consolidated terms of reference for the open round...

NOTE: THE OFFICIAL LANGUAGE OF THE SELECTION PROCESS IS SPANISH. IN CASE OF DIFFERENCES IN THE ENGLISH TRANSLATION, THE SPANISH VERSION SHALL PREVAIL.

CONSOLIDATED TERMS OF REFERENCE FOR THE OPEN ROUND COLOMBIA 2010

COMPETITIVE BIDDING PROCESS

2/93 Calle 99 No. 9A - 54 Piso 14 - PBX: (571) 5931717 - Fax (571) 5931718 - Bogotá, Colombia

|www.anh.gov.co | [email protected]|

LEGAL NOTICE

The following Legal Notice must be carefully read by the Companies. Notwithstanding other matters described in these Terms of Reference, fundamental matters of the Bidding Process are set forth in this Legal Notice, which must be taken into account to participate therein.

1. These Terms of Reference, as amended, modified or supplemented according to the provisions of this document, have been issued by the National Agency of Hydrocarbons with the purpose of providing the Companies with the necessary information for the submission of their Offers related to the object of the Bidding Process.

2. Neither the National Agency of Hydrocarbons or its directors, officers, employees, advisors or consultants grant, will grant, or shall be deemed to have granted any representation or warranty, express or implied, regarding the accurateness, reliability or completeness of the information contained in these Terms of Reference (including its annexes), or in the Information Package, or in other documents made available to the Companies. Consequently, the contents of this document shall not be considered a promise or representation regarding past or future events or acts, given that such information has been prepared solely to assist the Companies to perform their own evaluation of the Project, and does not pretend to be exhaustive or to comprise all the information that can be required or desired.

3. The National Agency of Hydrocarbons reserves the right, at any time, at its discretion and according to the applicable laws and these Terms of Reference, to: (i) modify or supplement these Terms of Reference and (ii) extend or modify the schedule of the Bidding Process.

4. With the submission of its Offer, the Bidder accepts all the terms, obligations, requirements, deadlines, conditions and demands set forth in the Documents of the Bidding Process, including, without limitation, in these Terms of Reference and in the contracts to be signed as a result of this Bidding Process. Consequently, any deviation, omission, addition, exception, condition or in general any modification made in the Offer, in the documents comprising the same, or the lack of minimum requirements provided for such documents in these Terms of Reference, shall give place to the inadmissibility or ineligibility of the Offer, and consequently it shall be rejected by the National Agency of Hydrocarbons, except if the same can be cured according to the provisions of these Terms of Reference.

5. With the submission of its Offer the Bidder accepts and declares that: 5.1 Its Offer shall remain in effect for the term of six (6) months from the

delivery of the Offer according to the Schedule of the Bidding Process or any of its extensions. It is therefore understood that for such term, and, in case of its extension, for the period of time set forth in the corresponding



extension, the Offer shall be binding and irrevocable. 5.2 It had access to, and knowledge of all and each one of the Documents of

the Bidding Process, including without limitation: (i) these Terms of Reference (including its annexes), (ii) the addenda issued by the National Agency of Hydrocarbons from time to time and (iii) the clarifications and observations to these Terms of Reference issued by the National Agency of Hydrocarbons from time to time.

5.3 It consulted and analyzed all the information required to prepare and submit its Offer and that the National Agency of Hydrocarbons gave answer to all the requests for clarifications and observations that it submitted.

5.4 The Documents of the Bidding Process are complete, compatible and adequate to identify the object and scope of the contracts to be executed.

5.5 It knows the terms, obligations, requirements, deadlines, conditions and demands set forth in the Documents of the Bidding Process and consequently it accepts them without deviation, omission, addition, waiver, exception, condition or modification in general whatsoever.

5.6 According to Colombian laws and regulations, the Documents of the Bidding Process and these Terms of Reference, it acknowledges and accepts that conditioned or incomplete Offers that tangentially or substantially differ from the requirements of the Documents of the Bidding Process shall not be admissible or eligible and consequently will be rejected by the ANH.

5.7 That it knows the conditions of the area or areas of interest where the contracts shall be performed and that in the preparation of its Offer it took into account its characteristics among others, without limitation, geographic, weather, access roads, social, political, environmental and public order conditions.

5.8 All information contained in its Offer is true, accurate and there is no false information therein, and that the ANH shall be authorized to verify the foregoing, and may reject it in case of findings of errors, inconsistencies or discrepancies.

5.9 It knows and accepts that in furtherance of the principles of transparency, equality and impartiality, all the information included in its Offer and in particular, such included to evidence compliance with the minimum requirements, shall be public according to the law, the provisions of this Terms of Reference and the contract to be signed as a result of this process.

5.10 It has full capacity to execute and perform the E&P Contract and/or Special TEA, as the case may be, completely and in its entirety.

5.11 It declares, under oath, subject to the penalties established in the Colombian Criminal Code, that the Bidder (including its members in case of



a Consortium or Temporary Union): (i) is not under any event of inability or incompatibility of those contemplated in the Political Constitution and in the law, and is not under any event of special prohibition to make offers or enter into contracts and (ii) is not under a situation of breach of payment of parafiscal contributions with regards to its employees in Colombia.

5.12 The correspondence and electronic messages issued by the ANH during the Bidding Process and those sent by the companies or third parties to the ANH regarding the Bidding Process are under and shall be subject to the binding, legal effectiveness and other provisions of the Law 527 of 1999 (Law of Electronic Commerce).

5.13 Except in the event the Terms of Reference expressly allow the total or partial presentation of an Offer by electronic means, it acknowledges and accepts that the ANH shall not take into account and shall not evaluate documents or information that are not included in the printed document (physical copy) containing the Offer; and in case of discrepancies between the information contained in the document of the Offer (printed in physical copy) and that submitted in electronic form, the information in the Offer (printed in physical copy) shall prevail.

5.14 If it results being the Awardee in the Bidding Process, it shall be under the obligation to execute the E&P Contract and/or Special TEA, as the case may be, which drafts shall be published by the ANH. The Awardee shall submit the necessary documents for the execution and performance of such contracts within the term set forth to that effect.

5.15 In case of resulting as Awardee in this Bidding Process, it shall assume and timely comply with all diligence and care corresponding to the nature of the corresponding contract.

5.16 In case of finding itself affected by an inability, incompatibility or conflict of interest occurring during the course of the Bidding Process, it shall immediately notify the same to the ANH and, if necessary or appropriate it shall resign from participating in the same and to the rights that would ensue if it results favored by the Award.

5.17 The lack of analysis, study or verification of the Documents of the Bidding Process by the Awardee shall not relieve it from the obligation to assume the corresponding responsibilities and shall not entitle it to claims, reimbursements or adjustments of any nature. As a consequence of the foregoing, all deductions, errors and omissions of the Bidder resulting from its own analysis, interpretations or conclusions shall be its exclusive responsibility. The ANH shall in no event assume liabilities for such analysis, interpretations and conclusions or the deductions, errors and/or omissions deriving therefrom.

5.18 It assumes all the costs and expenses related to the preparation and submission of its Offer and in no event, even in case the Bidding Process is declared void, will it have the right to recognition or reimbursement of any of



such costs and expenses. 5.19 With the submission of its Offer it declares that it knows the provisions

currently in effect according to Colombian law and the Regulations of the ANH.

5.20 It accepts that the final Terms of Reference and its Addenda replace and supersede any document or oral or written information provided by the ANH prior to the date of delivery of the same.

In the event of knowledge of cases of corruption, they must be reported to the Unit of Complaints of the Presidential Program of “Modernization, Efficiency, Transparency and Fight Against Corruption” by telephone to the following telephone numbers: (1) 334 15 07 – (1) 565 86 90 - (1) 565 76 49; by fax to the following numbers (1) 565 86 71; (1) 565 85 90; to the transparent line of the program to the telephone number: 01 8000 91 30 40; by email to the address: [email protected]; to the web site of complaints of the program at: http://www.anticorrupcion.gov.co; by mail to the address: Calle 7 No 6 - 54, Bogotá, D.C, or in person at the address: Carrera 8 No 7-27, Bogotá, D.C.

http://www.anticorrupcion.gov.co/servicio/[email protected]�

http://www.anticorrupcion.gov.co/�



TABLE OF CONTENTS

CHAPTER 1. DEFINITIONS ........................................................................... 11CHAPTER 2. OBJECT AND SCOPE OF THE PROCESS ............................ 16

2.1 Object .................................................................................................... 162.2 General Conditions ................................................................................ 162.3 Location. ................................................................................................ 172.4 Exploration Program: ............................................................................. 17

2.4.1 Minimum Exploration Programs ........................................................ 17

2.4.2 Additional Investment ........................................................................ 20

2.4.3 Unit Prices: ....................................................................................... 20

2.5 Participation in Production for the ANH (X%) ........................................ 212.6 Award Criteria ........................................................................................ 22

2.6.1 Areas Type 1 and Type 3: ................................................................. 22

2.6.2 Area Type 2: ..................................................................................... 22

2.7 Schedule ............................................................................................... 222.8 Applicable Norms: ................................................................................. 232.9 Communications .................................................................................... 242.10 Interpretation of the Terms of Reference ............................................... 242.11 Clarifications to the TOR ....................................................................... 242.12 Publication of the final TOR ................................................................... 252.13 Costs Associated to the Documents of the Bidding Process ................. 252.14 Clarifications to the Required Documentation ....................................... 25

CHAPTER 3. THE PROCESS ........................................................................ 263.1 General Requirements to participate in the Process ............................. 26

3.1.1 Acquisition of the Information Package: ............................................ 26

3.2 Qualification ........................................................................................... 283.2.1 Capacity of the Parent Company ...................................................... 30

3.2.2 No changes to the documentation submitted .................................... 31

3.2.3 Qualified Companies ......................................................................... 31



3.2.4 Qualified Operating Companies ........................................................ 31

3.2.5 Qualified Restricted Operating Companies: ...................................... 31

3.2.6 Qualification of the Legal Capacity. ................................................... 31

3.2.7 Qualification of Financial Capacity: ................................................... 36

3.2.8 Qualification of Technical Capacity. .................................................. 38

3.2.9 Qualification of Operational Capacity ................................................ 38

3.2.10 Environmental Capacity .................................................................... 41

3.2.11 Corporate Social Responsibility (CSR) .............................................. 41

3.3 Transparency Commitment ................................................................... 423.4 Statement 1 ........................................................................................... 423.5 Statement 2 ........................................................................................... 423.6 Social Security and other Contributions ................................................ 423.7 Other documents ................................................................................... 433.8 Reasons for rejecting the qualification ................................................... 433.9 Publication of the list of Qualified Companies ....................................... 44

3.9.1 Observations to the Qualification and Answers ................................. 44

3.9.2 Publication of the final list of Qualified Companies ............................ 44

CHAPTER 4. THE OFFERS ........................................................................... 454.1 Contents of the Offer ............................................................................. 454.2 Form of Presentation of the Offers. ....................................................... 454.3 Bid bond for the Offer ............................................................................ 47

4.3.1 Area Type 1: ..................................................................................... 47

4.3.2 Area Type 2: ..................................................................................... 47

4.3.3 Area Type 3: ..................................................................................... 47

4.4 Validity of the Offer ................................................................................ 484.5 Procedure for delivery of the Offers and public opening ........................ 484.6 Award .................................................................................................... 48

4.6.1 Area Type 1 and 3: ........................................................................... 49

4.6.2 Areas Type 2: ................................................................................... 49

4.7 Criteria to break a tie among Offers ...................................................... 504.7.1 Areas Type 1 and 3: .......................................................................... 50

4.7.2 Areas Type 2: ................................................................................... 50

4.7.3 Award criteria for restricted operating companies: ............................. 50



4.8 Declaring the Process Void ................................................................... 514.9 Procedure to correct arithmetic mistakes: ............................................. 514.10 Signature of the E&P Contract and/ or Special TEA .............................. 52

CHAPTER 5. REASONS FOR REJECTION .................................................. 53CHAPTER 6. THE CONTRACT ..................................................................... 55

6.1 RIGHT TO RELINQUISH ...................................................................... 556.2 PERFORMANCE GUARANTIES .......................................................... 55



LIST OF ANNEXES

Annex 1. General map of location of the blocks of the areas ................................ 57Annex 2. Map of location of the blocks of the areas .............................................. 58Annex 3. Borders and Coordinates ....................................................................... 77Annex 4. Letter of Presentation of the Qualification Documents ........................... 78Annex 5. Form of Letter of Intent to participate in the Bidding Process ................. 79Annex 6. Form of Letter of Intent to Execute the Consortium Agreement ............. 80Annex 7. Transparency Commitment .................................................................... 82Annex 8. Letter of Presentation of the Offer .......................................................... 83Annex 9. Historic Balance Sheet ........................................................................... 84Annex 10. Historic Income Statement Of The Company ....................................... 85Annex 11. Company Profile ................................................................................... 86Annex 12. Form to Evidence the Operational Capacity ......................................... 87Annex 13. Form to Evidence the Technical Capacity ............................................ 88Annex 14. Additional Investment ........................................................................... 89Annex 15. Participation Percentage X ................................................................... 90Annex 16. Form of Joint and Several Guaranty ..................................................... 91Annex 17. Form of Bid Bond for the Offer ............................................................. 92



LIST OF TABLES Table 1. Unit Prices ............................................................................................... 21Table 2. Schedule ................................................................................................. 23Table 3. Credit Rating ........................................................................................... 37



CHAPTER 1. DEFINITIONS For purposes of this special competitive process and for the corresponding contractual act, the terms set forth below shall have the following meanings: Inherent Activities: activities inherent to the hydrocarbon sector shall mean the following: Geology, Geophysics, Geochemistry; Drilling of hydrocarbon wells; Reservoir Engineering; Management, operation and maintenance of oil fields, inspection of equipment, pipes and other elements used in the drilling and production of hydrocarbons. Addendum (Addenda): Are all the documents issued to clarify, precise or modify these Terms of Reference, after the date of publication of the final Terms and until the submission of the Offer. Awardee: Qualified Company, Operator and /or Consortium or Temporary Union formed by the foregoing, whose submitted Offer has been selected as the most favorable for the purposes and interests of the ANH to sign with it an E&P Contract and/or Special TEA, as the case may be, on a block in furtherance of this Competitive Process. Annex(es): Is the group of forms and documents that are attached to these Terms of Reference. ANH: The National Agency of Hydrocarbons, a Special Administrative Unit ascribed to the Ministry of Mines and Energy. Areas object of the process: Area Type 1: (E&P Mini Round) Blocks in mature basins (mini round) on which E&P Contracts will be signed. Area Type 2: (E&P) Blocks in basins with new potential on which E&P Contracts will be signed. Area Type 3: (Special TEA) Blocks in frontier basins offered to sign Special Technical Evaluation Agreements. Announcements: Communications of the ANH related to the Bidding Process.

Letter of Presentation of the Qualification Documents: It is the form of communication included as Annex 4 of these Terms of Reference, that each Bidder shall fill in, sign by the legal representative of the Bidder or attorney, as the case may be, and submit with the qualification documents.



Participating Company: It is the Company that has acquired the Information Package and has expressed in writing to the ANH its desire to participate in the Process. Qualified Company: It is understood that a Company is Qualified if it complies with the qualification of its legal and financial capacities according to the provisions of these Terms of Reference. The Qualified Company shall be a member of only one Consortium or Temporary Union with Qualified Operating Company for each block offered. Qualified Operating Company: Is the Qualified Company that in addition of meeting the Legal and Financial Capacities, meets the qualification requirements for Operational, Environmental and Corporate Social Responsibility, contemplated in these Terms of Reference, according to the conditions required in Chapter 3 of these Terms of Reference. Each Qualified Operating Company may only submit one Offer per each block, either individually or as a member of a Consortium or Temporary Union. In any event no Bidder or member of a Bidder may participate in more than one Offer for one same block. Qualified Restricted Operating Company: It is the Participating Company that meets the requirements established to evidence the legal, financial, technical, environmental and corporate social responsibility capacities, but does not have the minimum reserves and production requirements contemplated in section 3.2.9. of these Terms of Reference, in which case it may apply to one (1) or three (3) contracts for Exploration and Production of hydrocarbons on blocks in Areas Type 1, as a result of the Bidding Process, according to the terms and conditions set forth herein. Consortium: It is the kind of association referred to in numeral 1 of article 7 of Law 80 of 1993, which allows two or more individuals or legal entities to jointly submit one same Offer for the award, execution and performance of the contract, in this case and E&P Contract and/or Special TEA, being jointly and severally liable for all and each one of the obligations deriving from the Offer and the E&P Contract and/or the Special TEA, and for the effects generated or that may be generated by the acts, events or omissions of all or any of the participants in such acts. Special Contract for Technical Evaluation (Special TEA): Contract for the Technical Evaluation that in the framework of this process will be signed between the ANH and the Awardee Companies, whereby the evaluator is granted the exclusive right to carry out technical evaluation operations at its cost and risk, aimed at evaluating the hydrocarbon potential with the purpose of identifying the zones of greatest prospective interest in the evaluation area, pursuant to the performance of the Technical Evaluation Program. The special character derives



from the rights of the evaluator regarding conversion, priority, nomination of areas and exclusivity set forth in the contract. E&P Contract: Contract of Exploration and Production of hydrocarbons signed between the ANH and the Awardee Companies, whereby the Contractor is granted the exclusive right to explore the Contract Area and to produce the Hydrocarbons property of the State that are discovered in such area. Schedule: Is the Table 2 which sets forth the dates in or during which the Bidding Process shall take place and which may be modified by the ANH at any time during the course of the process. Heavy Crude: Are those crudes with gravity between 10 and 16 API degrees. Participation Right: Is the right of a Company that has acquired the Information Package, to submit the documents that are necessary for its qualification, after having indicated in writing its intent to participate in the Bidding Process. Contractor: Is the Bidder that signs an E&P Contract or a Special TEA with the ANH. Joint and Several Guaranty: Is the guaranty granted by the Parent Company of a Company which has used the qualifications of the former to meet the qualification requirements contemplated in these Terms of Reference. Bid Bond of the Offer: Is the obligation of the Bidder in favor of the ANH and that has the purpose of guaranteeing the seriousness of the Offer submitted, according to the provisions of these Terms of Reference

Additional Investment: Is the investment offered by the Bidder over the minimum established for the ANH for each block. Regarding Exploration and Production Contracts, the Additional Investment is only predicated with respect to the first phase of the contract. The Additional Investment must be expressed in Dollars of the United States of America. The Additional Investment proposed shall be considered as integral part of the exploration program and must be presented according to the form in Annex 14. Information Package: Is the group of data, coordinates, figures and, in general, information regarding seismic, wells and technical reports of the areas that are the object of this Bidding Process. Participation in Production (X%): is the percentage of the net production that the Bidders offer to the ANH in consideration for the granting of an E&P Contract and/or Special TEA. The amount of X must be an integer number equal or greater



than one (1) expressed in percentiles (%) and corresponding to barrels of oil equivalent (BOE). Term: Is the time that is set for the compliance with an obligation. The terms established in these Terms of Reference shall be understood as calendar days, except as otherwise expressly provided. When the expiration of a term is a day when the ANH is not rendering services to the public, for any reason, such expiration shall be extended to the first following business day. Polygons A and B: Areas defined in article 4 of Accord No. 008 de 2004 issued by the ANH and its amendments. Stratigraphic Well: Drilling aimed at determining the lithologic formation and physical properties of the stratigraphic sequence existing in the subsoil of a given place. The percentage of conventional core extracted from the stratigraphic well must be at least 5% of the total width of the column cut in the same. The rest of the stratigraphic information must be completed with rubble or well cuttings (with samples taken every 15 feet), with fluids and gases contained in the sequence and with the registries of the well (electric, sonic, visual, radioactive and thermal). According to the stratigraphic characteristics of the basin, the depth of the well must reach basement or ten thousand (10.000) feet. To carry out the drilling of a stratigraphic well it is possible to use drilling rigs with different strength according to the programmed depth and the diameter of the core to be recovered. Exploratory Well: The ANH adheres to the definition of A3 and A2 wells of F.H Lahee, accepted by the Colombian Ministry of Mines and Energy and of common use by the operating companies in Colombia. Unit Prices: Is the amount per unit equivalent of each one of the activities of the Minimum Exploration Program established by the ANH according to Table 1. Bidding Process: Is the group of actions defined in these Terms of Reference, leading to the award of the blocks that are the object of the process. In all the cases when this document makes reference to the Bidding Process it shall be understood to be the Open Round Colombia 2010 Competitive Process. Minimum Exploration Program: Are the activities of mandatory compliance that have been established by the ANH, to be developed in each one of the phases of the E&P Contract and the Special TEA, which are established in detail in CHAPTER 2 of these Terms of Reference. Bidder: Is every Qualified Operating Company or Consortium whose members have been qualified (one of them as a Qualified Operating Company) and that submit an Offer.



Terms of Reference or TOR: Is the present document which contains the regulations, requirements and information necessary to participate in the Bidding Process. The other defined terms in capital letters shall have the meaning ascribed hereafter in the TOR.



CHAPTER 2. OBJECT AND SCOPE OF THE PROCESS

2.1 Object The object of this Bidding Process is to award the blocks of the areas defined in Annex 2 and Annex 3 and sign the corresponding Exploration and Production Contracts and/or Special Technical Evaluation Agreements, with the companies that result as Awardees in the Bidding Process, according to the provisions of Accords Nos. 34 of 2006, 01 and 03 of 2007, 01 of 2008 and 06 of 2009 and Resolutions 407 of October 20th 2009 and 006 of January 6th 2010, issued by the ANH.

2.2 General Conditions The National Agency of Hydrocarbons invites the companies of the hydrocarbon sector to participate in the OPEN ROUND COLOMBIA 2010 for the award of blocks in Areas Type 1, Type 2 and Type 3, defined as “Areas object of the process”. The Companies interested in participating in the Bidding Process must acquire the Information Package and submit all the documentation required by the ANH for the process of qualification of the legal, financial, technical, operational, environmental and corporate social responsibility capacities, as the case may be, and subsequently submit and Offer as described ahead. The Participating Companies may qualify as Qualified Companies, Qualified Operating Companies, or Qualified Restricted Operating Companies, as appropriate, and according to the requirements contemplated in these Terms of Reference or may be qualified as Consortiums, in which case they must maintain such form of association and composition to submit the Offer and until the signature of the contract. Likewise, the Participating Companies may submit written observations to the ANH and will have access to the information sessions organized by the ANH in the terms and opportunities indicated in the Schedule and in these Terms of Reference. The Bidders may only submit one Offer to the ANH per each block, either individually or as members of a Consortium. The Offer must contain all the documents according to the conditions and requirements set forth in these Terms of Reference. The Offers will be deposited in an urn during an audience of delivery of the Offers, which will take place on the date set forth in the Schedule.



The Participating Companies in the Bidding Process cannot improve or modify their Offer, or the documents delivered for the legal, financial, technical, operational, environmental and corporate social responsibility qualification. The Offers that are not deposited in the urn in the form, day and time set forth in the TOR shall be deemed not submitted.

2.3 Location. The maps where the blocks object of the process are identified and located per areas are included in Annex 1 and Annex 2 of these de Terms of Reference. The borders and coordinates of the blocks must be consulted in the File denominated Annex 3. Borders and Coordinates, which is part of these Terms of Reference and will be available to the companies in the web page http://www.rondacolombia2010.com

2.4 Exploration Program: The activities comprising the Exploration Program are those that are part of the Minimum Exploration Program, as well as those related to the Additional Investment. Regarding the Special Technical Evaluation Contracts, the Exploration Program is mandatory. Regarding the Exploration and Production Contracts that are signed as a result of this Bidding Process, the activities that are part of the first phase of the Exploration Program are mandatory. In case the Contractor expresses its intent to continue with the same and proceed to the second phase, the activities contemplated in the Minimum Exploration Program for such phase will equally be of mandatory compliance. The activities of the Exploration Program shall include activities such as acquisition of 2D or 3D seismic and A3 or A2 exploration wells, prior authorization of the ANH.

2.4.1 Minimum Exploration Programs The ANH offers 47.767.886,69 hectares in the Areas Type 1, Type 2 and Type 3. Regarding blocks in Area Type 1, when its extension is higher than 45.000 hectares, once the first phase is over, the contractor must relinquish fifty per cent (50%) of the contracted area.

http://www.rondacolombia2010.com/�



Regarding blocks in areas type 2 and 3, once the first phase is over, the contractor must relinquish fifty per cent (50%) of the contracted area.

2.4.1.1 Areas Type 1: Phase I (36 months) Drilling of one (1) well. Phase II (36 months) The drilling of two (2) exploratory wells. or The drilling of one (1) exploratory well in eighteen (18) months and the relinquishment of 50% of the area

2.4.1.2 Area Type 2: Onshore: Guajira, Sinú-San Jacinto, Lower Magdalena Valley and Eastern Plains basins. Phase I (36 months) 20 km of 2D seismic per each 10,000 Ha or its 3D equivalent. The conversion factor for seismic 2D/3D is 1.6. Drilling of one (1) exploratory well

Phase II (36 months) The drilling of two (2) wells, or The drilling of one (1) exploratory well in eighteen (18) months and the relinquishment of 50% of the area. Onshore: Chocó Phase I (36 months) Covering of 100% of the area with indirect high resolution methods: multispectral analysis or aero geophysics of high density (net of 5 Km of side). 10 km of 2D seismic per each 10,000 Ha or its 3D equivalent. The conversion factor of seismic 2D/3D is 1.6.



Phase II (36 months) The drilling of two (2) exploratory wells

Offshore Los Cayos, Tumaco offshore, Urabá offshore, Sinú offshore basins. Phase I (36 months) Covering of 100% of the area with multispectral analysis and piston core sampling , 1 per each 20,000 Ha.

Phase II (36 months) 15 km2 of 3D seismic per each 20,000 Ha. Drilling of one (1) exploratory well

2.4.1.3 Area Type 3: The exploration program must be developed in one sole phase of thirty six (36) months. Areas Onshore: Guajira, Cesar-Ranchería, Cauca-Patía, Lower Magdalena Valley, Middle Magdalena Valley, Catatumbo, Eastern Mountains, Urabá and Sinú San Jacinto basins. Two seismic orthogonal lines according to the design proposed by the ANH and which can be revised by mutual agreement with the Technical Subdirection. Drilling of one (1) stratigraphic well. Areas Onshore: Caguán-Putumayo, Tumaco and Chocó. Covering of 100% of the area with indirect high resolution methods: multispectral analysis or aero geophysics of high density (net of 5 Km of side). Two seismic orthogonal lines covering the block. The design of the seismic line must be presented to the ANH for approval upon obtaining the results of the analysis of the preceding point. Areas Offshore: Los Cayos, Colombia, Chocó offshore, Tumaco offshore, Guajira offshore. 20 km of seismic per each 10,000 Ha or its 3D equivalent. The conversion factor for seismic 2D/3D is 1.6. Covering of 100% of the area with 20 km of bathymetry of high resolution per each 10,000 Ha.



2.4.2 Additional Investment The Bidder must present an Offer with the value of the proposed additional investment, which must be an amount expressed in dollars of the United States of America, over the minimum investment established by the ANH per each block. The Bidder must fill in the form included in Annex 14 listing the activities that it will carry out with such resources. For purposes of determining the value of other exploratory activities, other than those listed in Table 1, the proponent shall indicate the value corresponding to that investment.

2.4.3 Unit Prices: The ANH has established the unit prices for the exploration activities, which are mandatory to establish the minimum exploration program value and the value of the seismic and wells related to the additional investment. To determine the value of other activities, prices in Table 1 will only be a reference.



Table 1. Unit Prices

BASIN Cost km 2D seismic (prices in US$)

Cost km 3D seismic offshore (prices in US$)

Cost km of high resolution bathymetry (prices in US$)

Stratigraphic or Exploration Well (prices in millions US$)

Cost Km aero geophysics (prices in US$)

Cost km Multispectral analysis (prices in US$)

Cost point piston core (prices in US$)

Cost km Seismic reprocessing and reinterpretation (prices in US$)

Caguan-Putumayo

45,000 6 170 1,100 100

Catatumbo 45,000 6 170 1,100 100 Cauca-Patía

50,000 6 170 1,100 100

Cesar-Ranchería

30,000 6 170 1,100 100

Chocó 45,000 6 170 1,100 100 Chocó offshore

4,000 12,000 250 25 170 1,100 15,000 100

Eastern Cordillera

40,000 6 170 1,100 100

Eastern Plains

25,000 3 170 1,100 100

Guajira 30,000 6 170 1,100 100 Guajira Offshore

4,000 12,000 250 25 170 1,100 15,000 100

Los Cayos-Colombia

4,000 12,000 250 25 170 1,100 15.000 100

Lower Magdalena Valley

35,000 3 170 1,100 100

Middle Magdalena Valley

40,000 3 170 1,100 100

Upper Magdalena Valley

40,000 3 170 1,100 100

Sinú – San Jacinto

35,000 3 170 1,100 100

Sinú offshore

4,000 12,000 250 25 170 1,100 15,000 100

Tumaco 45,000 6 170 1,100 100 Tumaco offshore

4,000 12,000 250 25 170 1,100 15,000 100

Urabá 35,000 6 170 1,100 100 Urabá offshore

4,000 12,000 250 25 170 1,100 15,000 100

2.5 Participation in Production for the ANH (X%) In all cases, this is, for blocks in Areas Type 1, Type 2 and Type 3, the Qualified Operating Company or the Consortium must propose an amount “X” of participation in production after royalties to the ANH, for which it must fill in the form contained in Annex 15. The amount X must be an integer number equal to or greater than one (1) expressed in percentiles (%) and corresponding to barrels of oil equivalent (BOE).



2.6 Award Criteria In case of a tie with the first criteria, the second criteria shall be applied. If the tie persists, equal participations shall be offered to the tied Bidders, if they so accept by unanimity. Otherwise a raffle with ballots shall take place, with the winner being that which draws the higher number.

2.6.1 Areas Type 1 and Type 3: The additional investment proposed will be the first award criteria for the blocks that are part of the Areas Type 1 and Type 3. In case of a tie, the second criteria for these blocks will apply, which shall be the participation in production (X%) proposed by the offeror. To these effects, the Qualified Operating Company or the Consortium interested in the block located in Areas Type 1 and 3, must present with its Offer the forms contained in Annex 14 and Annex 15 of these Terms of Reference, dully filled in.

2.6.2 Area Type 2: The participation in production (X%) proposed by the Bidder will be the first award criteria for the blocks that are part of the Areas Type 2. In case of a tie, the second award criteria for these blocks will apply, which shall be the additional investment proposed by the Bidder for the E&P Contracts to be signed. To these effects, the Qualified Operating Company or Consortium interested in a block located in the Areas Type 2, must present with its Offer the forms included in Annex 14 and ¡Error! No se encuentra el origen de la referencia. of these Terms of Reference dully filled in.

2.7 Schedule The following Table 2 has the Schedule and general description of the activities that are part of this Bidding Process for the award of the blocks object of the same. The dates set forth in this table may vary, all of which shall be duly communicated by the ANH and must be taken into account by the Participating Companies.



Table 2. Schedule *The last Thursday of each month, beginning in January 2010, the workshops for clarification of the TOR will take place in Bogotá, in a place and at a time to be timely informed.

Activity Year 2009 - 2010 Publication of the first draft of the TOR October 15, 2009 Road Show Dec 10, 2009 to May 16, 2010 Launching of the process in Bogotá December 2, 2009 Publication of final TOR February 19, 2010

Delivery of qualification documents February 19 and until April 15, 2010

Publication of list of qualified companies April 29, 2010 Presentation of observations to the list of qualification Until May 6, 2010

Publication of final list of qualified companies May 14, 2010 Deposit of offers in the urn, delivery of the bid bond and public act of opening of the offers June 22, 2010

Publication of the preliminary eligibility list June 23, 2010 Validation of the Offers Until June 30, 2010 Award July 2010 Contract signature July and August 2010

2.8 Applicable Norms: This Bidding Process is governed by the provisions of these TOR. In absence of express regulation, the Accords issued by the Council of Directors of the ANH shall apply, particularly Accord No. 008 of 2004 and others that modify, precise or clarify it, as well as the drafts of the contracts of Exploration and Exploitation of Hydrocarbons (E&P) and Special Technical Evaluation (Special TEA) which are part of these Terms of Reference. Likewise, the process shall be governed by the results of the application of article 13 of Law 1150 of 2007 and other Colombian applicable laws. Consequently, in the presentation of the Offers the provisions of the norms that regulate the exploration and exploitation of hydrocarbons in Colombia must be taken into account, including, among others, the following provisions (i) regulations for the protection of the environment, including those that establish the obligation to obtain the environmental license and permits for the use and exploitation of renewable natural resources, as applicable, as well as the provisions for the protection of the Areas of the System of Natural National Parks, Protected Marine Areas or any other category of environmental protection; and (ii) the instruments directed to ensuring the participation of the indigenous and black communities, including prior consultation with such communities when the Inherent Activities are developed in their territory.



The regime applicable to the contract resulting from the Bidding Process will be that contemplated in article 76 of Law 80 of 1993, the Resolutions and Accords issued by the ANH by virtue of such article, and the provisions of the Petroleum Code, Commerce Code, Civil Code and other applicable norms. Such norms, as well as the others that may be pertinent according to Colombian Law are deemed known by the Companies.

2.9 Communications

The ANH will receive all the observations, comments, clarifications or doubts that the companies may have regarding the process or the contract terms by email ([email protected]), during the term stipulated in the Schedule.

The questions and answers, as well as the information of general character will be published on the process web page www.rondacolombia2010.com, with the purpose of maintaining all the companies interested in the Bidding Process informed.

The observations, questions and requests for clarification may also be sent to the ANH to the following address and fax number:

NATIONAL HYDROCARBONS AGENCY Legal Advisor Office Re.: Bidding Process Open Round Colombia 2010 Calle 99 No. 9A - 54 Torre 3, Oficina 1401 Bogotá, Colombia Tel: (571) 5931717 Fax: (571) 5931718

2.10 Interpretation of the Terms of Reference The Companies assume the responsibility for the consultation with third parties and analysis of these Terms of Reference, such that all deductions, errors and omissions made based on their own analysis, interpretations or conclusions that, among others, are obtained by the Companies with respect to the Terms of Reference, are for their exclusive account.

2.11 Clarifications to the TOR Within the term set for the in the Schedule, the Participating Companies may submit questions or request clarifications to the TOR. The ANH will respond to the same within the term and with the frequency established to that effect. It is

mailto:[email protected]�




understood that the answers given by the ANH to the questions or suggestions formulated by the Participating Companies are simply for clarification and do not modify in any case these TOR. The ANH may modify the Terms of Reference through an Addendum until the expiration of the term for submission of Offers, which will be published in the web page of this Bidding Process: (www.rondacolombia2010.com), and in the web page of the Agency: www.anh.gov.co. All the Addenda published by the ANH will make part of these Terms of Reference and will be of mandatory compliance by the Participating Companies. After the date of submission of the Offer the ANH may modify the Schedule.

2.12 Publication of the final TOR On the date contemplated in the Schedule the ANH will publish in the web page of this Bidding Process: (www.rondacolombia2010.com), and in the web page of the Agency: www.anh.gov.co, the final text of these TOR, which shall be the basis for the Qualified Companies or Consortiums to submit their Offers.

2.13 Costs Associated to the Documents of the Bidding Process The costs of preparation and presentation of documents required for the qualification of the Participating Companies as Qualified Operating Companies or Qualified Companies, as well as the preparation of the Offers shall be for the exclusive account of the Participating Companies and the Bidders, as applicable, and at their risk, and for such reason the ANH will not recognize any amount or reimbursement of any nature for that matter.

2.14 Clarifications to the Required Documentation The ANH may request to all or any of the Participating Companies and Bidders the clarifications that it deeds pertinent, in order to clarify any doubt regarding the documentation delivered.


http://www.anh.gov.co/�


http://www.anh.gov.co/�



CHAPTER 3. THE PROCESS

3.1 General Requirements to participate in the Process Legal entities, national or foreign, individually or in Consortium, that are capable according to the law, to which no Contract for Exploration and Production or Technical Evaluation signed with the ANH has been terminated for default, may participate in this Process, according to the conditions and in compliance with the requirements set forth in this Chapter. The companies interested in this Bidding Process may schedule and attend a data room session, for which they must send a request via email to the following address, indicating the date and time, as well as the area of interest. Mr. Hans Morales, officer of the ANH, will confirm the session in the order of request: [email protected]. The data room session will be on the information available in the technical packages and may be scheduled during the term set forth in the Schedule of the Bidding Process. The information package can be acquired starting on the date noted in the Schedule. The acquisition of the Information Package gives the Participating Company the right to submit the documentation required for its qualification, but does not guaranty that the Participating Company will be qualified.

3.1.1 Acquisition of the Information Package: Depending on the area or areas of interest for the Participating Company, it may acquire the Information Packages as follows: i) Area Type 1: The Information Package for the blocks offered in this area has a cost of twenty thousand dollars of the United States of America (USD$20,000), including the VAT and, ii) The Information Package for the Areas Type 2 and Type 3 has a cost of one hundred thousand dollars of the United States of America (USD$100,000), including the VAT. These amounts may be cancelled in Colombian pesos liquidated at the market representative rate (TRM) published by the Bank of the Republic (www.banrep.gov.co/series-estadisticas/see_ts_cam_dia.htm) in effect on the day prior to the day of the payment. This amount is not reimbursable. The delivery of the Information Package to the Participating Company will be made at the offices of the ANH within two (2) business days from the confirmation of the corresponding payment by the ANH. The procedures to make the payment for the Information Package in the country and from abroad are described below:


http://www.banrep.gov.co/series-estadisticas/see_ts_cam_dia.htm�



Payment in Colombia: • Electronic Transfer through ACH, Cenit or Sebra: These can be made

through the systems of electronic banking implemented to that effect by the banking entity to which the participant is linked, as follows: NATIONAL HYDROCARBONS AGENCY-ANH Nit 830.127.607.8 Savings account No. 005-55884-1 Bank of Credit – Helm Financial Services Contact at the ANH [email protected] Telephone 5931717 ext.1412

• Payment by cashier through the system of online collection: Must be made

at the offices of the Bank of Credit at the national level, by deposit of the money to our account identifying itself as our client with an agreement code. It is necessary to use a special form which can be found available in any office of the Bank of Credit. NATIONAL HYDROCARBONS AGENCY-ANH Nit 830.127.607.8 Agreement 9185 Bank of Credit– Helm Financial Services Contact [email protected] Telephone 5931717 ext.1412

IMPORTANT:

Deposit from abroad:

For payments through the online collection do not use the Fast Cashier Box or depositories, they should only be made at the windows of the offices of the Bank of Credit.

Wire transfers of American dollars must be made for deposit to the Citibank account taking into account the following instructions: 56 Intermediary Bank: Citibank, New York N. Y

- Swift Code: CITIUS33 - Aba: 021000089

57 Beneficiary Bank: Banco de Crédito HFS - Swift Code: BCTOCOBB - Account: 10953817

59 Beneficiary: AGENCIA NACIONAL DE HIDROCARBUROS-ANH - Account: Savings Account No. 005-55884-1





70 Payment details: Include the reason for which the wire transfer is being made. Contact [email protected] Telephone 5931717 ext.1412 Payments made to accounts other than those indicated in these Terms of Reference, and outside the prescribed term shall be deemed not made. Payments made in the country must be made in Colombian pesos liquidated at the Market Representative Rate (TRM) of the day before the payment, published by the Banco de la República. The ANH will make an internal review to verify that the resources were deposited at the account of the entity, according to the instructions timely published in the web page of the Bidding Process and in the web page of the agency.

3.2 Qualification Within the term set forth in the Schedule, the Participating Companies interested in submitting the Offer must request the qualification by submitting the letter that to that effect is included in Annex 4, duly signed by the legal representative or duly authorized attorney, enclosing the supporting documents to evidence its legal, financial, technical, operational, environmental and corporate social responsibility capacities, as the case may be, and according to the provisions of these Terms of Reference. All the qualification documents must be submitted in Spanish or translated with the seal of an official translator. The companies of foreign countries that are not a party to the convention and those that are parties to it, that result Awardees, must submit the documents related to the qualification of their legal capacity, within the thirty (30) days after publication of the final list,. duly translated, legalized, and consularized, or with apostille, respectively. If a company does not present such documents during the mentioned period, it will not be awarded to sign the contract, and ANH will proceed in the same way with the company in second order of eligibility and so on. The Participating Companies must submit, in addition to the documents required for each capacity, the following documents:

• Letter of presentation of the qualifying documents; Annex 4. • Letter of Intent; Annex 5 • Transparency Commitment; Annex 7




• Certificate of social security and severance payments. This requirement is for those that have employees in Colombia, otherwise it must so be declared.

The qualification documents must be submitted at the offices of the ANH, Calle 99 No. 9A-54 Torre 3 Piso 14 of the city of Bogotá, D.C. within the deadline set forth in these Terms of Reference. The qualifying documents that are submitted after the day and time set forth in these Terms of Reference will not be taken into account and consequently they will be returned to the Participating Company without opening them. The documents for the legal, financial, technical, operational, environmental and corporate social responsibility capacities must be delivered in one (1) original and one (1) copy, in Spanish, without crossing-outs or erasures, in separate envelopes duly closed, paginated (the original and each one of the copies indicating page x of y) and signed in each page, with the corresponding index, indicating in a clear and precise way each one of the required data and attaching all the documents and forms prescribed in the Terms of Reference. Any correction contained in the documents submitted must be clarified and validated with the signature of the legal representative of the Participating Company in the same documents. The original and each copy must be submitted with identical information, clearly marking in each envelope and cover page the name of the Participating Company, its address, telephone and fax numbers and email, indicating if it is the original or the corresponding copy, as follows:

National Agency of Hydrocarbons “OPEN ROUND COLOMBIA 2010 – PUBLIC BIDDING FOR THE AWARD OF BLOCKS IN THE AREAS DENOMINATED xxxxxxxxxx, xxxxxxxxxx y xxxxxxxxxxxxx. National Agency of Hydrocarbons Address: Calle 99 No. 9 A-54 Torre 3 Piso 14 RE: Documents for the legal, financial, technical, operational, environmental and corporate social responsibility qualification. Name of the participant: Address: Telephone: Fax:



E-mail address Original/ copy

The address, telephone, fax and email that appear in the documents of the legal, financial, technical, operational, environmental and corporate social responsibility qualification will be the ones that the ANH will use for all purposes related to the communications referred to in these Terms of Reference. It is the exclusive responsibility of each Participating Company to inform in advance and in writing any change in such data. The documents required in this Bidding Process must be filled in taking into account the instructions and forms included in these Terms of Reference, with no changes in its original drafting and keeping the established order. The original and the copy of the documents for the legal, financial, technical, operational, environmental and corporate social responsibility qualification may be sent by certified mail and presented at the ANH before the date and time established in the Schedule for the receipt of documents. Qualification documents sent by fax or email will not be accepted. If any difference is found between the original and the copy, the information in the original will prevail.

3.2.1 Capacity of the Parent Company The Participating Companies that do not meet the requirements to evidence one or more of the capacities required, may opt to meet the same by using their parent or controlling company. For purposes of evidencing the subordination to the parent company, the Participating Company must submit the pertinent documents with official translation, issued by the same parent company and signed by whoever has the legal representation or authority to bind it. It is understood by pertinent documents the following: Certificate of Good Standing of the Parent Company and a certificate of control or consolidated balance sheet evidencing the financial condition of the Parent Company. In the event the capacities of the parent or controlling company are used to evidence compliance with the requirements of a Participating Company, the former must sign the Joint and Several Guaranty included in Annex 16 of these Terms of Reference.



3.2.2 No changes to the documentation submitted In no event may the Bidders modify the legal, operational, technical, financial, environmental and corporate social responsibility terms submitted for their qualification. In any case, the National Agency of Hydrocarbons is authorized to request at any time the clarifications that may be applicable. Every Participating Company will be evaluated according to the information attached to the Letter of Presentation of the Qualification Documents (Annex 4). The existence of a foreign Company must be evidenced with the certificate of incorporation or equivalent document of its country of origin.

3.2.3 Qualified Companies The companies that wish to participate as Qualified Companies must only evidence their legal and financial capacities. To submit an Offer they must form a Consortium with at least one Qualified Operating Company. The results of the qualification will be published in the web pages of the Round and of the ANH on the date set forth in the Schedule.

3.2.4 Qualified Operating Companies On its turn, the Participating Companies wishing to be qualified as Qualified Operating Companies must comply with the requirements to evidence their legal, financial, operational, environmental and corporate social responsibility capacities.

3.2.5 Qualified Restricted Operating Companies: The Participating Companies wishing to be qualified as Qualified Restricted Operating Companies must meet the requirements to evidence their legal, financial, technical, environmental and corporate social responsibility capacities. These companies may only apply for blocks in the Areas Type 1, in the terms and conditions set forth in section 3.2.9.1.

3.2.6 Qualification of the Legal Capacity.

The process to qualify the legal capacity of the Participating Companies will be done according to procedure set forth herein. Each Participating Company or its members in case of a Consortium will be evaluated individually.

The Qualified Companies must prove that their corporate purpose includes the possibility to make investments in Hydrocarbon Exploration and Production



Contracts and / or Technical Evaluation Agreements during a term not shorter than one (1) year from the date of presentation of the documents. In addition to the requirement set forth above, the Participating Company wishing to act as operator must evidence having a corporate purpose that allows the development of Inherent Activities with a term not shorter than five (5) years from the date of presentation of the documents, or that the shareholders having control over the operator meet the technical experience in activities inherent to the hydrocarbon sector for a term not shorter than ten (10) years from the date of presentation of the documents.

3.2.6.1 Colombian Legal Entities and Colombian Branches of Foreign Legal Entities

a) The Colombian legal entities and the Colombian branches of foreign legal

entities must submit a certificate of existence and legal representation issued by the Chamber of Commerce within sixty (60) calendar days prior to the date of presentation of the qualification documents.

b) Evidence of the capacity of the legal representative to submit the Offer and to

sign the E&P Contract and/or Special TEA resulting from the process.

c) Evidence that the corporate purpose allows the legal entity to execute and perform the Contract.

d) Evidence as of the date of presentation of the Offer that the term of duration of the company is at least equal to the term of the E&P Contract and / or Special TEA to be signed plus one (1) more year.

When the legal representative has bylaw limitations to submit the Offer, sign the Contract or carry out any other act required for entering into the contract in case of resulting the Awardee, the Offer must include a copy of the minutes evidencing the decision of the corresponding corporate body authorizing the presentation of the Offer, the execution of the Contract and the performance of all other acts required to enter into the contract. This requirement may be cured, but the meeting where such authorities were granted must be prior to the date of presentation of the Offers, otherwise the Offer will be rejected.

3.2.6.2 Foreign Legal Entities without Colombian Branch For purposes of this section, a Bidder of foreign origin will be a company that has not been formed according to the [Colombian] national laws.



For all purposes, the Offers of Companies of foreign origin shall be subject to Colombian laws, notwithstanding, in order to participate they must comply with the following conditions: a) The foreign legal entities without branch in Colombia must evidence their existence and legal representation with documents issued within ninety (90) calendar days prior to the date of delivery of the qualification documents of the Participating Companies. b) In case of award and signature of the E&P Contract and/or Special TEA, the foreign companies without branch in Colombia will have a term of sixty (60) calendar days from the date of signature thereof to establish a branch in Colombia giving application to the provisions of Colombian laws. If at the end of such term they have not established the branch, the E&P Contract and/or Special TEA shall be deemed rescinded as a matter of law and the guaranty will be collected in favor of the ANH. The ANH in its discretion may extend the term.

a) Evidence their existence and legal representation, for which they must present a document issued by the competent authority of the country of their domicile, issued within ninety (90) days prior to the date of delivery of the qualification documents, stating its existence, object, term of duration, name of the legal representative or of the person or persons that have the authority to legally bind the company and their authorities, expressly stating that the representative does not have limitations to submit the Offer.

Certification of the existence and legal representation of Foreign Companies without branch in Colombia: The foreign legal entities must meet the following requirements:

If part of the information requested is not included in the aforementioned certificate, or if such kind of certificates do not exist according to the applicable laws of the country of origin, the information must be presented in an independent document issued by an authorized representative of the legal entity, certified by a competent authority of the country of origin, or instead by the Colombian Consul1

1 Code of Commerce, Article 8º. “The evidence of the existence of the foreign mercantile usage, and of its effectiveness, shall be evidenced by certificate of the corresponding Colombian consul or in lieu thereof of that of a friend nation. Such officers to issue that certificate shall request evidence to the local chamber of commerce or other entity replacing it, and in lieu of both, two lawyers of the place, of known honorability, specialized in commercial law.”

, with authority to that effect, as the case may be, with issue date within ninety (90) days prior to the delivery of the qualification documents. These documents will be deemed granted under oath.



b) The Operator must evidence that its main or related corporate purpose allows the execution and performance of the E&P Contract and/ or Special TEA

c) Evidence of sufficient capacity of their legal representative or special attorney in

Colombia to sign the Contract, according to Law 80 of 1993 and the commercial law.

d) Evidence that it has been incorporated before the date of delivery of the

documents required for the qualification, and that the term of duration is at least equal to the term of the E&P Contract and / or Special TEA and one (1) more year.

When the legal representative of the branch has limitations to submit the Offer, sign the Contract or carry out any other act required to enter into the contract in case of resulting the Awardee, the Offer must include copy of the minutes containing the decision of the competent corporate body of the foreign company that authorizes the presentation of the Offer, the execution of the Contract and the performance of all other acts required to enter into the contract in case of resulting as the Awardee. These requirements can be cured, provided, however, that the corresponding decision had been adopted prior to the date of closing or delivery of the Offer in this Bidding Process. In the event that the term of duration of the foreign legal entity is shorter than the term required, ANH will admit minutes of the corporate body with authority to take such kind of decisions, expressing the firm commitment to extend the term of duration of the legal entity in order to meet the terms herein set forth, in case of resulting Awardee of the Offer where it participates. The omission of this document or its mistakes, prior consideration of the ANH, may be cured within the term set forth to that effect by the ANH; upon expiration thereof if the omission or deficiency has not been cured, the Offer will be rejected according to the provisions of CHAPTER 5 of this document. This requirement is subject to cure; provided, however, the corresponding decision was adopted prior to the date of delivery of the Offer under this Bidding Process.

Foreign individuals with no residency in Colombia, and foreign legal entities without domicile in Colombia, must evidence having an attorney domiciled in Colombia, duly authorized to present the qualification documents, the Offer, sign the bid bond of the Offer, participate and bind its principal in the different instances of the Bidding Process, sign the documents and statements required, as well as the E&P Contract and/ or Special TEA, submit the information that may be requested, and other necessary acts according to these Terms of Reference, as well as to represent it, judicially and extra judicially.

Attorney



Such attorney may be the same sole attorney for the foreign persons that participate in a Consortium, and in such case, it shall suffice for all purposes the presentation of the joint power granted by all the participants of the Consortium with the requirements of authentication, consularization and translation required by the Colombian Commerce Code. The power of attorney referred to in this paragraph may be granted in the same document of formation of the Consortium or Temporary Union. The power of attorney granted abroad must be apostilled or consularized and if it is in a language other than Spanish it must be officially translated.

3.2.6.3 Consortia The Participating Companies may qualify individually or as a Consortium. In the event the Participating Company is qualified as a Consortium, it must keep such form of association and composition until the signature of the contract. In this case, the right to participate in the Bidding Process derives from the purchase of the information package by one or all of the members of the consortium. In addition to the qualification documents, the companies that form the Consortium must present the corresponding letter of intent to form it, fulfilling all the requirements set forth below and according to the form in Annex 6 of these Terms of Reference. The Qualified Companies may only submit a joint offer under a Consortium with at least one Qualified Operating Company. In such case the Qualified Operating Company must have a participation of at least thirty percent (30%) in the Consortium. For purposes of the foregoing, the Qualified Companies and the Qualified Operating Company must present with the Offer a letter of intent, which form is attached to these Terms of Reference as Annex 6 signed by the legal representatives stating that once the corresponding block is awarded within one of the Areas object of the Bidding Process, and prior to the signature of the E&P Contract and/or Special TEA, they will proceed to sign the consortium agreement. The consortium agreement must be signed by the legal representatives of the legal entities that form it and must set forth: a) The participating percentage of each one of the members.



b) The member company that will act as operator of the E&P Contract and/or Special TEA.

c) The terms and conditions, the authorities and attributes and the activities to be carried out by each one of the members of the Consortium or Temporary Union.

d) Name and identification of the representative, its alternate, and their authorities.

e) Its term of duration, which shall not be less than the term of duration of the E&P

Contract and/ or Special TEA and one (1) more year. None of the Participating Companies may present more than one Offer for one block or form part of more than one association or plural Bidder for one same block, in which case all the Offers that fall under this prohibition will be rejected.

3.2.7 Qualification of Financial Capacity: The Participating Company must prove that it has sufficient financial resources to meet, regularly and timely, its current obligations in the country [Colombia] under other oil contracts, and those to be acquired under the new contract. The Participating Company must present the last balance sheet with its notes and the income statement of the three (3) last years, duly audited. Additionally, the company may choose to submit financial statements for an interim period also audited. This information must be submitted in dollars of the United States of America and must be certified by the accountant and/or fiscal auditor and signed by the legal representative of the Company. In addition, Annex 9 and Annex 10 must be filled in based on such information, which must be signed by the legal representative. If the company has started operations less than three (3) years before or, in the event that it is a newly established company, the documentation requested must correspond to the length of it. In case of affiliates, subsidiaries and branches the requirement regarding the net worth will be deemed met if its parent or controlling company evidences the provisions herein. In such case the parent or controlling company whose capacities are used to be qualified must signed the Joint and Several Guaranty included in Annex 16 of these Terms of Reference. In the case of a consortium that is qualified as such, compliance with financial requirements shall be the sum of the assets of each of its members.



In case of the companies that qualify individually and declare their intent of forming a Consortium with other Qualified Companies at the moment of submitting the Offer, the Operating Company must have a minimum participation of thirty percent (30%) in the Consortium. The Participating Companies that are included in the latest publication of “The Energy Intelligence Top 100: Ranking of the World's Top Oil Companies” issued by the firm “Petroleum Intelligence Weekly” (PIW) or that prove to the ANH that they obtained in the last year a credit rating equal to or higher than those set forth in the following table, will be exempt from presenting the documents and financial evaluation.

Table 3. Credit Rating

Credit Rating Agency Qualification Standard & Poor’s BBB Moody’s Baa Duff & Phelps BBB

Depending on the area where the company is interested in presenting an Offer or Offers, the requirements set forth below must be met, as follows:

3.2.7.1 Area Type 1: The Participating Company must have a total net worth for the last audited period equal to or higher than six million American dollars (US$6,000,000). In any case, the Bidder must have a net worth equal to or higher than six million American dollars (US$6,000,000) per each block awarded. If the Bidder submits the best Offer for various blocks but does not have the required minimum net worth for all the blocks offered, the ANH will award the blocks that result from applying as criteria the greatest added benefit for the Nation, in terms of participation in production (X%) offered.

3.2.7.2 Area Type 2: The Participating Company must have a total net worth for the last audited period equal to or higher than twenty million American dollars (US$20,000,000). In any case per each block awarded it must have a net worth equal to or higher than twenty million American dollars (US$20,000,000). If the Bidder submits the best Offer for various blocks but does not have the minimum net worth required for all the offered blocks, the ANH shall award the blocks that result from applying as



criteria the greatest added benefit for the Nation, in terms of the participation in production (X%) offered.

3.2.7.3 Area Type 3:

The Participating Company must have a total net worth equal to or higher than two hundred thousand million dollars of the United States of America (US$200,000,000). In any case, the Bidder must have a net worth equal or higher than two hundred thousand million American dollars (US$200,000,000) per each block awarded. If the Bidder presents the best Offer for various blocks but does not have the minimum net worth required for all the offered blocks, the ANH will award the blocks that result from applying as criteria the greatest benefit for the Nation in terms of the participation in production (X%) offered.

3.2.8 Qualification of Technical Capacity. The verification of the qualification of the technical capacity shall only be done with respect of the Participating Company wishing to act as restricted operator. The Participating Companies must evidence their technical capacity by presenting their work team, in the form described ahead and in the form included in Annex 13 duly signed by the legal representative or attorney. Even though the Participating Company is free to establish the number of persons to use for the performance of the contract, according to its organizational focus, it must have under part time labor relationship, at least one petroleum engineer, one geologist and one professional with experience in health, safety and the environment (HSE). Each one of the foregoing professionals must have its respective professional degree and evidence an operational experience of not less than 8 years in the oil industry in the areas described in Annex 13. In case of affiliates, subsidiaries and branches, the requirement shall be deemed fulfilled if their parent or controlling foreign company provides evidence of the provisions herein. In such case the foreign parent or controlling company whose capacities are used to be qualified must sign the Joint and Several Guaranty included in Annex 16 of these Terms of Reference.

3.2.9 Qualification of Operational Capacity The verification to determine the operational capacity will only be done with respect to the Participating Company or member of the Participating Company pretending



to act as operator. In case of consortiums or temporary unions, the company pretending to act as operator in the E&P Contract and/ or Special TEA to be executed must evidence by itself the requirements. To evidence the operational capacity the Participating Company must fill in Annex 12 and present it dully signed by the legal representative or attorney of the Participating Company. In addition to the requirement related to production and reserves set forth below, the Participating Company pretending to act as operator must evidence: A term not less than five (5) years with a corporate purpose that allows the development of Inherent Activities, prior to the date of presentation of the documents for the qualification. In case of affiliates, subsidiaries and branches, this requirement shall be deemed met if the parent or controlling company evidences the provisions herein. In such case the parent or controlling company whose capacities are used to be qualified must sign the Joint and Several Guaranty included in Annex 16 of these Terms of Reference, which must be granted at the moment of signature of the E&P Contract and/or Special TEA.

The Bidders that appear in the last publication of “The Energy Intelligence Top 100: Ranking the World's Top Oil Companies” issued by the “Petroleum Intelligence Weekly” as Bidders of the integrated or “Upstream” type are exempt from this evaluation.

The Participating Company must prove to the ANH that it has the operational experience to conduct the operations of the future E&P Contract and/ or Special TEA, according to the Good Practices of the Oil Industry and with the following operational parameters depending on the area or areas of interest:

3.2.9.1 Area Type 1: That in the last three (3) years it has drilled at least two (2) wells.

That it has proven reserves of not less than one million barrels of oil equivalent (1 MBPE).

That it has a minimum production of five hundred barrels of oil equivalent per day (500 BPED). To convert the gas production to oil equivalent, the following conversion factor shall be used: 1 BPE equals 5700 PCG.

The Participating Company that on the date of presentation of the qualification documents does not have a contract signed with ANH and that meets the



requirements of legal, financial, technical, environmental and corporate social responsibility capacities, but does not have the minimum reserves and production requirements set forth in this section, may be Awardee of only one Hydrocarbon Exploration and Production Contract as a result of this Bidding Process. The area may not exceed 45,000 hectares and must be located within the polygons defined by the coordinates of the Tables 1 and 2 of Accord 008 of 2004.

Notwithstanding the foregoing, the Participating Company that is under such restriction, may be Awardee in the capacity of restricted operator, of up to a maximum of three (3) hydrocarbon exploration and production contracts that result from this Bidding Process, provided they meet the conditions required in these Terms of Reference and in addition they evidence having a total net worth equal to or higher than one hundred million dollars (US$100,000,000) and that are up to date in the fulfillment of their contractual commitments to the ANH.

The Participating Company that is under this circumstance, as well as its partners or shareholders, may participate to apply for all the contracts resulting from this Bidding Process, as long as they do so in a capacity different than that of operator, evidencing the capacities required to that effect.

3.2.9.2 Area Type 2: Onshore and Offshore: Proven reserves not less than five million barrels of oil equivalent (5 MBPE). Minimum production of five thousand barrels of oil equivalent per day (5.000 BPED). To convert the gas production to oil equivalent, the following conversion factor shall be used: 1 BPE equals 5700 PCG. For deep water blocks they must evidence that they operate the same minimum daily production of five thousand (5,000) barrels or its equivalent from offshore fields located in waters with a minimum depth of 300 m.

3.2.9.3 Area Type 3:

The Participating Company must evidence the following operational parameters required by the ANH, depending on the location of the block or blocks of interest: Onshore and Offshore: Own proven reserves, reported in their financial statements, of not less than 50,000,000 barrels of oil equivalent for the closing of year 2008. Minimum own operated production of 20,000 daily barrels of oil equivalent.



For deep water blocks they must evidence that they operate the same minimum daily production of 20,000 barrels or its equivalent from offshore blocks located in waters with a minimum depth of 300 m.

3.2.10 Environmental Capacity The Participating Company that requests its qualification as Operating Company or Restricted Operating Company must prove to the ANH that it has the environmental credentials to conduct the operations of the future E&P Contract or Special TEA, according to the Good Oil Industry Practices. To that effect, the Participating Company must evidence the following environmental parameters and documents required by the ANH: a) Presentation of the document of environmental policy of the Participating

Company; and

b) Last environmental management report. If the Company does not have these documents, it may submit documents attesting to such information, which will be submitted for consideration by the Board of Directors for their approval. If at the time to present the documentation for qualification, the required translated documents with the seal of the translator are not available, the company may deliver the information in the language of the country of origin. The translated document with the seal of official translator must be delivered up to three working days before publishing the final list of qualified companies.

3.2.11 Corporate Social Responsibility (CSR) The Participating Company that requests its qualification as Operator or as Restricted Operating Company must present to the ANH the document that contains the Corporate Social Responsibility Policy (CSR) as well as the last annual report of Corporate Social Responsibility (CSR). If the Company does not have these documents, it may submit documents attesting to such information, which will be submitted for consideration by the Board of Directors for their approval. If at the time to present the documentation for qualification, the required translated documents with the seal of the translator are not available, the company may deliver the information in the language of the country of origin. The translated



document with the seal of official translator must be delivered up to three working days before publishing the final list of qualified companies.

3.3 Transparency Commitment The Participating Company must attach to the qualification documents Annex 7 of these Terms of Reference (Transparency Commitment) duly filled in and signed by the Legal Representative or Attorney.

3.4 Statement 1 Statement that the Participating Company does not have pending law suits, legal processes or any other circumstance that may lead to the breach of the obligations that it acquires. This statement is included in the Letter of Presentation of the Qualification Documents (Annex 4).

3.5 Statement 2 Statement under oath that the Participating Company is not under any event of inability or incompatibility to contract with the ANH. This declaration is included in the Letter of Presentation of the Qualification Documents. (Annex 4).

3.6 Social Security and other Contributions The individual Participating Companies and each one of the members of the Plural Participating Companies, Colombian or foreign with domicile in the country must be up to date in the compliance with their obligations corresponding to the General Social Security System in Health, Professional Risks and Pensions, as well as in the payment of the contributions to the family compensation entities, the Colombian Institute of Family Wellbeing, ICBF and the National Learning Service, Sena, according to the provisions of article 50 of Law 789 of 2002, meaning that it is current in its obligations for the last six (6) months prior to the presentation of the information. To this effect it must submit a certification issued no more than ten (10) calendar days prior to the date of presentation of the documents, signed by the fiscal auditor, if the legal entity is obliged to have one, or, on the contrary, by its legal representative. Such certification must be accompanied with the copy of the Professional License and the Certificate of Disciplinary Background of the Public Accountant, issued maximum thirty (30) days before the date of closing of this phase.



This requirement must also be evidenced for the execution of the proposed Contract, as the case may be, and fulfilled during the entire term of duration of the Contract and its final liquidation.

3.7 Other documents In addition to the documents mentioned in CHAPTER 3 of these Terms of Reference, the Participating Company must present: • Photocopy of the NIT. • Photocopy of the Citizenship Card or document of identification of the legal

representative • Company profile, duly filled in and signed by the Legal Representative or

Attorney. (Annex 11). The Participating Companies that appear in the last publication of “The Energy Intelligence Top 100: Ranking of the World's Top Oil Companies” issued by the firm “Petroleum Intelligence Weekly” (PIW) are exempt from presenting this document.

3.8 Reasons for rejecting the qualification The reasons to reject the qualification of the legal, technical, financial, operational, environmental and corporate social responsibility capacities of a Participating Company are: a) When it is determined that the information included in the documents is

inconsistent.

b) When the Participating Company is under any of the events of inability or incompatibility according to Colombian law.

c) The lack of evidence of the legal, technical, financial, operational,

environmental and corporate social responsibility capacities, as the case may be.

d) If within three (3) years prior to the launch of this process, the ANH has

terminated an Exploration and Production or a Technical Evaluation contract to the Participating Company, for default as a result of a non-compliance procedure.



3.9 Publication of the list of Qualified Companies The evaluating firm designated by the ANH to verify compliance with the requirements corresponding to legal, financial, technical, operational, environmental and corporate social responsibility capacities of the Participating Companies shall analyze the information submitted and will make the preliminary list of prequalification of the Qualified Companies, Qualified Operating Companies and Qualified Restricted Operating Companies in this Bidding Process. Such list will be published in the Web Page of the ANH on the date set forth in the Schedule.

3.9.1 Observations to the Qualification and Answers During the term set forth in the Schedule, any Participating Company may submit in writing to the ANH the observations related to the prequalification or not of the Participating Companies. During such term the ANH will answer the observations that the Participating Companies have presented.

3.9.2 Publication of the final list of Qualified Companies On the date set forth in the Schedule, and once the observations of the Participating Companies have been analyzed by the evaluator, the ANH will publish the final list of Qualified Companies, Qualified Operating Companies and Qualified Restricted Operating Companies. The ANH may review the contents at any time if after the publication referred to herein, situations become known or appear which merit and justify such review.



CHAPTER 4. THE OFFERS

4.1 Contents of the Offer The Qualified Operating Company and the Consortia formed at least by one Qualified Operating Company and Qualified Companies, must submit the Offers on the date set forth in the Schedule, which shall contain the following: • Envelopes of presentation of the Offers, sent by the ANH to the Participating

Companies Qualified as Operators. • Letter of presentation of the Offer (Annex 8) • Forms of the Offer, indicating the additional investment proposed and the

percentage of participation “X” in the total production after royalties offered to the ANH. (Annex 14 and Annex 15).

• Commitment or letter of intent to create the Consortium if the Companies opt for this form. (Annex 6)

• Bid bond of the Offer (Annex 17)

The aforementioned documents must be filled in and/ or delivered in Spanish in original and with one (1) copy. The omission of any of the foregoing documents is not subject to cure and will give place to the rejection of the Offer. Except in case of the requirements the lack of which gives place to the rejection of the corresponding Offer, the ANH may request in writing, sent physically by fax or email and copy of which will be published in the web page of the entity, the missing documents or clarifications and explanations that may be applicable. In compliance with this request the Bidders may not complete, supplement, modify or improve their Offers.

4.2 Form of Presentation of the Offers. The Qualified Operating Company, or the company acting as Operator in the case of a Consortium, must include the letter of presentation of the Offer duly signed by the legal representative or by the person having authority to contract (Annex 8, Annex 14, Annex 15 and Annex 17). Without exception, this letter is mandatory for all the Qualified Participating Companies that wish to submit an Offer. The failure to present this document shall not be subject to cure and shall result in the rejection of the Offer. If the Bidder wishes to add any explanation or clarification such must be made in a separate letter and included in the annex duly numbered and paginated. Any correction contained in the Offer must be clarified and validated with the signature of the legal representative of the Bidder in the same document.



The original and the copy will be presented with identical information, clearly marking in each envelope and cover page the name of the Bidder, its address, telephone and fax numbers, and email address, indicating if it is the original or the copy. The Offers must be marked as follows: National Agency of Hydrocarbons “OPEN ROUND COLOMBIA 2010 – PUBLIC BIDDING FOR THE AWARD OF BLOCKS IN THE AREAS KNOWN AS TYPE 1, TYPE 2 AND TYPE 3. National Agency of Hydrocarbons Address: Calle 99 No. 9 A-54 Torre 3 Piso 14 RE: DOCUMENTS OF THE OFFER for block XXX of area XXX Name of the bidder: Address: Telephone: Fax: E-mail address: Original/ copy The documents required in this Bidding Process must be filled in taking into account the instructions and forms included in these Terms of Reference, with no changes to its original drafting and keeping the order established. Offers sent by certified mail, fax or email will not be accepted. Alternative or supplementary Offers or proposals for modifications to the Offers, partial Offers or Offers subject to conditions will not be accepted. If any difference is found between the documents delivered or included in the original and its copy, the information included in the original shall prevail. All the expenses for the preparation and presentation of the Offer will be for the account of the Qualified Participating Company. The documents or Offers that are delivered after the date and time set forth in the TOR shall be deemed not submitted and will be returned to the Participating Company or the Bidder as applicable, unopened.



The presentation of the Offer constitutes a commitment between the Bidder and the ANH, whereby such Offer will remain open for evaluation and acceptance during the term of the bid bond of the Offer, otherwise the bid bond shall be collected if the Bidder withdraws the Offer, unless such withdrawal is due to the occurrence of an event of inability or supervening incompatibility. Consequently no Offer may be modified or withdrawn after being deposited in the corresponding urn.

4.3 Bid bond for the Offer The bid bond for the Offer in favor of State Companies must be issued by an insurance company or banking entity legally established in Colombia according to the form included in Annex 17, and must be submitted independently per each one of the blocks depending on the area for which an Offer is presented, as follows:

4.3.1 Area Type 1:

For an amount equal to one hundred thousand dollars of the United States of America (US$ 100,000).

4.3.2 Area Type 2: For an amount equal to two hundred thousand dollars of the United States of America (US$ 200,000).

4.3.3 Area Type 3: For an amount equal to two million dollars of the United States of America (US$ 2,000,000,000). In all cases the insured amounts must be payable in Colombian pesos at the TRM of the day prior to the date of payment. This guaranty must be issued by an insurance company or bank legally established in Colombia or in lieu thereof a Banking Guaranty issued by a bank legally incorporated in Colombia.

In case of observations to the bid bond, the Qualified Operating Companies or the Consortia may remedy the same within the term set forth to that effect by the ANH. The auditing firm hired by the ANH shall keep custody of the bid bonds. The effective date of the bid bond must be from the date of delivery of the Offer and its duration shall be six (6) months from the date of closing of the urn. In any



case the insurance company must provide that the same shall not expire for lack of payment of the premium or for unilateral revocation. In case of presentation of joint Offers the bid bond must be issued in the name of all the members of the Consortium as the case may be. The ANH will return the bid bond to the Bidders that are not Awardees prior request, and once the corresponding E&P Contracts and / or Special TEA have been signed by the Awardees.

4.4 Validity of the Offer The Offer submitted shall be deemed valid for a term of six (6) months from the date of its submission.

4.5 Procedure for delivery of the Offers and public opening The Bidders must present their written Offers to the ANH according to the Schedule and in the place prepared by the ANH to that effect. Such Offers will be deposited in a closed urn located at the site of the event. The Offers must be presented separately per each block by the Bidder. No Bidder may present more than one Offer for one same block. The Offers will be opened and the name of each Bidder, the Participation in Production (X%) and the amount of the Additional Investment offered shall be announced according to the first criteria for the award of blocks, depending on the Area of interest of the Bidder. The Offers that are not deposited in the urn at the date and time set forth in the Schedule shall be deemed not presented.

4.6 Award Companies that at the date of delivery of the proposals are in a procedure of non compliance, regarding a contract with ANH, and that result in the first order of eligibility, cannot be awarded, until the procedure has concluded in his favor. Otherwise, ANH will award the block and sign the contract with the company in second order of eligibility.



4.6.1 Area Type 1 and 3: The award of the blocks in these areas shall be defined based on the largest Additional Investment in exploration expressed in dollars of the United States of America over the Minimum Exploration Program established by the ANH. The second criteria shall be the Participation in Production (“X” %) over the volume of production offered. In case of Areas Type 3 it shall be for the E&P Contracts resulting from the Special TEA. This percentage must be an integer number between one (1) and one hundred (100) percent (%). Regarding the blocks of the Area Type 1, each Qualified Operating Company or Consortium in which it acts as Operator or Restricted Operator, may be the Awardee in the first round for one or more blocks, according to the provisions of section 3.2.9.1 of these Terms of Reference; provided, however the total amount of the areas of contiguous blocks to be awarded does not exceed 45,000 has. In case the total amount of the area of the blocks to be awarded exceeds the limit set forth herein, the ANH will proceed to award the blocks using as criteria the greatest added benefit for the Nation, in terms of exploration investment. For the award of blocks of Area Type 3, each Qualified Operating Company or Consortium in which it acts as Operator, may be Awardee in the first round of one or more blocks; provided, however that the total amount of the areas of contiguous blocks to be awarded does not exceed 4.500,000 has. In case the total amount of the area of the blocks to be awarded exceeds the limit set forth herein, the ANH will proceed to award the blocks using as criteria the greatest added benefit for the Nation, in terms of exploration investment.

4.6.2 Areas Type 2: The award of the blocks in Areas Type 2 will be defined based on the greatest Percentage of Participation in Production % offered. This percentage must be an integer number greater or equal to one (1) and up to one hundred (100). The criteria to break the tie or secondary criteria shall be the Additional Investment offered, which must be expressed in dollars of the United States of America.



4.7 Criteria to break a tie among Offers

4.7.1 Areas Type 1 and 3: In case of a tie between two or more Offers presented for each one of the blocks, the Percentage of Participation in Production X% offered shall be used. This percentage must be an integer number greater than one (1) and up to one hundred (100). If the tie persists, equal participations will be offered to the tied Bidders if they so unanimously accept. On the contrary, a raffle will be made with ballots, and the winner will be the one that draws the greatest number.

4.7.2 Areas Type 2: In case of a tie in the X offered between two or more Offers presented for each one of the blocks, the proposal of additional investment offered by the Bidders will be used to break the tie. If the tie persists, equal participations will be offered to the tied Bidders if they so unanimously accept. On the contrary, a raffle will be made with ballots, and the winner will be the one that draws the greatest number.

4.7.3 Award criteria for restricted operating companies: When the same Bidder has restricted financial or operational capacities and presents Offers for more than one block regarding which it results in the first place of eligibility, the following will apply: 1) It will be awarded the block for which it is the only Bidder.

2) In case a Bidder results in first place of eligibility regarding various blocks, it will

be awarded the block for which it has proposed the largest participation in production X%.

3) If it offers the same participation in production X% in all the Offers, it will be awarded the block for which it has offered the largest additional investment.

4) If the additional investment for the first phase is the same in all the Offers, the

ANH will award the block at its discretion. When a restricted Bidder presents Offers for a number of blocks higher than its operating capacity and results as first and only in the order of eligibility for a larger number of blocks than that allowed for its capacity, to determine the block in which



it will result as first in eligibility order and to liberate the other blocks to be offered in second round, the procedure established in numbers 2, 3 and 4 above shall apply, in the same order.

4.8 Declaring the Process Void Taking into account that in this Bidding Process Offers may be submitted for one or various blocks corresponding to each one of the three (3) areas, it is possible that the process may be declared void for one or various blocks of the areas, as well as for all of the blocks of the areas. The Bidding Process may be declared void in the following events: 1) When no Offers are presented. 2) When none of the Offers presented complies with these Terms of Reference. 3) When there are reasons or events that prevent an objective selection. 4) By discretional decision of the Council of Directors of the ANH pursuant to their

legal authorities.

The declaration of the process being void will be taken pursuant to administrative act which will state, in an express and detailed way, the reasons leading to such decision. It is understood that the ANH is not and shall not be liable for the expenses incurred by the Bidders for the presentation of the Offers.

4.9 Procedure to correct arithmetic mistakes: The ANH will determine if there are errors in the result of the arithmetic operations, and if so it will correct the same. The corrections of arithmetic errors will be of mandatory acceptance for the Bidder regarding the quantities and amounts of the exploration programs, in case it is awarded the contract. If the Awardee refuses to accept them, the bid bond will be collected, in which case the contract will be executed with the Bidder qualified in second place, if the Offer is convenient for the ANH.



4.10 Signature of the E&P Contract and/ or Special TEA On the date set forth in the Schedule and at the time indicated in writing by the ANH, the ANH and the Awardee Company(ies) will sign the applicable E&P Contracts and / or Special TEA, according to the terms and conditions of the drafts of the E&P Contract and Special TEA in effect at the date of signature. Within the term established by the ANH in communication sent to the Awardee indicating the date and time for the signature of the contract, the Awardee Company must submit: 1. The Joint and Several Guaranty (Annex 16) duly signed by the legal

representative. Any company that is part of the same economic group of the Awardee Company, listed or not in the TOP 100 ranking, may grant the Joint and Several Guaranty.

2. Document of formation of the Consortium.

3. According to the provisions of article 50 of Law 789 of 2002, the Awardee Company must present the certificate issued by its fiscal auditor, and in case such does not exist, by the legal representative, evidencing the timely compliance with its obligations regarding the health, professional risks, and pensions systems and other contributions, with a date of issuance not older than ten (10) calendar days prior to the date of signature of the E&P Contract.

In case of Consortium each one of the members must present this certificate. The Awardee Companies without branch in Colombia must certify that this does not apply to them.



CHAPTER 5. REASONS FOR REJECTION The following shall be reasons for the rejection of the Offer in each one of the phases of the process, as applicable: 5.1. The presentation of more than one Offer for one same block by the same

Bidder, in case of individual Qualified Companies; or by Qualified Companies that are part of more than one plural Bidder, or by qualified plural Bidders formed with any Qualified Company that has submitted an individual Offer, either directly or indirectly, by itself or through another interposed person.

5.2. The omission of the document that evidences the identification, existence

and legal representation of the Individual Participating Company or of each one of the members of a Plural Participating Company, as the case may be.

5.3. When the corporate purpose of the Individual Participating Company or the

object or activity of each one of the members of a Plural Participating Company does not allow them to participate in the Contract or to perform the activities for which they are responsible according to the corresponding association agreement.

5.4. The omission of the duly signed letter of intent to form a Consortium in the

event of Plural Participating Companies or plural Qualified Participating Companies.

5.5. When the Participating Company or any of the members of any of the

members of a Plural Participating Company does not meet the term of duration required in these Terms of Reference.

5.6. Not delivering Annex 4 or its submission without the signature of the

representative of the Participating Company. 5.7. Not delivering the Letter of Presentation of the Offer or its submission

without the signature of the representative of the Qualified Company and other documents for the legal, financial, operational and technical evaluation.

5.8. Not delivering the bid bond for the Offer. 5.9. If the Participating Company or Qualified Company is within any of the

events for inability or incompatibility contemplated in the Constitution or the law.

5.10. When the ANH has requested any document or requested that any

requirement be remedied and the Participating Company or Qualified



Company does not submit or remedy the same within the term established to that effect, or the document submitted does not complied with the requirement.

5.11. When the Qualified Company is not up to date in the compliance with its

obligations corresponding to the National Social Security System, according to the provisions of article 50 of Law 789 of 2002.

5.12. Any other event expressly set forth in these Terms of Reference as a reason

for the rejection of the Offers. 5.13. Not submitting the documents that are part of the Offer according to section

4.1 of these Terms of Reference.



CHAPTER 6. THE CONTRACT

6.1 RIGHT TO RELINQUISH Within the first 18 months of the first phase in case of the E&P Contracts, or at the middle of the term of duration of the Special TEA the Contractor must communicate in writing to the ANH its intent to continue or to relinquish the contract. In case of relinquishment, the CONTRACTOR must transfer to the ANH the amount pending execution until reaching fifty percent (50%) of the amount of the activities not performed of the corresponding Minimum Program and up to one hundred percent (100%) of the Additional Investment.

6.2 PERFORMANCE GUARANTIES The Contractor must establish within the fifteen calendar days from the start of the First Phase or the signature of the contract, as the case may be, the following performance guaranties: a) Letter of Credit for ten percent (10%) of the amount of the Minimum Exploration

Program and with a term of duration equal to half of the duration of the first phase or of the contract, as applicable.

b) Letter of Credit for fifty percent (50%) of the amount of the additional investment

and with a term of duration equal to half of the duration of the first phase or of the contract, as applicable.

If the contractor decides to continue with the contract, according to the provisions of the preceding section, one (1) month prior to the expiration of the first half of duration of the first phase of the E&P Contract or TEA, the contractor must increase the amount of the performance guaranty for the remaining fifty percent (50%) of the amount of the additional investment. The contractor must also extend the duration of the performance guaranties up to the eighteen (18) remaining months of the E&P Contract or TEA, as applicable, and six (6) more months. Las garantías podrán reducirse en el monto equivalente a los trabajos que se hayan ejecutado a lo largo de la duración de la respectiva fase, una vez recibida en el EPIS la información técnica resultante, a satisfacción de la ANH. Para efectos de establecer el valor a reducir en la garantía, en lo que corresponde a las actividades diferentes de sísmica y pozo, relacionadas con la Inversión Adicional, el contratista deberá presentar el documento que acredite su valor.



The guarantees may be reduced by an amount equivalent to the work executed along the length of the respective phase, once the technical information is received by the EPIS, to the satisfaction of the ANH. For purposes of determining the value to reduce the guarantee, regarding activities different than seismic and wells, and related to the Additional Investment, the contractor must submit the document proving their value.



Annex 1. General map of location of the blocks of the areas



Annex 2. Map of location of the blocks of the areas



Annex 3. Borders and Coordinates

Please consult the file entitled Annex 3. Borders and Coordinates that will be available to the companies the web page http://www.rondacolombia2010.com, which is part of these Terms of Reference.




Annex 4. Letter of Presentation of the Qualification Documents Qualified Company: Qualified Operating Company: Qualified Restricted Operating Company: CORPORATE NAME: Bogotá, _________ (date) Messrs. NATIONAL AGENCY OF HYDROCARBONS, Bogotá, D. C., The undersigned ________________________ identified with citizenship/foreigner identification document/ passport _________________ issued in _____________, acting in the name of ______________________ and/or in the capacity of legal representative of the Participating Company _____________________________, domiciled in _____________________ and sufficiently authorized as stated in __________________________, submits the relevant documents to qualify the legal, financial, technical, operational, environmental and corporate social responsibility capacities, as applicable, in the Bidding Process and declare under oath with the signature of this letter that: 1. Neither the legal entity that I represent nor the undersigned are under any of the

inabilities, incompatibilities or prohibitions set forth in the law. 2. All the information attached for the qualification is truthful and verifiable. 3. The entity that I represent does not have pending litigations, legal processes or any

other circumstance that prevents me from participating in the Bidding Process or that may lead to the breach of the obligations that I acquire by virtue thereof.

For all purposes I inform you that all correspondence related to the Bidding Process will be received at: Address: City: _____________________________ Fax: _______________________ Telephone: _____________________________ Email address 1: ________________________________________________ Email address 2: ________________________________________________ Sincerely, Signature of the Legal Representative or Attorney: _ Name: __________________________________________________________ Identification: ______________________________________________________ The attached documents have confidential nature: (Include as many numerals as required) 1. 2. 3. The foregoing according to the (Law, Decree, Resolution, Accord, etc.)



Annex 5. Form of Letter of Intent to participate in the Bidding Process

CORPORATE NAME: Bogotá, _________ (date) Messrs. NATIONAL AGENCY OF HYDROCARBONS Bogotá, D. C., The undersigned ________________________ identified with citizenship/foreigner identification card/ passport _________________ issued in _____________, acting in the name of ______________________ and/or in the capacity of legal representative of the Participating Company _____________________________, domiciled in _____________________ and sufficiently authorized as stated in __________________________, pursuant to this letter declare that the entity that I represent wishes to participate in the Bidding Process that is being carried out by the National Agency of Hydrocarbons. To that effect, I attach to this letter the receipt of payment of the Right to Participate as set forth in the Terms of Reference that govern this Bidding Process. The defined terms in this letter will have the meaning ascribed to them in the Terms of Reference. For all purposes I inform you that all correspondence related with the Bidding Process will be received at: Address: City: _____________________________ Fax: _______________________ Telephone: _____________________________ Email address 1: ________________________________________________ Email address 2: ________________________________________________ Sincerely, Signature of the Legal Representative or Attorney: _ Name: __________________________________________________________ Identification: ______________________________________________________



Annex 6. Form of Letter of Intent to Execute the Consortium Agreement

Between __________ a company duly formed under the laws of _________, hereafter referred to as “_________”, represented in this act by _________________, ___________ national ______________, of legal age, holder of __________ No. ________, acting in his/her capacity as ___________, on the one hand, and on the other ____________ a company duly formed under the laws of __________, hereafter referred to as “_________”, represented in this act by _________________, ______________ national, of legal age, holder of __________ No. ________, acting in his/her capacity as ___________, have agreed to enter into this letter of intent which contains the preliminary agreements between _______ and _______ regarding the Bidding Process for the Contracting of Blocks object thereof carried out by the National Agency of Hydrocarbons of Colombia.

WHEREAS ______ has declared its interest in participating in the Bidding Process having been qualified as Operating Company, as defined in the Terms of Reference.

WHEREAS _______ wishes to form a [Consortium/] to jointly participate with __________ in the activities and obligations related with the Exploration and Production Contract and/ or Special Technical Evaluation Agreement, according to the terms and conditions set forth in the Terms of Reference for the bidding Process.

WHEREAS ______ has been qualified by the ANH as a Qualified Company according to the mechanisms established in the Terms of Reference.

The Parties have agreed as follows:

First: __________ and ________ agree to form a [consortium] in case the Offer submitted by them results favorable in the Bidding Process.

Second: Each one of the parties shall have the following participation in the formation of the [consortium]:

_______________ _____%

_______________ _____%

Third: The parties agree that________ will be the Operating Company.

Fourth: For purposes of the submission of the offer and all the acts related with the Bidding Process, _________ is designated as legal representative of the [consortium/] and _________as it’s alternate.

Fifth: ________ and ______ agree to form the [consortium/] before the signature of the Exploration and Production Contract and/or Special Technical Evaluation Agreement in case of being favored with the award thereof. In case the [consortium] is not formed, ____________ and ________ agree that the same shall not be considered formed, and consequently they shall not sign the Exploration and Production Contract and/or Special



Technical Evaluation Agreement with the ANH. In that sense, if such situation occurs, _______ and ________ agree to release the ANH from all liability resulting from the fact that the parties to this Letter of Intent did not form the [consortium] and the ANH had determined that the Exploration and Production Contract and/or Special Technical Evaluation Agreement should not be signed for any reason.

Sixth: This Letter of Intent shall be governed and construed according to the laws of the Republic of Colombia.

This is made in three (3) equal counterparts and to one sole effect.

By ____________ By __________



Annex 7. Transparency Commitment

CORPORATE NAME: Bogotá, _________ (date) Messrs. NATIONAL AGENCY OF HYDROCARBONS Bogotá, D. C., Reference: Transparency Commitment. The undersigned ________ identified with citizenship card ______________ issued in __________, acting in the name of _________ and/or in the capacity as legal representative of the Participating Company __________, domiciled in _______, and sufficiently authorized as stated in __________, present the following Transparency Commitment within the Bidding Process. I undertake to develop all my activities within the framework of ethical principles and to assume, seriously and responsibly, all the commitments related to the future contracting process. I undertake to provide to the National Agency of Hydrocarbons all information regarding corrupt acts, bribes, subjectivity, pressure or favoritism in the development of the Bidding Process, of which I have or shall have knowledge. I undertake to comply with all the obligations and terms contemplated in the TOR and in the future contract. I declare that I have not been offered, received, requested, and will not request, directly or indirectly, any gift or benefit for the presentation of the qualification documents. I declare that I have not offered and will not offer, have not given and shall not give, directly or indirectly, any gift or benefit to obtain a decision in my favor, improper advantage or to harm any of the Participating Companies. I declare that all the information that I delivered and will deliver to the National Agency of Hydrocarbons is truthful and accurate, and that I did not omit and will not omit information that is necessary for the transparency in the execution and development of the Bidding Process, the submission of the Offer and the execution of the E&P Contract and / or Special TEA. Sincerely, PARTICIPATING COMPANY: NAME OF LEGAL REPRESENTATIVE: Identification Document No.: Signature:



Annex 8. Letter of Presentation of the Offer

CORPORATE NAME: Bogotá, _________ (date) Messrs. NATIONAL AGENCY OF HYDROCARBONS Bogotá, D. C., The undersigned __________ identified with citizenship/foreigner identification card / passport _________________ issued in _____________, acting in the name of ______________________ and/or in the capacity of legal representative of the Participating Company _____________________________, domiciled in _____________________ and sufficiently authorized as stated in __________________________, pursuant to this document declare that the terms of this Offer have been formulated based on the specifications included in the TOR and declare: 1. That I know the TOR, its Annexes and information regarding the questions and answers, as well as the other documents related with the Bidding Process. 2. That I have understood the same in their entire extent, scope and meaning. 3. That I accept the rules established in these TOR, in terms of transparency, equity and equality and have not introduced conditions or modifications to them or to the Offer that I attach. 4. That I accept the Exploration Program for the corresponding block in case the E&P Contract and/ or Special TEA is awarded to me. 5. That in the event of resulting favored by the award, I undertake to sign the E&P Contract and/or Special TEA within the term set forth in the Schedule and to perform the object of the contract according to the documents that are part of the Bidding Process, as well as those of the E&P Contract and/or Special TEA, the terms of the Offer submitted by the entity that I represent and the other stipulations of the same, as accepted by the ANH. 6. That no person or entity other than those herein mentioned has interest in the Bidding Process or in the Contract that may be executed as a result thereof and that therefore it only binds the signatories. For all purposes I inform you that all correspondence related to the award of the E&P Contract and/or Special TEA will be received at: Address: City: _____________________________ Fax: _______________________ Telephone: _____________________________ Email address 1: ________________________________________________ Email address 2: ________________________________________________ Sincerely, Signature of the Legal Representative or Attorney: _ Name: __________________________________________________________ Identification: ______________________________________________________



Annex 9. Historic Balance Sheet

COMPANY’S BALANCE SHEET: Amounts in US Dollars (US$)

YEAR 1 YEAR 2 YEAR 3(*) ASSETS Cash and banks Temporary investments Accounts receivable Prepaid expenses Other current assets TOTAL CURRENT ASSETS Properties, Plant and Equipment TOTAL ASSETS LIABILITIES Financial obligations Suppliers Payable accumulated expenses Other short term liabilities TOTAL CURRENT LIABILITIES Long term financial obligations Other liabilities NET WORTH

Paid in capital Retained profits Total Net worth TOTAL LIABILITIES + NET WORTH Name and signature ______________________ Legal Representative C.C. Note: Please clarify the accounts of the Balance that are grouped with regards to the annual reports of each company. (*) Year 3 means the last audited year.



Annex 10. Historic Income Statement Of The Company

Amounts in US Dollars (US$) Year 1

Year 2 Year 3*

Operational Income (+) Other Operational Income TOTAL OPERATIONAL INCOME (-) Costs of Operations GROSS PROFITS

(-) Management expenses (-) Sales expenses (-) Depreciation (-) Amortization OPERATIONAL PROFITS

(-) Financial expenses (-) Other expenses (+) Other income (+/-) Currency adjustment PROFIT BEFORE TAXES

(-) Income tax reserve PROFIT FOR THE PERIOD

Name and signature _____________________ Legal Representative C.C. No. (*) Year 3 means the last audited year



Annex 11. Company Profile

FINANCIAL INFORMATION (Million US$) YEAR 1 YEAR 2 YEAR 3 (*) Total income* Net Income (Losses) Cash flow Total net worth Long term debt *net of royalties OPERATIONAL INFORMATION (Year ended in December) YEAR 1 YEAR 2 YEAR 3 (*) Sales of hydrocarbons (mb/d) Gas reserves (mmbls) Hydrocarbon reserves Name and signature ____________________ Legal Representative C.C. (*) Year 3 means the last audited year



Annex 12. Form to Evidence the Operational Capacity

1. PROVEN HYDROCARBON RESERVES

UNITS LAST YEAR

Volume of Reserves

MBOE

2. HYDROCARBON PRODUCTION

UNITS LAST YEAR

Average yearly production

BOED (*)

(*) To convert the daily production of gas, the following conversion factor shall be used: 1 BOE equals 5700 PCG.

3. NUMBER OF WELLS DRILLED IN THE LAST THREE YEARS

Units YEAR 1 YEAR 2 YEAR 3

Number of wells

Wells

The data set forth in this form corresponds to the activity carried out in the capacity as operator, is taken from the Company’s files and is part of its experience. Name and signature ____________________________________ Legal Representative or Attorney of the Participating Company



Annex 13. Form to Evidence the Technical Capacity GENERAL INFORMATION

Name of the Professional: Position in the Company: Identification Document: Professional License: EDUCATION:

Professional Degree – Undergraduate

University Year

Postgraduate Degrees University Year

EXPERIENCE:

. Time of Experience: ___________________ Operational Experience:

Number of Wells Years Company Regional geology Prospecting Seismic design and acquisition Other geology work Reservoir engineering Drilling Production facilities Operation of oil fields Environment and industrial safety

I certify my will and commitment to participate in the contract to be entered into with _______________ (name of the Company) and confirm the truthfulness of all the information contemplated in this form. Name and Signature Professional Name and Signature Legal Representative Note: This form must be filled in by each of the professionals required to evidence the technical capacity.



Annex 14. Additional Investment Type of Area Area Type 1

Area Type 2 Type of Contract E&P

Area Type 3 TEA

Name of the Block

Bidder

Area (in Ha)

Phase No. Duration EXPLORATION WORK Estimated Investment(1)

Description Quantity Unit Unit Amount (US$)

(US$)

TOTAL ESTIMATED INVESTMENT

Name and signature

_____________________

Legal Representative

(1) The estimated investment must be based on the unit prices in Table 1



Annex 15. Participation Percentage X Participation in production (“X”%) offered to the ANH. X (%)= ___________ An integer number that corresponds to the percentage for the ANH. This participation applies equally to liquid hydrocarbons and natural gas. Name and signature of the legal representative ____________________________



Annex 16. Form of Joint and Several Guaranty

The undersigned, XXXXXXXXXXXXX, natural of XXXXXXXXXXX, XXXX, of legal age, domiciled in XXXXXXXXXXXXX identified with XXXXXXXXX identification card number XXXXXXXX, declare: 1. That in my capacity as “XXXXXXXXXXXXXXXXXXXXXXX” I act in the name and representation of XXXXXX(PARENT COMPANY), company formed according to the laws of XXXXXX, according to the documents and certificates that evidence the formation, existence and representation of such entity, duly legalized, particularly with the minutes of the meeting of the Board of Directors dated XXXXXX of XXXXXXXXX of XXXXX. 2. That was authorized without limitation by the Board of Directors to grant and sign all the documents to jointly and severally guaranty all the obligations of the Colombian branch of XXXXXXXXXXXXXXXXXXXXXXXXXXXX, company organized according to the laws of XXXXXXXXXXXX, which capital is 100% owned by XXXXXX (PARENT COMPANY), acquires pursuant to the Hydrocarbon Exploration and Production Contract and / or Special Technical Evaluation Agreement executed with the National Agency of Hydrocarbons of Colombia, hereafter the ANH, for the sector known as “XXXX”, or for the damages deriving from the breach of such obligations. 3. That there is no legal or bylaw provision prohibiting XXXXXX (PARENT COMPANY) to grant this guaranty to be jointly and severally liable with respect to the obligations deriving from this contract or for the damages deriving from their breach, or to sign the same to perfect this guaranty. 4. That there is no contract entered into by XXXXXX(PARENT COMPANY), prohibiting or preventing the granting of this guaranty of joint and several liability for the compliance with the obligations deriving from the Exploration and Production Contract and/or Special Technical Evaluation Agreement, or for the damages resulting from the breach thereof. 5. That under oath I declare that I am not into any event of incompatibility or inability to sign this contract as joint and several guarantor in the terms of Colombian law, undertaking XXXXXX(PARENT COMPANY) therefore, to carry out and fulfill all and each one of the activities and obligations deriving from the object of the contract XXXXXXXXX, such that it will also be jointly liable to the ANH for the damages in case of any breach of such contract, without limitation. 6. That because XXXXXX(PARENT COMPANY) is joint and several guarantor of XXXXXXXXXXXXXXXXX it acknowledges and accepts that it has no right to call for any exculpatory clause and any other benefit given to the non joint and several guarantors. Therefore it undertakes to be directly and principally liable for the performance or the damages resulting from the breach of the obligations deriving from this contract of exploration and production and/or Special Technical Evaluation. 7. That XXXXXX(PARENT COMPANY), has evidenced that it has and undertakes to maintain the financial capacity, technical competency and professional abilities necessary to perform the activities under the XXXXXXXXX contract. Signed on __________ on this ________ day of ________ of 2010. XXXXXX(PARENT COMPANY) XXXXXXXXXXXXXXX LEGAL REPRESENTATIVE



Annex 17. Form of Bid Bond for the Offer

: Letter of Credit No ______________________________

: DATE AND PLACE OF ISSUANCE _______________________________

: EXPIRATION DATE

[__from the date of delivery of the offer its validity shall be of six (6) months from the date of closing of the urn

: NOMINAL AMOUNT Us$XXXX dollars of the United States of America : ISSUING BANK [____Name of issuing bank_____]

: BENEFICIARY NATIONAL AGENCY OF HYDROCARBONS - ANH

: ORDERED BY [____Name of the Company____]

: NAME OF THE PROCESS IN

WHICH IT WILL PARTICIPATE

Pursuant to this document we communicate to you that for the account and order [_____Name of the Company_____] hereafter the BIDDER, we have issued in your favor this irrevocable standby letter of credit, confirmed and to order, in the amount of XXXX dollars of the United States of America (US$XXX), to guaranty the Offer presented by the BIDDER in the Open Round Colombia 2010 Bidding Process. It is understood that the responsibility of the [____Name of issuing bank ____] deriving from this standby letter of credit is only and exclusively limited to the amount in Colombian legal currency mentioned above.

In case of breach by the BIDDER of all or any of the obligations and other activities inherent to such obligations deriving from the presentation of the Offer referred to in the first paragraph of this standby letter of credit, hereafter the GUARANTEED OBLIGATIONS, the Beneficiary shall notify such breach to [Name of issuing bank] at its offices of _________________, within the term of duration of this letter of credit. On the same date of receipt by us of such notice, we will unconditionally pay to the order of the Beneficiary the amounts claimed by it against this letter of credit, without exceeding, in any case, the total guaranteed amount. If the notice of breach mentioned above is not sent within the term of duration of this letter of credit, our responsibility hereunder shall cease. The notice communicating the breach of the GUARANTEED OBLIGATIONS to the [____Name of issuing bank____] shall consist of a document duly signed by the Legal Representative of the ANH, or whoever is carrying out his duties, stating the breach by the BIDDER of the GUARANTEED OBLIGATIONS and requesting the payment of this letter of credit. This notice must include the number of this letter of credit and the amount to be



collected hereunder, converted into legal Colombian currency at the market representative rate in effect on the date when the notice is sent to us, as stated in a certificate of the Financial Superintendency of Colombia or the entity that may replace it for such purposes. This document shall be governed by the “Rules and Uniform Uses regarding Letters of Credit” (Last Revision) published by the International Chamber of Commerce (ICC). _________________________________________________ Name and Signature of the Legal Representative of the Issuing Bank