e corporation with the status of a legal person and has theexclusive right to prospect for, develop, produce and market the petroleumwithin the zones of cooperation with foreign enterprises.CNOOC may, as the work requires, establish regional corporations,specialized corporations and overseas representative offices to carry outthe tasks delegated by the head office.Article 6CNOOC shall, by means of calling for bids and signing petroleum contracts,cooperate with foreign enterprises to exploit petroleum resources inaccordance with the zones, surface areas and areas of cooperation withforeign enterprises for the exploitation of petroleum resources.The petroleum contracts referred to in the preceding paragraph shall comeinto force upon approval by the Foreign Investment Commission of thePeople's Republic of China. All the documents signed by CNOOC for otherforms of cooperative exploitation of petroleum resources utilizingtechnology and funds provided by foreign enterprises shall also be subjectto approval by Foreign Investment Commission of the People's Republic ofChina.
【章名】Chapter II Rights and Obligations of the Parties to Petroleum Contracts
Article 7CNOOC shall cooperate with foreign enterprises to exploit offshorepetroleum resources by means of entering into petroleum contracts, and,unless otherwise specified by the Ministry of Petroleum Industry or in apetroleum contract, the foreign enterprise party to the petroleum contract(hereafter "foreign contractor") shall provide the investment to carry outprospecting, be responsible for prospecting operations and bear allprospecting risks; after a commercial oil (gas) field is discovered, boththe foreign contractor and CNOOC shall provide the investment for itscooperative development, and the foreign contractor shall be responsiblefor the development operations and production operations until CNOOC takesover the production operations when conditions permit as provided in thepetroleum contract. The foreign contractor, in accordance with theprovisions of the petroleum contract, recovers its investment and expensesand receives remuneration out of the petroleum produced.Article 8The foreign contractor may export the petroleum due to it and thepetroleum it purchases, and may also, in accordance with the law, remitabroad the investment it recovers, its profits and its other legitimateincome.Article 9All Chinese enterprises and foreign enterprises participating in thecooperative exploitation of offshore petroleum resources shall pay taxesin accordance with the law and shall pay mining royalties.All the employees of the enterprises referred to in the precedingparagraph shall pay individual income tax in accordance with the law.Article 10The equipment and materials imported for carrying out the petroleumcontract shall be subject to tax at a reduced rate, or be exempted fromtax, or be given other preferen-tax treatment in accordance with stateprovisions.Article 11The foreign contractor shall open a bank account in accordance with theprovisions of the Interim Regulations on Foreign Exchange Control of thePeople's Republic of China.Article 12In carrying out the petroleum contract, the foreign contractor shall useappropriate and advanced technology and management experience and shall beobligated to transfer the technology and pass on the experience to thepersonnel of the Chinese side involved in carrying out the petroleum-contract (hereafter "Chinese personnel"); in petroleum operations, theforeign contractor must give preference in employment to Chinesepersonnel, progressively increase the percentage of Chinese personnel andtrain Chinese personnel in a planned way.
Article 13In carrying out the petroleum contract, the foreign contractor mustpromptly and accurately report to CNOOC on the situation of petroleumoperations; and it must acquire complete and accurate data, records,samples, vouchers and other original data with respect to the variousaspects of the petroleum operations, and regularly submit to CNOOC therequired data and samples as well as various technological, economic,financial and accounting, and administrative reports.Article 14In carrying out the petroleum contract, the foreign contractor shallestablish a branch or subsidiary or representative office within theterritory of the People's Republic of China and fulfil registrationformalities in accordance with the law.The location of the offices referred to in the preceding paragraph shallbe determined through consultation with CNOOC.Article 15The provisions of Articles 3, 8, 9, 10 and 14 of these Regulations shall,by analogy, apply to foreign subcontractors that render services inconnection with the petroleum operations.
【章名】Chapter III Petroleum Operations
Article 16In order to achieve the highest possible oil recovery factor, the operatormust, in accordance with these Regulations and the relevant provisionspromulgated by the Ministry of Petroleum Industry on the exploitation ofpetroleum resources and in the light of international practice, formulatean overall development program for the oil (gas) field and carry onproduction operations.Article 17In carrying out the petroleum contract, the foreign contractor shall usethe existing bases within the territory of the People's Republic of China,and, if new bases are needed, they must be established within theterritory of the People's Republic of China. The specific locations ofthe new bases referred to in the preceding paragraph, and otherarrangements that may be necessary in special circumstances, must all besubject to the written approval of CNOOC.Article 18CNOOC shall have the right to send personnel to join the foreign operatorin making master designs and engineering designs for carrying out thepetroleum contract. Designing corporations within the territory of thePeople's Republic of China shall enjoy priority in entering intosubcontracts for the master designs and engineering designs mentionedabove, provided that their terms are competitive.Article 19With respect to all facilities required to be built in carrying out thepetroleum contract, including artificial islands, platforms, buildings andstructures, when signing subcontracts, the operator must give preferenceto manufacturing plants and engineering corporations within the territoryof the People's Republic of China, provided that they are competitive interms of quality, price, time of delivery and services.Article 20With respect to the equipment and materials required to carry out thepetroleum contract, the operator and subcontractors must give preferenceto procuring and utilizing equipment and materials manufactured andsupplied by the People's Republic of China, provided that these arecompetitive.Article 21With respect to services that are required to carry out the petroleumcontract, such as those for geophysical prospecting, well-drilling,diving, aircraft, ships and bases, the operator and subcontractors mustenter into subcontracts and service contracts with relevant departmentswithin the territory of the People's Republic of China, provided that theyare competitive in terms of price, efficiency and services.
Article 22The ownership of all assets purchased or built by the foreign contractorto carry out the petroleum contract in accordance with the plan andbudget, excluding equipment leased from a third party, shall belong toCNOOC after the foreign contractor's investment has been compensated asprovided for, and, within the term of the contract, the foreign contractormay continue to use those assets in accordance with the provisions of thecontract.Article 23CNOOC shall have the ownership of all of the data, records, samples,vouchers and other original data with respect to the petroleum operationsstipulated in Article 13 of these Regulations.The utilization and transfer, donation, exchange, sale and publication ofthe previously mentioned data, rec