Section IV- Terms and Condition

PETRONAS CARIGALI SDN. BHD.

(Company Registration No. 39275U)

TENDER NO: PMO/2011/PRI/078

PROVISION TO UPGRADE AND MAINTENANCE OF DUYONG-CPP GAS METERING SYSTEM FOR PETRONAS CARIGALI SDN BHD, PENINSULAR MALAYSIA

OPERATIONS (PETRONAS CARIGALI - PMO)

PROVISION TO UPGRADE AND MAINTENANCE OF DUYONG-CPP GAS METERING SYSTEM FOR PETRONAS CARIGALI SDN BHD, PENINSULAR MALAYSIA OPERATIONS (PETRONAS CARIGALI - PMO)

TENDER NO. : PMO/2011/PRI/078 Page 1 of 46

TABLE OF CONTENT

TITLE PAGE

PREAMBLE 3 ARTICLE 1 - INTERPRETATION OF CONTRACT 4 ARTICLE 2 - DEFINITIONS 5 ARTICLE 3 - DURATION OF CONTRACT 7 ARTICLE 4 - CONTRACT PRICE 7 ARTICLE 5 - RESPONSIBILITY OF CONTRACTOR TO INFORM ITSELF 7 ARTICLE 6 - RESPONSIBILITY OF CONTRACTOR TO INFORM CARIGALI 8 ARTICLE 7 - INVOICING AND PAYMENTS 8 ARTICLE 8 - BANK GUARANTEE/PERFORMANCE GUARANTEE 11 ARTICLE 9 - TAXES AND DUTIES 12 ARTICLE 10 - INSURANCE 14 ARTICLE 11 - LIABILITIES AND INDEMNITIES 15 ARTICLE 12 - REVIEW AND ACCEPTANCE OF SERVICES 17 ARTICLE 13 - WARRANTY 17 ARTICLE 14 - CONTRACTOR'S OBLIGATION 18 ARTICLE 15 - CARIGALI'S OBLIGATION 22 ARTICLE 16 - ACTIONS ON BEHALF OF CARIGALI 23 ARTICLE 17 - CARIGALI’S CONTRACT ADMINISTRATOR AND REPRESENTATIVE(S) 23 ARTICLE 18 - CONTRACTOR'S CONTRACT ADMINISTRATOR AND REPRESENTATIVE 24 ARTICLE 19 - LIENS AND CLAIMS 24 ARTICLE 20 - SAFETY, HEALTH, FIRE, ENVIRONMENTAL PROTECTION AND SECURITY

REGULATIONS 25 ARTICLE 21 - DEFAULT OF CONTRACTOR 27 ARTICLE 22 - PROVISION FOR SUSPENSION OF SERVICES 28 ARTICLE 23 - PROVISION FOR TERMINATION OF SERVICES OR CONTRACT 29 ARTICLE 24 - LIQUIDATED DAMAGES 30 ARTICLE 25 - SUBCONTRACTS AND ASSIGNMENT 30 ARTICLE 26 - ACCESS AND AUDIT RIGHTS 31 ARTICLE 27 - PROCUREMENT OF EQUIPMENT, FACILITIES, MATERIALS, SUPPLIES AND SERVICES 32 ARTICLE 28 - CHANGES 33 ARTICLE 29 - FORCE MAJEURE 34 ARTICLE 30 - CONFLICT OF INTEREST 35 ARTICLE 31 - WAIVERS 35 ARTICLE 32 - CONFIDENTIALITY 35 ARTICLE 33 - ARBITRATION 36 ARTICLE 34 - COMPLIANCE WITH LAW 37 ARTICLE 35 - GOVERNING LAW AND LANGUAGE 37 ARTICLE 36 - PATENTS AND OTHER PROPRIETARY RIGHTS 37



ARTICLE 37 - ENTIRE AGREEMENT 38 ARTICLE 38 - NON-EXCLUSIVE AGREEMENT 38 ARTICLE 39 - INDEPENDENT CONTRACTOR 39 ARTICLE 40 - SURVIVAL OF OBLIGATIONS 39 ARTICLE 41 - LIMITATION OF LIABILITY 39 ARTICLE 42 - PETRONAS APPROVAL 39 ARTICLE 43 - NOTICES 40 ARTICLE 44 - TITLE 40 ARTICLE 45 - SEVERABILITY 40 ARTICLE 46 - LOCAL CONTENT 41 SIGNATORIES 42

E X H I B I T S

EXHIBIT I SCOPE OF SERVICES EXHIBIT II SCHEDULE OF COMPENSATION EXHIBIT III QUALITY ASSURANCE EXHIBIT IV HEALTH, SAFETY & ENVIRONMENT EXHIBIT V ACCOUNTING AND INVOICING PROCEDURES EXHIBIT VI ADMINISTRATIVE PROCEDURES EXHIBIT VII BANK GUARANTEE FORMAT EXHIBIT VIII PERFORMANCE GUARANTEE FORMAT



PREAMBLE This CONTRACT (hereinafter referred to as "CONTRACT") is made and entered into this _______ day of ________ effective as of the ________ day of ___________ (“Effective Date”) between PETRONAS CARIGALI SDN. BHD., a company incorporated in Malaysia under the Companies Act 1965 and having its registered office at Tower 1, PETRONAS Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur, Malaysia (hereinafter referred to as "CARIGALI") of the first part ________ a company incorporated under the laws of _____________having its registered office at and place of business ________________ (hereinafter referred to as "CONTRACTOR") of the second part. (Hereinafter the parties of the first and second parts shall be referred to singularly as "Party" and collectively as "Parties"). Whereas : CARIGALI, pursuant to various Production Sharing Contracts entered into with PETRONAS

and Joint Operating Agreements with Co-Venturers (as hereinafter defined), is engaged and appointed as Operator for the exploration, development and production of hydrocarbons for oil and gas fields onshore/offshore Malaysia.

Whereas : CARIGALI requires the provision of the SERVICES (as hereinafter defined) (hereinafter

referred to as the "SERVICES") as described in the EXHIBITS (attached hereto and made a part hereof) and in accordance with the terms of this CONTRACT;

Whereas : CONTRACTOR represents that it is able and willing to provide the SERVICES and that it

has the experience and capability to do so expeditiously. Now, therefore, for and in consideration of the mutual covenants and agreements set forth herein, the Parties hereto agree as follows:



ARTICLE 1 - INTERPRETATION OF CONTRACT

1.1 The following documents together constitute this CONTRACT: EXHIBIT I SCOPE OF SERVICES

EXHIBIT II SCHEDULE OF COMPENSATIONS EXHIBIT III QUALITY ASSURANCE EXHIBIT IV ADMINISTRATIVE PROCEDURES EXHIBIT V ACCOUNTING AND INVOICING EXHIBIT VI HEALTH, SAFETY AND ENVIRONMENT (HSE)

EXHIBIT VII BANK GUARANTEE FORMAT EXHIBIT VIII PERFORMANCE GUARANTEE FORMAT

In the event of any ambiguity, inconsistency or conflict between the provisions of the CONTRACT FORM and EXHIBITS listed above, the CONTRACT FORM shall take precedence and prevail over the EXHIBITS.

In the event of any ambiguity, inconsistency or conflict between the provisions of the EXHIBITS,

CARIGALI shall decide the order of prevalence amongst the EXHIBITS. 1.2 The CONTRACT documents are to be read as a whole and are to be taken as mutually explanatory of

one another. 1.3 All standards, codes, specifications, drawings, instructions, and other documents that are referred to

in the EXHIBITS shall be deemed incorporated herein by reference and made a part of the CONTRACT.

1.4 None of the documents or information herein before mentioned shall be used by CONTRACTOR for

any purpose other than for this CONTRACT. 1.5 Unless otherwise specified by CARIGALI, any reference to time period shall be deemed to be based

on calendar days. 1.6 All headings, indexes, titles, subtitles, subheadings, words that are bold, italic, capitalised or otherwise

emphasised of the CONTRACT are used for convenience and ease of reference only and should not be taken into consideration in the interpretation or construction of the CONTRACT.

1.7 All correspondence, documentation, and discussion with respect to the CONTRACT and the

SERVICES is to be in the English Language. 1.8 Any review, approval, acknowledgement or certificate given by CARIGALI shall not in any way

operate to release or relieve the CONTRACTOR from or limit in any way any of CONTRACTOR’s duties, responsibilities, obligations or liabilities imposed upon him by or as a result of any of the provisions of the CONTRACT.

1.9 Words importing the singular only also include the plural and vice verse where the context so

requires.

END OF ARTICLE



ARTICLE 2 - DEFINITIONS

The following definitions shall apply to this CONTRACT except where the context otherwise requires : 2.1 "Affiliate" or "Affiliated Company" means any company or other entity that directly or indirectly

through one or more intermediary controls or is controlled by or is under common control with a Party to this CONTRACT. "Control" in this context means ownership of more than fifty percent (50%) of the voting stock of the controlled company or the direct or indirect right to determine its actions by contract or otherwise.

2.2 "Approved" and "approval" wherever used means approved and/or approval in writing including

subsequent written confirmations of previous verbal approvals by (where provided for under this CONTRACT) made by CARIGALI.

2.3 "Area of Operations" means those areas of the seabed and subsoil beneath the territorial waters

and the continental shelf off Peninsula Malaysia or off the State of Sabah or off the State of Sarawak, in which CARIGALI is entitled to conduct operations relating to the exploration and production of hydrocarbons.

2.4 "PETRONAS Carigali” means PETRONAS CARIGALI SDN. BHD. 2.5 "PETRONAS Carigali’s Contract Administrator" means CARIGALI's personnel as defined in

ARTICLE 17 – “CARIGALI’S CONTRACT ADMINISTRATOR AND REPRESENTATIVE(S)”. 2.6 "CARIGALI Equipment" means the equipment and other related parts, spares and other materials

to be provided by CARIGALI. 2.7 "CARIGALI Representative" means CARIGALI's representative as defined in ARTICLE 17 –

“CARIGALI’S CONTRACT ADMINISTRATOR AND REPRESENTATIVE(S)”. 2.8 “CARIGALI’s Supply Base” or “Supply Base” means the location specified in EXHIBIT VI which will

be the port of call for work boats and supply boats where CONTRACTOR shall deliver the Equipment required for performance of the SERVICES, beyond the initial mobilisation requirement, if any.

2.9 "Commencement Date" means the time and date when CONTRACTOR completes mobilising the

first CONTRACTOR Equipment or Personnel to the designated Mobilisation Site or Mustering Point as the case may be.

2.10 "Change Order" means a document to be issued by CARIGALI which sets forth changes in the

SERVICES and adjustments to the CONTRACT Price or Schedule or both, and which sets forth the basis on which CONTRACTOR will be compensated for the change, if applicable.

2.11 "CONTRACT" means the terms and conditions of this CONTRACT FORM, and the EXHIBITS,

references and documents attached hereto or incorporated by reference including any subsequent amendments to them.

2.12 "CONTRACT Price" means the agreed compensation to be paid to CONTRACTOR in a prescribed

method as specified and qualified in EXHIBIT II - SCHEDULE OF COMPENSATION. 2.13 "CONTRACTOR" means the Party entering into the CONTRACT with CARIGALI for the

performance of the SERVICES or part thereof as set forth in the CONTRACT and includes the CONTRACTOR Personnel, representatives, successors and such other persons or body of persons to whom the CONTRACTOR has assigned this CONTRACT.

2.14 "CONTRACTOR Contract Administrator" means CONTRACTOR's Personnel as defined in

ARTICLE 18 – “CONTRACTOR CONTRACT ADMINISTRATOR AND REPRESENTATIVE”. 2.15 "CONTRACTOR Representative" means CONTRACTOR’s representative as defined in ARTICLE

18 – “CONTRACTOR CONTRACT ADMINISTRATOR AND REPRESENTATIVE”. 2.16 "CONTRACTOR Equipment" means the equipment and other related parts, spare parts, materials,

tools, vessels, expendables, designated equipment, call-out equipment and other supplies that are



to be provided or supplied by CONTRACTOR as defined in ARTICLE 14.7 – “CONTRACTOR’S OBLIGATION” and more specifically described in EXHIBIT I – “SCOPE OF SERVICES”.

2.17 "CONTRACTOR Personnel" means all personnel provided by CONTRACTOR in the performance

of the SERVICES as defined in ARTICLE 14.8 – “CONTRACTOR’S OBLIGATION” and more specifically described in EXHIBIT I – “SCOPE OF SERVICES”.

2.18 "Co-Venturers" means any parties having a legal interest in the operation of CARIGALI to which

the SERVICES or part thereof relates including but not limited to ExxonMobil Exploration and Production Malaysia Incorporated (EMEPMI), Sarawak Shell Berhad (SSB), Sabah Shell Petroleum Company (SSPC) and Nippon Oil Exploration (Malaysia) Limited (NOEX).

2.19 "Demobilisation Site" means the site designated in EXHIBIT VI - “ADMINISTRATIVE

PROCEDURES” where the CONTRACTOR Equipment that is released by CARIGALI is to be made available to CONTRACTOR.

2.20 "Designated Equipment" means the materials required by CARIGALI for its petroleum operations

and to be supplied by CONTRACTOR as described in EXHIBIT I – “SCOPE OF SERVICES”. 2.22 "Expert" means a person or company mutually agreed upon by CARIGALI and CONTRACTOR to

give a technical opinion in order to expedite settlement of any particular matter as described in ARTICLE 33 – “ARBITRATION”.

2.23 "Mobilisation Date" - means the date the CONTRACTOR Equipment is to be delivered to the

Mobilisation Site ready for SERVICES and subsequent transport to the Work Site(s), as specified by CARIGALI.

2.24 "Mobilisation Site" - means the site designated in EXHIBIT VI - “ADMINISTRATIVE

PROCEDURES” where CONTRACTOR Equipment is to be delivered by CONTRACTOR for loading and transport to the Work Site(s) by CARIGALI.

2.25 "Mustering Point" or "Point of Embarkation" means the location specified by CARIGALI in

EXHIBIT VI - “ADMINISTRATIVE PROCEDURES”, at which CONTRACTOR shall assemble its personnel and/or allowable air freight for transportation to the Work Site(s).

2.26 "PETRONAS" means Petroliam Nasional Berhad, a company incorporated under the Companies

Act 1965 and having its registered office at Tower 1, PETRONAS Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur, the parent company of CARIGALI.

2.27 "SERVICES" shall mean all duties to be performed rendered by CONTRACTOR or its Sub-

contractor as expressly set forth in the CONTRACT and all of CONTRACTOR's activities that are reasonably inferable from the description of the SERVICES. This shall include services performed pursuant to any authorisation for SERVICES.

2.28 “SERVICE Order” shall mean a document referred to in ARTICLE 15.8 – “CARIGALI’S

OBLIGATION” to be issued by CARIGALI to Contractor in the format provided in Appendix VI-10 to this CONTRACT.

2.29 "Specification" means a collection of documents, standards and codes to which the SERVICES

must conform to. 2.30 "Standard" means any description of a technical nature of materials, engineering methods and

techniques, equipment, construction systems and methods, specifications, plans, workmanship or otherwise defining a result to be achieved or method to be followed.

2.31 "Subcontract" means any contract between CONTRACTOR and any other third party or parties as

approved in writing by CARIGALI for the performance of any portion of the SERVICES or any part thereof.

2.32 "Sub-contractor" means any third party or parties having a subcontract with CONTRACTOR as

approved in writing by CARIGALI for the performance of any portion of the SERVICES or any part thereof.



2.33 "Work Site(s)" means the areas, places or installations either onshore or offshore as designated by CARIGALI where the SERVICES is to be performed.

2.34 "Writing(s)" means all printed or hand-written documentation including but not limited to all telexes,

cables and similar items. All requests, approvals, notices and agreements required under this CONTRACT shall be in writing.

END OF ARTICLE

ARTICLE 3 - DURATION OF CONTRACT 3.1 Subject to termination provision provided under ARTICLE 23 – “PROVISION FOR TERMINATION

OF CONTRACT”, this CONTRACT shall commence on the Effective Date stipulated in the preamble and shall be valid for a ONCE OFF basis commencing from the Commencement Date and shall expire on the completion of SERVICES.

3.2 CONTRACTOR shall complete the SERVICES within the stipulated time periods as prescribed in

EXHIBIT I - “SCOPE OF SERVICES” and EXHIBIT II - "SCHEDULE OF COMPENSATION", and any other period as specified in the SERVICES Order thereafter.

3.3 N/A 3.4 N/A

END OF ARTICLE

ARTICLE 4 - CONTRACT PRICE 4.1 For the satisfactory performance of the SERVICES in accordance with the CONTRACT, CARIGALI

shall pay CONTRACTOR the lump sum amounts and/or unit rates detailed in the EXHIBIT II - "SCHEDULE OF COMPENSATION".

4.2 Unless as otherwise specifically provided for in this CONTRACT, the CONTRACT Price shall remain

unchanged throughout the duration of this CONTRACT and shall not be subject to change for any reason whatsoever including but not limited to cost escalation or currency fluctuations.

4.3 CONTRACTOR shall be responsible for and pay at its expense (when due and payable) all taxes

and duties relating to the SERVICES as specified in ARTICLE 9 - "TAXES AND DUTIES".

END OF ARTICLE

ARTICLE 5 - RESPONSIBILITY OF CONTRACTOR TO INFORM ITSELF 5.1 The CONTRACTOR shall be deemed to have:

(a) Carefully read the CONTRACT documents to determine all the necessary services, labour, Equipment and Materials required for the performance of the SERVICES;

(b) Familiarise itself with the Work Site, any restrictions applicable to or associated with the site

whether imposed by any authority or third party and all ingress and egress from it; (c) Obtain for itself in advance a full understanding and knowledge of the nature and scope of the

SERVICES and of the conditions under which the SERVICES will be carried out.



5.2 Any information that CARIGALI decides to give to the CONTRACTOR shall be information that is

reasonably available to CARIGALI at the material time. CARIGALI shall not be responsible for the accuracy or sufficiency of any said information and CONTRACTOR shall interpret and apply any said information at his discretion and shall be fully responsible for such interpretation.

5.3 The CONTRACTOR assumes total responsibility for all SERVICES including SERVICES, based upon

data and information not contained in the CONTRACT or any conclusions, interpretations or SERVICES by the CONTRACTOR in applying the data, information and requirements contained in the CONTRACT.

5.4 No additional payment beyond what has been agreed in the CONTRACT will be paid to the

CONTRACTOR due to the CONTRACTOR’s lack of understanding of the nature and scope of the SERVICES which a reasonably prudent CONTRACTOR should have determined and understood in advance, or due to the CONTRACTOR’s conclusions or interpretations of any data or information nor shall CONTRACTOR be relieved from any risk or obligation imposed on or undertaken by him under the CONTRACT on any such ground or on the ground that he did not or could not foresee any matter which may in fact affect or has affected the execution of the SERVICES.

5.5 Any failure by the CONTRACTOR to take account of matters, which may affect the SERVICES, will

not relieve the CONTRACTOR from its obligations under the CONTRACT.

END OF ARTICLE

ARTICLE 6 - RESPONSIBILITY OF CONTRACTOR TO INFORM CARIGALI 6.1 The CONTRACTOR shall notify CARIGALI without undue delay of all things that are or may appear to

be:

(a) In conflict with applicable law; or (b) Deficiencies, omissions, contradictions or ambiguities in the CONTRACT.

6.2 Failure to notify CARIGALI of deficiencies, omissions, contradictions or ambiguities in the CONTRACT shall be deemed to be the CONTRACTOR’s confirmation that there are no deficiencies, omissions, contradictions or ambiguities in the CONTRACT. However if CARIGALI does receive such notice, CARIGALI will review these items and issue the necessary instructions before the CONTRACTOR proceeds with any part of the SERVICES affected. The CONTRACTOR shall not proceed with the SERVICES prior to the receipt of such instructions.

6.3 CONTRACTOR shall notify CARIGALI immediately of any impending or actual stoppages of

SERVICES, industrial disputes or other matters affecting or likely to affect the performance of the SERVICES.

6.4 The CONTRACTOR shall keep CARIGALI fully informed of the progress of the SERVICES and shall

comply with the reporting requirements as set out by CARIGALI. 6.5 Without prejudice to the foregoing, CONTRACTOR shall request in a timely manner, any information

or detailed drawings it reasonably requires from CARIGALI for the performance of the SERVICES under this CONTRACT and CARIGALI shall use its reasonable endeavours to respond within a reasonable time to such request.

END OF ARTICLE

ARTICLE 7 - INVOICING AND PAYMENTS 7.1 CONTRACTOR shall invoice CARIGALI for the SERVICE performed as soon as possible after the

completion of SERVICES as specified in CONTRACT, or SERVICE Order. If the period of SERVICE



Order exceeds thirty (30) days, CONTRACTOR shall submit interim invoices at the beginning of each calendar month for SERVICES performed during the previous month. The invoice may include any amount due to CONTRACTOR which has not been invoiced previously, as well as any charges made by CONTRACTOR for expenditures on CARIGALI's behalf. Expenditures on CARIGALI's behalf shall be authorised in writing by CARIGALI before being incurred.

7.2 All invoices shall be prepared on CONTRACTOR'S official letterhead and the original shall be verified

and signed by CONTRACTOR'S authorised personnel prior to submission to CARIGALI. Invoicing for the SERVICES performed and materials/supplies delivered shall be kept current at all times.

7.3 Any charges made by CONTRACTOR for items reimbursable at actual cost under this CONTRACT or

for payments made on CARIGALI's behalf shall be properly itemised and shall be net of all discounts and allowances, whether or not taken by CONTRACTOR. Invoices must be supported by sufficient original documentation to fully support such reimbursement and permit verification thereof by CARIGALI. Supporting documents include original service ticket, time sheet and/or man-hour reports verified by CARIGALI Representative, third party invoices and/or other supporting data or information as is required or reasonably necessary to support the charges.

7.4 All invoices for SERVICES performed shall be submitted in duplicate, one (1) original and one (1)

copy, each complete with the necessary original supporting documentation verified by the CARIGALI Representative and shall indicate the CONTRACT number and title, location where SERVICES is performed or materials routed to, the name of CARIGALI Representative authorising the SERVICES to be performed or materials to be purchased and shall be supported by relevant documentation to permit verification thereof. Invoicing currency shall be indicated on the invoice.

7.5 Invoices shall be addressed to: - PETRONAS CARIGALI SDN BHD – PMO (0302)

c/o PETRONAS Financial Shared Service Centre, Level 57, Tower 1. PETRONAS Twin Tower, Kuala Lumpur City Centre, 50088 Kuala Lumpur. Attn.: Senior Manager, Finance & Accounts Department

7.6 Payments of correct and undisputed invoiced items shall be made on or before the thirtieth (30th) day

after receipt of the invoice. If the thirtieth (30th) day falls on Saturday, Sunday or a gazetted public holiday, the next Working day shall be deemed to be the due date for payment.

7.7 CARIGALI may dispute an invoice and shall withhold payment for incorrect invoice(s) without the

appropriate supporting documentation required by CARIGALI. CARIGALI shall inform CONTRACTOR of the disputed item(s) within thirty (30) days of the receipt by CARIGALI of the particular invoice.

7.8 In the event that CARIGALI disputes any invoice, CARIGALI shall be entitled to withhold from

payment only the actual amount in dispute until the settlement of the dispute by mutual agreement. 7.9 Payment due to CONTRACTOR may be withheld by CARIGALI on account of unsatisfactory

performance of the CONTRACT, the filing of claims against CARIGALI caused by acts or omissions of CONTRACTOR or failure of CONTRACTOR to pay amounts when due for labour or materials used by CONTRACTOR in doing SERVICES or amounts due to CONTRACTOR'S Subcontractors on the SERVICES. CARIGALI shall have the right to deduct any moneys due to the CONTRACTOR under this CONTRACT in the event and on proof of default in payment of wages by CONTRACTOR, for settlement of such claim. Such payment shall be deemed to be a payment made to the CONTRACTOR by CARIGALI under and by virtue of this CONTRACT.

7.10 If and when the cause or causes for withholding any such payment has/have been remedied or

removed by CONTRACTOR and satisfactory evidence of such remedy or removal has been presented to CARIGALI, the payments withheld shall be made forthwith by CARIGALI.



7.11 If CONTRACTOR fails to take appropriate remedial action or refuses to remedy or remove any cause for withholding such payments after delivery of written notice to CONTRACTOR by CARIGALI, CARIGALI shall be entitled to cause the same to be remedied or removed on its own and may deduct the cost including the expenses thereby incurred by CARIGALI from any amounts due or owing or which may become due or owing to CONTRACTOR under the CONTRACT provided always that this provision shall not affect any other remedy to which CARIGALI may be entitled to for the recovery of such sums.

7.12 All payments to CONTRACTOR by CARIGALI under the terms of this CONTRACT shall be in Ringgit

Malaysia. Malaysian laws and regulations established by Bank Negara Malaysia place restrictions on payments in other currencies. If CONTRACT Price is expressed in a foreign currency and CONTRACTOR makes written request to CARIGALI to be paid in such other currency, CARIGALI may at its sole discretion pay CONTRACTOR in such foreign currency subject to: -

(1) CONTRACTOR furnishing documentary evidence to CARIGALI that CONTRACTOR is duly

authorised by Bank Negara Malaysia to accept payment in that other currency, or (2) Bank Negara regulations so permitting, or (3) CONTRACTOR paying to CARIGALI all direct costs incurred or may be incurred by

CARIGALI and complying with any other reasonable terms and conditions imposed from time to time by CARIGALI.

Where CONTRACT price is stated in a currency other than Ringgit Malaysia and CONTRACTOR is

not authorised to accept payment other than in Ringgit Malaysia, or CARIGALI at its sole discretion decides to pay CONTRACTOR in Ringgit Malaysia, then, for the purpose of converting a foreign currency to enable payment to be made in Ringgit Malaysia, the rate of exchange to be used shall be the average of the selling and buying rates of Telegraphic Transfer published in the opening of business rate sheet by Malayan Banking Berhad Kuala Lumpur, on the day of payment. If such day falls on a day where the rate is not available, the rate quoted immediately before such day shall be used.

All bank charges pertaining to the payment shall be borne by the CONTRACTOR. 7.13 CONTRACTOR shall prepare and submit in duplicate a monthly billing statement by the seventh

(7th) calendar day of each month showing the amount billed from the start of the CONTRACT through the last day of the prior month and the cumulative total of all billings. Submission of the Monthly Billing Statement is detailed out in EXHIBIT IV - "ADMINISTRATIVE PROCEDURES".

7.14 Upon notification of any erroneous billings made by or payments made to CONTRACTOR by

CARIGALI, CONTRACTOR shall within fourteen (14) days, make appropriate adjustments therein and reimburse to CARIGALI any amounts of overpayment still outstanding as reflected by the said adjustments, notwithstanding the fact that a temporary withholding or a correction of discrepancy may have been effected previously. Notwithstanding the foregoing, CARIGALI shall be entitled to deduct such amount from payment due to CONTRACTOR. Accordingly, CARIGALI shall pay CONTRACTOR any amount of underpayment subject to verification thereof.

7.15 Payment made by CARIGALI under this CONTRACT shall not preclude the right of CARIGALI to

thereafter dispute any of the items invoiced and shall not constitute an admission by CARIGALI as to the performance by CONTRACTOR of its obligations hereunder and in no event shall any such payment affect the warranty obligations by CONTRACTOR. Any payments withheld shall be without prejudice to any other rights or remedies available to CARIGALI.

7.16 All invoices, financial statements / settlements, and billings by CONTRACTOR to CARIGALI shall

reflect properly the facts relating to all activities and transactions handled for CARIGALI's account. 7.17 CONTRACTOR shall submit the last invoices not later than thirty (30) calendar days after SERVICES

has been completed. 7.18 All payment to CONTRACTOR shall be made to: - BANK NAME AND ADDRESS :



ACCOUNT NUMBER :

END OF ARTICLE

ARTICLE 8 - BANK GUARANTEE/PERFORMANCE GUARANTEE 8.1 CONTRACTOR shall furnish to CARIGALI an irrevocable on demand and unconditional Bank

Guarantee in the format set out in EXHIBIT VII - "BANK GUARANTEE FORMAT" of this CONTRACT issued by a commercial bank operating in Malaysia and acceptable to CARIGALI within thirty (30) days of the award of this CONTRACT by way of guarantee for the due performance by CONTRACTOR of its obligations under this CONTRACT. The Bank Guarantee shall be effective from the Effective Date and shall remain valid ninety (90) days after the completion of CONTRACT duration or thirty (30) days after submission of the last invoice whichever is the later and/or any extension thereto, and its value shall be as per EXHIBIT II - "SCHEDULE OF COMPENSATION".

Such guarantee shall be binding on CONTRACTOR notwithstanding such variation, alterations, or

extensions of time as may be made, given, conceded, or agreed under this CONTRACT. The expenses incurred in preparing, completing, and stamping such instrument shall be borne by CONTRACTOR.

8.2 Should the expiry date of the Bank Guarantee required to be furnished pursuant to ARTICLE 8.1

occur before the expiry of the validity period mentioned in ARTICLE 8.1, CONTRACTOR shall provide, at least fourteen (14) days before the date of expiry, a fresh guarantee in the form similar to and in the same amount of that previously provided, except for a revised date of expiry which shall be not earlier than ninety (90) days after the end of the duration of this CONTRACT or thirty (30) days after submission of the last invoice whichever is the later and any extension thereof. Should CONTRACTOR fail to provide the fresh Bank Guarantee as required, CARIGALI shall without prejudice to all its other rights under the CONTRACT or the law, invoke the Bank Guarantee referred to in ARTICLE 8.1 or otherwise have the right to withhold any payments due or becoming due after the date of such failure by CONTRACTOR.

8.3 If the Bank Guarantee to be furnished pursuant to ARTICLES 8.1 and 8.2, is not duly furnished by

CONTRACTOR to CARIGALI within the above prescribed period, CARIGALI may at its option and without prejudice to any rights or claims it may have against CONTRACTOR by reason of CONTRACTOR'S non-compliance with the provisions of this ARTICLE, withhold an amount equivalent to the Bank Guarantee as required under this ARTICLE from payment due to CONTRACTOR under this CONTRACT until such time the Bank Guarantee is furnished by the CONTRACTOR whereupon CARIGALI will immediately release such sums withheld to CONTRACTOR, or terminate this CONTRACT by notice in writing to CONTRACTOR. In the case of termination, the provisions under ARTICLE 21 - "DEFAULT OF CONTRACTOR" and ARTICLE 23.3 - "TERMINATION FOR CAUSE" shall apply.

8.4 Further, as a condition precedent to the award of this CONTRACT, CONTRACTOR shall, if

requested by CARIGALI, furnish CARIGALI with a Performance Guarantee duly executed by the principal, associate or parent company of CONTRACTOR in the form as provided in EXHIBIT VIII - "PERFORMANCE GUARANTEE FORMAT" hereof.

END OF ARTICLE



ARTICLE 9 - TAXES AND DUTIES

9.1 CONTRACTOR shall be responsible for, and pay at its own expense when due and payable, all taxes

and duties relating to the SERVICES including but not limited to:

9.1.1 All sales, excise, storage, consumption and use taxes, licences, permit and registration fees, income, profit, excess profit, franchise, and personal property taxes;

9.1.2 All employment taxes and contributions imposed or that may be imposed by law, trade union

contracts, or regulations with respect to or measured by the compensation (wages, salaries or other) paid to employees of CONTRACTOR including but not limited to, taxes and contribution for unemployment and compensation insurance, old age benefits, welfare funds, pensions and annuities, and disability insurance and similar items; and

9.1.3 All import licences, duties, surtax, sales tax, and/or, other statutory imposts levied (hereinafter

referred to as "Customs Duties") on imported CONTRACTOR Equipment except for equipment imported in CARIGALI's name and which is on the current "Master List of Materials and Equipment for Upstream Petroleum Operations Exempted from Customs Duties and Sales Taxes" (hereinafter referred to as the "Master Exemption List" or "MEL")

9.2 Importation of CONTRACTOR Equipment:

9.2.1 Any equipment imported overland into Malaysia for performance of the SERVICES shall be delivered under bond to CARIGALI's Supply Base (hereinafter referred to as "KSB" and/or "ASB").

9.2.2 If CONTRACTOR Equipment which falls within the MEL is to be imported in the name of

CARIGALI through other than KSB and/or ASB, CONTRACTOR shall be required to move such equipment under bond to KSB and/or ASB. CONTRACTOR shall obtain CARIGALI's prior written approval and shall provide sufficient notice to CARIGALI for Customs clearance.

9.2.3 Import of equipment shall be made in the name of CONTRACTOR if CONTRACTOR has a

warehouse in KSB and/or ASB; otherwise, such imports shall be made in the name of CARIGALI.

9.2.4 If CONTRACTOR Equipment which is not listed on the MEL and which will not be consumed

in the performance of SERVICES, will be utilised for a period of less than six (6) months, CONTRACTOR is advised to import such equipment under temporary imports.

9.2.5 CONTRACTOR shall be responsible for the preparation of all documents required by

Customs Authorities in connection with the import and export of CONTRACTOR Equipment to and from Malaysia.

9.3 CARIGALI shall hold CONTRACTOR harmless against any Customs Duties assessed on equipment

listed in the MEL and imported in the name of CARIGALI, provided that CONTRACTOR adheres to all of CARIGALI's instructions relating to such exemptions. Further, CONTRACTOR shall not be authorised to pay, and shall not be reimbursed for, any Customs Duties paid for or on behalf of CARIGALI for any equipment listed on the MEL and imported in the name of CARIGALI. Where it may be necessary to do so, written consent shall be obtained from CARIGALI prior to payment thereon.

9.4 CONTRACTOR shall be responsible for equipment that is imported while such equipment is in

CONTRACTOR'S custody. CONTRACTOR shall indemnify CARIGALI from and against any claims, demands and causes of action which may arise as a result of damage to, shortages, or overages in inventory of such equipment.

9.5 Upon termination of this CONTRACT or part(s) of the SERVICES involving the use of such

CONTRACTOR Equipment, whichever occurs first, CONTRACTOR shall take immediate steps to remove such equipment from Malaysia other than equipment that has been used or consumed in the performance of the SERVICES. Unless CARIGALI agrees otherwise in writing, CONTRACTOR shall comply with all directions and procedures as required by CARIGALI to cause such equipment to be removed as aforesaid as expeditiously as possible.



9.6 In the event that equipment listed on the MEL and imported in CARIGALI's name has to be

permanently taken out of Malaysia, sold, transferred, disposed of or otherwise dealt with prior to its removal from Malaysia, CONTRACTOR shall give sufficient notice to CARIGALI of its intention and such action shall only be taken after written consent from CARIGALI. CARIGALI shall attempt to obtain the necessary approvals from the relevant authorities for such action.

9.7 CONTRACTOR shall indemnify and hold CARIGALI and its Affiliates harmless from and against any

and all taxes, duties, surcharges, fines, or penalties of whatsoever nature for which CARIGALI shall be or become liable as a result of CONTRACTOR'S failure to comply with the directions and procedural requirements of CARIGALI with respect to the removal of CONTRACTOR Equipment imported in CARIGALI's name or as a result of CONTRACTOR'S act in selling, transferring, disposing, or otherwise dealing with such equipment prior to its removal from Malaysia or as a result of CONTRACTOR'S failure to furnish proper and accurate information for import of such equipment.

9.8 CONTRACTOR shall protect and indemnify and hold CARIGALI and its Affiliates safe and harmless

from any and all claims or liability for income, excess profits, royalty, and other taxes assessed or levied by the Government of Malaysia or by any relevant authorities thereof or by the government of any other country against CONTRACTOR or its Subcontractor or against CARIGALI for or on account of any payment made to or earned by CONTRACTOR or its Subcontractor hereunder. CONTRACTOR further shall protect and hold CARIGALI and its Affiliates harmless from all taxes assessed or levied against or on account of wages, salaries, or other benefits paid to or enjoyed by employees of CONTRACTOR or its Subcontractors; and all taxes assessed or levied against, on, or for account of any property or equipment of CONTRACTOR or its Subcontractors.

9.9 CARIGALI shall have the right to withhold taxes on income, excess profit, royalty, and other taxes

from payment due to CONTRACTOR under this CONTRACT; to the extent that such withholdings may be required by the Government of Malaysia or any relevant authorities thereof, or by the government of any other country; and payment by CARIGALI to the respective governmental office of the amount of money so withheld shall relieve CARIGALI from any further obligation to CONTRACTOR with respect to the amount so withheld.

CARIGALI will provide CONTRACTOR with a statement of any amounts withheld on behalf of the

CONTRACTOR including any original receipts received for payment on behalf of the CONTRACTOR. 9.10 CONTRACTOR shall indemnify CARIGALI and its Affiliates against all claims, demands and causes

of action based on any actual or alleged failure by CONTRACTOR or its Subcontractors to make timely payment of any taxes or duties for which they are liable or any actual or alleged failure by CONTRACTOR or its Subcontractors to comply with applicable reporting, return, or other procedural requirements with respect to their payment. This indemnity shall include without limitation all penalties, awards and judgements, court and arbitration costs, attorneys' fees, and other reasonable expenses associated with such claims, demands, and causes of action.

9.11 CONTRACTOR shall give prompt notice to CARIGALI of all matters pertaining to non-payment,

payment under protest, claims of immunity, or exemption from any taxes or duties. 9.12 CONTRACTOR shall be responsible to seek clarification through its tax adviser on the applicability of

withholding tax provisions under the Income Tax Acts, 1967 (the Act) as regards to non-resident company in Malaysia.

CONTRACTOR shall submit to CARIGALI a letter from its external company auditor, or tax

consultant, or legal counsel stating that CONTRACTOR is a resident in Malaysia under Section 7 or 8 of the Income Tax Acts, 1967 (the Act), failing which, CARIGALI shall consider CONTRACTOR a non-resident of Malaysia for tax purposes and thereby subject to the withholding tax provision of the Act. CARIGALI is required by law to withhold fifteen percent (15%) or twenty percent (20%) whichever is appropriate from all payments due to CONTRACTOR for SERVICES falling within the withholding tax provisions until such time that the required letter is submitted to CARIGALI.

END OF ARTICLE



ARTICLE 10 - INSURANCE

10.1 CONTRACTOR shall at its own cost and expense carry and maintain in full force throughout the

duration of this CONTRACT at least the following insurances with companies satisfactory to CARIGALI. Nothing contained herein shall serve in any way to limit or waive CONTRACTOR's responsibility under this CONTRACT. The insurances to be carried by CONTRACTOR are as follows: -

(a) Workmen's Compensation and/or Employer's Liability Insurance or similar statutory

social insurance as required by law at the Work Site where the SERVICES will be performed and which may be applicable covering all CONTRACTOR'S employees engaged in accomplishing the SERVICES.

(b) Comprehensive General Third Party Liability Insurance covering all operations hereunder

against bodily injury, death, loss of, or property damage with minimum limits of Ringgit Malaysia Four Million (RM4,000,000) or equivalent value in other currency for any one occurrence and unlimited as to the number of claims in the period of insurance. Such insurance shall include Contractual Liability coverage.

(c) "All Risks" Property Damage and Transit Insurance covering CONTRACTOR Equipment

at all times during the duration of this CONTRACT including, but not limited to, losses occurring at the Work Site(s) and/or in transit to or from the Work Site and/or between Work Site(s).

(d) Any other insurance which may be relevant and/or necessary and/or as may be required by

any law(s) to which the CONTRACTOR and/or Subcontractors are subjected to or as instructed by CARIGALI.

10.2 To the extent of indemnities given by CONTRACTOR herein, CONTRACTOR shall cause CARIGALI

and Co-Venturers, their parent companies, subsidiaries, Affiliates, consultants and their respective agents, officers and employees to be included as additional assured and to be covered by all insurances as stipulated in ARTICLE 10.1 with respect to operations conducted under this CONTRACT and shall cause the insurers thereof to waive all expressed or implied rights of subrogation against such Parties and their respective employees, servants and agents.

CONTRACTOR shall cause the insurers thereof and of any other policy of insurance carried by

CONTRACTOR including insurance covering CONTRACTOR Equipment and materials used in the performance of the SERVICES to waive all expressed or implied rights of subrogation against such Parties and their respective employees, servants and agents.

CONTRACTOR shall further cause the insurance policy as stipulated in ARTICLE 10.1 herein to

contain a "Severability of Interests" (Cross Liability) Clause providing that in the event of one insured Party incurring liability to any of the other insured Parties, the insurance shall apply for the benefit of the Party against whom claim is or may be made in the same manner as if separate policies had been issued to each insured Party.

10.3 All deductibles, exceptions, and exclusions applicable to the foregoing insurances resulting from any

act or omission of CONTRACTOR shall be for the account of and be paid by CONTRACTOR. Any breach of conditions and/or warranties contained in such policies of insurances shall also be for the account of CONTRACTOR.

10.4 CONTRACTOR shall fully indemnify CARIGALI against loss or damage arising out of any failure to

effect or maintain such insurances specified by this CONTRACT or out of any act or omission which invalidates the said insurances.

10.5 CONTRACTOR shall within fourteen (14) days of the award of this CONTRACT furnish to CARIGALI

certified copies of certificates of insurance provided for in ARTICLE 10.1 hereof including evidence of premiums payments thereof. No insurance shall be materially changed or cancelled while the SERVICES is in progress without prior written approval by CARIGALI. Policies and/or extension certificates or documents shall be furnished to CARIGALI.

If requested by CARIGALI, CONTRACTOR shall permit CARIGALI to examine copies of its and its

Subcontractors original insurance policies and current premium receipts.



10.6 The furnishing of certificates of insurances shall not be interpreted as implying endorsement by

CARIGALI or that CARIGALI assumes responsibility for the accuracy and adequacy of such documents or that the CONTRACTOR has complied with its other obligation contained in the CONTRACT.

10.7 Should CONTRACTOR at any time neglect or refuse to provide or renew any insurance required

herein, or should any insurance be cancelled, CARIGALI shall upon notification to CONTRACTOR have the right to procure such insurance and, in such event, any sum so paid by CARIGALI shall immediately become due and payable to CARIGALI by CONTRACTOR or CARIGALI shall be entitled to deduct such sums from any moneys due or which may become due to CONTRACTOR in addition to any other remedies CARIGALI may have under this CONTRACT.

10.8 CONTRACTOR shall notify CARIGALI immediately upon receipt of any notice of claims, incidents, or

demands or of any situation which may give rise to such claims or demands being made under the said policies. Written notice shall be given not later than two (2) days after the occurrence of any accident. However, for serious accidents (including but not limited to death or serious injuries) notice shall be given immediately and must be confirmed in writing.

10.9 CONTRACTOR shall ensure that its Subcontractors maintain similar insurance coverage as

specified herein and that its Subcontractors similarly indemnify and hold CARIGALI harmless against all costs, claims, and demands. Any deficiencies in the coverage or policy limits of Subcontractor's insurance shall be for the sole responsibility of CONTRACTOR.

10.10 The amounts of CONTRACTOR furnished insurance called for herein shall be the minimum and not

the maximum limits of liability. CONTRACTOR may provide other insurance coverage or higher limits of coverage. CARIGALI will bear no financial liability attributable to deficient insurance coverage by CONTRACTOR.

10.11 CONTRACTOR shall not commence the shipment of equipment and materials or commence

SERVICES until all the insurances that CONTRACTOR is required to provide are in full force.

END OF ARTICLE

ARTICLE 11 - LIABILITIES AND INDEMNITIES For the purposes of this ARTICLE, CARIGALI GROUP shall mean PETRONAS, CARIGALI, its Co-Venturers, its and their respective Affiliates, its and their respective directors, officers and employees of the aforesaid but shall not include any member of the CONTRACTOR GROUP; and CONTRACTOR GROUP shall for the purpose of this ARTICLE mean the CONTRACTOR, its Sub-contractor, its and their Affiliates, its and their respective directors, officers and employees but shall not include any member of CARIGALI GROUP. 11.1 Personnel of CONTRACTOR CONTRACTOR shall be responsible for and shall protect, defend, indemnify and hold harmless

CARIGALI GROUP from and against any and all claims, liabilities, costs, damages and expenses of every kind and nature, with respect to injury or death or damage to or loss of property of any person employed by CONTRACTOR GROUP howsoever arising and whether or not the negligence or other breach of duty of CARIGALI GROUP caused or contributed to such injury.

11.2 Personnel of CARIGALI CARIGALI shall be responsible for and shall protect, defend, indemnify and hold harmless

CONTRACTOR GROUP from and against any and all claims, liabilities, costs, damages and expenses of every kind and nature, with respect to injury or death of damage to or loss of property of any person employed by CARIGALI GROUP howsoever arising and whether or not the negligence or other breach of duty of CARIGALI GROUP caused or contributed to such injury.



11.3 Third Party CONTRACTOR shall be responsible for and shall protect, defend, indemnify and hold harmless CARIGALI GROUP from and against any and all claims, liabilities, cost, damages and expenses of every kind and nature, with respect to injury, illness or death of, or damage to or loss of property of any third party, arising during and/or as a result of the performance of this CONTRACT without re-gard to whether any act or omission of CARIGALI contributed to such injury, death or damage to or loss of property. However CONTRACTOR shall not be held responsible for nor be liable to indem-nify and hold CARIGALI GROUP harmless for injury, death or property damage caused by the sole negligence or wilful act of CARIGALI. CONTRACTOR's indemnity hereunder shall not exceed Ringgit Malaysia Four Million (RM4,000,000) for any one occurrence.

In respect of claims, liabilities, costs, damages and expenses in excess of Ringgit Malaysia Four Million (RM4,000,000) for any one occurrence, the respective liabilities of CONTRACTOR and CARIGALI as to the amount over and above Ringgit Malaysia Four Million (RM4,000,000) shall be determined according to law.

11.4 CARIGALI Equipment and Property CONTRACTOR shall be liable for and shall indemnify CARIGALI GROUP against any damage to or

destruction or loss of property owned by PETRONAS arising during, and/or as a result of the performance of this CONTRACT, without regard to whether any act or omission of CARIGALI contributed to the loss. CONTRACTOR's indemnity hereunder, except due to CONTRACTOR’s wilful default, shall not exceed Ringgit Malaysia Six Million (RM6,000,000) for any one occurrence.

11.5 CONTRACTOR Equipment 11.5.1 Save as otherwise expressly provided in ARTICLE 11.5.2, CONTRACTOR shall assume the

risk of, and shall be solely responsible for and in this regard shall indemnify, defend and hold CARIGALI harmless against any claims arising out of all damage to and/or loss or destruction of CONTRACTOR and its Subcontractor's Equipment and property, from any cause whatsoever, at all times during the duration of this CONTRACT. CONTRACTOR shall replace any lost or damaged CONTRACTOR Equipment at CONTRACTOR's sole cost in the most expeditious manner possible and at CONTRACTOR's sole expense.

11.5.2 Except as may be otherwise provided herein, CARIGALI shall compensate CONTRACTOR

for any CONTRACTOR Equipment damaged or lost in the well to the extent that such loss or damage is not covered by CONTRACTOR's insurance or recoverable from other sources, and provided that such loss or damage is not due to:-

(a) The wilful act or omission of CONTRACTOR, or (b) CONTRACTOR'S failure to follow good industry practices or to properly maintain

and inspect equipment, or (c) Any other negligence on the part of CONTRACTOR, its employees, agents,

contractors or Subcontractors, or (d) Failure or malfunction of CONTRACTOR'S surface equipment, within

CONTRACTOR'S control, or (e) Ordinary wear and tear.

CARIGALI's obligation under this ARTICLE 11.5.2 for any such lost or damaged equipment shall be based on reimbursement of costs as per EXHIBIT II – “SCHEDULE OF COMPENSATION”.

11.9 CONTRACTOR shall indemnify and hold harmless CARIGALI from and against such liability resulting

from pollution or for cost incurred or payments made by CARIGALI to control or clean up the pollutant or to prevent the threat of pollution or as compensation for damage suffered by others from any pollution arising from CONTRACTOR’s performance of the SERVICES under this CONTRACT. CONTRACTOR'S indemnity herein shall not exceed Ringgit Malaysia Six Million (RM6,000,000) or equivalent value in other currency for any one occurrence.



11.10 The indemnity addressed in Article 11.9 shall include all control and/or cleanup costs, and/or claims related to any such pollution. CONTRACTOR undertakes that equipment or rubbish in any form originating from the SERVICES will not be dumped overboard.

11.11 The indemnities given by the CONTRACTOR shall not be reduced by reasons of any negligence or

omission of CARIGALI Representative in failing to supervise or control the CONTRACTOR's site operations or methods of Working or to detect or prevent or remedy defective SERVICES or to ensure proper performance of any other obligations of the CONTRACTOR under this CONTRACT.

11.12 CONTRACTOR shall be solely responsible for the costs of all loss or damage caused by the wilful

misconduct, act, omission or negligence of CONTRACTOR, its Subcontractors, and/or their respective officers, agents or employees.

11.13 CONTRACTOR shall notify CARIGALI immediately of any incident, claims or litigation affecting the

provisions of this ARTICLE. 11.14 Any exclusion or limitation of liability specified in this CONTRACT shall apply to claims in contract, tort

or otherwise at law in respect of matters covered by such exclusion or limitation.

END OF ARTICLE

ARTICLE 12 - REVIEW AND ACCEPTANCE OF SERVICES 12.1 CARIGALI shall, without prejudice to its rights under ARTICLE 23 – “PROVISION FOR

TERMINATION OF CONTRACT” have the right to monitor and review, from time to time, the CONTRACTOR’s performance of the SERVICES under this CONTRACT and CONTRACTOR’s compliance with its obligations hereunder.

12.2 All SERVICES under this CONTRACT shall be performed in accordance with this CONTRACT to the

satisfaction of the CARIGALI representative. 12.3 Pursuant to this ARTICLE, CARIGALI Representative shall, decide on all matters as to the

performance and fulfilment of the CONTRACT and his decision thereon shall be final and conclusive. 12.4 Notwithstanding the above, acceptance of SERVICES or part thereof or approval of CONTRACTOR's

activities for the SERVICES or partial payments made to the CONTRACTOR shall not relieve CONTRACTOR of any of its obligations and/or liabilities provided in this CONTRACT.

END OF ARTICLE

ARTICLE 13 - WARRANTY 13.1 CONTRACTOR warrants and guarantees that the SERVICES shall be performed in a professional

manner in accordance with good and sound offshore engineering and industry practices and with the requirements and conditions of this CONTRACT.

13.2 CONTRACTOR warrants that the SERVICES comply with the technical specifications, are free from

defects in workmanship, fit and suitable for the purpose and use for which they are intended as stated in this CONTRACT.

13.3 Notwithstanding anything contrary under this CONTRACT, if there are defects in the SERVICES or

part thereof, CARIGALI shall notify CONTRACTOR of the defects. At CARIGALI's option, CARIGALI may instruct CONTRACTOR to repair or replace or remedy the defective SERVICES at no charge to CARIGALI. Alternatively, CARIGALI may repair or replace or remedy the defective SERVICES and any/all expenses incurred by CARIGALI for such repair or replacement or remedy SERVICES shall be reimbursed by CONTRACTOR in accordance with ARTICLE 13.7.

13.4 The scope of CONTRACTOR’s warranty shall cover all expenses incurred with respect to materials,

labour and all direct cost and remedy of the defective SERVICES.



13.5 CONTRACTOR shall obtain from its Sub-contractors for assignment to CARIGALI the best possible warranties and guarantees with respect to materials and workmanship of third party installed by CONTRACTOR. In the event that CONTRACTOR obtains more favourable warranties from its SUB-SUPPLIERS and suppliers than those in this ARTICLE, such warranties shall be assigned to CARIGALI.

13.6 CARIGALI's inspecting, testing, witnessing tests, paying invoices or issuing any final acceptance shall

not relieve CONTRACTOR from its warranty obligations set forth in this ARTICLE. 13.7 If CONTRACTOR fails to do the SERVICES or part thereof or make good the defect or deficiency as

required by CARIGALI within the specified period after delivery of written notice to CONTRACTOR by CARIGALI, CARIGALI shall be entitled to have the SERVICES or part thereof, or the defect or deficiency or part thereof, as the case may be, carried out by its own personnel or by any other contractor appointed by CARIGALI. If the SERVICES or part thereof, or the defect or deficiency or part thereof, which should have been rectified by CONTRACTOR at its own cost but was instead rectified by CARIGALI or its contractor, CARIGALI shall, without prejudice to any other rights CARIGALI may possess, be entitled to recover from CONTRACTOR the total cost to CARIGALI for such rectification SERVICES or may deduct the same from any moneys or payment due or which may become due to CONTRACTOR and if there are no or insufficient moneys available, CONTRACTOR shall reimburse CARIGALI within thirty (30) days after invoicing for all such costs.

END OF ARTICLE

ARTICLE 14 - CONTRACTOR'S OBLIGATION 14.1 CONTRACTOR shall perform the SERVICES in strict compliance with the provisions of this

CONTRACT including all EXHIBITS attached hereto and shall comply with and adhere strictly to CARIGALI's instructions and directions on any matter concerning the SERVICES including all plans, programs, specifications, schedules, and instructions provided or made by CARIGALI for carrying out the SERVICES. The foregoing shall not however be construed to exclude CONTRACTOR's duty to exercise diligence and to perform the SERVICES in accordance with the warranty set forth in ARTICLE 13 – “WARRANTY” hereof.

14.2 CONTRACTOR shall carry out all of its obligations under the CONTRACT and shall execute the

SERVICES with all due care and diligence and with the skill to be expected of a reputable contractor experienced in the types of SERVICES to be carried out under the CONTRACT.

14.3 CONTRACTOR shall take full responsibility for the adequacy, stability and safety of all operations

and methods necessary for the performance of the SERVICES and shall comply with the provisions of EXHIBIT IV – “SAFETY, HEALTH & ENVIRONMENT”.

14.4 CONTRACTOR shall furnish the equipment, materials, and supplies and the necessary personnel

required to perform the SERVICES as specified in the EXHIBITS attached hereto. Further CONTRACTOR shall where appropriate and practical if requested by CARIGALI, provide on-the-job training for employees of CARIGALI in respect of the SERVICES, including trouble-shooting and di-agnostic work, performed hereunder. All salaries and expenses incurred by the CONTRACTOR’s personnel providing the training shall be paid for and borne by the CONTRACTOR.

14.5 During the progress of the SERVICES performed hereunder, CONTRACTOR shall ensure that its

personnel keep the designated area of the Work Site(s) clean and orderly at all times and shall dispose of trash and spoil as instructed by CARIGALI.

14.6 CONTRACTOR shall commence the SERVICES as instructed by CARIGALI. 14.7 CONTRACTOR Furnished Equipment, Materials, and Supplies 14.7.1 CONTRACTOR shall at its own cost furnish, install, maintain in good working order, and

repair and replace where necessary throughout the duration of this CONTRACT, relevant and adequate equipment, materials and supplies for full and proper performance of the SERVICES, and shall carry all spare parts and supplies as required for maintenance and good working condition of CONTRACTOR Equipment.



14.7.2 CONTRACTOR shall ensure that all materials, tools, equipment and other items used in the SERVICES, whether purchased, rented, or otherwise provided by CONTRACTOR, are properly packed and equipped with proper and acceptable slings and spreader bars, where required, and that the equipment are in a safe, sound and good condition and capable of performing the functions for which they are intended; and are properly stored and protected against all weather elements that may be detrimental to the eventual performance of the equipment if no such protection is provided.

14.7.3 For equipment assigned to the SERVICES, the CONTRACTOR must indicate on the

proforma invoice that is submitted to CARIGALI, at time of delivery of the equipment to the Supply Base, the description, the serial number of the equipment, maintenance record, year of manufacture and/or year of purchase, with documental support.

The proforma invoice must reach CARIGALI Supply Base at least one day before the

actual shipment. All items delivered must be accompanied by CONTRACTOR's Delivery Order and must be clearly tagged for easy identification.

14.7.4 If any tool or other item of equipment is, in the judgement of CARIGALI, unsafe or incapable of doing the functions for which it is intended, CONTRACTOR shall repair or replace the same with a safe and capable tool or item of equipment at CONTRACTOR's expense.

14.7.5 CARIGALI shall have the right to inspect CONTRACTOR Equipment at any time to

observe their condition. If CARIGALI notifies CONTRACTOR of any defects thereto, CONTRACTOR shall take immediate steps to rectify the said defects at its own cost. However, such inspection by CARIGALI shall not imply any acceptance of the condition of the said CONTRACTOR Equipment by CARIGALI and CONTRACTOR shall not be relieved of its obligations under this CONTRACT by any such inspection.

14.7.6 CONTRACTOR shall keep and maintain up-to-date records of all CONTRACTOR

Equipment reflecting their conditions and quantity and shall make such records available to CARIGALI whenever requested.

14.7.7 CONTRACTOR agrees to visually inspect all CARIGALI Equipment and materials

furnished by CARIGALI and shall report to CARIGALI of any apparent defects therein. CONTRACTOR's use of such materials without so notifying CARIGALI shall be deemed to be conclusive evidence that such materials are free from apparent defects. CARIGALI Equipment at the Work Site shall be maintained in good condition and repaired by CONTRACTOR utilising CONTRACTOR Personnel provided CARIGALI shall, at its costs, provide all spare parts and materials required to maintain or repair CARIGALI Equipment.

14.7.8 CARIGALI shall have the right to release any part of or all of the CONTRACTOR

Equipment as specified in EXHIBIT I - “SCOPE OF SERVICES” at any time at CARIGALI's option upon giving CONTRACTOR advance notice, the said notice to be later confirmed in writing.

CONTRACTOR shall promptly prepare for demobilisation whatever portion of the

CONTRACTOR Equipment that is to be released and shall assist CARIGALI in the loading and offloading of the said equipment. All payments to CONTRACTOR for such released equipment shall terminate on the dates the said equipment is delivered either to the Demobilisation Site specified in EXHIBIT VI - “ADMINISTRATIVE PROCEDURES” or to any other mutually agreed location, and is made available to CONTRACTOR.

CARIGALI shall have the right and option to re-engage such released CONTRACTOR

Equipment as the same becomes available for the SERVICES under the terms and conditions herein and at the rates specified in EXHIBIT II - " SCHEDULE OF COMPENSATION".

14.8 CONTRACTOR'S Personnel 14.8.1 CONTRACTOR shall provide the necessary personnel as specified in EXHIBIT I -

“SCOPE OF SERVICES” and shall make the personnel available at the Mustering Points) for commencement of the SERVICES. CONTRACTOR shall thereafter ensure that such personnel are continuously available throughout the duration of the CONTRACT.



CONTRACTOR shall furnish at its sole expense any and all visas and SERVICES permits

or other permits required for its personnel. CONTRACTOR Personnel directly involved in the SERVICES shall be subjected to call

twenty-four (24) hours per day at the Work Site(s). CONTRACTOR shall furnish additional personnel as CARIGALI may request in writing

from time to time. 14.8.2 All CONTRACTOR Personnel directly involved in the performance of the SERVICES

offshore shall have undergone the necessary basic safety training required by CARIGALI's approved training centre, listed in EXHIBIT IV – “SAFETY, HEALTH & ENVIRONMENT”, and shall possess a valid CARIGALI's Offshore Safety Passport. All related costs with respect to getting CARIGALI's Safety Passport for CONTRACTOR Personnel shall be at CONTRACTOR'S own expenses.

14.8.3 Discipline In the performance of the SERVICES, CONTRACTOR shall maintain strict discipline and

good order among its employees and contractor's and subcontractor's employees and shall not permit any of them to engage in any activities that might, in CARIGALI's opinion, be contrary or detrimental to the performance of the SERVICES or the interests of CARIGALI.

14.8.4 Alcohol And Drug Use a) CONTRACTOR is responsible to ensure that its employees, agents, and

Subcontractors, its servants and its third party shall not use, be in possession or under the influence of any drug during the performance of the SERVICES, or cause any drugs to be carried into the Work Site(s).

b) CONTRACTOR shall also ensure that its employees, agents, subcontractors, its

servants and third party shall not use or be in possession of, distribute or engage in the sale of alcohol/alcoholic beverages at Work Site.

c) Any of the CONTRACTOR's personnel, employees, agents Subcontractors and third

party who is incapable of performing his SERVICES or duties due to the influence of alcohol, will be refused entry into or removed from the Work Site. CONTRACTOR shall replace such person immediately in accordance with the provision herein contained. Any cost incurred shall be for the CONTRACTOR's account.

14.8.5 Replacement of CONTRACTOR Personnel (a) CONTRACTOR shall employ on the SERVICES only competent and skilled

personnel. Subject to all other provisions of this ARTICLE, CONTRACTOR shall ensure that all such personnel continue in the functions and responsibilities to which they are initially assigned for as long as is necessary to achieve proper completion of the SERVICES. CONTRACTOR shall not change the personnel assigned to perform the SERVICES without prior approval from CARIGALI in writing.

CONTRACTOR shall also take steps to ensure that in the event of a replacement,

the replacement personnel shall be competent, skilled and familiar with the SERVICES. Such steps shall include the training of the "would be" new personnel to take-over the SERVICES at no additional cost to CARIGALI and shall include an appropriate hand over period for the replacement personnel.

(b) CARIGALI shall be entitled to, without prejudice to any other rights or remedies

available to CARIGALI under this CONTRACT or otherwise in law, to object and require CONTRACTOR to remove from the SERVICES and/or replace any of CONTRACTOR Personnel who, in the opinion of CARIGALI, is incompetent, misconduct himself, is negligent in the performance of his duties, and/or violates CARIGALI's alcohol/drug policy stated in ARTICLE 14.8.4 above and in EXHIBIT IV – “SAFETY, HEALTH & ENVIRONMENT”, or is otherwise considered to be undesirable.



In such event, CONTRACTOR shall forthwith remove such person from the

SERVICES and such person shall not be re-employed in the SERVICES again without the written permission of CARIGALI. CONTRACTOR shall immediately replace, at CONTRACTOR's sole expense, any discharged person with a suitably qualified and experienced person acceptable to CARIGALI.

In the event CONTRACTOR is unable to comply with these obligations, CARIGALI

shall have the option to terminate this CONTRACT. 14.8.6 Language Requirement

CONTRACTOR shall ensure that the personnel provided pursuant to this CONTRACT are competent, efficient and have adequate command of the English Language and shall endeavour to speak Bahasa Malaysia.

14.8.7 Personnel Policies CONTRACTOR shall not recruit CARIGALI Personnel or personnel of others performing

services for CARIGALI. CONTRACTOR shall maintain good site housekeeping and shall furnish where applicable,

to its personnel safety equipment including but not limited to safety helmets, safety shoes, safety harness and eye and ear protection, as specified in EXHIBIT IV - “SAFETY, HEALTH & ENVIRONMENT”.

CONTRACTOR shall be responsible for maintaining and enhancing the safety awareness

of its personnel and Subcontractor's personnel including arranging safety meeting and emergency drills.

CONTRACTOR shall establish and have its own written policy, safety rules and regulations for its employees and the employees of any of its subcontractors and shall also acquaint CARIGALI Representative with the same.

14.9 At all times, CONTRACTOR shall respond promptly and shall accurately furnish to CARIGALI

information about the SERVICES as requested. 14.10 In the execution of the SERVICES, no persons other than the authorised employees or agents of the

CONTRACTOR and the employees or agents of CARIGALI, shall be allowed on the Work Site without the written consent of CARIGALI.

14.11 Before commencing any hazardous SERVICES operations, CONTRACTOR shall inspect the

Worksite and equipment involved to ensure that the SERVICES will be performed under safe conditions acceptable to CARIGALI. CONTRACTOR shall verify that "Work Permits" or "Certificates" are obtained prior to initiating any hazardous SERVICES.

14.12 CONTRACTOR shall at no cost to CARIGALI be responsible for the medical welfare of its own and

Subcontractor's employees and shall take care of periodical medical examinations, arrangements for medical attendance, treatment or hospitalisation if and when necessary and will arrange suitable insurance coverage for such contingencies. In cases of emergency, CARIGALI may make or provide for, the necessary emergency arrangements, the costs of which shall be reimbursed to CARIGALI by CONTRACTOR.

14.13 CONTRACTOR shall advise CARIGALI immediately in writing of any labour dispute or anticipated

labour dispute which may be expected to affect the CONTRACTOR's performance of the SERVICES.

14.14 CONTRACTOR shall promptly review the information, data, drawings and specifications provided by

CARIGALI and shall immediately bring to the attention of CARIGALI all things which in CONTRACTOR's opinion appear to be deficiencies, omissions, contradictions or ambiguous in such information, data, drawings or specifications.



14.15 In addition to all legal and specific requirements stated herein, CONTRACTOR and CONTRACTOR's agents, employees, representatives and Subcontractors who are engaged in the performance on the SERVICES shall comply with, abide by and enforce at its sole expense any rules, regulations and standards on safety, fire protection and security regulations as set forth by CARIGALI in its safety manuals, policies and special instructions.

14.16 CONTRACTOR shall ensure that all its employees, agents and Subcontractors comply with

CARIGALI's rules, regulations, practices and requirements in the area of CARIGALI's operations. This shall not relieve CONTRACTOR of its obligations as stipulated herein and in particular this ARTICLE.

END OF ARTICLE

ARTICLE 15 - CARIGALI'S OBLIGATION

15.1 Access To Work Site(s) CARIGALI shall ensure that CONTRACTOR has rights of ingress and egress for its personnel and

CONTRACTOR Equipment to and from the Work Site(s), subject to the provisions of ARTICLE 9 - "TAXES AND DUTIES" and ARTICLE 14 -"CONTRACTOR'S OBLIGATION". CARIGALI shall promptly advise CONTRACTOR of any restrictions, conditions, or limitations in CARIGALI's permits or authorisations.

15.2 Use of CONTRACTOR Equipment CARIGALI shall not, without CONTRACTOR's specific consent, authorise any person other than

CONTRACTOR Personnel to operate CONTRACTOR Equipment. However, if an emergency should arise, CARIGALI may operate CONTRACTOR Equipment and shall notify CONTRACTOR within twenty four (24) hours of such use. CARIGALI shall pay CONTRACTOR the equipment rental rate, if applicable as specified in EXHIBIT II – “SCHEDULE OF COMPENSATION”.

15.3 Transportation of CONTRACTOR Equipment CARIGALI shall furnish transportation for CONTRACTOR Equipment from the Supply Base to the

Work Site(s) and vice versa. 15.4 SERVICES Schedule and Transportation of CONTRACTOR Personnel CONTRACTOR and CARIGALI shall agree upon a schedule for the regular change of working crews

who are engaged in the SERVICES at the Work Site(s) and, except in circumstances of emergency or safety, CARIGALI shall be obliged to transport CONTRACTOR Personnel only in accordance with the schedule so agreed upon. CARIGALI shall always have the right to change the schedule without prior notice for reasons of unavailability of transport and for emergency and safety considerations as determined solely by CARIGALI.

The normal mode of transportation for CONTRACTOR Personnel from Mustering Point to the

offshore Work Site, will be by helicopter if available. Otherwise fast-crew or supply vessel(s) will be used.

15.5 CARIGALI shall provide reasonable accommodation, meals and laundry service for CONTRACTOR

Personnel within the limits of stated requirements as to numbers of personnel so engaged from time to time at the Work Site(s). CONTRACTOR Personnel shall adhere to meal rosters as may be furnished by CARIGALI, if any.

15.6 CARIGALI shall provide first aid and medical attention as is available from time to time at the Work

Site. 15.7 CARIGALI may provide assistance to the CONTRACTOR in securing necessary permits or data

from Malaysian government authorities and/or agencies when required by this CONTRACT. However, failure by CARIGALI to obtain and provide such assistance shall not relieve the CONTRACTOR from the obligation to secure the same at its own costs.



15.8 The CONTRACT does not constitute or imply a commitment by CARIGALI to request CONTRACTOR to perform SERVICES. The performances of SERVICES are based on estimated requirement and the actual performance of SERVICES shall depend on the time of actual operational requirement. The commitment for performance of SERVICES under this CONTRACT shall be made by CARIGALI through the issuance of SERVICES Order to CONTRACTOR.

END OF ARTICLE

ARTICLE 16 - ACTIONS ON BEHALF OF CARIGALI

16.1 CONTRACTOR shall take no action on behalf of CARIGALI in the performance of the SERVICES,

which would subject either Party to liability or penalty under any laws, rules, regulations, or decrees of any relevant authority.

16.2 CONTRACTOR shall have no authority to and shall not make any statements, representations or

commitments of any kind or to take action which shall be binding upon CARIGALI, except as provided for herein or otherwise authorised in writing by CARIGALI.

16.3 CONTRACTOR is an independent CONTRACTOR and neither CONTRACTOR nor

CONTRACTOR's respective employees are deemed to be agents or employees of CARIGALI. 16.4 CONTRACTOR shall notify CARIGALI promptly upon discovery of any instance where

CONTRACTOR has not complied with the requirements of this ARTICLE.

END OF ARTICLE

ARTICLE 17 - CARIGALI’S CONTRACT ADMINISTRATOR AND REPRESENTATIVE(S)

The following defined CARIGALI Contract Administrator and Representative(s) shall be designated in EXHIBIT VI – “ADMINISTRATIVE PROCEDURES”. Notice of any change shall be given by CARIGALI to CONTRACTOR in writing. 17.1 CARIGALI Contract Administrator CARIGALI Contract Administrator is the person who shall be responsible for and is duly authorised

to receive and act on behalf of CARIGALI on all matters pursuant to the terms and conditions of this CONTRACT. The CARIGALI Contract Administrator shall have the authority to make the final decisions for CARIGALI on all questions, controversies, or disputes involving the interpretation and implementation of this CONTRACT.

17.2 CARIGALI Representative(s) CARIGALI shall maintain a representative at the Work Site(s) authorised to represent CARIGALI.

The CARIGALI Representative shall have the right to receive all information pertaining to records, reports, and any other information pursuant to the SERVICES and EXHIBITS attached hereto.

CARIGALI Representative(s) shall have the right to issue instructions with respect to the

CONTRACT, reject or disapprove of any part of the SERVICES, which does not conform to this CONTRACT, and to decide on all matters or questions which may arise relating to the performance of the SERVICES and his decision shall be final and conclusive.

CARIGALI Representative(s) shall be entitled to inspect all SERVICES performed hereunder and to

witness and to check all tests on CONTRACTOR Equipment. Notwithstanding the above, the presence of and the inspection by CARIGALI Representative(s) shall not relieve CONTRACTOR from CONTRACTOR's obligations and duties and shall not prejudice CARIGALI's rights under this CONTRACT.

CARIGALI Representative(s) shall consult with CONTRACTOR Representatives in delivery of

GOODS or planning and co-ordinating the SERVICES, and all instruction(s) given by CARIGALI



Representative(s) consistent with the provisions of this CONTRACT shall be deemed those of CARIGALI and shall be complied with by CONTRACTOR.

17.3 Instructions and Notices Instructions given by CARIGALI Contract Administrator or CARIGALI Representative(s) shall, at their

sole discretion, be verbal or in writing. All notifications, agreements, authorisations, approvals and acknowledgments shall be made in

writing in accordance with ARTICLE 43 – “NOTICES”.

END OF ARTICLE

ARTICLE 18 - CONTRACTOR'S CONTRACT ADMINISTRATOR AND REPRESENTATIVE

The following defined CONTRACTOR Contract Administrator and CONTRACTOR Representative shall be designated in EXHIBIT VI – “ADMINISTRATIVE PROCEDURES”. Notice of any change shall be given by CONTRACTOR to CARIGALI in writing. 18.1 CONTRACTOR CONTRACT Administrator CONTRACTOR Contract Administrator is the person who shall be responsible for and is duly

authorised to represent CONTRACTOR at all times during the progress of the SERVICES and to receive and to act on any request made by CARIGALI in the performance of the SERVICES pursuant to the terms of this CONTRACT.

CONTRACTOR Contract Administrator shall have full authority concerning the performance of the

SERVICES and shall have full authority to proceed with the SERVICES and every part thereof in conformity with this CONTRACT. CARIGALI shall be entitled to rely on all decisions and positions of the CONTRACTOR Contract Administrator as those of CONTRACTOR.

18.2 CONTRACTOR Representative(s) CONTRACTOR Representative is the person employed by CONTRACTOR who will have

supervisory authority over the SERVICES and with whom CARIGALI Representative(s) may plan and co-ordinate the performance of the SERVICES. Notice concerning operations which are transmitted to CONTRACTOR through its designated CONTRACTOR Representative(s) will be deemed, for the purpose of this CONTRACT, to have been sufficiently given.

18.3 Notices All notifications, agreements, authorisations, approvals and acknowledgments shall be made in

writing in accordance with ARTICLE 43 – “NOTICES”.

END OF ARTICLE

ARTICLE 19 - LIENS AND CLAIMS

19.1 CONTRACTOR shall indemnify and hold CARIGALI harmless from and shall keep CONTRACTOR

Equipment, CARIGALI Equipment, wells, and the SERVICES free of all liens, claims, assessments, fines, and levies created, caused, or committed by CONTRACTOR or its Subcontractors and all costs, damages, and expenses incidental thereto; including without limitation all court and arbitration costs, legal fees, and other reasonable expenses. CONTRACTOR shall notify CARIGALI of such liens and/or claims.

19.2 CARIGALI shall have the right to retain from any payment to be made under this CONTRACT an

amount sufficient to offset such liens and/or claims which CONTRACTOR fails to discharge promptly until such lien and/or claim is proven to be invalid or is satisfied, discharged, or settled.



19.3 Should there be any liens and/or claims after all payments hereunder have been made,

CONTRACTOR agrees to refund to CARIGALI upon demand all moneys that CARIGALI may be compelled to pay to discharge any such liens and/or claims in consequence of CONTRACTOR's default including all costs and legal and professional fees.

19.4 At the completion of the SERVICES hereunder, or upon expiry or earlier termination of this

CONTRACT, CARIGALI shall submit to CONTRACTOR a 'CONTRACT CLOSURE LETTER' upon which the CONTRACTROR shall submit a 'CONTRACT CLOSURE CERTIFICATE’ as per format in the EXHIBIT VI – “ADMINISTRATIVE PROCEDURES” stating that all of CONTRACTOR's employees, Subcontractors and suppliers have been paid in full, for SERVICES done or for equipment, materials and supplies furnished to, and all debts, taxes, liens, privileges, claims, charges, and obligations arising out of the purchase or lease of equipment, materials, supplies, and labour for use in the SERVICES hereunder to the date of such statements in connection with the performance of the SERVICES have been fully and finally paid. In the event of any dispute, CONTRACTOR shall post a bond, or any other form of security acceptable to CARIGALI, to secure or insure CARIGALI against any such liens and/or claims.

19.5 Such affidavit shall ensure immunity to CARIGALI from all liens and/or claims for which CARIGALI

might be or become liable. CONTRACTOR shall indemnify and hold CARIGALI harmless from and against all claims, demands, damages, losses, costs, proceedings, charges, and expenses arising out of or incurred in connection with any claims or liens asserted by CONTRACTOR's Subcontractors, suppliers, or any other liens and claims arising out of the performance of this CONTRACT by CONTRACTOR.

END OF ARTICLE

ARTICLE 20 - SAFETY, HEALTH, FIRE, ENVIRONMENTAL PROTECTION AND SECURITY

REGULATIONS 20.1 LAWS AND REGULATIONS CONTRACTOR shall comply with all laws, regulations, and requirements pertaining to safety,

health, fire, environmental protection, and security regulations which are applicable to the location where the SERVICES is being carried out.

CONTRACTOR shall ensure its personnel employed for the SERVICES comply at all times with the

requirements as set forth by CARIGALI in its HSE Manuals, Safety Manual, policies, procedures, any special instructions, and all requirements stipulated in EXHIBIT IV – “SAFETY, HEALTH & ENVIRONMENT” of this CONTRACT.

CONTRACTOR shall ensure that all services, materials, and CONTRACTOR's items used in the

performance of the SERVICES comply with the above laws, regulations, and requirements and otherwise meet generally accepted industry standards for occupational health, safety and environment.

20.2 SAFETY EQUIPMENT CONTRACTOR shall, where applicable, provide at its own expense adequate first aid, fire-fighting,

life saving, and other safety equipment of approved types and amount as may be specified in connection with this CONTRACT and shall maintain this equipment in a professional manner and, where appropriate, re-certify the said safety equipment as dictated by legal and industry standards.

CONTRACTOR shall keep up-to-date records of all said equipment, including equipment location

plans. CONTRACTOR shall ensure that all cargo and items of equipment located at Work Site and at

CONTRACTOR's onshore base are stored in a proper and safe manner and that CONTRACTOR's equipment is in all respects fit and suitable to undertake any operations.



CONTRACTOR shall also, at its own expense, be responsible for providing its personnel with

personal protective equipment as specified in EXHIBIT IV – “SAFETY, HEALTH & ENVIRONMENT”.

20.3 SAFETY PROCEDURES AND MANUALS CONTRACTOR shall have in place, prior to commencement of this CONTRACT, a written Safety

Manual and Emergency Response Manual duly endorsed by CONTRACTOR's Management and approved by CARIGALI.

20.4 CERTIFICATION OF PERSONNEL CONTRACTOR shall ensure that all machineries, equipment, and tools are operated by competent

personnel who are fully trained and certified to carry out the task. The said personnel shall be authorised in writing by CONTRACTOR's Management or certified by a reputable training establishment acceptable to CARIGALI as specified in EXHIBIT I - “SCOPE OF SERVICES” as being competent to perform the job.

20.5 RIGHT TO STOP SERVICES CARIGALI Representative shall have the right, but not the obligation, to prohibit the commencement

of the SERVICES or to stop any part of the SERVICES in progress if the equipment, personnel, or SERVICES conditions are considered to be unsafe or not in compliance with CARIGALI's rules and regulations.

20.6 WEATHER/SEA CONDITION CONTRACTOR may suspend any part of the SERVICES under this CONTRACT at any time with

CARIGALI's prior approval because of dangerous weather or sea conditions or other reasons relating to safety. Similarly, if requested to do so by CARIGALI in writing, CONTRACTOR shall immediately suspend all or a designated part of the SERVICES as may be requested by CARIGALI because of dangerous weather or sea conditions or other reasons relating to safety. In this event, CONTRACTOR shall take all reasonable measures to protect the Work Site(s), CARIGALI and CONTRACTOR Equipment and their components.

20.7 In addition to all legal and specific requirements stated herein, CONTRACTOR and

CONTRACTOR's agents, employees, representatives and subcontractors who are engaged in the performance of the SERVICES shall comply with, abide by and enforce at its sole expense any rules, regulations and standards on safety, drugs, and alcohol, fire protection, and security regulations as set forth by CARIGALI in its safety manuals, policies and special instructions.

20.8 In addition to all legal and specific requirements stated herein and all Malaysian legislative

requirements, CONTRACTOR and CONTRACTOR'S agents, employees, representatives and Subcontractors who are engaged in the performance of the SERVICES shall comply with, abide by and enforce at its sole expense any rules, regulations, and standards on safety, fire protection, environmental protection and security regulations as set forth by PETRONAS and CARIGALI in its published safety manuals, policies and special instructions. Before commencing any SERVICES, CARIGALI requires that CONTRACTOR inspect the Work Site(s) and the equipment involved to ensure that the SERVICES will be performed under safe conditions acceptance to CARIGALI. These inspections must be evidenced by "SERVICES Permits" issued by CARIGALI prior to initiating any such SERVICES. CARIGALI Representative or his designated representatives shall have the right to prohibit commencement of SERVICES or stop any SERVICES in progress if the equipment, personnel or SERVICES conditions are considered to be unsafe or not to be in compliance with CARIGALI rules and regulations.

20.9 CONTRACTOR shall prohibit the consumption and/or possession of alcoholic beverages or

dangerous drug at the Work Site. 20.10 CONTRACTOR shall prepare and execute an accident prevention programme to the approval of

CARIGALI. At monthly intervals, and at such lesser periods as is determined by CARIGALI, CONTRACTOR Project Co-ordinator and CARIGALI Representatives shall conduct safety inspections of the Work Site and the CONTRACTOR shall promptly conform with all recommendations made pursuant to said inspections.



20.11 CONTRACTOR shall compile and maintain safety records, data pertaining to its SERVICES with

CARIGALI. These records shall be updated and submitted to CARIGALI Representative as and when required. The safety records data shall be presented in the format as presented in Appendix VI-11 of EXHIBIT VI - “ADMINISTRATIVE PROCEDURES”.

20.12 CONTRACTOR shall be wholly responsible for the safety and safe working practices of its

employees, servants or agents, and all equipment, and shall be responsible for the training of its employees, servants or agents on safety and safe working practices. CONTRACTOR shall ensure that the personnel to be provided in the performance of the SERVICES are adequately trained in safety precautions and safe working practices before they are involved in the SERVICES and that they are competent to undertake their required duties in a safe and efficient manner. CONTRACTOR shall be responsible for maintaining and enhancing manner. CONTRACTOR shall be responsible for maintaining and enhancing the safety awareness among its personnel and Subcontractor's personnel, including arranging regular safety meetings and emergency drills. Copies of minutes of CONTRACTOR safety meetings shall be submitted to CARIGALI.

20.13 The employees, servants or agents of the CONTRACTOR when working offshore shall participate in

periodic fire and boat drills, instructions in survival, life saving and fire fighting. 20.14 All personnel assigned to Work Site shall be provided with approved safety helmets, safety glasses,

safety shoes and ear protections, by the CONTRACTOR. CONTRACTOR shall also provide to personnel assigned for special jobs with approved life lines, life jackets/life vests, breathing equipment, welding helmets, and all other protective equipment as necessitated by the scope of SERVICES and good industrial safety practices.

20.15 CARIGALI shall have the right to withhold part and/or all the payment due or terminate the

CONTRACT should the CONTRACTOR fail to follow CARIGALI safety requirement. 20.16 All portable electrical tools and equipment to be supplied by the CONTRACTOR shall be rated at

110V, and when used in hazardous areas, all fittings and tools will require to be rated "EXE", failing which, a hot Work Permit is required for their use.

20.17 CONTRACTOR shall allow CARIGALI Representative and/or its designated third Party personnel

access at any time to conduct audit on the CONTRACTOR Personnel, records and any other matters related to the safety aspect of the SERVICES at the Work Site (s).

20.18 CONTRACTOR'S SAFETY OFFICER CONTRACTOR shall at CONTRACTOR'S cost provide a Safety Officer who will be assigned at the

Work Site, when required, during the performance of the SERVICES. The CONTRACTOR's Safety Officer shall be a person who is familiar with the safety aspects mentioned hereinbefore, including the instructions, regulations and procedures provide by CARIGALI.

END OF ARTICLE

ARTICLE 21 - DEFAULT OF CONTRACTOR 21.1 The occurrence of any of the following events shall be deemed a default by CONTRACTOR under

this CONTRACT:-

(a) Any attempted transfer or assignment by CONTRACTOR of its right or duties under this CONTRACT without the prior written consent of CARIGALI; or

(b) The making by CONTRACTOR of an assignment for the benefits of creditors, the filing by or

against CONTRACTOR of a petition in bankruptcy or for corporate reorganisation, or the appointment of a receiver or trustee for CONTRACTOR or the properties of CONTRACTOR; or



(c) The failure of CONTRACTOR to satisfy within thirty (30) days of its entry any final judgement

upon which execution is possible or the attachment of any general liens against the real or personal property of CONTRACTOR and the continued existence thereof for more than thirty (30) days; or

(d) Failure to comply with ARTICLE 46 - "LOCAL CONTENT", or (e) If the CONTRACTOR has in the opinion of CARIGALI failed to comply with the CONTRACT

or failed to perform the SERVICES or part thereof or has failed to adhere to any of its duties and obligations; or

(f) The refusal or the inability or other failure of the CONTRACTOR to perform any part of the

CONTRACT in a safe, efficient, professional, workmanlike, skilful, professional and careful manner in accordance with good industry practices or with the required promptness or diligence; or

(g) Fulfil its obligations relating to prevention of pollution and substantial pollution result

therefrom; or (h) Failure to comply with ARTICLE 8 - "BANK GUARANTEE / PERFORMANCE

GUARANTEE"; or 21.2 CARIGALI shall notify CONTRACTOR in writing of any default and require CONTRACTOR to

immediately take appropriate corrective action without prejudice to any rights that CARIGALI may possess.

21.3 CARIGALI shall be entitled to, in addition to any and all other rights CARIGALI may possess,

terminate the CONTRACT in accordance with ARTICLE 23 – “PROVISION FOR TERMINATION OF SERVICES OR CONTRACT” if the CONTRACTOR fails to take the necessary corrective action stipulated in ARTICLE 21.2.

END OF ARTICLE

ARTICLE 22 - PROVISION FOR SUSPENSION OF SERVICES

22.1 At any time, CARIGALI may elect at its sole option to suspend all or any part of the remaining

SERVICES for any reason whatsoever and shall give notice to CONTRACTOR specifying the part of the SERVICES to be suspended and the effective date of suspension. CONTRACTOR shall cease performance of the said suspended part of the SERVICES on the effective date of suspension. CONTRACTOR shall continue to perform the unsuspended part of the SERVICES. CONTRACTOR shall be given sufficient time for orderly removal of personnel and items not required during suspension.

22.2 CONTRACTOR shall do whatever is necessary to preserve and protect the SERVICES already in

progress, to protect materials, drawings, documents, equipment and supplies in transit and at the Work Site against any deterioration, loss or damage and to minimise all costs to CARIGALI and CONTRACTOR resulting from such suspension.

22.3 Neither CARIGALI nor CONTRACTOR shall be liable to the other Party for loss of anticipated profits

or consequential loss sustained on account of any suspension of the SERVICES or part thereof. 22.4 CARIGALI may, at any time, authorise resumption of all or any part of the suspended SERVICES by

giving notice to CONTRACTOR specifying the SERVICES to be resumed and the effective date of withdrawal of suspension. The SERVICES shall be resumed by CONTRACTOR immediately after receipt of such notice, where applicable.

22.5 In the event CARIGALI suspends the SERVICES or any part thereof due to some default of or

breach of CONTRACT by CONTRACTOR, or some such default or breach reasonably anticipated by CARIGALI, such suspension shall not in any way affect CARIGALI’s entitlement to exercise its rights under ARTICLE 21 – “DEFAULT OF CONTRACTOR” and CARIGALI may at any time notify



CONTRACTOR in writing to take appropriate corrective action failing which CARIGALI shall be entitled to, in addition to any and all other rights CARIGALI may possess, terminate the CONTRACT in accordance with ARTICLE 23 – “PROVISION FOR TERMINATION OF SERVICES OR CONTRACT”.

END OF ARTICLE

ARTICLE 23 - PROVISION FOR TERMINATION OF SERVICES OR CONTRACT

23.1 CARIGALI shall have the right at its option to terminate this CONTRACT or all or any part of the

SERVICES pursuant to the following provisions. 23.2 Termination Without Cause a) CARIGALI may at any time, terminate without cause the CONTRACT or all or any part of the

SERVICES by giving fourteen (14) days prior written notice to CONTRACTOR that CARIGALI intends to terminate the CONTRACT, specifying the CONTRACT to be terminated, and the effective date of termination.

b) Should CARIGALI terminate this CONTRACT or all SERVICES without cause, CONTRACTOR shall stop performance of all SERVICES on the effective date of termination.

c) In the event CARIGALI terminate any part of the SERVICES without cause, CONTRACTOR shall stop performance of the said portion of the terminated SERVICES on the effective date of termination.

d) Upon receipt and verification of CONTRACTOR's invoice, CARIGALI shall pay CONTRACTOR all amounts properly due for the SERVICES performed prior to the date of termination and all expenses resulting directly from the termination as approved by CARIGALI.

23.3 Termination For Cause a) Subject to the provisions provided under ARTICLE 21 - "DEFAULT OF CONTRACTOR"

hereof, CARIGALI shall have the right to terminate for cause the CONTRACT or all or any part of the SERVICES by giving a notice in writing, specifying the CONTRACT to be terminated, and the effective date of termination. In any event, CARIGALI shall have available to it all rights and remedies that it may possess.

b) On the date on which the termination for cause made pursuant to the provisions under ARTICLE 21 - "DEFAULT OF CONTRACTOR" becomes effective, CONTRACTOR shall stop performance of the CONTRACT. CARIGALI shall, retain all amounts which are then due and payable to CONTRACTOR plus reimbursements due to CONTRACTOR for its reasonable and auditable costs incurred in the performance of the SERVICES to the extent such SERVICES are authorised in advance by CARIGALI.

23.4 If CARIGALI terminates any part of the SERVICES in accordance with this ARTICLE

CONTRACTOR shall execute and deliver to CARIGALI the documents required by CARIGALI with respect to the said portion of the terminated SERVICES.

23.5 If this CONTRACT, the SERVICES or any portion of the SERVICES is terminated and if CARIGALI

so requests, CONTRACTOR shall immediately make every reasonable effort to cancel existing subcontracts, purchase orders or other obligations entered into by CONTRACTOR with subcontractors, suppliers or others for the performance of the SERVICES or any part thereof as the case may be, upon terms satisfactory to CARIGALI.

23.6 CARIGALI may direct CONTRACTOR to execute and deliver to CARIGALI all documents related to

the CONTRACT as required by CARIGALI and to take all steps necessary to fully vest in CARIGALI the rights and benefits of CONTRACTOR under existing Subcontracts or other obligations with Subcontractors, suppliers and others. In addition, CONTRACTOR shall do whatever is necessary to preserve and protect the SERVICES already in progress, to protect materials, drawings, documents, equipment and supplies in transit or at the Work Site and to minimise all costs to CARIGALI and CONTRACTOR resulting from such termination. In the event CONTRACTOR fails to comply with the aforesaid, CARIGALI may take the necessary corrective action and may at its sole discretion deduct from any moneys due to CONTRACTOR without prejudice to any other rights that it may possess.



23.7 Unless specifically provided otherwise in this CONTRACT, in the event of termination of all or any

part of the SERVICES hereunder, the CARIGALI shall be released and discharged from any claims by CONTRACTOR in connection with the terminated SERVICES. CARIGALI shall not be liable to CONTRACTOR for loss of anticipated profits or consequential loss sustained on account of such termination.

END OF ARTICLE

ARTICLE 24 - LIQUIDATED DAMAGES

24.1 If CONTRACTOR fails to complete the WORKS or parts thereof by the required completion dates or as specified in the Purchase Order or schedule for reasons other than Force Majeure, then as damages to PETRONAS Carigali for such delay, the CONTRACT PRICE shall be reduced by an amount equal to one per cent (1%) of the Purchase Order value per day for each day of delay or portion thereof, provided however that such liquidated damages shall not exceed ten per cent (10%) of such Purchase Order value.

24.2 In the event that the CONTRACT PRICE is stated in other than Ringgit Malaysia, the amount of

damages due to PETRONAS Carigali as provided for under this ARTICLE shall be fixed in Ringgit Malaysia. Such amount shall be deducted from payments due to CONTRACTOR pursuant to this CONTRACT and shall be converted to the currency in which CONTRACT PRICE is stated at the rate of exchange prevailing on the day of such payments per ARTICLE 7.12.

24.3 CONTRACTOR and PETRONAS Carigali hereby agree that the aforementioned amount of liquidated

damages are fair and reasonable due to the difficulty of ascertaining the exact amount of damages that PETRONAS Carigali will incur by reason of such delay.

24.4 The payment of liquidated damages is in addition to and not in lieu of or substitution for any other

remedy that may be available to PETRONAS Carigali in the event of delay in completion of the WORKS in accordance with EXHIBIT I - SCOPE OF WORK.

END OF ARTICLE

ARTICLE 25 - SUBCONTRACTS AND ASSIGNMENT 25.1 CONTRACTOR may subcontract the SERVICES subject to obtaining CARIGALI's prior written

Approval. Subcontract documents and selection of Subcontractor related to the performance of the SERVICES require the written Approval of CARIGALI prior to award of each subcontract.

25.2 CONTRACTOR shall not assign the CONTRACT or any part of the CONTRACT without obtaining

CARIGALI's prior written Approval. Any purported assignment without the written Approval of CARIGALI shall be absolutely void against CARIGALI and CARIGALI shall in such event have no obligation whatsoever to the purported assignee.

25.3 Where Approval has been obtained, the CONTRACTOR shall ensure that all of CARIGALI's rights

under the CONTRACT, including Audit, patent and other property rights indemnity and all the requirements in the CONTRACT, are incorporated in all CONTRACTOR's subcontract. CONTRACTOR shall submit to CARIGALI all documents relating to the subcontract and assignment.

25.4 CARIGALI shall have the right to disapprove, for cause, which includes not having PETRONAS

license and/or unsatisfactory past performance on similar SERVICES, any Subcontractors, suppliers, vendor or source of supply selected by CONTRACTOR.

25.5 CONTRACTOR shall be fully responsible for any acts, defaults and omissions of any

Subcontractors, and persons either directly or indirectly employed by Subcontractors to the same



extent as it is for the acts and omissions of persons directly or indirectly employed by CONTRACTOR. CONTRACTOR shall not bind or purport to bind CARIGALI in the Subcontract in any manner.

25.6 CARIGALI may assign the CONTRACT including all rights and obligations at any time to its

Affiliates, Co-venturers or any prospective Co-venturers without Approval by CONTRACTOR provided that CARIGALI's notifies the CONTRACTOR of such assignment.

25.7 CONTRACTOR shall within fourteen (14) days from the date of CARIGALI's request provide a list of

all Subcontractors and suppliers utilised by CONTRACTOR in fulfilling its obligation under this CONTRACT.

25.8 Approvals granted pursuant to this ARTICLE shall not release or relieve CONTRACTOR of any of its

obligations under the CONTRACT or create any contractual relationship between any Subcontractor and CARIGALI.

END OF ARTICLE

ARTICLE 26 - ACCESS AND AUDIT RIGHTS

26.1 CONTRACTOR shall maintain and shall cause its Subcontractors, subsidiaries, and Affiliates to

maintain true and correct records of all charges and accounts including gifts and entertainment expenses in connection with the SERVICES and all transactions related thereto and shall retain all such records and accounts for a period of not less than thirty six (36) months after the expiry of the CONTRACT or any extensions or any termination thereof.

26.2 From the Effective Date of this CONTRACT and within the time period mentioned above, CARIGALI

shall have the right, during regular scheduled business hours, to inspect and audit the drawings, plans, instructions, procedures, controls, records, including gifts and entertainment records, and accounts of CONTRACTOR, its Subcontractors and Affiliates in connection with the performance of this CONTRACT, and are in compliance with the CONTRACT terms and conditions. CARIGALI shall have the right to reproduce any such documents, which have been inspected.

26.3 CARIGALI's claims for omissions, corrections, or errors in charges and credits for CARIGALI's

account and over-payments of amounts billed by CONTRACTOR and others noted above may be presented at any time during and after the duration of this CONTRACT provided that such claims are made during the course of the CONTRACT and within thirty six (36) months after the expiry of the CONTRACT or any extensions or any termination thereof. CONTRACTOR shall make a written response to CARIGALI concerning such claims within thirty (30) days of the date of such claims by CARIGALI.

26.4 CONTRACTOR shall ensure that the provisions of this ARTICLE and ARTICLE 25 -

"SUBCONTRACTS AND ASSIGNMENT", are included in all subcontracts it may enter into with its Subcontractors and Affiliates who will supply any of the labour, equipment, materials, or services to be provided under this CONTRACT.

END OF ARTICLE



ARTICLE 27 - PROCUREMENT OF EQUIPMENT, FACILITIES, MATERIALS, SUPPLIES AND SERVICES

27.1 In the procurement of equipment, facilities, goods, materials, supplies, and services required for the

SERVICES, CONTRACTOR shall use its best endeavours to observe the following: (a) the enhancement of effective local, especially Bumiputra, participation in equity, management,

and employment; and (b) the transfer of technology to local (especially Bumiputra) firms and companies with the

objective of developing local technical and managerial capabilities; and (c) the need to minimise outflow of foreign exchange. 27.2 In pursuance of the provision of ARTICLE 27.1, CONTRACTOR shall, unless otherwise approved by

CARIGALI, comply with the following, (a) give priority to locally-manufactured goods in the procurement of equipment, facilities, goods,

materials, supplies, and services required for the SERVICES; (b) give priority to Malaysian suppliers or manufacturers for equipment, facilities, goods,

materials, supplies, and services required for the SERVICES; (c) give priority to services and research facilities, professional or otherwise, which are rendered

by Malaysians or firms or companies incorporated or licensed in Malaysia; and (d) CONTRACT shall procure services for all forwarding activities and for transportation of

materials, equipment and personnel required for the SERVICES hereunder from any of the following Government of Malaysia's appointed transporters and for transportation of personnel required for the SERVICES: - Kontena Nasional Sdn Bhd - Malaysia Shipping Agencies Sdn Bhd - MISC Agencies Sdn Bhd - SA Cargo Sdn Bhd - Gapima Sdn Bhd. - Prima Logistic Sdn Bhd - Shapadu Trans-System Sdn Bhd - Tanjongria Shipping & Forwarding Sdn Bhd - Pelangi Shipping Sdn Bhd.

(e) CONTRACTOR shall give due consideration to the services offered by the Malaysia Airlines or its subsidiaries subject to competitiveness of prices and costs.

27.3 CONTRACTOR shall purchase all fuels and lubricants required during performance of the

SERVICES from PETRONAS' outlets provided grade, price, and delivery are competitive with other suppliers and supplies are readily available in the areas where the SERVICES are being performed.

27.4 CONTRACTOR shall seek at CARIGALI's prior approval and provide at CARIGALI's request a list of

equipment, goods, materials, supplies and services required for operations under this CONTRACT purchased or procured outside Malaysia.

END OF ARTICLE



ARTICLE 28 - CHANGES

28.1 Changes to the SERVICES and/or CONTRACTOR Equipment may be required during the

performance of SERVICES, or any extension of the CONTRACT, and should be handled expeditiously and effectively by the Parties hereto. Such changes may include, but are not limited to additions, deletions, substitutions, alterations, and modifications.

28.2 CARIGALI shall have the right, at any time, to make any change but such change shall in no way

affect the rights or obligations of the Parties hereto except as provided in a written Change Order. All provisions of the CONTRACT shall apply to all changes.

28.3 Except as provided in ARTICLE 28.6 below, CONTRACTOR shall not proceed with any change prior

to receipt of a Change Order, unless authorised in writing by CARIGALI Contract Administrator. 28.4 Should CARIGALI desire a change to the SERVICES and/or CONTRACTOR Equipment, it shall

advise CONTRACTOR of said request. CONTRACTOR shall, upon request from CARIGALI Contract Administrator, provide CARIGALI within fourteen (14) days a Change Order Proposal defining the terms and conditions of the Change Order Proposal. The terms and conditions set out in the Change Order Proposal shall include, but not be limited to price, method of payment, earliest commencement date, and any other information deemed necessary.

28.5 When and if CARIGALI approves the Change Proposal, CARIGALI will issue to CONTRACTOR a

written Change Order in duplicate originals in the form shown in EXHIBIT VI – “ADMINISTRATIVE PROCEDURES”. CONTRACTOR shall sign both duplicate originals of the Change Order to indicate its receipt, understanding and acceptance of it. After execution by CARIGALI, one duplicate original will be returned to CONTRACTOR.

28.6 In cases of extreme urgency for which CONTRACTOR is unable to submit a firm proposal prior to

commencement of SERVICES on the necessary change, CARIGALI may issue a "Preliminary Change Order" to authorise CONTRACTOR to proceed with the change on the basis of an approximate written estimate prepared by CONTRACTOR. As soon as possible thereafter, CONTRACTOR shall submit a Change Order Proposal giving a firm price for the change. If the firm price quoted in the Change Order Proposal is more than that quoted in the "Preliminary Change Order", CONTRACTOR shall furnish CARIGALI with the reasons for the differences. Upon agreement of the Parties on the firm price, a Change Order shall be issued as outlined in ARTICLE 28.5.

END OF ARTICLE



ARTICLE 29 - FORCE MAJEURE

29.1 Where any Force Majeure event renders impossible or hinders or delays the performance of any

obligation except for the obligation to make money payments due for SERVICES or the exercise of any right under this CONTRACT, then the failure or omission of CARIGALI or CONTRACTOR to perform such obligation shall not be treated as failure or omission to comply with this CONTRACT.

29.2 Upon the occurrence of any Force Majeure event, the Party so affected in the discharge of its

obligation shall promptly give written notice of such event to the other Party. The affected Party shall make every reasonable effort to remove or remedy the cause of such Force Majeure or mitigate its effect as quickly as may be possible. If such occurrence results in the suspension of all or part of the SERVICES for fourteen (14) days, the Parties shall meet and determine the appropriate measures to be taken.

29.3 The events falling within Force Majeure include but are not limited to acts of God or forces of nature,

landslide, lightning, earthquake, flood, fire, explosion, storm or storm warning, tidal wave, shipwreck and perils to navigation, act of war (declared or undeclared) or public enemy, act of terrorism, strike (excluding strikes, lockouts or other industrial disputes or action solely amongst employees of CONTRACTOR or its Subcontractors), act or omission of sovereign or those purporting to represent sovereign states, blockade, embargo, quarantine, public disorder, sabotage, accident, or similar events beyond the control of the Parties or either of them.

However, Force Majeure shall not include occurrence as follows:- (a) late delivery of materials caused by congestion at suppliers plant or elsewhere, an oversold

condition of the market, inefficiencies, or similar occurrences; or (b) late performance by CONTRACTOR and/or a Subcontractor caused by unavailability of

equipment, supervisors, or labour, inefficiencies or similar occurrence; or (c) mechanical breakdown of any item of CONTRACTOR's or its Subcontractor's, equipment,

plant, or machinery; or (d) financial distress of CONTRACTOR or Subcontractor. 29.4 If the event of a Force Majeure occurrence and if in the opinion of CARIGALI, CONTRACTOR

Equipment cannot be delivered to the Mobilisation Site on the Delivery Date or should any act of Force Majeure cause suspension of SERVICES hereunder for a continuous period of at least fourteen (14) days and continuation of this CONTRACT will adversely affect CARIGALI's petroleum operations then CARIGALI shall have the option either to terminate the CONTRACT, in which case neither Party shall have any further obligation or liability hereunder or specify a later Delivery Date in lieu of that specified in EXHIBIT I – “SCOPE OF SERVICES”.

29.5 Any delay or failure in performance by either Party thereto shall not constitute default hereunder or

give rise to any claims for damages or loss of anticipated profits or consequential loss if, and to the extent that such delay or failure is caused by Force Majeure.

29.6 Save as expressly provided in this ARTICLE 29, no payment of whatever nature shall be made in

respect of a Force Majeure occurrence.

END OF ARTICLE



ARTICLE 30 - CONFLICT OF INTEREST

30.1 CONTRACTOR shall exercise care and diligence to prevent any actions being taken or conditions

from arising which could result in a conflict with PETRONAS and CARIGALI's best interest. This obligation shall apply to the activities of the employees and agents of CONTRACTOR in their relations with CARIGALI's employees and their families, and with suppliers, Subcontractors, and third parties, arising from the CONTRACT or related to the performance of the SERVICES.

30.2 CONTRACTOR's efforts shall include, but not be limited to, establishing precautions to prevent its

employees, officers or agents from making, receiving, providing, or offering gifts, entertainment, payments, loans, or other considerations for the purpose of influencing individuals to commit acts contrary to PETRONAS and CARIGALI's best interest.

END OF ARTICLE

ARTICLE 31 - WAIVERS

31.1 The failure of CARIGALI, at any time, or from time to time to enforce, or to require the strict

adherence and performance of any of the terms and conditions of the CONTRACT, to exercise any option, right, or privilege hereunder, or to demand compliance as to any obligation or covenant, shall not constitute a waiver of any such terms and conditions and/or affect or impair such terms or conditions in any way, or the right, privilege, or option of CARIGALI, or of the strict performance of the CONTRACT thereof unless an express waiver is properly executed and evidenced in writing.

31.2 Waivers by CARIGALI of any breach or non-observance by CONTRACTOR of any of the terms and

conditions of this CONTRACT shall not constitute or be construed as a waiver of any succeeding breach or non-observance of the same or any other terms or conditions.

END OF ARTICLE

ARTICLE 32 - CONFIDENTIALITY

32.1 CONTRACTOR shall obtain written approval from CARIGALI prior to making any publicity release,

public statements or announcement regarding the CONTRACT and the performance of the SERVICES or CONTRACTOR's activities related to its participation in the SERVICES.

32.2 CONTRACTOR shall at all times hold confidential and shall not, without CARIGALI's prior written

approval, divulge to third parties or use in any way other than for accomplishing the SERVICES or for purposes other than that specified in the CONTRACT, any technical information or any processes, process data or calculations or any drawings or designs showing the equipment, devices and machinery by which the processing is to be performed or carried out, disclosed, directly or indirectly, to CONTRACTOR by CARIGALI or its Affiliates in regard to the SERVICES or the results thereof.

32.3 Upon completion of the SERVICES or upon receipt by CONTRACTOR of CARIGALI's notification of

termination of the SERVICES or any part thereof as the case may be, CONTRACTOR shall return to CARIGALI all documents, drawings, and data provided to CONTRACTOR by CARIGALI.

32.4 CONTRACTOR shall ensure that the provisions of this ARTICLE are adhered to by its employees,

its Subcontractors, and Subcontractor's employees and shall promptly notify CARIGALI upon discovery of any instance where the requirements of this ARTICLE have not been complied with.

32.5 This ARTICLE shall continue in force notwithstanding the completion or earlier termination of this

CONTRACT.



32.6 The provisions of this ARTICLE shall not apply:

(a) insofar as any of the documents, drawings, and data referred to in the SERVICES are part of public knowledge or literature at the date of their receipt by the CONTRACTOR as from such date;

(b) insofar as any of the documents, drawings, and data referred to in the SERVICES become part

of public knowledge or literature after the date of their receipt by the CONTRACTOR as from such subsequent date;

(c) insofar as any of the documents, drawings, and data are developed by the CONTRACTOR

independently of the CONTRACT.

(d) insofar as any of the documents, drawings, and data lawfully becomes known or available to the CONTRACTOR from third party who are not under a similar agreement, directly or indirectly, with CARIGALI hereto.

(e) where disclosure is required to be made in order to comply with the requirements of any law,

rule or regulation of any governmental or regulatory body having jurisdiction over the SERVICES or the CONTRACTOR , or of any relevant stock exchange.

END OF ARTICLE

ARTICLE 33 - ARBITRATION

33.1 Any dispute between the Parties as to the performance of this CONTRACT or the rights or liabilities

of the Parties herein, or any matter arising out of the same or connected therewith, which cannot be settled amicably shall be settled by arbitration in accordance with the Rules of the Kuala Lumpur Regional Centre for Arbitration, before a board of three (3) arbitrators. Each of the Parties hereto shall be entitled to appoint one arbitrator and the two arbitrators shall agree on a third arbitrator. In the event agreement upon the third arbitrator cannot be reached, the third arbitrator shall be appointed by the Director for the time being of the Kuala Lumpur Regional Centre for Arbitration. It is agreed, however, that no one who is an employee of either Party or who is in anyway financially interested in this CONTRACT shall be appointed to act as an arbitrator.

33.2 Such arbitration shall be held at Kuala Lumpur, Malaysia. The award of the arbitrators shall be final

and binding upon the Parties. The costs of the arbitration shall be borne by the Party whose contention was not upheld by the arbitration tribunals, unless otherwise provided in the arbitration award.

33.3 Notwithstanding the foregoing, the Parties may agree that any particular matter of disputes can most

expeditiously be settled by an Expert. In that event, the Parties shall jointly prepare and sign a statement on the issue to be determined by the Expert before agreeing upon the identity of the Expert. The Parties shall then agree upon the identity of the Expert to determine the issue described in the said statement and the decision of the Expert on that issue shall be final and binding on the Parties without further arbitration on that issue. If the Parties cannot agree upon the identity of the Expert within fourteen (14) days after the date the last Party signs the aforesaid statement of the issue, then the dispute shall be referred to arbitration as indicated above.

END OF ARTICLE



ARTICLE 34 - COMPLIANCE WITH LAW CONTRACTOR shall acquaint itself with all applicable laws within the jurisdiction of Malaysia. 34.1 CONTRACTOR and its Subcontractors shall be subject to all applicable laws in connection with the

SERVICES. If CONTRACTOR or its Subcontractors perform any part of the SERVICES in breach of the law, then CONTRACTOR shall bear any additional costs of the SERVICES resulting from said violation and correction thereof. For the purpose of this ARTICLE, "law" includes any laws (national, state, municipal, local, or others) and any requirements, ordinances, rules, or regulations of any relevant authority or agency (national, state, municipal, local, or other).

34.2 CONTRACTOR shall not enter into negotiations with any relevant authority or agency to develop

acceptance to exemption, composition, variation, or revision to law in connection with this CONTRACT without CARIGALI's prior written approval.

34.3 CONTRACTOR shall be responsible for and shall bear all the costs of obtaining all necessary

licences, permits, and authorisations required by law that must be obtained in CONTRACTOR'S name from the relevant governmental authorities for CONTRACTOR to do business in the country, or countries wherein any part of the SERVICES is performed, and shall give all required notices.

34.4 CONTRACTOR shall, at CONTRACTOR's cost, defend, indemnify, and hold CARIGALI and its

Affiliates harmless from all forms of penalty which may be imposed on CARIGALI and its Affiliates by reason of any alleged or violation of law by CONTRACTOR or its Subcontractors and also from all claims, suits, or proceedings that may be brought against CARIGALI and/or its Affiliates arising under, growing out of, or by reason of the SERVICES with respect to such alleged or violation of law whether brought by employees of CONTRACTOR or its Subcontractors or by third parties or by any relevant authority.

34.5 CONTRACTOR's obligations under this ARTICLE shall include, without limitation, obtaining all

necessary or appropriate import and export licences and Customs clearances for materials, tools, vessel, parts and spares, and equipment for the SERVICES and providing all documentation in support of such licenses and clearance.

END OF ARTICLE

ARTICLE 35 - GOVERNING LAW AND LANGUAGE

35.1 This CONTRACT shall be governed by and construed according to laws for the time being in force in

Malaysia and, subject to ARTICLE 33 - "ARBITRATION", the Malaysian Courts shall have exclusive jurisdiction to hear and determine all actions and proceedings arising out of the CONTRACT and CONTRACTOR hereby submits to the exclusive jurisdiction of the Malaysian Courts for the purpose of any such actions and proceedings.

35.2 All documents produced by CONTRACTOR in the performance of this CONTRACT as well as all

written communications between CARIGALI and CONTRACTOR shall be written in the English language which is hereby designated the governing language of the CONTRACT. CONTRACTOR and CARIGALI may use any language within their own organisations, except that all Subcontracts and all written communications pertaining to them shall be in English.

END OF ARTICLE

ARTICLE 36 - PATENTS AND OTHER PROPRIETARY RIGHTS

36.1 CONTRACTOR shall indemnify and hold CARIGALI and its Affiliates harmless against all losses,

claims, demands, proceedings, costs, damages, charges, and expenses that may arise by reason of any alleged or actual infringement of any patent, design, or copyright and/or trademark or violation of process or other protected rights of any person or entity arising out of CONTRACTOR performing its



obligations in the CONTRACT, or by reason of the manner in which the same is performed, or through the use by CONTRACTOR of any patented article or device.

36.2 The indemnities set forth in this ARTICLE shall include without limitation all penalties, awards, and

judgements; all court and arbitration costs; attorney's fees; and other reasonable expenses associated with such claims, demands, and causes of action. CONTRACTOR shall promptly notify CARIGALI of any accusations of patent infringement by any third Party. In the event CARIGALI or its Affiliates, as covered by such indemnities, is accused of patent infringement by a third party, CARIGALI or its Affiliates shall promptly notify CONTRACTOR and have the right to participate in its own defence with attorneys of its own selection provided always that CONTRACTOR shall be bound by ARTICLE 36.1 above.

36.3 CONTRACTOR shall disclose promptly to CARIGALI all inventions, discoveries, and improvements

(whether patentable or not) conceived or made by CONTRACTOR Personnel, either alone or jointly with others, and which are based on the technical information provided to CONTRACTOR by CARIGALI in the course of the SERVICES. CONTRACTOR shall assign and require its personnel to assign to CARIGALI, or to its designer, each such invention, discovery, and improvement. CONTRACTOR shall also require its employees to execute such papers as CARIGALI requests in connection with the assignment or prosecution of patents or patents applications covering each such invention, discovery, or improvement in all countries specified by CARIGALI and to render reasonable assistance to CARIGALI in connection with protecting CARIGALI's right to such invention, discovery, or improvement.

36.4 CONTRACTOR agrees to reimburse CARIGALI for any royalties, licensing fees or other similar

payments that CARIGALI shall be obligated to pay by virtue of the use by CONTRACTOR of any such protected rights unless such costs have been specifically agreed in writing to be borne by CARIGALI. CONTRACTOR shall obtain a patent indemnity, if obtainable, for any items manufactured or supplied by others for the benefits of CARIGALI.

36.5 CONTRACTOR hereby grants to CARIGALI and its successors an irrevocable, royalty-free, world-

wide, transferable, non-exclusive licence under all patent and know-how rights now or hereafter owned or controlled by CONTRACTOR to make, use, sell, operate, maintain, repair, reconstruct, alter or modify the SERVICES in whole or in part.

36.6 CONTRACTOR shall ensure that any Subcontracts between CONTRACTOR and its Subcontractors

or suppliers contain a provision similar to this ARTICLE.

END OF ARTICLE

ARTICLE 37 - ENTIRE AGREEMENT

This CONTRACT constitutes the entire agreement between the Parties hereto and supersedes all prior negotiations, representations or agreements related to this CONTRACT, either written or oral, including CARIGALI's bid document and CONTRACTOR's proposal(s) except to the extent they are expressly incorporated into this CONTRACT. No changes, alterations, or modifications to this CONTRACT shall be effective unless in writing, and executed by the authorised signatories of CARIGALI and CONTRACTOR.

END OF ARTICLE

ARTICLE 38 - NON-EXCLUSIVE AGREEMENT

This CONTRACT is non-exclusive and CARIGALI reserves the right, without having to give any reason whatsoever to engage other suppliers and/or contractors to supply and/or perform similar or identical SERVICES. CONTRACTOR shall afford such other contractors adequate opportunity to carry out their contracts and shall accomplish the SERVICES in co-operation with those contractors and with CARIGALI.

END OF ARTICLE



ARTICLE 39 - INDEPENDENT CONTRACTOR 39.1 CONTRACTOR is an independent contractor and neither CONTRACTOR nor its employees, nor

CONTRACTOR's Subcontractors or their employees, are agents or employees of CARIGALI. The entire performance, operation, management, and control of CONTRACTOR Equipment shall be under the exclusive control and command of CONTRACTOR. CONTRACTOR's primary purpose shall be to perform all acts necessary to execute the SERVICES consistent with safety and good oilfield practice.

39.2 It shall be the sole exclusive duty of CONTRACTOR to determine at all times whether the

SERVICES can be safely continued or undertaken. It shall be CONTRACTOR's duty to inspect and ensure that all cargo and items of equipment located at the Work Site(s) and at CONTRACTOR's onshore base are stored in a proper and safe manner and in all respects fit and suitable to undertake any contemplated operation under the then existing conditions.

39.3 The presence of, and the inspection and supervision by, CARIGALI Representative(s) at the Work

Site(s) shall not relieve CONTRACTOR from CONTRACTOR's obligations and responsibilities.

END OF ARTICLE

ARTICLE 40 - SURVIVAL OF OBLIGATIONS

Notwithstanding anything to the contrary written in this CONTRACT, the liabilities, indemnity and obligations of CARIGALI and CONTRACTOR under this CONTRACT arising prior to the termination or completion of this CONTRACT shall survive any termination, repudiation, cancellations or completion of this CONTRACT.

END OF ARTICLE

ARTICLE 41 - LIMITATION OF LIABILITY

Subject to ARTICLE 46.2 - "LOCAL CONTENT", neither party shall be responsible to the other for any indirect or remote losses of any kind including but not limited to loss of revenue or anticipated profits, loss of production, loss of business opportunity or business interruption, regardless of cause and even if caused by negligence or breach of contract resulting from the carrying out of the operations or the exercise of rights by the Parties under this CONTRACT.

END OF ARTICLE

ARTICLE 42 - PETRONAS APPROVAL

This CONTRACT is subject to and conditional upon the approval of the same by PETRONAS, and if not so approved, then neither Party hereto shall have any rights to or obligations arising out of or related to this CONTRACT.

END OF ARTICLE



ARTICLE 43 - NOTICES 43.1 All notices, including notifications, agreements, authorisations, approvals and acknowledgements,

required herein shall be in writing and made to either Party and shall be deemed to have been properly given or made to the Party it is addressed to if the notices are sent to the respective Party at the address as per EXHIBIT VI – “ADMINISTRATIVE PROCEDURES”.

43.2 The date of any notice shall be either the date it is first delivered received at the office of the

addresser, or the date it is first received by the addressee, whichever is earlier. Written notice or instruction shall be deemed to have been received: If delivered by hand - At time of delivery to either Party If sent by fax - At time of transmission If sent by registered mail - At time of receipt or recorded delivery. 43.3 If the time of such deemed receipt of notice is not during customary hours of business, notice shall

be deemed to have been received at 10:00 A.M. on the first customary day of business thereafter. 43.4 Either Party may change the person or address to which notice shall be sent by giving the other

Party written notice of such change.

END OF ARTICLE

ARTICLE 44 - TITLE 44.1 All materials, raw data, field logs, documents drawings and calculations covered by this CONTRACT

in respect of the SERVICES and each part thereof, and everything intended for incorporation therein, shall, as soon as they are delivered or appropriated to the SERVICES be sole and unencumbered property of CARIGALI.

44.2 The CARIGALI Representative shall be entitled at all reasonable times to inspect the said raw data,

field logs, documents, drawings, calculations and materials or parts thereof at all areas where the SERVICES is being or has been performed to ensure that this ARTICLE has been observed and, if it has not been observed, to clearly mark or identify the equipment and materials at CONTRACTOR's cost.

44.3 CONTRACTOR hereby waives any liens or claims, which it might have at any time on or against any

material raw data, field logs and documents, drawings and calculations, which is to be incorporated into the SERVICES.

END OF ARTICLE

ARTICLE 45 - SEVERABILITY In the event that a determination, binding upon CARIGALI and CONTRACTOR, is made that one or more provisions of the CONTRACT are void, unenforceable or unlawful, all other provisions of the CONTRACT shall continue in force to the extent not affected thereby provided that as a result of such determination, either the rights and obligations of CARIGALI and CONTRACTOR hereunder are not materially adversely affected or CARIGALI and CONTRACTOR agree to maintain this CONTRACT in force together with such amendments as they deemed advisable.



END OF ARTICLE

ARTICLE 46 - LOCAL CONTENT 46.1 Pursuant to CARIGALI's Production Sharing Contract with PETRONAS, CARIGALI shall comply with

the national objective of maximising Malaysia participation in the use of local equipment, facilities, goods, materials supplies and services required for Petroleum Operations. In pursuance of the foregoing, CONTRACTOR shall ensure: - a. Equipment Maintenance Facilities To have full equipment maintenance facilities in Malaysia and all maintenance are performed at

these facilities. CONTRACTOR is to seek approval from CARIGALI if CONTRACTOR is unable to perform the maintenance locally on selected equipment (e.g. State-of-the-art equipment).

b. Personnel CONTRACTOR is required to submit a Malaysianization Plan and must ensure full compliance

with the requirement of Malaysian Personnel in EXHIBIT I (PART I Section T7 – CONTRACTOR PERSONNEL. CONTRACTOR will be penalized by discounting 50% of the personnel rates if the Malaysianization requirement is not met.

Documents of employment of the Malaysian must be submitted to CARIGALI when submitting

invoice for Expatriate Specialist.

46.2 CONTRACTOR acknowledges that the requirements of this ARTICLE 46 is fundamental to this CONTRACT. CONTRACTOR hereby indemnifies and holds harmless CARIGALI against all losses or consequential damages suffered by CARIGALI under the aforementioned Production Sharing Contract resulting from CONTRACTOR not conforming to the requirements of this ARTICLE 46.

46.3 In the event, CONTRACTOR fails to comply with ARTICLE 46.1(a) and (b), then it is agreed that the

following penalties shall apply:

1. Non-compliance to ARTICLE 46.1 (a) - CARIGALI may take any necessary action it deems appropriate in case of non-compliance to the

provision under ARTICLE 46.1 (a) including but not limited to invoking the Bank Guarantee provided pursuant to ARTICLE 8 – “BANK GUARANTEE/PERFORMANCE GUARANTEE”.

END OF ARTICLE



SIGNATORIES

IN WITNESS WHEREOF, the Parties have caused this CONTRACT to be executed in duplicate originals in their respective corporate names by their respective officers, thereunder duly authorised, as of the date and year first above written. CARIGALI CONTRACTOR

For and on behalf of For and on behalf of PETRONAS CARIGALI SDN. BHD. PFC ENGINEERING SDN BHD

Name : Name : Designation : Designation :

WITNESS WITNESS

Name : Name : Designation : Designation :

Section IV- Terms and Condition

Documents

Transcript of Section IV- Terms and Condition