CONTRACT
MODIFICATIONS TO THE SPECIFIC SERVICES CONTRACT TO
DEVELOP, PRODUCE, AND UPGRADE CRUDE OIL IN BLOCK 20, INVOLVING
THE
PUNGARAYACU FIELD IN THE ECUADORIAN AMAZON REGION.
SIGNED BETWEEN:
THE ECUADORIAN STATE PETROLEUM COMPANY, PETROECUADOR, AND ITS
SUBSIDIARY, THE ECUADORIAN STATE COMPANY FOR PETROLEUM
EXPLORTATION AND PRODUCTION, PETROPRODUCCION, AND THE COMPANY
IVANHOE ENERGY ECUADOR INC.
(February 11, 2009)
1. First:
Appearing Parties:
The
following parties appear to sign these contract modifications:
firstly, the Ecuadorian State Petroleum Company, PETROECUADOR, and
its Subsidiary, the Ecuadorian State Petroleum Company for
Exploration and Production, PETROPRODUCCION, represented by Rear
Admiral Luis Aurelio Jaramillo Arias and Ship Captain E.M.C.,
Camilo Delgado Montenegro, as Executive President and Vice
President, respectively, both duly authorized by the Contracting
Committee of PETROPRODUCCION, as shown through the attached
documents, herein PETROECUADOR AND PETROPRODUCCION; and, secondly,
the company IVANHOE ENERGY ECUADOR INC., represented by its General
Proxy in Ecuador, and therefore its Legal Representative in
Ecuador, Carlos Espinoza, as verified by the documents added
hereto, herein the CONTRACTOR, and duly authorized by the Head
Office.
Two Point
One (2.1)
On
October 9, 2008, a specific services contract was signed for
the development, production, and upgrading of crude oil in Block
20, involving the Pungarayacu Field in the Ecuadorian Amazon
Region, between: The Ecuadorian State Petroleum Company,
PETROECUADOR and its Subsidiary, the Ecuadorian State Company for
Exploration and Production of Petroleum, PETROPRODUCCION, and the
company IVANHOE ENERGY ECUADOR INC.
Two Point
Two (2.2)
The parties
freely, spontaneously, and voluntarily, free from any deficiency or
pressure, have mutually agreed to clarify certain formal issues and
interpretation of the specific services contract for the
development, production, and upgrading of crude oil in Block 20,
involving the Pungarayacu Field (herein the main contract) because
it is in the best interest of the Ecuadorian State.
Two Point
Three (2.3)
Article 3
of the Contracting Regulation for Specific Goods and Services of
the State Petroleum Company PETROECUADOR and its subsidiary
companies establish that “PETROECUADOR and its subsidiaries
may sign, according to the scope of this regulation, any type of
contract, agreement, or deal of any nature whatsoever, as long as
they are necessary to comply with their purposes as permitted by
the Law.”
Two Point
Four (2.4)
The Eleventh Clause of the main contract deals with contract
modification and the procedures to be followed in such an
event.
Two Point
Five (2.5)
Sub-clause Eleven Point One, in the pertinent section, establishes
that “This Contract may only be modified by mutual agreement
between the Parties and following authorization from the
Contracting Committee...”
Two Point
Six (2.6)
That through Resolution No. 001-CC-VPR -2009, from
January 21, 2009, the PETROPRODUCCION Contracting Committee
has authorized signing these contractual modifications to the main
contract for specific services with IVANHOE ENERGY ECUADOR
INC.
Two Point
Seven (2.7)
That Through Resolution No. 002-CC.VPR.2009-02-05, from
February 5, 2009, the PETROPRODUCCION Contracting Commitittee
has authorized signing the contractual modification to the main
contract for specific services with IVANHOE ENERGY ECUADOR
INC.
Three Point
One (3.1)
In the
clause Twelve Point One, “Tax Administration and Profit
Sharing,” first paragraph, after the phrase, “to
include a factor,” eliminate the word
“automatic,” and at the end of this paragraph,
include the phrase, “any readjustments will be made
according to clauses 9.1.2 and 12.9,” leaving the clause
to read in the following way:
“The
CONTRACTOR will pay income tax according to the regulations found
in the Organic Law for the Domestic Tax System, and all other
regulations applicable to the subject matter. The CONTRACTOR may
deduct any investments, costs, and expens
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