GEINT LTD Drilling Rig Tender Dossier

TENDERINGDOCUMENTS
TenderREN:PRFGI11006

SectionI
InstructionstoTenderers(ITT)

LandDrillingRigServices
BerBahrBlock KurdistanRegionNorthernIraq GEI 30May2011

Invitation to Tender Land Drilling Rig(s) Service
Tender REN: PRF-GI-11-006
TABLEOFCONTENTS
SECTIONI:INSTRUCTIONTOTENDERERS......................................................................................... 3 A. GENERAL................................................................................................................................3 B. PSCOPERATINGAREA............................................................................................................3 C. SECURITY...............................................................................................................................3 D. PREPARATIONOFTENDERS...................................................................................................4 I. DEFINITIONS..............................................................................................................................4 II. INTRODUCTION.......................................................................................................................... 5 III. GENERALDESCRIPTIONOFSERVICES.............................................................................................. 5 IV. COMMENCEMENTDATE.............................................................................................................. 6 V. CONTRACTTERM ....................................................................................................................... . 6 VI. KURDISTANCONTENT ................................................................................................................. . 6 VII. SUBCONTRACTORSANDUNINCORPORATEDJOINTVENTURES.............................................................. 6 VIII. GROUPINGOFSERVICES .............................................................................................................. . 7 IX. COMPANYOPERATINGBASE ........................................................................................................ . 7 X. COMPANY'SHELICOPTERBASE ..................................................................................................... . 7 XI. TENDERSUBMITTALPROCEDURES................................................................................................. 7 XII. TENDERER'SEXCEPTIONSTOTERMS&CONDITIONSINCOMPANY'SPROPOSEDAGREEMENTSECTIONIII10 XIII. BUSINESSPRACTICES ................................................................................................................ 0 . 1 XIV. CURRENCYOFPAYMENT............................................................................................................ 1 1 XV. QUESTIONSANDCLARIFICATIONS................................................................................................ 1 1 XVI. QUOTATIONWITHDRAWAL........................................................................................................ 1 1 XVII. RIGHTOFACCEPTANCE ............................................................................................................. 1 . 1 XVIII.INSPECTIONOFTENDERER'SFACILITYANDEQUIPMENT ................................................................... 1 . 1 XIX. COMMERCIALITTREQUIREMENTS .............................................................................................. 2 . 1 XX. INFORMATIONREQUIREDUPONCONTRACTAWARD ....................................................................... 2 . 1 XXI. COMPLIANCEWITHENGLISHLAW ............................................................................................... 2 . 1 XXII. BINDINGLEGALRELATIONSHIP.................................................................................................... 3 1 XXIII. TENDERINGCOSTS.................................................................................................................... 3 1 XXIV.CONFIDENTIALINFORMATION..................................................................................................... 3 1 XXV. ILLEGALINFORMATIONBROKERING.............................................................................................. 3 1 SECTIONII:DOCUMENTATIONANDINFORMATION.......................................................................17 E. FORMATOFTHETENDER.....................................................................................................17 F. INSTRUCTIONSFORPROVIDINGREQUIREDDOCUMENTS....................................................18
SECTIONIII: DRILLINGRIGSERVICESAGREEMENT SCHEDULEA: SCOPEOFSERVICESANDRATES SCHEDULEB: CONTRACTOR'SPERSONNEL SCHEDULEC: MATERIALS,SUPPLIESANDSERVICESPROVIDEDBYCONTRACTORANDCOMPANY SCHEDULED: SPECIFICATIONANDEQUIPMENTLISTOFDRILLINGUNIT. SCHEDULEE: TECHNICALDATA SCHEDULEF: SAFETY,HEALTHANDENVIRONMENTALREQUIREMENTS SCHEDULEG: CONTRACTORDRUG,ALCOHOLANDCONTRABANDPOLICY SCHEDULEH: CHANGEORDERS SCHEDULEI: QUALITYPLANANDREQUIREMENTS SCHEDULEJ: BACKGROUNDCHECKS SCHEDULEK: DRILLINGUNITINSPECTIONTEST SCHEDULEL: DRILLSTRINGINSPECTIONPROCEDURE
2/26
SECTIONI:INSTRUCTIONTOTENDERERS A. GENERAL Genel Energy International Limited (GENEL or GEI) is the Operator of the Production Sharing Contract (PSC) of Ber Bahr block, signed on March 31st , 2009 between the Contractor Parties, being Genel Energy International Limited and Gulf Keystone Petroleum Ltd. (GKP). GENEL is an independent Exploration and Production (E&P) company holding severalPSCintheKurdistanRegionofIraqsince2002.GEIholdsparticipatinginterestsinsix exploration and production licenses in in the region; namely Taq Taq (44%) Tawke (25%), Dohuk(40%),Miran(25%),ChiaSurkh(20%),andBerBahr(40%)GEIhassignificantamount ofproductionfromtwofieldsTaqTaqandTawkeincreasingonannualbase. PleaseseeSectionIIIScheduleE(TechnicalDetails)forfurther. B. PSCOPERATINGAREA TheBerBahrprospectislocatedincoreofanEastWestorientedanticline.Satelliteimage analysis,surfacegeologicalmappingandseismicinterpretationindicatea4wayclosureat surface.BerBahrstructureisadoubleplungingasurfaceanticlinewithmappedclosureof 40 km2 (10km x 4 km) at reservoir level. The surface expression forms a 400m positive featureinthetopography,withhighestelevationabout1100mamsl.Theverticalclosureis controlledbyagentlesynclineseparatingBerBahrandthe neighbouringLinevastructure.
ViewofBerBahrstructureisgiveninthepicturebelow. C. SECURITY Security will be provided by the Contractor. Security measurements will be conducted in accordancewithGEIsecuritymeasurementsincoordinationwithGEISecurityManager.
3/26
D. PREPARATIONOFTENDERS Tenderers whom called for tender for the provision of a Land Rig Drilling Unit are now requested to complete the Technical Tender for consideration for Technical Qualification andaseparateCommercialTender.OnlyTenderersmeetingtheTechnicalQualificationwill behavingtheirCommercialTenderopened. This Section I (Instructions to Tenderers ITT) includes instructions to tenderers regarding items to be submitted to Company as part of Tenderers response to this Invitation for Tender.SectionII(ContentsoftenderingDocuments)specifiestheminimumdocumentation required for the Tenderer to be considered for Technical Qualification in the tendering process. Section III (Drilling Rig Services Agreement and Schedules A to L) is Company's proposed agreement for the Work being tendered. Tenderer shall provide all information requested per Section II. Failure to provide all of the required information within the time specified and as detailed therein may preclude further consideration of Tenderer for TechnicalQualification. UnlessadditionalinformationisspecificallyrequestedthroughaCompanyissuedtechnical clarification, the information Tenderer submits in this Technical Tender will be the only information used in the Technical Evaluation Process. Information submitted by Tenderer previouslyinthepreliminaryprocesswillnotbeutilizedintheTechnicalEvaluationprocess. Therefore, Tenderer should ensure the Technical Tender information and documents are complete,comprehensiveandwellorganizedinformatasnotedinSectionII. AlthoughthehardcopyTechnicalTendermarked"Original"asspecifiedinthisArticlexi(2) willgovernincaseswherediscrepanciesexist,TenderershouldnotethattheelectronicCD ROM copy will be the primary tool used to review and evaluate the Technical Tender. TenderersareencouragedtostructureandorganizetheinformationcontainedontheCD ROMcopyinasimilarmannertothatofthe"Original"hardcopyTechnicalTender. AcceptablefileformatsfortheCDROMcopyareMSWord,MSExcelandPDForAutoCAD *.dwg.DrawingsrequiredtobeincludedontheCDROMcopyaretobehighresolutionPDF (resolution suitable to read smallest font on drawing) or AutoCad R14.dwg format (preferred). If drawings are provided in the PDF format only, Tenderer is to state and confirmthatAutoCadR14.dwgfilesarenotavailable.
1. Definitions
ForpurposesofthisInvitationtoTender(ITT),thefollowingwordsandphrasesshall havethemeaningsstatedbelow: a) Affiliate:(1)anycompanyinwhichGEInoworhereafter(a)ownsor(b)controls, directlyorindirectly,morethanfiftypercent(50%)ofthestockhavingtheright tovoteorappointitsdirectors(Company),and(2)anyjointventureinwhichGEI oraCompanyasdefinedunder(1)inthisparagraphistheoperator. b) Tenderer(orBidder):ThosewhoreceivethisITTandrespondinsuchamanner astoconstituteasubmissionofatender. c) AgreementorContract:ThefullyexecuteddocumentscontainedinSectionIII of this ITT as may be modified by the mutual agreement of Company and Contractor.
4/26
d) Company:GenelEnergyInternationalLimited(orGEI). e) Contractor(s):ThesuccessfulTenderer(s). f) Contractor's Personnel: Employees of Contractor assigned for callout in supportofCompanyJointVentureprojects. g) Goods:Thematerialsand/orequipmentspecifiedinInvitationtoTenderSection III(DrillingRigServicesOutlineAgreement)andeachapplicableOrder. h) ITT:InstructionstoTenderer. i) Order: The document issued by Company specifying the Goods to be supplied and/ortheServicestobeperformedforCompany,usinganyformCompanymay provide whether labelled as an Order or by other labels including, but not limited to, calloff, release, work release, work order, work authorisation, letter of authorisation, purchase order or request for services. j) Services (or Work): The Services specified in Invitation to Tender Section III Drilling Rig Services Agreement and in each applicable Order, including all the activities,operations,tasks,duties,workandundertakingsofContractorandits SubcontractorsrequiredtoperformsuchServicesincluding,butnotlimitedto, the provision of materials, equipment, tools, and personnel and the necessary supervision,consultations,andsupportincidentalthereto. k) Subcontract:AnycontractbetweentheContractorandanyparty(otherthanthe CompanyoranyemployeesoftheContractor)fortheperformanceofanypart oftheWork. l) Subcontractor:AnyentityhavingaSubcontractwiththeContractororanother Subcontractor. m) Tender:TheTenderer'ssubmissioninresponsetothisITT.AsusedinthisITT, Tenderer may refer, individually or collectively, to Tenderer's Technical Tender orCommercialTenderorboth,asthecasemaybe.
2. Introduction
a) Company, as Operator of the Kurdistan Regional Government/Genel Energy International Limited and Gulf Keystone Petroleum International Limited, PSC fortheBerBahrBlock,extendsthisinvitationtosubmitaTechnicalTenderand CommercialTenderfortheprovisionofDrillingRigServices. b) CompanyintendstoawardServicesunderthetermsoftheDrillingRigServices Agreement.
3. GeneralDescriptionofServices
Company plans to explore and develop the Ber Bahr PSC in the Kurdistan Region of Northern Iraq with equipment and services supplied as part of this agreement. The quantities of qualified personnel, equipment, and materials associated with each serviceisrequiredtobesufficienttoconcurrentlysupportwellconstructionactivities foronedrillingunitoperatinginBerBahrBlock.
5/26
4. CommencementDate
Company desires to commence Drilling Rig Services subject to the Agreement as of September1st,2011andnolaterthanOctober15th2011(oruponcontractaward).
5. ContractTerm
TheSpecifiedTermoftheAgreementshallbeforthedrillingofonewell,andpossibly one additional option well. Refer to Section III (Drilling Rig Services Agreement), Article3.2(Term)foradditionaldetailsandrequirements.
6. KurdistanContent
Kurdistan Regional Content in the upstream sector of the Northern Iraqi oil and gas industryisdefinedbyGEIas: thequantumofcompositevalueaddedto,orcreatedin,the Kurdistaneconomy through a deliberate utilization of Kurdistan human and material resources and services in the exploration, development, exploitation, transportation and sale of the Kurdistan Regions crude oil and gas resources, so as to stimulate the development of indigenous companies, and encourage foreign investment and participation, without compromising quality, health, safety and environmental standards. The Vision and Policy thrusts of the Kurdistan Regional Council in Northern Iraq on localcontentdevelopmentare: Vision i. To transform the Oil & Gas industry by developing incountry capacity and indigenous capabilities of high international standard resulting in a significant valueupliftintheeconomy. ii. To create the economic engine for national growth, driving employment and GDPgrowthleadingtoimprovedlinkageoftheOil&Gassectortoothersectors of the Northern Iraqi economy, and ultimately positioning Northern Iraq as a hubforenergyservicedelivery. Policy Tendererswillbeevaluatedontheirperceivedwillingness,documentedtrackrecord, and demonstrated plans to fully comply with the Regional Directives and Company requirements. Failure to comply with the regional directives or demonstrate a commitment to Kurdistan Content development may result in Tenderers disqualification. ShouldtheTendererbesuccessful,CompanywillassistthesuccessfulTendererwhere possible,inobtainingworkpermits,registeringasalegalentityintheFederalRegion of Kurdistan, and arranging exemptions and payment for duties. Tenderer will, however,reimbursetoCompanyanycostsrelatingtosuchassistance.
7. SubcontractorsandUnincorporatedJointVentures
IntheeventmorethanoneentitymaybeneededtoperformtheServices,allother entitiesproposedtohaveapartintheServices(whetherTendererisacorporationor an unincorporated joint venture) must be placed in a Subcontractor role. No such
6/26
outsideentitieswillbeapartytoanyAgreemententeredintobetweenCompanyand Contractor, and Contractor will be required to take full responsibility for any such entity's performance under the Agreement. Tenderer shall identify and completely describeallproposedSubcontractsaspartofitsTender. ThefollowingrequirementsapplytoaTendersubmittedforanunincorporatedjoint venture: a) If Tenderer submits a Tender that is a joint venture, the administrative requirements shall include a "Power of Attorney" executed by all of the membersofthejointventureandtobelegalizedbyanotarypublic,asrequired, designating and appointing one of the members of the joint venture as a "ManagingMember"andauthorizingtheManagingMembertosigntheTender onbehalfofthejointventure,andtoactforandtobindthejointventureinall mattersrelatingtotheTender.TheTendershallbesignedonbehalfofthejoint venturebytheManagingMemberorbyallmembersofthejointventure. b) IntheeventacontractresultsfromtheTender,theManagingMembershallbe authorizedtoincurliabilitiesandreceiveinstructionsandotherwiseactforand on behalf of any and all members of the joint venture during the entire executionofthecontract,includingpaymentorreceiptofpaymentonbehalfof the joint venture. Certain revisions to Section III Drilling Rig Services Agreement,mayberequiredbyGEItoaccommodateanunincorporatedjoint ventureincaseacontractresultsfromtheTender. c) A copy of the joint venture agreement entered into by the joint venture membersshallbesubmittedwiththeTechnicalTenderasspecifiedinSectionII. Thejointventureagreementmustprovidethat: Eachmemberofthejointventureshallbejointlyandseverallyliableforany andallofthedutiesandobligationsassumedbythejointventureunderthe Tenderandtheresultingagreement,ifawarded. The composition and the constitution of the joint venture shall not be alteredwithoutthepriorconsentofCompany.
8. GroupingofServices
GroupingofServicesisnotapplicabletothispackage.Thescopeofworkpresentedin thisInvitationtoTenderisconsideredtobeasingleservice.
9. CompanyOperatingBase
Company'sOperatingBasewillbetheBerBahrField,NorthernIraq.
10. Company'sHelicopterBase
Company'sHelicopterBasemaybeinNorthernIraq,ifapplicable.
11. TenderSubmittalProcedures
TheTechnicalandCommercialTenderswillbesubmittedinEnglish.Tendersmustbe signed by an officer of the Tenderer who has the authority to bind Tenderer to an Agreementiftenderisaccepted.
7/26
TechnicalTendersandCommercialTendersshouldbecompletedinstrictaccordance with all instructions in this ITT or they may be deemed unresponsive and may be disqualified from further consideration. Technical information not included in the originalsealedtenderwillnotbeconsideredunlessspecificallyrequestedaspartofa formaltechnicalclarificationissuedinwritingbyCompany. TheTechnicalTenderandCommercialTenderisdueonJune17th2011Tendererswith successful Technical Tenders will have their Commercial Tenders opened for review. NocommercialpricinginformationmaybeincludedintheTechnicalTender. The written tenders from Tenderer will be handled as Sealed Tenders and must complywiththerequirementssetoutinthisInvitationtoTender. 1) TheNoticeofIntentincludedattheendofthisSectionImustbecompleted and returned via email (preferred) or facsimile by June 2nd 2011, to the TenderBoardSecretaryasnotedontheform. 2) Technical Tender: Two (2) electronic CDROM copies of the Technical Tenderplus one(1) hardcopymarkedOriginal,and one(1) hardcopy marked Copy must be submitted. Technical Tenders shall be presented inlooseleafring bindersusing8.5"x11"orA4sizepaper.Afontsizeof 11 is preferred. In the event of discrepancy between the original tender and the electronic or hard copies, the tender identified as Original shall govern. 3) CommercialTender:Two(2)hardcopiesoftheCommercialTender,with one(1)copymarkedOriginal,andone(1)copymarkedCopy,mustbe submitted.CommercialTendersshallbepresentedstapledusing8.5"x11" orA4sizepaper.Afontsizeof11ispreferred.Intheeventofdiscrepancy betweentheoriginaltenderandtheelectronicorhardcopies,thetender identifiedasOriginalshallgovern. 4) Technical Tenders submitted in Ankara must be addressed in separate sealedenvelopesorotherpackagesandbeplainlymarkedontheoutside asfollows: FROM: (Tenderer'sName) (Tenderer'sContactAddress) TO: GenelEnergyInternationalLimited BesetepelerMah.NergizSk.No:7/52 SoguztozuANKARA,Turkey ATTENTION: TenderBoardSecretaryMr.AhmetKutay
TENDERCLOSINGDATE:
TelNo.:+903122188400 FaxNo.:+903122191883 Email: tender@genelenergy.com June17th,2011
ProvisionOfDrillingRigServices ITTNo.PRFGI11006
8/26
5) Commercial Tenders submitted in Ankara must be addressed in separatesealedenvelopesorotherpackagesandbeplainlymarkedonthe outsideasfollows:
FROM:
(Tenderer'sName) (Tenderer'sAddress) TO: TenderBoardSecretaryMr.AhmetKutay c.o.GenelEnergyInternationalLimited BesetepelerMah.NergizSk.No:7/52 SoguztozuANKARA,Turkey TelNo.: +903122188400 FaxNo.:+903122191883 Email: tender@genelenergy.com ATTENTION: ProvisionOfDrillingRigServices GEI ITTNo.PRFGI11006
DUEDATE:(INSERTDATEANDTIME) (TurkishLocalTime)
SEALEDCOMMERCIALTENDERDONOT OPENWITHTECHNICALTENDER All Tender packages should be either hand delivered or forwarded to the GEI Ankaraofficethroughmailorcouriernolaterthantheduedateindicatedabove. Any tenders NOT received at the GEI Ankara office by this due date will be considereda"noquote"andreturnedtoTendererunopened.Tenderssentby faxwillNOTbeaccepted.Ifthetenderissentbycourierormail,Tenderershall allowenoughtimeforthetendertoarriveattheAnkaraofficepriortothedue date. Only tenders received at the GEI Ankara office by the due date will be considered for evaluation. Tenderer shall advise the Tender Board Secretary, Genel Energy International Limited (ref. above) by email (tender@genelenergy.com) or facsimile (+90 312 219 1883) of the date their tenderwasdispatchedandhowitwassent. Company may only open Commercial Tenders from successful tenderers who pass the Technical Tender process. Tenderers who do not pass the Technical TendermayhavetheirCommercialTendersreturnedunopened. Tenderer must provide a contact for Company to use during the technical evaluation phase of the Tender process. This contact must be familiar with the Tender submitted by the Tenderer and able to answer clarification questions regardingtheTenderer'sTechnicalTender.Tenderermustprovidethecontacts name, title, address (both physical and post office if applicable), phone number, facsimilenumber,andemailaddressifavailable.
9/26
12. Tenderer'sExceptionstoTerms&ConditionsinCompany'sProposedAgreement
Tenderer shall submit a compliant base tender that is in strict accordance with the specifications set forth in this Invitation to Tender. Tenderer's exceptions to the proposedAgreement(SectionIII),ifany,shouldbedetailedinaseparatedocument.In addition,Tenderershouldinserttheirproposedchangesinanelectronicfileusingthe electroniccopyoftheAgreementprovidedbyCompanyonCDROMandinSectionII Table21Exceptions.Theseproposedchangesshouldbehighlightedthrough"Track Changes" in Microsoft Word utilizing the "track changes while editing" feature. TenderermustsubmitacopyoftheeditedAgreementonaCD/ROMalongwiththe rest of their Technical Tender submission. This will be the one and only opportunity theTendererwillhavetosubmitexceptionstotheAgreementTermsandConditions. Company will review Tenderer's proposed exceptions to the Agreement Terms and ConditionsduringtheTechnicalEvaluationStage.IfthetendererpassestheTechnical Tender, the proposed exceptions will form part of the Company's evaluation of the Commercial Tender, and the Company will inform the Tenderer of any exceptions whichCompanyispreparedtoaccept.FailuretoagreeuponAgreementTermsand Conditions during the Technical Evaluation Stage may result in Tenderers disqualification.
13. BusinessPractices
Company wishes to emphasize that Tenderer and its Subcontractors must strictly comply with its Conduct of Contractor, Safety and Manner of Conducting Work, and AlcoholandDrugUsepolicies;theprovisionsofwhicharesetforthinSectionIIIofthe InvitationtoTender. Tenderer is required to observe the requirements of all applicable laws, rules, regulationsanddecreesofgovernmentalauthoritieswithrespecttotheperformance of the Contract. Company does not expect nor authorize Contractor or its Subcontractors to take any action on behalf of Company in the performance of the Work,conductofoperationsorrenditionofservicesthatwouldsubjecteitherpartyto liabilityorpenaltyunderanylaws,rules,regulationsordecreesofanygovernmental authority. Company policies require that Company book all assets and record all transactions properly. In order to do this, it is essential that all invoices, financial settlements, reportsandbillingsfurnishedbyacontractormustproperlyreflectthefactsaboutall theactivitiesandtransactionshandledfortheaccountofCompany. Companyrequiresthatall employeesavoidanyconflictbetweentheirown interests andtheinterestsofCompany.ThismeansthatCompany'semployeesortheirfamily membersmaynotowninterestsinorotherwisereceivebenefitsfromotherpersons or organizations if such ownership or benefits might influence such employees' judgment in handling the Company's business. In this connection, Company employeesarenotallowedtoacceptanygiftsorextravagantentertainment. Company has also advised all other companies, firms and individuals that provide servicestoCompanyofthesepoliciesandsimilaractionhasbeentakenworldwideby allcompanieswithwhichCompanyisaffiliated.
10/26
14. CurrencyofTender
PaymenttoContractorundertheAgreementshallbemadeinU.S.Dollarswhichisthe currency of this tender. However, all reimbursable costs due Contractor shall be reimbursedinthecurrencyofexpenditure.
15. ClarificationofTenders
Tenderer shall direct all questions and exceptions regarding this ITT in writing via e mail (preferred) or facsimile to the Tender Board Secretary (insert the named secretary), at the address and numbers shown in Section XI Tender Submittal Proceduresabove. IftheanswertoanyquestionsignificantlychangesorsupplementsthisITT,Company willissueawrittenaddendumwhichshallbenumberedconsecutivelyandforwarded toallTenderersasarevisiontothedocumentscontainedinthisITT.Nothingshallbe deemedtochangeorsupplementthisITTexceptsuchaddendaissuedinwriting,via facsimileoremail,toTenderersbyCompany. Tenderer shall submit all questions and clarification requests regarding this Invitation to Tender to Company on or before June 10th 2011. Questions and clarificationrequestssubmittedafterthisdatewillnotbeentertained.Companyshall respondtoallTenderersquestionsandclarificationsbyJune14th2011.
16. Withdrawal,SubstitutionandModificationstothetender
ATenderermaywithdraw,substitute,ormodifyitstenderafterithasbeensubmitted by sending a written notice, duly signed by an authorized representative, and shall includeacopyofitsauthorizationtotheTenderBoardSecretary(seearticlexiabove) priortothestipulatedTechnicalTenderresponseduedate.
17. CompanysRightofAcceptance
Companyreservesthesoleright: a) to determine whether or not a Tenderer will be included in any commercial Tenderlist; b) to accept or reject part or all of any quotation received that it believes is unresponsiveorinanywayunsatisfactory; c) toselectthesuccessfulTenderer(s)forAgreementaward; d) to award or not to award an Agreement as a result of this solicitation of quotations including any subsequent conditioning, clarification, requotes or negotiationofsuchtenders; e) towithholdanaward,withoutjustificationtotheTenderer,asaresultofthis ITT.
18. InspectionofTenderer'sDrillingUnit,FacilityandEquipment
Company may require an onsite inspection and/or audit of Tenderer's proposed drilling unit, facilities, associated equipment and work areas prior to including Tenderer in any commercial Tender list. Refusal of Tenderer to submit to such an
11/26
inspectionand/orauditwillprecludefurtherconsiderationofTendererforTechnical Qualification.
19. CommercialTenderRequirements
CommercialTendersmust,ataminimum,includethefollowing: a) CompliancewiththeenclosedAgreementTermsandConditions,asspecified in Section III (Drilling Rig Services Agreement) or as revised per article xii above; b) Compliance with all operational and commercial requirements as contained herein; c) Compliance with Safety and Health Policies and Drug and Alcohol Requirements as contained in the Drilling Rig Services Agreement and its Schedules; d) Allmiscellaneouscostssuchas:insurance,overhead,consumablesandlabour requiredformaintenanceofContractor'sequipment,standardwearandtear costs,profit,etc.and e) AnycostsforadditionalequipmentwhichCompanydidnotspecifyinExhibitB of Section III (Drilling Rig Services Agreement) but which Tenderer, being experienced in providing Land Drilling Rig Services for similar drilling and completion programs, should have reasonably foreseen and included as requiredequipmentforcompletingthework. Compliancewiththeserequirementswillbeadeterminingfactorinthefinalaward.
20. EvaluationandComparisonofTenders
Company may use the criteria and methodologies listed in this ITT. To evaluate a tender,Companywillconsiderthefollowing: 1. TheTechnicalTendersshouldbeevaluatedonthebasisoftheresponsiveness totheITTandinaccordancewiththeScheduleAthruL(ofSectionIII:Drilling RigServicesAgreement).EachresponsiveTendershallobtainarighttohave opened its Commercial Tender. A Tender may be rejected at this stage if it doesnotrespondtoimportantaspects(i.e.indicatedtechnicalrequirements) thereforefailstomeettheminimumtechnicaltenderqualifications. 2. CommercialevaluationwillseektheMostEconomicallyAdvantageousTender in conjunction with operational considerations in accordance with the ScheduleAthruC(ofSectionIII:DrillingRigServicesAgreement)and
21. InformationRequireduponContractAward
Upon award of an Agreement, the successful Tenderer will provide additional documentationperCompany'srequest.Suchdocumentationshallinclude,butisnot limited to, equipment inventories, specifications, and maintenance and inspection recordsandpersonnelinformation.
22. CompliancewithEnglishLaw
TenderersmustcomplywithapplicableEnglishLawsandregulations.
12/26
23. BindingLegalRelationship
This ITT and any participation therein, including any statements whether oral or written between Company and Tenderer or any negotiations between Tenderer and Company, shall not create or be deemed to create any binding legal relationship or contractorbeconstruedtodosobetweenCompanyandanyTenderer.Onlywhena written agreement is signed by the successful Tenderer and communicated by Company to the successful Tenderer in the manner specified in these instructions, shallanylegalrelationshipbecreatedbetweenCompanyandthesuccessfulTenderer. TheprovisionsofthatAgreementshallgoverntherelationshipbetweentheparties. AllTendererssubmittingtendersdosowiththeunderstandingthatCompanydoesnot accept any obligation of confidentiality with respect to any information disclosed to Company in the ITT documents unless specifically covered by a separate written confidentiality agreement. By submitting their quotations, all Tenderers agree they willplacenorestrictivenoticesonanydocument(includingdrawings)providedaspart of this ITT. The Tenderers further agree that if they do place such notices on documents, Company is authorized to remove and/or disregard any such restrictive clausesandshallbefreetouseanddiscloseanyorallinformationcontainedtherein to third parties without accounting to the Tenderer. Company has provided anticipated activity as part of this ITT to assist Tenderers in developing the pricing structuresforthequotation,butdoesnotguaranteeanyamountofwork.
24. TenderingCosts
Company shall not be under any obligation to the successful Tenderer or Tenderers exceptastospecificworkorquantitiesdescribedintheOrdersagainstanAgreement ifsoawarded.Companyspecificallydisclaimsallresponsibilitiesforworkperformed, quantitiesbegunorproduced,andobligationsorexpensesincurredbythesuccessful Tenderer or Tenderers prior to the issuance of the Agreement Award and any applicablereleases,including,withoutlimitation,quotationpreparationexpensesand Tenderercommitmentorcancellationcharges.
25. ConfidentialInformation
All information contained in this ITT is confidential and may not be disclosed, published,oradvertisedinanymannerwithoutCompany'swrittenauthorization.All documents remain the property of Company, and Tenderers shall be required to returnthemuponrequest.AppropriateinformationmaybegiventoSubcontractors, butTenderermustinformSubcontractorsthattheconditionsinthissectionapply.
26. IllegalInformationBrokering
a) Warranty and Representation. Tenderer and Company are aware of a practice (known as "Illegal Information Brokering") where certain persons or entities approach Tenderers, subcontractors, vendors or other suppliers, and offer confidential information or illicit influence in order to obtain business through corruptionofthecompetitiveTenderingprocesses.Tendererrecognizesthat the practiceofIllegalInformationBrokeringoranyothercorruptionoftheagreement award process is not permitted by Company and Tenderer warrants and
13/26
represents that it has not and will not utilize or participate in Illegal Information BrokeringinconnectionwiththisAgreementoranyrelease. b) Notification.TendereragreesthatitwillpromptlynotifyCompany'sTenderBoard Secretary if anyone approaches Tenderer for the purpose of Illegal Information Brokering concerning this Agreement, any release, or any other related business interestofCompanyoranyBuyer.Companyundertakesthatsuchnoticeandany related information provided by Tenderer will be treated with the utmost discretion. Company also undertakes that it will handle this information with appropriate security measures in order to prevent any supplier, Tenderer or subcontractorfromgaininganyunfairadvantagesubsequenttosuchnotice.
14/26
NoticeofIntent
LANDDRILLINGRIGSERVICESITT RECEIPTACKNOWLEDGEMENTFORM

InvitationtoTenderNo.:PRFGI11006
PLEASERETURNTHISFORMVIAFAXOREMAILBYJune2nd,2011TO: TenderBoardSecretaryMr.AhmetKutay GenelEnergyInternationalLimited BesetepelerMah.NergizSk.No:7/52 SoguztozuANKARA,Turkey TelNo :+903122188400 FaxNo :+903122191883 Email :tender@genelenergy.com
WeacknowledgereceiptoftheInvitationtoTenderandweinformyouthat:
Wewillquotewithintherequireddate. Rig(s)tobeProposedareanticipatedtobe :________________________ ________________________ ________________________ Wewillnotquote. Company: Signature: Date: PrintName: Title: Telephone: Facsimile: Email:
15/26
PROPRIETARYINFORMATIONAGREEMENT
All information and documents provided by Genel Energy International Limited in this Invitation to Tender (ITT) for the provision of a Land Drilling Rig(s) shall be deemed Proprietary Information. In consideration for providing said information, Tenderer's agreement to the provisions herein is required in respect of Company Proprietary Information. (Name of Tenderer receiving the ITT) hereby agrees to the following: Tenderer agrees to treat any information provided by Company as part of this ITT as confidential and proprietary information and to divulge only those segments of the information to others as required to obtain subcontract pricing or material pricing. The term Proprietary Information shall mean all information, directly or indirectly acquired from the Company, concerning the technical and business activities and know-how of the Company, Participants, their respective affiliates, successors, including all such information contained in the ITT, except information falling into any of the following categories; Information which, at the time of disclosure hereunder, is lawfully in the public domain. Information which, after disclosure hereunder, enters the public domain, except where such entry is the result of breach of this agreement. Information, other than that obtained from third parties, which prior to disclosure hereunder, was already lawfully in Tenderer's possession either without limitation on disclosure to others or which subsequently becomes free of such limitations. Information obtained from a third party, who is lawfully in possession of such information and not subject to a contractual or fiduciary relationship to the Company, with respect to said information. Information may only be disclosed in accordance with the terms under which it was provided. Proprietary Information shall not be deemed to be within the foregoing categories merely because such information is embraced by more general information in the public domain or in Tenderer's possession. In addition, any combination of features shall not be deemed to be within the foregoing categories merely because individual features are in the public domain or in Tenderer's possession but only if the combination itself and its principle of operation are in the public domain or in Tenderer's possession. Tenderer will not disclose any Proprietary Information to any third party, except its Sub-Contractors and joint venture partners, nor use Proprietary Information other than on Company's behalf. Tenderer also agrees to take all reasonable precautions to safeguard any documents which may be supplied in respect to the ITT. Tenderer agrees to return all documents supplied by the Company prior to disclosure by Tenderer of any Proprietary Information to any Tenderer or joint venture participant. Tenderer hereby remains liable for and is obligated to obtain from any such Sub-Contractor or joint venture participant, their agreement to the terms contained herein by obtaining signed Proprietary Information Agreements identical to that contained herein. This Agreement must be signed by Tenderer upon receipt of the ITT and returned with the completed ITT Receipt Acknowledgment Form. FOR: ................................................................................................. (Tenderer) SIGNED: .......................................................................................... BY: ................................................................................................... TITLE: ............................................................................................. DATE: ....................................
TendererMUSTcompleteandreturnthisformviaemail(preferred)orfacsimilebyJune 2nd2011to:
Tender Board Secretary Mr. Ahmet Kutay Genel Energy International Limited Besetepeler Mah. Nergiz Sk. No:7/52 Soguztozu ANKARA, Turkey Tel No : +90 312 218 8400 Fax No : +90 312 219 1883 E-mail : tender@genelenergy.com
16/26
SECTIONII:CONTENTSofTENDERDOCUMENT The documentation and information referred to in this Section II must be submitted by Tenderer in its Technical Tender per the provisions set forth in Section I (General Information and Instructions). Tenderer is not to provide any pricing information in this TechnicalTender.PricinginformationwillbeincludedonlyintheCommercialTender. Tenderer must be exceptionally experienced and possess a thorough knowledge of the Services and Operations specified in Section III (Drilling Rig Services Agreement). Tenderer shouldunderstandthatalldescriptionsofpersonnelandequipmententeredbyCompanyin ScheduleAandCofSectionIIIareforreferencepurposesonly.DuringthisTechnicalPhase ofthetenderingprocess,TenderershouldrevisethedescriptionsandinserttheItem/Part Numbers for materials and equipment which Tenderer normally provides and which are necessary to perform the Services and Operations in a safe, efficient and well managed manner. Tenderer shall identify all equipment, personnel and services for which Company may be charged and under what circumstances those charges might apply and include them in SectionIII,ScheduleB(ContractorsPersonnel)andScheduleD(SpecificationandEquipment ListingofDrillingUnit).TenderershalllistallequipmentconstitutingtheSpecificationand Equipment Listing of Drilling Unit in Schedule D adjusting, where necessary, Company Specification requirements already listed. Please note, however, that those specifications listedbyCompanyareminimumequipmentspecifications. Tenderers failure to identify any item in its tender that should have been reasonably envisionedasrequiredfromContractortoperformtheServicesandOperationsspecifiedin theAgreementinasafe,efficientandwellmanagedmannerwillbesufficientjustificationto disallowpaymentforthoseitemsduringtheTermoftheAgreement. TenderermustsubmitequipmentthatcomplieswiththespecificationsofSectionIIIofthis technicaltender.GeneralizedstatementssuchasspecificationsofSchedulesA&Bwillbe met will not be considered acceptable documentation for technical specification requirements.IfTenderersequipmentdoesnotmeettheminimumrequirementsTenderer shallprovideexistingspecificationsofthedeficientequipmentandaproposedupgradeto theequipmentwithcorrespondingspecifications. Tenderer should request clarifications from Company as required to ensure a comprehensive understanding of Company requirements prior to submitting a Technical Tender. Company'sintentistoprocuretheServicesandOperationsspecifiedintheAgreementata fairrateandtoensureallcontractorsarefairlyrewarded.Tenderershouldrecognizethat Companymustbeabletoanticipatethecostsofitsoperations.Thisistothebenefitofboth CompanyandContractor. Failure to provide all of the required documentation and information within the time specified and as detailed may preclude further consideration of Tenderer for technical qualification.
E. FORMATOFTHETENDER
TendererisprovidedthefollowingFormatofTenderandisstronglyencouragedtousethis generallayoutforassemblingtherequireddocumentation. CoverLetterAuthorizedSignature
17/26
TableofContents 1. ExecutiveSummary 1.1. ScopeOfWork 1.2. DesignBasis 1.3. SystemAdvantages(MeritsOfProposalVersusAlternatives) 2. KurdistanContent 3. Commercial 3.1. ScheduleDTables 3.2. CommercialNotesAndAssumptions 3.3. ProFormaInvoice 3.4. ExceptionsTableProvidedandTrackChangeEditofSectionIII 3.5. FinancialstatementsofTenderer/JVpartnerlast3years 3.6. InsuranceDocumentation 4. ProjectExecutionPlan 4.1. TendererOrganizationDescription 4.2. OperationalCapabilities 4.3. CapacityAndResourceAvailabilityDocumentation 4.4. InterfaceMatrix 4.5. Resumes 4.6. StatusReportTemplate 4.7. MasterEquipmentList 4.8. DocumentRegister 4.9. ReliabilityStatistics 4.10. ProjectExecutionProcedures 5. TechnicalDocumentation 6. CompanyRequiredSupport 7. AdditionalTechnicalConsiderations 8. QualityPlan 9. HSEDocumentation F.
INSTRUCTIONSforPROVIDINGREQUIREDDOCUMENTS
Cover Letter Tenderer's proposal shall contain a cover letter stating the Tenderer's understanding of the ITT supply scope, Tender validity and intent to fulfil the scope upon mutuallyagreedtermsandconditions.LettershallconfirmthatTendererunderstandsthat theAgreementwillhaveadurationnecessaryforthedrillingofonewellandpossiblyone option well, by means of one land drilling rig. Letter shall be signed by a company representativeauthorizedtocommittheTenderertoafuturesupplyagreement. 1. Executive Summary Tenderer shall include a summary of the proposal that providesanoverviewofthesystem,designcriteriaandfeaturesthatwouldmakeTenderer's
18/26
proposal technically superior to alternatives. A design basis should be included and summarizethesystemspecificationsandotherinformationdetailingcapabilities. 2. KurdistanContentKurdistanContentisdefinedasthecompositevalueaddedto, or created in, the Kurdistan Region through deliberate utilization of Kurdistan human and material resources and services in the exploration, development, exploitation, transportation and sale of Kurdistan crude oil and gas resources, so as to stimulate the development of indigenous companies, and to encourage foreign investment and participation, without compromising quality, health, safety and environmental standards. Tenderershall: give preference to the purchase of Iraqi products and services whenever they are competitive in terms of price, comparable in terms of quality, and available on a timelybasisinthequantityrequired; employ Iraqi citizens having appropriate qualifications and shall undertake to train andpreparepotentialcandidatestowardsthisobjective; maximize to the greatest reasonable extent, training and technology transfer opportunities for Iraqi nationals, at all levels of Petroleum Operations including management.
Tenderers are encouraged to fully comply with any Kurdistan Government Directives as failure to comply with or demonstrate commitment to the Kurdistan Region Development mayresultincontractor'sdisqualificationfromthisITT. TenderershallprovidethefollowingdocumentationwiththeTechnicalTender: 1. DetailsofTendererandjointventure partneryearsinbusiness,projecthistory providing similar services in the Kurdistan/Iraq region (This must include company,location,whethercontractingorsubcontractingstatus,datesofwork, etc.)andcapacitytoexecutetheproposedwork. 2. DescriptionofallworkrelatingtothisservicethatContractorproposescouldbe accomplished using Kurdistan resources as well as name and address of potential companies. Past experience listed where applicable. Maximizing KurdistanContentisakeyProjectpriority. Advise the percentage of the workscope to be conducted by Kurdistan personnel. Given the brief outline of the nature of the project, what items of goods, materials,consumablesorservices,ifany,doyouenvisagebeingprocuredinthe KurdistanRegion? Describewhereyourproject managementteamandprocurement centres will be located. Please also submit an organisation chart to substantiate this information. Evidence, if projected, of an established, equipped office and operating base withaminimumof2yearspresenceinKurdistanincludelocationanddetailsof office and operating base communication links (i.e. land telephone, satellite telephone,email,internet,radio,etc.).
3. 4.
5.
6.
19/26
Detailsofofficeandoperatingbasecapabilityintermsofequipment,manpower and facilities. If existing facilities will not suffice for the Work, provide description of plans in place to acquire supplementary facilities in order to handletheadditionalwork. 3. Commercial Schedule A to D provides Tenderers with a common template for organizingandlistingproposedequipmentandservices.Tenderermayalterthecomponent descriptions as long as Tenderer's component performs a similar function. If the items as listedarenotrequiredorcombinefunctionalityofseveralcomponents,Tenderershallleave theitemblankornote,describeorappendthetablesandmakeappropriatereferencesso thatCompanycanfairlyevaluatetheproposalbasedon"likeforlike"functionality. 3.1 TenderermustprovideinScheduleAtoDtheinformationlistedbelow: Description Company has only listed general descriptions for equipment, materials and personnel in Schedule A to D as guidance. Tenderer shall includerelevantinformationasapplicableincluding butnotlimitedtopart numbers, OD/ID, end connection, detailed specification, materials, etc. as part of the comprehensive description for each item (see note above regardingfunctionallyequivalentcomponents).Tenderer'sfailuretoprovide sufficient details to compare against other tenders may preclude further consideration. Tenderer is responsible to ensure that equipment proposed meets or exceeds any generalized specification provided by Company. Tenderershalladdallequipmentoritemsnecessarytofunctionallyconform toTenderersproposedsystem.WherenospecificationisprovidedTenderer isencouragedtoproposethehighestqualitycomponentstosuittheWork. ContractorsPartNumberPartnumberassignedtoequipment,personnel ormaterialbyTenderer. Quantity Currently Available Locally Tenderer shall note quantities currently available locally for primary and backup rental equipment and toolsusedtoperformtheWork. Quantity Primary Tenderer shall propose recommended quantities for primarycomponentsandequipmenttobelocatedontherig(onaperwell basis) to ensure a safe, well managed operation for three rigs drilling concurrently. Quantity Backup Tenderer shall propose recommended quantities for backup components and equipment to be located at the Tenderer's operating Base (on a per well basis) to ensure a safe, well managed operation. Delivery Time Tenderer shall note lead times for restocking installed and consumable items routinely used and for items not stocked or available locally. Duration shall include import and delivery to vendor's onshore facility.Cycletimewillbecriticalformeetingtherigdevelopmentprogram. Reconditioning and ReInspection Time Tenderer shall note anticipated time required to service, inspect and/or rebuild item after use. Indicated reconditioningtimetoincorporatetotalturnaroundtimerequiredfromthe time Company returns tool at Company Operating Base after use through the time the tool could be returned to Company Operating Base in fully inspectedlikenewcondition.Tenderershallnotecomponentsthatrequire exportation/reimportation for servicing due to lack of incountry qualified
7.
20/26
or certified facility. Note: Cycle time will be critical for meeting the rig developmentprogramschedule. OperatingandStandbyRatesRatesshallbeallinclusiveandincludebut not be limited to mob/demob, restocking, refurbishment, assembly and testing, certificates, data books, QA/QC, project management, transport preparation, consumables and spares required to perform the Work Do Not Price within the Technical Tender, priced rates should be contained in CommercialTender. Replacement Covers lost or damaged equipment or outright purchase if Companysoelects. Personnel rates Tenderer shall note any and all personnel who may be requiredforperformanceoftheworkorwhoTendererforeseeschargingto Company. If Mob/Demob expenses for Contractor's personnel are not includedin theratesquoted Tenderershallseparatelyquote thiscostasa lump sum per person, per round trip and inclusive of airfare, mileage, expenses,traveltimeandaccommodation. Tenderers standard Middle East Price Book shall be an attachment to ScheduleA,shouldanAgreementbeawarded. Tenderer may add tables to capture missing scope as necessary to fulfil the intended scope of work. Tenderer shall not provide any pricing information in theTechnicalTender;thisshallbeincludedonlyintheCommercialTender. 3.2 Commercial Notes and Assumptions Tenderer may include statements regarding the work scope to further clarify and note assumptions. 3.3 Pro Forma Invoice Tenderer shall submit a complete sample invoice, without pricing, from a recent similar job completed with joint venture partner. All items charged in the invoice must be included in ScheduleA. 3.4 Exceptions Tenderer shall use the format of the table in this Section II Table 21 to note ALL exceptions to the Agreement and its Schedulesincludingthespecificlocation,impacttotheprojectandproposed alternate language. If Tenderer has not taken exceptions, Tenderer shall state "No Exceptions Taken". Tenderer shall include with tender an electronic "Track Change" version of the ITT documents with proposed alternatelanguage. 3.5 Financial Statements Tenderer shall include copies of Audited FinancialStatementsforthelastthreeyears 3.6 Insurance Documentation Tenderer shall include details of Tenderer insurance [amount of coverage(s), endorsements, waiver of subrogation,etc]. KurdistanContentValueCalculation:Atthecommercialevaluationstageof the award process, the Kurdistan Content value of each Tenderer's submission will be a factor. Therefore, each Tenderer should populate the KurdistanContentBreakdownTemplateinTable2.2attachedbelow. 4. Project Execution Plan Tenderer shall include in its Tender the project managementdocumentsinthissection.Someofthedocumentsasdescribedmaystrictly applyonlytosupplyofmajormanufacturedgoods,howeverifTenderermustmanufacture orpurchasenewequipmentthenallwillapply.
21/26
4.1
4.2
Organization Description Tenderer shall provide an overview of the Tenderers organization including organizational charts for regional managementandproject. Operational Capabilities Tenderer shall include details regarding the following: a. Drawingsofproposeddrillingunit,rigplatandcamplayout.Dimensions of equipment, storage and work areas should be clearly indicated. Picturesoffacilityincludingbuildingsandworkareasaresuggested. b. Evidence of past safe, wellmanaged, operations under similar conditionsandworkrequirementsovertheprevious5years. Resourceavailabilityschedulesanddocumentationthatshow: a. Availabilitytocommenceoperationsatthebeginningofthe3rdquarter of2011. b. Evidenceconfirmingresourceavailability. Interface responsibility matrix that clearly defines where the Tenderer's scope begins and ends relative to the Company and Companys other contractors. ResumesTenderershallsubmitthefollowing: a. Copy of CVs (curriculum vitae) of Tenderer's primary and backup personnelproposedforpositionslistedinSectionIII,ScheduleB.Clearly detail personnel's experience overseas and in Iraq and languages spoken. Sufficient CV's for each position must be provided to clearly demonstrate the capability to accommodate the volume of work anticipatedsupportingdrillingandcompletionoperations. b. Documentation showing applicable qualifications, licenses, certificates and training of Tenderers personnel demonstrating experience supportingonshorecompletionactivities. c. Details and list of minimum qualifications Tenderer requires of each (personnel) position designated as necessary to perform the Work includingcertificationandtrainingrequirements.RequiredforTechnical ServiceCoordinatorandeachpositionspecifiedinSectionIIIScheduleB. d. DetailsofTenderertrainingprogramsforpersonnel. Status Report Template Examples of project update report, if applicable, covering interface actions, variation/change order status, revised schedule, criticalissuessummary,etc. MasterEquipmentListMasterlistingofequipmentthatindicatesCompany purchased items, quantity, rental items noting primary/backup quantities andinterfaceequipment notsupplied byTenderer.Equipment includedin thislistshouldcorrelatewiththecomponentslistedinScheduleDTables. Master Document Register Master document list noting all documents issued to the Company for information, approval and final documentation and milestone dates. In addition, Tenderer shall list all project specific documents generated for internal (Contractor's) approval and project execution with schedule completion dates. Tenderer may submit an
4.3
4.4
4.5
4.6
4.7
4.8
22/26
examplefromprevioussimilarprojects;finallistshallbeissuedforCompany approval14daysaftercontractaward. 4.9 Reliability Statistics System statistics and overview of Tenderer reliability programandTenderersPerformanceMonitoringProcedure. 4.10 Project Execution Procedures Standard operating procedures for typical execution processes including manpower capacity monitoring, resource charts,scheduling,riskassessment,etc. 5. TechnicalDocumentationTendererprimarilyshouldstatethecurrentavailability statusoftherigbyindicatingthecurrentlocationandexpectedavailabilitydate.Component and system technical descriptions shall be comprehensive to allow for a proper and fair evaluationagainstalternativesystems.Additionaldocumentationshallincludeproductdata sheets, system installation and operational procedures, operational sequence, dimensions, etc. Tenderer may make section and page references if drawings and procedures have alreadybeenincludedintheproposalelsewhere. 6. Company Required Support for Installations Tenderer shall note any special service and access requirements that are to be supplied by Company or Companys other contractors. 7. Additional Technical Considerations Tenderer shall note any additional considerationsthatarerelevanttotheproposalthathavenotbeenincludedelsewhere. 8. Quality Plan Tenderer and joint venture partner Quality Plan for the proposed equipment.Planshallincludenotationofallinvolvedparty'sinspectionWitness,Holdpoints etc. Tenderers Quality Plan shall also cover operation and maintenance of Contractor equipmentandsystems.SeeScheduleIforadditionaldetails. If Tenderer is unfamiliar with Company's standards and procedures, Tenderer should requestclarificationsfromCompanyasrequiredtoensureacomprehensiveunderstanding ofCompanyrequirementspriortosubmittingaTechnicalTender. Tenderershallincludethefollowing: a. Details of Tenderer's program for reporting data for purposes of continuous improvementofCompany'sdrilling/completionsprogram. b. Details of Tenderer and joint venture partner QA/QC program basis (i.e. internationalqualityassurancestandardISO:14000/9001/9002) i. Quality assurance department structure (i.e. number of personnel assigned, officelocations,etc). ii. Responsible parties for QA/QC program administration (their positions, experience,trainingandspecificresponsibilities). iii. SpecificCriteriaforQA/QCincludingbutnotlimitedtopersonnelandequipment certification requirements, equipment maintenance overview, calibration details,flowchartsforMPIwork,proceduresforMPIwork,inspectionreporting documentationandtraining. 9. Safety, Health and Environmental Documentation Tenderer shall include the followinginitsHSEDocumentation: a. Overview of Tenderer's Job Safety Analysis (JSA) programs including list of operations where programs are used and details of management and personnel involvement in the JSA programs. Provide actual examples of JSAs used in the performanceofsimilarwork.
23/26
b. Tenderer and joint venture partner statistical information for the past three (3) calendaryears(2008,2009and2010)forWorldwideOperations(includingIraq)and statisticalinformationforthepastthree(3)calendaryearsforIraqOperationsonly two(2)separatesetsofinformation. i. ExposureManHoursarethetotalmanhoursthatTendererrealizedduringa one(1)calendaryearperiod. ii. FatalitiesTenderer. iii. LostTimeIncidentsarethenumberofincidentsthattheTendererrealizedin whichanemployeewasinjuredonthejobandunabletoreturntoworkin anycapacityonthedayaftertheinjuryorsubsequentdaysaftertheinjury. iv. Recordable Medical Treatments are the number of incidents that the Tenderer realized in which an employee was injured on the job and the injury required a procedure that is associated with medical treatments as identifiedinOSHA3000guidelines(i.e.treatmentofinfection,treatmentof 2ndand3rddegreeburns,applicationofsutures,steristripsinlieuofsutures, multipledoseprescriptionmedication,positivexrays,etc). c. Details of Tenderer audit and other procedures to identify and analyse deviations from HSE and quality assurance programs and how corrective actions are implemented.Includenumberandtypesofauditsthathavebeenperformedwithin thelasttwelve(12)months. d. Confirmation that Tenderer and joint venture partner Drug and Alcohol (D&A) policieswillmeetorexceedtherequirementsinSectionIII,ScheduleI. e. CopyofTenderer'ssafetyriskassessmentprocedure. f. Details of how temporary and permanent changes to policies or operating proceduresarereviewedimplementedandcommunicatedtoallaffectedpartiesby Tenderer.
g. Details of Tenderer's system to report, investigate, analyse and document HSE incidents. h. Copy of Tenderer's emergency response plan including details of HSE incident reportingtoCompany'sNNPC/MPNDrillingandCompletionTeam. i. j. Details of Tenderer's emergency response simulations and drills performed within thelasttwelve(12)months. CopyofTendererandjointventurepartnerHSEandRegulatorycompliancepolicies.
24/26
ExceptionstoITTforconsiderationbyCompany
Table21:Exceptions Item # 1 Article/ Paragraph Reference Tenderers Reasonsfor Exceptions ImpactonDeliveryor Price Donotprice TenderersProposedAlternative Language
Donotprice
Donotprice
Donotprice
Donotprice
Donotprice
Donotprice
Donotprice
10
Donotprice
25/26
Table2.2:KurdistanContentBreakdown
S/N PROJECT DESCRIPTIONOFWORK Value UnitedStates Dollar(US$) Catering LocalLabour Transportation Security Catering Communication Warehousing ExpeditingSupportServces Other TOTALVALUE
DrillingRig
26/26
SECTIONIII
InvitationtoTender:PRFGI11006
TechnicalTender ProvisionofDrillingRigServices BerBahrBlock KurdistanRegionNorthernIraq GENELENERGYINTERNATIONALLIMITED SECTIONIII DRILLINGRIGSERVICESAGREEMENT
30May2011
PRFGI11006

ONSHOREIRAQ(KurdistanRegion) DRILLINGRIGSERVICESCONTRACT between GENELENERGYINTERNATIONALLIMITED and ________________________________ fortheuseof LandDrillingUnit_______

ThisAgreement,datedthe___Dayof__________2011ismadebyandbetween: GENELENERGYINTERNATIONALLIMITED,acompanyincorporatedandexistingunderthe lawsofAnguillaBritishWestIndies,whoseregisteredofficeisatMAICOBuilding,TheValley, Anguilla,BritishWestIndiesTV111P(hereinafterreferredtoasCompany),and ___________________________________,acompanyincorporatedunderthelawsof _________andhavingitsregisteredofficeat ________________________________________(hereinafterreferredtoasContractor)of theotherpart. RECITALS Whereas, Company has a Production Sharing Contract with the Kurdistan Regional Government, Northern Iraq for the Ber Bahr Block, and desires to carry out drilling operationsfortheexploitationofhydrocarbonsinitsPermitandiswillingtoenterintothis AgreementwiththeContractorforthepurposeofcarryingoutthesame. Whereas, Contractor is willing to furnish the drilling unit complete with drilling and other associated equipment and personnel all as detailed in the attached Schedules to this AgreementforthepurposeofcarryingoutsuchdrillingoperationsforCompany. ITISHEREBYAGREEDasfollows: 1. Definitions Unlessthecontextotherwiserequires,thefollowingwordsandexpressionsshallhavethe meaningsattributedtothemhereunder: 1.1 AbandonmenthasthemeaningassignedtoitinArticle2hereof. 1.2 Affiliatemeans,inrespecttoaparty,anycompanywhichownsmorethan50%of the share capital of that Party, orofwhich that Party owns more than 50% of the share capital or any company of which more than fifty percent (50%) of the share capitalisownedbyacompanywhichalsoownsmorethanfiftypercent(50%)ofthe share capital of that Party, or any company which effectively controls, or is effectivelycontrolledby,thatParty. 1.3 Agreement means the main body of this Agreement and the Schedules listed in Article21hereof. 1.4 CommencementDatemeansthedatespecifiedinArticle3.2hereof. 1.5 Company'sEquipmenthasthemeaningassignedtoitinArticle7.1hereof. 1.6 CompanyRepresentativehasthemeaningassignedtoitinArticle18hereof.
1.7
Compensation means the rates and fees payable to the Contractor in remuneration for the Work performed hereunder, as are indicated in Article 10 hereofandinScheduleAhereto. CompletionhasthemeaningassignedtoitinArticle2hereof. ContractCurrencymeansUnitedStatesdollars. ContractorsDefaulthasthemeaningassignedtoitinArticle15.1hereof. Contractor'sEquipmenthasthemeaningassignedtoitinArticle4.1hereof. Contractor'sPersonnelhasthemeaningassignedtoitinArticle5.1hereof. ContractorRepresentativehasthemeaningassignedtoitinArticle18hereof. DaymeansacalendarDay. DemobilisationFeehasthemeaningassignedtoitinArticle10.8hereof. Drilling Unit means the drilling rig known as ____ together with associated equipment,thedescriptionandspecificationofwhicharecontainedinScheduleD hereto. EffectiveDatehasthemeaningassignedtoitinArticle3.1hereof. ExpatriatePersonnelmeansthepersonnelengagedbyContractortoperformthe WorkhereunderinaccordancewithScheduleBheretoandrecruitedfromoutside thecountryinwhichtheWorkisbeingperformed. FirstWellhasthemeaningassignedtoitinArticle3.2hereof. Gross Negligence means the reckless disregard for harmful, avoidable and foreseeableconsequences. Location means a place within the Operating Area, which the Company has designatedtoconductdrillingoperationshereunderpursuanttoArticle2hereof. MonthmeansaGregoriancalendarmonth. Operating Area shall be the Ber Bahr Block located in the Kurdistan Region of NorthernIraqasdefinedintheProductionSharingContractbetweentheCompany andtheKurdistanRegionalGovernmentofIraqfortheBerBahrBlock. OptionWellhasthemeaningassignedtoitinArticle3.2hereof. PartyorPartiesmeanseitherCompanyand/orContractor,asthecasemaybe, togetherwiththeirrespectivesuccessorsandassigns. Representatives means the person or persons designated in accordance with Article18hereof.
1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16
1.17 1.18
1.19 1.20 1.21 1.22 1.23
1.24 1.25 1.26
1.27
Spud means the moment the drilling unit has been accepted by Company and Contractorasbeingreadytocommencedrillingoperationsonanewwellwithinthe OperatingArea. Subcontract means any contract between the Contractor and any party (other thantheCompanyoranyemployeesoftheContractor)fortheperformanceofany partoftheWork. Subcontractor means any entity having a Subcontract with the Contractor or anotherSubcontractor. TermhasthemeaningassignedtoitinArticle3.2hereof.
1.28
1.29 1.30 1.31
Wilful Misconduct means any act or omission by Contractor or Contractors Personnel done or omitted with deliberate disregard for foreseeable and harmful consequences. Work means all work that the Contractor is required to carry out in accordance with the provisions of the Agreement, including the provision of all materials, servicesandequipmenttoberenderedinaccordancewiththeAgreement.
1.32
2. TheWork DuringtheperiodoftheAgreement,ContractorwilldrillwellsforCompanytoproduceoil, gasorwateratsuchLocationsintheOperatingAreaandtosuchdepthsasisspecifiedby CompanysubjecttothelimitationsondrillingdepthssetoutinScheduleD.Contractorshall alsofurnishCompanyotherservicesspecifiedelsewhereinthisAgreement.Contractorwill furnish equipment, personnel, materials and supplies required to perform such drilling operationsandotherservices,asmorefullysetouthereafter. Companywillprovidetherelevantdrillingandcasingprogrammeforthewellspriortothe commencementofdrillingoperationsateachoftheLocations.Companymayalteranysuch programmeincludingatentativeprogrammeforanyadditionalwell(s)andContractorshall complete such programme. Company may terminate the drilling at a lesser depth or have the depth extended, provided such extended depth does not exceed the drilling depth capacitysetoutinScheduleD. Company may elect to have any and each of the wells drilled under this Agreement completed as a producing well (Completion) or to have such well abandoned, either temporarilyorpermanently(Abandonment).Inanyoftheseevents,Companywillsupply the relevant operational programme and Contractor shall complete such programme in a mannersatisfactorytoCompanyandincompliancewithapplicableregulations. Contractoracknowledgesthattheoperatingconditionsandtentativewellschematicforthe workisassetforthinScheduleE.
3. EffectiveDateandTermofAgreement 3.1 EffectiveDate This Agreement shall become effective on the date when it has been executed by both Parties(theEffectiveDate). 3.2 Term The term of this Agreement (the Term) shall begin on the date upon which the Drilling Unit is on Location completely rigged up and ready to spud the first well in the Operating Area,suchdatebeinghereinafterreferredtoastheCommencementDate,whichshallbe between September 1st, 2011 and October 15th, 2011, unless otherwise agreed by the Parties. The Term of this Agreement will continue in force for a period required for the drilling, CompletionandAbandonmentofone(1)well(the"FirstWell")plusone(1)optionwell(the "OptionWell"),unlessterminatedearlierpursuanttotheprovisionsofArticle20.2or20.3 hereof, or as otherwise herein expressly specified. Company will notify Contractor of its electiontoextendthisAgreementfortheOptionWell,notlaterthanten(10)Daysfollowing Completion or Abandonment of the First Well. This Agreement may be extended for the drilling, Completion and Abandonment of additional wells at Companys sole discretion providedCompanygivesthirty(30)Daysnoticepriortotheexpiryoftheinitialterm. 4. Contractor'sEquipment 4.1 Contractor'sSupplyObligation (a) Contractor shall furnish, maintain and repair the equipment, machinery, tools, supplies, materials and services (herein collectively referred to together with the Drilling UnitasContractor'sEquipment)asindicatedinSchedulesCandDhereto. Contractor shall provide, store, and maintain a readily available stock of maintenance and repair parts and operating supplies sufficient to ensure the continued operation of Contractor'sEquipmentandotherfacilitiesfurnishedbyContractorhereunder. Contractor's Equipment shall be capable of performing the Work properly in conditions likely to prevail in the Operating Area, and shall be capable of being transported for all movesrequiredunderthisAgreementpursuanttoArticle2hereof. (b) The Drilling Unit shall at Contractor's sole cost and expense be constructed and maintained to comply with any applicable laws, codes, decrees, directives, declarations, instructions, regulations and surveys in the Operating Area and Contractor shall furnish to theCompanyallnecessarycertificatesasmayberequiredbylocalauthoritiesinconnection therewith. Contractor warrants that: (i) the Drilling Unit's rig specifications and rating capacity are as specified in Schedule D; and (ii) from the Commencement Date of this AgreementtheDrillingUnitwillnot(totheknowledgeofContractor)haveanydamageor defects, which would necessitate repairs to the Drilling Unit within the Term of this Agreement.
4.2 InspectionofContractor'sEquipment (a) ContractorshallsupplyCompanywithdetailed listsofContractor'sEquipmentand officialdrawingsoftherigfootprintbeforetransferofsamefromtheplaceoforigintofirst Location. (b) Contractor'sEquipmentshallatalltimesbeingoodconditionandabletoperform itsintendedfunction.Contractorshallconductinspectionsofsuchnatureandfrequencyas to ensure such good condition and shall specifically inspect lifting and hoisting equipment and drill pipe, drill collars, and other downhole tools in accordance with the requirements setoutinSchedulesC,KandL.PriortotheCommencementDate,Contractorshallfurnish Company with an inspection report prepared by an independent third party following operations on the well most recently completed by the Drilling Unit prior to the CommencementDate,inrespectofalltubularsanddownholetools.Ifnotnew,Contractor willalsosupplyahistoryofthedrillstring.AllinspectionsperformedbyContractortomeet theprovisionofthisArticle4mustnotresultinanylostdowntime,andiftheydothenthe dailyRepair Rateshallbeapplicable. CompanywllundertaketoconducttheDrilling Unit AcceptanceTestwhentheDrillingUnthasbeenriggedupontheLocationintheOperatng Area. (c) Companyshallhavetherightatanytimeatitsexpensetohaveinspectionsofanyof Contractor's Equipment made by a recognised inspection service company and reject for good cause any items of Contractor's Equipment. Contractor shall replace at Contractor's expenseanysuchrejecteditemswithitemsacceptabletotheCompany.Drillpipethatdoes not pass IADC API Premium Class requirements of API RP7G (latest edition) shall be considereddefective. (d) Contractorsdrillpipeshallbesmoothhardbanded. (e) Contactors drilling unit acceptance test and inspection requirements are listed in ScheduleKofthisAgreement. (f) Contractors drill string inspection procedures are listed in Schedule L of this Agreement. (g) Contractor shall keep and maintain uptodate records of Contractor's Equipment reflecting its condition and will make such records available to Company whenever requestedtoenableCompanytoascertainthatsuchContractorsEquipmentisadequately maintainedandmeetsthespecificationscontainedinScheduleD. 4.3 OperationAndMovingOfTheDrillingUnit Contractor shall be solely responsible for the operation of the Drilling Unit, including, withoutlimitation,supervisingwithitscrewandequipment,allmovesoftheDrillingUnit, riggingupanddownonLocations,offandonloadingofContractor'sEquipmentandsuch operationsasmaybenecessaryordesirableforthesafetyoftheDrillingUnit. 4.4 Lubricants
Throughout the Term of this Agreement Contractor shall be responsible for purchasing all lubricantsandgreasesrequiredbytheDrillingUnitandtherestofContractor'sEquipment. 5. Contractor'sPersonnel 5.1 ProvidingPersonnel Contractorshallfurnishallofthepersonnelnecessaryandcompetenttoperformoperations contemplatedunderthisAgreement(hereinafterreferredtoasContractor'sPersonnel),as specifiedinScheduleBhereto.ContractorshallhaveContractorsPersonnelavailableatthe Locationoratamutuallyagreedplacereadytoconductoperationshereunder.Contractor shall have its full crew of men on duty and working at all times when receiving Compensation at the rates set forth in Schedule A which are predicated on this full crew working.Intheeventofabsenceofoneormoremembersformorethan24hours,weather permitting, Company shall deduct from the monthly invoice submitted by Contractor an amountequaltothedaily"DeductionRateUS$indicatedinScheduleBpercrewmember pertwelve(12)hourtourofabsence. Tothe extentrequiredbytheCompany,theContractorwillassistwithatrainingprogram providedbyCompanyforthelocalemployeesoftheKurdistanRegionalGovernment,which willbecarriedoutintheKurdistanRegionofIraq,otherpartsofIraqorinforeigncountries. 5.2 ReplacementofPersonnel In the performance of the Work Contractor shall maintain strict discipline and good order amongitsemployeesanditsSubcontractor'semployeesanditshallconsultCompanyonall mattersrelatedtoemployeerelations.ContractorshallkeepCompanyfullyinformedonall saidmatterstotheextentnecessarysothatCompany'sinterestsinthesemattersshallnot beprejudiced,andinanycaseasandwhenCompanydesires. CompanyshallhavetherightatanytimetoobjecttoandtorequireContractorbywritten notice to remove forthwith at its own cost and expense any member of Contractor's PersonnelwhointheopinionofCompanyisincompetentornegligentintheperformanceof his duties or guilty of misconduct or not conforming with relevant safety procedures or otherwise considered by Company to be unsuitable. Any person so removed shall not be employed again on the performance of operations under this Agreement without Company'spriorwrittenapprovalandshallpromptlybereplacedbyContractoratitsown costandexpensewithasuitablyskilledandcompetentsubstitute. 5.3 IncreaseinContractor'sPersonnel Company may, at any time, with Contractor's approval, require Contractor to increase the number of Contractor's Personnel and the Day rates provided herein shall be adjusted to reflecttheadditionalcostincurredbyContractor. 5.4 ConductofContractor NeitherContractornoranyofContractorsPersonnelshallmakeorofferanybribe,gratuity, reward,commissionorotherinducementinmoneyorofanyotherdescriptionwhatsoever. Neither Contractor nor any of Contractors Personnel shall, except for bona fide medical
purposes, keep, sell, barter, give, dispense or otherwise dispose of any drugs or alcoholic liquorstoanypersonatorontheDrillUnitorpermitthesametobedonebyanyperson. Breach of these provisions shall be considered to be misconduct under this Agreement. Contractor and Contractor's Personnel shall comply with the requirements of Schedule G regardingdrug,alcoholandcontraband. 5.5 CertificatesandDocuments Subject to Article 6.9 (b) below, Contractor shall be responsible for ensuring that Contractors Personnel hold and maintain all necessary valid health certificates, work permits,traveldocuments,insurance(includingaccidentandemergencymedicalcover)and visastoenablethem toperformthe Workinthe OperatingArea.Contractorshallensure that the requirements of Schedule J regarding background checks of Contractor Personnel areperformed. 5.6 ResumesofPersonnel Prior to mobilisation of the Drilling Unit, Contractor shall supply Company with detailed resumes of Contractors key positions, including Rig Manager, Toolpusher, Tourpusher, Driller,ChiefMechanic,ChiefElectricianandSafetyOfficer.Contractorshallensurethatsuch key personnel and supervisory personnel of the Contractor and Subcontractors shall read, writeandspeakfluentinEnglishLanguage. 6. GeneralObligationsofContractor
6.1 IndependentContractor Contractor shall perform this Agreement as an independent contractor. Subject to Company's rights to give general directions and to inspect as specifically set out in this Agreement,Contractorshallhavecompleteandexclusivecontroloftheentireperformance, operation, supervision of moving, management and direction of the Drilling Unit and Contractor'sEquipment,ContractorsPersonnelandContractor'sauthorisedsubcontractors. Contractor shall determine at all times whether operations can safely be continued or undertaken. 6.2 SafetyandMannerofConductingWork Contractor shall conduct all Work hereunder in a diligent, safe, skilful and workmanlike manner, in accordance with accepted good oil field practices and sound engineering principles and with that degree of skill, care and diligence ordinarily and reasonably exercisedbyskilledandexperienceddrillingContractorsengagedinsimilaroperationsinthe same or similar circumstances and conditions. Contractor must comply with all applicable HSE requirements contained in Companys HSE Manual and other documents (e.g., HSE Policy, etc.) as well as industry standards and governmental regulations. Contractor shall adopt appropriate practices to protect against possible hazards. Contractor shall furnish within 24 hours Company reports of any accident involving Contractor's employees or property connected with the Work. Contractor shall prepare and submit the following documentspriortostartingtoMobilization:
(a) A quality, safety, health and environmental protection plan for the Contractor's activitiesattheLocation(whichshallalsoapplytoanyoptionwellunderthisAgreement), whichshallrequireCompany'sapproval;and (b) Contractor'sHSEstatisticsforlasttwoyears. Contractor'sfailuretoobservehealth,safety,environmentandqualitystandards,codesor regulations,includingthosesetforthinSchedulesFandI,shallconstituteamaterialbreach of this Agreement, and Company may require Contractor to remove offending employees from the Work or terminate this Agreement pursuant to Article 20.3.2 c) hereof. These rightsshallbeinadditiontoCompany'srighttoindemnityforContractor'sfailuretoobserve anylaw,regulationororder. Withoutprejudicetothegeneralityoftheforegoing: i. Contractorshallensurethatitspersonnelreceiveallnecessaryinformationand instruction on Drilling Unit dangers to enable them to carry out the Work without undue risk to themselves, other personnel, plant and equipment and theenvironment; ii. Contractor shall take all measures to provide safe working conditions; in particular,nosmokingoropenflameormatchesorlightersshallbepermitted on the Drilling Unit except in areas designated by Contractor in consultation withCompanyassafe;and iii. Contractor shall conduct safety drills on the Drilling Unit for all personnel and shallreportthemonthedailydrillingreport. 6.3 BlowoutandFireHazard Contractorshallexerciseduecaretopreventfire,explosionandblowouts.Contractorshall useadequateblowoutpreventionequipment,approvedbyCompany,onalldrillingstrings and casing strings during all drilling operations. Contractor shall maintain well control and blowoutpreventionequipmentinfirstclasscondition.Contractorshallexamineandtestall blowout prevention devices as often as necessary and in accordance with Company's instructions. Test results shall be noted on the drilling reports and the IADC API Daily DrillingReportForm. In the event of blowout or loss of control, Contractor shall use all reasonable means to protect the hole and to bring the well under control. Company shall have the reasonable righttouseContractor'sEquipmentandPersonnelduringsuchtimestobringawellunder control. 6.4 InspectionsandReports Contractor shall at alltime permit Company and its authorised employees and Company RepresentativestoinspectallWorkperformedhereunderandallmeasurementsandtests made in connection with said Work. Contractor shall keep an accurate history and log of wells and casing, which shall be open to inspection by Company and Company Representatives. Contractor shall furnish Company's Representatives with an IADC API Daily Drilling Report Form or other daily written report on forms prescribed by Company, showing depths drilled, depth cored and footage of cores recovered during the preceding twentyfour (24) hours and recorded to the nearest fifteen (15) minutes, and any other
relevantinformationrequestedbyCompany.Contractorshallreportinwritingallaccidents andincidentsrelatedtosafety,healthandenvironmentalprotection. 6.5 RemovalofContractor'sEquipmentuponTermination Contractor shall upon termination of this Agreement for any reason whatsoever promptly prepare and remove the Drilling Unit including all other items of Contractor's Equipment fromLocation. 6.6 RemovalofWreck IftheDrillingUnitbecomesanactual,constructive,compromisedorarrangedtotallossora wreck and as a result thereof becomes an obstruction to operations of Company, or Company is required under the terms of the Production Sharing Contract governing the OperatingArea,orbyanyapplicablelaworbyanyorderofanycourtorothergovernmental body or agency to remove the Drilling Unit, Contractor shall without delay and at its cost, remove the Drilling Unit and any debris produced from the Operating Area to the satisfactionofCompany.IfContractorfailstoremovetheDrillingUnitwithinoneweekafter receiving written notice from the Company, the Company may remove it and Contractor shallindemnifyandreimburseCompanyforallcostsandexpensesconnectedtherewith. 6.7 CompliancewithLawandCompanyPolicies (a) ContractorshallregisteralegalentitywiththerelevantauthoritiesintheKurdistan Region,Iraqandcomplywithallapplicablelaws,regulationsandordersandshallobtainall necessarypermitsand consentsrequiredforthe conductofthe Work(other thanpermits and consents to be obtained by Company as provided in (b) below) and shall indemnify Companyforanyfine,penalty,liability,andforanycostsrelatedthereto,includingwithout limitationcourtcostsandattorney'sfees,arisingoutofanyfailurebyContractortoobserve any law, regulation or order or obtain any permits and consents as aforesaid except as otherwisespecifiedinArticle8ofthisAgreement. (b) Company will obtain necessary authorisations or permits to drill wells in the OperatingArea.CompanyshallpromptlyadviseContractorofanyrestrictions,conditionsor limitationsinCompany'srightsorpermitsthatwouldaffectContractor'sfreerightofentry totheOperatingArea.ContractorshallassistCompanyinobtainingsuchauthorisationsor permits by providing data, information and certificates, which might be reasonably requestedinconnectionwithContractorsEquipmentorContractorsPersonnel. (c) Contractor shall comply with all policies and procedures of Company applicable to the Work as established and amended by Company from time to time. Company shall provide to Contractor a written copy of all such policies and procedures and amendments thereto at the Effective Date and thereafter promptly following establishment or amendment. 6.8 LabourandMaterials ContractorshallpayforallContractorPersonnelemployedbyContractor,includingbutnot limited to all social benefits, indemnities, compensations, training courses, fringe benefits and taxes of whatever nature required by the authorities governing the area where such ContractorsPersonnelishired.Contractorshallalsopayallbillsforsuppliesandforservices furnished to perform the Work hereunder except for supplies and materials furnished for
theaccount ofCompany. Contractorshallprovide transportationfromdeparturepointto Drilling Unit site and to safety site for Contractors employees and invitees, and return to departurepoint. 6.9 Pollution At all times Contractor shall adhere to Companys Environmental Impact Assessment and Waste Management Policies and Procedures, to avoid pollution or contamination arising outofperformanceoftheactivitiescoveredbythisAgreement.Utmostattentionisrequired to prevent disposed mud and cuttings from overflowing the waste pits. On leaving the Location,ContractorshallremoveallofitswasteordisusedequipmentfromtheLocation. ContractorshallconsiderandincorporateEnvironmentalManagementProgram,asrequired or as indicated, provision for waste management and services, environmental monitoring programs, water pollution prevention and spill response measures, and regulatory compliancemeasures. The Contractor shall take all necessary steps to respond to, and shall promptly notify the Company of, all emergency and other events (including explosions, leaks and spills), occurring in relation to the services and equipment provided pursuant to this Agreement whichmaycausematerialenvironmentaldamageorhealthandsafetyeffects.Suchnotice shall include a summary description of the circumstances and steps taken and planned by the Contractor to control and remedy the situation. The Contractor shall provide such additionalreportstotheCompanyasarenecessaryinrespectoftheeffectsofsuchevents and the course of all actions taken to prevent further loss and to mitigate deleterious effects. InprovidingservicespursuanttothisAgreement,theContractoranditsSubcontractorsshall operateaccordingtoprudentinternationalpetroleumindustrypracticesinsimilarphysical andecologicalenvironmentsandtakerreasonablemeasuresnecessaryforthepreservation of the environment, including the surface, surface and subsurface water, sea, air, flora, fauna, ecosystems and other natural resources and property. The order of priority for actionsshallbeprotectionoflife,environmentandproperty. 6.10 HousekeepingandHygiene Contractor shall ensure that all Contractors Personnel working on the Location and in the campmaintaincontinuouslythroughoutthedurationoftheAgreementgoodhousekeeping practices;inparticularthetidinessoftherigsiteandcamp,rackingoftoolsandcleannessof the camp facilities. Contractor shall ensure that high standards of hygiene are kept at the campsite. 6.11 BranchOffice Contractorherebyagreesandundertakestomaintainingoodstandingitsbranchofficein theOperatingAreaoranothersuitablelocationtosupportoperationsundertheAgreement. 6.12 CertificatesandDocuments Contractorshallberesponsibleforensuringthatallmaterialsandequipmentorderedand used by Contractor, including Contractors Equipment (other than Company's Equipment)
holdandmaintainallnecessaryproductionandtestcertificates,qualityapprovals,adequacy torequiredtechnicalspecificationsandinsurancedocuments,whichwillbesubmittedand approvedtoCompanyRepresentative. Companyanditsclassificationorcertificationsociety,andCompanyRepresentativehavethe righttoinspecttheContractorsEquipmentortheWorkfurnishedandtheprogressofthe Work at all reasonable times wherever it is located. Company and Contractor shall afford safe access to and proper facilities for such inspection. Company has the right to order specialtestsnototherwiserequired,andContractorshallcooperateintheperformanceof such tests with the cost of such tests to be borne by Company unless Contractors Equipment or the Work tested proves to be defective. In the event Company notifies Contractor that it intends to perform or witness certain inspection or testing, Contractor shallgivetimelynoticetoCompanyofthereadinessoftheContractorsEquipmentorthe Workforsuchinspectionortesting.NeitherCompanysinspectionortesting,northelack thereof,shallrelieveContractorofanyresponsibilityhereunder.Allmutuallyagreedcritical defects/deficiencies noted during the inspection shall be corrected prior to startup of operations. 6.13 LocalPersonnel Contractor and its Subcontractors shall give preference to personnel from the Kurdistan Region of Iraq and other parts of Iraq to the extent such personnel have the technical capability,qualifications,competenceandexperiencerequiredtoperformtheWork. 6.14 Security ContractorshallprovideallnecessarysecurityforprotectonofContractorsPersonneland Contractor'sEquipmentoperatingwithintheKurdistanRegionofIraqandshallcommence onarrivalattheTurkishIraqiborderorErbilAirportontotheOperatingAreaorsuchother locationasthePartiesmayagreeinwriting. SecuritymeasureswillbeconsistentwithCompany'ssecuritymeasuresandrequirements, asestablishedincoordinationwiththeCompany'sSecurityManager. 7. Company'sEquipment
7.1 Company'sSupplyObligation Company will furnish such equipment, machinery, tools, material, supplies and services as are indicated in Schedule C hereto as being furnished by Company, and other equipment, tools, materials, supplies and services necessary for the Work pursuant to this Agreement (hereincollectivelyreferredtoasCompany'sEquipment). 7.2 InspectionofCompany'sEquipment ContractorshallacknowledgereceiptofCompany'sEquipmentbysigningCompany'scopyof thetransferringdocuments.Contractorshallvisuallyinspectsameandshallhavetherightto rejectforgoodcauseanyitems,whereuponContractorshallimmediatelynotifyCompanyof
such observation and rejection. Company shall replace any such rejected items with items acceptabletoContractor. 7.3 MaintenanceandStorageofCompany'sEquipment Contractorshall,atnoadditionalcharge,properlystore,maintain,protectand,ifrequested by Company, repair Company's Equipment which Contractor is qualified to and can store, maintain, protect or repair with resources on the drilling unit; provided, however that Company shall provide all spare parts and materials required to maintain or repair Company's Equipment and the basic responsibility and liability for furnishing and maintaining Company's Equipment shall otherwise remain with Company. Company shall have the right to an accounting by Contractor for Company's Equipment and its use. Company may verify such accounting by inspecting Contractor's records relating to Company'sEquipment.ContractorshallreturntoCompanyanyofCompany'sEquipmentin itspossessionimmediatelyuponterminationofthisAgreement,andatalltimesduringthe TermhereofuponCompany'srequest. 8. RiskStructure
8.1 Terms ForthepurposeofthisArticle8: (a) "Claim"meansanyactualorpotentialclaim,action,causeofaction,demandorlegal proceedingofanykind; (b) thetermContractorshallinclude: (i) Agents,officers,employeesandinviteesofContractor; (ii) Subcontractors of Contractor together with their agents, officers and employees;and (iii) AffiliatesofContractortogetherwiththeiragents,officersandemployees; IndemnitiesgivenbyContractoraregiveninrespectofContractorandeachofthepersons listed in this subArticle 8.1 (a) and are given for the benefit of Company and each of the personslistedinsubArticle8.1(b). (c) thetermCompanyshallinclude: (i) Agents,officers,employeesandinviteesofCompany; (ii) AffiliatesofCompanytogetherwiththeiragents,officersandemployees; Indemnities given by Company are given in respect of Company and each of the persons listedinthissubArticle8.1(b)andaregivenforthebenefitofContractorandeachofthe personslistedinsubArticle8.1(a). (d) inviteeshallmeananypersonwhosepresenceintheAreaofOperationsisatthe invitationofaPartyasaguestandnotundersubcontractwithsuchParty; (e) "Loss"meansanyactualorpotentialliability,loss,damages,cost,legalexpenseor otherexpenseofanykind;
(f) references to the property or equipment of a Party shall include all property and equipment,whetherpersonalorotherwiseandwhetherowned,charged,leased,rentedor hiredbysuchParty. 8.2 MutualGeneralIndemnification Except as otherwise specifically provided in Sections 8.3 to 8.11 inclusive, each party covenantsandagreestoindemnifyandsaveharmlesstheotherparty(inthisArticle8the party so covenanting and agreeing to indemnify being the "Indemnifying Party" and the party being so indemnified being the "Indemnified Party") from and against any and all ClaimsorLosseswhichmaybemadeorbroughtagainsttheIndemnifiedParty,orwhichthe Indemnified Party suffers or incurs, in respect of or in any manner arising out of or as a directorindirectconsequenceof: (a) the failure of the Indemnifying Party to observe or perform or fulfil any of its obligations,covenantsoragreementsinthisAgreement; (b) anynegligentactoromissionoftheIndemnifyingParty;or (c) any representation or warranty of the Indemnifying Party in this Agreement being materiallyuntrueorincorrect. 8.3 EmployeesofCompanyandContractor Company shall bear all risk and liability and shall indemnify and hold Contractor harmless from any Claim or Loss arising out of any injury to or death of any employee or invitee of Company.Contractor,likewise,shallbearallriskandliabilityandshallindemnifyandhold Company harmless from any Claim or Loss arising out of any injury to or death of any employeeorinviteeofContractor.Theforegoingassumptionsofriskandindemnifications shall apply regardless of the cause of injury or death and regardless of whether or not causedorcontributedtobyanyactoromissionoftheIndemnifiedParty. 8.4 LossorDamagetoPropertyofCompany AnydamagetoorlossofCompany'spropertyorequipmentshallbethelossofCompany,its underwriters or insurers. Company shall bear all risk and liability and shall indemnify and holdContractorharmlessfromanyClaimorLossarisingoutofanysuchdamageorloss,and waivesitsrightofrecoveryforsuchdamageorloss,ifany,againstContractor. 8.5 LossorDamagetoPropertyofContractor (a) Except as contemplated in Section 8.5(b), any damage to or loss of Contractor's property or equipment shall be the loss of Contractor, its underwriters or insurers. Contractor shall bear all risk and liability and shall indemnify and hold Company harmless from any Claim or Loss arising out of any such damage or loss, and waives its right of recoveryforsuchdamageorloss,ifany,againstCompany. (b) Companyshall,regardlessoffaultornegligenceofanypersonorparty,beliableat alltimesandshallindemnifyContractorforanyClaimorLossarisingoutofanydamagesor destruction of Contractor's down hole equipment including but not limited to drill pipe or drillcollars,whilesuchequipmentisbelowthedrillfloor.
8.6 FormationorReservoirDamage Company shall bear all risk and liability and shall indemnify and hold Contractor harmless fromanyClaimorLossarisingoutofanydamagetoanygeologicalformation,strata,oroil or gas reservoir beneath the surface of the ground, or loss of any oil, gas, or mineral substances, which may arise as a result of or by reason of any operation under this Agreement. 8.7 WellBlowOut Companyshallbearallrisk,liability,costandexpenseofanywellblowoutorwellcraterand killingorotherwisebringinganywellblowoutorcraterundercontrol,andshallindemnify andholdContractorharmlessagainstanyClaimorLosswhichmayariseasaresultoforby reason of any such well blow out or well crater. The foregoing assumption of risk and indemnificationshallapplyregardlessofthecauseofwellblowoutorcraterandregardless ofwhetherornotcausedorcontributedtobyanyactoromissionofContractor. 8.8 Pollution (a) Contractor shall bear all risk and liability and shall indemnify and hold Company harmlessfromanyClaimorLossarisingfrompollution,contaminationorseepage(including control, containment, clean up and removal) which originates above the surface of the groundfrom fuels,lubricants,motoroils,pipedope,paints,solvents,orgarbagewhollyin the possession and control of and directly associated with Contractor's equipment or operations,expresslyexcludingslushpitbreakageorseepage. (b) Contractorshalltakeallprecautionstokeepthedrillsiteandsurroundinglocation freeandclearofallrubbishandobstacles.IfintheopinionofCompanyContractorfailsor neglects to control, remove or clean up any pollution, contamination or seepage falling within Contractor's responsibility pursuant to the foregoing provisions of this Article 8.8, Companyshallbeentitled(withoutprejudicetoanyotherrightsandremediesavailableto it)totakesuchmeasuresasmaybenecessarytocontrol,removeorcleanupthesameand todeductanycostsorexpensestherebyincurredfromanysumdueorwhichmaybecome duetoContractorunderthisAgreementortorecoverthesameasadebt. (c) Other than that for which Contractor is liable under Article 8.8(c) Company shall bearallriskandliabilityandshallindemnifyandholdContractorharmlessfromanyClaimor Loss arising from all other pollution, contamination or seepage (including control, containment,cleanupandremoval)includingbutnotlimitedtopollutionorcontamination from any well fire, blow out, cratering or any other uncontrolled flow of oil, gas or other substancesfromanywellduringthecourseofoperationsunderthisAgreement. 8.9 LossofHole CompanyshallbearallriskandliabilityforandshallindemnifyandholdContractorharmless in respect of any Claim or Loss arising out of any damage to or loss of a hole; provided howeverthatifsuchdamagetoorlossofaholeiscausedbyanynegligentactoromission of Contractor for which it may be liable pursuant to this Article 8, Contractor may, in full satisfaction of its liability, redrill the hole or drill a substitute hole, at the Redrill Rate specifiedinScheduleA,tothedepthandsizeofthelostordamagedhole.
8.10 ExceptionforCertainClaimsorLosses IfContractor'sGrossNegligenceorWilfulMisconductcauses: (a) damagetoorlossofanywell,CompanymayrequireContractortoredrillasectionof the hole or drill a new hole at the Redrill Rate in the case of Contractors Gross NegligenceandatzerorateinthecaseofContractorsWillfulMisconduct;and (b) blowoutorlossofcontrolofawell,andifContractor'sEquipmentandContractors Personnel are being used to bring the well under control in accordance with Article 6.3, Contractor during such time shall be paid at the Redrill Rate in the case of Contractors Gross Negligence and at zero rate in the case of Contractors Willful Misconduct. 8.11 PatentLiability ContractorshallindemnifyandholdharmlessCompanyfromandagainstanyandallclaims, actions,demands,proceedings,liabilities,damages,costsandexpenseswhatsoeversuffered orincurredbyCompanyasaresultorbyreasonofanyinfringementorallegedinfringement of any patent, trademark, copyright or other like right protected by law in respect of any property, equipment, methods or processes furnished or used by Contractor for or in connection with the performance of this Agreement. Likewise, Company shall indemnify and hold harmless Contractor from and against any and all claims, actions, demands, proceedings, liabilities, damages, costs and expenses whatsoever suffered or incurred by Contractor as a result or by reason of any infringement or alleged infringement of any patent,trademark,copyrightorotherlikerightprotectedbylawinrespectofanyproperty, equipment,methodsorprocessesfurnishedorusedbyCompanyfororinconnectionwith theperformanceofthisAgreement. 8.12 ConductofClaims AnIndemnifiedPartyshallgivepromptwrittennoticetoanIndemnifyingPartyofanyClaim or Loss for which the Indemnifying Party may have liability. An Indemnifying Party may, upon receipt of such notice, advise the Indemnified Party of its intention to defend at its ownexpenseanyClaimthathasormaybebroughtagainsttheIndemnifiedParty,inwhich casetheIndemnifyingPartyshallassumeconductoftheClaim.TheIndemnifiedPartyshall providereasonablecooperationtotheIndemnifyingParty.TheIndemnifyingPartyshallnot, withoutthepriorwrittenconsentoftheIndemnifiedParty,settleorattempttosettleany ClaimifthesettlementwouldorcouldresultinanyLosstotheIndemnifiedPartythatwould notbefullyreimbursedbytheIndemnifyingParty. 8.13 IndemnityApplication The exclusions of liability contained in this Articles 8, and expressly excluding the indemnitiescontainedinArticle8.10,shallapplywithoutregardtocauseorcausesthereof, including, without limitation the sole, joint or Gross Negligence or breach of warranty, representationordutyoranyothertheoryoflegalliability. 8.14 ConsequentialDamages
NeitherPartyshallbeliabletotheother(oranyoneforwhomtheothermaybeacting)for special,indirectorconsequentialdamagesresultingfromorarisingoutofthisAgreement, including,withoutlimitation,lossofprofitorbusinessinterruptions,howeversamemaybe caused. 8.15 DutiestoReportandNotify (a) ContractorshallinformCompanyimmediatelyandconfirminwritingofanyaccident orincidentresultinginpersonalinjurytoorthedeathofanypersonordamagetoortheloss ofanypropertyarisingoutoforduringthecourseofoperationsunderthisAgreementand shall prepare and furnish to Company such reports on any such accident or incident as Companymayreasonablyrequest. (b) ContractorandCompanyagreetogivepromptnotice,onetotheother,ofanyclaim which the other Party is obligated to defend under the above stated indemnities. Upon receipt of such notice, the indemnifying Party shall investigate such claim and defend all suits and actions arising there from at its own cost including, but not limited to, interest, attorney's fees, expenses incident to such suits and actions, and judgments and costs enteredtherein. (c) Otherthanasmaybeabsolutelynecessaryinthecourseofmakingareporttothe policeorotherauthoritiesconcerninganyaccident,Contractorshallnotmakeanyformof admissionofliabilityinrespectofanyclaiminrespectoftheinjuryordeathofanypersonor thelossofordamagetoanypropertyforwhichCompanyisormightbeliabletoindemnify Contractorhereunder,ortakeanyactiontosettle orcompromiseanysuchclaim,without thepriorwrittenapprovalofCompany.TheindemnitiesonthepartofCompanycontained intheprecedingprovisionsofthisArticleshallnotapplyinanycasewhereContractororany ofitspersonnelhasfailedtoobserveorcomplywiththeprovisionsofthissubArticle8.10 (c). 8.16 ContinuingObligations TheobligationsandresponsibilitiescontainedinthisArticle8arecontinuingobligationsand responsibilitiesandshallsurvivetheexpirationorearlierterminationofthisAgreement. 9. Insurance
9.1 Contractor'sInsurancePolicies WithoutprejudicetotheliabilitiesandresponsibilitiesofContractorundertheprovisionsof Article8,Contractorshallatalltimes duringtheTermof thisAgreement, provide,payfor andmaintainthefollowinginsurance: (a) Workers Compensation Insurance or similar insurance required by any country's laws which are applicable to any employee of Contractor used in the performance of the Work. (b) EmployersLiabilityInsurancewithlimitsasrequiredbylawbutinnoeventlessthan twomillionUSdollars($2,000,000)peroccurrence.
(c) General Public Liability Insurance covering liabilities for bodily injury, including death,topersonsandliabilitiesfordamagetopropertywithacombinedsinglelimitofnot lessthanfivemillionUSdollars($5,000,000)peroccurrence.Thisinsurancemustcoverall operationsofContractorrequiredtofulfiltheWork. (d) AllRisksPhysicalDamageInsurancetothefullreplacementvalueofthedrillingrig and all Contractor's Equipment utilised in the Work including during transit and transport. The deductible on such insurance shall not exceed one hundred thousand US dollars ($100,000). (e) Automobile Public Liability Insurance covering owned, nonowned and hired automobilesusedintheperformanceoftheWorkhereunder,withbodilyinjurylimitsofnot lessthanthegreateroffivehundredthousandUSdollars($500,000)ortheamountlegally requiredbyappropriatelawsforeachaccident. AnydeductiblespayableonanyoftheaboveinsurancesshallbebornebyContractor. 9.2 RequiredEndorsements Contractor shall provide Company with written confirmation that its insurers and the insurersofanysubcontractorengagedbyithaveagreedtowaiveallrightsofsubrogation againstCompanyanditsandtheirrespectiveAffiliates,contractors,employeesandagents, andinrespectofinsurancepoliciesdescribedinsubarticles9.1a)to9.1e)inclusive,have namedCompanyasadditionalinsuredaswellasKurdistanRegionalGovernmentofIraqand GulfKeystonePetroleumInternationalLimitedascoinsured,butinallinstancesonlytothe extentoftheliabilitiesassumedbyContractorunderthisAgreement. If this Agreement is assigned in accordance with Article 19 the assignee will be named as additionalinsuredhereunder. 9.3 ProofofInsurance Before the Commencement Date, Contractor shall furnish Company with written evidence thatallinsurancerequiredofContractorunderthisAgreementisinfullforceandeffectand specifyingthegeneralcoverageofanyinsurancereferredtoinArticle9.1.Suchcertificates shallshow(a)theeffectiveandexpirationdatesofallpolicies,(b)thattheinsurancewillnot be cancelled or materially altered during the Term of this Agreement without thirty (30) Days' prior written notice by facsimile transmission and registered mail return receipt requestedtoCompany,(c)astatementthatalloftheendorsementsrequiredbyArticle9.2 havebeenattachedtotheappropriatepolicies. 9.4 InsuranceofanySubContractor ItshallbeContractor'sresponsibilitytoensurethatanySubcontractoreffectsandmaintains employer's liability insurance and third party liability insurance together with such other insurances as may be required by law or as the Company and/or Contractormay consider necessary.Anydeficienciesinthecoveronpolicylimitsofsubcontractorsinsurancesshall bethesoleresponsibilityofContractor. 9.5 Company'sRightsineventofContractor'sFailuretoeffectInsurance
If Contractor fails to effect or keep in force any of the insurances required under this Agreement, Company shall be entitled to effect and keep in force the same and pay such premiumsasmaybenecessaryforthatpurposeandthendeducttheamountsopaidfrom anymoniesdueorwhichmaybecomeduetoContractorhereunderorrecoverthesameas adebtduefromContractor. 10. CompensationtoContractor CompanyshallpayContractor,asfullCompensationfortheWorkperformedhereunder,the ratesandfeessetforthhereafter,intheamountssetforthinScheduleAheretocalculated tothenearestfifteen(15)minutesbasedonatwentyfour(24)hoursDay. 10.1 MobilisationFee TheMobilisationFeeshallcoveralltransportation,equipment,personnelandinsurancecosts formovingContractorsEquipmentfromthePointofMobilisationasspecifiedtotheOperating Area until Contractor's Equipment is rigged up and ready to commence the Work at the LocationandDrillingUnitacceptanceletterhasbeenexecutedbyCompany'sRepresentative. (MobilisationFee) Fifty percent (50%) of the Mobilisation Fee shall be due when: (a) if the Drilling Unit mobilisesfromalocationinIraq,atthetimethatitdepartsfromitsPointofMobilization; and(b)iftheDrillingUnitmobilisesfromalocationoutsideIraq,atthetimethatitarrivesat theinternationalborderofIraq.Theremainingfiftypercent(50%)oftheMobilisationFee shall be due when Contractor's Equipment has been moved as specified to the Operating Area, rigged up and ready to commence the Work at the Location and the Drilling Unit AcceptanceletterhasbeenexecutedbyCompany'sRepresentative. 10.2 OperatingRate TheOperatingRateshallapplyperDay(prorataorpartthereof)andshallbeapplicablefrom thetimeanddatethattheDrillingUnitisreadytocommenceWorkatthefirstlocation(first drillbitthroughrotarytable)andshallcontinue,subjecttoapplicationofanalternativerate, until the Drilling Unit actually ceases operations at the location (when the Xtree has been testedorwhenthesuspensioncaphasbeeninstalledandtested)ofthelastwelltobeworked onundertheAgreement. 10.3 StandbyRate (a) TheStandbyRatewithCrewshallapplyperDay(prorataforpartthereof)andshallbe applicableduringperiodsofroutinemaintenanceandinspections,suchaslubrication,servicing oftopdriveorpackingofswivels,slipandcutdrillingline,adverseweather,electricloggingand well testing, delays due to failure of Company to provide services or issue instructions, pre commencementinspectionsorotherperiodsofdelaynotattributabletotheContractor. (b) TheStandbyRatewithoutCrewshallapplyperDay(prorataforpartthereof)andshall beapplicableduring periodsof extended maintenance,extendedadverse weather, extended delaysduetofailureofCompanytoprovideservicesormaterials,orotherperiodsofextended delaynotattributabletotheContractor.
10.4 RedrillRate The Redrill Rate shall apply per Day (pro rata for part thereof) and shall apply during redrill operationspursuanttothisAgreement. 10.5 RepairRate (a) TheRepairRateshallapplyperDay(prorataforpartthereof)andshallapplyduring suspension of operations due to nonroutine failure of Contractor's Equipment. The Repair Rateshallapplyforuptotwentyfour(24)hoursperMonthafterwhichtheContractorwillbe paidatzerorate. (b) If Contractor elects to repair off Location, the time taken to move hereto and to returntoLocationshallbeincludedintheRepairTimeperiodsreferredtohereinabove. (c) Withintwo(2)DaysofcommencementofrepairsContractorshallgiveCompanyits bestestimateofthetimerequiredtocarryoutrepairsandbeabletoresumefulloperations hereunder. Intheeventthatanyrepaircontinuesformorethanfifteen(15)consecutiveDays,Company may terminate this Agreement forthwith subject to the payment to Contractor of the Compensationthendueandowing. (d) Company shall advise Contractor by written notice if, in Company's good faith opinion, Contractor fails to use due diligence to maintain any item of its Contractors Equipment in sound, efficient operating condition. Upon receipt of the aforementioned notice, Contractor shall immediately undertake to repair the relevant item(s) of its ContractorsEquipmentand,ifsodirectedbyCompany,suspendoperationshereunderuntil samehasbeenrepaired.Alltimerequiredforrepairunderthisparagraph(d)shallbepaidall asaforesaidinthisArticle10.5. 10.6 ForceMajeureRate DuringperiodofForceMajeurepursuanttoArticle14CompanyshallpayContractortheForce MajeureRate. 10.7 FixedMovingRate
TheFixedMovingRateshallincludetransportation,equipment,personnelandinsuranceduring DrillingUnitmovementoperationsbetweenlocationsandshallbeapplicablefromthetimeand datetheDrillingUnitcommencespreparationsformovingafterreleasebyCompanyfromthe currentlocationoftheDrillingUnitandshallcontinueduringtheDrillingUnitmovingoperation until such time the Drilling Unit is ready to commence the Work as set forth in 10.2 at the Location. The Fixed Moving Rate shall be stated separately in Schedule A for (i) moving the DrillingUnitsubstructureadistanceof5morlesstodrillasecondwell,and(ii)formovingthe DrillingUnittoanewlocationwhichis10kmorlessfromitscurrentlocation.
10.8 DemobilisationFee The fee for demobilisation (the Demobilisation Fee) shall cover all transportation and insurancecostsformovingContractorsEquipmentfromitsLocationintheOperatingAreato theMaximumDemobilisationPointasspecified. Furthermore: (a) ShouldContractorenterintoanotherdrillingcontractoutsideofIraqforworkindirect continuationfromthisdemobilisation,theDemobilisationFeeshallbereducedbyfiftypercent (50%);and (b) ShouldContractorenterintoanotherdrillingcontractforworkinsideofIraqindirect continuationfromthisdemobilisation,theDemobilisationFeeshallbereducedbyonehundred percent(100%). 10.9SuspensionofDayRate In the event of Contractors Default, Company may give Contractor written notice thereof specifying in detail the breach, and Contractor shall undertake to remedy such breach forthwith. Without prejudice to any rights of Company to terminate this Agreement pursuanttoArticle20,ContractorshallbeentitledtonoCompensationwhatsoeverduring all times where operations are suspended if he has not remedied or commenced and continued diligently to remedy Contractors Default to the satisfaction of Company within ten(10)Daysafteritsoccurrence. 10.10RateConflict The Parties recognise that in given situations more than one rate described hereinbefore mayapply.Inanycasewheretwoormoreratescouldapplytoagivensituation,theParties agreethatContractorshallbepaidatthelowestapplicablerate. 10.11AdjustmentofRates In the event that the Agreement is extended, the rates referred to in Schedule A may be adjustedtoreflectanychangesinapplicablelawsolelyinIraqincludingtaxlegislation.This willbesubjecttobothpartiesmutualagreement. 11. InvoicingandPayment (a) Withinthirty(30)DaysaftertheendofeachMonth,Contractorshallsendaninvoice chargedintheContractCurrencycoveringtheWorkperformedduringthepreviousMonth. InvoicesshallbesubmittedinduplicateintheformrequestedbyCompanyaccompaniedby suchcertificateanddocumentationasCompanymayrequest. Contractorsinvoicesshallbeissuedto: GenelEnergyInternationalLimited MAICOBuilding TheValley,Anguilla,BritishWestIndiesTV111P Contractorsinvoicesshallbecourieredto:
c/o BestepelerMah.NergizSk.No:7/52 Sogutozu,Ankara,Turkey To the extent that payments made under the Agreement attract Value Added Tax or any otherstatutorytax,theproperamountofsuchtaxshallbeshownasaseparateitemonthe invoice. Eachinvoiceshallbeaccompaniedbyasummaryshowingallinvoicesbilledtodate,witha totalinvoicedtodatevaluequotedinUnitedStatesdollars. (b) Within fortyfive (45) Days of receipt of each monthly invoice at said office, Company shall pay the approved amount of Contractor's invoice by bank transfer to Contractor'sdesignatedbankaccount(unlessotherwiseprovidedherein). (c) IfCompanydisputesanyinvoiceinwholeorinpart,Companyshallpromptlynotify Contractor of the dispute and shall pay only the undisputed portion. Company and Contractorshallendeavourtosettleandadjustanydisputedamountforthwith. (d) Company may setoff against payments due to Contractor hereunder any amount dueandowingtoCompanybyContractorforanyreason. (e) Any payment made by Company hereunder, including the final billing under this Agreement,shallnotpreventCompanyfromfilingclaimsorprejudiceitsrighttorecoverthe amountofsuchclaimshowevertheymayhavearisen.Withoutlimitingthetypeornature oftheclaimsmentionedintheprecedingsentence,Companymayrecoveranysumspaidto Contractorbymistakeoflaworoffact.NopaymentmadebyCompanyshallbeconstruedas acceptance in whole or in part of the performance of Contractor of any of its obligations underthisAgreement. (f) All items provided by Contractor under this Agreement and reimbursable by Company shall be invoiced within six Months of Contractor incurring the obligation to pay for such items. Company may refuse and shall be under no obligation to pay for any such itemsnotinvoicedasaforesaid. (g) If Contractor intends to make any significant expenditure in a currency other than theContract Currency(ForeignCurrency)formaterials,equipmentorserviceswhichare reimbursable hereunder, Contractor shall give Company advance notice of such intent. Company may or may not elect to pay Contractor (or pay Contractor's supplier or subcontractor directly, with Contractor's consent) for such reimbursable in the Foreign Currency. (h) AllContractorsEquipmenteitherrenderedbyContractororacquiredbyContractor on Company's behalf shall be documented by Contractor on the form and in accordance withproceduresrequestedbyCompany. 12. LiensandClaims Contractorshallpayallclaimsforlabour,equipment,suppliesandmaterialstobefurnished byContractorhereunder.Further,ContractorshallnotatanytimeortimesduringtheTerm hereof or any time thereafter suffer or permit liens, attachments or encumbrances to be
imposedbyanyperson,firm,corporationorgovernmentalauthorityuponCompany'sright orinterestintheOperatingAreaorotherproperty,oranyequipmentthereonbyreasonof any claim or demand against Contractor, and any such lien, attachment, or other encumbrance, until Contractor shall have secured the release thereof, shall preclude any claims or demand by Contractor for any payment whatsoever under or pursuant to this Agreementandintheeventthatthesameshallnothavebeenremovedwithinfifteen(15) Days after written notice by Company, Company at its option, may remove or release the same, including fees and expenses with funds owing to Contractor, or Contractor shall reimburseCompanyforthecostofremovalthereof,includinganylegalfeesandexpenses, andinterest. Contractor further agrees to indemnify and hold harmless Company, its successors and assigns and any parties in contract therewith from any and all damages, expenses, losses, costs, including, but not limited to, attorney's fees which the abovenamed parties may sufferasaresultofanylienorattachmentbeingimposedasaresultoftheperformanceof thisAgreement. This provision shall not be construed as a waiver of liability of the Contractor under any otherprovisionofthisAgreement. 13. RecordsandAudit Contractorshallmaintainatrueandcorrectsetofrecordspertainingtoitsperformanceof thisAgreementandalltransactionsrelatedthereto.Contractorfurtheragreestoretainall suchrecordsforaperiodofnotlessthanseven(7)yearsfollowingtheterminationofthis Agreement. Any representative or representatives authorised by Company may audit any andallsuchrecordsofContractoratanytimeortimesduringtheTermofthisAgreement andduringthetwoyearperiodfollowingtheterminationofthisAgreement. 14. ForceMajeure (a) Force Majeure means circumstances beyond the control of the Party concerned and resulting in or causing a failure or delay by or hindrance to or interference with such PartyinthefulfilmentwhollyorinpartofanyofitsobligationsunderthisAgreementwhich circumstancecannotbeovercomebytheexerciseofduediligencebythePartyconcerned. Suchcircumstancesshallbedeemedtoincludebutnotbelimitedto:riots;invasions;actsof foreign enemies; strikes; wars (declared or undeclared); insurrections; rebellions; terrorist acts;civildisturbances;actsofGod;unusuallysevereweatherconditions;compliancewith anylaw,regulationsororderofanygovernment;andinabilitytoobtainequipment,supplies orfuel. (b) Except in relation to obligation to make payments hereunder the Parties shall be relievedfromliabilityunderthisAgreementtotheextentthatowingtotheForceMajeure circumstances they have failed to comply with their respective obligations under this Agreement. (c) A Party seeking relief under this Article shall as soon as possible notify the other Party of the event of Force Majeure and shall with diligence furnish such relevant informationasisavailablepertainingtosuchevent.IfContractoristhePartyseekingrelief itshalluseitsbestendeavourstoeffectamaximumofsavings.
(d) IfthecircumstancesofForceMajeurecontinueforaperiodoffifteen(15)Daysor longer, Company may, after said period of fifteen (15) Days terminate forthwith this Agreement,withnofurtherliabilityoftheCompanyotherthanforobligationsarisingprior totermination. 15. NonperformancebyContractor 15.1 RightsoftheCompany The Contractor shall be in default of the Agreement (Contractors Default) upon the occurrence,withoutlimitation,ofanyofthefollowingevents: a) any material failure by the Contractor to perform the Work in accordance withtherequirementsoftheAgreement. b) therefusalortheinabilityorotherfailureoftheContractortowhere applicable,performanypartoftheAgreementinasafe,efficient, workmanlike,skilfulandcarefulmannerorwiththerequiredpromptnessor diligence,orcomplywithanyoneoftherequirementsoftheAgreement. c) The Contractor becoming bankrupt or making a composition arrangement withitscreditorsorhavingawindingupordermadeor(exceptforthe purposesofamalgamationorreconstruction)aresolutionforvoluntary windinguppassedorhavingaprovisionalliquidator,specialadministrator, receiverormanagerofitsbusinessorundertakingappointed,orhaving possessiontakenbyoronbehalfoftheholdersofanydebenture,whether securedbyafloatingchargeorotherwise. IncaseofContractorsDefault,theCompanyshallhavetherighteither: (i) To shut down operations or to suspend the Work until such time as the Contractorshallhavemadegoodanyspecifiedfailure;or (ii) to hire, if the Contractor has no substitute equipment, from the nearest availablesourcesatisfactorytotheCompanyanyequipmentwhichshouldhave beenprovidedbytheContractororwhichisrequiredtoreplaceequipmentnot acceptable to the Companys representative and the justifiable, substantiated and documented costs of hiring and transporting such equipment shall be recoveredbytheCompanyfromtheContractor. 15.2 ShutdownorTermination NotwithstandingtheprovisionsofArticle15.1(ii)and15.1(ii)theCompanymay,atitssole discretion,givewrittennoticetotheContractorofitsdissatisfactionandelecttoshutdown operationsorsuspendtheWorkuntilsuchtimeastheContractormakesgoodContractors Default or, if Contractors Default is not remedied, until the Company elects to terminate the Agreement. Such notice shall not be given unreasonably. During the period of shutdownofoperationsorsuspensionofWorkunderthisArticle15.2nopaymentshallbe duetotheContractor.
16. 16.1
Confidentiality Contractormayreceiveconfidential,proprietarytechnicalinformation,data,know how and other information relating to Company's business, technology, products and customers of Company and Company's predecessorsininterest, and with documentation, including, without limitation, drawings, specifications, standards, designs, plans, orders, computer disks and other documents and things which are thepropertyofCompany("ConfidentialMaterial"). Contractor agrees that all Confidential Material, including all copies thereof and notesbasedthereon,whetherpreparedbyCompanyorothers,arethepropertyof andbelongtoCompany.Further,Contractoragrees: (1) touseConfidentialMaterialsolelyforthepurposeofperformingtheWork requestedbyandforCompany,andnotforitselforanythirdparty;and (2) to hold in strict confidence, not disclose to third parties without prior written consent of Company, and not to use except for the sole purpose set out above, any and all Confidential Material received directly or indirectly from Company either before the date of this Agreement or during the term of this Agreement. The obligations of confidentiality and nonuse shall not apply to information or documentsincludedinConfidentialMaterialwhich: (1) was available or becomes available to the public through no fault of Contractor;or (2) isdisclosedtoContractorbyathirdpartyhavingtherighttodisclosesuch information;or (3) canbeshownbyeitherParty,priortoanydisclosureundertheAgreement, alreadyknowtoorinthepossessionofthatParty;or (4) is required to be disclosed by a court of law or other due legal process or applicablestockexchangeregulations. It is understood that specific Confidential Material disclosed by Company shall not be deemed to be available to the public or in the possession ofContractor merely becausethespecificConfidentialMaterialisembracedbymoregeneralinformation availabletothepublicorinthepossessionofContractor. Contractor agrees to limit access to Confidential Material only to those in Contractor's employ who have a need to access Confidential Material for assisting Contractor to perform its obligations and receive its full benefit under this Agreement.ContractorwillinstructsuchemployeesnottodisclosetheConfidential Materialtothirdpartiesoruseitforanypurposeotherthanasintendedherein. Contractor also agrees to return all drawings, specifications and other materials writtenorrecordedinanyform,andanyothertangiblematerialsrelatinginanyway totheConfidentialMaterialandallcopiesthereofinanyform,toCompanywithin fiveDaysafterreceiptofawrittenrequestthereforfromCompany.
16.2
16.3
16.4
16.5
16.6
IfinperforminghereunderContractororiginatesorparticipatesintheoriginationor developmentofindustrialandintellectualpropertysuchasaninvention,discovery, or industrial, commercial or technical knowhow ("Industrial and Intellectual Property")which maybe entitledtoprotection underthelawsrelating topatents, copyrights or trade secrets, Contractor acknowledges that Company, to the extent permittedbylaw,isentitledtoandshallbethesoleandexclusiveownerofallrights insuchIndustrialandIntellectualPropertyfreeofanyrightorclaimbyContractor. Contractor information and intellectual property rights related hereto shall be and remainthepropertyoftheContractor. TheobligationsofContractorunderthisAgreementwithrespecttotheConfidential Material shall extend for a period of ten (10) years after the disclosure of the ConfidentialMaterialbyCompany. In the event of a breach or threatened breach by Contractor of the obligations provided in this Article 16, Company shall be entitled to an injunction restraining Contractorfromusingordisclosing,inwholeorinpart,suchConfidentialMaterial. NothinghereinshallbeconstruedasprohibitingCompanyfrompursuinganyother remediesavailabletoitforsuchbreachorthreatenedbreach,includingtherecovery ofdamagesfromContractor. InviewofConfidentialMaterialinpossessionofContractor,uponterminationofthis Agreement for any reason or cause, Contractor shall not manufacture any tools, equipment or products incorporating the specifications furnished by Company and includedintheConfidentialMaterial.
16.7
16.8
16.9
17. PatentInfringement ThePartiesshallindemnifyandholdeachotherharmlessagainstanyandallclaims,losses andliabilities(includingbutnotlimitedtocourtcostsandattorney'sfees)forinfringement ofanypatentorpatentsbroughtagainsteachofthembyanythirdpartyasaresultofeither Party's use of any patented processes, compositions, machines or articles of manufacture. The Party using the patents shall, at its cost, defend the other Party against such claims, provided that latter Party shall at all times have the right to be represented by its own counsel and to participate in the defence of any action relating to such infringement in which such Party is a party defendant. Should Contractor be prevented from performing thisAgreementbyreasonoflegalproceedingsbaseduponsaidinfringement,Companyshall berelievedofitsobligationtomakepaymentforWorknotperformedorscheduleditems notfurnishedasaresultthereof. 18. Representatives Contractor shall designate in writing to Company the person or persons who will have supervisoryauthorityofthedrillingoperations(ContractorRepresentative(s)). Company shall designate in writing the person or persons with whom Contractor's representative(s) may consult in planning and coordinating the Work and to whom Contractor's representative(s) may deliver notices, reports and Confidential Material (Company Representative(s)) All instructions given by Company's Representatives
consistent with the provisions of this Agreement shall be deemed those of Company. Company'sRepresentativesmaycoordinatetheperformanceoftheWorkandgivenotices underthisAgreementtosuchpersonorpersons. Company Representative and Contractor Representative designated by the Company and theContractorarereferredtointhisAgreementasRepresentatives. The Company may change the Company Representative at any time and shall notify the Contractorofanychange. The Contractor shall not change the Contractor Representative without cause or any nominateddeputywithoutthepriorapprovaloftheCompanywhichshallnotunreasonably bewithheldordelayed. The Representatives shall have the authority to commit the Company and Contractor respectivelyinallmattersundertheAgreement. 19. AssignmentandSubcontracting (a) TheCompanyisentitledtoassignthisAgreementoranypartofitoranybenefitor interestinorunderittoanyitsAffiliate.Furthermore,Companymaymakesuchassignment toanyotherthirdpartybutonlywiththeprioragreementoftheContractorwhichshallnot unreasonablybewithheldordelayed. (b) Contractor shall not subcontract the whole of the Work. Contractor shall not subcontractanypartoftheWorkwithoutthepriorwrittenconsentofCompanywhichwill notbeunreasonablywithheld.Companyshallbegivenadequateopportunitytoreviewthe form of Subcontract, the choice of Subcontractor, the part of the Work included in the SubcontractandanyotherrelevantdetailsrequestedbyCompany. (c) NotwithstandingtheCompany'sconsentunder(a)or(b)above,noSubcontractshall relieve Contractor from any of its obligations and liabilities under this Agreement and Contractor shall be responsible for acts, defaults and neglects of any Subcontractor, its agentsorrepresentativesasfullyasiftheyweretheacts,defaultsorneglectsofContractor, itsagentsorrepresentatives. 20. TerminationofAgreement
20.1 OccurrenceofTerm Subject to paragraphs 20.2 and 20.3 hereafter, this Agreement shall terminate upon the occurrenceofitsTerm,accordingtoArticle3.2hereof. 20.2 TotalLoss IftheDrillingUnitbecomesanactual,constructive,arrangedorcompromisedtotalloss,this Agreement shall terminate from the moment the loss occurs and Company shall owe ContractoronlytheCompensationearnedtosuchmomentplus,(ifapplicable)aprorataof theDemobilisationFeeforContractor'sEquipment.
20.3 EarlyTerminationbyCompany 20.3.1 TerminationbyNotice This Agreement terminates by at the end of the Term when the First Well has been Completed or Abandoned, or if Company elects to drill the Option Well, when the Option Well has been Completed or Abandoned. Company may nevertheless terminate this Agreement at any earlier time after the Commencement Date by giving Contractor thirty (30)Dayspriorwrittennotice.CompanyshallincurnoliabilitywhatsoevertoContractorin respectofanysuchearlyterminationpursuanttothisArticleexcepttopayContractorany moneys then due and owing any applicable early termination fee and the Demobilisation Fee,asdescribedinScheduleA. Company may terminate this Agreement at its convenience at any time prior to the Commencement Date by written notice to Contractor. Company shall incur no liability whatsoevertoContractorinrespectofterminationpursuanttothisArticle. 20.3.2 ImmediateTermination Company may terminate this Agreement forthwith upon the occurrence of the following eventsforreasonsattributabletoContractor: (a) if: (i) apetitioninbankruptcyisfiledbyoragainstContractor;or (ii) areceiverisappointedforanypartofContractor'sassets;or iii) anassignmentismadeofanypartofContractor'sassetsforthebenefitofits creditors;or (iv) processofcourtorauthorityisleviedorenforceduponorissuedoutagainst anyassetsoftheContractorandsuchprocessisnotdischargedwithinthirty (30)Days;or (v) anorderismadeoraneffectiveresolutionispassedforthewindingupof the Contractor otherwise than for the purpose of reconstruction or amalgamationwhilesolvent;or (vi) anysimilaractiontakenunderthelawsofthecountrywhereContractoris domiciled which would materially impair Contractor's ability to fulfil its obligationshereunder. (b) in the event that Contractor is not completely rigged up for drilling operations on CommencementDate; (c) in case of Contractors Default, which has not been remedied pursuant to Article 10.9hereof; (d) incaseofrepairsexceedingthetimelimitprovidedinArticle10.5(c); (e) if the Drilling Unit is prevented from operating due to Force Majeure according to Article14hereof.
20.4 LiabilityAndLegalRemedy CompanyshallincurnoliabilitywhatsoevertoContractorinrespectofterminationpursuant toArticles20.2and20.3.2aboveexcepttopayContractoranymoneysthendueandowing save that Company shall not be required to pay any early cancellation fees or penalties calledforunderthisAgreement. Contractor agrees that its Drilling Unit will be available to commence operations in the OperatingAreabetweenSeptember1st,2011andOctober15th,2011.Contractoragreesthat itwillprovideCompanywithregularprogressreportsandtimingschedulesfortheexpected arrivaloftheDrillingUnit.IftheDrillingUnitisnotlocatedintheOperatingAreaandready to commence operations by October 15th, 2011, then (a) Contractor shall be obliged to promptlypaytoCompanyadelayfeeequaltothelesserof(i)adailydelayfeeof$10,000 perDayfromOctober15th,2011untiltheCommencementDate,and(ii)$300,000;and(b) theCompanyisentitled toterminate thisAgreementatany timeafter October15th,2011 withoutanypaymenttoContractor(andtheContractor'sdailydelayfeeshallthenceaseto apply). 21. SchedulesAttachedTotheAgreement AttachedheretoandincorporatedinthisAgreement,arethefollowingSchedules: ScheduleA: ScopeofServicesandRates ScheduleB: Contractor'sPersonnel ScheduleC: Materials,SuppliesandServicesprovidedbyContractorandCompany ScheduleD: SpecificationandEquipmentListofDrillingUnit. ScheduleE: TechnicalData ScheduleF: Safety,HealthandEnvironmentalRequirements ScheduleG: ContractorDrug,AlcoholandContrabandPolicy ScheduleH: ChangeOrders ScheduleI: QualityPlanandRequirements ScheduleJ: BackgroundChecks ScheduleK: DrillingUnitInspectionTest ScheduleL: DrillStringInspectionProcedure Exceptasotherwisespecified,intheeventofanyambiguityorinconsistencybetweenanyof theprovisionsoftheSchedulesandanyofthetermsandconditionscontainedinthemain bodyofthisAgreement,thelattershallprevail.
22. Notices AllnoticesinrespectoftheAgreementshallbegiveninwriting,beintheEnglishlanguage and delivered by hand or by first class courier. Daily correspondence (excluding notices) relatingtotheperformanceoftheWorkcanbemadebyemailorbyfax.Noticesanddaily correspondencesbetweenthePartiesshallbemadeatthefollowingaddresses: Company: Address: GenelEnergyInternationalLimited c/o BesetepelerMah.NergizSk.No:7/52 SoguztozuAnkara,Turkey Telephone:+903122188400 Facsimile:+903122191873 AttentionoftheMr.LeventAka Email:tba DrillingManagerMr.AllenFaircloth cc:tba TechnicalManagerMr.smailAbalolu cc:tba Contractor: Address:
Telephone: Facsimile: Email: Attentionofthe____________
Noticesordailycorrespondencesshallbeeffective: a. ifdeliveredbyhand,atthetimeofdelivery; b. ifsentbyfaxoremail,atthetimeofreceiptofthefaxoremailbetween 9.00amand5.00pmonabusinessdayatthetimeofreceiptorifreceived outofworkinghours,at9.00amonthenextbusinessday;or c. ifsentbyfirstclasscourier,postageprepaid,onreceiptofsuchcourierby theaddresseeasevidencedbythecouriercompany.
EitherPartymaychangeitsaddressatanytimebygivingnoticeofsuchchangeinwritingto theotherParty. 23. Miscellaneous 23.1 Headings Title headings contained in this Agreement are for identification and reference purposes only, and are not to be construed as limiting or extending the meaning of any of its provisions. 23.2 DefaultandNonWaiver TherightofeitherPartytorequirestrictperformanceofthisAgreementwillnotbeaffected byanypreviouswaiverordelays.NofailureorfailuresonthepartofeitherPartyheretoto enforce,fromtimetotime,allorpartofanyprovisionofthisAgreementshallbeconstrued asawaiverofsuchprovision. 23.3 Enforceability Anyprovisionhereinwhichinanywaymaycontravenetheapplicablelawsorregulationsof anyjurisdictiontowhich thisAgreementissubject shallbe deemed, tothe extentofsuch contravention,severableandofnoforceoreffectandshallnotaffectanyotherprovisionof thisAgreement. 23.4 EntireAgreementandAmendments ThisAgreementincludingitsSchedulesconstitutestheentireagreementoftheParties,and no other writing or conversations shall be considered a part of this Agreement unless evidenced by written agreement of the Parties on or after the Effective Date of this Agreement. In the event that the Company and Contractor propose to amend the Work or the terms hereof, such amendment shall be subject to mutual agreement of the Parties. This Agreementmaybeamendedonlyinwriting. 23.5 Security Contractorshallprovide,atitsexpenseandinaccordancewiththeCompanySecurityPolicy, protectionofatypeandnaturecustomaryfortheprotectionofallpersonnelandequipment operatingontheAccessRoadtoWorkSite,atWorkSite,WaterPumps,WaterPonds,Water Pipeline, Storage area and Camp Site or such other location as the Parties may agree in writingasestablishedncoordinationwiththeCompanysSecurityManager 23.6 BusinessEthics ForpurposesofthisArticle23.6"Official"meansandincludes:
a)
b) c) d) e)
anyofficeroremployeeofanygovernmentoranydepartment,agencyor instrumentality(i.e.,anylegalentitycontrolledbythegovernment)thereof, oranypersonactinginanofficialcapacityonbehalfofanysuch government,department,agencyorinstrumentality; anypoliticalparty; anyofficialofapoliticalparty; anycandidateforpoliticaloffice;or anyofficeroremployeeofaPublicInternationalOrganization(e.g.,United Nations,IMF,WorldBank).
Contractor represents that it has not offered, paid, promised to pay, authorized the paymentof,ortransferred,moneyoranythingofvaluetoanOfficialtosecureanyimproper advantage or benefit in relation to the matters contemplated by this Agreement, either directly or indirectly through a third party. In recognition of the principles of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business TransactionswhichenteredintoforceonFebruary15,1999,andtheUnitedStatesForeign CorruptPracticesAct,andtheUKBriberyAct(2010),Contractorrepresentsandagreesthat itwillnot,directlyorindirectly,inconnectionwiththisAgreementandthemattersresulting therefrom,offer,pay,promisetopay,orauthorizethegivingofmoneyoranythingofvalue toanOfficial,ortoanyotherpersonwhileknowingorbeingawareofahighprobabilitythat alloraportionofsuchmoneyorthingofvaluewillbeoffered,givenorpromised,directlyor indirectlytoanOfficial,forthepurposeofinfluencingtheact,decisionoromissionofsuch OfficialtoobtainorretainbusinessrelatedtothisAgreement,todirectbusinessrelatedto thisAgreementtoanyperson,ortoobtainanyimproperadvantageorbenefit.Contractor representsthatnoOfficialorcloserelativeofanOfficialhasanydirectorindirectownership or other legal or beneficial interest in it or any of its affiliates, or in the contractual relationshipestablishedbythisAgreementoranyOrder,andthatnosuchOfficialservesas an officer, director, employee, or agent of Contractor. This representation shall be continuingthroughoutthisAgreement.ContractoragreestonotifytheCompanypromptly and in writing of any changes in its direct or indirect ownership in it or its affiliates that wouldmakeitorthemanOfficialasdefinedinthisAgreement.Contractorcovenantsthat shouldCompanynotifyitofanyconcernsthattherehasbeenabreachoftheprovisionsof thisSubArticle,itshallcooperateingoodfaithwiththeCompanyindeterminingwhether suchabreachhasoccurred.IftheCompanydeterminesinitssolediscretionthattherehas beensuchabreachorthatContractorhastakenanyactionthatwouldcreateamaterialrisk ofliabilityfortheCompanyunderanyapplicablelaw,itshallbeentitledtotreatthebreach as an event of default and to exercise any rights it may have under its Orders upon the occurrence of an event of default, without regard to any waiting periods or cure periods specified in this Agreement. Contractor further agrees that, in connection with the Work performed under any Order it will require its Subcontractors to agree to and comply with contractualprovisionssubstantiallyidenticaltothosecontainedinthisSubArticle. 24. Customs,DutiesandTaxes 24.1 CustomsandDuties Company shall arrange for exemptions or pay customs duties and deposits, import taxes, excisedutiesandlike,ifimposedbytheauthoritiesoftheIraqiGovernmentinrespectofthe entryintotheKurdistanRegionofIraq,temporarypresenceintheKurdistanRegionofIraq andexitfromtheKurdistanRegionofIraqofContractorsEquipmentstrictlynecessaryto carry out operations under this agreement and always excluding personal effects, food,
tobacco, amusement material and vehicles. Company will endeavor to utilize its customs exemptionundertheProductionSharingContractforimportingandexportingContractor's Equipment and Drilling Unit and other supplies that are necessary to carry out operations underthisAgreement.ContractoragreestofollowtheinstructionsoftheCompanyinthis respect. Contractor agrees to follow the instructions of Company in this respect of the above provision, and Contractors failure to do so will relieve Company of the aforementioned obligationtotheextentthatitisincreasedbyContractorssaidfailure.Contractorshallwork closely with Company from award of contract to ensure that all paperwork prepared to accompanyanyshipmentswillbeacceptabletoIraqicustomsandinatimelymannersothat delays and customs charges are minimised. Contractor shall be solely responsible for all importation including clearing and shipping of all Contractors equipment and its sub contractors materials and equipment required for the Work. Contractor must obtain approvalfromCompanyforanysuchimportationpriortocommencingtheimportation.All machinery,equipment,vehiclesandconsumablesimportedunderthisAgreementmustbe solelyusedintheperformanceofcontractorsobligationsunderthisAgreementandinthe Operating Area. Before importing or exporting any of its items, machinery, equipment, spare parts or materials, Contractor will consult with and follow instructions given by Company pertaining to such importation or reexport of any such items from the country wheretheoperationswereconducted.Contractoragreesnottosell,transferordisposeof anyofitsmachinery,equipment,sparepartsormaterialswithinthecountrywithoutprior writtenapprovalfromCompanyandwithoutpaymentoftaxesduetothegovernment. 24.2Taxes Contractorshallpayorcausetobepaidforitsownaccountallfees,levies,socialsecurity and pension contributions, and taxes assessed or levied against Contractor or its representatives,Subcontractors,employees,directorsoragentsarisingoutofContractors performanceoftheWorkhereunderincludingcorporateincomeandexpatriatepersonnel personalincometaxesassessedundersimplifiedtaxregimes,providedthattheContractor shallnotbeliabletopayorcausetobepaidsuchfees,levies,socialsecurityandpensions contributionsandtaxesrelatedtoemployeesoftheContractoriftheCompanyshallreceive evidence to the satisfaction of the Company, in its absolute discretion, that an exemption from such fees, levies, social security and pensions contributions and taxes applies to the Contractor. 24.3 AllsumspayablebyCompanytoContractorunderthisAgreementareexclusiveof any goods and services taxes, value added tax (VAT), sales and withholding taxes if any, imposed assessed or levied by any level of the authorities of Iraq, and which shall be the responsibilityofandshallbeabsorbedbyCompany. 24.4 ContractoranditsSubcontractorsshallbesubjecttothepaymentorwithholdingof the personal income tax and social security contributions for which it is liable to pay or withholdinrespectofitsemployeeswhoareIraqinationals,pursuanttotheLawofTaxation (LawNo.5of1999)passedbytheNationalAssemblyoftheKurdistanRegionofIraq,asmay beamendedfromtimetotimeoranyrelevantlegislationapplicableintheKurdistanRegion of Iraq, in the same manner as the same shall be generally applied to all other industries, except that Contractor and its Subcontractors shall not be liable for such taxes or contributionswithrespecttopersonsotherthanitsownemployees. 24.5ChangeinTaxLegislation
Should, after the Effective Date , the tax legislation in force in Iraq at the time of the Effective Date is changed or abrogated which subsequently and materially affects the CompensationorthetimeforCompletion,then,thePartiesshallmeetuptodecidewhat courseofactiontotakeandCompanymayagreetotreattheconsequencesofsuchchange intheIraqitaxlegislationasaChangeOrderpursuanttoScheduleH. 25. ApplicableLawandArbitration 25.1 The Agreement shall be construed and take effect in accordance with the Laws of Englandwithoutanyreferencetotherulesofconflictoflawsthereof,andtheEnglishCourts shallhaveexclusivejurisdictionoveranymatterwhichisnotwithinthesoleauthorityofany arbitration tribunal which is appointed pursuant to the provisions of Article 25.3. Notwithstandingtheforegoing,theContracts(RightsofThirdParties)Act1999shallnotbe applicable. 25.2 TherulinglanguageoftheAgreementshallbetheEnglishlanguage. 25.3 Anydispute,controversy,orclaim(a"Dispute")arisingoutoforinconnectionwith thisAgreementwhichcannotbeamicablysettledshallbefinallysettledundertheRulesof Arbitration of the International chamber of commerce (ICC), by an arbitration panel comprisingthreearbitrators,subjectasfollows:
a)
b) c)
Thelanguageofthearbitrationproceedings,thesubmissionofallwritings, thedecisionoftheTribunal,andthereasonssupportingsuchdecision,shall betheEnglishlanguage; TheseatofthearbitrationshallbeLondon,England;and AnymonetaryawardshallbemadeinU.S.Dollars,freeofanytaxorother deduction.
IN WITNESS WHEREOF, the duly authorised representatives of the Parties hereto have signedthisAgreementinduplicateontheDayandyearherebelowwritten.
ForandonbehalfofCompany:
GENELENERGYINTERNATIONALLIMITED
ForandonbehalfofContractor: Signature: Name:
Signature: Name:
Title:
Title:
Date:
Date:
PRFGI11006
Land Drilling Rig(s) Service-Schedules
SCHEDULE A: SCOPE OF SERVICES AND RATES

A1. Operating Area
The Operating Area shall be the Ber Bahr Block ("Ber Bahr"), Dohuk, Kurdistan Region, Iraq.
A2. Depth of Wells

The average depth of wells in Ber Bahr shall be 3,100 meters to 5,000 meters with 5 drill pipe.
A3. Schedule of Rates

Unit Description 1 Mobilisation Fee: The Mobilisation Fee shall include cranes, trucks, escorts, special permits, transportation and insurance or other cost to move Contractor's Equipment, supplies and personnel from point of origin to Companys designated well site in Operating area, rg up drilling unit and equipment, testing of equipment and execution of rig acceptance document that Drilling Unit is ready to commence Work at this designated well site. Operating Rate Standby Rate with Crew Standby Rate without Crew Redrill Rate Repair Rate (applying maximum 24 hours per calendar month) Fixed Moving Rate (for moves of >10m to <10 km) Fixed Moving Rate (for moves of <10m) Force Majeure Rate Lump sum Rates
United States Dollar (USD)
2 3 3A 4 5 6 6A 7 8
per day per day per day per day per day Lump sum Lump sum per day
10
Lump sum Demobilisation Fee (applicable for export out of Iraq) Demobilisaton for all Contractors equipment and spare parts from the designated Work ste in the Operating Area to the Maximum Demobilisation Point as specified by Contractor herein, or to another point as provided in Drilling Rig Services Contract article 10.8. The Maximum Demobilisation Point is _____________________ Additional Services Procurement fee: 10% Mark-up to First $10,000 per purchase 5% Mark-up over $10,000 per purchase *Lump Sum Depreciation rate of drill string (*2% per month to a maximum of 70% of CIF Replacement Cost)
Day Rates shall not apply during periods when Lump Sum payments apply.
PLEASE COMPLETE CONTRACTORS PERSONNEL TO BE PROVIDED BY JOB POSITION, NUMBER, SCHEDULE AND NATIONALITY
JOB POSITION IS ALL INCLUSIVE
SCHEDULE B: CONTRACTORS PERSONNEL

Position Rig Superintendent (Day) Tourpusher (Day & Night) Electrician Rig Mechanic Driller Assistant Driller Derrickman Assistant Derrickman Floor man Forklift Driver Crane Operator Roustabout Welder Assistant Mechanic Assistant Electrician Medic / Radio Operator Camp Boss, Staff, Catering Crew, Number Employed 2 4 2 2 4 3 3 3 9 3 3 9 2 2 2 2 As required 2 On Duty / On Rig 1 2 1 1 2 2 2 2 6 2 2 6 1 1 1 1 As required 1 Deduction Rate,
United States Dollar (USD)/man-day
Status EXPATRIATE EXPATRIATE EXPATRIATE EXPATRIATE EXPATRIATE NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL
EXPATRIATE- CAMP BOSS NATIONAL CATERING CREW
Warehouseman Safety Officer Sub-Total Rig Manager (office based) Grand Total
2 2 58 2 59 or 60
1 1 34 1 35
NATIONAL
EXPATRIATE
EXPATRIATE
Note Note Note Note
1: Expatriate personnel shall be employees of Contractor unless otherwise notified to Company. 2: The above rates are cost rates for personnel salaries and burdens and any additional personnel required will be chargeable at the above rates. 3: The Deduction Rate refers to both short manning and requested additional personnel. 4: Contractor shall ensure that such key personnel and supervisory personnel of the Contractor and Subcontractors shall read, write and speak fluent in English Language. 5: Total number National Employees depend on work schedule. Contractor should include their Rig staff & office staff personnel.
Note
SCHEDULE C: MATERIALS, SUPPLIES AND SERVICES PROVIDED BY CONTRACTOR AND COMPANY

LEGEND: 1. Provided by Contractor at Contractors cost. 2. 3. Provided by Contractor with costs reimbursed by Company. Provided by Company at Companys cost. SUPPLIES AND SERVICES 1. 1.1 1.2 1.3 Drilling Location Licences and consents to perform operations including suspension or abandonment. Preparation of a sound location, adequate in size and capable of supporting the drilling rig. Location surveying equipment. 3 3 3 Provided By
2. 2.1 2.2
Transportation / Handling Transportation for Contractors personnel between point of origin to the Drilling Unit n the Operating Area and return to their point of origin. Mobilisaton for all Contractors equipment and spare parts from their point of origin to the designated well site in the Operating Area. All trucks, cranes, other equipment, personnel and services to rig up & prepare Drilling Unit to commence Work on designated well site in the Operating area. Transportation of Contractor's equipment and spare parts between Contractors base to Drilling Unit and return. Labour and equipment for loading/unloading of Company's materials and/or Contractor's equipment at the Work ste Transfer facilities to transfer Contractor personnel and cargo from Erbil Airport or other Airports to the Drilling Unit. Transportation and containers for disposing of all rig waste and contaminated cuttings and fluids as set out in article 8.8 and 6.9 Trucks and cranes (other than specified in Schedule D) for moving the Drilling Unit to/from/between designated locations in the operating area. Demobilisaton for all Contractors equipment and spare parts from the designated Work site in the Operating Area to the Maximum Demobilsation Point as specified by Contractor herein, or to another point as provded in Tender Document section 10.8. 1 1
2.3
2.4 2.5 2.6 2.7
1 1 1 1
2.8
2.9
2.10 2.11
Cargo baskets, slings and containers for equipment supplied by Company and Company's other Contractors. Cargo baskets, slings and containers for use by Contractor.
3 1
3. 3.1 3.2
Securty Provide Security for Contractors Personnel from their point of origin to their arrival into and their departure from the Kurdistan Region and Iraq. Provide a detailed Security Plan and Safety Plan which will include: Furnishing Security Servces and Security Personnel: For all personnel and all equipment on the Access Road to Work site. At Work Site, Water Pumps, Water Pipeline, Storage area and Camp site for all personnel and all equipment. 1 1 1 1 1
3.3
Provide and install fencng and gates to secure Work Ste ncludng but not limited to Access Road, Location, Camp and Storage area,
2/3
4. 4.1
Customs Duties, etc Customs duties, taxes, licences, import tariffs and the costs of any similar charges including any brokerage fees in respect of Contractor's equipment directly required for the Work. Customs duties, taxes, licences, import tariffs and the costs of any similar charges including any brokerage fees in respect of Contractor's equipment not directly required for the Work and including personal goods of employees or agents of Contractor. 3
4.2
5. 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9
Third Party Services Drill stem testing tools and services. Electric well logging equipment and services. Mud Logging equipment and services. Mud engineering services and supervision. Mud Motor drilling services. Acidizing, fracturing and other specialist services. Directional drilling equipment and services. Cementing service. Coring services and equipment. 3 3 3 3 3 3 3 3 3
5.10 Tubing and casing running services. 5.11 Extra welders and welding material used on welding and cutting Company's equipment as authorised by Company
3 3 3 3 3
5.12 Well completion services. 5.13 Well test equipment and services. 5.14 Specialist services and equipment not designated herein but required by Company for the operations.
Inspection of drill pipe, drill collars, other down-hole equipment to standard DS-1 Cat.4. (API RP7G is sufficient as minimum) 5.15 At Contract start and finish Drill pipe SEE SCHEDULE M Drill collars and BHA components SEE SCHEDULE M 5.16 5.17 5.18 Repair of damaged Contractors down-hole equipment due to normal wear and tear Repair of damaged Contractors down-hole equipment due to abnormal down-hole condition or abnormal operations Space, assistance and services for Company's other Contractors personnel and equipment in accordance with Drilling Unit specification.
1 1 1 1 2/3 1
Inspection and repair of BOP: a). Internal visual inspection and a full pressure and functional test prior to the Commencement Date, at the end of each well and at all other times required by Company, statutory or certifying authorities. 5.19 b). Repairs to BOP due to fair wear and tear (except as provided under Item 6.11 below). c). Repairs to BOP except as described in (b) above and additional inspections as required by Company. 5.20 Fishing services (including fishing specialists, equipment as per 7.2 and consumables).
1 2 3
Cuttings, cleaning/injection, disposal of cuttings and drilling fluids, 5.21 disposal services (including disposal specialists, equipment and consumables). 5.22 5.23 Flare stacks and pits, associated pipe work, burner heads and consumables. Glycol and glycol injection equipment other than specified in Schedule B - Rig Specification.
3 3 3
5.24 H2S services (including personnel, equipment and consumables). 6. 6.1 6.2 6.3 Materials and Supplies Cement and cement additives. Mud chemicals and completion fluids. Diesel fuel for use on the Drilling Unit.
3 3 3
6.4 6.5 6.6 6.7 6.8
Lubricants and hydraulic fluids for the Drilling Unit and Contractors equipment, including drill pipe dope. Casing dope. Drilling water. Potable water. Drilling bits, diamond bits, core heads and catchers. Shale shaker and mud cleaner screens (Company to advise mesh sizes): a). Initial installed set of screens as specified by Company b). Replacement of all used screens.
1 3 3 3 3
6.9
1 2/3
Casing protectors for drill pipe: 6.10 initial set if available replacement set(s) to be defined by Company BOP consumables (including ram rubbers) - first set (to be as new) 6.11 - replacement set(s) due to fair wear and tear - replacement set(s) due to other than fair wear and tear - steel gaskets for Contractors BOP connections 6.12 Replacement blades for stabilisers, rollers, etc for reamers. 6.13 Cup testers and replacement seals to fit casing sizes used by Company
1 1 2 1 2/3 1
7. 7.1
Drilling Equipment and Unit Contractor's equipment and the Drilling Unit as described in Schedule D Rig Specification. Fishing tools in excess of those detailed in Schedule D Rig Specification. Contractor to provide a minimum of 1 set Full Strength Fishing tools (overshot) for all drill strings. Anything in excess 2/3 All casing and tubing handling equipment. As per equipment list All drill pipe and HWDP including drill collars and handling tools in excess of those detailed in Schedule D Rig Specification. Cementing heads. Elevators, tongs and handling tools in excess of those detailed in Schedule D Rig Specification. Drilling bumper subs/drilling jars/accelerators. Hole openers, reamers and stabilisers in excess of those detailed in Schedule D Rig Specification. Kelly saver sub rubbers and drill pipe wipers. 1
7.2
2/3
7.3 7.4 7.5 7.6 7.7 7.8 7.9
1&3 2/3 3 2/3 2/3 2/3 1 2/3 3
7.10 Casing cutters, casing spears. 7.11 Casing power tongs and hydraulic power unit.
Mud pump fluid end consumables (Contractor to state liner sizes available in Schedule D Rig Specification): 7.12 first set (to be as new) replacement set(s) 7.13 Spares for choke manifold. 7.14 Maintenance, including all hand and power tools and spare parts for all Contractor's equipment unless otherwise provided herein.
1 1 1 1 2/3 1 1 2 1
7.15 Mud vacs and sludge gulpers. 7.16 Mud laboratory test equipment for routine mud testing and treatment as specified in Schedule D, Rig Specification.
7.17 Contractor's personnel as listed in Schedule B. 7.18 Additional Contractor's personnel as required by Company. 7.19 Connectors, adapters, drilling and cross-over spools necessary to fit Contractors BOP to Companys wellhead
8. 8.1 8.2 8.3 8.4 8.5
Well Equipment All tubular goods, including casing, tubing hangers and packers, conductor pipe and corrosion caps. Casing shoes, collars, baskets, centralisers, float equipment, baffles, scratchers and all other such in-hole equipment. Wellheads including casing and tubing heads, wear bushings and all associated wellhead equipment including ring joint gaskets. Valves, Xmas Trees and all necessary tools and equipment for installation. All running and pressure testing tools for wellhead equipment. 3 3 3 3 3
9. 9.1
Safety and Medical Radio and satellite equipment as specified in Schedule D Rig Specification for communication with Contractors base and personnel, including portable sets. Communication equipment other than as specified in Schedule D, Rig Specification, for communication with Companys base, including portable sets. Permits, licences, required for operation of Contractors communication equipment. Doctor/Medc Medical support on the Drilling Unit for all persons as specified in Schedule D, Rig Specification. Emergency medivac services contract to provide cover for Contractors personnel. Safety hats, protective clothing, safety boots and gloves for all 1
9.2
9.3 9.4 9.5 9.6
1 1 1 1
Contractors personnel for use with both oil based and water based mud and completion fluids. 9.7 9.8 9.9 Drilling Unit fire fighting and safety equipment. Any fire fighting and safety equipment required by Company in excess of rig equipment list. Ste specfc HSE & Q Qualty Assurance Plan 1 2/3 1
10. 10.1
Camp, Catering and Miscellaneous 100 man Camp for Contractor's personnel and Company employees and Company's other Contractors personnel. 1 1 1 2 1 1 3
10.2 On-site office for Contractor's tool pusher and Companys Supervisors. 10.3 10.4 Catering for Contractor's personnel, plus 20 (twenty) Company employees or Company's other Contractor's personnel. Catering for any Company employees and Company's other Contractors personnel in excess of 20 (twenty).
10.5 Camp video films and leisure equipment. 10.6 10.7 Any other item, equipment or service ordinarily provided by a day work drilling Contractor in accordance with good oilfield practice. Except as provided above, any other item, equipment or service required for the performance of the work.
SCHEDULE D: SPECIFICATION AND EQUIPMENT FOR DRILLING UNIT CAPABLE OF DRILLING TO 5000M WITH 5" DRILL PIPE
Ourpreferenceisfora2000HPRigAsanALTERNATIVETECHNICALPROPOSALa1500HP(750,000#mincapacity, 25'minsubstructure)with2or31300HPpumpsmaybetenderedwithotherequipmentaslistedbelow.
1 2 3 4 5 6 7 8 9 10 11 12 2000HPDRAWWORKS1,000,000#or(1500hpWITH750,000#CAPACTY)WITHCROWNOMATICANDDYNAMICBRAKE 2530'Substructure1,000,000#CAPACITYor(750.000#CAP1500HPDW)SPECIFYCLEARHEIGHTUNDERSUBSTRUCTURE MASTANDCROWNBLOCK1,000,000#CAPACITYor(750,000#CAPACTY1500HPDW)HANDLEPIPEINTRIPLESTANDS TOPDRIVECOMPATIABLEWITHRIGANDDERRICKCAPACITYROTATINGMOUSEHOLE DRILLERSCABINWITHBRAKESYSTEMFORDRAWWORKS,CONTROLPANELWITHCOMPLETEINSTRUMENTATIONINCLUDING WEIGHTINDICATOR,TOPDRIVEORROTARYTORQUE,PUMPPRESSURE,SETTORQUELIMITS,AUTOMATICDRILLER TRAVELINGBLOCK,HOOK,SWIVEL,KELLYSPINNERCOMPATIABLEWITHRIGCAPACITY 371/2"ROTARYTABLE 2OR31600HPMUDPUMPSOR(2OR31300HPPUMPSW/1500HPDW)COMPLETEWITHPULSATIONDAMPENERS,CHARGING PUMPS,RELIEFVALVES,5000PSIDISCHARGEMANIFOLD,5000PSISTANDPIPEAND5000PSIROTARYHOSES 3HIGHSPEEDSHALESHAKERWITHJACKINGSYSTEM,DESANDER,DESILTER,ORCOMBINATIONMUDCLEANERANDCENTRIFUGE 2000BBLACTIVEMUDSYSTEMCOMPLETEWITHSHAKERTANK,SETTLINGTANK,INTERMEDIATETANK,RESERVEPIT,MIXING TANKS,TRIPTANKWITHPUMP,SHEARINGPUMPANDSANDPUMP 2500BBLSTANKCAPACITYFORKILLWEIGHTMUD RIGPOWEREQUIPMENT4MAINENGINESAND1AUXILARYENGINESWITH1250KWGENCOMPLETEWITHELECTRICALCONTROL ROOM,AIRCOMPRESSORSANDCOLDSTARTUNIT ALLWELLCONTROLEQUIPMENTTOBESUITABLEFORH2SSERVICE,RECERTIFIEDAFTERMOSTRECENTEXPOSURETOH2S,OR RECERTIFIEDINLAST5YEARSIFNOEXPOSURETOH2S 30"ROTATINGHEAD20"ROTATINGHEAD 20"BOPSRAMSANDANNULAR20"SPOOL BOPHANDLINGSYSTEMBOPTESTSTUMP 135/8"5000OR10000PSIANNULAR 135/8"10000PSIDOUBLERAM 135/8"10000PSISINGLERAM 135/8"10000PSIMUDCROSS 135/8"10000PSIX5000PSISPOOL 135/8"PSISPOOLX11"10000PSISPOOL 135/8"10000PSIX71/16"SPOOL10000PSI MINIMUM31/16`10000PSIDUALCHOKEMANIFOLDWITHTWOHYDRAULICCHOKESANDONBYPASS/STRAIGHTTHROUGHLINE CHOKELINE31/16"OR41/16"WITHONEHYDRAULICANDONEMANUAL10000#VALVES KILLLINE21/16"OR31/16"WITHTWOMANUAL10000#VALVESTWO10000#CHOKEANDKILLLINES(COFLEXORSTEEL) ACCUMULATORUNITELECTRICOVERHYDRAULICSTORAGECAPACITY50%OVERTOTALBOPCLOSINGCAPACITY SUBMITDRAWINGSFORBOP'SANDCHOKEMANIFOLD ALLDRILLPIPE,DRILLCOLLARS,HEVIWT,CROSSOVERS,BITSUBS,PUPJOINTS,KELLYS,SAVERSUBS,SWIVELSUBS,SAFETYVALVES ANDANYITEMSINDRILLSTRINGMUSTBESUITABLEFORH2SSERVICE 5000M5"19.50&25.50DRILLPIPE 3500M31/2"15.50DRILLPIPE 30JTS5"HEVIWT 30JTS31/2"HEVIWT 991/2"DRILLCOLLARS 158"DRILLCOLLARS 2161/2"DRILLCOLLARS 5"AND31/2"TESTJOINTFORBOPS ALLNECESSARYHANDLINGTOOLS,SAFETYCLAMPS,ANDCROSSOVERSFOREACHSIZEOFDOWNHOLEEQUIPMENT TONGSTOHANDLEALLDRILLSTRINGCONNECTIONS CASINGTONGS FUELTANKSFOR25000GALLONSDIESEL WATERTANKSFOR1000BBLSTORAGEWATERPUMPSONLOCATION FORKLIFTMANLIFT CELLARDISPOSALPUMP COMMUNICATIONSSYSTEM TOOLPUSHER,COMPANYMAN,MUDENGINEER,GEOLOGISTTRAILERSATRIGSITE 100MANCAMP,MEDICFACILITIESANDCATERINGFACILITIESWITHSEPERATEPOWER/FUEL/WATERSTORAGETANKS COMPLETERIGANDCAMPSPECIFICATIONS,SUBSTRUCTURELOADINGANDFOUNDATIONREQUIREMENT/DRAWINGSANY OTHERFOUNDATIONREQUIREMENTSFOREQUIPMENT
13
14
15 16 17 18 19 20 21 22 23 24
Invitation to Tender Schedule E
SCHEDULE E: TECHNICAL DETAILS

A. INTRODUCTION
Company is the Operator of the Production Sharing Contract (PSC) of Ber Bahr block, signed on March 31st 2009 between the Contractor Parties, being Genel Energy International Limited and Gulf Keystone Petroleum Ltd. (GKP). Company is an independent Exploration and Production (E&P) company holding several PSC in the Kurdistan Region of Iraq since 2002. Company holds participating interests in six exploration and production licenses in in the region; namely Taq Taq (44%) Tawke (25%), Dohuk (40%), Miran (25%), Chia Surkh (20%), and Ber Bahr(40%). Company has significant amount of production from two fields Taq Taq and Tawke increasing on annual base.
B. PSA OPERATING AREA

The Ber Bahr prospect (208 km2) is located to the northeast of the Dohuk City and approximately 118 km by road from Erbil the capital of the Kurdistan Region of Iraq and 264 km by road from Sulaymaniyah. Both cities have international airports with regular flights from Dubai, Istanbul and other European destinations. The area forms a high topographic feature situated in the high mountainous region of Northern Iraq. As a part of folded zone, the anticlines are represented by high and elevated area while the synclines are reflected by lowlands or plain areas. Jebel Bekhair is a mountainous feature that is standing to the east of a plain located between Ain Zala and Bekhair structure which is represented by a broad syncline filled with terraces. The surface expression forms a 400m positive feature in the topography, with highest elevation about 1000m amsl. The area is reasonably well serviced by either paved or gravel roads Several villages are present on the block however, the population is generally sparse. View of Ber Bahr structure is given in Figure 1 (above).
There is scant humidity during the summer, and very little rain falls between June and September, but annual winter (December-February) rainfall averages around 300-560 mm (12 to 22 inches) in the foothills. In the mountains, most of the winter precipitation falls as snow and may total as much as 1,020 mm (40 inches). Winters are considerably colder and longer in the highlands than the lowlands; January temperatures range roughly between -4 and 17 C (24 - 63 F), though it can get as cold as -11 C (12 F). Summers bring clear skies and hot temperatures averaging around 30 C (86 F) in the daytime, although temperatures of up to 43 C (110 F) have been recorded. At night, temperatures drop considerably. Because of its location, Iraq is affected by several strong wind currents. In the summer, a steady northerly and north-westerly wind called the shamal brings very dry air to all of Iraq.
Invitation to Tender Schedule E
BER BAHR -1 - BER BAHR BLOCK KURDISTAN REGION NORTHERN IRAQ CURRENT PROPOSED: WELL SCHEMATIC
SCHEDULEE BERBAHR1 BERBAHRBLOCK KURDISTANREGION NORTHERNIRAQ CURRENTPROPOSED WELLSCHEMATIC
RotaryElevation1069m GoundElevation1060m Lat:36deg53'14.8935"N Long:43deg03'50.6601"E
30"@50m
DRILL121/4"LOG DRILL26`HOLE MW8.59.0PPG 20`94ppfK55BTCCONN CMTTOSURFACE
CRETACEOUS SHIRANRISH@GL
POSSIBLE LOSSES NOLOGS
300to450m
KOMETAN@540M OAMCHUD@620M
PARTIAL TO FULLLOSSES
DSTASDIRECTED CORINGASDIRECTED
900to1250m
DRILL121/4"plotholelog DRILL171/2"hole MW8.59.0PPG 133/8"72ppfL80BTC CMTTOSURFACEASPERPROGRAM
BARNISN/COTINA@850M SARGEL@1010M ALAN@1080M BUTMAN@1230M
GRSONIC RESISTIVITY NEUTRON DENSITY IFSHOWS IMAGELOGS FLUIDSAMPLE
DSTASDIRECTED CORINGASDIRECTED
PARTIIAL TO FULLLOSSES
POSSIBLE117/8"72ppfL80LINER MW9.011.0PPG
BALUTI@1680M
GRSONIC RESISTIVITY NEUTRON DENSITY IMAGELOGS RFT FORMATIONEVALUATIONTOOLS SWC VSPCHECKSHOT
Drll121/4"holeRunlogs 1800to2250m CMTPERPROGRAM DSTASDIRECTED CORINGASDIRECTED
MW11.014PPG
KURRACHINA@1780M
95/8"53.50ppfL80Vamorotherpremiumconn
POSSIBLE75/8"39ppfL80LINER MW11.014.0PPG
DOLOMITETOP@2300M
MW11.015PPG
GELIKHANA@2700M
GRSONIC RESISTIVITY NEUTRON DENSITY IMAGELOGS RFT FORMATIONEVALUATIONTOOLS SWC VSPCHECKSHOT
Drll81/2"holetotdRunlogs MW11.015.0PP 7"26ppf32ppfL80buttorVamcmtperprogram OR41/2`BAREFOOTCOMPLETIONWITHSWELLABLEPACKERS 3100MTD REV.29.03.11
Invitation to Tender Schedule F
DRILLING RIG SERVICES AGREEMENT SCHEDULE F HEALTH, SAFETY, ENVIRONMENT AND QUALITY REQUIREMENTS
Contractor shall place equal emphasis on quality, safety, health, and the environment while performing work for Company. Failure to comply with Companys quality, safety, health and environmental requirements is cause for immediate termination of this Contract at the discretion of Company.
1. General Safety Specifications

1.1. General
With Company and its Affiliates, safety and environmental protection are core values. No business objective is so important that it will be pursued at the sacrifice of Safety and Environmental Protection. The Contractor must comply with all applicable HSE requirements contained in Genel Energy HSE Manual and other documents (e.g., Safety Alerts, etc.) as well as industry standards and governmental regulations. Adequate time will be provided by Company to complete each job in a safe and timely manner. The Contractor is expected to communicate this expectation to their employees. The Contractor is subject to a safety audit with no advance notice, but no such audit(s) shall serve to shift responsibility for, or control of, safety to Company. 1.2. Contractor Responsibility The Contractor is required to have a HSE management system that meets or exceeds the Companys HSE management system. The Contractors HSE management system should include but not be limited to, commitment of resources, HSE tools and processes, and stewardship of and accountability for the systems results. 1.3. Safety Equipment Contractor's Personnel must not report to any work location without proper Personal Protective Equipment (PPE). Company is not financially responsible for providing Contractor's Personnel with the proper PPE. Additional equipment may be dictated by the HSE Safety Plan provided by Contractor pursuant to Article 6.2(a) of the Agreement (e.g., hearing protection, H2S monitors, gloves, goggles, harness etc.). Prior to commencement of work, Contractor will inspect the work site and ascertain whether any health or safety hazards exist. Contractor is responsible for ensuring Contractor's Personnel have necessary full set Personal Protective Equipment. Whenever Contractor cannot obtain the necessary Personal Protective Equipment, Contractor will request Companys assistance in providing the equipment. Should Company provide such equipment, it shall be the sole responsibility of
the Contractor to inspect and approve it prior to providing it to Contractor's Personnel. If Company is unable to provide assistance, then Contractor, at Companys discretion, may be required to stop, at no cost to Company, the work for which such protective equipment is needed until such time as it obtains the necessary protective equipment. Contractor will not use equipment of any kind, whether or not furnished by Company, which is not safe for the premises of the Work site or the Work to be done. 1.4. Vehicle Safety Vehicle seat belts must be worn at all times when driving on Company roads or while under contract to Company. Personal vehicles of Contractor's Personnel are not allowed inside the facilities, other than to drive to designate parking areas. All Company or lease designated speed limits must be observed. All vehicles and equipment will be turned off while fuelling. Fuel storage areas and containers will be properly marked. Vehicles being refuelled must not be left unattended. Vehicles travelling between sites will be subject to a Journey Management Plan which will be strictly enforced. 1.5. Cellular Telephone Safety Contractors Personnel must comply with the requirements of Schedule J when operating a vehicle in the performance of services exclusively for Company. 1.6. Safety Policy/Meeting Requirement Contractor must have an active and visible Health, Safety and Environmental Protection program that is equal to or exceeds Companys HSE requirements. Contractor must review its HSE policy and Companys Safety Manual with all of its employees before they begin work at the Company location. Contractor will fill out necessary medical information forms for all employees prior to reporting for work. All Contractor's Personnel must be given a site specific safety orientation and security briefing before beginning Work at the Location. Contractor's Personnel must attend all Company-sponsored HSE meetings, as directed, that are specifically set up for their area. A contractor management representative may be expected to attend other Company safety meetings and workshops as prescribed by the Company Drilling Manager. In addition, the Contractor will hold safety meetings and/or pre-tour safety planning sessions each day before commencing work. Contractor must designate one of its supervisory personnel to be a HSE contact who will coordinate the Contractors safety program with Companys representative. The Contractor will have written pre-tour safety plans such as Job Safety Analysis available for inspection by Companys representative. All persons involved in the work to be done will participate in the pre-tour safety plan preparation.
1.7.
Incident Management Contractor must submit HSE statistics for last three years within the tender package. Contractor employees must report all incidents (i.e., safety hazards, near misses, motor vehicle accidents, injuries, illnesses and property damage, loss of production, etc.) immediately to their supervisor and the Contractor supervisor must report to the Company Supervisor and follow-up with documentation Company Manager. Contractor agrees to immediately inform Company of any hazardous, unsafe or unhealthy unsound condition or work practice of which it becomes aware, even if it has no authority to correct. Contractor is expected to intervene and suspend work activity, if warranted, to ensure safety and operations integrity. Contractor must furnish to Companys Representative a copy of the incident report on incidents occurring on Companys property, and assist Companys representative in filling out Companys incident report. Contractor will conduct incident investigations including root cause analysis for all recordable incidents and provide full reports to Companys representative. Contractor will participate in and cooperate with any independent analysis of Contractors incidents that may be conducted by Company.
1.8.
Pre-employment Screening Contractor must verify that pre-employment screening has been conducted, with emphasis on the following: 1 Medical History: Contractor assures that Contractors and subcontractor's employees are medically fit for the job at hand. 2 Training History: Contractor assures that Contractor's Personnel and sub-contractor's employees have been trained in the safe performance of all aspects of the work and/or situations normally encountered in and around inland oilfields. Contractor agrees to provide documentation of completed training upon request by Company. Contractor training requirements should meet or exceed Companys minimum safety training requirements. Rig Managers, Toolpushers, Tourpushers and Drillers shall as a minimum qualification have valid IWCF certification. Chief Mechanics and Chief Electricians shall have Fire Fighting certification.
1.9.
Supervisor Approval Requirement The Company Supervisor can reject any crewmembers deemed not qualified for the job. CVs for appropriate Supervisors must be made available to the Company before any work commences. Contractor must obtain prior approval from Company Supervisor before changing or substituting personnel working on Company jobs.
1.10. Permitting Requirement Unless the Company accepts the Contractors Safety System of Work including any Permits to Work Programs, It shall be the responsibility
of the Contractor to become familiar with Companys hot work, confined space entry, and energy isolation permitting requirements. Contractor shall cooperate fully in the use of permits and abide by all rules stated on them. Contractors may use their own permitting process upon Company approval provided it meets or exceeds Companys procedures. 1.11. Operations Stoppage Contractor shall not permit a condition that renders any work environment unsafe for its employees or any other person. All tools, equipment, facilities, and other items used by Contractor and practices employed by Contractor in accomplishing the Work are considered to be part of the working environment. The Company Representative will have the right, but not the obligation, to periodically inspect Contractors operations for the purpose of monitoring compliance by Contractor with Company's health and safety requirements. The Company representative may stop work at no cost to Company until any hazards or unsafe conditions noted are abated. 1.12. Contractor Safety, Health, Environment and Quality Plan Company requires the Contractor to prepare a HSEQ Plan and submit this document within the tender package. Company requires the Contractor to prepare a site specific HSEQ Quality Assurance Plan prior to Commence of Operations. This plan will conform to industry standards and governmental regulations the Kurdistan Region of Northern Iraq. Contractors practices and procedures, either written or adopted, will comply with industry standards and governmental regulations. It will be the Contractors responsibility to alert and train Contractor's Personnel concerning all health and safety hazards to which Contractor's Personnel may be exposed and the safety rules or practices that are necessary to avoid those hazards. Contractor shall keep the Company Supervisor informed in writing of any hazardous materials that Contractor brings on site. 1.13. Subcontractors The requirements of this Schedule are applicable to all subcontractors hired by Contractor to perform work on Company property. Contractors contract with such sub-contractor will provide that subcontractor will be subject to the requirements of this Schedule F. 1.14. General Health Specifications It is Company policy to identify, evaluate, and control health risks related to its operations that potentially affect its employees, contractors or the public.
1.15. Employee Medical Requirement Contractor shall conduct pre-entry (i.e., before deployment to the assigned location) and thereafter biennial medical assessments by an accredited physician to determine fitness for work for Contractor's Personnel assigned to work in remote locations. A remote location is considered to be those locations where access to medical care or treatment beyond simple first aid is two or more transportation links away. The assessments shall be conducted at other appropriate times such as return from prolonged sickness, absence or when fitness for work needs to be determined for any other reason. Such assessment shall include the administration of appropriate health questionnaires and a physical examination. The purpose for the medical assessment is to: a Screen for significant medical conditions, which might require immediate medical treatment (beyond simple first aid) or follow-up, not readily available in a location lacking an adequate medical care infrastructure. b Ensure at the time of employment/placement that an employee is medically (physically and mentally) fit to perform all duties specified in the job description without undue risk to him/herself or others or Companys assets. Contractor shall make travel health medical services readily accessible to each Contractor's Personnel. Such services shall ensure appropriate preparations for assigned locations including vaccinations, personal medical supplies/prescriptions and education about local/public health risks. Contractor shall adhere to all medical requirements especially those for residence and employment, including vaccinations, when Contractors employees travel to countries for the Company. Any costs incurred by Contractor for medical/vaccination costs are for Contractors account and nonreimbursable from Company. Contractor must therefore ensure it is knowledgeable about the medical requirements of such countries or risk further costs to their own account should Contractor's Personnel not be allowed into these countries or expelled from these countries due to lack of medical certification. The Company will endeavour to notify Contractor of any medical risk which it may become aware of, during the life of the Contract. Contractor shall obtain medical evacuation coverage (urgent and nonurgent) from internationally recognized medical assistance providers, such as International SOS. Company will make available to Contractor its onsite medical facilities and services, where available. 1.16. General Environmental Specifications It is Company policy to conduct its business in a manner that is compatible with the balanced environmental and economic needs of the communities in which it
operates. Company is committed to continuous efforts to improve environmental performance throughout its operations. 1.17. Scope This section sets forth Company's minimum requirements of Contractor for implementation of a Regulatory and Environmental Management Program throughout performance of the Work. Contractor shall consider and incorporate in this program, as required or as indicated, provision for waste management and services, environmental monitoring programs, water pollution prevention and spill response measures, and regulatory compliance measures. 1.18. Objectives The regulatory and environmental objectives for the Work are: That the Work is performed in a manner which complies with all applicable government regulations, statutes and permitting requirements. That the Work is performed in a manner consistent and compatible with Company's Environment policy and business objectives including: The Work is performed in an environmentally sound manner. Performance requirements are defined and communicated. Personnel are trained, qualified, and able to perform the Work. Performance is stewarded, and a system for assessing performance is used which provides feedback for correction of deficiencies in performance of the Work. The Work is performed in a way that controls emissions and wastes at or below environmentally-acceptable levels. Management demonstrates leadership and commitment with accountability at all organizational levels to encourage active and personal roles in complying with regulatory requirements and environmental standards. Full compliance with applicable Laws at the Work Site to include: No issuance of non-compliance notices from governing authorities. No environmental incidents.
2. Quality Assurance and Quality Control

Contractor shall follow quality control and inspection procedures acceptable to Company to assure compliance with the specifications and drawings and shall maintain a file of authenticated inspection and test reports which shall be available to Company for the period of time specified by Company or as is otherwise reasonable. Company and its classification or certification society or representatives have the
right to inspect the material or work furnished and the progress of the work at all reasonable times wherever it is located, and Company shall afford safe access to and proper facilities for such inspection. Company has the right to order special tests not otherwise required, and Contractor shall cooperate in the performance of such tests with the cost of such tests to be borne by Company unless the material or work tested proves to be defective. In the event Company notifies Contractor that it intends to perform or witness certain inspection or testing, Contractor shall give timely notice to Company of the readiness of the material or the work for such inspection or testing. Neither Company's inspection or testing, nor the lack thereof, shall relieve Contractor of any responsibility hereunder
Invitation to Tender Schedule G
DRILLING RIG SERVICES AGREEMENT

SCHEDULE G: COMPANY DRUG, ALCOHOL AND CONTRABAND POLICY REQUIREMENTS
1. Purpose To insure a safe, healthy, and productive work environment for the employees of Contractor and Company and others on Company Property, to protect the public, Company Property and assets, and to ensure efficient operations, Contractor shall adopt, comply with and enforce a written policy on drugs, alcohol, and other prohibited items that, at a minimum, meets the requirements outlined below ("Company's Policy"). 2. Definitions A. Contractor Personnel -- includes any of Contractor's employees, agents, subcontractors or sub-contractors' employees working on Company Property. B. Company Property -- all real or tangible personal property, including facilities, buildings, vehicles, products and equipment either owned or controlled by Company. C. Third-Party Services services that Company has contracted to provide to a third party which services will be performed by Contractor. D. Prohibited Substances -- (1) illicit or unprescribed drugs and controlled substances and mood or mind altering substances, (2) prescribed drugs used in a manner inconsistent with the prescription, and (3) alcoholic beverages. E. Reasonable Suspicion -- a belief based on objective and articulated facts sufficient to lead a supervisor to suspect. F. Under the Influence -- (1) the presence of a Prohibited Substance, or metabolites of a Prohibited Substance in body fluids above the cut-off level established by Company's Policy, or other commonly accepted cut-off level and/or (2) the presence of a Prohibited Substance that affects an individual in any detectable manner. The symptoms of influence may be, but are not limited to, slurred speech or difficulty in maintaining balance. 3. Prohibitions Unless specifically authorized in writing by Company, Company's Policy and its implementation shall prohibit Contractor and Contractor Personnel from the following: A. Using, possessing, selling, manufacturing, distributing, concealing, or transporting while on or handling Company Property or during performance of Third-Party Services any of the following items: i. Any Prohibited Substance; ii. Contraband, including firearms, ammunition, explosives, and weapons; iii. Illicit drug equipment or paraphernalia.
B. Using or possessing while on or handling Company Property or performing Third-Party Services prescription drugs or over-the-counter medication that may cause impairment except when all of the following conditions have been met: i. Prescription drugs have been prescribed by a licensed physician for the person in possession of the drugs. ii. The prescription was filled by a licensed pharmacist for the person possessing the drugs. iii. The individual notifies their supervisor that they will be in possession of or using, impairment-causing prescription drugs or over-the-counter medication and appropriate steps are taken to accommodate the possibility of impairment, including but not limited to, removal from work for the period of possible impairment. C. Being Under the Influence of Prohibited Substances while performing any work for Company. D. Switching or adulterating any urine, blood or other sample used for testing. E. Performing work for Company if that person has tested positive, or refused testing, in any employment-related test except that Contractor Personnel seeking access to Company Property may be considered if the positive employment-related test in question was an initial pre-employment test administered more than twelve months before and the employee will not perform in a designated-like position. The prohibition in part 3(E) will not apply to Contractor Personnel seeking access to Company Property for low-exposure positions whose employment-related positive test did not occur during employment on Company Property or work. F. Upon request Contractor will certify in writing that it has enforced all provisions of Paragraph 3. 4. Searches and Inspections On Company Property Company may, at any time, have Company supervisors, Contractor supervisors and/or authorized search and inspection specialists, including scent-trained animals, conduct unannounced searches and inspections of Contractor and/or Contractor Personnel and their property; that property may include, but is not limited to, the following: wallets, purses, lockers, baggage, offices, desks, tool boxes, clothing, and vehicles. 5. Testing A. Categories All Contractor Personnel shall be assigned to one of the following categories based on the individual's job function: Comparable-to-Designated: Has a high exposure to a catastrophic operational incident; has a direct role in operations where failure could result in serious harm to public or employee well-being, Operator assets, or the environment; and has no direct or very limited supervision available to provide operational checks.
Safety-Sensitive: Has a high exposure to catastrophic operational incident and has access to operations where failure could result in serious harm to public or employee well-being, Operator assets, or the environment. Low-Exposure: Has an indirect role and no access to operations where failure could result in serious harm to public or employee well-being, Operator assets or the environment. All positions are "safety-sensitive" unless a position, or positions, is/are identified as "low-exposure" or "comparable-to-designated" in Attachment 1 to this Schedule. If during the course of this Agreement, Company determines that additional positions require treatment as "low-exposure" or "comparable-todesignated," Company may at its sole discretion, after notifying Contractor of a change, or changes, modify Attachment 1. Company must confirm the modification in writing. Contractor shall ensure that alcohol and drug tests are conducted according to the following requirements as defined in Paragraph B below: Job Category Comparable-toDesignated Safety-Sensitive Low-Exposure Reasonable Suspicion X X X Post-Incident X X X Pre-Access X X Random X
In addition, executives of Contractor are encouraged to be subject to the same random alcohol and drug-testing program that they require of their employees to demonstrate commitment to a substance-free workplace. B. Requirements i. Pre-Access Testing: a. Each Contractor Personnel requiring pre-access testing must have received a negative result on a comprehensive alcohol and drug test within the 12 months preceding that Contractor Personnel's first access to Company Property. In addition each Contractor Personnel requiring pre-access testing must have received a negative result on a comprehensive alcohol and drug test in any calendar year in which that Contractor Personnel performs work on Company Property. Upon Company's request Contractor shall so certify in writing. Contractor shall not send laboratory test results to Company. b. A single letter certifying negative test results for all Contractor Personnel requiring site access is preferred. c. Contractor will provide no information to Company identifying individuals who have positive pre-access tests. ii. Random Testing: a. Contractor Personnel requiring random testing must be subject to unannounced and continuous random selection and testing for Prohibited Substances while performing work for Company.
b. The number of tests randomly conducted during each calendar year must be at least the current United States Department of Transportation (USDOT) required percentage or, where testing is not required by USDOT, at least fifty per cent (50%) of the number of Contractor Personnel in the random selection pool. iii. Post-Incident Testing: a. If Contractor or Company determines from the best information available immediately after a work-related incident that performance of one or more Contractor Personnel contributed to the incident, or cannot be completely discounted as a contributing factor to the incident, Contractor shall remove that/those individual(s) from Company Property and surrender his/her/their site credentials to Company. For purposes of this part "incident" means an incident that caused personal injury requiring medical treatment beyond first aid administered at the work site, or property damage of more than $1000, or an incident that carried the potential for serious personal injury or significant property damage. b. An individual so removed will be allowed to return to work on Company Property only after Contractor conducts alcohol and drug testing on the individual as soon as possible following the individual's removal from the site, and Contractor certifies in writing the test identification number, the individual's government work identification number (i.e., U.S. Social Security, or equivalent), the test date and time, and a negative test result. On that written certification Contractor will include a consent signed by the individual permitting disclosure to Company of the test result. See Attachment 2. iv. Reasonable Suspicion Testing: a. Upon Reasonable Suspicion of Contractor or Company that a Contractor Personnel is Under the Influence of a Prohibited Substance while on Company Property, Contractor shall remove the individual from Company Property and surrender his/her site credentials to Company. b. An individual removed from Company Property for Reasonable Suspicion will be allowed to return to work on Company Property only after Contractor conducts alcohol and drug testing on the individual as soon as possible following the individual's removal from the site, and Contractor certifies in writing the test identification number, the individual's social security number, the test date and time, and a negative test result. On that written certification Contractor will include a consent signed by the individual permitting disclosure to Company of the test result. See Attachment 2. C. Company's Policy will specify substances, and threshold levels that comply, at a minimum, with the USDOT alcohol and drug testing regulations as shown in the table immediately below. Contractor shall adopt collection, chain-of-custody and other related procedures consistent with USDOT testing procedures or sound industry practice. Contractor will include alcohol in any test panel regardless of any lesser USDOT requirement. Contractors that do not have an existing program are strongly encouraged to adopt Company's alcohol and drug testing standards.
Invitation to Tender Schedule G DRUG AND ALCOHOL TEST PANEL Substance Cocaine Phencyclidine Marijuana Opiates Amphetamines Alcohol Screen Levels 300 ng/ml 25 ng/ml 50 ng/ml 300 ng/ml 1000 ng/ml Detection
Confirmatory Levels 150 ng/ml 25 ng/ml 15 ng/ml 300 ng/ml 500 ng/ml .04 % BAC
D. Contractor shall use only testing laboratories that are properly certified under a recognized program. 6. Non-Compliance Any Contractor Personnel found in violation of Company's Policy or who refuse to cooperate with the searches and tests included in Company's Policy shall be permanently removed by Contractor from Company Property and from performing work for Company. Contractor must immediately notify Company that the individual has become "disqualified under Schedule G". Contractor will immediately review with Company the nature of the work previously performed by the individual. At Company's request Contractor shall, at its sole cost and risk, inspect all work in which the individual may have participated, and submit a written report to Company that documents the inspection, any findings, and the actions taken to assure all deficiencies have been corrected. 7. Drug Awareness Contractor warrants that Contractor Personnel performing work have each been fully informed of the requirements of this Schedule and Company's Policy, and that before beginning work each has signed a written certification that he has been so informed and agrees to be bound by those requirements. 8. Exemptions Local Company management may, at its sole discretion, grant certain exemptions to Contractor from the requirements of Company's Policy. Exemptions are valid only if in writing. No exemption will be construed by Contractor as a promise of any future exemptions. Any exemption granted to Contractor may be revoked by local Company management at any time. 9. Special Provisions Company - Approved Consortium Enrolment in, and maintenance of, "active status" in an Company-approved consortium that requires pre-enrolment testing and continuously subjects active members to random drug and alcohol testing at an annual effective rate of at least 50% will be recognized as satisfying Company's pre-access and random testing requirements. Upon request, Company will provide Contractor with a list of all approved consortiums. Contractor may request approval by Company of other consortiums. 10. Applicable Laws Contractor shall comply with all applicable drug and alcohol related laws and regulations.
11. Audit A. Contractor shall keep records required by this Schedule available for inspection by Company during the term of this agreement and for a period of three (3) years after its termination. B. Company shall have the right, at its discretion, to perform unannounced audits of Contractor's alcohol and drug program to verify that Contractor's policy and its enforcement comply with these guidelines. C. At Company's request Contractor will provide separate lists of Contractor Personnel (including name and government work identification number) who were eligible for Company work on a date specified by Company in SafetySensitive Contractor Positions or Jobs Comparable to Designated Positions. Upon further request, Contractor will provide Company with the following information on each alcohol and drug test conducted for each Contractor Personnel identified by Company from those lists: 1) date of and type of test (e.g. random, pre-access) 2) laboratory chain-of-custody identification number and/or test number. Contractor will obtain an agreement from any consortium, specimen collection service, laboratory and/or Medical Review Officer providing drug/alcohol testing services under this agreement that upon submission by Company of a list, or lists, of Government Work Identification Numbers, chain-of-custody ID numbers and test dates: 1) the laboratory will verify that the tests were conducted as represented; and 2) the laboratory and/or Contractor Medical Review Officer will provide a sworn statement that each of the tests identified by Company were confirmed as negative or that it/he/she cannot so swear.
SCHEDULE G CONTRACTOR DRUG, ALCOHOL AND CONTRABAND POLICY REQUIREMENTS ATTACHMENT 1 JOB CATEGORIES AND EXEMPTIONS
All Contractor Personnel will be working in Safety Sensitive positions except those shown below.
The following positions and/or personnel will be considered in jobs Comparable to Company "Designated":
The following positions and/or personnel will be considered in jobs that are Low Exposure:

Company management has approved the following exemptions from Contractor's Drug and Alcohol requirements:
o o
SCHEDULE G CONTRACTOR DRUG, ALCOHOL AND CONTRABAND POLICY REQUIREMENTS ATTACHMENT 2 REASONABLE SUSPICION / POST-INCIDENT DISCLOSURE CONSENT AND CERTIFICATION
__________________________________ Contractor Personnel Printed Name
_________________ Social Security Number
______________ Test ID #
Consent and Authorization for Disclosure to Company of Drug Test Result and Related Information I hereby consent to disclosure by Contractor and its agents, including, but not limited to, any collecting and testing agencies, of the test result identified above and any related information to Company and/or Company authorized agents, assigns or representatives. ______________________________ Contractor Personnel Signature __________________________ Date
CERTIFICATION FOR RETURN TO WORK Section 1 - Early Return Alcohol & Drug Screen Certification ( For Post-Incident Testing Only) _____________________ certifies that the individual shown above was tested using an approved drug
(Contractor)
and alcoholscreening process on _____________ at _________ and that the result of that test was
(date) (time)
negative. The individual is therefore eligible to return to work pending result of required laboratory test. _____________________________ Authorized Contractor Representative _____________________Title Section 2 - Certification of Laboratory Test Result
_________________ certifies that the individual shown above was tested on _____________ at __________
(Contractor) (date) (time)
_____________________________ Signature ____________________ Date
and that the result of the required laboratory alcohol and drug test was negative.
______________________________ Authorized Contractor Representative _____________________ Title
_____________________________ Signature ____________________ Date
Contractor Instructions: Fax or send a copy of this form to Company at the work site when the disclosure consent and Section 1 of the certification have been completed. Deliver the completed original to Company when Section 2 of the certification is completed.
Invitation to Tender Schedule H
DRILLING RIG SERVICES AGREEMENT SCHEDULE H CHANGE ORDERS
Any change orders to the Contract will be attached here as approved by the parties from time to time.

Invitation to Tender Schedule I Tender REN: PRF-GI-11-006
DRILLINGRIGSERVICESAGREEMENT SCHEDULEI:QUALITYPLANANDREQUIREMENTS
1.
GENERAL Contractorshallmaintainandimplementaqualityassuranceprogramthat conforms to the latest editions of ISO9000, 9001 or ISO9002, where applicable.
Contractor is responsible to ensure Contractor's sub contractor/supplier/third party equipment, tools, materials and/or services are fit for operations/utilization by Company. Subcontracted equipment, tools, and materials will be accepted only if the Contractor is able to documentthattheequipment,tools,andmaterialshasbeenmanufactured under a quality assurance program that is no less stringent than the Contractor'sprogram. 2. QUALITYPLAN ContractorisrequiredtoprepareandsubmitaQualityPlanforCompany's review60daysafterawardofthecontract.Onceapproved(byContractor), ContractorshallsubmitacopyoftheapprovedQualityPlanforCompany's reference.TheQualityPlanshallformpartoftheProjectExecutionPlanand shallbemaintainedcurrentthroughoutthedurationofthecontract. TheQualityPlanshallincludebutisnotlimitedto: Contractor'sQualityPolicy Contractor'sorganizationchartforthecontract Rolesandresponsibilities(towardsqualityofservices)of Contractor'spersonnelinvolvedintheWORK ListoftheContractor'sproceduresapplicabletotheWORK Qualitycontrolpointsonatypicaloperationinclusiveofquality controlchecksattheonshorefacility. Qualityauditsplannedthroughoutthedurationofthecontract Procedureforreportingandinvestigatingequipment/operational failures Listofqualityindicators Qualityreporting 3. QUALITYAUDIT Companyreservestherighttoperform,withnopriornotice,auditstoverify compliance with all aspects of the Contractor's quality assurance program. TheseauditsmaybeperformedbyCompanyorCompanyRepresentatives.

Company shall inform Contractor two (2) working days prior to performingtheaudit. The audit shall assess Contractor's compliance to the requirements of 1SO 9001 (latest edition), Quality Plan and Agreement. Company shall review with Contractor the findings of the audit and Contractor is responsible for identifyingandimplementingtheresolutions.Contractorshallsubmitacopy of the list of resolution items fifteen (15) Days after the audit and periodicallyupdateCompanyofthestatus. 4. DOCUMENTATION All Contractor's and Subcontractor's quality records and test certificates shallbeproperlyverifiedandshallbeavailabletoCompanyatalltimes CALIBRATION All measuring devices, pressure gauges, etc shall be calibrated prior to mobilization.ContractorshallhaveaCalibrationScheduleforallmeasuring devices and Contractor shall ensure the measuring devices are calibrated basedontheschedule. QUALITYINVESTIGATION Contractorshallensureallqualityincidents(equipmentfailure,substandard materials, poor service, etc.) are investigated as soon as practicable. A preliminaryreportofthequalityincidentsshallbesubmittedtotherelevant Manager within 48 hours of the incident. The preliminary report shall identifyimmediatemitigationmeasurestoavoidsuchincident.Afullreport, whichidentifiestherootcause(s)andactionstobetaken,shallbesubmitted totherelevantManagerpriortocommencingthenextjob. Contractor shall monitor and ensure timely implementation of the mitigationmeasures. 7. ACCEPTANCETESTS Contractor shall conduct preacceptance tests/inspections prior to mobilizationofContractorsEquipment.Thisistoensurethatequipment and materials are in accordance with specifications, terms and conditions identified in the Agreement document, and is "fit for purpose" in its field application. Contractor shall notify Company one week prior to conducting the preacceptance tests/inspections. Company may witness such pre acceptancetests/inspections.Preacceptancetests/inspectionswitnessedby Company do not relieve Contractor's responsibility to ensure the
5.
6.

equipment and materials meet specifications, terms and conditions identifiedintheAgreement. Preacceptancetests/inspectionsshallbeconductedbyContractoronthird party equipment, tools, materials and services that will be used for the WORK. Following the pre acceptance testing/inspection, all defects identified shall be corrected prior to using the equipment, tools and materialsfortheWORK. Equipment and tools, if used intermittently but maintained on Agreement, will be reinspected after any layoff of six months or longer. Contractor's records will be checked to verify that equipment is being inspected and maintainedaccordingtotheAgreement. 8. PREVENTIVEMAINTENANCEANDINSPECTION/TESTINGPROGRAM Contractor shall have a documented Preventative Maintenance and Inspection/Testing Program for all equipment, tools and materials supplied to CompanyunderthisAgreement.CompanyhastherighttoreviewthePreventative Maintenance and Inspection/Testing Program. The requirements for the Program shallincludebutarenotlimitedtothefollowing: a) Maintenanceprogramsforallequipment,materials,tools,spares andnecessaryaccessories b) Testingandpreventativemaintenancerequirementsareestablishedbasedon risk,systemreliability,experience,regulatoryrequirements,industry recommendedpracticesandlatesteditionofrelevantindustry codes/standards(API,IADC,ASME,ISO9000etc.) c) Manufacturer'sguidelines/recommendations d) Testingofequipment,materials,tools,sparesandnecessaryAccessoriesshall verifyboththeitemandsystemfunctionality(whereapplicable) e) Recordsofmaintenanceandperformancearemaintainedindicatingany performancedeficiency Company reserves the right to review the Preventative Maintenance and Inspection/Testing Program, procedures, and past performance of all Contractor equipment,materials,tools,sparesandnecessaryaccessories.TheContractorshall also ensure that a specification and inspection /acceptance checklist for all equipment, materials, tools, spares and necessary accessories is utilized to assure qualityandreliability.
Invitation to Tender Schedule J
DRILLING RIG SERVICES AGREEMENT SCHEDULE J BACKGROUND CHECKS

Contractor agrees that it will obtain background checks on its employees and agents who perform Security Services on the premises of Company or its Affiliates and that it will also require any parties to whom it Subcontracts such work to do the same. The background check for any Contract Workers performing Services designated on the Security Services must include a criminal record check for criminal convictions, deferred adjudications, suspended sentences, no contest pleas, or their equivalent in all jurisdictions in which the individual has lived or worked during the previous five (5) years. These records must be checked as far back in time as feasible or as permitted by Law. A conviction, deferred adjudication, suspended sentence, no contest plea, or their equivalent relating to any major or serious crime whatsoever or any lesser crime indicating a proclivity or potential to harm to persons or assets, such as, but not limited to, an offense for theft, embezzlement, physical violence, sexual misconduct, controlled substances, or alcohol-related misconduct shall be considered a basis for not assigning a Contract Worker to perform Security Services. Contractor also agrees that it will maintain files of background checks obtained and will permit Company Representatives to review and audit such files during regular business hours upon Company's request. Contractor further agrees that it has the ongoing duty to require Contract Workers to immediately inform Contractor of any criminal conviction, deferred adjudication, suspended sentence, or no contest plea arising after the completion of their background check. Upon being informed of a conviction, deferred adjudication, suspended sentence or no contest plea, Contractor will immediately inform Company in writing and will discontinue the individual's assignment on Company Premises unless Company agrees in writing to the continuation of the assignment.
Invitation to Tender Schedule K
DRILLINGRIGSERVICESAGREEMENT SCHEDULEK: DRILLINGUNITACCEPTANCETESTINSPECTIONREQUIREMENTS

Scope The purpose of the Acceptance Test program is to locate and correct defects which could affect rig/personnel safety or result in well control or major rig related downtime after operations are underway. Company plans to have representatives witness the inspection andreservestherighttoexpandthescopeoftheinspectionifresultswarrant.Allmutually agreed critical defects/deficiencies noted during the inspection shall be corrected prior to startup of operations. Non critical defects/deficiencies will be corrected during the campaign. CompanywillrequireaninspectionoftheContractorsItemsincludingbutnotlimitedtothe BOP,BOPcontrolsystem,otherwellcontrolequipment,mudpumps,drillstring,rotating equipment,safetyequipment,liftinggear,electricalgenerationanddistributionsystems,air winches and hoisting equipment prior to startup of operations. When possible, manufacturer's tolerances/specification shall be used as a basis for determining acceptability. Thelevelofinspectionsrequiredisdescribedinbriefherein. Any major equipment which has not been completely disassembled, repaired, and refurbished to API, or IADC published recommendations (a socalled 5year inspection) within the preceding three (3) years shall undergo such a procedure before Company acceptstherig. 1. DrillingEquipmentInspection 1.1 InspectionandRedressingofRamPreventers a. b. c. d. e. 1.2 AllpiperamblockhangoffareasshallbeMPIinspected. AllramrubbersandsealsshallbenewatContractcommencement. All ram cavities shall be inspected. Cavity dimensions and condition shallconformtomanufacturer'sspecification. Bonnet(ordoor)sealsshallbereplacedatContractcommencementand eachtimethebonnet(doors)areopenedthereafter. FunctionandpressuretestsaredescribedinSection1.11.
InspectionandRedressingofAnnularPreventer a. Annular preventer packing element shall be new at Contract commencement.
b. 1.3
FunctionandpressuretestsaredescribedinSection1.11.
InspectionandTestingofBOPControlSystem a. b. The control system shall be function tested and hydrostatically tested. Allleaksshallberepaired. All components of the system shall be visually inspected for corrosion, damage and hose condition. Fittings and hoses shall be replaced as necessary. FunctionandpressuretestsaredescribedinSection1.11.
c. 1.4
InspectionofChokeandKillManifold a. A visual inspection shall be made of the choke manifold to determine that the layout and access to valves is acceptable, that all turns both upstream and downstream of the chokes are targeted and that upstreamanddownstreampipingisasshowninlayoutdrawings. Verifypropercloseandopenoperationofallvalvesandchokes. FunctionandpressuretestsaredescribedinSection1.11.
b. c. 1.5
OtherMajorBOPStackComponents Wellhead adapters, choke and kill valves, and choke and kill flexible hoses shallbeinspectedusingtheproceduresetforthbelow: 1.5.1 All double studded adapters (DSAs), flanges and other connectors shallbeinspectedasfollows: a. 1.5.2 Visually check bore, condition of seal ring groove, all exposed components.
Flexiblehoses(BOPcontrolandchoke/killlines)shallbeinspectedas follows: a. b. NewandusedhosesmustbeinspectedandtestedonContract commencementand/oronhosechangeouts. Hose(s)mustbeverifiablebyserialnumber(s)toensurethatthe correct hose and manufacturer's documentation/certification match. FunctionandpressuretestsaredescribedinSection1.11.
c. 1.6 MudPumps
Themudpumpsshallbecheckedforexcessiveknockingandvibrationinboth fluid and power ends. All valves, seats, pistons, and liners shall be new at Contractcommencement. 1.7 DrillString
RefertoScheduleM,"DrillStringInspectionProcedures",attachedheretoas parthereof. 1.8 HoistingEquipment 1.8.1 Thedrawworksshallbeinspectedandcheckedasfollows: a. b. c. d. Visuallycheckalignmentofsprockets,bearingsandshafts. Visuallyinspectallchainsforwearordamage. Check all air connections and hoses for leaks and repair as necessary.Checkoperationofairvalves. Engage and disengage air clutches several times to verify that theyoperatesmoothlywithoutslippageoroverheating.Review drawworks maintenance records. Note last date diaphragms werechanged. Checkoperationofdrumandrotarydriveclutches. Checkcatheadengagement. Confirmthatthewatercoolingsystemdeliverssufficientwater to the brake rims and the auxiliary brake. Check spear connections to the drum shaft and auxiliary brake to verify packingisingoodconditionandnotleaking. Verifylockingsystemtopreventauxiliarybrakefrombecoming disengaged. Checkauxiliarybrakelubrication. Visuallycheckwearonmaindrum,rims,brakebandsandbrake liningsorbrakediscsandpads. Visuallyinspectdrumgroovingwearringorkickbackrollers. Check tightness of brake lining blocks, bolts, and drum brake adjustment. Note last time a drill line sample was checked internally for corrosionandpulltested.
e. f. g.
h. i. j. k. l. m. 1.8.2
Thecrownblockshallbeinspectedasfollows: a. b. c. d. e. Visually inspect sheaves for wear, damage, cracks and alignment. Checkallgreasefittingstoverifyproperlubrication. Run blocks up and down while visually observing sheaves for misalignmentandloose/wornbearings. MPIsheavegrooveandflangetowebconnections. Notelasttimebearingsandshaftswereinspected.
1.8.3
The traveling blocks/hook and hook swivel shall be inspected as follows: a. b. c. d. e. f. g. Visuallycheckforwear,damageandloosepins. Visuallychecksheavesforwear,damageandmisalignment. Checkgreasefittingstoverifyproperlubrication. Unlock, turn hook and relock in all possible positions to verify adequatelockingcapabilityandconditionofswivel. Check for cracks using MPI on hook, eyes and bails, and DP elevators. MPIsheavegrooveandflangetowebconnections. Notelasttimebearingsandshaftsinspected.
1.8.4
Thedeadlinetiedownshallbeinspectedasfollows: a. b. c. d. Checkthatallboltsaretight. Check for cracks at base, flange to hold down sheaves, hold downsheaves,andotherareasofhighstressusingMPI. Checkbrassinsertsoftiedownclamp. Checklinetensiontransducer(orloadcell)andweightindicator.
1.9
FunctionandPressureTests Rigequipmentandsystemsshallbefunctionandpressuretestedasdescribed below.Allpressuretestsshallbe10minutesdurationateachpressurepoint and shall be clearly recorded and labelled on a chart recorder. Test criteria shallbenovisibleleaksandnopressurelossindicationlinesonchartsshall bestraightfortestduration.Freshwaterorappropriatecontrolfluidshallbe used BOP&CirculatingSystems a. TestallBOPhydrauliccontrollinesincludingBOPplumbingand related valves to full rated working pressure. Test with accumulatorbankisolated.Allvalvesthatdonotholdpressure shallbedisassembled,cleaned,andrepairedorreplaced. Function test all BOP hydraulic functions from each remote panel. Record all opening/closing times and volumes. Verify control system alarms, pressure gauges/readouts and BOP componentpositionindicatorsduringfunctiontesting. Rampreventers,valvesandchokeandkillhosesto200psiand maximumratedworkingpressure. Annular preventers to 200 psi and 70% of maximum rated workingpressure.
b.
c. d.
e.
Checkthegasprechargeofaccumulator.PerformanAPIBOP control system accumulator test with the hydraulic pumps isolatedtoverifyaccumulatorsystemcapacity. Pressure test cement line to rig floor including manifold valves to200psiandmaximumworkingpressureofBOPSystem. Pressuretestallchokemanifoldvalvesandlinesto200psiand maximumworkingpressureofBOPsystem. Functiontesttriptankbyfillingwithwaterandpumpingoutto bell nipple or shakers. Check calibration of level indicator simultaneously.Verifycalibrationofflowlinemeters. Pressuretestallrigfloorstandpipemanifoldvalves,mudpump dischargemanifoldvalves,andpipingfrommudpumpstolower kellyvalvetoMaximumworkingpressureofcirculatingsystem. Test all rig floor safety valves, i.e. drill string full opening ball valves and inside BOPs, to 200 psi and maximum working pressureofBOPsystem.
f. g. h.
i.
j.
1.9.1
RotaryandTopDrive a. Operaterotaryinbothforwardandreversewhileobservingfor noise, leaks, vibrations, etc. Check operation of brake frequently.Usebothhighandlowgearsduringthistest. Verifycalibrationofrotaryspeedindicator. Operatetopdriveinbothforwardandreversewhileobserving fornoise,oilleaks,airleaks,vibrations,etc.Checkoperationof brakefrequently.Usebothhighandlowgearsduringthistest. Verifycalibrationoftopdrivespeedindicator. TestswivelpackingbypressuringagainstlowerIBOPvalveand rotating top drive at 150 to 200 RPM. Check that pressure remainsconstantandvisuallyobserveswivelpackingforleaks. Verify derrick TV camera clearly monitors area where connectionswillbemadeatmonkeyboardlevel(ifavailable).
b. c.
d. e.
f. 1.9.2
OtherDrillingEquipment a. b. c. d. Function test power tongs, power slips, and pipe handling equipment. Functiontestcrownblocksafetydevice. Operate desilters, desanders, degasser, and mud cleaner using waterandrecordmanifoldpressuresoneach. Operate shale shakers at Operator's discretion and expense theshaleshakersandotherpiecesofsolidscontrolequipment
may be inspected by a manufacturer's representative. Any recommended repairs will be made by the Contractor at Contractor'sexpense. 2. Miscellaneous 2.1 FireFighting a. b. 2.2 Testfirepumpforadequateoutputpressurewithtwonozzlesopen. Inspecttheconditionofportablefireextinguishers.
EmergencyPowerSystem a. Testtheemergencypowersource(s)withasimulatedblackout. Test operate emergency generator under full load for at least 30 minutes.
b.
Invitation to Tender Schedule L
DRILLING RIG SERVICES AGREEMENT SCHEDULE L : DRILL STRING INSPECTION PROCEDURES
Drill pipe and drill collars and other drill string components shall be inspected in accordance with Standard DS-1, Second Edition, "Drill Stem Design and Inspection", T. H. Hill Associates, Inc. All inspections shall be witnessed by a Operator designated QA/QC Inspector. Drill pipe Drill pipe tubes: Use service category 3 in Table 3.2 (in the Basic Standard DS1) except instead of inspecting the slip/upset area of drill pipe tubes using dry MPI with an AC yoke, the area shall be inspected by the wet fluorescent MPI method. Drill pipe tool joints: Use service category 3 in DS-1 Table 3.2. Acceptance/rejection criteria: Only Premium class or better tubes and tool joints according to DS-1 Table 3.5 are acceptable. Drill pipe that does not pass IADC - API Premium Class requirements of API RP7G (latest edition) shall be considered defective. Drill collars, heavyweight drill pipe and other downhole tools Drill collar connections and drill collar elevator grooves: Use service category 2 in DS-1 Table 3.3 except the black light inspection of the connection shall be extended to include the outside surfaces of tong areas, slip and elevator recesses and hard banded areas. HWDP tubes: Use service category 2 in DS-1 Table 3.3 except the upset area shall be inspected by the wet fluorescent MPI method, instead of the using dry MPI with an AC yoke. Other drilling BHA tools: (stabilizers, reamers, jars, shock subs, downhole motors, MWD tools and non-magnetic components) shall undergo a complete shop inspection as DS - 1, service category 2 using wet fluorescent magnetic particles on the inside and outside surfaces of the connections (threads and relief areas) and on the outside surfaces joining the blades, mandrels, rollers and other high stress concentration areas. Any tools going offshore will be accompanied by documentation of the inspection performed. Acceptance/Rejection criteria: Tables 3.8 and 3.9 of DS-1. The acceptable drill collar and BHA bending strength ratio is 1.8 to 3.2 depending on drill collar OD as in table 2.1 of DS-1. < 6" 6" - 7-7/8" >=8" BSR = 1.8 - 2.5 BSR = 2.25 - 2.75 BSR = 2.5 - 3.2
Stess Relief Features Stress Relief Features for all BHA connections (including stress relief pin grooves and bore back boxes) are required for connections greater than NC 38 as per DS-1. Hardbanding If the tool joints are hard banded, then the applied hard banding on the box shall be approximately 4 in length and shall be approximately 2 on the pin. The height of hard banding shall be 3/32, - 0, + 1/32. The hard banding profile shall be convex or flat, but shall not be concave. All hard banding must be applied in consideration of the Weld Procedure Specifications (WPS) and Procedure Qualification Record (PQR) for the particular hard banding which is being applied. Inspection Frequency Initial Inspections: Drill string: When each new rig is contracted and/or additional drill string components are brought in by the Drilling Contractor that have not been subjected to an initial inspection. Periodic Inspections: Rotating hours between inspections Drill Pipe Drill Collar/BHA 6" and smaller 150 250 Components 6-1/4" larger 200 300 and
Downhole Risk Category Critical Service Standard Service
1500 2500
These intervals shall be adjusted based on actual drill string failure experience. Serialization All inspections shall be traceable to the specific item by uniquely numbering, or recording permanent serial numbers for each length to be inspected. For drill pipe, this number shall be dye stamped on the pin end tool joint. After the initial inspections and/or after replacement or additional lengths of drill stem components are added, the serial numbering for the most recent inspection must often be added to the shoulder along with the numbers from previous inspections. Each series of numbers shall be accompanied by a means to identify them as the most recent applied. This shall be done by adding numbers denoting the month and year in which the inspection is performed. If drill string components, including drill pipe, have a permanent serial number affixed by the manufacturer or by the owner, the permanent identification system (where available and legible), may be used in place of the regular serial
numbering process. Also any component found without an available or legible serial number shall be given a number. Care shall be exercised to avoid placing new serial numbers over the same area occupied by previous numbers. Serial numbers shall be affixed to areas where wear and other damage to the numbers will be minimized and in a low-stressed section of the component.

GEINT LTD Drilling Rig Tender Dossier

Transféré par

Informations du document

Description originale:

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

GEINT LTD Drilling Rig Tender Dossier

Transféré par

Droits d'auteur :

Formats disponibles

TENDERINGDOCUMENTS

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

TelNo.:+903122188400 FaxNo.:+903122191883 Email: tender@genelenergy.com June17th,2011

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

5) Commercial Tenders submitted in Ankara must be addressed in separatesealedenvelopesorotherpackagesandbeplainlymarkedonthe outsideasfollows:

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

Invitation to Tender Land Drilling Rig(s) Service

Tender REN: PRF-GI-11-006

ONSHOREIRAQ(KurdistanRegion) DRILLINGRIGSERVICESCONTRACT between GENELENERGYINTERNATIONALLIMITED and ________________________________ fortheuseof LandDrillingUnit_______

1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16

1.19 1.20 1.21 1.22 1.23

1.24 1.25 1.26

1.29 1.30 1.31

Thelanguageofthearbitrationproceedings,thesubmissionofallwritings, thedecisionoftheTribunal,andthereasonssupportingsuchdecision,shall betheEnglishlanguage; TheseatofthearbitrationshallbeLondon,England;and AnymonetaryawardshallbemadeinU.S.Dollars,freeofanytaxorother deduction.

ForandonbehalfofContractor: Signature: Name:

Land Drilling Rig(s) Service-Schedules

Tender REN: PRF-GI-11-006

SCHEDULE A: SCOPE OF SERVICES AND RATES

ONSHOREIRAQ(KurdistanRegion) DRILLINGRIGSERVICESCONTRACT between GENELENERGYINTERNATIONALLIMITED and __________________________ fortheuseof LandDrillingUnit_