Dear Pak Dixie, We have reviewed the new draft KSO amended by PEP pursuant to your meeting with

them on 27 Feb 2011. From our review, we note that PEP has added several new clauses as follows: (i) Page 1 - Recital In the recital, PEP stated that Pertamina EP KKS is valid for a period of 30 years. Based on our discussion, as the draft KSO is a standard draft and generally applicable to all KSO, PEP cannot create a representation on the validity of the PEP KKS. (ii) Page 2 Additional wording to Clause 1.5 We note that PEP added new wordings on the definition of Asset. The new clause 1.5 provides that Assets also includes such moveable and immoveable assets which right to manage is transferred from PEP to REL and/or those assets which are purchased by REL. We are of the view that the additional wordings are acceptable. Please let us know should you have any comments on this. (iii) Page 6 Additional Sentence in Clause 1.26 We note that PEP added a new sentence to Clause 1.26 which provides that Point of Export/sales/lifting will be defined specifically under separate procedures. (iv) Page 9 Clause 2.2.5 We note that PEP replaced Sub-Clause (d) of Clause 2.2.5 of the KSO. The previous clause provided that the extension of KSO will be given, among others, for the purpose of completing additional Work Program agreed by PEP. The new sub-clause (d) provides that the extension of KSO will be given, among others, for the purpose of completing the Substitution Program. We are of the view that the changes of Clause 2.2.5 Sub-Clause (d) are acceptable. (v) Page 9 Clause 2.2.5, additional paragraph 2 We note that PEP inserted a new paragraph in Clause 2.2.5 on the extension of KSO which states that if PEP does not give any response on the extension up to the end of Firm Commitment period, hence PEP will be deemed to have given a one year extension. PEP is also obliged to issue the extension letter of the KSO. Please let us know if you have any comments on this. (vi) Page 15 Changes to Article 4.3 Paragraph 2 and 3 We note that PEP made some changes to Paragraph 2 of Clause 4.3. The previous paragraph 2 of Clause 4.3 provided as follow: If during the first Firm Commitment Year, REL performs less Work Program than required in a Firm Commitment Year, REL, with a prior written consent of PEP, may carry forward the Work Program which is not performed on such first Firm Commitment Year and shall perform such Work Program at the end of the second Firm Commitment Year. The amended new clause has been changed (as marked in yellow) and now provides as follow: If during the first Firm Commitment Year, REL performs less Work Program than required in a Firm Commitment Year, REL, with a prior written approval of PEP who considers the completion of Firm Commitment, may propose to carry forward the Work Program, not later than 3 months before the end of the first Firm Commitment

Year and shall complete such Work Program not later than the end of the second Firm Commitment Year. Please let us know if you have any comments on the changes to Paragraph 2 Clause 4.3. In regard to Paragraph 3, Clause 4.3 of the KSO, we note that PEP added the same wording as highlighted in yellow above to Paragraph 3 on the uncompleted work in the second Firm Commitment Year. Please let us know should you have any comments on this. (vii) Page 17 Additional Clause 4.9 We also note that PEP added the new Clause 4.9 which provides that for the purpose of operational effectiveness, REL may perform additional work which is (are) not a part of the Firm Commitment activity, within the Firm Commitment Period. However, if such additional work program has not yet been started nor completed then there will be no sanction imposed to the REL. The additional paragraph is acceptable. (viii) Page 18 Additional Clause 5.1 We note that PEP added the new Clause 5.1 regarding the rights and obligations of REL. Such new clause provides that REL shall be responsible to conduct operation Management in accordance with applicable law and related regulations. Please note by adding this clause, both PEP and REL will be responsible for conducting the operation management. Please let us know if you have any comments on this. (ix) Page 26 Additional wording to Clause 5.2.2 We note that PEP added new wordings to PEPs obligation to be responsible for the management of the Operations. For your reference, we highlight the additional wordings in yellow, hence the new Clause 5.2.2 now provides that PEP shall be responsible for the Operations management during operation provided that REL conducts the Operations according to the applicable laws and regulations. Please let us know should you have any comments on the additional wordings. (x) Page 27 Deletion of Clause 5.2.5 on PEPs obligation PEP deleted Clause 5.2.5 which provides that PEP is obliged to provide information which relates to the implementation of the Operations to REL in accordance with applicable regulations. We propose to include back Clause 5.2.5 into the KSO. (xi) Page 28 Deletion of Wordings in First Sentence of Clause 6.1.2 on Cost Recovery The previous First Sentence of Clause 6.1.2 provided as follow: REL will recover all Operating Costs out of the Crude Oil equals in value to such Operating Costs, which is produced and sold from the Operating Area and not used in the Operations. Of the Operating Area and not used in Operations in any Calendar Year the maximum of 80% shall be allocated for the Operating Costs in such Calendar Year. The new Clause deleted the terms highlighted in yellow above. Hence the new Clause provides REL will recover all Operating Costs out of the Crude Oil equals in value to such Operating Costs, which is produced and sold from the Operating Area the maximum of 80% shall be allocated for the Operating Costs in such Calendar Year. Please let us know should you have any comments on the change of Clause 6.1.2. (xii) Page 31 Additional Paragraph (c) to Clause 7.1 on Transfer of Rights and Obligations

PEP added a new paragraph (c) in relation to transfer of rights and obligation which provides that PEP shall give response to RELs proposal to transfer not later than 90 Calendar Days after receiving RELs written proposal. If in 90 Calendar Days after receiving RELs proposal PEP has not submitted a written response to REL, then PEP shall be deemed to have agreed to such transfer. PEP has to further issue the approval letter for such transfer. This is a straightforward clause and acceptable. (xiii) Page 34 Clause 8.1 on the Value of Bank Guarantee PEP stated the value of the bank guarantee. The required value is in the amount of US$2,880,000 (United States Dollars two million eight hundred and eighty thousand). (xiv) Page 52 Additional new Clause 16.14 PEP added a new Clause 16.14 on termination of KSO which provides that in the event of a termination of KSO before COCP approval is given, all assets including without limitation to those that are related to the implementation of Firm Commitments remain to be owned by PEP and REL cannot demand any compensation to PEP. In the event of termination after COCP approval is given, all assets including but not limited to those related to the implementation of Firm Commitments, which cost have been recovered or have not been recovered, remain to be owned by PEP and REL cannot demand any compensation to PEP. Please let us know should you have any comments on this. (xv) Page 55 Deletion of Clause 19.3 We note that PEP took out Clause 19.3 from the draft KSO which provides that in the event that any of RELs share under the KSO becomes subject to Income Tax Law, then all of the percentages of RELs shares stipulated in Section VI of the Agreement which affected by the new Indonesian Income Tax Law shall be revised to maintain the same amount of net split for REL as, basically, RELs net split is [15]% after corporate and dividend tax for Crude Oil before DMO obligation pursuant to Section V of the KSO and [20]% after corporate dividend taxes for Natural Gas before DMO obligation pursuant to Section V of the KSO. We would propose to include Clause 19.3 back into the KSO to maintain REL net split under the KSO in case that it is affected by Income Tax Law. Should you need a further discussion on the above, please let us know. Warmest regards, Evie