Appendix A Physical Delivery Procedures

In these Physical Delivery Procedures, the following additional definitions shall apply. Cargo means the total quantity of Oil to be lifted by a Vessel, whether or not it is all for the Buyer. Layday Notice means a notice of the actual Laydays that is to be given by the Seller as provided in Paragraph 3(3). Lifting Instructions means the latest edition from time to time of the Terminal Operator's Crude Lifting Procedures. Loading Schedule means the schedule prepared by the Terminal Operator specifying the date on which each Parcel is intended to be made available for delivery at the Loading Port during the Delivery Month and the Parcel Reference Number allocated to each Parcel. NOR means a notice of readiness given by a Vessel that it is ready to take a Parcel from the Loading Port. Parcel means a specified volume of Oil intended to be made available for loading at the Loading Port during the Delivery Month in accordance with the Loading Schedule. Parcel Reference Number means, in relation to each Parcel, the number allocated by the Terminal Operator to that Parcel as shown by the Loading Schedule. Primary Supplier means any person to whom, in relation to a particular Delivery Month, Oil is allocated as that person's equity entitlement under the applicable crude oil production allocation. Scheduled Day means, in relation to each Parcel, the day shown in the Loading Schedule as the day on which that Parcel is intended to be made available for loading.

Any reference to a Paragraph is, unless the context otherwise requires, a reference to a paragraph of these Physical Delivery Procedures.

1.

METHOD AND RATE OF SUPPLY The Oil shall be supplied by the Seller to the Buyer, free of any expense, in bulk F.O.B. Vessels provided or procured by the Buyer at the Loading Port.

2.

MEASUREMENT, SAMPLING AND TESTING (1) The quantity and quality of the Oil in each Cargo shall be determined by measurement, sampling and testing in the manner customary at the Loading Port and shall include testing that enables a net quantity to be calculated. The Seller shall request the Seller's Suppliers to prepare and sign certificates as to the quantit y and quality of the Oil loaded upon completion of loading of the Cargo. The Seller shall advise the Buyer by telex, cable or facsimile of the quantity and quality recorded on such certificates as soon as possible after completion of loading of the Cargo.

06 August 2007

Chapter 10 - DME Oman Crude Oil Futures Contract

Page 16

The results of measurement, sampling and testing shall, for the purposes of this Chapter 10, be treated as conclusive as to the quantity and quality loaded. However, the conclusiveness of the results so far as they relate to the quantity and quality loaded may be displaced to the extent that it can be reasonably shown that the results are incorrect. (2) Where permitted by the Seller's Suppliers, the Buyer may appoint a representative (the Representative) acceptable to the Seller and the Seller's Suppliers to assist in the supervision of and to inspect the loading of each Cargo. If such representative is appointed, the quantity and quality of the Oil as jointly ascertained by the Representative and the Seller's Suppliers shall be the quantity and quality for the purpose of the certificate(s). If any difference arises between the Representative and the Seller's Suppliers with regard to the loaded quantity and quality, it shall be settled by an expert appointed under Rule 10.22. The decision of such expert shall be final and binding upon the Parties save for fraud and manifest error; but pending such decision, the quantity and quality as ascertained by the Seller's Suppliers shall be used for the purpose of the telex, cable or facsimile referred to in Paragraph 2(1). Unless otherwise specifically agreed, all costs incurred by the Buyer in respect of the Representative shall be borne by the Buyer and demurrage resulting from any delays occasioned by such inspection shall be for the sole account of the Buyer. A sufficient quantity of the relevant representative samples shall be correctly taken at the Loading Port and kept in accordance with internationally recognised methodology and practice.

(3)

(4)

3.

LAYDAYS AND TANKER NOMINATION PROCEDURE (1) Fixing Laydays The Laydays applicable to each quantity of Oil which the Seller is to deliver as one Parcel shall be determined as provided under this Paragraph 3. Unless this Paragraph 3 provides otherwise the Laydays shall be: (i) (ii) the Scheduled Day; and the day after the Scheduled Day.

(2) Buyers preferred Laydays (i) From the first (1st) Singapore Business Day of the Prior Month, but no later than the tenth (10th) day of the Prior Month (or if the 10th day falls on a nonSingapore Business Day, then by 17.00 (Singapore time) on the preceding Singapore Business Day), the Buyer shall notify the Seller of the dates preferred by the Buyer as Laydays. Thereafter the Buyer may revise its previous notification of preferred dates by so notifying the Seller by not later than the tenth (10th) day of the Prior Month (or if the tenth (10th) day falls on a non-Singapore Business Day, then by 17.00 (Singapore time) on the preceding Singapore Business Day). No preferred dates notified by the Buyer under this Paragraph 3(2)(i) shall include any date after the twenty-fifth (25th) day of the Delivery Month. If the Buyer intends to co-load the Oil and other crude oil at the Loading Port into the same Vessel, the Buyer shall notify the Seller of this when giving notice under Paragraph 3(2)(i) above.

(ii)

06 August 2007

Chapter 10 - DME Oman Crude Oil Futures Contract

Page 17

(iii)

The Seller must promptly notify the Seller's Suppliers of the dates notified by the Buyer under Paragraph 3(2)(i) above and any notification given to the Seller under Paragraph 3(2)(ii) above. However, the Seller is not obliged to accept any of the dates notified by the Buyer. In the event that the Buyer fails to notify the Seller of any preferred Laydays under Paragraph 3(2)(i) above, the Seller will advise the Buyer of his failure to do so, and the Seller will notify the Sellers Suppliers of the preferred Laydays as decided by the Seller, in order to fulfil the Sellers obligations to the Sellers Suppliers. Failure of the Buyer to notify any preferred Laydays to the Seller shall not excuse or reduce any of the Buyers obligations under the Rules.

(iv)

(3) Notification or agreement of actual Laydays If the Seller is a Primary Supplier and the Contract is the Seller's first sale of the Oil (a First Primary Sale) then the Seller must give the Buyer the Layday Notice by 17.00 (Singapore time) on the next Singapore Business Day following after the Loading Schedule publication date. If the Seller is not a Primary Supplier and the contract is not a First Primary Sale, then the Seller must give the Buyer the Layday Notice within one (1) business hour after the time the Seller received notice of the Laydays from Seller's Suppliers and by no later than 18.00 (Singapore time) on the fifteenth (15th) day of Prior Month (or, if that day is not a Singapore Business Day then by 18.00 (Singapore time), on the preceding Singapore Business Day). The Seller must give the Buyer the Layday Notice irrespective of whether the dates to be notified as the actual Laydays are the same as any of the preferred dates notified by the Buyer under Paragraph 3(2)(i) above. If the Seller does not give a Layday Notice in accordance with this Clause, then the Seller must give the Layday Notice within 1 (one) business hour after the time the Seller received notice of the Laydays from Seller's Suppliers. (4) Late Layday Notice(s): Limitation of Sellers remedies If the Layday Notice is received by the Buyer later than the time provided for under Paragraph 3(3), no such losses, costs and expenses as are described in Paragraph 3(10) below shall be reimbursable by or otherwise recoverable from the Buyer (and shall be borne and paid exclusively by the Seller) unless and to the extent that they result from failure by the Buyer to comply with the requirements of the proviso to Paragraph 3(5)(iii) below. (5) Continuance of Buyers Obligations despite late Layday Notice(s) (i) This Paragraph 3(5) applies if any Layday Notice is received by the Buyer later than the time provided for under Paragraph 3(3) above. (ii) Late receipt by the Buyer of the Seller's Layday Notice shall not constitute or be treated as a breach of the Seller's obligations entitling the Buyer to treat any Oman Futures Contract as having been repudiated by the Seller, and the Buyer expressly waives, relinquishes and foregoes any such entitlement. (iii) The Buyer further agrees expressly that, subject as provided below, the Buyer will continue to observe and perform all of the Buyer's duties and obligations under this Chapter 10 in the like manner and to the like extent as would be applicable if the Layday Notice had not been given later than required under Paragraph 3(3). (iv) For the purpose of sub-Paragraph (ii) above, any failure by the Buyer to nominate a Vessel within any of the times provided for under this Paragraph 3, or to procure the Vessel to arrive or tender an NOR within the Laydays shall not constitute and shall

06 August 2007

Chapter 10 - DME Oman Crude Oil Futures Contract

Page 18

not be treated as a breach of the Buyer's duties and obligations in relation to such matters, provided that the Buyer shall have (a) complied with the requirements of Paragraph 3(6) below; (b) nominated a Vessel in the least time reasonably practicable after receipt of the Seller's notification of the Laydays; and (c) taken all steps reasonably practicable in the circumstances to cause the Vessel to proceed to and arrive at Loading Port within, or as close as reasonably practicable to, the time at which it ought to have done so if the Layday Notice had been given within the time provided for under Paragraph 3(3) and thereafter proceed diligently with the receipt and loading of the Oil as provided in sub-Paragraph (iv) below but in any event within the Delivery Month. (v) The provisions of sub-Paragraphs (i) and (ii) above shall apply subject to and without prejudice to the Buyer's right and entitlement to exercise all such remedies (if any) as may be or become exercisable by the Buyer in all the circumstances (with the exception of any right or entitlement which may have been available to the Buyer but for the foregoing provisions of this Paragraph 3(5)). (6) Duty of Buyer in absence of Layday Notice If, by 18.00 (Singapore time) on the fifteenth (15th) day of Prior Month, the Buyer has not received notification from the Seller of Laydays, the Buyer shall forthwith; (a) notify the Seller; (b) notify the Terminal Operator and furnish the Terminal Operator with the name of the Seller and Selling Customer (if known). (7) Contents of Layday Notices Each Layday Notice must specify the following: (i) the Parcel Reference Number(s) applicable to the Parcel(s) intended to comprise the Oil; the quantity of each Parcel; the Laydays applicable to each Parcel; except in the case of a First Primary Sale, the date and time of day when the Seller received notice from Seller's Suppliers; and the date and time of day when the Seller's notice was given to the Buyer.

(ii) (iii) (iv)

(v) (8)

Communication of Layday Notices, etc. (i) All Layday Notices must first be given orally by the Seller to the Buyer and promptly confirmed by facsimile. (ii) Each Party must ensure that appropriate facilities and sufficient authorized personnel are available and ready to receive and pass Layday Notices and all other pertinent information during business hours on Singapore Business Days. (iii) Additionally, if the Seller is purchasing the Oil from, or the Buyer is selling the Oil to, a third party, each Party must pass on as expeditiously as possible any communication received by it under this Chapter 10 and which it is contractually bound to communicate to such third party.

(9)

Large Cargoes

06 August 2007

Chapter 10 - DME Oman Crude Oil Futures Contract

Page 19

In respect of Cargoes of one million, five hundred thousand and one (1,500,001) Barrels or more, the Parties understand that the Terminal Operator may impose a shorter range of Laydays than Paragraph 3(1) provides and such other special conditions as the Terminal Operator may reasonably require given the size of the Cargo and the loading facilities and conditions at Loading Port, and the Buyer agrees to comply with such shorter range of Laydays and such other special conditions imposed by the Terminal Operator. (10) Buyer's responsibility Once a lifting programme has been determined in accordance with Paragraphs 3(1) to 3(9), the Buyer shall be held fully responsible for any problems arising from its failure to take a Parcel on the Laydays or otherwise failing to fulfil its programme or any of these nomination procedures, and shall be liable to compensate the Seller for any loss, cost or expense arising thereby. (11) Delivery Month In the event a Parcel of Oil for delivery in the Delivery Month is not loaded within the Delivery Month for reasons beyond the Buyer's control, then such volume as is subsequently loaded in lieu of such Parcel shall be counted against the Delivery Month, and the pricing terms applicable to such Parcel shall apply unchanged. (12) Right to refuse nominated tankers The Buyer understands and agrees that the Terminal Operator shall have the right to refuse to accept nominated tankers if, at the Terminal Operator's sole discretion, the Terminal Operator determines that such nominated tanker: (i) does not comply with the Terminal Operator's tanker safety regulations; or (ii) is not suitable to load at the Loading Port. (13) Buyer's nomination The Buyer's nomination shall be consistent with the Loading Port authority requirements and shall include, but shall not be limited to, the Vessel's name, flag, crew nationality, capacity, length, beam, summer deadweight and draught together with the quantity and quality of the grade(s) of Oil to be loaded inclusive of the operational tolerance requirement, estimated date of arrival of the Vessel at Loading Port, the Vessels agent, the Parcel Reference Number notified by the Seller to the Buyer as being applicable to the Oil, full instructions regarding the Vessel, the makeup and disposition of bills of lading and other documents and orders for port(s) of discharge, and the destination of the crude oil Cargo nominated. (14) Firm tanker nominations Nominations quoted (to be nominated) shall be replaced by firm tanker nominations for the same quantities with the same accepted date range not less than five (5) days before the beginning of the first day of the accepted date range (or if the fifth (5th) day falls on a non-Singapore Business Day, then by 17.01 (Singapore time) on the preceding Singapore Business Day). (15) Vessel substitution

06 August 2007

Chapter 10 - DME Oman Crude Oil Futures Contract

Page 20

The Buyer, with the Seller's prior agreement, may, or if necessary to perform their obligations hereunder must, substitute any Vessel by another Vessel which is similar in all material respects to the Vessel so replaced and otherwise complies with all requirements of the current tanker nomination procedures issued by the Terminal Operator relating to the lifting of the Cargo. The notice of the substitution and of the estimated time of arrival of the substitute tanker shall be given not less than five (5) days prior to the first day of the accepted date range for the originally nominated tanker (or if five (5) days prior falls on a non-Singapore Business Day, then by 17.01 (Singapore time) on the preceding Singapore Business Day). The Buyer may also, with the Seller's prior written agreement and by giving the Seller reasonable notice, amend in other respects any Vessel nomination or series of Vessel nominations provided that the expected date of arrival of the Vessel remains within the Laydays allocated to the Buyer's nomination in accordance with this Paragraph 3 and such nominations otherwise comply with all requirements of the current tanker nomination procedures issued by the Terminal Operator relating to the lifting of this Cargo. If such amendment is rejected by the Seller, the Parties shall negotiate a mutually acceptable alternative Vessel nomination. The Buyer shall not, unless otherwise agreed, be relieved of their responsibility to perform the agreed lifting within the accepted loading date range. (16) Any substitution other than as described above shall be considered a new nomination and require fresh acceptance by the Seller. Cancellation of a Vessel shall be notified to the Seller in writing or by telex not less than five (5) days before such Vessel's first day of the accepted date range at Loading Port (or if the fifth (5th) day falls on a non-Singapore Business Day, then by 17.01 (Singapore time) on the preceding Singapore Business Day). Cancellation will require that the Buyer nominate a substitute Vessel. In case of cancellation, if the Buyer fails to nominate a substitute Vessel and, for operational reasons, the Seller has to make alternative arrangements for disposal of the nominated volume, all direct associated costs will be for the Buyer's account provided Seller has made all reasonable efforts to mitigate such costs. Documentation requirements for each Vessel shall be notified to the Seller in writing or b y telex at least five (5) days in advance of the date of arrival (or if the fifth (5th) day falls on a non-Singapore Business Day, then by 17.01 (Singapore time) on the preceding Singapore Business Day) and not later than five (5) days prior to the start of the first day of the accepted date range. Buyer's warranties The Buyer hereby warrants and undertakes that: (i) they are familiar with the latest vessel size restrictions, including but not limited to, deadweight, draught, beam and overall length limitations of the Loading Port and will not nominate a Vessel exceeding such limitations; they are familiar with, and shall cause the Vessel to comply with, all applicable regulations in force at the loading port, including, but without limitation, those relating to fires on board vessels; and they shall procure that each Vessel nominated hereunder shall, at the time of loading: (a) comply with all applicable rules, regulations and directions of governmental, local and port authorities (and of the Loading Port) and shall conform in all respects to all relevant international regulations and agreements;

(17)

(18)

(ii)

(iii)

06 August 2007

Chapter 10 - DME Oman Crude Oil Futures Contract

Page 21

(b)

have hull, machinery, boilers, tanks, equipment and facilities which are in good order and condition, in every way fit for the service required and fit to load and carry the Cargo specified; and have a full and efficient complement of master, officers and crew.

(c)

If the Buyer's Vessel does not meet any of the requirements set out in (a), (b) and (c) above, the Buyer recognises that the Terminal Operator may refuse to berth or load or continue to load the Vessel with the scheduled loading. (19) Should the Buyer fail to load the contractual quantity of the scheduled loading, due to (i) the Buyer's withdrawal of any Vessel, (ii) the arrival of any Vessel at the Loading Port after the last Layday or (iii) rejection of a Vessel by the Terminal Operator as a result of it not meeting the requirements of Paragraph 3(18), the Seller shall be indemnified by the Buyer for any and all costs, damages or expenses incurred by the Seller as a result of the Buyer's failure to load the contractual quantity due to any of the above reasons and for all payments required to be made by the Seller to the Seller's Suppliers for failing to take delivery of the volume of Oil due to any of the above reasons and for all additional costs, damages or expenses incurred by Seller in defending any such claims or in avoiding the requirement to make such payments. The Buyer warrants and undertakes to the Seller that (for each Vessel nominated to carry a Cargo) the Vessel is owned or demise chartered by a member of the International Tanker Owners Pollution Federation Limited. The Buyer shall exercise reasonable efforts to ensure that: (a) the Vessel carries on board a valid certificate of insurance as described in the 1969 Civil Liability Convention for Oil Pollution Damage and the International Convention on Civil Liability for Oil Pollution Damage 1992; and the Vessel has in place insurance cover for oil pollution no less in scope and amounts than the highest available under the Rules of P&I Clubs entered into the International Group of P&I Clubs.

(20)

(b)

4.

LOADING CONDITIONS (1) The Buyer shall give the Seller, not less than five (5) days before the Scheduled Day with respect to the Parcel, full instructions consistent with the Loading Port regulations regarding the loading of each Vessel and the making up and destination of documentation covering the Cargo(s). The Seller shall use reasonable endeavours to arrange for such instructions to be carried out but they shall not be obliged to arrange for an instruction to be carried out which is inconsistent with any provision, expressed or implied, in this Chapter 10. The Buyer shall arrange for each Vessel to give to the Seller, and to any other person nominated by the Seller, its estimated time of arrival at the Loading Port in such manner and at such intervals prior to arrival as required by the Loading Port authorities and the Seller. The Seller shall provide or shall cause to be provided, free of charge, a berth or berths which the Vessel can safely reach and leave and at which she can lie and load always safely afloat. All port costs, including the expense, if any, of shifting berth at the Loading Port (unless such shift is for the Seller's purposes), shall be for the Buyer's account. The Buying Customer agrees that it is familiar with the current lifting instructions issued by Terminal Operator (Lifting Instructions) relating to the lifting of this Cargo and

(2)

(3)

(4)

06 August 2007

Chapter 10 - DME Oman Crude Oil Futures Contract

Page 22

agrees that these Lifting Instructions, including any subsequent amendments relevant to this Cargo, shall govern the lifting of the Cargo. The Buyer agrees to comply with all of the obligations under the Lifting Instructions related to the Vessel or the obligations of the Buyer thereunder. 5. ISPS COMPLIANCE

(1) The Buyer shall procure that the Vessel shall comply with the requirements of the ISPS Code. (2) The Buyer shall procure that the Vessel shall when required submit a Declaration of Security (DoS) to the appropriate authorities prior to arrival at the Loading Port. (3) Notwithstanding any prior acceptance of the Vessel by the Terminal Operator, if at any time before the passing of risk and title the Vessel ceases to comply with the requirements of the ISPS Code: (i) the Terminal Operator shall have the right not to berth such nominated Vessel and no demurrage resulting thereby shall be for the account of the Seller; and the Buyer shall be obliged to substitute such nominated Vessel with a Vessel complying with the requirements of the ISPS Code.

(ii)

(4) The Seller shall procure that the Loading Port shall comply with the requirements of the ISPS Code.

6.

DESTINATION RESTRICTIONS The Buyer recognises that the Seller cannot cooperate with, agree to or comply with any terms or requests, including documentary requests, which are prohibited under the laws applicable to the Seller or under United Nations decisions.

06 August 2007

Chapter 10 - DME Oman Crude Oil Futures Contract

Page 23