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Sectors: Utilities
Governing Law: Malaysia
Effective Date: January 31, 2005
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EXHIBIT 10.5A


FPSO CHARTER CONTRACT

for


FPSO Hull No: 2284


between


Malaysia International Shipping Corporation Berhad


and


Murphy Sabah Oil Co., Ltd.

CONTRACT NUMBER

Murphy/Kikeh/K003A

TABLE OF CONTENTS


ARTICLE 1 DEFINITIONS AND INTERPRETATIONS 2

ARTICLE 2 FPSO TO BE CHARTERED 16

2.1

CHARTER PERIOD/CLASS 16

2.2

OWNER' S SERVICES 17

2.3

COMPLIANCE WITH LAWS 17

2.4

WORK AND SPECIFICATIONS/SAILAWAY DATE 17

2.5

CHARTERER' S PERSONNEL ON BOARD 19

2.6

FPSO NAME 19

2.7

FIRST OIL/OWNERSHIP 19

2.8

EXCLUSIVE USE 19

2.9

OWNER SUPPLIED ITEMS 19

ARTICLE 3 DELIVERY 19

3.1

FPSO COMMISSIONING; DELIVERY DATE 19

3.2

COMMENCEMENT OF HIRE 21

3.3

PROGRESS REPORTS 21

3.4

PERMITTED DELAY 23

3.5

DELAYED READY FOR RISERS DATE/CANCELLATION 23

3.6

ADJUSTMENTS TO READY FOR RISERS DATE 24

3.7

NO COMMERCIAL USE PRIOR TO DELIVERY 24

3.8

FPSO SITE 25

3.9

DELIVERABLES 25

3.10

OCIMF 26

ARTICLE 4 OWNER' S OBLIGATIONS 27

4.1

TIMELY PERFORMANCE 27

4.2

PERFORMANCE OF THE SERVICES 27

4.3

OWNER' S PERSONNEL 27

4.4

SAFETY OF OWNER' S AND CHARTERER' S PERSONNEL 28

4.5

ENGLISH COMMUNICATIONS 28

4.6

PERFORMANCE DATA 28

4.7

OWNER GUARANTEE 28

4.8

[INTENTIONALLY LEFT BLANK] 28

4.9

QUIET ENJOYMENT LETTER AND ESTOPPEL 28

4.10

FPSO DOCUMENTATION ON BOARD AT DELIVERY 29

4.12

EVIDENCE OF AUTHORIZATIONS, APPROVALS, ETC. 29

4.13

INSURANCE 29

4.14

OPERATING AREA PERMITS 29

ARTICLE 5 CHARTERER' S OBLIGATIONS 30

5.1

CHARTERER' S INSTRUCTIONS 30

5.2

GOVERNMENT APPROVALS 30

5.3

[INTENTIONALLY LEFT BLANK] 30

5.4

CHARTERER SUPPLIED ITEMS 30

ARTICLE 6 TERM OF CHARTER 30

6.1

EARLY TERMINATION 30

6.2

RENEWAL OPTION 30

6.3

EXTENDED TERM 30

6.4

LAY UP 31

6.5

RELOCATION OF FPSO 31

6.6

THIRD PARTY CRUDE OIL 31

ARTICLE 7 RELATIONSHIP OF THE PARTIES 31

7.1

OWNER GROUP PERSONNEL 31

7.2

NEITHER PARTY MAY BIND OTHER PARTY 31

7.3

NO CLAIMS AGAINST CO-VENTURERS 31

7.4

CONTROL OF FPSO 32

7.5

OWNER GROUP PERSONNEL' S WAGES 32


i 7.6

CHARTERER' S INSPECTION RIGHTS 32 7.7

HYDROCARBON DEPOSITS 32 7.8

ENVIRONMENTAL LAWS' WAIVER 32 7.9

CONTROL OF CRUDE OIL PRODUCTION 33

ARTICLE 8 UNDERTAKINGS, REPRESENTATIONS AND WARRANTIES 33 8.1

OWNER 33 8.2

OTHER REPRESENTATIONS AND UNDERTAKINGS OF OWNER 33 8.3

CHARTERER REPRESENTATIONS AND WARRANTIES 36 8.4

FPSO BUILDING, REFURBISHMENT AND CONVERSION CONTRACT 37

ARTICLE 9 COMPENSATION 38 9.1

HIRE RATE ACCRUAL 38 9.2

HIRE RATE ADJUSTMENT; DOWNTIME/SHUTDOWN; ANNUAL MAINTENANCE ALLOWANCE 39 9.3

PRE-PAYMENTS 42 9.4

INSURANCE COSTS AND REIMBURSABLES 44

ARTICLE 10 MANNER OF PAYMENT/SHUTDOWN 44 10.1

DATE AND MANNER; ACCRUED HIRE RATE; SHUTDOWN. 44 10.2

PAYMENT PERIOD 48 10.3

LATE PAYMENTS 48 10.4

NO WAIVER AS TO PAYMENTS 49 10.5

INVOICE DISPUTES 49 10.6

INVOICE CONTENTS 49 10.7

CHANGE OF OWNER BANK ACCOUNT 49

ARTICLE 11 LIENS 49 11.1

NO LIENS 49 11.2

LIENS ARISING BY OPERATION OF LAW 50 11.3

CHARTERER' S QUIET ENJOYMENT 50

ARTICLE 12 HEALTH, SAFETY AND ENVIRONMENTAL OBLIGATIONS 50 12.1

ENVIRONMENTAL LAWS 50 12.2

SAFETY LAWS 50 12.3

HELICOPTERS/SUPPLY BOATS 50

ARTICLE 13 TAXES/DUTIES 51 13.1

TAXES AND DUTIES 51 13.2

STATUTORY EXEMPTIONS 52 13.3

CHARTERER' S TAX INDEMNITY 52 13.4

OWNER' S TAX INDEMNITIES 52 13.5

CERTAIN MALAYSIAN TAX AND CUSTOMS DUTIES REQUIREMENTS 53 13.6

CHARTERER' S TAX INDEMNITIES 54 13.7

OTHER TAX INDEMNITIES 55 13.8

TAX SAVINGS 56

ARTICLE 14 CONFLICTS OF INTEREST; FEES; GOVERNMENT PAYMENTS 56 14.1

COMMISSIONS/FEES 56 14.2

CORRUPT PAYMENTS 56 14.3

ARTICLE 14 CLAIMS 57

ARTICLE 15 OPTION TO PURCHASE THE FPSO 57 15.1

OPTION 57 15.2

EXERCISE OF OPTION 57 15.3

TERMS AND CONDITIONS OF SALE 57 15.4

CLOSING OF SALE 57 15.5

ASSIGNMENT OF PURCHASE RIGHT 58

ARTICLE 16 PARTY REPRESENTATIVES 58 16.1

OWNER REPRESENTATIVE 58 16.2

CHARTERER REPRESENTATIVE 58

ARTICLE 17 TERMINATION 58 17.1

TERMINATION BY CHARTERER 58 17.2

EARLY TERMINATION PAYMENT AND EXPENSES 58 17.3

CHARTERER' S OTHER GENERAL TERMINATION RIGHTS 59 17.4

OWNER' S TERMINATION RIGHTS 61 17.5

PARTIES' OTHER TERMINATION OR CANCELLATION RIGHTS. 62


ii 17.6

OWNER' S MATERIAL BREACH - PROCEDURES. 62 17.7

TERMINATION WITHOUT PREJUDICE 62 17.8

SPECIFIC PERFORMANCE. 63 17.9

FPSO OPERATING AND MAINTENANCE AGREEMENT. 63

ARTICLE 18 MAINTENANCE, REPAIRS AND DRYDOCKING 63 18.1

OBLIGATIONS 63 18.2

OTHER REPAIRS, INSPECTIONS, FPSO CLASSIFICATION CERTIFICATES, ETC. 63 18.3

DRYDOCKING DUE TO OWNER BREACH, ETC. 64 18.4

[INTENTIONALLY LEFT BLANK.] 67 18.5

FPSO OPERATING AND MAINTENANCE AGREEMENT 67

ARTICLE 19 REPLACEMENT EQUIPMENT OR MACHINERY 67 19.1

EQUIPMENT REPLACEMENT 67 19.2

FPSO ASSISTANCE 67

ARTICLE 20 REQUISITION OR SEIZURE 68 20.1

GOVERNMENT ACTION 68 20.2

INDEMNIFICATION 68

ARTICLE 21 ACTUAL OR CONSTRUCTIVE TOTAL LOSS 69 21.1

TOTAL LOSS TERMINATION 69 21.2

REMOVAL OF WRECK AND/OR DEBRIS 69 21.3

MITIGATION OF EXPOSURE; REIMBURSEMENT 69 21.4

REPAIRS 69

ARTICLE 22 AUDIT 70

ARTICLE 23 VARIATIONS 70 23.1

GENERALLY 70 23.2

CHARTERER' S REQUEST FOR VARIATION 71 23.3

VARIATION PROPOSAL PROCEDURES 71 23.4

OWNER' S VARIATION PROPOSAL; VARIATION ORDER 71 23.5

INCREASE IN COMPENSATION 72 23.6

VARIATION ORDER COSTS 72 23.7

IMPLEMENTATION OF VARIATION ORDER 72 23.8

WRITTEN AUTHORIZATION 72 23.9

ALTERATION AND INSTALLATION OF ADDITIONAL EQUIPMENT 72 23.10

CHARTERER' S RIGHT OF AUDIT 73 23.11

VARIATION ORDER PROCEDURES AND FORMATS 73

ARTICLE 24 ASSIGNMENT AND SUBCONTRACTING 73 24.1

ASSIGNMENT BY CHARTERER 73 24.2

CHARTERER' S OBLIGATIONS UPON ASSIGNMENT 74 24.3

ASSIGNMENT BY OWNER 74 24.4

TRANSFER OF THE FPSO; ASSIGNMENT TO AFFILIATE OF OWNER 74 24.5

NOVATION AGREEMENT 74 24.6

OWNER' S SUBCONTRACT RIGHTS 74 24.7

CHARTERER' S RIGHT TO REVIEW SUBCONTRACTS 75 24.8

BREACH OF CHARTER BY SUBCONTRACTOR OR CONTRACTOR 75 24.9

CHARTERER' S SUB-CHARTER RIGHTS 75

ARTICLE 25 REDELIVERY OF FPSO 75 25.1

REDELIVERY 75 25.2

DEMOBILIZATION COSTS 75 25.3

CRUDE OIL AND PROCESSED OIL 75 25.4

CHARTERER SUPPLIED ITEMS 76

ARTICLE 26 FORCE MAJEURE 76 26.1

FORCE MAJEURE 76 26.2

HIRE RATE DURING FORCE MAJEURE 76 26.3

CHARTERER' S FORCE MAJEURE TERMINATION RIGHT 77 26.4

OWNER' S FORCE MAJEURE TERMINATION RIGHT. 77

ARTICLE 27 PATENT INDEMNIFICATION 78 27.1

OWNER' S INDEMNIFICATION OBLIGATION 78 27.2

CHARTERER' S INDEMNIFICATION OBLIGATION 78 27.3

INTELLECTUAL PROPERTY OWNERSHIP AND LICENSE 78 27.4

IMPROPER USE 78


iii

ARTICLE 28 INDEMNITIES AND LIABILITIES 79

28.1

PRIOR TO DELIVERY DATE 78

28.2

ON AND AFTER THE DELIVERY DATE AND DURING THE TERM 79

28.3

POLLUTION 81

28.4

WRECK REMOVAL 82

28.5

NO CONSEQUENTIAL DAMAGES 82

28.6

THIRD PARTY LIABILITY 82

28.7

BOTH-TO-BLAME COLLISION CLAUSE 84

28.8

GENERAL AVERAGE 84

28.9

SURVIVAL OF INDEMNITIES 84

28.10

INDEMNITIES ABSOLUTE 84

28.11

INDEMNITIES COVERED BY INSURANCE 85

ARTICLE 29 INSURANCES 85

29.1

GENERAL 85

29.2

POLICY PROVISIONS WITH RESPECT TO ALL POLICIES AND COVERAGES. 86

29.3

INSURANCES AND COVERAGES 87

29.4

OTHER REQUIRED INSURANCE PROVISIONS, LIMITS AND COVERAGES 90

29.5

INSURANCES UNDER THE FPSO OPERATING AND MAINTENANCE AGREEMENT; NO DUPLICATION 91

29.6

INSURANCE PROCEEDS. 91

ARTICLE 30 NOTICES 91

ARTICLE 31 APPLICABLE LAW AND ARBITRATION 92

31.1

GOVERNING LAW 92

31.2

DISPUTE RESOLUTION 92

31.3

SMALL DISPUTES 94

31.4

[INTENTIONALLY BLANK] 94

31.5

ARBITRATION PROVISIONS SURVIVE 94

ARTICLE 32 CONFIDENTIAL INFORMATION 94

32.1

CONFIDENTIAL DATA 94

32.2

PRESS RELEASES; ANNOUNCEMENTS 96

32.3

CONFIDENTIALITY PROVISIONS SURVIVAL 96

ARTICLE 33 ENTIRE AGREEMENT 96

ARTICLE 34 SURVIVAL 96

ARTICLE 35 RISK ZONE 96

35.1

DANGEROUS LOCATION 96

35.2

RISK ZONE PROCEDURES 97

ARTICLE 36 ENGLISH LANGUAGE AND INTERPRETATION 97

36.1

COMMUNICATIONS 97

36.2

HEADINGS 97

36.3

SINGULAR; PLURAL 97

36.4

GENDER 97

ARTICLE 37 SUCCESSORS AND ASSIGNS 98

ARTICLE 38 WAIVER; CUMULATIVE REMEDIES 98

38.1

NO WAIVER 98

38.2

WAIVER IN WRITING 98

38.3

POWERS CUMULATIVE 98

ARTICLE 39 PARTIAL INVALIDITY 98

ARTICLE 40 MODIFICATIONS 98

ARTICLE 41 EXECUTION BY FACSIMILE AND/OR COUNTERPARTS 99

41.1

FACSIMILE SIGNATURES 99

41.2

COUNTERPARTS 99

ARTICLE 42 RIGHTS OF THIRD PARTIES 99

ARTICLE 43 CROSS REFERENCES 99

ARTICLE 44 MISCELLANEOUS 99

44.1

GENERAL PROVISIONS 99


iv 44.2 GENERAL SURVIVAL 99

44.3 HOST COUNTRY REQUIREMENTS 100

44.4 WAIVER OF SOVEREIGN IMMUNITY 101

44.5 FTL. 101


APPENDICES


1


v

This FPSO Charter Contract (together with all Appendices attached hereto, this " Charter" ) is made as of the 31st day of January, 2005.


BETWEEN:

Murphy Sabah Oil Co., Ltd., a company incorporated under the laws of The Bahamas and having its place of business at the address set forth in Article 30 hereof (referred to as " Charterer" );

and


Malaysia International Shipping Corporation Berhad , a Malaysian company with its registered office at the address set forth in Article 30 hereof (referred to as " Owner" ).

This Charter consists of this Charter document and Appendices A through M attached hereto and made a part hereof for all purposes.


RECITALS :

(i) Charterer is engaged in oil and gas exploration activities offshore Sabah, Malaysia pursuant to the Production Sharing Contract entered into with Petronas (hereinafter defined);

(ii) Charterer desires to charter from Owner the use of the " FPSO" (as hereinafter defined) at the " Field" (as hereinafter defined) located offshore Sabah, Malaysia or such other Field offshore Malaysia or other reasonable location determined by Charterer from time to time;

(iii) Charterer is desirous of having the Owner make certain modifications to a very large crude oil carrier to convert it into an FPSO in accordance with the Specifications to render it suitable as a FPSO for use at the Field prior to delivery;

(iv) Owner is willing to cause such modifications to be made and to charter the use of the FPSO to Charterer;

(v) As a condition of entering into this Charter, Charterer requires " Owner Guarantor" (as hereinafter defined) to execute and deliver to Charterer the " Owner Guarantee" (as hereinafter defined) which guarantees Owner' s obligations under this Charter;

(vi) As and from the Delivery Date and thereafter throughout the Term, Charterer shall, unless otherwise provided herein, be responsible for the manning, management, operation, maintenance and supervision associated with the FPSO; and

(vii) Concurrently with the execution and delivery of this Charter and of even date herewith, Contractor and Charterer are entering into the FPSO Operating and Maintenance Agreement (hereinafter defined).


1

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth below, IT IS AGREED as follows:


ARTICLE 1 DEFINITIONS AND INTERPRETATIONS

The following terms shall have the meaning set forth below for the purposes of this Charter:

Actual Flow Rate Has the meaning given to it in Clause 9.2(ii). Accrued Hire Rate The per Day sum (expressed in U.S. dollars) of (i) Daily Accrued Reduced Hire Rate which accrued during both the First Reduced Hire Rate Period and the Second Reduced Hire Rate Period, plus (ii) Daily Accrued Full Hire Rate which accrued during the Full Hire Rate Accrual Period, which is payable, on a Day by Day basis, pursuant to the provisions of Article 10. Additional Equipment Equipment for the FPSO that is provided and owned exclusively by Charterer, including but not limited to Charterer Supplied Items (except the Fluid Transfer Lines, DTU Riser Facilities and Umbilicals), Subsea Related Equipment and Charterer' s Communications Equipment, but expressly excluding the FPSO. Affiliate(s) In relation to any Person, any entity (incorporated or unincorporated) that controls that Person, is controlled by that Person or is controlled by another entity which also controls that Person, and, " control" and " controlled" means a shareholding (or voting right) of greater than fifty percent (50%) of another entity, provided that any joint venture entity (whether incorporated or unincorporated) between any entity or joint venture in which both Owner and IHC, Inc. S.A., or their Affiliates, has any interest shall be deemed to be an Affiliate of Owner irrespective of the percentage interest therein held by either Owner or IHC, Inc. S.A. Agreed Interest Rate A floating interest rate, compounded monthly, equal to two percentage points (2%) per annum above LIBOR. Annual Maintenance Allowance The time allowed for maintenance and/or repair as set forth in Clause 5.4 of the FPSO Operating and Maintenance Agreement during which the Hire Rate shall be payable regardless of any Shutdown, which is calculated with respect to a percentage equal to of the total time (in hours) that exists in the Primary Term, and that exists in any Secondary Term, and which is allocated by Owner with the agreement of Charterer on an annual basis in advance of each contract year of the Term. Annual Maintenance Allowance Schedule The annual written budgeted schedule of Contractor' s proposed Annual Maintenance Allowance hours to be allocated to the immediately following contract year, which Owner and Contractor present to Charterer for its approval pursuant to the provisions of Clauses 5.4 (ii) and 5.4(iii) of the FPSO Maintenance and Operating Agreement.


2 Arrival Date The Day on which the FPSO arrives at the FPSO Site after its initial voyage from the shore-based last location where work on the FPSO is being performed by the Builder. Best Efforts All efforts having the highest likelihood of accomplishing their intended purpose in light of (i) the ability of the Party charged with exercising such efforts to take such action and (ii) the justifiable expectations of the Party to which the benefit of such efforts will accrue, if successful. Builder Malaysia Shipyard and Engineering Sdn. Bhd. or other ship builder or contractor performing the FPSO Work with respect to the Building Contract and in accordance with the Specifications, to make the FPSO ready for delivery on the Delivery Date. Builder' s Documents Register A register of all drawings, building guidelines, procedures and technical documents compiled by Owner, Builder and all Subcontractors with respect to the FPSO and Additional Equipment and delivered to and approved by Charterer pursuant to the provisions of Clause 8.4(ii). Building Contract The contract for the construction, refurbishment, conversion and upgrade of the FPSO, and installation of the Additional Equipment and all other equipment necessary to make the FPSO ready for delivery on the Delivery Date between Owner and Builder, a true copy of which will be delivered to Charterer within thirty (30) Days after the Contract Date, provided however that all commercial pricing information will be deleted from such copy delivered to Charterer. Business Day Means a Day on which banks are open for business in Malaysia. Certificate of Final Acceptance Written notification from Owner, and executed by Charterer showing Charterer' s acceptance, specifying that: (i) the FPSO has successfully undergone FPSO Commissioning in compliance with the Specifications, which shall specify the date and time of the Successful Run Completion Date, evidencing completion of FPSO Commissioning; (ii) the FPSO is classed with the final FPSO Classification as required hereunder; (iii) the Delivery Date has occurred; and (iv) Owner has received a certified copy of the final FPSO Classification certificate issued by the Classification Society confirming that the FPSO meets the requirements of (i) and (ii) above, with no requirements or recommendations which would impede, restrict or prevent the FPSO from conducting Commercial Operations. Charter This Charter and all of the Appendices hereto, all of which are attached hereto and made a part hereof for all purposes. Charterer Group Any or all of Charterer, its respective Affiliates, any Co-Venturer, its and their contractors and their subcontractors, and the Personnel


3 of any entity mentioned above; but excluding Owner Group and excluding Petronas or any other Government entity or instrumentality party to the PSC (other than Petronas Carigali SDN Bhd., which shall be considered part of Charterer Group). Charterer Guarantee The guarantee of Charterer' s performance under this Charter given by Charterer Guarantor, the form of which is attached as Appendix G-2 , and referenced in Clause 5.5. Charterer Guarantor . Charterer' s Notice of Readiness Hydrocarbons Written notice from Charterer, after it has received Owner' s Notice of Readiness FPSO Commissioning, that Charterer is ready to deliver hydrocarbons and commence FPSO Commissioning. Charterer Property All equipment, property, facilities, vessels, if any, consumables, and materials of Charterer Group (whether owned by Charterer Group or owned by or leased or rented from Third Parties), including without limitation, the Additional Equipment, the Wells, Christmas Tree, Riser Facilities and Umbilicals, and the Crude Oil and Processed Oil on board the FPSO, regardless of whether the Crude Oil and Processed Oil is owned by Charterer and the Co-Venturers, the Government or a Third Party, the Fluid Transfer Lines and DTU. Charterer Representative Such Person as Charterer shall designate from time to time (or any other member of Charterer Group appointed by Charterer or such Person to be such Person' s alternate), who shall carry out technical and administrative co-ordination of the duties of Charterer as set out in Clause 16.2 and who shall be entitled to be and remain on the FPSO at any time. Charterer Supplied Items Such information, services and equipment for which Charterer shall have the responsibility to provide to Owner as set forth in Appendix B , Part B and Appendix E or elsewhere in this Charter Charterer' s Communications Equipment Certain equipment owned by Charterer to be installed by Owner for ship to shore communications, satellite transmissions, fax transmissions and other similar communications equipment required by Charterer for communicating and transferring voice, videos, data and information. Christmas Tree The system of pipes, valves, gauges and related equipment, located on and around the DTU or attached to any subsea wellheads, that controls the flow of Crude Oil, gas and other hydrocarbons produced from, and the flow of water and gas injection to, the Wells. Claims All claims, losses, liabilities, suits, demands, judgments, and causes of action of any kind (including, but not limited to, those for bodily


4 injury, illness, loss of consortium, death, property damage, loss or destruction, and wrongful termination of employment) in any way arising under or relating (directly or indirectly) to: (i) this Charter; (ii) any subcontract or other agreement executed in connection herewith; or (iii) the operation of the FPSO or any helicopter, tanker, shuttle tanker, supply or crew boat or other vessel used in connection with the Services or with respect to the operations of the FPSO, including, without limitation, claims for any and all damages (including, without limitation, punitive and exemplary damages), expenses, bonding fees, penalties, assessments, costs (including, without limitation, attorneys' fees and court costs), and losses, and whether asserted by either Party or an injured Person (as to personal injury or property damage) or such Person' s spouse, heirs, survivors or legal representative, or those Persons or entities entitled to assert claims on account of bodily injury, illness, loss of consortium or support, death, or damage to or loss of personal property, and irrespective of whether any of same arises in contract, tort or strict liability. Classification Society American Bureau of Shipping (" ABS" ) or another equivalent body agreed by the Parties in writing. Closing Shall have the meaning given in Clause 15.4 with respect to Charterer' s option to purchase the FPSO. Co-Venturer Any party to the PSC other than Petronas. Commercial Operations The production, receiving, storage and processing of Crude Oil, processing and compression of natural gas, injection of water into the Wells and storing and off-loading Processed Oil in accordance with the Specifications and the Classification Society' s FPSO Classification certificate. Contract Date The date of this Charter set forth in the first paragraph of this Charter above. Contractor The Person (as agreed in writing by Charterer) who shall perform the O&M Services for the FPSO under the FPSO Operating and Maintenance Agreement. Crude Oil Liquid petroleum and other hydrocarbons produced at the wellhead in a liquid state at atmospheric pressure. Daily Accrued Full Hire Rate The Hire Rate per Day which accrues on a Day by Day basis during the Full Hire Rate Accrual Period, and which shall be paid on a Day by Day basis after the Hire Rate Payment Commencement Date in the manner set forth in Clause 10.1. Daily Accrued Reduced Hire Rate The U.S. dollar amount per Day equal to seventy five percent (75%) of the Hire Rate which accrues on a Day by Day basis during the First Reduced Hire Rate Period and the Second Reduced Hire


5 Rate Period, if any, and which shall be paid on a Day by Day basis on and after the Hire Rate Payment Commencement Date in the manner set forth in Clause 10.1. Day or day The period commencing at 00.01 hours of any day and ending at 24.00 hours on the same day. Delivery Date Has the meaning set forth in Clause 3.1(v). Demobilization Costs The Owner Group' s documented costs required to demobilize the FPSO to a nearby location in Malaysia, as more particularly described and payable as set out in Appendix B , Part A , Section 2 . Demobilization Date The Day on which the FPSO has been disconnected from the Riser Facilities at the end of the Term and is ready for tow to the agreed place of re-delivery with the intent to cease operation hereunder. Downtime Any time pursuant to the provisions of this Charter or the FPSO Operating and Maintenance Agreement commencing at and during which there is a reduction, restriction, suspension or complete cessation of the flow of Crude Oil to the FPSO for any reason, including but not limited to, (i) a reduction or cessation of water injection or gas purification or compression which causes Charterer to order a reduction, restriction, suspension or cessation of Crude Oil production or processing, or (ii) subject to the provisions of Clause 9.2, the FPSO being unable to produce, receive, process, store or offload (or any combination of the foregoing) Crude Oil or Processed Oil (as the case may be) in compliance with the Specifications and this Charter or the FPSO Operating and Maintenance Agreement; and such reduction, restriction, suspension or cessation is not due to: (a) the well stream being outside the parameters set forth in the Specifications; (b) the offloading vessel (for any reason not attributable to Owner Group or the FPSO) being unable to receive the Processed Oil; (c) any malfunction or operational default of Charterer' s Fluid Transfer Lines, DTU, Charterer' s subsea equipment, Riser Facilities, Wells and Umbilicals or Additional Equipment (other than, with respect to the Additional Equipment, any malfunction or operational default due to the default of, or breach by, any of Owner Group of any obligations under this Charter or the FPSO Operating and Maintenance Agreement); (d) any Sole Fault of Charterer Group; or (e) an event of Force Majeure. DTU The surface facility attached to the mudline used to support the Christmas Tree and Wells, which is located near to the FPSO Site and is used to control the flow of hydrocarbons from the casinghead. Early Payment Commencement Date The sixty-first (61st) Day after the Full Hire Rate Accrual Date (or if such day is not a
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