Contract QAMP-069 – Provision of Rig and associated Services

Qarat Al Milh Petroleum LLC

Contract Number QAMP-069
Provision of Rig and associated Services
C8, Procedures for Contractor

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Contract QAMP-069 – Provision of Rig and associated Services

SECTION C-08
PROCEDURES FOR CONTRACTORS
1. Introduction........................................................................................................................... 3
2. Communication Between Company and Contractor .................................................................. 3
2.1. Correspondence ............................................................................................................. 3
2.2. Verbal Communication .................................................................................................... 3
2.3. Meetings ........................................................................................................................ 3
3. Variations and Change Orders ................................................................................................. 4
3.1. Instruction ..................................................................................................................... 4
3.2. Time Sheets ................................................................................................................... 4
3.3. Variation to Contract ....................................................................................................... 4
4. Site Security Procedures ......................................................................................................... 4
4.1. Security ......................................................................................................................... 4
4.2. Security Passes ............................................................................................................... 5
5. Payment ................................................................................................................................ 5
5.2. Submission of Invoice ..................................................................................................... 5
6. Documents ............................................................................................................................ 5
7. Progress and Reporting .......................................................................................................... 6
8. Reporting of payment terms for Omani employees ................................................................... 6
9. Identification and Marking ...................................................................................................... 6
9.1. General: ......................................................................................................................... 6
10. Company Supplied Materials ............................................................................................... 6
10.1. Contractors Site Records ................................................................................................. 6
11. Appendix ‘B’ Particular Reporting Requirements for Rig/well-hoist operations. ........................ 8
11.1. Daily Requirements ......................................................................................................... 8
11.2. Contractor shall provide daily: ......................................................................................... 8
11.3. Monthly, Quarterly & Yearly Requirements ....................................................................... 8
11.4. Ad Hoc Requirements (as and when requested by the Contract Holder) ............................. 8

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Contract QAMP-069 – Provision of Rig and associated Services

1. INTRODUCTION
1.1.1. This Document describes the minimum procedures that shall be employed by Company and
Contractor in administration of this Contract. The Contractor shall ensure that where
detailed requirements are not comprehensively set out, such requirements shall be
developed in a timely manner to efficiently and effectively carry out the Work/Service in
accordance with the time available.
1.1.2. The requirements stated herein shall, in no way, limit the requirements of other Company
procedures and regulations or any other requirements stated elsewhere in the Contract.
2. COMMUNICATION BETWEEN COMPANY AND CONTRACTOR
2.1. CORRESPONDENCE
2.1.1. Unless specifically stated otherwise all correspondence and communications in the execution
of the Contract shall be addressed and directed by Contractor Contract Manager to Company
Contract Holder and vice versa. All contractual notices shall be issued strictly in accordance
with C3 the General Conditions.
2.1.2. All Correspondence shall be dealt with by acknowledged E-mail or letter. E-mail
correspondence may be used for the day to day administration of the Contract and require
acknowledgement of receipt.
2.1.3. All Letters, Facsimiles and email correspondence shall be acknowledged by return and bear
the following headings:
Date:
Contract No: QAMP-xxxx
Title of Contract: “Contract Title”
Letters shall be sent to:- Address stated in C-1 - Form of Agreement.
Faxes shall be sent to:- Address stated in C-1 - Form of Agreement.
Attn.: “Contract Holder”
Email: “Contract Holder E-mail”
2.1.4. Unless specifically agreed otherwise exchange of reports, drawings, and other documents
shall be accomplished by means of a transmittal note. The recipient shall sign the
transmittal note and return the copy of the transmittal note to the initiator. The initiator shall
ensure that all transmittals have been acknowledged as received by the recipient.
2.1.5. Contractor shall maintain a log of all correspondence, originating from both Contractor and
Company, which shall include a summary of relevant details plus any actions and their
status. Correspondence Log shall be in an electronic format, suitable for sorting and
reporting against.
2.2. VERBAL COMMUNICATION
2.2.1. Notwithstanding the requirements of the General Conditions all Verbal instructions and other
significant technical or contractual matters must be confirmed in writing within three (3)
working days.
2.3. MEETINGS
2.3.1. shall be conducted in the English language. The Contract Holder or his nominated
representative shall chair all meetings. The Contractor shall prepare an Agenda and review
material required for each meeting.
2.3.2. Minutes of meetings shall be dated and numbered consecutively record all action items
discussed and/or agreed during the meeting and shall indicate the party to take the required
action by a due date. Discussion of minutes of previous meeting shall be the first agenda
point of the subsequent meeting, and previous minutes shall be approved or amended
accordingly.
2.3.3. Progress review meetings between the parties will be held weekly, or as requested by
Company, for the purpose of: -

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Contract QAMP-069 – Provision of Rig and associated Services

i) Keeping all parties fully informed of all aspects of the Work.

ii) Reviewing progress, status, scheduling and HSE aspects of the Work; and
iii) Reviewing technical or financial subjects.
2.3.4. Such meetings will be held at the Site in the Contractor's premises. Technical documents for
discussion and progress report narratives, together with other relevant documents as
considered appropriate by Company, shall be submitted with a proposed agenda at least
three (3) working days in advance of such meetings by Contractor or such time as may
reasonably be required by Company.
2.3.5. Minutes of each meeting shall be prepared by the Contractor and forwarded to the Contract
Holder for endorsement within two (2) working days following the day of the meeting. The
minutes shall be reviewed and agreed by both parties, only after the Contract Holder and
Contract Manager have signed the minutes shall they be deemed a true record of that
meeting.
2.3.6. Contractor shall maintain action registers for all meetings indicating the action party, the
required action, the required completion date of the action, and the status of progress
against the action item.
2.3.7. Company or Contractor may call separate specific meetings as may be necessary during the
performance of the Work/Service. Such meeting requests shall be advised a minimum of
two (2) working days in advance.

3. VARIATIONS AND CHANGE ORDERS

3.1. INSTRUCTION
3.1.1. An Instruction in a form approved by the Company shall be issued for alterations to the
Work, or required additional Services, that are commensurate with the content and intent of
Scope of the Work/Services. Any Instruction that alters the Contract terms or prices shall be
endorsed by Variation to Contract.
3.2. TIME SHEETS
3.2.1. If time reimbursable payment or the recording of time-based resources is deemed
appropriate, then a ‘Time Sheet’ in a format approved by the Contract Holder shall be kept
to record the daily working time spent by the Contractor's Personnel whilst performing the
Work/Service. The Time Sheets shall be prepared by the Contractor and presented for
endorsement to the Contract Holder, or his delegated authority, daily within 24 hours of the
event or work taking place.
3.2.2. The endorsement of the Time Sheet by the Contract Holder, or his delegated authority, in
no-way signifies approval of payment. Such endorsement of the Time Sheet can only be
held as establishing agreement to the resources employed on an activity.
3.3. VARIATION TO CONTRACT
3.3.1. A Variation to Contract, in a form approved by the Company, shall be issued to formalise all
amendments or alterations to the Conditions of Contract including the Scope of
Work/Service, or Schedule of Rates. (Ref. C-3 General Conditions).
3.3.2. Both the Contractor and the Company shall sign each Variation to Contract, in two originals.
One original shall be forwarded to the Contractor and the other retained by the Company.
3.3.3. Each Variation to Contract shall carry the Contract number and be numbered sequentially.
4. SITE SECURITY PROCEDURES
4.1. SECURITY
4.1.1. Prior to mobilisation on Site, the Contractor shall submit the following to the Company for
information:
i) Nominated senior Contractor's staff responsible for all aspects of security.

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Contract QAMP-069 – Provision of Rig and associated Services

ii) Nominated staff responsible for security at each Site location

iii) Procedures to track & control access of personnel and others within the Site.
4.1.2. The Contractor shall provide guards and watchmen and shall take all other measures
necessary to maintain security of the Site.
4.2. SECURITY PASSES
4.2.1. For security reasons, all existing Company facilities are restricted areas. The Contractor is
therefore responsible for liaising with the Company to enable Key personnel and those
required to work within existing facilities to obtain appropriate Security Passes.
4.2.2. It is emphasised that each application must be presented with two passport photographs
and a copy of the Labour Card, and may take up to 10 working days to process.
5. PAYMENT
5.1.1. SAP is an integrated software package that has been employed by Company to administer
and authorise payments to its Contractors. As such the Contractor is deemed fully familiar
with the requirements of this software in order to facilitate payment.
5.1.2. The Contractor is advised to ensure that the information held in SAP relating to the
Contractor is correct, in particular the Contractor's email address and bank account details.
5.1.3. The following requirements must be strictly adhered to in order to enable expeditious
payment of Contractor’s invoices. Failure to adhere to the following requirements will result
in the return of a Contractor’s invoice unpaid.
5.2. SUBMISSION OF INVOICE
5.2.1. All invoices shall be submitted to: - Qarat Al Milh LLC, attn Finance department, P.O. Box
1127, P.C. 112 Muscat, Sultanate of Oman. Invoices, as a minimum shall detail the
following: -
• SAP Purchase Order Number
• Contract Title & Number
• Contractor’s Name in-line with that recorded in SAP which should be the same as that on
the signed Contract, and not an associate or parent company
• SAP Service Entry or Entries against which the invoice is to be matched.
5.2.2. Invoices should not include any altered, disputed or other unapproved amounts additional to
those included within the applicable SAP-PO. In this respect the Contractor’s attention is
drawn to the provisions of section C-3 the General Conditions and that non-application for
payment of an amount in no way limits the Contractors rights under the Contract.

6. DOCUMENTS
6.1.1. For the purposes of this Article, the term Documents shall include the following: -.
• Drawings and documents for review • Execution or implementation Programmes
• Minutes of meetings • Drawings and specifications
• Progress reports • Instructions, Notices and other Contract
related correspondence
6.1.2. Contractor shall be responsible for providing and maintaining comprehensive documentation
required for the performance of the Work/Service. Contractor shall retain all original
Documents in a secure manner and Contractor shall arrange for back up of all documents on
electronic data files.
6.1.3. All computer readable documents that form part of the documents issued to Company shall,
in addition to the hard copy output, be delivered on electronic file formats that are
acceptable to Company.
6.1.4. Contractor shall maintain a complete record of all correspondence related to the
Work/Service.

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Contract QAMP-069 – Provision of Rig and associated Services

6.1.5. Contractor shall provide and maintain in Contractor's Site offices the latest issues of all-
relevant rules, regulations, standard specifications and documents.

7. PROGRESS AND REPORTING

7.1.1. Contractor shall for the duration of the Contract provide accurate and timely reports of the
progress, HSE and financial status of the Work/Service. The reports shall highlight all trends
that impact on the Programme and/or the Contract Price. The reports shall include
explanations for deviations from the Programme and proposals for remedial action, together
with any revised plans, schedules and projections.
7.1.2. The detailed format and content of Contractor reports shall be developed by Contractor and
approved by Company. Any consequences arising from late and/or inaccurate reporting to
Company shall be for the sole cost of Contractor.
7.1.3. The specific reporting requirements applicable for this contract are further detailed in 11
Appendix ‘B’ Particular Reporting Requirements for Rig/well-hoist operations.

8. REPORTING OF PAYMENT TERMS FOR OMANI EMPLOYEES

8.1.1. As a requirement of section C-3 the General Conditions the Contractor shall maintain and
provide information on employment terms and remuneration of Omani personnel, including
subcontractor personnel that maybe subject to transfer on completion or termination of the
Contract. In order to ensure that this information is available the Contractor is required to
provide a quarterly ‘Employment Statement’. The Contractor’s ‘Employment Statement’ shall
detail, as a minimum, the information listed below for every employee of the Contractor that
maybe subject to transfer on completion or Termination of the Contract: -
Employment terms
General Information Accrued Benefits Allowance / Bonus
& remuneration
Employee ref. Number Basic Salary End of Service Benefit Housing
Name of Employee Standard allowances Leave entitlement Transport
Soc. No Previous ORTC status Pension deductions Meal
Date of Birth Work Schedule Telephone
Date of Employment Base Working Hours Shift work
Employment Location Overtime rate(s) Eid
Residence Location Others
Salary Grade

This quarterly ‘Employment Statement’ shall be submitted to the Contract Holder on or

before the end of the month following the end of each 3 month period.

9. IDENTIFICATION AND MARKING

9.1. GENERAL:
9.1.1. Contractor shall ensure that clear and sufficient identification marking is provided on
Materials supplied to Company or which Company will be expected to handle as follows:
a) On minimum of 2 sides of every box, container or package the following marking shall
be stencilled in letters 7.5 mm tall:
• For consignment to QAMP LLC
• Package dimensions in metres & weight in kilograms
• Specific Handling and Storage Instructions
b) Packing list in a waterproof cover clearly visible on the outside of the package.
c) Individual items shall be tagged with part numbers.

10. COMPANY SUPPLIED MATERIALS

10.1. CONTRACTORS SITE RECORDS
10.1.1. The Company requires the Contractor to maintain an accurate record of the receipt and
issue of Company supplied Material. The information required includes: -

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Contract QAMP-069 – Provision of Rig and associated Services

a) Quantities received, with details of date received, Order and item number against which
received, delivery voucher number (i.e. Material Receipt Sheet No., Transfer Voucher
No. or Issue Voucher No.) and Material Master No.
b) Quantities Issued, with detail of the work for which the issue was made.
c) Balance in store/on site
10.1.2. The Contractor shall instigate and keep fully up to date on a daily basis a method of record
keeping which shall monitor the status of receipt and issue documentation.
10.1.3. All issues on Site should be made against a properly completed Field Requisition of a type
approved by the Company. The Field Requisition will refer to the Drawing Number Line
Number, Area Number, Spool Number or other reference that will identify the purpose for
which the material is to be issued.

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Contract QAMP-069 – Provision of Rig and associated Services

11. APPENDIX ‘B’ PARTICULAR REPORTING REQUIREMENTS FOR RIG/WELL-HOIST

OPERATIONS.
11.1. DAILY REQUIREMENTS
11.1.1. All daily reports shall be provided to the Contract Holder (or delegate) no later than 06:00
hours daily, except for the programmed activity report, which shall be provided by 09:00
hours each day. The reports shall cover the previous calendar day, i.e. the twenty-four (24)
hour period commencing at 00:00 hours on the previous day and ending at midnight on the
calendar day prior to the date of the report.
11.2. CONTRACTOR SHALL PROVIDE DAILY:
a) Two (2) copies of the International Association of Drilling Contractors (IADC) daily report
b) A programmed activity report for the following forty-eight (48) hours.
c) Charts from the multi-pen recorder or computerised monitoring system printout covering
the drilling parameters, either presented as a single 24-hour record or divided into two
parts covering 00.00 to 12.00 and 12.00 to 24.00 hours.
d) Strategic stock report covering well consumables at site including but not limited to
tubulars and fuel.
e) Personnel on Site report.
f) Daily journey management plans of all personnel transportation journeys scheduled for
the next 24 hours and a record of the non-routine journeys made in the last 24 hours.
g) Daily and/or phase/ hole section progress against plan for cost, time and NPT, with
predictions to end of well.
11.3. MONTHLY, QUARTERLY & YEARLY REQUIREMENTS
a) Monthly report in a format to be agreed with Contract Holder but covering at least the
measurement of key performance indicators and record of expenditure versus approved
contract value.
b) Quality Assurance & HSE Improvement Programme:
 Summary of status of QA & HSE improvement programme.
 Status of pending action items (arising from operations reviews, incident reviews,
field standards team visits, management visits, DOIRC and LSF meetings).
 Line management visits.
 Graphical display of LTIF & TRCF.
c) Review and analysis of incidents:
 Summary of incidents for the year.
 Details of incidents for the month.
 Summary of STOP performance.
 Monthly HSE overview (meetings, drills, exercises, visits).
d) Training:
 Status of training matrix as per end of month.
e) Operations Performance Review:
 Summary of well delivery performance; actual time versus AFE time.
 NPT analysis.
 Graphical display of NPT analysis.
 Summary of incentives earned per well per month.
f) Omanization Returns
g) Bi-monthly rig inspection report including the status of maintenance hours used
compared to the total yearly allowance included in Section C5.
h) End of well reports within 7 days of the end of the well
i) Annual HSE plan and progress thereof.
j) Contractor shall monitor and report the KPIs agreed with Company.
k) Contractor shall participate in business performance reviews, kick-off meetings, monthly
performance review meetings and any other activities related to contract performance
management.
11.4. AD HOC REQUIREMENTS (AS AND WHEN REQUESTED BY THE CONTRACT HOLDER)
h) Mobilisation progress against plan.

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Contract QAMP-069 – Provision of Rig and associated Services

i) Commissioning reports.
j) Equipment test reports.
k) Bottom Hole Assembly (BHA) sheet after each change of BHA only if different to that
defined in the drilling programme.
l) Pre-kick calculation sheet.
m) Bit record as and when completed and also with the end of well report.
n) Casing and tubing tally for all tubulars run and/or left in the hole.
o) Regular (daily or per phase or hole section) mud report and solids control report.
p) Metal recovery summary during drilling of reservoir summary.
q) After Action Reviews (AAR’s) by well as part of the end of well report.

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