[s. 3]
THIS AGREEMENT is made this 9 th day of September 2003
BETWEEN:
THE HONOURABLE GEOFFREY IAN GALLOP , B.Ec., MA., MPhil., DPhil., M.L.A.,
Premier of the State of Western Australia, acting for and on behalf of the
said State and its instrumentalities from time to time (hereinafter called
“the State”) of the one part; and
CHEVRONTEXACO AUSTRALIA PTY. LTD. ABN 29 086 197 757 of Level 24 QV1
Building, 250 St George’s Terrace, Perth, Western Australia, TEXACO
AUSTRALIA PTY. LTD. ABN 18 081 647 047 of Level 24 QV1 Building, 250 St
George’s Terrace, Perth, Western Australia, MOBIL AUSTRALIA RESOURCES
COMPANY PTY. LIMITED ABN 38 000 113 217 of 12 Riverside Quay, Southbank,
Melbourne, Victoria and SHELL DEVELOPMENT (AUSTRALIA) PROPRIETARY LIMITED ABN
14 009 663 576 of Level 28 QV1 Building, 250 St George’s Terrace, Perth,
Western Australia (hereinafter collectively called “the Joint
Venturers” in which term shall be included their respective successors
and permitted assigns) of the other part.
WHEREAS:
A. The Joint Venturers are the holders of the
Title Areas (as hereinafter defined) granted under the
Petroleum (Submerged Lands) Act 1967 of the Commonwealth and propose to
undertake offshore production of natural gas and other petroleum from those
areas and a gas processing and infrastructure project as hereinafter defined
as the Project on Barrow Island.
B. The State, for the purpose of promoting
industrial development in Western Australia and the supply of gas to the
mainland of Western Australia, desires to facilitate the establishment of the
Project upon and subject to the terms of this Agreement.
C. The State and the Joint Venturers recognise the
need for employment and training opportunities for the Western Australian
workforce and for participation in the proposed development by suppliers
manufacturers contractors and consultants resident in Western Australia.
D. The State and the Joint Venturers acknowledge
the high biodiversity value on Barrow Island and the need for this Agreement
to provide for net environmental, social and economic benefits for current and
future generations and the need for minimisation of environmental impact of
the Project on Barrow Island.
NOW THIS AGREEMENT WITNESSES:
Definitions
1. In this Agreement subject to the context:
“ advise ”, “ apply ”,
“ approve ”, “ approval ”, “ consent ”,
“ certify ”, “ direct ”, “ notice ”,
“ notify ”, “ request ”, or “ require ”,
means advise, apply, approve, approval, consent, certify, direct, notice,
notify, request or require in writing as the case may be and any inflexion or
derivation of any of those words has a corresponding meaning;
“ Associated Entity ” means:
(a) in
relation to a Joint Venturer other than Shell Development (Australia)
Proprietary Limited (“ Shell ”):
(i) a body corporate, partnership or other legal
entity which is directly or indirectly controlled by the Joint Venturer;
(ii) a body corporate, partnership or other legal
entity which directly or indirectly controls the Joint Venturer; or
(iii) a body corporate, partnership or other legal
entity which is directly or indirectly controlled by a body corporate,
partnership or other legal entity which directly or indirectly controls the
Joint Venturer; and
(b) in
relation to Shell:
(i) N.V. Koninklijke Nederlandsche Petroleum
Maatscappij (“ Royal Dutch ”);
(ii) The ‘Shell’ Transport and Trading
Company, plc (“ Shell Transport ”); and
(iii) any company (other than Shell) which is for
the time being directly or indirectly controlled by Royal Dutch and Shell
Transport or either of them.
For the purpose of this definition, a body
corporate, partnership or other legal entity (“ Entity ”) is
directly controlled by another Entity or Entities holding shares carrying the
majority of votes exercisable at a general meeting of the first mentioned
Entity; and a particular Entity is indirectly controlled by an Entity or
Entities (the “ parent Entity or Entities ”) if a series of
Entities can be specified, beginning with the parent Entity or Entities and
ending with the particular Entity, so related that each Entity in the series,
except the parent Entity or Entities, is directly controlled by one or more of
the Entities earlier in the series;
“ approved proposal ” means a proposal
approved or deemed to be approved under this Agreement;
“ Barrow Island Coordination Council ”
or “ BICC ” means the group referred to in clause 13;
“ BICC Participants ” means the
participants in the BICC from time to time;
“ Barrow Island lease ” has the
meaning given to it in the Ratifying Act;
“ BI Lessee ” means the lessee from
time to time under the Barrow Island lease;
“ CALM Act ” means the
Conservation and Land Management Act 1984 ;
“ CALM Act Minister ” means the
Minister to whom the administration of the CALM Act is for the time being
committed;
“ Commencement Date ” means the date
on which the Ratifying Act comes into operation;
“ Commonwealth ” means the
Commonwealth of Australia and includes the Government for the time being
thereof;
“ DCLM ” means the Department of
Conservation and Land Management referred to in section 32 of the CALM Act;
“ Domgas Project ” means any domestic
gas treatment plant within the Gas Processing Area on Barrow Island and a
pipeline connection or connections to deliver natural gas from that plant to
domestic gas infrastructure on the mainland of Western Australia;
“ EP Act ” means the
Environmental Protection Act 1986 ;
“ Executive Director ” means the
executive director of DCLM referred to in section 36(1) of the CALM Act;
“ First long term lease ” means the
first long term lease granted by the State to the Joint Venturers for the
purposes of establishment of a gas processing plant pursuant to an approved
proposal under clause 7 and includes that lease, if renewed or varied, as so
renewed or varied;
“ Gas Processing Area ” means the
areas of Barrow Island not exceeding in aggregate 300 hectares, as described
in section 9 of the Ratifying Act;
“ gas processing project purpose ” has
the meaning given to it in the Ratifying Act;
“ Greater Gorgon Area ” means the
areas which are the subject of Retention Leases WA-15-R, WA-17-R, WA-18-R,
WA-19-R, WA-20-R, WA-21-R, WA-22-R, WA-23-R, WA-24-R, WA-25-R and WA-26-R,
Exploration Permits WA-253-P, WA-267-P and WA-268-P and graticular blocks 439,
440, 511, 512, 583 and 584 of Exploration Permit WA-205-P, or of titles
derived from those titles, which are held during the term of this Agreement by
any person under such titles granted pursuant to the
Petroleum (Submerged Lands) Act 1967 of the Commonwealth;
“ LA Act ” means the
Land Administration Act 1997 , as amended by the Ratifying Act;
“ laws relating to native title ”
means laws applicable from time to time in Western Australia in respect of
native title and includes the Native Title Act 199 3 (Commonwealth);
“ local government ” means a local
government established under the Local Government Act 1995 ;
“ Minister ” means the Minister in the
Government of the State for the time being responsible for the administration
of the Act to ratify this Agreement and pending the passing of that Act means
the Minister for the time being designated in a notice from the State to the
Joint Venturers and includes the successors in office of the Minister;
“ month ” means calendar month;
“ Net Conservation Benefits ” means
demonstrable and sustainable additions to or improvements in biodiversity
conservation values of Western Australia targeting, where possible, the
biodiversity conservation values affected or occurring in similar bioregions
to Barrow Island;
“ person ” or “ persons ”
includes bodies corporate;
“ petroleum ” has the meaning given to
it in the Petroleum (Submerged Lands) Act 1967 of the Commonwealth;
“ Project ” means the processing of
gas or other petroleum from within the Title Areas and, subject to this
Agreement, gas or other petroleum from the Greater Gorgon Area and other areas
to produce, by staged phases of development, some or all of:
(a)
liquefied natural gas or other petroleum based products for sale within
Australia and/or overseas;
(b)
natural gas or processed natural gas or other petroleum based products for
sale or industrial use on Barrow Island; and
(c)
processed natural gas and the pipeline transportation of such gas to the
mainland of Western Australia for sale within Australia,
and all related activities including construction,
operation and maintenance of pipelines, transport, carbon dioxide disposal and
other ancillary services and facilities;
“ Ratifying Act ” means the Act that
ratifies this Agreement;
“ Title Areas ” means the areas which,
at the Commencement Date, are the subject of Retention Leases WA-2-R, WA-3-R,
WA-4-R, WA-5-R, WA-14-R and WA-16-R and graticular blocks 153, 154, 225, 226,
296, 297, 368 and 369 within Exploration Permit WA-205-P and in which
interests are held during the term of this Agreement by any or all of the
Joint Venturers under titles granted pursuant to the
Petroleum (Submerged Lands) Act 1967 of the Commonwealth;
“ this Agreement ”, “ hereof
” and “ hereunder ” refer to this Agreement as from time to
time added to, varied or amended.
Interpretation
2. (1) In this
Agreement:
(a) monetary references are references to
Australian currency unless otherwise specifically expressed;
(b) power given under any clause other than clause
24 to extend any period or date shall be without prejudice to the power of the
Minister under clause 24;
(c) clause headings do not affect interpretation
or construction;
(d) words in the singular shall include the plural
and words in the plural shall include the singular according to the
requirements of the context;
(e) one gender includes the other genders;
(f) a covenant or agreement by more than one
person binds, and is enforceable against, those persons jointly and each of
them severally;
(g) reference to an Act includes the amendments to
that Act for the time being in force and also any Act passed in substitution
therefor or in lieu thereof and the regulations for the time being in force
thereunder;
(h) reference to any other document includes that
document as from time to time added to, varied or amended and notwithstanding
any change in the identity of the parties;
(i) reference to a clause or schedule is a
reference to a clause or schedule to this Agreement, and a reference to a
subclause or paragraph is a reference to the subclause of the clause or
paragraph of the clause or subclause as the case may be in, or in relation to,
which the reference is made; and
(j) “including” means
“including, but not limited to”.
(2) Nothing in this
Agreement shall be construed to exempt the State or the Joint Venturers from
compliance with or to require the State or the Joint Venturers to do anything
contrary to any law relating to native title or any lawful obligation or
requirement imposed on the State or the Joint Venturers as the case may be
pursuant to any law relating to native title.
(3) Nothing in this
Agreement shall be construed to exempt the Joint Venturers from compliance
with any requirement in connection with the protection of the environment
arising out of or incidental to their activities under this Agreement that may
be made pursuant to the EP Act or the Ratifying Act.
Ratification and operation
3. (1) The State shall
introduce and sponsor a Bill in the State Parliament of Western Australia to
ratify this Agreement and endeavour to secure its passage and commencement as
an Act prior to 31 December 2003 or such later date as may be agreed between
the parties hereto.
(2) The provisions of
this Agreement other than this clause and clauses 1 and 2 will not come into
operation until the Bill referred to in subclause (1) has been passed by the
State Parliament of Western Australia and comes into operation as an Act.
(3) If by 31 December
2003 or later agreed date the said Bill has not commenced to operate as an Act
then, unless the parties hereto otherwise agree, this Agreement will then
cease and determine and no party hereto will have any claim against any other
party hereto with respect to any matter or thing arising out of, done,
performed, or omitted to be done or performed under this Agreement.
(4) On the said Bill
commencing to operate as an Act all the provisions of this Agreement will
operate and take effect notwithstanding the provisions of any Act or law.
Preparatory work
4. (1) The Joint
Venturers shall continue their field and office geological, geotechnical,
engineering, environmental, social impact, heritage, marketing and finance
studies and investigations into other matters as they consider necessary to
enable them to finalise and to submit proposals under this Agreement and shall
report in writing thereon to the State at quarterly intervals or such longer
periods as may be approved by the Minister. If such preparatory work leads the
Joint Venturers to conclude at any time prior to submission of their complete
detailed proposals under clause 7(1) that the Project cannot successfully be
established in accordance with this Agreement, the Joint Venturers shall
consult with the Minister thereon and following such consultation, if they are
still of that mind, they may within 21 days after the consultation notify the
Minister that they do not intend to submit such proposals and, upon that
notification, this Agreement shall cease and determine.
(2) With each report
pursuant to subclause (1) the Joint Venturers shall also advise the State of
the then expected Western Australian and other Australian content of their
proposed works and, in relation thereto, the matters the subject of clause
15(4).
(3) The Joint
Venturers shall co-operate with the State and consult with the representatives
or officers of the State regarding matters referred to in subclause (1) and
any other relevant studies in relation thereto that the Minister may wish to
undertake and shall join with the State in any studies into infrastructure
that the Minister and the Joint Venturers agree should be undertaken.
(4) If so requested by
the Joint Venturers the State shall, at the cost of the Joint Venturers,
exercise any powers available to it pursuant to the Barrow Island lease in
relation to access for the Joint Venturers to land within that lease for the
purposes of this clause.
(5) For the purpose of
this Agreement, the Joint Venturers in relation to any land the subject of
approved proposals or proposed as land to be granted in accordance with
proposals under this Agreement shall be deemed to be within the expression
“the owner of any land” for the purposes of section 18 of the
Aboriginal Heritage Act 1972 .
Overall development - existing infrastructure
5. (1) Having regard
to the Class A Nature Reserve status of Barrow Island, the provisions of the
Ratifying Act, the need to minimise environmental disturbance and the impact
on conservation values on Barrow Island by the avoidance of duplication of
services, facilities and infrastructure and that no more than 300 hectares of
uncleared land (as described in section 9 of the Ratifying Act) is available
for this and other future gas processing developments on Barrow Island, the
Joint Venturers in their planning and preparations for proposals shall take
into account and make provision as far as practicable for use and sharing of
services, facilities and infrastructure. The Joint Venturers and the State
shall co-operate and consult with each other regarding these matters, State
Government policies and development objectives, the Joint Venturers’
commercial requirements and any other relevant matters that the Minister or
the Joint Venturers may wish to consider.
(2) Subject to clause
21 the Joint Venturers shall, if so requested by the Minister or by another
existing or prospective occupant of Barrow Island, enter into negotiations for
the sharing or supply, in both cases on reasonable commercial terms and
subject to there being spare capacity available, of the Joint Venturers’
services, facilities and infrastructure on Barrow Island. The implementation
of such arrangements shall not be precluded by this Agreement.
Reservation of areas
6. (1) The Gas
Processing Area shall be reserved by the State solely for the provision of
land areas for the establishment of projects to process or use natural gas and
other petroleum from the Title Areas and the Greater Gorgon Area (together
with ancillary processing or use of gas and other petroleum from the Barrow
Island lease or elsewhere if approved by the Minister), and for associated
activities to such projects and the Minister shall not consent to the grant of
any lease, easement or licence under the Ratifying Act which is inconsistent
with this reservation.
(2) For the period
from the Commencement Date to 31 December 2009 the State shall reserve to the
Joint Venturers areas within the Gas Processing Area of 150 hectares in the
aggregate from which they may seek the grant of long term leases of land for
the purposes of the Project and easements for carbon dioxide pipelines,
control lines and ancillary services under the LA Act in accordance with
approved proposals.
(3) The State shall
also reserve areas within the Gas Processing Area of not less than 50 hectares
for the grant of easements under the LA Act for petroleum pipelines, control
lines and ancillary services associated with gas and other petroleum
processing within the Gas Processing Area by the Joint Venturers and other
occupants of the Gas Processing Area.
(4) If the Joint
Venturers or any other occupants of the Gas Processing Area are granted any
easement under subclause (3), the State shall ensure that they locate their
pipelines and other lines and services within such easement and implement
arrangements for risk management and risk allocation so as to allow others to
install lines within the easement associated with gas and other petroleum
processing within the Gas Processing Area.
(5) The Joint
Venturers shall, where reasonably practicable, locate their construction and
laydown areas within the 150 hectares reserved under subclause (2) or within
cleared land and may seek the grant of short term leases under the LA Act over
such areas in accordance with approved proposals.
(6) The Joint
Venturers shall also, where reasonably practicable and subject to
implementation of reasonable arrangements for risk management and risk
allocation, allow third parties to locate temporary construction and laydown
areas on areas within the 150 hectares reserved under subclause (2). If the
State reserves areas for or grants titles to third parties in respect of other
parts of the Gas Processing Area or other cleared land, the State shall,
without limiting subclause (5), ensure that the Joint Venturers have
equivalent construction and laydown rights over such areas.
(7) In respect of any
area reserved pursuant to subclause (2) which is not the subject of an
approved proposal or approved proposals at 31 December 2009, the State and the
Joint Venturers shall consult with each other regarding the market situation
and gas reserves in the Title Areas and the Greater Gorgon Area and the Joint
Venturers’ continued requirement for the area or any part thereof. Any
portions of the area not reasonably required by the Joint Venturers at the
discretion of the Joint Venturers, shall be released from the reservation. Any
area not so released shall continue to be reserved under subclause (8) until
31 December 2014 or the sooner cessation of this Agreement.
(8) In respect of any
area continuing to be reserved pursuant to subclauses (2) and (7) which is not
the subject of an approved proposal or approved proposals at 31 December 2014,
the State and the Joint Venturers shall consult with each other regarding the
market situation and gas reserves in the Title Areas and the Greater Gorgon
Area and the Joint Venturers’ continued requirement for the area. After
such consultation the Minister at his discretion, may cancel the reservation
or extend the whole or any part thereof that is then not the subject of an
approved proposal for such period not exceeding 5 years as the Minister may
determine.
(9) If the date 31
December 2008 referred to in clause 7(1) is extended pursuant to clause 24
then the dates 31 December 2009 and 31 December 2014 in subclauses (2), (7)
and (8) shall respectively be automatically extended for the same length of
time.
(10) If the Joint
Venturers wish to use land within the Gas Processing Area beyond that which is
reserved for them from time to time, they may request permission to bring
forward a proposal under this Agreement in respect of that land and the
Minister may in his discretion allow this.
(11) The Minister
shall advise the Joint Venturers of any land within the Gas Processing Area
that the State is considering reserving or granting to a third party for the
establishment and operation of plant for the treatment of natural gas and
other petroleum, its processing, storage and/or shipment and associated
ancillary structures and for incidental and ancillary purposes and, if
requested by the Joint Venturers, the Minister shall consult with them in this
regard.
Joint Venturers to submit Proposals
7. (1) Subject to the
provisions of this Agreement, the Joint Venturers shall, on or before 31
December 2008, or by such extended date as may be allowed pursuant to clause
24 or clause 30(3), submit to the Minister to the fullest extent reasonably
practicable their detailed proposals (including plans where practicable and
specifications where reasonably required by the Minister and any other details
normally required by a local government in whose area any works are to be
situated) with respect to the Project including, subject to and in accordance
with clause 5, their proposals for the use and/or sharing of existing
services, facilities or infrastructure on Barrow Island, which proposals shall
include the location, area, provisions relating to management of quarantine
risk, lay-out, design (including design features to enable future delivery of
gas to the mainland), quantities, materials and time program for the
commencement and completion of construction or the provision (as the case may
be) of each of the following matters, namely:
(a)
a pipeline or pipelines bringing untreated natural
gas and other petroleum from the Title Areas to Barrow Island, including
details of how the pipeline or pipelines will deliver or be expanded to
deliver the untreated gas required for the establishment of a Domgas Project
in accordance with clause 17;
(b)
pipelines to be situated on Barrow Island;
(c)
the treatment plant;
(d)
disposal of carbon dioxide (including by injection
or sale);
(e)
shipping facilities and services;
(f)
quarantine management plan in respect of Barrow
Island;
(g)
water supply;
(h)
power supply;
(i) accommodation for construction
and permanent workforce;
(j)
a social impact management plan including
education, health and policing services and community facilities;
(k)
use of local professional services labour and
materials and measures to be taken with respect to the engagement and training
of employees by the Joint Venturers, their agents and contractors;
(l)
any leases, licences or easements required from
the State;
(m)
airport and heliport facilities;
(n)
any other works, service or facilities desired by
the Joint Venturers;
(o)
establishment and operation of the Barrow Island
Coordination Council; and
(p)
closure plan including rehabilitation and long
term management plan for injected carbon dioxide.
Order of proposals
(2) Each of the
proposals pursuant to subclause (1) may, with the approval of the Minister or
if so required by him, be submitted separately and in any order as to any
matter or matters mentioned in subclause (1).
Additional submissions
(3) (a)
Each time that the Joint Venturers submit a
proposal or proposals under this clause they shall submit to the Minister in
respect of that proposal or proposals details of any services (including any
elements of the project investigations design and management) and any works
materials plant equipment and supplies that they propose to consider obtaining
from or having carried out or permitting to be obtained from or carried out
outside Australia together with their reasons therefor and shall, if required
by the Minister, consult with the Minister with respect thereto.
(b)
At the time when the Joint Venturers submit the
complete detailed proposal or proposals required under this clause they shall
confirm or address further the matters referred to in paragraph (a) and shall
also submit to the Minister:
(i)
evidence to the reasonable satisfaction of the Minister as to the availability
of finance necessary to carry out the Project; and
(ii)
evidence to the reasonable satisfaction of the Minister as to the readiness of
the Joint Venturers in all other respects to carry out the Project.
(4) If the complete
detailed proposals submitted under this clause do not include a proposal to
inject carbon dioxide recovered during gas processing, the Minister may notify
the Joint Venturers within 60 days after submission of those proposals that he
will not consider the proposals. On such notification the proposals shall
lapse and clause 8(3) shall apply in relation to the submission of further
proposals by the Joint Venturers. The Minister’s decision under this
subclause shall not be referable to arbitration under clause 30.
(5) The provisions of
clause 23 shall not apply to this clause.
Consideration of proposals
8. (1) Subject to
clause 7(4), in respect of each proposal pursuant to clause 7(1) the Minister
shall:
(a)
approve the proposal without qualification or
reservation; or
(b)
defer consideration of or decision upon the same
until such time as the Joint Venturers submit a further proposal or proposals
in respect of some other of the matters mentioned in clause 7(1) not covered
by the said proposal; or
(c)
require, as a condition precedent to the giving of
his approval to the said proposal, that the Joint Venturers make such
alteration thereto or comply with such conditions in respect thereto as he
thinks reasonable, and in such a case the Minister shall disclose his reasons
for such alterations or conditions,
PROVIDED ALWAYS that:
(d)
where implementation of any proposals hereunder
have been approved pursuant to the EP Act subject to conditions or procedures,
any approval or decision of the Minister under this clause shall, if the case
so requires, incorporate a requirement that the Joint Venturers make such
alterations to the proposals as may be necessary to make them accord with
those conditions or procedures; and
(e)
subject to clause 8(1)(d), if the proposals
include details of the conditions and restrictions that have been imposed on
an approval to inject carbon dioxide under section 13 of the Ratifying Act,
the Minister may not make any decision under clause 8(1)(b) or (c) which is
inconsistent with those conditions and restrictions.
Advice of Minister’s decision
(2) The Minister
shall, within two months after receipt of proposals pursuant to clause 7(1)
and compliance by the Joint Venturers with clause 7(3), give notice to the
Joint Venturers of his decision in respect to the proposals PROVIDED THAT :
(a)
where a proposal is to be assessed under section
40(1)(b) of the EP Act the Minister shall give notice to the Joint Venturers
of his decision in respect to the proposal within 2 months after the later
happening of the receipt of the proposal and the service on him of an
authority under section 45(7) of the EP Act; and
(b)
where a proposal will or may require the State to
do any act which affects any native title rights and interests the Minister
shall give notice to the Joint Venturers of his decision in respect to the
proposal within 2 months of the later happening of the receipt of the proposal
and the completion of all processes required by laws relating to native title
to be undertaken by the State before that act may be done by the State.
Consultation with Minister
(3) If the decision of
the Minister is as mentioned in clause 7(4) or in either of paragraphs (b) or
(c) of subclause (1), the Minister shall afford the Joint Venturers full
opportunity to consult with him and, should they so desire, to submit new or
revised proposals either generally or in respect to some particular matter.
Minister’s decision subject to arbitration
(4) If the decision of
the Minister is as mentioned in either of paragraphs (b) or (c) of subclause
(1) and the Joint Venturers consider that the decision is unreasonable, the
Joint Venturers within 2 months after receipt of the notice mentioned in
subclause (2), may elect to refer to arbitration in the manner hereinafter
provided the question of the reasonableness of the decision PROVIDED THAT any
requirement of the Minister pursuant to the proviso to subclause (1) shall not
be referable to arbitration hereunder.
Arbitration award
(5) An award made on
an arbitration pursuant to subclause (4) shall have force and effect as
follows:
(a)
if by the award the dispute is decided against the
Joint Venturers then, unless the Joint Venturers within 3 months after
delivery of the award give notice to the Minister of their acceptance of the
award, this Agreement shall on the expiration of that period of 3 months
determine and neither the State nor the Joint Venturers shall have any claim
against the other of them with respect to any matter or thing arising out of,
done, performed or omitted to be done or performed under this Agreement; or
(b)
if by the award the dispute is decided in favour
of the Joint Venturers, the decision shall take effect as (and be deemed to
be) a notice by the Minister that he is so satisfied with and approves the
matter or matters the subject of the arbitration.
Effect of non-approval of proposals - termination
(6) Notwithstanding
that under this clause any proposals of the Joint Venturers under clause 7(1)
are approved by the Minister or deemed to be approved as a consequence of an
arbitration award, unless each and every such proposal and matter is so
approved or deemed to be approved by 31 December 2009 or by such extended date
or period if any as the Joint Venturers shall be granted pursuant to clause 24
or clause 30(3) then, notwithstanding anything to the contrary in this
Agreement, this Agreement shall on that date cease and determine.
Variation of proposals
(7) Notwithstanding
clause 22 the Minister may during the implementation of approved proposals
approve variations to those proposals.
Implementation of approved proposals
9. The Joint Venturers shall implement approved
proposals in accordance with the terms thereof.
Additional proposals
10. (1) Subject to
clause 5, if the Joint Venturers at any time during the continuance of this
Agreement desire to significantly modify, expand or otherwise vary their
activities carried on pursuant to any approved proposals they shall give
notice of such desire to the Minister and, within 2 months thereafter, shall
submit to the Minister detailed proposals in respect of all matters covered by
such notice and such of the other matters mentioned in clause 7(1) as the
Minister may require.
(2) The provisions of
subclause (1) shall not apply to matters the subject of clause 17.
(3) The provisions of
clause 7 and clause 8 (other than clauses 8(5)(a) and (6)) shall mutatis
mutandis apply to detailed proposals submitted pursuant to this clause, with
the proviso that the Joint Venturers may withdraw such proposals at any time
before approval thereof or, where any decision of the Minister in respect
thereof is referred to arbitration, within 3 months after the award by notice
to the Minister that it shall not be proceeding with the same.
Net Conservation Benefits
11. (1) The Joint
Venturers shall pay to the State $40 million, by instalments to be indexed in
accordance with subclause (3) from 1 January 2004, for ongoing programs that
will provide Net Conservation Benefits.
(2) Each instalment
under subclause (1) shall become due and payable, and shall be paid into a
special purpose trust account, as follows:
(a)
by an initial instalment of $3 million within one
month following the Commencement Date or upon establishment of the account in
accordance with subclause (5), whichever is the later; and
(b)
thereafter by further instalments totalling $37
million (indexed in accordance with subclause (3)) commencing within one month
of approval of complete detailed proposals submitted under clause 7 and
continuing in accordance with a schedule of payments to be agreed between the
Joint Venturers and the Minister, in consultation with the CALM Act Minister,
prior to the approvals of those proposals.
(3) Each instalment
under subclause (1) shall be adjusted immediately prior to payment in
accordance with the following formula (unless the adjustment would result in a
reduction in the instalment) and the Joint Venturers shall become liable to
pay the adjusted amount in accordance with this clause:
Where:
A =
the adjusted amount of the instalment.
B =
the unadjusted amount of the instalment, as at 1 January 2004.
C =
the Consumer Price Index All Groups Perth last published by the
Australian Bureau of Statistics before 1 January in the year of the
adjustment.
D =
the Consumer Price Index All Groups Perth last published by the
Australian Bureau of Statistics before 1 January 2004.
(4) If either:
(a)
the Consumer Price Index All Groups Perth ceases
to be published; or
(b)
the method of calculation of the Consumer Price
Index All Groups Perth substantially alters,
then the Consumer
Price Index All Groups Perth is to be replaced by the nearest equivalent index
and any necessary consequential amendments are to be made. That replacement
index and those amendments are to be determined as follows:
(c)
by agreement between the Joint Venturers and the
Minister; or
(d)
if they do not agree within 6 months, by the
Australian Statistician or his nominee (acting as an expert and not as an
arbitrator), whose decision is binding and conclusive.
(5) The special
purpose trust account under subclause (2) shall be established pursuant to
section 69 of the CALM Act and shall be subject to arrangements for
governance, consultation and reporting to be agreed between the Joint
Venturers and the Minister, in consultation with the CALM Act Minister, as
soon as practicable after the date of this Agreement. If section 69 of the
CALM Act is repealed or substantially amended during the term of this
Agreement, the Joint Venturers and the Minister shall promptly agree on an
alternative equivalent special purpose trust account and any necessary
alterations to the arrangements for governance, consultation and reporting.
(6) No additional
proposals shall be submitted under clause 10 for expansion of the Project
beyond nameplate capacity of 10mtpa LNG production (or the equivalent gas
input for other petroleum based product) until proportionate funding
additional to the $40 million referred to above has been agreed between the
Joint Venturers and the State. Establishment and expansion of a Domgas Project
by the Joint Venturers shall not be subject to additional Net Conservation
Benefits payments.
DCLM costs
12. (1) The Joint
Venturers shall, during the term of this Agreement after approval of complete
detailed proposals submitted under clause 7:
(a)
pay to DCLM full cost recovery to cover all
management costs of DCLM (to include a contribution to corporate support costs
and the cost of salaries, including labour on-costs and other costs of the
officers engaged therein); and
(b)
provide within facilities on Barrow Island and
from normal support services all food and accommodation, office and laboratory
facilities, transport to and from Barrow Island and a dedicated motor vehicle,
plus any other services and facilities agreed by DCLM and the Joint Venturers,
reasonably required by
DCLM to maintain a permanent management presence on Barrow Island for the
purpose of managing the Project’s presence in relation to island and
marine conservation and to carry out its role and responsibility in respect of
the Joint Venturers’ operations and activities under this Agreement.
(2) The term
“permanent management presence” in subclause (1) includes:
(a)
the capacity to provide for full time independent
quarantine audit on Barrow Island and the mainland of Western Australia; and
(b)
the capacity to ensure that all onsite and offsite
areas including marine are appropriately monitored, researched and managed in
relation to primary and secondary (direct and indirect) impacts in order to
ensure that the total island marine and terrestrial ecology is being properly
monitored and managed and to ensure that the ecological knowledge base is
being properly developed.
(3) To the extent DCLM
claims reimbursement from the Joint Venturers, DCLM shall provide such
substantiation as the Joint Venturers may reasonably request of DCLM’s
costs under subclause (1).
(4) The maximum amount
payable by the Joint Venturers under subclause (1)(a) shall be limited to $1
million per calendar year during major construction phases of the Project and
$750,000 per calendar year during other times. These limits shall be pro rated
in respect of periods of less than a calendar year and shall be indexed
annually on the same basis set out in clause 11(3).
(5) The Joint
Venturers’ obligations under subclause (1)(b) shall be limited to
providing the accommodation and other facilities and services for the presence
of three officers on Barrow Island during major construction phases and two
officers at other times.
Barrow Island Coordination Council
13. The Joint
Venturers shall prior to receiving approval of their complete detailed
proposals under clause 7 make arrangements with the BI Lessee satisfactory to
the Minister, in consultation with the CALM Act Minister, to form and operate
the Barrow Island Coordination Council in accordance with the following
principles:
(a)
The formation and operation of the BICC shall not
limit any rights or powers of DCLM in relation to the management of Barrow
Island except to the extent, if any, that DCLM agrees.
(b)
The BICC shall commence operation on a nominated
date within one month of approval of the proposals and the commitments of the
BICC Participants shall relate to, and only to, matters, activities and events
that occur after that date.
(c)
All of the Joint Venturers and the BI Lessee shall
participate in the BICC either directly or through a properly authorised joint
venture operator as their agent.
(d)
The BICC Participants shall nominate one of the
BICC Participants as the BICC Manager with authority to undertake, and to
represent all the BICC Participants in relation to, all BICC activities from
time to time.
(e)
The matters to be coordinated by the BICC are:
(i)
providing a single point of contact and interaction for DCLM in relation to
the management of issues related generally to the operations of the BICC
Participants on Barrow Island;
(ii)
liaising with DCLM in relation to the terms and implementation of the
management plan under Division 1 of Part 5 of the CALM Act so far as it
relates generally to the operations of the BICC Participants on Barrow Island;
(iii)
establishing, monitoring and reviewing from time to time procedures to apply
to quarantine of all people and materials brought to Barrow Island for the
purposes of the operations of any of the BICC Participants;
(iv)
planning and coordinating the BICC’s role in emergency response to and
undertaking, where necessary, remediation of any suspected or actual breach of
quarantine in the operations of any of the BICC Participants;
(v)
planning and coordinating the BICC’s role in emergency response to and
undertaking, where necessary, remediation of escape of hydrocarbons or other
pollutants from the operations on Barrow Island of any of the BICC
Participants;
(vi)
reporting to the Minister and DCLM at least annually on all BICC activities in
the preceding 12 months; and
(vii)
other matters agreed between the BICC Participants from time to time.
(f)
The BICC Participants shall fund all the
activities of the BICC.
(g)
The BICC Participants shall undertake direct
obligations to the State in respect of their involvement in the BICC.
(h)
In addition to its commitments as a BICC
Participant, each BICC Participant shall remain responsible and liable for its
own environmental and other obligations relating to its operations on Barrow
Island.
(i) The State shall require as a
pre-condition to any grant of a lease, easement or licence under the LA Act
that the grantee is a BICC Participant. If the State proposes to grant such
tenure to a person who is not a BICC Participant, it must give at least 6
months notice to the BICC Participants and provide, or require the proposed
grantee to provide them with details of the grantee’s proposed
operations on Barrow Island and of its technical and financial capacity. The
BICC Participants shall, subject to the proposed grantee doing likewise,
negotiate promptly and in good faith with a view to admitting the proposed
grantee as a BICC Participant and they shall admit the grantee if:
(i) the
third party has undertaken all of the same obligations to the State as the
other BICC Participants have undertaken in respect of their involvement in the
BICC;
(ii) the
BICC Participants, acting reasonably, are satisfied that the additional issues
and risks associated with the proposed activities of the third party on Barrow
Island can adequately be managed by the BICC; and
(iii)
the BICC Participants, acting reasonably, are satisfied that the third party
is capable of meeting all its commitments as a BICC Participant, including
commitments to other BICC Participants, and has entered into such instruments
and provided such security as may reasonably be required by the BICC
Participants to ensure that those commitments are met.
Protection and management of the environment
14. The Joint Venturers shall in respect of their
activities and operations hereunder comply in all respects with the EP Act and
all requirements and conditions applicable thereunder or pursuant thereto.
Use of local labour professional services and materials
15. (1) Except as
otherwise agreed by the Minister the Joint Venturers shall, for the purposes
of this Agreement -
(a)
except in those cases where the Joint Venturers
can demonstrate it is not reasonable and economically practicable so to do,
use labour available within Western Australia (using all reasonable endeavours
to ensure that as many as possible of the workforce be recruited from the
Pilbara) or if such labour is not available then, except as aforesaid, use
labour otherwise available within Australia;
(b)
as far as it is reasonable and economically
practicable so to do, use the services of engineers surveyors architects and
other professional consultants experts and specialists, project managers,
manufacturers, suppliers and contractors resident and available within Western
Australia or if such services are not available within Western Australia then,
as far as practicable as aforesaid, use the services of such persons otherwise
available within Australia;
(c)
during design and when preparing specifications,
calling for tenders and letting contracts for works materials plant equipment
and supplies (which shall at all times, except where it is impracticable so to
do, use or be based upon Australian Standards and Codes) ensure that suitably
qualified Western Australian and Australian suppliers manufacturers and
contractors are given fair and reasonable opportunity to tender or quote;
(d)
give proper consideration and where possible
preference to Western Australian suppliers manufacturers and contractors when
letting contracts or placing orders for works, materials, plant, equipment and
supplies where price quality delivery and service are equal to or better than
that obtainable elsewhere or, subject to the foregoing, give that
consideration and where possible preference to other Australian suppliers
manufacturers and contractors; and
(e)
if notwithstanding the foregoing provisions of
this subclause a contract is to be let or an order is to be placed with other
than a Western Australian or Australian supplier, manufacturer or contractor,
give proper consideration and where possible preference to tenders
arrangements or proposals that include Australian participation where price,
quality, delivery and service are otherwise equal or better.
(2) Except as
otherwise agreed by the Minister the Joint Venturers shall in every contract
entered into with a third party for the supply of services labour works
materials plant equipment or supplies for the purposes of this Agreement
require as a condition thereof that such third party shall undertake the same
obligations as are referred to in subclause (1) and shall report to the Joint
Venturers concerning such third party’s implementation of that
condition.
(3) The Joint
Venturers shall submit a report to the Minister at quarterly intervals from
the Commencement Date to the date of the first submission of proposals under
clause 7 and thereafter at monthly intervals or such longer period as the
Minister determines concerning its implementation of the provisions of this
clause together with a copy of any report received by the Joint Venturers
pursuant to subclause (2) during that month or longer period as the case may
be PROVIDED THAT the Minister may agree that any such reports need not be
provided in respect of contracts of such kind or value as the Minister may
from time to time determine.
(4) The Joint
Venturers shall keep the Minister informed on a regular basis as determined by
the Minister from time to time or otherwise as required by the Minister during
the currency of this Agreement of any services (including any elements of the
project investigations design and management) and any works materials plant
equipment and supplies that it may be proposing to obtain from or have carried
out or permit to be obtained from or carried out outside Australia together
with its reasons therefor and shall as and when required by the Minister
consult with the Minister with respect thereto.
Leases, licences and easements
16. (1) The State
shall in accordance with the Ratifying Act and the Joint Venturers’
approved proposals grant to the Joint Venturers or arrange to have the
appropriate authority of the State grant to the Joint Venturers for such
periods and on such terms and conditions including rentals and renewal rights
as shall be reasonable having regard to the requirements of the Joint
Venturers and as are consistent with the terms of this Agreement and the
approved proposals leases and where applicable licences and easements under
the LA Act for all or any of the purposes of the Joint Venturers’
activities hereunder.
(2) The First long
term lease shall be for a term of 60 years from the date of approval of the
complete detailed proposals under clause 7. At least 5 years before expiry of
the First long term lease, the Minister and the Joint Venturers shall consult
with each other about whether and on what basis the State proposes to grant
any further tenure for industrial purposes over the land the subject of the
First long term lease and whether the Joint Venturers propose to continue the
Project. If the State proposes to grant any such further tenure and the Joint
Venturers propose to continue the Project, the State shall, subject to
subclause (6), offer such tenure to the Joint Venturers at least 2 years
before expiry of the First long term lease. The State shall not, during the 5
years after expiry of the First long term lease, offer or grant to any person
any tenure over the land that was the subject of the First long term lease
unless the Joint Venturers have first been offered and refused such tenure on
terms and conditions at least as favourable to them as the terms and
conditions of the tenure offered or granted to the other person.
(3) All other long
term land titles issued pursuant to approved proposals shall have terms which
expire at the same time as or, if agreed between the State and the Joint
Venturers, on a date before the expiry of the First long term lease and the
Joint Venturers shall also have rights of consultation and first refusal, as
contained in subclause (2), in respect of continued tenure over the areas the
subject of those titles. The Joint Venturers’ rights of first refusal
under subclauses (2) and (3) shall survive expiry of this Agreement due to
expiry of the First long term lease.
(4) The rental or
charges for the First long term lease and other land titles granted to the
Joint Venturers by the State shall, at the time of grant, be set at levels
commensurate with rentals and charges payable in respect of equivalent titles
granted for the purposes of other then existing large gas processing projects
in the Pilbara region which are not subject to Government agreements (as
defined in the Government Agreements Act 1979 ).
(5) The State’s
obligations under subclause (1) shall, subject to subclause (6), include:
(a)
at the cost of the Joint Venturers, exercising any
powers available to the State pursuant to the Barrow Island lease to enable
the grant of leases, easements and licences to the Joint Venturers; and
(b)
granting or arranging on terms and conditions to
be agreed between the State and the Joint Venturers the grant from time to
time of leases, easements or licences in respect of land then used by the
Joint Venturers for gas processing project purposes if so requested by the
Joint Venturers to enable continued use thereof after expiry or surrender of
the Barrow Island lease over the relevant area.
(6) The grant or offer
of any title or other tenure under subclauses (2), (3) or (4) shall be subject
to and may only be made in accordance with the Ratifying Act.
(7) If the Joint
Venturers obtain approval under Part 4 of the Ratifying Act to inject into the
Dupuy aquifer or other aquifers or depleted reservoirs carbon dioxide
recovered during gas processing, the State, subject to ongoing compliance by
the Joint Venturers with relevant regulatory requirements, shall not revoke,
restrict or vary, or permit revocation, restriction or variation of the
approval during the term of this Agreement except in accordance with the
approval.
Gas to mainland
17. (1) The Joint
Venturers shall reserve or procure the reservation of gas within the Title
Areas sufficient for the delivery of 2000 petajoules to the mainland. This
reservation shall reduce by the number of petajoules of natural gas from the
Project delivered to the mainland from time to time.
(2) The Joint
Venturers shall submit to the Minister by 31 December 2010 proposals for the
establishment of a Domgas Project by 31 December 2012, including design
features to enable the progressive expansion of the connection(s) to deliver
at least 300 terajoules (“TJ”) per day of natural gas. The
provisions of clause 10(3) shall apply to proposals under this clause.
(3) From the
Commencement Date until at least 300 TJ per day of natural gas is first
delivered from Barrow Island to domestic gas infrastructure on the mainland
the Joint Venturers shall:
(a)
actively and diligently undertake:
(i)
ongoing marketing of natural gas in Western Australia (including investigation
of proposals for using such gas as petrochemical feedstock); and
(ii)
design, engineering and other relevant activities in relation to establishment
of a Domgas Project; and
(b)
report progress on these matters to the Minister
on an annual basis or more often as may be required by the Minister.
(4) To assist in his
review of matters under subclause (3), the Minister may at any time after
lodgement of complete detailed proposals under clause 7(1) until at least 300
TJ per day of natural gas is first delivered from Barrow Island to domestic
gas infrastructure on the mainland, appoint at the cost of the Joint Venturers
(subject to an agreed budget) an agreed person who is independent of the
parties and does not have any conflict of interest with other companies
involved in the Western Australian domestic gas industry to advise him of the
extent to which the Joint Venturers have actively and diligently undertaken
ongoing marketing in accordance with subclause (3). The Joint Venturers will
provide on a confidential basis to such person, information on their marketing
activities including indicative prices, quantities and qualities of natural
gas offered for sale.
(5) The provisions of
clause 23 shall not apply to this clause.
(6) If the Joint
Venturers anticipate a need to extend the dates referred to in subclause (2),
or to further extend any later dates previously agreed by the Minister, they
shall consult with the Minister and then, at least 90 days after such
consultations commence, lodge a request with the Minister seeking such
extension or further extension.
(7) If the Joint
Venturers seek to extend the dates referred to in subclause (2), or to further
extend any later dates previously agreed by the Minister, on the grounds that
a Domgas Project is not then Commercially Viable, the request shall include
information that identifies the circumstances which would make a Domgas
Project Commercially Viable and address their likelihood of occurrence and
also include an analysis of the Commercial Viability of a Domgas Project,
including the assumptions, the methodology and the conclusions reached by the
Joint Venturers.
(8) If the Minister
receives a request under subclause (7), he is required to make a determination
of Commercial Viability under this clause. For that purpose, the Minister may,
or if so requested by the Joint Venturers shall, at the cost of the Joint
Venturers, appoint an independent expert (“ Independent Expert ”)
to prepare a report and recommendation to the Minister as to whether or not a
Domgas Project is then Commercially Viable. The election by the Minister or
the request by the Joint Venturers to appoint an Independent Expert shall be
made within 20 days of the Joint Venturers’ request for extension under
subclause (7). For the purposes of this sub-clause the following arrangements
will apply in relation to the Independent Expert:
(a)
the identity of the Independent Expert and the
terms of reference for the conduct of the Independent Expert’s work
(covering matters such as process and budgets, but not the tests of Commercial
Viability itself) are to be agreed between the Minister and the Joint
Venturers or, failing agreement within 50 days of the election or request to
appoint, determined by the President of the Institution of Engineers
(Australia);
(b)
the Independent Expert shall comply with the terms
of reference and enter into a confidentiality undertaking in favour of the
State and the Joint Venturers and any other relevant third parties if
appropriate;
(c)
the Joint Venturers and the State may make written
and, if so requested by the Independent Expert, oral submissions to the
Independent Expert in relation to Commercial Viability;
(d)
the Joint Venturers and the State shall use all
reasonable endeavours to make available to the Independent Expert all
information relevant to the matter and which the Independent Expert reasonably
requires in order to make a recommendation;
(e)
the Independent Expert must prepare and provide
the Minister with a report and recommendation as to Commercial Viability
within 80 days of his or her appointment or such other period as agreed to by
the parties;
(f)
the Minister shall give the Joint Venturers a copy
of the report and recommendation within 7 days of receipt from the Independent
Expert; and
(g)
the Independent Expert will act as an expert and
not as an arbitrator.
(9) The
Minister’s decision as to whether or not to grant an extension:
(a)
must be made within 90 days of request by the
Joint Venturers, or if an Independent Expert is appointed, within 50 days of
receipt of the Independent Expert’s report and recommendation;
(b)
must be based only on whether a Domgas Project is
then Commercially Viable, taking due regard of any recommendation of the
Independent Expert; and
(c)
shall not be subject to arbitration under clause
30.
(10) Unless the
Minister otherwise agrees the Joint Venturers shall not expand the Project
beyond that provided for in the complete detailed proposals approved under
clause 7 until proposals for a Domgas Project under subclause (2) have been
approved. The Minister in making his decision shall take into account such
matters including Commercial Viability as the Minister considers relevant. The
Minister’s decision shall not be subject to arbitration under clause 30.
(11) If the Minister
gives consent to an expansion under subclause (10), that subclause and this
subclause shall continue to apply mutatis mutandis to any subsequent expansion
of the Project.
(12) If the Joint
Venturers make a request under subclause (7) at least 200 days before the
deadline date which they are seeking to have extended but, upon occurrence of
that date, the Minister has not made a decision whether or not to extend, the
Joint Venturers will not be considered to be in default for failing to meet
the deadline at least until such decision has been made.
(13) For the purposes
of this clause:
(a)
“ Commercially Viable ”, in relation
to a Domgas Project means that a Domgas Project could be established in
conjunction with an LNG or other gas processing facility within the Gas
Processing Area on Barrow Island such that the commercial rates of return
(including recovery of all capital and operating costs, taxes, royalties and
other charges associated with the delivery of domestic gas) meet or exceed the
minimum return considered acceptable for this type of project by a reasonable
petroleum developer or by investors or lenders to this type of project.
“Commercial Viability” shall have a corresponding meaning.
(b)
Commercial Viability shall be determined for a
Domgas Project having regarding to prevailing market conditions, and using
proven technology readily available within the industry. Market conditions
include market access, contract duration, prices, certainty and timing of
market opportunities.
(c)
A Domgas Project can not be claimed to be not
Commercially Viable only because of an unwillingness by the Joint Venturers to
acquire or to apply proven technology, financial or human resources.
(d)
The cost of gas delivered to the inlet flange of
the Domgas Project shall be deemed to be the average landed cost at Barrow
Island of gas from the Title Areas assuming all the gas usage for gas
processing at that time plus 300 TJ per day of domestic gas.
(e)
Where Commercial Viability is dependent upon
combining a development with other third party developments or accessing third
party facilities or technology, a Domgas Project will not be considered to be
Commercially Viable if the Joint Venturers, using all reasonable endeavours,
are unable to complete an agreement with that party, on reasonable commercial
terms which provides an acceptable rate of return.
Processing and use of gas from other areas
18. (1) In addition to
gas and other petroleum from the Title Areas, the Joint Venturers may process
and use gas and other petroleum produced from the Greater Gorgon Area and the
Barrow Island lease provided they give the Minister prior notice.
(2) The Joint
Venturers may process and use gas and other petroleum produced from other
areas provided they have the prior consent of the Minister.
No discriminatory charges
19. Except as provided
in this Agreement the State shall not impose, nor shall it permit or authorise
any of its agencies or instrumentalities or any local government or other
authority of the State to impose, discriminatory taxes, rates or charges of
any nature whatsoever on or in respect of the titles, property or other
assets, products, materials or services used or produced by or through the
activities of the Joint Venturers in the conduct of their business hereunder
nor will the State take or permit to be taken by any such State authority any
other discriminatory action which would deprive the Joint Venturers of full
enjoyment of the rights granted or intended to be granted under this
Agreement.
Zoning
20. The State shall
ensure after consultation with the relevant local government that the lands
the subject of any leases, easements and licences granted to the Joint
Venturers under this Agreement will be and remain zoned for use or otherwise
protected during the currency of this Agreement so that the activities of the
Joint Venturers hereunder may be undertaken and carried out thereon without
any interference or interruption by the State or by any State agency or
instrumentality or by any local government or other authority of the State on
the ground that such activities are contrary to any zoning by-law, regulation
or order.
Assignment
21. (1) Subject to the
provisions of this clause the Joint Venturers or any of them may at any time
assign, mortgage, charge, sublet or dispose of to each other or to an
Associated Entity as of right, or to any other company or person with the
consent of the Minister (which consent shall not be unreasonably withheld) the
whole or any part of the rights of the Joint Venturers hereunder (including
their rights as the holders of any land title hereunder) and of the
obligations of the Joint Venturers hereunder subject however in the case of an
assignment, subletting or disposition to the assignee, sublessee or disponee
(as the case may be) executing in favour of the State (unless the Minister
otherwise determines) a deed of covenant in a form to be approved by the
Minister to comply with observe and perform the provisions hereof on the part
of the Joint Venturers to be complied with, observed or performed in regard to
the matter or matters the subject of such assignment, subletting or
disposition.
(2) Notwithstanding
anything contained in or anything done under or pursuant to subclause (1) the
Joint Venturers will at all times during the currency of this Agreement be and
remain liable for the due and punctual performance and observance of all the
covenants and agreements on their part contained in this Agreement PROVIDED
THAT the Minister may agree to release the Joint Venturers or any of them from
such liability where the Minister considers such release will not be contrary
to the interests of the State.
Variation
22. (1) The parties to
this Agreement may from time to time by agreement in writing add to,
substitute for, cancel or vary all or any of the provisions of this Agreement
for the purpose of more efficiently or satisfactorily implementing or
facilitating any of the objects of this Agreement. For the avoidance of doubt,
the parties may not agree to extend the Gas Processing Area beyond 300
hectares.
(2) The Minister shall
cause any agreement made pursuant to subclause (1) to be laid on the Table of
each House of Parliament within 12 sitting days next following its execution.
(3) Either House may,
within 12 sitting days of that House after the agreement has been laid before
it, pass a resolution disallowing the agreement, but if after the last day on
which the agreement might have been disallowed neither House has passed such a
resolution the agreement shall have effect from and after that last day.
Force majeure
23. Subject to clause 7(5) and clause 17(5), this
Agreement shall be deemed to be made subject to any delays in the performance
of the obligations under this Agreement and to the temporary suspension of
continuing obligations under this Agreement, except in either case any
obligations to pay monies to the State or any instrumentality of the State,
that may be caused by or arise from circumstances beyond the power and control
of the party responsible for the performance of those obligations including
(without limiting the generality of the foregoing) delays or any such
temporary suspension as aforesaid caused by or arising from act of God, force
majeure, earthquakes, floods, storms, tempest, washaways, fire (unless caused
by the actual fault or privity of the party responsible for such performance)
act of war, act of public enemies, riots, civil commotions, strikes, lockouts,
stoppages, restraint of labour or other similar acts (whether partial or
general), acts or omissions of the Commonwealth, shortages of labour or
essential materials, reasonable failure to secure contractors, delays of
contractors, factors due to overall world economic conditions or factors due
to action taken by or on behalf of any government or governmental authority
(other than the State or any authority of the State) or factors that could not
reasonably have been foreseen PROVIDED ALWAYS that the party whose performance
of obligations is affected by any of the said causes shall promptly give
notice to the other party or parties of the event or events and shall use its
best endeavours to minimise the effects of such causes as soon as possible
after the occurrence.
Power to extend periods
24. Notwithstanding any provision of this
Agreement, the Minister may at the request of the Joint Venturers from time to
time extend or further extend any period or vary or further vary any date
referred to in this Agreement for such period or to such later date as the
Minister thinks fit, whether or not the period to be extended has expired or
the date to be varied has passed.
Determination of Agreement
25. (1) If:
(a)
(i)
the Joint Venturers make default which the State considers material in
the due performance or observance of any of the covenants or obligations of
the Joint Venturers in this Agreement, or
(ii) the
Joint Venturers abandon or repudiate this Agreement or abandon or repudiate
their activities under this Agreement,
and such matter is not remedied within a period of 180 days after
notice is given by the State as provided in subclause (2) or if the matter is
referred to arbitration, then within the period mentioned in subclause (3); or
(b)
the Joint Venturers or any of them goes into
liquidation (other than a voluntary liquidation for the purpose of
reconstruction) and unless within 3 months from the date of such liquidation
the interest of the Joint Venturers is assigned to another Joint Venturer or
to an assignee approved by the Minister under clause 21;
the State may by
notice to the Joint Venturers determine this Agreement.
(2) The notice to be
given by the State to the Joint Venturers in terms of subclause (1)(a) shall
specify the nature of the default or other ground so entitling the State to
exercise such right of determination.
(3) (a)
If the Joint Venturers contest the alleged default
or other ground referred to in subclause (1)(a) the Joint Venturers shall
within 60 days after notice given by the State as provided in subclause (2)
refer the matter in dispute to arbitration.
(b)
If the question is decided against the Joint
Venturers, the Joint Venturers shall comply with the arbitration award within
a reasonable time to be fixed by that award PROVIDED THAT if the arbitrator
finds that there was a bona fide dispute and that the Joint Venturers were not
dilatory in pursuing the arbitration, the time for compliance with the
arbitration award shall not be less than 90 days from the date of such award.
(4) If the default
referred to in subclause (1)(a) has not been remedied within a period of 180
days after receipt of the notice referred to in that subclause or within the
time fixed by the arbitration award as aforesaid the State instead of
determining this Agreement as aforesaid because of such default may itself
remedy such default or cause the same to be remedied (for which purpose the
State by agents workmen or otherwise shall have full power to enter upon lands
occupied by the Joint Venturers and to make use of all plant, machinery,
equipment and installations thereon) and the actual costs and expenses
incurred by the State in remedying or causing to be remedied such default
shall be a debt payable by the Joint Venturers to the State on demand.
(5) For the purposes
of this clause, remediation of defaults may with the approval of the Minister
include one or both of payment of reasonable compensation and substantial
commencement of a reasonable program of remediation which will take longer
than 180 days provided that failure by the Joint Venturers to pay such
compensation or to complete such program shall itself constitute a default by
them under this Agreement.
Effect of cessation or determination of Agreement
26. On the cessation or determination of this
Agreement:
(a)
except as otherwise agreed by the Minister the rights of the Joint Venturers
to, in or under this Agreement shall thereupon cease and determine but without
prejudice to the liability of any of the parties hereto in respect of any
antecedent breach or default under this Agreement or in respect of any
guarantee or indemnity given under this Agreement;
(b) the
Joint Venturers shall forthwith pay to the State all money which may then have
become payable or accrued due; and
(c) save
as aforesaid and as otherwise provided in this Agreement none of the parties
shall have any claim against the other of them with respect to any matter or
thing in or arising out of this Agreement.
Indemnity
27. (1) Unless the
Minister and the Joint Venturers otherwise agree in writing, the Joint
Venturers shall indemnify and keep indemnified the State and its servants
agents and contractors in respect of all actions suits claims demands or costs
of third parties arising out of or in connection with any work carried out by
or on behalf of the Joint Venturers pursuant to this Agreement or relating to
their activities hereunder or arising out of or in connection with the
construction maintenance or use by the Joint Venturers or their servants
agents contractors or assignees of the Joint Venturers’ works or
services the subject of this Agreement or the plant apparatus or equipment
installed in connection therewith PROVIDED THAT subject to the provisions of
any relevant Act such indemnity will not apply in circumstances where the
State, its servants, agents, or contractors are negligent in carrying out work
for the Joint Venturers pursuant to this Agreement.
(2) The State shall
notify the Joint Venturers as soon as practicable of:
(a)
receipt of any written demand or notice or the
service or institution of Proceedings; or
(b)
becoming aware of the occurrence of any act or
omission which is likely to give rise to a Third Party Claim.
(3) If a Third Party
Claim is made, the State shall:
(a)
unless prohibited by law, provide the Joint
Venturers with all information, relevant to the Third Party Claim and any
Proceedings, that the Joint Venturers may reasonably require from time to
time;
(b)
receive and give due consideration to opinions,
requests and submissions from the Joint Venturers in relation the Third Party
Claim or Proceedings;
(c)
act with due regard to the interests of the Joint
Venturers;
(d)
if requested by the Joint Venturers and at the
Joint Venturers’ cost, join the Joint Venturers to any Proceedings;
(e)
involve the Joint Venturers in any negotiations
and discussions between the State and the third party relating to the Third
Party Claim or Proceedings;
(f)
not make any admission, offer, promise or payment
or compromise or settle the Third Party Claim or Proceedings without the
consent of the Joint Venturers;
(g)
at the cost of the Joint Venturers, co-operate
with the Joint Venturers in defending any Third Party Claim; and
(h)
not hinder the Joint Venturers, at their own cost,
from making any offer, promise or payment or compromising or settling the
Third Party Claim or Proceedings.
(4) Clause 30 applies
to any dispute under this clause.
(5) For the purposes
of this clause, the following words have the following meanings:
“Proceedings” means any civil, criminal, administrative or
arbitral proceedings, mediation or other form of dispute resolution (whether
or not held in conjunction with any civil, criminal, administrative or
arbitral proceedings) relating to a Third Party Claim;
“State”
includes the servants, agents and contractors of the State; and
“Third Party
Claim” means a claim by a third party against the State which could give
rise to a claim by the State for indemnity under this clause.
Subcontracting
28. Without affecting the liabilities of the
parties under this Agreement both the State and the Joint Venturers will have
the right from time to time to entrust to one or more Joint Venturers or to
third parties the carrying out of any portions of the activities which it is
or they are authorised or obliged to carry out hereunder.
No resumption
29. The State shall not during the currency hereof
without the consent of the Joint Venturers resume nor suffer nor permit to be
resumed by any State instrumentality or by any local or other authority of the
State any of the works installations plant equipment or other property for the
time being belonging to the Joint Venturers and the subject of or used for the
purpose of this Agreement nor any of the works on the lands the subject of any
lease, easement or licence granted to the Joint Venturers in terms of this
Agreement AND without such consent (which shall not be unreasonably withheld)
the State shall not create or grant or permit or suffer to be created or
granted by any instrumentality or authority of the State as aforesaid any road
right-of-way water right or easement of any nature or kind whatsoever over or
in respect of any such lands which may unduly prejudice or interfere with the
Joint Venturers’ operations hereunder.
Arbitration
30. (1) Any dispute or
difference between the State and the Joint Venturers arising out of or in
connection with this Agreement, the construction of this Agreement or as to
the rights duties or liabilities of either of them under this Agreement or as
to any matter to be agreed upon between them under this Agreement shall, in
default of agreement between them and in the absence of any provision in this
Agreement to the contrary, be referred to and settled by arbitration under the
provisions of the Commercial Arbitration Act 1985 and each party may be
represented before the arbitrator by a duly qualified legal practitioner or
other representative.
(2) Except where
otherwise provided in this Agreement, the provisions of this clause will not
apply to any case where the State, the Minister or any other Minister in the
Government of the State is by this Agreement given either expressly or
impliedly a discretionary power.
(3) The arbitrator of
any submission to arbitration under this Agreement is hereby empowered upon
the application of either the State or the Joint Venturers, to grant in the
name of the Minister any interim extension of any period or variation of any
date referred to herein which having regard to the circumstances may
reasonably be required in order to preserve the rights of that party or of the
parties to the arbitration and an award may in the name of the Minister grant
any further extension or variation for that purpose.
Consultation
31. The Joint Venturers shall during the currency
of this Agreement consult with and keep the State informed on a confidential
basis concerning any action that the Joint Venturers propose to take with any
third party (including the Commonwealth or any Commonwealth constituted
agency, authority, instrumentality or other body) which is likely to
significantly affect the overall interest of the State under this Agreement.
Stamp duty
32. (1) The State
shall exempt this Agreement from any stamp duty which but for the operation of
this clause would or might be assessed and chargeable on it.
(2) Any lease or
agreement for lease from the Minister for Lands under the LA Act shall be
subject to item 6(1) of the Third Schedule to the Stamp Act 1921 .
Notices
33. Any notice consent or other writing authorised
or required by this Agreement to be given or sent by the State to the Joint
Venturers will be deemed to have been duly given or sent if signed by the
Minister or by any senior officer of the Public Service of the State acting by
the direction of the Minister and forwarded by prepaid post or handed to the
Joint Venturers at their addresses as hereinbefore set forth or other address
in Western Australia nominated by the Joint Venturers to the Minister and by
the Joint Venturers to the State if signed on their behalf by any person or
persons authorised by the Joint Venturers or by their solicitors as notified
to the State from time to time and forwarded by prepaid post to or handed to
the Minister and except in the case of personal service any such notice
consent or writing shall be deemed to have been duly given or sent on the day
on which it would be delivered in the ordinary course of post.
Term of Agreement
34. Subject to the provisions of clauses 4(1),
8(5), 8(6), 25 and 26, this Agreement shall expire on the expiration or sooner
determination of the First long term lease.
Applicable law
35. This Agreement is to be interpreted according
to the law for the time being in force in the State of Western Australia.
IN WITNESS WHEREOF this Agreement has been executed by or on behalf of the
parties hereto the day and year first hereinbefore mentioned.
SIGNED by THE PREMIER THE HONOURABLE GEOFFREY IAN GALLOP MLA |
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Signature | ||
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C M Brown | | | ||
THE MINISTER FOR STATE DEVELOPMENT THE HONOURABLE CLIVE MORRIS BROWN MLA | | |||
EXECUTED by CHEVRONTEXACO |
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Director/ | |||
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Paul M Oen | |||
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Director | |||
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EXECUTED by TEXACO |
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Director/ | |||
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Paul M Oen | |||
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Director |
EXECUTED by MOBIL AUSTRALIA |
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Signature |
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A L Groves |
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Witness |
EXECUTED by SHELL |
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Christopher Gunner |
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Director |