The Petroleum (Production) (Landward Areas) Regulations 1991

• (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 the scheme, as to his appointment, shall be appointed by the Lord Chief Justice of England.

• (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: Where the licensed area is situate in Scotland or in waters adjacent thereto the following provisions will be substituted for the last two foregoing paragraphs.

• (2) 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.

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

Note: Schedules to each licence will (1) describe the area 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 rates at which royalty is to be assessed.

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

Signed

John Wakeham — Secretary of State for Energy — 13th April 1991

Explanatory note

(This note is not part of the Regulations)

These Regulations provide for applications to the Secretary of State for licences to search for and get petroleum in Great Britain and those islands and waters adjacent to it which are “landward areas” as defined in the Regulations. They also set out model clauses which are to be incorporated in such licences unless the Secretary of State thinks fit to modify or exclude them in any particular case. The Regulations supersede the Petroleum (Production) (Landward Areas) Regulations 1984 (S.I. 1984/1832), except as respects licences applied for before the date on which these Regulations come into force.

As in the 1984 Regulations, there is provision for six-year exploration licences (incorporating model clauses set out in Schedule 3), five-year appraisal licences (incorporating model clauses set out in Schedule 5) and twenty-year development licences (incorporating model clauses set out in Schedule 6); all such licences confer exclusive rights in relation to a particular landward area. These Regulations also provide for the first time for a one-year, non-exclusive, supplementary seismic survey licence (incorporating model clauses set out in Schedule 4), which will permit the holder of an exclusive licence to extend a seismic survey for a distance of up to one kilometre beyond the boundary of the area to which that licence relates in order to obtain additional data concerning that area.

Other changes of substance introduced by the Regulations are as follows. In relation to exploration licences, there is provision for the Secretary of State to invite particular persons to apply for a licence in respect of a particular area by serving a notice on them (regulation 6(3)). This is in addition to the established provision for issuing a general invitation to apply for exploration licences by publishing a notice in the London and Edinburgh Gazettes. There are new provisions in the model clauses in Schedule 3 for an exploration licensee to surrender part of the area to which his licence relates (m.c. 4), and to undertake an extended well test of up to 90 days' duration (m.c. 9(1)). The minimum area to which an appraisal or development licence may relate is reduced (regulation 8(1)). Returns relating to the progress of operations under a licence are required to be submitted to the Secretary of State every six months rather than quarterly.

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]: S.I. 1984/1832.

[^f00004]: 1988 c. 1.

[^f00005]: 1990 c. 8.

[^f00006]: 1972 c. 52.