I.R IRAN - NORWAY TECHNOLOGY PARTNERSHIP WORKSHOP

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1 I.R IRAN - NORWAY TECHNOLOGY PARTNERSHIP WORKSHOP Teheran 1 March Teheran 1 March

2 Previous buy back contract The buy back contract A risk service contract, repayment of petroleum costs + remunerations fee Commercially challenging The need for renewal of the contracting regime Teheran 1 March

3 New Iranian Petroleum Contract ("IPC") Teheran summit Principles for draft new IPC presented Nov 2015 IPC This presentation is based on a draft IPC Approved IPC to be presented to qualified IOC's only A process for pre-qualification of IOC's established Process for award of IPC to qualifying IOC's not published yet MOU and bilateral negotiations Bidding Suppliers may engage with IOC's after award of IPC. Focus here: how will the IPC affect the content of the supplier contracts Teheran 1 March

4 New Iranian Petroleum Contract (2) Three versions: greenfield, brownfield and IOR. In the following greenfield only. Appendices to be negotiated. Contractor/Joint Operating Company ("JOC") Contractor is the International Oil Company ("IOC") Contractor expected to form joint venture with Iranian entity (and possibly other third party) Contractor remains liable for JOC's actions, IPC art Teheran 1 March

5 The IPC is a Risked Service Contract Risked service contract Contractor shall carry out Petroleum Operations Covers exploration, appraisal, development and production Carries exploration and appraisal risk. Contractor shall provide all funds necessary for Petroleum Operations Repayment of Petroleum Costs + Remuneration Fee post first production only. Teheran 1 March

6 Ownership to Assets and IP All assets, property and equipment shall be owned by NIOC (IPC cl 31.1), except equipment leased or imported on a temporary basis, ref IPC cl Very important to follow the correct procedure! Any technology developed and/or intellectual property created as a result of the Petroleum Operations shall be owned by NIOC and may be used by NIOC in its own operations without consent (IPC cl 32.3). These provisions must probably be carried through to supplier contracts These provisions must be considered before you perform technology development projects or improvement projects in Iran. Teheran 1 March

7 Licensed IP For licenses acquired by Contractor on behalf of NIOC for use in Petroleum Operations Both NIOC and Contractor shall fully comply with any license restrictions. Suppliers can protect their background IP with license terms! Make sure to identify all background you want to protect Eg background in reports/data/analysis included in the contract or in documents to be delivered under the contract Teheran 1 March

8 Technology Transfer Transfer of Technology Plan in Appendix N will define: Transfer of technology and Know-how to Iran, ref cl. 12. A detailed plan for training of Iranian employees and trainees engaged in this Project to be agreed with NIOC, ref cl 12.3 Detailed principles and procedures related to employment of Iranian citizens and training of NIOCs personnel to be agreed, ref cl When will Appendix N on Technology Transfer be developed? Suppliers will relate to Contractors after award. Teheran 1 March

9 Local content requirements IPC cl 6.6 Contractor shall ensure the most economically advantageous cost and take due regard to quality and level of work and services. IPC cl 27 Maximum Utilization of Iranian Content (equipment, materials, works and services) Iranian content no less than 51% of the Direct Capital Costs Is it cost or local content that has priority? Process for award of contracts to suppliers not yet clear. Teheran 1 March

10 Local content requirements for personell IPC 6 Project management team, work place etc to be established in Iran. Under comparable and competitive terms priority must be given to Iranian qualified subcontractors. IPC 12 Contractor shall require its subcontractors and affiliates to give priority to qualified and experienced Iranian citizens. Foreign nationals only where qualified and experienced Iranian personnel are not available and NIOC has given prior written approval. Foreign employees to be replaced when qualified Iranians are available. Note: Contractor (IOC) seems to be liable for all personnel, including suppliers personnel. Teheran 1 March

11 Thanks! Adele Os Partner T: Teheran 1 March

12 Teheran 1 March