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Petroleum Act 1998

Type Public General Act

Publication 1998-06-11

Last updated 2023-12-26

State In force

Department Statute Law Database

Source legislation.gov.uk

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Part I — Petroleum

Section 17GA: supplemental

1

In this Part of this Act “petroleum”—

(a) includes any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in strata; but

(b) does not include coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation.

Rights to petroleum vested in Her Majesty

2

(1) Her Majesty has the exclusive right of searching and boring for and getting petroleum to which this section applies.

(2) This section applies to petroleum (including petroleum in Crown land) which for the time being exists in its natural condition in strata in Great Britain or beneath the territorial sea adjacent to the United Kingdom.

(3) For the purposes of subsection (2), “Crown land” means land which—

(a) belongs to Her Majesty or the Duchy of Cornwall;

(b) belongs to a government department; or

(4) Subsection (1) is subject to paragraph 4 of Schedule 3 and subsection (2) is subject to paragraph 5(3) of that Schedule.

Licences to search and bore for and get petroleum

3

(1) The appropriate authority, on behalf of Her Majesty, may grant to such persons as the appropriate authority thinks fit licences to search and bore for and get petroleum to which this section applies.

(2) This section applies to—

(a) petroleum to which section 2 applies; and

(b) petroleum with respect to which rights vested in Her Majesty by section 1(1) of the Continental Shelf Act 1964 (exploration and exploitation of continental shelf) are exercisable.

(3) Any such licence shall be granted for such consideration (whether by way of royalty or otherwise) as the OGA with the consent of the Treasury may determine, and upon such other terms and conditions as the appropriate authority thinks fit.

(4) Subsection (1) is subject to paragraph 4 of Schedule 3.

Licences: further provisions

4

(1) The appropriate Minister shall make regulations prescribing—

(a) the manner in which and the persons by whom applications for licences under this Part of this Act may be made;

(b) the information to be included in or provided in connection with any such application;

(d) the conditions as to the size and shape of areas in respect of which licences may be granted;

(e) model clauses which shall, unless the appropriate authority thinks fit to modify or exclude them in any particular case, be incorporated in any such licence.

(1A) The Scottish Ministers or the Welsh Ministers may not make regulations under subsection (1)(e) prescribing model clauses that may be prescribed under subsection (1B).

(1B) The Secretary of State may make regulations prescribing model clauses on the consideration payable for a licence granted by the Scottish Ministers or the Welsh Ministers, and the following so far as they relate to such consideration—

(a) the measurement of petroleum obtained from the licenced area (including the facilitation of such measurement);

(b) the keeping of accounts;

(c) cancellation of a licence by the Secretary of State if there has been a failure to pay consideration or to comply with a clause on a matter falling within paragraph (a) or (b).

(1C) Model clauses prescribed under subsection (1B) shall, unless the Secretary of State thinks fit to modify or exclude them in any particular case, be incorporated in any licence granted by the Scottish Ministers or the Welsh Ministers.

(2) Different regulations may be made for different kinds of licence.

(3) Any regulations made by the Secretary of State shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(3ZA) Before making regulations under this section the Secretary of State must consult the OGA.

(3A) Any regulations made by the Scottish Ministers shall be subject to the negative procedure (see section 28 of the Interpretation and Legislative Reform (Scotland) Act 2010).

(3B) Any regulations made by the Welsh Ministers shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the National Assembly for Wales.

(4) As soon as practicable after granting a licence under section 3, the OGA shall publish notice of the fact in such manner as it thinks appropriate stating—

(a) the name of the licensee; and

(b) the situation of the area in respect of which the licence has been granted,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4A) As soon as practicable after granting a licence under section 3, the Scottish Ministers shall publish notice of the fact in the Edinburgh Gazette stating—

(a) the name of the licensee; and

(b) the situation of the area in respect of which the licence has been granted.

(4B) As soon as practicable after granting a licence under section 3, the Welsh Ministers shall publish notice of the fact in such manner as they think appropriate stating—

(a) the name of the licensee; and

(b) the situation of the area in respect of which the licence has been granted.

(5) Any information which the Commissioners of Inland Revenue possess in connection with petroleum won by virtue of a licence granted under section 3—

(a) may be disclosed by the Commissioners to the Secretary of State, or to an officer of his who is authorised by him to receive such information, in connection with provisions of the licence relating to royalty payments; but

(b) shall not be disclosed by a person to whom it is disclosed under paragraph (a) except—

(i) as authorised by the licence;

(ii) to a person to whom it could have been disclosed under paragraph (a); or

(iii) for the purposes of proceedings (which may be arbitration proceedings) in connection with the licence.

Existing licences

5

(1) In this section, the “current model clauses” means, in relation to any paragraph of Schedule 1, the model clauses which, immediately before the commencement of this Act, would be incorporated in a licence granted under section 2 of the Petroleum (Production) Act 1934 if the licence, when granted, had incorporated the model clauses mentioned in that paragraph.

(2) The reference in subsection (1) to the model clauses which, immediately before the commencement of this Act, would be incorporated in a licence is a reference to those model clauses as they would then have effect but as if any reference (however expressed) in a model clause to an enactment repealed and re-enacted by this Act were, or (where the context requires) included, a reference to the corresponding provision of this Act.

(3) For the purposes of subsection (2), any provision of a model clause which would have effect (or would have a particular effect) only in relation to a licence of a description of which none is in force immediately before the commencement of this Act shall be treated as not then having effect (or as not then having that effect).

(4) The Secretary of State shall, in an order made before the commencement of this Act, reproduce the current model clauses in relation to each paragraph of Schedule 1.

(5) Subject to subsections (7) and (8), any licence granted under section 2 of the Petroleum (Production) Act 1934 which—

(a) is in force immediately before the commencement of this Act; and

(b) when granted, incorporated any of the model clauses mentioned in any paragraph of Schedule 1,

shall on the commencement of this Act have effect as if it incorporated, in place of the relevant model clauses, the current model clauses reproduced in relation to that paragraph in the order under subsection (4).

(6) For the purposes of subsection (5), the relevant model clauses, in relation to any licence, are the model clauses which the licence incorporates immediately before the commencement of this Act other than any model clause which—

(a) was incorporated into the licence when it was granted; and

(b) is not within any paragraph of Schedule 1.

(7) Where immediately before the commencement of this Act any such licence incorporates model clauses subject to any amendment or modification, or with the omission of any model clause, the current model clauses reproduced under subsection (4) shall have effect in relation to that licence—

(a) subject to the same amendment or modification; or

(b) as the case may be, with the omission of the model clause corresponding to the model clause omitted from the licence.

(8) Where before the commencement of this Act model clauses (the “substitute model clauses”) set out in any regulations made under section 6 of the Petroleum (Production) Act 1934 have been substituted for the model clauses originally incorporated in any licence granted under section 2 of that Act, the licence shall be treated for the purposes of this section as if, when granted, it had incorporated the substitute model clauses.

(9) It is hereby declared that any provision incorporated in a licence by virtue of subsection (5) may be altered or deleted by deed executed by the appropriate authority and the licensee or, as respects Scotland, by an instrument subscribed or authenticated by the appropriate authority and the licensee in accordance with the Requirements of Writing (Scotland) Act 1995.

(10) Where any provision is replaced by virtue of subsection (5)—

(a) a reference in any document to that provision (or which immediately before the commencement of this Act is to be construed as a reference to that provision) shall, except so far as the nature of the document or context otherwise requires, be construed as a reference to the replacement; and

(b) anything done under or for the purposes of that provision shall, except where the context otherwise requires, be treated as having been done under or for the purposes of the replacement.

(11) The order to be made under subsection (4) shall be made by statutory instrument, shall be laid before Parliament after being made and shall come into force on the commencement of this Act.

Repayments for development

6

(1) Where any person has paid to the Secretary of State a sum by way of royalty under the terms of a licence granted under section 3, the Secretary of State may with the approval of the Treasury repay to him the whole or a part of that sum if the Secretary of State considers it expedient to do so for the purpose of facilitating or maintaining the development of the petroleum resources of the United Kingdom.

(2) Where for any chargeable period for the purpose of a licence granted under section 3 any person has been required to deliver petroleum to the Secretary of State under the terms of that licence, subsection (1) shall have effect as if for that period that person had paid to the Secretary of State by way of royalty such sum, or (where he has been required to deliver some but not all of the petroleum which he could have been required to deliver) such additional sum, as he would have been required to pay under the terms of the licence if he had not been required to deliver the petroleum.

(3) Any repayment and right to a repayment under this section shall be disregarded for the purposes of income tax, corporation tax and petroleum revenue tax.

Ancillary rights

7

(1) Subject to the provisions of this section, the Mines (Working Facilities and Support) Act 1966 shall apply (in England and Wales and Scotland) for the purpose of enabling a person holding a licence under this Part of this Act to acquire such ancillary rights as may be required for the exercise of the rights granted by the licence.

(2) In its application for the purposes of this section, the Mines (Working Facilities and Support) Act 1966 shall have effect as if—

(a) references to a person having a right to work minerals included references to a person holding a licence under this Part of this Act;

(b) references to minerals included references to petroleum; ...

(c) references to the working of minerals included references to the getting, carrying away, storing, treating and converting of petroleum; and

(d) references to the Secretary of State (or the Minister) in sections 4 and 9 of that Act included references to

(i) the Scottish Ministers, in relation to licences granted in relation to the Scottish onshore area, ...

(ia) the Welsh Ministers, in relation to licences granted in relation to the Welsh onshore area, and

(ii) the OGA, in relation to other licences.

(3) Without prejudice to the generality of subsection (1) of section 2 of the Mines (Working Facilities and Support) Act 1966, that Act shall have effect for the purposes of this section as if the ancillary rights mentioned in that subsection included—

(a) a right to enter upon land and to sink boreholes in the land for the purpose of searching for and getting petroleum; and

(b) a right to use and occupy land for—

(i) the erection of such buildings;

(ii) the laying and maintenance of such pipes; and

(iii) the construction of such other works,

as may be required for the purpose of searching and boring for and getting, carrying away, storing, treating and converting petroleum.

(4) Where an application is made to the court under the Mines (Working Facilities and Support) Act 1966 by virtue of this section—

(a) in deciding—

(i) whether to grant any right applied for; or

(ii) what terms and conditions, if any, should be imposed upon the grant of such a right,

the court shall have regard, among other considerations, to the effect on the amenities of the locality of the proposed use and occupation of the land in respect of which the right is applied for;

(b) in determining the amount of any compensation to be paid in respect of the grant of any right, an additional allowance of not less than 10 per cent. shall be made on account of the acquisition of the right being compulsory;

(c) the costs in connection with the application incurred by the applicant shall not be ordered to be paid by any person from whom a right is sought to be obtained; and

(d) the costs in connection with the application incurred by each person from whom a right is sought to be obtained shall be ordered to be paid by the applicant unless the court is satisfied that an unconditional offer in writing was made by the applicant to that person of a sum as compensation equal to or greater than the amount of any compensation awarded to him by the court.

Power to inspect plans of mines

8

(1) For the purpose of ascertaining on behalf of the appropriate authority the position of the workings, actual and prospective, of any mines or abandoned mines through or near which it is proposed to sink any borehole for the purpose of searching for or getting petroleum, any officer appointed by the appropriate authority shall have the same powers with respect to the production and inspection and the taking of copies of relevant documents as may under section 20 of the Health and Safety at Work etc. Act 1974 be exercised by an inspector acting for the purpose mentioned in subsection (1) of that section.

(2) For the purposes of subsection (1)—

(a) “relevant documents” means plans, sections, drawings or other similar documents which, by virtue of paragraph 16 of Schedule 3 to that Act of 1974, are required to be kept;

(b) “an inspector” means an inspector appointed under section 19 of that Act; and

Supplementary

9

(1) Nothing in this Part of this Act shall be construed as imposing any liability on any person where in the course of mining or other lawful operations petroleum is set free.

(2) Nothing in this Part of this Act shall be construed as conferring, or as enabling the Secretary of State to confer, on any person, whether acting on behalf of Her Majesty or not, any right which he does not enjoy apart from this Part of this Act to enter on or interfere with land.

(3) The issue of an authorisation within the meaning of Part III of this Act shall be deemed not to derogate from a licence granted under section 3 which is for the time being in force.

Part II — Offshore activities

Application of criminal law etc

10

(1) Her Majesty may by Order in Council provide that, in such cases and subject to such exceptions as may be prescribed by the Order, any act or omission which—

(a) takes place on, under or above an installation in waters to which this section applies or any waters within 500 metres of any such installation; and

(b) would, if taking place in any part of the United Kingdom, constitute an offence under the law in force in that part,

shall be treated for the purposes of that law as taking place in that part.

(2) Her Majesty may by Order in Council provide that, in such cases and subject to such exceptions as may be prescribed by the Order, a constable shall on, under or above any installation in waters to which this section applies or any waters within 500 metres of such an installation have all the powers, protection and privileges which he has in the area for which he acts as constable.

(3) Subsection (2) is without prejudice to any other enactment or rule of law affording any power, protection or privilege to constables.

(4) Where a body corporate is guilty of an offence by virtue of an Order in Council under this section and that offence is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

(5) Where the affairs of a body corporate are managed by its members, subsection (4) shall apply in relation to acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.

(6) Proceedings for anything that is an offence by virtue of an Order in Council under this section may be taken, and the offence may for all incidental purposes be treated as having been committed, in any place in the United Kingdom.

(7) The waters to which this section applies are—

(a) the territorial sea adjacent to the United Kingdom;

(b) waters in an area designated under section 1(7) of the Continental Shelf Act 1964; or

(8) Her Majesty may from time to time by Order in Council specify any area which—

(a) is in a foreign sector of the continental shelf; and

(b) comprises any part of a cross-boundary field,

as an area as respects which the powers conferred by this section and section 11 are exercisable.

(9) In this section—

“cross-boundary field” means a field that extends across the boundary between waters falling within paragraph (a) or (b) of subsection (7) and a foreign sector of the continental shelf;

“field” means a geological structure identified as such by Order in Council under subsection (8).

(10) This section applies to installations notwithstanding that they are for the time being in transit but does not apply to an installation that is a renewable energy installation (within the meaning of Chapter 2 of Part 2 of the Energy Act 2004) .

(11) A statutory instrument containing an Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Application of civil law

11

(1) Her Majesty may by Order in Council , subject to subsection (4A) —

(a) provide that, in such cases and subject to such exceptions as may be prescribed by the Order, questions arising out of acts or omissions taking place on, under or above waters to which this section applies in connection with any activity mentioned in subsection (2) shall be determined in accordance with the law in force in such part of the United Kingdom as may be specified in the Order; and

(b) make provision for conferring jurisdiction with respect to such questions on courts in any part of the United Kingdom so specified.

(2) The activities referred to in subsection (1) are—

(a) activities connected with the exploration of, or the exploitation of the natural resources of, the shore or bed of waters to which this section applies or the subsoil beneath it; and

(b) without prejudice to the generality of paragraph (a), activities carried on from, by means of or on, or for purposes connected with, installations to which subsection (3) applies.

(3) This subsection applies to any installation which is or has been maintained, or is intended to be established, for the carrying on of any of the following activities, namely—

(a) the exploitation or exploration of mineral resources in or under the shore or bed of waters to which this section applies;

(aa) the exploration of any place in, under or over such waters with a view to the storage of gas in such a place;

(ab) the conversion of any place in, under or over waters to which this section applies for the purpose of storing gas;

(b) the storage of gas in, under or over such waters or the recovery of gas so stored;

(ba) the unloading of gas at any place in, under or over such waters;

(c) the conveyance of things by means of a pipe, or system of pipes, constructed or placed on, in or under the shore or bed of such waters; and

(d) the provision of accommodation for persons who work on or from an installation which is or has been maintained, or is intended to be established, for the carrying on of an activity within any of paragraphs (a) to (c) or this paragraph.

(3A) In subsection (3) references (in whatever form) to storing gas include storing gas with a view to its permanent disposal.

(4) The fact that an installation has been maintained for the carrying on of an activity within subsection (3) shall be disregarded for the purposes of that subsection if, since it was so maintained, it has been outside waters to which this section applies or has been maintained for the carrying on of an activity not falling within that subsection.

(4A) An Order in Council may not make provision under subsection (1) in relation to questions arising out of acts or omissions taking place in connection with any activity carried on in, under or over relevant Scottish waters with a view to, or in connection with, the storage of carbon dioxide.

(4B) In subsection (4A)—

(a) “relevant Scottish waters” means tidal waters, and parts of the sea, in or adjacent to Scotland up to the seaward limits of the territorial sea, and

(b) references to the storage of carbon dioxide do not include the use of carbon dioxide for a purpose ancillary to getting petroleum (within the meaning of section 1).

(5) Any jurisdiction conferred on a court under this section shall be without prejudice to any jurisdiction exercisable apart from this section by that or any other court.

(6) This section applies to installations notwithstanding that they are for the time being in transit.

(7) A statutory instrument containing an Order in Council under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(8) The waters to which this section applies are—

(a) tidal waters and parts of the sea in or adjacent to the United Kingdom up to the seaward limits of the territorial sea;

(b) waters in an area designated under section 1(7) of the Continental Shelf Act 1964;

(d) in relation to installations which are or have been maintained, or are intended to be established, in waters within paragraph (a), (b) or (c), waters in a foreign sector of the continental shelf which are adjacent to such waters.

(9) In this section “gas” means—

(a) gas within the meaning of section 2(4) of the Energy Act 2008, or

(b) carbon dioxide.

Prosecutions

12

(1) Subject to subsection (2), this subsection applies to—

(a) any offence alleged to have been committed on, under or above an installation in waters to which section 10 applies or any waters within 500 metres of such an installation; and

(b) any offence committed on or as respects an aircraft which is not registered in the United Kingdom which is an offence created by virtue of paragraph 6(5) of Part III of Schedule 13 to the Civil Aviation Act 1982.

(2) Subsection (1) does not apply to any offence to which subsection (5) applies nor to any offence under, or under any provision which has effect under—

(a) the Customs and Excise Acts 1979, or any enactment to be construed as one with those Acts or any of them;

(b) except where it is created by virtue of paragraph 6(5) of Part III of Schedule 13 to the Civil Aviation Act 1982, that Act or any enactment to be construed as one with that Act;

(d) the Value Added Tax Act 1994 or any enactment to be construed as one with that Act;

(e) the Merchant Shipping Act 1995; or

(f) Part III or IV of this Act.

(3) No proceedings for an offence to which subsection (1) applies shall be instituted—

(a) in England and Wales, except by or with the consent of the Director of Public Prosecutions unless prosecution of the offence there requires the consent of the Attorney General;

(b) in Northern Ireland, except by or with the consent of the Director of Public Prosecutions for Northern Ireland unless prosecution of the offence there requires the consent of the Attorney General for Northern Ireland.

(4) Section 3 of the Territorial Waters Jurisdiction Act 1878 (restriction on prosecutions) shall not apply to any proceedings for an offence to which subsection (1) or (5) applies.

(5) This subsection applies to—

(a) any offence under section 23 of the Petroleum Act 1987 (safety zones); and

(b) any offence under any provision made under the Mineral Workings (Offshore Installations) Act 1971 which has effect by virtue of—

(i) paragraph (1) of regulation 6 (savings) of the Offshore Safety (Repeals and Modifications) Regulations 1993; or

(ii) paragraph (1) of regulation 6 (savings) of the Offshore Safety (Repeals and Modifications) Regulations (Northern Ireland) 1993.

Interpretation of Part II

13

(1) In this Part of this Act—

“foreign sector of the continental shelf” has the meaning given by section 48(1); and

“installation” includes any floating structure or device maintained on a station by whatever means.

(2) An Order in Council under section 126(2) of the Scotland Act 1998 (apportionment of sea areas) has effect for the purposes of this Part if, or to the extent that, the Order is expressed to apply—

(a) by virtue of this subsection, for the purposes of this Part, or

(b) if no provision has been made by virtue of paragraph (a), for the general or residual purposes of that Act.

Part III — Submarine pipelines

Construction and use of pipelines

14

(1) No person shall—

(a) execute in, under or over any controlled waters any works for the construction of a pipeline; or

(b) use a controlled pipeline of which the construction was begun on or after 1st January 1976,

except in accordance with an authorisation given in writing by the OGA.

(2) In this Part of this Act—

“controlled pipeline” means so much of any pipeline as is in, under or over controlled waters; and

“controlled waters” means the territorial sea adjacent to the United Kingdom and the sea in any area designated under section 1(7) of the Continental Shelf Act 1964.

Authorisations

15

(1) Schedule 2 (applications for and issue of authorisations) shall have effect.

(2) The OGA shall not issue an authorisation to a person other than a body corporate.

(3) Any authorisation in respect of a controlled pipeline may contain such terms as the OGA thinks appropriate including in particular terms as to—

(a) the duration of the authorisation, including the method of ascertaining its duration;

(b) the persons or kinds of persons who are authorised to execute the works in question or to use the pipeline or are so authorised if the OGA consents to the execution of the works or the use of the pipeline by them;

(i) the route of the pipeline (subject to subsection (3A));

(ii) the boundaries within which any works may be executed in pursuance of the authorisation;

(iii) the design and capacity of the pipeline or of part of it; and (subject to subsection (3A))

(iv) the steps to be taken to avoid or reduce interference by the pipeline with fishing or with other activities connected with the sea or the sea bed or subsoil;

(d) the things authorised to be conveyed by the pipeline;

(e) the steps to be taken to ensure that funds are available to discharge any liability for damage attributable to the release or escape of any thing from the pipeline;

(f) the transactions relating to the pipeline which are not to be entered into, and the other things relating to the pipeline which are not to be done, without the consent of the OGA;

(g) the persons who may be permitted to acquire an interest in the pipeline and who may not be permitted to retain such an interest;

(h) the operation of the pipeline, including the methods by which it is to be operated and the persons by whom it may be operated;

(i) the information to be provided in respect of the pipeline; and

(j) the giving by the OGA, with respect to matters specified in the authorisation, of directions which shall have effect as terms of the authorisation.

(3A) The power conferred by virtue of paragraph (c)(i) or (iii) of subsection (3) is not exercisable to the extent that the powers conferred by regulation 7 of the Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011 are exercisable.

(4) Unless the OGA considers that there are special circumstances by reason of which the duration of an authorisation should be limited, an authorisation shall provide for its duration to be unlimited subject to the following provisions of this Part of this Act.

(5) Subject to subsection (5A), subsection (6) applies where a works authorisation contains a term (the “variation term”) requiring that—

(a) the capacity of the controlled pipeline to which it relates or of any part of the pipeline shall be greater than that proposed in the application for the authorisation; or

(b) any of the route of the pipeline shall be different from that so proposed.

(5A) Subsection (6) does not apply where the term is a variation condition imposed by virtue of regulation 7 of the Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011.

(6) Where this subsection applies, the OGA may, subject to section 17(7) or 17G(6) of this Act or section 89(4) and (5) of the Energy Act 2011, serve a notice in accordance with subsection (7) on—

(a) the holder of the authorisation; and

(b) any other person who made representations to the OGA that the capacity should be greater than that proposed as mentioned in subsection (5) or that any of the route should be different from that so proposed.

(7) A notice under subsection (6) shall—

(a) specify the sums or the method of determining the sums which the OGA considers should be paid to the holder by the other person for the purpose of defraying so much of the cost of constructing the pipeline as is attributable to the variation term;

(b) require the other person to make, within a specified period, arrangements which the OGA considers are appropriate to ensure that those sums will be paid to the holder if he constructs the pipeline or a relevant part of it in accordance with the variation term or satisfies the OGA that he will so construct it;

(c) provide that the holder may, if those arrangements are not made by the other person within the specified period, elect in the specified manner that—

(i) the variation term shall have effect with such modifications as are specified with a view to eliminating the consequences of the representations of the other person; and

(ii) the provisions included in the notice by virtue of paragraph (d) shall cease to have effect; and

(d) authorise the holder, if he satisfies the OGA that the pipeline or a relevant part of it has been or will be constructed in accordance with the variation term, to recover those sums from the other person.

(8) In subsection (7), “specified” means specified in the notice.

Compulsory modifications of pipelines

16

(A1) This section applies to controlled pipelines, other than those which are excepted from the operation of this section.

(A2) Controlled carbon dioxide pipelines are excepted from the operation of this section.

(A3) Pipelines that are relevant upstream petroleum pipelines for the purposes of section 82(1) of the Energy Act 2011 are excepted from the operation of this section.

(1) If in the case of a controlled pipeline it appears to the OGA, on the application of a person other than the owner of the pipeline—

(a) that the capacity of the pipeline can and should be increased by modifying apparatus and works associated with the pipeline; or

(b) that the pipeline can and should be modified by installing in it a junction through which another pipeline may be connected to the pipeline,

then, subject to section 17(8) or 17G(7), the OGA may, after giving the owner of the pipeline an opportunity of being heard about the matter, serve on the owner and the applicant a notice in accordance with subsection (2).

(2) A notice under subsection (1) shall—

(a) specify the modifications which the OGA considers should be made in consequence of the application;

(b) specify the sums or the method of determining the sums which the OGA considers should be paid to the owner by the applicant for the purpose of defraying the cost of the modifications;

(c) require the applicant to make, within the period specified for the purpose in the notice, arrangements which the OGA considers appropriate to secure that those sums will be paid to the owner if he carries out the modifications or satisfies the OGA that he will carry them out;

(d) require the owner, if the applicant makes those arrangements within that period, to carry out the modifications within a period specified for the purpose in the notice; and

(e) authorise the owner, if he satisfies the OGA that he has carried out or will carry out the modifications, to recover those sums from the applicant.

(3) References in subsections (1) and (2) to modifications include, in the case of modifications of any apparatus and works, references to changes in, substitutions for and additions to the apparatus and works.

(4) For the purposes of section 14(1) a notice under subsection (1) of this section requiring a person to carry out modifications authorises him to carry out the modifications; but nothing in Schedule 2 shall apply to such a notice.

Acquisition of rights to use pipelines

17

(1) Subsections (2) and (3) apply where a person applies to the OGA for a notice under this section securing to the applicant a right to have conveyed, by a controlled pipeline of which he is not the owner, quantities specified in the application of things which are of a kind so specified and which the pipeline is designed to convey.

(1A) This section does not apply to—

(a) controlled petroleum pipelines;

(b) pipelines in, under or over the territorial sea adjacent to Great Britain which are used to convey gas directly from a terminal to a pipeline system operated by a gas transporter or to any premises;

(1B) This section also does not apply to controlled carbon dioxide pipelines.

(2) The OGA shall—

(a) give notice to the owner of the pipeline and the applicant that it proposes to consider the application; and

(b) after the expiry of 21 days beginning with the date on which notice under paragraph (a) was served, but before considering the application, give them an opportunity of being heard with respect to the application.

or to a gas interconnector (within the meaning of Part 1 of the Gas Act 1986).

(3) Where the OGA is satisfied that, if it served a notice under this section the pipeline in question could be operated in accordance with the notice without prejudicing its efficient operation for the purpose of conveying, on behalf of its owner, the quantities of permitted substances which the owner requires or may reasonably be expected to require, the OGA may serve such a notice on the owner and the applicant.

(4) In subsection (3), “permitted substances” means the things which may be conveyed by the pipeline in accordance with an authorisation (or, if no authorisation for the use of the pipeline is required by section 14(1), means the things which the pipeline is designed to convey).

(5) A notice under this section may contain such provisions as the OGA considers appropriate for any of the following purposes—

(a) to secure to the applicant, without prejudicing the efficient operation of the pipeline for the purpose mentioned in subsection (3), the right to have conveyed by the pipeline the quantities specified in the application of the things so specified;

(b) to secure that the exercise of the right is not prevented or impeded;

(d) to secure to the applicant the right to have a pipeline of his connected to the pipeline by the applicant or owner.

(6) Such a notice may also authorise the owner to recover from the applicant payments by way of consideration for any right mentioned in subsection (5)(a) or (d) of amounts specified in the notice or determined in accordance with the notice.

(7) Before serving a notice under section 15(6) on a person other than the holder of the relevant authorisation, the OGA shall give that person an opportunity to make an application under subsection (1) in respect of the proposed pipeline to which the authorisation relates; and subsections (1) to (6) shall have effect for this purpose as if references to a pipeline and the owner of it were references to the proposed pipeline and the proposed owner of it.

(8) Before serving a notice under section 16(1) on a person other than the owner of the relevant pipeline, the OGA shall give that person particulars of the modifications which it proposes to specify in the notice and an opportunity to make an application under subsection (1) in respect of the pipeline; and subsections (1) to (6) shall have effect for this purpose as if references to a pipeline were references to the pipeline as it would be with those modifications.

(9) The use of a pipeline by any person in accordance with a right secured to him by virtue of this section is not a contravention of section 14(1); but a person to whom a right is so secured may not assign the right to any other person.

Termination of authorisations

18

(1) An authorisation shall cease to be in force at the earliest of the following—

(a) where the duration of the authorisation is not expressed to be unlimited, the time at which that duration expires as specified by or ascertained under the terms of the authorisation;

(b) the time (if any) agreed in writing by the holder and the OGA as the time at which the authorisation is to cease to be in force; and

(2) If it appears to the OGA that the execution of works authorised by a works authorisation has not been begun at the expiry of the period specified in subsection (3), it shall serve on the holder a notice stating that the authorisation is to cease to be in force at a time specified in the notice.

(3) The period referred to in subsection (2) is—

(a) the period of three years beginning with the date when the authorisation is expressed to come into force; or

(b) such longer period beginning with that date as the OGA has, on the application of the holder, specified in a notice served under this paragraph on the holder during the period mentioned in paragraph (a).

(4) For the purpose of subsection (2), the OGA shall disregard the execution of any of the works which it considers should be disregarded for that purpose.

(5) The OGA shall not serve a notice under subsection (3)(b) unless—

(a) it is satisfied that notice of the application under that provision has been served on—

(i) the persons on whom, in accordance with Schedule 2, notice of the application for the authorisation was served or such of them as the OGA considers appropriate in the circumstances; and

(ii) such other persons, if any, as it considers appropriate in the circumstances; and

(b) it has considered any written representations about the application under subsection (3)(b) made during such a period as it considers reasonable by any of the persons on whom notice of the application was served in accordance with paragraph (a).

(6) Subject to subsections (7) and (8), if the OGA considers that the holder of an authorisation—

(a) has contravened a term of the authorisation; or

(b) has contravened any provision of a notice which, under section 16, 17 or 17F(9) of this Act or section 82(11) of the Energy Act 2011, was served on him in his capacity as the owner of the pipeline (or the proposed owner of the proposed pipeline) to which the authorisation relates,

the OGA may serve on the holder a notice stating that the authorisation is to cease to be in force at a time specified in the notice.

(7) The OGA shall not serve a notice under subsection (6) without first giving the holder of the authorisation an opportunity to make written representations to it.

(8) The OGA shall not serve a notice under subsection (6) in consequence of a contravention if the OGA considers that—

(a) having regard to the nature and consequences of the contravention and to any previous contravention, it would be unreasonable to terminate the authorisation in consequence of the contravention; and

(b) the holder has taken adequate steps to prevent similar contraventions in future.

(9) When an authorisation ceases to be in force the OGA shall publish in the London and Edinburgh and Belfast Gazettes, or in such of them as it considers appropriate, a notice stating that it has ceased to be in force.

Vesting of pipelines on termination or subsequent issue of authorisations

19

(1) When an authorisation ceases to be in force the controlled pipeline to which it relates shall, by virtue of this subsection, be transferred to and vest in the OGA free from encumbrances, except that nothing in this subsection prejudices—

(a) any interest belonging to the Crown Estate or to Her Majesty in right of the Duchy of Lancaster or to the Duchy of Cornwall; or

(b) any right conferred by a notice relating to the pipeline under section 17 or section 17F(9) of this Act or section 82(11) of the Energy Act 2011 .

(2) Where the OGA proposes to issue an authorisation to any person in respect of a pipeline vested in the OGA by virtue of subsection (1) the OGA may agree with that person, on terms which may include provision for that person to make payments to the OGA, that the authorisation is to include a statement that subsection (3) applies to the authorisation.

(3) Where an authorisation includes such a statement the pipeline to which the authorisation relates shall, by virtue of this subsection and at the time specified in the authorisation, be transferred to and vest in the holder of the authorisation subject to any interest or right then subsisting in respect of the pipeline by virtue of paragraph (a) or (b) of subsection (1).

Inspectors etc

20

(1) The OGA may appoint, as inspectors to assist it in the execution of this Part of this Act, such number of persons appearing to it to be qualified for the purpose as it considers appropriate from time to time.

(2) The Secretary of State may by regulations make provision with respect to—

(a) the powers and duties of—

(i) inspectors appointed under subsection (1); and

(ii) any other persons acting on the directions of the OGA in connection with the execution of this Part of this Act; and

(b) the facilities to be accorded to such inspectors and other persons.

(3) For the purpose of enforcing regulations made under subsection (2), an inspector appointed under subsection (1) shall have the same powers under section 38 of the Health and Safety at Work etc. Act 1974 (institution of proceedings in England and Wales) as he would have if he were an inspector appointed by the Health and Safety Executive under section 19 of that Act who is authorised to act for the purposes of the regulations.

(4) In the application of this section to Northern Ireland, subsection (3) shall have effect as if—

(a) the references to sections 19 and 38 of the Health and Safety at Work etc. Act 1974 were references to Articles 21 and 35, respectively, of the Health and Safety at Work (Northern Ireland) Order 1978; and

(b) the reference to the Health and Safety Executive were a reference to the Health and Safety Executive for Northern Ireland.

(5) A statutory instrument containing regulations under subsection (2) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Enforcement

21

(1) Any person who—

(a) contravenes any provision of section 14(1); or

(b) contravenes any provision of a notice under section 16, 17 or 17F(9) served on him in his capacity as the owner of the pipeline to which the notice relates in a case where no authorisation for the use of the pipeline is required by section 14(1); or

(c) makes a statement which he knows is false in a material particular, or recklessly makes a statement which is false in a material particular, for the purpose of inducing the OGA—

(i) to issue any authorisation; or

(ii) to agree under section 18(1)(b) that an authorisation is to cease to be in force; or

(iii) to specify a period under section 18(3)(b); or

(iv) not to serve a notice under section 18(6),

shall be guilty of an offence and liable on summary conviction to a fine not exceeding the statutory maximum or on conviction on indictment to a fine.

(2) If a person executes any works in contravention of section 14(1) the OGA may at any time serve on him a notice requiring him to remove such of the works as are specified in the notice as works to be removed.

(3) The recipient of a notice under subsection (2) shall comply with the notice within the period specified in the notice; and if he fails to do so the OGA may comply with the notice on his behalf and recover from him any expenses reasonably incurred in doing so.

(4) If a person executes any works in contravention of section 14(1) and the OGA considers that it is urgently necessary to do such things in relation to the works as it could have required that person to do by a notice under subsection (2), the OGA may do those things and recover from that person any expenses reasonably incurred in doing so.

(5) The fact that any thing is done or omitted—

(a) by the recipient of a notice under subsection (2) for the purpose of complying with the notice; or

(b) by the OGA under subsection (3) or (4),

shall not relieve him from liability for any damage which is attributable to the act or omission and for which he would have been liable had the act or omission not been authorised by this section; but the OGA shall be entitled to recover from the person who executed the works in question the amount of any damages which, in consequence of the works, are paid by the OGA by virtue of this subsection.

Criminal proceedings

22

(1) Proceedings for an offence under section 21(1) or created by regulations made under this Part of this Act (a “relevant offence”) may be taken, and the offence may for all incidental purposes be treated as having been committed, in any place in the United Kingdom.

(2) Proceedings for a relevant offence alleged to have been committed in, under or over controlled waters shall not be instituted in England and Wales except—

(a) by the Secretary of State or by a person authorised in that behalf by the Secretary of State; or

(b) by or with the consent of the Director of Public Prosecutions.

(3) Proceedings for a relevant offence alleged to have been committed in, under or over controlled waters shall not be instituted in Northern Ireland except—

(a) by the Secretary of State or by a person authorised in that behalf by the Secretary of State; or

(b) by or with the consent of the Director of Public Prosecutions for Northern Ireland.

(4) Subsections (2) and (3) do not apply to proceedings for an offence created by regulations made under section 20.

(5) In proceedings for a relevant offence an averment in the information, complaint or indictment that anything was done or situated in, under or over controlled waters shall, unless the contrary is proved, be sufficient evidence of the matter stated in the averment.

(6) Where a relevant offence committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

(7) In subsection (6), in relation to a body corporate which—

(a) is established by or under any enactment for the purpose of carrying on under public ownership any industry or part of an industry or undertaking; and

(b) is a body whose affairs are managed by its members,

(8) In any proceedings for—

(a) an offence under paragraph (a) of subsection (1) of section 21 of executing works or using a pipeline otherwise than in accordance with the terms of the relevant authorisation; or

(b) an offence under paragraph (b) of that subsection of contravening any provision of a notice,

it shall be a defence to prove that the accused used all due diligence to comply with those terms or, as the case may be, with that provision.

(9) Section 3 of the Territorial Waters Jurisdiction Act 1878 (restriction on prosecutions) shall not apply to any proceedings for a relevant offence.

Civil liability for breach of statutory duty

23

(1) Breach of a duty imposed on any person by regulations made under this Part of this Act which state that this subsection applies to such a breach shall be actionable so far, and only so far, as the breach causes personal injury.

(2) References in—

(a) the Fatal Accidents Act 1976; and

(b) Article 3(1) of the Fatal Accidents (Northern Ireland) Order 1977,

to a wrongful act, neglect or default shall include references to any such breach which is so actionable.

(3) Nothing in subsections (1) and (2) prejudices any action which lies apart from the provisions of those subsections.

(4) A defence to a charge which is available by virtue of section 25(3)(c) shall not be a defence in any civil proceedings whether they are brought by virtue of this section or otherwise.

(5) For the purposes of subsection (1) any such regulations as are mentioned in that subsection shall bind the Crown, and references in those regulations to employees shall for those purposes include persons in the service of the Crown; but nothing in this subsection—

(a) confers any right of action on a person as a member of the armed forces of the Crown; or

(b) authorises proceedings against Her Majesty in her private capacity or in right of the Duchy of Lancaster or against the Duke of Cornwall.

(6) In subsection (1) “personal injury” includes any disease, any impairment of a person’s physical or mental condition and any fatal injury.

Application of Part III

24

(1) Where no initial or terminal point of a pipeline is situated in the United Kingdom or controlled waters, the pipeline shall be disregarded for the purposes of this Part of this Act except this subsection and subsection (2).

(2) The Secretary of State may by order provide that specified provisions of this Part of this Act shall apply, subject to such modifications (if any) as are specified, to the whole or any part of a pipeline of a kind mentioned in subsection (1); but an order under this subsection shall contain only such provisions as the Secretary of State considers are consistent with the jurisdiction which belongs to the United Kingdom under international law.

(2A) If a pipeline—

(a) is specified in an order made by the Secretary of State under this subsection, or

(b) is of a description so specified,

the pipeline shall be disregarded for the purposes of this Part of this Act (other than this subsection) or shall be so disregarded while any specified condition is satisfied.

(3) The Secretary of State may in regulations provide that specified provisions of this Part of this Act shall not apply to a pipeline of a specified kind or shall not apply to such a pipeline while any specified condition is satisfied.

(3A) The Secretary of State may by order provide that specified provisions of this Part of this Act shall apply, subject to such modifications (if any) as are specified, in relation to a controlled pipeline—

(a) which is specified or of a specified description, and

(b) which meets the conditions in subsection (3B).

(3B) The conditions are—

(a) that the pipeline is used in connection with exploration for, or exploitation of, petroleum, or the importation of petroleum into the United Kingdom;

(b) that, by virtue of the date when construction of the pipeline was begun, section 14(1)(b) would not apply in relation to use of the pipeline but for an order under this subsection.

(4) In this section “specified”, in relation to an order or regulations, means specified in the order or, as the case may be, the regulations.

(5) A statutory instrument containing an order under subsection (2) , (2A) or (3A) or regulations under subsection (3) shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Orders and regulations

25

(1) Before making any order or regulations under this Part of this Act, the Secretary of State must consult—

(a) the OGA, and

(b) in the case of regulations, such organisations in the United Kingdom as the Secretary of State considers are representative of persons who will be affected by the regulations.

(2) In making regulations under section 20, the Secretary of State shall have regard to the extent of the jurisdiction which belongs to the United Kingdom under international law.

(3) Any regulations under this Part of this Act may provide—

(a) for the creation of offences which, subject to paragraph (b), are punishable on summary conviction by a fine not exceeding the statutory maximum and on conviction on indictment by imprisonment for a term not exceeding two years and a fine;

(b) for the maximum punishment for an offence created by the regulations to be less than that authorised by paragraph (a) and for such an offence to be punishable only on summary conviction; and

(4) Regulations under this Part of this Act—

(a) may be limited so as to apply only in prescribed cases or may exclude prescribed cases from the application of the regulations;

(b) may provide for a case to be excluded from the application of the regulations only so long as conditions specified in the regulations are satisfied.

(5) The Health and Safety Executive may, by directions given to such persons as it considers appropriate, provide for any such regulations not to apply in a case specified in the directions so long as conditions so specified are satisfied.

(6) In its application to Northern Ireland, subsection (5) shall have effect as if the reference to the Health and Safety Executive were a reference to the Health and Safety Executive for Northern Ireland.

(7) Any order or regulations under this Part of this Act—

(a) may make different provision for different circumstances; and

(b) may include such incidental, supplemental and transitional provision as the Secretary of State considers appropriate in connection with the order or regulations.

(8) Without prejudice to the generality of paragraph (b) of subsection (7), provision that may be included in regulations by virtue of that paragraph includes provision for the payment of fees in respect of consents and certificates required by the regulations.

(9) Section 14 of the Interpretation Act 1978 (implied power to amend) shall not apply in relation to the power conferred by section 24(2).

(10) Any power conferred by this Part of this Act to make an order or regulations shall be exercisable by statutory instrument.

Meaning of “pipeline”

26

(1) Except where the context otherwise requires, in this Part of this Act “pipeline” means a pipe or system of pipes (excluding a drain or sewer) for the conveyance of any thing, together with all apparatus, works and services associated with the operation of such a pipe or system .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The Secretary of State may by order provide that a part of a pipeline specified in the order shall be treated for the purposes of this Part of this Act, except this subsection, as a pipeline.

Meaning of “owner”

27

(1) For the purposes of this Part of this Act “owner” in relation to a pipeline, and “proposed owner” in relation to a proposed pipeline, mean the person for the time being designated as the owner of the pipeline, or as the case may be as the proposed owner of the proposed pipeline, by an order made by the Secretary of State.

(1A) For the purposes of this Part of this Act (other than section 16, section 17(1) , the first reference in section 17F(2) and the reference in 17GA(2)(a)) , in the case of downstream gas pipelines and controlled petroleum pipelines—

“owner” in relation to a pipeline includes a person in whom the pipeline is vested; and a person who has the right to use capacity in the pipeline, where such right has been acquired by that person on terms that—he is entitled to use the capacity for a period of one year or more; andthe right is capable of being assigned or otherwise disposed of to another person; and

“proposed owner” in relation to a proposed pipeline includes a person in whom the pipeline is proposed to be vested.

(2) An order designating a person as the proposed owner of a proposed pipeline may also provide for him to be designated as the owner of the pipeline in question at a time determined by or under the order.

(3) Before designating a person under subsection (1) or (2), the Secretary of State shall give the person an opportunity of being heard with respect to the matter.

(4) Where a person for the time being designated under subsection (1) or (2) requests the Secretary of State in writing to cancel the designation, the Secretary of State shall—

(a) consider the request; and

(b) if he considers it appropriate to do so, give the person an opportunity of being heard in connection with the request.

Interpretation of Part III

28

(1) Except where the context otherwise requires, in this Part of this Act the following expressions have the following meanings—

“authorisation” means an authorisation required by section 14;

“carbon dioxide storage site” means a facility—for the storage of carbon dioxide (with a view to its permanent disposal, or as an interim measure prior to its permanent disposal); andin respect of the use of which a person is required to have a licence under section 18 of the Energy Act 2008;

“construction”, in relation to a pipeline, includes placing, and cognate expressions shall be construed accordingly;

“controlled carbon dioxide pipeline” means any controlled pipeline or one of a network of controlled pipelines—which is used to convey carbon dioxide to a carbon dioxide storage site, orwhich is not being used for any purpose but which is intended to be used to convey carbon dioxide to such a site;

“controlled petroleum pipeline” means any controlled pipeline or one of a network of controlled pipelines—which is operated or constructed as part of a petroleum production project and is not a controlled carbon dioxide pipeline; orwhich is used to convey petroleum from the site of one or more such projects—directly to premises, in order for that petroleum to be used at those premises for power generation or for an industrial process;directly to a place outside Great Britain;directly to a terminal; orindirectly to a terminal by way of one or more other terminals, whether or not such intermediate terminals are of the same kind as the final terminal;

“controlled pipeline” and “controlled waters” have the meanings given to them by section 14;

“downstream gas pipeline” means a controlled pipeline, other than a controlled petroleum pipeline, which is used to convey gas to or from a place outside Great Britain;“enactment” includes an enactment of the Parliament of Northern Ireland or of the Northern Ireland Assembly;

“gas” means any substance which consists wholly or mainly of—methane, ethane, propane, butane, hydrogen, carbon monoxide or a substance designated under paragraph (e) of the definition of “gas” in section 2(4) of the Energy Act 2008;a mixture of two or more of those substances ; ora combustible mixture of one or more of those substances and air;

“gas processing facility” means any facility in Great Britain operated otherwise than by a public gas transporter which carries out gas processing operations;

“gas processing operation” means any of the following operations, namely—purifying, blending, odorising or compressing gas for the purpose of enabling it to be introduced into a pipeline system operated by a public gas transporter or to be conveyed to an electricity generating station, a gas storage facility or any place outside Great Britain;removing from gas for that purpose any of its constituent gases, or separating from gas for that purpose any oil or water; ...determining the quantity or quality of gas which is or is to be so introduced, or so conveyed, whether generally or by or on behalf of a particular person; separating, purifying, blending, odorising or compressing gas, for the purpose of— converting it into a form in which a purchaser is willing to accept delivery from a seller, orenabling it to be loaded for conveyance to another place (whether inside or outside Great Britain); andloading gas—at a facility which carries out operations of a kind mentioned in paragraph (d), orpiped from such a facility,for the purpose of enabling the gas to be conveyed to another place (whether inside or outside Great Britain);

“heard” means—in relation to section 27, heard on behalf of the Secretary of State by a person appointed by the Secretary of State for the purpose, andotherwise, heard on behalf of the OGA by a person appointed by the OGA for the purpose.

“holder”, in relation to an authorisation, means the person to whom the authorisation was issued;

“new facility” means—an offshore gas storage facility the construction of which is or is to be completed after 3rd August 2003; oran offshore gas storage facility the modification of which to provide for a significant increase in capacity is or is to be completed after 3rd August 2003

“notice” means notice in writing;

“oil processing facility” means any facility in Great Britain, the territorial sea adjacent to the United Kingdom or the sea in any area designated under section 1(7) of the Continental Shelf Act 1964 which carries out oil processing operations;

“oil processing operations” means any of the following operations—initial blending and such other treatment of petroleum as may be required to produce stabilised crude oil and other hydrocarbon liquids to the point at which a seller could reasonably make a delivery to a purchaser of such oil and liquids;receiving stabilised crude oil and other hydrocarbon liquids piped from an oil processing facility carrying out operations of a kind mentioned in paragraph (a), or storing oil or other hydrocarbon liquids so received, prior to their conveyance to another place (whether inside or outside Great Britain); loading stabilised crude oil and other hydrocarbon liquids piped from a facility carrying out operations of a kind mentioned in paragraph (a) or (b) for conveyance to another place (whether inside or outside Great Britain);

“offshore gas storage facility” means a facility for the storage of gas in controlled waters other than the territorial sea of the United Kingdom adjacent to Northern Ireland;

“petroleum” has the same meaning as in Part I of this Act, and includes petroleum which has undergone any processing;

“petroleum production project” means a project carried out by virtue of a licence granted under section 3, or an equivalent project in a foreign sector of the continental shelf, and includes such a project which is used for the storage of gas;“pipeline”, in relation to an application for a works authorisation, means the proposed pipeline in respect of which the application is made;“prescribed” means prescribed by regulations; and

“public gas transporter” means a public gas transporter within the meaning of Part I of the Gas Act 1986;

“terminal” includes—onshore facilities in the United Kingdom for such initial blending and other treatment as may be required to produce stabilised crude oil and other hydrocarbon liquids to the point at which a seller could reasonably make a delivery to a purchaser of such oil and liquids;oil processing facilitiesgas processing facilities; anda facility for the reception of gas prior to its conveyance to a place outside Great Britain;

“works authorisation” means an authorisation—for works for the construction of a pipeline; orfor such works and for the use of the pipeline.

(2) For the purposes of this Part of this Act, works at any place in, under or over controlled waters for the purpose of determining whether the place is suitable as part of the site of a proposed pipeline and the carrying out of surveying operations for the purpose of settling the route of a proposed pipeline are not works for the construction of a pipeline.

(3) Any reference in this Part of this Act to a contravention of a provision of this Part or regulations made or directions given under this Part includes a reference to a failure to comply with that provision.

(4) Subsections (1) to (3) of section 49 of the Pipe-lines Act 1962 (service of documents) have effect as if—

(a) references to that Act included references to this Part of this Act; and

(b) in subsection (3), after “arrangements agreed” there were inserted “ or in accordance with regulations under Part III of the Petroleum Act 1998 ”.

(5) In the application of subsection (4) to Northern Ireland, section 49(1) to (3) of the Pipe-lines Act 1962 shall have effect as if it extended to Northern Ireland.

(6) Except so far as this Part of this Act otherwise expressly provides, nothing in this Part of this Act—

(a) confers a right of action in any civil proceedings (other than proceedings for recovery of a fine) in respect of any contravention of this Part of this Act or an order or regulations made under it;

(b) affects any restriction imposed by or under any other enactment, whether public, local or private; or

(c) derogates from any right of action or other remedy (whether civil or criminal) in proceedings instituted otherwise than under this Act.

(7) Subsection (6) is subject to section 18 of the Interpretation Act 1978 (duplicated offences).

Part IV — Abandonment of offshore installations

Preparation of programmes

29

(1) The Secretary of State may by written notice require—

(a) the person to whom the notice is given; or

(b) where notices are given to more than one person, those persons jointly,

to submit to the Secretary of State a programme setting out the measures proposed to be taken in connection with the abandonment of an offshore installation or submarine pipeline (an “abandonment programme”).

(1A) The power to give a notice under subsection (1) is exercisable—

(a) on the Secretary of State's own motion, or

(b) at the request of any person to whom the notice may be given (whether or not the notice is given to that person).

(2) A notice under subsection (1) shall either specify the date by which the abandonment programme is to be submitted or provide for it to be submitted on or before such date as the Secretary of State may direct.

(2A) A person to whom a notice under subsection (1) is given—

(a) must consult the OGA before submitting the abandonment programme to the Secretary of State, and

(b) must frame the programme so as to ensure (whether by means of the timing of the measures proposed, the inclusion of provision for collaboration with other persons, or otherwise) that the cost of carrying it out is kept to the minimum that is reasonably practicable in the circumstances.

(2B) When consulted under paragraph (a) of subsection (2A) the OGA must (in particular) consider and advise on—

(a) alternatives to abandoning or decommissioning the installation or pipeline, such as re-using or preserving it, and

(b) how to comply with paragraph (b) of that subsection.

(3) A notice under subsection (1) may require the person to whom it is given to carry out such other consultations as may be specified in the notice before submitting an abandonment programme.

(4) An abandonment programme—

(a) shall contain an estimate of the cost of the measures proposed in it;

(b) shall either specify the times at or within which the measures proposed in it are to be taken or make provision as to how those times are to be determined;

(c) if it proposes that an installation or pipeline be left in position or not wholly removed, shall include provision as to any continuing maintenance that may be necessary.

(5) A person who submits an abandonment programme to the Secretary of State under this section shall at the same time pay to him such fee in respect of his expenditure under this Part of this Act as may be determined in accordance with regulations under section 39.

(6) The Secretary of State may exercise his powers under this section notwithstanding that an abandonment programme has previously been submitted for the installation or pipeline in question if the Secretary of State has under section 32—

(a) rejected that programme, or

(b) approved it (whether or not the approval has been withdrawn).

Persons who may be required to submit programmes

30

(1) A notice under section 29(1) shall not be given to a person in relation to the abandonment of an offshore installation unless at the time when the notice is given he is within any of the following paragraphs—

(a) the person having the management of the installation or of its main structure;

(b) a person to whom subsection (5) applies in relation to the installation;

(ba) a person to whom subsection (5)(a) and (b) applied in relation to the installation, but who—

(i) transferred the right mentioned in that subsection to another person, and

(ii) has not obtained a consent required under the licence in relation to the transfer;

(c) a person outside paragraphs (a) and (b) who is a party to a joint operating agreement or similar agreement relating to rights by virtue of which a person is within paragraph (b);

(d) a person outside paragraphs (a) to (c) who owns any interest in the installation otherwise than as security for a loan;

(e) a body corporate which is outside paragraphs (a) to (d) but is associated with a body corporate within any of those paragraphs.

(2) A notice under section 29(1) shall not be given to a person in relation to the abandonment of a submarine pipeline unless at the time when the notice is given he is within any of the following paragraphs—

(a) a person designated as the owner of the pipeline by an order made by the Secretary of State under section 27;

(b) a person outside paragraph (a) who owns any interest in the whole or substantially the whole of the pipeline, otherwise than as security for a loan;

(c) a body corporate which is outside paragraphs (a) and (b) but is associated with a body corporate within one of those paragraphs.

(3) The Secretary of State may by written notice require a person appearing to the Secretary of State to be within any of the paragraphs of subsection (1) or (2) to give him, within such time as may be specified in the notice, the name and address of every other person whom the recipient of the notice believes to be within any of those paragraphs in relation to the installation or pipeline concerned.

(4) A person who without reasonable excuse fails to comply with a notice under subsection (3) shall be guilty of an offence.

(5) This subsection applies to a person in relation to an offshore installation if—

(a) the person has the right—

(i) to exploit or explore mineral resources in any area,

(ii) to unload, store or recover gas in any area or to convert any natural feature in any area for the purpose of storing gas, or

(iii) to explore any area with a view to, or in connection with, the exercise of a right within sub-paragraph (i) or (ii), and

(b) either—

(i) any activity mentioned in subsection (6) is carried on from, by means of or on the installation, or

(ii) the person intends to carry on an activity mentioned in that subsection from, by means of or on the installation,

or if he had such a right when any such activity was last so carried on.

(6) The activities referred to in subsection (5) are—

(a) the exploitation or exploration of mineral resources in the exercise of the right mentioned in subsection (5)(a);

(aa) the unloading, storage or recovery of gas in the exercise of that right;

(ab) the conversion, in the exercise of that right, of any natural feature for the purpose of storing gas;

(ac) the exploration in exercise of that right with a view to, or in connection with, the exercise of a right within subsection (5)(a)(ii);

(b) the conveyance in the area so mentioned, by means of a pipe or system of pipes, of minerals got, or gas being stored or recovered, in the exercise of that right; and

(c) the provision of accommodation for persons who work on or from an installation which is or has been maintained, or is intended to be established, for the carrying on of an activity falling within paragraph (a) to (b) or this paragraph.

(7) The fact that an installation has been maintained for the carrying on of an activity within subsection (6) shall be disregarded for the purposes of paragraph (c) of that subsection if, since it was so maintained, the installation—

(a) has been outside relevant waters or, where it was so maintained in a part of a foreign sector of the continental shelf adjacent to those waters, the area consisting of those waters and that part; or

(b) has been maintained for the carrying on of an activity which is not within that subsection.

(8) For the purposes of this section, one body corporate is associated with another if one of them controls the other or a third body corporate controls both of them; and subsections (8A) to (8D) set out the circumstances in which one body corporate (“A”) controls another (“B”).

(8A) Where B is a company, A controls B if A possesses or is entitled to acquire—

(a) one half or more of the issued share capital of B,

(b) such rights as would entitle A to exercise one half or more of the votes exercisable in general meetings of B,

(c) such part of the issued share capital of B as would entitle A to one half or more of the amount distributed if the whole of the income of B were in fact distributed among the shareholders, or

(d) such rights as would, in the event of the winding up of B or in any other circumstances, entitle it to receive one half or more of the assets of B which would then be available for distribution among the shareholders.

(8B) Where B is a limited liability partnership, A controls B if A—

(a) holds a majority of the voting rights in B,

(b) is a member of B and has a right to appoint or remove a majority of other members, or

(c) is a member of B and controls alone, or pursuant to an agreement with other members, a majority of the voting rights in B.

(8C) In subsection (8B)(a) and (c) the references to “voting rights” are to the rights conferred on members in respect of their interest in a limited liability partnership to vote on those matters which are to be decided on by a vote of the members of the limited liability partnership.

(8D) In any case, A controls B if A has the power, directly or indirectly, to secure that the affairs of B are conducted in accordance with A's wishes.

(9) In determining whether, by virtue of subsections (8) to (8D) , one body corporate controls another, the first-mentioned body corporate shall be taken to possess—

(a) any rights and powers possessed by a person as nominee for it; and

(b) any rights and powers possessed by a body corporate which it controls (including rights and powers which such abody corporate would be taken to possess by virtue of this paragraph).

Section 29 notices: supplementary provisions

31

(A1) The Secretary of State may not give a notice under section 29(1) in relation to an offshore installation to a person (“P”) who, in relation to the installation, falls within paragraph (b) or (c) of section 30(1), if—

(a) P is not entitled to derive, and never has been entitled to derive, any financial or other benefit from any activity within section 30(6)—

(i) which has been or is carried on (or is intended to be carried on) from, by means of or on the installation, and

(ii) is an activity to which subsection (B1) applies, and

(b) P is not, and never has been, a person within section 30(1)(a), (ba), (d) or (e) in relation to the installation.

(B1) This subsection applies to an activity if—

(a) where the activity is the exploitation or exploration of mineral resources, it relates to an oil field for which the installation is or is to be established or maintained;

(b) where the activity is the conveyance of minerals, the minerals are got, or to be got, from such an oil field;

(c) where the activity is the unloading, storage or recovery of gas, it relates to a controlled place (within the meaning of Chapter 2 or 3 of Part 1 of the Energy Act 2008) for which the installation is or is to be established or maintained;

(d) where the activity is the conveyance of gas being stored or recovered, the storage or recovery of the gas relates to such a controlled place;

(e) where the activity is within section 30(6)(c)—

(i) the installation is in an oil field in respect of which P has an interest, or

(ii) the installation is in a controlled place in respect of which P has a licence under Part 1 of the Energy Act 2008.

(C1) For the purposes of subsection (B1)—

(a) “oil field” means an area which the appropriate authority (within the meaning of paragraph 1(2) of Schedule 1 to the Oil Taxation Act 1975) has determined to be an oil field for the purposes of Part 1 of that Act,

(b) P has an interest in an oil field if P is entitled to derive, or has at any time been entitled to derive, any financial or other benefit from activities within section 30(6) (other than paragraph (c)) carried on in the field.

(D1) The Secretary of State may not give a notice under section 29(1) in relation to an offshore installation to a body corporate if—

(a) the body corporate falls within paragraph (e) of section 30(1) (and no other paragraph of that section), and

(b) the body corporate falls within that paragraph by reason only that it is associated (within the meaning given by section 30(8)) with a person to whom the Secretary of State may not give a notice in relation to the installation by virtue of subsection (A1).

(1) Subject to subsection (3), the Secretary of State shall not give a notice under section 29(1) in relation to an offshore installation to a person within paragraph ... (e) of section 30(1) if the Secretary of State has been and continues to be satisfied that adequate arrangements (including financial arrangements) have been made by a person or persons within paragraph (a), (b) or (c) to ensure that a satisfactory abandonment programme will be carried out.

(2) Subject to subsection (3), the Secretary of State shall not give a notice under section 29(1) in relation to a submarine pipeline to a person within paragraph (b) or (c) of section 30(2) if the Secretary of State has been and continues to be satisfied that adequate arrangements (including financial arrangements) have been made by a person or persons within paragraph (a) to ensure that a satisfactory abandonment programme will be carried out.

(3) Subsections (1) and (2) shall not apply if there has been a failure to comply with a notice under section 29(1) or if the Secretary of State has rejected a programme submitted in compliance with such a notice.

(4) The Secretary of State shall not give a notice to a person under section 29(1) without first giving him an opportunity to make written representations as to whether the notice should be given.

(5) Where the Secretary of State has given a notice under section 29(1) in relation to an installation or a pipeline, he may at any time before the programme required by it is submitted withdraw the notice or give (subject to the preceding provisions of this section) a further notice under section 29(1) (whether in substitution for or in addition to any notice already given); and if he does so he shall inform the recipients of any other notices which have been given in relation to that installation or pipeline and not withdrawn.

(6) Neither the withdrawal of a notice given under section 29(1) nor the giving of a further notice shall relieve the recipient of any other notice of his duty to submit a programme (jointly, in a case where more than one notice is given and not withdrawn, with the recipients of the other notices).

Approval of programmes

32

(1) The Secretary of State may either approve or reject a programme submitted to him under section 29.

(2) If he approves a programme, the Secretary of State may approve it with or without modifications and either subject to conditions or unconditionally.

(2A) The modifications or conditions may (in particular) include modifications or conditions—

(a) which are intended (whether by means of the timing of the measures proposed, the inclusion of provision for collaboration with other persons, or otherwise) to reduce the total cost of carrying out the programme, provided that they do not increase the total costs to be met by any person who is to be subject to obligations under the programme or under any other abandonment programme;

(b) requiring the persons who submitted the programme to carry out and publish or make available to the Secretary of State and the OGA a review of the programme and its implementation including, where relevant, recommendations as to the contents and implementation of future abandonment programmes.

(3) Before approving a programme with modifications or subject to conditions, the Secretary of State shall give the persons who submitted the programme an opportunity to make written representations about the proposed modifications or conditions.

(4) If he rejects a programme, the Secretary of State shall inform the persons who submitted it of his reasons for doing so.

(5) The Secretary of State shall act without unreasonable delay in reaching a decision as to whether to approve or reject a programme.

(6) Before reaching a decision under this section the Secretary of State must—

(a) consult the OGA, and

(b) take into account the cost of carrying out the programme that has been submitted and whether it is possible to reduce that cost by modifying the programme or making it subject to conditions.

(7) When consulted under subsection (6)(a), the OGA must (in particular) consider and advise on—

(a) alternatives to abandoning or decommissioning the installation or pipeline, such as re-using or preserving it, and

(b) whether section 29(2A)(b) has been complied with and, if it has not been, modifications or conditions that would enable it to be complied with.

Failure to submit programmes

33

(1) If a notice under section 29(1) is not complied with, or if the Secretary of State rejects a programme submitted in compliance with such a notice, the Secretary of State may himself prepare an abandonment programme for the installation or pipeline concerned.

(2) With a view to exercising his powers under subsection (1) of this section, the Secretary of State may by written notice require any of the persons to whom notice was given under section 29(1) to provide him, within such time as may be specified in the notice, with such records and drawings and such other information as may be so specified.

(3) A person who without reasonable excuse fails to comply with a notice under subsection (2) shall be guilty of an offence.

(3A) When preparing an abandonment programme under this section the Secretary of State must—

(a) consult the OGA, and

(b) frame the programme so as to ensure (whether by means of the timing of the measures proposed, the inclusion of provision for collaboration with other persons, or otherwise) that the cost of carrying it out is kept to the minimum that is reasonably practicable in the circumstances.

(3B) When consulted under paragraph (a) of subsection (3A), the OGA must (in particular) consider and advise on—

(a) alternatives to abandoning or decommissioning the installation or pipeline, such as re-using or preserving it, and

(b) how to comply with the requirement in paragraph (b) of that subsection.

(4) The Secretary of State may recover from any of the persons to whom a notice was given under section 29(1) any expenditure incurred by the Secretary of State in preparing an abandonment programme under this section, and any fee that would have been payable on the submission of a programme by those persons.

(5) A person liable to pay any sum to the Secretary of State by virtue of subsection (4) shall also pay interest on that sum for the period beginning with the day on which the Secretary of State notified him of the sum payable and ending with the date of payment.

(6) The rate of interest payable in accordance with subsection (5) shall be a rate determined by the Secretary of State as comparable with commercial rates.

(7) Where the Secretary of State prepares an abandonment programme under this section, he shall inform the persons to whom notice was given under section 29(1) of its terms; and when he has done so, the following provisions of this Part of this Act shall have effect as if the programme had been submitted by those persons and approved by the Secretary of State.

Revision of programmes

34

(1) Where the Secretary of State has approved a programme submitted to him under section 29—

(a) either he or the persons who submitted it acting together may propose an alteration to the programme or to any condition to which it is subject; and

(b) either he or any of those persons may propose that any person who by virtue of section 36 has a duty to secure that the programme is carried out shall cease to have that duty, or that a person who does not already have that duty shall have it (either in addition to or in substitution for another person).

(2) In the case of a proposal of the kind mentioned in subsection (1)(b), any person who would if the proposed change were made have a duty to secure that the programme is carried out must be a person who—

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