Petroleum Act 1998

JurisdictionUK Non-devolved
Citation1998 c. 17


Petroleum Act 1998

1998 CHAPTER 17

An Act to consolidate certain enactments about petroleum, offshore installations and submarine pipelines.

[11th June 1998]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

I Petroleum

Part I

Petroleum

S-1 Meaning of ‘petroleum’.

1 Meaning of ‘petroleum’.

1. In this Part of this Act ‘petroleum’—

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

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

S-2 Rights to petroleum vested in Her Majesty.

2 Rights to petroleum vested in Her Majesty.

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

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

(3) For the purposes of subsection (2), ‘Crown land’ means land which—

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

(b) belongs to a government department or

(c) is held in trust for Her Majesty for the purposes of a government department.

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

S-3 Licences to search and bore for and get petroleum.

3 Licences to search and bore for and get petroleum.

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

(2) This section applies to—

(a) petroleum to which section 2 applies and

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

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

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

S-4 Licences: further provisions.

4 Licences: further provisions.

(1) The Secretary of State shall make regulations prescribing—

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

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

(c) the fees to be paid on any such application

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

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

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

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

(4) As soon as practicable after granting a licence under section 3, the Secretary of State shall publish notice of the fact in the London Gazette stating—

(a) the name of the licensee and

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

and, if that area or any part of it is in Scotland, the Secretary of State shall also publish the notice in the Edinburgh Gazette.

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

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

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

(i) as authorised by the licence

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

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

S-5 Existing licences.

5 Existing licences.

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

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

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

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

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

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

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

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

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

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

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

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

(a) subject to the same amendment or modification or

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

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

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

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

(a) a reference in any document to that provision (or which immediately before the commencement of this Act is to be construed as a reference to that...

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