* [Reprinted from an English translation prepared by the American Embassy in Djakarta. The explanatory memorandum was published in the Appendix to State Gazette No. 2599.]

* [This contract was signed on September 25, 1963. P. T. Shell Indonesia, P. T. Caltex Pacific Indonesia, and California Asiatic Oil Company and Texaco Overseas Petroleum Company signed similar contracts on the same date. Indonesia Law No. 14 of November 28, 1963, prpmulgating these contracts appears at page 243. The Heads of Agreement to the contracts signed at Tokyo on June 1, 1963, are reprinted at 3 International Legal Materials 81 (1964).

[The contract of P. T. Stanvac Indonesia, jointly owned by Standard Oil Company (New Jersey) and Socony Mobil Oil Company, Inc. (hereafter “PTSI“) is here reprinted in full (except for exhibits giving the geographical boundaries of the areas) from a text provided by the Department of Basic Industry and Mining of the Republic of Indonesia. The contracts concluded by P. T. Shell Indonesia (hereafter “Shell“), P. T. Caltex Pacific Indonesia (hereafter “CPI“) (jointly owned by Standard Oil Company of California and Texaco, Inc.), and California Asiatic Oil Company and Texaco Overseas Petroleum Company (hereafter “Calasiatic-Topco“) are very similar. The footnotes, prepared by the editors of International Legal Materials, indicate the principal differences.

[Basically the contracts provide for the return by the companies to the Indonesian Government of the areas formerly held under concession, with the Government granting to the companies rights to exploit the areas as contractors for the Government. The contracts contain detailed provisions regarding profit-sharing, taxes, and the eventual acquisition by the Government of the companies’ assets. The PTSI and Shell contracts have provisions relating to refining as well as crude oil production while the CPI and Calasiatic-Topco contracts do not. The CPI contract differs from the other contracts principally in its provisions for the sale of its marketing assets to the Government and the succession of CPI to an earlier enterprise. The Calasiatic-Topco contract contains special provisions to permit the actual operations under the contract to be carried out by CPI or another subcontractor. The Calasiatic-Topco contract also contains special provisions throughout to define which rights and obligations belong to these two companies jointly and which belong to them separately, but these provisions have not been noted. Difference's in the numbering of articles and other editorial variations have not been noted. All of the contracts are available for study in the Library of the American Society of International Law, 2223 Massachusetts Avenue, N.W., Washington 8, D.C.]

1 [The Calasiatic-Topco contract adds “pursuant to Law No. 44/1960.“]

2 [The Calasiatic-Topco contract omits this paragraph.]

3 [The Calasiatic-Topco contract omits this paragraph. This paragraph in the CPI contract reads:

“WHEREAS, CPI is willing to procure that the mining rights of mineral oil and gas of N.V. Caltex Pacific Oil Company (hereinafter called ‘CPOC’) with respect to areas in Central Sumatra designated as the “ROKAN I BLOCK’ and ‘ROKAN III BLOCK1 will be returned to the Government of the Republic of Indonesia (hereinafter referred to as ‘the Government’) for inclusion in the area over which an authority to mine mineral oil and gas will be granted to PN, so that the continued development of those areas will take place in conformity with Law No. 44/1960 with CPI conducting the operations as contractor for PN;“]

4 [In the Shell, CPI, and Calasiatic-Topco contracts the area geographical descriptions here and throughout the contracts are different. None of the exhibits has been reprinted.]

5 [The CPI contract omits this paragraph. In the Calasiatic-Topco contract the paragraph reads: “WHEREAS, the Government of the Republic of Indonesia (hereinafter referred to as ‘the Government’) has granted to PN pursuant to Law No. 44/1960, for a period of time sufficient for the discharge of all the rights and obligations under this Contract, an irrevocable authority to mine mineral oil and gas covering certain areas in Central Sumatra described in Exhibits 1 and 2 attached hereto (hereinafter collectively referred to as ‘the Area’);“]

6 [The Calasiatic-Topco contract reads “are prepared” in place of “has agreed.“]

7 [The Calasiatic-Topco contract omits this article.]

8 [In the CPI contract this paragraph reads: “a. CPI will procure that all rights of CPOC to mine mineral oil and gas in Indonesia will be returned to the Government, such return to be effective on the date this Contract becomes effective in accordance with Article 27.“]

9 [The CPI contract omits the remainder of the words in parenthesis.]

10 [The Shell contract reads “New Areas” in place of “New Area,” and “Old Areas“ in place of “Old Area” in this article.]

11 [In the CPI contract this provision reads: “CPI shall also have the right to sell and dispose of crude oil and products for export, to have crude oil refined in Indonesia for export (not interfering with refining for domestic consumption), and to perform all related activities appropriate to further such operations, and all other operations and activities specified in this Contract or .appropriate for the discharge of CPI's obligations hereunder. “

[In the Calasiatic-Topco contract this provision reads: “CALASIATIC and TOPCO shall each have the right, either directly or through the intermediary of such others as either may designate, to sell and dispose of crude oil and products for export, to have crude oil refined in Indonesia for export (not interfering with refining for domestic consumption), and to perform all related activities appropriate to further such operations, and all other operations and activities specified herein or appropriate for the discharge of CONTRACTORS' obligations hereunder.“]

12 [The Calasiatic-Topco contract adds:

“Without in any way detracting from CONTRACTORS’ responsibilities and obligations hereunder, they shall have the right to designate P.T. Caltex Pacific Indonesia (hereinafter referred to as ‘CPI’), or any other affiliated company established in Indonesia, to perform the actual operations hereunder as operator on their behalf, provided such operator shall act for this purpose strictly on a non-profit basis.“]

13 [The CPI contract at this point adds the following article:

“Article 3. TRANSFER OF ENTERPRISE.

“a. Subject to full disclosure to the Directorate of Oil and Gas and PN, for the purpose of performing its obligations under this Contract, CPI will acquire at book value, and will procure the transfer to CPI of, all the rights, assets and liabilities of CPOC, which rights, assets and liabilities shall be the same in CPI as they were in CPOC, except that the mining rights of CPI shall be based on a contractor status pursuant to this Contract. It is understood and agreed that the terms ‘rights’ and ‘assets’ may not be interpreted or construed to include any property or titular interest in the naturaj. resources, crude oil, and gas in the ground in Indonesia at the time of the transfer, or products derived therefrom, such natural resources being the property of the Government on behalf of the people of Indonesia. Such assets shall be represented partly as share investment and partly as profits after taxes (which part represented as profits after taxes shall not exceed the profits after taxes which have been previously earned by CPOC but have not yet been paid out to shareholders).

“b. The acquisition and transfer of assets and liabilities to CPI pursuant to this Article 3, the issuance by CPI of shares for the resulting increase in share investment, and the liquidation of CPOC shall be free of all taxes, duties and levies in Indonesia,.and the Government and PN shall indemnify CPI, CPOC and their shareholders against any such taxes. CPI, subject to Article 12 [Article 11 of PTSI contract], shall have the right to retain outside Indonesia, and to use for reinvestments in Indonesia, financing of customers, repaying loans, paying dividends, making loans, et cetera, all foreign exchange thus acquired or realized through conversion to cash of any of such acquired assets.

“c. CPI shall also take over all personnel employed by CPOC at the time of transfer of assets and liabilities pursuant to this Article 3. For the purposes of any employee benefits based on length of service, including pensions, full recognition will be given to the length of service of such personnel in the employ of CPOC, and for all purposes the continuity of service of such CPOC personnel transferred to CPI shall be fully recognized.“]

14 [in the CPI contract this article reads:

“Article 4. AREA AND TERM.

“a. Area: The area covered by this Contract is the Area as specified in paragraph b of Article 1. If CPI should find in the Area one or more structures or traps of a type which may contain mineral oil or gas and which extend beyond the boundaries of the Area, PN shall request the Government to grant to PN an enlargement of its authority to mine to include all of such structures or traps; if such enlargement is granted by the Government, the Area covered by this Contract shall thereby be automatically extended to cover the area of such enlargement for all purposes of this Contract.

“b. Term: The rights and obligations of CPI in respect of the Area shall continue for twenty (20) years from the date the ratification of this Contract is promulgated; however, it is understood and agreed that at least two (2) years prior to the end of such twenty (20) years the Government and PN will give sympathetic consideration to extending the term in recognition of the requirements for appropriate economic recovery from the Area.“

[In the Calasiatic-Topco contract this article reads:

“Article 2. AREA AND TERM.

“a. The area mentioned in Article 1 of this Contract [Article 2 of PTSI contract] and referred to herein as ‘the Area’ shall consist of certain areas'for which PN holds a valid authority to mine mineral oil and gas granted pursuant to Law No. 44/1960, which areas are designated as ‘Area A', ‘Area B’ and ‘Area C and described in Exhibits 1 and 2 attached hereto and made part of this Contract.

“b. The rights and obligations of CONTRACTORS in respect to the Area shall continue for thirty (30) years from the date the ratification of this Contract is promulgated.

“c. By the end of five (5) years following the date the ratification of this Contract is promulgated, CONTRACTORS shall exclude from this Contract one or more portions of the Area, which exclusion shall total twenty-five percent (25%) thereof. By the end of ten (10) years following the date the ratification of this Contract is promulgated, CONTRACTORS shall exclude from this Contract one or more additional portions of the Area, which exclusions shall total a second twenty-five percent (25%) of the Area as it exists at the beginning of the term hereof, leaving fifty percent (50%) of the Area as it exists at the beginning of the term hereof within the scope of this Contract. After such exclusions, the term ‘the Area’ shall refer to all of the areas remaining within the scope of this Contract. CONTRACTORS shall determine, and shall give PN written notice of, the size, shape and location of the portions of the Area as it exists at the beginning of the term hereof to be thus excluded from this Contract. Such portions shall, so far as reasonably possible, each be of sufficient size and convenient shape, taking into account contiguous areas not then covered by a contract of work between any State Enterprise and any oil mining contractor other than CALASIATIC or TOPCO or an affiliate, to enable oil mining operations to be conducted thereon. The Government and PN shall give sympathetic consideration to waiver of this exclusion obligation to the extent that such waiver may be appropriate to assure the economic development of mineral oil and gas resources discovered in the Area.

“d. If CONTRACTORS should find in the Area one or more structures or traps of a type which may contain mineral oil or gas and which extend beyond the boundaries of the Area, PN shall request the Government to grant to it an enlargement of its authority to mine to include all of such structures or traps; if such enlargement is granted by the Government, the Area covered by this Contract shall thereby be automatically extended to cover the area of such enlargement for all purposes of this Contract.

“e. During the first three contract years exploration operations may not be suspended or stopped for any reason whatsoever, except force majeure. At the end of the said period, CONTRACTORS may relinquish parts or all of the Area at any time by giving ninety (90) days advance notice of such surrender to PN. The size, shape and location of such relinquished portions of the Area shall be determined by CONTRACTORS but shall, so far as reasonably possible, be an area or areas, at each time of surrender, of sufficient size and convenient shape, taking into account contiguous areas not then covered by a contract of work between any State Enterprise and any oil mining contractor other than CALASIATIC or TOPCO or an affiliate, to enable oil mining operations to be conducted thereon, giving due regard to the Government's““desire to contract said relinquished areas to third parties. If the entire Area is relinquished and there remains an unexpended financial commitment pursuant to Article 3 [Article 4 of PTSI contract] with respect to previous years, including the year in which the last of the Area is relinquished, all of such unexpended commitment shall be paid by CONTRACTORS to PN (CALASIATIC and TOPCO each paying fifty percent (50%) thereof). If such relinquishment covers the Area entirely, this Contract shall terminate automatically, and thereupon CONTRACTORS shall be released from all further obligations and financial commitments whatsoever hereunder, provided that they shall have duly performed all the terms and conditions on their part. If the relinquishment does not cover the Area entirely, this shall not diminish in any manner the extent or nature of CONTRACTORS’ investment or other obligations hereunder. Upon such termination or release, all of CONTRACTORS’ permanent installations in the area so released shall belong to PN without any payment by PN to CONTRACTORS therefor. (For the purposes of this Contract, ‘permanent installations’ shall consist of all buildings and equipment which are permanently affixed to or installed on the land and which cannot be removed without injury or damage to the buildings, equipment or land.)“]

15 [The Shell contract here and throughout the remainder of this article ﹛unless otherwise indicated) reads “Old Areas” in place of “Old Area,” and “New Areas” in place of “New Area.“]

16 [The Shell contract in this and the following sentence only reads “each New Area” in place of “the New Area.“]

17 [In the Shell contract this paragraph reads: “(iv) If the entire area of the New Areas is relinquished and there remains an unexpended financial commitment pursuant to Article 4 with respect to previous years, including the year in which the last of the New Areas is relinquished, all of such unexpended commitment shall be paid by Shell to PN. If such relinquishment covers the entire area of the New Areas, this Contract shall terminate automatically insofar as the New Areas are concerned, and thereupon Shell shall be released from all further obligations and financial commitments whatsoever hereunder in respect of the New Areas, provided that it shall have duly performed in respect of such areas all the terms and conditions on its part. If the relinquishment does not cover the entire area of the New Areas, this shall not diminish in any manner the extent or nature of Shell's investment or other obligations hereunder in respect of such areas.“]

18 [The CPI contract omits this article. See, however, page 262, footnote 37.]

19 [The Shell contract reads:

[The Calasiatic-Topco contract reads:

20 [Paragraph c in the Shell contract reads:

“c. As a consideration for granting the New Areas, Shell undertakes to pay to PN a bonus of five million United States dollars (U.S. $5,000,000), within ten (10) days after the date the ratification of this Contract is promulgated. A second bonus of five million United States dollars (U.S. $5,000,000) shall be due within thirty (30) days after the end of the first contract year in which the exports of crude oil and/or petroleum products made under this Contract average from New Areas at least fifteen thousand barrels per day (15,000 b/d). However, on payment, such bonus shall be reduced by forty-five percent (45%) in settlement of the amount which the Government owes to Shell in accordance with the Agreement of 6th April, 1962 (Tjepu). No part of such payments shall be recovered by Shell in any manner hereunder, whether by inclusion in general costs or otherwise. “

[Paragraph c in the Calasiatic-Topco contract reads:

“c. CONTRACTORS shall pay to PN a bonus of five million United States of America dollars (U.S. $5,000,000), of which amount CALASIATIC and TOPCO shall each pay two million five hundred thousand dollars (U.S. $2,500,000), within ten (10) days after the date the ratification of this Contract is promulgated. CONTRACTORS shall pay to PN a second bonus of five million United States of America dollars (U.S. $5,000,000), of which amount CALASIATIC and TOPCO shall each pay two million five hundred thousand dollars (U.S. $2,500,000), within thirty (30) days after the end of the first contract year in which exports of crude oil produced from the Area have averaged at least fifteen thousand (15,000) barrels per day. No part of such bonus payments shall be recovered by CONTRACTORS in any manner hereunder, whether by inclusion in general costs or otherwise.“]

21 [The CPI contract omits “(mentioned in Article 9).” The Calasiatic-Topco contract reads “with respect to the crude oil and products purchased from such CONTRACTOR” in place of “(mentioned in Article 9).“]

22 [The CPI and Calasiatic-Topco contracts omit “to be.“]

23 [The Shell contract omits “Sumatran.“]

24 [The CPI and Calasiatic-Topco contracts omit “or product export.“]

25 [The Shell, CPI, and Calasiatic-Topco contracts omit “the production and delivery of gas pursuant to paragraph d of Article 20 and. “]

26 [The CPI and Calasiatic-Topco contracts omit “the refining of that crude oil and distribution of the resulting products for PN.“]

27 [The Shell, CPI, and Calasiatic-Topco contracts omit “in the production and delivery of gas pursuant to paragraph d of Article 20 and.“]

28 [The CPI and Calasiatic-Topco contracts omit “the refining of that crude oil and distribution of the resulting products for PN.“]

29 [The Shell contract, here and throughout the remainder of the contract, reads “pounds sterling” in place of “United States dollars.“]

30 [The CPI and Calasiatic-Topco contracts omit this paragraph c and the following paragraph d, and in their place have a single paragraph which reads (quoting from the CPI contract):

“c. Deliveries to PN pursuant to Article 6 and to Refineries in Indonesia: The value of crude oil delivered to PN pursuant to paragraph a of Article 6, or to refineries in Indonesia for refining for CPI, shall be the weighted average value per barrel, pursuant to paragraphs a and b of this Article 7, of the same kind, grade and quality of crude oil delivered by CPI or Oil Disposal Companies (mentioned in Article 9) to purchasers f.o.b. Sumatran ports for export during the calendar quarter in which the crude oil is delivered to PN or refineries.“]

31 [The Shell contract omits “Sumatran ports.“]

32 [The CPI and Calasiatic-Topco contracts omit “or petroleum products” in this sentence.]

33 [The CPI contract omits “and products” in this sentence.]

34 [in the Calasiatic-Topco contract this sentence reads:

“The sales and disposition of crude oil mentioned in Article 6 [Article 7 of PTSI contract] are (i) sales or disposition by CALASIATIC and TOPCO to parties other than CPI or Oil Disposal Companies and (ii) sales or disposition by CPI or Oil Disposal Companies to third parties, but do not include sales or disposition by CALASIATIC and TOPCO to CPI or Oil Disposal Companies or between Oil Disposal Companies, such sales or disposition being merely steps preliminary to the ultimate sales or disposition of the crude oil by CPI or the Oil Disposal Companies. “]

35 [The Calasiatic-Topco contract adds “either directly or through CPI.“]

36 [The Shell, CPI, and Calasiatic-Topco contracts read “make” in place of “made.“]

37 [Immediately before this article on taxes the CPI contract includes the following article:

“Article 10. EXPLORATION EXPENDITURES AND INVESTMENT.

“In addition to its operational expenses for production, CPI shall expend, during the first eight (8) years after the date this Contract becomes effective in accordance with Article 27, at least U.S. $30,000,000, or the equivalent, for exploration, and for investment for development and expansion of the operations; facilities for exploration, production, handling and disposal at ports of export; and supporting facilities in Indonesia.“]

38 [The Calasiatic-Topco contract omits the remainder of this sentence.]

39 [The Calasiatic-Topco contract adds “(including, inter alia, any tax or levy on or in connection with operations performed hereunder by a non-profit operator). “]

40 [The Calasiatic-Topco contract omits the remainder of this paragraph.]

41 [The CPI contract adds “or CPOC.“]

42 [The Shell contract omits “gas.” The CPI and Calasiatic-Topco contracts omit “gas and petroleum products.“]

43 [The CPI contract adds “the acquisition of assets pursuant to Article 3 or.“ See page 251, footnote 13, where Article 3 of the CPI contract is reprinted.]

44 [The CPI and Calasiatic-Topco contracts read “field operations” in place of “operations.“]

45 [The Calasiatic-Topco contract adds “with respect to their operations hereunder. “]

46 [in the Shell contract this sentence reads: “Receipts and disbursements incurred or accrued in currencies other than pounds sterling or rupiahs will be recorded in pounds sterling by applying the mean of the buying and selling rates of exchange for the currency concerned quoted by the London Office of the Chase Manhattan Bank, prevailing as of the close of business on the last banking day of the month preceding the month in which the entry concerned is recorded; if there is no such quotation by the London Office of the Chase Manhattan Bank for a particular currency, then International Monetary Fund parity rates in respect to that currency shall apply.“]

47 [The Calasiatic-Topco contract adds “with respect to their operations hereunder. “]

48 [The Calasiatic-Topco contract adds “with respect to their operations hereunder. “]

49 [The Calasiatic-Topco contract omits “subject to Article 22.“]

50 [The Calasiatic-Topco contract inserts at the beginning of this sentence: “In any year after export sales of crude oil from the Area have averaged at least fifteen thousand (15,000) barrels per day for a period of six (6) consecutive calendar months and.“]

51 [The Calasiatic-Topco contract omits “in any year after the date ratification of this Contract is promulated.“]

52 [The CPI and Calasiatic-Topco contracts omit this paragraph. See footnote 50, supra.]

53 [The CPI contract reads “include” in place of “be.“]

54 [The CPI and Calasiatic-Topco contracts omit this sentence.

55 [The CPI and Calasiatic-Topco contracts omit paragraphs b, c, d, e,and f. At this point the CPI and Calasiatic-Topco contracts insert a sub-paragraph a (3) which is similar to paragraph j of the PTSI contract, page 270. Following paragraph a (3) the CPI contract, only, adds sub-paragraphs a (4), (5), (6), and (7) regarding the sale of marketing assets: ““

“[a.] (4) Effective as of the date ratification of this Contract is promulgated, or at such time or times thereafter as PN may elect, CPI will sell and deliver to PN its marketing assets in Indonesia (except those related to CPI's producing area and which are used in connection with its producing operations) so that, upon such delivery, PN shall own all such assets and CPI shall relinquish its rights and be relieved of its obligations under sub-paragraph a (6) of this Article 15, except such rights and obligations as related to the period prior to relinquishment and rights and obligations which are appropriate to the termination of such operations.

“(i) In respect of the assets covered by the foregoing the value as of the date the ratification of this Contract is promulgated shall be sixty percent (60%) of the original installed cost ('acquisition cost’) as shown by CPI's records, a statement of which value shall be submitted to PN and the Government within thirty (30) days after such date. For each year elapsed after the date the ratification of this Contract is promulgated until PN acquires a particular asset, the value established above shall be reduced by five percent (5%) . The value as of the date of sale shall then be sixty percent (60%) Of the reduced amount.

“(ii) The value Of any additions to or replacements of such assets acquired after the date the ratification of this Contract is promulgated shall be the full cost as of the date Of acquisition. The value of such additions or replacements shall be reduced each year by a percentage equal to one over twenty minus the number of years elapsed between the date the ratification of this Contract is promulgated and the date of the acquisition.

“(iii) PN shall pay the amount calculated under (i) and (ii) above on delivery of the particular asset to PN. PN may defer payment of such amount to the extent that it may elect to pay one-sixth (1/6) of the purchase price of the asset on delivery and one-sixth (1/6) of such price at the end of each of the five (5) annual periods following the date of delivery, in which event interest shall be payable on the outstanding balance at the rate of five (5%) per annum and such interest amount shall be paid at the same time and under the same conditions as the then due installment of the purchase price. The total amount Of the deferred payments on account of the assets so acquired by PN shall, in the aggregate, never exceed at any one time the amount calculated to be due to PN on account of oil exports already made in respect of which payment is not yet due under the terms of Article 6. All such payments by PN shall be made in United States dollars or other foreign currency acceptable to CPI, and any tax thereon shall be settled by PN and not by CPI.

”(iv) At the time CPI sells and transfers its marketing assets to PN, CPI shall also sell and transfer its inventory of marketing maintenance materials and supplies to PN at the values as shown by CPI's records. Payment shall be made by PN on the date of transfer in the currencies for which the materials and supplies were obtained provided that, with respect to foreign currencies, settlement may be effected in United States dollars or any foreign currency acceptable to CPI. In the event that PN should elect not to take any particular items in such inventory, CPI shall have the right either to export such items free of duties and levies or to sell such items in Indonesia after compliance with general import and customs regulations and use the proceeds in its operations.

“(5) Inventories of domestic fuel products reflected in the inventory records of CPI as of the date the ratification of this Contract is promulgated, or which are on that date in the process of being refined in Indonesia for CPI's account for purposes of supplying the domestic fuel products market, shall be treated in the same manner as though they had been produced from crude oil supplied to PN pursuant to subparagraph a (1) of this Article 15, and refined for the account of PN. PN shall pay to CPI for such products (a) in respect of the crude oil from which the products were made, costs and fees in accordance with the procedure laid down in subparagraphs a (2) and a (3) and the next sentence of this subparagraph a (5) of this Article 15, and (b) in respect of the refining of such products, the cost to CPI of such refining. Within fifteen (15) days after the date ratification of this Contract is promulgated CPI shall notify PN of the quantities of such inventories and of the costs and fees allocable thereto. Within thirty (30) days after receipt of such notice PN shall pay to CPI the amount of such costs and fees (except foreign currency costs incurred on account of sea transportation, which shall be payable as provided in subparagraph a (3) of this Article 15).

“(6) Insofar as CPI is able to do so with the assets referred to in subparagraph a (4) of this Article 15 still remaining from time to time in its ownership, and insofar as PN may request, CPI shall distribute in Indonesia for PN's account products delivered to CPI by PN for this purpose which have been made from crude oil supplied to PN pursuant to subparagraph a (1) of this Article 15. CPI shall distribute such products against payment by PN to CPI of the costs of distribution so incurred plus a fee of ten (10) United States cents per barrel so distributed. The cost and fee shall be payable in rupiahs except that CPI shall be reimbursed by PN for that portion of its foreign currency costs incurred on account of sea transportation of the products concerned in United States dollars or any other foreign currency involved, which foreign currency reimbursement shall be effected in accordance with the procedure laid down in subparagraph a (3) of this Article 15. Payment of the part of the costs due in rupiahs and the fee shall be effected in accordance with the procedure laid down in subparagraph a (3) of this article 15.

“(7) The sales proceeds of the products thus distributed by CPI for PN which are collected by CPI shall be deposited on a daily basis to PN's account in banks designated by PN. CPI's responsibility shall be limited to handing over such balance of the proceeds actually collected.“]

56 [The Shell contract adds “by Shell.“]

57 [This paragraph appears as paragraph (b) in the CPI and Calasiatic-Topco contracts, and is followed by a paragraph (c) which is similar to paragraph k of the PTSI contract, page 271.]

58 [The CPI and Calasiatic-Topco contracts omit “either refines or.“]

59 [ Paragraphs h and i appear as paragraphs (d) and (e) in the CPI and Calasiatic- Topco contracts.]

60 [See page 268, footnote 55.]

61 [In the CPI contract this sentence reads:

“Within fifteen (15) days after the end of each calendar month CPI shall furnish to PN a statement for that month containing the following information: (i) the quantity of crude oil made available to PN pursuant to subparagraph a (1); (ii) the quantity of crude oil transported by sea on behalf of PN; (iii) the quantity of any products distributed on behalf of PN pursuant to subparagraph a(6); (iv) the quantity of any products transported by sea on behalf of PN; (v) the foreign currency costs, the rupiah costs, and the fees allocable to the quantities mentioned in (i) through (iv) above; and (vi) any appropriate adjustments pertaining to prior months.“

[The Calasiatic-Topco contract is similar to the CPI contract, except that it omits “(iii) the quantity of any products distributed on behalf of PN pursuant to subparagraph a (6); (iv) the quantity of any products transported by sea on behalf of PN.“]

62 [The CPI and Calasiatic-Topco contracts omit “on account of refining and distribution under paragraph f of this Article 14 and.“]

63 [The CPI and Calasiatic-Topco contracts add ‘‘(except that for the first year following the date ratification of this Contract is promulgated this period shall be thirty (30) days).“]

64 [The CPI and Calasiatic-Topco contracts omit the remainder of this paragraph.]

65 [See page 270, footnote 57.]

66 [In the CPI contract this paragraph reads:

“a. All assets acquired by CPI pursuant to Article 3 [See page 251, footnote 13.], and all other assets purchased, constructed or otherwise acquired by CPI shall be the sole property of CPI and may, subject to Articles 19 an'd 22 [Articles 18 and 21 of PTSI contract] and to subparagraph a (4) of Article 15 [See page 268, footnote 55], be freely disposed of by CPI when no longer needed in the operations.“]

67 [The CPI and Calasiatic-Topco contracts omit “refining.“]

68 [The Shell, CPI, and Calasiatic-Topco contracts omit “after the date the ratification of this contract is promulgated.“]

69 [The Calasiatic-Topco contract reads “delivery” in place of “discovery.“]

70 [The Shell, CPI, and Calasiatic-Topco contracts omit paragraph d.]

7l [The CPI and Calasiatic-Topco contracts omit “of exploration and production rights.“]

72 [in the CPI contract this paragraph reads:

“a. If in its opinion economic exploitation of the Area should become no longer possible, CPI may, by giving written notice to that effect to the Government and PN, relinquish its rights and be relieved of its obligations pursuant to this Contract, except such rights and obligations as relate to the period prior to relinquishment and rights and obligations which are appropriate to the termination of the operations and the liquidation of CPI and would be effective subsequent to the normal expiration of this Contract.“

[The Calasiatic-Topco contract is similar to the CPI contract, except that in place of “liquidation of CPI” it reads “liquidation of the non-profit operator.“]

73 [The CPI and CalasiaticfTopco contracts omit “exploration and production.“]

74 [The CPI contract adds: “However, it is recognized that some of such equipment and buildings may be required by CPI for the continuance of its operations as non-profit operator on behalf of its affiliates under other Contracts of Work to which PN is a party. PN and CPI shall consult and reach mutual agreement concerning the nature and extent of such requirements, and such items shall then be made available to CPI, provided that CPI shall maintain such items in good working order.“]

75 [The Shell contract omits “of the term“]

76 [The CPI contract omits “proceeds and” here and later in the sentence.]

77 [In the Calasiatic-Topco contract this paragraph reads:

“d. If, in connection with the expiration of this Contract, or its termination pursuant to paragraph a of this Article 20, a decision to liquidate CONTRACTORS' respective establishments in Indonesia, the non-profit operator or any Oil Disposal Company should be made by the shareholders concerned, such liquidations, and any liquidation proceeds and dividends pursuant thereto, shall be free from all taxes and duties in Indonesia, and all liquidation proceeds and dividends shall be paid in United States dollars which may be exported freely.“]

78 [The CPI and Calasiatic-Topco contracts omit this article. See, however, page 268, footnote 55, for CPI contract provisions regarding termination of marketing operations.]

79 [The CPI and Calasiatic-Topco contracts read “Area” in place of “operations of PTSI.“]

80 [The definition of “affiliate” in the CPI contract is the same as in the PTSI contract. This definition in the Shell contract reads:

“(2) ‘affiliate’ means any company Vhich is directly or indirectly controlled by or controls Shell or its shareholder, including (i) any company of which the share capital conferring a majority of the votes at shareholders’ meetings is legally or beneficially owned directly or indirectly by Shell; (ii) the shareholder of Shell; and (iii) any company of which the share capital conferring a majority of the votes at. shareholders’ meetings is legally or beneficially owned directly or indirectly by the shareholder of Shell. ‘Non-affiliate’ means any company which is not an affiliate. “

[The Calasiatic-Topco contract reads:

“b. ‘affiliate’ means any company which is directly or indirectly controlled by or controls CALASIATIC or TOPCO or their shareholders, including (i) any company of which the share capital conferring a majority of votes at stockholders' meetings is legally or beneficially owned directly or indirectly by CALASIATIC, or by TOPCO, or by both of them; (ii) any company which is directly or indirectly the legal or beneficial owner of share capital of CALASIATIC or TOPCO conferring a majority of the votes at the stockholders’ meetings; and (iii) any company of which the share capital conferring a majority of the votes at stockholders’ meetings is legally or beneficially owned directly or indirectly by the same company or companies, individually or collectively, which legally or beneficially own directly or indirectly share capital of CALASIATIC or TOPCO conferring a majority of the votes at stockholders’ meetings of CALASIATIC or TOPCO; ‘non-affiliate' means any company which is not an affiliate.“]

81 [The CPI contract omits this paragraph defining “contract year.“]

82 [The CPI contract adds “(including assets transferred from CPOC).“]

83 [The Calasiatic-Topco contract omits “financial charges (but not including interest on any monies borrowed after the date this Contract becomes effective).“]

84 [The Calasiatic-Topco contract omits “(other than those realized under Article 22)” and the CPI contract substitutes “(other than pursuant to subparagraph a (4) of Article 15).” See page 268, footnote 55.]

85 [The CPI and Calasiatic-Topco contracts omit “(excluding refinery assets).“]

86 [The CPI contract omits this paragraph defining “preproduction costs.” In the Calasiatic-Topco contract this paragraph reads: “f. ‘preproduction costs’ means all costs incurred by CALASIATIC and TOPCO in the performance of operations under this Contract prior to the calendar year in which sales of crude oil or gas produced in the Area under this Contract commence. ”]

87 [in the CPI contract this paragraph reads:

“(4) ‘general costs’ means all of CPI's costs for the operations and related activities hereunder properly allocable to the fiscal period in which sales and/or deliveries are made in accordance with sound accounting principles except (i) costs for which CPI is reimbursed by PN pursuant to subparagraphs a (2) and a (6) of Article 15 [see text and footnotes, pages 267-269] and paragraph b of Article 21 [Article 20 of PTSI contract], (ii) costs allocable to any refining and distribution of products for CPI for export, and (iii) costs allocable to operations pursuant to paragraph b of Article 21. Exploration expenditures which CPOC or CPI has elected to treat as investment may be amortized at the rate of 10% per annum (and such amortization will be included in general costs) so long as production is available in the Area to provide reimbursement. However, if CPI should! have no production in the Area, exploration costs may not be recovered. General costs shall be reduced by the amount of the fees paid to CPI by PN pursuant to subparagraphs a (2) and a (6) of Article 15. Separate accounting shall be maintained in respect of (i) any refining and distribution of products for CPI for export (crude oil being charged to those operations at the value determined in accordance with Article 7), and (ii) any operations pursuant to paragraph b of Article 21; and CPI's profits and losses allocable to the operations for which such separate accounting is maintained shall be included in the computation of CPI's general costs, the profits serving to reduce and the losses serving to increase such general costs. (Costs for which CPI has been reimbursed by PN will of course not be included in the calculation of CPI's profits and losses from any operations pursuant to paragraph b of Article 21.) The calculation of general costs shall be made in terms of money, and general costs shall be expressed in such terms.“

[In the Calasiatic-Topco contract this paragraph reads:

“g. ‘general costs’ means all costs for the operations and related activities hereunder incurred by CALASIATIC and TOPCO (in equal portions) in the performance of this Contract, beginning with the calendar year in which sales of crude oil and gas produced in the Area under this Contract commence, properly allocable to the fiscal period in which sales and/or deliveries are made in accordance with sound accounting principles except (i) costs for which CALASIATIC and TOPCO are reimbursed by PN pursuant to subparagraph a (2) of Article 13 [See page 267] and paragraph b of Article 19 [Article 20 of PTSI contract], (ii) costs allocable to any refining and distribution of products for CALASIATIC or TOPCO for export, and (iii) costs allocable to operations pursuant to paragraph b of Article 19; but including each year ten percent (10%) of the total preproduction costs as amortization thereof, until all of such preproduction costs shall have been reimbursed as part of .general costs pursuant to subparagraph a (1) of Article 4 [Article 5 of PTSI contract]. Each CONTRACTOR's portion of general costs shall be reduced by the amount of the fees paid to such CONTRACTOR by PN pursuant to subparagraph a (2) of Article 13. Separate accounting shall be maintained in respect of (i) any refining and distribution of products for CALASIATIC or TOPCO for export (crude oil being charged to those operations at the value determined in accordance with Article 6 [Article 7 of PTSI contract]), and (ii) any operations pursuant to paragraph b of Article 19; and CALASIATIC's and TOPCO's profits and losses allocable to the operations for which such separate accounting is maintained shall be included in the computation of the pertinent CONTRACTOR's portion of general costs, the profits serving to reduce and the losses serving to increase such portion of general costs. (Costs for which CALASIATIC and TOPCO have been reimbursed by PN will of course not be included in the calculation of their respective profits and losses from any operations pursuant to paragraph b of Article 19.) The calculation of general costs shall be made in terms of money, and general costs shall be expressed in such terms.“]

88 [The CPI and Calasiatic-Topco contracts omit this paragraph defining “refinery.“ The geographical location is different in the Shell contract.]

89 [The CPI and Calasiatic-Topco contracts omit paragraphs b and c]

90 [The Calasiatic-Topco contract adds “reaffirms the continued validity of the authority to mine mineral oil and gas granted to PN for the Area and term set out in Article 2 [Article 3 of PTSI contract] hereof, and.“]

91 [Immediately before this paragraph, the CPI contract adds a new paragraph b, set forth below, and paragraph b of the PTSI contract becomes paragraph c of the CPI contract.

“b. The provisions of this Contract and of any ancillary agreements and related decrees shall be deemed to have been applicable mutatis mutandis to the Government, PN, CPOC and CPI in respect of the period, if any, from the date the ratification of this Contract is promulgated until the transfer of assets and liabilities from CPOC to CPI pursuant to Article 3 [See page 251, footnote 13] is completed, so that obligations in respect of that period will be discharged, and rights will be exercised, by either CPOC or CPI, as the case may be, but not by both. For this purpose any payments made by CPOC or CPI to the Government in respect of any taxes applicable to that period shall be deemed to have been made for and shall be credited against obligations in respect of crude oil retained by CPI pursuant to paragraph a of Article 6, and such taxes shall be deemed to have been paid by the delivery of crude oil, or payment of the value of crude oil deliverable but retained, or otherwise, in the manner provided in Articles 5, 6 and 11 [Articles 5, 6, and 10 of PTSI contract]. To the extent, if any,- that CPOC has not already done so, in respect of the period between 1 January 1961 and the date the ratification of this Contract is promulgated CPOC or CPI (but not both) shall remit in foreign currency into Indonesia an amount equal to its total receipts in foreign currency less profits, depreciation and foreign currency costs in respect of all its operations during such period and this shall be the maximum amount of foreign currency required of CPOC and CPI in respect of that period.“]

92 [The CPI and Calasiatic-Topco contracts.omit paragraph d.]

93 [The Shell contract omits the remainder of this paragraph.]

94 [immediately before this article, the Calasiatic-Topco contract adds a new article:

“Article 27. OPERATOR.

“CALASIATIC and TOPCO shall have the right, without thereby in any way detracting from their responsibilities and obligations under this Contract, to enter into an agreement with CPI, or any affiliate established in Indonesia, pursuant to which CPI or such .jpther affiliate will carry out, as operator for and on behalf of CONTRACTORS, such operations and activities under this Contract as CONTRACTORS may designate. The Government hereby affirms that if CPI or such affiliate is engaged in conducting mining operations of mineral oil and gas in Indonesia pursuant to a contract of work with any state enterprise, it will be permitted to use or make available as operator for CONTRACTORS the facilities, equipment, materials, supplies, personnel, et cetera, owned or procured by it for the performance of its obligations pursuant to such contract of work — provided such use may not in any manner curtail or hamper the operations under such contract of work. It is understood and agreed between the parties hereto that the operator may under no circumstances derive any profit from such activities on behalf of CONTRACTORS, and that therefore any and all services, facilities, equipment, materials, supplies, personnel, et cetera, provided by the operator shall be charged to CONTRACTORS at cost (determined in accordance with good international oil industry account practice) without profit, and that such cost shall be no greater than would have been the case if CONTRACTORS themselves had provided such services, facilities, equipment, materials, supplies, personnel, et cetera. CALASIATIC and TOPCO shall each pay fifty percent (50%) of the total charge of the operator, and such payments shall be included in costs as defined in paragraph e of Article 24 [Paragraph a (4) of Article 26 of PTSI contract] in the manner provided therein.“]

95 [The addresses of PN and the contractors are different in the Shell, CPI, and Calasiatic-Topco contracts.]

96 [The Calasiatic-Topco contract, immediately before this paragraph, adds new paragraph b, set fort?h below, and paragraph b of the PTSI contract becomes paragraph c.

“b. This Contract shall not be construed for any purpose to result in any arrangement constituting among the parties hereto or any of them a partnership, joint venture, association or any other relationship under which any of the parties might be deemed responsible for the acts or omissions of any of the other parties, and each party shall be responsible for its own obligations.“]

97 [The Calasiatic-Topco contract omits this article. In the CPI contract this article reads:

“Article 31. TRANSITION PERIOD.

“a. CPOC's obligations vis-a-vis the Government in respect of all CPOC's operations during the period from 1 January 1961 to the date the ratification of this Contract is promulgated shall be settled by payments (additional to those made prior to the date this Contract is executed) as follows:

“1. U.S. $12,500,000 within thirty (30) days after the date ratification of the Contract is promulgated;

“2. U.S. $17,500,000 within ninety (90) days after the date ratification of this Contract is promulgated; and

“3. if the date ratification of this Contract is promulgated is later than 1 October 1963, an additional amount based upon operations subsequent to 1 October 1963 and established in accordance with the principles and procedures laid down in Articles 5, 7, 8, 9 and 11 of this Contract [Articles 5, 7, 8, 9, and 10 of-*>TSI contract], such amount to be paid within ninety (90) days after the date ratification of this Contract is promulgated,

“b. The payments provided for in paragraph a of this Article 31 shall be applied against obligations in the following order: (i) company taxes, calculated for the periods involved in accordance with law, which have not been paid previous to the date ratification of this Contract is promulgated, and (ii) such other items as the Minister of Basic Industry/Mining shall designate until the total payments specified in paragraph a of this Article 31 have been applied. Such payments shall be made in United States dollars. When such payments have been made, all of CPOC's fiscal obligations (and those of any Oil Disposal Companies) vis-a-vis the Government and any governmental authority in Indonesia in respect of the period from 1 January 1961 to the date ratification of this Contract is promulgated, including payments pursuant to mining rights, shall have been finally discharged, excepting only fees for services at rates generally applicable, taxes collected by CPOC from others (such as personal income taxes of employees), and any duties which would be applicable in conformity with the principles laid down in Article 19 [Article 18 of PTSI contract] on imports which were not to be used in the operations or were for personal use or consumption of employees or were intended for resale.“]