The Petroleum (Production) (Seaward Areas) Regulations 1988

• (4) The Licensee shall forthwith comply with any request for the delivery of the whole or any part of any sample which is made in accordance with the preceding provisions of this clause.

Reports to be treated as condidential

34

All records, returns, plans, maps, samples, accounts and information (in this clause referred to as “the specified data”) which the Licensee is or may be from time to time required to furnish under the provisions of this licence shall be supplied at the expense of the Licensee and shall not (except with the consent in writing of the Licensee which shall not be unreasonably withheld) be disclosed to any person not in the service or employment of the Crown:

Inspection of records etc.

35

The Licensee shall–

• (a) permit any person in the service or employment of the Crown who is appointed by the Minister for the purpose to inspect, and to take copies of and make notes from, all books, papers, maps and other records of any kind kept by the Licensee in pursuance of this licence or in connection with activities about which the Minister is entitled to obtain information in pursuance of clauses 27(3) and 32(3) of this licence; and

• (b) furnish that person at reasonable times with such information and provide him at reasonable times with such reasonable assistance as he may request in connection with or arising out of an inspection in pursuance of this clause.

Rights of access

36

Any person or persons authorised by the Minister shall be entitled at all reasonable times to enter into and upon any of the Licensee’s installations or equipment used or to be used in connection with searching, boring for or getting petroleum in the licensed area for the purpose hereinafter mentioned–

• (a) to examine the installations, wells, plant, appliances and works made or executed by the Licensee in pursuance of the licence and the state of repair and condition thereof; and

• (b) to execute any works or to provide and install any equipment which the Minister may be entitled to execute or provide and install in accordance with the provisions hereof.

Power to execute works

37

If the Licensee shall at any time fail to perform the obligations arising under the terms and conditions of any of clauses 14, 19, 22, 23 or 26 of this licence, the Minister shall be entitled, after giving to the Licensee reasonable notice in writing of such his intention, to execute any works and to provide and install any equipment which in the opinion of the Minister may be necessary to secure the performance of the said obligations or any of them and to recover the costs and expenses of so doing from the Licensee.

Right of distress

38

If and whenever any of the payments mentioned in clause 9(1) of this licence or any part thereof shall be in arrear or upaid for 28 days next after any of the days whereon the same ought to be paid (whether the same shall have been legally demanded or not) then and so often as the same may happen the Minister may (as an additional remedy and without prejudice to the power of distress and any other rights and remedies to which he would be entitled) enter into and upon any of the Licensee’s installations and equipment used or to be used in connection with searching, boring for or getting petroleum in the licensed area and may seize and distrain and sell as a landlord may do for rent in arrear all or any of the stocks of petroleum, engines, machinery, tools, implements, chattels and effects belonging to the Licensee which shall be found in or upon or about the installantions and equipment so entered upon and out of the moneys arising from the sale of such distress may retain and pay all the arrears of the said payments and also the costs and expenses incident to any such distress and sale rendering the surplus (if any) to the Licensee.

38

If and whenever any of the payments mentioned in clause 9(1) of this licence or any part thereof shall be in arrear or unpaid for 28 days next after any of the days whereon the same ought to be paid (whether the same shall have been legally demanded or not) then and so often as the same may happen the Minister may (as an additional remedy and without prejudice to any other rights and remedies to which he would be entitled) do diligence in respect thereof in like manner as a landlord may do diligence in respect of unpaid arrears of rent and such diligence shall be effectual to attach all or any of the stocks of petroelum, engines, machinery, tools, implements and other effects belonging to the Licensee which shall be found on or about any of the Licensee’s installations and equipment used or to be used in connection with searching, boring for or getting petroleum in the licensed area, and where in pursuance of such a diligence a sale of such effects as shall have been attached thereby takesd place the Minister may out of the proceeds thereof retain and pay all the arrears of the said payments and also the expenses of an incident to such diligence and sale and shall pay the surplus there (if any) to the Licensee.

Indemnity against third party claims

39

The Licensee shall at all times keep the Minister effectualy indemnified against all actions, proceedings, costs, charges, claims and demands whatsoever which may be made or brought against the Minister by any third party in relation to or in connection with this licence or any matter or thing done or purported to be done in pursuance thereof.

Advertisements, prospectuses etc.

40

No statement shall be made either in any notice, advertisement, prospectus or other document issued by or to the knowledge of the Licensee or in any other manner claiming or suggesting whether expressly or by implication that Her Majesty or any Government Department or any person or body acting on behalf of Her Majesty has or have formed or expressed any opinion that the licensed area is from its geological formation or otherwise one in which petroleum is likely to be obtainable.

Restrictions on assignment, etc.

41

• (1) The Licensee shall not, except with the consent in writing of the Minister and in accordance with the conditions (if any) of the consent do anything whatsoever whereby, under the law (including the rules of equity) of any part of the United Kingdom or of any other place, any right granted by this licence or derived from a right so granted becomes exercisable by or for the benefit of or in accordance with the directions of another person.

• (2) An agreement permitting the carrying out of geological surveys by physical or chemical means in the licensed area otherwise than by drilling is not prohibited by paragraph (1) of this clause if the person by whom such surveys are to be carried out is–

• (a) the holder of a licence granted by the Minister of the right, in common with all other persons to whom the like right may have been granted, to search for petroleum in respect of an area which would include the licensed area, but for a proviso therein excluding the sxercise of such right in the licensed area without the consent of the Licensee; or

• (b) the holder of a licence granted by the Minister to search and bore for, and get, petroleum in an area adjacent to the licensed area.

and if the information intended to be obtained by such survey is reasonably necessary to enable that holder more efficiently to exercise the rights granted by the licence which he holds from the Minister.

• (3) The Licensee shall not enter into any agreement providing for a person other than the Licensee to become entitled to, or to any proceeds of sale of, any petroleum which, at the time when the agreement is made, has not been but may be won and saved from the licensed area unless the terms of the agreement have been approved in writing by the Minister either unconditionally or subject to conditions, but the preceding provisions of this paragraph do not apply to–

• (a) an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved; and

• (b) an agreement in so far as it provides that, after any petroleum has been won and saved from the licensed area, it shall be exchanged for other petroleum.

• (4) The Licensee shall not, without the consent of the Minister, dispose of any petroleum won and saved in the licensed area or any proceeds of sale of such petroleum in such a manner that the disposal does, to the knowledge of the Licensee or without his knowing it, fulfil or enable another person to fulfil obligations which a person who controls the Licensee, or a person who is controlled by a person who controls the Licensee, is required to fulfil by an agreement which, if the person required to fulfil the obligations were the Licensee, would be an agreement of which the terms require approval by virtue of paragraph (3) of this clause; and subsections (2) and (4) to (6) of section 416 of the Income and Corporation Taxes Act 1988 shall apply, for the purposes of determining whether for the purposes of this paragraph a person has control of another person, with the following modifications, namely–

• (a) for the words “the greater part” wherever they occur in the said subsection (2) there shall be substituted the words “one-third or more”; and

• (b) in the said subsection (6), for the word “may” there shall be substituted the word “shall”, the words from “and such attributions” onwards shall be omitted and in the other provisions of that subsection any reference to an associate of a person shall be construed as including only a relative of his (as defined by section 417(4) of that Act), a partner of his and a trustee of a settlement (as defined by section 681(4) of that Act) of which he is a beneficiary.

• (5) Where the Licensee is two or more persons, then, without prejudice to the preceding provisions of this clause, none of those persons shall enter into an agreement with respect to the entitlement of any of them to–

• (a) the benefit of any right granted by this licence; or

• (b) any petroleum won and saved from the licensed area; or

• (c) any proceeds of sale of such petroleum,

unless the terms of the agreement have been approved in writing by the Minister, but the preceding provisions of this paragraph do not apply to an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved and an agreement in so far as it provides that, after any petroleum has been won and saved from the licensed area, shall be exchanged for other petroleum.

Power of revocation

42

• (1) If any of the events specified in the following paragraph shall occur then and in any such case the Minister may revoke this licence and thereupon the same and all the rights hereby granted shall cease and determine but subject nevertheless and without prejudice to any obligation or liability incurred by the Licensee or imposed upon him by or under the terms and conditions hereof.

• (2) The events referred to in the foregoing paragraph are–

• (a) any payments mentioned in clause 9(1) of this licence or any part thereof being in arrear or unpaid for two months next after any of the days whereon the same ought to have been paid;

• (b) any breach or non-observance by the Licensee of any of the terms and conditions of this licence;

• (c) the bankruptcy of the Licensee;

• (d) the making by the Licensee of any arrangement or composition with his creditors;

• (e) if the Licensee is a company, the appointment of a receiver or any liquidation whether compulsory or voluntary;

• (f) any breach or non-observance by the Licensee of the terms and conditions of a development scheme;

• (g) the Licensee’s ceasing in the case of a company to have its central management and control in the United Kingdom;

• (h) any breach of a condition subject to which the Minister gave his approval in pursuance of clause 41(3) of this licence;

• (i) any breach of clause 41(5) of this licence;

and where two or more persons are the Licensee any reference to the Licensee in sub-paragraphs (c) to (g) of this paragraph is a reference to any of those persons.

• (3) The Minister may revoke this licence, with the like consequences as are mentioned in paragraph (1) of this clause, if–

• (a) the Licensee is a company; and

• (b) there is a change in the control of the Licensee; and

• (c) the Minister serves notice in writing on the Licence stating that the Minister proposes to revoke this licence in pursuance of this paragraph unless such a further change in the control of the Licensee as is specified in the notice takes place within the period of three months beginning with the date of service of the notice; and

• (d) that further change does not take place within that period.

• (4) There is a change in the control of the Licensee for the purposes of paragraph (3)(b) of this clause whenever a person has control of the Licensee who did not have control of the Licensee when this licence was granted; and subsections (2) and (4) to (6) of section 416 of the Income and Corporation Taxes Act 1988 shall apply, for the purpose of determining whether for the purposes of this paragraph a person has or had control of the Licensee, with the modifications specified in clause 41(4) of this licence.

• (5) Where two or more persons are the Licensee and any of them is a company, paragraphs (3) and (4) of this clause shall have effect as if–

• (a) sub-paragraph (a) of paragraph (3) were omitted;

• (b) in sub-paragraph (b) of that paragraph, after the word “of” there were inserted the words “any company included among the persons who together constitute”; and

• (c) for the word “Licensee” in any other provision of those paragraphs there were substituted the word “company”.

Arbitration

43

• (1) If at any time any dispute, difference or question shall arise between the Minister and the Licensee as to any matter arising under or by virtue of this licence or as to their respective rights and liabilities in respect thereof then the same shall, except where it is expressly provided by this licence that the matter or thing to which the same relates is to be determined, decided, directed, approved or consented to by the Minister, be referred to arbitration as provided by the following paragraph.

• (2) The arbitration referred to in the foregoing paragraph shall be in accordance with the Arbitration Act 1950 by a single arbitrator who, in default of agreement between the Minister and the Licensee and, in the case of arbitration in relation to a development scheme, other Licensees affected by that scheme, as to his appointment, shall be appointed by the Lord Chief Justice of England for the time being.

Note:Where the licensed area is situate in the Scottish area, as defined in the Civil Jurisdiction (Offshore Activities) Order 1987, paragraph(2A)following will be substituted for the foregoing paragraph(2).

Where the licensed area is situate in the Northern Irish area, as defined in the Civil Jurisdiction (Offshore Activities) Order 1987, paragraph(2B)following will be substituted for the foregoing paragraph(2).

• (2A) The arbitration referred to in the foregoing paragraph shall be by a single arbiter who, in default of agreement between the Minister and the Licensee and, in the case of arbitration relating to a development scheme, other Licensees affected by that scheme, as to his appointment, shall be appointed by the Lord President of the Court of Session.

• (2B) The arbitration referred to in the foregoing paragraph shall be in accordance with the Arbitration Act (Northern Ireland) 1937 by a single arbitrator who, in default of agreement between the Minister and the Licensee and, in the case of arbitration in relation to a development scheme, other Licensees affect by that scheme, as to his appointment, shall be appointed by the Lord Chief Justice of Northern Ireland for the time being.

• (3) In the case of any such arbitration which relates to a development scheme the Licensee shall unless the arbitrator otherwise determines perform and observe the terms and conditions of the development scheme pending the decision of the arbitrator.

Note:In any licence incorporating paragraph(2A)in substitution for paragraph(2)of this clause, the paragraph(3A)following will be substituted for the foregoing paragraph(3).

• (3A) In the case of any such arbitration which relates to a development scheme the Licensee shall unless the arbiter otherwise determines perform and observed the terms and conditions of the development scheme pending the decision of the arbiter.

Note:Schedules to each Licence will(1)identify the blocks to which the licence relates,(2)provide for the payment by the Licensee of sums which may include initial payments on the grant of the Licence and annual payments payable in advance,(3)specify the rate at which royalty is to be assessed and(4)set out working obligations.

Licences will be executed as deeds in duplicate by all parties thereto.

SCHEDULE 5 — MODEL CLAUSES FOR EXPLORATION LICENCES IN SEAWARD AREAS OR IN LANDWARD AREAS BELOW THE LOW WATER LINE

Interpretation

1

• (1) In the following clauses the following expressions have the meanings hereby respectively assigned to them, that is to say:–

• “the Act of 1934” means the Petroleum (Production) Act 1934;

• “the Act of 1964” means the Continental Shelf Act 1964;

• “the exploration area” means the area for the time being in which the Licensee may exercise the rights granted by this licence;

• “the Licensee” means the person or persons to whom this licence is granted, his personal representatives and any person or persons to whom the rights conferred by this licence may lawfully have been assigned;

• “the Minister” means the Secretary of State for Energy;

• “petroleum” includes any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in strata, but does not include coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation;

• “well” includes borehole.

• (2) Any obligations which are to be observed and performed by the Licensee shall at any time at which the Licensee is more than one person be joint and several obligations.

Right to search for petroleum

2

In consideration of the payments hereinafter provided and the performance and observance by the Licensee of all the terms and conditions hereof, the Minister, in exercise of the powers conferred upon him by the Act of 1934 and the Act of 1964, hereby grants to the Licensee LICENCE AND LIBERTY in common with all other persons to whom the like right may have been granted or may hereafter be granted during the continuance of this licence and subject to the provisions hereof to search for petroleum in the strata in the islands and in the sea bed and subsoil:

• (a) comprised in the seaward areas defined by Regulation 3(1) of the Petroleum (Production) (Seaward Areas) Regulations 1988; and

• (b) where the lines drawn in accordance with Schedule 1 to the said Regulations dividing landward areas from seaward areas are not the low-water line, in the areas between that line and the said dividing lines:

Provided that no rights conferred by this licence shall be exercisable in any area in respect of which a licence (not being a methane drainage licence) is for the time being in force, entitling the grantee thereof to search and bore for and get petroleum, except with the agreement of the holder of that licence to the exercise in any such area of any such rights.

Prospecting methods

3

The right to search for petroleum conferred by this licence shall include prospecting and carrying out geological surveys by physical or chemical means and drilling for the purpose of obtaining geological information about strata in the exploration area but shall not include any right to get petroleum or any right to drill wells for production of petroleum or any other well of a depth exceeding three hundred and fifty metres below the surface of the sea bed or such greater depth as the Minister may from time to time approve either generally or in relation to a particular well or in relation to a class of wells to which that well belongs.

Term of licence

4

This licence unless sooner determined under any of the provisions hereof shall be and continue in force for the term of three years from but may, if the Minister sees fit and the Licensee has at least three months before the expiry of the said term made a written request for its extension, be continued for a further period of three years.

Right of Licensee to determine licence

5

Without prejudice to any obligation or liability imposed by or incurred under the terms and conditions hereof the Licensee may at any time determine this licence by giving to the Minister not less than six months' previous notice in writing to that effect.

Payment of consideration for licence

6

• (1) The Licensee shall pay to the Minister during the term of this licence the consideration for the grant of this licence specified in Schedule 1 to this licence at the times and in the manner so specified.

• (2) The Licensee shall not by reason of determination of this licence or of any reduction in the exploration area be entitled to be repaid or allowed any part of any sum payable to the Minister pursuant to this licence.

Commencement, abandonment and plugging of wells

7

• (1) The Licensee shall not commence or, after abandoning in manner hereinafter provided, shall not recommence the drilling of a well without the consent in writing of the Minister.

• (2) The Licensee shall not abandon any well without the consent in writing of the Minister except as provided in paragraphs (5) and (6) of this clause.

• (3) The Licensee shall ensure compliance with any conditions subject to which any consent under either of the foregoing paragraphs is given.

• (4) If any such condition under paragraph (1) of this clause relates to the position, depth or direction of the well or to any casing of the well or any condition under either paragraph (1) or paragraph (2) of this clause relates to any plugging or sealing of the well, the Minister may from time to time direct that the well and all records relating thereto shall be examined in such manner upon such occasions or at such intervals and by such persons as may be specified by the Minister’s direction and the Licensee shall pay to any such person or to the Minister such fees and expenses for such examination as the Minister may specify.

• (5) Where the Licensee’s rights in any area cease for the time being to be exercisable, by reason of the grant of such a licence as is mentioned in the proviso to clause 2 of this licence or by reason of the ending of any such agreement as referred to in that proviso, the Licensee unless the Minister otherwise determines, shall within one month after the date on which such rights cease to be exercisable plug any of the Licensee’s wells in that area.

• (6) All the Licensee’s wells (other than wells to which the last foregoing paragraph applies) in the exploration area shall, unless the Minister otherwise determines, be plugged by the Licensee not less than one month nor more than three months before the expiry or determination of the Licensee’s rights under this licence.

• (7) The plugging of any well shall be done in accordance with a specification approved by the Minister applicable to that well or to wells generally or to a class of wells to which that well belongs and shall be carried out in an efficient and workmanlike manner.

Distance of wells from boundaries of exploration area

8

No well shall except with the consent in writing of the Minister be drilled or made so that any part thereof is less than one hundred and twenty-five metres from any of the boundaries of the exploration area.

Avoidance of harmful methods of working

9

• (1) The Licensee shall maintain all apparatus and appliances and all wells which have not been abandoned and plugged as provided by clause 7 of this licence in good repair and condition and shall execute all operations in or in connection with the exploration area in a proper and workmanlike manner in accordance with methods and practice of exploration customarily used in good oilfield practice and without prejudice to the generality of the foregoing provision the Licensee shall take all steps practicable in order–

• (a) to prevent the escape or waste of petroleum discovered in the exploration area;

• (b) to conserve the exploration area for productive operations;

• (c) to prevent damage to petroleum bearing strata;

• (d) to prevent the entrance of water through wells to petroleum bearing strata; and

• (e) to prevent the escape of petroleum into any waters in or in the vicinity of the exploration area.

• (2) The Licensee shall comply with any instructions from time to time given by the Minister in writing relating to any of the matters set out in the foregoing paragraph. If the Licensee objects to any such instruction on the ground that it is unreasonable he may, within fourteen days from the date upon which the same was given, refer the matter to arbitration in manner provided by clause 22 of this licence.

• (3) The Licensee shall give notice to the Minister of any event causing escape or waste of petroleum, damage to petroleum bearing strata or entrance of water through wells to petroleum bearing strata forthwith after the occurrence of that event and shall, forthwith after the occurrence of any event causing escape of petroleum into the sea, give notice of the event to the Chief Inspector of Her Majesty’s Coastguard.

Fishing and navigation

10

The Licensee shall not carry out any operations authorised by this licence in or about the exploration area in such manner as to interfere unjustifiably with navigation or fishing in the waters of the exploration area or with the conservation of the living resources of the sea.

Safety, health and welfare of employees

11

The Licensee shall comply with any instructions from time to time given by the Minister in writing for securing the safety, health and welfare of persons employed in or about the exploration area.

Licensee to keep records

12

• (1) The Licensee shall keep accurate records in a form from time to time approved by the Minister of the drilling, deepening, plugging or abandonment of all wells and of any alterations in the casing thereof. Such records shall contain particulars of the following matters–

• (a) the site of and number assigned to every well;

• (b) the subsoil and strata through which the well was drilled;

• (c) the casing inserted in any well and any alteration to such casing;

• (d) any petroleum, water, mines or workable seams of coal encountered; and

• (e) such other matters as the Minister may from time to time direct.

• (2) The Licensee shall keep in the United Kingdom accurate geological plans and maps relating to the exploration area and such other records in relation thereto as may be necessary to preserve all information which the Licensee has about the geology of the exploration area.

• (3) The Licensee shall deliver copies of the said records, plans and maps referred to in the two foregoing paragraphs to the Minister as and when required.

Returns

13

• (1) The Licensee shall furnish to the Minister on or before the fifteenth day of each month in which this licence is in force a return in a form from time to time approved by the Minister of the progress of his operations in the exploration area. Such return shall contain–

• (a) a statement of the areas in which any geological work, including surveys by any physical or chemical means, has been carried out;

• (b) the number assigned to each well, and in the case of any well the drilling of which was begun or the number of which was changed in that month, the site thereof;

• (c) a statement of the depth drilled in each well; and

• (d) a statement of any petroleum, water, mines or workable seams of coal encountered in the course of the said operations.

• (2) Within two months after the end of each calendar year in which this licence is in force and within two months after the expiration or determination of this licence the Licensee shall furnish to the Minister an annual return in a form from time to time approved by the Minister of the operations conducted by him in the exploration area during that year or the period prior to such expiration or determination as the case may be together with a plan upon a scale approved by the Minister showing the situation of all wells. The Licensee shall also indicate on the said plan all works executed by him in connection with searching for petroleum.

• (3) The Licensee shall furnish to the Minister such other information, including information in the form of maps and plans, as to progress of his operations in the exploration areas as the Minister may from time to time require.

Licensee to keep samples

14

• (1) As far as reasonably practicable the Licensee shall correctly label and preserve for reference for a period of five years samples of the sea bed and of the strata encountered in any of the Licensee’s wells in the exploration area and samples of any petroleum or water discovered in any such wells.

• (2) The Licensee shall not dispose of any sample after the expiry of the said period of five years unless–

• (a) he has at least six months before the date of the disposal given notice in writing to the Minister of his intention to dispose of the sample; and

• (b) the Minister or any person authorised by him has not within the said period of six months informed the Licensee in writing that he wishes the sample to be delivered to him.

• (3) The Minister or any person authorised by him shall be entitled at any time–

• (a) to inform the Licensee in writing that he wishes part of any sample preserved by the Licensee to be delivered to him; or

• (b) to inspect and analyse any sample preserved by the Licensee.

• (4) The Licensee shall forthwith comply with any request for the delivery of the whole or any part of any sample which is made in accordance with the preceding provisions of this clause.

Reports to be treated as confidential

15

All records, returns, plans, maps, samples, accounts and information (in this clause referred to as “the specified data”) which the Licensee is or may be from time to time required to furnish under the provisions of this licence shall be supplied at the expense of the Licensee and shall not (except with the consent in writing of the Licensee which shall not be unreasonably withheld) be disclosed to any person not in the service or employment of the Crown:

Power to inspect records

16

Any person authorised by the Minister may at all reasonable times inspect and make abstracts or copies of any records, returns, plans or maps which the Licensee is required to keep or make in accordance with the provisions of this licence.

Rights of access

17

Any person or persons authorised by the Minister shall be entitled at all reasonable times to enter into and upon any of the Licensee’s installations and equipment used or to be used in connection with searching for petroleum in the exploration area for the purposes hereinafter mentioned–

• (a) to examine the installations, wells, plant, applicances and works made or executed by the Licensee in pursuance of this licence and the state of repair and condition thereof; and

• (b) to execute any works or to provide and install any equipment which the Minister may be entitled to execute or provide and install in accordance with the provisions hereof.

Power to execute works

18

If the Licensee shall at any time fail to perform the obligations arising under the terms and conditions of any of clauses 7, 9 and 11 of this licence then and in any such case the Minister shall be entitled, after giving to the Licensee reasonable notice in writing of such his intention, to execute any works and to provide and install any equipment which in the opinion of the Minister may be necessary to secure the performance of the said obligations or any of them and to recover the costs and expenses of so doing from the Licensee.

Indemnity against third party claims

19

The Licensee shall at all times keep the Minister effectually indemnified against all actions, proceedings, costs, charges, claims and demands whatsoever which may be made or brought against the Minister by any third party in relation to or in connection with this licence or any matter or thing done or purported to be done in pursuance thereof.

Agreement not to assign

20

The Licensee shall not without the consent of the Minister in writing assign or part with any of the rights granted by this licence in relation to the whole or any part of the exploration area or grant any sub-licence in respect of any such rights.

Power of revocation

21

• (1) If any of the events specified in the following paragraph shall occur then and in any such case the Minister may revoke this licence and thereupon the same and all the rights hereby granted shall cease and determine but subject nevertheless and without prejudice to any obligation or liability incurred by the Licensee or imposed upon him by or under the terms and conditions hereof.

• (2) The events referred to in the foregoing paragraph are–

• (a) any consideration specified in Schedule 1 hereto or any part thereof being in arrear or unpaid for two months next after any of the days whereon the same ought to be have been paid;

• (b) any breach or non-observance by the Licensee of any of the terms and conditions of this licence;

• (c) the bankruptcy of the Licensee;

• (d) the making by the Licensee of any arrangement or composition with his creditors;

• (e) if the Licensee is a company, the appointment of a receiver or any liquidation whether compulsory or voluntary;

• (f) the Licensee’s ceasing in the case of a company to have its central management and control in the United Kingdom;

and where two or more persons are the Licensee any reference to the Licensee in sub-paragraphs (b) to (f) of this paragraph is a reference to any of those persons.

Arbitration

22

• (1) If at any time any dispute, difference or question shall arise between the Minister and the Licensee as to any matter arising under or by virtue of this licence or as to their respective rights and liabilities in respect thereof then the same shall, except where it is expressly provided by this licence that the matter or thing to which the same relates is to be determined, decided, approved or consented to by the Minister, be referred to arbitration as provided by the following paragraph.

• (2) The arbitration referred to in the foregoing paragraph shall be in accordance with the Arbitration Act 1950 by a single arbitrator who, in default of agreement between the Minister and the Licensee as to his appointment, shall be appointed by the Lord Chief Justice of England for the time being:

Provided that if any such dispute, difference or question arises solely out of any act or omission taking place in the Scottish area, as defined in the Civil Jurisdiction (Offshore Activities) Order 1987, the arbitration referred to in the foregoing paragraph shall be by a single arbiter who, in default of agreement between the Minister and the Licensee as to his appointment shall be appointed by the Lord President of the Court of Session.

And provided further that if any such dispute, difference or question arises solely out of any act or omission taking place in the Northern Irish area, as defined in the Civil Jurisdiction (Offshore Activities) Order 1987, the arbitration referred to in the foregoing paragraph shall be in accordance with the Arbitration Act (Northern Ireland) 1937 by a single arbitrator who, in default of agreement between the Minister and the Licensee as to his appointment shall be appointed by the Lord Chief Justice of Northern Ireland for the time being.

Note:A Schedule to each Licence will provide for the payment by the Licensee of sums which may include annual payments payable in advance.

Licences will be executed as deeds in duplicate by all parties thereto.

Signed

Peter Morrison — Minister of State, — Department of Energy — 12th July 1988

Explanatory note

(This note is not part of the Regulations)

These Regulations consolidate with amendments the provisions of the Petroleum (Production) Regulations 1982 (as amended) in relation to (a) applications to the Secretary of State for petroleum production licences in respect of seaward areas and (b) applications to the Secretary of State for petroleum exploration licences in respect of seaward areas and landward areas below the low water line.

The Regulations set out the requirements for such applications and in the case of applications for seaward production licences increase the amount of the application fee (from £2,500) to £3,100 (Regulation 9(1) and (2)).

The Regulations also prescribe model clauses to be incorporated, unless the Secretary of State sees fit to modify or exclude them in a particular case, in licences granted in pursuance of applications under these Regulations (Regulation 8). The clauses appropriate to seaward production licences are set out in Schedule 4 and those appropriate to exploration licences in seaward areas and landward areas below the low water line are set out in Schedule 5.

The main changes in relation to seaward production licences are in the model clauses dealing with the continuance of the licence beyond the initial term of 6 years. The revised clause 4(4) provides that the licence may be continued for a further period of 12 years (“the second term”) after the initial term. The new clause 5 provides that, subject to the conditions specified in that clause being satisfied, the licence may be continued thereafter for a further maximum period of 18 years. The new clause 6 introduces a power further to extend the term of the licence after the expiry of such 18-year period.

The Regulations provide that after the date of coming into force of these Regulations the Petroleum (Production) Regulations 1982 shall cease to have effect in relation to applications for production licences in respect of seaward areas and for exploration licences in respect of seaward areas and landward areas below the low water line (Regulation 3(2) and Schedule 2). The 1982 Regulations ceased to have effect after 18 December 1984 in relation to applications for production licences in respect of landward areas and exploration licences in respect of landward areas above the low water line, by virtue of the Petroleum (Production) (Landward Areas) Regulations 1984 (S.I. 1984/1832) (which Regulations laid down a new framework for landward licensing). The future scope of the 1982 Regulations is thus now confined to applications for methane drainage licences.

Footnotes

[^f00001]: 1934 c. 36.

[^f00002]: S.R. & O. 1942/1132, the Ministry of Fuel and Power Act 1945 (c. 19), S.I. 1969/1498, 1970/1537.

[^f00003]: 1964 c. 29.