Common use of Full Field Development Clause in Contracts

Full Field Development. SOCAR and Contractor anticipate that all of the following conditions necessary for commencement of Petroleum Operations toward achieving Full Field Development will be satisfied in a timely manner. The Parties agree that for Petroleum Operations to commence with respect to achieving Full Field Development the following conditions will have to be resolved after the Effective Date to the mutual satisfaction of the Parties; (a) insurance by appropriate authorities of all authorizations, permissions, licences and approvals necessary for the performance of Contractor's work in connection with this Contract, including but not limited to arranging for the construction and operation of an offshore gathering system, onshore processing and related facilities and onshore supply base and construction facilities, securing contractual arrangements with the appropriate authorities and entities having jurisdiction thereof that will provide open access on an acceptable basis to Contractor for use of a waterway and canal system servicing the Caspian Sea for transit of such equipment, supplies, products and other cargoes necessary for the performance of Petroleum Operations under this Contract which cannot be economically transported by alternative methods of transport; (b) arrangements for the financing, construction and operation of the Main Export Pipeline system. The term "arrangements" with respect to the Main Export Pipeline system shall mean the following: (i) agreement among the Parties on the choice of route for the Main Export Pipeline and the conclusion and entry into force of multilateral government treaties between the Government and the government of each country through which the Main Export Pipeline must pass, providing, inter alia, for the construction and operation thereof and the unimpeded flow of Petroleum through the Main Export Pipeline; (ii) the conclusion, enactment into law and entry into force of agreements between the Main Export Pipeline entity and/or the owners of the Main Export Pipeline and each government of a country through which the Main Export Pipeline passes providing, inter alia, for the uninterrupted flow of Petroleum through the Main Export Pipeline, the fixing of stabilized taxes, levies, duties, payments, fees or contributions (and transit fees, if any), or exemptions therefrom, to which the Main Export Pipeline entity and shippers/owners of the Petroleum will be subject, assurances from each such government that it will provide necessary security of the Main Export Pipeline, associated facilities and pipeline personnel; provided that SOCAR and the Contractor Parties (or their Affiliates), as equity participants in the Main Export Pipeline shall have acted reasonably and in good faith in an effort to diligently reach the conclusion of such agreements which contain terms generally accepted by good international Petroleum industry practice; (iii) the grant or issuance by the government of each country through which the Main Export Pipeline passes of the necessary rights, approvals, licenses and permits, including necessary land use rights, required for the Main Export Pipeline entity to construct, own, operate and have access to the Main Export Pipeline and associated facilities and installations; (iv) conclusion and entry into force of an agreement among the Main Export Pipeline owners governing ownership structure and interests of each of the owners, operatorship, voting procedures, operational issues, and tariffs; provided that SOCAR and the Contractor Parties (or their Affiliates), as equity participants in the Main Export Pipeline, shall have acted reasonably and in good faith in an effort to diligently reach the conclusion of such agreement which contains terms generally accepted by good international Petroleum industry practice; (v) execution of financial agreements or financing commitments with financial institutions covering the provision of all necessary funds for the design, construction, completion and operation of the Main Export Pipeline, throughput agreements as necessary and satisfaction of all conditions precedent contained therein to enable release of funds; provided that SOCAR and the Contractor Parties (or their Affiliates), as equity participants in the Main Export Pipeline, shall have acted reasonably and in good faith in an effort to diligently reach the conclusion of such agreement which contains terms generally accepted by good international Petroleum industry practice; (c) The Parties expressly agree that, notwithstanding anything elsewhere in this Contract to the contrary, Contractor shall have no obligation to conduct Petroleum Operations under this Contract, other than those under the Minimum Obligatory Work Programme, and any current Annual Work Programme and Budget pertaining to the Early Oil Production project undertaken by Contractor pursuant to Article 10.2, unless and until the conditions listed under (a) and (b) above have been completed to the reasonable satisfaction of both SOCAR and Contractor.