The Petroleum (Production) (Landward Areas) Regulations 1995

• (1) The Licensee shall not suspend work on the drilling of a development well, or having suspended it in accordance with this paragraph shall not begin it again, except with the consent in writing of the Minister and in accordance with the conditions, if any, subject to which the consent is given.

• (2) When work on the drilling of a development well is suspended in accordance with paragraph (1) of this clause, the Licensee shall forthwith furnish the Minister with such information relating to the well as the Minister may specify.

• (3) The Licensee—

• (a) shall not do any completion work in respect of a well in the licensed area except in accordance with a programme of completion work approved by the Minister in respect of the well;

• (b) shall furnish to the Minister, in accordance with the provisions of such a programme, particulars of any completion work done by him in respect of a well in the licensed area; and

• (c) shall not remove or alter any casing or equipment installed by way of completion work in respect of a well except with the consent in writing of the Minister and in accordance with the conditions, if any, subject to which the consent is given.

• (4) In this clause—

• “completion work”, in relation to a well, means work, by way of the installation of a casing or equipment or otherwise, after the well has been drilled, for the purpose of bringing the well into use as a development well; and

• “development well” means a well which the Licensee uses or intends to use in connection with the getting of petroleum in the licensed area, other than a well which for the time being he uses or intends to use only for searching for petroleum.

Provision of storage tanks, pipes, pipelines or other receptacles

20

The Licensee shall use methods and practice customarily used in good oilfield practice for confining the petroleum obtained from the licensed area in tanks, gas holders, pipes, pipe-lines or other receptacles constructed for that purpose.

Avoidance of harmful methods of working

21

• (1) The Licensee shall maintain all apparatus and appliances and all wells in the licensed area which have not been abandoned and plugged as provided by clause 17 of this license in good repair and condition and shall execute all operations in or in connection with the licensed area in a proper and workmanlike manner in accordance with methods and practice 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 control the flow and to prevent the escape or waste of petroleum discovered in or obtained from the licensed area;

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

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

• (d) to prevent the entrance of water through wells to petroleum bearing strata except for the purposes of secondary recovery; and

• (e) to prevent the escape of petroleum into any waters in or in the vicinity of the licensed 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 39 of this licence.

• (3) Notwithstanding anything in the preceding provisions of this clause, the Licensee shall not—

• (a) flare any gas from the licensed area; or

• (b) use gas for the purpose of creating or increasing the pressure by means of which petroleum is obtained from that area,

except with the consent in writing of the Minister and in accordance with the conditions, if any, of the consent.

• (4) Before deciding to withhold consent or to grant it subject to conditions in pursuance of paragraph (3) of this clause, the Minister shall give the Licensee an opportunity of making representations in writing to the Minister about the technical and financial factors which the Licensee considers are relevant in connection with the case and shall consider any such representations then made to him by the Licensee.

• (5) Consent in pursuance of paragraph (3) of this clause shall not be required for any flaring which, in consequence of an event which the Licensee did not foresee in time to deal with it otherwise than by flaring, is necessary in order—

• (a) to remove or reduce the risk of injury to persons in the vicinity of the well in question; or

• (b) to maintain a flow of petroleum from that or any other well;

but when the Licensee does any flaring which is necessary as aforesaid he shall forthwith inform the Minister that he has done it and shall, in the case of flaring to maintain a flow of petroleum, stop the flaring upon being directed by the Minister to stop it.

• (6) 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 except for the purposes of secondary recovery 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.

• (7) The Licensee shall comply with any reasonable instructions from time to time given by the Minister with a view to ensuring that funds are available to discharge any liability for damage attributable to the release or escape of petroleum in the course of activities connected with the exercise of rights granted by this licence; but where the Minister proposes to give such instructions he shall before giving them—

• (a) give the Licensee particulars of the proposal and an opportunity of making representations to the Minister about the proposal; and

• (b) consider any representations then made to him by the Licensee about the proposal.

Appointment of operators

22

• (1) The Licensee shall ensure that another person (including, in the case where the Licensee is two or more persons, any of those persons) does not exercise any function of organising or supervising all or any of the operations of searching or boring for or getting petroleum in pursuance of this licence unless that other person is a person approved in writing by the Minister and the function in question is one to which that approval relates.

• (2) The Minister shall not refuse to give his approval of a person in pursuance of paragraph (1) of this clause if that person is competent to exercise the function in question, but where an approved person is no longer competent to exercise that function the Minister may, by notice in writing given to the Licensee, revoke his approval.

Fishing and navigation

23

The Licensee shall not carry out any operations authorised by this licence in or about the licensed area in such manner as to interfere unjustifiably with—

• (a) navigation in any navigable waters; or

• (b) fishing in, or conservation of the living resources of any waters in or in the vicinity of the licensed area.

Training

24

• (1) The Minister may from time to time give to the Licensee instructions in writing as to the training of persons employed or to be employed, whether by the Licensee or by any other person, in any activity which is related to the exercise of the rights granted by this licence and the Licensee shall ensure that any instructions so given are complied with.

• (2) The Minister shall not give instructions in pursuance of paragraph (1) of this clause unless he has consulted as to the provisions proposed to be included in such instructions the Offshore Petroleum Industry Training Organisation Limited or such other body of a like nature as may from time to time be carrying on activities of a substantially similar kind to those performed by the said Organisation.

• (3) The Licensee shall furnish the Minister with such information relating to the training of persons referred to in paragraph (1) of this clause as the Minister may from time to time request.

Unit development

25

• (1) If at any time in which this licence is in force the Minister shall be satisfied that the strata in the licensed area or any part thereof form part of a single geological petroleum structure or petroleum field (hereinafter referred to as “an oil field”) other parts whereof are formed by strata in areas in respect of which other licences granted in pursuance of the Act of 1934 or of that Act as applied by the Act of 1964 are then in force, and the Minister shall consider that it is in the national interest in order to secure the maximum ultimate recovery of petroleum and in order to avoid unnecessary competitive drilling that the oil field should be worked and developed as a unit in co-operation by all persons including the Licensee whose licences extend to or include any part thereof, the following provisions of this clause shall apply.

• (2) Upon being so required by notice in writing by the Minister the Licensee shall co-operate with such other persons, being persons holding licences under the Act of 1934 or that Act as applied by the Act of 1964 in respect of any part or parts of the oil field (hereinafter referred to as “the other Licensees”) as may be specified in the said notice, in the preparation of a scheme (hereinafter referred to as “a development scheme”) for the working and development of the oil field as a unit by the Licensee and the other Licensees in co-operation, and shall, jointly with the other Licensees, submit such scheme for the approval of the Minister.

• (3) The said notice shall also contain or refer to a description of the area or areas in respect of which the Minister requires a development scheme to be submitted and shall state the period within which such scheme is to be submitted for approval by the Minister.

• (4) If a development scheme shall not be submitted to the Minister within the period so stated or if a development scheme so submitted shall not be approved by the Minister, the Minister may himself prepare a development scheme which shall be fair and equitable to the Licensee and all other Licensees, and the Licensee shall perform and observe all the terms and conditions thereof.

• (5) If the Licensee shall object to any such development scheme prepared by the Minister he may within 28 days from the date on which notice in writing of the said scheme shall have been given to him by the Minister refer the matter to arbitration in the manner provided by clause 39 of this licence.

Licensee to keep records

26

• (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, number and name (if any) 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 licensed 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 licensed area.

• (3) The Licensee shall deliver copies of the said records, plans and maps referred to in the two foregoing paragraphs to the Minister when requested to do so either—

• (a) within any time limit specified in the request; or

• (b) if there is no time limit specified, within four weeks of the request.

Returns

27

• (1) The Licensee shall furnish to the Minister not later than 6 weeks after the end of each calendar year which falls wholly or partly within the period during 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 licensed area. Such return shall contain—

• (a) a statement of all geological work, including surveys and tests, which has been carried out and the areas in which and the persons by whom the work has been carried out and the results thereof,

• (b) the number and name (if any) assigned to each well, and in the case of any well the drilling of which was begun or the number of which has been changed during the period to which the return relates, the site thereof,

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

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

• (e) a statement of all petroleum won and saved.

• (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 or any renewal thereof 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 in the licensed 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 development and other works executed by him in connection with searching, boring for or getting petroleum.

• (3) The Licensee shall furnish the Minister with such information as the Minister may from time to time request about any aspect of the activities of the Licensee which are attributable directly or indirectly to the grant of this licence, except that the Licensee shall not by virtue of this paragraph be required to furnish information in respect of his activities in connection with any crude oil after he has appropriated it for refining by him.

• (4) The licensee shall comply with any request for information made in accordance with paragraph (3) above either—

• (a) within any time limit specified in the request; or

• (b) if there is no time limit specified, within four weeks of the request.

• (5) For the purposes of paragraph (3) of this clause any reference to the Minister shall be construed as if it included a reference to the Chancellor of the Exchequer.

Licensee to keep samples

28

• (1) As far as reasonably practicable the Licensee shall correctly label and preserve for reference for a period of five years samples of the strata encountered in any well (including, where the site of such well is on land covered by water, the surface of such land) and samples of any petroleum or water discovered in any well in the licensed area.

• (2) The Licensee shall not dispose of any sample 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

29

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.

30

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 24(3) and 27(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

31

Any person or persons authorised by the Minister shall be entitled at all reasonable times to enter into and upon any land for the time being possessed or occupied by the Licensee in the licensed area or 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 purposes 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

32

If the Licensee shall at any time fail to perform the obligations arising under the terms and conditions of any of clauses 12, 17, 20 or 21 of this licence, the Minister shall be entitled, after giving to the Licensee reasonable notice in writing of his intention to do so, 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

33

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 the power of distress and any other rights and remedies to which he would be entitled) enter into and upon any land which shall for the time being be possessed or occupied by the Licensee for the purposes of the licence or the exercise of any of the rights thereby granted or 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 land installations 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.

34

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 petroleum, engines, machinery, tools, implements and other effects belonging to the Licensee which shall be found in or upon any land which shall for the time being be possessed or occupied by the Licensee for the purposes of the licence or the exercise of any of the rights thereby granted, or 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 takes place the Minister may out of the proceeds thereof retain and pay all the arrears of the said payments and also the expenses of and incident to such diligence and sale and shall pay the surplus thereof (if any) to the Licensee.

Indemnity against third party claims

35

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.

Advertisements, prospectuses, etc.

36

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.

37

• (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) 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.

• (3) 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 (2) of this clause.

• (4) Whether for the purposes of paragraph (3) of this clause a person has control of another person shall be determined as if subsections (2) and (4) to (6) of section 416 of the Income and Corporation Taxes Act 1988 applied subject to the following modifications, namely—

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

• (b) in the said subsection (6), for the word “may” there were substituted the word “shall”, the words from “and such attributions” onwards were omitted and in the other provisions of that subsection any reference to an associate of a person fell to 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;

• (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, it shall be exchanged for other petroleum.

Power of revocation

38

• (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) if the Licensee is a company, the Licensee’s ceasing to direct and control either—

• (i) its operations under the licence; or

• (ii) any commercial activities in connection with those operations

from a fixed place within the United Kingdom;

• (h) any breach of a condition subject to which the Minister gave his approval in pursuance of clause 37(2) of this licence;

• (i) any breach of clause 37(5) of this licence;

• (j) if the Licensee is a company, any breach of a condition subject to which the Oil and Gas Authority gave its consent to a change in control of the Licensee (see clause 37A);

• (k) if the Licensee is a company, any failure to provide full and accurate information in response to a notice given by the Oil and Gas Authority to that company under section 5D of the Petroleum Act 1998;

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

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Arbitration

39

• (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 Scotland or in waters adjacent thereto the following provisions will be substituted for the last two foregoing paragraphs.

• (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.

• (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 observe 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 4 — MODEL CLAUSES FOR SUPPLEMENTARY SEISMIC SURVEY LICENCES IN LANDWARD AREAS

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 exploration area” means the area for the time being within 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 and Climate Change;

• “petroleum” includes any mineral oil or relative hydrocarbon and methane or any other 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;

• “the principal licence” has the meaning assigned thereto by clause 2.

• (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 by undertaking seismic surveys

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 his powers under the Act of 1934 hereby grants to the Licensee, as holder of Licence No. (hereinafter referred to as “the principal licence”) LICENCE AND LIBERTY in common with any 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 underlying the area to which the principal licence relates by undertaking seismic surveys in the adjacent area more particularly described in Schedule 1 to this licence.

Term of licence

3

This licence unless sooner determined under or consequent upon any of the provisions hereof shall be and continue in force for the term of 12 months next after .

Automatic termination of licence

4

• (1) This licence shall automatically cease and determine—

• (a) on the termination of the principal licence, and

• (b) on the grant of a petroleum exploration and development licence in respect of an area which includes the whole of the exploration area.

• (2) Where a petroleum exploration and development licence is granted in respect of part of the exploration area, this licence shall automatically cease and determine as regards that part.

• (3) Any termination or partial termination of this licence shall be without prejudice to any obligation or liability imposed upon the Licensee or incurred by him under the terms and conditions of this licence.

Payment of consideration for licence

5

• (1) The Licensee shall make to the Minister the payment specified in Schedule 2 to this licence as consideration for the grant of this licence.

• (2) The Licensee shall not by reason of the termination of this licence be entitled to be repaid or allowed all or any part of the sum payable to the Minister hereunder.

Seismic surveys

6

• (1) The Licensee shall give the Minister at least 21 days written notice of any seismic survey he proposes to undertake and such notice shall indicate the nature of the survey and the total distance to be shot and shall be accompanied by a copy of an Ordnance Survey map drawn to the scale of 1:50,000 or 1:63,360 for the relevant area upon which the proposed lines of survey are indicated, and by evidence that the planning authorities for the area to be surveyed have been consulted about the proposed survey and, in a case where any planning permission under the Town and Country Planning Act 1990 or the Town and Country Planning (Scotland) Act 1972 is required for the survey in question, evidence that such permission has been granted.

• (2) The Licensee shall not carry out any seismic survey if notice thereof has not been given as aforesaid or if the Minister indicates to the Licensee within fourteen days of the receipt of such notice that the survey is not to be carried out.

Licensee to keep records

7

• (1) 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.

• (2) The Licensee shall deliver copies of the said records, plans and maps referred to in the foregoing paragraph to the Minister when requested to do so either—

• (a) within any time limit specified in the request; or

• (b) if there is no time limit specified, within four weeks of the request.

Returns

8

• (1) The Licensee shall furnish to the Minister, six months from the date of this licence and upon the termination of this licence, 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 statement of the areas in which any surveys have been carried out.

• (2) The Licensee shall furnish to the Minister such other information, in the form of maps and plans, as to the progress of his operations in the exploration area as the Minister may from time to time request either—

• (a) within any time limit specified in the request; or

• (b) if there is no time limit specified, within four weeks of the request.

Reports to be treated as confidential

9

All records, returns, plans, maps 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

10

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.

Indemnity against third party claims

11

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

12

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 of such rights.

Power of revocation

13

The Minister may revoke this licence in the event of any breach or non-observance by the Licensee of any of the terms and conditions of 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 imposed upon the Licensee or incurred by him under the terms and conditions hereof.

Arbitration

14

• (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.

Note:Where the licensed area is situate in Scotland the following provision will be substituted for the last foregoing paragraph.

• (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 as to his appointment, shall be appointed by the Lord President of the Court of Session.

Note:Schedules to each licence will describe the area to which the licence relates and specify the payment to be made by the Licensee in consideration for the grant of the licence.

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

SCHEDULE 5 — MODEL CLAUSES FOR METHANE DRAINAGE LICENCES

Interpretation

1

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

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

• “the licensed area” means the area 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;

• “mine” has the same meaning as in the Mines and Quarries Act 1954;

• “the OGA” means the Oil and Gas Authority.

• (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.

2

In consideration of the payments hereinafter provided and the performance and observance by the Licensee of all the terms and conditions hereof, the OGA in exercise of the powers conferred by the Act, hereby grants to the Licensee LICENCE AND LIBERTY during the continuance of this licence and subject to the provisions hereof to get natural gas in the course of operations for making and keeping safe mines whether or not disused within ALL THOSE lands having a superficial area of or thereabouts, situate in the County (Counties) of and more particularly delineated and described on the Ordnance Survey map annexed hereto and thereon edged red.

Term of licence

3

This licence unless sooner determined under any of the provisions hereof shall be and continue in force for the term of next after .

Right of Licensee to determine licence

4

Without prejudice to any obligation or liability imposed by or incurred under the terms and conditions hereof the Licensee may at any time during the term hereby granted determine this licence by giving to the OGA not less than one month’s previous notice in writing to that effect.

Payment of consideration for licence

5

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

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

Records

6

The Licensee shall keep and furnish to the OGA such records relating to the operations conducted in the licensed area under this licence, the results thereof and the disposal of any natural gas won and saved as the OGA may from time to time determine.

Power to inspect accounts, etc.

7

Any person authorised by the OGA may at all reasonable times enter into and upon any land for the time being possessed or occupied by the Licensee in the licensed area and inspect and make abstracts or copies of any records or accounts which the Licensee is required to keep or make in accordance with the provisions of this licence.

Records to be treated as confidential

8

All records, accounts and information 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 OGA or the Crown. The OGA shall nevertheless be entitled at any time to make use of any information received from the Licensee for the purpose of preparing and publishing such returns and reports as may be required of the OGA by law.

Notice of commencement and termination of operations

9

As soon as the licensee has decided to get natural gas at any place he shall notify the OGA in writing of the situation thereof stating—

• (a) the name of the mine for the safety of which the operations are to be undertaken;

• (b) whether such mine is a disused mine or not.

Indemnity against third party claims

10

The Licensee shall at all times keep the OGA effectually indemnified against all actions, proceedings, costs, charges, claims and demands whatsoever which may be made or brought against the OGA 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

11

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

Power of revocation

12

If there shall be any breach or non-observance by the Licensee of any of the terms and conditions herein contained the OGA 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 imposed by or incurred under the terms and conditions hereof.

Arbitration

13

• (1) If at any time any dispute, difference or question shall arise between the OGA 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 or consented to by the OGA, 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 OGA and the licensee 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 Scotland the following paragraph will be substituted for the last foregoing paragraph.

• (2A) The arbitration referred to in the foregoing paragraph shall be by a single arbiter who, in default of agreement between the OGA and the Licensee as to his appointment, shall be appointed by the Lord President of the Court of Session.

Note:A schedule to each Licence will provide for the payment by the Licensee of sums agreed between the OGA and the Treasury which may include annual payments payable in advance.

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

Signed

Tim Egger, — Minister for Industry and Energy, — 1995-05-25

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 1991 (S.I. 1991/981), except as respects licences applied for before the date on which these Regulations come into force.

Regulation 3(3) disapplies the Petroleum (Production) Regulations 1982 (S.I. 1982/1000) in respect of applications made after the date on which these Regulations come into force for methane drainage licences and the model clauses that such licences may contain. The model clauses for methane drainage licences are now contained in Schedule 5 to these Regulations. The principal amendment to these model clauses is that model clause 3 no longer prescribes a 25 year term for the licence.

These Regulations introduce a single exploration and development licence which confers exclusive rights in relation to a particular landward area in place of the separate exploration, appraisal and development licences available under the 1991 Regulations. M.c.3 provides that the initial term of this licence is six years (which corresponds to the six year term of an exploration licence) which may be continued for a further five years (which corresponds to the five year term of an appraisal licence) and this can be extended for a 20 year period (which corresponds to the 20 year term of a development licence).

Regulation 7 of these Regulations implements paragraphs 1 to 5 inclusive of Article 3 and partially implements paragraph 1 of Article 5 of Council Directive 94/22/EEC on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons (O.J. L 164, 30.6.94, p. 3) by introducing a new procedure for applications for licences. Details of the blocks to be licensed, the latest date upon which applications are to be made and the period within which licences are to be granted are to be published in the Official Journal of the European Communities. The regulation also introduces a procedure whereby licensees may apply for a licence for an area contiguous to the area or areas covered by their existing licence if the Secretary of State decides that geological or production considerations justify the grant of such a licence.

Changes of substance in the model clauses are as follows. There is now no model clause which provides for the delivery of petroleum in place of the payment of the royalty. The Minister is prohibited from giving instructions to a licensee concerning the training of any employee or prospective employee without first consulting the Offshore Petroleum Industry Training Organisation Limited or any body exercising similar activities (m.c.24). The model clauses now specify the date for compliance with requests for information from the Secretary of State and modify the length of time for which information supplied pursuant to such requests remains confidential.

The model clauses for a supplementary seismic survey licence are now contained in Schedule 4 to these Regulations.

Footnotes

Editorial notes