Common use of Annual Work Programmes and Budgets Clause in Contracts

Annual Work Programmes and Budgets. (a) At least three (3) months before the beginning of each Calendar Year, or for the first year, within one (1) month from the Effective Date, the Contractor shall prepare and submit, or cause to be prepared and submitted, to the Steering Committee for approval an Annual Work Programme together with the related Budget in respect of the Petroleum Operations Contractor proposes to be carried out in such Calendar Year. The Steering Committee shall meet within thirty (30) days of receipt of the Annual Work Programme and Budget to consider same and any revisions thereto and to approve the Annual Work Programme and the Budget in its final form. It is agreed by SOCAR and Contractor that knowledge acquired as the work proceeds or from certain events may justify changes to the details of the Annual Work Programme; thus the Contractor may at any time propose to the Steering Committee an amendment to the Annual Work Programme and Budget. Except as provided in this Article 5.3 and in Article 5.4, Contractor shall not conduct any operations which deviate materially from the applicable Annual Work Programme and Budget without the prior consent of the Steering Committee. If necessary to carry out an Annual Work Programme, Contractor is authorized to make expenditures during the relevant Calendar Year that are in excess of the Budget adopted therefor so long as the aggregate of such excess expenditures does not exceed ten percent (10%) of the Budget unless such expenditures exceeding ten percent (10%) are approved by the Steering Committee, which approval will not be withheld where the expenditures have been demonstrated to be reasonable and necessary. In accordance with the other provisions of this Contract, after approval of an Annual Work Programme, Contractor shall conduct the Petroleum Operations in accordance therewith. (b) In the event the Annual Work Programme and Budget has not been approved by the Steering Committee by the first day of the Calendar Year to which it relates Contractor shall be entitled (but not obligated) to carry out Petroleum Operations in accordance with some or all of its proposed Annual Work Programme and Budget until such time as the Annual Work Programme and Budget is agreed by the Steering Committee or any dispute relating to the Annual Work Programme and Budget has been resolved by reference to arbitration in accordance with the provisions in Appendix VI. As soon as agreement on an Annual Work Programme and Budget is reached by the Steering Committee or the decision of the arbitrators is rendered, Contractor shall amend the then current and/or next following Annual Work Programme and Budget, as appropriate, to conform with such agreement or decision; provided that Contractor shall not be obligated to undo work already performed, may complete any work in progress to the extent Contractor deems necessary and that all costs incurred by Contractor in performing Petroleum Operations under its proposed Annual Work Programme and Budget shall be deemed to be Petroleum Costs subject to Cost Recovery under this Contract. The foregoing notwithstanding, Contractor shall not be entitled to Cost Recover any costs incurred under any portions of the proposed Annual Work Programme as identified in the written minutes of the Steering Committee meeting at which the proposed Annual Work Programme was considered and which were not approved by the Steering Committee and for which the arbitration award is issued in favor of SOCAR; except that in all cases Contractor shall be entitled to Cost Recover the following items: (i) ongoing commitments of Contractor, including contracts entered into prior to the initiation of any such arbitration; (ii) work the Contractor considers necessary for the protection of the reservoir and equipment and facilities; and (iii) work Contractor considers necessary for the protection of the environment, health and safety.

Annual Work Programmes and Budgets. (a) At Not more than thirty (30) days following the formation of the Steering Committee and thereafter at least three (3) months before the beginning of each Calendar YearYear during the Development and Production Period, or for the first year, within one (1) month from the Effective Date, the Contractor shall prepare and submit, or cause to be prepared and submitted, to the Steering Committee for approval an Annual Work Programme together with the related Budget in respect of the Petroleum Operations Contractor proposes to be carried out in such Calendar Year. The Steering Committee shall meet within thirty (30) days of receipt of the Annual Work Programme and Budget to consider same and any revisions thereto and to approve the Annual Work Programme and the Budget in its final form. It is agreed by SOCAR and Contractor that knowledge acquired as the work proceeds or from certain events may justify changes to the details of the Annual Work Programme; thus the Contractor may at any time propose to the Steering Committee an amendment to the Annual Work Programme and Budget. Except as provided in this Article 5.3 and in Article 5.4, Contractor shall not conduct any operations which deviate materially from the applicable Annual Work Programme and Budget without the prior consent of the Steering Committee. If necessary to carry out an Annual Work Programme, Contractor is authorized authorised to make expenditures during the relevant Calendar Year that are in excess of the Budget adopted therefor so long as the aggregate of such excess expenditures does not exceed ten percent (10%) percent of the Budget unless such expenditures exceeding ten percent (10%) percent are approved by the Steering Committee, which approval will shall not be withheld where the expenditures have been demonstrated to be reasonable and necessary. In accordance with the other provisions of this ContractAgreement, after approval of an Annual Work Programme, Contractor shall conduct the Petroleum Operations in accordance therewith. (b) In the event the Annual Work Programme and Budget has not been approved by the Steering Committee in the case of the first Annual Work Programme and Budget within sixty (60) days of the formation of the Steering Committee and in the case of each subsequent Annual Work Programme and Budget by the first day of the Calendar Year to which it relates Contractor shall be entitled (but not obligated) to carry out Petroleum Operations in accordance with some or all of its proposed Annual Work Programme and Budget until such time as the Annual Work Programme and Budget is agreed by the Steering Committee or any dispute relating to the Annual Work Programme and Budget has been resolved by reference to arbitration in accordance with the provisions in Appendix VIArbitration Procedure. As soon as agreement on an Annual Work Programme and Budget is reached by the Steering Committee or the decision of the arbitrators is rendered, Contractor shall amend the then current and/or next following Annual Work Programme and Budget, as appropriate, to conform with such agreement or decision; provided that Contractor shall not be obligated to undo work already performed, may complete any work in progress to the extent Contractor deems necessary and that all costs incurred by Contractor in performing Petroleum Operations under its proposed Annual Work Programme and Budget shall be deemed to be Petroleum Costs subject to Cost Recovery under this ContractAgreement. The foregoing notwithstanding, Contractor shall not be entitled to Cost Recover Recovery of any costs incurred under any portions of the proposed Annual Work Programme as identified in the written minutes of the Steering Committee meeting at which the proposed Annual Work Programme was considered and which were not approved by the Steering Committee and for which the arbitration award is issued in favor favour of SOCAR; except that in all cases Contractor shall be entitled to Cost Recover Recovery of the following items: (i) ongoing commitments of Contractor, including contracts entered into prior to the initiation of any such arbitration;; and (ii) work the Contractor considers necessary for the protection of the reservoir and equipment and facilities; and (iii) work Contractor considers necessary for the protection of the environment, health and safety.