The Petroleum (Production) (Landward Areas) Regulations 1991

• (8) The Licensee shall carry out any programme approved by the Minister or served on the Licensee in pursuance of this clause or, if such a programme is varied in pursuance of clause 14 of this licence, the programme as so varied, except so far as the Licensee is authorised in writing by the Minister to do otherwise or is required to do otherwise by such a conditon as is mentioned in paragraph (4)(b) of this clause; but if it is necessary to carry out certain works in order to comply with provisions included in a programme by virtue of paragraph (5)(c) of this clause or provisions of a programme served on the Licensee in pursuance of paragraph (6) of this clause or provisions of a programme as varied in pursuance of clause 14 of this licence, then, notwithstanding anything in the programme as to the time when those provisions are to be complied with, the Licensee shall not be treated as having failed to comply with those provisions before the expiration of the period reasonably required for carrying out the works.

• (9) In this clause “relevant works” means any structures and any other works whatsoever which are intended by the Licensee to be permanent and are neither designed to be moved from place to place without major dismantling nor intended by the Licensee to be used only for searching for petroleum.

Provisions supplementary to clause 13

14

• (1) A consent or approval given by the Minister in pursuance of clause 13(1) of this licence may be given subject to such conditions as are specified in the document signifying the consent or approval and may in particular, without prejudice to the generality of the preceding provisions of this paragraph, be limited to a period so specified.

• (2) Where—

• (a) the Minister approves a programme in pursuance of clause 13(1) or gives notice in respect of a programme in pursuance of paragraph (4)(a) or (b) or paragraph (6) of clause 13 of this licence or serves a programme in pursuance of the said paragraph (6); or

• (b) it is determined by arbitration that the Licensee is not required by virtue of paragraph (i) of clause 13(5)(c) of this licence to submit modifications of a programme in respect of which notice of rejection containing such a statement as is mentioned in the said paragraph (i) was given by the Minister in pursuance of clause 13(4)(c) of this licence,

the Minister may give to the Licensee, with the approval or notice given or the programme served as mentioned in sub-paragraph (a) of this paragraph or, in a case falling within sub-paragraph (b) of this paragraph, within the period of three months beginning with the date of the arbitrator’s or arbiter’s determination, a notice (hereafter in this clause referred to as a “limitation notice”) authorising the Minister, by a further notice given to the Licensee from time to time after the expiration of the period specified in that behalf in the limitation notice, to provide that the programme to which the limitation notice relates shall have effect while the further notice is in force with the substitution for any quanitity of petroleum or any period specified in the programme in pursuance of clause 13(2)(c) of this licence of a different quantity of petroleum or a different period specified in the further notice.

• (3) A quantity or period specified in such a further notice as that to be substituted for a quantity or period which is specified in the programme in question shall be within the limits specified in the limitation notice as those applicable to that quanitity or period specified in the programme; and those limits shall be such as to secure that the expenditure to be incurred by the Licensee in complying with the further notice, in a case where an effect of the notice is to increase the quantity of petroleum which the Licensee is required to get from the licensed area in any period, is less than the cost of drilling a new well in the licensed area at the time when the further notice is given.

• (4) Where the Minister proposes to give a limitation period or any such further notice as aforesaid he shall before doing so—

• (a) give the Licensee particulars of the proposal and an opportunity of making representations to the Minister about the technical and financial factors which the Licensee considers are relevant in connection with the proposal; and

• (b) consider any such representations then made to him by the Licensee;

and the Minister shall not give such a further notice of which an effect is to increase the quantity of petroleum which the Licensee is required to get from the licensed area during any period unless the Minister is satisfied that the notice is required by reason of a national emergency and shall not give any other such further notice as aforesaid, unless he is satisfied that the notice is required in the national interest.

• (5) A limitation notice or such a further notice as aforesaid may—

• (a) specify any quantity or period by reference to such factors as the Minister thinks fit; and

• (b) in the case of such a further notice, contain provisions as to—

• (i) the date when the notice is to come into force,

• (ii) the date when the notice is to cease to be in force,

• and specify different dates in pursuance of this sub-paragraph for different provisions of the notice;

Commencement and abandonment and plugging of wells

15

• (1) The Licensee shall not commence, or after abandoning in the manner hereinafter provided, shall not recommence the drilling of any 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.

• (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 condition subject to which a consent under paragraph (1) of this clause is given relates to the position, depth or direction of the well, or to any casing of the well, or if any condition subject to which a consent under either paragraph (1) or paragraph (2) of this clause is given 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) 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.

• (6) Any well drilled by the Licensee pursuant to this licence, which at the expiry or determination of the Licensee’s rights in respect of the area or part thereof in which that well is drilled has not with the consent of the Minister been abandoned, shall be left in good order and fit for further working together with all casings and any well head fixtures the removal whereof would cause damage to such well, or, if the Minister so directs in the manner provided by paragraph (8) of this clause, be plugged and sealed in accordance with the Minister’s direction.

• (7) All casings and fixtures left in position pursuant to the last foregoing paragraph shall be the property of the Minister.

• (8) In any case to which paragraph (6) of this clause applies, a direction by the Minister may be given by notice in writing to the Licensee not less than one month before the Licensee’s rights in respect of the area or part thereof in which the well is situtate expire or determine, specifying the manner in which the well is to be plugged and sealed and the time within which such work is to be done.

• (9) An application for the consent of the Minister to the drilling of a well at any place above the low water line shall be accompanied by evidence that the planning authority for the relevant place has been consulted about the drilling and that any planning permission required by the Town and Country Planning Act 1990 or the Town and Country Planning (Scotland) Act 1972 for the drilling of that well has been granted.

Distance of wells from boundaries of licensed area

16

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 licensed area.

Control of development wells

17

• (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

18

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

Avoidance of harmful methods of working

19

• (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 15 of this licence 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. 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 or water-bearing strata 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 praragraph. 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 the manner provided by clause 36 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) An application for consent in pursuance of paragraph (3) of this clause must be made in writing to the Minister and must specify the date on which the Licensee proposes to begin the flaring or use in question; and subject to paragraph (5) of this clause that date must not be before the expiration of the period of 12 months beginning with the date when the Minister receives the application.

• (5) If the Minister gives notice in writing to the Licensee stating that, in consequence of plans made by the Licensee which the Minister considers are reasonable, the Minister will entertain an application for consent in pursuance of paragraph (3) of this clause which specifies a date after the expiration of a period mentioned in the notice which is shorter than the period mentioned in paragraph (4) of this clause, an application made in consequence of the notice may specify, as the date on which the applicant proposes to begin the flaring or use in question, a date after the expiration of that shorter period.

• (6) 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 finanical 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.

• (7) 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.

• (8) 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.

• (9) 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 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

20

• (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

21

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—

• (a) with navigation in any navigable waters; or

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

Training

22

• (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 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

23

• (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 that 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 36 hereof.

Licensee to keep records

24

• (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 as and when required.

Returns

25

• (1) The Licensee shall furnish to the Minister not later than 6 weeks after the end of each half 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

• (2) 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.

Licensee to keep samples

26

• (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 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

27

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 at any time to any person not in the service or employment of the Crown:

Inspection of records etc.

28

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 22(2) and 25(2) 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

29

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 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

30

If the Licensee shall at any time fail to perform the obligations arising under the terms and conditions of any of clauses 11, 15, 18, 19 or 22 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

31

If and whenever any of the payments mentioned in clause 7(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 have been 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 this 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 of and incidental to any such distress and sale rendering the surplus (if any) to the Licensee.

31

If and whenever any of the payments mentioned in clause 7(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 have been 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 this 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

32

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.

33

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 an opinion that the licensed area is from its geological formation or otherwise one in which petroleum is likely to be obtainable.

Restrictions on assignments etc.

34

• (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 insofar 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; 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 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.

• (4) 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 insofar 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

35

• (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 7(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 34(2) of this licence;

• (i) any breach of clause 34(4) 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 a notice in writing on the Licensee 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 34(3) 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

36

• (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 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.