February 2016

INVESTMENTHANBOOK

HYDROCARBONPERÚ

EXPLORATION AND EXPLOITATION

EXPLORATION AND EXPLOITATION

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PERU HYDROCARBON INVESTMENT HANDBOOK

Primera edición: febrero 2016Hecho el Depósito Legal en la Biblioteca Nacional del Perú N° 2016-01653ISBN: 978-612-4175-14-5

Editado por: © 2016, Sociedad Nacional de Minería Petróleo y Energía Jirón Francisco Graña 671, Magdalena del Mar, Lima - PerúTeléfono: (+511) 215-9250www.snmpe.org.pe

© “Peru Hydrocarbon Investment Handbook” is copyrighted by the Sociedad Nacional de Minería, Petróleo y Energía – SNMPE, and cannot be reproduced, copied, sold or otherwise restructured without the express prior consent of the SNMPE. All rights reserved.

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PERU HYDROCARBON INVESTMENT HANDBOOK

This “Peru Hydrocarbon Investment Handbook” is intended to give potential investors an overview of the main procedures contemplated by Peruvian law to carry out hydrocarbon exploration and production operations in Peru. This first installment is regarding Exploration and Exploitation of hydrocarbon.

This document has considered eight topics of particular importance for the exploration and production of hydrocarbon, which describes the main legal aspects that regulate the development of a Hydrocarbon project being addressed in the following chapters:

1. General considerations2. Procedure to enter into hydrocarbon contracts3. Qualification procedure4. Hydrocarbon Contracts5. Environmental and social regulations applicable to hydrocarbon activities6. Taxation system applicable to hydrocarbon activities7. Royalties8. Use of public and third-party property

In addition, this handbook includes a Glossary of Terms and Abbreviations used in the Chapters and a list of the main legal regulations that were covered in preparing this handbook.

SNMPE does not bear any liability for any direct, indirect, consequential, compensatory or incidental damages that could be generated by making decisions based on the information provided by this handbook. The information presented is not intended to replace any specialized studies required, or the company’s own management system within its operations; it only aims at complementing them.

This document is for orientation purposes only, and addresses the most relevant legal aspects regulating investments in the Hydrocarbon Sector that were in force as of December 31st, 2015.

(EXPLORATION AND EXPLOITATION)

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GENERAL CONSIDERATIONS

1. HYDROCARBONS LAw, LAw 26221

The Law 26221 took effect on November 18th, 1993 to be the regulation which aims to promote investment in the exploration and exploitation of hydrocarbons. In that law PERUPETRO S.A. (PERUPETRO) is created as a State Company of the Energy and Mines Sector ruled by private law representing the Peruvian State being responsible for the negotiation and signing of Hydrocarbon contracts - License Contract or Service Contract for Exploration and Exploitation or only for Exploitation of Hydrocarbons, or any of the other type of contracts authorized by the Ministry of Energy and Mines (MINEM for its acronym in Spanish) either by holding direct negotiations or calling for bids. It is also responsible for overseeing the fulfillment of said Contracts

2. OwNERSHIP Of HYDROCARBON

“In situ” hydrocarbons are property of the State, which has granted the right to subscribe contracts to PERUPETRO; in turn, the ownership rights over extracted hydrocarbons are transferred from PERUPETRO to the Contractor on the signature date of the license contract. The Contractor agrees to pay to the State, through PERUPETRO, a cash royalty to the conditions and timing under the Contract. In service contracts, PERUPETRO maintains the property rights of hydrocarbons.

The Contractor has free disposal of hydrocarbons according to the license agreement and can export free from all taxes. In case of national emergency declared by Law, under which the State must acquire hydrocarbons from local producers, this shall be carried out according to international prices and recovery mechanisms of payment established in each contract.

3. TYPES Of CONTRACTS fOR EXPLORATION AND EXPLOITATION Of HYDROCARBONS

License Contract: is held by PERUPETRO S.A., with the Contractor and for which it obtains the permission to explore and exploit or exploit hydrocarbons within the Contract area; in which merit PERUPETRO S.A. transfer the property rights of Hydrocarbons to the Contractor, who must pay a royalty to the State.

Services Contract: is held by PERUPETRO S.A. with the Contractor, so that it exercises the right to carry out exploration and exploitation or exploitation of hydrocarbons in the area of the contract, the Contractor shall receive compensation according to the controlled production of hydrocarbons.

Other type of contract: Authorized by the Ministry of Energy and Mines. Up to date no other modality to the current ones has been authorized.

4. OTHER CONSIDERATIONS

At the end of the contract, facilities, electronic media, energy, camps and pipelines will become property of the Peruvian State at no cost.

The contractor can keep their accounts in foreign currency; however, tax payments must be made in national currency.

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PROCEDURE TO BE FOLLOWED TO ENTER INTO HYDROCARBON CONTRACTS

Companies interested in developing exploration and exploitation of hydrocarbon can consult about the existence of technical information in PERUPETRO’s database. The database contains information in relation to the exploration and production of hydrocarbons, as well as other areas of the national territory. The information provided by PERUPETRO’s database, after a period of confidentiality, is available to the investors free of charge.

1. DIRECT NEGOTIATIONS

• LetterofInterestandRequestforthequalificationofinterestedcompanies Interested companies must send a letter to PERUPETRO, informing the General Manager’s office that

they are interested in holding negotiations for one or more blocks and requesting their qualification as oil companies in order to hold negotiations for the block they are interested in, in accordance with the provisions set forth in Supreme Decree Nº 030-2004-EM (Regulations on the Qualification)

• EvaluationandQualificationofCompanies Companies must file their last annual report, which shall include a corporate profile and legal information,

along with a list of the operations they have carried out in the oil and gas field. PERUPETRO will evaluate the information within 10 business days, as provided for by the Regulations on the Qualification and will analyze the economic, financial, technical and legal conditions from the applicant company. After the evaluation, PERUPETRO will issue a Qualification Certificate authorizing the company to start negotiations.

• NegotiationoftheContract PERUPETRO will designate a committee to negotiate that should be composed of competent professionals

who will begin negotiations with the company to set the contractual conditions for the development of hydrocarbon activities in the areas of interest.

As stated in the Organic Hydrocarbon Law, any foreign company interested in entering into a Hydrocarbon Contract in Peru must establish a branch or incorporate a corporation in keeping with the provisions set forth in Peru’s Business Corporation Law. Said company must be domiciled in the city of Lima, Peru, and must appoint a Peruvian representative. It must also be registered in the Register of Hydrocarbon Contractors kept by the Public Registry Office.

• AgreementonthefinaltextoftheHydrocarbonContract Once there is an agreement on the final terms of the Contract, two copies of the draft Contract must be

signed to signify their agreement therewith.

• ApprovaloftheContractbytheBoardofDirectorsofPERUPETRO Once the draft contract is signed, it will be submitted to the Board of Directors of PERUPETRO for approval.

• ApprovaloftheContractbytheMINEMandtheMinistryofEconomyandFinance(MEFforitsacronyminSpanish)

Once the contract has been approved by the Board of Directors of PERUPETRO it will be sent to the MINEM for approval. MINEM, after evaluation and approval, will send the contract to the MEF for approval. Once the Contract has been approved by both ministries, it will be authorized by the President of the Republic within the term set forth in the Organic Hydrocarbon Law, through the approval of a supreme decree.

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• ConformityoftheCentralReserveBankofPeru(BCRPforitsacronyminSpanish) Simultaneously, the contract is sent to the BCRP for approval of the clause regarding financial rights

granted to the contractor

• IssuanceofasupremedecreeauthorizingthesigningoftheHydrocarbonContract The President of the Republic will issue a Supreme Decree establishing the contract area and awarding

PERUPETRO the “in situ” property of hydrocarbons and authorizing it to sign the corresponding contract.

• SigningoftheContract PERUPETRO and the contractor, together with the MINEM and the BCRP, will sign the contract on the

agreed date. Once signed, the contract will be converted into a public deed by a Notary Public and registered on the Register of Hydrocarbon Contractors kept by the Public Registry Office.

2. CALL fOR BIDS

The bidding processes are carried out by a public tender and each one must have their own terms approved by the Board of PERUPETRO

Oil companies interested in entering into Hydrocarbon Contracts to carry out hydrocarbon exploration and exploitation operations in one or more blocks will be invited to participate in a bidding process that will select the best technical and financial proposals in order to enter into the respective Hydrocarbon Contracts.

To take part in the bidding process, interested companies must submit a Letter of Interest, along with the additional information indicated in the Bidding terms and conditions.

The bidding process includes the following stages:

a) PublicationoftheBiddingtermsandconditions The bidding terms and conditions will specify the requirements and conditions applicable to the bidding

process. They also set the deadlines.

b) Qualificationofcompaniesforthebiddingprocess PERUPETRO will objectively evaluate the minimum conditions to be met by companies in order to enter

into a Hydrocarbon Contract, within the framework of the Regulations on the Qualification. Once PERUPETRO proves that the companies comply with the minimum requirements, it will provide the

companies with the documents required to move on with the bidding process. They will also be informed of the blocks in respect of which they can submit their bids and the business score obtained, if applicable.

c) TechnicalInformationabouttheBlocksandDigitalDataRoom After receiving the notice sent by PERUPETRO, the companies can request the information package

containing relevant technical information on the block or blocks they are interested in. To this end, they must sign a Confidentiality Agreement.

d) QueriesandclarificationoftheBiddingConditions Qualified companies can make queries or request that the bidding conditions be clarified by sending a

letter to the Working Committee in charge of the bidding process, which will reply the queries and give notice thereof to the companies.

e) SubmissionofTechnicalandFinancialProposals The deadline and the way to submit bids will be established in the bidding conditions.

f) EvaluationandQualificationofTechnicalProposals The terms and conditions will establish how and when the Working Committee will evaluate the proposals.

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g) Contract Award The Working Committee will award the Contract to the successful bidder. To this end, the results of the

bidding process will be disclosed in the manner contemplated in the bidding conditions.

h) NoticeofContractAward All participating companies will be informed of the outcome of the bidding process.

i) SigningoftheHydrocarbonContract After being informed of the outcome of the bidding process, the successful bidder will sign two copies of

the proposed Hydrocarbon Contract to signify its agreement therewith.

j) IssuanceofaSupremeDecreeauthorizingthesigningoftheContract PERUPETRO will take the necessary steps to have the signing of the Hydrocarbon Contract approved by

means of a Supreme Decree.

k) SigningoftheContract The bidding conditions will specify the term to sign the Hydrocarbon Contract, which must be converted

into a Public Deed executed before a Notary Public and registered in the Register of Hydrocarbon Contractors kept by the Public Registry Office.

To sign the Hydrocarbon Contract, the successful bidder must provide a Bank Letter of Guaranty, a Corporate Guaranty furnished by its home office (as per the forms provided by PERUPETRO), and a Training Contribution Certificate evidencing that it has paid its contribution.

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QUALIFICATION PROCEDURE

In order to obtain the Qualification Certificate that is required for companies to begin negotiations for Hydrocarbon Contracts, they must submit to PERUPETRO S.A. the information as set forth in the Regulations on the Qualification.

PERUPETRO also considers the minimum parameters for those companies that wish to invest in the country. It should be noted that the granting of the qualification does not generate rights on the area of the block.

1. LEGAL INfORMATION

Companies must provide evidence of their legal existence by delivering:

a) A legalized copy of their Articles of Incorporation, including their Bylaws, as well as any other document that may prove the existence of the company in its country of origin (for example, certificate of registration with the public registries, good standing certificates, etc)

b) An affidavit authenticated by a notary public and signed by an authorized company representative, certifying that the company:

- Is not involved in bankruptcy or insolvency proceedings. - Has no legal impediment to enter into contracts with the Peruvian State. - Has trained technical and professional staff to perform hydrocarbon activities. - Has undertaken to comply with the legislation related to environmental and social matters.

Any document obtained abroad must be certified by an authorized company officer in the company’s country of origin. Similarly, the signature of the foreign public officer must be certified by the Peruvian Consulate (or Apostille, if the Hague Convention is applicable) and, finally, the Peruvian Consul’s signature must be certified by the Peruvian Ministry of Foreign Affairs (in case you were not able to have an Apostille)

2. fINANCIAL INfORMATION

Companies must submit a copy of the audited financial statements corresponding to the last three (3) years, including Consolidated Balance Sheets, Profit-and-Loss Statements, and Changes in the Shareholders’ Equity.

3. TECHNICAL INfORMATION

A report must be submitted on the hydrocarbon exploration and exploitation operations carried out by the company during the last five (5) years, including information on drilling work performed, areas and fields operated, production of oil or natural gas; and condensates and proven reserves.

In addition, the companies must submit any other additional document that they may deem convenient.

All documents submitted must be duly translated into Spanish, except for the information contained in pamphlets, brochures, annual reports, etc.

4.QUALIFICATIONCERTIFICATE

Within a term of 10 business days, PERUPETRO S.A. will evaluate the economic, financial, technical and legal information provided by the company requesting qualification and will issue the Qualification Certificate which will allow the company to begin negotiations. Such certificate shall cease to have effect if, within two (2) years no contract is signed.

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HYDROCARBON CONTRACTS

As noted in Chapter 1 hereof, the Article 10 of the Organic Hydrocarbon Law states that the exploration and exploitation of hydrocarbons can be done by: i) License Contract, ii) Service contract, and iii) other types of contracts authorized by the Ministry of Energy and Mines.

1. CHARACTERISTICS Of HYDROCARBON CONTRACTS

Hydrocarbon contracts, regardless of their type, have the legal nature as “ Contract-Law” governed by private law, and are subject to the provisions contained in Article 1357 of the Civil Code.

These contracts must be approved by a Supreme Decree countersigned by the Ministers of Energy and Mines and of Economy and Finance, with the participation of the BCRP (Peruvian Central Bank of Reserves).

Once approved by a Supreme Decree and executed as a Public Deed before a Notary Public, Contracts may only be amended through an agreement in writing signed by the parties, for which have to follow a similar procedure required for the approval.

2. CONTRACT STAGES

Contract stages are two: exploration and exploitation. For oil, the validity of the contract is 30 years; for non-associated natural gas and condensated, the validity of the contract is 40 years. In both cases, the exploration phase is within the total contract term.

The exploration phase lasts seven (7) years with the possibility to be extended to three (3) additional years in certain cases. It is divided into several periods which are agreed under negotiation process. This phase can continue until the expiration of the term, even if they had begun production of the discovered hydrocarbons.

3. RETENTION PERIOD

The contract can be terminated, for decision of the contractor, at the end of any period of the exploration phase, depending on the results of the exploration activity and compliance of the agreed minimum work program.

In case the contractor carries out a discovery of hydrocarbons during any exploration phase, that would not be commercial but only for lack of transportation facilities, the contractor may ask for a retention period which may not exceed five (5) years in order to make the transportation of the production feasible.

In the case the contractor finds non-associated natural gas, or non-associated natural gas and condensates in any period of the exploration phase, it can request a retention period up to ten (10) years for developing a market for these products.

In case of drilling an exploratory well, the contractor may request the suspension of the exploration period up to six (6) months, in order to study and integrate the exploration results before deciding to proceed with the next period of the minimum work program.

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4. MINIMUM wORK PROGRAM

PERUPETRO is authorized to negotiate minimum work programs which are flexible for each period of the exploration phase agreed in the Contract. The Minimum Work Program can be established in Exploration Work Units (UTEs for their acronym in Spanish), according to which the Contractor is free to carry out a work program in order to meet the number of UTEs agreed in each period.

The execution of the minimum programs is guaranteed by the Letter of Guarantee. The non-fulfillment of the commitments of these programs generates the execution of the Letter of guarantee.

5. AREA RELEASES

The Contract area will be reduced as the parties agreed in the contract, until reaching the surface under which the producing horizons are found plus a surrounding area for technical security.

6. VALUATION

The valuation of crude oil and condensates produced is based on international prices taken from a basket of hydrocarbons fixed by mutual agreement between the parties. The appraisal of the gas is based on the current selling price of the natural gas produced from the contract area. This price must reflect the market price of the gas produced from the contract area.

7. TRANSfER

The contractor or any natural or legal person that belongs to the Contractor will be able to transfer its contractual position or to associate with third parties, for that an approval by Supreme Decree authenticated by MINEM and MEF is needed. In this case, obligations and guarantees assumed by the contractor will be maintained.

8. JURISDICTION AND SOLUTION Of DISPUTES

The contract is negotiated, written and signed according to the Peruvian legal framework and it is subjected to the jurisdiction of the Peruvian law.

In case of controversy, the contract anticipates the installation of a Technical Committee of Conciliation for cases of discrepancies related to the operations and also the subjection to the International Arbitration, considering itself like an alternative to solve any controversy, differentiates or conflict related to the contract that can arise between the Contractor and PERUPETRO that cannot be solved in mutual agreement.

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SOCIAL AND ENVIRONMENTAL REGULATION ON HYDROCARBON ACTIVITIES

In the License Contracts for the Exploration and Exploitation of Hydrocarbons signed between PERUPETRO and the contractor, there are obligations regarding environmental protection and community relations.

In this regard, the contractor is obliged to comply with the provisions established in the Environmental Protection Regulations for Hydrocarbon Activities, approved by means of Supreme Decree No. 039-2014-EM (Environmental Protection Regulations), the General Environmental Law, Law No. 28611 (LGA) and its amendments and other applicable environmental provisions as applicable.

Furthermore, the contractor is obliged to perform operations according to sustainable development guidelines, conservation and environmental protection in accordance with the laws and regulations regarding environmental protection, native and peasant communities, and international conventions ratified by the Peruvian State. In that sense, the contractor must respect the culture, habits, customs, principles and values of communities, maintaining an adequate harmony with the Peruvian government and civil society.

The contractor must use the best practices available in the international industry in compliance with environmental laws and regulations regarding the prevention and control of the environmental pollution applicable to the operations. It should also perform its operations in accordance with current regulations on the preservation of biodiversity, natural resources, health and safety of the population and its employees.

1. REGARDING THE LGA AND THE ENVIRONMENTAL PROTECTION REGULATIONS

The Law 28611 is applicable and enforceable to any natural or legal, public or private person in the country. It is aim at establishing the basic principles and standards to ensure the effective exercise of the right to a healthy, balanced and suitable environment for the full development of life. That article provides that productive activities and exploitation of natural resources are governed by their respective laws; being applicable to the policies, regulations and instruments for environmental management.

Meanwhile, the Environmental Protection Regulation aims at regulating environmental protection and management of hydrocarbon activities in the country with the main purpose of preventing, minimizing, rehabilitating, remediating and compensateing for negative environmental impacts of such activities to foster sustainable development.

2. APPLICATION Of OTHER REGULATONS ON ENVIRONMENTAL MATTERS

There are other hydrocarbon regulations on environmental matters, such as the regulation of the activities of Exploration and Exploitation of Hydrocarbons, approved by the Supreme Decree No. 032-2004-EM; Safety Regulations for Hydrocarbon Activities, approved by the Supreme Decree No. 043-2007-EM, among others.

It should also be noted that hydrocarbon regulations are not the only applicable regulations. There are general regulations related to environmental protection and natural resources that should be considered according to the specific characteristics of each project. Among the most important general regulations, without this list being exhaustive, we can find the following:

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General Law of Solid Waste Law Nº 27314

General Law of Health Law Nº 26842

Law on the Conservation and Sustainable Use of Biodiversity Law N° 26839

Law of Forestry and Wildlife Law Nº 29763

Law of Protected Natural Area Law N° 26834

Law on Environmental Impact Assessment for Works and Activities Law N° 26786

Organic Law for the Sustainable Use of Natural Resources Law N° 26821

Water Resources Law Law N° 29338

On the other hand, there is an international legal framework subscribed by Peru that must also be complied by the hydrocarbon activities. Some of them are: the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), the Basel Convention, the Vienna Convention, the United Nations Framework Convention on Climate Change, Convention on Biological Diversity, Bonn Convention, International Tropical Timber Agreement, the Montreal Protocol on Substances that Deplete the Ozone Layer, among others

3. ENVIRONMENTAL CERTIfICATION OBLIGATION

According to the Environmental Regulations, prior to the commencement of any hydrocarbon activity that may cause environmental impacts such as: seismic exploration, exploration drilling, exploitation (development and production), among others. The contractor is required to prepare an Environmental Assessment to evaluate and determine prevention, minimization, mitigation and remediation of potential negative environmental impacts. The Environmental Assessments can be of three categories: DIA (Statement of environmental impact) (Category I), EIA-sd (Environmental Impact Assessment, semi detailed) (Category II) and EIA-d (Environmental Impact Assessment, detailed) (Category III).

The investment project could not be developed, executed or continued without an environmental certification. Administrative sanctions will apply..

• Categorizationofenvironmentalstudies

DIA: Environmental Impact DeclarationEIA-sd: Semi-detailed Environmental Impact AssessmentEIA-d: Detailed Environmental Impact AssessmentEVAP: Preliminary Environmental Evaluation (*) the items mentioned in the chart are references, for better understanding

we encourage to see Annex 1 of the Regulation approved by DS 039-204-EM.

CATEGORY I

ENV

IRO

NM

ENTA

L S

TUD

IES

CATEGORY II

CATEGORY III

DIA

EIA-sd

EIA-d

Projects that can cause minor negative environmental impacts, such as*: - Seismic exploration on the sea, coast or highlands that are not developed in certain

areas or marine or terrestrial ecosystems (ie: Natural Protected Area including buffer zone or regional conservation, fragile ecosystems, critical habitats or of importance for endemic, threatened economic, areas of natural bank resource projects construction of new accesses)

Projects that can cause moderated negative quantitative and qualitative environmental impacts, such as*: - Seismic Exploration on the sea, coast or highlands developed within one or more

particular areas or marine or terrestrial ecosystems mentioned above, Exploratory Drilling An EVAP can be requested when corresponds, because it can correspond an EIA)

Projects that can cause significant moderated negative quantitative and qualitative environmental impacts, such as*: - Seismic Exploration in the jungle; Exploratory drilling on the sea, coast and

highlands An EVAP can be requested when it corresponds, you can request EVAP it could be an EIA-sd) taking place in certain areas or marine or terrestrial ecosystems; and Exploitation (all projects in on the sea, coast, highlands and jungle)

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The Annex 1 of the Environmental Protection Regulation has established the corresponding environmental studies for hydrocarbon activities, indicating the classification and description of each. That Regulation also established the minimum requirements for the presentation of such environmental studies.

In case the specific activity is not considered in the Annex 1, or if the contractor considers that due to the specific characteristics of its project or the environmental conditions, it does not correspond the categorization assigned, the contractor shall make an application for the classification of the environmental studies, called Preliminary Environmental Assessment (EVAP for its acronym in Spanish) before the competent environmental authority, who will issue a classification decision within 20 working days. It should be taken into consideration that the EVAP cannot be considered as an environmental certification and will be effective provided that no material or technical conditions of the project, its location or the environmental and social impacts have not changed.

• ReferencetermsIn the case of environmental studies of projects with Category II and III, the contractor must submit a draft Terms of Reference (TdR for its acronym in Spanish) before preparing the environmental study. The content of this TdR is developed in the Ministerial Resolution 546-2012-EM-DM which approves the Terms of Reference for Environmental Impact Assessment for Investment Projects with common or similar characteristics in the hydrocarbon sector.

• ComplementaryenvironmentalmanagementinstrumentsAs a reference, without extending the description in this handbook, the Environmental Protection Regulation has considered the following as Complementary Environmental Management Tools:- The Closure Plan and Partial Closure Plan.- Rehabilitation Plan.- Technical Report

4. BASELINE

The baseline used to draft the environmental studies must be representative and reasonable of a project study area. For sequential hydrocarbon activities or in case of expansion and modification of a hydrocarbon activity in the same area that have raised environmental baseline study previously approved, it will not require a new baseline for subsequent environmental studies.

In the event that the baseline exceeds five (5) years since the execution of the project and depending on the type of the proposed activity, the contractor should prove that the area has similar characteristics to those of the baseline, contained in the environmental study approved, and require authorization from the competent environmental authority.

There is also the possibility of using the baseline to modify or extend the original project or new projects that are located in adjacent areas, which must be properly supported and approved by the MINEM.

For the drafting of the environmental studies, accordingly, the contractor of the hydrocarbon activity would include information regarding the relevant aspects related with the collective rights of the indigenous peoples that may be arisen by the project, in order to design and implement the appropriate measures be established on the environmental management strategy.

The Hydrocarbon activities contractors must notify the MINEM the date of start of the preparation of the semi-detailed and detailed Environmental Impact Assessments (EIA-sd and EIA-d), so that the relevant arrangements are made when collecting data for the baseline.

The Law No. 30327, Law on the Promotion of Investments for Economic Growth and Sustainable Development, has established that the baselines for every approved EIA (detailed and semi-detailed) are made public and free of

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charge. In that sense, the owner of a project can decide to freely share the baseline information of any approved EIA. The use shall apply to investment projects in any economic sector, for the development of any environmental management instrument. The holder of EIA may use the document in a different stage or phase of your project.

5. ACTIVITIES EXCEMPT fROM ENVIRONMENTAL CERTIfICATION

It should be noted that some hydrocarbon activities do not require environmental studies: those that do not generate any negative environmental impact such as aerial photography, aerogravimetry, aeromagnetometry, surface geology, surface gravimetry, surface geochemical exploration, among others.

Notwithstanding, the contractor shall adopt any necessary measures in order to mitigate environmental impacts that could emanate from his activities, in compliance with the Environmental Protection Regulations, the Maximum allowable limits (LMP for its acronym in Spanish) and the relevant environmental standards.

6. VALIDITY Of THE ENVIRONMENTAL CERTIfICATION

The environmental certification is invalid if, within a maximum period of three (3) years after issuance, the titleholder does not start the works for the execution of the project. For once, and upon dully supported request of the titleholder, this period may be extended for up to two (2) additional years.

7.GLOBALENVIRONMENTALCERTIFICATION(CAGforitsacronyminSpanish)

The above-mentioned Law of the Promotion of Investments for Economic Growth and Sustainable Development created the CAG, in order to gradually incorporate different authorization certificates regarding the detailed EIA1

in a single administrative proceeding being conducted by the National Service for Environmental Certification of sustainable Investment (SENACE)

Some of the authorization certificates included in the CAG are: water resources, forest resources, treatment and disposal systems, use of water areas, risk assessments and contingency plans, favorable technical opinions, among others that may be incorporated progressively2.

The SENACE has 150 business days as from the submission date of the EIA to review and issue the CAG, period that may be extended for 30 working days if the complexity of the case justifies it and under exceptional circumstances. The mechanisms for citizen participation are included within the EIA assessment period.

8. CITIZEN PARTICIPATION

This is the right to participate in political, economic, social and cultural life and is enshrined in the Constitution of Peru, and it has been regulated in the Regulations for Citizen Participation for carrying out Hydrocarbon Activities approved by the Supreme Decree No. 012-2008-EM.

There are laws for the hydrocarbon sector that govern the citizen participation process through consultation mechanisms in hydrocarbon exploration or exploitation activities, covering from the start of negotiations or contract tender to the project closure.

1 In the case of a semi-detailed EIA, it has been established that its transfer will be gradual, 2 years after SENACE has concluded the complete transfer of the detailed EIA.

2 Currently the CAG is optional because the companies have the option to apply this for all or some of the authorization certificates or follow the traditional procedure for obtaining the EIA certificate.

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The citizen participation process has the following stages for a positive development of these activities:

• BeforethesignatureofthecontractThis process takes place through different mechanisms (hands-on information events) under PERUPETRO responsibility, which include the negotiation process with interested companies through its award and subsequent submission by the companies to stakeholders.Information on the Project and the actions taken for contract negotiation or tender are disseminated in this stage.

• DuringthedraftingandassessmentoftheEIA The DGAAE is in charge of the citizen participation process and is conducted under a Citizen Participation Plan proposed by the Owner of the Project that has to be approved by the DGAAE3. This Citizen Participation Plan is the document describing the actions and mechanisms aimed at informing stakeholders about the Project. Informative workshops organized by the environmental authority are held during this stage. They present the project to the population in the area of influence. The number of workshops varies for each project.

• StagefollowingtheEIAapprovalThis is the Citizen Participation Process that takes place after the approval of environmental assessments during the project life cycle. This stage aims at fostering the participation of stakeholders, their community authorities and representative institutions in following up on hydrocarbon activities, taking into account the characteristics of each project.

9. PRIOR CONSULTATION

It is the right of the indigenous peoples to be consulted by the State every time there is a legislative or administrative measure that could directly impact their collective rights.

Therefore, Prior Consultation takes place each time Governmental agencies identify potential impacts on the collective rights of the indigenous people and before to get the authorization to perform the activity or project. It consists of an intercultural dialogue between the state and indigenous peoples about actions and measures that could affect them, in order to reach agreements with mandatory fulfillment. The Ministry of Culture is the specialized technical body on indigenous matters and, therefore, responsible to manage the database that identify the indigenous or native people, which will be updated along time.

• AboutthePriorConsultationprocessThe Peruvian State, through its promoting entities at national, regional or local level, identifies which of its legislative and administrative measures could directly impact the collective rights of indigenous people; and must identify indigenous people potentially affected by the measure and establish a dialogue with them. It should also afford the costs of the process.

The Ministry of Culture coordinates and articulates the government policy for the implementation of the prior consultation and will provide the promoting entities with the guidance, training and assistance for the prior consultation.

3 The Directorate General for Energy Environmental Affairs (DGAAE for its acronym in Spanish) or the SENACE, according to the transferring process functions.

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Source: Ministry of Culture

In this regard, for exploration and exploitation activities, the MINEM has determined: the administrative procedure for the consultation process (by the approval of the Supreme Decree to sign the contract for exploration and exploitation of oil or gas blocks); the opportunity of the prior consultation to take place (before issuing supreme decree); and the Direction in charge (DGAAE)

• RegardingthedecisionadoptedaspartoftheprocessIf no agreement is reached, corresponds to the state entity to propose the measure to make a decision. When this occurs, the entity shall justify its decision and do everything necessary to ensure the collective rights of the indigenous peoples and ensure the protection of the right to life, integrity and full development of these peoples.

The content of this measure must be aligned to the competency of the promoting entity, respecting the laws of public order, fundamental rights and guarantees granted by the Constitution, as well as preserving the existence of the indigenous peoples.

The Peruvian legislation does not grant a veto power to the prior consultation process, since it is considered as an opportunity to establish a dialogue that is based on the principle of good faith.

STAGES

A. Identification of the measure to be consulted

B. Identification of the indigenous people to be consulted and their

representative organizations Consultation Plan

Proposal of Consultation PlanInitial meetings

Consultation Act

Registry of the results of the Consultation

process

Official Database

Registry of facilitators

Registry of interpreters

Legislative or administrative

measure

C. Publicity of the measure

D. Information

E. Internal evaluation of the indigenous people

F. Dialogue between Government and the indigenous people

G. Decision

INSTRUMENTS

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TAXATION SYSTEM APPLICABLE TO HYDROCARBON ACTIVITIES

1. TAX STABILITY

According to the provisions set forth in Article 63 of the Single Revised Text of Law No. 26221, Organic Hydrocarbon Law, approved by Supreme Decree No. 042-2005-EM, the State guarantees contractors that the tax system in force on the date of signing of Contract will remain unchanged during the term of the Contract.

In this sense, the company or companies that are the Contractor are subject to the common tax regime in force in the Republic of Peru, which includes the common Income Tax Regime, as well as the specific rules established in the Organic Hydrocarbon Law, the provisions of Supreme Decree No. 32-95-EF, which approved the Tax Stability Guaranty Regulations and the tax rules under the Organic Hydrocarbon Law and Law No. 27343, which regulates Stability Contracts entered into with the State under the scope of the Laws of each sector.

Thus, the Contractor is guaranteed tax stability that only includes the taxes in force on the date of signing of the Contract, the taxes established thereafter not being applicable to it. In the case of Income Tax, the tax rate in force plus two percentage points is stabilized. However, in the case of exploration and exploitation of natural gas, these two percentage points additional to the income tax rate may be exempt through a Supreme Decree.

Tax stability applies to the following Contractor’s activities: i) The activities pertaining to the Contract; ii) The complementary activities required to perform the Contract, as long as they do not produce revenues for the Contractor; and iii) Revenues of an occasional nature.

2. INCOME TAX (IT)

Income Tax is a tax levied on income (profits or benefits) obtained by taxpayers that qualify as parties Domiciled in the country4 regardless of the nationality of the individuals, the place of incorporation of the companies, or the location of the income-producing source. In addition, the Tax is applicable to those parties that qualify as taxpayers not domiciled in the country, but only in respect of the revenues they produce and qualify as “Peruvian-source”. This tax is calculated and paid on an annual basis although it is mandatory to make monthly prepayments.

For purposes of this tax, income subject to it will be classified into the following categories:

• Capital-basedIncomea) First: Income produced by leasing, subleasing and transfer of assets.b) Second: Income from other capitals (interest, dividends, capital gains, etc.).

4 The following are considered to be parties domiciled in the country:

A) Individuals: (i) Peruvian nationals domiciled in the country, (ii) foreigners who have resided or remained in the country more than one hundred and eighty three (183) calendar days, during any twelve (12)-month period; and, (iii) Individuals discharging representation duties or filling official positions abroad.

B) Legal Entities: (i) Incorporated in the country, (ii) branches, agencies or other permanent establishments in Peru of non-domiciled indi-viduals, only in respect of their income from Peruvian source, (iii) multinational banks, in respect of the income of their operations on the internal market, (iv) sole proprietorship enterprises, de facto partnerships and other entities incorporated or established in the country.

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• BusinessIncomec) Third: Income from trade, industry and others expressly included by law. All income generated by

companies belongs to this category. The following table shows rates of IR applicable to earners of third category income domiciled in the country, according to the fiscal year:

fISCAL YEAR RATE

2015 - 2016 28%

2017 - 2018 27%

2019 forward 26%

fISCAL YEAR RATE (*)

2015 - 2016 30%

2017 - 2018 29%

2019 forward 28%

(*) Includes current rate plus two percent points.

• WorkIncomed) Fourth: Income from independent work. e) Fifth: Income as an employee and other income from independent activities expressly defined by law.

According to the current legal regulations in force, business activities carried out by parties considered to be domiciled, whether individuals or legal entities, qualify as Third Category Income; therefore, the provisions contemplated in the corresponding rule will apply for purposes of determining the tax.

• DeterminationofthirdcategoryincometaxinhydrocarbonsactivitiesAccording to Law No. 27343, which regulates Stability Contracts with the State under the Organic Hydrocarbons Law, IT conditions currently in force on the date of signing Contract will remain unchanged during the term of the Contract, applying the current rate plus two (2) percent points.

For the third category (corporate income tax), the IT to the taxpayers domiciled in the country is applied on the Income Net that the company has obtained in the exercise. In order to establish the Net Income, it shall be deducted from Gross Income (set of taxable income that has been earned in the year): (i) the costs necessary to produce and maintain that generates income source, while the deduction is not expressly prohibited by law; and (ii) the total net losses from previous years.5

The tax payable by domiciled companies will be determined on an annual basis at the rate of 30% over the Net Income; notwithstanding, companies that produce third category income are obliged to make monthly prepayments, charged to the annual tax.

5 Taxpayers domiciled in the country may offset their Peruvian-source third category losses of a year, according to any of the following sys-tems:a) Offsetting the total net loss recorded in a year, imputing it year-by-year, until the amount thereof is exhausted, to the net income obtai-

ned in the immediately subsequent four (4) years, losing the balance that has not been offset during this period.b) Offsetting the total net loss recorded in a year, imputing it year-by-year, until the amount thereof is exhausted, to fifty percent (50%)

of net income obtained in the immediately subsequent fiscal years.

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It should be pointed out that Domiciled or Non-Domiciled individuals and Non-Domiciled companies that receive dividends and other forms of profit distribution from Domiciled companies, will have to pay a 6.8% withholding tax in 2015-2016 period, 8% in 2017-2018 period and 9% since 2019.

In the case of Contractors performing activities in more than one Contract area and also are engaged in other activities related to oil, natural gas and condensates and hydrocarbon-related energy activities, they will determine the results of each year independently for each Contract area and activity, for Income Tax calculation purposes.

Contractors will make their prepayments in accordance with provisions set forth in the common regime in force on the date of signing of each Contract.

Exploration and development expenses, as well as investments made until the date of commencement of commercial extraction, including the cost of wells, will be amortized in accordance with any of the following procedures:

- Based on the unit of production. - Through linear amortization, deducting it in equal portions, during a period of no less than five (5) financial

years.

Once commercial extraction has commenced all the entries corresponding to expenditures that do not have a recovery value will be deducted as an expense of the year.

In the case of Non-Domiciled Parties, IT is determined through the application of various rates (depending on the type of operation or activity that has produced the income: interest from foreign loans, royalties, technical assistance, other income, among others) over the total revenues paid or credit, except as provided in article 48 and item g) of article 76 of the Single Unified Text (TUO) of the Income Tax Law.

• Accounting It is possible to keep the accounts in foreign currency; however, the tax will be held in local currency (soles)

3. AGREEMENTS TO PREVENT DOUBLE TAXATION

In order to determine the IT to be paid and the economic effect thereof on foreign investment, it is absolutely necessary to take into account the Agreements to prevent double taxation that Peru has entered into with several countries.

Agreements currently in force are those signed with: the Andean Community (Peru, Colombia, Ecuador and Venezuela), Chile; Canada, Brazil, Mexico, Korea, Switzerland and Portugal.

4. VALUE ADDED TAX (VAT)

VAT is a tax levied on consumption which is calculated on a monthly basis over the value added of each layer of the production and marketing chain, using a scheme of debits and credits. This tax operates as follows: the tax payable is determined on a monthly basis by deducting the Tax Credit (VAT paid on all the purchases of goods and services rendered) from the Gross Tax (amount resulting from the application of the tax rate over the taxable base6), in such a way that only the difference between these two amounts is what is actually paid to the Treasury.

6 The taxable base is comprised by: a) Sale of goods: sale price. b) Rendering or use of services: Total compensation paid. c) Construction contracts: Construction value. d) First sale of real property by the constructor, excluding land value: Revenues earned. e) Imports: Customs price plus the respective duties and taxes

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• VATdeterminationThis tax is levied specifically on the following transactions: (i) the sale of personal property in the country, (ii) the rendering or use of services in the country, (iii) construction contracts, (iv) the first sale of real property made by the builders thereof; and (v) the importation of goods.

The applicable rate is 16%, to which, 2% Municipal Promotion Tax must be added, totaling 18%.

The structure of the Tax contemplates certain permanent exemptions (in which cases it should not be applied), such as: (i) exportation of goods, (ii) exportation of certain services contemplated in the law, (iii) the transfer of assets made as a result of corporate reorganization, (iv) among others.

• VATrefund

a) General Regime

- Favorable balance for exporterExporters are entitled to request refund of VAT levied on goods purchased or services employed as consumables in the production of goods to be exported.

- VAT Recovery Refund of VAT paid on imports or local purchases of capital assets made by parties engaged in production of goods and services in this country for their subsequent export, the sale of which is subject to VAT, and have yet to start commercial activities.

b) SpecialRegimes

- VAT Early Refund Consists of the refund of VAT levied on imports or the local purchase of new capital goods, new intermediate goods, services and construction contracts, made during the preproduction stage to be used directly in the implementation of the projects contemplated in Investment Agreements that could be entered into with the State and provided they are used to perform operations on which VAT is levied or for exports.

- VAT Final Refund It gives to the contractors the right to request the final refund of VAT levied on imports or purchase of goods, rendering or use of services and construction contracts, provided they correspond to activities of exploration performed during the exploration phase of Contacts and to the performance of Technical Evaluation Agreements. The request can be made monthly from the month following the date of entry in the Purchasing Registry.The tax will be refunded within 90 (ninety) days after being requested, in accordance with the refund procedures approved by the tax authority. In order to be able to exercise this right, the goods and services must be previously recognized in a List approved by the Ministry of Energy and Mines, which must have the favorable opinion of the Ministry of Economy and Finance and must be included in the text of the respective Contract.

This benefit will last until December 31, 2018.7

- Temporary ImportThe contractors may import temporary goods to be used in their activities for two-year term with the suspension of import duties, including those that require express reference.

7 Law No. 30404, Law extending the validity of tax benefits and exemptions.

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The procedure, requirements and guaranties necessary for the application of the temporary importation regime will be subject to the provisions contained in the General Customs Law, amendments thereto and regulations thereunder. Temporary imports may be extended for one-year periods up to two times. In the event of an extension, the contractor must request it to PERUPETRO in due course, which will take steps to obtain the corresponding Directorial Resolution from the General Bureau of Hydrocarbons (DGH). With the referred documentation, the National Superintendence of Tax Administration (SUNAT) will authorize the extension of the temporary importation regime.

5. wORKERS’ SHARE IN PROfITS OBTAINED BY HYDROCARBON COMPANIES

Workers are entitled to a share in the profits of every company engaged in an income-producing business- Rent of third category. Consequently, the companies engaged in hydrocarbon activities, whenever count with more than twenty workers, are obliged to distribute the five per cent (5%) of their annual taxable income, after the compensation of losses of previous exercises, in favor of its workers, with a maximum limit by worker equivalent to 18 monthly remunerations..

If a balance remains between the amount obtained after the application of 5% over the taxable net income obtained by the company and the cap applicable to each worker, it will be turned over to the State to be used in training workers and employment promotion, as well as for public investment projects.

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ROYALTIES

The License Contracts for the exploration and exploitation of hydrocarbons provide that if a Declaration of Commercial Discovery is made and hydrocarbon production begins, the Contractor will be obliged to pay a royalty to the State in return for the hydrocarbon extracted which is established and collected by PERUPETRO and it is differentiated by contract.

The Contractor will pay the royalty in cash, based on the controlled hydrocarbons valued at one or more production controlled points. The controlling points are determined by the contracting parties. These hydrocarbons are called Controlled Hydrocarbon Production. The Controlled Hydrocarbon Production will be valued based on a series of international prices, which will be used as a reference. These reference prices are the “price basket” and its components will be the prices published in the Platt’s Oilgram Price Report or other publications recognized by the oil industry.

The Royalty is a percentage of the valuation of the hydrocarbons measured at the Controlling Point, which is calculated and determined in the manner established in the Contract, according to a methodology established in the Supreme Decree N° 049-93-EM that approve the Methodology for the Calculation of the Royalty in License Contracts for the Exploration and Exploitation of Hydrocarbon8.

According to these regulations, methodologies for determining royalties are methodology Factor “R”, the methodology of Accumulated Production Field by adjusting for price, the methodology for production scales and methodology for economic result.

8 It was extended and in the Supreme Decree N° 017-2003-EM.

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USE OF PUBLIC AND THIRD-PARTY ASSETS

The regulations governing hydrocarbon activities authorize the Contractor to arrange permits, rights of use, easements, and surface rights on private and State property, and to use, gratuitously, the soil, subsoil and air space over public roads, streets, squares and other public assets.

Pursuant to the regulation, easements for the use of public and private assets may be:

a) Occupation of public or private assetsb) Right of wayc) For transit

An easement right will include soil and subsoil occupation, if necessary.

If a conflict arises between the easement requested and any other mining-energy right granted on the property, such conflict will be settled by the MINEM.

The Regulations on Hydrocarbon Exploration and Exploitation approved by Supreme Decree N° 032-2004-EM, establishes a prior direct negotiation procedure between the owner of the land and the contractor. However, when it is not possible to reach an agreement, or when the owner or holder is unknown, the contractor may request the establishment of an easement right on such land (administrative easement) before the General Hydrocarbon Bureau (DGH for its acronym in Spanish) of the MINEM, who will determine the compensation or indemnity.

In addition, to the above procedure in the case of easements of State-owned lands not located in the jungle of Peru, the Law No. 30327 – Law for the Promotion of Investment for the Economic Growth and Sustainable Development - establishes a procedure which begins with the submission of an application to the DGH who within 10 working days must submit to the Superintendence of National Assets (SBN for its acronym in Spanish) a report containing information regarding to: (i) if the project qualifies as one of investment, (ii) the time required for its implementation, (iii) the area of land needed; and (iv) if there is evidence on the existence of native and peasant communities in the requested area. With this report, the SBN will do a technical-legal diagnosis within the 15 working days and will provide to the contractor a temporary access to the land, in order to prevent another person’s request over the same area, so the final easement award continue its process. The granted easement and its valuation – that will be performed by an experienced company in the field- will be paid by the contractor.

Once the final easement is approved and the method of payment is accepted, it should be register at the National Superintendence of Public Registries (SUNARP for its acronym in Spanish) and recorded in the National Information System for State Goods (SINABIP for its acronym in Spanish).

Finally, it should be noted that the regulation of exploration and exploitation of hydrocarbons was amended by Supreme Decree No. 035-2015-EM, which include the native and peasant communities with recognition or enabling right, located in the jungle of Peru, as subjects of compensation from the contractor which exercise the possession of state land, establishing a procedure that allows those affected to submit an opposition against the request of the contractor.

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CentralReserveBankofPeru(BCRP)This is a public legal entity with autonomy having as purpose to preserve the monetary stability. Its function is to regulate the currency and the credit of the financial system, administer the international reserves under its responsibility, among other functions.

DirectorateGeneralforEnergyEnvironmentalAffairs(DGAAE)This is the technical regulatory body responsible for proposing and evaluating the policy, proposing and/or issuing the necessary regulations to promote the execution of activities oriented to the conservation and environmental protection for sustainable development of energy activities. It is hierarchically subordinate to the Deputy Minister of Energy.

GeneralBureauofHydrocarbons(DGH)This is a regulatory technical body responsible for participating in the formulation of the energy policy in the hydrocarbons subsector. Its main mission is to promote private investment in hydrocarbons. It is hierarchically subordinate to the Deputy Minister of Energy.

MinistryofCulture(MINCUL)This is an agency of the executive power responsible for formulating, implementing and establishing strategies for cultural promotion in an inclusive and accessible way. It also carries out actions for conservation and protection of the cultural heritage, planning and managing in all levels of government activities for the development of Amazonian, Andean and Afro-Peruvian communities, among other functions.

MinistryofEconomyandFinance(MEF)It is an organism of the Executive Power which is responsible for planning, directing and controlling matters related to the budget, treasury indebtedness, accounting, fiscal policy, public investment and economic and social policy. Furthermore, it designs, establishes, executes and supervises the national and sectorial policy of its area of competence, assuming the leadership thereof.

MinistryofEnergyandMines(MEM)It is a public entity, part of the Executive Branch and it is the governing body of the Energy and Mining Sector. Its functions and administration depends on the Presidency of the Council of Ministers. It aims to promote the sustainable and integral development of the mining and energy activities by regulating and/or supervising the compliance of its national policies, as appropriate.

MinistryofEnvironment(MINAM)It is responsible of the conservation and sustainable use of natural resources, biodiversity and natural protected areas, as well as to ensure the prevention of environmental degradation and natural resources and to revert the negative processes that affect them.

GLOSSARY OF ENTITIES

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PERUPETRO S.A.It is a State Company governed by private law, created by article 6 of Law N° 26221, Organic Hydrocarbon Law for the purpose of promoting the hydrocarbon activities in Peru and negotiating and signing the Hydrocarbon Contracts on behalf of the State.

EnvironmentalAssessmentandSupervisoryBoard(OEFA)It is a specialized technical agency ascribed to the Ministry of Environment and the guiding entity of the National Environmental Assessment and Supervisory System (SINEFA). It works to ensure that economic activities in Peru are conducted in keeping with the right of the individual to enjoy a healthy environment. For this, it is responsible for the assessment, supervision, enforcement and sanction in environmental matters, as well as for the incentive application in energy sector, among others.

SupervisoryBodyofPrivateInvestmentinEnergyandMines(OSINERGMIN)It is the entity responsible of supervising and overseeing the fulfillment of the legal rules applicable to hydrocarbon activities.

NationalServiceforEnvironmentalCertificationofsustainableInvestment(SENACE)It is a specialized technical agency ascribed to the Ministry of Environment which aims to assess and approve the detailed Environmental Impact Studies (EIA-d) on hydrocarbons, among others. It is also responsible for the review and approval of the Technical Report (Informe Técnicos Sustentatorios)

NationalServiceforNaturalAreasunderStateProtection(SERNANP)It is a specialized technical agency ascribed to the Ministry of Environment responsible for approving and establishing the technical and management criteria and the procedures for the preservation of Protected Natural Areas and overseeing the conservation of biological diversity.

NationalSuperintendenceofTaxAdministration(SUNAT)It is a decentralized public entity of the economy and finance sector and enjoys economic, administrative, functional, technical and financial autonomy. It is in charge of collecting the taxes managed by the Central Government.

NationalSuperintendenceofPublicRegistries(SUNARP)It is an autonomous decentralized organism of the Justice Sector and governing body of the National System of Public Registries, and has among its main functions and attributions the establishment of the technical registration policies and norms of the public registries that form the National System, plan, organize, regulate, direct, coordinate and supervise the inscription and publication of minutes and contracts in the Registries that make up the system.

TaxUnit–UITforitsacronyminSpanishFor fiscal year 2016-2017, one tax unit amounts to S/. 3,950.00 (Three thousand nine hundred fifty soles) equivalent to approximately US $ 1,128.00 (Exchange rate: S/. 3.5 per US$ 1.00).

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LEGAL fRAMEwORK

• LawNo.26221,OrganicHydrocarbonLaw.

• LawNo.27343,LawregulatingStabilityAgreementswiththeStateunderthesectoriallegislation.

• LawNo. 27624, Law that provides the returnof theValueAddedTax andMunicipal PromotionTax forhydrocarbon exploration.

• LawNo.28611,GeneralEnvironmentalLaw.

• LawNo.30327–LawforthePromotionofInvestmentfortheEconomicGrowthandSustainableDevelopment.

• MethodologytoCalculatetheRoyaltyinLicenseContractsfortheExplorationandExploitationofHydrocarbons- Supreme Decree Nº 049-93-EM.

• TaxStabilityGuarantyRegulationsandTaxRulesundertheOrganicHydrocarbonLaw-SupremeDecreeNº32-95-EF.

• Setdeadlines,amounts,coverageofgoodsandservices,proceduresanddurationoftheEarlyRefundRegimeof the VAT created by Legislative Decree No. 775 - Supreme Decree No. 046-96-EF.

• SingleRevisedTextoftheValueAddedTaxLawandtheSelectiveConsumptionTax-SupremeDecreeNº055-99-EF.

• AdditionofmethodologiestodetermineRoyaltiesinLicenseContractsfortheExplorationandExploitationofHydrocarbons, to the Article 5 of the Regulations approved by Supreme Decree No. 049-93-EM – Supreme Decree No. 017-2003-EM.

• RegulationsontheQualificationofOilCompaniesSupremeDecreeNo.030-2004-EM.

• RegulationsgoverningtheExplorationandExploitationofHydrocarbons-SupremeDecreeNº032-2004-EM

• SingleRevisedTextoftheIncomeTaxLaw-SupremeDecreeNo.179-2004-EF.

• SingleRevisedTextoftheOrganicHydrocarbonLaw-SupremeDecreeNo.042-2005-EM.

• CommunityParticipationRegulationsforHydrocarbonActivities-SupremeDecreeNo.012-2008-EM.

• EnvironmentalProtectionRegulationsforHydrocarbonActivities-SupremeDecreeNo.039-2014-EM.