NPDC

INTERNAL MEMORANDUM

To: MD., NPDC Ref: NPDC/ETSD/CPD/01.05

From: ED., ETSD Date: August 02, 2016

ENGINEERING, PROCUREMENT, SITE PREPARATION, ON-SITE

CONSTRUCTION AND INSTALLATION OF LACT UNITS TO NPDC:

ANTICIPATORY APPROVAL REQUEST FOR THE EXTENSION OF

CONTRACTS COMPLETION DATES FOR LACT UNIT CONTRACTS

1.0 OBJECTIVE

The objective of this memo is to seek Management consideration and

approval to extend the Contract validity date for LACT Unit Contracts with
Messrs IGPES Gas and Power Ltd at no extra cost to NPDC.

2.0 BACKGROUND

NPDC signed Crude Handling Agreement (CHA) with SPDC to enable accurate
accounting of NPDC crude oil production exported through SPDC’s operated
Forcados terminal. A key requirement of the execution of the aforementioned
CHA is that “NPDC shall procure and install Lease Automatic Custody Transfer
(LACT) units”, to fiscally measure crude oil volumes before delivery to SPDCs
Forcados Terminal. The installation of this LACT Unit will eliminate the
recurring challenges on the accuracy of crude volume reallocated/reassigned
to NPDC and its JV Partners.

Contracts for Engineering, Procurement, Site Preparation, On-site

Construction, Installation and Integration of LACT units at NPDC’s Forcados
and Eriemu in OML 30 assets were awarded to Messrs IGPES Gas and Power
Ltd in 2015.

Delays in payment of their invoices by NPDC have translated to delays in the

execution of the works and consequently lapsing of contracts
duration/validity.

Currently, NPDC is unable to process their invoices for works performed due
to contract validity expiration. This has caused further delay in delivery of the
project.

The list of contracts requiring validity Extension with their proposed validity
dates is below;

1
 S/ Contract Title Contract Date of Propose
N Price (USD) Award/ d
Date Contract
Expired Validity
Date
1 Contract for Engineering, 14,013,044. 01-Jun-15/ March 31
Procurement, Site Preparation, 12 2017
On-site Construction Works, 31-May-16
Installation and Integration of
Forcados Lease Automatic
Custody Transfer (LACT) Unit in
NPDC’s OML-30 Asset
2 Contract for Engineering, 4,066,708.0 07-Jul-15/ March 31
Procurement, Site Preparation, 5 2017
On-site Construction Works, 06-Feb-16
Installation and Integration of
Eriemu Lease Automatic Custody
Transfer (LACT) Unit in NPDC’s
OML-30 Asset
3.0 PRAYER
Based on the submission above, we hereby seek Management consideration
and approval to extend the Contract validity Dates for Messrs IGPES Gas and
Power Ltd at no extra cost to NPDC.

Please approve

ALI UWAIS