CHINESE JOINT VENTURE 1. SEDCO formed a joint venture with the China National Offshore Oil Corporation ("CNOOC") and Occidental on 20 Feb 84 to operate drilling vessels offshore China. Each party owns and votes a 1/3 interest. M4-u-k f /0-0 2. Term of the JV is ten years. Training and transfers of technology to the Chinese are stated goals of the joint venture. 3. The joint venture will charter equipment from SEDCO rather than own rigs. SEDCO is responsible for the management of the joint venture. 4. The joint venture agreement details the organization chart, staffing levels, wage and benefit packages, accounting procedures, and training program in an effort to minimize future disputes and control costs. 5. Disputes will be arbitrated in Sweden. 6. Liquidation procedures are established and controled by a Liquidation Committee of one director from each party. 7. SEDCO has drilled eight wells offshore China to date. WPC:WWC/vp 4/11/85 4,tk cW•. A).-)÷" k)JZj— 4 rt CT