1. At: COMMON LAW SOCIETY OF CAMEROON Limbe, Saturday, 3 rd October 200 9 Presented by: Emmanuel Tarh, (B.Sc. Geology, M.Sc. Mineral Exploration) Head of Geology Workstation EurOil Ltd

2. Outline Introduction: demystifying the oil sector Institutional and regulatory framework Exploration sequence Opportunities for lawyers Challenges Conclude

3. Introduction: Demystifying the oil sector: Wrong perception of sector is due to ignorance of laws Unbelievable fact: Volume for volume, (at present prices,) Crude Oil is cheaper than (mineral) Water! © alibaba.com

4. Institutional & Regulatory Framework Constitution Law N° 99/133 of 22 nd December 1999 (The Petroleum Code) replacing Decree 64-DF-162 of 26 May 1964 ( Exploration for Hydrocarbons in Cameroon) Decree N° 485/2000 of 30 th June 2000 modalities of application of Petroleum Code Law N° 2002/013 of 30 th December 2002: Gas Code Decree N° 2003/2034/pm of 4th September 2003: Terms and conditions for the implementation of the Gas Code Law 95/13 of 8 August 1995 Re Special Measures For The Promotion of Liquid Hydrocarbons In Marginal Fields Decree 81/225 Of 17 June 1981 Recreation of National Hydrocarbons Corporation (SNH). Decree N° 99/818/PM of 9th November 1999: Terms and conditions for installing /operating establishments classified as dangerous, unhealthy or obnoxious;

5. Institutional & Regulatory Fmwk (cont.) Law N° 96/12 of 5/8/96: Environmental Legislation Framework Decree N° 2005/577/PM of 23rd Feb. 2005: modalities of preparation of EIAs; public sensitizations, audiences Ministerial Order N° 70/MINEP of 22nd April 2005: list of operations subject to EIAs Ministerial Order N° 00001/MINEP of 13 th Feb. 2007 the modalities of preparation of the TORs Law N° 95/09 of 30 th January 1995: maritime and para- maritime sector activities Law N° 92/007 of 14/8/92: Labour Code International Conventions, ex. EITI

6. Contract signing and monitoring Licensing through restricted international tender OR unsolicited application PSC or Concession Agreements Cameroon is running a mixture of both regimes Old (pre PC) vs New (post PC) procedures Validity Periods for Permits: Renewals and Extensions 4+4(+0.5) (1.5) yrs Old vs New (3+2+2 (+0.5)+(1.5) yrs Contractual obligations (minimum work programme + corresponding Budget) TCMs and OCMs for Statutory monitoring

7. Concession vs PSC Terms Initial concessions1 st Gen. of PSCs Ownership of resourcesIOCState Royalties (surface/proportional) YesNo Operations managementIOCState Assets ownershipIOCState Assets depreciationYesNo Production ownershipIOCState Transfer of production ownership to IOC WellheadDelivery point IOC share of productionAllCost Oil + Profit Oil only Additional corporate taxYesNo

8. The Exploration sequence Obtain acreage / sign Petroleum contract Acquire seismic and interprete results Drill wildcat well(s)Drill appraisal well(s) in case of discoveryCertify reserves / Apply for Production Licence

9. Subdivisions of Petroleum Sector 1)Upstream: exploration and production (E&P) 2)Midstream 3) Downstream - refining - distribution - storage - marketing River Analogy: People live and subsist at various points on its banks, without any significant decrease in the volume of water.

10. Opportunities for Legal Practitioners legal statutes of company /drafting of MOA, statutory documents Negotiation and signing of contracts with Government Negotiation and signing of contracts with service providers signing of employment contracts insurance for accidents, deaths, etc retainership for various levels of legal advice litigation during disputes between partners

11. Challenges: Quote: "In the middle of every difficulty lies opportunity.“ Albert Einstein Demonstrate through the use of antithesis ( 2 sides of a coin): what one party sees as a challenge will be seen as an opportunity by the other Illustrate by a hypothetical example of arbitration of downtime or force majeure (Company X –Operator and Company Y-Contractor for a drilling contract)

12. Conclusion Cameroon’s Petroleum legislation tries to achieve equity for both State and investor. Workable for Oil and in process for gaseous hydrocarbons. Lawyers will always provide a necessary link at every point of the chain It is where other specialists end that lawyers (exclusively) begin plying their trade Remember: the most important thing when reading through contracts: THE FINE PRINT.

13. Thank You