the costs, etc.

Exceptions to the Buyer’s liability:

(a) Raw Gas rejected by the Buyer as Off-Specification Gas;

(b) volumes of Raw Gas delivered at any Delivery Point in excess of the volume scheduled by the Buyer for delivery at such delivery point in accordance with the nomination and scheduling procedure to be included in the Raw Gas Supply Agreement;

(c) Raw Gas tendered at any Delivery Point below the DMQ for that Delivery Point; or

(d) inability of the Buyer to accept delivery of Raw Gas as a result of a failure by the Domestic Offtaker to accept scheduled volumes of Petroleum Products, unless such failure is attributable to the breach or default of the Buyer under the LPG and Condensate Supply Agreement or the Dry Gas Supply Agreement (in its capacity as the “seller” under such agreements).

FLARING

Buyer Flares Raw Gas

If the Buyer flares Raw Gas as a result of the reasons (a) through (d) set out above, then the Seller shall be liable to the Buyer for all fines or

173

penalties that any Gimpose against the Buye

The Seller shall reimbuBuyer accordingly. Omitigate the costs, etc.

overnment Agency may r as a result thereof.

rse and/or indemnify the bligation on the Buyer to

CUTRAILMENT

The Raw Gas Supplyprovisions as appropriaand 7.7.4 of the BGDA.

Agreement will contain te to reflect Articles 7.7.3

FACILITIES DEVELOPMENT

Each Party may propofurther development ofDevelopment”).

A Party proposing to dsubmit to the other Pdevelopment and discufaith to agree a schedule(a “Facilities DevelopParties will ensure, to tthe implementation of tSc dule is undertakendisruption to the Seller Seller and Buyer prFacilities, that such devsame approximate timcurtailments for any pereasonably necessary. TSchedule will be submCoordination Group Coordination Group shaProgrammes are develoFacilities DevelopmentDelivery Points.

se that it will engage in its facilities (“Facilities

evelop its Facilities shall arty a proposal for such ss such proposal in good for facilities development ment Schedule”). The he extent practicable, that he Facilities Development with a view to limiting

and the Buyer (and, if both opose to develop their elopment will occur at the es) in order to avoid

riod beyond that which is he Facilities Development itted to the Planning and and the Planning and ll ensure that the Delivery ped to accommodate the

Schedule at the affected

he

General FORCE MAJEURE

A “Force Majeure Evor occurrence (or combi

(a) is beyond the reasothe fault or negligence, o

(b) was not foreseeable been avoided

affected Party (acting as

(c) prevents, hinders oin its performance of anobligations under this A

The Raw Gas Supply Anon-exhaustive, custom

ent” means any act, event nation thereof) that:

nable control, and without f the affected Party;

e, or if foreseeable could or overcome by the an RPO); and

not hav

r delays the affected Party y (or any part) of its

greement.

greement will contain a ary list of examples of

174

Force Majeure Events, including events affecting upstream and downstream facilities, provided that such events fall under the above description.

For greater certainty, the force majeure provisions of the BGDA will not apply to suspend a Party’s obligations under the Raw Gas Supply Agreement or the Domestic Sales and Purchase Agreements, unless the relevant act, event or occurrence falls within the definition of Force Majeure in the relevant agreement.

Exclusions

The following acts, events or circumstances occurring within the Republic of Iraq shall not constitute Force Majeure Events in respect of the Seller:

(a) any act, or failure or delay in acting, by the government or any Government Agency;

(b) any Change in Law;

(c) failure to supply by the Seller’s upstream suppliers to the extent such failure would not be excused under the force majeure provisions of the technical service contract or other agreement governing the field(s) from which such supplies are produced (or, if there is no such agreement, under the force majeure provisions of the Raw Gas Supply Agreement); and

(d) failure to make payments or fulfilling other financial obligations under the Raw Gas Supply Agreement;

The following acts, events or circumstances shall not constitute Force Majeure Events in respect of the Buyer:

(a) failure to offtake by the Buyer’s offtakers, which failure would not be excused under the force majeure provisions to the Raw Gas Supply Agreement;

(b) failure to make payments or fulfilling other financial obligations under the Raw Gas Supply Agreement.

The occurrence of a Force Majeure Event affecting the Seller will be without prejudice to SGC’s obligations under the BGDA with respect to Deficit Volumes.

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Effect of a Force Majeure Event

A Party shall not be liable for any failure to perform any of its obligations under the Raw Gas Supply Agreement (other than the obligation to make payments) if, and to the extent that:

(a) such failure:

(i) is caused by or is due to any Force Majeure Event; and

(ii) would not ordinarily be mitigated, avoided or overcome by such Party (acting as an RPO); and

(b) the Party intending to invoke a Force Majeure Event has issued a notice to that effect.

Notification, Responsibilities and Duty to Mitigate

A Party wishing to invoke a Force Majeure Event needs to notify the other Party as soon as possible and provide such information or supporting information as might be required on a timely basis.

A Party invoking protection under the Force Majeure provisions shall use all reasonable endeavours to prevent, minimise and mitigate the effects of a Force Majeure Event.

Extended Force Majeure Event

If a Force Majeure Event continues for a period of 90 consecutive days or more, the Parties shall meet to discuss the effects of such event or to agree upon alternative arrangements as may be fair and reasonable.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties

The Raw Gas Supply Agreement will contain the usual representations and warranties as agreed by the Parties.

Liability

The Buyer’s liability for failing to accept quantities of Raw Gas is set out in the Take or Pay provisions and is limited to the Take or Pay Payment.

The Seller’s liability for failing to deliver Raw Gas is set out in the Shortfall provisions and is limited to those remedies.

Each Party’s liability with respect to flaring is set out in the Flaring provisions and is limited to those remedies.

LIABILITY

Indemnities (“Knock-for-Knock”)

The Seller and the Buyer will save, indemnify and hold harmless the other against any claims or liabilities arising in respect of: (i) damage to property owned, hired or leased by it; and (ii) injury to any of its personnel.

176

Consequential Loss and Damage

Except as expressly provided in the Raw Gas Supply Agreement neither Party shall be liable for any indirect or consequential losses and/or damages.

INVOICING AND PAYMENT

The Buyer shall submit to the Seller a Monthly Advice within 10 working days after the end of each month in any Contract Year.

The Monthly Advice shall show for the immediately preceding month all information required for issuing an invoice. The information will be specified in an Appendix of the Raw Gas Supply Agreement.

Within 10 working days after receipt of each Monthly Advice, the Seller shall issue an invoice consistent with the Monthly Advice. The invoice shall be in USD.

If the Buyer fails to provide a Monthly Advice the Seller may issue a provisional invoice based on its good faith best estimate of the applicable Raw Gas Payment.

After the end of each Contract Year, the Buyer and the Seller shall do a reconciliation (details to be included in the Raw Gas Supply Agreement).

Payments under the Raw Gas Supply Agreement shall be made in USD by direct bank transfer, or equivalent.

Payment of the net sums shall be due on the 30th day after receipt of the invoice.

In the event of a disputed invoice the Parties do not have the right to offset or deduct, unless in cases of manifest error.

The Parties shall try to resolve the dispute amicably. If the Parties fail to resolve the dispute, the matter may be referred to an Expert for determination. The Expert provisions from the BGDA shall be included in the Raw Gas Supply Agreement.

The default interest rate for late payment and disputed invoices is LIBOR plus three 3% with a minimum of five percent 5%.

Both Parties will have the right to ask a certificate from independent auditors confirming that the Monthly Advices, Monthly Invoices and/or the annual reconciliation, as the case may be, have

177

been issued and/or calcthe terms and conditionAgreement.

ulated in accordance with s of the Raw Gas Supply

PAYMENT SECURITYThe Raw Gas Supply Agprovisions to reflect Art reement will contain

icle 11.5 of the BGDA.

CONFIDENTIALITY

Parties shall keep the cstrictly confidential andTerms to any third pco ultants and advisersand, in the case of the lenders (if any) and the prior agreement of the o

ontent of the Key Terms shall not disclose the Key arty (except to affiliates, that have a need to know, Seller, its shareholders, its Iraqi government) without ther Party.

ns

For both Parties:

(a) a material breach uAgreement (with a cure

(b) liquidation or otheother Party;

(c) Persistent DefaulShareholders’ Agreem

ake paymeneement.

For the Seller:

(a) if during any Conreason of its default, faat least 30% of the ACQ

For the Buyer:

(a) if during any Conreason of its default, ffail) to deliver of at leas

nder the Raw Gas Supply period of 90 days);

r insolvency event of the

t as defined in the ent resulting from t under the Raw Gas failure to m

Supply Agr

tract Year the Buyer, by ils to take delivery of .

tract Year the Seller, by ails (or is deemed to t 30% of the ACQ.

Termination Grounds

SUSPENSION AND TERMINATION

Suspension and automatic termination for insolvency event

Upon the occurrence onon-defaulting Party maParty:

(a) withhold or suspend

(b) igati

In idevent the R as automatically terminate.

In as far as practictermination included mirrored in the Raw Gas

f a termination event, the y, upon notice to the other

any payments; and

suspend its obl

the event of liquaw G

ons.

ation or other insolvency Supply Agreement shall

able the provisions on in the BGDA will be Supply Agreement.

178

TAXES

Up to the Delivery Poiaccount of the Seller.

From the Delivery Pores onsible for all taxes

In the event of changintroduction of a new taeffect on the Raw Gas S 11.3 of the BGDA shall appl

nt(s) all taxes shall be for

int(s) the Buyer shall be . p

es to an existing or the x, which has a detrimental upply Agreement, Article

y.

ASSIGNMENT

No assignment of anywithout the prior writtParty. Exceptions: thassign to:

(a) a Wholly Owned A ia

(b) any Project Entity

(c) the Lenders (if any

without the consent ofnotice. On request of tenter into a direct agreem

The Raw Gas Supplyprovisions to reflect Art

rights and/or obligations en approval of the other e Buyer may transfer or

ffil te; or

; or

),

the Seller, but by giving he Buyer, the Parties shall

ent with the Lenders.

Agreement will contain icle 14.5 of the BGDA.

NOTICES Al otices under the Rashall be in the English la

l n w Gas Supply Agreement nguage.

EXPERT The Raw Gas Supply Ace in technical disputeexpert.

greement will provide for s to be determined by an rta

GENERAL TERMS ANCONDITIONS

The standard type oamongst others:

(a) Amendments;

(b) Severability;

(c) Language of Agree

(d) Survival;

(e) Public announceme

(f) Sovereign Immunit

will be in as far as prBGDA and included Agreement.

D

f provisions regarding,

ment;

nts, and

y

acticable aligned with the in the Raw Gas Supply

GOVERNING LAW AND DISPUTE RESOLUTION LawGoverning Iraqi Law will apply

Agreement.

The United Nations Conthe International Sale of

to the Raw Gas Supply

vention on Contracts for Goods will not apply to

179

the Raw Gas Supply Agreement.

Dispute Resolution

In as far as possible, the dispute resolution clause of the BGDA will be included in the Raw Gas Supply Agreement.

APPENDICES

Envisaged appendices of the Raw Gas Supply Agreement:

(a) Pro forma Confirmation Notice;

(b) ToR of the Planning and Coordination Group;

(c) Delivery Programmes;

(d) Monthly Invoice.

180

181

EXHIBIT 12 KEY TERMS OF DRY GAS SUPPLY AGREEMENT

Basrah Gas Company (“Seller”) PARTIES

South Gas Company (“Buyer”)

INTERPRETATION


The BGDA stipulates, inter alia, that the Seller and the Buyer shall enter into an agreement based on this Term Sheet (the “Dry Gas Supply Agreement”), for the Seller to supply, and for the Buyer to purchase, Dry Gas at the specified Dry Gas Delivery Points;

The BGDA further stipulates that (subject to the provisions thereof) in the event of an LNG export project, the Seller will allocate sufficient Raw Gas to produce a minimum of 600 MMscfd of Feedstock Gas (as defined in the BGDA) for such project;

In accordance with the BGDA a Joint Planning and Coordination Committee (or “JPC Committee”) will be established in accordance with the JPCC Terms of Reference to co-ordinate and align, inter alia, current and future Raw Gas production and the offtake of Dry Gas, LNG, LPG and Condensate (“Petroleum Products”), with infrastructure development so as to enable the Parties to meet their obligations and exercise their rights;

Pursuant to the BGDA a plan in respect of the current and future Raw Gas production and offtake of Petroleum Products shall be established (the “Gas Supply and Offtake Plan”). This Plan (and any amendments thereto) together with the Dry Gas Supply Agreement shall form a basis for the Seller to sell and for

182

the Buyer to buy Dry Gas;


Pursuant to the Gas Supply and Offtake Plan (and any amendments thereof) the Parties shall establish a confirmation note relevant to the subject of this Agreement (the “Confirmation Notice”).

SALE AND PURCHASE

The sale and delivery by the Seller and the purchase and acceptance of Dry Gas by the Buyer at the Delivery Points, in the quantities described in the Dry Gas Supply Agreement.

DRY GAS

The gaseous product resulting from the treatment and processing of Raw Gas, which is to be delivered at an agreed specification as set out in the Dry Gas Supply Agreement.

TERM The Dry Gas Supply Agreement shall become effective on the date of its execution and shall continue until terminated in accordance with its terms.

CONTRACT YEAR

A Contract Year will equal a calendar year. However, the first Contract Year shall commence at 00:00 hours Basrah local time on the Commencement Date and end at 00.00 hours Basrah local time on 1 January of the following year; the last Contract Year shall end at 00:00 hours Basrah local time on the date of termination of the Dry Gas Supply Agreement.


The Confirmation Notice (as amended from time to time) sets out the quantities (in MMscfd) of Dry Gas, which the Seller is obliged to deliver to the Buyer and which the Buyer is obliged to accept delivery of at the relevant Delivery Points in each Contract Year.

In case a Confirmation Notice is not signed by both Parties, or in case of any inconsistency between a Confirmation Notice and the Gas Supply and Offtake

Plan, then the quantities set out in the Gas Supply and Offtake Plan set out the Parties’ respective obligations in respect of the delivery and accepting delivery of the Dry Gas.

Resulting from the Committed Volumes, the annual contract quantity (“ACQ”), the monthly contract quantity (“MCQ”), the daily contract quantity (“DCQ”) and the daily minimum quantity (“DMQ”) shall be established.

Delivery Points

The points set out in the Gas Supply and Offtake Plan and the Confirmation Notice generally being the outlet flange of each applicable gas treatment plant at which Dry Gas is to be delivered by the Seller to the Buyer.

Each specific delivery point shall be more particularly defined and described in the Gas Supply and Offtake Plan (and, if also required, in the Dry Gas Supply Agreement).

Commencement

The Commencement Date (established as “Commencement of Operations” in the BGDA) for the Committed Volumes shall be set out in the Gas Supply and Off-take Plan and the Confirmation Notice.

Any additional Committed Volumes and date(s) associated therewith (each a “First Delivery Date”) will be set out in subsequent Confirmation Notice(s).

FIRST DELIVERY DATE

Infrastructure

The Seller will provide and construct (if required) such infrastructure as may be necessary, from the outlet flange of the degassing stations to the outlet flange of each applicable gas treatment plant, for the performance of its obligations under the Dry Gas Supply Agreement.

The Buyer will provide and construct (or procure that its Affiliates provide and construct) (if required) such infrastructure as may be necessary, from and after each applicable gas treatment plant, for the performance of its obligations under the

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Dry Gas Supply Agreem

The Parties shall align ainterface issues in respeinfrastructure through Coordination Group awith Article 6.6 of the B

ent.

nd coordinate any ct of the relevant the Planning and nd in accordance GDA.


The Parties agree tocom nd to einfo hat is fulfilment of their respe

maintain close xchange available relevant to the

ctive obligations.

munication armation t

INFORMATION EXCHPLANNING AND COORDINATION GRO

ANGE,

UP Planning and Coordination Group

Each Party shall representatives to a jocoordination group Coordination Group”either in addition to thethe principles of the Agreement Term Sheet established under that Planning and Coordinameet as soon as praexe e DAg

The Planning and Coshall amongst other thinfor discussing, agreeingoperational matters and

The Planning and Cowill have no power to aSupply Agreement or tvary any legal or contraeither of the Parties.

appoint three int planning and (“Planning and , which group is one set up under Raw Gas Supply or the same group agreement. The tion Group is to

cticable after the ry Gas Supply cution of th

reement.

ordination Group gs be responsible and carrying out procedures.

ordination Group mend the Dry Gas o create, waive or ctual obligation of

The Planning and Coshall develop deliv(envisaged to be AWeekly ProgrammeNomination, as well abased on the Gas Supplyand the Confirmation N

The Committed VolumNotice shall form the bato plan and coordinate th

ordination Group ery programmes nnual, Monthly,

s and Daily s indicative ones) and Offtake Plan

otice.

es Confirmation sis for the Parties eir operations.

MES General DELIVERY PROGRAM

QUALITY AND MEASUREMENT; OFF e with - Complianc Eac ti

applicable specificationh Confirmation No ce will contain the

s for the Dry Gas

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Specification to be delivered thereunder (the “Specification”).

SPECIFICATION GAS Measurement of Quantity and Quality

The Parties shall develop principles and procedures on measuring and/or determining the quantity and quality of Dry Gas delivered, which principles and procedures shall be consistent with internationally accepted petroleum industry standards.

The Seller shall carry out the reading of instruments and the collection and processing of sample data. The Seller shall make all data obtained available to the Buyer.

The Buyer may designate representatives who shall have the right to be present at and witness any measurement, sampling or testing of the quantity and quality of Dry Gas.

For existing and future measurement facilities located outside of the Seller’s facilities or facilities not owned or operated by the Seller, the Seller and the relevant owner(s) and operator(s) of such facilities shall enter into agreements with respect to such facilities and their operation covering measurement obligations, principles and procedures required to ensure the accurate measuring of Dry Gas. The Buyer shall, and shall procure that its Affiliates shall, procure that such persons enter such agreements.

If required, the Buyer shall provide, and shall procure that its Affiliates provide, access to the Seller to the aforementioned measurement facilities.

The Seller shall be entitled to appoint a representative to inspect and audit such owners’ and operators’ measurement facilities.


The first Party to identify that Dry Gas being made available at the Delivery Point will not or does not conform to the Specification shall as soon as reasonably

185

practicable notify the other Party of the type and degree of such non-conformance, together with (to the extent known):


(b) the composition of the Dry Gas;



Off-Specification Gas

If:

(1) any Dry Gas offered for delivery fails at any Delivery Point to conform to the applicable Specification; or

(2) the Buyer is made aware that any Dry Gas is or will be non-compliant with the applicable Specification,

then such Dry Gas will be referred to herein as “Off-Specification Gas”.

Notwithstanding anything else contained herein, the Seller shall have no liability to the Buyer for delivery of Off-Specification Gas to the Buyer, to the extent that such Dry Gas does not conform to the applicable Specifications as a result of the Seller accepting off-specification Raw Gas from the Buyer under the Raw Gas Supply Agreement.

Buyer Election

If Off-Specification Gas is tendered for delivery, the Buyer may:

(a) reject (further) delivery of such Off-Specification Gas until the Buyer is satisfied that the Dry Gas meets the Specification; or

(b) accept delivery of such Off-Specification Gas;

provided that the Buyer shall use reasonable endeavours to accept Off-Specification Gas, if (i) it can do so without suffering any material loss,

186

damage, costs or expenses and (ii) it is able to on-sell such Off-Specification Gas.

At the request of either the Buyer or the Seller, a meeting of the JPC Committee shall be called to discuss potential solutions for handling Off-Specification Gas.

Buyer Rejects Off-Specification Gas

If the Buyer rejects Off-Specification Gas (whether or not flared), the Seller shall be deemed to have failed to deliver the quantity of Dry Gas so rejected.

Buyer Accepts Off-Specification Gas

If the Buyer accepts Off-Specification Gas the price for such Off-Specification Gas shall be (a) the price for on-Specification Dry Gas, less (b) all incremental costs reasonably incurred by the Buyer in relation to transporting, handling and marketing such Off-Specification Gas (including discounts or rebates to customers); provided however that the price shall not be less than zero.

In addition, if (despite having acted as an RPO and unless the Off-Specification Gas results from the delivery of off-specification Raw Gas under the Raw Gas Supply Agreement) the Buyer unknowingly accepts the Off-Specification Gas, the Seller shall be liable to and indemnify the Buyer for any reasonable cost, loss and/or expense incurred or suffered by the Buyer in relation to personal injury to the Buyer’s personnel or to third parties as a result of having taken delivery of such Off-Specification Gas.



The Buyer shall have no right or remedy and the Seller will have no liability with respect to Off-Specification Gas other than as set out in the Off-Specification provisions and the rights of the Buyer as set out in the Flaring provision in respect of Off-Specification Gas, even where

187

caused by the negligence of the Seller.

Without prejudice to the remedies specified in this term sheet in relation to deliveries of Off-Specification Gas, the Seller will make no warranties with regard to the quality of Dry Gas delivered under the Dry Gas Supply Agreement or its compliance with the Specifications, and all implied warranties in relation thereto will be expressly disclaimed.

Quality Disputes

The Parties shall try to settle a dispute on the quality of Dry Gas amicably. If no settlement can be reached, the matter shall be referred to an expert.

Until such dispute is resolved, the quantity of Dry Gas in dispute shall be deemed to be Off-Specification Gas. The relevant provisions apply accordingly.

TITLE AND DELIVERY Transfer of Title

Title to and risk or loss of or damage to Dry Gas delivered and sold, shall pass from the Seller to the Buyer at each of the relevant Delivery Points.


“Grace Period”: the period from the Commencement Date to the last day of the month falling one calendar year after the Commencement Date (or such other date as the Parties may agree).

During the Grace Period the Parties shall be released from the following obligations and/or liabilities:

(1) Take or Pay;

(2) Shortfall;

(3) Excess Gas;

(4) Flaring; and

(5) Supply and delivery of at least 30% of the ACQ.

But: The Parties shall use reasonable endeavours to fulfil their respective obligations under the Dry Gas Supply

188

Agreement.

DRY GAS PAYMENT

For the duration of theAgreement, the Buyer sfor Dry Gas on a monthlGas Payment (or “DGproduct of the volume orelevant month multipliDry Gas, as determined

Dry Gas Supply hall pay the Seller y basis. This Dry P”) shall be the f Dry Gas for the

ed by the price for under Exhibit 5 to

the BGDA.

If at the end of a monthmonth cannot be calculafor the previous month provisional basis wadjustment to occur oncis determined.

, the DGP of such ted, then the DGP shall be used on a ith a true-up e the actual DGP


Subject to the terms ofthe Buyer shall be obligfor, or pay for if not taDry Gas equal to (x) 9less (y) (without doubquantities:

(i) not made availabl r to planned maintenanSeller’s facilities or whibe taken due tomaintenance of thfacilities;

(ii) not made availabl es Developm

acilities or whibe taken due toDevelopment of thfacilities;

(iii) not made availablto delays to planneexpansions as set oFacilities Development respect of the Seller’s fa

(iv) that could not delays to plannedexpansions as set oFacilities Development respect of the Buyer’provided that the Buyer

the Grace Period, ed to take and pay ken, a quantity of 0% of the ACQ le counting) any

e fo delivery due ce of the ch could not planned

e Buyer’s

e for delivery due ent of the

ch could not Facilities e Buyer’s

to FacilitiSeller’s f

e for delivery due d capacity ut in the Schedule in cilities;

be taken due to capacity ut in the Schedule in s facilities, acted as an

189

RPO while implementing the Facilities Development Schedule, and provided further that any delays in respect of the Facilities Development Schedule will be capped at 12 months, calculated from the anticipated hand-over date(s), except where such delays result from Events of Force Majeure);

(v) constituting Shortfall Quantities;

(vi) not made available as a result of a failure by the Raw Gas Supplier to supply on-specification Raw Gas under the Raw Gas Supply Agreement for any reason;

(vii) flared by the Seller due to other Petroleum Products (for example, LPG and Condensate) not being taken by the Buyer (in its capacity as Petroleum Product Buyer) under the respective Sale and Purchase Agreement in accordance with its terms; and

(viii) not delivered by the Seller or taken by the Buyer due to the occurrence of a Force Majeure Event;

(“ToP Quantity”)

Take or Pay Payment

If at the end of a Contract Year the aggregate quantity of Dry Gas taken by the Buyer during that Contract Year (“Aggregate Annual Quantity Taken”) is less than the ToP Quantity, then such shortfall quantity shall be referred to as the “ToP Quantity Deficiency”.

At the end of each relevant Contract Year the Buyer shall pay the Seller an amount in USD (the “ToP Payment”) in accordance with the following calculation:

ToP Payment = a * b/c

Where:

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“b” is the sum of the Dry Gas Payments for all months in the relevant Contract Year;




SHORTFALL Obligations to Supply Gas

Subject to the terms of the Grace Period, the Seller shall be obliged to make available for delivery, or pay for if not made available, a quantity of Dry Gas equal to (x) 85% of the MCQ less (y) any quantities:

(i) not made available for delivery due to planned maintenance of the Seller’s facilities;

(ii) not made available for delivery due to Facilities Development of the Seller’s facilities;

(iii) not made available for delivery due to delays to planned capacity expansions as set out in the Facilities Development Schedule in respect of the Seller’s facilities (provided that the Seller acted as an RPO while implementing the Facilities Development Schedule, and provided further that any delays in respect of the Facilities Development Schedule will be capped at 12 months, calculated from the anticipated hand-over date(s), except where such delays result from Events of Force Majeure);

(iv) not made available as a result of a failure by the Raw Gas Supplier to

191

supply on-specification Raw Gas under the Raw Gas Supply Agreement for any reason other than a breach or default by the Seller of its obligations thereunder;

(v) not made available for delivery due to a Force Majeure Event;

(vi) not made available for delivery as a result of any breach by the Buyer of the Dry Gas Supply Agreement; and

(vii) not made available as a result of suspension by a Party under the Dry Gas Supply Agreement.

(the “Seller’s Adjusted Monthly Contract Quantity” or the “Seller’s Adjusted MCQ”)

The “Seller’s Adjusted Monthly Delivery Quantity” or the “Seller’s Adjusted MDQ” is the Seller’s adjusted quantity of Dry Gas actually made available for delivery to the Buyer at the Delivery Points and is determined for each month as follows:


Where:

“A” means the (unadjusted) quantity of Dry Gas actually made available by the Seller for delivery to the Buyer at the Delivery Points in such month;

“D” means the sum (without double counting) of the following quantities (in MMscf) of Dry Gas in such month:

(i) quantities below the DMQ, which the Buyer was unable to accept or was forced to flare in accordance with the Dry Gas Supply Agreement during such month;

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(ii) quantities that the Buyer was unable to accept, or flared, as a result of such quantities being Off-Specification Gas.

The “Shortfall Quantity” for a month shall be calculated as follows:

SQ = SAMCQ – SAMDQ - EG Where: “SQ” is the Shortfall Quantity for the relevant month;

“SAMCQ” is the Seller’s Adjusted MCQ for that relevant month;

“SAMDQ” is the Seller’s Adjusted MDQ for the relevant month; and


provided however that if such amount is negative, it shall be deemed to be zero.


In the event of a Shortfall Quantity, the Buyer shall use its reasonable endeavours to source alternative equivalent energy supplies. The Seller shall pay the Buyer (in USD) the difference between the cost of the alternative equivalent energy supply and the cost of Dry Gas under the Dry Gas Supply Agreement for the relevant period where such shortfall occurs (“Shortfall Payment”). The payment shall be calculated as follows:

Shortfall Payment = SFQ * (AE – PDry Gas)

where:

“SFQ” is the Shortfall Quantity for the relevant month, where the energy has been replaced;

“AE” is the price per MMBtu for the alternative energy supplies sourced by the

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Buyer;

“PDry Gas” is the relevant Dry Gas Price for the relevant month;

where (AE – PDry Gas) is capped at PDry Gas.

For the avoidance of doubt, if AE is less than PDry Gas then there is no Shortfall Payment.

To the extent that the Buyer cannot source alternative energy, the Shortfall Payment for quantities not replaced shall be:

Shortfall Payment = SFQ (unreplaced) * PDry Gas

The Buyer has the right to deduct any undisputed Shortfall Payment from the Dry Gas Payment (the “Adjusted Dry Gas Payment”). If this calculation results in a negative Adjusted Raw Gas Payment for month M, such negative balance shall be carried forward on a rolling basis to the following month unless month M is the last month of the Contract Year. If month M is the last month of the Contract Year, the negative balance shall be referred to as the “Shortfall Entitlement Payment”. The Buyer may submit an invoice to the Seller for the Shortfall Entitlement Payment.


In respect of (i) the Contract Year during which the Grace Period ends and, (ii) the last Contract Year, the Shortfall provisions shall apply to the maximum extent possible and any payment calculations to be made shall be done on a pro-rata basis for such Contract Year.


“Excess Gas” means any quantity of Dry Gas the Seller delivers or intends to deliver to the Buyer in excess of the applicable DCQ at each Delivery Point.

The Buyer shall use reasonable endeavours to accept delivery of Excess Gas.

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The terms and conditions of the Dry Gas Supply Agreement shall apply to any Excess Gas taken by the Buyer.

Rejected Excess Gas that is flared is subject to the relevant flaring provisions of the Dry Gas Supply Agreement.

At the request of either the Buyer or the Seller, a meeting of the JPC Committee shall be called to discuss potential solutions for handling Excess Gas.

Seller Flares Dry Gas

If the Buyer fails to take delivery of Dry Gas and as a result the Seller flares Dry Gas, the Buyer shall, subject to the exceptions set out below, be liable to the Seller for all fines or penalties that any Government Agency may impose against the Seller as a result thereof. The Buyer shall reimburse and/or indemnify the Seller accordingly.

Obligation on the Seller to mitigate the costs, etc.

Exceptions to the Buyer’s liability:

(a) Dry Gas rejected by the Buyer as Off-Specification Gas unless the reason such Dry Gas was Off-Specification Gas was due to the Raw Gas Supplier’s delivery of off-specification gas under the Raw Gas Supply Agreement;

(b) volumes of Dry Gas delivered at any Delivery Point in excess of the volume scheduled by the Buyer for delivery at such Delivery Point in accordance with the nomination and scheduling procedure to be included in the Dry Gas Supply Agreement; or

(c) Dry Gas tendered below the DMQ for the relevant Delivery Point.

FLARING

Buyer Flares Dry If the Buyer flares Dry Gas as a result of the reasons (a) – (c) set out above,

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Gas then the Seller shall bBuyer for all fines or pGovernment Agency against the Buyer as a re

The Seller shall rindemnify the BuyObligation on the Buycosts, etc.

e liable to the enalties that any

may impose sult thereof.

eimburse and/or er accordingly.

er to mitigate the

CURTAILMENT

The Dry Gas Supplycontain provisions asreflect Article 7.7.3 a e BGDA.

Agreement will appropriate to nd 7.7.4 of th

FACILITIES DEVELO

Each Party may proposeengage in further develofacilities (“Facilities De

A Party proposing to deshall submit to the othefor such development proposal in good faith tfor facilities developmDevelopment Schedulwill ensure, to the extenthe implementation oDevelopment Schedule a view to limiting disruand the Buyer (and, iBuyer propose to develthat such development same approximate timescurtailments for any pwhich is reasonably Facilities Developmentsubmitted to the Coordination Group andCoordination Group shDelivery Programmes accommodate the FacilSchedule at the affected

PMENT

that it will pment of its velopment”).

velop its Facilities r Party a proposal and discuss such

o agree a schedule ent (a “Facilities e”). The Parties t practicable, that f the Facilities

is undertaken with ption to the Seller f both Seller and op their Facilities, will occur at the ) in order to avoid eriod beyond that necessary. The

Schedule will be Planning and

the Planning and all ensure that the are developed to ities Development Delivery Points.

FORCE MAJEURE alGener

A “Force Majeure Eact, event or occurrencthereof) that:

(a) d the reasowithout the fault or negaffected Party; and

(b) was not fores

vent” means any e (or combination

is beyon nable control, and ligence of the

eeable, or if

196

foreseeable, could not have been avoided or overcome by the affected Party (acting as an RPO); and

(c) prevents, hinders or delays the affected Party in its performance of any (or any part) of its obligations under this Agreement.

The Dry Gas Supply Agreement will include a non-exhaustive, customary list of examples of Force Majeure Events, including events affecting upstream and downstream facilities, provided that such events qualify under the above description.


Exclusions


(a) failure to make payments or fulfilling other financial obligations under the Dry Gas Supply Agreement.

The following acts, events or circumstances occurring within the Republic of Iraq shall not constitute force majeure in respect of the Buyer:

(a) any act, or failure or delay in acting by the government or any Government Agency;


(c) a failure to take delivery of Dry Gas by any of the Buyer’s customers under a sale and purchase agreement, to the extent such failure would not be excused as a Force Majeure

197

Event under the Dry Gas Supply Agreement;

(d) failure to make payments or fulfilling other financial obligations under the Dry Gas Supply Agreement.


A Party shall not be liable for any failure to perform any of its obligations under the Dry Gas Supply Agreement (other than the obligation to make payments) if, and to the extent that:

(a) such failure:

(i) is caused by or is due to any Force Majeure Event; and

(ii) would not ordinarily be mitigated, avoided or overcome by such Party (acting as an RPO); and

(b) the Party intending to invoke a Force Majeure Event has issued a notice to that effect.





If a Force Majeure Event continues for a period of 90 consecutive days or more, the Parties shall meet to discuss the effects of such event or to agree upon alternative arrangements as may be fair and reasonable.



The Dry Gas Supply Agreement will contain the usual representations and warranties as agreed by the Parties.

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Liability

The Buyer’s liability for failing to accept quantities of Dry Gas is set out in the Take or Pay provisions and is limited to the Take or Pay Payment.

The Seller’s liability for failing to deliver Dry Gas is set out in the Shortfall provisions and is limited to those remedies.


The Seller’s liability for Off Specification Gas is set out in those provisions and is limited to those remedies.



LIABILITY


Except as expressly provided in the Dry Gas Supply Agreement neither Party shall be liable for any indirect or consequential losses and/or damages.


The Seller will submit to the Buyer an invoice within 10 working days after the end of each month. The invoice will be in USD and will show for the immediately preceding month all information in relation to amongst others the quantities of Dry Gas supplied, taken, rejected and the Dry Gas Payment. The information will be specified in an Appendix to the Dry Gas Supply Agreement.

The Buyer shall pay such invoice within 30 days upon receipt to the bank account specified by the Seller.

In the event of a disputed invoice the Parties do not have the right to offset or deduct, unless in cases of manifest error. The Parties shall try to resolve such dispute amicably. If the Parties fail to resolve the dispute, the matter may be

199

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referred to an Expert for determination. The Expert provisions from the BGDA shall be included in the Dry Gas Supply Agreement.

The default interest rate for late payment and disputed invoices is LIBOR plus 3% with a minimum of 5%.

The Parties shall develop and establish a reconciliation process in respect of ToP and Shortfall, which is customary in the gas/hydrocarbon product industry.

The Buyer will have the right to ask a certificate from the Seller’s independent auditors confirming that the invoices have been calculated in accordance with the terms and conditions of the Dry Gas Supply Agreement.

PAYMENT SECURITY The Dry Gas Supply Agreement will contain provisions to reflect article 11.5 of the BGDA.

CONFIDENTIALITY

Parties shall keep the content of the Key Terms strictly confidential and shall not disclose the Key Terms to any third party (except to affiliates, consultants and advisers that have a need to know, and, in the case of the Seller, its shareholders, its lenders (if any) and the Iraqi government) without prior agreement of the other Party.

SUSPENSION AND TERMINATION Termination

Grounds For both Parties:

(a) a material breach under the Dry Gas Supply Agreement (with a cure period of 90 days);

(b) liquidation or other insolvency event of the other Party;

(c) Persistent Default as defined in the Shareholders’ Agreement resulting from failure to make payment under the Dry Gas Supply Agreement.

For the Seller:

(a) if during any CBuyer, by reason of itsto take delivery of at leaACQ.

For the Buyer:

(a) if during any CSeller, by reason of its(or is deemed to fail) toleast 30% of the ACQ.

ontract Year the default, fails st 30% of the

ontract Year the default, fails deliver of at


Upon the occurrence event, the non-defaultinnotice to the other Party

(a) withhold or suspeand

(b) gati

In liquins e Agreement shall automa

In as far as practicabletermination included in Raw Gas Supply Agmirrored in the DAgreement.

of a termination g Party may, upon :

nd any payments;

suspend its obli

the event of olvency event th

ons.

idation or other Dry Gas Supply tically terminate.

the provisions on the BGDA and the reement will be ry Gas Supply

TAXES

Up to the Delivery Poinbe for account of the Se

From the Delivery Poshall be responsible for

In the event of changesthe introduction of a newdetrimental effect on thAgreement, Article 11will apply.

t(s) all taxes shall ller.

int(s) the Buyer all taxes.

to an existing or tax, which has a

e Dry Gas Supply .3 of the BGDA

ASSIGNMENT

No assignment of aobligations under the Agreement without tapproval of the other Pa

Exceptions

ny rights and/or Dry Gas Supply

he prior written rty.

: the Selleassign to:

r may transfer or

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(a) a Wholly Owned A

(b) any Project Entity;

(c) the Lenders (if any

without the consent of giving notice. On reqthe Parties shall entagreement with the Lend

The Dry Gas Supplycontain provisions to reof the BGDA.

ffiliate; or

or

),

the Buyer, but by uest of the Seller, er into a direct ers.

Agreement will flect Article 14.5

NOTICES All notices under the Agreement shall be language.

Dry Gas Supply in the English

EXPERT

The Dry Gas Supplyprovide for certain techndetermined by an expepracticable these provisame as the expert provthe Raw Gas Supply Ag

Agreement will ical disputes to be rt. In as far as

sions will be the isions included in reement.

GENERAL TERMS ANCONDITIONS

The standard type of proamongst others:

(a) Amendments;

(b) Severability;

(c) Language of Agree

(d) Survival;


(f) Sovereign Immunit

will be in as far as pwith the BGDA and theAgreement and includeSupply Agreement.

D

visions regarding,

ment;

nts; and

y

racticable aligned Raw Gas Supply d in the Dry Gas

GOVERNING LAW ANDISPUTE RESOLUTIO aw

D N Governing L Iraq ly

Supply Agreement.

The United Nations Contracts for the Inte

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i Law will app to the Dry Gas

Convention on rnational Sale of

Goods will not apply to the Dry Gas Supply Agreement.

Dispute Resolution

In as far as practicable the dispute resolution provisions shall be aligned with the provisions of the BGDA and the Raw Gas Supply Agreement.

APPENDICES OF THE DRY GAS SUPPLY AGREEMENT

Envisaged appendices of the Dry Gas Supply Agreement:





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EXHIBIT 13 KEY TERMS OF LPG AND CONDENSATE SUPPLY AGREEMENTS

Parties might decide to split these key terms into 2 SPAs: one for LPG and one for Condensate

Basrah Gas Company (“Seller”)

PARTIES South Gas Company (“Buyer”)

INTERPRETATION


The BGDA stipulates, inter alia, that the Seller and the Buyer shall enter into an agreement, based on this Term Sheet (the “LPG and Condensate Supply Agreement”), for the Seller to supply, and for the Buyer to purchase, LPG and Condensate at the specified LPG and Condensate Delivery Points;

The BGDA further stipulates that (subject to the provisions thereof) in the event of an LNG export project, the Seller will allocate sufficient Raw Gas to produce a minimum of 600 MMscfd of Feedstock Gas (as defined in the BGDA) for such project;

In accordance with the BGDA, a Joint Planning and Coordination Committee (or “JPC Committee”) will be established in accordance with the JPCC Terms of Reference to co-ordinate and align, inter alia, current and future Raw Gas production and the off-take of Dry Gas, LNG, LPG and Condensate (“Petroleum Products”), with infrastructure development so as to enable the Parties to meet their obligations and exercise their rights;

Pursuant to the BGDA, a plan in respect of the current and future Raw Gas production and offtake of Petroleum Products such as LPG and Condensate shall be established (the “Gas Supply and Offtake Plan”). This Plan (and any amendments thereto) together with LPG and Condensate Supply Agreement shall form a basis for the Seller to sell and for the Buyer to buy LPG and Condensate.


204

Pursuant to the Gas Supply and Offtake Plan (and any amendments thereof) the Parties shall establish a confirmation note relevant to the subject of this Agreement (the “Confirmation Notice”).

SALE AND PURCHASE

The sale and delivery by the Seller and the purchase and acceptance of LPG and Condensate by the Buyer at the Delivery Points, in the quantities described in the LPG and Condensate Supply Agreement.

TERM

The LPG and Condensate Supply Agreement shall become effective on the date of its execution and shall continue until terminated in accordance with its terms.

CONTRACT YEAR

A Contract Year will equal a calendar year. However, the first Contract Year shall commence at 00:00 hours Basrah local time on the Commencement Date and end at 00.00 hours Basrah local time on 1 January of the following year; the last Contract Year shall end at 00:00 hours Basrah local time on the date of termination of the LPG and Condensate Supply Agreement.

LPG Whenever the abbreviation “LPG” is used it refers to Propane, Butane and a mixture of Propane/Butane.

PRODUCTS

Condensate Condensate means a mixture of liquid hydrocarbons extracted from Raw Gas and composed principally of pentanes and heavier hydrocarbons.


The Confirmation Notice (as amended from time to time) sets out the quantities (in tonnes) of LPG and (in barrels) of Condensate, which the Seller is obliged to deliver to the Buyer and which the Buyer is obliged to accept delivery of at the relevant Delivery Points in each Contract Year.

In case a Confirmation Notice is not signed by both Parties, or in case of any inconsistency between the Confirmation Notice and the Gas Supply and Off-take Plan, then the quantities set out in the Gas Supply and Off-take Plan set out the Parties’ respective obligations in respect of the delivery and accepting delivery of the LPG and Condensate.

Resulting from the Committed Volumes, the annual contract quantity (“ACQ”), the monthly contract quantity (“MCQ”), and, if applicable, the daily

205

contract quantity (“DCQ”) shall be established.

Delivery Points

The points set out in the Gas Supply and Off-take Plan and the Confirmation Notice generally being the outlet flange of each applicable facility at which LPG and/or Condensate is to be delivered by the Seller to the Buyer.

Each specific delivery point shall be more specifically defined and described in the Gas Supply and Offtake Plan (and, if also required, in the LPG and Condensate Supply Agreement).

Commencement Date

The Commencement Date (established as “Commencement of Operations” in the BGDA) for the Committed Volumes shall be set out in the Gas Supply and Off-take Plan and the Confirmation Notice.

Any additional Committed Volumes and date(s) associated therewith (each a “First Delivery Date”) will be set out in subsequent Confirmation Notice(s).

FIRST DELIVERY DATE

Infrastructure

The Seller will provide and construct (if required) such infrastructure as may be necessary, from the outlet flange of the degassing stations to the outlet flange of each applicable LPG facility or Condensate facility, for the performance of its obligations under the LPG and Condensate Supply Agreement.

The Buyer will provide and construct (or procure that its Affiliates provide and construct) (if required) such infrastructure as may be necessary, from and after each applicable LPG facility or Condensate facility, for the performance of its obligations under the LPG and Condensate Supply Agreement.

The Parties shall align and coordinate any interface issues in respect of the relevant infrastructure through the Planning and Coordination Group and in accordance with Article 6.6 of the BGDA.


The Parties agree to maintain close communication and to exchange available information that is relevant to the fulfilment of their respective obligations.

INFORMATION EXCHANGE, PLANNING AND COORDINATION GROUP

Planning and Coordination Group

Each Party shall appoint three representatives to a joint planning and coordination group (“Planning and Coordination Group”, which group is either in addition to the one set up under the principles of the Raw Gas Supply Agreement Term Sheet and/or the

206

Dry Gas Supply Agreement Term Sheet, or the same group established under these agreements. The Planning and Coordination Group is to meet as soon as practicable after the execution of the LPG and Condensate Supply Agreement. The Planning and Coordination Group shall amongst other things be responsible for discussing, agreeing and carrying out operational matters and procedures.

The Planning and Coordination Group will have no power to amend the LPG and Condensate Supply Agreement or to create, waive or vary any legal or contractual obligation of either of the Parties.

DELIVERY PROGRAMMES

General

The Planning and Coordination Group shall develop delivery programmes (envisaged to be Annual, Monthly, Weekly Programmes and, if applicable, Daily Nomination, as well as indicative ones) based on the Gas Supply and Off-take Plan and the Confirmation Notice.

The Committed Volumes Confirmation Notice shall form the basis for the Parties to plan and coordinate their operations.

QUALITY AND MEASUREMENT; OFF-SPECIFICATION PRODUCTS

Compliance with Specification

Each Confirmation Notice will contain the applicable specifications for LPG and/or Condensate to be delivered thereunder (the “Specification”).

The specification of LPG shall comply with the specification of commercial grade LPG.

Measurement of Quantity and Quality

The Parties shall develop principles and procedures on measuring and/or determining the quantity and quality of LPG and Condensate delivered, which principles and procedures shall be consistent with international accepted petroleum industry standards.

The Seller shall carry out the reading of instruments and the collection and processing of sample data. The Seller shall make all data obtained available to the Buyer.

The Buyer may designate representatives who shall have the right to be present at and witness any measurement, sampling or testing of the quantity and quality of LPG and/or Condensate.

For existing and future measurement facilities located outside of the Seller’s facilities, or facilities not owned or operated by the Seller, the Seller and

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the relevant owner(s) and operator(s) of such facilities shall enter into agreements with respect to such facilities and their operation covering measurement obligations, principles and procedures required to ensure the accurate measuring of LPG and Condensate. The Buyer shall, and shall procure that its Affiliates shall, procure that such persons enter such agreements.

If required, the Buyer shall provide, and shall procure that its Affiliates provide, access to the Seller to the aforementioned measurement facilities.

The Seller shall be entitled to appoint a representative to inspect and audit such owners’ and operators’ measurement facilities.


The first Party to identify that LPG and/or Condensate being made available at the Delivery Point will not or does not conform to the Specification shall as soon as reasonably practicable notify the other Party of the type and degree of such non-conformance, together with (to the extent known):


(b) the composition of the LPG and Condensate;



Off-Specification Product

If:

(1) any LPG and/or Condensate offered for delivery fails at any Delivery Point to conform to the applicable Specification; or

(2) the Buyer is made aware that any LPG and/or Condensate is or will be non-compliant with the applicable Specification,

then such LPG and Condensate will be referred to herein as “Off-Specification Product”.

Notwithstanding anything else contained herein, the Seller shall have no liability to the Buyer for delivery of Off-Specification Product to the Buyer, to the extent that such LPG and/or Condensate does not conform to the applicable Specifications as a

208

result of the Seller accepting off-specification Raw Gas from the Buyer under the Raw Gas Supply Agreement.

Buyer Election

If Off-Specification Product is tendered for delivery, the Buyer may:

(a) reject (further) delivery of such Off-Specification Product until the Buyer is satisfied that the LPG and/or Condensate meets the Specification; or

(b) accept delivery of such Off-Specification Product;

provided that the Buyer shall use reasonable endeavours to accept Off-Specification Product, if (i) it can do so without suffering any material loss, damage, costs or expenses and (ii) it is able to on-sell such Off-Specification Product.

At the request of either the Buyer or the Seller, a meeting of the JPC Committee shall be called to discuss potential solutions for handling Off-Specification Product.

Buyer Rejects Off-Specification Product

If the Buyer rejects Off-Specification Product (whether or not flared), the Seller shall be deemed to have failed to deliver the quantity of LPG and/or Condensate so rejected.

Buyer Accepts Off-Specification Product

If the Buyer accepts Off-Specification Product the price for such Off-Specification Product shall be (a) the price for on-Specification LPG and/or Condensate (as applicable), less (b) all incremental costs reasonably incurred by the Buyer in relation to transporting, handling and marketing such Off-Specification Product (including discounts or rebates to customers); provided however that the price shall not be less than zero.

In addition, if (despite having acted as an RPO and unless the Off-Specification Product results from the delivery of off-specification Raw Gas under the Raw Gas Supply Agreement) the Buyer unknowingly accepts the Off-Specification Product, the Seller shall be liable to and indemnify the Buyer for any reasonable cost, loss and/or expense incurred or suffered by the Buyer in relation to personal injury to the Buyer’s personnel or to third parties as a result of having taken delivery of such Off-Specification

209

Product.



The Buyer shall have no right or remedy, and the Seller will have no liability, with respect to Off-Specification Product other than as set out in the Off-Specification provisions and the rights of the Buyer as set out in the Flaring provision in respect of Off-Specification Product, even where caused by the negligence of the Seller.

Without prejudice to the remedies specified in this term sheet in relation to deliveries of Off-Specification Product, the Seller will make no warranties with regard to the quality of LPG and Condensate delivered under the LPG and Condensate Supply Agreement or its compliance with the Specifications, and all implied warranties in relation thereto will be expressly disclaimed.

Quality Disputes

The Parties shall try to settle a dispute on the quality of LPG and/or Condensate amicably. If no settlement can be reached, the matter shall be referred to an expert.

Until such dispute is resolved, the quantity of LPG and/or Condensate in dispute shall be deemed to be Off-Specification Product. The relevant provisions apply accordingly.

TITLE AND DELIVERY

Transfer of Title

Title to and risk or loss of or damage to LPG and Condensate delivered and sold, shall pass from the Seller to the Buyer at each of the relevant Delivery Points.


“Grace Period”: the period from the Commencement Date to the last day of the month falling one calendar year after the Commencement Date (or such other date as the Parties may agree).

During the Grace Period the Parties shall be released from the following obligations and/or liabilities:

(1) Take or Pay;

(2) Shortfall;

(3) Excess Gas;

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(4) Flaring; and

(5) Supply and delivery of at least 30% of the ACQ.

But: The Parties shall use reasonable endeavours to fulfil their respective obligations under the LPG and Condensate Supply Agreement.

LPG AND CONDENSATE PAYMENT

For the duration of the LPG and Condensate Supply Agreement, Buyer shall pay Seller for LPG and Condensate on a monthly basis. The LPG and Condensate payment shall be equal to the product of the volume of LPG and/or Condensate for the relevant month multiplied by the price for LPG and Condensate as determined under Exhibit 5 to the BGDA.

If at the end of a month, the LPG and/or Condensate payment of such month cannot be calculated, then the LPG and/or Condensate payment for the previous month shall be used on a provisional basis with a true-up adjustment to occur once the actual LPG and/or Condensate payment is determined.


Subject to the terms of the Grace Period, the Buyer shall be obliged to take and pay for, or pay for if not taken, a quantity of LPG and/or Condensate equal to (x) 90% of the ACQ less (y) (without double counting) any quantities:

(i) not made available for delivery due to planned maintenance of the Seller’s facilities or which could not be taken due to planned maintenance of the Buyer’s facilities;

(ii) not made available for delivery due to Facilities Development of the Seller’s facilities or which could not be taken due to Facilities Development of the Buyer’s facilities;

(iii) not made available for delivery due to delays to planned capacity expansions as set out in the Facilities Development Schedule in respect of the Seller’s facilities;

(iv) that could not be taken due to delays to planned capacity expansions as set out in the Facilities Development Schedule in respect of the Buyer’s facilities, provided that the Buyer acted as an RPO while implementing the

211

Facilities Development Schedule, and provided further that any delays in respect of the Facilities Development Schedule will be capped at 12 months, calculated from the anticipated hand-over date(s), except where such delays result from Events of Force Majeure);

(v) constituting Shortfall Quantities;

(vi) not made available as a result of a failure by the Raw Gas Supplier to supply on-specification Raw Gas under the Raw Gas Supply Agreement for any reason;

(vii) flared by the Seller due to other Petroleum Products (for example, Dry Gas) not being taken by the Buyer (in its capacity as Petroleum Product Buyer) under the respective Sale and Purchase Agreement in accordance with its terms; and

(viii) not delivered by the Seller or taken by the Buyer due to the occurrence of a Force Majeure Event;

(“ToP Quantity”).

Take or Pay Payment

If at the end of a Contract Year the aggregate quantity of LPG and/or Condensate taken by the Buyer during that Contract Year (“Aggregate Annual Quantity Taken”) is less than the ToP Quantity then such shortfall quantity shall be referred to as the “ToP Quantity Deficiency”.

At the end of each relevant Contract Year the Buyer shall pay the Seller an amount in USD (the “ToP Payment”) in accordance with the following calculation:

ToP Payment = a * b/c

Where:


“b” is the sum of the LPG and Condensate Payments for all months in the relevant Contract Year;

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Storage

Subject to operational storage availability and having no effect on the Seller’s other supply commitments, the Seller shall use reasonable endeavours to store all quantities of LPG and/or Condensate not taken delivery of at the cost of the Buyer.

If storage is not available or if the Seller anticipates that storage will become unavailable, the Seller shall inform the Buyer thereof as soon as reasonably practicable. Subsequently the Seller shall be entitled to sell or (if it cannot be sold) flare such volume of LPG and/or Condensate not taken delivery of.

If such volume of LPG and/or Condensate is flared, the Buyer shall be liable to the Seller for all cost, loss and/or expense reasonably incurred or suffered by the Seller as a result thereof.

If such volume of LPG and/or Condensate is sold to a third party, any revenues generated from such sale (minus the storage costs, if any) will be paid by the Seller to the Buyer.



SHORTFALL

Obligations to Supply LPG/Condensate

Subject to the terms of the Grace Period, the Seller shall be obliged to make available for delivery, or pay for if not made available, a quantity of LPG and/or Condensate equal to (x) 85% of the MCQ less (y) any quantities:

(i) not made available for delivery due to planned maintenance of the Seller’s facilities;

(ii) not made available for delivery due to Facilities Development of the Seller’s facilities;

(iii) not made available for delivery due to delays to planned capacity expansions as set out in the Facilities Development Schedule in respect of the Seller’s facilities (provided that the Seller acted as an RPO while implementing the Facilities Development Schedule, and

213

provided further that any delays in respect of the Facilities Development Schedule will be capped at 12 months, calculated from the anticipated hand-over date(s), except where such delays result from Events of Force Majeure);

(iv) not made available as a result of a failure by the Raw Gas Supplier to supply on-specification Raw Gas under the Raw Gas Supply Agreement for any reason other than a breach or default by the Seller of its obligations thereunder:

(v) not made available for delivery due to a Force Majeure Event;

(vi) not made available for delivery as a result of a breach by the Buyer of the LPG and Condensate Supply Agreement; and

(vii) not made available as a result of suspension by a Party under the LPG and Condensate Supply Agreement.

(the “Seller’s Adjusted Monthly Contract Quantity” or the “Seller’s Adjusted MCQ”)

The “Seller’s Adjusted Monthly Delivery Quantity” or the “Seller’s Adjusted MDQ” is the Seller’s adjusted quantity of LPG and/or Condensate actually made available for delivery to the Buyer at the Delivery Points and is determined for each month as follows:


Where:

“A” means the (unadjusted) quantity of LPG and/or Condensate (as the case may be) actually made available by the Seller for delivery to the Buyer at the Delivery Points in such month;

“D” means the quantities that the Buyer was unable to accept, or flared, as a result of such quantities being Off-Specification Product.

The “Shortfall Quantity” for a month shall be

214

calculated as follows:

SQ = SAMCQ – SAMDQ - EG

Where:

“SQ” is the Shortfall Quantity for the relevant month;

“SAMCQ” is the Seller’s Adjusted AMQ for that relevant month;

“SAMDQ” is the Seller’s Adjusted MDQ for the relevant month; and


Provided however that if such amount is negative, it shall be deemed to be zero.


In the event of a Shortfall Quantity, the Buyer shall use its reasonable endeavours to source alternative equivalent energy supplies. The Seller shall pay the Buyer (in USD) the difference between the cost of the alternative equivalent energy supply and the cost of LPG and/or Condensate under the LPG and Condensate Supply Agreement for the relevant period where such shortfall occurs (“Shortfall Payment”). The payment shall be calculated as follows:

Shortfall Payment = SFQ * (AE – P)

where:

“SFQ” is the Shortfall Quantity for the relevant month, where the energy has been replaced;

“AE” is the price per MMBtu for the alternative energy supplies sourced by the Buyer;

“P” is the relevant LPG and Condensate Price for the relevant month;

where (AE – P) is capped at P.

For the avoidance of doubt, if AE is less than P then there is no Shortfall Payment.

To the extent that the Buyer cannot source

215

alternative energy, the Shortfall Payment for quantities not replaced shall be:

Shortfall Payment = SFQ (unreplaced) * P

The Buyer has the right to deduct any undisputed Shortfall Payment from the LPG and/or Condensate payment (the “Adjusted Payment”). If this calculation results in a negative Adjusted Payment for month M, such negative balance shall be carried forward on a rolling basis to the following month unless month M is the last month of the Contract Year. If month M is the last month of the Contract Year, the negative balance shall be referred to as the “Shortfall Entitlement Payment”. The Buyer may submit an invoice to the Seller for the Shortfall Entitlement Payment.


In respect of (i) the Contract Year during which the Grace Period ends and, (ii) the last Contract Year, the Shortfall provisions shall apply to the maximum extent possible and any payment calculations to be made shall be done on a pro-rata basis for such Contract Year.


“Excess Product” means any the quantity of LPG and/or Condensate the Seller delivers or intends to deliver to the Buyer in excess of the applicable MCQ at each Delivery Point.

The Buyer shall use reasonable endeavours to accept delivery of Excess Product.

The terms and conditions of the LPG and Condensate Supply Agreement shall apply to any Excess Product taken by the Buyer.

Rejected Excess Product that is flared is subject to the relevant flaring provisions of the LPG and Condensate Supply Agreement.

At the request of either the Buyer or the Seller, a meeting of the JPC Committee shall be called to discuss potential solutions for handling Excess Product.

FLARING Seller Flares Products

If the Buyer fails to take delivery of LPG and/or Condensate and as a result the Seller flares LPG and/or Condensate, the Buyer shall, subject to the exceptions set out below, be liable to the Seller for all fines or penalties that any Government Agency

216

may impose against theThe Buyer shall reimbSeller accordingly.

Obligation on the Seller

Exceptions to the Buyer

(a) LPG and/or C saBuyer as Off-Specificathe reason such LPG anOff-Specification ProduRaw Gas Supplier’s Specification Gas underAgreement;

(b) volumes of LPG delivered at any Delivethe volume scheduleddelivery at such Daccordance with thescheduling procedure toLPG and Condensate Su

(c) LPG and/or Co sateDMQ for the relevant D

Seller as a result thereof. urse and/or indemnify the

to mitigate the costs, etc.

’s liability:

onden te rejected by the tion Product unless d/or Condensate was ct was due to the delivery of Off-

the Raw Gas Supply

and/or Condensate ry Point in excess of by the Buyer for

elivery Point in nomination and be included in the pply Agreement; or

nden tendered below the elivery Point.

FLARING Buyer Flares Products

If the Buyer flares LPresult of the reasons (a)Seller shall be liable topenalties that any Goveag r as a re

The Seller shall reimbBuyer accordingly. Omitigate the costs, etc.

G and/or Condensate as a – (c) set out above, then the the Buyer for all fines or

rnment Agency may impose sult thereof. ainst the Buye

urse and/or indemnify the bligation on the Buyer to

CUTRAILMENT

The LPG and Condencontain provisions as a 7.7.3 and 7.7.4 of the BGDA.

sate Sales Agreement will

ppropriate to reflect Articles

FACILITIES DEVELOPMENT

Each Party may proposedevelopment of its faciliDevelopment”).

A Party proposing to submit to the other development and discusto agree a schedule fo“Facilities Developmenwill ensure, to the eimplementation of thSchedule is undertakedisruption to the Seller

that it will engage in further ties (“Facilities

develop its Facilities shall Party a proposal for such s such proposal in good faith r facilities development (a t Schedule”). The Parties xtent practicable, that the e Facilities Development

n with a view to limiting and the Buyer (and, if both

217

Seller and Buyer propose to develop their Facilities, that such development will occur at the same approximate times) in order to avoid curtailments for any period beyond that which is reasonably necessary. The Facilities Development Schedule will be submitted to the Planning and Coordination Group and the Planning and Coordination Group shall ensure that the Delivery Programmes are developed to accommodate the Facilities Development Schedule at the affected Delivery Points.

FORCE MAJEURE General

A “Force Majeure Event” means any act, event or occurrence (or combination thereof) that:

(a) is beyond the reasonable control, and without the fault or negligence of the affected Party; and

(b) was not foreseeable, or if foreseeable, could not have been avoided or overcome by the affected Party (acting as an RPO); and

(c) prevents, hinders or delays the affected Party in its performance of any (or any part) of its obligations under this Agreement.

The LPG and Condensate Supply Agreement will include a non-exhaustive, customary list of examples of Force Majeure Events, including events affecting upstream and downstream facilities, provided that such events qualify under the above description.


Exclusions


(a) failure to make payments or fulfilling other financial obligations under the LPG and Condensate Supply Agreement.

The following acts, events or circumstances occurring within the Republic of Iraq shall not

218

constitute Force Majeure Events in respect of the Buyer:

(a) any act, or failure or delay in acting by the government or any Government Agency;


(c) a failure to take delivery of LPG and/or Condensate by any of the Buyer’s customers under a sale and purchase agreement, to the extent such failure would not be excused as a Force Majeure Event under the LPG and Condensate Supply Agreement;

(d) failure to make payments or fulfilling other financial obligations under the LPG and Condensate Supply Agreement.


A Party shall not be liable for any failure to perform any of its obligations under the LPG and Condensate Supply Agreement (other than the obligation to make payments) if, and to the extent that:

(a) such failure:

(i) is caused by or is due to any force majeure event; and

(ii) would not ordinarily be mitigated, avoided or overcome by such Party (acting as an RPO; and

(b) the Party intending to invoke a force majeure event has issued a notice to that effect.





If a Force Majeure Event continues for a period of 90 consecutive days or more, the Parties shall meet to discuss the effects of such event or to agree upon alternative arrangements as may be fair and

219

reasonable.



The LPG and Condensate Supply Agreement will contain the usual representations and warranties as agreed by the Parties.

Liability

The Buyer’s liability for failing to accept quantities of LPG and/or Condensate is set out in the Take or Pay provisions and is limited to the Take or Pay Payment.

The Seller’s liability for failing to deliver LPG and/or Condensate is set out in the Shortfall provisions and is limited to those remedies.


The Seller’s liability for Off Specification Product is set out in those provisions and is limited to those remedies.



LIABILITY


Except as expressly provided in the LPG and Condensate Supply Agreement neither Party shall be liable for any indirect or consequential losses and/or damages.


The Seller will submit to the Buyer an invoice within 10 working days after the end of each month. The invoice will be in USD and will show for the immediately preceding month all information in relation to amongst others the quantities of LPG and Condensate supplied, taken, rejected and the LPG and Condensate Payment. The information will be specified in an Appendix to the LPG and Condensate Supply Agreement.

The Buyer shall pay such invoice within 30 days upon receipt to the bank account specified by the Seller.

In the event of a disputed invoice the Parties do not have the right to offset or deduct, unless in cases of manifest error. The Parties shall try to resolve such

220

dispute amicably. If thdispute, the matter maydetermination. The exp

The default interest rdisputed invoices is LIminimum of five percen

The Parties shall dreconciliation process Shortfall, which is custoproduct industry.

If the Buyer defaults to LPG and CondensatePayment Security provPayment Security Packapply.

The Buyer will have tfrom the Seller’s indepthat the invoices have bwith the terms and cCondensate Supply Agr

e Parties fail to resolve the be referred to an expert for ert provisions will apply.

ate for late payment and BOR plus three 3% with a t 5%.

evelop and establish a in respect of ToP and

mary in the gas/hydrocarbon

pay an amount due under the Supply Agreement the isions as described in the age under the BGDA shall

he right to ask a certificate endent auditors confirming

een calculated in accordance onditions of the LPG and eement.

PAYMENT SECURITY

The LPG and Condenscontain provisions to BGDA.

ate Supply Agreement will reflect Article 11.5 of the

CONFIDENTIALITY

Parties shall keep the strictly confidential andTerms to any third co sultants and adviserand, in the case of thelenders (if any) and thprior agreement of the o

content of the Key Terms shall not disclose the Key

party (except to affiliates, s that have a need to know, Seller, its shareholders, its e Iraqi government) without ther Party.

n

SUSPENSION AND TERMINATION Termination

Grounds

For both Parties:

(a) a material breach unSupply Agreement (widays);

(b) liquidation or other

(c) Persistent DefaulShareholders’ Agreemeto make payment under Supply Agreement.

der the LPG and Condensate th a cure period of 90

insolvency event of the other Party;

t as defined in the nt resulting from failure the LPG and Condensate

221

For the Seller:

(a) if during any Contraof its default, fails to t(30%) of the ACQ.

For the Buyer:

(a) if during any Contraof its default, fails (odeliver of at least (30%)

ct Year the Buyer, by reason ake delivery of at least

ct Year the Seller, by reason r is deemed to fail) to of the ACQ.


Upon the occurrence of defaulting Party may, up

(a) withhold or suspend

(b) suspend its obligatio

In of liquidatith densau ate.

In as far as practicable tincluded in the BGDAgreement and the Drybe mirrored in the LPAgreement.

a termination event, the non-on notice to the other Party:

any payments; and

ns.

the event e LPG and Contomatically termin

on or other insolvency event ate Supply Agreement shall

he provisions on termination A, the Raw Gas Supply Gas Supply Agreement will G and Condensate Supply

TAXES

Up to the Delivery Poaccount of the Seller.

From the Delivery Pore onsible for all taxes

In the event of chanintroduction of a new teffect on the LPG Agreement, Article 11.3 pply

int(s) all taxes shall be for

int(s) the Buyer shall be . sp

ges to an existing or the ax, which has a detrimental

and Condensate Supply of the BGDA shall a .

ASSIGNMENT

No assignment of any rithe LPG and Condensatthe prior written approv

Exceptions

ghts and/or obligations under e Supply Agreement without al of the other Party.

: the Seller m

(a) a Wholly Owned Af

(b) any Project Entity; o

ay transfer or assign to:

filiate; or

r

222

(c) the Lenders (if any)

without the consent ofnotice. On request of enter into a direct agreem

The LPG and Condenscontain provisions to BGDA.

,

the Buyer, but by giving the Seller, the Parties shall ent with the Lenders.

ate Supply Agreement will reflect Article 14.5 of the

NOTICES A notices under the LAgreement shall be in th

ll PG and Condensate Supply

e English language.

EXPERT

The LPG and Condensprovide for certain determined by an expeth e provisions will provisions included iAgreement and the Dry

ate Supply Agreement will technical disputes to be rt. In as far as practicable be the same as the expert n the Raw Gas Supply Gas Supply Agreement.

es

GENERAL TERMS AND CONDITIONS

The standard type of prothers:

(a) Amendments;

(b) Severability;

(c) Language of Agreem

(d) Survival;


(f) Sovereign Immunity

will be in as far as pBGDA, the Raw Gas SuGas Supply Agreement,Condensate Supply Agr

ovisions regarding, amongst

ent;

nts; and

,

racticable aligned with the pply Agreement and the Dry and included in the LPG and eement.

Governing Law

Iraqi Law will apply tSupply Agreement.

T s ConInternational Sale of GLPG and Condensate Su

o the LPG and Condensate

he United Nation vention on Contracts for the oods will not apply to the pply Agreement.

GOVERNING LAW AND DISPUTE RESOLUTION

Dispute Resolution In apr nBGDA, the Raw Gas Su

as far as practicovisions shall be alig

ble the dispute resolution ed with the provisions of the pply Agreement and the Dry

223

Gas Supply Agreement.

APPENDICES OF THE LPG AND CONDENSATE SUPPLY AGREEMENT

Envisaged appendices of the LPG and Condensate Supply Agreement:





224

EXHIBIT 14 KEY TERMS OF LNG SALE AND PURCHASE AGREEMENT

The detailed terms and conditions governing the sale and purchase of LNG produced by any LNG Projects to the LNG Buyer shall be set out in an LNG Sale and Purchase Agreement (s) (the “LNG SPA”), to be entered into between BGC or any other Project Entity established for the purpose of undertaking an LNG Project (“Seller”) and the LNG Buyer. The SPA shall include but not be limited to the following principles:

1. LNG Buyer shall off-take and purchase all LNG produced by Seller in full cargo lots on FOB terms and LNG Buyer shall be solely responsible for the transportation and delivery of LNG to downstream markets. LNG Buyer shall be free to take the LNG to any market, provided that LNG produced by Seller may not be sold to any buyer located at the time of sale in a destination then embargoed by the government of Iraq.

2. The SPA shall become effective on the date of its execution and delivery and deliveries of LNG will start on the day the first commercial cargo departs the Liquefaction Facilities (“Start Date”). A windowing mechanism for ascertaining the Start Date shall be agreed in the SPA. The term of the LNG SPA shall be detailed in the LNG SPA but shall in any event be no less than 20 years from the Start Date.

3. Seller shall deliver LNG to the LNG Buyer, at the point at which the flange coupling of the loading manifold of the LNG ship joins the flange coupling of the loading line of the Liquefaction Facilities.

4. Delivery scheduling shall be done on a yearly basis and updated on a monthly basis. LNG shall be delivered at intervals and in quantities reasonably even and rateable in each contract year. The contract year and the procedures and notice periods required for agreeing such delivery schedule shall be defined in the LNG SPA.

5. The LNG quality and specifications shall be agreed in the LNG SPA.

6. The pricing mechanism is to be based on market prices and will be agreed at the time of negotiating the LNG SPA.

7. LNG Buyer shall be obliged to purchase, take and pay for, or pay for if not taken the LNG volumes properly nominated, except in circumstances including but not limited to Seller’s failure to deliver and force majeure. Where the LNG Buyer pays for, but does not take, any volume of LNG, the LNG Buyer shall in circumstances to be set out in the LNG SPA accrue make-up rights.

8. If Seller fails to deliver LNG pursuant to a nomination made in accordance with the SPA, Seller shall be obliged to compensate LNG Buyer via an LNG shortfall mechanism to be further defined within the LNG SPA.

9. The LNG quantities to be delivered by Seller to LNG Buyer shall be calculated in energy terms (e.g., MMBtu), details of which shall be covered in the LNG SPA.

225

10. The LNG Buyer’s financial obligations will guaranteed by a creditworthy entity.

226

EXHIBIT 15 FORM OF INITIAL PROJECT DOCUMENTS ACCESSION AGREEMENT

THIS INITIAL PROJECT DOCUMENTS ACCESSION AGREEMENT (the “Agreement”) is made this [___] day of [_________] (the “Effective Date”) by and between:

1. SOUTH GAS COMPANY a public company incorporated by a decree of the Companies Registrar dated 30 June 1998 in accordance with the State Companies Law No 22 of 1997, represented by its Director-General (“SGC”);

2. SHELL GAS IRAQ B.V., a private limited liability company incorporated in accordance with the laws of The Netherlands (“Shell”);

3. DIAMOND GAS IRAQ B.V., a private limited liability company incorporated in accordance with the laws of The Netherlands (“Diamond Gas”); and

4. [BASRAH GAS COMPANY] [* Insert corporate details] (the “Company”),

WHEREAS:

(A) SGC, Shell and Diamond Gas are parties to the Basrah Gas Development Agreement dated [______] (the “BGDA”);

(B) SGC, Shell and Diamond Gas are parties to the Shareholders’ Agreement dated [_______] (the “SHA”) and to the Asset Transfer Agreement dated [______] (the “ATA”);

(C) The Company was incorporated on [________]; and

(D) The BGDA, SHA and ATA each provide that, following its incorporation, the Company will become a party to each of those agreements through entry into, and in accordance with the terms of this Agreement.

NOW THEREFORE, in consideration of the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows.

5. Accession to BGDA

5.1 SGC, Shell and Diamond Gas agree that, with effect on and from the Effective Date, the Company shall become a Party to the BGDA and shall be entitled to all the rights and benefits of a Party and of BGC under the BGDA, in each case as if it had been an original signatory to the BGDA in such capacities.

5.2 The Company agrees that, with effect on and from the Effective Date, it will become a Party to the BGDA, and undertakes to perform and to be bound by all provisions of the

227

BGDA which are applicable to it as a Party and applicable to BGC under the BGDA, in each case as if it had been an original signatory to the BGDA in such capacities.

5.3 For the purposes of this Article 1, “BGC” and “Party” shall have meanings given to them in the BGDA.

6. Accession to SHA

6.1 SGC, Shell and Diamond Gas agree that, with effect on and from the Effective Date, the Company shall become a Party to the SHA and shall be entitled to all the rights and benefits of a Party and of BGC under the SHA, in each case as if it had been an original signatory to the SHA in such capacities.

6.2 The Company agrees that, with effect on and from the Effective Date, it will become a party to the SHA, and undertakes to perform and to be bound by all provisions of the SHA which are applicable to it as a Party and applicable to BGC under the SHA, in each case as if it had been an original signatory to the SHA in such capacities.

6.3 For the purposes of this Article 2, “BGC” and “Party” shall have meanings given to them in the SHA.

7. Accession to ATA and Related Assignment, Novation and Release

[* The following will need to be reviewed on completion on signing of the ATA and, if necessary, revised to reflect any changes to the final form of the ATA]

7.1 With effect on and from the Effective Date:

(a) the Interim Transferees hereby assign to the Company all of their rights, title, interest, powers and privileges which are attributable to the Interim Transferees under the ATA to BGC, and the Transferor hereby agrees to such assignment;

(b) the Company hereby: (i) replaces the Interim Transferees as recipient of the SGC Transfer Assets and any Additional Assets; (ii) releases the Interim Transferees from any obligations under the ATA; and (iii) agrees that it will become a party to the ATA and undertakes to perform and to be bound by all provisions of the ATA which are applicable to it as a Party and which are applicable to “the Company” and “the Interim Transferees” under the ATA, in each case as if it had been an original signatory to the ATA in such capacities;

(c) the Interim Transferees and the Transferor agree that the Company shall become a Party to the ATA and shall be entitled to all the rights and benefits of a “Party”, “the Company” and the “Interim Transferees” under the ATA, in each case as if it had been an original signatory to the ATA in such capacities; and

(d) the Interim Transferees, the Transferor and the Company each agree that the assignment, novation and release referred to in this Article 3 shall not affect the rights of Shell and Diamond Gas to benefit under the warranties set out in

228

article 8 andindemnities given inclaims arising prior

7.2 For the pur“Interim Tranmeanings give

8. Notice

The address and detaSHA and ATA are:

[Drafting Note: notic

9. Each o 17.5, 17.7 to 17.12 8read and cons

IN WITNESS WHERthe day and the year fi

[Drafting Note: Inser

schedule 6 of the Asset Transfer Agreement or under any their favour under the ATA, in each case with respect to

to the date hereof.

poses of this Article 3, the terms “Additional Assets”, “the Company”, sferees”, “Party”, “SGC Transfer Assets” and “Transferor” shall have n to them in the ATA.

Details of Company

ils for notices to be provided to the Company under the BGDA,

e details to be inserted prior to signing of this accession agreement]

f the parties to this Agreement agree that the provisions of articles [ 15, 16, 17.1 to , 1 and 19] of the BGDA shall apply to this Agreement and shall be

trued mutatis mutandis as if set out in full herein.

EOF, the Parties hereto have caused this Agreement to be executed as of rst written above.

t signing clauses for each of SGC, Shell, Diamond Gas and BGC]

229

EXHIBIT 16GAS SUPPL

Y AND OFFTAKE PLAN

230

EXHIBIT 17FORM OF G

Dear Sirs,

With reference to Artiyou as follows:

As from [______]1 Agreement, the followSupply and Off-take P

Mandatory GSOP Cha

SOP AMENDMENT NOTICE

cle 5.3.6 of the Basrah Gas Development Agreement, we herewith inform

and in accordance with Article 5.3 of the Basrah Gas Development ing [Mandatory GSOP Changes/Approved GSOP Changes]2 to the Gas

lan will apply:

nges

[Format to be agreed]

Approved GSOP Chan

ges

[Format to be agreed]

[We kindly request yoreceipt of this notice a

[We kindly request yoacceptance of the matt

Kind regards, For and on behalf of Basrah Gas Company

_________________

Accepted and agreed For and on behalf of SAs Raw Gas Supplier

u to sign and return one copy of this amendment notice to acknowledge nd the matters set out in this notice]3.

u to sign and return one copy of this amendment notice to confirm your ers set out in this notice]4.

outh Gas Company and Domestic Off-taker

1 insert date as from which2 delete whichever is not a3 Insert this paragraph for4 Insert this paragraph for

the amendment(s) will apply pplicable Mandatory GSOP Changes. Approved GSOP Changes.

231

EXHIBIT 18AGREED FO

Letter of Confirmati

To: SGC, Shell, M itogether “Recipients”

We refer to the BaAgreement (“SHA”) (“Shell”) and Diamonwhich the Recipients ito be known as “Basterms used in ConfirmBGDA or the SHA (as

In consideration of thVenture the Ministry and Council of Minist

1. CONSENT

1.1 The Mnecessary coDocuments anand agrees thathem.

1.2 The Mtransfer of thDocuments anaims.

1.3 The MinVenture Inter(i) a Shareholder othan a Whollytechnical and Shareholder, pthe Ministry ato such transfer are mShareholder (notice but if deemed to hav

RM OF LETTER OF CONFIRMATION

on (“the Confirmation”) for SGC, BGC, Shell and Mitsubishi

itsub shi, (and following Incorporation, BGC) (each a “Recipient”, )

srah Gas Development Agreement (“BGDA”) and the Shareholders’ executed today by South Gas Company (“SGC”). Shell Gas Iraq B.V. d Gas Iraq B.V (“Mitsubishi”) and the other Project Documents under ntend to incorporate an Iraqi mixed limited liability joint venture company rah Gas Company” (“BGC”) and to carry out the Venture. Capitalised ation but not otherwise defined will have the meaning given to them in the applicable).

e Recipients entering into the Project Documents and undertaking the (acting on behalf of the Government of Iraq pursuant to Law 101 of 1976 ers Decree no. 243 dated 30th June 2010) irrevocably confirms as follows.

S AND APPROVALS BY THE MINISTRY

inistry having been involved in the relevant negotiations, having made all nsultations required for the Project and having approved the Project d the Venture hereby authorises SGC to enter into the Project Documents t future amendments to the Project Documents may be made as specified in

inistry hereby grants all consents needed for the incorporation of BGC and the e SGC Transfer Assets to BGC on the terms set out in the Project d agrees to take any further action necessary to procure or achieve these

istry irrevocably consents to the transfer of Shares in BGC (and associated ests and Venture Obligations) by any Shareholder where the transfer is to

r a Wholly-Owned Affiliate of a Shareholder or (ii) an Entity other -Owned Affiliate of a Shareholder where the proposed transferee has the

financial competence to purchase the Shares and to meet its obligations as a rovided that in both cases at least 45 days written notice has been given to nd all applicable requirements of the Shareholders’ Agreement with respect

et. The Ministry shall confirm its written consent to the transferring with a copy to all other Recipients) within 45 days of the date of receipt of this confirmation is not provided within such time the Ministry shall be e approved such transfer.

232

2. GRANT O

2.1 The Mthe Recipientstipulated in irrevocably gpower under L

2.2 The Minisis a party to ahas the poweand dischargeThe Ministryconstituent documrequired to enunder the Proj

2.3 The bIncorporationwithout it couany Recipientbenefit of thiConfirmation.

3. ASSIST

3.1 The MinisRecipient):

(a) take (and cactions; and

(b) without limAgencies (othapplies) provithe Law (subj

in order to aexercise theirimplement anmanner.

3.2 Notwiof the BGDArequired to usan Entity tak(including not permundertakes to

F RIGHTS

inistry hereby undertakes that BGC (following Incorporation), any Project Entity, s and their respective Affiliates (as applicable) shall have all rights the Project Documents or necessary to carry out the Venture and hereby rants such rights to the foregoing, to the maximum extent that it has the aw to do so.

try hereby irrevocably grants to SGC (and if any other Affiliate of the Ministry Project Document, to each such Affiliate), to the maximum extent that it

r under Law to do so, all rights necessary for it to fully exercise its rights its obligations under the Project Documents and in respect of the Venture. shall procure the amendment of the Company Contract and other

ents of SGC and other relevant Affiliates of the Ministry to the extent able each of them to fully exercise its rights and discharge its obligations ect Documents and in respect of the Venture.

enefit of this Confirmation shall extend automatically to BGC following without the need for any further action to be taken by BGC (including ntersigning or acknowledging this Confirmation) or any other Entity. If believes that it is desirable it shall be entitled to unilaterally assign the s Confirmation to BGC, without prejudice to its own rights under this

ANCE BY THE MINISTRY

try shall promptly (and in any case within 90 days of a request by any

ause SGC and the Ministry’s other Affiliates to take) all necessary

iting 3.1.1, use its Best Endeavours to procure that Government er than Affiliates of the Ministry in respect of which paragraph 3.1.1 de, all necessary Approvals to which BGC is properly entitled under ect to BGC complying with any necessary formalities),

llow any or all of the Recipients, any Project Entity or other Entity to rights and perform their obligations under the Project Documents or to d carry out the Venture and related activities in a timely and efficient

thstanding the foregoing, where SGC or a Ministry Party is required by the terms or any other Project Document to cause or to procure (and where it is e its Best Endeavours or reasonable endeavours to cause or to procure) that es or does not take any action or does or does not do any other thing

itting any other Entity to do a specified thing), the Ministry hereby cause or procure (and use its Best Endeavours or reasonable endeavours to

233

cause or to procure,does or does not do su

3.3 Withoto remedy aninconsistent wunder any Prcomplies with

3.4 The MBGC all Comunder the BDMinistry acknto be not less

3.5 The MinistrBGDA.

4. AUDI

The Ministry shall hav

(a) audit before the dareceived by Bprice payable

(b) inspect the o

all at its ownwith BGC. applicable opeenvironmental proreport for comment.

5. MISCELLANEOUS

5.1 The Mperformed in to this Confirmand such actio

5.2 Each pconstitute commarrangements set outhe other partthe Republic oof the BGDA

as applicable) that such Entity does or does not take such action or ch other thing.

ut limiting 3.2, the Ministry hereby undertakes that it will use its Best Endeavours y act (or failure to act) by any Government Agency (or Affiliate) that is ith or which prejudices the rights of any Recipient or any Project Entity

oject Documents and that it will procure that each of SGC and SOMO its obligations under the Project Documents.

inistry shall ensure that SGC fulfils its obligation to supply and make available to mitted Volumes and Planned Volumes of Raw Gas, as and when required GA, including by making available Deficit Volumes as needed. The

owledges that the plateau Raw Gas requirement for this purpose is expected than 2,000 MMscfd.

y will have representation in the JPC Committee in accordance with the

T BY THE MINISTRY

e the right to:

the books of BGC relating to the period starting up to 2 calendar years te of commencement of any audit in order to verify (i) revenue GC from sales of Petroleum Products and (ii) the calculation of the for Raw Gas to the Raw Gas Supplier; and

perations of BGC;

cost and expense and at times agreed with BGC and on the basis agreed Any individuals carrying out such audit shall comply with all BGC’s rational policies, including in particular those relating to health, safety and

tection. BGC will be provided with a final draft copy of any audit

inistry agrees that any right or benefit conferred on BGC, or action to be favour of BGC, shall extend to any Project Entities, as if they were parties

ation. BGC or any other Recipient may enforce such privileges, rights ns on behalf of such Project Entities.

arty hereby irrevocably acknowledges that the obligations under this Confirmation ercial obligations to be performed in support of the commercial

t in the Project Documents and will not take action that might deny y an effective remedy. This Confirmation shall be governed by the laws of f Iraq and the terms of Articles 1.1, 1.2, 15, 16, 17.1, 17.3, 17.5 and 17.10

shall apply to this Confirmation after making changes necessary to give

234

effect to themreference.

5.3 This Confwill be bindinpermitted assigneesinclude a refcontained in teach Recipient ind

5.4 The adMinistry of OThe Ministry mprovided to tRecipients).

5.5 The M

(a) it is aConfirmation Venture; and

(b) it is acrights grantedwithout hindrance.

By the Minister of OFor and on behalf of Government of the R

__________________

Dated: ACKNOWLEDGEDFor and on behalf of South Gas Company

By:

in the context of this Confirmation and they are incorporated herein by

irmation shall remain in full force and effect for the Term of the BGDA and g upon and inure for the benefit of the respective successors in title and

of each Recipient. References to one or more Recipients shall erence to them acting in all capacities. The rights and undertakings his Confirmation are granted to and may be exercised in their entirety by

ividually and independently of each other Recipient.

dress of the Ministry for the purposes of enforcement of this Confirmation is the il, Baghdad, Republic of Iraq, attention The Deputy Minister (Refining).

ay change its address for notices or enforcement by written instrument he Recipients (which shall be effective five days after receipt by such

inistry hereby represents and warrants severally to each of the Recipients that:

ware that each of the Recipients is relying on the matters set out in this in entering into the Project Documents and undertaking the

ting within its express authority and that as at the BGDA Effective Date the under this Confirmation may be exercised with full effect and

il, the Ministry of Oil, epublic of Iraq

_____

AND ACCEPTED

Dated:

235

236

For and on behalf of Shell Gas Iraq B.V.

By:

Dated:

For and on Behalf of Diamond Gas Iraq B

By:

.V.

Dated: