AGREEMENT BETWEEN THE PEOPLE’S MINISTRY FOR ENERGY AND PETROLEUM OF THE BOLIVARIAN REPUBLIC OF VENEZUELA AND THE MINISTRY OF the BASIC INDUSTRY OF THE REPUBLIC OF CUBA, FOR THE DEVELOPMENT OF THE PETROCHEMICAL TRANSFORMATION INDUSTRY IN SANTIAGO DE CUBA

The People’s Ministry for Energy and Petroleum of the Bolivarian Republic of Venezuela and the Ministry of the Basic Industry of the Republic of Cuba (hereinafter “The Parties”);

WHEREAS
The governments of the Bolivarian Republic of Venezuela and the Republic of Cuba, strengthening their bonds within the framework of ALBA, have taken the initiative to promote actions towards sub-regional integration, by creating alliances in the field of petrochemical industry, where energy sources are perceived as elements that pave the way for the development and well-being, based on complementarity and solidarity, of the Latin American and Caribbean peoples;

WHEREAS
The Bolivarian Republic of Venezuela has gas reserves available and has expressed its interest in the development of the petrochemical industry in the Republic of Cuba, thereby considering that the implementation of projects aiming at the proper use of natural resources of the Parties for this industry is considered opportune;

WHEREAS
The Republic of Cuba is interested in developing the production of petrochemical products obtained from oil refining;

WHEREAS
In April this year a Framework Agreement was signed between Petroquímica de Venezuela S.A. and the Grupo Empresarial de la Industria Química of the Ministry of the Basic Industry, for the Development of the petrochemical industry in Cuba, and a Memorandum of Understanding was signed on October 15, 2007 between the People’s Ministry for Energy and Petroleum of the Bolivarian Republic of Venezuela and the Ministry of the Basic Industry of te Republic of Cuba, for the development of the petrochemical industry in Cuba, being thus necessary to advance the implementation of projects in this industry;

Agree to sign this Agreement under the following terms and conditions:

FIRST: PURPOSE
1.1 This Agreement is aimed at:

a) Jointly carrying a technical-economic feasibility study for the construction of a paint manufacturing plant, a syringe manufacturing plant and a disposable diaper plant, as well as evaluating the implementation of other projects in the field of the transformation petrochemical industry in Santiago de Cuba.

1.2. The Parties hereto agree that the Bi-national Steering Committee for Petrochemical Industry, hereinafter “The Committee”, set up by the Memorandum of Understanding for the development of the Petrochemical Industry, signed on October 15, 2007, shall be responsible for carrying out the studies for the construction of a paint manufacturing plant, a syringe manufacturing plant and a disposable diaper plant. These studies shall include the analysis of the project, its terms and conditions, as well as the feasible operation, marketing and property schemes for these facilities.

SECOND: ON THE BI-NATIONAL STEERING COMMITTEE

2.1. Within the thirty (30) calendar days following the execution of this Agreement, the Committee shall define the scope of the Feasibility Studies for the construction of a paint manufacturing plant, a syringe manufacturing plant and a disposable diaper plant in the Republic of Cuba.

The comprehensive feasibility studies on the construction of a paint manufacturing plant, a syringe manufacturing plant and a disposable diaper plant shall determine, at least:

a) The scope of the manufacturing capacity of paints, syringes and disposable diapers;

b) The projects to be developed to achieve the previously determined scope;

c) The amount of the investments to be made;

d) The most satisfactory location of the processing plants that have to be built and the infrastructure works; and

e) The appropriate technologies based on costs, project implementation time, and other related considerations.

The Committee, within three (3) months following the execution of this Agreement, shall submit the Comprehensive Feasibility Study on the construction of a paint manufacturing plant, a syringe manufacturing plant and a disposable diaper plant,

2.2. The Parties hereto agree that the contracts to be signed within the framework of this Agreement shall be governed by the national legislation of each one of the Parties herein.

THIRD:

Upon approval of the Comprehensive Feasibility Study, in a period no longer than thirty (30) days, the Parties hereto shall agree on how the projects deriving from said study shall be implemented and on their general completion schedule.

FOURTH: ON CONFIDENTIALITY

6.1. Use of confidential information: The Parties hereto agree to consider the information included herein as Confidential Information and pledge not to disclose to third parties said information, unless the Parties agreed otherwise in written.

6.2. Restrictions: The restrictions referred to herein on the disclosure and use of the Confidential Information by the Receiver of said information shall not apply when:

a) The Confidential Information is disclosed by the Receiver to any of his/her Directors, Executives, Agents or employees;

b) The Confidential Information is revealed to a financial, legal or any counsel of the Receiver or to a advisor, contractor or subcontractor of said Receiver, in the event that these individuals have to know necessarily said Confidential Information (the individuals referred to in paragraphs a) and b) of this Section shall be jointly appointed “Authorized Representatives”);

c) The Confidential Information is of public domain on the date of execution of this Agreement;

d) The Confidential Information is made public after the date of execution of this Agreement by the Receiver or by any Authorized Representative in any way other than the breaching of any provision of this Agreement;

e) The Receiver, independently, in a way other than the breaching of any provision of this Agreement, has known the Confidential Information, either before or after the execution of this Agreement;

f) The Receiver is required by law, judicial order, legal proceeding or rules or policies of any securities commission or governmental or regulatory authority whatsoever with jurisdiction in this matter to disclose the Confidential Information; and

g) The individual that discloses the information agrees by written on the disclosure of said Confidential Information.

FIFTH: ON DISPUTE SETTLEMENT
7.1. Any dispute related to this Agreement or deriving from its construction, application, implementation or fulfillment, shall be amicably settled by the Parties hereto.

7.2. The Parties hereto pledge to apply their best efforts in order to settle said disputes within a prudential and reasonable time.

SIXTH: AMENDMENTS
This Agreement may be modified only by means of written document, signed by the authorized representatives of the Parties hereto.

SEVENTH: GENERAL PROVISIONS
The Parties hereto are legally bound by the provisions contained herein, which shall not generate preferring, exclusive or excluding rights.

EIGHTH: ENTRY INTO FORCE
10.1. This Agreement shall enter into force on its execution date and shall remain in force for twelve (12) months, starting from said execution date.

10.2. Any of the Parties hereto may terminate this Agreement, by means of previous written notice.

Executed in the Province of Santiago de Cuba, Republic of Cuba, on the 22nd day of the month of December, 2007, in two original documents, written in the Spanish language, both texts being identical.

On behalf of the Peoples’ Ministry for Energy and Petroleum of the Bolivarian Republic of Venezuela

RAFAEL DARÍO RAMÍREZ CARREÑO
Minister

 On behalf of the Ministry of the Basic Industry of the Republic of Cuba

YADIRA GARCIA VERA
Minister