SCHEDULE 1
CURRENT MODEL CLAUSES FOR MINING LICENCES DERIVING FROM PARTS 1 AND III OF SCHEDULE 2 TO THE PETROLEUM (PRODUCTION) REGULA TIONS 1935 AS THEY HAD EFFECT ON AND AFTER 1ST OCTOBER 1957
PART I
1. This Schedule has effect in relation to paragraph 1 of Schedule 1 to the Act (Parts I and III of Schedule 2 to the Petroleum (Production) Regulations 19352as amended by the Petroleum (Production) (Amendment) Regulations 19543and the Petroleum (Production) (Amendment) Regulations 19574).
2. In relation to the said paragraph 1, the current model clauses are those reproduced in Part II.
PART II
Interpretation
In these model clauses:—
1. “The Act of 1934” and “the Act of 1998” mean, respectively, the Petroleum (Production) Act 19345and the Petroleum Act 19986.
2. The “Regulations” mean the Petroleum (Production) Regulations 1935.
3. “Licensee” means a person to whom a licence under the Act is granted his successors in title and the persons deriving title under him.
4. “The licensed area” means the area for the time being upon which the Licensee may exercise powers and privileges granted by this licence.
5. “Petroleum” includes any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in strata, but does not include coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation.
6. “Crude oil” means oil in its natural state before the same has been refined or otherwise treated but excluding water and foreign substances.
7. “Natural gas” means gas obtained from boreholes and wells and consisting primarily of hydrocarbons.
8. “Casinghead petroleum spirit” means any liquid hydrocarbons obtained from natural gas by separation or by any chemical or physical process.
9. “Ancillary right” means any facility right or privilege other than the rights granted by this licence at any time vested in the Licensee in respect of any part of the licensed area.
10. “The Minister” means the Secretary of State.
Extension of licensed area
The Licensee may at any time during the term hereby granted or any renewal thereof, but subject nevertheless to the payment of all minimum annual payments and royalties hereby reserved and the performance and observance by the Licensee of all the terms and conditions hereof, apply to the Minister to extend this licence to any lands, the boundaries of which are delineated in manner prescribed by paragraph (5) of regulation 2, adjoining the licensed area:
Provided that the licensed area as thus extended shall comply in all respects with regulation 3.
Right of Licensee to determine Licence
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 or any renewal thereof determine this licence by giving to the Minister not less than eighteen months previous notice in writing to that effect.
Right of Licensee to abandon portions of the licensed area
Without prejudice to any obligation or liability imposed by or incurred under the terms and conditions hereof the Licensee shall be entitled at any time during the term hereby granted or any renewal thereof by giving six months notice in writing to the Minister to surrender the rights granted by this licence in respect of any part or parts of the licensed area:
Provided that—
(a) the part of the licensed area in respect of which the said rights are retained shall comply with the Regulations; and
(b) the part of the licensed area in respect of which the said rights are surrendered shall either be an area in respect of which a licence could be granted in accordance with regulation 3 or be of such shape and size as the Minister may determine.
To the notice hereinbefore referred to shall be attached two copies of the Ordnance Survey Map annexed to the licence upon which shall be delineated the boundaries of the area to be surrendered.
Refund of minimum annual payment on determination or surrender
Upon the determination by the Licensee of the term hereby granted or any renewal thereof, or upon the surrender by him of the rights granted by this licence in respect of any part or parts of the licensed area, the Minister will refund to the Licensee an apportioned part of any minimum annual payment paid by the Licensee in advance in respect of the licensed area or any such part or parts thereof for a period the whole of which has not expired at the date of such determination or surrender.
Avoidance of harmful methods of working
1. The Licensee shall maintain all apparatus and appliances and all boreholes and wells capable of producing petroleum 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; and
(b) to conserve the licensed area for productive operations; and
(c) to prevent damage to adjoining petroleum bearing strata; and
(d) to prevent the entrance of water through boreholes and wells to petroleum bearing strata; and
(e) to prevent the escape of petroleum into any water-well spring stream river lake reservoir estuary or harbour.
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 sub-clause (1) hereof. If the Licensee objects to any such instruction on the ground that it is unreasonable he may, within 14 days from the date upon which the same was given, refer the matter to arbitration in manner provided by clause … hereof (the marginal note whereof is “Arbitration”).
Provision of storage tanks pipes pipelines or other receptacles
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. No petroleum shall, save as a temporary measure during an emergency, be placed or kept in an earthen reservoir.
Protection of mines and coal seams
Where any borehole or well drilled within the licensed area shall penetrate any mine or any workable seam of coal the Licensee shall case such borehole or well in such manner as to prevent any water or petroleum in the borehole or well from entering such mine or workable seam of coal.
Disposal of waste oil, salt water and refuse
The Licensee shall drain all waste oil, salt water and refuse from tanks gasholders boreholes and wells into proper receptacles erected and maintained by him for that purpose at a safe distance from such tanks gasholders boreholes and wells and from any buildings or structures whether situate within the licensed area or not and shall dispose of such waste oil salt water and refuse in manner from time to time approved by the Minister. The Licensee shall not use or permit any waste oil, salt water or refuse to flow into or over or to be deposited upon any land, whether situate within the licensed area or not.
Distance of boreholes or wells from boundaries of licensed area
No borehole or well shall except with the consent in writing of the Minister be drilled or made within a distance of 121.92 metres from the boundaries of the licensed area.
Preservation of amenities
The Licensee shall carry out all operations within the licensed area in such a manner as not to interfere unnecessarily with the amenities of the locality in which the licensed area is situate.
Measurement of petroleum obtained from the licensed area
1. The Licensee shall measure or weigh by a method or methods customarily used in good oilfield practice and from time to time approved by the Minister, all crude oil and natural gas won and saved, other than natural gas used for the purpose of carrying on drilling and production operations and pumping to field storage and refineries, and all casinghead petroleum spirit recovered from the licensed area.
2. If any measuring or weighing appliance shall at any time be found to be false or unjust the same shall, if the Minister so determines after considering any representations in writing made by the Licensee, be deemed to have existed in that condition during the period of three months...
