India - Second Bombay High Offshore Development Project : Loan 1925 - Loan Agreement - Conformed

OFFICIAL LOAN NUMBER VI7-<IN DOCUMENTS Loan Agreement (Second Bombay High Offshore Development Project) between INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1980 LOAN NUMBER I 26IN LOAN AGREEMENT AGREEMENT, dated i, 1980, between INDIA, acting by its President (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOP- MENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out by Oil and Natural Gas Commission witn the Borrower's assistance and, as part of such assistance, the Borrower will make available to Oil and Natural Gas Commission the proceeds of the Loan as hereinafter provided; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Bank and Oil and Natural Gas Commission; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated October 27, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agree- ments of the Bank being hereinafter called the General Condi- tions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Commission" means the Oil and Natural Gas Commission established under the Oil and Natural Gas Commission Act, 1959 of the Borrower; -2- (b) "Project Agreement" means the agreement between the Bank and the Commission of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; and (c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and the Commission pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Ag iement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to four hundred million dollars ($400,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Sched- ule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan, shall be governed by the provisions of the Schedule to the Project Agreement. Section 2.04. The Closing Date shall be March 31, 1984 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commit- ment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. -3- Section 2.06. The Borrower shall pay interest at the rate of nine and one-fourth per cent (9-1/4%) per annum on the prin- cipal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on January 1 and July 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause the Commission to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable the Commission to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall relend the proceeds of the Loan to the Commission under a subsidiary loan agreement to be entered into between the Borrower and the Commission, under terms and conditions which shall have been approved by the Bank and which shall, inter alia, provide that the Commission shall: (i) pay to the Borrower interest at an effective rate of ten and three- fourths per cent (10-3/4%) per annum on the principal amount so relent and withdrawn by the Commission and outstanding from time to time; (ii) the Commission shall repay to the Borrower the principal amount so relent over a period of not more than 20 years from the date of this Agreement, including therein a period of grace of five years; and (iii) the foreign exchange risk shall be borne by the Borrower. (c) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. Without limitation or restriction upon the provisions of Section 3.01 (a) of this Agreement, the Borrower specifically undertakes, whenever there is reasonable cause to believe that the funds available to the Commission will be inade- quate to meet the estimated expenditures required for the carrying out of the Project or for the carrying out of the Commission's other investments, to make arrangements, satisfactory to the Bank, promptly to provide the Commission or cause the Commission to be provided with such funds as are needed to meet such expenditures. ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. -5- (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdiv4sion thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. The Borrower shall, from time to time on the basis of, inter alia, the report furnished to it by the Commission pursuant to Section 4.03 of the Project Agreement, carry out a review of the price of crude oil and natural gas to the Commission which shall determine the price levels needed to enable the Commission, under ccnditions of efficient operation, to meet its operating expenses and earn a return on its invested capital sufficient to cover its debt service requirements, main- tain adequate working capital and finance a substantial portion of its proposed capital expansion. ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) The Commissionshall have failed to perform any of its obligations under the Project Agreement; (b) an extraordinary situation shall have arisen which shall make improbable that the Commission will be able to perform its obligations under the Project Agreement; (c) the Commission or the Borrower, or any other authority having jurisdiction, shall have taken any action for the dissolu- tion or disestablishment of the Commission or for the suspension of its operations; (d) a change shall have been made in the Borrower's Oil and Natural Gas Commission Act, 1959 which will materially and adversely affect the financial condition or operations of the Commission; -6- (e) a subsidiary company shall have been created or acquired or taken over by the Commission, if such creation, acquisition or taking over would materially and adversely affect the conduct of the Commission's business or its financial condition; and (f) a default shall have occurred in the performance by the Commission or by the Borrower of any of their obligations under the Subsidiary Loan Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) any event specified in paragraphs (a), (d), (e) and (f) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Bank to the Borrower and the Commission; and (b) the event specified in paragraph (c) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an addi- tional condition to the effectiveness of the Loan Agreement within the meaning of Section, 12.01 (c) of the General Conditions, namely, that the Subsidiary Loan Agreement has been executed on behalf of the Borrower and the Commission. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by the Commission, and is legally binding upon the Commission in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and the Commission and is legally binding upon the Borrower and the Commission in accordance with its terms. -7- Section 6.03. The date , is hereby specified for the purposes of Section 12.04 of the General Condi-- tions, ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. Any Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary or Under Secretary in the Ministry of Finance, Department of Economic Affairs of the Bor- rower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: ECOFAIRS New Delhi For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. -8- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INDIA By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By c-t ' Regional Vice President South Asia -9- SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Construction and 400,000,000 100% of foreign installation of expenditures platforms and and 100% of connecting sub-sea local expendi- pipelines tures (ex- factory) TOTAL 400,000,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments for taxes levied by, or in the territory of, the Borrower on goods, or on the importation, manufacture, procurement or supply thereof; and - 10 - (b) payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $5,000,000 may be made In respect of expenditures on oil pumps, compressors and generators on account of payments made for such expenditures before that date but after September 30, 1980. 4. If the Bank shall have reasonably determined that the procurement of any item is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expendi- tures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 11 - SCHEDULE 2 Description of the Project The Project, which comprises phase IV and advance action of phase V of the Borrower's offshore development program, consists of the following Parts: Part A: Development Drilling Drilling of about sixty-four direc- tional development wells. Part B: Well Platforms Construction and installation of about fifteen well platforms. Part C: Processing Platform-Bombay High South Construction and equipping of a processing platform with an approximate capa- city of 180,000 Bbl/d. Part D: Living Quarters Platform Construction of a living quarters platform. Part E: Subsea Pipelines Installation of approximately 133 km of subsea floW lines. Part F: Shore Facilities Installation of an additional crude storage tank and an additional train of crude stabilization facility, along with necessary utilities. - 12 - Part G: Telemetry and Telecontrol Extension of telemetry and tele- control facilities. The Project is expected to be completed by June 30, 1983. - 13 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each January 1 and July 1 beginning July 1, 1986 through July 1, 2000 13,335,000 On January 1, 2001 13,285,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.0f), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 14 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.40% More than three years but not more than six years before maturity 2.75% More than six years but not more than eleven years before maturity 5.00% More than eleven years but not more than sixteen years before maturity 7.40% More than sixteen years but not more than eighteen years before maturity 8.30% More than eighteen years before maturity 9.25% INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this /1 day of 198 02. FOR SECRETARY